1
EXHIBIT 10.65
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (this "Agreement") is entered into as of
July ___, 2000 by and between Century Yuma Cellular Corp., Xxxxxxx Electronics,
Inc., Xxxxxxx Radio Communications, Inc., El Centro Cellular Corp., Century El
Centro Cellular Corp., Centennial Southwest License Company LLC (collectively,
"Sellers" and each a "Seller"), Centennial Communications Corp. (solely for
purposes of Section 12.2) ("Centennial"), WWC License LLC, a Delaware limited
liability company ("Purchaser") and Western Wireless Corporation ("Western").
Purchaser, Western and Sellers are sometimes referred to herein collectively as
the "Parties" and each as a "Party."
RECITALS:
A. Centennial Southwest License Company LLC ("Centennial Licensee") holds
the non-wireline (A-Side) cellular licenses granted by the Federal
Communications Commission (the "FCC") for the cellular
telecommunications systems (collectively, the "Systems") serving Rural
Service Areas Arizona #4 (Yuma) and California #7 (El Centro).
B. Each of the Sellers own, lease, or otherwise have the right to use all
of the Assets comprising the Systems.
C. Each of the Sellers is a direct or indirect, wholly-owned subsidiary of
Centennial.
X. Xxxxxxx are willing to sell to Purchaser, and Purchaser is willing to
purchase from Sellers, all right, title and interest of Sellers in and
to the Assets comprising the Systems other than the Excluded Assets, all
in accordance with the terms and conditions set forth in this Agreement.
E. Western is an Affiliate of Purchaser and is willing to guarantee each
and all of the obligations of Purchaser contained in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and promises contained
herein and for other good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged, the Parties hereto agree as follows:
1. DEFINITIONS
As used herein, the terms below shall have the following meanings:
1.1 "Action" shall have the meaning set forth in Section 6.9.
1.2 "Affiliate" of a Person shall mean any Person, which directly or
indirectly controls, is controlled by or is under common control
with, such Person. The term "control" (including, with
correlative meaning, the terms "controlled by" and "under common
control with"), as used with respect to any Person, shall mean
the possession, directly or indirectly, of the power to direct or
cause the direction of
2
the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise.
1.3 "Adjusted Accounts Receivable" shall have the meaning set forth
in Section 2.3.1.
1.4 "Agreement" shall have the meaning set forth in the preamble to
this Agreement.
1.5 "Adjustments" shall have the meaning set forth in Section 2.3.3.
1.6 "Assets" shall mean all assets, properties and rights, both
tangible and intangible, that are (i) owned or leased by Sellers,
(ii) used or held for use in the Systems and (iii) necessary to
operate the Business of the Systems in a manner consistent with
its present operations and with past practices, including,
without limitation, the Real Property, Equipment, Authorizations,
Contracts, Customer Agreements, Intellectual Property, and Books
and Records; provided, however, that the Assets shall not include
the Excluded Assets.
1.7 "Assignment Application" shall mean the joint application filed
with the FCC relating to the assignment of the FCC Authorization
by Centennial Licensee to Purchaser in the manner contemplated by
this Agreement.
1.8 "Assumed Liabilities" shall have the meaning set forth in Section
3.1.
1.9 "Auditor" shall have the meaning set forth in Section 2.3.5.
1.10 "Authorizations" shall mean the consents, approvals,
authorizations, permits and licenses issued by the FCC and any
other Governmental Authority to Sellers relating to the Systems.
1.11 "Books and Records" shall mean all of the books and records of
Sellers related to the Business.
1.12 "Business" shall mean all of the business and operations of
Sellers relating to the Systems.
1.13 "Business Day" means any day of the year on which banks are not
required or authorized to be closed in the State of New York.
1.14 "Closing" means the consummation of the assignment, transfer,
conveyance and delivery of the Assets and the Purchase Price as
contemplated hereunder.
1.15 "Closing Date" shall mean the date of Closing, which shall be a
date that is three (3) Business Days after the date on which all
of the conditions precedent set forth in Sections 8 and 9 have
been satisfied or waived or such other date as agreed upon by
Sellers and Purchaser.
2
3
1.16 "Closing Place" shall mean such location agreed upon by the
Parties.
1.17 "Consents" shall mean any and all consents, approvals,
authorizations or waivers of any Governmental Authority,
including, without limitation, the FCC Consent, and any and all
consents, approvals or waivers from third parties that are (a)
required for the consummation of the transactions contemplated by
this Agreement or (b) necessary in order that Purchaser can
operate the Systems after the Closing Date substantially in the
same manner as Sellers operated the Systems before the Closing
Date.
1.18 "Contracts" shall mean all leases, contracts, commitments,
understandings and agreements relating to the Systems to which
any Seller is a party, whether oral or written.
1.19 "Customer Agreements" shall mean agreements whereby Sellers have
agreed to provide Service.
1.20 "Discovery Period" shall have the meaning set forth in Section
2.3.5.
1.21 "Employees" shall mean all persons employed by Sellers on a full
or part-time basis.
1.22 "Environmental Laws" shall mean any and all federal, state, local
or foreign statutes, Laws, Licenses and Permits relating to
health, safety or the environment, including without limitation
the Handling of Substances, the presence of Substances at an
Operating Site or any antipollution requirements.
1.23 "Equipment" shall mean all of the furniture, fixtures,
furnishings, machinery, computer hardware, switching equipment,
antennas, transmitters and other personal property used by
Sellers in the Systems or located on any of the Real Property.
1.24 "Escrow Agreement" has the meaning set forth in Section 2.2.
1.25 "Escrow Amount" has the meaning set forth in Section 2.2.
1.26 "Escrow Deposit" has the meaning set forth in Section 2.2.
1.27 "Escrow Period" has the meaning set forth in Section 2.2.
1.28 "Excluded Assets" means (i) all cash and cash equivalents of
Sellers, (ii) all refunds (including interest thereon or claims
therefrom) of Taxes paid by Sellers prior to the Closing Date,
(iii) all refunds of premiums paid on and rights and claims under
insurance policies prior to the Closing Date, (iv) all rights of
Sellers in and to the Purchase Price, (v) bonds, letters of
credit, surety instruments and other similar items, (vi) any
agreement, right, asset or property owned or leased
3
4
by Sellers that is not used or held for use in connection with
their operation of the Systems, (vii) the account books of
original entry, general ledger and financial records used in
connection with the Systems, (viii) the oak filing cabinet
located in Xxxxx Xxxxxxx'x office and (ix) all Intellectual
Property associated with or related to the name "Centennial" and
derivatives thereof.
1.29 "FCC" has the meaning set forth in the recitals to this
Agreement.
1.30 "FCC Consent" shall mean the action of the FCC granting its
consent to the assignment of the FCC License from Sellers to
Purchaser.
1.31 "FCC Authorizations" shall mean the FCC License along with any
other licenses, grants or authorizations from the FCC relating to
the operation of the Systems, all as set forth on Schedule 1.31.
1.32 "FCC License" has the meaning set forth in the recitals to this
Agreement.
1.33 "Final Order" shall mean a Preliminary Order which is not
reversed, stayed, enjoined, set aside, annulled or suspended, and
with respect to which no timely request for stay, motion or
petition for reconsideration or rehearing, application or request
for review, or notice of appeal or other judicial petition for
review is pending, and as to which the time for filing any such
request, motion, petition, application, appeal, or notice, and
for the entry of an order staying, reconsidering, or reviewing on
the FCC's or other regulatory authorities' own motion, has
expired. A Preliminary Order with respect to the assignment of
the FCC License that is not reversed, stayed, enjoined, set
aside, annulled or suspended, and with respect to which no timely
request for stay, motion or petition for reconsideration or
rehearing, application or request for review or notice of appeal
or other judicial petition for review is pending, and as to which
the time for filing any such request, motion, petition,
application, appeal or notice, and for the entry of an order
staying, reconsidering or reviewing on the FCC's or other
regulatory authorities' own motion has expired, but which is
subject to materially burdensome conditions is not (and shall not
be deemed) a Final Order unless and until the Purchaser has
notified Sellers of Purchaser's willingness to accept such
conditions.
1.34 "GAAP" means generally accepted accounting principles as
currently in effect.
1.35 "Governmental Authority" shall mean any court or any federal,
state, county, local or foreign governmental, legislative or
regulatory body, agency, department, authority, instrumentality
or other subdivision thereof, including without limitation, the
FCC and the PUC.
1.36 "Handling" has the meaning set forth in the definition of
Pre-Closing Environmental Matters.
4
5
1.37 "HSR Act" shall mean the Xxxx Xxxxx Xxxxxx Antitrust Improvements
Act of 1976, as amended.
1.38 "Indemnitee" has the meaning set forth in Section 12.4.
1.39 "Indemnitor" has the meaning set forth in Section 12.4.
1.40 "Intellectual Property" shall mean all patents, trademarks,
service marks, trade names, copyrights, licenses and other
intellectual property rights or intangible property rights of
Sellers that are used or intended for use in connection with the
Systems, other than Intellectual Property associated with or
related to the name "Centennial" and derivatives thereof.
1.41 "Inventory" shall mean all merchandise owned by Sellers and
intended for resale, whether or not located on Sellers premises,
on consignment to a third party, or in transit or storage.
1.42 "Judgment" means any judgment, writ, order, injunction,
determination, award or decree of or by any court, judge, justice
or magistrate, including any bankruptcy court or judge, and any
order of or by a Governmental Authority.
1.43 "Law" means any statute, ordinance, code, rule, regulation or
order enacted, adopted, promulgated, applied or followed by any
Governmental Authority.
1.44 "Liabilities" shall mean claims, liabilities, obligations or
commitments of a Person of any nature, absolute, accrued,
contingent or otherwise, known or unknown, whether matured or
unmatured.
1.45 "Licenses and Permits" means all licenses, permits, approvals,
franchises, registrations, accreditations (i) required by Law or
(ii) issued to a Person by a Governmental Authority and used in
its business.
1.46 "Lien" shall mean any claim, lien, pledge, charge, easement,
security interest, mortgage, deed of trust, right-of-way or other
encumbrance.
1.47 "Losses" has the meaning set forth in Section 12.2.
1.48 "Material Adverse Effect" means any event, circumstance or
condition that, individually or when aggregated with all other
similar events, circumstances or conditions could reasonably be
expected to have a material adverse effect on: (i) with respect
to Sellers, (a) the property, operations, condition (financial or
otherwise) or results of operations of the Business or the
Systems or (b) the ability of Sellers to consummate the
transactions contemplated by this Agreement and (ii) with respect
to Purchaser, (a) the property, operations, condition (financial
or otherwise) or results of operations of Purchaser or (b) the
ability of
5
6
Purchaser to consummate the transactions contemplated by this
Agreement; provided, however, that Material Adverse Effect shall
not include any effect arising out of or resulting from (i) the
transactions contemplated by this Agreement, (ii) general
economic, financial, competitive or market conditions, (iii)
changes affecting the wireless or communications industry
generally or (iv) new or changed legislation, rules or
regulations.
1.49 "Non-Assumed Liabilities" has the meaning set forth in Section
3.2.
1.50 "Notice" has the meaning set forth in Section 12.4.
1.51 "Operating Site" has the meaning set forth in the definition of
Pre-Closing Environmental Matters.
1.52 "Outstanding" has the meaning set forth in Section 2.3.1.
1.53 "Permitted Lien" means those Liens set forth on Schedule 1.53.
1.54 "Person" shall mean any person or entity, whether an individual,
trustee, corporation, general partnership, limited partnership,
trust, unincorporated organization, business association, firm,
joint venture or Governmental Authority.
1.55 "Pre-Closing Environmental Matters" shall mean (a) the
production, use, generation, storage, treatment, recycling,
disposal, discharge, release or other handling or disposition of
any kind (collectively "Handling") at any time on or prior to the
Closing Date of any toxic, hazardous, or other regulated wastes,
substances, products, pollutants or materials of any kind
(including, without limitation, petroleum and petroleum products,
asbestos and radon) (collectively "Substances") either in, on or
under any real property or facility owned, leased or used at any
time by Sellers (or an Affiliate of Sellers) in connection with
the Systems (an "Operating Site"), including without limitation
the effects of such Handling of Substances on resources, Persons
or property within or outside the boundaries of any Operating
Site, (b) the presence as of the Closing Date of Substances in,
on or under any Operating Site regardless of how the Substances
came to rest in, on or under the Operating Site, (c) the failure
on or prior to the Closing Date of any Operating Site or any
operations of the Systems to be in compliance with any
Environmental Laws and (d) any other act, omission or condition
existing prior to the Closing Date that gives rise to liability
or potential liability under any Environmental Laws.
1.56 "Preliminary Order" shall mean an action by the FCC or other
applicable state regulatory authority consenting to or
authorizing the assignment of the FCC License to Purchaser, which
action has not yet become a Final Order.
1.57 "Prorations" has the meaning set forth in Section 2.3.2.
6
7
1.58 "PUC" has the meaning set forth in Section 4.1.1.
1.59 "Purchase Price" has the meaning set forth in Section 2.2.
1.60 "Purchaser" has the meaning set forth in the Preamble to this
Agreement.
1.61 "Purchaser's Closing Certificate" has the meaning set forth in
Section 8.1.
1.62 "Real Property" has the meaning given to such term in Section
6.6.
1.63 "Sale Transaction" has the meaning set forth in Section 4.1.7.
1.64 "Sellers" has the meaning set forth in the Preamble to this
Agreement.
1.65 "Sellers Closing Certificate" has the meaning set forth in
Section 9.1.
1.66 "Sellers Estimate" has the meaning set forth in Section 2.3.3.
1.67 "Substances" shall have the meaning set forth in the definition
of Pre-Closing Environmental Matters in Section 1.
1.68 "Systems" has the meaning set forth in the recitals to this
Agreement.
1.69 "Taxes" shall mean all taxes, charges, fees, levies or other
assessments, including without limitation, income, excise, use,
transfer, payroll, occupancy, property, sales, franchise,
unemployment and withholding taxes, imposed by the United States
or any state, county, local or foreign government or subdivision
or agency thereof.
1.70 "To the knowledge" or "knowledge" of a party (or similar phrases)
means actual knowledge of a fact, or constructive knowledge if a
reasonably prudent person in a like position would have known or
should have known, the fact.
2. PURCHASE OF ASSETS
2.1 Transfer of Assets. Subject to the terms and upon satisfaction of
the conditions contained in this Agreement, at the Closing, Sellers shall sell,
convey, transfer, assign and deliver to Purchaser all of Sellers' right, title
and interest in and to the Assets (other than the Excluded Assets), and
Purchaser shall purchase, acquire and accept from Sellers all of Sellers' right,
title and interest in and to the Assets, free and clear of all Liens other than
Permitted Liens.
2.2 Purchase Price. The purchase price for the Assets shall be
$__________ (the "Purchase Price"), as adjusted pursuant to this Article 2,
which shall be paid by Purchaser to Sellers at the Closing by wire transfer of
immediately available funds in U.S. dollars, to an account designated by
Sellers. Simultaneously with the execution and delivery of this Agreement,
Purchaser
7
8
will deposit $3,000,000 into escrow (the "Escrow Deposit") pursuant to an escrow
agreement in the form attached hereto as Exhibit 1 (the "Escrow Agreement") to
be held and applied pursuant to the terms of the Escrow Agreement. Upon the
Closing, (a) the amount of the Escrow Deposit (exclusive of any interest and
income thereon) shall be credited against the Purchase Price, and shall be
retained by Escrow Agent in accordance with the terms of the Escrow Agreement,
to secure Sellers' performance pursuant to Section 12.2. All interest and income
earned on the Escrow Deposit will be paid to Purchaser at Closing. The Escrow
Deposit will be held by an escrow agent to be mutually agreed upon by the
Parties and shall be held in an interest bearing escrow account for a period of
six (6) months following the Closing Date (the "Escrow Period"), unless earlier
released pursuant to the terms hereof or the Escrow Agreement. Under the terms
of the Escrow Agreement, the amount of the Escrow Deposit then held by the
Escrow Agent, together with all accrued interest thereon (the "Escrow Amount"),
shall be released to Sellers at the end of the Escrow Period.
2.3 Adjustments and Prorations.
2.3.1 The Purchase Price shall be increased by:
(a) any Adjusted Accounts Receivable of Sellers as of the
Closing Date. For purposes of this paragraph, "Adjusted Accounts
Receivable" shall equal the sum of the following:
(i) (x) 100% of all accounts receivable that are
less than 60 days outstanding from the date of billing
("Outstanding"), including all amounts not yet billed; plus (y)
50% of all accounts receivable that are more than 60 days
Outstanding, but less than 91 days Outstanding; and
(ii) with respect to accounts receivable generated
by customers of other Systems and payable by other carriers, 100%
of all accounts receivable outstanding on or prior to the Closing
Date.
(b) the book value of any unused Inventory transferred to
Purchaser plus $50 times the number of used handsets held in
Sellers' stock on the Closing Date.
2.3.2 All revenues and all expenses arising from the Business
prior to the Closing Date, including resale charges and other expenses payable
in respect to cellular telephone services, utility charges, personal property
Taxes and assessments levied against the Assets, property and equipment rentals,
sales and service charges, Taxes (except for Taxes arising from the transfer of
the Assets hereunder), and similar prepaid and deferred items (collectively, the
"Prorations"), shall be prorated between Sellers and Purchaser in accordance
with GAAP and the general principle that Sellers shall receive the benefit of
all revenues, and be responsible for all expenses, costs, obligations and
Liabilities, allocable to the Systems for the period prior to the Closing Date,
and Purchaser shall receive the benefit of all revenues, and be responsible for
all expenses, costs, obligations and Liabilities, allocable to the Systems after
the Closing Date.
8
9
2.3.3 Sellers shall prepare and submit to Purchaser, not later
than two (2) Business Days prior to the Closing Date, a written good faith
estimate of the adjustments and prorations set forth in Sections 2.3.1 and 2.3.2
(collectively, the "Adjustments") in accordance with this Section 2.3, along
with Sellers' estimate of the Purchase Price resulting from the Adjustments
("Sellers Estimate"). After delivery of Sellers Estimate and prior to Closing,
Purchaser and Sellers shall attempt to resolve any disputes between Sellers and
Purchaser with respect to Sellers Estimate.
2.3.4 Except as provided in Section 2.3.5, a final settlement of
all Adjustments or Prorations made under this Section, with payment being made
by the appropriate Party in cash, shall occur no later than ninety (90) days
after the Closing Date. Each party shall provide the other with any
documentation reasonably requested by such party to determine the
appropriateness of any Adjustment or Proration claimed by such Party.
2.3.5 In the event that the Parties cannot agree on the amount of
the final Adjustments or Prorations, the determination shall be made by a
mutually agreeable national accounting firm (the "Auditor"). The Auditor shall
make the determination based on GAAP in effect on the Closing Date. Either Party
may invoke the use of the Auditor by notifying the other Party in writing,
provided that neither Party may invoke the use of the Auditor to determine the
final Adjustments or Prorations earlier than ninety (90) days after the Closing
Date. In the event that either Party invokes the use of the Auditor, there shall
be a thirty (30) day period (the "Discovery Period") when the Parties may
request of and shall provide to each other in writing or computer format where
appropriate any documentation or records in the possession of the other Party
that is related to a claim or defense to be made to the Auditor. Fifteen (15)
Business Days after the expiration of the Discovery Period, the Parties shall
have the opportunity to present their claims and supporting documentation to the
Auditor. The Auditor shall be required to render a decision within fifteen (15)
Business Days after the Auditor is requested to render a determination under
this Section. The decision of the Auditor shall be binding on the Parties and
shall not be subject to any judicial challenge by either Party. Within five (5)
Business Days after the Auditor provides the determination to the Parties, the
final payments shall be made in accordance with that determination. The expenses
of the Auditor shall be paid by the Party, who based on the Auditor's resolution
of the issue or issues, is not the substantially prevailing Party.
3. ASSUMED LIABILITIES
3.1 Assumed Liabilities. On and after the Closing, Purchaser shall
assume and timely pay, discharge and perform all Liabilities arising out of or
relating to Purchaser's ownership of the Assets or operation of the Systems
after the Closing, including, without limitation all Liabilities attributable to
periods after the Closing under or with respect to the Licenses and Contracts
(collectively, the "Assumed Liabilities").
3.2 Excluded Liabilities. All Liabilities not expressly assumed by
Purchaser hereunder are collectively referred to herein as "Non-Assumed
Liabilities."
9
10
4. COVENANTS AND AGREEMENTS
4.1 Covenants of Sellers. Sellers covenant and agree from and after the
execution and delivery of this Agreement to and including the Closing Date as
follows:
4.1.1 Best Efforts. Each Seller shall use its reasonable best
efforts to cause the transactions contemplated by this Agreement to be
consummated in accordance with the terms hereof, and, without limiting the
generality of the foregoing, use its reasonable best efforts to obtain all
necessary Consents required in connection with this Agreement and the
transactions contemplated hereby, including, without limitation, the consent of
the FCC, and any required consent of any state public utilities commission
("PUC") and all other Governmental Authorities with lawful jurisdiction of
Sellers. Sellers shall make all filings with and give all notices to third
parties that may be necessary or reasonably required of Sellers in order to
consummate the transactions contemplated hereby. Notwithstanding any provision
contained in this Agreement to the contrary, Sellers shall not be required to
make any payments to Persons who are parties to the Contracts in order to obtain
their consents.
4.1.2 No Control. Notwithstanding any provision of this Agreement
to the contrary, pending the Closing, Sellers shall maintain actual (de facto)
and legal (de jure) control over the FCC Authorizations and the Systems.
Specifically, and without limitation, Sellers shall retain responsibility for
the operation of the Business and the Systems, pending the Closing, including,
without limitation, responsibility for the following matters: access to and use
of the facilities of and equipment owned by Sellers; control of the daily
operation of the Systems; creation and implementation of policy decisions;
employment and supervision of Employees; payment of financing obligations and
expenses incurred in the operation of the Systems prior to the Closing; receipt
and distribution of moneys and profits derived from the operation of the
Systems; and execution and approval of all contracts and applications prepared
and filed before the FCC, any PUC or any other Governmental Authority.
4.1.3 Access. Sellers shall give to Purchaser and its agents
reasonable access during normal business hours to all of Sellers' personnel,
premises, properties, assets, financial statements and records, books,
contracts, documents and commitments of or relating to the Systems that are in
Sellers' possession or control, and shall furnish Purchaser with all such
information concerning the affairs of the Systems as Purchaser reasonably may
request. This shall specifically include access to billing, customer service and
maintenance personnel and records.
4.1.4 Ordinary Course. Sellers shall operate the Systems and
maintain the Assets in the ordinary course of business consistent with past
practice, including maintaining appropriate insurance on the Assets. Each Seller
shall use its reasonable best efforts to keep its organization intact, preserve
and maintain the Assets and properties of the Systems, preserve the Business and
preserve the goodwill of suppliers, subscribers, Governmental Authorities and
others dealing with Sellers. Sellers' Books and Records shall be maintained in
accordance with GAAP, in the usual manner, on a basis consistent with prior
years.
10
11
4.1.5 Compliance with Laws. Sellers shall comply in all material
respects with all Laws, Licenses and Permits applicable to Sellers, their
properties or the conduct of the Business.
4.1.6 Contracts. Sellers shall use their reasonable best efforts
to (i) not default under, or breach any term or provision of, or suffer or
permit to exist any condition or event that, after notice or lapse of time, or
both, would constitute a default under, any material Contract of Sellers, (ii)
not cause or permit the termination, modification or amendment of any material
Contract of Sellers and (iii) not create, assume, consent to or suffer to exist
any Lien on any of its Assets (other than Permitted Liens), in each case other
than in the ordinary course of business.
4.1.7 No Solicitation. Except pursuant to this Agreement or in
the ordinary course of business, Sellers shall not (i) sell, transfer, lease,
assign or otherwise dispose of or distribute any of the Assets (a "Sale
Transaction"), (ii) knowingly solicit, encourage, entertain, negotiate or enter
into any transaction or agreement for a Sale Transaction, or (iii) provide any
non-public information about the transactions contemplated by this Agreement or
the Systems to any third party. Sellers shall promptly inform Purchaser of any
such proposal that they may receive, even if it is unsolicited.
4.2 Covenants of Purchaser. Purchaser covenants and agrees that from and
after the execution and delivery of this Agreement to and including the Closing
Date as follows:
4.2.1 Best Efforts. Purchaser shall use its reasonable best
efforts to cause the transactions contemplated by this Agreement to be
consummated in accordance with the terms hereof, and, without limiting the
generality of the foregoing, use its reasonable best efforts to obtain all
necessary Consents and other authorizations required in connection with this
Agreement and the transactions contemplated hereby, including, without
limitation, the consent of the FCC, and any required consent of any PUC and
other Governmental Authorities with lawful jurisdiction. Purchaser shall make
all filings with and give all notices to third parties that may be necessary or
reasonably required in order to consummate the transactions contemplated hereby.
4.2.2 No Control. Notwithstanding any provision of this Agreement
to the contrary, pending the Closing, Purchaser shall do nothing to interfere
with Sellers actual (de facto) and legal (de jure) control over the Systems.
Specifically, and without limitation, Purchaser acknowledges and agrees that the
responsibility for the operation of Sellers and the Systems shall, pending the
Closing, reside with Sellers, including, without limitation, responsibility for
the following matters: access to and use of the facilities of and equipment
owned by Sellers; control of the daily operation of the Systems; creation and
implementation of policy decisions; employment and supervision of Employees;
payment of financing obligations and expenses incurred in the operation of the
Systems prior to the Closing; receipt and distribution of moneys and profits
derived from the operation of the Systems; and execution and approval of all
contracts and applications prepared and filed before the FCC, any PUC or any
other Governmental Authority.
11
12
4.2.3 No Inconsistent Agreements. Purchaser shall not purchase or
agree to purchase any cellular, personal communications services or other radio
spectrum or enter into any other agreement or transaction that would prohibit or
materially interfere with or materially delay the transactions contemplated
hereby.
5. JOINT COVENANTS
5.1 Governmental Authority. The Parties shall consult with one another
as to the approach to be taken with any Governmental Authority with respect to
obtaining any necessary Consent of such Governmental Authority to the
transactions contemplated hereby, and each Party shall keep the other Party
reasonably informed as to the status of any communications by it with any
Governmental Authority. No Party hereto shall make any material commitments
relating to any Consent of any Governmental Authority that would alter in any
material way any application or request filed jointly by the Parties with
respect to the transactions contemplated hereby without the other Party's prior
written consent.
5.2 Joint Filings. Sellers and Purchaser covenant and agree from and
after the execution and delivery of this Agreement to and including the Closing
Date that the Parties will cooperate in the preparation and joint filing with
the FCC and under the HSR Act, and, if necessary, with any applicable PUC or
other Governmental Authority, as soon as practicable, following the date hereof
(but no later than ten (10) Business Days following the date hereof), of
applications requesting the approval of the assignment of the Systems to
Purchaser. Each of the Parties hereto shall diligently take or cooperate in the
taking of all steps which are necessary or appropriate to expedite the
prosecution and favorable consideration of such applications. The Parties
covenant and agree to undertake all actions and file such materials as shall be
necessary or required to obtain any necessary waivers or other authority in
connection with the foregoing applications. If any suit is threatened or
instituted challenging the transactions contemplated by this Agreement as
violating any Law (including the antitrust laws), Purchaser will take such
action (including opposing by all appropriate legal means any claim raised in
any such suit and, if necessary, agreeing to hold separate or to divest any of
the businesses, product lines or assets of Purchaser or any of its Affiliates
controlled by it or of any of its subsidiaries or affiliates) as may be required
by the applicable Governmental Authority in order to resolve such objections as
such Governmental Authority may have to such transactions under such Law. The
entry by a court, in any suit brought by a private party or Governmental
Authority challenging the transactions contemplated hereby as violating any
antitrust law, of an order or decree permitting the transactions contemplated
hereby but requiring that any of the businesses or assets of Purchaser or
Affiliates be divested or held separate by Purchaser or its Affiliates, or that
would otherwise limit Purchaser's freedom of action with respect to, or its
ability to retain, the Assets or any portion thereof or any of Purchaser's or
its subsidiaries' or Affiliates' other assets or businesses, will not be deemed
a failure to satisfy the condition specified in Section 9.6.
5.3 Notice of Breach. Purchaser and Sellers shall give prompt notice to
one another of (i) the occurrence or nonoccurrence of any event the occurrence
or nonoccurrence of which has caused or would be likely to cause any
representation or warranty contained in this
12
13
Agreement to be untrue or inaccurate in any material respect at or prior to the
Closing Date and (ii) any material failure of Purchaser or Sellers, as the case
may be, to comply with or satisfy in any material respect any covenant,
condition or agreement to be complied with or satisfied by it hereunder;
provided, however, that the delivery of any notice pursuant to this Section 5.3
shall not cure such breach or non-compliance or limit or otherwise affect the
remedies available hereunder to the Party receiving such notice.
5.4 Bulk Sales. Sellers and Purchaser hereby waive compliance by the
other with bulk sales Legal Requirements applicable to the transactions
contemplated hereby.
5.5 Use of Name and Logos. The parties shall cooperate in the prompt
removal after Closing of the Intellectual Property of Sellers and Centennial and
their respective Affiliates to the extent incorporated in or on the Assets.
Purchaser shall have no right to use the name "Centennial" or any derivatives
thereof, other than for a brief transition period (not to exceed 90 days) after
Closing, provided that Purchaser use commercially reasonable efforts to complete
its transition in regards to the use of the Centennial name as soon as possible
after Closing.
5.6 Billing Transition Services. For a period of 90 days after Closing
(or such other period of time as agreed upon by the parties), Sellers agree to
provide Purchaser with transition billing services for the System in accordance
with the billing services currently used by the System, at a cost to Purchaser
of Centennial's fully-loaded cost plus 6% and such other terms to be agreed upon
by the parties prior to Closing.
6. REPRESENTATIONS AND WARRANTIES OF SELLERS
Each Seller hereby represents and warrants to Purchaser as follows:
6.1 Organization and Standing. Each Seller is a corporation or limited
liability company, duly organized and validly existing under the laws of its
state of formation and has full power and authority to enter into and perform
this Agreement. Each Seller is authorized to own, lease and operate the Systems
and the Assets owned by it and to carry on the Business associated with such
Assets as now being conducted.
6.2 Authorization and Binding Obligations. Sellers have all requisite
power to execute, deliver and perform this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery and performance of
this Agreement by Sellers have been duly and validly authorized by all necessary
corporate action. This Agreement has been duly executed and delivered by Sellers
and constitutes a valid and binding agreement of Sellers enforceable against
each in accordance with its terms, except as its enforceability may be limited
by bankruptcy, insolvency, moratorium or other Laws relating to or affecting
creditors' rights generally and the exercise of judicial discretion in
accordance with general equitable principles.
6.3 No Contravention. Except as otherwise contemplated hereunder, the
execution, delivery and performance of this Agreement, the consummation of the
transactions contemplated
13
14
hereby and the compliance with the provisions hereof by Sellers will not violate
any provisions of the organizational documents of Sellers, result in the breach
of, constitute a default under or result in the creation of any Lien upon any of
the Assets under the provisions of, any agreement or other instrument to which
any Seller is a party or by which the Assets are bound or affected or violate
any Laws or Judgments applicable to Sellers.
6.4 Compliance with Law. Sellers are in compliance with all applicable
Laws, Licenses and Permits of all applicable jurisdictions and Governmental
Authorities relating to the Systems, the Business and the Assets, except where
the failure to be in compliance would not have a Material Adverse Effect.
6.5 Title to Assets. Sellers have good and marketable title to or a
valid leasehold interest in, or otherwise have the right to use, all material
Assets used in the Business, and the Assets include all assets reasonably
necessary to conduct the Business and operations of the Systems as presently
conducted, except for Permitted Liens.
6.6 Real Property. Schedule 6.6 sets forth an accurate and complete list
of all Real Property (collectively, "Real Property") owned or leased by Sellers.
All Real Property is in condition and repair adequate for its current use by the
Business, and is suitable for use in the Business as presently conducted. Each
Real Property lease is in full force and effect and Sellers have complied in all
material respects with all commitments and obligations on its part to be
performed or observed under each Real Property lease. To Sellers' knowledge, no
event or condition has occurred or presently exists which constitutes a material
default by Sellers under any of the Real Property Leases.
6.7 Authorizations. All material Authorizations are validly issued in
the name of Sellers, are in full force and effect, are unimpaired by any acts or
omissions of Sellers (or any of its Representatives) and are free and clear of
any restrictions that might limit the full operation of the Systems. Sellers
have complied in all material respects with all the terms of the Authorizations
and there are no pending modifications, revocations or amendments to the
Authorizations which would have a Material Adverse Effect.
6.8 Contracts. Schedule 6.8 is a list of all material Contracts other
than Customer Agreements. Each Contract set forth on Schedule 6.8 is in full
force and effect. Except as set forth on Schedule 6.8, no material Contract
requires the Consent of any other contracting party to the transactions
contemplated by this Agreement. No Seller is (and, to Sellers' knowledge, no
other party is) in material breach or violation of, or default under any of the
material Contracts.
6.9 Litigation. Except as set forth on Schedule 6.9, there is no action
or Judgment outstanding or any claim suit, litigation, proceeding or labor
dispute (other than rule-making proceedings affecting the cellular telephone
industry generally) ("Action"), pending or, to the knowledge of Sellers,
threatened or anticipated, relating to or affecting Sellers, the Assets, the
Business or the transactions contemplated by this Agreement, that, individually
or in the aggregate, could reasonably be expected to have a Material Adverse
Effect.
14
15
6.10 Complaints. To Sellers' knowledge, there is no FCC notice of
apparent liability or order of forfeiture pending or outstanding against Sellers
or the Systems and no investigation with respect to any violation or alleged
violation of any FCC rule, regulation or policy by Sellers. To Sellers'
knowledge, there is no complaint before the FCC as a result of which an
investigation, notice of apparent liability or order of forfeiture may be issued
from the FCC relating to the Systems.
6.11 Taxes. Sellers have filed, or caused to be filed, with the
appropriate Governmental Authority, all required Tax returns, and Sellers have
paid, caused to be paid or accrued all Taxes shown to be due and payable or
claimed to be due and payable thereon, except where the failure to file, pay or
accrue could not reasonably be expected to have a Material Adverse Effect. To
the knowledge of Sellers, it has no liability material in amount, contingent or
otherwise, for any Taxes due and owing. Sellers have received no notice of and
are otherwise not aware of any audit or examination of any deficiencies,
adjustments or changes in assessment with respect to any Taxes of Sellers.
6.12 No Other Agreements to Sell the Systems or the Assets. Sellers have
no legal obligation, whether absolute or contingent, to any Person other than
Purchaser, to sell any of the Assets (other than sales of inventory in the
ordinary course of business) or to effect any merger, consolidation or other
reorganization of Sellers or to enter into any agreement with respect thereto.
6.13 Environmental Matters. Except as would not have a Material Adverse
Effect, there is no handling of any Substances at, on or from any Operating
Site; and there is (i) no presence of Substances on or under any Operating Site
and (ii) no underground tanks, PCBs or asbestos-containing materials located on
or under any Operating Site. To Sellers' knowledge, neither Sellers nor any
Person acting on behalf of Sellers has released any other Person from any claims
Sellers might have, or have had, for any matter relating to the presence or
Handling of Substances at any Operating Site. No Liens have been, or are,
imposed on any of the Assets under any Environmental Laws. Sellers have obtained
all permits, licenses, registrations and other approvals and have made all
reports and notifications required under any Environmental Laws in connection
with the Assets, and are in compliance with all applicable Environmental Laws,
except where the failure to obtain such permits, licenses, registrations and
approvals and to be in compliance could not reasonably be expected to have a
Material Adverse Effect. Sellers have not received any notice of or, to the
knowledge of Sellers, are the subject of any Action by any person alleging
liability under or non-compliance with any Environmental Law.
6.14 Brokers. Except for Xxxxxx Capital Corporation, Sellers have not
engaged any agent, broker or other Person acting pursuant to the express or
implied authority of Sellers which is or may be entitled to a commission or
broker or finder's fee in connection with the transactions contemplated by this
Agreement or otherwise with respect to the sale of the Assets or the Business.
Sellers shall not enter into any arrangement or understanding with any Person
that will result in the obligation of Purchaser to pay any finder's fee,
brokerage commission or similar payment in connection with the transactions
contemplated hereby.
15
16
6.15 Material Adverse Change. Since May 31, 1999, Sellers have not
experienced a Material Adverse Effect.
6.16 Financial Statements. Sellers have previously delivered to
Purchaser an unaudited balance sheet and income statement for the fiscal year
ended May 31, 2000 (collectively, the "Financial Statements"). The Financial
Statements were prepared in accordance with GAAP (except for the absence of
footnotes and subject to year end adjustments) applied on a consistent basis
throughout the periods covered except as otherwise expressly stated therein and
present fairly in all material respects the financial position of the Systems at
such dates and the results of operations for the periods then ended.
6.17 Labor. On the date hereof, Sellers' currently employ those Persons
in those positions and at those salaries as set forth on Schedule 4.2.3. No
Employee is bound by any oral or written collective bargaining agreement. There
are not pending any unfair labor practice charges against any Seller. Except as
set forth on Schedule 6.17, no Employee is party to any employment agreement
which cannot be terminated at will by such Seller without liability. There are
no pending or, to Sellers' knowledge, threatened unfair labor practice charges
or discrimination complaints relating to race, color, national origin, sex,
religion, age, marital status, or handicap against any Seller that if adversely
determined would have a Material Adverse Effect. There are no existing or, to
Sellers' knowledge, threatened, labor strikes, disputes, grievances or other
labor controversies affecting the System.
6.18 Disclosure. Except for the representations and warranties contained
in this Section 6, neither Sellers nor any other Person makes any express or
implied representation or warranty on behalf of Sellers.
6.19 Miscellaneous. No representation or warranty made by Sellers in
this Agreement contains any untrue statement of a material fact or knowingly
omits or fails to state any material fact or information necessary to make such
representation or warranty not materially misleading.
7. REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to Sellers as follows:
7.1 Organization and Standing. Purchaser is a limited liability company
and Western is a corporation, in each case, duly organized, validly existing and
in good standing under the laws of the state of Delaware and Washington,
respectively. Purchaser and Western each have full corporate power and authority
to enter into and perform this Agreement, and are duly qualified to do business
and are in good standing as a foreign corporation in every jurisdiction in which
the nature of the business conducted by it requires such qualification, except
where the failure to so qualify would not have a Material Adverse Effect on
Purchaser or Western.
7.2 Authorization and Binding Obligations. Purchaser and Western have
all requisite power to execute, deliver, and perform this Agreement and to
consummate the transactions
16
17
contemplated hereby. The execution, delivery and performance of this Agreement
by Purchaser and Western have been duly and validly authorized by all necessary
corporate action. This Agreement has been duly executed and delivered by
Purchaser and Western and constitutes a valid and binding agreement of Purchaser
and Western, enforceable against Purchaser and Western in accordance with its
terms, except as its enforceability may be limited by bankruptcy, insolvency,
moratorium or other Laws relating to or affecting creditors' rights generally
and the exercise of judicial discretion in accordance with general equitable
principles.
7.3 No Contravention. Except as otherwise contemplated hereunder, the
execution, delivery and performance of this Agreement, the consummation of the
transactions contemplated hereby and the compliance with the provisions hereof
by Purchaser and Western will not violate any provisions of the organizational
documents of Purchaser or Western, or violate any Laws or Judgments applicable
to Purchaser or Western.
7.4 Compliance with Law. There are no violations by Purchaser or Western
of any applicable Laws, Licenses and Permits of any applicable jurisdictions and
Governmental Authorities relating to any business of Purchaser or Western that
could reasonably be expected to have a Material Adverse Effect on Purchaser or
Western.
7.5 Brokers. Neither Purchaser nor Western has engaged any agent, broker
or other Person acting pursuant to the express or implied authority of Purchaser
or Western 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 transactions contemplated herein. Neither Purchaser nor
Western will enter into any arrangement or understanding with any Person that
will result in the obligation of Sellers to pay any finder's fee, brokerage
commission or similar payment in connection with the transactions contemplated
hereby.
7.6 Qualifications. Neither Purchaser nor Western know of any facts that
would, at the Closing Date, under present Law, disqualify Purchaser with respect
to the assignment or transfer of the FCC Authorizations. Neither Purchaser nor
Western has engaged in any course of conduct that would impair the ability of
Purchaser or any Affiliate thereof to be the holder of the FCC License.
7.7 Availability of Funds. Purchaser and Western have available the
necessary funds to enable it to pay the Purchase Price and to consummate the
transactions contemplated hereby.
7.8 Disclosure. Except for the representations and warranties contained
in this Section 7, neither Purchaser, Western nor any other Person makes any
express or implied representation or warranty on behalf of Purchaser or Western.
7.9 Miscellaneous. No representation or warranty made by Purchaser or
Western in this Agreement contains any untrue statement of a material fact or
knowingly omits or fails to state, any material fact or information necessary to
make such representation or warranty not materially misleading.
17
18
8. CONDITIONS PRECEDENT TO OBLIGATION OF SELLERS TO CLOSE
The obligations of Sellers to sell the Assets and to otherwise
consummate the transactions contemplated by this Agreement are subject to the
satisfaction or waiver, on or prior to the Closing Date, of each of the
following conditions:
8.1 Representations, Warranties and Covenants. All representations and
warranties of Purchaser contained in this Agreement shall be true and correct in
all material respects at and as of the Closing Date as if such representations
and warranties were made at and as of the Closing Date, and Purchaser shall have
performed in all material respects all agreements and covenants required hereby
to be performed by it prior to or at the Closing Date, and Sellers shall have
received a certificate signed by a senior officer of Purchaser attesting to the
foregoing effect ("Purchaser's Closing Certificate").
8.2 Closing Documents. Sellers shall have received from Purchaser the
documents and other items to be delivered to Sellers by Purchaser pursuant to
Section 10.2 of this Agreement.
8.3 Receipt of Payment. Sellers, or the Escrow Agent, as applicable,
shall have received payment of the Purchase Price in accordance with Article 2
hereof.
8.4 Receipt of FCC Consent and HSR. Sellers shall have received
notification from the FCC of the FCC Consent. Any waiting period required by the
HSR Act shall have lapsed or been terminated.
8.5 Opinion of Purchaser's Corporate Counsel. Purchaser shall have
delivered to Sellers an opinion or opinions of counsel for Purchaser, dated the
Closing Date, reasonably satisfactory in form and substance to Sellers.
8.6 No Injunction. No Law or Judgment shall have been promulgated,
enacted, entered or enforced, and no other action shall have been taken, by any
Governmental Authority that in any of the foregoing cases has the effect of
making illegal or directly or indirectly restraining, prohibiting or restricting
the consummation of the transactions contemplated hereby.
9. CONDITIONS PRECEDENT TO OBLIGATION OF PURCHASER TO CLOSE
The obligations of Purchaser to purchase the Assets and to otherwise
consummate the transactions contemplated by this Agreement are subject to the
satisfaction or waiver, on or prior to the Closing Date, of each of the
following conditions:
9.1 Representations, Warranties and Covenants. All representations and
warranties of Sellers contained in this Agreement shall be true and correct in
all material respects at and as of the Closing Date as if such representations
and warranties were made at and as of the Closing Date, and Sellers shall have
performed in all material respects all agreements and covenants
18
19
required hereby to be performed by Sellers prior to or at the Closing Date, and
Purchaser shall have received a certificate signed by a senior officer of
Sellers to the foregoing effect ("Sellers Closing Certificate").
9.2 Closing Documents. Purchaser shall have received from Sellers the
documents and other items to be delivered by Sellers pursuant to Section 10.1 of
this Agreement.
9.3 FCC Consent and HSR. Purchaser shall have received notification from
the FCC of the FCC Consent and such FCC Consent shall have become a Final Order.
Any waiting period required by the HSR Act shall have lapsed or been terminated.
9.4 Opinion of Sellers Corporate Counsel. Sellers shall have delivered
to Purchaser an opinion of counsel for Sellers, dated the Closing Date,
reasonably satisfactory in form and substance to Purchaser.
9.5 Opinion of Sellers FCC and PUC Counsel. Sellers shall have delivered
to Purchaser an opinion of FCC counsel for Sellers dated the Closing Date,
reasonably satisfactory in form and substance to Purchaser.
9.6 No Injunction. No Law or Judgment shall have been promulgated,
enacted, entered or enforced, and no other action shall have been taken, by any
Governmental Authority that in any of the foregoing cases has the effect of
making illegal or directly or indirectly restraining, prohibiting or restricting
the consummation of the transactions contemplated hereby.
10. THE CLOSING
On the Closing Date and at the Closing Place:
10.1 Deliveries by Sellers to Purchaser. Sellers shall deliver to
Purchaser:
10.1.1 One or more bills of sale transferring to Purchaser all of
the Assets in form and substance reasonably satisfactory to Purchaser.
10.1.2 The opinions of Sellers counsel referenced in Sections 9.4
and 9.5 hereof;
10.1.3 A copy of the resolutions of Sellers approving the
transactions contemplated by this Agreement;
10.1.4 Sellers Closing Certificate; and
10.1.5 Such other documents reasonably requested by Purchaser to
give effect to the transactions contemplated by this Agreement.
10.2 Deliveries by Purchaser to Sellers. Purchaser shall deliver to
Sellers:
19
20
10.2.1 One or more agreements whereby Purchaser assumes and
agrees to perform the Assumed Liabilities in form and substance reasonably
satisfactory to Sellers;
10.2.2 The opinion of Purchaser's counsel referenced in Sections
8.5 hereof;
10.2.3 A copy of the resolutions of Purchaser approving the
transactions contemplated by this Agreement;
10.2.4 Purchaser's Closing Certificate;
10.2.5 Payment of the Purchase Price, except for the Escrow
Amount, which shall be delivered as provided for in Section 2.2; and
10.2.6 Such other documents reasonably requested by Sellers to
give effect to the transactions contemplated by this Agreement.
11. ACTIONS BY THE PARTIES AFTER THE CLOSING
On and after the Closing Date, the Parties will take all appropriate and
commercially reasonable action and execute all documents, instruments or
conveyances of any kind that may be reasonably necessary or advisable to carry
out any of the provisions hereof, including without limitation, putting
Purchaser in possession and operating control of the Assets and the Systems.
12. INDEMNIFICATION
12.1 Survival. The representations, warranties, covenants and agreements
of the Parties contained in this Agreement (or in any document delivered in
connection herewith) shall be deemed to have been made on the date of this
Agreement and on the Closing Date, shall be deemed to be material and to have
been relied upon by the Parties notwithstanding any investigation made by the
Parties, shall survive the Closing Date and shall remain operative and in full
force and effect for a period of six (6) months following the Closing Date,
except for representations and warranties set forth in Sections 6.2, 6.11, 6.13
and 7.2 which shall survive until the applicable statute of limitations (the
applicable period of such survival being the "Indemnification Period").
12.2 Sellers' and Centennial's Indemnity. During the Indemnification
Period (or thereafter, solely with respect to any claim for indemnification for
which Notice has been given prior to the expiration of the Indemnification
Period), Sellers and Centennial shall indemnify and hold harmless Purchaser, its
Affiliates and its representatives from and against any and all demands, losses,
Liabilities, Actions or causes of action, assessments, actual damages (but
excluding incidental or consequential damages), fines, Taxes, penalties,
reasonable costs and expenses (including, without limitation, interest,
reasonable expenses of investigation, reasonable fees and disbursements of
counsel, accountants and other experts) (collectively "Losses")
20
21
incurred or suffered by Purchaser, its Affiliates or its representatives,
arising out of, resulting from or relating to:
(a) Any breach of any of the representations or warranties
made by Sellers in this Agreement;
(b) Any failure by Sellers to perform any of its covenants
or agreements contained in this Agreement; or
(c) the Non-Assumed Liabilities;
provided, however, that no such indemnity shall be available to Purchaser for
Losses that relate to any circumstance, act or omission constituting a breach of
any representation or warranty by Sellers or failure of Sellers to comply with
any of their covenants or agreements hereunder if Purchaser had knowledge of
such circumstance, act, omission or failure at Closing, in which event Sellers
have no obligation with respect thereto.
12.3 Purchaser's Indemnity. During the Indemnification Period (or
thereafter solely with respect to any claim for which indemnification has been
made prior to expiration of the Indemnification Period), Purchaser shall
indemnify and hold harmless Sellers, its Affiliates and its representatives from
and against any and all Losses incurred or suffered by Sellers, its Affiliates
or its representatives, arising out of, resulting from or relating to:
(a) Any breach of any of the representations or warranties
made by Purchaser in this Agreement;
(b) Any failure by Purchaser to perform any of its
covenants or agreements contained in this Agreement; or
(c) The Assumed Liabilities and any Liabilities arising
from Purchaser's ownership and control of the Assets, the Business and
the Systems after the Closing Date;
provided, however that no such indemnity shall be available to Sellers for
Losses that relate to any circumstance, act or omission constituting a breach of
any representation or warranty by Purchaser or failure of Purchaser to comply
with any of their covenants or agreements hereunder if Sellers had knowledge of
such circumstance, act, omission or failure at Closing, in which event Purchaser
have no obligation with respect thereto.
Notwithstanding any provision contained in this Agreement to the
contrary, Sellers, Centennial or Purchaser shall not be liable under Section
12.2 or 12.3, respectively, until, and thereafter only to the extent, the
aggregate amount of its respective indemnification obligations pursuant to this
Section 12 exceeds on an aggregate basis $750,000, and then in such case Sellers
and Purchaser, as the case may be, will be liable only for the excess over
$750,000 up to the amount stated in the next succeeding sentence.
Notwithstanding anything contained in this
21
22
Agreement to the contrary, the maximum aggregate liability of Sellers under
Section 12.2 shall be $12,500,000 and the maximum aggregate liability of
Purchaser under Section 12.3 shall be $12,500,000.
12.4 Procedure. In the event that any Party hereto shall sustain or
incur any Losses in respect of which indemnification may be sought by such party
pursuant to this Article 12, the party seeking such indemnification (the
"Indemnitee") shall assert a claim for indemnification by giving prompt written
notice thereof (the "Notice") which shall describe in reasonable detail the
facts and circumstances upon which the asserted claim for indemnification is
based, along with a copy of the claim or complaint, to the Party providing
indemnification (the "Indemnitor"). For purposes of this paragraph, any Notice
that is sent within fifteen (15) days of the date upon which the Indemnitee
actually learned of such Loss shall be deemed to have been "prompt notice;"
provided that failure of the Indemnitee to give the Indemnitor prompt notice as
provided herein shall not relieve the Indemnitor of any of its obligations
hereunder, except to the extent that the Indemnitor is materially prejudiced by
such failure.
12.4.1 Upon the receipt of such Notice, the Indemnitor shall have
the right to undertake (at its own expense), by counsel or
representatives of its own choosing, the good faith defense, compromise
or settlement to be undertaken on behalf of the Indemnitee and shall
keep the Indemnitee reasonably informed with respect thereto, provided
that the Indemnitor unconditionally agrees in writing to assume, as
against the Indemnitee, all Losses relating to the Notice. Assumption of
such Losses shall not be deemed an admission of liability on the part of
the Indemnitor as against any such third party. If the Indemnitor elects
to undertake such defense by its own counsel or representatives, the
Indemnitor shall give notice to the Indemnitee within thirty (30) days
of its receipt of the Notice. Notwithstanding the foregoing, the
Indemnitor may not assume or control the defense if the named parties to
the action giving rise to the Notice (including any impleaded parties)
include both the Indemnitor and the Indemnitee and representation of
both parties by the same counsel would be inappropriate (based on a
written opinion of outside counsel) due to actual or potential differing
interests between them, in which case the Indemnitee shall have the
right to defend the action and to employ counsel reasonably approved by
the Indemnitor, and, to the extent the matter is determined to be
subject to indemnification hereunder, the Indemnitor shall reimburse the
Indemnitee for all reasonable costs associated with such defense.
12.4.2 The Indemnitee shall cooperate with the Indemnitor in such
defense and provide the Indemnitor with all information and assistance
reasonably necessary to permit the Indemnitor to settle and/or defend
any such claim. Except as otherwise provided in the last sentence of
Section 12.4.1, the Indemnitee may retain counsel (at the Indemnitee's
expense) to monitor or participate in the defense of such claim, but the
Indemnitor shall be entitled to control the defense, unless the
Indemnitee unconditionally agrees in writing to relieve the Indemnitor
from liability with respect to the particular matter. The Indemnitor
shall have the right in good faith to settle or compromise any such
claim, provided that at least ten (10) days prior notice of such
settlement or compromise
22
23
is given to the Indemnified Party. Notwithstanding the foregoing, in
connection with any such settlement or compromise negotiated by the
Indemnitor, no Indemnitee shall be required by an Indemnitor to (i)
enter into any settlement that does not include as an unconditional term
thereof the delivery by the claimant or plaintiff to the Indemnitee of a
release from all liability in respect of such claim or litigation, or
(ii) enter into any settlement that attributes by its terms any
non-indemnified liability to the Indemnitee.
12.4.3 If an Indemnitor fails, within thirty (30) days after the
date of the Notice to give notice to the Indemnitee of said Indemnitor's
election to assume the defense thereof, the Indemnitor shall be bound by
any determination made in such action or any compromise or settlement
thereof effected by the Indemnitee and shall reimburse the Indemnitee
for all Losses (including reasonable attorney's fees) incurred by the
Indemnitee; provided, however, that the Indemnitee shall keep the
Indemnitor advised on a timely basis of significant developments with
respect to such defense and permit the Indemnitor to participate, at its
own election and expense, at any time, in the defense thereof.
12.5 Indemnification Payments in Cash; Escrow Amount. All payments in
respect of any indemnification obligation shall be made in cash by wire transfer
of immediately available funds. The Escrow Amount shall be used to satisfy the
indemnification obligations, if any, of Sellers prior to any other funds being
required of Sellers to satisfy their indemnification obligations pursuant to
this Section 12.
12.6 Investigations; Waivers. The survival periods and rights to
indemnification provided for in this Article 12 shall remain in effect
notwithstanding any investigation at any time by or on behalf of any Party or
any waiver by any Party of any condition to such Party's obligations to
consummate the transactions contemplated hereby.
13. DEFAULT AND REMEDIES; RISK OF LOSS
13.1 Opportunity to Cure. If any Party believes another to be in default
hereunder, such Party shall provide the other with prompt written notice
specifying in reasonable detail the nature of such default in which case such
party shall have 30 days to cure such default.
13.2 Remedies. The Parties hereto shall have the right to pursue any
remedy that each may have at law or in equity. Without limiting the foregoing,
the Parties agree that irreparable damage would occur in the event that any of
the provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
Parties shall be entitled to an injunction or injunctions to prevent breaches of
this Agreement and to enforce specifically the terms and provisions hereof in
any court of the United States or any State having jurisdiction, this being in
addition to any other remedy to which they are entitled at law or in equity.
Each Party agrees that it will not assert, as a defense against a claim for
specific performance, that the Party seeking specific performance has an
adequate remedy at law.
23
24
13.3 Risk of Loss. The risk of any loss or damage to the Assets
resulting from fire, theft or any other casualty (except reasonable wear and
tear) shall be borne by Sellers at all times prior to the Closing. In the event
that any such loss or damage shall be sufficiently substantial so as to cause
any representation or warranty of Sellers not to be true and correct in all
material respects at the Closing Date, Sellers shall immediately notify
Purchaser in writing of the circumstances, and Purchaser, at any time within ten
days after receipt of such notice, may elect by written notice to Sellers either
to (a) waive such defect and proceed toward consummation of the transactions
contemplated by this Agreement in accordance with the terms hereof or (b)
terminate this Agreement. If Purchaser elects to so terminate this Agreement,
Purchaser and Sellers shall stand fully released and discharged of any and all
obligations hereunder.
14. TERMINATION
This Agreement may be terminated and the transactions contemplated
hereby abandoned at any time prior to the Closing Date, by written notice
promptly given to the other party hereto:
(i) by mutual consent of Sellers and Purchaser;
(ii) by Purchaser pursuant to Section 13.3; and
(iii) by Sellers if, at any time on or after the date 30 days
after the satisfaction of all conditions to Closing set forth in Section
9 (other than the conditions to be satisfied by deliveries to be made
pursuant to Section 10.1), the Purchaser shall be unable or unwilling to
consummate the Closing.
Neither Party may terminate this Agreement pursuant to this Section if such
Party is in material default hereunder. Nothing contained in this Section 14
shall relieve any Party hereto from liability for breach of this Agreement prior
to termination.
In the event this Agreement is terminated in accordance with the terms of
clauses (i) or (ii) of this Section 14, then the Parties shall promptly send a
notice to the Escrow Agent instructing the Escrow Agent to transfer the Escrow
Deposit, together with all interest accrued thereon, to Purchaser in accordance
with such notice. In the event this Agreement is terminated in accordance with
the terms of clause (iii) of this Section 14, then the Parties shall promptly
send a notice to the Escrow Agent instructing the Escrow Agent to transfer the
Escrow Deposit, together with all interest accrued thereon, to Sellers in
accordance with the terms of such notice. The disbursement of the Escrow Deposit
to any Party shall not preclude such Party from exercising any other rights or
remedies provided for in this Agreement or at law or equity in the event of a
breach by the other Party of its obligations to complete the Closing under this
Agreement.
24
25
15. MISCELLANEOUS
15.1 Assignment. Neither this Agreement nor any of the rights or
obligations hereunder may be assigned by Sellers or Purchaser without the prior
written consent of the other Party hereto. Subject to the foregoing, this
Agreement shall be binding upon and inure to the benefit of the Parties hereto
and their respective successors and assigns, and no other person shall have any
right, benefit or obligation hereunder.
15.2 Notices; Transfer of Funds. Unless otherwise provided herein, any
notice, request, instruction or other document to be given hereunder by any
Party shall be in writing and delivered in person or by courier, telegraphed or
by facsimile transmission or mailed by registered or certified mail, postage
prepaid, return receipt requested as follows:
If to Sellers:
c/o Centennial Communications Corp.
0000 Xxxxxx Xxxxxxx
Xxxxxxx, XX 00000
Attn: Chief Executive Officer and Office of the General Counsel
Tel: 000-000-0000
Fax: 000-000-0000
If to Purchaser or Western:
Western Wireless Corporation
0000 000xx Xxxxxx XX, #000
Xxxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxx
Tel: 000-000-0000
Fax: 000-000-0000
or to such other place and with such other copies as either Party may designate
as to itself by written notice to the others. All such notices and
communications shall be deemed to have been duly given at the time delivered by
hand, if personally delivered; five (5) Business Days after being deposited in
the mail, first class postage prepaid, return receipt requested, if mailed; when
receipt confirmed (or if receipt is confirmed after normal business hours, as of
the next Business Day), if sent by facsimile; and the next Business Day after
timely delivery to the courier, if sent by an over-night air courier service
guaranteeing next day delivery.
15.3 Allocation of Purchase Price. The Purchase Price shall be allocated
in accordance with a schedule to be prepared by the parties on or before the
Closing Date, and Purchaser and Sellers agree to cooperate reasonably in the
preparation of such allocation. Each of the Parties agrees that (i) such
allocation represents the fair market value of the Assets and shall be binding
upon it, (ii) no filings made by it with any taxing or other authority shall
reflect an allocation
25
26
other than in the manner agreed upon and (iii) it shall timely make all filings
required by any taxing authority, including, without limitation, the filing of
Internal Revenue Service Form 8594.
15.4 Choice of Law. This Agreement shall be construed, interpreted and
the rights of the Parties determined in accordance with the laws of the State of
New York, without giving effect to the principles of conflicts of law of such
state.
15.5 Entire Agreement; Amendments and Waivers. Except as provided in any
confidentiality or non-disclosure agreement executed by the Parties or their
Affiliates prior to the date hereof, this Agreement, together with all Exhibits
and Schedules hereto, constitutes the entire agreement among the Parties
pertaining to the subject matter hereof and supersedes all prior agreements,
understandings, negotiations and discussions, whether oral or written, of the
Parties with respect to the matters set forth herein. No supplement,
modification or waiver of this Agreement shall be binding unless executed in
writing by the Party to be bound thereby. No waiver of any of the provisions of
this Agreement shall be deemed or shall constitute a waiver of any other
provision hereof (whether or not similar), nor shall such waiver constitute a
continuing waiver unless otherwise expressly provided.
15.6 Counterparts. This Agreement may be executed in one or more
counterparts each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
15.7 Invalidity. In the event that any one or more of the provisions
contained in this Agreement or in any other instrument referred to herein,
shall, for any reason, be held to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect any
other provision of this Agreement or any other such instrument and this
Agreement shall be construed in a manner that, as nearly as possible, reflects
the original intent of the Parties.
15.8 Headings. The headings of the Articles and Sections herein are
inserted for convenience of reference only and are not intended to be a part of
or to affect the meaning or interpretation of this Agreement.
15.9 Expenses. Except as otherwise expressly provided herein, Purchaser
shall be solely responsible for any sales and transfer Taxes, recording and
transfer fees arising from the purchase and sale of the Assets pursuant to this
Agreement. In addition, Purchaser shall be responsible for any fees associated
with filing (i) the application for the FCC Consent (ii) any filings required
under the HSR Act and (ii) any other application for Consent required from any
Governmental Authority. Except as otherwise provided in this Agreement, Sellers
and Purchaser shall each be liable for its own fees and expenses incurred in
connection with the negotiation, preparation, execution or performance of this
Agreement and the consummation of the transactions contemplated herein.
15.10 Schedules. The Schedules to this Agreement are a material part
hereof and shall be treated as if fully incorporated into the body of the
Agreement.
26
27
15.11 Publicity. Without the prior approval of the other Party, except
as required by law, no Party hereto shall issue any press release or make any
public statement regarding the transactions contemplated hereby or of the
specific terms of this Agreement.
15.12 Confidential Information. The Parties acknowledge that the
non-disclosure agreement executed by the parties prior to the date hereof shall
remain in full force and effect.
15.13 Guaranty by Western. Western hereby unconditionally and
irrevocably guarantees the timely performance by Purchaser of each and all of
Purchaser's obligations under this Agreement, including, without limitation, the
payment of the Purchase Price.
IN WITNESS WHEREOF, each Party hereto has caused this Agreement to be
duly executed on its behalf by its officer thereunto duly authorized as of the
day and year first above written.
CENTURY YUMA CELLULAR CORP. XXXXXXX RADIO COMMUNICATIONS, INC.
By: /s/ Xxxx Xxxx By: /s/ Xxxx Xxxx
---------------------------------- ----------------------------------
Name: Xxxx Xxxx Name: Xxxx Xxxx
Title: Vice President, General Counsel Title: Vice President, General Counsel
XXXXXXX ELECTRONICS, INC. EL CENTRO CELLULAR CORP.
By: /s/ Xxxx Xxxx By: /s/ Xxxx Xxxx
---------------------------------- ----------------------------------
Name: Xxxx Xxxx Name: Xxxx Xxxx
Title: Vice President, General Counsel Title: Vice President, General Counsel
CENTURY EL CENTRO CELLULAR CORP. CENTENNIAL SOUTHWEST LICENSE COMPANY
LLC
By: /s/ Xxxx Xxxx By: /s/ Xxxx Xxxx
---------------------------------- ----------------------------------
Name: Xxxx Xxxx Name: Xxxx Xxxx
Title: Vice President, General Counsel Title: Vice President, General Counsel
CENTENNIAL COMMUNICATIONS CORP. WWC LICENSE LLC
(solely for purposes of Section 12.2)
By: /s/ Xxxxx X. Xxxxxx
----------------------------------
By: /s/ Xxxx Xxxx Name: Xxxxx X. Xxxxxx
---------------------------------- Title: Vice President
Name: Xxxx Xxxx
27
28
Title: Vice President, General Counsel Title: Vice President
WESTERN WIRELESS CORPORATION
By: /s/ Xxxxx X. Xxxxxx
----------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
28
