ASSET PURCHASE AGREEMENT
by and between
A-1 CELLULAR OF TEXAS, L.P.
("SELLER")
and
XXXXXX CELLULAR OF XXXXXXX, INC.
("PURCHASER")
DATED AS OF SEPTEMBER 2, 1998
TABLE OF CONTENTS
ARTICLE I - PURCHASE AND SALE. . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II - DESCRIPTION OF ASSETS; EXCLUDED ASSETS. . . . . . . . . . . . . 2
SECTION 2.01. ASSETS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 2.02. EXCLUDED ASSETS . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 2.03. PURCHASER'S ACKNOWLEDGMENT. . . . . . . . . . . . . . . . . . 3
ARTICLE III - ASSUMPTION OF LIABILITIES. . . . . . . . . . . . . . . . . . . 3
ARTICLE IV - INSTRUMENTS OF TRANSFER AND ASSUMPTION. . . . . . . . . . . . . 4
SECTION 4.01. TRANSFER DOCUMENTS. . . . . . . . . . . . . . . . . . . . . . 4
SECTION 4.02. ASSUMPTION DOCUMENTS. . . . . . . . . . . . . . . . . . . . . 4
ARTICLE V - PURCHASE PRICE; ALLOCATION . . . . . . . . . . . . . . . . . . . 4
SECTION 5.01. PURCHASE PRICE. . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 5.02. DEPOSIT . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 5.03. PAYMENT OF PURCHASE PRICE . . . . . . . . . . . . . . . . . . 5
SECTION 5.04. ALLOCATION OF PURCHASE PRICE. . . . . . . . . . . . . . . . . 5
ARTICLE VI - CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 6.01. PRIMARY CLOSING . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 6.02. FINAL CLOSING . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE VII - SELLER'S REPRESENTATIONS . . . . . . . . . . . . . . . . . . . 6
SECTION 7.01. ORGANIZATION; QUALIFICATION; PARTNERS . . . . . . . . . . . . 6
SECTION 7.02. CONSENTS, AUTHORIZATION, EXECUTION AND DELIVERY
OF AGREEMENT. . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 7.03. TITLE TO ASSETS; LIABILITIES, CONDITION OF ASSETS . . . . . . 7
SECTION 7.04. REAL PROPERTY - OWNED . . . . . . . . . . . . . . . . . . . . 7
SECTION 7.05. REAL AND PERSONAL PROPERTY - LEASED . . . . . . . . . . . . . 7
SECTION 7.06. EXISTING CONTRACTS. . . . . . . . . . . . . . . . . . . . . . 8
SECTION 7.07. GOVERNMENTAL LICENSES . . . . . . . . . . . . . . . . . . . . 8
SECTION 7.08. COMPLIANCE WITH LAWS. . . . . . . . . . . . . . . . . . . . . 9
SECTION 7.09. NO VIOLATION OF EXISTING AGREEMENTS . . . . . . . . . . . . . 9
SECTION 7.10. LITIGATION AND LEGAL PROCEEDINGS. . . . . . . . . . . . . . . 9
SECTION 7.11. ENVIRONMENTAL COMPLIANCE. . . . . . . . . . . . . . . . . . . 9
SECTION 7.12. LABOR MATTERS . . . . . . . . . . . . . . . . . . . . . . . .10
SECTION 7.13. EMPLOYEE BENEFITS . . . . . . . . . . . . . . . . . . . . . .10
SECTION 7.14. TAX MATTERS . . . . . . . . . . . . . . . . . . . . . . . . .10
SECTION 7.15. SUBSCRIBERS . . . . . . . . . . . . . . . . . . . . . . . . .11
SECTION 7.16. INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . .11
SECTION 7.17. BROKERS . . . . . . . . . . . . . . . . . . . . . . . . . . .11
SECTION 7.18. XXXX-XXXXX-XXXXXX . . . . . . . . . . . . . . . . . . . . . .11
ARTICLE VIII - PURCHASER'S REPRESENTATIONS . . . . . . . . . . . . . . . . .11
SECTION 8.01. ORGANIZATION; QUALIFICATION . . . . . . . . . . . . . . . . .11
SECTION 8.02. CONSENTS; AUTHORIZATION; EXECUTION AND DELIVERY OF
AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . .11
SECTION 8.03. LITIGATION AND LEGAL PROCEEDINGS. . . . . . . . . . . . . . .12
SECTION 8.04. BROKERS . . . . . . . . . . . . . . . . . . . . . . . . . . .12
ARTICLE IX - SELLER'S AND PURCHASER'S AFFIRMATIVE COVENANTS. . . . . . . . .12
SECTION 9.01. MANAGEMENT AGREEMENT. . . . . . . . . . . . . . . . . . . . .12
SECTION 9.02 ACCESS. . . . . . . . . . . . . . . . . . . . . . . . . . . .12
SECTION 9.03. CONDUCT OF BUSINESS . . . . . . . . . . . . . . . . . . . . .12
SECTION 9.04. GOVERNMENTAL APPROVALS. . . . . . . . . . . . . . . . . . . .13
SECTION 9.05. THIRD PARTY CONSENTS; CLOSING CONDITIONS. . . . . . . . . . .14
SECTION 9.06. ENVIRONMENTAL REVIEW. . . . . . . . . . . . . . . . . . . . .14
SECTION 9.07. NO SHOPPING . . . . . . . . . . . . . . . . . . . . . . . . .14
SECTION 9.08. SUPPLEMENTAL DISCLOSURE . . . . . . . . . . . . . . . . . . .15
SECTION 9.09. LITIGATION MATTERS. . . . . . . . . . . . . . . . . . . . . .15
ARTICLE X - CONDITIONS PRECEDENT TO PURCHASER'S OBLIGATION TO PRIMARY
CLOSING. . . . . . . . . . . . . . . . . . . . . . . . . . . . .15
SECTION 10.01. ACCURACY OF REPRESENTATIONS AND WARRANTIES;
PERFORMANCE OF THIS AGREEMENT. . . . . . . . . . . . . . . .15
SECTION 10.02. CERTIFIED AUTHORIZATION. . . . . . . . . . . . . . . . . . .15
SECTION 10.03. [INTENTIONALLY OMITTED . . . . . . . . . . . . . . . . . . .15
SECTION 10.04. THIRD PARTY CONSENT; FCC GRANT . . . . . . . . . . . . . . .15
SECTION 10.05. NO MATERIAL ADVERSE CHANGE . . . . . . . . . . . . . . . . .16
SECTION 10.06. OPINION OF COUNSEL TO SELLER . . . . . . . . . . . . . . . .16
SECTION 10.08. OPINIONS OF FCC COUNSEL TO SELLER . . . . . . . . . . . . .16
ARTICLE XI - CONDITIONS PRECEDENT TO SELLER'S OBLIGATION TO
PRIMARY CLOSING . . . . . . . . . . . . . . . . . . . . . . . .16
SECTION 11.01. ACCURACY OF REPRESENTATIONS AND WARRANTIES;
PERFORMANCE OF THIS AGREEMENT. . . . . . . . . . . . . . . .16
SECTION 11.02. DIRECTORS' RESOLUTIONS . . . . . . . . . . . . . . . . . . .16
SECTION 11.03. INCUMBENCY CERTIFICATE . . . . . . . . . . . . . . . . . . .17
SECTION 11.04. XXXX-XXXXX ACT . . . . . . . . . . . . . . . . . . . . . . .17
SECTION 11.05. OPINION OF COUNSEL TO PURCHASER. . . . . . . . . . . . . . .17
ARTICLE XII - CONDITIONS PRECEDENT TO PURCHASER'S OBLIGATION AT FINAL
CLOSING. . . . . . . . . . . . . . . . . . . . . . . . . . . .17
SECTION 12.01. ACCURACY OF REPRESENTATIONS AND WARRANTIES;
PERFORMANCE OF THIS AGREEMENT. . . . . . . . . . . . . . . .17
SECTION 12.02. FCC FINAL ORDER. . . . . . . . . . . . . . . . . . . . . . .17
SECTION 12.03. OPTION OF FCC COUNSEL TO SELLER. . . . . . . . . . . . . . .17
ARTICLE XIII - CASUALTY LOSSES . . . . . . . . . . . . . . . . . . . . . . .17
ARTICLE XIV - INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . . . . .17
SECTION 14.01. INDEMNIFICATION BY SELLER. . . . . . . . . . . . . . . . . .18
SECTION 14.02. INDEMNIFICATION BY PURCHASER . . . . . . . . . . . . . . . .19
SECTION 14.03. NOTICE OF CLAIMS; DEFENSE OF THIRD PARTY . . . . . . . . . .19
SECTION 14.04. PURCHASE ESCROW AGREEMENT. . . . . . . . . . . . . . . . . .20
SECTION 14.05. LIMITATIONS. . . . . . . . . . . . . . . . . . . . . . . . .20
ARTICLE XV - CONFIDENTIALITY AND PRESS RELEASES. . . . . . . . . . . . . . .21
SECTION 15.01. CONFIDENTIALITY. . . . . . . . . . . . . . . . . . . . . . .21
SECTION 15.02. PRESS RELEASES . . . . . . . . . . . . . . . . . . . . . . .21
SECTION 15.03. DISCLOSURES REQUIRED BY LAW. . . . . . . . . . . . . . . . .21
ARTICLE XVI - TERMINATION. . . . . . . . . . . . . . . . . . . . . . . . . .22
SECTION 16.01. TERMINATION PRIOR TO FINAL CLOSING . . . . . . . . . . . . .22
ARTICLE XVII - BROKERS' FEES . . . . . . . . . . . . . . . . . . . . . . . .23
ARTICLE XVIII - CONSENT OF JURISDICTION, WAIVER OF JURY TRIAL. . . . . . . .23
ARTICLE XIX - MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . .23
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SECTION 19.01. ADDITIONAL INSTRUMENTS OF TRANSFER . . . . . . . . . . . . .23
SECTION 19.02. NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . . .24
SECTION 19.03. EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . .25
SECTION 19.04. TRANSFER TAXES . . . . . . . . . . . . . . . . . . . . . . .25
SECTION 19.05. COLLECTION PROCEDURES. . . . . . . . . . . . . . . . . . . .25
SECTION 19.06. SPECIFIC PERFORMANCE . . . . . . . . . . . . . . . . . . . .25
SECTION 19.07. GOVERNING LAW. . . . . . . . . . . . . . . . . . . . . . . .25
SECTION 19.08. ASSIGNMENT . . . . . . . . . . . . . . . . . . . . . . . . .25
SECTION 19.09. SUCCESSORS AND ASSIGNS . . . . . . . . . . . . . . . . . . .26
SECTION 19.10. AMENDMENTS; WAIVERS. . . . . . . . . . . . . . . . . . . . .26
SECTION 19.12. ENTIRE AGREEMENT . . . . . . . . . . . . . . . . . . . . . .26
SECTION 19.13. THIRD PARTIES. . . . . . . . . . . . . . . . . . . . . . . .26
SECTION 19.14. SEVERABILITY . . . . . . . . . . . . . . . . . . . . . . . .26
SECTION 19.15. SECTION HEADINGS . . . . . . . . . . . . . . . . . . . . . .26
SECTION 19.16. INTERPRETATION . . . . . . . . . . . . . . . . . . . . . . .26
SECTION 19.17. FURTHER ASSURANCES . . . . . . . . . . . . . . . . . . . . .26
SECTION 19.18. COUNTERPARTS . . . . . . . . . . . . . . . . . . . . . . . .26
SECTION 19.19. LIMITED RECOURSE TO PARTNERS . . . . . . . . . . . . . . . .27
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DEFINED TERMS
TERM SECTION CITE
---- ------------
Adjustment 5.05(b)
Asserting Party 14.03
Assets 2.01
Assumed Liabilities Article III
Assumption Agreement 4.02
Authorizations 7.07
AWS Recitals
Xxxx of Sale 4.01
Business Recitals
Cellular System Recitals
CERCLA 7.11(b)
Claims Article XIII
Code 7.13
Controlled Group Member 7.13
Defending Party 14.03
Defined Benefit Pension Plan 7.13
Deposit 5.02
Deposit Escrow Agreement 5.02
Employee Benefit Plans 7.13
Environmental Laws 7.11(c)
ERISA 7.13
ERISA Affiliate 7.13
Escrow Agent 5.02
Escrowed Amount 5.03
Excluded Assets 2.02(a)
Existing Contracts 7.06
FCC Recitals
FCC Authorization Recitals
Final Closing 6.02
Final Closing Date 6.02
Final Order 6.02
General Partner Recitals
Xxxx-Xxxxx Act 9.06(b)
Hazardous Substance 7.11(b)
Indemnified Purchaser Parties 14.01(a)
Indemnity Escrow Amount 5.03
Independent Accountants 5.05(c)
Interest or Interests 9.07(a)
Inventory 5.05(a)
IOA Recitals
Liens Article I
iv
Liquidated Damages Amount 5.02
Management Agreement 9.01
Manager Recitals
Multiemployer Plan 7.13
Non-Assumed Liabilities Article III
Partners Recitals
Partnership Recitals
Permitted Liens Article I
Primary Closing 6.01
Primary Closing Date 6.01
Purchase Escrow Account 5.03
Purchase Escrow Agreement 5.03
Purchase Price 5.01
Purchaser Introduction
RCLA 7.11(b)
RCRA 7.11(b)
RSA Recitals
Risk Sharing Proceeding Article III
Seller Introduction
Seller's Estimate 5.05(c)
Third Party Claim 14.03
v
SCHEDULES
1 Permitted Liens
2.01(a) Contracts and Licenses
2.01(f) Intangible Personal Property
2.01(g) Property Acquired Prior to Primary Closing
2.02 Excluded Assets
7.01(a) Organizational Documents
7.01(b) Partners' Names
7.03 Liens
7.05(a) Leased Real Property
7.05(b) Leased Personal Property
7.06 Existing Contracts
7.07 Governmental Licenses
7.08 Compliance with Laws
7.10 Litigation
7.14 Tax Matters
7.16 Insurance
7.17 Brokers
EXHIBITS
A. Xxxx of Sale
B. Assumption Agreement
C. Deposit Escrow Agreement
D. Purchase Escrow Agreement
vi
E. Management Agreement
F. Opinion of Counsel for Seller
G-1 Opinion of FCC Counsel for Seller to be delivered at Primary
Closing
G-2 Opinion of FCC Counsel for Seller to be delivered at Final
Closing
H. Opinion of Counsel for Purchaser
vii
ASSET PURCHASE AGREEMENT
THIS AGREEMENT is made and entered into as of the 2nd day of
September, 1998 by and between A-1 CELLULAR OF TEXAS, L.P., a Delaware
limited partnership ("Seller"), and XXXXXX CELLULAR OF XXXXXXX, INC., an
Oklahoma corporation ("Purchaser").
R E C I T A L S
WHEREAS, Seller is the owner of that certain license (the "FCC
Authorization") granted by the Federal Communications Commission (the "FCC")
to provide non-wireline cellular telecommunications service in RSA 10 (the
"RSA") #661, in Xxxxxxx, Texas (the "Cellular System");
WHEREAS, Seller owns all rights to develop, construct, own and
operate the Cellular System in the RSA (the "Business"), subject to AT&T
Wireless Services, Inc.'s ("AWS") right to operate the Business under an
Interim Operating Authority ("IOA") granted by the FCC;
WHEREAS, A-1 Cellular of Texas, LLC, a Delaware limited liability
company (the "General Partner"), owns a one percent general partnership
interest in Seller, and A-1 Cellular Communications, a New Jersey general
partnership (the "Partnership"), owns a 99 percent limited partnership
interest in Seller and all of the membership interests in the General Partner;
WHEREAS, the persons identified on Schedule 7.01(b) (the
"Partners") own all of the interests in the Partnership;
WHEREAS, Purchaser desires to purchase from Seller, and Seller
desires to sell to Purchaser, substantially all of the assets of Seller
relating to the Business, including assets acquired by Seller after the date
hereof until the Primary Closing Date, all subject to the terms and
conditions set forth herein; and
WHEREAS, prior to the consummation of all of the transactions
contemplated herein, the Business may be managed by DOC Cellular Subsidiary
Company, Inc., an Oklahoma corporation which is the parent corporation of
Purchaser ("Manager"), on behalf of Seller pursuant to the Management
Agreement (as defined herein).
NOW, THEREFORE, in consideration of the premises and mutual
covenants and agreements herein set forth and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties hereto hereby agree as follows:
ARTICLE I
PURCHASE AND SALE
Except as otherwise provided and subject to the terms and
conditions set forth in this Agreement, Seller agrees to sell, convey,
assign, transfer and deliver to Purchaser, and Purchaser
agrees to purchase from Seller at the Primary Closing, all of Seller's right,
title and interest in and to the Assets (as defined in Section 2.01 hereof),
free and clear of all security interests, liens, pledges, charges, rights of
third parties and encumbrances of every kind (collectively, "Liens") other
than Permitted Liens. As used herein, the term "Permitted Liens" means (i)
any Lien for taxes and assessments not yet past due or otherwise being
contested in good faith and for which appropriate reserves have been
established and will be taken into account in any Adjustment, (ii) any Liens
represented by easements, rights of way, restrictions, installations or
public utilities, title imperfections and restrictions, reservations in land
patents, zoning ordinances or other similar Liens which do not and will not
individually or in the aggregate, materially interfere with the use by Seller
or Purchaser of the property subject thereto or affected thereby, (iii) as to
leaseholds, interests of the lessors thereof and Liens affecting the
interests of such lessors and (iv) any Lien set forth on SCHEDULE 1 attached
hereto.
ARTICLE II
DESCRIPTION OF ASSETS; EXCLUDED ASSETS
SECTION 2.01. ASSETS. The assets to be conveyed to Purchaser
shall include all real and personal tangible and intangible assets,
properties and business owned or used by Seller of whatever description,
which relate in any way to the ownership, use or operation of the Business,
including all property and rights acquired or obtained by Seller from the
date hereof through the date of the Primary Closing, other than the assets
excluded pursuant to Section 2.02 hereof (collectively, the "Assets"). Such
Assets shall be free and clear of all Liens other than Permitted Liens. Such
Assets shall include, without limitation (it being understood that Seller
makes no representation or warranty as to the existence as of the date of
this Agreement of any Assets of the kinds described in subsections (c)
through (f)):
(a) All licenses (including the FCC Authorization), leases,
agreements, permits, authorizations, consents and other contracts, revenue
sharing and like agreements, agreements for the reception or transmission of
signals by microwave, easements, appurtenances, rights-of-way and
construction permits; all right, title and interest, if any, in and to all
streets, roads and public places, open or proposed; all agreements between
Seller and suppliers, cellular telephone service companies and subscribers
(including subscriber deposits), and all other similar rights and agreements
(including so-called roaming agreements), which in any way may relate to or
concern the operation by Seller of the Business, all as more particularly
described on SCHEDULE 2.01(A) attached hereto;
(b) All files of correspondence, lists, records and reports
concerning (i) customers and prospective customers of the Business and (ii)
all dealings with Federal, state and local regulatory agencies with respect
to the Business, including, but not limited to, all reports filed by or on
behalf of Seller with the FCC;
(c) All towers, tower equipment, antennas, switching and cell
site equipment and buildings, construction in progress, microwave equipment,
testing equipment, motor vehicles, office equipment, furniture and fixtures,
supplies, inventory and other physical assets, if
2
any, used in or relating to the Business, and all modifications, additions,
restorations or replacements of the whole or any part thereof;
(d) All interests in real property used in or relating to the
Business;
(e) All right, title and interest to engineering records, files,
data, drawings, blueprints, schematics, maps, reports, lists and plans and
processes intended for use in connection with the Business;
(f) All right, title and interest to intangible personal
property used in or relating to the Business, including all rights, patents
and copyrights used by Seller, and all of the rights of Seller associated
therewith (including any and all applications, registrations, extensions and
renewals thereof), and such rights, patents and copyrights as are described
on SCHEDULE 2.01(f) attached hereto; and
(g) Any of the tangible and intangible property of Seller
which is acquired after the date hereof but prior to the Primary Closing and
which will be set forth on SCHEDULE 2.01(g), as such Schedule shall be
amended and supplemented from time to time through the Primary Closing.
SECTION 2.02. EXCLUDED ASSETS. (a) The properties and assets
described in SCHEDULE 2.02 attached hereto and in Section 2.02(b) of this
Agreement shall be retained by Seller and shall not be sold, assigned or
transferred to Purchaser (the "Excluded Assets").
(b) Anything in this Agreement to the contrary
notwithstanding, the Assets sold to Purchaser pursuant to the terms of this
Agreement shall not include Seller's partnership records, books of account,
cash, bank deposits and cash equivalents of Seller at the time of the Primary
Closing.
SECTION 2.03. PURCHASER'S ACKNOWLEDGMENT. Purchaser acknowledges
that at the time of the execution of this Agreement, Seller's only assets are
its FCC authorizations described herein and any rights it may have or
hereafter acquire as provided in this Agreement in any agreements with AWS
concerning the acquisition of AWS assets related to the RSA.
ARTICLE III
ASSUMPTION OF LIABILITIES
As of the Primary Closing, Purchaser shall assume and agree to
perform and discharge the following as they become due for all periods from
and after the date of the Primary Closing, to the extent not previously
performed or discharged: (i) all obligations of Seller which accrue and are
to be performed from and after the Primary Closing (x) under those permits,
authorizations, licenses, leases, rights of way, easements and other
agreements related to the Business listed on SCHEDULES 2.01(a) and 2.01(g),
(y) under those permits, authorizations, licenses, leases, rights of way,
easements, subscriber and other agreements related to the Business which
Manager in the name of Seller entered into, and all other liabilities
incurred by
3
Manager on Seller's behalf, in accordance with the terms and conditions of
the Management Agreement, and (z) under the AWS agreements referred to in
Section 2.03; and (ii) all other obligations of Seller entered into during
the period from the date hereof to the Primary Closing by Seller and
identified to and consented by Purchaser and specifically assumed by
Purchaser at the Primary Closing (all of such permits, authorizations,
licenses, leases, rights of way, easements and other agreements referred to
in items (i) and (ii) being referred to hereinafter as the "Assumed
Liabilities"). Purchaser shall not be liable for any liabilities, debts,
contracts, agreements, including without limitation any contracts or
agreements set forth on Schedule 2.02, or other obligations of Seller of any
nature whatsoever other than the Assumed Liabilities and it is expressly
understood that Purchaser shall not assume, and shall not be liable for any
of Seller's expenses or obligations relating to or accruing by reason of the
proceedings relating to the FCC Authorization in FCC CC Docket 91-142 (the
"Risk Sharing Proceeding"), including any obligations relating to any
settlement thereof (such other liabilities, debts, contracts, agreements or
other obligations of Seller other than the Assumed Liabilities being referred
to as the "Non-Assumed Liabilities").
ARTICLE IV
INSTRUMENTS OF TRANSFER AND ASSUMPTION
SECTION 4.01. TRANSFER DOCUMENTS. At the Primary Closing, Seller
will deliver to Purchaser (a) a Xxxx of Sale in substantially the form
attached hereto as EXHIBIT A (the "Xxxx of Sale"), (b) all such other good
and sufficient instruments of sale, transfer and conveyance, in such form and
including such matters as Purchaser shall reasonably request, as shall be
effective to vest in Purchaser all of Seller's right and title to, and
interest in, the Assets; and (c) all contracts and commitments, instruments,
books and records (except as otherwise provided in Section 2.02 hereof) and
other data relating to the Assets, business and operations of Seller.
SECTION 4.02. ASSUMPTION DOCUMENTS. At the Primary Closing,
Purchaser and Seller will execute and deliver an Assumption Agreement in
substantially the form attached hereto as EXHIBIT B (the "Assumption
Agreement") in order to effect the assumption of the Assumed Liabilities by
Purchaser.
ARTICLE V
PURCHASE PRICE; ALLOCATION
SECTION 5.01. PURCHASE PRICE. The total purchase price for the
Assets shall be Fifty-Five Million Dollars ($55,000,000) (the "Purchase
Price").
SECTION 5.02. DEPOSIT. Purchaser is depositing into escrow with
PNC Bank, National Association (the "Escrow Agent") Three Million Dollars
($3,000,000) (the "Deposit") on the date hereof. The Deposit is being held
and invested and will be disbursed pursuant to the terms of the Deposit
Escrow Agreement, a copy of which is attached hereto as EXHIBIT C (the
"Deposit Escrow Agreement"). If the Primary Closing occurs (i) the earnings
on the Deposit shall be paid to Purchaser in accordance with the Deposit
Escrow Agreement, and (ii) the Deposit shall be retained in the escrow
account, such amount to be administered in accordance with the Purchase
4
Escrow Agreement (as defined below). If Seller terminates this Agreement in
accordance with the provisions of Section 16.01(e) prior to the Primary
Closing, and at the time of such termination neither Seller nor Manager is
then in breach of any of its representations, warranties, covenants or
agreements set forth in this Agreement or the Management Agreement (if then
in effect) and the conditions set forth in Section 10.04 have been satisfied,
then Seller shall be entitled to the Deposit as liquidated damages (the
"Liquidated Damages Amount"), which Liquidated Damages Amount the parties
agree is a fair and reasonable measure of the damages that Seller would
sustain as a result of such termination. Notwithstanding anything else set
forth in this Section 5.02, Seller's sole and exclusive recourse in the event
Seller terminates this Agreement in accordance with the provisions of Section
16.01(e) prior to the Primary Closing, including as a result of Purchaser's
or Manager's breach of its representations or obligations under this
Agreement or the Management Agreement prior to the Primary Closing, shall be
to receive the Deposit. If for any other reason the Primary Closing does not
occur, then the Deposit and all earnings thereon shall be paid to Purchaser.
All payments by the Escrow Agent shall be made in accordance with the
procedures and other provisions set forth in the Deposit Escrow Agreement.
SECTION 5.03. PAYMENT OF PURCHASE PRICE. On the Primary Closing
Date and subject to the terms and conditions set forth in this Agreement, in
reliance on the representations, warranties, covenants and agreements of the
parties contained herein and in consideration of the sale of the Assets,
Purchaser will pay the Purchase Price LESS the Deposit into an account (the
"Purchase Escrow Account") maintained by the Escrow Agent, and such amount,
along with the Deposit, will be held, invested and disbursed pursuant to the
terms of the Purchase Escrow Agreement substantially in the form of EXHIBIT D
attached hereto (the "Purchase Escrow Agreement"), whereupon the Deposit
Escrow Agreement shall terminate. Seller shall be paid the earnings on
amounts held pursuant to the Purchase Escrow Agreement on a monthly basis.
At Final Closing, an amount equal to the funds in the Purchase Escrow Account
(the "Escrowed Amount") less the sum of (x) amounts held in respect of
pending but unpaid claims by Purchaser for indemnification pursuant to
Section 14.01 and (y) $2,500,000 (such sum being referred to collectively as
the "Indemnity Escrow Amount") will be paid to Seller from the Purchase
Escrow Account at the Final Closing and the Indemnity Escrow Amount shall be
held and released in accordance with the terms of the Purchase Escrow
Agreement. In the event this Agreement is terminated after the Primary
Closing for any reason under Article XVI of this Agreement, (i) the Escrowed
Amount shall be released to Purchaser in accordance with the terms of the
Purchase Escrow Agreement and (ii) Seller shall pay Purchaser the difference,
if any, between the Purchase Price and the Escrowed Amount.
SECTION 5.04. ALLOCATION OF PURCHASE PRICE. No later than five
(5) days before the Primary Closing, Purchaser and Seller in good faith shall
determine an allocation of the Purchase Price in accordance with the
respective fair market values of the Assets being purchased. Purchaser and
Seller each further agree to file their income tax returns and their other
tax returns reflecting the allocation as determined in this Section 5.04. If
no agreement on an allocation of the Purchase Price is reached within thirty
(30) days of the Primary Closing, such allocation shall be determined by a
nationally recognized appraisal firm mutually agreeable to Seller and
Purchaser and the costs of such appraisal shall be borne equally by Seller
and Purchaser.
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ARTICLE VI
CLOSING
SECTION 6.01. PRIMARY CLOSING. Subject to the terms and
conditions hereof, the Primary Closing (the "Primary Closing") shall take
place at the offices of Xxxxxxx & Xxxxxx, LLP, Xxx XxxxXxxxxx Xxxxx,
Xxxxxxxxxx, Xxxxx Xxxxxx 00000 a date designated by Purchaser that is within
five (5) business days after the date on which the FCC has granted its
consent to the assignment of the FCC Authorization from Seller to Purchaser
and the other conditions precedent to the Primary Closing have been satisfied
(the "Primary Closing Date").
SECTION 6.02. FINAL CLOSING. Subject to the terms and conditions
hereof, the Final Closing (the "Final Closing") shall take place at the
offices of Xxxxxxx & Xxxxxx, LLP, Xxx XxxxXxxxxx Xxxxx, Xxxxxxxxxx, Xxxxx
Xxxxxx 00000 on a date designated by Purchaser that is within ten (10)
business days after the later to occur of each of the following: (a) the
date on which the FCC's approval of the assignment of the FCC Authorization
from Seller to Purchaser has become a Final Order and (b) the date on which
the FCC order in the Risk Sharing Proceeding granting the FCC Authorization
to Seller has become a Final Order (the "Final Closing Date"). For the
purposes of this Agreement, the term "Final Order" shall mean action by the
FCC as to which (i) no request for stay by the FCC of the action is pending,
no such stay is in effect, and, if any deadline for filing any such request
is designated by statute or regulation, such deadline has passed; (ii) no
petition for rehearing or reconsideration of the action is pending before the
FCC, and the time for filing any such petition has passed; (iii) the FCC,
does not have the action under reconsideration on its own motion and the time
for such reconsideration has passed; and (iv) no appeal to a court, or
request for stay by a court, of the FCC's action is pending or in effect,
and, if any deadline for filing any such appeal or request is designated by
statute or rule, it has passed.
ARTICLE VII
SELLER'S REPRESENTATIONS
Seller hereby represents, warrants, covenants and agrees that:
SECTION 7.01. ORGANIZATION; QUALIFICATION; PARTNERS. Seller is a
limited partnership duly organized, validly existing and in good standing
under the laws of the State of Delaware. The General Partner is a limited
liability company duly organized, validly existing and in good standing under
the laws of the State of Delaware. True and complete copies of the General
Partner's Certificate of Formation and Limited Liability Company Operating
Agreement and Seller's Partnership Agreement, each as amended to date, are
attached as SCHEDULE 7.01(a) hereto. Seller has all power and authority to
own and operate its properties and to carry on its business as now being
conducted or proposed to be conducted by Seller and to carry out the
transactions contemplated by this Agreement. Seller has the power and
authority to execute and deliver and, subject to obtaining the FCC's approval
to assign the FCC Authorization to Purchaser, perform its obligations under
this Agreement and to undertake the transactions contemplated hereby. The
General Partner and the Partnership are the owners of all the interests in
Seller, the Partnership is
6
the owner of all the interests in the General Partner, and all such interests
are held by the General Partner and the Partnership free and clear of any and
all Liens. A true and accurate list of the names of the Partners of the
Partnership is set forth on SCHEDULE 7.01(b) attached hereto. Subject to the
provisions of Section 19.08, nothing in this Section 7.01 shall preclude (1)
the liquidation of Seller and the General Partner simultaneously with or
after the Primary Closing, (2) the conversion of the Partnership to a limited
liability company before or after the Primary Closing, or (3) the transfer by
any Partner (or any member of a successor limited liability company) of all
or part of his interest in the Partnership (or such successor) before or
after the Primary Closing.
SECTION 7.02. CONSENTS, AUTHORIZATION, EXECUTION AND DELIVERY OF
AGREEMENT. All necessary consents and approvals have been obtained by Seller
for the execution and delivery of this Agreement. The execution, delivery
and performance of this Agreement by Seller and the transfer of the Assets to
Purchaser have been duly and validly authorized and approved by all necessary
partnership action of Seller, limited liability company action of the General
Partner, and partnership action of the Partnership. This Agreement is a
valid and binding obligation of Seller, enforceable against it in accordance
with its terms.
SECTION 7.03. TITLE TO ASSETS; LIABILITIES, CONDITION OF ASSETS.
Except as set forth on SCHEDULE 7.03 attached hereto, Seller has full power,
right and authority to sell and convey the Assets to Purchaser. Seller has,
and at the Primary Closing will transfer and convey to Purchaser, good and
marketable title to the Assets, free and clear of all Liens other than
Permitted Liens. All Liens on the Assets in effect on the date hereof are
listed on SCHEDULE 7.03 hereto and all such Liens, other than Permitted
Liens, will be discharged at the Primary Closing. Seller does not have any
liabilities which would be required to be disclosed on a balance sheet
prepared in accordance with GAAP. The tangible property, if any, included
among the Assets as of the date hereof are in good working order and repair,
reasonable wear and tear excepted. The Assets, together with the assets
owned or used by AWS in connection with its provision of cellular services in
the RSA, constitute all of the assets used or useful by Seller in connection
with the operation of the Business. Neither the Partnership nor any Partner
owns, leases or has any rights in any property, license or other assets
related to the Business. The Assets, together with the assets owned or used
by AWS in connection with its provision of cellular services in the RSA, are
in all material respect technically sufficient and capable of providing
cellular telephone service in the RSA for which Seller is licensed in
accordance with applicable FCC regulations.
SECTION 7.04. REAL PROPERTY - OWNED. Seller does not own any real
property or interests in real property in fee simple.
SECTION 7.05. REAL AND PERSONAL PROPERTY - LEASED. Set forth on
SCHEDULE 7.05(a) (in the case of real property) and SCHEDULE 7.05(b) (in the
case of personal property), are true and accurate descriptions of all real
and personal property leased by Seller and used or useful in the ownership or
operation of the Assets and the Business setting forth (i) the name of the
lessor and (ii) a description of the property leased. Such leases are in
full force and effect, and will be free and clear of all liens and
encumbrances at the Primary Closing other than Permitted Liens.
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SECTION 7.06. EXISTING CONTRACTS. Set forth on SCHEDULE 7.06
attached hereto are all agreements, contracts commitments, options, Liens,
licenses, mortgages and other security interests, promises and understandings
(written or oral) to which Seller is a party or by which any of the Assets
and/or the operation of the Business are bound (the "Existing Contracts").
No Partner or any person or entity (other than Seller) controlled or
affiliated with any Partner has any contractual relationship relating to the
ownership of the Assets or operation of the Business. Seller has heretofore
delivered to Purchaser true and correct copies of the Existing Contracts.
Seller has no knowledge of any breach or anticipated breach by the other
parties to any Existing Contracts that would have a material adverse effect
on the Business, the Assets or Seller's ability to perform its obligations
under this Agreement (a "Material Adverse Effect"). The Existing Contracts
are in full force and effect and Seller is in compliance with the terms of
such Existing Contracts except for matters that would not have a Material
Adverse Effect. Except for the Existing Contracts, neither Seller nor the
Partnership has entered into any other agreements relating to the ownership
of the Assets or the operation of the Business, including, but not limited
to, rights-of-way, rights of entry, licenses, easements, leases (real
property or equipment), or guaranty agreements. Seller is not aware of any
claims by third parties that Seller is required to enter into such other
agreements to enable it to continue owning the Assets and operating the
Business as it is presently being operated.
SECTION 7.07. GOVERNMENTAL LICENSES. Seller holds all necessary
licenses including without limitation the FCC Authorization, consents,
permits, approvals and authorizations of public or governmental bodies
including, without limitation, the FCC and the state, counties and
municipalities served by the Business, which are required in connection with
the ownership of the Assets and which are required for the provision of
cellular services in the RSA in connection with applicable FCC regulations
(collectively referred to as the "Authorizations"). All Authorizations are
in full force and effect. Seller and the Partnership have complied in all
material respects with the terms of the Authorizations and there are no
pending modifications, amendments or revocations of the Authorizations which
would materially and adversely affect the ownership of the Assets or the
operation of the Business. All fees of Seller and the Partnership due and
payable to governmental authorities pursuant to the Authorizations have been
paid and subject to the outcome of the Risk Sharing Proceeding, no event has
occurred which, with or without the giving of notice or lapse of time or
both, would constitute grounds for revocation or modification of the
Authorizations. All reports required of Seller and the Partnership to be
filed in connection with the Authorizations have been timely filed and are
accurate and complete in all material respects. Neither Seller nor the
Partnership has engaged in any course of conduct that could reasonably be
expected to impair the ability of Seller to be the holder of the
Authorizations and is not aware of any reason why the Authorizations might
not be renewed in the ordinary course, why any of the Authorizations might be
revoked, or why any pending applications or notifications might not be
approved. True and correct copies of the Authorizations, and all amendments
thereto to the date hereof, have been delivered by Seller to Purchaser and
are identified on SCHEDULE 7.07 attached hereto. The ownership of the Assets
and the operation of the Business by Seller is not subject to regulation or
supervision by any applicable state public utilities commission or other
similar state governmental instrumentality.
8
SECTION 7.08. COMPLIANCE WITH LAWS. Except as set forth on
SCHEDULE 7.08 attached hereto, Seller is currently complying in all material
respects with and it and the Partnership have so complied with, and is not in
default in any material respect under or in violation of, and neither the
Business nor any of the Assets nor the operation or maintenance thereof,
contravenes in any material respect any statute, law (including environmental
or employment laws), ordinance, decree, order, rule or regulation of any
governmental body applicable to the Assets or the Business, including,
without limitation, rules and regulations of the FCC.
SECTION 7.09. NO VIOLATION OF EXISTING AGREEMENTS. The execution,
delivery and performance of this Agreement by Seller will not violate any
provisions of law and will not, with or without the giving of notice or the
passage of time, or both, conflict with or result in any breach of any of the
terms or conditions of, or constitute a default under any Existing Contracts
in any respect that would have a Material Adverse Effect. The execution,
delivery and performance of this Agreement by Seller will not result in the
creation of any Lien upon the Assets or the Business.
SECTION 7.10. LITIGATION AND LEGAL PROCEEDINGS. Except as set
forth on SCHEDULE 7.10 attached hereto, there is no outstanding judgment
against Seller, the General Partner, the Partnership, or any Partner and
there is no litigation, proceeding or investigation pending, or, to Seller's
knowledge, threatened, against Seller, the General Partner, the Partnership,
any Partner or the Business or the Assets or which questions the validity of
any action taken or to be taken pursuant to or in connection with the
provisions of this Agreement. Except as set forth on SCHEDULE 7.10, there are
no proceedings pending to which Seller, the General Partner, the Partnership
or any Partner is a party or, to 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 Seller's rights with
respect to the Authorizations or Existing Contracts whereby such termination
or modification would result in a Material Adverse Effect on the Business or
the Assets. The pendency of the Risk Sharing Proceeding (including any
related appeals or other further proceedings) will not constitute a breach of
any representation or warranty contained in this Agreement, whether or not
such representation or warranty is expressly qualified by reference to the
Risk Sharing Proceeding.
SECTION 7.11. ENVIRONMENTAL COMPLIANCE. (a)(i) Neither Seller nor
the Partnership has generated, used, transported, treated, stored, released
or disposed of, or has suffered or permitted anyone else to generate, use,
transport, treat, store, release or dispose of any Hazardous Substance (as
hereinafter defined) with respect to the Assets or the Business in violation
of any Environmental Laws (as hereinafter defined); (ii) there has not been
any generation, use, transportation, treatment, storage, release or disposal
of any Hazardous Substance in connection with the ownership of the Assets,
the conduct of the Business or the use of any property or facility which
relates to the ownership of the Assets, the Business, or any adjacent
properties or facilities, which has created or might reasonably be expected
to create any liability under any Environmental Laws or which would require
reporting to or notification of any governmental entity; (iii) no friable
asbestos or polychlorinated biphenyl, and no underground storage tank, is
contained in or located at any facility of Seller relating to the Business in
violation of any Environmental Laws; and (iv) any Hazardous Substance handled
or dealt with in any way with
9
respect to the Assets or the Business by Seller or the Partnership, or during
Seller's or the Partnership's ownership of the Assets or the Business, has
been and is being handled or dealt with in compliance with any Environmental
Laws.
(b) For purposes of this Agreement, the term "Hazardous
Substance" shall mean any substance which, as of the date of this Agreement,
is listed as hazardous or toxic in the regulations implementing the
Comprehensive Environmental Response Compensation and Liability Act of 1980,
as amended ("CERCLA"), the Response Compensation and Liability Act ("RCLA"),
the Resource Conservation and Recovery Act of 1976, as amended ("RCRA"), or
listed as a hazardous substance under any applicable state environmental
laws, or any substance which has been determined at any time by regulation,
ruling or otherwise by any agency or court to be a hazardous or toxic
substance regulated under federal or state law.
(c) For purposes of this Agreement, the term "Environmental
Laws" shall mean CERCLA, RCRA, RCLA and any applicable statutes, regulations,
rules, ordinances, codes, licenses, permits, orders, approvals, plans,
authorizations, concessions, franchises and similar items of all governmental
authorities, including the FCC, and all applicable judicial, administrative
and regulatory decrees, judgments and orders, any of which relate to the
protection of human health or the environment from the effects of Hazardous
Substances, including but not limited to those pertaining to reporting,
licensing, permitting, investigating and remediating emissions, discharges,
releases or threatened releases of Hazardous Substances into the air, surface
water, groundwater or land, or relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Hazardous Substances.
SECTION 7.12. LABOR MATTERS. Seller has no employees.
SECTION 7.13. EMPLOYEE BENEFITS. Seller has no Employee Benefit
Plans in which any one or more Partners participate or are eligible to
participate as of the date hereof and is not a party to any employment
contract. The term "Employee Benefit Plans" means all employee benefit plans
as that term is defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"). No Partner or employee of Seller
participates or is eligible to participate in a "defined benefit pension
plan" as defined in Section 3(35) of ERISA, maintained or made available by
Seller. Neither Seller nor any Controlled Group Member maintains or
contributes to, or ever maintained or contributed to, a plan under which any
employee of Seller participates or is eligible to participate subject to
Section 412 of the Internal Revenue Code of 1986, as amended (the "Code").
The term "Controlled Group Member" means any trade or business (whether or
not incorporated) which is, or was at any relevant time, aggregated with
Seller pursuant to Section 414(b), (c), (m) or (o) of the Code. Neither
Seller nor any ERISA Affiliate has participated in or made contributions to
any "multiemployer plan" as defined in Section 4001(a)(3) of ERISA. The term
"ERISA Affiliate" means each trade or business (whether or not incorporated)
which is, or was at any relevant time, treated as a single employer with
Seller pursuant to Section 4001(b)(1) of ERISA.
SECTION 7.14. TAX MATTERS. Except as disclosed on SCHEDULE 7.14
attached hereto, Seller has timely filed all federal, state, county and local
tax returns required to be filed as of the date
10
hereof and will file all such returns required to be filed from the date
hereof to the Primary Closing, and has paid and will pay all taxes due and
owing for all such periods. There are no suits, actions, claims,
investigations, inquiries or proceedings pending or, to Seller's knowledge,
threatened against Seller or the Partnership in respect of any taxes,
interest, assessments, governmental charges or penalties.
SECTION 7.15. SUBSCRIBERS. As of the date hereof, the Business
does not have any subscribers.
SECTION 7.16. INSURANCE. Attached hereto as SCHEDULE 7.16 is an
accurate and complete list in all material respects of all insurance
policies, bonds and letters of credit which relate in any way to the
ownership, use or operation of the Assets and the Business.
SECTION 7.17. BROKERS. Except as set forth on SCHEDULE 7.17
attached hereto, neither Seller, the General Partner nor the Partnership has
engaged any agent, broker or other person acting pursuant to the express or
implied authority of Seller 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.
SECTION 7.18. XXXX-XXXXX-XXXXXX. Seller does not meet the "size
of person test" for an acquired person under the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act, since Seller's ultimate parent entity and all entities that
its ultimate parent entity controls do not meet the financial thresholds set
forth in 16 C.F.R. Part 801.
ARTICLE VIII
PURCHASER'S REPRESENTATIONS
Purchaser hereby represents, warrants, covenants and agrees that:
SECTION 8.01. ORGANIZATION; QUALIFICATION. Purchaser is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Oklahoma. Purchaser has all power and authority to (i)
own and operate its properties, (ii) carry on its business as it is now being
conducted, and (iii) carry out the transactions contemplated by this
Agreement and to own and operate the Assets and the Business, subject to
obtaining all necessary consents required for the transfer by Seller of the
Assets.
SECTION 8.02. CONSENTS; AUTHORIZATION; EXECUTION AND DELIVERY OF
AGREEMENT. All necessary consents and approvals have been obtained by
Purchaser for the execution and delivery of this Agreement. The execution
and delivery of this Agreement by Purchaser has been duly and validly
authorized and approved by all necessary corporate action. Purchaser has
full power and authority to execute and deliver and perform its obligations
under this Agreement. This Agreement is a valid and binding obligation of
Purchaser, enforceable against it in accordance with its terms.
11
SECTION 8.03. LITIGATION AND LEGAL PROCEEDINGS. There is no
outstanding judgment against Purchaser and there is no litigation, proceeding
or investigation pending, or, to Purchaser's knowledge, threatened, against
Purchaser or its assets which individually or in the aggregate would, if
adversely determined, result in a material adverse change in the business
condition (financial or otherwise), properties, prospects or assets of
Purchaser or which questions the validity of any action taken or to be taken
pursuant to or in connection with the provisions of this Agreement or the
consummation of the transactions contemplated hereby by Purchaser.
SECTION 8.04. BROKERS. Purchaser has not engaged any agent,
broker or other person acting pursuant to the express or implied authority of
Purchaser which is or may be entitled to a commission or broker or finder's
fee in connection with the transactions contemplated by this Agreement or
otherwise with respect to the sale of the Assets or the Business.
ARTICLE IX
SELLER'S AND PURCHASER'S AFFIRMATIVE COVENANTS
SECTION 9.01. MANAGEMENT AGREEMENT. Simultaneously with the
execution of this Agreement, Manager and Seller shall enter into a Management
Agreement in the form attached hereto as EXHIBIT E (the "Management
Agreement") pursuant to which Manager shall provide management services to
Seller from October 1, 1998 to the Primary Closing Date in connection with
the operation of the Business.
SECTION 9.02 ACCESS. Seller shall give Purchaser and its counsel,
accountants and other representatives access during normal business hours to
inspect all of the properties, books and records of Seller as they pertain to
the Assets and the Business, wherever located, and furnish Purchaser with
such available and existing documentation concerning the Assets and the
Business as Purchaser may reasonably request. Seller shall also provide
Purchaser with access to, and shall (to the extent required) consent to
disclosure by AWS to Purchaser of, any information within Seller's custody of
control pertaining to AWS's operation of the Business under the IOA granted
by the FCC.
SECTION 9.03. CONDUCT OF BUSINESS. From the date hereof until the
Primary Closing Seller shall:
(a) Use its best efforts to preserve intact the Assets and
the Business, including, but not limited to, maintaining in effect casualty
and liability insurance coverage on the Assets and the Business customary in
the industry for similar cellular telephone businesses, complying in all
material respects with applicable Federal, state and local laws, rules and
regulations and pertinent provisions of all Existing Contracts and
Authorizations;
(b) Use all reasonable efforts to preserve the goodwill of
the customers, suppliers and others having business relations with it;
12
(c) Not sell, transfer, convey or otherwise dispose of the
Assets without the prior written consent of Purchaser or pledge or otherwise
encumber any of the Assets without the prior written consent of Purchaser;
(d) Not make any distribution of any Assets to any of its
Partners or any affiliate of any of its Partners;
(e) Not hire any employees without Purchaser's prior written
consent;
(f) Maintain its books and records in accordance with prior
practice;
(g) Provide to the Purchaser, concurrently with filing
thereof, copies of all reports to and other filings with the FCC and any
other governmental agency;
(h) Not permit the FCC Authorization to expire or to be
surrendered or voluntarily modified in a manner materially adverse to the
Business, or take any action which would reasonably be expected to cause the
FCC Authorization or any other governmental authority to institute
proceedings for the suspension, revocation or limitation of rights under the
FCC Authorization; or fail to prosecute with due diligence any pending
applications to any governmental authority;
(i) Notify Purchaser in writing promptly after learning of
the institution or threat of any material action against Seller in any court,
or any action against Seller before the FCC or any other governmental agency,
and notify Purchaser in writing promptly upon receipt of any administrative
or court order relating to the Assets or the Business; and
(j) pay or cause to be paid or provide for all taxes of or
relating to Seller, the Assets and the employees required to be paid to city,
county, state, Federal and other governmental units up to the Primary Closing
Date.
Actions taken or omitted on Seller's behalf by Manager under
the Management Agreement will not constitute a breach of this covenant.
SECTION 9.04. GOVERNMENTAL APPROVALS. (a) Purchaser will fully
cooperate with Seller and do all things that are commercially reasonable to
assist Seller to obtain all consents and approvals necessary for the transfer
or assignment to Purchaser of the Authorizations (including without
limitation, the FCC Authorization), including the furnishing of financial and
other information specifically with respect to Purchaser reasonably required
by the person whose consent or approval is being sought. Seller shall
provide adequate prior written notice to Purchaser of any meeting with
governmental authorities the purpose of which is to seek a consent or
approval to the transactions contemplated hereby, and Purchaser shall use all
reasonable efforts to furnish a representative to attend meetings with
appropriate government authorities for the purpose of obtaining such consents
or approvals. Seller hereby agrees to file the necessary Form 490 with the
FCC transferring or assigning control of the FCC Authorization to Purchaser
and diligently pursue the processing of the assignment of the FCC
Authorization to
13
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.
(b) Purchaser and Seller shall share equally all fees relating
to filings made pursuant to this Section 9.04.
SECTION 9.05. THIRD PARTY CONSENTS; CLOSING CONDITIONS. (a) Each
of Purchaser and Seller covenants and agrees that each of them will
reasonably cooperate with each other, and Purchaser will do all things
reasonably necessary to assist Seller to obtain all consents and approvals
necessary for the transfer or assignment to Purchaser of the Assets,
including the furnishing of financial and other information specifically with
respect to Purchaser or Seller, as the case may be, reasonably required by
the person whose consent or approval is being sought. Notwithstanding the
foregoing, to the extent that any of the Assets to be sold, assigned,
transferred or conveyed to Purchaser, or any claim, right or benefit arising
thereunder or resulting therefrom (individually, an "Interest" and
collectively, the "Interests"), is not capable of being sold, assigned,
transferred or conveyed without the approval, consent or waiver of the issuer
thereof or the other party thereto, or any third person (including a
government or governmental unit), and such approval, consent or waiver has
not been obtained, or if such sale, assignment, transfer or conveyance or
attempted assignment, transfer or conveyance would constitute a breach
thereof, and such approval, consent or waiver has not been obtained, this
Agreement shall not constitute a sale, assignment, transfer or conveyance
thereof, or an attempted assignment, transfer or conveyance thereof; provided
Seller shall use its best efforts to provide Purchaser the benefits of any
such Interest as provided in Section 19.01(b). Each of Purchaser and Seller
shall use all reasonable efforts to consummate the transactions contemplated
hereby.
(b) Purchaser and Seller hereby covenant and agree to use all
reasonable efforts to satisfy, or assist the other party in
satisfying, the closing conditions applicable to Purchaser in Article
XI hereof and Seller in Article X hereof prior to the Primary Closing
Date.
SECTION 9.06. ENVIRONMENTAL REVIEW. Purchaser may, at its own
expense, cause an environmental review to be performed by an independent
consulting firm of good reputation in the industry on the leased real
property listed on the Schedules hereto to determine compliance with the
Environmental Laws.
SECTION 9.07. NO SHOPPING. Seller and the Partners and any of
their respective affiliates, advisors or representatives shall not directly
or indirectly, solicit, encourage or initiate any contact with, negotiate
with, or provide any information to, endorse or enter into any agreement with
respect to, or take any other action to facilitate any person or group, other
than Purchaser and its representatives, concerning any inquiries or the
making of any proposals concerning any merger, sale of all or substantially
all of the assets, acquisition of Seller's partnership interests, or any
similar transaction involving Seller.
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SECTION 9.08. SUPPLEMENTAL DISCLOSURE. Seller shall promptly from
time to time prior to the Primary Closing Date and Final Closing Date
supplement in writing the Schedules hereto with respect to any matter
hereafter arising (other than matters arising as a result of Manager's
actions under the Management Agreement) that, if existing or known as of the
date of this Agreement, would have been required to be set forth or described
in the Schedules hereto; provided, however, that no such supplemental
disclosure shall be deemed to cure any breach of any representation or
warranty of Seller made in this Agreement unless Purchaser waives any such
breach in writing to Seller.
SECTION 9.09. LITIGATION MATTERS. Seller and Purchaser agree that
any and all costs of litigation and other proceedings pertaining to the FCC
Authorization, including but not limited to the Risk Sharing Proceeding shall
be the responsibility of Seller, and that Seller shall control the defense of
the Risk Sharing Proceeding, subject to Purchaser's right to assist in the
defense. Seller and Purchaser agree to cooperate in good faith in defending
the Risk Sharing Proceeding, but Seller shall have the right to settle the
Risk Sharing Proceeding without the prior written consent of Purchaser,
provided Seller bears the entire economic consequence of any such settlement.
ARTICLE X
CONDITIONS PRECEDENT TO PURCHASER'S OBLIGATION TO
PRIMARY CLOSING
The obligation of Purchaser under this Agreement with respect to
the purchase and sale of the Assets shall be subject to the fulfillment on or
prior to the Primary Closing of each of the following conditions:
SECTION 10.01. ACCURACY OF REPRESENTATIONS AND WARRANTIES;
PERFORMANCE OF THIS AGREEMENT. All of the representations and warranties by
Seller contained in this Agreement shall be true and correct at and as of the
Closing in all material respects, except as they may have been affected by
Manager's actions under the Management Agreement. Seller shall have complied
with and performed in all material respects all of the agreements and
covenants required by this Agreement to be performed or complied with by it
on or prior to the Primary Closing. Purchaser shall have been furnished with
a certificate or certificates of a duly authorized representative of Seller,
dated as of the Primary Closing, certifying to the fulfillment of the
foregoing conditions.
SECTION 10.02. CERTIFIED AUTHORIZATION. Seller shall deliver to
Purchaser a copy of the approval required in order to authorize Seller's
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 a duly authorized representative of
Seller.
SECTION 10.03. [Intentionally Omitted] ..
SECTION 10.04. THIRD PARTY CONSENT; FCC GRANT. Seller shall have
delivered to Purchaser such instruments, consents and approvals of third
parties (the form and substance of which shall be reasonably satisfactory to
Purchaser) as are necessary to transfer to Purchaser without
15
modification thereof, as of the Primary Closing, the Assets and the
Authorizations. Prior to the Primary Closing, the FCC shall have granted its
consent to the transfer and assignment of the FCC Authorization to Purchaser
without any conditions which Purchaser determines, in its sole discretion, to
be materially adverse.
SECTION 10.05. NO MATERIAL ADVERSE CHANGE. There shall not have
been any material adverse change in the financial condition, assets,
business, properties or prospects of the Cellular System, whether owned or
operated by Seller or AWS, from April 3, 1998 to the Primary Closing, other
than as a result of actions or omissions by Manager under the Management
Agreement.
SECTION 10.06. OPINION OF COUNSEL TO SELLER. Purchaser shall have
been furnished with an opinion of Drinker Xxxxxx & Xxxxx LLP, counsel to
Seller, dated as of the Primary Closing and addressed to Purchaser and to any
financial institution designated by Purchaser in substantially the form of
EXHIBIT F hereto.
SECTION 10.07. OPINION OF FCC COUNSEL TO SELLER. Purchaser shall
have been furnished with an opinion of Drinker Xxxxxx & Xxxxx LLP, FCC
counsel for Seller, dated as of the Primary Closing and addressed to
Purchaser and to any financial institution designated by Purchaser in
substantially the form of EXHIBIT G-1 attached hereto. Purchaser shall also
have been furnished with reasonable written assurance from counsel to Seller
that the consent of the Texas Public Utilities Commission is not necessary to
consummate the transaction contemplated hereby.
ARTICLE XI
CONDITIONS PRECEDENT TO SELLER'S OBLIGATION TO
PRIMARY CLOSING
The obligations of Seller under this Agreement with respect to the
purchase and sale of the Assets shall be subject to the fulfillment on or
prior to the Primary Closing of each of the following conditions:
SECTION 11.01. ACCURACY OF REPRESENTATIONS AND WARRANTIES;
PERFORMANCE OF THIS AGREEMENT. All of the representations and warranties by
Purchaser contained in this Agreement shall be true and correct in all
material respects at and as of the Primary Closing. Purchaser shall have
complied with and performed in all material respects all of the agreements
and covenants required by this Agreement to be performed and complied with by
it on or prior to the Primary Closing. Seller shall have been furnished with
a certificate of an officer of Purchaser, dated as of the Primary Closing,
certifying to the fulfillment of the foregoing conditions.
SECTION 11.02. DIRECTORS' RESOLUTIONS. Purchaser shall deliver to
Seller copies of the resolutions of its Board of Directors authorizing the
execution, delivery and performance of this Agreement and all instruments and
documents to be delivered in connection herewith and the transactions
contemplated hereby, duly certified by an authorized officer of Purchaser.
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SECTION 11.03. INCUMBENCY CERTIFICATE. Seller shall have received
a certificate of the secretary or an assistant secretary of Purchaser,
certifying as to the genuineness of the signatures of representatives of
Purchaser authorized to take certain actions or execute any certificate,
document, instrument or agreement to be delivered pursuant to this Agreement,
which incumbency certificate shall include the true signatures of such
representatives.
SECTION 11.04. FCC CONSENT. The FCC shall have granted its
consent to the assignment of the FCC Authorization from Seller to Purchaser.
SECTION 11.05. OPINION OF COUNSEL TO PURCHASER. Seller shall have
been furnished with an opinion of Xxxxxxx & Xxxxxx, LLP, counsel to
Purchaser, dated as of the Primary Closing and addressed to Seller in
substantially the form of EXHIBIT H hereto.
ARTICLE XII
CONDITIONS PRECEDENT TO PURCHASER'S OBLIGATION AT FINAL CLOSING
The obligations of Purchaser under this Agreement with respect to
the purchase and sale of the Assets shall be subject to the fulfillment on or
prior to the Final Closing of each of the following conditions:
SECTION 12.01. ACCURACY OF REPRESENTATIONS AND WARRANTIES;
PERFORMANCE OF THIS AGREEMENT. All of the representations and warranties by
Seller contained in this Agreement shall be true and correct in all material
respects at and as of the Final Closing, except as they have been affected by
Purchaser's actions. Seller shall have complied with and performed in all
material respects all of the agreements and covenants required by this
Agreement to be performed and complied with by it on or prior to the Final
Closing. Purchaser shall have been furnished with a certificate of a duly
authorized representative of Seller, dated as of the Final Closing,
certifying to the fulfillment of the foregoing conditions.
SECTION 12.02. FCC FINAL ORDER. Each of (i) the FCC order
consenting to the assignment of the FCC Authorization from Seller to
Purchaser and (ii) the FCC order granting the FCC Authorization to Seller in
the Risk Sharing Proceeding shall have become a Final Order, in each instance
without any conditions which the Purchaser shall have determined, in its sole
discretion, to be materially adverse to its ability to operate a cellular
system in the RSA.
SECTION 12.03. OPTION OF FCC COUNSEL TO SELLER. Purchaser shall
have been furnished an opinion of Drinker Xxxxxx & Xxxxx LLP, FCC counsel for
Seller, dated as of the Final Closing and addressed to Purchaser and any
financial institution designated by Purchaser in substantially the form of
EXHIBIT G-2 attached hereto.
ARTICLE XIII
CASUALTY LOSSES
In the event that there shall have been suffered between the date
hereof and the Primary Closing any casualty loss relating to the Assets or
the Business which does not materially and
17
adversely affect the Business, then at the Primary Closing all claims to
insurance proceeds or other rights of Seller against third parties arising
from such casualty loss (the "Claims") shall (to the extent assignable) be
separately assigned by Seller to Purchaser. 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 Seller.
ARTICLE XIV
INDEMNIFICATION
SECTION 14.01. INDEMNIFICATION BY SELLER. (a) Notwithstanding the
Primary Closing or Final Closing, and regardless of any investigation made at
any time by or on behalf of Purchaser or any information Purchaser may have,
but subject to the terms of this Article XIV Seller agrees to indemnify and
to hold Purchaser, its shareholders, officers, directors, and employees (the
"Indemnified Purchaser Parties") harmless from and against and in respect of
any losses (including lost revenues), damages, costs, expenses (including
costs of investigations and reasonable attorney fees), suits, demands,
judgments and diminutions in value suffered or incurred (each a "Loss" and
collectively "Losses") by Purchaser arising from or related to:
(i) Any and all Non-Assumed Liabilities, whether or not known
or asserted at or prior to the Primary Closing, relating to or
arising from the ownership, operation, control or sale of the Assets
or the Business, or any other state of facts which existed at or prior
to the Primary Closing;
(ii) Any liability, debt, obligation, tax, claim or demand
relating to the FCC Authorization or any application therefor,
including without limitation, any fines or forfeitures imposed or
threatened to be imposed by the FCC, prior to the Final Closing;
(iii) Any misrepresentation, breach of warranty, or
nonfulfillment of any agreement or covenant on the part of Seller
under this Agreement, the Schedules or Exhibits hereto, the Management
Agreement including the Exhibits thereto, the Xxxx of Sale, the
Assumption Agreement, the Deposit Escrow Agreement, the Purchase
Escrow Agreement or in any closing certificate delivered by Seller to
Purchaser pursuant to Article XI hereof; and
(iv) All costs and expenses (including reasonable attorneys'
fees) incurred by any Indemnified Purchaser Party in connection with
any action, suit, proceeding, demand, assessment or judgment incident
to any of the matters such Indemnified Purchaser Party is indemnified
against by Seller in this Agreement.
(b) In addition and subject to the terms of this Article XIV,
Seller shall indemnify the Indemnified Purchaser Parties against and hold
them harmless from any and all Losses which they may incur by reason of the
failure (if any) of Seller to comply with the Bulk Transfers Article of the
Uniform Commercial Code of any state.
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SECTION 14.02. INDEMNIFICATION BY PURCHASER. Notwithstanding the
Primary Closing or Final Closing, and regardless of any investigation made at
any time by or on behalf of Seller or any information Seller may have, but
subject to the terms of this Article XIV, Purchaser agrees to indemnify and
to hold Seller, the General Partner, the Partnership and the Partners
harmless from and against and in respect of any Losses incurred by Seller and
its Partners arising from or related to:
(i) All liabilities and obligations of Purchaser, and all
claims and demands made in respect thereof relating to or arising
from, Purchaser's ownership, operation or control of the Assets or
the Business after the Primary Closing, including on account of the
Assumed Liabilities;
(ii) Any liability, debt, obligation, tax, claim or demand
relating to the FCC Authorization, including without limitation, any
fines or forfeitures imposed or threatened to be imposed by the FCC,
after the Final Closing;
(iii) Any misrepresentation, breach of warranty, or
nonfulfillment of any agreement or covenant on the part of Purchaser
or Manager under this Agreement, the Schedules or Exhibits hereto, the
Management Agreement including the Exhibits thereto, the Assumption
Agreement, the Deposit Escrow Agreement, the Purchase Escrow Agreement
or in any closing certificate delivered by Purchaser to Seller
pursuant to Article XII hereof; and
(iv) All reasonable costs and expenses (including reasonable
attorneys' fees) incurred by Seller, the General Partner, the
Partnership and the Partners in connection with any action, suit,
proceeding, demand, assessment or judgment incident to any of the
matters Seller, the General Partner, the Partnership and the Partners
are indemnified against by Purchaser in this Agreement.
SECTION 14.03. NOTICE OF CLAIMS; DEFENSE OF THIRD PARTY. A party
claiming indemnification under this Article XIV (the "Asserting Party") must
promptly notify (in writing and in reasonable detail) the party from which
indemnification is sought (the "Defending Party") of the nature and basis of
such claim for indemnification within the applicable Survival Period. If
such claim relates to a claim, suit, litigation or other action by a third
party against the Asserting Party or any fixed or contingent liability to a
third party (a "Third Party Claim"), the Defending Party may elect to assume
and control the defense of the Third Party Claim at its own expense with
counsel selected by the Defending Party. Notwithstanding the foregoing, the
Defending Party may not assume or control the defense if the named parties to
the Third Party Claim (including any impleaded parties) include both the
Defending Party and the Asserting Party and representation of both parties by
the same counsel would be inappropriate due to actual or potential differing
interests between them, in which case the Asserting Party shall have the
right to defend the Third Party Claim and to employ counsel reasonably
approved by the Defending Party, and to the extent the matter is determined
to be subject to indemnification hereunder, the Defending Party shall
reimburse the Asserting Party for the reasonable costs of its counsel. If
the Defending Party assumes the defense and control of the Third Party Claim
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pursuant to this Section 14.03, the Defending Party shall not be liable for
any fees and expenses of counsel for the Asserting Party incurred thereafter
in connection with the Third Party Claim (except in the case of actual or
potential differing interests, as provided in the preceding sentence), but
shall not agree to any settlement of such Third Party Claim which does not
include an unconditional release of the Asserting Party by the third party
claimant on account thereof, PROVIDED that such requirement shall be deemed
waived to the extent that the Asserting Party does not undertake to provide
and promptly execute and, concurrently with the delivery of any such release,
deliver a corresponding release of the third party claimant with respect to
such Third Party Claim. If the Defending Party does not assume the defense
of the Third Party Claim pursuant to this Section 14.03, the Asserting Party
shall have the right (i) to control the defense thereof and (ii), if the
Asserting Party shall have notified the Defending Party of the Asserting
Party's intention to negotiate a settlement of the Third Party Claim (at the
Defending Party's expense to the extent the matter is determined to be
subject to indemnification hereunder), which notice shall include the
material terms of any proposed settlement in reasonable detail, to settle the
Third Party Claim (at the Defending Party's expense to the extent the matter
is determined to be subject to indemnification hereunder) on terms not
materially inconsistent with those set forth in such notice, unless the
Defending Party shall have notified the Asserting Party in writing of the
Defending Party's election to assume liability for and the defense of the
Third Party Claim pursuant to this Section 14.03 within ten days after
receipt of such notice, and the Defending Party promptly thereafter shall
have taken appropriate action to implement such defense. The Asserting Party
shall not be entitled to settle any such Third Party Claim pursuant to the
preceding sentence unless such settlement includes an unconditional release
of the Defending Party by the third party claimant on account thereof,
PROVIDED that such requirement shall be deemed waived to the extent that the
Defending Party does not undertake to provide and promptly execute and,
concurrently with delivery of any such release, deliver a corresponding
release of the third party claimant with respect to such Third Party Claim.
The Asserting Party and the Defending Party shall use all reasonable efforts
to cooperate fully with respect to the defense and settlement of any Third
Party Claim covered by this Article XIV.
SECTION 14.04. PURCHASE ESCROW AGREEMENT. The obligation of
Seller to indemnify Indemnified Purchaser Parties for Losses pursuant to this
Article XIV shall be secured by the funds held pursuant to the Purchase
Escrow Agreement.
SECTION 14.05. LIMITATIONS. The Defending Party's obligations to
indemnify the Asserting Party pursuant to this Article XIV shall be subject
to the following limitations:
(a) No indemnification shall be required to be made by the
Defending Party until the aggregate amount of the Asserting Party's Losses
exceeds $100,000 (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, the Deductible shall not be
applicable to (i) Seller's obligation to indemnify the Indemnified Purchaser
Parties for Non-Assumed Liabilities, (ii) Purchaser's obligation to indemnify
Seller, the General Partner, the Partnership and the Partners for Assumed
Liabilities, (iii) Seller's obligation to indemnify the Indemnified Purchaser
Parties pursuant to Section 14.01(b), (iv) a breach by Seller of its
20
representations set forth in Section 7.02, the first and second sentences of
Section 7.03 and Section 7.14 or (v) Losses resulting from fraud.
(b) All representations and warranties contained in this
Agreement shall survive the Primary Closing until the second anniversary
thereof; provided, however, that notwithstanding the foregoing, (x) the
representations and warranties contained in Section 7.02, the first and
second sentences of Section 7.03 and Section 8.02 shall survive the Primary
Closing for an unlimited duration, (y) the representations and warranties
contained in Sections 7.09 (as it may relate to Environmental Laws), 7.11 and
7.14 shall survive the Primary Closing until the expiration of the applicable
statute of limitation, and (z) the representations and warranties contained
in Section 7.07 shall in any event survive until the Final Closing (the
applicable period of survival being referred to as the "Survival Period").
To the extent a claim is made in respect of a representation or warranty
within the applicable Survival Period, such representation or warranty shall
survive after the Survival Period for purposes of such claim until such claim
is finally determined or settled. Each party shall be precluded from
asserting claims against the other party after the applicable Survival Period.
(c) Seller's liability to the Indemnified Purchaser Parties
for indemnification pursuant to this Article XIV shall be limited to
$2,500,000 and shall be satisfied only from the funds held pursuant to the
Purchase Escrow Agreement.
ARTICLE XV
CONFIDENTIALITY AND PRESS RELEASES
SECTION 15.01. CONFIDENTIALITY. Each party shall hold in strict
confidence all documents and information concerning the other and its
business and properties and, if the transaction contemplated hereby should
not be consummated, such confidence shall be maintained, and all such
documents and information (in written form) shall immediately thereafter be
returned to the party originally furnishing the same.
SECTION 15.02. PRESS RELEASES. No press release or public
disclosure, either written or oral, of the existence or terms of this
Agreement shall be made by either Purchaser or Seller without the consent of
the other subject to the provisions of Section 15.03, and Purchaser and
Seller shall each furnish to the other advance copies of any release which it
proposes to make public concerning this Agreement or the transactions
contemplated hereby and the date upon which Purchaser or Seller, as the case
may be, proposes to make such press release.
SECTION 15.03. DISCLOSURES REQUIRED BY LAW. This Article XV shall
not, however, be construed to prohibit any party from making any disclosures
to any governmental authority that it is required to make by law or from
filing this Agreement with, or disclosing the terms of this Agreement to, any
institutional lender to such party, or prohibit Seller, Purchaser or any of
their affiliates from disclosing to its investors, partners, accountants,
auditors, attorneys, financing sources, investment bankers, parent company
and broker/dealers such terms of this transaction and such of Seller's
business and financial information as are reasonably necessary to be
21
disclosed to them in connection with the Company's financing activities and
other proper business purposes.
ARTICLE XVI
TERMINATION
SECTION 16.01. TERMINATION PRIOR TO FINAL CLOSING. This Agreement
may be terminated and the transactions contemplated herein may be abandoned,
by written notice promptly given to the other party hereto, at any time prior
to the Final Closing (excepted as noted):
(a) by mutual written consent of Seller and Purchaser;
(b) by either Purchaser or Seller, if any court of competent
jurisdiction in the United States or other United States governmental
body shall have issued an order, decree or ruling or taken any other
action permanently restraining, enjoining or otherwise permanently
prohibiting the sale of the Assets to Purchaser (which Seller and
Purchaser shall have used all reasonable efforts to have lifted or
reversed) and such order, decree, ruling or other action shall have
become final and nonappealable;
(c) by Purchaser, but only prior to Primary Closing, if Seller
shall have materially breached any of its representations, warranties,
covenants or agreements set forth in this Agreement or the Management
Agreement (if then in effect), and said breach is not cured within 10
business days after written notice of the breach is received by
Seller;
(d) by Purchaser, in the event that the FCC's order granting its
consent to the assignment of the FCC Authorization to Purchaser is
reversed, on reconsideration by the FCC or after judicial review, or
in the event that Seller's rights in the FCC Authorization are
revoked, denied or conditioned on such grounds that the value of the
FCC Authorization is materially impaired, on reconsideration by the
FCC or after judicial review, and in either event, Purchaser's right
to operate the Cellular System pursuant to the FCC Authorization
without materially adverse conditions is terminated;
(e) by Seller, but only prior to Primary Closing, if Purchaser
or Manager shall have materially breached any of its representations,
warranties, covenants or agreements set forth in this Agreement or the
Management Agreement (if then in effect), and said breach is not cured
within 10 business days after written notice of the breach is received
by Purchaser or Manager, as appropriate; or
(f) by either Purchaser or Seller, effective on January 1, 2001,
and on the first day of any calendar quarter thereafter, if (i) such
party has provided ninety (90) days' written notice to the other party
of such termination, (ii) the
22
Primary Closing has not taken place at the time of termination, and
(iii) the party seeking to terminate this Agreement is not then in
material breach of any of its (or Manager's) representations,
warranties, covenants or agreements set forth in this Agreement or
the Management Agreement (if then in effect).
ARTICLE XVII
BROKERS' FEES
Each party represents and warrants to the other that it shall be
solely responsible for the payment of any fee or commission due to any broker
or finder it has engaged with respect to this transaction and the other party
hereto shall be indemnified for any liability with respect thereto pursuant
to Article XIV hereof.
ARTICLE XVIII
CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL
PURCHASER AND SELLER HEREBY CONSENT TO THE JURISDICTION OF THE
FEDERAL AND STATE COURTS OF THE STATE OF TEXAS, AS WELL AS TO THE
JURISDICTION OF ALL COURTS FROM WHICH AN APPEAL MAY BE TAKEN FROM THE
AFORESAID COURTS, FOR THE PURPOSE OF ANY SUIT, ACTION OR OTHER PROCEEDING
ARISING OUT OF ANY OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.
PURCHASER AND SELLER ALSO WAIVE TRIAL BY JURY IN ANY ACTION BROUGHT ON OR
WITH RESPECT TO THIS AGREEMENT.
ARTICLE XIX
MISCELLANEOUS
SECTION 19.01. ADDITIONAL INSTRUMENTS OF TRANSFER. (a) From time
to time after the Closing, each party shall, if requested by another party,
make, execute and deliver such additional assignments, bills of sale, deeds
and other instruments, as may be reasonably necessary or proper to carry out
the specific provisions of this Agreement, including transfer to Purchaser
all of Seller's right, title and interest in and to the Assets. Such efforts
and assistance shall be without cost to any party.
(b) Anything in this Agreement to the contrary notwithstanding,
Seller is not obligated to sell, assign, transfer or convey to Purchaser any
of their rights and obligations in and to any Interest without first
obtaining all necessary approvals, consents or waivers. To the extent any of
the approvals, consents or waivers described in Section 10.04 have not been
obtained by Seller as of the Primary Closing and Purchaser elects to proceed
with the Primary Closing, Seller shall, for a period equal to the longer of
six months after the Primary Closing, the Final Closing Date, or the
remaining term of such Interest, use all reasonable efforts to (i) obtain the
consent of any such third party; (ii) cooperate with Purchaser in any
reasonable and lawful arrangements designed to provide the benefits
(including, without limitation, the payment to Purchaser of any monies
received by Seller in connection therewith) of such Interest to Purchaser so
long as Purchaser performs all obligations with respect to the Interest (and
the payment of all expenses in connection therewith); and (iii) enforce, at
the request of Purchaser and at the expense and for the
23
account of Purchaser, any rights of Seller arising from such Interest against
such issuer thereof or the other party or parties thereto (including the
right to elect to terminate any such Interest in accordance with the terms
thereof upon the request of Purchaser); PROVIDED, HOWEVER, that neither
Purchaser nor Seller shall be obligated to pay any consideration or other
sums therefor (except for filing fees and other ordinary administrative
charges and except as set forth above) to the third party from whom such
approval, consent or waiver is requested.
SECTION 19.02. NOTICES. All notices and other communications
required or permitted to be given hereunder shall be in writing and shall be
deemed to have been duly given if delivered, sent by telecopier, recognized
overnight delivery service or mailed, registered or certified mail, return
receipt requested, postage prepaid, to the following addresses:
(i) If to Purchaser:
x/x Xxxxxx Xxxxxxxxxxxxxx Xxxxxxxxxxx
00000 X. Xxxxxxxx Extension
Suite 200
Oklahoma City, Oklahoma 73114
Attention: Xxxxxxx Xxxxxx
Facsimile No.: (000) 000-0000
with a copy to:
Xxxxxxx & Xxxxxx, LLP
Xxx XxxxXxxxxx Xxxxx
Xxxxxxxxxx, Xxxxx Xxxxxx 00000
Attention: Xxxxx X. Xxxxxxx, Esq.
Facsimile No.: (000) 000-0000
(ii) If to Seller:
A-1 Cellular Communications
000 Xxxxxxxxx Xxxxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxxxxx X. Xxxx
Facsimile No.: (000) 000-0000
with a copy to:
Drinker Xxxxxx & Xxxxx LLP
0000 Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Facsimile No.: (000) 000-0000
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Notices delivered personally shall be effective upon delivery.
Notices transmitted by telecopy shall be effective when received, provided
that the burden of proving notice when notice is transmitted by telecopy
shall be the responsibility of the party giving such notice. Notices
delivered by overnight mail shall be effective when received. Notices
delivered by registered or certified mail shall be effective on the date set
forth on the receipt of registered or certified mail, or 72 hours after
mailing, whichever is earlier.
SECTION 19.03. EXPENSES. Except as otherwise provided herein,
each party shall bear its own expenses and costs, including the fees of any
corporate or FCC attorney retained by it, incurred in connection with the
preparation of this Agreement and the consummation of the transactions
contemplated hereby.
SECTION 19.04. TRANSFER TAXES. Seller shall pay any use, sales or
transfer taxes imposed in connection with the sale and delivery of the Assets
and rights acquired by Purchaser under this Agreement.
SECTION 19.05. COLLECTION PROCEDURES. From and after the Primary
Closing, Purchaser shall have the right and authority, at its expense, to
collect for its account all items to which it is entitled as provided in this
Agreement and to endorse with the name of Seller any checks or drafts
received on account of any such items.
SECTION 19.06. SPECIFIC PERFORMANCE. The parties recognize and
acknowledge that in the event Seller shall fail to perform its obligations
under the terms of this Agreement, money damages alone will not be adequate
to compensate Purchaser. The parties, therefore, agree and acknowledge that
in the event Seller fails to perform its obligations under this Agreement,
Purchaser shall be entitled, in addition to any action for monetary damages,
in addition to any other rights and remedies on account of such failure, to
specific performance of the terms of this Agreement and of the covenants and
obligations hereunder.
SECTION 19.07. GOVERNING LAW. This Agreement shall be governed by
and construed in accordance with the laws of the State of Texas (without
application of principles of conflicts of law).
SECTION 19.08. ASSIGNMENT. Except as provided below, neither this
Agreement nor any of the rights, interests or obligations hereunder shall be
assigned by any of the parties hereto (by merger or other operation of law or
otherwise) without the prior written consent of the other party, which
consent will not be unreasonably withheld, except that (a) Purchaser shall
have the right (i) at any time to assign its rights and obligations under
this Agreement to another entity controlled by Xxxxxx Communications
Corporation, and (ii) after the Primary Closing, to assign its rights and
obligations under this Agreement to any third party; and (b) Seller shall
have the right, at or after the Primary Closing, to liquidate and in
connection therewith to assign its duties and obligations to the Partnership
or to a limited liability company that succeeds to the Partnership's assets
and liabilities. A party shall provide prompt written notice to the other
party of any such assignment.
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SECTION 19.09. SUCCESSORS AND ASSIGNS. All agreements made and
entered into in connection with this transaction shall be binding upon and
inure to the benefit of the parties hereto, their successors and assigns.
SECTION 19.10. AMENDMENTS; WAIVERS. No alteration, modification
or change of this Agreement shall be valid except by an agreement in writing
executed by the parties hereto. No failure or delay by any party hereto in
exercising any right, power or privilege hereunder (and no course of dealing
between or among any of the parties) shall operate as a waiver of any such
right, power or privilege. No waiver of any default on any one occasion
shall constitute a waiver of any subsequent or other default. No single or
partial exercise of any such right, power or privilege shall preclude the
further or full exercise thereof.
SECTION 19.12. ENTIRE AGREEMENT. This Agreement merges all
previous negotiations and agreements between the parties hereto, either
verbal or written, including that certain letter agreement dated April 3,
1998, and constitutes the entire agreement and understanding between the
parties with respect to the subject matter of this Agreement.
SECTION 19.13. THIRD PARTIES. Except as set forth in Article XIV
hereof, nothing herein, expressed or implied, is intended to or shall confer
on any person other than the parties hereto any rights, remedies, obligations
or liabilities under or by reason of this Agreement.
SECTION 19.14. SEVERABILITY. If any provision of this Agreement
or the application thereof to any person or circumstance shall be invalid or
unenforceable to any extent, the remainder of this Agreement and the
application of such provision to other persons or circumstances shall not be
affected thereby and shall be enforced to the greatest extent permitted by
law, but only as long as the continued validity, legality and enforceability
of such provision or application does not materially (a) alter the terms of
this Agreement, (b) diminish the benefits of this Agreement or (c) increase
the burdens of this Agreement, for any person.
SECTION 19.15. SECTION HEADINGS. The section headings contained
in this Agreement are solely for the purpose of reference, are not part of
the agreement of the parties and shall not in any way affect the meaning or
interpretation of this Agreement.
SECTION 19.16. INTERPRETATION. As both parties have participated
in the drafting of this Agreement, any ambiguity shall not be construed
against either party as the drafter.
SECTION 19.17. FURTHER ASSURANCES. Seller agrees to provide to
Purchaser from time to time any information that Seller possesses with
respect to the operation of the Business and Assets prior to the Closing
which Purchaser requests in the future in connection with Purchaser's
financing efforts now or in the future or in connection with any FCC or other
regulatory filing.
SECTION 19.18. COUNTERPARTS. This Agreement may be executed in
one or more counterparts, each of which when so executed shall be an
original, but all of which together shall constitute one agreement.
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SECTION 19.19. LIMITED RECOURSE TO PARTNERS. Any liability of
Seller under this Agreement shall be satisfied solely out of the assets of
Seller and the General Partner, and neither the Partnership nor any Partner
shall have any liability under this Agreement.
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IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed by its duly authorized representative as of the day
and year first above written.
SELLER:
A-1 CELLULAR OF TEXAS, L.P.
By: A-1 CELLULAR OF TEXAS, LLC, General Partner
By: A-1 CELLULAR COMMUNICATIONS, Sole Member
By: /s/ Xxxxxxxxx X. Xxxx
---------------------------------------------
, a General Partner
PURCHASER:
XXXXXX CELLULAR OF XXXXXXX, INC.
By: /s/ Xxxxxxx Xxxxxx
---------------------------------------------
Name:
Title:
