EXHIBIT 2.1
AGREEMENT FOR PURCHASE AND SALE OF LICENSES
Between
SUNSHINE PCS CORPORATION
CINGULAR WIRELESS LLC
and
for purposes of Articles X and XII,
those Stockholders identified on the signature pages hereto
Dated August 18, 2003
AGREEMENT FOR PURCHASE AND SALE OF LICENSES
This Agreement for Purchase and Sale of Licenses (the "Agreement") is
entered into the 18th day of August, 2003 (the "Effective Date") by and between
Sunshine PCS Corporation, a Delaware corporation "Seller"), Cingular Wireless
LLC, a Delaware limited liability company ("Buyer"), and for purposes of
Articles X and XII hereof, those stockholders of Seller identified on the
signature pages hereto (the "Stockholders").
WHEREAS, Seller has acquired the authorizations of the Federal
Communications Commission (the "FCC") to construct and operate personal
communication services ("PCS") wireless telecommunications systems ("Systems")
in the Basic Trading Areas ("BTAs") as described on the attached Exhibit A
(referred to herein as the "Tallahassee License", the "Panama City License", and
the "Ocala License" or, collectively, the "Licenses");
WHEREAS, Seller desires to sell, assign and transfer to Buyer, and Buyer
desires to purchase from Seller, the Licenses on the terms and subject to the
conditions set forth herein (the "Acquisition"); and
WHEREAS, the prior consent of the FCC to the transfer of the Licenses from
Seller to Buyer is required, and the parties intend that the transfer of the
Licenses contemplated by this Agreement will be consummated only if such FCC
consent to transfer is obtained; and
WHEREAS, concurrent with the execution of this Agreement, as an inducement
to Buyer's willingness to enter into this Agreement, certain stockholders of
Sellers have entered into Voting Agreements (copies of which are attached
hereto) pursuant to which those stockholders have agreed, among other things,
subject to the terms of such Voting Agreement, to vote their shares of capital
stock of Seller over which such Persons have voting power to approve this
Agreement and the Acquisition; and
WHEREAS, concurrent with the execution of this Agreement, as an inducement
to Buyer's willingness to enter into the Agreement, Buyer and Seller have
entered into that System Access and Services Agreement and that Wholesale
Agreement of even date herewith.
NOW, THEREFORE, in consideration of the mutual covenants herein and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto, each intending to be legally bound, do hereby
agree as follows:
ARTICLE I.
DEFINITIONS
1.1 Definitions. In this Agreement, the following terms have the meanings
specified or referred to in this Section 1.1 and shall be equally applicable to
both the singular and plural forms. Any agreement referred to below shall mean
such agreement as amended, supplemented and modified from time to time to the
extent permitted by the applicable provisions thereof and by this Agreement.
"Affiliate" of a Person shall mean: (i) any other Person directly, or
indirectly through one or more intermediaries, controlling, controlled by or
under common control with such Person; (ii) any officer, director, partner,
employer, or direct or indirect beneficial owner of any 10% or greater equity or
voting interest of such Person; (iii) any other Person for which a Person
described in clause (ii) acts in any such capacity; or (iv) any other Person in
which such Person beneficially owns a majority of the outstanding capital stock
or equity interests.
"Communications Act" means the Communications Act of 1934, as amended.
"Court Order" means any judgment, order, award or decree of any foreign,
federal, state, local or other court or tribunal and any award in any
arbitration proceeding.
"Encumbrance" means any lien (including, without limitation, any tax lien),
claim, charge, security interest, mortgage, pledge, easement, right of first
offer or first refusal, conditional sale or other title retention agreement,
defect in title, covenant or other restriction of any kind, or any microwave
interference.
"Expenses" means any fees or expenses incurred in connection with
investigating, defending or asserting any claim, action, suit or proceeding
incident to any matter indemnified against under Article X hereunder (including,
without limitation, court filing fees, court costs, arbitration fees or costs,
witness fees, and reasonable fees and disbursements of legal counsel,
investigators, expert witnesses, consultants, accountants and other
professionals).
"FCC Consent" means the consent of the FCC to the assignment of the
Licenses described herein from Seller to Buyer.
"Final Order" means an action taken or order issued by the applicable
Governmental Body as to which (i) no request for stay of the action or order is
pending, no such stay is in effect, and, if any deadline for filing any such
request is designated by statute or regulation, it is passed; (ii) no petition
for rehearing or reconsideration of the action or order, or protest of any kind,
is pending before the Governmental Body and the time for filing any such
petition or protest is passed; (iii) the Governmental Body does not have the
action or order under reconsideration or review on its own motion and the time
for such reconsideration or review has passed; (iv) the action or order is not
then under judicial review, there is no notice of appeal or other application
for judicial review pending, and the deadline for filing such notice of appeal
or other application for judicial review has passed; (v) with respect to an
action taken or order issued by a Governmental Body granting consent to the
transactions contemplated hereunder, such consent shall be without material
adverse conditions; and (vi) free of the imposition of any unjust enrichment
penalties, unless the Seller pays such penalties on or before Closing and
provides Buyer with satisfactory evidence of such payment.
"Governmental Body" means any foreign, federal, state, local or other
governmental authority or regulatory body.
"Losses" means any loss, cost, obligation, liability, settlement payment,
award, judgment, fine, penalty, damage, expense, deficiency, diminution of value
or other charge.
"Person" means any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization or Governmental Body.
"Requirements of Laws" means any foreign, federal, state and local laws,
statutes, regulations, rules, codes or ordinances enacted, adopted, issued or
promulgated by any Governmental Body or common law that is applicable to the
Licenses, the transactions contemplated in this Agreement or any material aspect
of such transactions.
ARTICLE II.
PURCHASE AND SALE
2.1 Purchase of Licenses. On the Closing Date, upon the terms and subject to the
representations, warranties and conditions of this Agreement, Seller shall sell,
transfer, convey, assign, and deliver to Buyer, and Buyer shall purchase and
accept from Seller, the Licenses, free and clear of all Encumbrances.
2.2 Purchase Price Payable at Closing. The aggregate purchase price (the
"Purchase Price") for the Licenses shall be (i) Thirteen Million Seven Hundred
Fifty Thousand Dollars ($13,750,000.00) minus (ii) the aggregate amounts paid by
Buyer to Seller for the term of the Wholesale Agreement as the Fixed Fee on
Schedule A to the Wholesale Agreement. At the Closing, in exchange for the
Licenses, Buyer shall pay and deliver the Purchase Price to Seller by wire
transfer of immediately available funds to an account designated by Seller.
2.3 Excluded Liabilities. Notwithstanding any other provision of this Agreement,
Buyer shall not assume, or otherwise be responsible for any liabilities,
obligations, taxes or indebtedness of Seller or any of its Affiliates, whether
direct or indirect, liquidated or unliquidated, known or unknown, whether
accrued, absolute, contingent, matured, unmatured or otherwise, and whether
arising out of occurrences prior to, at or after the date hereof, including,
without limitation, arising out of the matters set forth on Schedule I hereto
(collectively, the "Excluded Liabilities"). The term "Excluded Liabilities" does
not include liabilities, obligations, taxes or indebtedness related to or
arising out of Buyer's ownership or use of the Licenses from and after the
Closing Date.
2.4 Microwave Cost-Sharing Obligations. All of the cost-sharing reimbursement
obligations owed to other PCS licensees (or to microwave incumbents) by Seller
pursuant to 47 C.F.R. ss.24.239 et seq., which related to Seller's operations
prior to the Closing Date, as well as all of Seller's related obligations
triggered by its operations prior to the Closing Date, shall be Excluded
Liabilities.
ARTICLE III.
CLOSING
3.1 Closing. The closing of the transfer of the Licenses (the "Closing") shall
occur at the offices of Buyer at 10:00 A.M., local time, on a date to be
specified by Buyer to Seller, which closing date will not be more than ten (10)
business days after the date on which the FCC, and all other state and federal
regulatory authorities with jurisdiction over the Licenses or any material
aspect of the transactions contemplated in this Agreement, if any, shall have
consented to the transfer of the Licenses from Seller to Buyer by Final Order,
and subject in all respects to the fulfillment or waiver of the parties'
respective conditions to closing set forth in Article VIII and Article IX, or
such other time and place as the parties may agree (such date, the "Closing
Date").
3.2 Closing Deliveries of Buyer. Subject to fulfillment or waiver of the
conditions set forth in Article VIII, at the Closing, Buyer shall deliver to
Seller all of the following:
(a) Immediately available funds in the amount described in Section 2.2 in
accordance with the payment instructions to be provided by Seller to Buyer prior
to the Closing;
(b) A certificate of good standing of Buyer issued within thirty (30) days
prior to the Closing Date by the Secretary of State of the State of Delaware;
and
(c) A certificate of a manager or the managing member of Buyer, dated the
Closing Date, certifying that as of such Closing Date, (i) each representation
and warranty of Buyer contained in this Agreement is true and correct in all
material respects and (ii) Buyer has complied in all material respects with all
of its obligations under this Agreement.
3.3 Closing Deliveries of Seller. Subject to fulfillment or waiver of the
conditions set forth in Article IX, at the Closing, Seller shall deliver to
Buyer all of the following:
(a) A certificate of an officer of Seller, dated the Closing Date,
certifying that as of such Closing Date, (i) each representation and warranty of
Seller contained in this Agreement is true and correct in all material respects
and (ii) Seller has complied in all material respects with all of its
obligations under this Agreement;
(b) A certificate of the Secretary of Seller dated as of the Closing Date,
as to the resolutions of the Board of Directors and Stockholders of Seller
authorizing the execution, delivery and performance of this Agreement and the
transactions contemplated hereby;
(c) An executed assignment and assumption agreement transferring the
Licenses to Buyer in a form reasonably acceptable to Buyer;
(d) Opinions of Seller's legal counsel, dated as of the Closing Date,
covering the matters set forth on Exhibit B attached hereto; and
(e) All required third party consents to the consummation by the parties
hereto of the transactions contemplated by this Agreement.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Buyer as follows:
4.1 Organization of Seller. Seller is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware. Seller is
duly qualified and in good standing as a foreign corporation in each of the
jurisdictions where such qualification is required by law.
4.2 Authority of Seller. Seller has the full power and authority to own the
Licenses, and is qualified under the FCC's rules and the Communications Act to
hold and convey the Licenses. Seller has full power and authority to execute,
deliver and perform this Agreement and any agreement, document or instrument
executed and delivered pursuant to this Agreement or in connection with this
Agreement. The execution, delivery and performance of this Agreement and any
agreement, document or instrument executed and delivered pursuant to this
Agreement or in connection with this Agreement by Seller has been or will be
prior to the Closing Date duly authorized and approved by all necessary action
of Seller. This Agreement is the legal, valid and binding obligation of Seller,
enforceable against Seller in accordance with its terms except for the effect
thereon of any applicable bankruptcy, insolvency, reorganization, moratorium,
and similar laws affecting the rights of creditors generally, and general
principles of equity.
4.3 No Conflicts. Except for the FCC Consent, neither the execution and delivery
of this Agreement nor the consummation of any of the transactions contemplated
hereby nor compliance with or fulfillment of the terms, conditions and
provisions hereof will:
(a) Violate or conflict with, result in a breach of the terms, conditions
or provisions of, or constitute a default, an event of default or an event
creating rights of acceleration, termination, modification or cancellation or a
loss of rights under, or require any notice to, authorization or approval of,
filing with or consent under: (1) the certificate of incorporation or bylaws of
Seller; (2) any note, indenture, instrument, agreement, mortgage, lease,
license, franchise, permit or other authorization, right restriction or
obligation to which Seller is a party or any of its properties is subject or by
which Seller is bound; (3) any Court Order to which Seller is a party or by
which it is bound; or (4) any Requirements of Laws affecting Seller.
(b) Require the approval, consent, authorization or act of, or the making
by Seller of any declaration, filing or registration with any Person other than
the consent or approval of the stockholders of Seller.
4.4 The Licenses; Build-Out of Licenses.
(a) Seller has all permits, licenses, franchises, variances, exemptions,
orders, operating rights and other governmental authorizations, consents and
approvals, necessary to conduct its business as presently conducted, except for
those the absence of which are not, individually or in the aggregate, reasonably
likely to have a material adverse effect on Seller or prevent, materially delay
or materially impair its ability to consummate the transactions contemplated by
this Agreement.
(b) Seller has performed as of the Effective Date, and will have performed
as of the Closing Date, all of its respective obligations required to have been
performed under the Licenses as of such dates. Except as set forth on Schedule
I, no event has occurred or condition or state of facts exists which constitutes
or, after notice or lapse of time or both, would constitute a breach or default
under the Licenses which permits or, after notice or lapse of time or both,
would permit revocation or termination of the Licenses, or which might adversely
affect the rights of Seller under the Licenses. The Licenses are valid and in
full force and effect. The Licenses may be assigned and transferred to Buyer in
accordance with this Agreement and will continue in full force and effect
immediately after such assignment and transfer, without the consent, approval,
or act of, or the making of any filing with, any Governmental Body except for
the FCC Consent. The Licenses (i) were granted on the grant date specified on
Exhibit A and (ii) expire on the expiration dates specified on Exhibit A.
(c) Seller has timely complied with, and timely notified the FCC of its
compliance with, the five-year construction benchmarks applicable to the
Licenses as mandated by Section 24.203 of the FCC rules.
4.5 Title to Licenses. Seller has good and marketable title to the Licenses,
free and clear of all Encumbrances. Upon delivery to Buyer on the Closing Date,
Seller will transfer to Buyer good and marketable title to the Licenses, subject
to no indebtedness or Encumbrances.
4.6 No Violation, Litigation or Regulatory Action. Except for the FCC Consent,
Seller has complied in all material respects with all Requirements of Law which
are applicable to the Licenses, including without limitation, all applicable
rules and regulations of the FCC, tower and lighting requirements of the Federal
Aviation Administration (""FAA""), and any applicable electrical or other codes
of the city/locality/state concerned. Seller has made all regulatory filings
required, and paid all fees and assessments imposed, by any Governmental Body,
and all such filings and the calculation of such fees, are accurate in all
material respects, except where the failure to make such filing or pay such fees
or assessments would not have a material adverse effect on the Licenses. Except
as set forth in Schedule I, there is no investigation, claim, action, suit or
other proceeding pending or, to the best knowledge of Seller, threatened against
Seller, relating to Seller or the Licenses which, if adversely determined,
either would result in the revocation, cancellation, suspension or adverse
modification of the Licenses or would have a material adverse effect on the
ability of Seller to perform its obligations hereunder, nor is Seller aware of
any reasonable basis for any such investigation, claim, action, suit or
proceeding.
4.7 No Finder. No broker or finder has acted on behalf of Seller in connection
with the transactions contemplated hereby.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Seller as follows:
5.1 Organization of Buyer. Buyer is a limited liability company, duly organized,
validly existing and in good standing under the laws of the State of Delaware.
5.2 Authority of Buyer. Buyer has full power and authority to execute, deliver
and perform this Agreement and any agreement, document or instrument executed
and delivered pursuant to this Agreement or in connection with this Agreement.
The execution, delivery and performance of this Agreement and any agreement,
document or instrument executed and delivered pursuant to this Agreement or in
connection with this Agreement by Buyer have been duly authorized and approved
by all necessary limited liability company actions on the part of Buyer. This
Agreement is the legal, valid and binding agreement of Buyer, enforceable
against Buyer in accordance with its terms except for the effect thereon of any
applicable bankruptcy, insolvency, reorganization, moratorium, and similar laws
affecting the rights of creditors generally, and general principles of equity.
5.3 No Conflicts. Except for the FCC Consent, neither the execution and delivery
of this Agreement nor the consummation of any of the transactions contemplated
hereby nor compliance with or fulfillment of the terms, conditions and
provisions hereof will:
(a) Violate or conflict with, result in a breach of the terms, conditions
or provisions of, or constitute a default, an event of default or an event
creating rights of acceleration, termination, modification or cancellation or a
loss of rights under, or require any notice to, authorization or approval of,
filing with or consent under: (1) the certificate of formation or operating
agreement of Buyer; (2) any material note, indenture, instrument, agreement,
mortgage, lease, license, franchise, permit or other authorization, right
restriction or obligation to which Buyer is a party or any of its properties is
subject or by which Buyer is bound; (3) any Court Order to which Buyer is a
party or by which it is bound; or (4) any Requirements of Laws affecting Buyer.
(b) Require the approval, consent, authorization or act of, or the making
by Buyer of any declaration, filing or registration with any Person.
5.4 No Finder Fees. No broker or finder has acted on behalf of Buyer in
connection with the transactions contemplated hereby.
5.5 Litigation. There is no investigation, claim, action, suit or other
proceeding pending or, to the knowledge of Buyer, threatened against Buyer,
which is reasonably likely to prevent the consummation of the transactions
contemplated hereby.
5.6 Qualification. Buyer (or its assignee in the event of an assignment pursuant
to Section 12.4) is legally qualified to hold the Licenses, and to receive any
authorization or approval from any state or local regulatory authority necessary
for it to acquire the Licenses. Buyer (or its assignee in the event of an
assignment pursuant to Section 12.4) is in compliance with Section 310(b) of the
Communications Act, and all rules, regulations or policies of the FCC
promulgated thereunder with respect to alien ownership.
ARTICLE VI.
ACTION PRIOR TO THE CLOSING DATE
The parties hereto covenant and agree to take the following actions between
the date hereof and the Closing Date:
6.1 Investigation by Buyer. Seller shall furnish to Buyer or its authorized
representatives such information concerning the Licenses and Seller as shall be
reasonably requested, including all such information as shall be necessary to
enable Buyer or its authorized representatives to verify the accuracy of the
representations and warranties contained in this Agreement, to verify that the
covenants of Seller contained in this Agreement have been complied with and to
determine whether the conditions set forth in Article VIII have been satisfied.
No investigation made by Buyer or its authorized representatives hereunder shall
affect the representations and warranties of Seller hereunder.
6.2 Investigation by Seller. Buyer shall furnish to Seller or its authorized
representatives such information concerning Buyer as shall be reasonably
requested, including all such information as shall be necessary to enable Seller
or its authorized representatives to verify the accuracy of the representations
and warranties contained in this Agreement, to verify that the covenants of
Buyer contained in this Agreement have been complied with and to determine
whether the conditions set forth in Article IX have been satisfied. No
investigation made by Seller or its authorized representatives hereunder shall
affect the representations and warranties of Buyer hereunder.
6.3 Preserve Accuracy of Representations and Warranties. Each party shall
promptly notify the other in writing (a) of any action, suit or proceeding that
shall be instituted or threatened against such party to restrain, prohibit or
otherwise challenge the legality of any transaction contemplated by this
Agreement, (b) of any development causing a breach of any of the representations
and warranties of such party in Articles IV or V above, as applicable, or (c) of
any lawsuit, claim, proceeding or investigation that may be threatened, brought,
asserted or commenced against such party which would have been disclosed if such
lawsuit, claim, proceeding or investigation had arisen prior to the date hereof.
No disclosure by any party pursuant to this Section 6.3, however, shall be
deemed to amend or supplement this Agreement or to prevent or cure any
misrepresentation, breach of warranty or breach of covenant therein.
6.4 Consents of Third Parties; Governmental Approvals.
(a) Consents. Seller will act diligently and reasonably to secure, before
the Closing Date, any consent, approval or waiver, in form and substance
reasonably satisfactory to Buyer, from any party as required to be obtained to
assign the Licenses to Buyer or to otherwise satisfy the conditions set forth
herein; provided that Seller shall not make any agreement or understanding
affecting the Licenses as a condition for obtaining any such consent, approval
or waiver except with the prior written consent of Buyer. During the period
prior to the Closing Date, Buyer shall act diligently and reasonably to
cooperate with Seller to obtain the consents, approvals and waivers contemplated
by this Section 6.4(a); provided that Buyer shall have no obligation to offer or
pay any consideration in order to obtain any such consent or approval (other
than as provided in Section 2.3).
(b) FCC Consents. Seller shall, as promptly as practicable, but in no event
later than five (5) business days, following the date of the Stockholder
Approval, file with the FCC an FCC Form 603 (or other appropriate form)
application seeking consent to assign the Licenses from Seller to Buyer. The
parties shall cooperate and use their respective reasonable efforts to prosecute
such application to a favorable conclusion and shall each bear its own costs for
such filings.
ARTICLE VII.
ADDITIONAL AGREEMENTS
7.1 Reasonable Efforts; Obligations of Buyer and Seller. Subject to the terms
and conditions herein, each of the parties hereto agrees to use all commercially
reasonably efforts to take, or cause to be taken, all actions, and to do, or
cause to be done, all things reasonably necessary, proper or advisable under
applicable laws and regulations to consummate and make effective the
transactions contemplated by this Agreement as promptly as practicable. In case
at any time after the Closing any further action is reasonably necessary to
carry out the purposes of this Agreement, the proper agents, officers and
directors of each party hereto shall take such action.
7.2 Stockholder Approval.
(a) Seller shall take all action necessary in accordance with the Delaware
General Corporation Law and its Certificate of Incorporation and Bylaws to
obtain the necessary approval in favor of this Agreement and the transactions
contemplated hereby, whether by vote or by written consent, of its stockholders
entitled to vote on this Agreement and the transactions contemplated hereby (the
"Stockholder Approval"), which approval shall be obtained, subject to Section
7.3(c)(iii), no later than the 20th day following the Effective Date. Subject to
Section 7.3, Seller shall use its reasonable best efforts to solicit from its
stockholders the Stockholder Approval.
(b) Except as expressly permitted by Section 7.3: (i) the Board of
Directors of Seller shall recommend that the stockholders of Seller vote or act
by written consent in favor of adoption and approval of this Agreement and
approval of the Acquisition, (ii) the information statement or similar
documentation disseminated to the voting stockholders of Seller in connection
with the Stockholder Approval shall include a statement to the effect that the
Board of Directors of Seller has recommended that Seller's stockholders vote or
act by written consent in favor of the adoption and approval of this Agreement
and approval of the Acquisition, and (iii) neither the Board of Directors of
Seller nor any committee thereof shall withdraw, amend or modify, or propose or
resolve to withdraw, amend or modify in a manner adverse to Buyer, the
recommendation of its Board of Directors that the stockholders of Seller vote or
act by written consent in favor of adoption and approval of this Agreement and
the Acquisition.
7.3 Acquisition Proposals.
(a) Seller agrees that neither it nor any of its Affiliates nor any of the
officers and directors of it or its Affiliates shall, and that it shall cause
its and its Affiliates' employees, agents and Representatives not to (and shall
not authorize any of them to) directly or indirectly: (i) solicit, initiate,
encourage, knowingly facilitate or induce any inquiry with respect to, or the
making, submission or announcement of, any Acquisition Proposal (as defined in
Section 7.3(g)), (ii) participate in any discussions or negotiations regarding,
or furnish to any Person any nonpublic information with respect to, or take any
other action to knowingly facilitate any inquiries or the making of any proposal
that constitutes or may reasonably be expected to lead to, any Acquisition
Proposal, (iii) approve, endorse or recommend any Acquisition Proposal (except
to the extent specifically permitted pursuant to Section 7.3(d)), or (iv) enter
into any letter of intent or similar document or any contract, agreement or
commitment contemplating or otherwise relating to any Acquisition Proposal or
transaction contemplated thereby. Seller and its Subsidiaries and their
respective officers, directors, employees, agents and representatives shall
immediately cease any and all existing activities, discussions or negotiations
with any third parties conducted heretofore with respect to any Acquisition
Proposal.
(b) (i) Within two (2) business days after receipt of any Acquisition
Proposal or any request for nonpublic information or inquiry which it reasonably
believes could lead to an Acquisition Proposal, Seller shall provide Buyer with
oral and written notice of the material terms and conditions of such Acquisition
Proposal, request or inquiry, and the identity of the Person or Group making any
such Acquisition Proposal, request or inquiry and a copy of all written
materials provided in connection with such Acquisition Proposal, request or
inquiry. Upon receipt of the Acquisition Proposal, request or inquiry, Seller
shall provide Buyer as promptly as practicable oral and written notice setting
forth all such information as is reasonably necessary to keep Buyer informed in
all material respects of the status and details (including material amendments
or proposed material amendments) of any such Acquisition Proposal, request or
inquiry and shall promptly provide to Buyer a copy of all written materials
subsequently provided in connection with such Acquisition Proposal, request or
inquiry.
(ii) Seller shall provide Buyer with forty-eight (48) hours prior notice
(or such lesser prior notice as is provided to the members of its Board of
Directors) of any meeting of its Board of Directors at which its Board of
Directors is reasonably expected to consider any Acquisition Proposal.
(c) Notwithstanding anything to the contrary contained in Section 7.3(a)
and subject to compliance with Section 7.3(b), in the event that Seller receives
an unsolicited, bona fide Acquisition Proposal from a Person that its Board of
Directors has in good faith concluded (following the receipt of the advice of
its outside legal counsel and its financial advisor, if any), is, or is
reasonably likely to result in, a Superior Offer (as defined in Section 7.3(g)),
it may then take the following actions (but only if and to the extent that its
Board of Directors concludes in good faith, following the receipt of advice of
its outside legal counsel, that the failure to do so is reasonably likely to
result in a breach of its fiduciary obligations under applicable law): (i)
furnish nonpublic information to the third party making such Acquisition
Proposal, provided that (A) (1) concurrently with furnishing any such nonpublic
information to such party, it gives Buyer written notice of its intention to
furnish nonpublic information and (2) it receives from the third party an
executed confidentiality agreement containing customary limitations on the use
and disclosure of all nonpublic written and oral information furnished to such
third party on its behalf, the terms of which are at least as restrictive as the
terms contained in the NDA and (B) contemporaneously with furnishing any such
nonpublic information to such third party, it furnishes such nonpublic
information to Buyer (to the extent such nonpublic information has not been
previously so furnished); (ii) engage in negotiations with the third party with
respect to the Acquisition Proposal, provided that concurrently with entering
into negotiations with such third party, it gives Buyer written notice of its
intention to enter into negotiations with such third party and (iii) postpone
the Stockholder Approval for such period of time not to exceed 15 days following
the date of the receipt of such Acquisition Proposal as in the reasonable
judgment of the Board of Directors is required in order to determine whether
such Acquisition Proposal constitutes a Superior Offer and/or to comply with the
provisions of this Section 7.3.
(d) In response to the receipt of a Superior Offer, the Board of Directors
of Seller may withhold, withdraw, amend or modify its recommendation in favor of
the Acquisition (any of the foregoing actions, whether by a Board of Directors
or a committee thereof, a "Change of Recommendation"), if all of the following
conditions in clauses (i) through (v) are met at least two days prior to any
Change of Recommendation: (i) a Superior Offer with respect to Seller has been
made and has not been withdrawn; (ii) the Stockholder Approval has not yet been
obtained; (iii) Seller shall have (A) provided to Buyer written notice which
shall state expressly (1) that it has received a Superior Offer, (2) the
material terms and conditions of the Superior Offer and the identity of the
Person or Group making the Superior Offer, and (3) that it intends to effect a
Change of Recommendation and the manner in which it intends to do so, (B)
provided to Buyer a copy of all written materials delivered to the Person or
Group making the Superior Offer in connection with such Superior Offer, and (C)
made available to Buyer all materials and information made available to the
Person or Group making the Superior Offer in connection with such Superior
Offer; (iv) its Board of Directors has concluded in good faith, after receipt of
advice of its outside legal counsel, that, in light of such Superior Offer, the
failure of the Board of Directors to effect a Change of Recommendation is
reasonably likely to result in a breach of its fiduciary obligations to its
stockholders under applicable Law; and (v) it shall not have breached in any
material respect any of the provisions set forth in Section 7.2 or this Section
7.3.
(e) Notwithstanding anything to the contrary contained in this Agreement,
Seller shall not submit to the vote of its respective stockholders or take any
action by written consent on any Acquisition Proposal, or propose to do so,
unless and until this Agreement shall have been terminated in accordance with
its terms.
(f) Nothing contained in this Agreement shall prohibit either party or its
respective Board of Directors from taking and disclosing to its stockholders a
position contemplated by Rules 14d-9 and 14e-2(a) promulgated under the Exchange
Act; provided that Seller shall not effect a Change of Recommendation unless
specifically permitted pursuant to the terms of Section 4.3(d).
(g) For purposes of this Agreement, the following terms shall have the
following meanings:
(i) "Acquisition Proposal" shall mean any offer or proposal, relating to
any transaction or series of related transactions involving: (A) any purchase
from Seller or acquisition by any Person or "Group" (as defined under Section
13(d) of the Exchange Act and the rules and regulations thereunder) of more than
a ten percent (10%) interest in the total outstanding voting securities of
Seller or any tender offer or exchange offer that if consummated would result in
any Person or Group beneficially owning ten percent (10%) or more of the total
outstanding voting securities of Seller, or any acquisition, consolidation,
merger, business combination or similar transaction involving Seller, (B) any
sale, lease (other than in the ordinary course of business), exchange, transfer,
license (other than in the ordinary course of business), acquisition or
disposition of more than ten percent (10%) of the assets of Seller, or (C) any
liquidation, spin-off or dissolution of the Assets or Seller.
(ii) "Superior Offer" shall mean an unsolicited, bona fide offer made by a
third party to acquire, directly or indirectly, pursuant to a merger, tender
offer, exchange offer, acquisition, consolidation or other business combination,
substantially all of the assets of Seller or more than 50% of the total
outstanding voting securities of Seller on terms that the Board of Directors of
Seller has in good faith concluded (following the receipt of advice of its
outside legal counsel and consultation with its financial adviser), taking into
account, among other things, all legal, financial, regulatory and other aspects
of the offer and the Person making the offer, to be more favorable, from a
financial point of view, to Seller's stockholders (in their capacities as
stockholders) than the terms of the Acquisition (which shall be adjusted for
comparison purposes to include an implied residual enterprise value for Seller's
assets other than the Licenses) and is capable of being consummated.
7.4 Filing of Form 8-K. The parties hereto acknowledge that Seller shall file
with the Securities and Exchange Commission the Current Report on Form 8-K
prepared by Seller and delivered to Buyer on the date hereof, to which Seller
shall annex as an exhibit a copy of this Agreement and a copy of the press
release mutually agreeable to Buyer and Seller issued in accordance with Section
12.2 hereof.
ARTICLE VIII
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF BUYER
The obligations of Buyer under this Agreement shall be, at the option of
Buyer, subject to the satisfaction of the conditions set forth below, on or
prior to the Closing Date. These conditions are solely for the benefit of Buyer
and may be waived by Buyer at any time in its sole discretion.
8.1 No Misrepresentation or Breach of Covenants and Warranties. There shall have
been no material breach by Seller in the performance of any of its covenants and
agreements herein; each of the representations and warranties of Seller
contained or referred to herein shall be true and correct in all material
respects on the Closing Date as though made on the Closing Date, except for
changes therein specifically permitted by this Agreement or resulting from any
transaction expressly consented to in writing by Buyer.
8.2 No Restraint or Litigation. No action, suit, investigation or proceeding
(except for any action, suit, investigation or proceeding relating to the FCC
Consent, which shall be governed solely by the condition set forth in Section
8.3) shall have been instituted to restrain or prohibit or otherwise challenge
the legality or validity of the transactions contemplated hereby, and no action,
suit, investigation or proceeding shall have been instituted, nor shall an order
have been issued by the court addressing the merits of the matters set forth in
Schedule I in a manner that directly and materially adversely affects the right
of Buyer to own and control the Licenses following the Closing or awards
material damages, fines, penalties or expenses to be paid by Seller which have
not been paid by Seller.
8.3 FCC Consent. The FCC shall have consented by Final Order to the assignment
of the Licenses to Buyer.
8.4 Stockholder Consent. Seller shall have received the consent or approval of
its stockholders to the consummation of the transaction contemplated by this
Agreement.
8.5 Necessary Consents. Seller shall have delivered all third party consents
required for Seller to consummate the transaction contemplated by this
Agreement.
8.6 Closing Deliveries. Seller shall have made all of its Closing Deliveries
described in Section 3.3.
ARTICLE IX
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLER
The obligations of Seller under this Agreement shall be, at the option of
Seller, subject to the satisfaction of the conditions set forth below, on or
prior to the Closing Date. These conditions are solely for the benefit of Seller
and may be waived by Seller at any time in their sole discretion.
9.1 No Misrepresentation or Breach of Covenants and Warranties. There shall have
been no material breach by Buyer in the performance of any of its covenants and
agreements herein; each of the representations and warranties of Buyer contained
or referred to herein shall be true and correct in all material respects on the
Closing Date as though made on the Closing Date, except for changes therein
specifically permitted by this Agreement or resulting from any transaction
expressly consented to in writing by Seller.
9.2 No Restraint or Litigation. No action, suit, investigation or proceeding
(except for any action, suit, investigation or proceeding relating to FCC
matters, which shall be governed solely by the condition set forth in Section
9.3) shall have been instituted to restrain or prohibit or otherwise challenge
the legality or validity of the transactions contemplated hereby.
9.3 FCC Consent. The FCC Consent shall have been obtained.
9.4 Stockholder Consent. Seller shall have received the consent or approval of
its stockholders to the consummation of the transaction contemplated by
this Agreement.
9.5 Closing Deliveries. Buyer shall have made all of its Closing Deliveries
described in Section 3.2.
ARTICLE X.
INDEMNIFICATION
10.1 Survival. All of the representations and warranties of the parties
contained in Article IV or Article V shall survive the Closing hereunder (even
if the other party knew or had reason to know of any misrepresentation or breach
of warranty at the time of such Closing, unless the other party expressly waives
in writing any such breach at or before the time of such Closing) and shall
continue in full force and effect until the two (2) year anniversary of the
Closing Date, except that the representations and warranties set forth in
Sections 4.2, 4.5, 5.2 and 5.6 shall survive the Closing and continue in full
force and effect until the five (5) year anniversary of the Closing Date.
10.2 Indemnification by Seller. Seller and the Stockholders, jointly and
severally, shall indemnify Buyer, its Affiliates and their respective directors,
officers, agents, successors and assigns from and against the entirety of any
Losses or reasonable Expenses any such person may incur prior to, through and
after the date of the claim for indemnification resulting from, arising out of,
relating to, in the nature of, or caused by:
(a) the breach (or any claim, action, suit or proceeding, in the event any
third party alleges facts that, if true, would mean Seller has breached) of any
of its representations, warranties, or covenants contained herein, and, if there
is an applicable survival period pursuant to Section 10.1 above, Buyer makes a
written claim against Seller within such period;
(b) the matters set forth in Schedule I; and
(c) any actual or threatened claim, action, suit or proceeding (including,
without limitation, FCC enforcement action) against Buyer or any of its
Affiliates arising from Seller's ownership or operation of the Licenses prior to
the Closing or arising out of, or based upon, any Excluded Liability.
10.3 Indemnification by Buyer. In the event Buyer breaches (or in the event any
third party alleges facts that, if true, would mean Buyer has breached) any of
its representations, warranties, or covenants contained herein and, if there is
an applicable survival period pursuant to Section 10.1 above and Seller makes a
written claim against Buyer within such period, or in the event of any actual or
threatened claim, action, suit or proceeding against Seller arising from Buyer's
ownership or operation of the Licenses following the Closing, then Buyer shall
indemnify Seller and its respective directors, officers, agents, successors and
assigns from and against the entirety of any Losses or reasonable Expenses any
such person may incur prior to, through and after the date of the claim for
indemnification resulting from, arising out of, relating to, in the nature of,
or caused by the breach (or the alleged breach), or such claim, action, suit or
proceeding.
10.4 Certain Limitations. Notwithstanding any provision of this Agreement to the
contrary and except for fraud or as set forth below:
(a) the maximum aggregate liability of Seller pursuant to the
indemnification obligations under Section 10.2 shall not exceed Thirteen Million
Seven Hundred Fifty Thousand Dollars ($13,750,000.00);
(b) the maximum aggregate liability of Xxxxx Interactive Corporation
pursuant to the indemnification obligations under Section 10.2 shall not exceed
the greater of (x) Eight Million Dollars ($8,000,000.00) or (y) the Purchase
Price paid to Xxxxx Interactive Corporation as a result of any redemption,
distribution, dissolution or liquidation of or transaction with Seller;
(c) the maximum aggregate liability of Fortunet Wireless Communication
Corporation pursuant to the indemnification obligations under Section 10.2 shall
not exceed the greater of (x) Six Hundred Thousand Dollars ($600,000.00) or (y)
the Purchase Price paid to to Fortunet Wireless Communication Corporation as a
result of any redemption, distribution, dissolution or liquidation of or
transaction with Seller;
(d) the maximum aggregate liability of Buyer pursuant to the
indemnification obligations under Section 10.3 shall not exceed Eight Million
Six Hundred Thousand Dollars ($8,600,000.00);
(e) the indemnification rights in this Article X shall expire: (i) at the
end of the survival period set forth in Section 10.1, (ii) with respect to the
matters set forth in Section 10.2(b) ninety (90) days after Buyer receives
written notice from Seller of both (x) a final, nonappealable order, and (y)
confirmation by Seller and/or Stockholders of payment of any amounts that may be
payable by Seller and/or the Stockholders with respect thereto; and (iii) five
(5) years following the Closing Date for all other matters; provided that in
each case the Indemnitor (as defined below) shall continue to be responsible
after such expiration dates for those claims and losses of which they have
received notice required by this Article prior to the expiration dates referred
to in (i), (ii) and (iii) of this Section 10.4(e).
Except in the case of fraud or a willful or intentional breach of this
Agreement, no Indemnified Party (as defined below) shall be entitled to receive
any special, punitive, incidental or consequential damages.
10.5 Notice of Claims.
(a) Any party (the "Indemnified Party") seeking indemnification under this
Article X shall give to the party obligated to provide indemnification to such
Indemnified Party (the "Indemnitor") a notice (a "Claim Notice") describing in
reasonable detail the facts giving rise to any claim for indemnification
hereunder and shall include in such Claim Notice (if then known) the amount or
the method of computation of the amount of such claim, and a reference to the
provision of this Agreement or any agreement, document or instrument executed
pursuant hereto or in connection herewith upon which such claim is based;
provided, that a Claim Notice in respect of any action at law or suit in equity
by or against a third Person as to which indemnification will be sought shall be
given promptly after the action or suit is commenced; provided further that
failure to give such notice shall not relieve the Indemnitor of its obligations
hereunder except to the extent it shall have been prejudiced by such failure.
(b) Subject to Section 10.4, after the giving of any Claim Notice pursuant
hereto, the amount of indemnification to which an Indemnified Party shall be
entitled under this Article X shall be determined: (i) by the written agreement
between the Indemnified Party and the Indemnitor; or (ii) by an award from an
arbitrator pursuant to Section 12.10 hereof or by a final judgment or decree of
any court of competent jurisdiction. The judgment or decree of a court shall be
deemed final when the time for appeal, if any, shall have expired and no appeal
shall have been taken or when all appeals taken shall have been finally
determined. The Indemnified Party shall have the burden of proof in establishing
the amount of Losses and Expenses suffered by it.
10.6 Third Person Claims.
(a) Subject to Section 10.6(b), the Indemnified Party shall have the right
to conduct and control, through counsel of its choosing, the defense, compromise
or settlement of any third Person claim, action or suit against such Indemnified
Party as to which indemnification will be sought by any Indemnified Party from
any Indemnitor hereunder, and in any such case the Indemnitor shall cooperate in
connection therewith and shall furnish such records, information and testimony
and attend such conferences, discovery proceedings, hearings, trials and appeals
as may be reasonably requested by the Indemnified Party in connection therewith;
provided, that the Indemnitor may participate, through counsel chosen by it and
at its own expense, in the defense of any such claim, action or suit as to which
the Indemnified Party has so elected to conduct and control the defense thereof;
and provided, further, that the Indemnified Party shall not, without the written
consent of the Indemnitor (which written consent shall not be unreasonably
withheld), pay, compromise or settle any such claim, action or suit, except that
no such consent shall be required if, following a written request from the
Indemnified Party, the Indemnitor shall fail, within fourteen (14) days after
the making of such request, to acknowledge and agree in writing that, if such
claim, action or suit shall be adversely determined, such Indemnitor has an
obligation to provide indemnification hereunder to such Indemnified Party.
Notwithstanding the foregoing, the Indemnified Party shall have the right to
pay, settle or compromise any such claim, action or suit without such consent,
provided that in such event the Indemnified Party shall waive any right to
indemnity hereunder unless such consent is unreasonably withheld.
(b) If any third Person claim, action or suit against any Indemnified Party
is solely for money damages, then the Indemnitor shall have the right to conduct
and control, through counsel of its choosing, the defense, compromise or
settlement of any such third Person claim, action or suit against such
Indemnified Party as to which indemnification will be sought by any Indemnified
Party from any Indemnitor hereunder if the Indemnitor has acknowledged and
agreed in writing that, if the same is adversely determined, the Indemnitor has
an obligation to provide indemnification to the Indemnified Party in respect
thereof, and in any such case the Indemnified Party shall cooperate in
connection therewith and shall furnish such records, information and testimony
and attend such conferences, discovery proceedings, hearings, trials and appeals
as may be reasonably requested by the Indemnitor in connection therewith;
provided, that the Indemnified Party may participate, through counsel chosen by
it and at its own expense, in the defense of any such claim, action or suit as
to which the Indemnitor has so elected to conduct and control the defense
thereof. Notwithstanding the foregoing, the Indemnified Party shall have the
right to pay, settle or compromise any such claim, action or suit, provided that
in such event the Indemnified Party shall waive any right to indemnity therefor
hereunder unless the Indemnified Party shall have sought the consent of the
Indemnitor to such payment, settlement or compromise and such consent was
unreasonably withheld, in which event no claim for indemnity therefore hereunder
shall be waived.
10.7 Amount of Indemnification Payments. In calculating any Loss or Expense
there shall be deducted any insurance recovery in respect thereof (and no right
of subrogation shall accrue hereunder to any insurer).
ARTICLE XI.
TERMINATION
11.1 Termination. Anything contained in this Agreement to the contrary
notwithstanding, this Agreement may be terminated:
(a) By the mutual written consent of Seller and Buyer;
(b) By either Seller or Buyer upon written notice to the other, in the
event the other party (the "Breaching Party") has materially breached its
representations, warranties or covenants contained in this Agreement and failed
to cure such breach within 30 days after it has been given a Termination Notice
in respect of such breach; provided, however, that the party claiming such
breach (i) is not itself in material breach of its representations, warranties
or covenants contained herein, (ii) promptly notifies the Breaching Party in
writing (the "Termination Notice") of its intention to exercise its rights under
this Agreement as a result of the breach, and (iii) specifies in such
Termination Notice the representation, warranty or covenant of which the
Breaching Party is allegedly in material breach;
(c) By either Seller or Buyer upon written notice to the other, if a court
of competent jurisdiction or Governmental Body shall have issued an order,
decree or ruling permanently restraining, enjoining or otherwise prohibiting the
transactions contemplated by this Agreement, and such order, decree, ruling or
other action shall have become final and non-appealable; or
(d) By either Seller or Buyer upon twenty (20) days' prior written notice
of such termination, if the Closing shall not have occurred on or before the one
(1) year anniversary of the date of the Stockholder Approval, unless the failure
to consummate the transaction contemplated by this Agreement is the result of a
breach of this Agreement by the party seeking termination.
(e) By either Buyer or Seller in the event the stockholders of Seller fail
to give the Stockholder Approval within the applicable time period set forth in
Section 7.2; provided, however, that the right to terminate this Agreement under
this Section 11.1(e) shall not be available to Seller where the failure to
obtain stockholder approval shall have been caused by the action or failure to
act by Seller and such action or failure to act constitutes a material breach by
Seller of this Agreement; or
(f) By Buyer in the event that (i) the Board of Directors of Seller, shall
have resolved not to reaffirm the Acquisition, or (ii) the Board of Directors of
Seller shall have failed to include in the information statement or similar
documentation disseminated to the voting stockholders of Seller in connection
with the Stockholder Approval its recommendation, without modification or
qualification, that Seller's stockholders approve and adopt this Agreement and
approve the Acquisition or shall have withdrawn, qualified or modified, or
proposed publicly to withdraw, qualify or modify, in a manner adverse to Buyer,
the recommendation of such Board of Directors to Seller's stockholders that they
approve and adopt this Agreement and approve the Acquisition, or (iii) the Board
of Directors of Seller shall have made a Change of Recommendation or, within ten
business days after commencement of any tender or exchange offer for any shares
of Seller Common Stock, the Board of Directors of Seller shall have failed to
recommend against acceptance of such tender or exchange offer by its
stockholders or takes no position with respect to the acceptance of such tender
or exchange offer by its stockholders, or (iv) any Person (other than Buyer)
shall have acquired beneficial ownership (determined pursuant to Rule 13d-3
promulgated under the Exchange Act) of 10% or more of the outstanding shares of
Seller Common Stock; or
(g) By Seller, (provided that Seller has complied with Sections 7.2 and 7.3
hereof), if the Board of Directors of Seller has made a Change of Recommendation
in order to approve and permit Seller to accept a Superior Offer; provided,
however, that (i) upon request by Buyer, the Board of Directors of Seller shall
negotiate in good faith to modify this Agreement for three (3) business days
after Seller has provided to Buyer an initial notice of its intent to terminate
pursuant to this Section 11.1(g), and (ii) Seller shall have tendered to Buyer
payment in full of the amount specified in Section 11.3 after compliance with
the foregoing clause (i) and concurrently with delivery of its final notice of
termination pursuant to this Section 11.1(g); or
(h) By Buyer in the event that: a Final Order is not issued within
twelve (12) months of the date the applications are placed on public notice; a
Final Order is issued that is expressly conditioned upon the outcome of the
matters set forth in Schedule I; the FCC issues an Order to Show Cause (or
similar notice) why the Licenses should not be revoked; the FCC designates the
transferor/assignor's basic qualifications for hearing; or an order is issued by
the court addressing the merits of the matters set forth in Schedule I in a
manner that directly and materially adversely affects the right of Buyer to own
and control the Licenses following the Closing.
11.2 Effect of Termination. In the event of termination of this Agreement by
either party, except as otherwise provided herein, all rights and obligations of
the parties under this Agreement shall terminate without any liability of any
party to any other party (except for any liability of any party then in breach
of its covenants, representations or warranties hereunder). The provisions of
Sections 11.2, 11.3, 12.1, 12.3, 12.5, 12.6, 12.7, 12.8, 12.10, 12.11, and 12.12
shall expressly survive the expiration or termination of this Agreement. Nothing
in this Section 11.2 shall be deemed to release any party from any liability for
breach by such party of its obligations under this Agreement or from any
obligations that exist under separate agreements between the parties.
11.3 Expenses. Notwithstanding Section 12.7 of this Agreement, if:
(a) (i) either Seller or Buyer terminates this Agreement pursuant to
11.1(d), Section 11.1(e) or 11.1(b) and there has been publicly announced an
Acquisition Proposal (other than the Acquisition) prior to the termination date,
and there has been publicly announced an Acquisition Proposal (other than the
Acquisition) prior to the termination date, and Seller has not publicly
disapproved without condition or qualification such Acquisition Proposal and
publicly reaffirmed without condition or qualification its approval of the
Acquisition, or (ii) Seller has failed to perform and comply in all material
respects with any of its obligations, agreements or covenants required by this
Agreement and Buyer terminates this Agreement pursuant to Section 11.1(b), and
within twelve months of such termination under either of (i) or (ii) above
Seller shall either (1) consummate an Acquisition Proposal or (2) enter into an
agreement with respect to an Acquisition Proposal, whether or not such
Acquisition Proposal (but changing, in the case of (1) and (2), the references
to the 10% amounts in the definition of Acquisition Proposal to 50%) is
subsequently consummated; or
(b) Buyer shall terminate this Agreement pursuant to 11.1(f); or
(c) Seller shall terminate this Agreement pursuant to 11.1(g); then Seller
shall pay to Buyer an amount equal to $500,000 (the "Termination Fee"). Seller
hereby waives any right to set-off or counterclaim against such amounts. If the
Termination Fee shall be payable pursuant to subsection (a) of this Section
11.3, the Termination Fee shall be paid in same-day funds at or prior to the
earlier of the date of consummation of such Acquisition Proposal or the date of
execution of an agreement with respect to such Acquisition Proposal. If the
Termination Fee shall be payable pursuant to subsection (b) of this Section
11.3, the Termination Fee shall be paid in same-day funds upon the earlier of
(i) the execution of an agreement with respect to such Acquisition Proposal or
(ii) two business days from the date of termination of this Agreement. If the
Termination Fee shall be payable pursuant to subsection (c) of this Section
11.3, the Termination Fee shall be paid in same-day funds concurrently with the
delivery of the notice of termination of this Agreement pursuant to Section
11.1(g).
ARTICLE XII.
GENERAL PROVISIONS
12.1 Confidential Nature of Information. Each party will treat as confidential
all documents, materials and other information which it shall have obtained
regarding the other party during the course of the negotiations leading to the
consummation of the transactions contemplated hereby (whether obtained before or
after the date of this Agreement), the investigation provided for herein, and
the preparation of this Agreement and other related documents, all in accordance
with the terms of the non-disclosure agreement (entitled Information Exchange
Agreement dated November 5, 2001 by and between Seller and Buyer (the "NDA").
The parties agree that the term of the NDA shall extend until the Closing Date.
12.2 No Public Announcement; Press Releases. No party shall, without the
approval of the other, make any press release or other public announcement
concerning the transactions contemplated by this Agreement, except as and to the
extent that any such party shall be so obligated by law, in which case the other
party shall be advised and the parties shall use their reasonable efforts to
cause a mutually agreeable release or announcement to be issued; provided that
the foregoing shall not preclude communications or disclosures necessary to
implement the provisions of this Agreement, to comply with accounting and
Securities and Exchange Commission disclosure obligations or applicable FCC
disclosure obligations; and provided further that Seller and Buyer each hereby
consents to the other party issuing a press release in a mutually agreeable form
with respect to this Agreement promptly after the execution of this Agreement.
12.3 Notices. All notices, certifications, requests, demands, payments and other
communications hereunder shall be in writing and shall be deemed to have been
duly given and delivered if by overnight delivery, by a nationally-recognized
carrier; if by mail, by first class certified mail, postage prepaid, or
delivered personally; or if sent by facsimile, with transmission confirmed by a
printout from the facsimile machine and simultaneously followed by the original
communications by first class certified mail, postage prepaid:
If to Seller:
Sunshine PCS Corporation
000 Xxxx 00xx Xxxxxx
Xxxxx 0X
Xxx Xxxx, XX 00000
Attention: Xxxxx Xxxxxxx, CEO
Telephone: (000) 000-0000
Facsimile: (000) 000-0000 (Attention: Xxxxx X. Xxxxx, Esq.)
If to Buyer:
Cingular Wireless LLC
0000 Xxxxxxxxx Xxxxxxxxx
Xxxxxxx, Xxxxxxx, 00000
Attention: General Counsel
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
or to such other address or addresses as may hereafter be specified by
notice given by any of the above to the others. Notices given by United States
certified mail as aforesaid shall be effective on the third business day
following the day on which they were deposited in the mail. Notices delivered in
person or by overnight courier shall be effective upon delivery. Notices given
by facsimile shall be effective when transmitted, provided facsimile notice is
confirmed by telephone and is transmitted on a business day during regular
business hours.
12.4 Successors and Assigns. The rights and obligations of any party under this
Agreement shall not be assignable by such party hereto without the written
consent of the other party; provided, however, Buyer may, without the prior
consent of Seller, assign its rights hereunder to receive the Licenses to, (a)
any Affiliate of Buyer, (b) any successor of all or substantially all of Buyer's
business by way of merger, consolidation, liquidation, purchase of assets of
Buyer or other form of acquisition or other form of reorganization or (c) any
lender of Buyer as collateral, but no such assignment shall relieve Buyer of any
of its obligations to Seller hereunder. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their successors and permitted
assigns. No Stockholder a party hereto, nor their successors or assigns, shall
assign their obligations under this contract without the prior written consent
of Buyer. In the event any Stockholder assigns or distributes its right to all
or any part of the Purchase Price from Seller or sells or otherwise transfers
any securities in Seller to any Person, such assignment, distribution or
transfer shall be deemed not to have occurred for purposes of the calculations
set forth in Sections 10.4(b)(y) and 10.4(c)(y)..
12.5 Entire Agreement; Amendments. Except for the NDA referred to in Section
12.1, which shall continue in full force and effect and shall be binding upon
the parties for the full length of its term, this Agreement and the Exhibits
referred to herein and the documents delivered pursuant hereto contain the
entire understanding of the parties hereto with regard to the subject matter
contained herein or therein, and supersede all prior agreements or
understandings among Buyer and Seller, with respect to the transactions
contemplated herein. This Agreement shall not be amended, modified or
supplemented except by a written instrument signed by authorized representatives
of Buyer and Seller.
12.6 Waivers. Any failure of Buyer or Seller to comply with any obligation,
covenant, agreement or condition herein may be waived by the other party only by
a written instrument signed by Buyer or Seller, as applicable, granting such
waiver, but such waiver or failure to insist upon strict compliance with such
obligation, covenant, agreement or condition shall not operate as a waiver of,
or estoppel with respect to, any subsequent or other failure.
12.7 Expenses. Except as otherwise set forth in this Agreement, each party
hereto will pay all of its own costs and expenses incident to its negotiation
and preparation of this Agreement and the consummation of the transactions
contemplated hereby, including the fees, expenses and disbursements of its
counsel and advisors. In the event any party shall bring an action or
arbitration in connection with the performance, breach or interpretation of this
Agreement, the prevailing party in any such action or arbitration shall be
entitled to recover from the losing party all reasonable costs and expenses of
such action or arbitration, including attorneys' fees.
12.8 Partial Invalidity; Construction. Wherever possible, each provision hereof
shall be interpreted in such manner as to be effective and valid under
applicable law, but in case any one or more of the provisions contained herein
shall, for any reason, be held to be invalid, illegal or unenforceable in any
respect, such provision shall be ineffective to the extent, but only to the
extent, of such invalidity, illegality or unenforceability without invalidating
the remainder of such provision or provisions or any other provisions hereof,
unless such a construction would be unreasonable; provided, however, that if the
removal of such offending term or provision materially alters the burdens or
benefits of any of the parties under this Agreement, the parties agree to
negotiate in good faith such modifications to this Agreement as are appropriate
to ensure the burdens and benefits of each party under such modified Agreement
are reasonably comparable to the burdens and benefits originally contemplated
and expected. The parties agree that this Agreement shall be construed
neutrally, without regard to the party responsible for its preparation.
12.9 Execution in Counterparts. This Agreement may be executed in one or more
counterparts which may be delivered by facsimile, each of which shall be
considered an original instrument, but all of which shall be considered one and
the same agreement, and shall become binding when one or more counterparts have
been signed by each of the parties hereto and delivered to each of the other
parties hereto.
12.10 Resolution of Disputes. Except with respect to a breach of the obligations
of confidentiality and actions detrimental to the assignment and acquisition of
the Licenses contemplated hereunder, as to which the non-breaching party shall
have the right to seek from any court of proper jurisdiction specific
performance, injunctive remedy or other equitable remedies without complying
with the provisions of this Section 12.10, senior management employees of Buyer
and Seller shall meet and negotiate in good faith to reach a satisfactory
resolution to any dispute arising in connection with this Agreement. If such
negotiations do not result in a resolution within five (5) calendar days after
the first meeting of such representatives, then any dispute, claim or
controversy arising under this Agreement or in any way related to this
Agreement, or its interpretation, enforceability or inapplicability (including
the issue of whether or not the arbitrator has jurisdiction to decide any
particular dispute, controversy or claim) shall be submitted to binding
arbitration at the election of either Buyer or Seller. The arbitration shall be
conducted by a single arbitrator. The arbitration shall be conducted in New York
City in accordance with the Commercial Arbitration Rules of the American
Arbitration Association. In rendering an award, the arbitrator shall determine
the rights and obligations of the parties in accordance to the substantive laws
of the State of New York (thereby excluding that body of law relating to choice
of laws), as though the arbitrator were a court of the State of New York. The
arbitration award shall be in writing and shall be final and binding, and
judgment on the award may be entered in any court having jurisdiction thereof.
Notwithstanding anything herein to the contrary, (a) nothing contained in this
Section 12.10 shall affect the right of either party to terminate this Agreement
pursuant to Article XI or to seek indemnification pursuant to Article X, and (b)
in the event of arbitration, the parties hereto shall each have and retain (i)
the rights and remedies of specific performance and injunctive and other
equitable relief existing in their favor at law or in equity to enforce or
preven the violation of any provision of this Agreement; (ii) the right to
institute an appropriate action, suit or proceeding to enforce in the courts any
final award made in such arbitration; and (iii) the right to seek in the courts
prejudgment remedies, such as a preliminary injunction in aid of arbitration.
12.11 Governing Law. This Agreement shall be governed by, enforced and construed
in accordance with the laws of the State of New York, without regard to choice
of law principles.
12.12 Specific Performance. Notwithstanding anything herein to the contrary, if
Buyer or Seller fail to perform any of its obligations under this Agreement, the
aggrieved party shall have the right, in addition to all other rights or
remedies, to specific performance of the terms hereof.
12.13 Headings. Subject headings are included for convenience only and shall not
affect the interpretation of any provisions of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
SELLER: BUYER:
Sunshine PCS Corporation Cingular Wireless LLC
By: /s/ Xxxxx X. Xxxxxxx By: /s/ Xxxx Xxxxxxx
-------------------- ----------------
Its: Chief Executive Officer Its: Chief Financial Officer
For purposes of Articles X and XII of this Agreement:
STOCKHOLDERS:
Xxxxx Interactive Corporation
By: /s/ Xxxxxx X. Xxxxx
-------------------
Its: Chief Financial Officer
Fortunet Wireless Communication Corporation
By: /s/ Xxxxxxxx X. Xxxx
--------------------
Its: President
EXHIBIT A
LICENSES
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FCC
Seller BTA License # Market Name MHz Grant Date Exp. Date
--------------------------------------------------------------------------------------------
439 KNLF361 Tallahassee 1902.5-1910/1982.5-1990 09/17/96 09/17/06
340 KNLF362 Panama City 1902.5-1910/1982.5-1990 09/17/96 09/17/06
326 KNLF325 Ocala 1902.5-1910/1982.5-1990 09/17/96 09/17/06
EXHIBIT B
SUBJECT MATTER OF OPINION OF COUNSEL TO SELLER
Subject to appropriate qualifications and assumptions set forth in the
Opinion, the Opinion of counsel to Seller shall state the following:
1. Seller is a corporation and is validly existing and in good standing
under the laws of the State of Delaware with corporate power and authority to
enter into the Agreement and perform its obligations thereunder.
2. The execution, delivery and performance of the Agreement have been
duly authorized by all necessary corporate action of Seller, and the Agreement
has been duly executed and delivered by Seller.
3. The Agreement constitutes a legally valid and binding obligation of
Seller, enforceable against Seller in accordance with its terms, subject to (i)
the effect of bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to or affecting the rights or
remedies of creditors; (ii) the effect of general principles of equity, whether
enforcement is considered in a proceeding in equity or at law, and the
discretion of the court before which any proceeding therefore may be brought;
(iii) the unenforceability under certain circumstances under law or court
decisions of provisions providing for the indemnification of or contribution to
a party with respect to a liability where such indemnification or contribution
is contrary to public policy; and (iv) the unenforceability of any provision
requiring the payment of attorney's fees, except to the extent that a court
determines such fees to be reasonable.
4. The execution and delivery of the Agreement by Seller, and the
consummation by Seller of the transactions contemplated by the Agreement on the
date hereof do not:
(i) to the best of our knowledge, violate any federal or Delaware statute,
rule or regulation applicable to Seller;
(ii) violate the provisions of the certificate of incorporation or bylaws
of Seller;
(iii) result in the breach of or a default under any of the agreements
identified to us by an officer of Seller as material to Seller, and listed on
Annex I hereto (the "Material Agreements"); or
(iv) to the best of our knowledge, require any consents, approvals,
authorizations, registrations, declarations or filings by Seller under any
federal or Delaware statute, rule or regulation applicable to Seller.
No opinion is expressed in clauses (i) and (iv) of this paragraph 4 as to the
application of Section 548 of the federal Bankruptcy Code and comparable
provisions of state law or of any antifraud laws, securities laws, antitrust or
trade regulation laws.
5. Seller holds and has the right to use the Tallahassee License, Panama
City License and Ocala License (collectively, the "Licenses"). The Licenses are
in full force and effect, and have not been revoked, suspended, cancelled or
modified. The Licenses include all FCC licenses, permits and authorizations
necessary for Seller to operate a PCS system in the markets corresponding to
each License.
6. Except as described on Annex II, there are no actions, suits or
proceedings before the FCC pending or, to the best of our knowledge, threatened,
against Seller or the Licenses, other than FCC rulemaking proceedings generally
applicable to C- and F-Block PCS systems. Based solely on our review of the FCC
Records, except as described on Annex III, there is no unsatisfied adverse FCC
order, decree, or ruling outstanding against Seller or the Licenses.
7. Sellers have filed a timely notification with the FCC stating that they
have satisfied the five-year construction benchmarks applicable to the Licenses,
as mandated by Section 24.203 of the FCC rules.
SCHEDULE I
Fortunet Communications, L.P., Seller's predecessor-in-interest, as well as
Xxxxxxxx X. Xxxx, the sole stockholder of Fortunet Wireless Communication
Corporation which is Seller's largest stockholder, Xxxxx X. Xxxxxxx, Seller's
Chief Executive Officer, and Xxxxx Interactive Corporation, which through
February 25, 2001 owned 49.9% of Seller's equity and currently all of Seller's
preferred stock and an option to acquire 4,300,000 shares of Seller's common
stock, among others, have been named as defendants in a lawsuit brought under
the so-called "qui tam" provisions of the federal False Claims Act in the United
States District Court for the District of Columbia. The complaint was filed
under seal with the court on February 14, 2001 and the seal was lifted on
January 11, 2002. Under the False Claims Act, a private plaintiff, termed a
"relator," may file a civil action on the U.S. government's behalf against
another party for violation of the statute. In return, the relator receives a
statutory bounty from the government's litigation proceeds if he is successful.
The relator in this lawsuit is X.X. Xxxxxx III, who is allegedly an
attorney specializing in telecommunications law. The main allegation in the case
is that the defendants participated in the creation of "sham" bidding entities
that allegedly defrauded the United States Treasury by improperly participating
in certain Federal Communications Commission spectrum auctions restricted to
small businesses, as well as obtaining bidding credits in other spectrum
auctions allocated to "small" and "very small" businesses. The lawsuit seeks to
recover an unspecified amount of damages, which would be subject to mandatory
trebling under the statute.
Seller was formally served with the complaint on July 10, 2002. On
September 19, 2002, Seller joined Xxxxx Interactive and certain other defendants
in filing two motions with the United States District Court for the District of
Columbia: a motion to dismiss the lawsuit and a motion to transfer the action to
the Southern District of New York. On November 25, 2002, the relator filed an
opposition reply to Seller's motion to dismiss and on December 5, 2002, Seller
filed a reply in support of its motion to dismiss.
Seller strongly believes that this lawsuit is completely without merit, and
intends to defend the suit vigorously. The U.S. Department of Justice has
notified the court that it has declined to intervene in the case. Nevertheless,
Seller cannot predict the ultimate outcome of the litigation, nor can Seller
predict the effect that the lawsuit or its outcome will have on Seller's
financial condition.
