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Exhibit 10.75
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (this "Agreement") is entered into as of
June 10, 1998 by and between WWC Holding Co., Inc., a Delaware corporation
("Purchaser"), Celludyne II, Inc. a Nevada corporation ("Seller"), and Western
Wireless Corporation, a Delaware corporation, as guarantor pursuant to Section
15.2. Purchaser and Seller are sometimes referred to herein collectively as the
"Parties" and individually as a "Party."
RECITALS
WHEREAS, Seller is the holder of the non-wireline cellular radio
telephone license granted by the Federal Communications Commission (the "FCC" or
the "Commission") for the Colorado 4 - Park Rural Service Area, Market No. 351A
(the "System");
WHEREAS, the Parties desire that Purchaser acquire from Seller all of
the assets of the System including, among other things, all of the
authorizations issued by the FCC and, to the extent assignable, any state or
local government for the operation of the System, all in accordance with the
terms and conditions set forth in this Agreement; and
WHEREAS, the Parties have determined that it would further the
development of competitive, non-wireline cellular systems in the United States
to consummate the transactions set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the Parties hereto agree as follows:
ARTICLE 1.
DEFINITIONS
As used herein, the terms below shall have the following meanings:
1.1. "Action" shall have the meaning set forth in Section 5.11
1.2. "Affiliate" of a Person shall mean any Person which directly or
indirectly controls, is controlled by, or is under common control with, such
Person. The term "control" (including, with correlative meaning, the terms
"controlled by" and "under common control with"), as used with respect to any
Person, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities, by contract or otherwise.
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1.3. "Assets" shall mean all Seller's currently held assets, properties
and rights, both tangible and intangible, currently used in the System and
otherwise necessary to operate the Business of the System in a manner consistent
with its present operations including, without limitation, the Real Property,
Equipment, Authorizations, Contracts, Customer Agreements, Intellectual Property
and Books and Records; provided, however, that the Assets shall not include the
Excluded Assets; provided, further, that the Leadville Site, as defined in
Section 2.1.1, may be excluded from the Assets by Purchaser according to the
procedure in set forth in Section 2.1.1.
1.4. "Assumed Liabilities" shall have the meaning set forth in Section
3.1.2
1.5. "Authorizations" shall mean the authorizations, permits and
licenses issued to Seller by the FCC and any other governmental authority which
relate to the System.
1.6. "Books and Records" shall mean all the books and records currently
maintained by Seller or within Seller's control and related to the Assets, the
Business and the System, including without limitation, (a) books and records
relating to the purchase of materials and supplies, invoices, customer lists,
supplier lists, personnel records, and subscriber information, and (b) any
computer software and data in computer readable and/or human readable form used
to maintain such books and records together with the media on which such
software and data are stored and all documentation relating thereto, except for
any Excluded Assets.
1.7. "Business" shall mean all of the Seller's business and operations
relating to the System.
1.8. "Closing Date" shall mean the last business day of the month in
which the FCC Consent becomes a Final Order, unless the Final Order date occurs
within the last ten (10) calendar days of a month, in which case the Closing
Date shall be on the last business day of the month following the month in which
the FCC Consent becomes a Final Order.
1.9. "Closing Place" shall mean such location agreed upon by the Parties
or, in the absence of such an agreement, the offices of Xxxxxx Xxxxxxxx, P.S.,
000 Xxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxxxx 00000-0000.
1.10. "Closing" shall mean the consummation of the assignment, transfer,
conveyance and delivery of the Assets and the Purchase Price as contemplated
hereunder.
1.11. "Code" shall mean the Internal Revenue Code of 1986, as amended.
1.12. "Consents" shall mean any and all consents, approvals,
authorizations or waivers of any public, governmental or regulatory body or
authority, including, without limitation, the FCC Consent, and any and all
consents, approvals or waivers from parties to Contracts that are (a) required
for the consummation of the transactions contemplated
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by this Agreement or (b) necessary or, in Purchaser's reasonable determination,
desirable in order that Purchaser (or its designee) can operate the System after
the Closing Date substantially in the same manner in which it is being operated
by Seller before the Closing Date.
1.13. "Contracts" shall mean all leases, contracts, commitments,
understandings and agreements relating to the System to which Seller is a party
and which are set forth on Schedule 5.7, whether written or oral.
1.14. "Customer Agreements" shall mean those agreements which are
currently in effect whereby Seller has agreed to provide Service.
1.15. "Deferred Access Revenue" shall mean amounts collected in advance
by Seller from System subscribers for Service to be rendered to such subscribers
after the Closing Date and which are reflected as a Liability on Seller's
Financial Statements.
1.16. "Employees" shall mean all persons employed by Seller on a full or
part-time basis.
1.17. "Environmental Laws" shall mean any and all federal, state, local
or foreign statutes, rules, laws, regulations, ordinances, codes, orders,
licenses, franchises, permits, authorizations and concessions relating to
health, safety or the environment that are applicable to the System or the
Business, including without limitation the Handling of Substances, the presence
of Substances at an Operating Site or any antipollution requirements.
1.18. "Equipment" shall mean all of the Seller's furniture, fixtures,
furnishings, machinery, computer hardware, antennas, transmitters, and other
personal property used in the System or located at any of the Real Property,
except as listed on Schedule 1.19.
1.19. "Excluded Assets" shall mean those assets set forth on Schedule
1.19 hereto.
1.20. "FCC Consent" shall mean the action of the FCC granting its
consent to the assignment of the FCC Authorization from Seller to Purchaser.
1.21. "FCC Authorization" shall mean the Authorizations issued by the
FCC relating to the construction and operation of the System.
1.22. "Final Order" shall mean a Preliminary Order which is not
reversed, stayed, enjoined, set aside, annulled, or suspended, and with respect
to which no timely request for stay, motion or petition for reconsideration or
rehearing, application or request for review, or notice of appeal or other
judicial petition for review is pending, and as to which the time for filing any
such request, motion, petition, application, appeal, or notice, and for the
entry of an order staying, reconsidering, or reviewing on the FCC's or any other
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regulatory authorities' own motion, has expired. A Preliminary Order which is
not reversed, stayed, enjoined, set aside, annulled, or suspended, and with
respect to which no timely request for stay, motion or petition for
reconsideration or rehearing, application or request for review, or notice of
appeal or other judicial petition for review is pending, and as to which the
time for filing any such requests, motion, petition, application, appeal, or
notice, and for the entry of an order staying, reconsidering or reviewing on the
FCC's or any other regulatory authorities' own motion has expired, but which is
subject to conditions, other than conditions generally applied in conjunction
with the grant of such consents, which could materially and adversely affect the
Purchaser's operation of the System and the Business as it is currently being
conducted, is not (and shall not be deemed) a Final Order unless and until the
Party acquiring such FCC Authorization pursuant to the terms of this Agreement
has notified the assignor of such FCC Authorization of its acceptance of such
conditions; provided, however, that the assignee may not unreasonably withhold
its acceptance and may not, in any case, withhold its acceptance where the
conditions have been caused or materially contributed to by assignee's action or
inaction.
1.23. "Financial Statements" shall have the meaning set forth in Section
5.10
1.24. "Handling" shall have the meaning set forth in the definition of
Pre-Closing Environmental Matters in Section 1.32.
1.25. "Intellectual Property" shall mean all patents, trademarks,
service marks, trade names, copyrights, licenses, formulas, computer software,
advertising slogans, advertising technology, advertising techniques,
merchandising techniques, operating procedures, data and other intellectual
property rights or intangible property rights of Seller and its Affiliates which
are used or intended for use in connection with the System and which are
assignable, as listed on Schedule 5.8.
1.26. "Inventory" shall mean all merchandise owned by Seller and
intended for resale, whether or not located on the Seller's premises, on
consignment to a third party, or in transit or storage valued at its acquisition
cost. For purposes of this definition and this Agreement, any item set forth on
Schedule 1.26 shall be deemed "Inventory."
1.27. "Liabilities" shall mean liabilities, obligations or commitments
of any nature, absolute, accrued, contingent or otherwise, known or unknown,
whether matured or unmatured.
1.28. "Lien" shall mean any contract for sale (except for the sale of
cellular telephone service and rentals of cellular telephone equipment to
customers), claim, lease, lien, pledge, option, charge, easement, security
interest, mortgage, deed of trust, right-of-way, encumbrance or adverse interest
of any kind or character of any other Person relating to the Assets, System or
the Business, except for Permitted Liens.
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1.29. "Operating Site" shall have the meaning set forth in the
definition of Pre-Closing Environmental Matters in Section 1.32.
1.30. "Permitted Lien" shall mean (i) any lien for Taxes, assessments,
or other governmental charges or levies that are not yet due and payable or
which are being contested in good faith in appropriate proceedings, (ii)
easements, rights of way and other similar property rights which do not and will
not have a material adverse effect on Seller's or Purchaser's use in a similar
manner of any particular parcel of Real Property, and (iii) materialman and
xxxxxxx'x liens created by operation of law in the ordinary course of Seller's
Business for Liabilities which are reflected on the Seller's Financial
Statements, and for which Seller has received no notice of enforcement or
execution.
1.31. "Person" shall mean any person or entity, whether an individual,
trustee, corporation, general partnership, limited partnership, trust,
unincorporated organization, business association, firm, joint venture,
governmental agency or authority.
1.32. "Pre-Closing Environmental Matters" shall mean (a) the production,
use, generation, storage, treatment, recycling, disposal, discharge, release, or
other handling or disposition of any kind (collectively "Handling") at any time
on or prior to the Closing Date of any toxic, hazardous, or other regulated
wastes, substances, products (except for appropriate storage and use in
accordance with applicable Environmental Laws of (i) reasonable amounts of
gasoline or diesel fuel for the purpose of powering emergency electric power
generating equipment and (ii) standard commercial batteries used in the
operation of cell site equipment or cellular telephones), pollutants or
materials of any kind (including, without limitation, petroleum and petroleum
products, asbestos, and radon) (collectively "Substances"), either in, on, or
under any real property or facility currently owned, leased or used by Seller
(or an Affiliate of Seller) in connection with the System (an "Operating Site"),
including without limitation the effects of such Handling of Substances on
resources (e.g., air, water), Persons, or property within or outside the
boundaries of any Operating Site; (b) the presence as of the Closing Date of
Substances in, on or under any Operating Site regardless of how the Substances
carne to rest in, on or under the Operating Site, which presence violates
applicable Environmental Laws, (c) the failure on or prior to the Closing Date
of any Operating Site or any operations of the System to be in compliance with
any Environmental Laws, and (d) any other act, omission or condition existing
prior to the Closing Date which gives rise to liability or potential liability
of Purchaser under any Environmental Laws; provided, however, that this
paragraph shall not include any authorized use of the radio frequencies in
accordance with authorizations issued by the FCC to be employed by the Seller in
the conduct of the Business.
1.33. "Preliminary Order" shall mean an action by the FCC and any other
applicable state regulatory authority consenting to or authorizing the
assignment of the FCC or other Authorization or the Assets to Purchaser (or its
designee), which action has not yet become a Final Order.
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1.34. "Real Property" shall mean all real property owned or leased by or
used, or intended by Seller or its Affiliates for use, in connection with the
System, together with all Seller's rights to buildings, improvements, fixtures,
easements, licenses (to the extent assignable), options, insurance proceeds and
condemnation awards and all other rights of Seller or its Affiliates in or
appurtenant thereto, all of which are listed on Schedule 5.4.2.
1.35. "Representative" shall mean any officer, director, attorney,
accountant, employee or other duly authorized agent of any Person.
1.36. "Service" shall mean the cellular telephone service provided by
Seller in the ordinary course of business of operating the System.
1.37. "Substances" shall have the meaning set forth in the definition of
Pre-Closing Environmental Matters in Section 1.32.
1.38. "Taxes" shall mean all taxes, charges, fees, levies or other
assessments, including without limitation, income, excise, use, transfer,
payroll, occupancy, property, sales, franchise, unemployment and withholding
taxes, imposed by the United States or any state, county, local or foreign
government or subdivision or agency thereof on Seller's Business, the Assets or
the System, and any assessments against Real Property together with any
interest, penalties or additional taxes attributable to such taxes and other
assessments.
1.39. "To the best knowledge" or "knowledge" of a party (or similar
phrases) shall mean to the extent of matters (a) which are actually known by
such party or (b) which, based on facts of which such party is aware, would be
known to a reasonable Person in similar circumstances.
1.40. "Assignment Application" shall mean that joint application filed
with the FCC relating to the assignment of the FCC Authorizations to Purchaser
in the manner contemplated by this Agreement.
ARTICLE 2.
PURCHASE OF ASSETS
2.1. Transfer of Assets. Subject to Section 2.1.1 and satisfaction of
the other terms and conditions contained in this Agreement, at the Closing,
Seller shall sell, convey, transfer, assign and deliver to Purchaser (or its
designee), and Purchaser (or its designee) will acquire, the Assets.
2.1.1. Purchaser shall have the right to decline to assume
Seller's rights and obligations under that easement commonly known as the
Leadvillle Site Easement, dated
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___________, 199_, between Seller and ________ (the "Leadville Site"). If
Purchaser elects to exclude the Leadville Site from the Assets to be acquired by
it, it shall so notify Seller in writing of that decision within fifteen (15)
days of Purchaser's receipt of a completed phase II environmental study of the
Leadville Site, but in no event less than thirty (30) days prior to the Closing
Date. The exclusion of the Leadville Site from the Assets shall not exclude any
other Assets located on or at the Leadville Site, and shall not result in any
adjustment of the Purchase Price. Any expenses associated with the deactivation,
removal, storage or transport of the Leadville Assets as a result of Purchaser's
exercise of its right under this Section 2.1.1 shall be the responsibility of
Purchaser.
2.2. Purchase Price. The purchase price for the Assets shall be eighteen
million five hundred thousand dollars ($18,500,000) (the "Purchase Price"), as
adjusted pursuant to this Article 2, which shall be paid by Purchaser to Seller
(or its designee) on the Closing Date as follows: (i) one million dollars
($1,000,000) of such Purchase Price shall be delivered to an escrow agent
jointly selected by Purchaser and Seller that is located the in Southern
California, which amount shall be held by the escrow agent in escrow for a
period of one (1) year following the Closing Date pursuant to the terms of an
escrow agreement the terms of which shall be substantially similar to those
contained in the agreement attached hereto as Schedule 2.2. Such escrow shall
secure the obligations of Seller pursuant to the indemnification provisions
contained in Article 11 hereof; and (ii) the balance of such Purchase Price
shall be paid to Seller by certified or official bank check or by bank wire
transfer of immediately available funds, at the option of Seller.
2.3. Adjustments and Prorations.
2.3.1. Pursuant to the procedures prescribed in Sections 2.3.3
and 2.3.4, as the case may be, the Purchase Price shall be adjusted in
accordance with the following:
2.3.1.1. The Purchase Price shall be increased by the
current assets of Seller as of the Closing Date, which shall be the sum of (i)
Adjusted Accounts Receivable as of the Closing Date, (ii) Inventory, and (iii)
prepaid expenses (including rent, deposits and taxes) assigned to Purchaser. For
purposes of this Section 2.3, "Adjusted Accounts Receivable" shall equal the sum
of the following:
100% of the amount of all accounts receivable outstanding
from the date of billing ("Outstanding") for less than 31
days; plus
90% of the amount of all accounts receivable that are more
than 30 days Outstanding, but less than 61 days
Outstanding; plus
75% of the amount of all accounts receivable that are more
than 60 days Outstanding, but less than 91 days
Outstanding.
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There shall be no adjustment (i.e. 0%) for any accounts
receivable that are more than 90 days Outstanding.
2.3.1.2. The Purchase Price shall be decreased by the
current liabilities of the Seller as of the Closing Date, which shall be the sum
of (i) all Liabilities that relate to Seller's operation of the System, the
Business and the Assets on or prior to Closing (including, without limitation,
accounts payable, the current portion of any long-term Liabilities and accrued
and payable taxes), (ii) subscriber deposits, and (iii) Deferred Access Revenue
assumed by Purchaser; provided, however, it shall not include lease or contract
liabilities being assumed by Purchaser pursuant to Section 3.1.2 of this
Agreement.
2.3.2. In addition, all revenues and all expenses arising from
operation of the System before and after the Closing Date, including resale
charges and other expenses payable in respect to cellular telephone services,
utility charges, real and personal property taxes and assessments levied against
the Assets, property and equipment rentals, sales and service charges, taxes
(except for taxes arising from the transfer and assignment of the Assets
hereunder), and similar prepaid and deferred items, shall be prorated between
Seller and Purchaser in accordance with the principle that Seller shall receive
the benefit of all revenues, and be responsible for all expenses, costs,
obligations and liabilities associated with ownership and operation of the
System for the period on or prior to the Closing Date, and Purchaser shall
receive the benefit of all revenues, and be responsible for all expenses, costs,
obligations and liabilities associated with the ownership and operation of the
System after the Closing Date.
2.3.3. A final settlement of all adjustments or prorations made
under this Section, with payment being made by the appropriate Party in cash,
shall occur no later than sixty (60) days after the Closing Date. Within such
sixty (60) day period Purchaser shall provide Seller with a written statement,
together with reasonable supporting documentation, of any final adjustments or
prorations required by this Section 2.3.
2.3.4. In the event that the Parties cannot agree on the amount
of the final adjustments or prorations, the determination shall be made by the
Denver, Colorado office of one of the "Big 6" national accounting firms selected
by Seller that has not, during the prior three (3) years, been employed by
either of the Parties ("Auditor"). The Auditor shall make the determination
based on the express provisions of this Agreement; provided, however, that if
the Auditor finds the express terms of this Agreement are not sufficient to
resolve any issue or issues, the Auditor shall rely upon generally accepted
accounting principles then in effect. Either Party may invoke the use of the
Auditor by notifying the other Party in writing, provided that neither Party may
invoke the use of the Auditor to determine the final adjustments or prorations
earlier than forty (40) days after the Closing Date. The Auditor shall be
required to render a decision within twenty-one (21) days after the Auditor is
requested to render a determination under this Section. The decision of the
Auditor shall be binding on the Parties and not subject to any judicial
challenge by either
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Party. Within five (5) business days after the Auditor provides the
determination to the Parties, the final payment shall be made in accordance with
that determination. The expenses of the Auditor shall be paid by Seller and
Purchaser in reciprocal proportion to the allocation to Seller and Purchaser of
the amount in disagreement, as the case may be. For example, if the amount in
disagreement is One Hundred Thousand Dollars ($100,000) and the Auditor
determines that the Seller should receive Seventy Thousand Dollars ($70,000) and
the Purchaser should receive Thirty Thousand Dollars ($30,000), then Seller
shall pay thirty percent (30%) of the Auditor's expenses, and Purchaser shall
pay seventy percent (70%).
2.4. Allocation of Purchase Price. The Purchase Price, as adjusted
pursuant to Section 2.3, shall be allocated in accordance with Schedule 2.4, to
be prepared on or before the Closing and Purchaser and Seller agree to cooperate
reasonably in the preparation of such Schedule. Each of the Parties agrees that
(i) such allocation represents the fair market value of the Assets and shall be
binding upon it; (ii) no filings made by it with any taxing or other authority
shall reflect an allocation other than in the manner agreed upon; and (iii) it
shall timely make all filings required by any taxing authority, including the
filing of Internal Revenue Service Form 8594. A preliminary allocation is
attached as Schedule 2.4. The final allocation shall be generally consistent
with Schedule 2.4.
ARTICLE 3.
ASSUMED OBLIGATIONS
3.1. No Assumption of Liabilities by Purchaser.
3.1.1. Except (i) for Liabilities for which there is an
adjustment in the Purchase Price pursuant to Section 2.3.1.2, and (ii) as set
forth in Section 3.1.2 below, Purchaser expressly does not, and shall not,
assume or be deemed to have assumed under this Agreement, or by reason of any
transactions contemplated hereunder, any debts, liabilities (contingent or
otherwise) or obligations of Seller, or any of its stockholders, of any nature
whatsoever or any debts, liabilities (contingent or otherwise) or obligations
relating to the System.
3.1.2. Purchaser shall assume and timely pay or perform all of
Seller's liabilities and obligations (i) for which there has been an adjustment
in the Purchase Price pursuant to Section 2.3.1.2 and (ii) which are due after
the Closing Date on those Contracts and obligations set forth on Schedule 3.1.2
(the "Assumed Liabilities").
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ARTICLE 4.
COVENANTS AND AGREEMENTS
4.1. Covenants of Seller. Seller covenants and agrees from and after the
execution and delivery of this Agreement to and including the Closing Date as
follows:
4.1.1. Consummate Transactions. Seller shall use its reasonable
best efforts to cause the transactions contemplated by this Agreement to be
consummated in accordance with the terms hereof, and, without limiting the
generality of the foregoing, use best efforts to obtain all necessary approvals,
consents, permits, licenses and other authorizations required in connection with
this Agreement and the transactions contemplated hereby, including, without
limitation, those required by all governmental authorities and agencies, and to
make all filings with and to give all notices to third parties which may be
necessary or reasonably required of Seller in order to consummate the
transactions contemplated hereby.
4.1.2. Full Access. Seller shall give to Purchaser and its
Representatives reasonable access during normal business hours to all of
Seller's Employees, premises, properties, Assets, Financial Statements, Books
and Records, Contracts, and other documents and commitments relating to the
System and the Business, and shall furnish Purchaser and its Representatives
with all such information concerning the operation of the System and the
Business as Purchaser may reasonably request. This shall specifically include
access to Employees responsible for (and Books and Records relating to) billing,
customer service, and maintenance components of System operations. To the extent
reasonably requested by Purchaser, Seller shall cooperate with and assist
Purchaser in developing a comprehensive transition plan for the Business and
System operations.
4.1.3. Ordinary Course. Seller shall cause the Business to be
conducted only in the ordinary course and consistent with past practices.
Without limiting the foregoing, Seller shall continue to pay its bills and other
obligations, all in the ordinary course of business consistent with past
practices, and shall not, without the prior written consent of Purchaser, (a)
incur any material obligation or liability, absolute or contingent, other than
obligations (i) incurred in the ordinary course consistent with past practices
and (ii) to Seller's brokers, attorneys and accountants, all of which shall be
paid by Seller; (b) assume, guarantee, change any existing guarantee, endorse or
otherwise as an accommodation become responsible for obligations of any other
individual or entity; (c) make any loans or advances to any individual or
entity; (d) sell, transfer, convey, mortgage, pledge, hypothecate or subject to
any Liens (except Permitted Liens) any of the Assets; (e) waive or compromise
any right or claim for any material amount; (f) cancel any note, loan or other
material obligation owing to Seller; (g) enter into any Contract with the
shareholders of Seller or any of its Affiliates, consultants, agents or assigns,
or any material Contract with any other Person other than Service agreements
with subscribers in the ordinary course; (h) agree to pay any new or additional
compensation of any type to
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any of Seller's Representatives or to increase or modify any compensation
currently so paid; (i) make any arrangement for any profit-sharing plan,
retirement plan, bonus plan, severance arrangement, employee benefit plan, or
any similar plan; (j) except as required by law, enter into any collective
bargaining agreement, or make any commitment whatsoever to any union or other
representative or party which intends to represent any Employees; (k) increase
the number of Employees; (l) enter into any additional reseller agreements; or
(m) add subscribers other than in the ordinary course on terms and conditions
consistent with past practices (which shall include the obtaining of
satisfactory credit information, regular equipment and/or Service deposits,
executed subscriber contracts, and a commitment to the provision of Service for
cash consideration); provided that consistent with past practices Seller may
respond in good faith and in a manner consistent with reasonable business
practices to competitive service offerings initiated by its competitors. For
purposes of this Section the term "material" shall mean an obligation or
liability in excess of Twenty-Five Thousand Dollars ($25,000).
4.1.4. Preserve Business and Goodwill. Seller shall use its best
efforts to retain Seller's current Representatives, to preserve and maintain the
Assets and the System, to preserve the Business and the goodwill of suppliers,
subscribers and others dealing with Seller.
4.1.5. Compliance with Law. Seller shall comply in all material
respects with all applicable laws, rules, ordinances, regulations, codes,
orders, decrees, licenses and permits of all applicable jurisdictions and
governmental authorities or agencies relating to Seller, the Assets or the
conduct of the Business.
4.1.6. Approvals; Consents. Seller shall obtain and maintain in
full force and effect all approvals, consents, permits, licenses and other
authorizations, from all appropriate Federal, state and local governmental
agencies or authorities necessary or required for the operation of Seller's
Business as presently conducted, as and when such approvals, consents, permits,
licenses or other authorizations are necessary or required. Without limiting the
generality of the foregoing, Seller shall maintain the Authorizations in full
force and effect, and shall not take any action which might have a material
adverse effect on the continued effectiveness of such Authorizations. The
Parties shall consult with one another concerning the process for obtaining any
consent of any governmental agency or authority required to carry out the
transactions contemplated hereby, and each Party shall keep each other Party
reasonably informed as to the status of any communications with any governmental
authority or agency concerning such consent. Seller shall not make any material
commitments to any governmental authority or agency relating to any approval,
consent, permit or license without Purchaser's prior written consent.
4.1.7. Insurance. From the date hereof through the Closing Date,
Seller shall maintain in full force and effect (including necessary renewals
thereof) all of the insurance policies set forth on Schedule 4.1.7. From and
after the Closing Date, Seller shall take all actions that may be reasonably
necessary to ensure that such policies will
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continue to provide insurance coverage for claims relating to occurrences prior
to the Closing Date and shall take all actions reasonably necessary to preserve
or protect Seller's rights under any such policies with respect to any existing
claim against Seller arising out of Seller's ownership and operation of the
Assets or Business prior to the Closing Date. Seller shall provide Purchaser
with information and records regarding all claims pending with respect to the
Assets or Business as of the Closing Date and agrees to provide to Purchaser any
additional information and records Purchaser may reasonably request regarding
such claims.
4.1.8. Books and Records. Seller's Books and Records shall be
maintained in the ordinary course, on a basis consistent with past practices.
4.1.9. Notice of Claims. Seller shall notify Purchaser promptly
after it becomes aware of the commencement of any action, investigation,
arbitration or proceeding (including any proceeding before any governmental
agency), or promptly upon receiving a threat of any such action, investigation,
arbitration or proceeding which would, if adversely determined, materially and
adversely affect (a) Seller's ability to consummate the transactions
contemplated hereby or (b) the Business, System or Assets.
4.1.10. Notice of Breaches. In the event that Seller obtains
knowledge of the occurrence of, or the impending or threatened occurrence of,
any event which would cause or constitute a breach of any warranties,
representations, covenants or agreements of the Seller contained in this
Agreement, Seller shall promptly notify Purchaser of such occurrence or
impending or threatened event or occurrence, and use its best efforts to prevent
or to promptly remedy any such breach.
4.1.11. Material Contracts. Seller shall not default in any
material respect under, or breach any term or provision of, or suffer or permit
to exist any condition or event which, after notice or lapse of time, or both,
would constitute a material default under, any material Contract.
4.1.12. No Amendment or Termination of Material Contracts. Seller
shall not cause or permit, to the extent preventable by Seller, the termination,
modification or amendment of any material Contract of Seller.
4.1.13. No Sale. Seller shall not enter into any contract to sell
or encumber any of its Assets other than in the ordinary course of business.
4.1.14. Retention of Records. To the extent not previously
provided, on the Closing Date, Seller shall deliver to Purchaser all the Books
and Records and Contracts. In addition, for a period of three (3) years after
the Closing Date, Seller shall provide Purchaser with access to any other
financial records and other documents that relate to the System, the Assets or
the Business that Seller has retained. Such access shall be provided during
normal business hours after reasonable advance request by Purchaser.
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4.2. Covenants of Purchaser. Purchaser covenants and agrees that from
and after the execution and delivery of this Agreement to and including the
Closing Date:
4.2.1. Consummate Transaction. Purchaser shall preserve and
maintain its eligibility to be an assignee of the FCC Authorizations and use its
best efforts to cause the transactions contemplated by this Agreement to be
consummated in accordance with the terms hereof, and, without limiting the
generality of the foregoing, use best efforts to assist Seller in obtaining all
necessary consents and authorizations of third parties, including, without
limitation, the approval of this Agreement and the transactions contemplated
hereby by all governmental authorities and agencies, including the FCC and any
state public utilities or public service commission, and to make all filings
with and to give all notices to third parties which may be necessary or
reasonably required of Purchaser in order to consummate the transactions
contemplated hereby.
4.2.2. Purchaser Not to Control. Notwithstanding any other
provision of this Agreement that may be construed to the contrary, pending the
consummation of the Closing, Seller shall maintain actual (de facto) and legal
(de jure) control over the System. Specifically, and without limitation, the
responsibility for the operation of Seller and the System shall, pending the
Closing, reside with the Board of Directors of Seller, including, but not
limited to, responsibility for the following matters: (a) access to and the use
of the facilities of and equipment owned by Seller; (b) control of the daily
operation of the System; (c) creation and implementation of policy decisions;
(d) employment and supervision of employees; (e) payment of financing
obligations and expenses incurred in the operation of the System; (f) receipt
and distribution of monies and profits derived from the operation of the System;
and (g) execution and approval of all contracts and applications prepared and
filed before regulatory agencies.
4.3. Governmental Filings. Each of Seller and Purchaser covenant and
agree from and after the execution and delivery of this Agreement to and
including the Closing Date that the Parties have filed or shall file with the
FCC, and, if necessary, will file with any applicable state public utilities or
public service commission, or any other relevant state agency or agencies, as
soon as practicable following the date hereof, joint applications requesting the
approval of the transfer and assignment of the Assets to Purchaser, and, if
applicable, shall file all necessary applications with the Department of Justice
and/or the Federal Trade Commission pursuant to the Antitrust Improvement Acts
of 1976, as amended ("HSR Act"). Each of the Parties hereto shall diligently
take or cooperate in the taking of all steps which are necessary or appropriate
for the prosecution and favorable consideration of such applications. The
Parties covenant and agree to undertake all actions and file such material as
shall be reasonably necessary or required to obtain any necessary waivers or
other authority in connection with the foregoing applications.
4.4. Forest Service Special Use Permits. Purchaser acknowledges that the
U.S. Forest Service Special Use Permits ("SPU") for the Mount Princeton,
Granite, Fairplay and Badger Mountain cell sites are not assignable and that,
under U.S. Forest Service
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procedures, Purchaser will have to make application for and receive its own SPUs
for each such cell site. Purchaser agrees to make application to the appropriate
office of the U.S. Forest Service to obtain such SPUs within ten (10) business
days of the date of this Agreement so long as Seller provides assistance and
cooperation in providing all necessary documentation relating to the existing
SPUs, and appropriate contact information. Receipt of new SPUs issued in the
name of Purchaser shall be a condition to Closing; however, Purchaser may close
at its election if it receives a written commitment from the U.S. Forest
Service, in form satisfactory to Purchaser, that ensures that the SPUs will be
issued in a timely manner after the Closing.
ARTICLE 5.
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby makes the following representations and warranties to
Purchaser, all of which have been relied upon by Purchaser in entering into this
Agreement and the truth and accuracy of which shall constitute a condition
precedent to the obligations of Purchaser hereunder:
5.1. Organization and Standing. Seller (a) is a corporation duly
organized, validly existing and in good standing under the laws of the state of
its incorporation, (b) has full corporate power and authority to enter into and
perform this Agreement, to own, lease and operate the System and the Assets and
to carry on the Business associated with the Assets as now being conducted and
proposed to be conducted by it under existing agreements, and (c) is duly
qualified to do business and is in good standing as a foreign corporation in
every jurisdiction in which the nature of the business conducted by it requires
such qualification, except where the failure to so qualify would not materially
adversely effect the System, the Business or the Assets.
5.2. Authorization and Binding Obligations. The execution, delivery and
performance of this Agreement by Seller have been duly and validly authorized by
all necessary corporate action, including approval of the entire transaction by
the requisite vote of the board of directors of Seller. This Agreement has been
duly executed and delivered by Seller and constitutes a valid and binding
agreement of Seller enforceable against it in accordance with its terms, except
as its enforceability may be limited by bankruptcy, insolvency, moratorium or
other laws relating to or affecting creditors' rights generally and the exercise
of judicial discretion in accordance with general equitable principles.
5.3. No Contravention. Except as otherwise contemplated hereunder, the
execution, delivery and performance of this Agreement, the consummation of the
transactions contemplated hereby and the compliance with the provisions hereof
by Seller will not (a) violate any provisions of the corporate charter or
by-laws of Seller, (b) result in the breach of, or constitute a default under,
or result in the creation of any lien, charge or
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encumbrance upon any of the Assets under the provisions of any agreement or
other instrument to which Seller is a party or by which the Assets or Business
of Seller is bound or affected or (c) violate any laws, regulations, orders or
judgments applicable to Seller.
5.4. Title to Assets.
5.4.1. Schedule 5.4.1 is a list of all tangible personal property
included in the Assets. Seller has good and marketable title to all the tangible
personal property to be transferred by it hereunder, free and clear of all
Liens, except for and subject only to Permitted Liens.
5.4.2. Schedule 5.4.2 is a list of all the Real Property. Seller
has good and marketable title to all of the Real Property which it owns and is
to be transferred by it hereunder, free and clear of all Liens, except for and
subject only to (a) Permitted Liens listed on Schedule 5.4.2, (b) the leases
listed on Schedule 5.4.2,none of which is violated by existing structures or
impairs Seller's use and none of which materially impairs or pursuant to its
terms would materially impair the present operations of the System or the
present use of such property by Seller, and (c) those other Liens set forth in
Schedule 5.4.2. All of the Liens, other than the Permitted Liens, shall be
removed on or prior to the Closing Date.
5.4.3. The Assets include all assets (except the Excluded Assets)
which are reasonably necessary to conduct the Business and operations of the
System as presently conducted.
5.5. Condition of the Equipment. The Equipment is in good operating
condition and repair, ordinary wear and tear excepted, is being used for the
purposes for which it was intended to be used, and to Seller's knowledge its use
and operation is in material compliance with all applicable federal, state and
local statutes, ordinances and regulations, including the rules and regulations
of the Commission and all applicable zoning ordinances, rules and regulations,
and Seller has no knowledge and has received no notice that Seller or its
present use of the Equipment or any other Asset is in violation in any material
respect of applicable statutes, ordinances and regulations.
5.6. Authorizations. To Seller's knowledge, the Authorizations listed on
Schedule 5.6 are all of the licenses, permits, and other authorizations
necessary to operate the System, the Business and the Assets as they are now
operated. The Authorizations were duly issued in the normal course in the name
of Seller and are in full force and effect. Except as set forth on Schedule 5.6,
the Authorizations have not been and are unimpaired by any acts or omissions of
Seller (or any of its Representatives) and the Authorizations are free and clear
of any restrictions which might limit the operation of the System. The FCC
actions granting the current FCC Authorizations to operate the System together
with all underlying FCC construction permits have not been reversed, stayed,
enjoined, set aside, annulled, or suspended and those grants have now become
Final Orders.
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5.7. Contracts. Schedule 5.7 is a list of all Contracts other than
Customer Agreements. Each Contract is in full force and effect, paid currently,
and has not been materially impaired by any acts or omissions of Seller or any
of its Representatives. Except as set forth on Schedule 5.7, no Contract
requires the consent of any other contracting party to the transactions
contemplated by this Agreement. Seller is not (and, to its best knowledge, no
other party is) in material breach or violation of, or default under any of the
Contracts. Seller is not aware of any intent by any party to any Contract to
terminate or amend the terms thereof or to refuse to renew any Contract upon the
expiration of its term. Seller has delivered to Purchaser true and correct
copies of all the Contracts (or in the case of oral contracts, true and correct
descriptions thereof). Purchaser is under no obligation to assume the
obligations under those Contracts which Purchaser notifies Seller that Purchaser
chooses not to assume not later than fourteen (14) days after the Parties'
execution of this Agreement.
5.8. Intellectual Property. Schedule 5.8 is a list of all Intellectual
Property. No person has a right to receive a royalty or similar payment in
respect of any Intellectual Property other than as indicated on Schedule 5.8
Seller has no licenses granted by or to it, or any other agreements to which it
is a party, relating in whole or in part to any of the Intellectual Property
other than as indicated on Schedule 5.8 To Seller's best knowledge, Seller's use
of the Intellectual Property is not infringing upon or otherwise violating the
rights of any third party, and no proceedings have been instituted against or
notices received by Seller alleging that such use of the Intellectual Property
infringes upon or otherwise violates any rights of a third party.
5.9. Employees; Employment Obligations. Seller and/or the System
currently employs those persons in those positions and at those salaries
(including benefits) as are listed on Schedule 5.9. Except as otherwise set
forth on such Schedule 5.9, Seller and the System are not bound, and at no time
have been bound, by any oral or written collective bargaining agreement,
severance, pension, retirement, profit-sharing, 401(k), "employee benefit plan"
(within the meaning of Section 3(3) of the Employee Retirement Income Security
Act of 1974, as amended), or other employment agreement (other than any
agreements terminable on thirty (30) days' or less notice without penalty or
severance obligation) with any officer, employee or consultant, nor does Seller
or the System have any liability under any such agreement which was terminated
previously. Seller has complied in all material respects with all applicable
laws, rules and regulations which relate to prices, wages, hours, discrimination
in employment and collective bargaining and to the operation of the System and
is not liable for any arrears of wages or any taxes or penalties for failure to
comply with any of the foregoing. With respect to each "employee benefit plan,"
if any, within the meaning of Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), which is now, or ever has been,
maintained, contributed to, or required to be contributed to by Seller, such
employee benefit plan has been established and maintained in all material
respects in accordance with its terms and in compliance with all applicable
laws, statutes, orders, rules and regulations, including but not limited to
ERISA. Seller is not a party to, and is not affected by or, to the best of
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Seller's knowledge, threatened with, any dispute or controversy with a union or
with respect to unionization or collective bargaining involving the employees of
Seller or the System.
5.10. Financial Statements. Attached hereto as Schedule 5.10 is a list
of unaudited financial reports relating to the System ("Financial Statements").
Schedule 5.10 also lists documents which set forth the available historical data
on System subscribers and their local and roaming minutes of use of Services
("Operating Data Statements"). On a monthly basis Seller will provide to
Purchaser updated, unaudited Financial Statements and Operating Data Statements
covering periods between execution hereof and the Closing Date. All Financial
Statements are (or shall be) true and correct in all material respects, have
been (or shall have been) prepared from the books and records of Seller and
fairly present (or shall fairly present) the financial position of Seller in a
manner consistent with prior periods as of the dates of such statements and the
results of the Business operations and statements of cash flow for the year or
interim period then ended, in each case in conformity with generally accepted
accounting principles then in effect. Seller has not incurred nor is it subject
to any liabilities or obligations, whether accrued, absolute or contingent,
which are not required to be disclosed in the Financial Statements and are not
so disclosed. All Operating Data Statements are (or shall be) accurate in all
material respects.
5.11. Litigation. Except as set forth on Schedule 5.11, there is no
action, order, writ, injunction, judgment or decree outstanding or claim, suit,
litigation, proceeding, or labor dispute ("Action"), other than rule making
proceedings affecting the cellular telephone industry generally, pending or, to
the knowledge of Seller, threatened or anticipated against, relating to or
involving (a) Seller, (b) the Assets, (c) the Business, or (d) the transactions
contemplated by this Agreement. Seller is not in material default with respect
to any material judgment, order, writ, injunction or decree of any court or
governmental agency relating to or involving (i) Seller, (ii) the Assets, (iii)
the Business, or (iv) the System, and there are no unsatisfied judgments against
Seller or the Assets. There is not a reasonable likelihood of an adverse
determination of any pending Action which would, individually or in the
aggregate, have a material adverse effect on the Assets or the Business or the
financial condition of Seller.
5.12. Complaints. There is not, to the best of Seller's knowledge, any
Commission investigation, notice of apparent liability or order of forfeiture
pending or outstanding against Seller or the System respecting any violation, or
allegation thereof, of any Commission rule, regulation or policy, or, to the
best of Seller's knowledge, any complaint before the Commission as a result of
which an investigation, notice of apparent liability or order of forfeiture may
issue from the Commission relating to the System.
5.13. Reports. Except as set forth in Schedule 5.13 hereto, Seller has
filed and complied with all returns, reports and statements currently required
to be filed by Seller with the Commission or with any other governmental agency
with respect to the System.
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Seller shall continue to make and comply with such filings until the Closing
Date. All such reports, returns and statements are (or will be, in the case of
future reports) substantially complete and correct as filed.
5.14. Taxes. Except as disclosed on Schedule 5.14, Seller has filed, or
caused to be filed, with the appropriate federal, state and local governmental
agencies all required tax and information returns and reports which are due or
required to be filed at the date hereof, and Seller has paid, caused to be paid
or accrued all Taxes shown to be due and payable or claimed to be due and
payable thereon to the date hereof. Except as disclosed on Schedule 5.14, Seller
has no liability material in amount, contingent or otherwise, for any Taxes.
Except as disclosed on Schedule 5.14 hereto, Seller has received neither notice
of nor is otherwise aware of any audit or examination relating to its Taxes; nor
is Seller a party to any action or proceeding by any governmental authority for
assessment or collection of Taxes; nor has any claim for assessment and
collection been asserted against Seller, nor has Seller executed a waiver of any
statute of limitations with respect thereto. Seller has not received any notices
and is not otherwise aware of any deficiencies, adjustments or changes in
assessments with respect to any Taxes other than as set forth on Schedule 5.14
hereto. No extensions of time are in effect for the assessment of deficiencies
for Taxes in respect of any fiscal period.
5.15. No Other Agreements to Sell the System or the Assets. Seller has
no legal obligation, absolute or contingent, to any other person or firm to sell
the Assets or to sell any capital stock of Seller or to effect any merger,
consolidation or other reorganization of Seller or to enter into any agreement
with respect thereto.
5.16. Resale and Roaming Agreements. Schedule 5.16 contains a list of
all resale agreements to which Seller is a party, both as reseller and as a
provider of resale services to others. Schedule 5.16 also contains a list of all
roaming agreements to which Seller is a party. All such resale and roaming
agreements are in full force and effect and reflect terms reasonable and
customary in the cellular telephone industry as of the time they were entered
into.
5.17. Environmental Matters. Except as set forth in Schedule 5.17,
5.17.0.1. there is and has been no handling of any Substances at, on, or from
any Operating Site; (a) there is and has been no presence of Substances on or
under any Operating Site regardless of how the Substance or Substances came to
rest there; (b) no underground tanks, PCBs or asbestos-containing materials are
or have been located on or under any Operating Site; (c) neither Seller nor any
Person acting on behalf of Seller has released any other Person from any claims
Seller might have, or have had, for any matter relating to presence or Handling
of Substances at any Operating Site; (d) no Liens have been, or are, imposed on
any of the Assets under any Environmental Laws; and (e) Seller has obtained all
permits, licenses, registrations, and other approvals and has made all reports
and notifications required under any Environmental Laws in connection with the
Assets, and is in compliance in all material respects with all applicable
Environmental Laws; provided, however, that the
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representations and warranties in this Section regarding acts or omissions by
parties other than Seller are made to the best knowledge of Seller. Schedule
5.17 hereto also contains a list and brief description of all filings by Seller
with, notices to Seller from, and related reports to all governmental
authorities administering Environmental Laws, within three (3) years prior to
the date hereof, including without limitation, filings made, corrective action
taken, or citations received by Seller.
5.18. Brokers. Seller has entered into an agreement with Xxxxxxx &
Associates, Inc. to assist it with this transaction. Seller shall be solely
responsible for all fees and costs payable to, or as a result of using, such
broker. Seller shall not enter into any arrangement or understanding with any
person or firm which will result in the obligation of Purchaser to pay any
finder's fee, brokerage commission or similar payment in connection with the
transactions contemplated hereby.
5.19. Miscellaneous. No representation or warranty made by Seller in
this Agreement, and no statement made in any schedule, exhibit, certificate or
other document furnished pursuant to this Agreement, contains or will contain
any untrue statement of a material fact or knowingly omits or fails to state, or
will knowingly omit or fail to state, any material fact or information necessary
to make such representation or warranty or any such statement not materially
misleading.
5.20. No Material Adverse Change. Since the date of the most recent
Financial Statements, which is March, 1998, there has not been:
5.20.1. any issuance, assumption or guarantee by Seller of
material indebtedness other than pursuant to agreements or binding
commitments in existence on the date hereof and set forth or described
on Schedule 5.20.1;
5.20.2. the creation by Seller of any Lien (other than a
Permitted Lien) on any material Asset other than pursuant to agreements
or binding commitments in existence on the date hereof and set forth or
described on Schedule 5.20.2;
5.20.3. any making of any loan, advance or capital contribution
to or investment in any Person by Seller;
5.20.4. any damage, destruction or other casualty loss affecting
the Business or the Assets which, after giving effect to payments to
Seller under applicable insurance policies, has had or is likely to have
a material adverse effect on Seller, the System, or the Business; or
5.20.5. any change by Seller in its accounting principles or
methods.
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ARTICLE 6.
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby makes the following representations and warranties to
Seller, all of which have been relied upon by Seller in entering into this
Agreement and the truth and accuracy of which shall constitute a condition
precedent to the obligations of Seller hereunder:
6.0.1. Organization and Standing. Purchaser (a) is a corporation duly
organized, validly existing and in good standing under the laws of the state of
its incorporation, (b) has full corporate power and authority to enter into and
perform this Agreement, and, subject to receipt of the Consents, to own, lease
and operate the System and Assets and to carry on the Business associated with
the Assets as now being conducted, and (c) is duly qualified to do business and
is in good standing as a foreign corporation in every jurisdiction in which the
nature of the business conducted by it requires such qualification, except where
the failure to so qualify would not materially adversely affect Purchaser.
6.1. Authorization and Binding Obligations. The execution, delivery and
performance by Purchaser of this Agreement has been duly and validly authorized
by all necessary corporate action, including any necessary approval of the
entire transaction by the board of directors of Purchaser. This Agreement has
been duly executed and delivered by Purchaser and constitutes a valid and
binding agreement of Purchaser, enforceable against Purchaser in accordance with
its terms except as its enforceability may be limited by bankruptcy, insolvency,
moratorium or other laws relating to or affecting creditors' rights generally
and the exercise of judicial discretion in accordance with general equitable
principles.
6.2. No Contravention. Except as otherwise contemplated hereunder, the
execution, delivery and performance of this Agreement, the consummation of the
transactions contemplated hereby and the compliance with the provisions hereof
by Purchaser will not (a) violate any provisions of the corporate charter or
by-laws of Purchaser, (b) result in the breach of, or constitute a default under
the provisions of any agreement or other instrument to which Purchaser is a
party or by which the property of Purchaser is bound or affected or (c) violate
any laws, regulations, orders or judgments applicable to Purchaser.
6.3. Litigation. Except as set forth on Schedule 6.3, there is no
Action, other than rule making proceedings affecting the cellular telephone
industry generally, pending or, to the knowledge of Purchaser, threatened or
anticipated against, relating to or involving Purchaser that would have a
material adverse effect Purchaser's ability to consummate the transactions
contemplated by this Agreement. Purchaser is not in material default with
respect to any material judgment, order, writ, injunction or decree of any court
or governmental agency, and there are no unsatisfied judgments against
Purchaser.
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There is not a reasonable likelihood of an adverse determination of any pending
Action which would, individually or in the aggregate, have a material adverse
effect on Purchaser's ability to consummate the transactions contemplated by
this Agreement.
6.4. Brokers. Neither Purchaser nor any of its Affiliates has entered
into or will enter into any contract, agreement, arrangement or understanding
with any person or firm which will result in the obligation of Seller to pay any
finder's fee, brokerage commission or similar payment in connection with the
transactions contemplated hereby.
6.5. Purchaser Qualifications. Purchaser is legally, technically,
financially and otherwise qualified under the Communications Act of 1934, as
amended, to hold the FCC Authorizations and to consummate the transactions
contemplated hereby. Purchaser has no knowledge of any fact that would, under
existing law (including the Communications Act), disqualify Purchaser as an
assignee of the FCC Authorizations.
6.6. Financial Capability. Purchaser has available or shall have
available on the Closing Date sufficient funds to consummate the transactions
contemplated by t his Agreement, including without limitation, payment of the
Purchase Price and Purchaser shall be solvent on the Closing Date with the
financial capability to meet its other obligations when they become due.
6.7. Knowledge of Claims. As of the date hereof, Purchaser has no actual
knowledge of any breach of the representations and warranties of Seller
contained in this Agreement.
6.8. Miscellaneous. No representation or warranty made by Purchaser in
this Agreement, and no statement made in any schedule, exhibit, certificate or
other document furnished pursuant to this Agreement, contains or will contain
any untrue statement of a material fact or knowingly omits or fails to state, or
will knowingly omit or fail to state, any material fact or information necessary
to make such representation or warranty or any such statement not materially
misleading.
ARTICLE 7.
CONDITIONS PRECEDENT TO OBLIGATION OF SELLER TO CLOSE
The obligations of Seller to sell the Assets and to otherwise consummate
the transactions contemplated by this Agreement are subject, in the discretion
of Seller, to the satisfaction, on or prior to the Closing Date, of each of the
following conditions:
7.1. Representations, Warranties and Covenants. All representations and
warranties of Purchaser contained in this Agreement shall be true and correct in
all material respects at and as of the Closing Date as if such representations
and warranties
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were made at and as of the Closing Date, and Purchaser shall have performed in
all material respects all agreements and covenants required hereby to be
performed by it prior to or at the Closing Date. There shall be delivered to
Seller a certificate (signed by a senior officer of Purchaser) to the foregoing
effect ("Purchaser's Closing Certificate").
7.2. Closing Documents. Seller shall have received from Purchaser the
documents and other items to be delivered by Purchaser pursuant to Section 9.2
of this Agreement.
7.3. Opinion of Purchaser's Corporate Counsel. Purchaser shall have
delivered to Seller an opinion or opinions of counsel for Seller in
substantially the form attached hereto as Schedule 7.3.
7.4. Receipt of Payment. Seller shall have received payment of the
Purchase Price in accordance with Article 2 hereof.
7.5. HSR Waiting Period. Any waiting period required by the HSR Act
shall have lapsed or been terminated, and any investigation of the transactions
contemplated by this Agreement commenced by the Department of Justice and/or the
Federal Trade Commission pursuant to the HSR Act shall have been terminated.
7.6. FCC Consents. The FCC and any other required Consents from
government authorities shall have been granted by Final Orders.
ARTICLE 8.
CONDITIONS PRECEDENT TO OBLIGATION OF PURCHASER TO CLOSE
The obligations of Purchaser to purchase the Assets and to otherwise
consummate the transactions contemplated by this Agreement are subject, in the
discretion of Purchaser, to the satisfaction, on or prior to the Closing Date,
of each of the following conditions:
8.1. Representations, Warranties and Covenants. All representations and
warranties of Seller contained in this Agreement shall be true and correct in
all material respects at and as of the Closing Date as if such representations
and warranties were made at and as of the Closing Date, and Seller shall have
performed in all material respects all agreements and covenants required hereby
to be performed by Seller prior to or at the Closing Date. There shall be
delivered to Purchaser a certificate (signed by the President or a Vice
President of Seller) to the foregoing effect ("Seller's Closing Certificate").
8.2. Consent. The FCC Consent shall have become a Final Order.
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8.3. Closing Documents. Purchaser shall have received from Seller the
documents and other items to be delivered by Seller pursuant to Section 9.1
hereof.
8.4. Opinion of Seller's Corporate Counsel. Seller shall have delivered
to Purchaser an opinion or opinions of counsel for Seller in substantially the
form attached hereto as Schedule 8.4, or such other form as is reasonably
acceptable to Purchaser.
8.5. Opinion of Seller's Regulatory Counsel. Seller shall have delivered
to Purchaser an opinion of FCC counsel for Seller in substantially the form
attached hereto as Schedule 8.5.
8.6. HSR Waiting Period. Any waiting period required by the HSR Act
shall have lapsed or been terminated, and any investigation of the transactions
contemplated by this Agreement commenced by the Department of Justice and/or the
Federal Trade Commission pursuant to the HSR Act shall have been terminated.
ARTICLE 9.
THE CLOSING
On the Closing Date at the Closing Place:
9.1. Deliveries by Seller to Purchaser. Seller shall deliver to
Purchaser the following, all in a form and to the extent reasonably requested by
Purchaser:
9.1.1. one or more assignments transferring to Purchaser (or its
designee) all of Seller's interest in and to the Authorizations;
9.1.2. one or more instruments of conveyance transferring to
Purchaser (or its designee) all of Seller's interest in and to the Equipment and
the Books and Records;
9.1.3. one or more assignments or other instruments of conveyance
transferring to Purchaser (or its designee) Seller's interest in and to the
Intellectual Property;
9.1.4. one or more instruments of conveyance transferring to
Purchaser (or its designee) the Contracts in effect on the Closing Date;
9.1.5. one or more executed warranty deeds and assignments in
recordable form, transferring to Purchaser (or its designee) Seller's interest
in and to the Real Property;
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9.1.6. one or more instruments of conveyance transferring to
Purchaser (or its designee) any of the other Assets not otherwise conveyed as
provided above;
9.1.7. the opinions of Seller's counsel referenced in Sections
8.4 and 8.5 hereof;
9.1.8. a copy of the resolutions of the board of directors of
Seller approving the transactions contemplated by this Agreement certified by an
appropriate officer of Seller, together with copies of the Certificate of
Incorporation and By-Laws of Seller, certified by an appropriate officer of
Seller; and
9.1.9. Seller's Closing Certificate.
9.2. Deliveries by Purchaser to Seller. Purchaser shall deliver to
Seller (or its designee):
9.2.1. one or more agreements whereby Purchaser (or its designee)
assumes and agrees to perform Seller's obligations, liabilities and duties under
the Assumed Liabilities;
9.2.2. the opinion of Purchaser's counsel referenced in Section
7.3;
9.2.3. Purchaser's Closing Certificate; and
9.2.4. payment of the Purchase Price
ARTICLE 10.
ACTIONS BY THE PARTIES AFTER THE CLOSING
10.1. Transition Assistance. For a period of not more than thirty (30)
days after the Closing, Seller shall provide reasonable assistance and training
to Purchaser's personnel in order to help familiarize Purchaser's personnel with
the operating systems of the Business, including applicable billing and customer
assistance programs.
10.2. Seller's Access to Records. After the Closing, Purchaser shall
provide Seller, during normal business hours after reasonable advance request,
with access to books and records of the System, Business or Assets which are
reasonably required by Seller to prepare Seller's Financial Statements, complete
tax returns, respond to requests for information from taxing authorities or in
connection with any tax audits.
10.3. Further Assurances. On and after the Closing Date, the Parties
shall take all appropriate actions, including the execution of all documents,
instruments or conveyances
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of any kind, which may be reasonably necessary to consummate the transactions
contemplated by this Agreement, including without limitation, providing
Purchaser (or its designee) with possession and operating control of the Assets
and the System.
ARTICLE 11.
INDEMNIFICATION
11.1. Survival. The several representations, warranties, and covenants
of the Parties contained in this Agreement (or in any document delivered in
connection herewith) shall be deemed to have been made on the date of this
Agreement and on the Closing Date, shall be deemed to be material and to have
been relied upon by the Parties notwithstanding any investigation made by the
Parties, shall survive the Closing Date, and shall remain operative and in full
force and effect for a period of two (2) years following the Closing Date;
provided, however, that the representations, warranties and agreements of (i)
Seller contained in Sections 5.4 (Title to Assets), 5.6 (Authorizations), 5.14
(Taxes), and 5.17 (Environmental Matters) and (ii) Buyer contained in Section
6.2 (Authorizations) and 6.6 (Purchaser Qualifications) shall continue for the
duration of any statute of limitations that is applicable to the matter that
gives rise to the indemnification claim. These periods during which the Parties
representations, warranties and covenants shall continue shall constitute the
Indemnification Period, as the case may be.
11.2. Seller's Indemnity.
11.2.1. During the indemnification period (or thereafter solely
with respect to any claim for which indemnification has been made prior to the
expiration of the indemnification period), in addition to any other
indemnification provided for under this Agreement, Seller shall indemnify and
hold harmless Purchaser and its Representatives and assigns from and against any
and all demands, claims, losses, liabilities, actions or causes of action,
assessments, actual damages (but excluding consequential damages), fines, taxes
(including, without limitation, excise and penalty taxes), penalties, reasonable
costs and expenses (including, without limitation, interest, reasonable expenses
of investigation, reasonable fees and disbursements of counsel, accountants and
other experts (whether such reasonable fees and disbursements of counsel,
accountants and other experts relate to claims, actions or causes of action
asserted by Purchaser against Seller or asserted by third parties))
(collectively "Losses") incurred or suffered by Purchaser, its Representatives
or its assigns arising out of, resulting from, or relating to:
11.2.1.1. Any breach of any of the representations
warranties, covenants, agreements or other commitments made by Seller in this
Agreement or in any agreement, certificate, exhibit or other instrument
delivered by the Seller pursuant to this Agreement; and
11.2.1.2. Any failure by Seller to perform any of its
covenants or agreements contained in this Agreement or in any agreement,
certificate or other instrument delivered by the Seller pursuant to this
Agreement.
11.3. Purchaser's Indemnity.
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11.3.1. During the indemnification period (or thereafter solely
with respect to any claim for which indemnification has been made prior to
expiration of the indemnification period), in addition to any other
indemnification provided for under this Agreement, from and after the Closing
Date, Purchaser shall indemnify and hold harmless Seller and its Representatives
and its assigns from and against any and all Losses incurred or suffered by
Seller, its Representatives or its assigns arising out of, resulting from, or
relating to:
11.3.1.1. Any breach of any of the representations or
warranties made by Purchaser in this Agreement or in any agreement, certificate
or other instrument delivered by Purchaser pursuant to this Agreement; or
11.3.1.2. Any failure by Purchaser to perform any of its
covenants or agreements contained in this Agreement or in any agreement,
certificate or other instrument delivered by Purchaser pursuant to this
Agreement.
11.4. Procedure. In the event that any Party hereto shall sustain or
incur any Losses in respect of which indemnification may be sought by such Party
pursuant to this Article 11, the Party seeking such indemnification (the
"Indemnitee") shall assert a claim for indemnification by giving prompt written
notice thereof (the "Notice") which shall describe in reasonable detail the
facts and circumstances upon which the asserted claim for indemnification is
based along with a copy of the claim or complaint, to the Party providing
indemnification (the "Indemnitor") and shall thereafter keep the Indemnitor
reasonably informed with respect thereto; provided that failure of the
Indemnitee to give the Indemnitor prompt notice as provided herein shall not
relieve the Indemnitor of any of its obligations hereunder, except to the extent
that the Indemnitor is materially prejudiced by such failure. For purposes of
this Section, any notice which is sent within fifteen (15) days of the date upon
which the Indemnitee learned of such Loss shall be deemed to have been a prompt
notice.
11.4.1. If the Indemnitor wishes to defend any claim for any
Losses for which such Indemnitor is or may be liable, and such Indemnitor first
establishes (to the reasonable satisfaction of the Indemnitee) the Indemnitor's
financial ability to pay for any such Losses, then such Indemnitor may, at its
own expense, defend such claim; provided that the Indemnitee may retain counsel
(at the Indemnitee's expense) to monitor the defense of such claim, and may take
over such defense if, during the course thereof, it reasonably appears that the
Indemnitor has lost its ability to pay for any Losses threatened by such claim.
If an Indemnitor assumes the defense of such an action, no compromise or
settlement thereof may be effected by the Indemnitor without the Indemnitee's
consent, which consent shall not be unreasonably withheld. If an Indemnitor
fails, within thirty (30) days after the date of the Notice, to give notice to
the Indemnitee of said Indemnitor's election to assume the defense thereof, said
Indemnitor shall be bound by any determination made in such action or any
compromise or settlement thereof effected by the Indemnitee.
11.4.2. Amounts payable by the Indemnitor to the Indemnitee in
respect of any Losses for which any Party is entitled to indemnification
hereunder shall be payable by the Indemnitor as incurred by the Indemnitee.
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11.5. Limitation on Indemnification. No Party shall be entitled to
indemnification in accordance with the provisions of this Article until such
time as the value of the aggregate loss or liability for which indemnification
is sought exceeds the sum of Fifty Thousand Dollars ($50,000). At such time as
the aggregate loss or liability for which indemnification may be sought exceeds
Fifty Thousand Dollars ($50,000), the Party to be indemnified may seek
indemnification for all such losses or liabilities, including the first Fifty
Thousand Dollars ($50,000), provided further that in no event shall the
aggregate liability of either Party for all such claims exceed Five Million
Dollars ($5,000,000).
11.6. Indemnification Payments in Cash. All payments in respect to any
indemnification obligation shall be made by wire transfer of immediately
available funds.
11.7. Investigations: Waivers. The survival periods and rights to
indemnification provided for in this Article 11 shall remain in effect
notwithstanding any investigation at any time by or on behalf of any Party
hereto or any waiver by any Party hereto of any condition to such Party's
obligations to consummate the transactions contemplated hereby.
11.8. Claims Outside the Indemnification Period. Any claim made outside
the Indemnification Period shall be barred.
ARTICLE 12.
DEFAULT AND REMEDIES
12.1. Opportunity to Cure. If any Party believes another to be in
default hereunder for breach of representations and warranties or any other
reason, such Party shall provide the other with written notice specifying in
reasonable detail the nature of such default. If the default has not been cured
by the earlier of: (a) the Closing Date, or (b) within thirty (30) days after
delivery of that notice, then the Party giving such notice may terminate this
Agreement by notifying the defaulting Party and/or exercise the remedies
available to such Party pursuant to this Article 12, subject to the right of the
other Party to contest either such action through appropriate proceedings;
provided, however, that if such breach is not capable of being cured within such
period and if the breaching Party shall have commenced action to cure such
breach within such period and is diligently attempting to cure such breach and
such breach can reasonably be expected to be cured during the additional time
period, the breaching Party shall be afforded an additional reasonable amount of
time to cure such breach but not to exceed an additional sixty (60) days;
provided, further, however, that Purchaser shall have no opportunity to cure the
breach of its obligation to deliver any required portion of the Purchase Price
to be delivered to Seller at Closing.
12.2. Remedies. Except as otherwise provided in this Agreement, the
Parties hereto shall have the right to pursue any remedy that each may have at
law or in equity. Without limiting the foregoing, the Parties agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the Parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions hereof in any court of the
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United States or any state having jurisdiction, this being in addition to any
other remedy to which they are entitled at law or in equity. Each Party agrees
that it will not assert, as a defense against a claim for specific performance,
that the Party seeking specific performance has an adequate remedy at law.
ARTICLE 13.
TERMINATION
Absence of Commission Consent. This Agreement may be terminated at the
option of Seller or Purchaser upon written notice to the other if the Assignment
Application has not been granted by Final Order within twelve (12) months after
the date of this Agreement. Neither Party may terminate this Agreement pursuant
to this Section if such Party is in material default hereunder, or if a delay in
any decision or determination by the Commission respecting the Assignment
Application has been caused or materially contributed to by such Party's action
or inaction with respect to such Assignment Application.
ARTICLE 14.
DAMAGE; RISK OF LOSS
14.1. Risk of Loss. The risk of loss or damage to the Assets shall be
upon Seller at all times prior to the Closing Date. In the event of material
loss or damage to the Assets prior to the Closing Date, Seller shall promptly
notify Purchaser thereof and use its best efforts to repair, replace or restore
the lost or damaged Assets to their former condition as soon as possible. If
such repair, replacement, or restoration has not been completed prior to the
Closing Date, Purchaser may, at its option:
14.1.1. elect to consummate the Closing and make such
arrangements as the Parties may reasonably agree upon to remedy such loss or
damage; or
14.1.2. elect to postpone the Closing Date, with prior consent of
the Commission if necessary, for such reasonable period of time (not to exceed
ninety (90) days) as is necessary for Seller to repair, replace, or restore (or
to cause to be repaired, replaced or restored) the lost or damaged Assets to
their former condition. If, after the expiration of that extension period, the
lost or damaged Assets have not been adequately repaired, replaced or restored,
Purchaser may terminate this Agreement by notifying Seller or elect to
consummate the Closing as provided in Section 14.1.1.
For purposes of this Section, loss or damage shall be deemed "material"
if the reasonable cost to repair, replace, or restore the lost or damaged
property exceeds $250,000.00.
14.2. Resolution of Disagreements. If the Parties are unable to agree
upon the extent of any loss or damage, the cost to repair, replace or restore
any lost or damaged Assets, the adequacy of any repair, replacement, or
restoration of any lost or damaged Assets, or any other matter arising under
this Section, the Parties shall jointly refer the
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disagreement to a qualified consulting communications engineer mutually
acceptable to Seller and Purchaser who is a member of the Association of Federal
Communications Consulting Engineers (the Engineer ), whose decision shall be
final, and whose fees and expenses shall be paid one-half by Seller and one-half
by Purchaser. The Engineer shall render his decision not later than thirty (30)
days after the date on which the disagreement is jointly referred.
ARTICLE 15.
MISCELLANEOUS
15.1. Assignment. Neither this Agreement nor any of the rights or
obligations hereunder may be assigned by Seller or Purchaser without the prior
written consent of the others, except that Purchaser, upon ten (10) days notice
to Seller, may assign its right, title and interest in, to and under this
Agreement to an Affiliate, provided, however that Western Wireless Corporation
shall continue to guaranty performance of the assignee s obligations under this
Agreement in accordance with Section 15.2. Subject to the foregoing, this
Agreement shall be binding upon and inure to the benefit of the Parties hereto
and their respective successors and assigns, and no other person shall have any
right, benefit or obligation hereunder.
15.2. Guaranty of Western Wireless Corporation. Western Wireless
Corporation, as an affiliate of Purchaser, agrees that it shall ensure
performance by Purchaser (or its assignee) of the obligations of Purchaser (or
its assignee) under this Agreement, including the payment of the Purchase Price
on the same terms and conditions as are contained in this Agreement. Except as
expressly stated in this section 15.2, Western Wireless Corporation shall have
no other obligation or responsibility under this Agreement.
15.3. Notices; Transfer of Funds. Unless otherwise provided herein, any
notice, request, instruction or other document to be given hereunder by any
Party to the other Party shall be in writing and delivered (i) in person or (ii)
by a recognized national overnight courier service, (iii) by confirmed facsimile
transmission, or (iv) mailed by registered or certified mail, postage prepaid,
return receipt requested, as follows:
If to Purchaser:
Western Wireless Corporation
0000 000xx Xxxxxx X.X., Xxxxx 000
Xxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx
With a copy to:
Xxxxxx Xxxxxxxx, P.S.
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000-0000
Attention: Xxxxxxx X. Xxxxxxxx
If to Seller:
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Celludyne II, Inc.
00000 Xxxxxx Xxxxxxxx Xxxxx
Xxxxxx Xxxxx, XX 00000
Attention: Xxxx Xxxxxx
With a copy to:
Xxxxxx Xxxxx, L.L.P.
0000 X Xxxxxx X.X.
Xxxxxxxxxx, X.X. 00000
Attention: Xxxx X. Xxxxxxx
or to such other place and with such other copies as either Party may designate
as to itself by written notice to the others. All such notices and
communications shall be deemed to have been duly given at the time delivered by
hand, if personally delivered; five (5) business days after being deposited in
the mail, first class postage prepaid, return receipt requested, if mailed; when
receipt confirmed, if sent by facsimile; and the next business day after timely
delivery to the courier, if sent by an over-night air courier service
guaranteeing next day delivery.
15.4. Choice of Law. This Agreement shall be construed, interpreted and
the rights of the Parties determined in accordance with the laws of the State of
Delaware, except with respect to matters of law concerning the internal
corporate affairs of any corporate entity which is a party to or the subject of
this Agreement, and as to those matters the law of the jurisdiction under which
the respective entity was organized shall govern.
15.5. Entire Agreement; Amendments and Waivers. This Agreement, together
with all Exhibits and Schedules hereto, constitutes the entire agreement between
the Parties pertaining to the subject matter hereof and supersedes all prior
agreements, understandings, negotiations and discussions, whether oral or
written, of the Parties. No supplement, modification or waiver of this Agreement
shall be binding unless executed in writing by the Party to be bound thereby. No
waiver of any of the provisions of this Agreement shall be deemed or shall
constitute a waiver of any other provision hereof (whether or not similar), nor
shall such waiver constitute a continuing waiver unless otherwise expressly
provided.
15.6. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
15.7. Invalidity. In the event that any one or more of the provisions
contained in this Agreement or in any other instrument referred to herein,
shall, for any reason, be held to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect any
other provision of this Agreement or any other such instrument.
15.8. Headings. The headings of the Articles and Sections herein are
inserted for convenience of reference only and are not intended to be a part of
or to affect the meaning or interpretation of this Agreement.
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15.9. Expenses. Except as otherwise expressly provided herein, Purchaser
shall be solely responsible for any sales and transfer Taxes, recording and
transfer fees arising from the purchase and sale of the Assets pursuant to this
Agreement. Each Party shall be responsible for one-half of any fees associated
with filing (i) the applications for the FCC Consents and (ii) any other
application for Consent required from any governmental authority. Purchaser
shall pay all fees associated with any required HSR filing. Except as otherwise
provided in this Agreement, Seller and Purchaser will each be liable for its own
expenses incurred in connection with the negotiation, preparation, execution or
performance of this Agreement.
15.10. Schedules and Exhibits. The Schedules and Exhibits to this
Agreement are a material part hereof and shall be treated as if fully
incorporated into the body of the Agreement.
15.11. Publicity. Except as required by law or on advice of counsel,
neither Party shall issue any press release or make any public statement
regarding the transactions contemplated hereby without the prior approval of the
other Party.
15.12. Confidential Information. The Parties acknowledge that the
transaction described herein is of a confidential nature and shall not be
disclosed except to Representatives and Affiliates, or as required by law, until
such time as the Parties make a public announcement regarding the transaction as
provided in Section 15.11 Seller and Purchaser shall not make any public
disclosure of the specific terms of this Agreement, except as required by law.
In connection with the negotiation of this Agreement and the preparation for the
consummation of the transactions contemplated hereby, each Party acknowledges
that it will have access to confidential information relating to the other
Party. Each Party shall treat such information as confidential, preserve the
confidentiality thereof and not duplicate or use such information, except to
Representatives and Affiliates in connection with the transactions contemplated
hereby provided such Representatives and Affiliates also agree to keep such
information confidential. In the event of the termination of this Agreement for
any reason whatsoever, each Party shall return to the other all documents, work
papers and other material (including all copies thereof) obtained in connection
with the transactions contemplated hereby and shall use all reasonable efforts,
including instructing any of its Representatives who have had access to such
information, to keep confidential and not to use any such information, unless
such information is now, or is hereafter disclosed, through no act or omission
of such Party, in any manner making it available to the general public.
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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
duly executed on its behalf by its officer thereunto duly authorized as of the
day and year first above written.
CELLUDYNE II, INC.
By
Its
WWC HOLDING CO., INC.
By /s/ XXXXX X. XXXXXXXXX
--------------------------------
Its Senior Vice President
--------------------------------
GUARANTORS:
Solely as to its obligation under
Section 15.2 of this Agreement:
WESTERN WIRELESS CORPORATION
By /s/ XXXXX X. XXXXXXXXX
--------------------------------
Its Senior Vice President
--------------------------------
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Schedules:
Excluded Assets - Schedule 1.19
Inventory - Schedule 1.26
Escrow Agreement - Schedule 2.2
Allocation of Purchase Price - Schedule 2.4
Assumed Liabilities - Schedule 3.1.2
Insurance - Schedule 4.1.7
Tangible Personal Property - Schedule 5.4.1
Real Property - Schedule 5.4.2
Authorizations - Schedule 5.6
Contracts - Schedule 5.7
Intellectual Property - Schedule 5.8
Employees - Schedule 5.9
Financial Statements - Schedule 5.10
Litigation - Seller - Schedule 5.11
Reports - Schedule 5.13
Taxes - Schedule 5.14
Resale and Roaming Agreements - Schedule 5.16
Environmental Matters - Schedule 5.17
Recent Indebtedness - Schedule 5.20.1
Recent Liens - Schedule 5.20.2
Litigation - Purchaser - Schedule 6.3
Purchaser's Corporate Counsel Opinion - Schedule 7.3
Seller's Corporate Counsel Opinion - Schedule 8.4
Seller's Regulatory Counsel Opinion - Schedule 8.5
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