1
EXHIBIT 10.28
AMENDED AND RESTATED AGREEMENT
FOR PURCHASE AND SALE OF LICENSES
This Amended and Restated Agreement for Purchase and Sale of
Licenses (the "Agreement") is entered into effective as of November 3, 2000 (the
"Effective Date") by and among MVI Corp., an Oregon corporation ("MVI"), Century
Personal Access Network, Inc., a Louisiana corporation ("CPAN"), Wisconsin RSA
#7, Limited Partnership, a Wisconsin limited partnership ("RSA," and together
with MVI and CPAN, the "Sellers"), Centurytel, Inc., a Louisiana corporation and
the parent corporation of MVI and CPAN (the "Shareholder"), and Leap Wireless
International, Inc., a Delaware corporation ("Buyer").
WHEREAS, Sellers have acquired the authorizations of the Federal
Communications Commission (the "FCC") described on Exhibits A-1 and A-2 to
construct and operate personal communication services ("PCS") wireless
telecommunications systems ("Systems") in the Basic Trading Areas ("BTAs")
listed on Exhibits A-1 and A-2;
WHEREAS, Sellers desire to sell, assign and transfer to Buyer,
and Buyer desires to purchase from Sellers, the Licenses described on Exhibits
A-1 and A-2 on the terms and subject to the conditions set forth herein;
WHEREAS, the Shareholder will receive a material benefit from
the sale of the Licenses to Buyer and is providing the representations,
warranties, covenants and indemnities contained herein as a material inducement
to Buyer entering into this Agreement;
WHEREAS, the prior consent of the FCC to the transfer of the
Licenses from Sellers to Buyer is required, and the parties intend that the
transfer of the Licenses contemplated by this Agreement will be consummated only
if such consent to transfer is obtained; and
WHEREAS, the parties previously entered into an Agreement for
Purchase and Sale of Licenses dated as of November 3, 2000 for the purchase and
sale of the Licenses, and in order to provide for the transfer of the Licenses
in two separate closings and to address related matters, the parties desire to
amend and restate and supercede that agreement in its entirety by the execution
and delivery of this Agreement.
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.
2
"Closings" means the Initial Closing and the Subsequent Closing,
and references to a "Closing" shall mean the Initial Closing or the Subsequent
Closing, or either of them, as the context may require.
"Code" means the Internal Revenue Code of 1986, 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.
"CPAN Lien" shall have the meaning set forth in Section
3.2(a)(iii) below.
"Encumbrance" means any 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, other than the FCC build-out requirements relating to
the Licenses.
"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 Sellers to Buyer.
"Final Order" means action by a regulatory authority as to which
(i) no request for stay by such authority of the action is pending, no such stay
is in effect, and, if any deadline for filing any such request is designated by
statute or regulation, it has passed; (ii) no petition for rehearing or
reconsideration of the action is pending before such authority, and the time for
filing any such petition has passed; (iii) such authority does not have the
action under reconsideration on its own motion and the time for such
reconsideration has passed; and (iv) no appeal to a court, or request for stay
by a court, of such authority's action is pending or in effect, and, if any
deadline for filing any such appeal or request is designated by statute or rule,
it has passed.
"Governmental Body" means any foreign, federal, state, local or
other governmental authority or regulatory body.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act
of 1976, as amended.
"HSR Approval" means the expiration or termination of the
applicable waiting period under the HSR Act.
"Initial Closing" shall have the meaning set forth in Section
3.1(a).
"Initial Closing Date" shall have the meaning set forth in
Section 3.1(a).
2
3
"Initial Licenses" means the authorizations of the FCC described
on Exhibit A-1 to construct and operate PCS wireless telecommunications Systems
in the BTAs listed on Exhibit A-1.
"IRS" means the Internal Revenue Service.
"Licenses" means the Initial Licenses and the Subsequent
License.
"Losses" means any loss, cost, obligation, liability, settlement
payment, award, judgment, fine, penalty, damage, expense, deficiency 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.
"Subsequent Closing" shall have the meaning set forth in Section
3.1(b).
"Subsequent Closing Date" shall have the meaning set forth in
Section 3.1(b).
"Subsequent License" means the authorization of the FCC
described on Exhibit A-2 to construct and operate PCS wireless
telecommunications Systems in the BTA listed on Exhibit A-2.
"Vendor Financing Agreements" shall have the meaning set forth
in Section 9.1(e) below.
ARTICLE II.
PURCHASE AND SALE
2.1 Purchase of Licenses.
(a) On the Initial Closing Date, upon the terms and subject to
the representations, warranties and conditions of this Agreement:
(i) MVI shall sell, transfer, convey, assign, and
deliver to Buyer, and Buyer shall purchase and accept from MVI, the Initial
Licenses listed as "MVI Licenses" on Exhibit A-1 hereto, free and clear of all
Encumbrances;
(ii) CPAN shall sell, transfer, convey, assign, and
deliver to Buyer, and Buyer shall purchase and accept from CPAN, the Initial
Licenses listed as "CPAN Licenses" on Exhibit A-1 hereto, free and clear of all
Encumbrances; and
3
4
(iii) RSA shall sell, transfer, convey, assign, and
deliver to Buyer, and Buyer shall purchase and accept from RSA, the Initial
Licenses listed as "RSA Licenses" on Exhibit A-1 hereto, free and clear of all
Encumbrances.
(b) On the Subsequent Closing Date, upon the terms and subject
to the representations, warranties and conditions of this Agreement, CPAN shall
sell, transfer, convey, assign, and deliver to Buyer, and Buyer shall purchase
and accept from CPAN, the Subsequent License listed on Exhibit A-2 hereto, free
and clear of all Encumbrances.
2.2 Purchase Price Payable at Closings.
(a) The purchase price for the Initial Licenses (the "Initial
Purchase Price") shall be $175,166,907 (One Hundred Seventy-Five Million One
Hundred Sixty-Six Thousand Nine Hundred Seven U.S. Dollars), payable as follows:
(i) Buyer shall pay to MVI $54,850,342 (Fifty-Four
Million Eight-Hundred Fifty Thousand Three Hundred Forty-Two U.S. Dollars),
payable in immediately available funds to an account designated by MVI at least
two (2) business days prior to the Initial Closing Date;
(ii) Buyer shall pay to CPAN $27,566,724 (Twenty-Seven
Million Five Hundred Sixty-Six Thousand Seven Hundred Twenty-Four U.S. Dollars),
payable in immediately available funds to an account designated by CPAN at least
two (2) business days prior to the Initial Closing Date;
(iii) Buyer shall deliver to CPAN a Promissory Note in
the form attached hereto as Exhibit B (the "CPAN Promissory Note") executed by
Buyer in favor of CPAN in an outstanding principal amount equal to $86,501,769
(Eighty-Six Million Five Hundred One Thousand Seven Hundred Sixty-Nine U.S.
Dollars); and
(iv) Buyer shall pay to RSA $6,248,072 (Six Million Two
Hundred Forty-Eight Thousand Seventy-Two U.S. Dollars), payable in immediately
available funds to an account designated by RSA at least two (2) business days
prior to the Initial Closing Date.
(b) The purchase price for the Subsequent License (the
"Subsequent Purchase Price") shall be $30,000,321 (Thirty Million Three Hundred
Twenty-One U.S. Dollars), payable to CPAN in immediately available funds to an
account designated by CPAN at least two (2) business days prior to the
Subsequent Closing Date.
2.3 Assumed Liabilities. Notwithstanding any other provision of
this Agreement, except for the construction milestone and build-out obligations
imposed by the FCC with respect to the Licenses, which Buyer shall not assume
until after the respective Closing Dates therefor, Buyer shall not assume, or
otherwise be responsible for any liabilities, obligations or indebtedness of
Sellers, the Shareholder, or any of their 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.
4
5
2.4 [Intentionally Omitted].
ARTICLE III.
CLOSINGS
3.1 Closings.
(a) Subject in all respects to the fulfillment or waiver of the
parties' respective conditions to closing set forth in Section 8.1 and Section
9.1 hereof, the closing of the transfer of the Initial Licenses (the "Initial
Closing") shall occur at the offices of Buyer at 10:00 A.M., local time, on
April 6, 2001, or such other time and place as the parties may agree (such date,
the "Initial Closing Date").
(b) Subject in all respects to the fulfillment or waiver of the
parties' respective conditions to closing set forth in Section 8.2 and Section
9.2 hereof, the closing of the transfer of the Subsequent License (the
"Subsequent Closing") shall occur at the offices of Buyer at 10:00 A.M., local
time, on a date to be specified by Buyer to Sellers, which 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, shall
have consented to the transfer of the Subsequent License from CPAN to Buyer, or
such other time and place as the parties may agree (such date, the "Subsequent
Closing Date").
3.2 Closing Deliveries of Buyer.
(a) Subject to fulfillment or waiver of the conditions set forth
in Section 8.1, at the Initial Closing, Buyer shall deliver to Sellers all of
the following:
(i) Immediately available funds in the amount of the
cash portion of the Initial Purchase Price to be paid to MVI, CPAN and RSA in
accordance with the payment and delivery instructions to be provided by such
Sellers to Buyer prior to the Initial Closing;
(ii) The CPAN Promissory Note;
(iii) A Share Pledge Agreement between Buyer and CPAN in
the form attached hereto as Exhibit C (the "Security Agreement") together with
any other documentation and filings necessary to perfect a first priority lien
in the Collateral (as defined in the Security Agreement) (the "CPAN Lien");
(iv) A certificate of good standing of Buyer issued
within thirty (30) days prior to the Initial Closing Date by the Secretary of
State of the State of Delaware;
(v) A certificate of the Secretary of Buyer, dated as of
the Initial Closing Date, as to the incumbency of the officers of Buyer who have
executed this Agreement or any other agreement or instrument delivered in
connection therewith, and as to resolutions of the
5
6
board of directors of Buyer authorizing the execution, delivery and performance
of this Agreement and the transactions contemplated hereby;
(vi) A certificate of an officer of Buyer, dated as of
the Initial Closing Date, certifying that as of such Initial Closing Date, (i)
each representation and warranty of Buyer contained in this Agreement is true
and correct in all material respects; (ii) Buyer has complied in all material
respects with all of its obligations under this Agreement; and (iii) the
condition set forth in Section 9.1(e) shall have been satisfied;
(vii) An opinion of Buyer's counsel, dated as of the
Initial Closing Date, substantially in the form of Exhibit D attached hereto;
and
(viii) Such other documents as Sellers and Shareholder
may reasonably request or as may be otherwise necessary to evidence and effect
the transactions contemplated by the Initial Closing under this Agreement.
(b) Subject to fulfillment or waiver of the conditions set forth
in Section 8.2, at the Subsequent Closing, Buyer shall deliver to CPAN all of
the following:
(i) Immediately available funds in the amount of the
Subsequent Purchase Price to be paid to CPAN in accordance with the payment and
delivery instructions to be provided by CPAN to Buyer prior to the Subsequent
Closing;
(ii) A certificate of good standing of Buyer issued
within thirty (30) days prior to the Subsequent Closing Date by the Secretary of
State of the State of Delaware;
(iii) A certificate of the Secretary of Buyer, dated as
of the Subsequent Closing Date, as to the incumbency of the officers of Buyer
who have executed this Agreement or any other agreement or instrument delivered
in connection therewith, and as to resolutions of the board of directors of
Buyer authorizing the execution, delivery and performance of this Agreement and
the transactions contemplated hereby;
(iv) A certificate of an officer of Buyer, dated as of
the Subsequent Closing Date, certifying that as of such Subsequent Closing Date,
(i) each representation and warranty of Buyer contained in this Agreement is
true and correct in all material respects; (ii) Buyer has complied in all
material respects with all of its obligations under this Agreement; and (iii)
the condition set forth in Section 9.2(e) shall have been satisfied;
(v) An opinion of Buyer's counsel, dated as of the
Subsequent Closing Date, substantially in the form of Exhibit D attached hereto;
and
(vi) Such other documents as Sellers and Shareholder may
reasonably request or as may be otherwise necessary to evidence and effect the
transactions contemplated by the Subsequent Closing under this Agreement.
3.3 Closing Deliveries of Sellers and the Shareholder.
6
7
(a) Subject to fulfillment or waiver of the conditions set forth
in Section 9.1, at the Initial Closing, Sellers and the Shareholder shall
deliver to Buyer all of the following:
(i) A certified copy of a shareholder or partner consent
action, as applicable, of each Seller authorizing and approving of the execution
and delivery of this Agreement by such Seller and the performance by such Seller
of its obligations herein;
(ii) A certificate of the Secretary of the Shareholder,
MVI, CPAN and RSA, dated as of the Initial Closing Date, as to the incumbency of
the officers of the Shareholder or Sellers who have executed this Agreement or
any other agreement or instrument in connection therewith, and as to resolutions
of the board of directors or partners, as applicable, of the Shareholder and
Sellers, authorizing the execution, delivery and performance of this Agreement
and the transactions contemplated hereby;
(iii) A certificate of an officer of each of the Sellers
and the Shareholder, dated as of the Initial Closing Date, certifying that as of
such Initial Closing Date, each representation and warranty of such Seller or
the Shareholder, as the case may be, contained in this Agreement is true and
correct in all material respects and that such Seller or the Shareholder, as the
case may be, has complied in all material respects with all of its obligations
under this Agreement;
(iv) Assignments by each of MVI, CPAN and RSA of the
Initial Licenses owned by it in a form reasonably acceptable to Buyer;
(v) An opinion of Shareholder's counsel, dated as of the
Initial Closing Date, substantially in the form of Exhibit E attached hereto;
(vi) All required third party consents to the
consummation by CPAN and the Shareholder of the transactions contemplated by
this Agreement;
(vii) The Security Agreement; and
(viii) Such other documents as Buyer may reasonably
request or as may be otherwise necessary to evidence and effect the transactions
contemplated by the Initial Closing under this Agreement.
In addition to the above deliveries, Sellers and the Shareholder shall take all
steps and actions as Buyer may reasonably request or as may otherwise be
reasonably necessary to put Buyer in actual possession and control of the
Initial Licenses.
(b) Subject to fulfillment or waiver of the conditions set forth
in Section 9.2, at the Subsequent Closing, Sellers and the Shareholder shall
deliver to Buyer all of the following:
(i) A certified copy of a shareholder resolution of CPAN
authorizing and approving of the execution and delivery of this Agreement by
CPAN and the performance by CPAN of its obligations herein;
7
8
(ii) A certificate of the Secretary of the Shareholder
and CPAN, dated as of the Subsequent Closing Date, as to the incumbency of the
officers of each of the Shareholder and CPAN who have executed this Agreement or
any other agreement or instrument in connection therewith, and as to resolutions
of the board of directors of each of the Shareholder and CPAN, authorizing the
execution, delivery and performance of this Agreement and the transactions
contemplated hereby;
(iii) A certificate of an officer of each of CPAN and
the Shareholder, dated as of the Subsequent Closing Date, certifying that as of
such Subsequent Closing Date, each representation and warranty of CPAN or the
Shareholder, as the case may be, contained in this Agreement is true and correct
in all material respects and that CPAN or the Shareholder, as the case may be,
has complied in all material respects with all of its obligations under this
Agreement;
(iv) An assignment by CPAN of the Subsequent License in
a form reasonably acceptable to Buyer;
(v) An opinion of Shareholder's counsel, dated as of the
Subsequent Closing Date, substantially in the form of Exhibit E attached hereto;
(vi) All required third party consents to the
consummation by CPAN and the Shareholder of the transactions contemplated by
this Agreement; and
(vii) Such other documents as Buyer may reasonably
request or as may be otherwise necessary to evidence and effect the transactions
contemplated by the Subsequent Closing under this Agreement.
In addition to the above deliveries, Sellers and the Shareholder shall take all
steps and actions as Buyer may reasonably request or as may otherwise be
reasonably necessary to put Buyer in actual possession and control of the
Subsequent License.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF SELLERS and the SHAREHOLDER
MVI, CPAN and the Shareholder jointly and severally represent
and warrant to Buyer with respect to themselves and the Licenses listed as "MVI
Licenses" on Exhibit A-1 hereto and "CPAN Licenses" on Exhibits A-1 and A-2
hereto, and RSA and the Shareholder jointly and severally represent and warrant
to Buyer with respect to RSA and the Licenses listed as "RSA Licenses" on
Exhibit A-1 hereto, that the statements contained in this Article IV are true
and correct as of the date of this Agreement and will be true and correct as of
each of the respective Closing Dates (as though then made):
4.1 Organization of Sellers and the Shareholder. MVI is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Oregon. CPAN is a corporation duly organized, validly existing
and in good standing under the laws of the State of Louisiana. RSA is a limited
partnership duly organized, validly existing and in good standing under the laws
of the State of Wisconsin. The Shareholder is a corporation duly organized,
8
9
validly existing and in good standing under the laws of the State of Louisiana.
MVI and CPAN are indirect wholly owned subsidiaries of Shareholder.
4.2 Authority of Seller and the Shareholder. Each Seller has
full power and authority to own and to operate the Licenses owned by it. The
Shareholder and each 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 the Shareholder and each Seller has been duly
authorized and approved by all necessary action of each Seller, the Shareholder
and their respective affiliates. This Agreement is the legal, valid and binding
obligation of the Shareholder and each Seller enforceable 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 and HSR Approval,
neither the execution or delivery of this Agreement nor the consummation of any
of the transactions contemplated hereby or compliance with or fulfillment of the
terms, conditions and provisions hereof will (i) result in the creation or
imposition of any Encumbrance upon the Licenses, or (ii) 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) any material note, indenture, instrument, agreement,
mortgage, lease, License, franchise, permit or other authorization, right,
restriction or obligation to which any of the Sellers or the Shareholder is a
party or the Licenses are subject or by which any of the Sellers or the
Shareholder is bound; (2) any Court Order to which any of the Sellers or the
Shareholder is a party or the Licenses are subject or by which any of the
Sellers or the Shareholder is bound; or (3) any Requirements of Law affecting
any of the Sellers, the Shareholder or the Licenses.
4.4 The Licenses. MVI validly holds the Licenses listed as "MVI
Licenses" on Exhibit A-1. CPAN validly holds the Licenses listed as "CPAN
Licenses" on Exhibits A-1 and A-2. RSA validly holds the Licenses listed as "RSA
Licenses" on Exhibit A-1. Except as set forth on Schedule 4.4 hereto, none of
the Sellers has commenced or otherwise undertaken any system build-out
activities with respect to any of the Licenses nor conducted any operations with
respect thereto (other than engaging professional and other services for
purposes of planning the build out). Each Seller has performed as of the
Effective Date, and will have performed as of the respective Closing Dates for
its Licenses (other than any required buildout activities), all of its
obligations required to have been performed under the Licenses, and 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 in
any material respect the rights of Sellers under the Licenses. No notice of
cancellation, of default or of any dispute concerning the Licenses, or of any
event, condition or state of facts described in the preceding clause, has been
received by, or is known to, Sellers. The Licenses are valid, subsisting and in
full force and effect and may be assigned and transferred to Buyer in accordance
9
10
with this Agreement and will continue in full force and effect thereafter, in
each case without (1) the occurrence of any breach, default or forfeiture of
rights thereunder, or (2) except for the FCC Consent and HSR Approval, the
consent, approval, or act of, or the making of any filing with, any Governmental
Body. Sellers have no reason to believe that the Licenses are not likely to be
renewed in the ordinary course or that the holder of such Licenses, if
qualified, would not be entitled to renewal expectancy as contemplated by FCC
rules and regulations. The Licenses (i) were granted on the grant date specified
on Exhibits A-1 and A-2, (ii) expire on the expiration dates specified on
Exhibits A-1 and A-2, and (iii) are subject to the five-year construction
milestone dates occurring on the date specified on Exhibits A-1 and A-2.
4.5 Title to Licenses. Sellers have good and marketable title to
the Licenses, free and clear of all Encumbrances. Upon delivery to Buyer on the
respective Closing Dates for such Licenses, Sellers will transfer to Buyer good
and marketable title to the Licenses to be transferred on each such date,
subject to no indebtedness or Encumbrances.
4.6 No Violation, Litigation or Regulatory Action.
(a) Except for the FCC Consent, Sellers have complied in all
material respects with all Requirements of Law which are applicable to the
Licenses; and
(b) There is no investigation, claim, action, suit or other
proceeding pending or, to the best knowledge of Sellers and the Shareholder,
threatened against any of the Sellers, relating to any of the Sellers 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 Sellers to perform their obligations
hereunder or upon the financial condition, assets, business, prospects or
results of operations of any of the Sellers, nor are any of the Sellers 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
Sellers or the Shareholder in connection with the transactions contemplated
hereby.
4.8 FCC Matters.
(a) The Licenses listed as "MVI Licenses" on Exhibit A-1 are
validly issued in the name of MVI. The Licenses listed as "CPAN Licenses" on
Exhibits A-1 and A-2 are validly issued in the name of CPAN. The Licenses listed
as "RSA Licenses" on Exhibit A-1 are validly issued in the name of RSA. Sellers
applied for and obtained the Licenses in compliance with FCC law, and Sellers
are the exclusive holders of the Licenses. On the respective Closing Dates for
such Licenses, Sellers will be the exclusive holders of the Licenses to be
transferred on each such date. The Licenses have been granted by Final Order.
The Licenses are in full force and effect, are unimpaired by any acts or
omissions of the Sellers or their affiliates, and are free and clear of any
restrictions which might limit the full operation of the Licenses, other than
such restrictions as are imposed on PCS licenses and/or the wireless
telecommunications industry generally. All reports and other documents required
to be filed by Sellers and their affiliates with the FCC and
10
11
with state regulatory authorities with respect to the Licenses have been filed.
All such reports and documents are correct in all material respects.
(b) Neither the Sellers nor the Shareholder have engaged in any
course of conduct which would impair Sellers' ability to remain holders of FCC
licenses, and Sellers and the Shareholder are not aware of any reason why the
Licenses might be revoked, canceled, suspended or otherwise transferred as a
result of the transactions contemplated hereby. All material payments and fees
of Sellers due and payable at or prior to each Closing Date to Governmental
Bodies pursuant to the Licenses have been paid. Subject to obtaining the consent
of the FCC to assign the Licenses to Buyer, Sellers have the absolute and
unrestricted right, power and authority under FCC law to hold the Licenses.
Subject to obtaining the consent of the FCC to assign the Licenses to Buyer, on
the respective Closing Dates Sellers will have the absolute and unrestricted
right, power and authority under FCC law to hold the Licenses to be transferred
on each such date.
(c) Sellers are 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 V.
REPRESENTATIONS AND WARRANTIES OF BUYER
The Buyer hereby represents and warrants to Sellers and the
Shareholder that the statements contained in this Article V are true and correct
as of the date of Agreement and will be true and correct as of each of the
respective Closing Dates (as though then made):
5.1 Organization of Buyer. Buyer is a corporation, 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 action of Buyer. This Agreement is, and
each of the CPAN Promissory Note and the Security Agreement when executed and
delivered will be, the legal, valid and binding agreement of Buyer, enforceable
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 and HSR Approval,
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:
11
12
(a) 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 or cancellation or a loss of rights
under: (1) the Amended and Restated Certificate of Incorporation or By-laws of
Buyer; (2) any material note, indenture, instrument, agreement, license, permit
or other right 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 Litigation. Except as disclosed on Schedule 5.4, there is no
investigation, claim, action, suit or other proceeding pending or, to Buyer's
knowledge, threatened against Buyer, which if adversely determined, would have a
material adverse effect on the ability of Buyer to perform its obligations
hereunder, nor is Buyer aware of any reasonable basis for any such
investigation, claim, action, suit or proceeding.
5.5 Qualification. Buyer is legally qualified to be an FCC
licensee generally and specifically with regard to the Licenses, and to Buyer's
knowledge, to receive any authorization or approval from any state or local
regulatory authority necessary for it to acquire the Licenses. Buyer 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 SUBSEQUENT CLOSING DATE
The parties hereto covenant and agree to take the following
actions between the date hereof and the Subsequent Closing Date:
6.1 Investigation by Buyer. Sellers shall provide Buyer a copy
of the Licenses and shall furnish to Buyer or its authorized representatives
such additional information concerning the Licenses and Sellers as shall be
reasonably requested, including all such information as shall be necessary to
enable Buyer or its representatives to verify the accuracy of the
representations and warranties contained in this Agreement, to verify that the
covenants of Sellers 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 representatives hereunder shall affect the
representations and warranties of the Sellers or the Shareholder hereunder;
provided, however, Buyer shall promptly notify Sellers and the Shareholder to
the extent it discovers any fact or circumstance that indicates that any Seller
or the Shareholder has breached a representation or warranty hereunder.
6.2 Preserve Accuracy of Representations and Warranties. Each of
the parties hereto shall refrain from taking any action that would render any
representation or warranty contained in this Agreement inaccurate in any
material respect as of the respective Closing Dates. 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
12
13
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 6.2, 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.
6.3 Consents of Third Parties; Governmental Approvals.
(a) Consents. Sellers will act diligently and reasonably to
secure, before the Initial 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 or transfer the Licenses to Buyer or to otherwise
satisfy the conditions set forth herein; provided that none of the Sellers nor
Buyer shall have any obligation to offer or pay any consideration in order to
obtain any such consent or approval; and provided, further, that Sellers 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 Subsequent Closing Date, Buyer
shall act diligently and reasonably to cooperate with Sellers to obtain the
consents, approvals and waivers contemplated by this Section 6.3(a).
(b) FCC Consents. Sellers and Buyer shall, as promptly as
practicable following the Effective Date of this Agreement and in any event
within thirty (30) days after the Effective Date of this Agreement, file with
the FCC an FCC Form 603 (or other appropriate form) application seeking consent
to assign the Licenses from Sellers to Buyer or Buyer's subsidiary. The parties
shall cooperate and use their respective reasonable efforts to prosecute such
application to a favorable conclusion and shall share equally any filing fees.
(c) HSR Filing. As soon as reasonably practicable following the
execution and delivery of this Agreement and in any event within thirty (30)
days after the Effective Date of this Agreement, Sellers, the Shareholder and
Buyer will take such action, if any, as may be required to be taken by them
under the HSR Act in connection with the transactions contemplated hereby. Each
party will cooperate in the preparation of, and will file complete and accurate
notification and report forms with respect to the transactions contemplated
hereby, pursuant to the HSR Act and the rules and regulations promulgated
thereunder, and will file on a timely basis such additional information and
documentary materials as may be requested by any Governmental Body pursuant to
the HSR Act. Each party will request early termination of the waiting period
under the HSR Act. Each party shall promptly inform the other of any inquiries
or communications from any such Governmental Body and provide copies of any
written communication relating thereto. Each party shall respond with reasonable
diligence and dispatch to any request for additional information made in
response to such filings. Each party shall pay its respective costs of
compliance with the HSR Act; it being understood that Buyer will pay the
applicable application fee.
13
14
6.4 Operations Prior to the Respective Closing Dates. At all
times prior to the respective Closings, Sellers shall keep and maintain the
Initial Licenses and the Subsequent License, as the case may be, current and in
good standing, including without limitation, making any payment of principal,
accrued interest, penalties or other indebtedness (if any) due to the FCC with
respect to such Licenses on a timely basis. Sellers shall retain control of the
Initial Licenses and the Subsequent License, as the case may be, at all times
prior to the respective Closings. Sellers shall not:
(i) Sell, lease, transfer or otherwise dispose of, or
mortgage or pledge, or impose or suffer to be imposed any Encumbrance on, the
Licenses, except pursuant to this Agreement; or
(ii) Take or agree to take any other action inconsistent
with the consummation of the transactions contemplated by this Agreement.
6.5 Exclusivity. Until the termination of this Agreement,
Sellers and the Shareholder will not (and Sellers and the Shareholder will cause
their respective affiliates not to) (a) solicit, initiate, or encourage the
submission of any proposal or offer from any Person relating to the acquisition
of the Licenses or (b) participate in any discussions or negotiations regarding,
furnish any information with respect to, assist or participate in, or facilitate
in any other manner any effort or attempt by any Person to do or seek any of the
foregoing. Sellers will notify Buyer immediately if any Person makes any
proposal, offer, inquiry, or contact with respect to any of the foregoing, which
notice shall include the identity of the Person making the proposal, offer,
inquiry or contact, and a summary of the principal terms thereof. Likewise,
Buyer (and each of its directors, officers, employees and agents) shall not (x)
solicit, initiate, or encourage the submission of any proposal or offer from any
Person relating to the acquisition of any PCS Licenses in the BTAs which would
be purchased by Buyer in lieu of the Licenses, or (y) participate in any
discussions or negotiations regarding, furnish any information with respect to,
assist or participate in, or facilitate in any other manner any effort or
attempt by any Person to do or seek any of the foregoing. Buyer will notify
Sellers immediately if any Person makes any proposal, offer, inquiry, or contact
with respect to any of the foregoing, which notice shall include the identity of
the Person making the proposal, offer, inquiry or contact, and a summary of the
principal terms thereof.
ARTICLE VII.
ADDITIONAL AGREEMENTS
7.1 Reasonable Efforts. 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 a
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.
14
15
7.2 Governmental Authorizations. Sellers shall not cause or
permit, by any act or failure to act, any of its governmental authorizations or
the Licenses to expire or to be surrendered or modified, or take any action that
would cause any Governmental Body to institute proceedings for the suspension,
revocation, or material and adverse modification of any of such governmental
authorizations or fail to prosecute with due diligence any pending applications
for any Governmental Body in connection with the Licenses.
7.3 Radio Frequency Testing Letter. On or about the Effective
Date of this Agreement, Sellers will deliver to Buyer an executed letter in the
form attached hereto as Exhibit F consenting to Buyer's commencement of radio
frequency testing in the BTAs covered by the Licenses.
7.4 Transition of Existing Customers. As promptly as practicable
and in any event within thirty (30) days after the respective Closings for its
Licenses, each Seller shall transition all existing customers off of the
spectrum represented by its Initial Licenses or Subsequent License, as the case
may be, in accordance with applicable Requirements of Law and the rules,
regulations and written policies and orders of the FCC. Without limiting the
foregoing, except for FCC build-out requirements generally applicable to the
Licenses, Buyer shall have no obligation to provide wireless telecommunications
services under the Licenses to any of Sellers' current or future customers, nor
to provide for the transition of Sellers' current or future customers to
third-party carriers providing similar services, which shall remain the sole
responsibility of each of the respective Sellers.
7.5 Consent to Extension of Build-out Deadline. From and after
the Initial Closing, at the reasonable request of Buyer, each of MVI, CPAN and
the Shareholder shall, at its sole expense, grant its consent to and join in
support of any application by Buyer to the FCC seeking to extend the five-year
construction milestone deadline dates for some or all of the Initial Licenses.
ARTICLE VIII.
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF BUYER
8.1 Buyer's Conditions to Initial Closing. The obligations of
Buyer to consummate the Initial Closing under this Agreement shall be, at the
option of the Buyer, subject to the satisfaction of the conditions set forth
below on or prior to the Initial Closing Date. These conditions are for Buyer's
sole benefit and may be waived by Buyer at any time in its sole discretion.
(a) No Misrepresentation or Breach of Covenants and Warranties.
There shall have been no material breach by CPAN or the Shareholder in the
performance of any of their covenants and agreements herein; each of the
representations and warranties of each of CPAN and the Shareholder contained or
referred to herein shall be true and correct in all material respects on such
Initial Closing Date as though made on such Initial Closing Date, except for
changes therein specifically permitted or contemplated by this Agreement or
resulting from any transaction expressly consented to in writing by Buyer.
15
16
(b) 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 8.1(c)) shall have been instituted to restrain or prohibit or otherwise
challenge the legality or validity of the transactions contemplated hereby, or
which would materially adversely effect the right of Buyer to own and control
the Initial Licenses following the Initial Closing.
(c) Final FCC Order and HSR Approval. The FCC shall have
consented to the assignment of the Initial Licenses to Buyer and such consent
shall have become a Final Order, without any additional unreasonable expenses or
requirements imposed on Buyer as a condition to transfer. The waiting period
under the HSR Act, if applicable, shall have expired or been terminated.
(d) Necessary Consents. Sellers shall have delivered all third
party consents required for Sellers to consummate the transactions contemplated
by this Agreement.
(e) FCC Debt. Sellers shall have paid in full all outstanding
indebtedness owed to the FCC, including without limitation, accrued interest and
fines and penalties, if any, with respect to the Initial Licenses.
(f) Closing Deliveries. Sellers and the Shareholder shall have
made all of their Closing Deliveries described in Section 3.3(a).
8.2 Buyer's Conditions to Subsequent Closing. The obligations of
Buyer to consummate the Subsequent Closing under this Agreement shall be, at the
option of the Buyer, subject to the satisfaction of the conditions set forth
below on or prior to the Subsequent Closing Date. These conditions are for
Buyer's sole benefit and may be waived by Buyer at any time in its sole
discretion.
(a) No Misrepresentation or Breach of Covenants and Warranties.
There shall have been no material breach by CPAN or the Shareholder in the
performance of any of their covenants and agreements herein; each of the
representations and warranties of each of CPAN and the Shareholder contained or
referred to herein shall be true and correct in all material respects on such
Subsequent Closing Date as though made on such Subsequent Closing Date, except
for changes therein specifically permitted or contemplated by this Agreement or
resulting from any transaction expressly consented to in writing by Buyer.
(b) 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 8.2(c)) shall have been instituted to restrain or prohibit or otherwise
challenge the legality or validity of the transactions contemplated hereby, or
which would materially adversely effect the right of Buyer to own and control
the Subsequent License following the Subsequent Closing.
(c) Final FCC Order and HSR Approval. The FCC shall have
consented to the assignment of the Subsequent License to Buyer and such consent
shall have become a Final
16
17
Order, without any additional unreasonable expenses or requirements imposed on
Buyer as a condition to transfer. The waiting period under the HSR Act, if
applicable, shall have expired or been terminated.
(d) Necessary Consents. Each of CPAN and the Shareholder shall
have delivered all third party consents required for such parties to consummate
the transactions contemplated by this Agreement.
(e) FCC Debt. CPAN shall have paid in full all outstanding
indebtedness owed to the FCC, including without limitation, accrued interest and
fines and penalties, if any, with respect to the Subsequent License.
(f) Closing Deliveries. CPAN and the Shareholder shall have made
all of their Closing Deliveries described in Section 3.3(b).
ARTICLE IX.
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLERS
9.1 Sellers' Conditions to Initial Closing. The obligations of
the Sellers to consummate the Initial Closing under this Agreement shall be, at
the option of the Sellers, subject to the satisfaction of the conditions set
forth below on or prior to the Initial Closing Date. These conditions are for
the sole benefit of the Sellers and may be waived by Sellers at any time in its
sole discretion.
(a) 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 and each of the representations and
warranties of Buyer contained or referred to in this Agreement shall be true and
correct in all material respects, on the Initial Closing Date as though made on
such Initial Closing Date, except for changes therein specifically permitted by
this Agreement or resulting from any transaction expressly consented to in
writing by Sellers or any transaction contemplated by this Agreement.
(b) No Restraint or Litigation. No action, suit or proceeding by
any Governmental Body (except for any action, suit or proceeding relating to FCC
matters, which shall be governed solely by the condition set forth in Section
9.1(c)) shall have been instituted to restrain, prohibit or otherwise challenge
the legality or validity of the transactions contemplated hereby.
(c) FCC Consent and HSR Approval. The FCC shall have granted its
consent to transfer the Initial Licenses from Sellers to Buyer. The waiting
period under the HSR Act, if applicable, shall have expired or been terminated.
(d) Closing Deliveries. Buyer shall have made all of its Closing
Deliveries described in Section 3.2(a).
(e) No Defaults under Vendor Financing Agreements. No event
shall have occurred and no circumstances shall exist which, with notice or
passage of time or both, would
17
18
constitute an event of default under the vendor financing agreements or similar
credit agreements between Buyer and/or its subsidiaries, on the one hand, and
any of Lucent Technologies, Inc., Nortel Networks, Inc. and Ericsson Wireless
Communications, Inc. or their respective successors and assigns, on the other
hand, (the "Vendor Financing Agreements"), unless Buyer has obtained a valid
waiver of such default from the applicable lender or lenders under the Vendor
Financing Agreements.
9.2 Sellers' Conditions to Subsequent Closing. The obligations
of CPAN and the Shareholder to consummate the Subsequent Closing under this
Agreement shall be, at the option of CPAN and the Shareholder, subject to the
satisfaction of the conditions set forth below on or prior to the Subsequent
Closing Date. These conditions are for the sole benefit of CPAN and the
Shareholder and may be waived by CPAN and the Shareholder at any time in their
sole discretion.
(a) 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 and each of the representations and
warranties of Buyer contained or referred to in this Agreement shall be true and
correct in all material respects, on the Subsequent Closing Date as though made
on such Subsequent Closing Date, except for changes therein specifically
permitted by this Agreement or resulting from any transaction expressly
consented to in writing by CPAN and the Shareholder or any transaction
contemplated by this Agreement.
(b) No Restraint or Litigation. No action, suit or proceeding by
any Governmental Body (except for any action, suit or proceeding relating to FCC
matters, which shall be governed solely by the condition set forth in Section
9.2(c)) shall have been instituted to restrain, prohibit or otherwise challenge
the legality or validity of the transactions contemplated hereby.
(c) FCC Consent and HSR Approval. The FCC shall have granted its
consent to transfer the Subsequent License from CPAN to Buyer. The waiting
period under the HSR Act, if applicable, shall have expired or been terminated.
(d) Closing Deliveries. Buyer shall have made all of its Closing
Deliveries described in Section 3.2(b).
(e) No Defaults under Vendor Financing Agreements. No event
shall have occurred and no circumstances shall exist which, with notice or
passage of time or both, would constitute an event of default under the Vendor
Financing Agreements, unless Buyer has obtained a valid waiver of such default
from the applicable lender or lenders under the Vendor Financing Agreements.
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 Closings
hereunder (even if the other party knew or
18
19
had reason to know of any misrepresentation or breach of warranty at the time of
any 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 final Closing hereunder,
except that the representations and warranties set forth in Sections 4.2, 4.4,
4.5, and 4.6 shall survive the final Closing hereunder and continue in full
force and effect forever thereafter.
10.2 Indemnification by MVI, CPAN and the Shareholder. In the
event MVI, CPAN or the Shareholder breaches (or in the event any third party
alleges facts that, if true, would mean MVI, CPAN or the Shareholder 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 the Buyer makes a written claim against MVI, CPAN or the Shareholder within
such period, or in the event of any actual or threatened claim, action, suit or
proceeding against Buyer or any of its subsidiaries arising from MVI's or CPAN's
ownership or operation of any of the Licenses listed as "MVI Licenses" on
Exhibit A-1 hereto or "CPAN Licenses" on Exhibits A-1 and A-2 hereto prior to
the respective Closings for such Licenses or arising from or relating to the
transitioning of existing customers off the spectrum represented by any of the
Licenses listed as "MVI Licenses" on Exhibit A-1 hereto or "CPAN Licenses" on
Exhibits A-1 and A-2 pursuant to Section 7.4 hereof, then MVI, CPAN and the
Shareholder jointly and severally agree to indemnify the Buyer and its
directors, officers, stockholders, agents, successors and assigns from and
against the entirety of any Losses or reasonable Expenses any such person may
incur 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.
10.3 Indemnification by RSA. In the event RSA breaches (or in
the event any third party alleges facts that, if true, would mean RSA 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 the Buyer makes a written claim against RSA within such period, or in the
event of any actual or threatened claim, action, suit or proceeding against
Buyer or any of its subsidiaries arising from RSA's ownership or operation of
the Licenses listed as "RSA Licenses" on Exhibit A-1 hereto prior to the Initial
Closing or arising from or relating to the transitioning of all existing
customers off the spectrum represented by the Licenses listed as "RSA Licenses"
on Exhibit A-1 pursuant to Section 7.4 hereof, then RSA and the Shareholder
jointly and severally agree to indemnify the Buyer and its directors, officers,
stockholders, agents, successors and assigns from and against the entirety of
any Losses or reasonable Expenses any such person may incur 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 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 any of the Sellers or the Shareholder makes a written claim against Buyer
within such period, or in the event of any actual or threatened claim, action,
suit or proceeding against any of the Sellers or the Shareholder arising from
Buyer's ownership or operation of the
19
20
Licenses following the respective Closings therefor, then Buyer agrees to
indemnify Sellers, the Shareholder and their respective directors, officers,
stockholders, successors and assigns from and against the entirety of any Losses
or reasonable Expenses any such person may incur 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.
10.5 Certain Limitations. Notwithstanding any provision of this
Agreement to the contrary, the maximum aggregate liability of MVI and CPAN
pursuant to their indemnification obligations under Section 10.2 shall be
$198,919,156; provided, however, that this amount shall be reduced by the amount
of the Subsequent Purchase Price if this Agreement is terminated prior to the
Subsequent Closing for any reason other than a termination by Buyer pursuant to
Section 11.1(b). Notwithstanding any provision of this Agreement to the
contrary, the maximum liability of RSA pursuant to its indemnification
obligations under Section 10.3 shall be $6,248,072. Notwithstanding any
provision of this Agreement to the contrary, the maximum liability of
Shareholder pursuant to its indemnification obligations under Section 10.2 and
10.3 shall be $205,167,228; provided that in no event shall the maximum
aggregate liability of MVI, CPAN, RSA and Shareholder exceed $205,167,228; and
provided further, that these amounts shall be reduced by the amount of the
Subsequent Purchase Price if this Agreement is terminated prior to the
Subsequent Closing for any reason other than a termination by Buyer pursuant to
Section 11.1(b). Notwithstanding any provision of this Agreement to the
contrary, the maximum aggregate liability of Buyer pursuant to its
indemnification obligations under Section 10.4 shall be $205,167,228; provided,
however, that this amount shall be reduced by the amount of the Subsequent
Purchase Price if this Agreement is terminated prior to the Subsequent Closing
for any reason other than a termination by Sellers or Shareholder pursuant to
Section 11.1(b). In no event shall any Indemnified Party (as defined below) be
entitled to receiver any special, punitive, incidental or consequential damages.
10.6 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 shall be given promptly after the
Indemnified Party knows or reasonably should have known of the circumstances
giving rise to the claim; 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 10.5, 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) an
award from an arbitrator pursuant to Section 12.11 hereof or by a final
20
21
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.
10.7 Third Person Claims.
(a) Subject to Section 10.7(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 therefor 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 (and, where a Seller or the
Shareholder is the Indemnitor, such claim, action or suit will have no
continuing effect in any material respect on the Licenses), 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
therefor hereunder shall be waived.
21
22
10.8 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 Sellers and Buyer;
(b) By either Buyer on the one hand, or Sellers and the
Shareholder on the other hand, 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 the 30-day cure period specified in this subsection;
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 Buyer on the one hand, or Sellers on the other
hand, upon written notice to the other, upon the filing by any of the Sellers or
the Shareholder or by Buyer, as the case may be, or having filed against it and
remaining pending for more than thirty (30) days, a petition under Title 11 of
the United States Code or similar state law provision seeking protection from
creditors or the appointment of a trustee, receiver or debtor in possession;
(d) By either Buyer on the one hand, or Sellers on the other
hand, upon written notice to the other, if a court of competent jurisdiction
shall have issued an order, decree or ruling permanently restraining, enjoining
or otherwise prohibiting any of the transactions contemplated by this Agreement,
and such order, decree, ruling or other action shall have become final and
non-appealable;
(e) By either Buyer on the one hand, or Sellers on the other
hand, upon twenty (20) days' prior written notice of such termination, if the
Initial Closing or the Subsequent Closing, or both of them, shall not have
occurred on or before the one (1) year anniversary of the Effective Date of this
Agreement; provided, however, that if the Initial Closing has occurred prior to
such termination, this Agreement shall continue in full force and effect in
accordance with its terms with respect to the Initial Licenses for which the
Initial Closing already has been consummated; or
(f) By Sellers prior to the Subsequent Closing upon twenty (20)
days prior written notice of such termination, if any of the lenders under the
Vendor Financing Agreements shall have accelerated any of the indebtedness
thereunder following a default by Buyer thereunder; provided, however, that if
the Initial Closing has occurred prior to such termination, this
22
23
Agreement shall continue in full force and effect in accordance with its terms
with respect to the Initial Licenses for which the Initial Closing already has
been consummated.
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 hereunder). The provisions of Sections 11.2,
12.1, 12.6, 12.7, 12.8, 12.11, 12.12, and 12.13 shall expressly survive the
expiration or termination of this Agreement. Nothing is 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.
ARTICLE XII.
GENERAL PROVISIONS
12.1 Confidential Nature of Information. Each party agrees that
it will treat in confidence 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 existing Non-Disclosure
Agreement among the parties.
12.2 No Public Announcement; Press Releases. No party shall,
without the approval of the other (the Sellers and the Shareholder shall be
considered one party for the purposes of this Section 12.2), 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, applicable FCC disclosure obligations or applicable
disclosure obligations under the HSR Act; or to preclude Buyer from issuing a
press release or press releases with respect to the transaction hereunder; and
provided further Sellers and the Shareholder hereby consent to Buyer issuing a
press release with respect to this Agreement promptly after the Effective Date
of this Agreement in the form set forth in Exhibit G attached hereto, and after
the consummation of the Initial Closing and after the consummation of the
Subsequent Closing, each in a form mutually agreeable to the parties.
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 sent by overnight delivery, by a
nationally-recognized overnight delivery service; if mailed, 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:
23
24
If to MVI, CPAN or the Shareholder:
CenturyTel, Inc.
000 XxxxxxxXxx Xxxxx
Xxxxxx, XX 00000
Attention: Xxxxxxx Xxxxx
Telephone: 000-000-0000
Fax: 000-000-0000
With a copy (which shall not constitute notice) to:
CenturyTel, Inc.
000 XxxxxxxXxx Xxxxx
Xxxxxx, XX 00000
Attention: Xxxxxx X. Xxxx, Esq.
Telephone: 000-000-0000
Fax: 000-000-0000
If to RSA:
Xxxx, Xxxxxxxx & Xxxxx, S.C.
00 Xxxx Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Xxxx X. Xxxx
Telephone: 000-000-0000
Fax: 000-000-0000
With a copy to:
LVT Corporation
Xxxx Xxxxxx
Xxxx Xxxxxxx, XX 00000
Attention: Xxxx Xxxx
Telephone: 000-000-0000
Fax: 000-000-0000
If to Buyer:
Leap Wireless International, Inc.
00000 Xxxxxxx Xxxxxx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: Legal Department
Telephone: 000-000-0000
Facsimile: 000-000-0000
24
25
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 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.
(a) The rights of any party under this Agreement shall not be
assignable by such party hereto prior to the Subsequent Closing without the
written consent of the other, except that the rights (but not obligations) of
Buyer hereunder may be assigned prior to the Subsequent Closing, without the
consent of Sellers or the Shareholder, to any of its affiliates, subsidiaries
and successors ("Permitted Assignees").
(b) This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their successors and permitted assigns. The
successors and permitted assigns hereunder shall include without limitation, in
the case of Buyer, any Permitted Assignees as well as the successors in interest
to such Permitted Assignee. Nothing in this Agreement, expressed or implied, is
intended or shall be construed to confer upon any Person other than the parties
and successors and Permitted Assignees, any right, remedy or claim under or by
reason of this Agreement.
12.5 Entire Agreement; Amendments. 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, understandings
or letters of intent between or among any of the parties hereto. This Agreement
shall not be amended, modified or supplemented except by a written instrument
signed by an authorized representative of Buyer, on the one hand, and Sellers
and the Shareholder, on the other hand.
12.6 Waivers. Any failure of Buyer on the one hand, or Sellers
or the Shareholder, on the other hand, 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 Sellers, 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. 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.
25
26
12.8 Partial Invalidity. 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.
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 Further Assurances. From time to time following the
Initial Closing, Sellers and the Shareholder shall execute and deliver, or cause
to be executed and delivered, to Buyer such other instruments of conveyance and
transfer as Buyer may reasonably request or as may be otherwise necessary to
more effectively convey and transfer to, and vest in, Buyer and put the Buyer in
possession of the Licenses.
12.11 Resolution of Disputes. Except with respect to a breach of
the obligations of confidentiality set forth in Section 12.1 and actions
detrimental to the acquisition of the Licenses contemplated hereunder, as to
which the non-breaching party shall have the right to seek specific performance,
injunctive remedy or other equitable remedies, senior management employees of
Buyer and Sellers 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) 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 may be submitted to binding
arbitration at the election of either Buyer or Sellers. The arbitration shall be
conducted by a single arbitrator. The arbitration shall be conducted in Denver,
Colorado in accordance with the Commercial Arbitration Rules of the American
Arbitration Association. 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.
12.12 Governing Law. This Agreement shall be governed by,
enforced and construed in accordance with the laws of the State of Delaware,
without regard to choice of law principles.
12.13 Specific Performance. Notwithstanding anything herein to
the contrary, if Buyer, Sellers or the Shareholder fails to perform any of its
obligations under this Agreement, the
26
27
aggrieved party shall have the right, in addition to all other rights or
remedies, to specific performance of the terms hereof.
12.14 Headings. Subject headings are included for convenience
only and shall not effect the interpretation of any provisions of this
Agreement.
12.15 Waiver of Jury Trial. To the extent permitted by
applicable law, Buyer, Sellers and the Shareholder hereby waive trial by jury in
any litigation in any court with respect to, in connection with, or arising out
of this Agreement, the Security Agreement or the CPAN Promissory Note, or any
document related to this Agreement, the Security Agreement or the CPAN
Promissory Note, or the validity, protection, interpretation, collection or
enforcement of this Agreement, the Security Agreement or the CPAN Promissory
Note. Buyer, Sellers and the Shareholder agree that this provision is a specific
and material aspect of this Agreement and acknowledge that the other parties
hereto would not enter into this Agreement if this section were not part of the
Agreement, the Security Agreement and the CPAN Promissory Note.
27
28
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the day and year first above written.
MVI: BUYER:
MVI Corp. Leap Wireless International, Inc.
By: /s/ R. XXXXXXX XXXXX, XX. By: /s/ XXXXX X. XXXXXXXX
------------------------------- ---------------------------------
Name: R. Xxxxxxx Xxxxx, Xx. Name: Xxxxx X. Xxxxxxxx
Its: Executive Vice President Its: Senior Vice President
CPAN:
Century Personal Access Network, Inc.
By: /s/ R. XXXXXXX XXXXX, XX.
-------------------------------
Name: R. Xxxxxxx Xxxxx, Xx.
Its: Executive Vice President
RSA:
Wisconsin RSA #7 Limited Partnership
By: Wisconsin RSA #7 General Partner, Inc.
Its General Partner
By: /s/ XXXXX XXXXXX
-------------------------------
Name: Xxxxx Xxxxxx
Its: Secretary
SHAREHOLDER:
Centurytel, Inc.
By: /s/ R. XXXXXXX XXXXX, XX.
-------------------------------
Name: R. Xxxxxxx Xxxxx, Xx.
Its: Executive Vice President
28
