XXXXXXX OPTION AGREEMENT
XXXXXXX OPTION AGREEMENT, dated as of December 24, 2002, between AT&T
Wireless Services, Inc., a Delaware corporation ("AWS"), AT&T Wireless Services
of Alaska, Inc., a Delaware corporation ("AWS Alaska"), and Xxxxxx
Communications Corporation, an Oklahoma corporation ("DCC"). Capitalized terms
not otherwise defined herein have the meanings given to such terms in the
Exchange Agreement referred to below.
WHEREAS, AWS Alaska is a wholly-owned subsidiary of AWS and a general
partner of Cordova Wireless Partnership, an Alaska general partnership (the
"Xxxxxxx Partnership") formed pursuant to a partnership agreement, dated
February 11, 1997, between XxXxx Communications of Anchorage, Inc. (the
predecessor to AWS Alaska) and Xxxxxxx Wireless Communications, Inc. ("CWC"), as
amended by that certain Letter Agreement between the same parties dated May 20,
1997 (the "Partnership Agreement"); and
WHEREAS, AWS Alaska desires to grant to DCC, and DCC wishes to acquire from
AWS Alaska, an option to purchase AWS Alaska's interest in the Cordova
Partnership (the "Cordova Interest"), all in accordance with the terms hereof.
NOW, THEREFORE, in consideration of the mutual covenants set forth below
and other valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, each of AWS Alaska and DCC hereby agree as follows.
1. Option to Purchase
In consideration of Xxxxxx Cellular Systems, Inc., an Oklahoma corporation,
and an indirect wholly-owned subsidiary of DCC, entering into the Asset Exchange
Agreement of even date herewith (the "Exchange Agreement") with AWS, AWS Alaska
hereby grants to DCC an option to purchase the Xxxxxxx Interest for * (the
"Option"), on the terms and subject to the conditions herein set forth,
exercisable by written notice of election delivered to AWS in accordance with
Section 18.2 of the Exchange Agreement no later than 45 days after the date
hereof (the "Option Expiration Date").
2. Closing and Closing Date
Subject to the terms and conditions hereof, the closing of the transactions
contemplated by this Agreement (the "Closing") shall take place at the offices
of Xxxxxxx & Xxxxxx, LLP, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, on the
date (the "Closing Date") which is the latest of (a) the second day after the
date that the FCC's consent to the assignment of the Xxxxxxx Interest by AWS
Alaska to DCC becomes a Final Order and (b) the date on which all conditions set
forth in Section 7 and Section 8 have been satisfied or waived; provided if such
latest date is not a business day, the Closing Date shall be the next following
business day.
3. Assignment and Assumption
At the Closing, (i) AWS Alaska will deliver to DCC, against payment of
$1.00 by DCC, an instrument of assignment in mutually agreeable form as shall be
effective to vest in DCC all of the right, title and interest of AWS Alaska and
its Affiliates in and to the Xxxxxxx Interest free and clear of all Liens (other
than the transfer restrictions set forth in Section 12 of the Partnership
Agreement) and (ii) DCC and AWS Alaska will execute and deliver an assumption
agreement in mutually agreeable form in order to effect the assumption by DCC of
(x) all Liabilities of AWS Alaska under the Partnership Agreement which are to
be performed from and after the Closing (other than any Liability in connection
with, resulting from or arising out of, directly or indirectly, any breach by
AWS Alaska of any provision of the Partnership Agreement that occurs prior to
Closing) and (y) all other Liabilities associated with the ownership of the
Xxxxxxx Interest (other than any Liability in connection with, resulting from or
arising out of, directly or indirectly, events, conditions and circumstances
that occur or exist in the period prior to the Closing) (clauses (x) and (y)
shall hereinafter be referred to as the "Assumed Liabilities"). Notwithstanding
anything to the contrary set forth in this Agreement, DCC is not assuming and
shall not be liable for any Liabilities of any nature whatsoever associated with
the Xxxxxxx Interest other than the Assumed Liabilities (such other Liabilities
being referred to as the "Nonassumed Liabilities").
4. Representations of AWS and AWS Alaska
AWS and AWS Alaska hereby jointly and severally represent and warrant to
DCC that:
(a) AWS and AWS Alaska are corporations duly incorporated, validly existing
and in good standing under the Laws of the State of Delaware and have all
necessary corporate power and authority to own and operate their properties and
to carry on their businesses as they are now being conducted and to carry out
the transactions contemplated by this Agreement. AWS and AWS Alaska have the
power and authority to execute and deliver and perform their obligations under
this Agreement and to undertake the transactions contemplated hereby.
(b) The Xxxxxxx Partnership is a general partnership duly organized and
validly existing under the laws of the State of Alaska, and has all necessary
power and authority to own and operate its properties and to carry on its
business as is now being conducted or proposed to be conducted. A true and
complete copy of the Partnership Agreement has previously been delivered to DCC.
The Partnership Agreement has not been amended, except by a letter agreement
dated May 20, 1997, and no rights thereunder have been waived by AWS Alaska. AWS
Alaska and CWC are the only partners in the Xxxxxxx Partnership. On the date
hereof, AWS Alaska has a 49% ownership interest in the Xxxxxxx Partnership, and
the balance in its capital account in the Xxxxxxx Partnership represents 49% of
the aggregate balances in the capital accounts of the partners of the Xxxxxxx
Partnership. The Xxxxxxx Interest and, to the knowledge of AWS Alaska, CWC's
interest in the Cordova Partnership have been duly authorized and are fully paid
as of the date hereof. To the knowledge of AWS Alaska, there are no
subscriptions, warrants, options, convertible securities, calls, rights,
Contracts, understandings or commitments of any character obligating the Xxxxxxx
Partnership to issue, deliver or sell any interest in the Xxxxxxx Partnership to
any person. AWS Alaska has not granted any subscriptions, warrants, options,
calls, rights, tag-along rights, drag-along rights, rights of first refusal,
Contracts, commitments, voting trusts, proxies, understandings, restrictions or
arrangements relating to the Xxxxxxx Interest other than as set forth in the
Cordova Partnership Agreement. AWS Alaska has not, as of the date hereof,
received written notice of any capital call that will be due after the Closing
Date. AWS Alaska has satisfied all capital calls, contribution requirements and
similar obligations to make contributions or investments in Cordova and is not
in default under the Partnership Agreement. To the knowledge of AWS and AWS
Alaska, CWC has satisfied all capital calls, contribution requirements and
similar obligations to make contributions or investments in the Xxxxxxx
Partnership and is not in default under the Partnership Agreement. To the
knowledge of AWS, the Xxxxxxx Partnership is not in default under its roaming
agreement with AWS. Except for the roaming agreement between AWS and the Cordova
Partnership, neither AWS nor AWS Alaska nor any of their Affiliates have entered
into any agreements relating to the Xxxxxxx Partnership with CWC, the Xxxxxxx
Partnership or any of their Affiliates. For purposes of this Section 4(b), "to
the knowledge" of AWS or AWS Alaska means the actual knowledge of the officers
and employees of AWS and its subsidiaries.
(c) The execution, delivery and performance of this Agreement by AWS and
AWS Alaska, and the transfer of the Xxxxxxx Interest to DCC have been duly and
validly authorized and approved by all necessary corporate action. This
Agreement is a valid and binding obligation of AWS and AWS Alaska, enforceable
against them in accordance with its terms subject to bankruptcy, insolvency,
reorganization, moratorium, or similar Laws affecting creditors' rights
generally.
(d) AWS Alaska has good and marketable title to the Xxxxxxx Interest, free
and clear of all Liens (other than the transfer restrictions set forth in
Section 12 of the Partnership Agreement). The transfer of the Xxxxxxx Interest
from AWS Alaska to DCC in accordance with the terms of this Agreement is not
prohibited or restricted under the Partnership Agreement and does not require
any consent or notice to any person (other than the FCC).
5. Representations of DCC
DCC hereby represents and warrants to AWS and AWS Alaska that:
(a) DCC is a corporation duly incorporated, validly existing and in good
standing under the Laws of the State of Oklahoma and has all necessary corporate
power and authority to own and operate its properties and to carry on its
business as it is now being conducted and to carry out the transactions
contemplated by this Agreement. DCC has the power and authority to execute,
deliver and perform its obligations under this Agreement and to undertake the
transactions contemplated hereby.
(b) The execution, delivery and performance of this Agreement by DCC has
been duly and validly authorized and approved by all necessary corporate action.
This Agreement is a valid and binding obligation of DCC, enforceable against DCC
in accordance with its terms subject to bankruptcy, insolvency, reorganization,
moratorium, or similar Laws affecting creditors' rights generally.
6. Covenants of the Parties
(a) In the event that the Option is exercised by DCC, then each of DCC and
AWS Alaska covenants and agrees that it will fully cooperate with the other, and
do all things reasonably necessary to assist the other to make such filings
required by FCC Law with regard to FCC Authorizations held by the Xxxxxxx
Partnership, as soon as practicable after the date the Option is exercised,
including, without limitation, the furnishing of financial and other information
specifically with respect to DCC, AWS or AWS Alaska, as the case may be,
reasonably required by the person whose consent or approval is being sought.
Each party (the "Notifying Party") shall use all commercially reasonable efforts
to provide adequate prior written notice to the other (the "Notified Party") of
any meeting with Governmental Authorities the purpose of which is to seek a
consent or approval to the transactions contemplated hereby or resulting from
any notice being filed, and the Notified Party shall have the right to attend
all such meetings with appropriate Governmental Authorities for the purpose of
obtaining such consents or approvals and responding to issues resulting from the
filing of a notice. DCC hereby agrees to file the necessary applications and
other filings with the FCC seeking consent to the assignment of the Xxxxxxx
Interest to DCC, and to file for all other necessary regulatory approvals for
the consummation of the transactions contemplated by this Agreement, within 15
business days following the exercise of the Option, and to diligently pursue the
processing of any such applications and filings before the FCC and other
applicable Governmental Authorities. AWS and AWS Alaska agree to take all
commercially reasonable actions to cause CWC, as the managing partner of the
Xxxxxxx Partnership, to file the necessary applications and other filings with
the FCC seeking consent to the assignment of the Xxxxxxx Interest to DCC, and to
file for all other necessary regulatory approvals for the consummation of the
transactions contemplated by this Agreement, within 15 business days following
the exercise of the Option, and to diligently pursue the processing of any such
applications and filings before the FCC and other applicable Governmental
Authorities. Neither party shall take any action or fail to take any action if
such act or omission is likely to cause a delay in, or the FCC not to grant its
consent to, the assignment of the FCC Authorizations contemplated hereby, it
being understood that if any petition to deny is filed against the transfer of
the FCC Authorizations principally by reason of the qualifications of only one
of the parties to this transaction, then it shall be the primary responsibility
of such party to defend against any allegations in such petition. DCC and AWS
Alaska shall each pay their own filing fees in connection with any filings
pursuant to this Section 6(a).
(b) Prior to the Closing Date, (i) AWS shall perform in all material
respects its obligations under its roaming agreement with the Xxxxxxx
Partnership and maintain in accordance with past practices its roaming
relationship with the Xxxxxxx Partnership, except as otherwise required by Law,
provided that the Xxxxxxx Partnership has complied in all material respects with
its obligations under the roaming agreement; (ii) AWS Alaska shall perform in
all material respects its obligations under the Partnership Agreement, including
the payment of (x) all capital calls made prior to the Option Expiration Date,
and (y) all capital calls made thereafter but prior to the Closing Date
consistent with past practice of the Cordova Partnership; * (iii) AWS Alaska
shall refrain from agreeing to amend the Partnership Agreement without DCC's
prior written approval (such approval not to be unreasonably withheld or
delayed); (iv) AWS Alaska shall notify DCC promptly after learning of (x) the
institution of any material action against the Xxxxxxx Partnership in any court,
or before the FCC or any Governmental Authority, or (y) entry of any
administrative or court order relating to the Xxxxxxx Partnership; and (v) AWS
shall promptly furnish to DCC copies of all material written communications
between AWS or its Affiliates and CWC or the Xxxxxxx Partnership.
(c) From and after the Closing, AWS Alaska shall no longer (i) be a general
partner of the Xxxxxxx Partnership or entitled to any of the rights of a person
having such status, including without limitation with respect to distributions
(liquidating or otherwise) from and allocations of the profits, losses, gains,
deductions and credits of, the Xxxxxxx Partnership, in each case in respect of
the period following the Closing (it being understood and agreed that AWS Alaska
shall be entitled to its allocable share of such items in respect of the period
prior to Closing), and (ii) have any obligations in respect of the Xxxxxxx
Partnership, as a general partner, under the Partnership Agreement or otherwise,
other than the Nonassumed Liabilities.
(d) Each party agrees to take any and all additional actions and to
execute, acknowledge and deliver any and all further documents which any other
party may reasonably request in order to effect the intent and purposes of this
Agreement.
7. Conditions to Obligation of AWS and AWS Alaska to Close
The obligation of AWS and AWS Alaska to consummate the transactions
contemplated hereby shall be conditioned upon the satisfaction or fulfillment,
at or prior to the Closing Date, of the following conditions, unless waived by
AWS and AWS Alaska:
(a) Each of the representations and warranties made by DCC in this
Agreement shall be true and correct in all material respects on and as of each
of the date hereof and the Closing Date (unless such representation or warranty
is made as of a particular date in which case such representation or warranty
will be considered only as of such particular date). DCC shall have complied
with and performed in all material respects all of the agreements and covenants
required by this Agreement to be performed or complied with by DCC on or prior
to the Closing Date. DCC shall have furnished AWS Alaska with a certificate of
an officer of DCC, dated as of the Closing Date, certifying to the fulfillment
of the foregoing conditions.
(b) On the Closing Date, no suit, action or other proceeding, or injunction
or final judgment relating thereto, shall be threatened or be pending before any
arbitrator or Governmental Authority in which it is sought to restrain or
prohibit the consummation of the transactions contemplated hereby or to obtain
damages or other relief in connection with this Agreement or the consummation of
the transactions contemplated hereby. (c) All Governmental Authorizations and
any third party consents required to be obtained prior to the Closing Date by
either party in order to consummate the transactions contemplated herein, and
the consent of CWC to the assignment by AWS Alaska of its rights under the
Partnership Agreement to DCC, shall have been made or obtained free of
conditions materially adverse to AWS and AWS Alaska.
(d) The closing under the Exchange Agreement shall have occurred.
(e) DCC shall have made the deliveries contemplated by Section 3.
8. Conditions to Obligation of DCC to Close
The obligation of DCC to consummate the transactions contemplated hereby
shall be conditioned upon the satisfaction or fulfillment, at or prior to the
Closing Date, of the following conditions, unless waived by DCC:
(a) Each of the representations and warranties made by AWS and AWS Alaska
in this Agreement shall be true and correct in all material respects on and as
of each of the date hereof and the Closing Date (unless such representation or
warranty is made as of a particular date in which case such representation or
warranty will be considered only as of such particular date). AWS and AWS Alaska
shall have complied with and performed in all material respects all of the
agreements and covenants required by this Agreement to be performed or complied
with by AWS and AWS Alaska on or prior to the Closing Date. AWS shall have
furnished DCC with a certificate of an officer of AWS, dated as of the Closing
Date, certifying to the fulfillment of the foregoing conditions.
(b) On the Closing Date, no suit, action or other proceeding, or injunction
or final judgment relating thereto, shall be threatened or be pending before any
arbitrator or Governmental Authority in which it is sought to restrain or
prohibit the consummation of the transactions contemplated hereby or to obtain
damages or other relief in connection with this Agreement or the consummation of
the transactions contemplated hereby.
(c) All Governmental Authorizations and third party consents required to be
obtained prior to the Closing Date by either party in order to consummate the
transactions contemplated herein, and the consent of CWC to the assignment by
AWS Alaska of its rights under the Partnership Agreement to DCC, shall have been
made or obtained free of conditions materially adverse to DCC.
(d) The closing under the Exchange Agreement shall have occurred.
(e) AWS and AWS Alaska shall have made the deliveries contemplated by
Section 3.
9. Indemnification
(a) Notwithstanding the Closing, subject to the terms of this Section 9,
DCC agrees to indemnify and to hold the AWS Indemnified Parties harmless from
and against and in respect of any Liability, action, suit, demand, judgment,
cost of investigation and reasonable attorney fees (but excluding any
Liabilities assumed pursuant to Section 3 and any exemplary, consequential or
punitive damages) (collectively, "AWS Losses"), sustained, incurred or paid by
any AWS Indemnified Party in connection with, resulting from or arising out of,
directly or indirectly: (i) any breach of a representation or warranty on the
part of DCC under this Agreement, (ii) any breach or nonfulfillment of any
covenant on the part of DCC under this Agreement, or (iii) any and all Assumed
Liabilities.
(b) Notwithstanding the Closing, subject to the terms of this Section 9,
AWS agrees to indemnify and to hold the DCC Indemnified Parties harmless from
and against and in respect of any Liability, action, suit, demand, judgment,
cost of investigation and reasonable attorney fees (but excluding any
Liabilities assumed pursuant to Section 3 and any exemplary, consequential or
punitive damages) (collectively, "DCC Losses"), sustained, incurred or paid by
any DCC Indemnified Party in connection with, resulting from or arising out of,
directly or indirectly: (i) any breach of a representation or warranty on the
part of AWS under this Agreement, (ii) any breach or nonfulfillment of any
covenant on the part of AWS under this Agreement, or (iii) any and all
Nonassumed Liabilities.
(c) The provisions of Sections 13.3 and 13.8 of the Exchange Agreement are
hereby incorporated by reference into this Agreement mutandis mutatis.
(d) The aggregate liability of the Defending Party under each of Section
9(a)(i) or Section 9(b)(i) shall not exceed $10,000, provided, that the
foregoing limitation shall not apply to (i) any intentional breach of a
representation or warranty or (ii) any breach by AWS of the fifth sentence of
Section 4(b), the first sentence of Section 4(c) or the first sentence of
Section 4(d) or any breach by DCC of the first sentence of Section 5(b).
(e) From and after the Closing Date, the indemnification rights contained
in this Section 9 shall constitute the sole and exclusive remedies of the
parties hereunder, and shall supersede and displace all other rights that either
party may have under Law, with respect to any breach of any of the
representations and warranties made by the parties in this Agreement or in any
certificate, schedule, statement, document or instrument furnished hereunder or
in connection with the execution and performance of this Agreement.
(f) All representations and warranties made by the parties in this
Agreement or in any certificate, schedule, statement, document or instrument
furnished hereunder shall survive for a period lasting eighteen months after
Closing, except that the representations set forth in the fifth sentence of
Section 4(b), the first sentence of Section 4(c), the first sentence of Section
4(d) and the first sentence of Section 5(b) shall survive Closing indefinitely.
Any claim by a party based upon breach of any such representation or warranty
must be submitted to the other party prior to or at the expiration of the
applicable survival period, along with a written explanation in reasonable
detail of the specifics of such breach. In the case of any claim submitted
within such time period, the right of the party submitting the claim to recover
from the other party with respect to such claim shall not be dependent on the
claim being resolved or the losses being incurred within such time period. The
right to indemnification hereunder shall not be affected by any investigation or
audit conducted before or after the Closing Date or the actual or constructive
knowledge of any party and each party shall be entitled to rely upon the
representations and warranties set forth herein regardless of any such
investigation or knowledge. The waiver of any condition regarding the accuracy
of any representation or warranty, or regarding the performance of or compliance
with any covenant or obligation, will not affect the right of indemnification or
any other remedy of the waiving party after Closing based on the inaccuracy of
such representation or warranty or the nonperformance of or noncompliance with
such covenant or obligation.
(g) DCC acknowledges and agrees that AWS and AWS Alaska do not make, and
have not made, any representations or warranties relating to the Xxxxxxx
Interest or the Xxxxxxx Partnership or its business or assets other than the
representations and warranties expressly set forth in this Agreement. In
addition, DCC acknowledges and agrees that AWS and AWS Alaska have not made any
implied warranties including implied warranties of merchantability or fitness
for a specific purpose with regard to the Xxxxxxx Interest.
10. Termination
This Agreement may be terminated and the transactions contemplated hereby
may be abandoned, by written notice given to the other party, at any time prior
to the Closing:
(a) by DCC acting alone (prior to the exercise of the Option) or by mutual
written consent of DCC and AWS Alaska;
(b) by either DCC or AWS Alaska, if any court of competent jurisdiction in
the United States or other United States Governmental Authority shall have
issued an order, decree or ruling or taken any other action permanently
restraining, enjoining or otherwise prohibiting the sale of the Xxxxxxx Interest
to DCC (which DCC and AWS Alaska shall have used all commercially reasonable
efforts to have lifted or reversed) and such order, decree, ruling or other
action shall have become final and nonappealable;
(c) subject to Section 10(e), by AWS Alaska, if, as of any date, DCC shall
have breached any of its representations, warranties or covenants such that the
condition set forth in Section 7(a) shall not be satisfied as of such date;
(d) subject to Section 10(e), by DCC, if, as of any date, AWS Alaska shall
have materially breached any of its representations, warranties or covenants
such that the condition set forth in Section 8(a) shall not be satisfied as of
such date; or
(e) by either DCC or AWS Alaska upon the termination of the Exchange
Agreement.
11. Miscellaneous
(a) The provisions of Section 18 of the Exchange Agreement (except for
Sections 18.1(b) and (c), 18.4, 18.5 and 18.10) are hereby incorporated by
reference into this Agreement mutatis mutandis.
(b) This Agreement merges all previous negotiations and agreements between
the parties hereto, either verbal or written, and constitutes the entire
agreement and understanding between the parties, with respect to the subject
matter of this Agreement.
(c) Neither this Agreement nor any of the rights, interests or obligations
hereunder shall be assigned (by operation of law or otherwise) by either AWS or
AWS Alaska, on the one hand, or DCC, on the other hand, without the prior
written consent of the other, which consent will not be unreasonably withheld or
delayed; provided, however, that at any time prior to the filing of the
necessary applications and other filings with the FCC seeking consent to the
assignment of the Xxxxxxx Interest, DCC may assign its rights under this
Agreement to a direct or indirect wholly-owned subsidiary of DCC; provided,
further, however, that no such assignment shall relieve DCC of any of its
obligations under this Agreement.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties hereto have executed this Xxxxxxx Option
Agreement as of the date first above written.
AT&T WIRELESS SERVICES, INC.
By: XXXX X. XXXXXXX
Name: Xxxx X. Xxxxxxx
Title: Vice President, Corporate Development
AT&T WIRELESS SERVICES OF ALASKA, INC.
By: XXXX X. XXXXXXX
Name: Xxxx X. Xxxxxxx
Title: Vice President
XXXXXX COMMUNICATIONS CORPORATION
By: XXXXXX X. XXXXXX
Name: Xxxxxx X. Xxxxxx
Title: Vice President
---------------
* Confidential information has been omitted and filed separately with the
Securities and Exchange Commission.
