SECURITIES PURCHASE AGREEMENT
by and among
XXXXXX CELLULAR OF CALIFORNIA, INC.,
SANTA XXXX CELLULAR TELEPHONE, INC.
and
THE SHAREHOLDERS AND OPTIONHOLDERS OF
SANTA XXXX CELLULAR TELEPHONE, INC.
WHO ARE AND WHO HEREAFTER BECOME SIGNATORIES HERETO
DATED AS OF March 25, 1998
TABLE OF CONTENTS
PAGE
----
ARTICLE I PURCHASE AND SALE OF SECURITIES 2
Section 1.01 Transfer of Securities 2
ARTICLE II PURCHASE PRICE 2
Section 2.01 Purchase Price; Deposit 2
Section 2.02 Payment of Purchase Price 3
Section 2.03 Purchase Price Adjustments 3
ARTICLE III CLOSING 7
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ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE SELLERS 7
Section 4.01 Organization; Qualification 7
Section 4.02 Consents; Authorization; Execution and
Delivery of Agreement 7
Section 4.03 Subsidiaries and Interests in Other Companies 8
Section 4.04 Capital Stock; Interests 8
Section 4.05 Ownership of Securities 8
Section 4.06 Real Property-Owned 8
Section 4.07 Real and Personal Property-Leased 8
Section 4.08 Existing Contracts 9
Section 4.09 Governmental Licenses 11
Section 4.10 Compliance with Law 11
Section 4.11 No Violation of Existing Agreements 11
Section 4.12 Litigation and Legal Proceedings 11
Section 4.13 Environmental Compliance 12
Section 4.14 Employees 13
Section 4.15 Employee Benefits 13
Section 4.16 Tax Matters 14
Section 4.17 Financial Statements 15
Section 4.18 Subscribers; Agents 17
Section 4.19 Insurance 17
Section 4.20 Brokers 17
Section 4.21 Undisclosed Liabilities; Guarantees 17
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Section 4.22 Pricing of Services 18
Section 4.23 Proprietary Rights 18
Section 4.24 Accounts Receivable and Bad Debts 18
Section 4.25 Product Information 19
Section 4.26 Certain Business Relationships 19
Section 4.27 Officers and Directors and Certain Authorized Persons 19
Section 4.28 Disclosure 19
ARTICLE V PURCHASER'S REPRESENTATIONS 20
Section 5.01 Organization; Qualification 20
Section 5.02 Consents; Authorization; Execution and Delivery of
Agreement 20
Section 5.03 Litigation and Legal Proceedings 20
Section 5.04 Brokers 20
Section 5.05 Investment Intent 20
Section 5.06 No Outside Reliance 21
ARTICLE VI THE COMPANY'S, SELLERS' AND PURCHASER'S COVENANTS 21
Section 6.01 Financial Statements and Cellular System Information 21
Section 6.02 Governmental Approvals 21
Section 6.03 Third Party Consents; Closing Conditions 22
Section 6.04 Access 22
Section 6.05 Conduct of Business 23
Section 6.06 No Shopping 26
Section 6.07 Employees 26
Section 6.08 Supplemental Disclosure 26
Section 6.09 Unitel 26
Section 6.10 Audit of Company's 1997 Financial Statements 26
Section 6.11 Offer to Purchase Remaining Securities 27
Section 6.12 Company's Articles and By-Laws 28
Section 6.13 Employees of Unitel 28
ARTICLE VII CONDITIONS PRECEDENT TO PURCHASER'S OBLIGATION TO CLOSE 28
Section 7.01 Accuracy of Representations and Warranties;
Performance of this Agreement 28
Section 7.02 Directors' Resolutions 29
Section 7.03 Incumbency Certificate 29
Section 7.04 Third Party Consents; FCC; Xxxx-Xxxxx Act 29
Section 7.05 Contract Termination 29
Section 7.06 No Material Adverse Change 29
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Section 7.07 Securities to Be Purchased 29
Section 7.08 Opinion of Counsel to Sellers 30
Section 7.09 Opinion of FCC Counsel to the Company 30
Section 7.10 Subscribers 30
Section 7.11 Estoppel 30
Section 7.12 Resignations of Officers and Directors 30
Section 7.13 Payment of Indebtedness 30
Section 7.14 Operating Cash Flow 30
Section 7.15 Escrow Agreement 31
Section 7.16 Management Contract 31
ARTICLE VIII CONDITIONS PRECEDENT TO THE COMPANY'S AND EACH SELLER'S
OBLIGATION TO CLOSE 31
Section 8.01 Accuracy of Representations and Warranties;
Performance of this Agreement 31
Section 8.02 Directors' Resolutions 31
Section 8.03 Incumbency Certificate 31
Section 8.04 FCC; Xxxx-Xxxxx Act 32
Section 8.05 Opinion of Counsel to Purchaser 32
ARTICLE IX CASUALTY LOSSES 32
ARTICLE X INDEMNIFICATION 32
Section 10.01 Indemnification by Sellers 32
Section 10.02 Indemnification by Purchaser 33
Section 10.03 Notice of Claims; Defense of Third Party Claims 34
Section 10.04 Limitations 35
ARTICLE XI CONFIDENTIALITY AND PRESS RELEASES 36
Section 11.01 Confidentiality 36
Section 11.02 Press Releases 36
Section 11.03 Disclosures Required By Law 36
ARTICLE XII TERMINATION 36
Section 12.01 Breaches and Defaults; Opportunity to Cure 36
Section 12.02 Termination 37
ARTICLE XIII BROKERS' FEES 37
ARTICLE XIV MISCELLANEOUS 38
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Section 14.01 Additional Instruments of Transfer 38
Section 14.02 Notices 38
Section 14.03 Expenses 39
Section 14.04 Sellers' Representative 39
Section 14.05 Specific Performance 40
Section 14.06 Governing Law 40
Section 14.07 Assignment 40
Section 14.08 Successors and Assigns 41
Section 14.09 Amendments; Waivers 41
Section 14.10 Entire Agreement 41
Section 14.11 Counterparts 41
Section 14.12 Severability 41
Section 14.13 Section Headings 41
Section 14.14 Interpretation 41
Section 14.15 Further Assurances 41
Section 14.16 Third Parties 41
Section 14.17 Waiver of Jury Trial; Jurisdiction 41
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DEFINED TERMS
TERM SECTION CITE
---- ------------
Acceptance Deadline Section 6.11
Acceptance Signature Page Section 6.11
Adjustment Amount Section 2.03(h)
Adjustments Section 2.03(g)
Agreed Adjustment Amount Section 2.03(h)
Asserting Party Section 10.03
Audit Section 6.10
Audited Historical Financial Statements Section 4.17(a)
Authorizations Section 4.09(b)
Balance Sheet Date Section 4.17(a)
Base Price Section 2.01
Breaching Party Section 12.01
Budget Section 4.17(a)
Business Recitals
Capital Expenditures Adjustment Section 2.03(d)
Cellular Area Recitals
Cellular System Recitals
Cellular Authorizations Article III
CERCLA Section 4.13
Claims Article IX
Closing Article III
Closing Certificate Section 2.03(h)
Closing Date Article III
Code Section 4.15
Common Stock Recitals
Controlled Group Member Section 4.15
CPUC Section 4.09
Current Assets Section 2.03(a)
Current Financial Statement Section 4.17(a)(ii)
Current Liabilities Section 2.03(a)
Debt Adjustment Section 2.03(f)
December Balance Sheet Section 4.17(a)(ii)
Defending Party Section 10.03
Deposit Section 2.01
Deposit Escrow Agent Section 2.01
Deposit Escrow Agreement Section 2.01
Disclosing Party Section 11.01
DOJ Section 7.04
Employee Benefit Plan Section 4.15
Encumbrances Section 1.01
Environmental Laws Section 4.13
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ERISA Section 4.15
Escrow Agent Section 2.02
Escrow Agreement Section 2.02
Escrow Payment Section 2.02
Existing Contracts Section 4.08(b)
FCC Authorizations Article III
Final Adjustment Amount Section 2.03(h)
Final Order Section 7.04
FTC Section 7.04
GAAP Section 2.03(a)
Xxxx-Xxxxx Act Section 6.02(b)
Hazardous Substance Section 4.13
Indemnified Purchaser Parties Section 10.01
Independent Accountants Section 2.03(h)
Interim Financial Statements Section 6.01
IRS Section 4.15
Liquidated Damages Amount Section 2.01
Loss Section 10.01
Management Contract Recitals
Material Adverse Effect Section 7.01
Material Loss Section 7.01
Microwave Authorizations Article III
Non-Breaching Party Section 12.01
Objection Notice Section 6.10
OCF Calculation Section 6.10
Offer Section 6.11
Operating Budget Section 6.01
Operating Cash Flow Section 7.14
Options Recitals
Option Shares Recitals
Other Holders Section 6.11
Outside Date Section 12.02
Outstanding Shares Recitals
Ownership Percentage Section 2.02
Person Section 4.03
Phase I and II Assessments Section 6.04(b)
Purchased Percentage Recitals
Purchase Orders Section 4.08(a)
Purchase Price Section 2.01
Purchaser's Accountant Section 6.10
Purchaser's Estimate Section 2.03(g)
RCLA Section 4.13
Recipient Party Section 11.01
Response Period Section 2.03(h)
Securities Recitals
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Sellers' Accountants Section 6.10
Sellers' Estimate Section 2.03(f)
Sellers' Representative Section 14.04
Shares Recitals
Subscriber Section 2.03(a)
Subscriber Adjustment Section 2.03(c)
Survival Period Section 10.04
Target Number of Subscribers Section 2.03(a)
Tentative Subscriber Section 2.03(a)
Third Party Claim Section 10.03
Total Purchase Price Section 2.01
Total Shares Recitals
Twelve Month Income Statement Section 4.17(a)
Unitel Recitals
Working Capital Adjustment Section 2.03(b)
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SCHEDULES
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1 Sellers
2.03(a) Promotional Plans
4.01 Charter
4.04 Outstanding Securities
4.07(a) Real Property Leased by Company
4.07(b) Personal Property Leased by Company
4.08 Existing Contracts
4.09 Authorizations
4.10 Violation of Laws
4.11 Violation of Existing Contracts
4.12 Litigation
4.13 Environmental Noncompliance
4.14 Employees
4.15 Employee Benefit Plans
4.16 Tax Noncompliance
4.17(a)(i) Audited Historical Financial Statements
4.17(a)(ii) Current Financial Statements
4.17(a)(iii) Capital Expenditures Plan
4.17(c) Changes since Balance Sheet Date
4.18 Subscribers; Agents
4.21 Guarantees and Certain Liabilities
4.22 Rate Plans
4.23 Proprietary Rights
4.24 Subscriber Receivables
4.25 Manufacturers of Handsets
4.26 Certain Business Relationships
4.27 Officers, Directors and Certain Authorized Persons
6.01 Operating Budget
14.04 Sellers' Expenses
EXHIBITS
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A Escrow Agreement
B Opinion of Counsel for the Company and the Sellers
C Opinion of FCC Counsel for the Company and the Sellers
D Opinion of Counsel for Purchaser
E. Deposit Escrow Agreement
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SECURITIES PURCHASE AGREEMENT
THIS SECURITIES PURCHASE AGREEMENT (the "Agreement") is made and entered
into as of March 25, 1998 by and among XXXXXX CELLULAR OF CALIFORNIA, INC., an
Oklahoma corporation ("Purchaser"), SANTA XXXX CELLULAR TELEPHONE, INC., a
California corporation (the "Company") and THE SHAREHOLDERS AND OPTIONHOLDERS
OF THE COMPANY WHO ARE SIGNATORIES HERETO and THE SHAREHOLDERS AND
OPTIONHOLDERS of the Company who become parties hereto after the date hereof in
accordance with the provisions of this Agreement (individually, a "Seller" and
collectively the "Sellers").
R E C I T A L S
WHEREAS, the Company owns all right, title and interest in those certain
licenses granted by the Federal Communications Commission ("FCC") to provide
cellular radio telephone service in the FCC's Santa Xxxx cellular geographic
service area in the State of California (the "Cellular Area") and owns and
operates pursuant to such licenses the non-wireline cellular telephone system
in the Cellular Area (the "Cellular System"); and
WHEREAS, the Company's only business is the ownership and operation of the
Cellular System (the "Business"); and
WHEREAS, the Company's authorized capital stock consists of (i) 10,000,000
shares of Common Stock, no par value per share (the "Common Stock"), of which
24,558.2215 shares are issued and outstanding (the "Shares") and of which the
Company has reserved 2,000 shares of Common Stock for issuance (the "Option
Shares", and together with the Shares, the "Total Shares") upon exercise of
outstanding options to purchase Common Stock (the "Options" and together with
the Shares the "Securities") and (ii) 2,000,000 shares of Preferred Stock,
$.001 par value per share (the "Preferred Stock") none of which have been
issued; and
WHEREAS, the Sellers who are executing this Agreement on the date hereof
(collectively, the "Majority Shareholders") own 68.6319% of the Shares and 64%
of the outstanding Options and each such Seller owns the number of Shares and
Options set forth on SCHEDULE 4.04(a); and
WHEREAS, it is anticipated that the Company will notify its Shareholders
and Option holders who are not currently parties to this Agreement of the offer
by Purchaser to acquire the Securities held by them to Purchaser on the same
terms and conditions as are provided for herein by their Agreement to become
bound by the terms and conditions of the Agreement as a "Seller" in accordance
with the terms hereof; and
WHEREAS, the percentage of the Total Shares to be purchased by Purchaser
under this Agreement on the Closing Date (as hereinafter defined) including by
the purchase of the Options, is referred to herein as the "Purchased
Percentage"; and
WHEREAS, Purchaser desires to purchase the Securities from Sellers, and
Sellers desire to sell the Securities to Purchaser, all subject to the terms
and conditions set forth herein; and
WHEREAS, the Sellers who are currently parties to this Agreement own at
least 70.3623% of the outstanding voting membership interest of Unitel, LLC, a
California limited liability company ("Unitel"), the exclusive business of
which is the provision of management services to the Company pursuant to a
Management Agreement dated September 1, 1995 (the "Management Contract"); and
WHEREAS, the Sellers shall cause Unitel to terminate the Management
Contract at or prior to the Closing without cost or penalty to the Company and
cause Unitel to be dissolved and liquidated promptly after the Closing;
NOW, THEREFORE, in consideration of the premises and mutual covenants and
agreements herein set forth and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the parties hereto
hereby agree as follows:
ARTICLE I
PURCHASE AND SALE OF SECURITIES
SECTION 1.01. TRANSFER OF SECURITIES. Except as otherwise provided and
subject to the terms and conditions set forth in this Agreement, Sellers agree
to sell, convey, assign, transfer and deliver to Purchaser, and Purchaser
agrees to purchase from Sellers at the Closing, all of Sellers' right, title
and interest in and to the Securities, free and clear of all options, pledges,
obligations, security interests, liens, charges, rights of third parties,
community property rights and other encumbrances (collectively,
"Encumbrances").
ARTICLE II
PURCHASE PRICE
SECTION 2.01. PURCHASE PRICE; DEPOSIT. The total unadjusted purchase
price for 100% of the outstanding Securities shall be Thirty-six Million
Dollars ($36,000,000) (the "Base Price"), as adjusted in accordance with the
provisions of Section 2.04 hereof (as adjusted, the "Total Purchase Price").
As used in this Agreement the term "Purchase Price" shall mean the product of
Total Purchase Price and the Purchased Percentage. Simultaneously with the
execution of this Agreement, Purchaser is depositing as a good faith deposit
One Million Dollars ($1,000,000) (the "Deposit") with CoreStates Bank, N.A.
(the "Deposit Escrow Agent"), to be held, invested and disbursed pursuant to
the terms of the Deposit Escrow Agreement in the form of EXHIBIT E attached
hereto (the "Deposit Escrow Agreement"). If the Closing occurs, then the
Deposit and all earnings on the Deposit shall be paid to Sellers at Closing
pursuant to the Deposit Escrow Agreement, and the full amount shall be paid as
a portion of the Purchase Price to be paid at Closing by Purchaser for the
Securities. If Sellers terminate this Agreement in accordance with the
provisions of Section 12.02(d), at the time of such termination neither Sellers
nor the Company are in material breach (following the expiration of any
applicable cure period) of any of representations, warranties, covenants or
agreements set forth in this Agreement and the conditions set forth in Sections
7.04 and 7.06 would have been satisfied had Closing occurred on the date
Sellers terminate this Agreement, then Sellers shall be entitled to and shall
be paid the Deposit as liquidated damages (the "Liquidated Damages Amount"),
which Liquidated Damages Amount the parties agree is a fair and reasonable
measure of the damages that Sellers would sustain as a result of such
termination. Notwithstanding anything else set forth in this
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Section 2.01, Sellers' sole and exclusive recourse for Purchaser's breach of
its representations or obligations under this Agreement shall be to receive
the Liquidated Damages Amount on the terms and conditions set forth in this
Section 2.01. In any other case if the Closing does not occur, then,
pursuant to the Deposit Escrow Agreement, the Deposit and all earnings
thereon shall be paid to Purchaser. All payments by the Deposit Escrow Agent
shall be made in accordance with the procedures and other provisions set
forth in the Deposit Escrow Agreement.
SECTION 2.02. PAYMENT OF PURCHASE PRICE. On the Closing Date and subject
to the terms and conditions set forth in this Agreement, in reliance on the
representations, warranties, covenants and agreements of the parties contained
herein and in consideration of the sale, assignment, transfer and delivery of
the Securities, Purchaser shall pay to each Seller an amount equal to the
product of (a) the Purchase Price plus the aggregate exercise price of Options
being purchased on the Closing Date by Purchaser less the product of the
Purchased Percentage and Two Million Dollars ($2,000,000) (the "Escrow
Payment") and (b) the quotient determined by DIVIDING (i) the number of Total
Shares owned by such Seller (after giving effect to the exercise of outstanding
Options held by such Seller) by (ii) the Total Shares being sold by all Sellers
under this Agreement (the "Ownership Percentage"); provided, however, the
amount otherwise payable in respect of Options being sold by such Seller shall
be reduced by the sum of the aggregate exercise prices of the Options being
sold by such Seller. The Escrow Payment shall be paid by the Purchaser at the
Closing to CoreStates Bank, N.A., as escrow agent (the "Escrow Agent"), to be
held invested and disbursed pursuant to the terms of the Escrow Agreement
substantially in the form of EXHIBIT A attached hereto (the "Escrow
Agreement").
SECTION 2.03. PURCHASE PRICE ADJUSTMENTS.
(a) As used in this Section 2.03, the following terms shall have the
meaning set forth below:
"CURRENT ASSETS" means the Company's (i) accounts receivable, including
roaming revenue receivables, that are current to less than 91 days past due,
net of a reserve for bad debts, which reserve shall equal the sum of the
following amounts: zero percent (0%) of such accounts receivable that are not
past due or that are thirty (30) or fewer days past due, ten percent (10%) of
such accounts receivable that are more than thirty (30) days past due but less
than sixty-one (61) days past due and fifty percent (50%) of such accounts
receivable that are more than sixty (60) days but less than ninety-one (91)
days past due; (ii) inventory of cellular telephone handsets (excluding any
refurbished handsets) and ancillary equipment held for sale to subscribers and
which is not obsolete and will reasonably be expected based on past practices
to be consumed in the normal course of business within six months after the
Closing, reflected at net book value (the "Inventory"); provided in no event
shall the net book value of the Inventory used to determine Current Assets
exceed $150,000 and (iii) prepaid items which Purchaser will receive the
benefit of after the Closing such as prepaid rent, insurance, property taxes,
utility charges, fees and deposits paid, all determined as of 12:01 a.m. on the
Closing Date in accordance with GAAP.
"CURRENT LIABILITIES" means the Company's (i) subscriber deposits
received, (ii) deferred revenue, (iii) employee vacation and sick pay expense
(whether or not to be paid or time taken after the Closing), (iv) to the extent
not paid by the Company prior to Closing, salaries, bonuses, fringe benefits
and other remuneration payable to employees of the Company for services
3
rendered prior to the Closing (including any amount of stay bonuses), (v)
accrued and unpaid management fees and (vi) all trade payables and accrued
expenses incurred in the normal course of business, including, without
limitation, taxes, utility charges, special assessments, commissions and fees,
all determined as of 12:01 a.m. on the Closing Date in accordance with GAAP.
"GAAP" means generally accepted accounting principles consistently
applied.
"SUBSCRIBER" means a person or entity subscribing for cellular telephone
service on the Cellular System for at least the 30 consecutive day billing
cycle of the Cellular System ("Billing Cycle") ending on or prior to the
Closing Date who (i) pays for service under one of the Company's normal rate
plans, (ii) has paid for at least one full Billing Cycle's service and whose
account is active within the normal practices and procedures of the Company and
in no case is more than 90 days past due and (iii) was obtained as a subscriber
in the normal course of business of the Company consistent with past practice
and not as a result of (A) marketing efforts that are not customary in the
cellular telephone industry generally or which were not utilized by the Company
during 1996 and 1997 on a regular basis or (B) any other plans for which the
Company failed to obtain Purchaser's prior written consent; provided, however,
any person or entity having more than one cellular telephone number in service
on the Cellular System will be counted as a "Subscriber" for each such cellular
telephone number in service on the Closing Date if such person or entity
satisfies the requirements of this definition with respect to the service
provided by the Cellular System in respect of such cellular telephone number.
SCHEDULE 2.03(a) attached hereto sets forth all marketing and promotional plans
the Company has used or is using or proposes to use, from December 15, 1996 to
the Closing to acquire subscribers.
"TARGET NUMBER OF SUBSCRIBERS" means 14,000 plus the product of (x) 175
and (y) the number of 30-day periods elapsed from February 15, 1998 to the
earlier of (A) the Closing Date and (B) May 15, 1998 (pro rated for any partial
periods of less than 30 days).
"TENTATIVE SUBSCRIBER" means a person or entity which as of the Closing
Date meets all of the requirements for being a "Subscriber" (as defined in this
Section 2.03(a)) except for the failure to have been a cellular telephone
service customer for the full Billing Cycle immediately prior to the Closing
Date.
(b) WORKING CAPITAL ADJUSTMENT. The Base Price shall be increased (or
decreased) by an amount equal to the amount by which Current Assets exceeds (or
is less than) Current Liabilities as of the Closing Date (such increase or
decrease in the Base Price being referred to herein as the "Working Capital
Adjustment").
(c) SUBSCRIBER ADJUSTMENT. The Base Price shall be decreased (or
increased) by the product of (i) $400.00 and (ii) the excess (deficit) of the
Target Number of Subscribers over the number of Subscribers as of the Closing
Date (such increase or decrease in the Base Price being referred to herein as
the "Subscriber Adjustment"); PROVIDED, HOWEVER, for purposes of determining
the Subscriber Adjustment, a Tentative Subscriber shall be counted as a
Subscriber as of the Closing Date if as of the end of the Company's normal
Billing Cycle which commences after the Closing Date such Tentative Subscriber
is still an active cellular telephone service customer of the Cellular System
and whose account is not more than thirty (30) days past due.
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(d) CAPITAL EXPENDITURES ADJUSTMENT. The Base Price shall be increased
by the dollar amount of capital expenditures incurred and paid for by the
Company during the period from November 25, 1997 to the Closing Date (such
increase in the Base Price being referred to herein as the "Capital
Expenditures Adjustment"); provided that such capital expenditure is specified
(including type of equipment to be acquired) on the Capital Expenditure Plan
attached hereto as Schedule 4.17(a)(iii), or, for capital expenditures not
reflected in such Capital Expenditure Plan, Purchaser has given the Company its
prior written consent for the amount, type and purpose of each such capital
expenditure, which consent will not be unreasonably withheld by Purchaser as to
expenditures which, in the aggregate, do not exceed $200,000. Nothing herein
shall be deemed to prohibit the Company from making such capital expenditures
as the Company in its sole discretion shall deem appropriate, provided such
expenditures will not necessarily be included in the calculation of the Capital
Expenditures Adjustment.
(e) DEBT ADJUSTMENT. The Base Price shall be decreased by the sum of (A)
the amount of outstanding indebtedness of the Company for borrowed money
(including capitalized lease obligations and interest and prepayment premiums
not paid at or before Closing) as of the Closing and (B) if not included as a
Current Liability in calculating the Working Capital Adjustment, the amount of
accrued and unpaid management fees owed by the Company as of the Closing (such
decrease in the Base Price being referred to herein as the "Debt Adjustment").
(f) PURCHASER'S AND SELLERS' ESTIMATES. Sellers' Representative (as
defined in Section 14.04 below) shall prepare and submit to Purchaser, not
later than 5 business days prior to the Closing Date, a written good faith
estimate of the amount of the Working Capital Adjustment, Subscriber
Adjustment, Capital Expenditure Adjustment and Debt Adjustment (collectively,
the "Adjustments") in accordance with this Section 2.03 and Sellers' estimate
of the Purchase Price resulting from the Adjustments ("Sellers' Estimate").
Sellers' Estimate shall be accompanied by details supporting the calculation of
each Adjustment and Sellers' Estimate. The Sellers' Estimate shall be based
upon the books and records of the Company. The Sellers' Estimate shall be
accompanied by a certificate signed by the Sellers' Representative certifying
that Sellers' Estimate was calculated in good faith and in accordance with the
provisions of this Section 2.03. After the delivery of Sellers' Estimate and
prior to the Closing, Purchaser and Sellers' Representative shall attempt to
resolve any disputes between Sellers' Representative and Purchaser with respect
to Sellers' Representative's proposed Adjustments. In connection therewith,
Purchaser shall have full access to all records of the Company related to
Sellers' Representative proposed Adjustments. Prior to Closing, Purchaser
shall advise Sellers' Representative in writing as to any dispute Purchaser has
with Sellers' Estimate and provide the Sellers' Representative with Purchaser's
calculation of the Adjustments and the Purchase Price, accompanied by a
certificate signed by the President or Chief Financial Officer of Purchaser
certifying that Purchaser's calculation was made in good faith and shall be
accompanied by supporting documents and information, to the extent the same is
available to Purchaser ("Purchaser's Estimate"). In the event that (i)
Purchaser's Estimate of the Purchase Price is less than $25,000 less than
Sellers' Estimate, the Closing shall proceed with the Purchase Price for
purposes of the payment to be made at Closing based upon Sellers' Estimate; or
(ii) the Purchaser's Estimate of the Purchase Price is more than $25,000 less
than Sellers' Estimate, then the mid-point between Sellers' Estimate and
Purchaser's Estimate shall be used as the Purchase Price for purposes of the
Closing.
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(g) POST-CLOSING ADJUSTMENTS. Within 120 days after the Closing Date,
Purchaser shall deliver to the Sellers' Representative a certificate (the
"Closing Certificate") signed by the President or Chief Financial Officer of
Purchaser providing a compilation of the Adjustments to be made pursuant to
this Section 2.03, including any changes in the Adjustments used to determine
the Purchase Price at Closing, together with a statement of any additional
amount owing to either party (the "Adjustment Amount"), a copy of any
supporting documents, work papers, Subscriber records and other data relating
to such Closing Certificate and such other supporting evidence as the Sellers'
Representative may reasonably request either prior to or after delivery
thereof. If the Sellers' Representative shall conclude that the Closing
Certificate does not accurately reflect the Adjustments to be made to the Base
Price in accordance with this Section 2.03 and the Adjustment Amount, the
Sellers' Representative shall, within 30 days after their receipt of the
Closing Certificate (such 30-day period being referred to as the "Response
Period"), deliver to Purchaser a written statement of any discrepancies
believed to exist. If the Sellers' Representative fails to so notify Purchaser
of any discrepancies, then the calculation of the Purchase Price set forth in
the Purchaser's Closing Certificate shall be controlling for all purposes
hereof and, on or before the fifth (5th) day following the expiration of the
Response Period, (i) if the Purchaser is obligated to pay the Sellers the
Adjustment Amount, the Purchaser shall pay each Seller the product of (x) the
Adjustment Amount and (y) such Seller's Ownership Percentage as determined on
the Closing Date and (ii) if the Sellers are obligated to pay the Purchaser the
Adjustment Amount, the Sellers, acting through the Shareholder Representative,
shall pay the Purchaser the Adjustment Amount. On or before the fifth day
following the earlier to occur of the expiration of the Response Period and the
date Purchaser receives Sellers' Representative's statement of discrepancies,
Purchaser or the Sellers, as the case may be, shall pay the portion of the
Adjustment Amount, if any, as to which there is no discrepancy (the "Agreed
Adjustment Amount") and in accordance with each Seller's Ownership Percentage,
if the Agreed Adjustment Amount is owing from the Purchaser. Purchaser and the
Sellers' Representative shall use good faith efforts to jointly resolve their
discrepancies within 15 days of Purchaser's receipt of the Sellers'
Representative's written statement of discrepancies, which resolution, if
achieved, shall be binding upon the Sellers and Purchaser and not subject to
further dispute or review. In the event Purchaser and Sellers' Representative
are unable to resolve their differences within such fifteen (15) day period,
then either party may request that the matter be resolved by Xxxxxx Xxxxxxxx
LLP (the "Independent Accountants"). In submitting a dispute to the
Independent Accountants, each of the parties shall furnish, at its own expense,
the Independent Accountants and the other party with such documents and
information as the Independent Accountants may reasonably request. Each party
may also furnish to the Independent Accountants such other information and
documents as it deems relevant with the appropriate copies and notification
being given to the other party. The Independent Accountants may conduct a
conference concerning the disagreements between Sellers' Representative and
Purchaser at which conference each party shall have the right to present
additional documents, material and other evidence and to have present its
advisors, accountants and counsel. The Independent Accountants shall promptly
render a decision on the issues presented and shall provide the Purchaser and
the Sellers' Representative with a statement of the amount owing, taking into
account the payment of the Agreed Adjustment Amount (the "Final Adjustment
Amount"), and such decision shall be final and binding on the parties. The
fees and expenses of the Independent Accountants shall be divided equally
between Purchaser, on the one hand, and Sellers, on the other hand. Within 5
days of receipt of the Independent Accountants' decision with respect to such
dispute, (i) if Purchaser is determined to owe the Final Adjustment Amount to
the Sellers, Purchaser shall pay each Seller the product of (x) the Final
Adjustment Amount
6
and (y) such Seller's Ownership Percentage and (ii) if the Sellers are
determined to owe an amount to Purchaser, Sellers, acting through the
Shareholder Representative, shall pay the Final Adjustment Amount to
Purchaser. All amounts owed by Purchaser or Sellers to the other in
accordance with this Section 2.03(g) shall be paid by wire transfer of
immediately available funds and shall not bear any interest. Any amount due
Purchaser from Sellers under this Section 2.03(g) and not paid when due may
also be paid from the funds held pursuant to the Escrow Agreement.
ARTICLE III
CLOSING
Subject to the terms and conditions hereof, the closing (the "Closing")
shall take place at the offices of Xxxxxxx & Xxxxxx, 0000 Xxxxxxxx Xxxxx Xxxxx,
Xxxxxxxxxx, Xxxxx Xxxxxx 00000, on the date (the "Closing Date") which is the
last day of the Company's normal subscriber billing cycle (or if not a business
day, the next business day) following (or occurring on) the later of (a) the
date that (i) the FCC granted its consent to the change of control of the
Company's licenses, including the FCC authorizations to operate a cellular
telephone system in the Cellular Area (the "Cellular Authorizations") and
microwave paths (if any) used in connection with such cellular operations (the
"Microwave Authorizations" and together with the Cellular Authorizations, the
"FCC Authorizations") to the Purchaser by a Final Order (as defined in Section
7.04) or (ii) if applicable, Sellers' Representative receives from Purchaser
the Final Waiver Notice (as defined in Section 7.04), or (b) the waiting period
under the Xxxx-Xxxxx Act expires or is terminated.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
The Sellers, jointly and severally (severally and not jointly with respect
to Sections 4.02, 4.05 and Section 4.12 and the third sentence of Section
4.04, as they relate to an individual Seller and not the Company), represent,
warrant, covenant and agree that:
SECTION 4.01. ORGANIZATION, QUALIFICATION. The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of California and has all necessary power and authority to own and
operate its properties and to carry on its business as now being conducted or
proposed to be conducted. Neither the Company's ownership of property or the
conduct of its business requires qualification in any jurisdiction other than
the State of California. Attached hereto as SCHEDULE 4.01 is a true and
complete copy of the Certificate of Incorporation, as amended to date, of the
Company.
SECTION 4.02. CONSENTS, AUTHORIZATION, EXECUTION AND DELIVERY OF
AGREEMENT. Each Seller has full power, authority and capacity, and the Company
has full corporate power, authority and capacity to execute and deliver this
Agreement and to carry out the transactions contemplated hereby. The Board of
Directors of the Company has duly approved and authorized the execution and
delivery of this Agreement and the consummation of the transactions
contemplated hereby, and no other proceedings, corporate or otherwise, on the
part of Sellers or the Company are necessary to approve and authorize the
execution and delivery of this Agreement by Sellers and the Company and the
consummation by Sellers and the Company of the transactions contemplated
hereby, subject to the other governmental and third-party consents referred to
in Section 7.04. This Agreement constitutes a valid and binding agreement of
each
7
Seller and the Company enforceable against Sellers and the Company in
accordance with its terms.
SECTION 4.03. SUBSIDIARIES AND INTERESTS IN OTHER COMPANIES. The Company
has no subsidiaries, and does not own or control any shares or other securities
of, or have any other proprietary interest in, any individual, corporation,
partnership, limited liability company, joint venture, business association or
other entity (a "Person").
SECTION 4.04. CAPITAL STOCK; INTERESTS. The authorized capital stock of
the Company consists of 10,000,000 shares of Common Stock and 2,000,000 shares
of Preferred Stock, of which 24,558.2215 shares of Common Stock are issued and
outstanding and 2,000 shares of Common Stock are reserved for issuance upon
exercise of Options, and no Preferred Stock has been issued. SCHEDULE 4.04
accurately sets forth the record and beneficial owners (as reflected on the
Company's books) of the Company's Outstanding Shares and Options and the number
of Shares and Options owned by each shareholder. Except as set forth on
SCHEDULE 4.04, there are no subscriptions, options, warrants, calls, rights,
tag-along rights, drag-along rights, rights of first refusal, contracts,
commitments, voting trusts, proxies, understandings, restrictions or
arrangements relating to the issuance, voting, sale or transfer by the Sellers
or the Company of any shares of such capital stock, including rights of
conversion or exchange under any outstanding securities or other instruments.
All outstanding shares of capital stock of the Company have been duly
authorized, validly issued and are fully paid, non-assessable and free of
preemptive rights. There are no accrued dividends or other amounts due and
owing with respect to the Shares.
SECTION 4.05. OWNERSHIP OF SECURITIES. Each Seller is the record and
beneficial owner of the Shares and Options set forth opposite its name on
SCHEDULE 4.04. Each Seller has, and will convey to Purchaser at Closing, good
and marketable title to the Shares and Options, free and clear of all
Encumbrances of any kind whatsoever.
SECTION 4.06. REAL PROPERTY - OWNED. The Company does not own any real
property. The real property leased by the Company related to the Business has
never been owned by the Company.
SECTION 4.07. REAL AND PERSONAL PROPERTY - LEASED. Set forth on SCHEDULE
4.07(a) (in the case of real property) and SCHEDULE 4.07(b) (in the case of
personal property), are true and accurate listings of all real and personal
property leases to which the Company is a party (other than personal property
leases with annual payments of less than $2,000 and which leases, together with
the other contracts and agreements not required to be disclosed in the
aggregate have annual payments of less than $25,000 or which are terminable
without penalty on one month or less notice) setting forth (i) the name of the
lessor and (ii) with respect to the real property leases, a description of the
property leased and its use. Except as set forth on SCHEDULE 4.07(a) (in the
case of leased real property) and SCHEDULE 4.07(b) (in the case of leased
personal property), all of the leases set forth are in full force and effect
and are valid, binding and enforceable in accordance with their respective
terms, (ii) all accrued and currently payable rents and other payments required
by such leases have been paid, (iii) the Company and each other party thereto
have complied with all respective covenants and provisions of such leases, (iv)
neither the Company nor any other party is in default in any respect under any
such leases, (v) no party has asserted any defense, set off, or counter claim
thereunder, (vi) no waiver, indulgence or
8
postponement of any obligations thereunder have been granted by any party,
and (vii) the validity or enforceability of any such lease will not be
adversely affected by the sale of the Securities to Purchaser.
SECTION 4.08. EXISTING CONTRACTS.
(a) SCHEDULE 4.08 hereto sets forth (i) all contracts, commitments and
other agreements (other than the Company's standard subscriber agreements for
cellular service) in effect on the date hereof with the Company's subscribers,
all leases to which the Company is a party (other than leases described on
SCHEDULE 4.07(a) OR (b), and (ii) all other contracts, credit agreements,
notes, debentures, instruments, mortgages, trusts, commitments and agreements
(other than leases described on SCHEDULE 4.07(a) OR (b) and agreements with
annual payments of less than $2,000 and which agreements, together with the
other leases and contracts not required to be disclosed, in the aggregate have
annual payments of less than $25,000 or which are terminable without penalty on
one month or less notice) or commitments (written or oral) to which the Company
is a party which relate to the ownership or the operation of the Business (the
"Existing Contracts") including, without limitation, the following:
(i) all purchase orders, agreements and commitments, other than
(a) roamer agreements entered into by Bay Area Cellular Telephone
Company with third parties and which govern roamer traffic on
Company's network which is switched through the facilities of Bay
Area Cellular Telephone Company, and (b) the purchase orders that are
included in the Budget ("Purchaser Orders"), for the purchase or sale
of advertising, services, materials, products or supplies which (x)
involve aggregate payments by the Company of more than $2,000 or (y)
involve aggregate payments to the Company of more than $25,000, or
(z) which were entered into other than in the ordinary course of
business of the Company;
(ii) all written employment contracts with any officer,
consultant, director or employee of the Company or any partner,
consultant or employee of the Company and any such oral contracts
which are not terminable at will by the Company;
(iii) all written and oral plans, contracts or arrangements
providing for stock options or share purchases, bonuses, pensions,
deferred or incentive compensation, retirement or severance payments,
profit-sharing, insurance or other benefit plans or programs for any
officer, consultant, director, shareholder or employee of the
Company;
(iv) all contracts for construction or for the purchase of real
estate, improvements, fixtures, equipment, machinery and other items
which under GAAP constitute capital expenditures and which
individually or in the aggregate for any related group of items
involve expenditures of the Company in excess of $2,000;
(v) all contracts relating in any way to direct or indirect
indebtedness for borrowed money or evidenced by a bond, debenture,
note or other evidence of indebtedness (whether secured or unsecured)
of or to the Company, including but
9
not limited to, indebtedness by way of lease or installment purchase
arrangement, guarantee, reimbursement obligations pertaining to letters
of credit, purchase price discount obligations, undertakings on which
others rely in extending credit, or otherwise, and all mortgages, pledges,
conditional sales contracts, chattel and purchase-money mortgages and
other security arrangements with respect to any real estate,
improvements, equipment, other personal property or fixtures, used or
owned by the Company, except in each case for contracts individually
involving less than $5,000 and in the aggregate less than $25,000;
(vi) all agreements with agents, sales representatives,
suppliers, distributors, advertising agencies, insurance companies,
manufacturers, brokers and vendors involving the payment or receipt
of more than $5,000 per year;
(vii) all licenses, sublicenses, franchises, and royalty, joint
venture, partnership, profit or expense sharing or similar
agreements;
(viii) all agreements relating to the acquisition by the
Company of the assets, stock or business of another company including
any predecessor entity;
(ix) all material agreements related to the expansion of any
current product or service or the launch of any new product or
service, including those related to new markets;
(x) all material software license and servicing agreements
relating to the Company's data processing operations;
(xi) all contracts restricting the Company from engaging in any
line of business or competing with any Person or in any geographical
area, or from using or disclosing any information in its possession
(other than routine supplier and customer confidentiality
agreements);
(xii) all contracts or commitments with any affiliate of the
Company and all contracts or commitments not made in the ordinary
course of its business;
(xiii) all commitments, contracts or agreements which are
expected to result in any loss upon completion of performance thereof
in excess of $5,000;
(xiv) all other contracts, except those which are (x)
cancelable on 30 days' or less notice without any penalty or other
financial obligation or (y) if not so cancelable, involve annual
aggregate payments by or to the Company of $5,000 or less.
(b) The Sellers have heretofore delivered to Purchaser true and correct
copies of the Existing Contracts. Except as disclosed on SCHEDULE 4.08,
neither the Company nor any Seller has knowledge of any breach, anticipated
breach, or violation by the other parties to any Existing Contract. The
Existing Contracts are valid, binding, and in full force and effect and the
Company is in compliance with its obligations under such Existing Contracts.
Except for the Existing Contracts and the Purchase Orders, the Company has not
entered into any other
10
contract, commitment or agreement (other than agreements with annual payments
of less than $2,000 and which agreements, together with the other leases and
contracts not required to be disclosed, in the aggregate have annual payments
of less than $25,000 or which are terminable without penalty on one month or
less notice) relating to the ownership of or the operation of the Business,
including, but not limited to, rights-of-way, rights of entry, licenses,
easements, leases, or guaranty agreements. There are no claims by third
parties that the Company is required to enter into other agreements to enable
it to continue to own and operate the Business as it is presently being
operated.
SECTION 4.09. GOVERNMENTAL LICENSES. Except as set forth on SCHEDULE
4.09, the Company holds all necessary licenses, consents, permits, approvals
and authorizations of public and governmental bodies including, without
limitation, the FCC Authorizations, authorizations from the California Public
Utilities Commission (the "CPUC") and other state, counties and municipalities
served by the Business, which are required in connection with the ownership and
operation of the Business (collectively referred to as the "Authorizations").
All Authorizations are in full force and effect. The Company has complied with
the terms of the Authorizations which it holds and there are no pending
modifications, amendments or revocations of the Authorizations which would
adversely affect the ownership or the operation of the Business. All fees due
and payable from the Company to governmental authorities pursuant to the
Authorizations have been paid. All reports required of the Company to be filed
in connection with the Authorizations have been timely filed (except such
failures to timely file which, in the aggregate, have not caused, and would not
reasonably be expected to cause, the Company to suffer a Material Loss) and are
accurate and complete. True and correct copies of the Authorizations, and all
amendments thereto to the date hereof, have been delivered by Sellers to
Purchaser and are identified on SCHEDULE 4.09 hereto. The terms and conditions
of service of the Business, the rates the Company charges for its cellular
telephone services and equipment and the transfer of the ownership of the
Business are not subject to regulation or supervision by any applicable state
public utilities commission or other similar state governmental instrumentality
other than the CPUC and pursuant to applicable state blue sky laws.
SECTION 4.10. COMPLIANCE WITH LAWS. Except as set forth on SCHEDULE
4.10, Sellers and the Company are currently complying with and have so complied
with, and are not in default under, in violation or contravention of, any
statute, law (including environmental or employment laws), ordinance, decree,
order, rule, regulation of any governmental body applicable to the business of
the Company or the Business, including, without limitation, the rules and
regulations of the FCC and the CPUC.
SECTION 4.11. NO VIOLATION OF EXISTING AGREEMENTS. Subject to the
consents for the Existing Contracts identified on SCHEDULE 4.11, the execution,
delivery and performance of this Agreement by the Sellers and the Company and
Sellers' transfer of the Shares to Purchaser (i) will not violate any
provisions of any law or any provision of the Company's certificate of
incorporation or by-laws, (ii) will not, with or without the giving of notice
or the passage of time, or both, conflict with or result in any breach of any
of the terms or conditions of, or constitute a default under any Existing
Contracts, and (iii) will not result in the creation of any Encumbrance upon
the assets of the Company.
SECTION 4.12. LITIGATION AND LEGAL PROCEEDINGS. Except as set forth on
SCHEDULE 4.12, there is no outstanding judgment against the Company or any
Seller or any director, officer or
11
stockholder of the Company affecting the Business or the Shares or which
questions the validity of any action taken or to be taken pursuant to or in
connection with the provisions of this Agreement. Except as set forth on
SCHEDULE 4.12, there is no claim, litigation, proceeding or investigation
pending, or, to the Company's or any Seller's knowledge, threatened, against
the Company or any Seller or any director, officer or stockholder of the
Company affecting the Business or which questions the validity of any action
taken or to be taken pursuant to or in connection with the provisions of this
Agreement and there is no basis for any such claim, litigation, proceeding or
investigation. Except for matters affecting the cellular telephone industry
generally or as set forth on SCHEDULE 4.12, there are no proceedings pending
to which the Company, any Seller or any director, officer or stockholder of
the Company is a party or, to the Company's or any Seller's knowledge,
threatened, nor any demands by any governmental agency, utility or other
party, to terminate, modify or adversely change the terms and conditions of
the Company's rights with respect to the Authorizations or Existing Contracts.
SECTION 4.13. ENVIRONMENTAL COMPLIANCE. (a) Except as set forth on
SCHEDULE 4.13 hereto, (i) none of the Sellers or the Company has received any
notice alleging any violation of any Environmental Law; (ii) the Company is in
compliance with all Environmental Laws; (iii) the Company has obtained and
complies with all required governmental environmental permits with respect to
its business as presently conducted; (iv) the Company has not generated, used,
transported, treated, stored, released or disposed of, or suffered or permitted
anyone else to generate, use, transport, treat, store, release or dispose of
any Hazardous Substance (as hereinafter defined) with respect to its business
in violation of any Environmental Laws (as hereinafter defined); (v) there has
not been any generation, use, transportation, treatment, storage, release or
disposal of any Hazardous Substance in connection with Company's ownership and
conduct of the Business or on, in or under any property or facility used, owned
or leased by the Company or any adjacent properties or facilities, which has
created or might reasonably be expected to create any liability under any
Environmental Laws or which would require reporting to or notification of any
governmental entity; (vi) no friable asbestos or polychlorinated biphenyl, and
no underground storage tank, is contained in or located on or under any
property or facility owned, used or leased by the Company; and (vii) any
Hazardous Substance handled or dealt with in any way with respect to the
business of the Company, or during the Company's ownership of its business, has
been and is being handled or dealt with in compliance with all Environmental
Laws.
(b) For purposes of this Agreement, the term "Hazardous Substance"
shall mean any substance which, as of the date of this Agreement, is listed as
hazardous or toxic in the regulations implementing the Comprehensive
Environmental Response Compensation and Liability Act of 1980, as amended
("CERCLA"), the Response Compensation and Liability Act ("RCLA"), the Resource
Conservation and Recovery Act of 1976, as amended ("RCRA"), or listed as a
hazardous substance under any applicable state environmental laws, or any
substance which has been determined by regulation, ruling or otherwise by any
agency or court to be a hazardous or toxic substance regulated under federal or
state law, and shall include petroleum and petroleum products.
(c) For purposes of this Agreement, the term "Environmental Laws"
shall mean CERCLA, RCRA, RCLA and any applicable statutes, regulations, rules,
ordinances, codes, licenses, permits, orders, approvals, plans, authorizations,
concessions, franchises and similar items of all governmental authorities and
all applicable judicial, administrative and regulatory
12
decrees, judgments and orders, any of which relate to the protection of human
health or the environment from the effects of Hazardous Substances, including
but not limited to those pertaining to reporting, licensing, permitting,
investigating and remediating emissions, discharges, releases or threatened
releases of Hazardous Substances into the air, surface water, groundwater or
land, or relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of Hazardous Substances.
SECTION 4.14. EMPLOYEES. SCHEDULE 4.14 sets forth a true and complete
list of the names and salaries of all employees of the Company and of Unitel.
Except as set forth on SCHEDULE 4.14, such employees are employees at will.
The Company has withheld all amounts required by law or agreement to be
withheld by it from the wages, salaries and other payments to its employees and
is not liable for any arrears of wages or any taxes for failure to comply with
any of the foregoing. There are no collective bargaining agreements covering
any of the employees of the Company or Unitel. Neither the Company nor Unitel
has breached or otherwise failed to comply with any provision of any collective
bargaining agreement or other labor union contract applicable to any of its
employees. No consent of any union (or similar group or organization) is
required in connection with the consummation of the transactions contemplated
hereby. There are no pending, or, to the Company's knowledge threatened or
anticipated, and, there is no factual basis for any (a) employment
discrimination (including age, sex, racial or handicap discrimination) charges
or complaints against or involving the Company or Unitel, before any federal,
state, or local board, department, commission or agency or (b) unfair labor
practice charges or complaints, disputes or grievances affecting the Company or
Unitel. There are no pending, or, to the Company 's knowledge threatened or
anticipated (a) union representation petitions respecting the employees of the
Company or Unitel, (b) efforts being made to organize any of the employees of
the Company or Unitel, or (c) strikes, slow downs, work stoppages, or lockouts
or threats affecting the Company or Unitel.
SECTION 4.15. EMPLOYEE BENEFITS. Except as set forth on SCHEDULE 4.15
attached hereto, neither the Company nor Unitel has any pension plan, profit
sharing plan, deferred compensation plan, stock option or stock bonus plan,
saving plan, or other benefit plan, policy, practice, or procedure or contract
concerning employee benefits or fringe benefits of any kind (collectively,
"Employee Benefit Plans"), whether or not governed by the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"). Except as set forth on
SCHEDULE 4.15, neither the Company nor Unitel is a party to any employment
contract. Except as set forth on SCHEDULE 4.15 attached hereto, no officer,
director or employee of the Company or Unitel participates or is eligible to
participate in a "defined benefit pension plan" as defined in Section 3(35) of
ERISA, maintained or made available by the Company. Except as set forth on
SCHEDULE 4.15 attached hereto, neither the Company or Unitel nor any Controlled
Group Member maintains or contributes to, or ever maintained or contributed to,
a plan under which any employee of the Company participates or is eligible to
participate subject to Section 412 of the Internal Revenue Code of 1986, as
amended (the "Code"). The term "Controlled Group Member" means any trade or
business (whether or not incorporated) which is, or was at any relevant time,
aggregated with the Company or Unitel pursuant to Section 414(b), (c), (m) or
(o) of the Code. Except as set forth on SCHEDULE 4.15 attached hereto, neither
the Company or Unitel nor any ERISA Affiliate has participated in or made
contributions to any "multiemployer plan" as defined in Section 4001(a)(3) of
ERISA. The term "ERISA Affiliate" means each trade or business (whether or not
incorporated) which is, or was at any relevant time, treated as a single
employer with the Company or Unitel pursuant to Section 4001(b)(1) of ERISA.
The Sellers have furnished
13
Purchaser with true, complete and accurate copies of all Employee Benefit
Plans and related trust agreements as in effect on the date hereof, all
summary plan descriptions, and the latest annual reports filed with the
Department of Labor or the Internal Revenue Service (the "IRS").
Each of the Employee Benefit Plans is in compliance with all applicable
requirements of ERISA, the Code, and other applicable law. Each of the
Employee Benefit Plans has been administered in all material respects in
accordance with its terms and with applicable legal requirements. All
"employee pension plans" (within the meaning of Section 3(2) of ERISA) have
been determined by the IRS to be qualified under Section 401(a) of the Code,
and no action or proceeding has been instituted or threatened which would
affect the qualification of any pension plan of the Company or Unitel. No
unfunded liabilities, based upon the Pension Benefit Guarantee Corporation (the
"PBGC") rates currently in effect for plan terminations, exist with respect to
any Employee Benefit Plan which is a "defined benefit plan" (within the meaning
of Section 3(35) of ERISA). There has not been any reportable event with
respect to any pension plan of the Company or Unitel. Neither Unitel nor the
Company has engaged in a "prohibited transaction" or breach of fiduciary
responsibility with respect to any Employee Benefit Plan which could subject
Purchaser or any affiliate of Purchaser to a penalty tax or other liability
under ERISA or the Code. Neither the Company or Unitel nor any ERISA Affiliate
of the Company or Unitel has ever incurred any liability under Title IV of
ERISA to the PBGC or to a multi-employer pension plan.
SECTION 4.16. TAX MATTERS. (a) Except as set forth on SCHEDULE 4.16
attached hereto, (i) the Company and each Seller has timely filed (except such
failures to timely file which, in the aggregate, have not caused, and would not
reasonably be expected to cause, the Company to suffer a Material Loss) all Tax
(as defined below) returns and statements which it is required to file with
respect to the Company; (ii) all such returns are complete and accurate and
disclose all Taxes required to be paid for the periods covered thereby; (iii)
neither the Company nor any Seller has waived any statute of limitations in
respect of Taxes or agreed to an extension of time with respect to a Tax
assessment or deficiency; (iv) no assessment of any additional Taxes for
periods for which returns have been filed has been asserted and no basis exists
therefor; (v) to the Company's and each Seller's knowledge, there are no
unresolved questions or claims raised by any Taxing authority concerning the
Tax liability of the Company, (vi) all Taxes which the Company is required by
law to withhold or to collect for payment have been duly withheld and
collected, and have been paid and (vii) the Company is not and has never made
an election to be taxed as an "S Corporation" (within the meaning of Section
1361 of the Code). The Company has paid all Taxes due prior to the date hereof
and will pay when due (or contest in good faith by appropriate proceedings) all
Taxes which may become due on or before the Closing Date.
(b) For purposes of this Section 4.16, the term "Tax" or "Taxes" means
all taxes, charges, fees, levies, imposts and other assessments including all
income, sales, use, goods and services, value added, capital, capital gains,
alternative net worth, transfer, profits, withholding, payroll, employer
health, excise, real property and personal property taxes, and any other taxes,
customs duties, stamp duties, fees, assessments or similar charges in the
nature of a tax, together with any interest, fines and penalties imposed by any
governmental authority (including federal, state, provincial, municipal and
foreign governmental authorities), and whether disputed or not.
14
SECTION 4.17. FINANCIAL STATEMENTS.
(a) The Purchaser has heretofore been furnished with the following:
(i) true and complete copies of the audited balance sheets of
the Company as of December 31, 1994, December 31, 1995 and December
31, 1996 and the related audited statements of income, cash flows and
stockholders equity, for the years then ended, each of such balance
sheet and income statement being attached hereto as SCHEDULE
4.17(a)(i) (collectively, the "Audited Historical Financial
Statements");
(ii) true and complete copies of the unaudited balance sheet
(the "December Balance Sheet") of the Company at December 31, l997
(the "Balance Sheet Date") and the related unaudited statement of
income for the twelve-month period then ended (the "Twelve Month
Income Statement"; and together with the December Balance Sheet, the
"Current Financial Statements"), such balance sheet and income
statement being attached hereto as SCHEDULE 4.17(a)(ii);
(iii) the capital expenditure budget for the Company providing
for expenditure of capital items in each quarter for the period from
January 1, 1998 through December 31, 1998 and attached hereto as
SCHEDULE 4.17(a)(iii) (the "Budget").
(b) Each of the Audited Historical and Current Financial Statements
delivered under Section 4.17(a)(i) and (ii) hereof was prepared in accordance
with GAAP applied on a basis consistent with prior periods and past practices
and, with respect to the Current Financial Statements, subject to normally
recurring year-end adjustments and except for the omission of certain footnotes
and other presentation items required by GAAP with respect to audited financial
statements; each of the balance sheets included in such Audited Historical and
Current Financial Statements fairly presents the financial condition of the
Company as at the close of business on the date thereof; and each of the
statements of income included in such Audited Historical and Current Financial
Statements fairly presents the results of operations of the Company for the
fiscal period then ended.
(c) Except as set forth on SCHEDULE 4.17(c) attached hereto, since the
Balance Sheet Date, the Company has not:
(i) sold, assigned or transferred any of its assets or
properties except pursuant to existing contracts or commitments
disclosed on any Schedule to this Agreement or inventory in the
ordinary course of business consistent with past practice); or
canceled any material debts or material claims;
(ii) waived any material rights, whether or not in the ordinary
course of business;
(iii) entered into any other transaction, except in the
ordinary course of business, or entered into any transaction with any
director, officer or shareholder of the Company, or any affiliate or
family member of any such Person;
15
(iv) suffered any material damage, destruction or casualty loss
with respect to its assets or properties whether or not covered by
insurance;
(v) declared or paid any dividend, made any distribution of any
of its assets to any director, officer or shareholder of the Company
or any affiliate or family member of any such Person or redeemed or
purchased any of its shares of capital stock or other equity
interest;
(vi) except as disclosed in writing by the Sellers to
Purchaser, the Company has not obligated itself or the Business to
give free or reduced price service to customers with respect to the
Business other than promotions offered in the ordinary course of
business and set forth on SCHEDULE 2.03(a);
(vii) made any increases in the base compensation, bonuses,
paid vacation time allowed or material fringe benefits for its
partners, officers, employees or consultants, except for normal
periodic increases in base compensation for employees made pursuant
to established compensation policies of the Company applied on a
basis consistent with that of prior years;
(viii) suffered to its knowledge any material adverse change in
the business relationship of the Company with any supplier;
(ix) made any capital expenditures, additions or improvements
or commitments for the same, except those which do not exceed
$100,000 in the aggregate for the Company;
(x) entered into any contract, commitment or agreement under
which it has outstanding indebtedness for borrowed money or for the
deferred purchase price of property in excess of $100,000, or has the
right or obligation to incur any such indebtedness or obligation, or
made any loan or advance to any Person other than advances to
employees for business expenses not exceeding $50,000 in the
aggregate for the Company;
(xi) paid any bonuses, deferred or otherwise, or deferred any
compensation to any of its directors, officers or employees in excess
of $25,000 to any such person for the Company's 1996 and 1997 fiscal
years, except as reflected in the Historical Financial Statements;
(xii) made any material change in accounting procedures or
practices;
(xiii) mortgaged or pledged any of its properties or assets,
tangible or intangible, or subjected them to any Encumbrances, except
Encumbrances for current property taxes not yet due and payable;
(xiv) except for the sale of inventory in the ordinary course
of business, entered into any agreement or arrangement granting any
rights to purchase or
16
lease any of its assets, properties or rights or requiring the consent
of any Person to the transfer, assignment or lease of any such assets,
properties or rights;
(xv) disposed of or permitted to lapse any rights to the use of
any patent, trademark, service xxxx, logo, trade name or copyright
identified on SCHEDULE 4.23 hereto, or disposed of or disclosed to
any Person (other than Persons subject to confidentiality obligations
in favor of the Company) any trade secret, formula, process, method
or know-how not theretofore a matter of public knowledge;
(xvi) suffered any resignation or termination of any key
officer or key employee; or
(xvii) entered into any agreement or understanding to do any of
the foregoing.
SECTION 4.18. SUBSCRIBERS; AGENTS. SCHEDULE 4.18 attached hereto sets
forth (a) the number of subscribers receiving service from Cellular System as
of a date within 5 days prior to the date hereof and (b) a list of all agents
who sell cellular telephone equipment and/or service on behalf of the Company
as of the date hereof, together with such agent's address and the number of
gross activations produced by each agent from January 1, 1997 to December 31,
1997.
SECTION 4.19. INSURANCE. Sellers have delivered previously to Purchaser
all policies of title, liability, fire, worker's compensation and other forms
of insurance (including bonds) of the Company which insure against risks and
liabilities to an extent and in a manner customary in the cellular industry and
which are adequate to provide coverage against risks of a nature to which the
Company would normally be exposed in the operation of its business. All such
insurance policies and binders are in full force and effect. The Company has
complied in all material respects with each of such insurance policies and
binders and have not failed to give any notice or present any claim thereunder
in a due and timely manner. There are no outstanding unpaid claims under any
of such insurance policies or binders and the Company has not received any
notice of cancellation or non-renewal of any such policy or binder. There is
no inaccuracy in any application for such policies or binders which would
reasonably be expected to materially adversely affect coverage thereunder. No
insurance carrier has canceled or reduced any insurance coverage for the
Company or has given any notice or other indication of its intention to cancel
or reduce any such coverage. All premiums due and payable under any such
insurance policies or binders of the Company have been duly paid or accrued to
the extent taken into account in the Working Capital Adjustment.
SECTION 4.20. BROKERS. Except for Xxxxxxx & Associates, none of the
Sellers or the Company have engaged any agent, broker or other person acting
pursuant to its express or implied authority which is or may be entitled to a
commission or broker or finder's fee in connection with the transactions
contemplated by this Agreement or otherwise with respect to the sale of the
Shares.
SECTION 4.21. UNDISCLOSED LIABILITIES; GUARANTEES. Except as disclosed
on Schedules 4.12 and/or 4.21, the Company does not have any liabilities or
obligations of any nature, whether absolute, accrued, contingent, known or
unknown, or otherwise, which are not reflected or reserved against the December
Balance Sheet except for liabilities and obligations that have
17
arisen in the ordinary and usual course of business and consistent with past
practice (none of which results from, arises out of, relates to, is in the
nature of, or caused by any breach of contract, breach of warranty, tort,
infringement or violation of law). Except as disclosed on SCHEDULE 4.21 or
in the Audited Historical and Current Financial Statements, there are no
contracts or commitments by the Company guaranteeing the payment or
performance by others, or whereby, except for the endorsement of checks in
the regular and ordinary course of its business, the Company in any way is or
will be liable with respect to the obligations of any other Person.
SECTION 4.22. PRICING OF SERVICES. SCHEDULE 4.22 sets forth a
description of all rate plans (including promotional rate plans) currently
offered to subscribers of the Cellular System.
SECTION 4.23. PROPRIETARY RIGHTS. The Company owns or has legal right to
use all patents, trademarks, tradenames, service marks and logos including
applications therefor, and all trade secrets, inventions and proprietary rights
and processes (all such items being hereinafter referred to as "Intangible
Property"), presently used in the conduct of the Business of the Company,
without any infringement upon the proprietary rights of others. All patents,
registered trademarks, trademark applications, trade names, service marks, and
registered logos used or owned by or licensed to the Company in connection with
its Business are set forth on SCHEDULE 4.23, and, in the case of any Intangible
Property owned by the Company, have been duly registered in, filed in, or
issued by the United States Patent and Trademark Office or the corresponding
offices of other jurisdictions (foreign or domestic) to the extent set forth on
SCHEDULE 4.23. All material licenses held by the Company, whether as licensee
or licensor, are also set forth on SCHEDULE 4.23. SCHEDULE 4.23 accurately
sets forth with respect to each patent, registered trademark, trademark
application, trade name, service xxxx, registered logo and material license
owned or used by or licensed by or to the Company in the conduct of its
business, (i) the owner thereof, (ii) the date of expiration, if any, (iii)
whether such rights are exclusive and (iv) any other licensee of the Company of
such rights. Except as otherwise set forth on SCHEDULE 4.23 hereto, no
royalties or fees are payable by the Company to any Person by reason of the
ownership or use of any of the Intangible Property. To the knowledge of the
Company, all items of Intangible Property owned by the Company are, and all
items of Intangible Property owned by a third party and used by the Company
are, (x) valid and in good standing, (y) adequate and sufficient to permit the
Company to conduct its Business as presently conducted, and (z) no other rights
of any kind in respect of the Intangible Property are required by the Company
for its operation as presently conducted. Except as set forth on SCHEDULE
4.23, the Company has not entered into any material licenses, sublicenses or
agreements relating to the use by any other Person of any Intangible Property
now used by the Company, and to the knowledge of the Company, no infringement
exists upon such Intangible Property by any other Person. Except as disclosed
on SCHEDULE 4.23, no charge or claim is pending or to the knowledge of the
Company threatened, nor has any charge or claim been made within the past three
years to the effect that, the sale of any of the services by the Company
infringe upon or conflict in any way with any rights or properties of the type
enumerated above owned or held by any other Person.
SECTION 4.24. ACCOUNTS RECEIVABLE AND BAD DEBTS. All notes and accounts
receivable of the Company shown on the December Balance Sheet or thereafter
acquired were or (to the extent not heretofore collected) are valid and
genuine, were acquired in the ordinary course of business, are subject to no
asserted counterclaims, defenses or setoffs and to the knowledge of the
18
Company, should be fully collectible within 90 days of Closing (subject to
reserves therefor as will be taken into account in the determination of Current
Assets at Closing in accordance with Section 2.03). SCHEDULE 4.24 attached
hereto sets forth a true, complete and accurate list, as of the end of the most
recent normal billing cycle of the Cellular System, listing the total amounts
of subscriber receivables and the aging of such subscriber receivables based on
the following Schedule: 0-30 days, 31-60 days, 61-90 days and over 90 days,
from the date thereof.
SECTION 4.25. PRODUCT INFORMATION. The Company does not assign any value
to its inventory of refurbished telephone handsets for financial statement
purposes. SCHEDULE 4.25 sets forth a list of manufacturers of telephone
handsets presently in the Company's inventory.
SECTION 4.26. CERTAIN BUSINESS RELATIONSHIPS. Except as set forth in
SCHEDULE 4.26 attached hereto, none of the officers, directors or stockholders
of the Company and any of their affiliates or family members have been involved
in any business arrangement or relationship with the Company within the past 12
months.
SECTION 4.27. OFFICERS, DIRECTORS AND CERTAIN AUTHORIZED PERSONS.
SCHEDULE 4.27 sets forth a complete and accurate list of:
(i) the names of all directors of the Company;
(ii) the names and offices of all officers of the Company;
(iii) the names of all Persons authorized to borrow money or
incur or guarantee indebtedness on behalf of the Company;
(iv) all safes, vaults and safe deposit boxes maintained by or
on behalf of the Company or in which its property is held, and the
names of all Persons authorized to have access thereto;
(v) all bank accounts of the Company and the names of all
Persons who are authorized signatories and the terms of their
authorizations; and
(vi) the names of all Persons to which the Company has granted
its power of attorney and the terms of any such powers of attorney.
SECTION 4.28. DISCLOSURE. No provision of this Agreement relating to any
of the Sellers, the Company, the Business or the Securities or any other
document, Schedule, Exhibit or other information furnished by Sellers to
Purchaser in connection with the execution, delivery and performance of this
Agreement, or the consummation of the transactions contemplated hereby,
contains or will contain any untrue statement of a material fact or omits or
will omit to state a material fact required to be stated in order to make the
statement, in light of the circumstances in which it is made, not misleading.
Except for facts affecting the cellular telephone industry generally, there is
no fact, event or condition known to any of the Sellers that has had or which
is reasonably likely to have a materially adverse affect on operation,
financial condition, business or prospects of the Business which has not been
disclosed to Purchaser or set forth in the Exhibits or Schedules attached
hereto. All Schedules attached hereto are accurate and complete as of the date
hereof.
19
ARTICLE V
PURCHASER'S REPRESENTATIONS
Purchaser hereby represents, warrants, covenants and agrees that:
SECTION 5.01. ORGANIZATION; QUALIFICATION. Purchaser is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Oklahoma. Purchaser has all power and authority to (i) own and
operate its properties, (ii) carry on its business as it is now being
conducted, and (iii) carry out the transactions contemplated by this Agreement
and to own the Shares and operate the Business, subject to obtaining all
necessary consents required for the transfer by Sellers of the Shares.
SECTION 5.02. CONSENTS; AUTHORIZATION; EXECUTION AND DELIVERY OF
AGREEMENT. All necessary consents and approvals shall have been obtained prior
to Closing by Purchaser for the execution and delivery of this Agreement. The
execution and delivery of this Agreement by Purchaser and the consummation of
the transactions contemplated hereby has been duly and validly authorized and
approved by all necessary corporate action. Purchaser has full power and
authority to execute and deliver and perform its obligations under this
Agreement. This Agreement is a valid and binding obligation of Purchaser,
enforceable against it in accordance with its terms. Purchaser will have on
the Closing Date and immediately prior to Closing funds sufficient to
consummate the transactions contemplated by this Agreement.
SECTION 5.03. LITIGATION AND LEGAL PROCEEDINGS. There is no outstanding
judgment against Purchaser and there is no litigation, proceeding or
investigation pending, or, to Purchaser's knowledge, threatened, against
Purchaser or its assets which individually or in the aggregate would, if
adversely determined, result in a material adverse change in the business
condition (financial or otherwise), properties or assets of Purchaser or which
questions the validity of any action taken or to be taken pursuant to or in
connection with the provisions of this Agreement or the consummation of the
transactions contemplated hereby by the Purchaser.
SECTION 5.04. BROKERS. Purchaser has not engaged any agent, broker or
other person acting pursuant to the express or implied authority of Purchaser
which is or may be entitled to a commission or broker or finder's fee in
connection with the transactions contemplated by this Agreement or otherwise
with respect to the sale of the Shares.
SECTION 5.05. INVESTMENT INTENT. Purchaser has such knowledge and
experience in financial and business matters that it is capable of evaluating
the merits and risks of its purchase of the Securities. Purchaser confirms
that the Company and Sellers have made available to Purchaser the opportunity
to ask questions of the officers and management employees of the Company and to
acquire additional information about the business and financial condition of
the Company. Purchaser is acquiring the Securities for investment and not with
a view toward or for sale in connection with any distribution thereof or with
any present intention of distributing or selling the Securities. Purchaser
agrees that the Securities may not be sold, transferred, offered for sale,
pledged, hypothecated or otherwise disposed of without registration under the
Securities Act of 1933, as amended, except pursuant to an exemption from such
registration available under such Act, and without compliance with state and
foreign securities laws, in each case to the extent applicable.
20
Section 5.06. NO OUTSIDE RELIANCE. Purchaser has not relied and is
not relying upon any statement or representation not made in this Agreement or
any Schedule or Exhibit attached hereto. It is expressly agreed that the
Sellers are making no representations or warranties whatsoever, express or
implied beyond those expressly stated in this Agreement or in the Exhibits or
Schedules hereto, including but not limited to any implied representation as to
condition, merchantability or suitability as to any of the properties or assets
of the business of the Company.
ARTICLE VI
THE COMPANY'S, SELLERS' AND PURCHASER'S COVENANTS
SECTION 6.01. FINANCIAL STATEMENTS AND CELLULAR SYSTEM INFORMATION. The
Sellers and the Company covenant and agree that during the period after the
execution of this Agreement and prior to the Closing, they shall provide
Purchaser, within 21 days of the end of each calendar month, the unaudited
balance sheet and income statement for such month for the Company ("Interim
Financial Statements"). The Interim Financial Statements will be true and
correct in all material respects, will be prepared using the same accounting
methods and procedures as used in the preparation of the Historical Financial
Statements except for the absence of footnotes, subject to normally recurring
year-end adjustments, and will present fairly the financial position of the
Company at the date indicated and the results of the Company's operations for
such period. The Sellers and the Company also shall provide Purchaser within
21 days of the end of each calendar month (i) a comparison of the results of
the Company's income from operations for such month as reflected in the Interim
Financial Statements to the amount budgeted for such month and the year to date
(as reflected in the Budget to be delivered to Purchaser as soon as practicable
following the date of this Agreement, but in no event later than March 31,
1998, a copy of which will be annexed hereto as SCHEDULE 6.01 (the "Operating
Budget")), (ii) the number of subscribers on the Cellular System at the
beginning and end of such month with a comparison to the Operating Budget,
(iii) an accounts receivable aging report for the Cellular System and (iv)
other reports generated by the Company's billing system as reasonably
requested by Purchaser.
SECTION 6.02. GOVERNMENTAL APPROVALS. (a) Purchaser covenants and
agrees that it will cooperate with the Company and Sellers, and do all things
reasonably necessary to assist them, to obtain all consents and approvals
necessary for assignment to Purchaser of the Authorizations, including the
furnishing of financial and other information specifically with respect to
Purchaser reasonably required by the person or entity whose consent or approval
is being sought. The Company and Sellers shall use all reasonable efforts to
provide adequate prior written notice to Purchaser of any meeting with
governmental authorities the purpose of which is to seek a consent or approval
to the transactions contemplated hereby, and Purchaser shall use all reasonable
efforts to furnish a representative to attend meetings with appropriate
government authorities for the purpose of obtaining such consents or approvals.
The Purchaser, the Company and each Seller have filed the necessary Form(s) 490
and 702 with the FCC transferring control of the FCC Authorizations for the
Business to Purchaser and will diligently pursue the processing of the transfer
of control of the FCC Authorizations to Purchaser and to file for all other
necessary regulatory approvals for the consummation of the transactions
contemplated by this Agreement within five business days of the date of
execution of this Agreement to the extent any such filings have not been made
prior to the date of execution of this Agreement. Sellers, on
21
the one hand, and Purchaser, on the other, shall share equally all filing
fees in connection with any filings pursuant to this Section 6.02(a).
(b) The Company, Sellers and Purchaser shall each cooperate and use their
reasonable best efforts to prepare and file with the Federal Trade Commission
and the Department of Justice and other regulatory authorities as promptly as
possible all requisite applications and amendments thereto together with
related information, data and exhibits necessary to satisfy the requirements of
the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act ("Xxxx-Xxxxx Act"). Sellers,
on the one hand, and Purchaser, on the other, shall share equally all filing
fees in connection with any filings pursuant to this Section 6.02(b).
SECTION 6.03. THIRD PARTY CONSENTS; CLOSING CONDITIONS. (a) The Company
and the Sellers covenant and agree to do all things reasonably necessary (not
including the payment of money they are not otherwise obligated to pay) to
obtain all consents and approvals necessary under those Existing Contracts that
require consent to the change in control of the Company as a result of the
Purchaser's purchase of the Shares. Purchaser covenants and agrees to
cooperate with the Company and Sellers and assist the Company and the Sellers
in obtaining such consents and approvals including the furnishing of financial
and other information, reasonably required by the Person whose consent or
approval is being sought.
(b) Purchaser, the Company and the Sellers hereby covenant and agree to
use all reasonable efforts to satisfy, or assist the other party in satisfying,
the closing conditions applicable to the Purchaser in Article VII hereof and
the Company and the Sellers in Article VIII hereof prior to the Closing Date.
SECTION 6.04. ACCESS. (a) Purchaser shall have the right, itself or
through its representatives, during normal business hours, after reasonable
notice (which may be oral) to Sellers' Representative and the Company, and
without undue disruption to the Company's normal business activities, to
inspect the assets and properties of the Company and to inspect and make
abstracts and reproductions of all books and records of the Company including,
without limitation, applications and reports to the FCC and CPUC, all financial
information relevant to the Business, employee records, and engineering and
environmental reports and the Company shall furnish Purchaser with such
information respecting the assets, business and financial records of the
Company as Purchaser may, from time to time, reasonably request.
(b) The Company and the Sellers acknowledge and agree, subject to any
restrictions placed thereon by an owner or lessor of any real property involved
that Purchaser may commission, at Purchaser's cost and expense, a so-called
"Phase I" environmental site assessment of the assets of the Company (the
"Phase I Assessment"). If the Phase I Assessment indicates that a so-called
"Phase II" assessment (the "Phase II Assessment") or other additional testing
or analysis of such assets is advisable, the Purchaser may elect to cause its
agents to conduct such testing and analysis, also at Purchaser's expense. The
Company and the Sellers will comply with any reasonable request for information
made by Purchaser or its agents in connection with any such investigation. The
Company and the Sellers covenant that any response to any such request for
information will be complete and correct in all material respects. The Company
and the Sellers will afford Purchaser and its agents access to all operations
of the Company at all reasonable times and in a reasonable manner in connection
with any such investigation subject to any required approval of the Company's
landlords, which approval the Company and the Sellers
22
will use their reasonable best efforts to obtain. Should Purchaser
commission such an investigation, such investigation will have no effect upon
the representations and warranties made by the Company and the Sellers to
Purchaser under this Agreement except that if any Phase I Assessment or Phase
II Assessment uncovers an environmental condition which then comprises a
breach of the Company and the Sellers' representations or warranties herein,
the Company and the Sellers shall not have breached such representation or
warranty if the Company and the Sellers cure such breach in accordance with
the provisions of this Agreement. Notwithstanding the foregoing, if the
reasonably estimated cost and expense to the Company and Sellers of curing
such breaches exceeds $500,000 and Purchaser fails to agree to bear the costs
and expense in excess thereof, the Sellers Representatives may terminate this
Agreement without penalty or cost, other than the reimbursement of
Purchaser's cost and expenses related to the transactions contemplated by
this Agreement.
(c) The Company and the Sellers shall allow Purchaser the opportunity to
conduct an engineering review of the Cellular System to confirm that the
Cellular System complies with the FCC Authorizations and the regulations of the
FCC in all material respects and are otherwise in good condition and repair,
reasonable wear and tear excepted.
SECTION 6.05. CONDUCT OF BUSINESS. From and after the date hereof the
Company and the Sellers shall cause the Company to be operated only in the
ordinary course of business consistent with past practice, and shall:
(a) operate the Cellular System in accordance with the FCC
Authorizations and all other Authorizations, and comply with all
laws, rules and regulations applicable to the Company, including the
regulations of the FCC and CPUC;
(b) except for inventory sold in the ordinary course of
business, refrain from making any sale, lease, transfer or other
disposition of any of the assets of the Company other than in
connection with replacements with assets of like use and value, or
with the prior written approval of Purchaser which approval shall not
be unreasonably withheld;
(c) refrain from modifying, amending or altering or terminating
any of the Existing Contracts other than in the ordinary course of
business consistent with past practice, and from waiving or canceling
any material default or breach or modifying, altering or terminating
any right or asset of the Company without Purchaser's prior written
approval, which approval will not be unreasonably withheld;
(d) maintain insurance on the assets and properties of the
Company comparable to that maintained prior to the date hereof, and
use the proceeds of any claims for loss under such policies, together
with such other funds as may be required, to repair, replace, or
restore to their former condition any assets or properties which may
be damaged by fire or other casualty, all as soon as reasonably
possible;
23
(e) maintain its books and records in accordance with prior
practice; maintain all of its property and assets in their present
condition, ordinary wear and tear excepted; maintain supplies of
inventory and spare parts consistent with past practice; and
otherwise operate its business in the ordinary course in accordance
with past practices;
(f) except in the ordinary course of business consistent with
past practice, refrain from changing the Cellular System's agents'
commission rate, sales practices (including the quality of the credit
of subscribers contracting for cellular telephone service) or
marketing practices without Purchaser's approval;
(g) other than increases in current base salary of not greater
than 5%, refrain from increasing the compensation payable or to
become payable to any employee or agent of the Company without
Purchaser's approval;
(h) refrain from entering into any contract or renewal of any
existing contract for the employment of any employee or agent of the
Company other than "at-will" employees and agents;
(i) use its best efforts to (x) keep the business organization
of the Company intact, (y) retain the services of the key employees
of the Cellular System, and (z) maintain good relationships with its
employees, suppliers, advertisers, subscribers, agents and others
having business relations with it, in each case in accordance with
past practices;
(j) refrain from changing the Charter or by-laws of the
Company;
(k) continue to advertise, promote and market the Cellular
System and its services in a manner consistent with past practice,
and in any event from the date hereof through the Closing, spend on
advertising, marketing and promotion, on an aggregate basis from the
date hereof to the Closing, the amounts set forth in the Operating
Budget.
(l) refrain from subjecting any of the assets or properties of
the Company to any new Encumbrance;
(m) refrain from doing or omitting to do any act which will
cause a breach of, or default under, or termination of (except in
accordance with its terms), any material contract, agreement, lease,
commitment, or obligation to which the Company is a party or by which
it is bound;
(n) provide to the Purchaser, concurrently with filing thereof,
copies of all reports to and other filings with the FCC;
(o) not permit any of the Authorizations to expire or to be
surrendered or voluntarily modified in a matter adverse to the
Business, or take any action which would reasonably be expected to
cause the Authorizations or any other governmental authority to
institute proceedings for the suspension, revocation or
24
limitation of rights under any of the Authorizations; or fail to
prosecute with due diligence any pending applications to any governmental
authority;
(p) notify Purchaser in writing promptly after learning of the
institution or threat of any material action against the Company in
any court, or any action against the Company before the FCC or the
CPUC or any other governmental agency, and notify Purchaser in
writing promptly upon receipt of any administrative or court order
relating to the Business;
(q) notify Purchaser of the hiring of any new employee, any
material change in job function of an employee, and the termination
of any employee;
(r) pay or cause to be paid or provide for all Taxes of or
relating to the Company, the Shares and the employees required to be
paid to city, county, state, federal and other governmental units up
to the Closing Date and refrain from extending any statute of
limitations with respect to such Taxes;
(s) refrain from taking any action not in the Company's usual
course of business without Purchaser's prior approval;
(t) cooperate with Purchaser in connection with Purchaser's
efforts to identify the current employees of the Company that
Purchaser would like to continue to hire following the Closing
consistent with all applicable federal, state and/or local employment
laws, rules and regulations;
(u) refrain from declaring or paying any dividends or making
any distribution upon, or redeeming or repurchasing any shares;
(v) refrain from creating, incurring, assuming, guaranteeing,
being or remaining liable, contingently or otherwise, with respect to
any indebtedness, other than indebtedness of the Company not to
exceed in the aggregate the amount outstanding at December 31, 1997;
(w) refrain from being a party to any merger or consolidation
or other transfer of any shares of the capital stock of the Company;
(x) refrain from increasing the amounts paid to Unitel pursuant
to the Management Contract;
(y) refrain from prepaying any indebtedness for borrowed money
(other than repayments of advances under its existing lines of credit
with financial institutions in the ordinary course of its business)
or prepaying any lease or other contractual obligations;
(z) continue to make all capital expenditures in connection
with the operation of the Business when and as required by its
capital expenditures in the Budget as set forth IN SCHEDULE 4.
17(a)(iii) as are required prior to the Closing Date; and
25
(aa) change the rates charged to Subscribers except pursuant to
promotional programs approved by Purchaser, which approval will not
be unreasonably withheld.
SECTION 6.06. NO SHOPPING. None of the Sellers, the Company and any of
their affiliates, advisors or representatives shall, directly or indirectly,
solicit, encourage or initiate any contact with, negotiate with, or provide any
information to, endorse or enter into any agreement with respect to, or take
any other action to facilitate any person or group, other than Purchaser and
its representatives, concerning any inquiries or the making of any proposals
concerning any merger involving the Company, sale of all or substantially all
of the assets of the Company, acquisition of the Shares or an equity interest
in the Company or any similar transaction involving the Company.
SECTION 6.07. EMPLOYEES. Except as provided by SECTION 6.09 hereof,
Nothing contained in this Agreement shall confer upon any employee of the
Company any right (over and above existing rights, if any) with respect to
continued employment by the Company or Purchaser. No provision of this
Agreement shall create any third-party rights in any such employee, or any
beneficiary or dependent thereof, with respect to the compensation, terms and
conditions of employment and benefits that may be provided to such employee by
Purchaser or under any benefit plan that Purchaser may maintain.
SECTION 6.08. SUPPLEMENTAL DISCLOSURE. The Company and the Sellers shall
promptly from time to time prior to the Closing Date supplement in writing the
Schedules hereto with respect to any matter hereafter arising that, if existing
or known as of the date of this Agreement, would have been required to be set
forth or described in the Schedules hereto; provided, however, that no such
supplemental disclosure shall be deemed to cure any breach of any
representation or warranty of the Company or the Sellers made in this Agreement
unless Purchaser fails to object in writing to the Company and the Sellers to
any such supplemental disclosure within ten (10) business days after
Purchaser's receipt thereof.
SECTION 6.09. UNITEL. Upon Purchaser's direction, and without cost or
penalty to the Company, the Sellers covenant and agree (i) to cause the Company
and Unitel to terminate the Management Contract as of the Closing, (ii) to
cause all accrued and unpaid management fees and other obligations to Unitel to
be paid or satisfied prior to the Closing, and (iii) to cause Unitel to be
dissolved and liquidated promptly after the Closing.
SECTION 6.10. AUDIT OF COMPANY'S 1997 FINANCIAL STATEMENTS.
Purchaser and Sellers covenant and agree as follows:
(a) As soon as reasonably practical after December 31, 1997, Xxxxxx
Xxxxxxxx LLP ("Sellers' Accountants") conduct an audit (the "Audit") of the
financial statements of the Company in accordance with GAAP and generally
accepted auditing standards for the 12-month period ending December 31, 1997,
including a balance sheet, a statement of income and cash flow, and consistent
with past practices.
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(b) As soon as possible after December 31, 1997 Sellers' Accountants
shall deliver to the Oklahoma City office of Xxxxxx Xxxxxxxx LLP ("Purchaser's
Accountant"), Purchaser and Sellers (i) the Audit and, based upon such Audit, a
calculation of the Cellular System's Operating Cash Flow (as defined in Section
7.14) for the calendar year 1997 certifying the accuracy thereof (the "OCF
Calculation"). Purchaser's Accountant shall be given reasonable access to the
work papers, notes and other data compiled by Sellers' Accountant in connection
with the Audit. If the Closing has not occurred by March 31, 1997, Sellers'
Accountants shall bring forward the Audit to cover the Other Applicable Period
following the same procedures set forth in subparagraphs (a) and (b) above and
shall revise the OCF Calculation accordingly for the Other Applicable Period.
If either party objects to the OCF Calculation, such party shall within ten
(10) calendar days after receipt of the delivery of the OCF Calculation notify
the other party in writing of its objection and shall specify the basis for
such objection (the "Objection Notice"). Sellers and Purchaser shall attempt
to resolve their differences within the ten (10) day period following either
party's receipt of any Objection Notice. In the event Purchaser and Sellers
are unable to resolve their differences within such ten (10) day period, then,
either party may request that the matter be resolved by another accounting firm
mutually acceptable to Purchaser and Sellers' Representative (the "OCF
Accountant").
(c) In submitting a dispute to the OCF Accountants, each of the parties
shall furnish, at its own expense, the OCF Accountants and the other party with
such documents and information as the OCF Accountants may reasonably request.
Each party may also furnish to the OCF Accountants such other information and
documents as it deems relevant with the appropriate copies and notification
being given to the other party. The OCF Accountants may conduct a conference
concerning the disagreements between Sellers and Purchaser at which conference
each party shall have the right to present additional documents, materials and
other evidence and to have present its or their advisors, accountants or
counsel. The OCF Accountants shall promptly render a decision on the issues
presented, and such decision shall be final and binding on the parties. The
Audit shall not be considered completed for purposes of the Closing until all
disputes have been finally resolved by the parties or the OCF Accountants.
(d) Fees and expenses of the Audit shall be paid by the Company, and the
fees and expenses of the OCF Accountants relating to the matters provided for
in this Section 6.10 shall be split evenly between Sellers and Purchaser.
SECTION 6.11. OFFER TO PURCHASE REMAINING SECURITIES. Purchaser agrees
that it will offer to purchase all of the currently outstanding Securities of
the Company from those holders of Securities who are not signatories to this
Agreement on the date hereof (the "Other Holders"). Within fifteen (15) days
after the execution of this Agreement, the Company will give written notice to
each Other Holder of the opportunity to sell the Securities held by the Other
Holders to Purchaser on the terms and conditions set forth in this Agreement
(the "Offer"). The Offer shall include (i) a summary of the terms and
conditions of the sale of the Securities to Purchaser, (ii) a copy of this
Agreement including the Exhibits and Schedules hereto, (iii) the recommendation
of the Company's Board of Directors that the Offer be accepted, (iv) a
signature page to this Agreement pursuant to which the Other Holder shall
become a party to and bound by this Agreement as a "Seller" (the "Acceptance
Signature Page") and (v) such other information as the Company, Purchaser and
their respective counsel shall consider necessary or appropriate. The Offer
shall remain open for thirty (30) days unless extended in writing by Purchaser
(as it may be extended the "Acceptance Deadline"). Each Other Holder
delivering a properly executed
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Acceptance Signature Page prior to the Acceptance Deadline will thereby
become a party to and bound by this Agreement as a "Seller" as if such Other
Party executed and delivered this Agreement on the date hereof, and SCHEDULE
4.04 will be appropriate amended to reflect such Other Holders' ownership of
Securities. The Purchaser may but shall not be obligated to purchase the
Securities of any Other Holder who has not delivered a properly executed
Acceptance Signature Page prior to the Acceptance Deadline.
SECTION 6.12 COMPANY'S ARTICLES AND BY-LAWS. After the Closing the
Purchaser shall not permit the Company to modify or amend its articles of
incorporation or by-laws in a manner that would adversely affect the liability
of or scope of the indemnification provided to those individuals who are the
officers and directors of the Company as of the date hereof.
SECTION 6.13 EMPLOYEES OF UNITEL. Purchaser and Sellers agree that
effective as of the Closing, all of Unitel's employees will be hired as at will
employees by, or offered at will employment with, the Company, at pay and
benefit levels and in positions at least equivalent to those they held with
Unitel, PROVIDED, HOWEVER, that prior to Closing, Xxxxxx X. Xxxxxxxxx will be
offered employment as Market Manager at a salary commensurate with that
position within Purchaser's organization. In the event Xx. Xxxxxxxxx declines
such offer of employment, the Company will pay him at his current salary for a
three-month transition period following Closing, and upon his departure will
pay him $75,000 in full satisfaction of any remaining obligations of the
Company under his employment contract with the Company. In the event Xx.
Xxxxxxxxx declines to sign a release acknowledging that such payment discharges
all remaining liabilities of the Company under his employment contract, all
other amounts owed to Xx. Xxxxxxxxx under such contract which relate to the
time period up to and including the Closing Date shall be an obligation of
Sellers.
ARTICLE VII
CONDITIONS PRECEDENT TO PURCHASER'S OBLIGATION TO CLOSE
The obligation of Purchaser under this Agreement with respect to the
purchase and sale of the Shares shall be subject to the fulfillment on or prior
to the Closing of each of the following conditions, any of which may be waived
in writing by Purchaser:
SECTION 7.01. ACCURACY OF REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF
THIS AGREEMENT. All of the representations and warranties made by the Company
and the Sellers in this Agreement shall be true and correct at and as of the
Closing except for such breaches and inaccuracies therein which, in the
aggregate, have not caused and would not reasonably be expected to cause
Purchaser to suffer a Loss (as defined in Section 10.01) in excess of $300,000
in the aggregate (a "Material Loss") or otherwise result in a material adverse
effect on the assets, properties, business, operations or prospects of the
Business taken as a whole which is not due to events or circumstances
applicable to the cellular telephone industry generally (a "Material Adverse
Effect"). The Company and the Sellers shall have complied in all material
respects with and performed all of the agreements and covenants required by
this Agreement to be performed or complied with by them on or prior to the
Closing. Purchaser shall have been furnished with a certificate or
certificates of the Company's President, dated as of the Closing, certifying to
the fulfillment of the foregoing conditions.
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SECTION 7.02. DIRECTORS RESOLUTIONS. The Company shall deliver to
Purchaser copies of the resolutions of the board of directors of the Company
authorizing the execution, delivery and performance of this Agreement and all
instruments and documents to be delivered in connection herewith and the
transactions contemplated hereby, duly certified by an officer of the Company.
SECTION 7.03. INCUMBENCY CERTIFICATE. Purchaser shall have received a
certificate or certificates of an officer of the Company, certifying as to the
genuineness of the signatures of officers of the Company authorized to take
certain actions or execute any certificate, document, instrument or agreement
to be delivered pursuant to this Agreement, which incumbency certificate shall
include the true signatures of such officers.
SECTION 7.04. THIRD PARTY CONSENTS; FCC; XXXX-XXXXX ACT. Sellers shall
have delivered to Purchaser such instruments, consents and approvals of third
parties (the form and substance of which shall be reasonably satisfactory to
Purchaser) as are necessary for the consummation of the transactions
contemplated by this Agreement and to assign to Purchaser without modification
thereof, as of the Closing, the Existing Contracts that require consent as a
result of Purchaser's purchase of the Shares, and Purchaser shall have obtained
all FCC Authorizations and other Authorizations necessary for the consummation
of the transactions contemplated by this Agreement. Prior to Closing Date, the
FCC shall have issued a Final Order granting the FCC's consent to the change in
ownership of the FCC Authorizations to Purchaser without any material
conditions, excepting conditions applied on an industry-wide basis, which the
Purchaser reasonably deems to be adverse. In addition, all applicable waiting
periods under the Xxxx-Xxxxx Act (if applicable to the transactions
contemplated by this Agreement) shall have expired or been terminated and no
objection shall have been made by the Federal Trade Commission ("FTC") or the
United States Department of Justice ("DOJ"). For the purposes of this
Agreement, the term "Final Order" shall mean action by the FCC as to which (i)
no request for stay by the FCC, as applicable, of the action is pending, no
such stay is in effect, and, if any deadline for filing any such request is
designated by statute or regulation, such deadline has passed; (ii) no petition
for rehearing or reconsideration of the action is pending before the FCC, and
the time for filing any such petition has passed; (iii) the FCC, does not have
the action under reconsideration on its own motion and the time for such
reconsideration has passed; and (iv) no appeal to a court, or request for stay
by a court, of the FCC's action, as applicable, 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.
SECTION 7.05. CONTRACT TERMINATION. The Employment Agreements between
the Company and Xxxxxxxx X. Xxxxx ("Xxxxx") and Xxxxxx X. Xxx ("Xxx") shall
have been terminated without cost, penalty or expense to the Company after
Closing and each of Xxxxx and Xxx shall have delivered to Purchaser at Closing
a release of any and all liabilities and claims against the Company.
SECTION 7.06. NO MATERIAL ADVERSE CHANGE. No Material Adverse Effect
shall have occurred, from December 31, 1997 to the Closing.
SECTION 7.07. SECURITIES TO BE PURCHASED. Sellers owning Securities
representing at least sixty-eight percent (68%) of the Total Shares shall be
parties to this Agreement and shall tender such Securities at the Closing.
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SECTION 7.08. OPINION OF COUNSEL TO SELLERS. Purchaser shall have been
furnished with an opinion of Young, Vogl, Harlick, Wilson & Xxxxxxx, LLP,
counsel to the Majority Shareholders and the Company, dated as of the Closing
and addressed to Purchaser, and to any institution designated by Purchaser
which has provided financing in connection with the transactions contemplated
by this Agreement in substantially the form of EXHIBIT B hereto.
SECTION 7.09. OPINION OF FCC COUNSEL TO THE COMPANY. Purchaser shall
have been furnished with opinions of Rosenman & Colin, FCC counsel for the
Company and the Sellers, dated as of the Closing and addressed to Purchaser,
and to any financial institution designated by Purchaser which has provided the
financing in connection with the transactions contemplated by this Agreement,
in substantially the form of EXHIBIT C attached hereto.
SECTION 7.10. SUBSCRIBERS. The aggregate number of "Subscribers" (as
defined in Section 2.04(a) on the Company's Cellular System as of Closing shall
be at least 13,000.
SECTION 7.11. ESTOPPEL. The Company and Sellers shall have obtained a
consent from each lessor of the real property identified on SCHEDULE 4.07(b)
consenting to the change in ownership of the Company if necessary in connection
with the sale of the Shares to Purchaser.
SECTION 7.12. RESIGNATIONS OF OFFICERS AND DIRECTORS. The Company and
the Sellers shall have provided to Purchaser, in a form satisfactory to
Purchaser, the resignations of each officer of the Company and each member of
the Company's Board of Directors other than those persons designated in writing
by Purchaser to the Company as persons who shall continue in office.
SECTION 7.13. PAYMENT OF INDEBTEDNESS. The Company and the Sellers shall
have provided to Purchaser, in a form satisfactory to Purchaser, a payoff
letter from every lender to the Company stating that the outstanding principal
balance of all existing indebtedness, all interest accrued on such indebtedness
and all prepayment premiums and other amounts due in order to pay all such
indebtedness as of the Closing Date.
SECTION 7.14. OPERATING CASH FLOW. The "Operating Cash Flow" of the
Company for the year ended December 31, 1997 shall be at least $3.6 million.
For purposes of this Section 7.15 the term "Operating Cash Flow" means (without
duplication) (i) the total operating revenue of the Company and Unitel
(including management fees received from the Company and long distance and
reciprocal trade revenue) less (ii) all expenses (other than interest expense,
income taxes, depreciation, amortization, management fees (including amounts
paid to Unitel under the Management Contract), executive expense and directors
fees) related to the ownership and operation of the Company and Unitel for the
calendar year ending December 31, 1997, determined in accordance with GAAP,
PROVIDED, HOWEVER, notwithstanding anything in this Agreement or GAAP to the
contrary (A) employee bonuses related to performance in 1997 shall be accrued
in 1997 notwithstanding that they may be payable in 1998, (B) employee vacation
pay shall be accrued in accordance with GAAP during the period earned
notwithstanding that vacation pay is paid or vacation days are taken in a
subsequent period, (C) the cost and expense needed to cause the assets of the
Company to be in good working order and repair consistent with past practices
at December 31, 1997 shall be accrued as an expense even if such expenditure is
deferred, (D) all subscriber acquisition costs, subscriber handset costs and
marketing costs shall be accrued as an expense in the period incurred (but in
no case later than 90 days) and not capitalized, (E) any reciprocal trade
expenses, such as the provision of cellular service in
30
exchange for advertising shall be accrued as an expense, (F) an accrual for
the normal accounting fees consistent with past practices, (G) any expenses
related to the normal operations of the Company (including insurance, legal,
accounting, payroll and fringe benefits) borne by Unitel or other affiliate
of the Company and related to the management or operation of the Company
shall be accrued as an expense (H) all expenses directly related to the
transactions contemplated by this Agreement (including legal expenses) which
would not have otherwise been incurred shall not be accrued as an expense)
and (I) all accounting practices used by the Company (except as modified by
clauses (A-H) above) shall be consistent with the practices used in preparing
the financial statements of the Company as of and from the 1997 fiscal year
of the Company through October 31, 1997, which were provided by the Sellers
to Purchaser. The Operating Cash Flow of the Cellular System shall be
determined pursuant to the Audit as provided for in Section 6.10 hereof.
SECTION 7.15. ESCROW AGREEMENT. Sellers' Representative shall have
executed and delivered the Escrow Agreement to Purchaser.
SECTION 7.16. MANAGEMENT CONTRACT; CERTIFICATE. Upon Purchaser's
direction and without cost or penalty to the Company, the Company and Unitel
shall have terminated the Management Contract and the Company shall have
received a release of all liabilities and obligations to Unitel, the form
thereof to be satisfactory to Purchaser. In addition, upon Purchaser's
direction and at Purchaser's cost, Unitel shall have assigned to an affiliate
of Purchaser designated by Purchaser in writing prior to Closing Unitel's
competitive local carrier certificate.
ARTICLE VIII
CONDITIONS PRECEDENT TO
THE COMPANY AND EACH SELLER'S OBLIGATION TO CLOSE.
The obligations of the Company and the Sellers under this Agreement with
respect to the sale of the Shares shall be subject to the fulfillment on or
prior to the Closing of each of the following conditions, any of which may be
waived in writing by the Company and the Sellers holding a majority of the
Shares:
SECTION 8.01. ACCURACY OF REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF
THIS AGREEMENT. All of the representations and warranties by Purchaser
contained in this Agreement shall be true and correct in all material respects
at and as of the Closing. Purchaser shall have complied with and performed in
all material respects all of the agreements and covenants required by this
Agreement to be performed and complied with by it on or prior to the Closing.
The Company and the Sellers shall have been furnished with a certificate of an
officer of Purchaser, dated as of the Closing, certifying to the fulfillment of
the foregoing conditions.
SECTION 8.02. DIRECTORS' RESOLUTIONS. Purchaser shall deliver to the
Company and the Sellers copies of the resolutions of its Board of Directors
authorizing the execution, delivery and performance of this Agreement and all
instruments and documents to be delivered in connection herewith and the
transactions contemplated hereby, duly certified by an authorized officer of
Purchaser.
SECTION 8.03. INCUMBENCY CERTIFICATE. The Company and the Sellers shall
have received a certificate of a secretary of Purchaser, certifying as to the
genuineness of the signatures of
31
representatives of Purchaser authorized to take certain actions or execute
any certificate, document, instrument or agreement to be delivered pursuant
to this Agreement, which incumbency certificate shall include the true
signatures of such representatives.
SECTION 8.04. FCC; XXXX-XXXXX ACT. The FCC shall have issued a Final
Order granting the FCC's consent to the change in ownership of the FCC
Authorizations to Purchaser. In addition, all applicable waiting periods under
the Xxxx-Xxxxx Act (if applicable to the transactions contemplated by this
Agreement) shall have expired or been terminated and no objection shall have
been made by the FTC or DOJ.
SECTION 8.05. OPINION OF COUNSEL TO PURCHASER. The Company and the
Sellers shall have been furnished with an opinion of Xxxxxxx & Xxxxxx, counsel
to Purchaser, dated as of the Closing and addressed to the Company and the
Sellers in substantially the form of EXHIBIT D hereto.
ARTICLE IX
CASUALTY LOSSES
In the event that there shall have been suffered between the date hereof
and the Closing any casualty loss relating to the assets or properties of the
Company the Company and the Sellers will promptly notify Purchaser of such
event. The Sellers shall, at their option, cause the Company to (i) repair,
rebuild or replace the portion of the assets, properties or Business damaged,
destroyed or lost prior to the Closing Date, or (ii) obtain all insurance
proceeds or other rights of the Company against third parties arising from such
casualty loss (the "Claims"); PROVIDED, HOWEVER that if such insurance proceeds
are or will not be sufficient in Purchaser's reasonable judgment to cover the
entire casualty loss, then Purchaser may request that Sellers pay at Closing an
amount equal to the product of (a) the shortfall in insurance proceeds and (b)
the Purchased Percentage. If Sellers decline such request, Purchaser may
terminate this Agreement and neither party shall be deemed in default.
ARTICLE X
INDEMNIFICATION
SECTION 10.01. INDEMNIFICATION BY SELLERS. (a) Notwithstanding the
Closing, and regardless of any investigation made at any time by or on behalf
of Purchaser or any information Purchaser may have, but subject to the terms of
this Article X, each Seller jointly and severally (except with respect to any
misrepresentation or omission with respect to Sections 4.02, 4.05 and Section
4.12 and the third sentence of Section 4.04 as they relate to an individual
Seller and not the Company) which shall be several and not joint) agrees to
indemnify and to hold Purchaser, its shareholders, officers, directors, and
employees (the "Indemnified Purchaser Parties") harmless from and against and
in respect of any losses (including lost revenues), damages, costs, expenses
(including costs of investigations and reasonable attorney fees arising out of
Third Party Claims), claims, suits, demands, judgments and diminutions in value
suffered or incurred (each a "Loss" and collectively "Losses") by Purchaser
resulting from any of the following; provided, however that for purposes of
this Article X the Losses of Purchaser resulting from the matters referred to
in clause (i) or clause (iv) below shall be the amount of such Losses
multiplied by the Purchased Percentage:
32
(i) Any obligation or liability of the Company for Taxes,
whether or not known or asserted at or prior to the Closing, to the
extent that such liability did not result in a reduction in the
Purchase Price at the Closing pursuant to Section 2.03 hereof;
(ii) Any misrepresentation or breach of warranty of the Company
or any Seller in this Agreement, the Schedules or Exhibits hereto, or
the Escrow Agreement, or in any closing certificate delivered by the
Company or any Seller to Purchaser pursuant to Article VII hereof;
(iii) Any breach or non-fulfillment of any covenant or
agreement on the part of the Company or any Seller under this
Agreement to be performed on or following the Closing Date;
(iv) Any and all amounts owed to Bay Area Cellular Telephone
Company which are not included as a liability in the Working Capital
Adjustment that related to the period prior to the Closing Date,
including amounts payable in respect of interconnect fees (the "BAC
Obligation"); and
(v) All costs and expenses (including reasonable attorneys'
fees) incurred by Purchaser in connection with any action, suit,
proceeding, demand, assessment or judgment incident to any of the
matters Purchaser is indemnified against by the Company and the
Sellers in this Agreement.
SECTION 10.02. INDEMNIFICATION BY PURCHASER. Notwithstanding the
Closing, and regardless of any investigation made at any time by or on behalf
of the Company or any Seller or any information the Company or any Seller may
have, but subject to the terms of this Article X, Purchaser agrees to
indemnify and to hold each of the Company and the Sellers, and their
directors, officers, stockholders, employees, representatives and agents
harmless from and against and in respect of any Losses incurred by the
Company and the Sellers, and after the Closing the Purchaser, the Company
and, if Xxxxxx Communication Corporation or another subsidiary then holds the
Cellular Authorizations now held by the Company, such company will indemnify
and hold each of the Sellers and any director, officer, stockholder,
employee, representative and agent of a Seller harmless from and against and
in respect of any Losses incurred by any of them, resulting from any of the
following:
(i) Any misrepresentation or breach of warranty in, or omission
from, any representation or warranty of Purchaser, in this Agreement,
the schedules or exhibits hereto, including the Escrow Agreement or
in any closing certificate delivered by Purchaser to the Company and
the Sellers pursuant to Article VIII hereof;
(ii) Any breach or non-fulfillment of any covenant or agreement
on the part of Purchaser under this Agreement to be performed on or
following the Closing Date;
(iii) Any claims made against a Seller by a third party arising
from the operations of the Company after the Closing Date and are not
claims for which
33
Purchaser Indemnified Parties are entitled to indemnity from Sellers
under Section 10.01 hereof;
(iv) Any violation of federal or state securities laws
resulting from Purchaser's misrepresentations in, or omission of
material information from, the Offer to the Other Holders pursuant to
Section 6.11 hereof, other than (x) any such misrepresentations in or
omissions from information provided to Purchaser by the Company or
Sellers or (y) the Company's or a Seller's omission to provide
Purchaser information the Company or a Seller was obligated to
provide or disclose to Purchaser pursuant to this Agreement; and
(v) All reasonable costs and expenses (including reasonable
attorneys' fees) incurred by the Company and the Sellers in
connection with any action, suit, proceeding, demand, assessment or
judgment incident to any of the matters for which the Company and the
Sellers are indemnified against by Purchaser in this Agreement.
SECTION 10.03. NOTICE OF CLAIMS; DEFENSE OF THIRD PARTY. A party
claiming indemnification under this Article X (the "Asserting Party") must
notify (in writing and in reasonable detail) the party from which
indemnification is sought (the "Defending Party") of the nature and basis of
such claim for indemnification. If such claim relates to a claim, suit,
litigation or other action by a third party against the Asserting Party or
any fixed or contingent liability to a third party (a "Third Party Claim"),
the Defending Party may elect to assume and control the defense of the Third
Party Claim at its own expense with counsel selected by the Defending Party
from and after such time as the Defending Party unconditionally agrees in
writing to accept, as against the Asserting Party, all liabilities on account
of such Third Party Claim. Assumption of such liability, as against the
Asserting Party, shall not be deemed an admission of liability as against any
such third party. Notwithstanding the foregoing, the Defending Party may not
assume or control the defense if the named parties to the Third Party Claim
(including any impleaded parties) include both the Defending Party and the
Asserting Party and representation of both parties by the same counsel (in
such counsel's reasonable determination) would be inappropriate due to actual
or potential differing interests between them, in which case the Asserting
Party shall have the right to defend the Third Party Claim and to employ
counsel reasonably approved by the Defending Party, and to the extent the
matter is determined to be subject to indemnification hereunder, the
Defending Party shall reimburse the Asserting Party for the reasonable costs
of its counsel. If the Defending Party assumes liability for the Third Party
Claim as against the Asserting Party and assumes the defense and control of
the Third Party Claim pursuant to this Section 10.03, the Defending Party
shall not be liable for any fees and expenses of counsel for the Asserting
Party incurred thereafter in connection with the Third Party Claim (except in
the case of actual or potential differing interests, as provided in the
preceding sentence), but shall not agree to any settlement of such Third
Party Claim which does not include an unconditional release of the Asserting
Party by the third party claimant on account thereof, PROVIDED that such
requirement shall be deemed waived to the extent that the Asserting Party
does not undertake to provide and promptly execute and, concurrently with the
delivery of any such release, deliver a corresponding release of the third
party claimant with respect to such Third Party Claim. If the Defending
Party does not assume liability for and the defense of the Third Party Claim
pursuant to this Section 10.03, the Asserting Party shall have the right (i)
to control the defense thereof and (ii), if the Asserting Party shall have
notified the
34
Defending Party of the Asserting Party's intention to negotiate a settlement
of the Third Party Claim (at the Defending Party's expense to the extent the
matter is determined to be subject to indemnification hereunder), which
notice shall include the material terms of any proposed settlement in
reasonable detail, to settle the Third Party Claim (at the Defending Party's
expense to the extent the matter is determined to be subject to
indemnification hereunder) on terms not materially inconsistent with those
set forth in such notice, unless the Defending Party shall have notified the
Asserting Party in writing of the Defending Party's election to assume
liability for and the defense of the Third Party Claim pursuant to this
Section 10.03 within ten days after receipt of such notice, and the Defending
Party promptly thereafter shall have taken appropriate action to implement
such defense. The Asserting Party shall not be entitled to settle any such
Third Party Claim pursuant to the preceding sentence unless such settlement
includes an unconditional release of the Defending Party by the Third party
claimant on account thereof, PROVIDED that such requirement shall be deemed
waived to the extent that the Defending Party does not undertake to provide
and promptly execute and, concurrently with delivery of any such release,
deliver a corresponding release of the third party claimant with respect to
such Third Party Claim. The Asserting Party and the Defending Party shall
use all reasonable efforts to cooperate fully with respect to the defense and
settlement of any Third Party Claim covered by this Article X.
SECTION 10.04. LIMITATIONS. The Defending Party's obligations to
indemnify the Asserting Party pursuant to this Article X shall be subject to
the following limitations:
(a) No indemnification shall be required to be made by the Defending
Party until the aggregate amount of the Asserting Party's Losses exceeds
$200,000 (the "Deductible") and then indemnification shall only be required
to be made by the Defending Party to the extent of such Losses that exceed
the Deductible; PROVIDED, HOWEVER, the Deductible shall not be applicable to
(i) adjustments to the Purchase Price provided for in Section 2.03, (ii) a
breach by any Seller or the Company of its representations set forth in
Section 4.02, Section 4.04, Section 4.05 and Section 4.16, (iii) the BAC
Obligation or (iv) losses resulting from fraud by the Defending Party.
(b) All representations and warranties contained in this Agreement
shall survive the Closing for twenty (20) months after the Closing Date;
PROVIDED, HOWEVER, that notwithstanding the foregoing, (x) the
representations and warranties contained in Section 4.02, Section 4.04,
Section 4.05 and Section 4.16 shall survive the Closing for an unlimited
duration and (y) the representations and warranties contained in Sections
4.13 and 4.10 (as it may relate to Environmental Laws) shall survive the
Closing until the fourth anniversary thereof (the applicable period of
survival being referred to as the "Survival Period"). To the extent a claim
is made in respect of a representation or warranty within the applicable
Survival Period, such representation or warranty shall survive after the
Survival Period for purposes of such claim until such claim is finally
determined or settled.
(c) The maximum liability of any Seller for indemnification under this
Article X (other than Losses resulting from such Seller's fraud) shall be the
portion of the Purchase Price paid to such Seller.
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ARTICLE XI
CONFIDENTIALITY AND PRESS RELEASES
SECTION 11.01. CONFIDENTIALITY. Each party (in such capacity, a
"Recipient Party") shall hold in strict confidence all documents and
information concerning the other (in such capacity, a "Disclosing Party")
and its business and properties and, if the transaction contemplated hereby
should not be consummated, such confidence shall be maintained, and all such
documents and information (in written form) shall immediately thereafter be
returned to the Disclosing Party. In furtherance of the foregoing, without
the express prior written consent of the Disclosing Party, the Recipient
Party shall not, directly or indirectly, disclose, disseminate, publish,
reproduce, retain, use (for its benefit or for the benefit of others) or
otherwise make available in any manner whatsoever, any such documents or
information to anyone except as provided in Section 11.03. If the Recipient
Party breaches, or threatens to commit a breach of, any of the provisions of
this Article XI, the Disclosing Party shall have the right (in addition to
any other rights and remedies available at law or in equity) to equitable
relief (including injunctions) against such breach or threatened breach, it
being acknowledged and agreed that any such breach or threatened breach will
cause irreparable harm to the Disclosing Party and that money damages would
not be an adequate remedy.
SECTION 11.02. PRESS RELEASES. No press release or public disclosure,
either written or oral, of the existence or terms of this Agreement shall be
made by either Purchaser or any Seller without the consent of each party
subject to the provisions of Section 11.03, and Purchaser, the Company and
Sellers shall each furnish to the other advance copies of any release which
it proposes to make public concerning this Agreement or the transactions
contemplated hereby and the date upon which Purchaser, the Company or any
Seller, as the case may be, proposes to make such press release.
SECTION 11.03. DISCLOSURES REQUIRED BY LAW. This Article XI shall not,
however, be construed to prohibit any party from making any disclosures to
any governmental authority that it is required to make by law or from filing
this Agreement with, or disclosing the terms of this Agreement to, any
institutional lender to such party, or prohibit the Company, any Seller,
Purchaser or any of their affiliates from disclosing to its investors,
partners, accountants, auditors, attorneys, parent company and broker/dealers
such terms of this transaction as are customarily disclosed to them in
connection with the sale or acquisition of a cellular telephone system;
PROVIDED, HOWEVER, that any such party shall be informed of the confidential
nature of such information and shall agree to keep such information
confidential; and PROVIDED, HOWEVER, that each party shall provide to the
other reasonable advance copies of any public release except where the
provision of such advance notice is not permissible.
ARTICLE XII
TERMINATION
SECTION 12.01. BREACHES AND DEFAULTS; OPPORTUNITY TO CURE. Prior to
the exercise by a party of any termination rights afforded under this
Agreement, if either party (the "Non-Breaching Party") believes the other
(the "Breaching Party") to be in breach hereunder, the Non-Breaching Party
shall provide the Breaching Party with written notice specifying in
reasonable detail the nature of such breach, whereupon the Breaching Party
shall have 15 days from the receipt of such notice to cure such breach to the
reasonable satisfaction of the Non-Breaching
36
Party; PROVIDED, HOWEVER, that if such breach is curable but is not capable
of being cured within such period and if the Breaching Party shall have
commenced action to cure such breach within such period and is diligently
attempting to cure such breach, then the Breaching Party shall be afforded an
additional twenty (20) days to cure such breach, PROVIDED, HOWEVER, that the
cure period for a breach shall in no event extend beyond the Outside Date (as
defined in Section 12.02(e) below). If the breach is not cured within such
time period, then the Breaching Party shall be in default hereunder and the
Non-Breaching Party shall be entitled to terminate this Agreement (as
provided in Section 12.02). This right of termination shall be in addition
to, and not in lieu of, any legal or equitable remedies available to the
Non-Breaching Party.
SECTION 12.02. TERMINATION. This Agreement may be terminated and the
transactions contemplated herein may be abandoned, by written notice given to
the other party hereto, at any time prior to the Closing:
(a) by written consent of each of the Company, the Sellers'
Representative, and Purchaser;
(b) by either Purchaser or the Sellers' Representative, if any court of
competent jurisdiction in the United States or other United States
governmental body shall have issued an order, decree or ruling or taken any
other action permanently restraining, enjoining or otherwise permanently
prohibiting the sale of the Shares to Purchaser (which Sellers and Purchaser
shall have used all reasonable efforts to have lifted or reversed) and such
order, decree, ruling or other action shall have become final and
nonappealable;
(c) subject to Section 12.01, by Purchaser, if either the Company or
the Sellers shall have breached any of their representations herein and such
breaches, in the aggregate, would reasonably be expected to have a Material
Adverse Effect or if the Company or the Sellers shall have materially
breached any of their covenants;
(d) subject to Section 12.01, by the Sellers, if Purchaser shall have
materially breached any of its representations or covenants herein;
(e) by either Sellers or Purchaser if the Closing shall not have
occurred on or before December 31, 1998, (the "Outside Date"), unless the
failure to have the Closing shall be due to the failure of the party seeking
to terminate this Agreement to perform in any material respect its
obligations under this Agreement required to be performed by it at or prior
to the Closing.
(f) by Sellers pursuant to the provisions of Section 6.04(b); and
(g) by Purchaser pursuant to Article IX.
37
ARTICLE XIII
BROKERS' FEES
Each party represents and warrants to the other that it shall be solely
responsible for the payment of any fee or commission due to any broker or
finder it has engaged with respect to this transaction and the other party
hereto shall be indemnified for any liability with respect thereto pursuant
to Article X hereof.
ARTICLE XIV
MISCELLANEOUS
SECTION 14.01. ADDITIONAL INSTRUMENTS OF TRANSFER. (a) From time to
time after the Closing, each party shall, if requested by another party,
make, execute and deliver such additional stock assignments, other
assignments, bills of sale, deeds and other instruments, as may be reasonably
necessary or proper to carry out the specific provisions of this Agreement,
including transfer to Purchaser all of Sellers' right, title and interest in
and to the Securities. Such efforts and assistance shall be at the cost of
the requesting party.
SECTION 14.02. NOTICES. All notices and other communications required
or permitted to be given hereunder shall be in writing and shall be deemed to
have been duly given if delivered, sent by telecopier, recognized overnight
delivery service or registered or certified mail, return receipt requested,
postage prepaid, to the following addresses:
(i) If to Purchaser:
00000 X. Xxxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxx Xxxx, Xxxxxxxx 00000
Attention: Xxxxxxx Xxxxxx
Facsimile No.: (000) 000-0000
with a required copy to:
Xxxxxxx & Xxxxxx
0000 Xxxxxxxx Xxxxx Xxxxx
Xxxxxxxxxx, Xxxxx Xxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxx, Xx., Esq.
Facsimile No.: (000) 000-0000
(ii) If to Sellers:
N.D. Xxxxx
0000 Xxxxxxxxx Xxx
Xxxxxxxxxx, XX 00000
with a required copy to:
Xxxxx X. Xxxxxx, Esq.
38
Young, Vogl, Harlick, Wilson & Xxxxxxx LLP
000 Xxxxxxxxxx Xx., Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
Notices delivered personally shall be effective upon delivery against
receipt. Notices transmitted by telecopy shall be effective when received
during regular business hours, provided that the burden of proving notice
when notice is transmitted by telecopy shall be the responsibility of the
party providing such notice. Notices delivered by overnight delivery
service shall be effective when received. Notices delivered by registered or
certified mail shall be effective on the date set forth on the receipt of
registered or certified mail, or 72 hours after mailing, whichever is earlier.
SECTION 14.03. EXPENSES. Each party shall bear its own expenses and
costs, including the fees of any corporate or FCC attorney retained by it,
incurred in connection with the preparation of this Agreement and the
consummation of the transactions contemplated hereby; provided that Sellers
and Purchaser shall bear equally FCC, Xxxx-Xxxxx Act and other governmental
filing fees.
SECTION 14.04. SELLERS' REPRESENTATIVE. Each of the Sellers hereby
designates N.D. Xxxxx to be the initial agent, attorney in fact and
representative of all Sellers (the "Sellers' Representative"). The Sellers'
Representative may be removed, and a new Sellers' Representative designated,
at any time and from time to time, only by a written notice to Purchaser and
the then Sellers' Representative from Sellers whose Securities represent a
majority of the Total Shares as of such date (or if after the Closing, as of
the date immediately prior to the Closing Date). In furtherance of the
foregoing designation of Sellers' Representative, each of the Sellers, by his
execution hereof, hereby makes, constitutes and appoints the Sellers'
Representative (and any successor Sellers' Representative designated in
accordance with the terms hereof), to be his true, sufficient and lawful
attorney, for him and in his name, place and xxxxx, for the purpose of (a)
collecting and disbursing to Sellers any and all amounts due and payable to
Sellers after the Closing and enforcing, waiving and compromising any and all
rights of Sellers under this Agreement and all other agreements, instruments
and documents contemplated by or required to be delivered in connection with
the transactions contemplated by this Agreement, (b) amending, modifying and
interpreting the provisions of this Agreement, the Deposit Escrow Agreement,
the Escrow Agreement and all other instruments and documents contemplated to
be delivered in connection with the transactions contemplated by this
Agreement; provided that no such amendment or modification shall
disproportionately affect any Seller, (c) making, agreeing to, compromising
and otherwise dealing with the Adjustments to the Purchase Price as
contemplated by Article II hereof and claims for indemnifications (whether
asserted by or against Purchaser) under Article X hereof, (d) executing and
delivering on behalf of Sellers all stock powers, endorsements, assignments,
stock certificates, receipts and all other instruments, documents and
agreements as shall be necessary or appropriate, in the good faith judgment
of the Sellers' Representative, to consummate and carry out the transactions
contemplated by this Agreement, the Deposit Escrow Agreement and the Escrow
Agreement and (e) acting as Sellers' Representative under this Agreement, and
the Escrow Agreement, and to do and perform all necessary acts contemplated
of the Sellers' Representative under this Agreement, the Escrow Agreement and
the Deposit Escrow Agreement both prior to, at and subsequent to the Closing
Date (including the performance and prosecution of this Agreement both prior
to, at and subsequent to the Closing Date), in as full and ample a manner as
such Seller might do if such
39
Seller were personally present. The Purchaser shall not be responsible or
liable in any manner for any actions taken or omitted to be taken by the
Sellers' Representative, including but not limited to, any actions with
respect to any amounts paid to the Sellers' Representative pursuant hereto,
and the Purchaser shall be indemnified and held harmless against any loss,
expense or damage arising therefrom. Upon the execution of this Agreement,
each Seller shall deliver to Sellers' Representative, to hold in escrow until
the Closing pending satisfaction or waiver by the Sellers' Representative of
the conditions precedent to Sellers' obligations set forth in Article VIII
hereof, original certificates or agreements evidencing the Securities owned
by him together with such executed stock powers or other instruments of
transfer as may be required pursuant to the terms hereof. The Sellers'
Representative is authorized to receive at Closing, and the Sellers hereby
irrevocably direct Purchaser to pay to Sellers' Representative or his
designees at Closing from the cash portion of the Purchase Price that would
have otherwise been paid to Sellers at Closing pursuant to the first sentence
of Section 2.03, a sum not to exceed $850,000 (the "Sellers' Expense
Reserve"). The Sellers' Representative is hereby authorized by Sellers to
utilize the Sellers' Expense Reserve for (w) the purposes of carrying out
Sellers' Representative's obligations and responsibilities under this
Agreement, including, without limitation, the expenses of accountants,
attorneys and other professionals as the Sellers' Representative deems
necessary or appropriate to hire, (x) paying all out-of-pocket expenses of
the Sellers' Representative relating to the performance of his duties, (y)
paying reasonable compensation to the Sellers' Representative for his
services and (z) paying the legal fees and expenses of Young, Vogl, Harlick,
Wilson & Xxxxxxx LLP, the brokers fee to Xxxxxxx & Associates and the other
amounts specified on SCHEDULE 14.04.
The Sellers' Representative agrees to faithfully perform his duties and
responsibilities to the Sellers, but shall have no personal liability to the
Sellers except for fraud or bad faith proven by clear and convincing
evidence. The Sellers' Representative shall be indemnified and held harmless
by Sellers for any claim, loss or expense (including reasonable attorneys
fees) arising from or related to the performance of his duties and
responsibilities hereunder and any and all costs of investigation and defense
of any claim incurred by the Sellers' Representative shall be advanced from
the Sellers' Expense Reserve.
At such time as the Sellers' Representative determines that all or any
portion of the Sellers' Expense Reserve is no longer necessary, the Sellers'
Representative will disburse such amounts to the Sellers pro rata in
proportion to their respective share of the Purchase Price.
SECTION 14.05. SPECIFIC PERFORMANCE. The parties recognize and
acknowledge that in the events any or all Sellers shall fail to perform its
obligations under the terms of this Agreement, money damages alone will not
be adequate to compensate the Purchaser. The parties, therefore, agree and
acknowledge that in the event any Seller fails to perform its obligations
under this Agreement prior to Closing, the Purchaser shall be entitled, in
addition to any action for monetary damages, in addition to any other rights
and remedies on account of such failure, to specific performance of the terms
of this Agreement as to such Seller and of the covenants and obligations
hereunder.
SECTION 14.06. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of California (without
application of principles of conflicts of law).
40
SECTION 14.07. ASSIGNMENT. Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any of the
parties hereto without the prior written consent of the other parties, which
consent will not be unreasonably withheld except that Purchaser shall have
the right to assign its rights under this Agreement to any institutional
lender.
SECTION 14.08. SUCCESSORS AND ASSIGNS. All agreements made and entered
into in connection with this transaction shall be binding upon and inure to
the benefit of the parties hereto, their successors and permitted assigns.
SECTION 14.09. AMENDMENTS; WAIVERS. No alteration, modification or
change of this Agreement shall be valid except by an agreement in writing
executed by the parties hereto. No failure or delay by any party hereto in
exercising any right, power or privilege hereunder (and no course of dealing
between or among any of the parties) shall operate as a waiver of any such
right, power or privilege. No waiver of any default on any one occasion
shall constitute a waiver of any subsequent or other default. No single or
partial exercise of any such right, power or privilege shall preclude the
further or full exercise thereof.
SECTION 14.10. ENTIRE AGREEMENT. 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.
SECTION 14.11. COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which when so executed shall be an original, but
all of which together shall constitute one agreement. Facsimile signatures
shall be deemed original signatures.
SECTION 14.12. SEVERABILITY. If any provision of this Agreement or the
application thereof to any person or circumstance shall be invalid or
unenforceable to any extent, the remainder of this Agreement and the
application of such provision to other persons or circumstances shall not be
affected thereby and shall be enforced to the greatest extent permitted by
law, but only as long as the continued validity, legality and enforceability
of such provision or application does not materially (a) alter the terms of
this Agreement, (b) diminish the benefits of this Agreement or (c) increase
the burdens of this Agreement, for any person.
SECTION 14.13. SECTION HEADINGS. The section headings contained in
this Agreement are solely for the purpose of reference, are not part of the
agreement of the parties and shall not in any way affect the meaning or
interpretation of this Agreement.
SECTION 14.14. INTERPRETATION. As both parties have participated in
the drafting of this Agreement, any ambiguity shall not be construed against
either party as the drafter.
SECTION 14.15. FURTHER ASSURANCES. For a period of twelve (12) months
after Closing, each Seller agrees to provide to Purchaser from time to time
any information that such Seller possesses with respect to the operation of
the Business and Shares prior to the Closing which the Purchaser reasonably
requests in the future in connection with the Purchaser's financing efforts
now or in the future or in connection with any FCC or other regulatory filing.
41
SECTION 14.16. THIRD PARTIES. Nothing herein, expressed or implied, is
intended to or shall confer on any person other than the parties hereto any
rights, remedies, obligations or liabilities under or by reason of this
Agreement.
SECTION 14.17. WAIVER OF JURY TRIAL; JURISDICTION. THE PARTIES HERETO
IRREVOCABLY WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING,
CLAIM, COUNTERCLAIM, OR CROSS CLAIM ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT. THE PARTIES HERETO SUBMIT AND AGREE, IN THE EVENT OF A DISPUTE
UNDER THIS AGREEMENT, TO SUBMIT ANY SUCH DISPUTE TO THE JURISDICTION OF THE
COURTS IN AND OF THE STATE OF CALIFORNIA AND TO THE JURISDICTION OF THE
UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA AND TO
THE COURTS TO WHICH AN APPEAL OF THE DECISIONS OF SUCH COURTS MAY BE TAKEN,
AND CONSENT THAT SERVICE OF PROCESS WITH RESPECT TO ALL SUCH COURTS MAY BE
MADE BY REGISTERED MAIL TO THEIR RESPECTIVE ADDRESSES SET FORTH IN SECTION
14.02 HEREOF OR THE SIGNATURE PAGES HERETO.
[THE REST OF THIS PAGE IS LEFT BLANK INTENTIONALLY.]
42
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be executed by its duly authorized representative as of the day and year
first above written.
PURCHASER:
XXXXXX CELLULAR OF CALIFORNIA, INC.
By: /s/ Xxxxxxx Xxxxxx
----------------------------------------------
Xxxxxxx Xxxxxx
Chairman
THE COMPANY:
SANTA XXXX CELLULAR TELEPHONE, INC.
By: /s/ Xxxxxxxx X. Xxxxx
----------------------------------------------
Title: President
SELLERS:
/s/ Xxxxxxxx X. Xxxxx
--------------------------------------------------
Xxxxxxxx X. Xxxxx
0000 Xxxxxxxxx Xxx
--------------------------------------------------
Xxxxxxxxxx, Xxxxxxxxxx 00000
--------------------------------------------------
Address:
00-0000000
--------------------------------------------------
Social Security Number/Taxpayer Identification No.
Shares Owned: 10,773.36290
-------------------------------------
Options Owned: -0-
------------------------------------
/s/ Xxxxxxxx X. Xxxxx
--------------------------------------------------
Xxxxxxxx X. Xxxxx
0000 Xxxxxxxxx Xxx
--------------------------------------------------
Xxxxxxxxxx, Xxxxxxxxxx 00000
--------------------------------------------------
Address:
###-##-####
--------------------------------------------------
Social Security Number/Taxpayer Identification No.
Shares Owned: 1,756.90960
-------------------------------------
Options Owned: 695
------------------------------------
[SIGNATURE PAGE TO STOCK PURCHASE AGREEMENT]
43
/s/ Xxxxxxxx X. Xxxxx
--------------------------------------------------
Xxxxxxxx X. Xxxxx
x/x Xxxxxxxx Xxxxx, 0000 Xxxxxxxxx Xxx
--------------------------------------------------
Xxxxxxxxxx, XX 00000
--------------------------------------------------
Address:
###-##-####
--------------------------------------------------
Social Security Number/Taxpayer Identification No.
Shares Owned: 1999.08805
-------------------------------------
Options Owned: -0-
------------------------------------
Vipui Xxxxx Trust
By: /s/ Xxxx Xxxxx
Xxxx Xxxxx, Trustee
c/o Xxxxxxxx Xxxxx, 0000 Xxxxxxxxx Xxx
--------------------------------------------------
Xxxxxxxxxx, XX 00000
--------------------------------------------------
Address:
00-0000000
--------------------------------------------------
Social Security Number/Taxpayer Identification No.
Shares Owned: 121.54130
-------------------------------------
Options Owned: -0-
------------------------------------
[SIGNATURE PAGE TO STOCK PURCHASE AGREEMENT]
44
Xxxxx Xxxxx Trust
By: /s/ Xxxx Xxxxx
--------------------------------------------
Xxxx Xxxxx, Trustee
c/o Xxxxxxxx Xxxxx, 0000 Xxxxxxxxx Xxx
--------------------------------------------------
Xxxxxxxxxx, XX 00000
--------------------------------------------------
Address:
00-0000000
--------------------------------------------------
Social Security Number/Taxpayer Identification No.
Shares Owned: 350.20825
-------------------------------------
Options Owned: -0-
------------------------------------
/s/ Xxxxxx Xxx
--------------------------------------------------
Xxxxxx Xxx
0000 Xxxxxxxxx Xxxxxx
--------------------------------------------------
Xxx Xxxx, XX 00000
--------------------------------------------------
Address:
###-##-####
--------------------------------------------------
Social Security Number/Taxpayer Identification No.
Shares Owned: 767.0000
-------------------------------------
Options Owned: 585
------------------------------------
[SIGNATURE PAGE TO STOCK PURCHASE AGREEMENT]
45
/s/ Xxxxx Xxx
--------------------------------------------------
Xxxxx Xxx
0000 Xxxxxxxxx Xxxxxx
--------------------------------------------------
Xxx Xxxx, XX 00000
--------------------------------------------------
Address:
###-##-####
--------------------------------------------------
Social Security Number/Taxpayer Identification No.
Shares Owned: 62.83090
-------------------------------------
Options Owned: -0-
------------------------------------
Xxxxx Xxx Trust
By: /s/ Xxxxxx Xxxx
--------------------------------------------
Xxxxxx Xxxx, Trustee
0000 Xxxxxxxxx Xxxxxx
--------------------------------------------------
Xxx Xxxx, XX 00000
--------------------------------------------------
Address:
00-0000000
--------------------------------------------------
Social Security Number/Taxpayer Identification No.
Shares Owned: 310.95805
-------------------------------------
Options Owned: -0-
------------------------------------
[SIGNATURE PAGE TO STOCK PURCHASE AGREEMENT]
46
/s/ Xxxx Xxx
--------------------------------------------------
Xxxx Xxx
0000 Xxxxxxxxx Xxxxxx
--------------------------------------------------
Xxx Xxxx, XX 00000
--------------------------------------------------
Address:
###-##-####
--------------------------------------------------
Social Security Number/Taxpayer Identification No.
Shares Owned: 62.83090
-------------------------------------
Options Owned: -0-
------------------------------------
Xxxx Xxx Trust
By: /s/ Xxxxxx Xxxx
--------------------------------------------
Xxxxxx Xxxx, Trustee
0000 Xxxxxxxxx Xxxxxx
--------------------------------------------------
Xxx Xxxx, XX 00000
--------------------------------------------------
Address:
00-0000000
--------------------------------------------------
Social Security Number/Taxpayer Identification No.
Shares Owned: 310.95815
-------------------------------------
Options Owned: -0-
------------------------------------
/s/ Xxxxx Xxx
--------------------------------------------------
Xxxxx Xxx
0000 Xxxxxxxxx Xxxxxx
--------------------------------------------------
Xxx Xxxx, XX 00000
--------------------------------------------------
Address:
###-##-####
--------------------------------------------------
Social Security Number/Taxpayer Identification No.
Shares Owned: 28.12900
-------------------------------------
Options Owned: -0-
------------------------------------
[SIGNATURE PAGE TO STOCK PURCHASE AGREEMENT]
47
Xxxxx Xxx Trust
By: /s/ Xxxxxx Xxxx
--------------------------------------------
Xxxxxx Xxxx, Trustee
0000 Xxxxxxxxx Xxxxxx
--------------------------------------------------
Xxx Xxxx, XX 00000
--------------------------------------------------
Address:
00-0000000
--------------------------------------------------
Social Security Number/Taxpayer Identification No.
Shares Owned: 310.95815
-------------------------------------
Options Owned: -0-
------------------------------------
[SIGNATURE PAGE TO STOCK PURCHASE AGREEMENT]
48
ACCEPTANCE SIGNATURE PAGE
Reference is made to that certain Securities Purchase Agreement dated [ ],
1998 by and among Xxxxxx Cellular of California, Inc., as Purchaser, Santa
Xxxx Cellular Telephone Company, Inc., and the Shareholders and Optionholders
of Santa Xxxx Cellular Telephone Company (the "Agreement"). All capitalized
terms used herein and not otherwise defined have the meaning given such term
in the Agreement.
The undersigned acknowledges receipt of the Offer, including a copy of
the Agreement and all Exhibits and Schedules thereto and that the undersigned
has read and understands same. By the execution of this Acceptance Signature
Page the undersigned hereby agrees to become a party to and bound by the
Agreement as a "Seller", including without limitation the Sections of the
Agreement providing for the representations and warranties to, and
indemnification of, Purchaser. The undersigned covenants and certifies to
the Company in connection with the Agreement and to Young, Vogl, Harlick,
Wilson and Xxxxxxx in connection with their opinion to be delivered pursuant
to Section 7.08 of the Agreement that such securities are held free and clear
of all encumbrances and that the undersigned owns of record and beneficially:
1,756.90960 Shares
--------------
695 Options
--------------
IN WITNESS WHEREOF, the undersigned has executed this Acceptance
Signature Page this __________ day of ______________________________, 1998.
/s/ Xxxxxxxx X. Xxxxx
------------------------------------------------
(Signature)
Xxxxxxxx X. Xxxxx
------------------------------------------------
Print Name
0000 Xxxxxxxxx Xxx, Xxxxxxxxxx, Xxxxxxxxxx 00000
------------------------------------------------
Address
* Note: If Securities are held jointly, both parties must sign. If
Securities are held in trust, the trustee or other authorized person must
sign. If a California resident or resident of any community property state,
both spouses must sign. [CONSULT YOUR ATTORNEY AS TO THE PROPER SIGNATURE
REQUIREMENTS.]
49
ACCEPTANCE SIGNATURE PAGE
Reference is made to that certain Securities Purchase Agreement dated [ ],
1998 by and among Xxxxxx Cellular of California, Inc., as Purchaser, Santa
Xxxx Cellular Telephone Company, Inc., and the Shareholders and Optionholders
of Santa Xxxx Cellular Telephone Company (the "Agreement"). All capitalized
terms used herein and not otherwise defined have the meaning given such term
in the Agreement.
The undersigned acknowledges receipt of the Offer, including a copy of
the Agreement and all Exhibits and Schedules thereto and that the undersigned
has read and understands same. By the execution of this Acceptance Signature
Page the undersigned hereby agrees to become a party to and bound by the
Agreement as a "Seller", including without limitation the Sections of the
Agreement providing for the representations and warranties to, and
indemnification of, Purchaser. The undersigned covenants and certifies to
the Company in connection with the Agreement and to Young, Vogl, Harlick,
Wilson and Xxxxxxx in connection with their opinion to be delivered pursuant
to Section 7.08 of the Agreement that such securities are held free and clear
of all encumbrances and that the undersigned owns of record and beneficially:
10,773.36290 Shares
--------------
-0- Options
--------------
IN WITNESS WHEREOF, the undersigned has executed this Acceptance
Signature Page this __________ day of ______________________________, 1998.
/s/ Xxxxxxxx X. Xxxxx
------------------------------------------------
(Signature)
Xxxxxxxx X. Xxxxx (A.R.A.P. Partners Nominee)
------------------------------------------------
Print Name
0000 Xxxxxxxxx Xxx, Xxxxxxxxxx, Xxxxxxxxxx 00000
------------------------------------------------
Address
* Note: If Securities are held jointly, both parties must sign. If
Securities are held in trust, the trustee or other authorized person must
sign. If a California resident or resident of any community property state,
both spouses must sign. [CONSULT YOUR ATTORNEY AS TO THE PROPER SIGNATURE
REQUIREMENTS.]
50
ACCEPTANCE SIGNATURE PAGE
Reference is made to that certain Securities Purchase Agreement dated [ ],
1998 by and among Xxxxxx Cellular of California, Inc., as Purchaser, Santa
Xxxx Cellular Telephone Company, Inc., and the Shareholders and Optionholders
of Santa Xxxx Cellular Telephone Company (the "Agreement"). All capitalized
terms used herein and not otherwise defined have the meaning given such term
in the Agreement.
The undersigned acknowledges receipt of the Offer, including a copy of
the Agreement and all Exhibits and Schedules thereto and that the undersigned
has read and understands same. By the execution of this Acceptance Signature
Page the undersigned hereby agrees to become a party to and bound by the
Agreement as a "Seller", including without limitation the Sections of the
Agreement providing for the representations and warranties to, and
indemnification of, Purchaser. The undersigned covenants and certifies to
the Company in connection with the Agreement and to Young, Vogl, Harlick,
Wilson and Xxxxxxx in connection with their opinion to be delivered pursuant
to Section 7.08 of the Agreement that such securities are held free and clear
of all encumbrances and that the undersigned owns of record and beneficially:
1999.08805 Shares
--------------
-0- Options
--------------
IN WITNESS WHEREOF, the undersigned has executed this Acceptance
Signature Page this __________ day of ______________________________, 1998.
/s/ Xxxxxxxx X. Xxxxx
------------------------------------------------
(Signature)
Xxxxxxxx X. Xxxxx
------------------------------------------------
Print Name
0000 Xxxxxxxxx Xxx, Xxxxxxxxxx, Xxxxxxxxxx 00000
------------------------------------------------
Address
* Note: If Securities are held jointly, both parties must sign. If
Securities are held in trust, the trustee or other authorized person must
sign. If a California resident or resident of any community property state,
both spouses must sign. [CONSULT YOUR ATTORNEY AS TO THE PROPER SIGNATURE
REQUIREMENTS.]
51
ACCEPTANCE SIGNATURE PAGE
Reference is made to that certain Securities Purchase Agreement dated [ ],
1998 by and among Xxxxxx Cellular of California, Inc., as Purchaser, Santa
Xxxx Cellular Telephone Company, Inc., and the Shareholders and Optionholders
of Santa Xxxx Cellular Telephone Company (the "Agreement"). All capitalized
terms used herein and not otherwise defined have the meaning given such term
in the Agreement.
The undersigned acknowledges receipt of the Offer, including a copy of
the Agreement and all Exhibits and Schedules thereto and that the undersigned
has read and understands same. By the execution of this Acceptance Signature
Page the undersigned hereby agrees to become a party to and bound by the
Agreement as a "Seller", including without limitation the Sections of the
Agreement providing for the representations and warranties to, and
indemnification of, Purchaser. The undersigned covenants and certifies to
the Company in connection with the Agreement and to Young, Vogl, Harlick,
Wilson and Xxxxxxx in connection with their opinion to be delivered pursuant
to Section 7.08 of the Agreement that such securities are held free and clear
of all encumbrances and that the undersigned owns of record and beneficially:
121.54130 Shares
--------------
-0- Options
--------------
IN WITNESS WHEREOF, the undersigned has executed this Acceptance
Signature Page this __________ day of ______________________________, 1998.
/s/ Xxxx Xxxxx
------------------------------------------------
(Signature)
Xxxx Xxxxx (Xxxxx Xxxxx Trust)
------------------------------------------------
Print Name
0000 Xxxxxxxxx Xxx, Xxxxxxxxxx, Xxxxxxxxxx 00000
------------------------------------------------
Address
* Note: If Securities are held jointly, both parties must sign. If
Securities are held in trust, the trustee or other authorized person must
sign. If a California resident or resident of any community property state,
both spouses must sign. [CONSULT YOUR ATTORNEY AS TO THE PROPER SIGNATURE
REQUIREMENTS.]
52
ACCEPTANCE SIGNATURE PAGE
Reference is made to that certain Securities Purchase Agreement dated [ ],
1998 by and among Xxxxxx Cellular of California, Inc., as Purchaser, Santa
Xxxx Cellular Telephone Company, Inc., and the Shareholders and Optionholders
of Santa Xxxx Cellular Telephone Company (the "Agreement"). All capitalized
terms used herein and not otherwise defined have the meaning given such term
in the Agreement.
The undersigned acknowledges receipt of the Offer, including a copy of
the Agreement and all Exhibits and Schedules thereto and that the undersigned
has read and understands same. By the execution of this Acceptance Signature
Page the undersigned hereby agrees to become a party to and bound by the
Agreement as a "Seller", including without limitation the Sections of the
Agreement providing for the representations and warranties to, and
indemnification of, Purchaser. The undersigned covenants and certifies to
the Company in connection with the Agreement and to Young, Vogl, Harlick,
Wilson and Xxxxxxx in connection with their opinion to be delivered pursuant
to Section 7.08 of the Agreement that such securities are held free and clear
of all encumbrances and that the undersigned owns of record and beneficially:
350.20825 Shares
--------------
-0- Options
--------------
IN WITNESS WHEREOF, the undersigned has executed this Acceptance
Signature Page this __________ day of ______________________________, 1998.
/s/ Xxxx Xxxxx
------------------------------------------------
(Signature)
Xxxx Xxxxx (Xxxxx Xxxxx Trust)
------------------------------------------------
Print Name
0000 Xxxxxxxxx Xxx, Xxxxxxxxxx, Xxxxxxxxxx 00000
------------------------------------------------
Address
* Note: If Securities are held jointly, both parties must sign. If
Securities are held in trust, the trustee or other authorized person must
sign. If a California resident or resident of any community property state,
both spouses must sign. [CONSULT YOUR ATTORNEY AS TO THE PROPER SIGNATURE
REQUIREMENTS.]
53
ACCEPTANCE SIGNATURE PAGE
Reference is made to that certain Securities Purchase Agreement dated [ ],
1998 by and among Xxxxxx Cellular of California, Inc., as Purchaser, Santa
Xxxx Cellular Telephone Company, Inc., and the Shareholders and Optionholders
of Santa Xxxx Cellular Telephone Company (the "Agreement"). All capitalized
terms used herein and not otherwise defined have the meaning given such term
in the Agreement.
The undersigned acknowledges receipt of the Offer, including a copy of
the Agreement and all Exhibits and Schedules thereto and that the undersigned
has read and understands same. By the execution of this Acceptance Signature
Page the undersigned hereby agrees to become a party to and bound by the
Agreement as a "Seller", including without limitation the Sections of the
Agreement providing for the representations and warranties to, and
indemnification of, Purchaser. The undersigned covenants and certifies to
the Company in connection with the Agreement and to Young, Vogl, Harlick,
Wilson and Xxxxxxx in connection with their opinion to be delivered pursuant
to Section 7.08 of the Agreement that such securities are held free and clear
of all encumbrances and that the undersigned owns of record and beneficially:
767.0000 Shares
--------------
585 Options
--------------
IN WITNESS WHEREOF, the undersigned has executed this Acceptance
Signature Page this __________ day of ______________________________, 1998.
/s/ Xxxxxx Xxx
------------------------------------------------
(Signature)
Xxxxxx Xxx
------------------------------------------------
Print Name
0000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, XX 00000
------------------------------------------------
Address
* Note: If Securities are held jointly, both parties must sign. If
Securities are held in trust, the trustee or other authorized person must
sign. If a California resident or resident of any community property state,
both spouses must sign. [CONSULT YOUR ATTORNEY AS TO THE PROPER SIGNATURE
REQUIREMENTS.]
54
ACCEPTANCE SIGNATURE PAGE
Reference is made to that certain Securities Purchase Agreement dated [ ],
1998 by and among Xxxxxx Cellular of California, Inc., as Purchaser, Santa
Xxxx Cellular Telephone Company, Inc., and the Shareholders and Optionholders
of Santa Xxxx Cellular Telephone Company (the "Agreement"). All capitalized
terms used herein and not otherwise defined have the meaning given such term
in the Agreement.
The undersigned acknowledges receipt of the Offer, including a copy of
the Agreement and all Exhibits and Schedules thereto and that the undersigned
has read and understands same. By the execution of this Acceptance Signature
Page the undersigned hereby agrees to become a party to and bound by the
Agreement as a "Seller", including without limitation the Sections of the
Agreement providing for the representations and warranties to, and
indemnification of, Purchaser. The undersigned covenants and certifies to
the Company in connection with the Agreement and to Young, Vogl, Harlick,
Wilson and Xxxxxxx in connection with their opinion to be delivered pursuant
to Section 7.08 of the Agreement that such securities are held free and clear
of all encumbrances and that the undersigned owns of record and beneficially:
62.83090 Shares
--------------
-0- Options
--------------
IN WITNESS WHEREOF, the undersigned has executed this Acceptance
Signature Page this __________ day of ______________________________, 1998.
/s/ Xxxxx Xxx
------------------------------------------------
(Signature)
Xxxxx Xxx
------------------------------------------------
Print Name
0000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, XX 00000
------------------------------------------------
Address
* Note: If Securities are held jointly, both parties must sign. If
Securities are held in trust, the trustee or other authorized person must
sign. If a California resident or resident of any community property state,
both spouses must sign. [CONSULT YOUR ATTORNEY AS TO THE PROPER SIGNATURE
REQUIREMENTS.]
55
ACCEPTANCE SIGNATURE PAGE
Reference is made to that certain Securities Purchase Agreement dated [ ],
1998 by and among Xxxxxx Cellular of California, Inc., as Purchaser, Santa
Xxxx Cellular Telephone Company, Inc., and the Shareholders and Optionholders
of Santa Xxxx Cellular Telephone Company (the "Agreement"). All capitalized
terms used herein and not otherwise defined have the meaning given such term
in the Agreement.
The undersigned acknowledges receipt of the Offer, including a copy of
the Agreement and all Exhibits and Schedules thereto and that the undersigned
has read and understands same. By the execution of this Acceptance Signature
Page the undersigned hereby agrees to become a party to and bound by the
Agreement as a "Seller", including without limitation the Sections of the
Agreement providing for the representations and warranties to, and
indemnification of, Purchaser. The undersigned covenants and certifies to
the Company in connection with the Agreement and to Young, Vogl, Harlick,
Wilson and Xxxxxxx in connection with their opinion to be delivered pursuant
to Section 7.08 of the Agreement that such securities are held free and clear
of all encumbrances and that the undersigned owns of record and beneficially:
310.95805 Shares
--------------
-0- Options
--------------
IN WITNESS WHEREOF, the undersigned has executed this Acceptance
Signature Page this __________ day of ______________________________, 1998.
/s/ Xxx Xxxx
------------------------------------------------
(Signature)
Xxx Xxxx (Xxxxx Xxx Trustee)
------------------------------------------------
Print Name
0000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, XX 00000
------------------------------------------------
Address
* Note: If Securities are held jointly, both parties must sign. If
Securities are held in trust, the trustee or other authorized person must
sign. If a California resident or resident of any community property state,
both spouses must sign. [CONSULT YOUR ATTORNEY AS TO THE PROPER SIGNATURE
REQUIREMENTS.]
56
ACCEPTANCE SIGNATURE PAGE
Reference is made to that certain Securities Purchase Agreement dated [ ],
1998 by and among Xxxxxx Cellular of California, Inc., as Purchaser, Santa
Xxxx Cellular Telephone Company, Inc., and the Shareholders and Optionholders
of Santa Xxxx Cellular Telephone Company (the "Agreement"). All capitalized
terms used herein and not otherwise defined have the meaning given such term
in the Agreement.
The undersigned acknowledges receipt of the Offer, including a copy of
the Agreement and all Exhibits and Schedules thereto and that the undersigned
has read and understands same. By the execution of this Acceptance Signature
Page the undersigned hereby agrees to become a party to and bound by the
Agreement as a "Seller", including without limitation the Sections of the
Agreement providing for the representations and warranties to, and
indemnification of, Purchaser. The undersigned covenants and certifies to
the Company in connection with the Agreement and to Young, Vogl, Harlick,
Wilson and Xxxxxxx in connection with their opinion to be delivered pursuant
to Section 7.08 of the Agreement that such securities are held free and clear
of all encumbrances and that the undersigned owns of record and beneficially:
62.83090 Shares
--------------
-0- Options
--------------
IN WITNESS WHEREOF, the undersigned has executed this Acceptance
Signature Page this __________ day of ______________________________, 1998.
/s/ Xxxx Xxx
------------------------------------------------
(Signature)
Xxxx Xxx
------------------------------------------------
Print Name
0000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, XX 00000
------------------------------------------------
Address
* Note: If Securities are held jointly, both parties must sign. If
Securities are held in trust, the trustee or other authorized person must
sign. If a California resident or resident of any community property state,
both spouses must sign. [CONSULT YOUR ATTORNEY AS TO THE PROPER SIGNATURE
REQUIREMENTS.]
57
ACCEPTANCE SIGNATURE PAGE
Reference is made to that certain Securities Purchase Agreement dated [ ],
1998 by and among Xxxxxx Cellular of California, Inc., as Purchaser, Santa
Xxxx Cellular Telephone Company, Inc., and the Shareholders and Optionholders
of Santa Xxxx Cellular Telephone Company (the "Agreement"). All capitalized
terms used herein and not otherwise defined have the meaning given such term
in the Agreement.
The undersigned acknowledges receipt of the Offer, including a copy of
the Agreement and all Exhibits and Schedules thereto and that the undersigned
has read and understands same. By the execution of this Acceptance Signature
Page the undersigned hereby agrees to become a party to and bound by the
Agreement as a "Seller", including without limitation the Sections of the
Agreement providing for the representations and warranties to, and
indemnification of, Purchaser. The undersigned covenants and certifies to
the Company in connection with the Agreement and to Young, Vogl, Harlick,
Wilson and Xxxxxxx in connection with their opinion to be delivered pursuant
to Section 7.08 of the Agreement that such securities are held free and clear
of all encumbrances and that the undersigned owns of record and beneficially:
310.95815 Shares
--------------
-0- Options
--------------
IN WITNESS WHEREOF, the undersigned has executed this Acceptance
Signature Page this __________ day of ______________________________, 1998.
/s/ Xxx Xxxx (Xxxx Xxx Trustee)
------------------------------------------------
(Signature)
Xxx Xxxx
------------------------------------------------
Print Name
0000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, XX 00000
------------------------------------------------
Address
* Note: If Securities are held jointly, both parties must sign. If
Securities are held in trust, the trustee or other authorized person must
sign. If a California resident or resident of any community property state,
both spouses must sign. [CONSULT YOUR ATTORNEY AS TO THE PROPER SIGNATURE
REQUIREMENTS.]
58
ACCEPTANCE SIGNATURE PAGE
Reference is made to that certain Securities Purchase Agreement dated [ ],
1998 by and among Xxxxxx Cellular of California, Inc., as Purchaser, Santa
Xxxx Cellular Telephone Company, Inc., and the Shareholders and Optionholders
of Santa Xxxx Cellular Telephone Company (the "Agreement"). All capitalized
terms used herein and not otherwise defined have the meaning given such term
in the Agreement.
The undersigned acknowledges receipt of the Offer, including a copy of
the Agreement and all Exhibits and Schedules thereto and that the undersigned
has read and understands same. By the execution of this Acceptance Signature
Page the undersigned hereby agrees to become a party to and bound by the
Agreement as a "Seller", including without limitation the Sections of the
Agreement providing for the representations and warranties to, and
indemnification of, Purchaser. The undersigned covenants and certifies to
the Company in connection with the Agreement and to Young, Vogl, Harlick,
Wilson and Xxxxxxx in connection with their opinion to be delivered pursuant
to Section 7.08 of the Agreement that such securities are held free and clear
of all encumbrances and that the undersigned owns of record and beneficially:
28.12900 Shares
--------------
-0- Options
--------------
IN WITNESS WHEREOF, the undersigned has executed this Acceptance
Signature Page this __________ day of ______________________________, 1998.
/s/ Xxxxx Xxx
------------------------------------------------
(Signature)
Xxxxx Xxx
------------------------------------------------
Print Name
0000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, XX 00000
------------------------------------------------
Address
* Note: If Securities are held jointly, both parties must sign. If
Securities are held in trust, the trustee or other authorized person must
sign. If a California resident or resident of any community property state,
both spouses must sign. [CONSULT YOUR ATTORNEY AS TO THE PROPER SIGNATURE
REQUIREMENTS.]
59
ACCEPTANCE SIGNATURE PAGE
Reference is made to that certain Securities Purchase Agreement dated [ ],
1998 by and among Xxxxxx Cellular of California, Inc., as Purchaser, Santa
Xxxx Cellular Telephone Company, Inc., and the Shareholders and Optionholders
of Santa Xxxx Cellular Telephone Company (the "Agreement"). All capitalized
terms used herein and not otherwise defined have the meaning given such term
in the Agreement.
The undersigned acknowledges receipt of the Offer, including a copy of
the Agreement and all Exhibits and Schedules thereto and that the undersigned
has read and understands same. By the execution of this Acceptance Signature
Page the undersigned hereby agrees to become a party to and bound by the
Agreement as a "Seller", including without limitation the Sections of the
Agreement providing for the representations and warranties to, and
indemnification of, Purchaser. The undersigned covenants and certifies to
the Company in connection with the Agreement and to Young, Vogl, Harlick,
Wilson and Xxxxxxx in connection with their opinion to be delivered pursuant
to Section 7.08 of the Agreement that such securities are held free and clear
of all encumbrances and that the undersigned owns of record and beneficially:
310.95815 Shares
--------------
-0- Options
--------------
IN WITNESS WHEREOF, the undersigned has executed this Acceptance
Signature Page this __________ day of ______________________________, 1998.
/s/ Xxx Xxxx
------------------------------------------------
(Signature)
Xxx Xxxx (Xxxxx Xxx Trustee)
------------------------------------------------
Print Name
0000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, XX 00000
------------------------------------------------
Address
* Note: If Securities are held jointly, both parties must sign. If
Securities are held in trust, the trustee or other authorized person must
sign. If a California resident or resident of any community property state,
both spouses must sign. [CONSULT YOUR ATTORNEY AS TO THE PROPER SIGNATURE
REQUIREMENTS.]
60
