ASSET PURCHASE AGREEMENT
between
PACIFIC TELECOM CELLULAR OF ALASKA RSA #1, INC.
and
XXXXXX CELLULAR SYSTEMS, INC.
DATED AS OF OCTOBER 6, 1999
TABLE OF CONTENTS
ARTICLE I PURCHASE AND SALE 1
ARTICLE II DESCRIPTION OF ASSETS, EXCLUDED ASSETS 2
Section 2.01. Assets 2
Section 2.02. Excluded Assets 3
ARTICLE III ASSUMPTION OF LIABILITIES 4
ARTICLE IV INSTRUMENTS OF TRANSFER AND ASSUMPTION 4
Section 4.01. Transfer Documents 4
Section 4.02. Assumption Documents 4
ARTICLE V PURCHASE PRICE; ALLOCATION 5
Section 5.01. Purchase Price 5
Section 5.02. Intentionally Omitted 5
Section 5.03. Payment of Purchase Price 5
Section 5.04. Allocation of Purchase Price 5
Section 5.05. Purchase Price Adjustment 5
ARTICLE VI CLOSING 8
ARTICLE VII SELLER'S REPRESENTATIONS 8
Section 7.01. Organization, Qualification 8
Section 7.02. Consents, Authorization, Execution and Delivery of Agreement 8
Section 7.03. Subsidiaries and Interests in Other Companies 9
Section 7.04. Title to Assets; Condition of Assets 9
Section 7.05. Real Property - Owned 9
Section 7.06. Real and Personal Property - Leased 9
Section 7.07. Existing Contracts 9
Section 7.08. Governmental Licenses 10
Section 7.09. Compliance with Laws 11
Section 7.10. No Violation of Existing Agreements 11
Section 7.11. Litigation and Legal Proceedings 11
Section 7.12. Environmental Compliance 11
Section 7.13. Employees 12
Section 7.14. Employee Benefits 12
Section 7.15. Tax Matters 13
Section 7.16. Financial Statements 14
Section 7.17. Subscribers/Agents 15
Section 7.18. Insurance 15
Section 7.19. Brokers 16
Section 7.20. Undisclosed Liabilities 16
Section 7.21. Pricing of Services 16
Section 7.22. Proprietary Rights 16
Section 7.23. Accounts Receivable and Bad Debts 16
Section 7.24. Product Information 17
Section 7.25. Certain Business Relationships with Seller 17
Section 7.26. Disclosure 17
ARTICLE VIII PURCHASER'S REPRESENTATIONS 17
Section 8.01. Organization; Qualification 17
Section 8.02. Consents; Authorization; Execution and Delivery of Agreement 17
Section 8.03. Litigation and Legal Proceedings 18
Section 8.04. Brokers 18
ARTICLE IX SELLER'S AND PURCHASER'S COVENANTS 18
Section 9.01. Financial Statements and Cellular System Information 18
Section 9.02. Governmental Approvals 19
Section 9.03. Third Party Consents; Closing Conditions 19
Section 9.04. Access 20
Section 9.05. Conduct of Business 21
Section 9.06. No Shopping 23
Section 9.07. Employees 23
Section 9.08. Supplemental Disclosure 23
Section 9.09. Management Agreement 24
Section 9.10. Purchaser's Financial Condition 24
ARTICLE X CONDITIONS PRECEDENT TO PURCHASER'S OBLIGATION TO CLOSE 24
Section 10.01. Accuracy of Representations and Warranties; Performance of
this Agreement 24
Section 10.02. Resolutions 24
Section 10.03. Incumbency Certificate 24
Section 10.04. Third Party Consents; FCC; Xxxx-Xxxxx Act 25
Section 10.05. No Material Adverse Change 25
Section 10.06. Opinion of Counsel to Seller 25
Section 10.07. Opinions of FCC Counsel to Seller 25
Section 10.08. Closing Escrow Agreement 25
Section 10.09. Title Insurance; Estoppel 26
Section 10.11. Operation of Cellular System 26
ARTICLE XI CONDITIONS PRECEDENT TO SELLER'S OBLIGATION TO CLOSE 26
Section 11.01. Accuracy of Representations and Warranties; Performance of
this Agreement 26
Section 11.02. Directors' Resolutions 26
Section 11.03. Incumbency Certificate 26
Section 11.04. FCC; Xxxx-Xxxxx Act 26
Section 11.05. Opinion of Counsel to Purchaser 27
Section 11.06. Closing Escrow Agreement 27
ARTICLE XII CASUALTY LOSSES 27
ARTICLE XIII INDEMNIFICATION 27
Section 13.01. Indemnification by Seller 27
Section 13.02. Indemnification by Purchaser 28
Section 13.03. Notice of Claims; Defense of Third Party 29
Section 13.04. Limitations 30
ARTICLE XIV CONFIDENTIALITY AND PRESS RELEASES 31
Section 14.01. Confidentiality 31
Section 14.02. Press Releases 31
Section 14.03. Disclosures Required By Law 31
ARTICLE XV TERMINATION 32
Section 15.01. Breaches and Defaults; Opportunity to Cure 32
Section 15.02. Termination 32
ARTICLE XVI BROKERS' FEES 33
ARTICLE XVII MISCELLANEOUS 33
Section 17.01. Additional Instruments of Transfer 33
Section 17.02. Notices 33
Section 17.03. Expenses 34
Section 17.04. Transfer Taxes 35
Section 17.05. Collection Procedures 35
Section 17.06. Specific Performance 35
Section 17.07. Governing Law 35
Section 17.08. Assignment 35
Section 17.09. Successors and Assigns 35
Section 17.10. Amendments; Waivers 35
Section 17.11. Entire Agreement 36
Section 17.12. Counterparts 36
Section 17.13. Severability 36
Section 17.14. Section Headings 36
Section 17.15. Interpretation 36
Section 17.16. Further Assurances 36
Section 17.17. Third Parties 36
Section 17.18. Waiver of Jury 36
DEFINED TERMS
TERM SECTION CITE
---- ------------
Asserting Party 13.03
Assets 2.01
Assumed Contracts Article III
Assumption Agreement 4.02
Assumed Liabilities Article III
Authorizations 7.08
Balance Sheet Date 7.16(a)(ii)
Base Price 5.01
Xxxx of Sale 4.01
Breaching Party 15.01
Business Recitals
Cellular System Recitals
CBA 7.13
CERCLA 7.12(b)
Closing Article VI
Closing Certificate 5.05(c)
Closing Date Article VI
Closing Escrow Agreement 5.03
Code 7.14
Controlled Group Member 7.14
Current Assets 5.05(a)
Current Financial Statements 7.16(a)(ii)
Current Liabilities 5.05(a)
Deductible 13.04(a)
Defending Party 13.03
Defined Benefit Pension Plan 7.14
Disclosing Party 14.01
DOJ 10.04
Employee Benefit Plans 7.14
Environmental Laws 7.12(c)
ERISA 7.14
ERISA Affiliate 7.14
Escrow Agent 5.03
Escrow Amount 5.03
Excluded Assets 2.02(a)
Excluded Contracts 7.07
Existing Contracts 7.07
FCC Recitals
FCC Authorization Recitals
Final Order 10.04
Final Working Capital Adjustment 5.05(c)
Finality Waiver Notice 10.04
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FTC 10.04
GAAP 5.05(a)
Xxxx-Xxxxx Act 9.02(b)
Hazardous Substances 7.12(b)
Historical Financial Statements 7.16(a)(i)
Indemnified Purchaser Parties 13.01(a)
Independent Accountants 5.05(c)
Interest or Interests 9.03
Interim Balance Sheet 7.16(a)(ii)
Interim Income Statement 7.16(a)(ii)
Interim Financial Statements 9.01
Inventory 5.05(a)
IRS 7.14
Liens Article I
Losses 13.01(a)
Management Agreement 9.09
Manager Recitals
Material Adverse Effect 10.01
Material Loss 10.01
Multiemployer Plan 7.14
Non-Assumed Liabilities Article III
Non-Breaching Party 15.01
Operating Budget 9.01
Outside Date 15.02(e)
PBGC 7.14
Permitted Liens Article I
Person 7.04
Phase I Assessment 9.04(b)
Phase II Assessment 9.04(b)
Purchase Price 5.01
Purchaser Introduction
Purchaser's Estimate 5.05(c)
RCLA 7.12(b)
RCRA 7.12(b)
Recipient Party 14.01
Response Period 5.05(c)
RSA Recitals
Seller Introduction
Seller's Estimate 5.05(c)
Survival Period 13.04(b)
Tax or Taxes 7.15
Third Party Claim 13.03
Working Capital Adjustment 5.05(b)
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SCHEDULES
---------
2.01(a) Contracts and Licenses
2.01(c) Tangible Assets
2.01(d) Interests in Real Property
2.01(f) Intangible Personal Property
2.02 Excluded Assets
5.05 Exceptions to Current Liabilities
7.04 Encumbrances
7.08 Governmental Licenses
7.09 Compliance with Laws
7.10 Consents
7.11 Litigation
7.12 Environmental Compliance
7.13 Employees
7.14 Employee Benefits
7.15 Tax Matters
7.16(a)(i) Audited Historical Financial Statements
7.16(a)(ii) Current Financial Statements
7.16(c) Certain Transactions Since Balance Sheet Date
7.16(g)(iii) Budget for Montly Capital Expenditures
7.17 Subscribers; Agents
7.18 Insurance
7.21 Pricing of Services
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7.23 Accounts Receivable Aging
7.24 Product Information
7.25 Certain Business Relationships
8.05 Purchaser's Balance Sheet
9.01 Operating Budget
9.03 Form of Consent Letter
9.05(e) Repairs
EXHIBITS
--------
A. Xxxx of Sale
B. Assumption Agreement
C. Closing Escrow Agreement
D. Management Agreement
E. Opinion of Counsel for Seller
F. Opinion of FCC Counsel for Seller
G. Opinion of Counsel for Purchaser
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ASSET PURCHASE AGREEMENT
THIS AGREEMENT is made and entered into as of the 6th day of October, 1999
by and between PACIFIC TELECOM CELLULAR OF ALASKA RSA #1, INC., an Alaska
corporation ("Seller"), and XXXXXX CELLULAR SYSTEMS, INC., an Oklahoma
corporation or its designee ("Purchaser").
R E C I T A L S
WHEREAS, Seller owns all right, title and interest in that certain license
(the "FCC Authorization") granted by the Federal Communications Commission (the
"FCC") to provide non-wireless cellular radio telephone service in the Alaska #1
rural service area (the "RSA") #315 Xxxx Xxxxxxx (the "Cellular System");
WHEREAS, Purchaser desires to purchase from Seller, and Seller desires to
sell to Purchaser, substantially all of the assets and rights of Seller relating
to the ownership and operation of the Cellular System (the "Business"), all
subject to the terms and conditions set forth herein; and
WHEREAS, prior to the consummation of all of the transactions contemplated
herein, the Business may be managed by Xxxxxx Communications Corporation, an
Oklahoma corporation or a subsidiary thereof (the "Manager"), on behalf of
Seller pursuant to the Management Agreement (as defined herein).
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
Subject to the terms and conditions set forth in this Agreement, Seller
agrees to sell, convey, assign, transfer and deliver to Purchaser, and Purchaser
agrees to purchase from Seller at the Closing, all of Seller's right, title and
interest in and to the Assets (as defined in Section 2.01 hereof), free and
clear of all debts, liabilities, obligations, taxes, other than Assumed
Liabilities, and free and clear of all security interests, liens, pledges,
charges, rights of third parties and encumbrances of every kind (collectively,
"Liens") other than Permitted Liens. As used herein, the term "Permitted Liens"
means (i) any Lien for taxes and assessments not yet past due or otherwise being
contested in good faith and for which appropriate reserves have been established
and are taken into account in the Working Capital Adjustment, and (ii) any Lien
that does not materially interfere with the use by Seller of the property
subject thereto or affected thereby (including any easements, rights of way,
restrictions, installations or public utilities, title
imperfections and restrictions, reservations in land patents, zoning ordinances
or other similar Liens).
ARTICLE II
DESCRIPTION OF ASSETS; EXCLUDED ASSETS
SECTION 2.01. ASSETS. The assets to be conveyed to Purchaser shall
include all real and personal tangible and intangible assets, properties and
rights owned by Seller of whatever description which relate in any way to the
ownership, use or operation of the Business, except assets excluded pursuant to
Section 2.02 hereof, but including all property and rights acquired or obtained
by Seller from the date hereof through the date of Closing (collectively, the
"Assets"). Such Assets shall be free and clear of all Liens other than
Permitted Liens as of the Closing. Such Assets shall include, without
limitation:
(a) All licenses (including the FCC Authorization), leases,
agreements, licenses, permits, consents, revenue sharing agreements, agreements
for the reception or transmission of signals by microwave; all easements,
appurtenances, rights-of-way and construction permits, if any, related to the
Business; all right, title and interest, if any, in and to all streets, roads
and public places, open or proposed; all agreements between Seller and any
suppliers, cellular telephone service companies and subscribers, and all other
similar rights and agreements (including roaming and interconnection
agreements), including all applications therefor, which in any way may relate to
or concern the operation by Seller of the Business, all of which items are more
particularly described on SCHEDULE 2.01(a) attached hereto.
(b) All of Seller's files of correspondence, lists, records and
reports concerning (i) customers and prospective customers of the Business and
(ii) all dealings with Federal, state and local regulatory agencies with respect
to the Business, including, but not limited to, all reports filed by or on
behalf of Seller with the FCC.
(c) All of Seller's right, title and interest in and to towers, tower
equipment, antennas, switching and cell site equipment and buildings,
construction in progress, microwave equipment, machinery, testing equipment,
motor vehicles, office equipment, computers and related software, furniture and
fixtures, supplies, inventory, spare parts, and other physical assets, used in
or relating to the Business, and all modifications, additions, restorations or
replacements of the whole or any part thereof including the assets described on
SCEDULE 2.01(c) attached hereto.
(d) All Seller's right, title and interest in and to real property,
leaseholds and other interests in real property of Seller used in or relating to
the Business, as are described on SCHEDULE 2.01(d) attached hereto.
(e) All of Seller's right, title and interest to engineering records,
files, data, drawings, blueprints, schematics, maps, reports, lists and plans
and processes used or intended for use in connection with the Business.
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(f) All of Seller's right, title and interest to intangible personal
property used in or relating to the Business, including all rights, patents and
copyrights used by Seller, and all of the rights of Seller associated therewith
(including any and all applications, registrations, extensions and renewals
thereof), and such rights, patents and copyrights as are described on
SCHEDULE 2.01(f) attached hereto.
(g) All of Seller's right, title and interest in any communications
towers, buildings, fixtures and other improvements including, without
limitation, all electrical, mechanical, plumbing and other building systems,
security and surveillance systems and wiring and cable installations owned or
leased by Seller and used in the Business, wherever such items may be located.
(h) All prepayments and prepaid expenses.
(i) All claims, causes of action, causes in action, rights of
recovery and rights of set-off of any kind.
(j) The right to receive and retain mail, accounts receivable
payments and other communications.
(k) The right to xxxx and receive payment for products shipped or
delivered and/or services performed but unbilled or unpaid as of the Closing.
(l) All advertising, marketing and promotional materials and all
other related printing or written materials.
(m) All notes receivable and accounts receivable (including
subscriber receivables and roaming revenue receivables).
(n) All goodwill as a going concern.
(o) Any assets of the type-described above which are acquired after
the date hereof but prior to the Closing.
SECTION 2.02. EXCLUDED ASSETS. (a) The properties and assets described
in SCHEDULE 2.02 attached hereto and in Section 2.02(b) of this Agreement which
relate to the Business shall not be included in the Assets, shall be retained by
Seller and shall not be sold, assigned or transferred to Purchaser (the
"Excluded Assets").
(b) Anything in this Agreement to the contrary notwithstanding, the
Assets sold to the Purchaser pursuant to the terms of this Agreement shall not
include the Seller's corporate records, books of account, cash, bank deposits
and cash equivalents at the time of the Closing.
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ARTICLE III
ASSUMPTION OF LIABILITIES
At Closing, Purchaser shall assume and agree to perform and discharge the
following to the extent not previously performed or discharged as of the
Closing: (i) all obligations of Seller which accrue and are to be performed
from and after the Closing under those permits, authorizations, licenses,
leases, rights of way, easements and other agreements either set forth on
SCHEDULES 2.01(a) AND (d) attached hereto or those agreements of a non-material
nature which are not required by this Agreement to be disclosed on SCHEDULES
2.01(a) AND (d) and (ii) all other obligations of Seller entered into during the
period from the date hereof to the Closing by Seller in the ordinary course of
its business in accordance with the provisions of Section 9.05 below or that
were identified to and consented by Purchaser (all of such permits,
authorizations, licenses, leases, rights of way, easements and other agreements
referred to in items (i) and (ii) being referred to hereinafter as the "Assumed
Contracts"); and (iii) all "Current Liabilities" (as defined in Section 5.05(a)
hereof) but only if and to the extent that Purchaser receives a credit against
the Purchase Price in the Net Working Capital Adjustment (such items (i) through
(iii) are collectively referred to herein as the "Assumed Liabilities").
Purchaser shall not be liable for any liabilities, debts, contracts, agreements,
including, without limitation, any environmental liabilities related to or
arising from Seller's and its predecessors' ownership, operation or control of
the Assets, the Cellular System or the Business (including with respect to
Seller's and its predecessors' interests in owned or leased real property) for
the period prior to the Closing or any contracts or agreements set forth on
SCHEDULE 2.02, or other obligations of Seller of any nature whatsoever other
than the Assumed Liabilities (such other liabilities, debts, contracts,
agreements or obligations of Seller other than the Assumed Liabilities being
referred to as the "Non-Assumed Liabilities"); provided, however, that any
breach of a representation, warranty or covenant by Seller hereunder shall be
handled in accordance with and subject to the indemnification provisions of
Article XIII hereof.
ARTICLE IV
INSTRUMENTS OF TRANSFER
AND ASSUMPTION
SECTION 4.01. TRANSFER DOCUMENTS. At the Closing, Seller will deliver to
Purchaser (a) one or more Bills of Sale in substantially the form attached
hereto as EXHIBIT A (a "Xxxx of Sale"), (b) all such other good and sufficient
instruments of sale, transfer and conveyance, including, without limitation,
assignments of leases, in such form and including such matters as Purchaser
shall reasonably request and as shall be reasonably acceptable to Seller, as
shall be effective to vest in Purchaser all of Seller's right and title to, and
interest in, the Assets; and (c) all contracts and commitments, instruments,
books and records (except as otherwise provided in Section 2.02 hereof) and
other data included in the Assets.
SECTION 4.02. ASSUMPTION DOCUMENTS. At the Closing, Purchaser and Seller
will execute and deliver an Assumption Agreement in substantially the form
attached hereto as EXHIBIT B (the
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"Assumption Agreement") in order to effect the assumption of the Assumed
Liabilities by Purchaser.
ARTICLE V
PURCHASE PRICE; ALLOCATION
SECTION 5.01. PURCHASE PRICE. The total purchase price for the Assets
shall be Sixteen Million Dollars ($16,000,000) (the "Base Price"), as adjusted
in accordance with the provisions of Section 5.04 hereof (as adjusted, the
"Purchase Price").
SECTION 5.02. INTENTIONALLY OMITTED.
SECTION 5.03. PAYMENT OF PURCHASE PRICE. The Purchase Price, less Five
Hundred Thousand Dollars ($500,000) (the "Escrow Amount") shall be paid to
Seller by Purchaser by wire transfer of immediately available funds at Closing.
At the Closing, the Escrow Amount shall be wired by Purchaser to the Trust
Department of Regions Bank, Monroe, Louisiana (the "Escrow Agent") to be held,
invested and disbursed pursuant to the terms of the Closing Escrow Agreement
substantially in the form of EXHIBIT C attached hereto (the "Closing Escrow
Agreement").
SECTION 5.04. ALLOCATION OF PURCHASE PRICE. Within sixty (60) days after
the Closing, Purchaser and Seller in good faith shall each use their respective
commercially reasonable efforts to agree on an allocation of the Purchase Price
and the Assumed Liabilities in accordance with the respective fair market value
of the Assets being purchased and as provided for under Section 1060 of the
Code. Purchaser and Seller each further agree to file their income tax returns
and their other tax returns and IRS Form 8594 reflecting the allocation as
determined in this Section 5.03 unless otherwise required by applicable legal
requirements. If no agreement on an allocation of the Purchase Price with
respect to the Assets is reached within such thirty (30) day period, such
allocation of the Purchase Price to the Assets shall be determined by a
nationally recognized appraisal firm mutually agreeable to Seller and Purchaser
and the costs of such appraisal shall be borne equally by Seller and Purchaser.
SECTION 5.05. PURCHASE PRICE ADJUSTMENT..
(a) As used in this Section 5.05, the following terms shall have the
meaning set forth below:
"CURRENT ASSETS" means the Cellular System's (i) subscriber accounts
receivable that are current to less than 91 days past due, net of a reserve for
bad debts equal to the sum of the following amounts: zero percent (0%) of such
accounts receivable that are unbilled accounts receivable or that are not past
due or that are thirty (30) or fewer days from date of billing, fifteen percent
(15%) of such accounts receivable that are more than thirty (30) but less than
sixty-one (61) days from date of billing and fifty percent (50%) of such
accounts receivable that are more than sixty (60) but less than ninety-one (91)
days from date of billing; (ii) inventory of cellular
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telephone handsets and ancillary equipment held for sale to subscribers and
which are reasonably to be expected based on past practices to be consumed in
the normal course of business within six months after the Closing and are not
otherwise obsolete, reflected at net book value (the "Inventory"); (iii)
prepaid items which Purchaser will receive the benefit of after the Closing
such as prepaid rent, property taxes, utility charges, fees and deposits
paid, all determined as of 12:01 a.m. on the Closing Date in accordance with
GAAP, and (iv) 100% of all accounts receivable from carriers that are less
than ninety-one (91) days past due.
"CURRENT LIABILITIES" means the Cellular System's (i) subscriber deposits
received, (ii) deferred revenue, (iii) accrued employee vacation and sick pay
expense, (iv) salaries, bonuses, fringe benefits and other remuneration payable
to employees to be hired by Purchaser, (v) expenses for goods and services
received in the normal course of business including Taxes, utility charges,
special assessments, commissions, fees and (vi) except as described on
SCHEDULE 5.05, other trade payables and accrued expenses incurred in the normal
course of business, all determined as of 12:01 a.m. on the Closing Date in
accordance with GAAP.
"GAAP" means generally accepted accounting principles consistently applied.
(b) The Base Price shall be increased (or decreased) by the amount by
which Current Assets exceeds (or is less than) Current Liabilities as of the
Closing Date (the "Working Capital Adjustment").
(c) Seller shall prepare and submit to Purchaser, not later than five (5)
business days prior to the Closing Date, a written good faith estimate of the
amount of the Working Capital Adjustment and Seller's estimate of the Purchase
Price resulting from the Working Capital Adjustment ("Seller's Estimate").
Seller's Estimate shall be accompanied by detailed supporting documents, work
papers, subscriber records and other data supporting the Working Capital
Adjustment and Seller's Estimate. The Seller's Estimate shall be based upon the
books and records of the Cellular System. The Seller's Estimate shall be
accompanied by a certificate signed by the President or Chief Financial Officer
of Seller certifying that Seller's Estimate was calculated in good faith and in
accordance with the provisions of this Section 5.05. After the delivery of
Seller's Estimate and prior to the Closing, Purchaser and Seller shall attempt
to resolve any disputes between Seller and Purchaser with respect to Seller's
proposed Working Capital Adjustment. In connection therewith, Purchaser shall
have full access to all Seller's records related to Seller's proposed Working
Capital Adjustment. Prior to Closing, Purchaser shall advise Seller in writing
of its acceptance or of any dispute Purchaser has with Seller's Estimate. In
the event Purchaser disputes Seller's calculation, Purchaser shall provide
Seller with Purchaser's calculation of the Working Capital Adjustment 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 in accordance with the provisions of this Section 5.05 and
shall be accompanied by supporting documents and information, to the extent the
same is available to Purchaser ("Purchaser's Estimate"). In the event
Purchaser's Estimate of the Purchase Price is less than $25,000 less than
Seller's Estimate, the Closing shall proceed with the Purchase Price based upon
Seller's Estimate. In the event the Purchaser's Estimate of the Purchase Price
is more than $25,000 less than Seller's Estimate, then the mid-point between
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Seller's Estimate and Purchaser's Estimate shall be used as the Purchase Price
for purposes of Closing.
Within 90 days after the Closing Date, Purchaser shall deliver to Seller a
certificate (the "Closing Certificate") signed by the President or Chief
Financial Officer of Purchaser providing a compilation of the Working Capital
Adjustment to be made pursuant to this Section 5.05 including any changes in the
Working Capital Adjustment used to determine the Purchase Price at Closing,
together with a copy of any supporting documents, work papers, subscriber
records and other data relating to such Closing Certificate and such other
supporting evidence as Seller may reasonably request either prior to or after
delivery thereof (such amount being referred to as the "Final Working Capital
Adjustment"). If Seller shall conclude that the Closing Certificate does not
accurately reflect the Final Working Capital Adjustment to be made to the Base
Price in accordance with this Section 5.05, Seller shall, within thirty (30)
days after its 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 Seller 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 Purchaser or Seller, as the case may be, shall on or before the fifth
business day following the expiration of the Response Period pay to the other
the amount which it is obligated to pay in accordance with the Closing
Certificate. On or before the fifth business day following the earlier to occur
of the expiration of the Response Period and the date Purchaser receives
Seller's statement of discrepancies, Purchaser or Seller, as the case may be,
shall pay the other the amount, if any, as to which there is no discrepancy.
Purchaser and Seller shall use good faith efforts to jointly resolve their
discrepancies within fifteen (15) days of Purchaser's receipt of Seller's
written statement of discrepancies, which resoluton, if achieved, shall be
binding upon the parties and not subject to further dispute or review. In the
event Purchaser and Seller are unable to resolve their differences within such
fifteen (15) day period, then either party may request that the matter be
resolved by PriceWaterhouseCoopers (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 Seller
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 such decision shall be final and
binding on the parties. The fees and expenses of the Independent Accountants
shall be divided equally between Purchaser and Seller. Within five (5) days of
receipt of the Independent Accountants' decision with respect to such dispute,
if Purchaser is determined to owe an amount to Seller, Purchaser shall pay such
amount thereof to Seller, and if Seller is determined to owe an amount to
Purchaser, Seller shall pay such amount thereof to Purchaser. All amounts owed
by Purchaser or Seller to the other in accordance with this Section 5.05(c)
shall be paid by wire transfer of immediately available funds and shall not bear
any interest. Any amount due
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Purchaser from Seller under this Section 5.05 and not paid when due may also
be paid from the funds held pursuant to the Closing Escrow Agreement.
ARTICLE VI
CLOSING
Subject to the terms and conditions hereof, the closing (the "Closing")
shall take place at the offices of Xxxxxxx & Xxxxxx, LLP, 0000 XxxxXxxxxx Xxxxx,
Xxxxxxxxxx, Xxxxx Xxxxxx 00000, on the date (the "Closing Date") which is the
latest of (a) the tenth (10th) day after the date that (i) the FCC granted its
consent to the assignment of the FCC Authorization from Seller to the Purchaser
by a Final Order (as defined in Section 10.04) or (ii) if applicable, Seller
receives from Purchaser the Finality Waiver Notice (as defined in Section
10.04); or (b) the tenth (10th) day after the expiration or early termination of
the waiting period under the Xxxx-Xxxxx Act; PROVIDED, HOWEVER, that the Closing
Date shall be the last day of a calendar month. The Closing shall be effective
as of 12:01 a.m. on the Closing Date.
ARTICLE VII
SELLER'S REPRESENTATIONS
Seller hereby represents and warrants that:
SECTION 7.01. ORGANIZATION, QUALIFICATION. Seller is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Alaska; and has all necessary power and authority to own and operate its
properties and to carry on its Business as now being conducted or proposed to be
conducted and to carry out the transactions contemplated by this Agreement.
Seller has the full power and authority to execute and deliver and, subject to
obtaining the FCC's approval to assign the FCC Authorization and the other
governmental and third-party consents referred to in Section 10.04, perform its
obligations under this Agreement and to undertake the transactions contemplated
hereby. Seller is duly qualified to conduct business as a foreign corporation
in all jurisdictions for which failure to so qualify would have a Material
Adverse Effect (as defined below).
SECTION 7.02. CONSENTS, AUTHORIZATION, EXECUTION AND DELIVERY OF
AGREEMENT. All necessary consents and approvals have been obtained by Seller
for the execution and delivery of this Agreement. The execution, delivery
and performance of this Agreement by Seller and the transfer of the Assets to
Purchaser have been duly and validly authorized and approved by all necessary
corporate and stockholder action of Seller. This Agreement is a valid and
binding obligation of Seller, enforceable against it in accordance with its
terms.
SECTION 7.03. SUBSIDIARIES AND INTERESTS IN OTHER COMPANIES. Seller has
no subsidiaries, and does not own or control any shares or other securities of,
or have any other proprietary interest in, any corporation, partnership, limited
liability company, joint venture, business association or other person.
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SECTION 7.04. TITLE TO ASSETS; CONDITION OF ASSETS. Except as set forth
on SCHEDULE 7.04, Seller has, and will convey to Purchaser at Closing, good and
marketable title to the Assets, free and clear of all Liens other than Permitted
Liens. All Liens in effect on the date hereof which are to be discharged at
Closing are listed on SCHEDULE 7.04 hereto. The tangible property included
among the Assets is in good working order and repair, reasonable wear and tear
excepted. The Assets constitute all of the assets which are used in the
operation of the Business as it is currently being conducted by Seller other
than the Excluded Assets. Except as disclosed on SCHEDULE 7.25, no officer,
director, stockholder or employee of Seller or any other individual,
partnership, corporation, limited liability company, person or entity (a
"Person") other than the Seller owns, leases or has any rights in any property,
license or other assets related to the Business other than the Excluded Assets.
Except for factors typically affecting propagation and reception in the cellular
telephone industry generally, the tangible property included in the Assets are
technically sufficient and capable of providing cellular telephone service in
the RSA in accordance with applicable FCC regulations except as set forth on
SCHEDULE 7.08. All of the buildings, towers, transmitters, antenna, fixtures
and improvements owned or leased by Seller, and all heating and air conditioning
equipment, plumbing, electrical and other mechanical facilities and the roof,
walls and other structural components of the real property which are part of, or
located in such buildings, towers, antenna or improvements and are owned or
leased by Seller comply with applicable zoning laws and the building, health,
fire and environmental protection codes of all applicable governmental
jurisdictions, have no structural defects and do not require any repair other
than routine maintenance and the repair of ordinary wear and tear.
SECTION 7.05. REAL PROPERTY - OWNED. Seller owns no real property.
SECTION 7.06. REAL AND PERSONAL PROPERTY - LEASED. Set forth on
SCHEDULE 2.01(d) (in the case of real property) and SCHEDULE 2.01(a) (in the
case of personal property), are true and accurate listings of all real and
personal property leases to which Seller is a party (other than personal
property leases with annual payments of less than $3,000 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, the legal description
of the property leased. Except as set forth on SCHEDULE 2.01(d) (in the case of
leased real property) and SCHEDULE 2.01(a) (in the case of leased personal
property), all of the leases set forth on such Schedules (i) 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) Seller and, to Seller's
knowledge, each other party thereto have complied with all respective covenants
and provisions of such leases, (iv) neither Seller nor, to Seller's knowledge,
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 postponement of any obligations thereunder has been granted by any
party, and (vii) the validity or enforceability of any such lease will be in no
way affected by the sale of the Assets to Purchaser provided all required
consents have been, or prior to the Closing will be, obtained from the other
parties to such lease.
SECTION 7.07. EXISTING CONTRACTS. SCHEDULES 2.01(a) AND (d) hereto set
forth all contracts, commitments and agreements in effect on the date hereof
with Seller's subscribers (other than standard subscriber agreements for
cellular service), all leases (other than personal property
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leases with annual payments of less than $3,000 or which are terminable
without penalty on one month or less notice) to which Seller is a party, and
all other contracts, commitments and agreements (other than agreements with
annual payments of less than $3,000 or which are terminable without penalty
on one month or less notice) or commitments (written or oral) to which Seller
is a party which relate to the ownership of the Assets or the operation of
the Business (the "Existing Contracts") except for the contracts, leases,
commitments and agreements included among the Non-Assumed Liabilities (the
"Excluded Contracts"). Except as disclosed on SCHEDULE 7.25, no officer,
director or employee of Seller or any Person (other than Seller) controlling,
controlled by or affiliated with or family member of any such officer,
director or employee has any contractual relationship relating to the
ownership or operation of the Business. Seller has heretofore delivered to
Purchaser true and correct copies of the Existing Contracts. Except as
disclosed on SCHEDULES 2.01(a) AND (d), Seller has no knowledge of any breach
or anticipated breach by the other parties to any Existing Contracts. The
Existing Contracts are in full force and effect and Seller is in compliance
with its obligations under such Existing Contracts. Except for the Existing
Contracts and the Excluded Contracts, Seller has not entered into any other
contract, commitment or agreement (other than agreements with annual payments
of less than $3,000 or which are terminable without penalty on one month or
less notice) relating to the ownership of the Assets 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 Seller is required to enter into other agreements to
enable it to continue to own the Assets and operate the Business as it is
presently being operated.
SECTION 7.08. GOVERNMENTAL LICENSES. Except as set forth on
SCHEDULE 7.08, Seller holds all licenses, consents, permits, approvals and
authorizations of public and governmental bodies including, without limitation,
the FCC Authorization and the state, counties and municipalities served by the
Business, which are required in connection with the ownership of the Assets
(collectively referred to as the "Authorizations"). All Authorizations are in
full force and effect. Seller 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 of the Assets
or the operation of the Business. All fees due and payable from Seller to
governmental authorities pursuant to the Authorizations have been paid. All
reports required of Seller to be filed in connection with the Authorizations
have been timely filed and are accurate and complete. The Seller does not
conduct any microwave operations on frequencies that are subject to relocation
under the FCC's rules. True and correct copies of the Authorizations, and all
amendments thereto to the date hereof, have been delivered by Seller to
Purchaser and are identified on SCHEDULE 2.01(a) hereto. The Seller has not
engaged in any course of conduct that could reasonably be expected to impair the
ability of Purchaser or its subsidiaries to be the holder of the Authorizations
or is aware of any reason why the Authorizations might not be renewed in the
ordinary course, why any of the Authorizations might be revoked, or why any
pending applications or notifications might not be approved. The ownership of
the Assets and the operation of the Business by Seller are not subject to
regulation or supervision by any applicable state public utilities commission or
other similar state governmental instrumentality.
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SECTION 7.09. COMPLIANCE WITH LAWS. Except as set forth on SCHEDULE
7.09, and to the extent not covered by a more specific representation or
warranty herein which specific representation or warranty shall control,
Seller is currently complying with and has so complied with, and is not in
default under or in violation of, and neither the Business nor any of the
Assets nor the operation or maintenance thereof, contravenes any statute, law
(including environmental or employment laws), ordinance, decree, order, rule,
regulation of any governmental body applicable to the Assets or the Business,
including, without limitation, the rules and regulations of the FCC.
SECTION 7.10. NO VIOLATION OF EXISTING AGREEMENTS. Subject to the
consents for the Existing Contracts identified in SCHEDULE 7.10, the
execution, delivery and performance of this Agreement by Seller and Seller's
transfer of the Assets to Purchaser (i) will not violate any provisions of
any law (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 Lien upon the Assets or the
Business other than Permitted Liens.
SECTION 7.11. LITIGATION AND LEGAL PROCEEDINGS. Except as set forth on
SCHEDULE 7.11, there is no outstanding judgment against Seller or any
director, officer or stockholder of Seller affecting the Business or the
Assets or which question the validity of any action taken or to be taken by
Seller pursuant to or in connection with the provisions of this Agreement and
there is no litigation, proceeding or investigation pending, or, to Seller's
knowledge, threatened, against Seller or any director, officer or stockholder
of Seller affecting the Business or the Assets or which questions the
validity of any action taken or to be taken by Seller pursuant to or in
connection with the provisions of this Agreement. Except as set forth on
SCHEDULE 7.11, there are no proceedings pending to which Seller or any
director, officer or stockholder of Seller is a party or, to Seller's
knowledge, threatened, nor has Seller received written notice of any demands
by any governmental agency, utility or other party, to terminate, modify or
adversely change the terms and conditions of Seller's rights with respect to
the Authorizations or Existing Contracts.
SECTION 7.12. ENVIRONMENTAL COMPLIANCE. (a) Except as set forth on
SCHEDULE 7.12 hereto, (i) Seller 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 the Assets or
the Business in violation of any Environmental Laws (as hereinafter defined);
(ii) there has not been any generation, use, transportation, treatment,
storage, release or disposal of any Hazardous Substance in connection with
Seller's or its predecessors' ownership or use of the Assets, the conduct of
the Business or on, in or under any property or facility used, owned or
leased by Seller 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; (iii) 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 Seller; and (iv) any Hazardous
Substance handled or dealt with in any way with respect to the Assets or the
Business by Seller, or during Seller's ownership or use of
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the Assets or the 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
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 7.13. EMPLOYEES. By separate letter of even date herewith,
Seller has delivered to Purchaser a true and complete list of the names and
current salaries of all employees of Seller involved in the operation of the
Business. Seller 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. SCHEDULE 7.13 sets forth the only collective
bargaining agreements covering any of the employees of Seller. Seller has not
breached or otherwise failed to comply with any provision of the Collective
Bargaining Agreement described on Schedule 7.13 (the "CBA"). There are no
pending, or, to Seller'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
Seller, before any federal, state, or local board, department, commission or
agency or (b) unfair labor practice charges or complaints, disputes or
grievances affecting Seller. There are no pending or, to Seller's knowledge,
threatened or anticipated strikes, slow downs, work stoppages or lockouts or
threats affecting Seller.
SECTION 7.14. EMPLOYEE BENEFITS. Except as set forth on SCHEDULE 7.14
attached hereto, Seller has no 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"). Other than the CBA, Seller is not a party
to any employment contract.
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Except as set forth on SCHEDULE 7.14, no officer, director or employee of
Seller 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 Seller. Neither Seller nor any Controlled Group Member
maintains or contributes to, or ever maintained or contributed to, a plan
under which any employee of Seller 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 Seller pursuant to Section 414(b), (c), (m) or (o) of the
Code. No employee of Seller participates in any "multiemployer plan" (as
defined in Section 4001(a)(3) of ERISA) which has any unfunded liability.
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 Seller pursuant to Section 4001(b)(1) of ERISA. Seller has
furnished 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 accordance with its terms and
with applicable legal requirements. All "employee pension plans" (within the
meaning of Section 3(2) of ERISA) which are intended to be qualified plans
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 Seller. Except as set
forth on SCHEDULE 7.14, 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 Seller.
Seller has not 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 Seller nor any Affiliate of Seller has ever
incurred any liability under Title IV of ERISA to the PBGC or to a
multi-employer pension plan.
SECTION 7.15. TAX MATTERS. Except as set forth on SCHEDULE 7.15
attached hereto: (a) Seller has timely filed all Tax (as defined below)
returns and statements (or extensions with respect thereto) which it is
required to file; (b) all such returns are complete and accurate and disclose
all Taxes required to be paid for the periods covered thereby; (c) Seller has
not waived any statute of limitations in respect of Taxes or agreed to an
extension of time with respect to a Tax assessment or deficiency; (d) no
assessment of any additional Taxes for periods for which returns have been
filed has been asserted and no basis exists therefor; (e) to Seller's
knowledge, there are no unresolved questions or claims raised by any Taxing
authority concerning the Tax liability of Seller; and (f) all Taxes which
Seller is required by law to withhold or to collect for payment have been
duly withheld and collected, and have been paid. Seller 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. For purposes of this Section 7.15, the term "Tax" or "Taxes"
means all taxes, charges, fees, levies, imposts and
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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.
SECTION 7.16. FINANCIAL STATEMENTS.
(a) The Purchaser has heretofore been furnished with the following:
(i) true and complete copies of the unaudited balance sheet of
Seller as of December 31, 1998 and the related statements of income
and retained earnings and cash flows, each of such balance sheet and
income statement being attached hereto as SCHEDULE 7.16(a)(i)
(collectively, the "Historical Financial Statements");
(ii) true and complete copies of the unaudited balance sheet
(the "Interim Balance Sheet") of Seller as of June 30, 1999 (the
"Balance Sheet Date") and the related unaudited statement of income
for the six-month period then ended (the "Interim Income Statement"
and together with the Interim Balance Sheet, the "Current Financial
Statements"), such balance sheet and income statement being attached
hereto as SCHEDULE 7.16(a)(ii); and
(iii) the budget for monthly capital expenditures on the
Cellular System during 1999 is attached hereto as SCHEDULE
7.16(g)(iii).
(b) Each of the Historical and Current Financial Statements delivered
under Section 7.16(a)(i) and (ii) hereof was prepared in accordance with GAAP
applied on a basis consistent with prior periods and past practices (to the
extent applicable) and, with respect to the Current Financial Statements,
subject to usual and customary year-end adjustments and except for the omission
of certain footnotes and other presentation items required by GAAP with respect
to reviewed financial statements; each of the balance sheets included in such
Historical and Current Financial Statements fairly presents the financial
condition of Seller, as at the close of business on the date thereof; and each
of the statements of income included in such Historical and Current Financial
Statements fairly presents the results of operations of Seller, for the fiscal
period then ended.
(c) Except as set forth on SCHEDULE 7.16(c) attached hereto, since the
Balance Sheet Date, Seller has not:
(i) sold, assigned or transferred any of its Assets (except
for the Excluded Assets and 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
for assets sold or disposed of and
-14-
replaced by other assets of comparable use and value); 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 officer,
director or shareholder of Seller, or any affiliate or family member
of any such Person;
(iv) suffered any material damage, destruction or casualty loss
with respect to the Assets, whether or not covered by insurance;
(v) made any distribution of any of the Assets to any officer,
director or shareholder of Seller or any affiliate or family member of
such officer, director or shareholder;
(vi) except as disclosed in writing by Seller to Purchaser,
obligated itself or the Business to give free or reduced price service
to customers with respect to the Business or entered into any
agreement with any governmental or regulatory authority granting the
authorization to freeze fees charged to customers of the Business; or
(vii) entered into any agreement or understanding to do any of
the foregoing.
SECTION 7.17. SUBSCRIBERS/AGENTS. SCHEDULE 7.17 attached hereto sets
forth (a) the number of subscribers receiving service from the Cellular
System and as of a date within five (5) days prior to the date hereof, (b) a
list of all agents who sell cellular telephone equipment and/or service on
behalf of Seller as of the date hereof, together with such agent's address
and the number of gross activations produced by each agent, and (c) all
marketing and promotional plans Seller has used, is using, or proposes to use
during 1999 to acquire subscribers. For purposes of this Agreement, the term
"subscriber" means a person or entity subscribing for cellular telephone
service on the Cellular System (i) who pays for service under the Cellular
System's normal rate plan for that category of subscriber, (ii) whose account
is active within the normal practices and procedures of the Cellular System
and in no case is more than 60 days past due from the due date and (iii) who
was obtained as a subscriber (A) in the normal course of business of the
Cellular System consistent with past practice and not as a result of
marketing efforts that are not customary in the cellular telephone industry
generally or which were not utilized by Seller during 1999 on a regular basis
or (B) any other plans for which the Seller obtain Purchaser's prior written
consent, which consent will not be unreasonably withheld.
SECTION 7.18. INSURANCE. Seller has delivered previously to Purchaser
a list of all policies of title, liability, fire, worker's compensation and
other forms of insurance (including bonds) which insure against risk and
liabilities to the extent and in a manner customary in the cellular
-15-
industry and which are adequate to provide coverage against risk of a
material nature to which Seller would normally be exposed in the operation of
the business. All such insurance policies and binders are in full force and
effect. Seller has complied with each of such insurance policies and binders
and has 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 Seller 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
Seller 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 Seller have been duly paid or accrued to the
extent take into account in the Working Capital Adjustment. Seller maintains
insurance policies for the Cellular System with the insurance carriers, in
such amounts and for such losses or casualties as are described on SCHEDULE
7.18 and such insurance shall remain in effect with respect to the Cellular
System until the Closing.
SECTION 7.19. BROKERS. Except for Xxxxxxxxxx Capital, Seller has not
engaged any agent, broker or other person acting pursuant to the express or
implied authority of Seller 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 Assets or the
Business.
SECTION 7.20. UNDISCLOSED LIABILITIES. Seller has no liabilities or
obligations of any nature, whether absolute, accrued, contingent or
otherwise, which are not reflected or reserved against the Interim Balance
Sheet except for liabilities and obligations that have 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) and except for liabilities and obligations directly related to the
transactions contemplated hereby.
SECTION 7.21. PRICING OF SERVICES. SCHEDULE 7.21 sets forth a
description of all rate plans currently offered to subscribers of the
Cellular System.
SECTION 7.22. PROPRIETARY RIGHTS. Seller lawfully possesses, and
(except for rights with respect to intellectual property rights listed on
SCHEDULE 2.02) the Assets will include, to the extent assignable, all
intellectual property rights that are necessary to the conduct of the
Business.
SECTION 7.23. ACCOUNTS RECEIVABLE AND BAD DEBTS. All notes and accounts
receivable of Seller shown on the Interim 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 and are subject to
no asserted counterclaims, defenses or setoffs (subject to reserves therefor
as will be taken into account in the determination of Current Assets at
Closing in accordance with Section 5.05). SCHEDULE 7.23 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
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of subscriber receivables and the aging of such subscriber receivables of the
Cellular System based on the following Schedule: 0-30 days, 31-60 days, 61-90
days and over 90 days, from the date thereof.
SECTION 7.24. PRODUCT INFORMATION. Except as disclosed on SCHEDULE
7.24, Seller has not sold and does not have in its inventory any refurbished
telephone handsets. SCHEDULE 7.24 sets forth a list of manufacturers of
telephone handsets presently in Seller's inventory.
SECTION 7.25. CERTAIN BUSINESS RELATIONSHIPS WITH SELLER. Except as
set forth in SCHEDULE 7.25 attached hereto, none of the officers, directors
or stockholders of the Seller and its affiliates or family members have been
involved in any business arrangement or relationship with Seller within the
past 12 months.
SECTION 7.26. DISCLOSURE. No provision of this Agreement relating to
Seller, the Business or the Assets or any other document, Schedule, Exhibit
or other information furnished by Seller 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. In connection with the
preparation of this Agreement and the documents, descriptions, opinions,
certificates, Exhibits, Schedules or written material prepared by Seller and
appended hereto or delivered or to be delivered hereunder, Seller agrees it
will disclose to Purchaser any fact known to Seller which Seller knows or
believes would affect Purchaser's decision to proceed with the execution of
this Agreement. Except for facts affecting the cellular telephone industry
generally, there is no fact now known to Seller relating to the Business or
Assets which in Seller's reasonable opinion adversely affects the condition
of the Assets, the status of the FCC Authorization or the ownership,
operation, financial condition or prospects of the Business which has not
been disclosed to Purchaser or set forth in the Exhibits or Schedules
attached hereto.
ARTICLE VIII
PURCHASER'S REPRESENTATIONS
Purchaser hereby represents, warrants, covenants and agrees that:
SECTION 8.01. 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 and operate the Assets and the Business, subject to
obtaining all necessary consents required for the transfer by Seller of the
Assets.
SECTION 8.02. CONSENTS; AUTHORIZATION; EXECUTION AND DELIVERY OF
AGREEMENT. All necessary consents and approvals have been obtained by
Purchaser for the execution and delivery of this Agreement. The execution
and delivery of this Agreement by Purchaser has been duly and validly
authorized and approved by all necessary corporate action. Purchaser has
full power
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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.
SECTION 8.03. 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 or which could have an
adverse effect on Purchaser's ability to perform its obligations hereunder.
SECTION 8.04. 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 Assets or the Business.
SECTION 8.05. BALANCE SHEET. The balance sheet of Purchaser dated June
30, 1999 attached hereto as SCHEDULE 8.05 accurately reflects the assets and
liabilities of Purchaser in all material respects as of such date.
SECTION 8.06. UNION MATTERS. Purchaser has reviewed the CBA and has
been represented by counsel to the extent it believes necessary in order to
comply with all labor laws with respect to employees of the Business
beginning on the Closing Date.
ARTICLE IX
SELLER'S AND PURCHASER'S COVENANTS
SECTION 9.01. FINANCIAL STATEMENTS AND CELLULAR SYSTEM INFORMATION.
Seller covenants and agrees that during the period after the execution of
this Agreement and prior to the Closing, Seller shall provide Purchaser,
within twenty-one (21) days of the end of each calendar month, Seller's
unaudited balance sheet and income statement for such month ("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 normal recurring
adjustments, and will present fairly the financial position of Seller at the
date indicated and the results of Seller's operations for such period.
Seller also shall provide Purchaser within twenty-one (21) days of the end of
each calendar month (i) a comparison of the results of Seller'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
operating budget delivered to Purchaser, a copy of which is annexed hereto as
SCHEDULE 9.01 (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
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the Cellular System and (iv) other reports generated by the Seller's billing
system as reasonably requested by Purchaser.
SECTION 9.02. GOVERNMENTAL APPROVALS. (a) Purchaser covenants and
agrees that it will cooperate with Seller, and do all things reasonably
necessary to assist Seller, to obtain all consents and approvals necessary
for assignment to Purchaser of the FCC Authorization, including the
furnishing of financial and other information specifically with respect to
Purchaser reasonably required by the Person whose consent or approval is
being sought. Seller 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. Each of Purchaser and Seller hereby agrees to file the necessary
Form(s) 490 and 702 with the FCC transferring or assigning control of the FCC
Authorization for the Business to Purchaser and diligently pursue the
processing of the assignment of the FCC Authorization 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. Seller and
Purchaser shall share equally all filing fees in connection with any filings
pursuant to this Section 9.02(a).
(b) Seller 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").
Seller and Purchaser shall share equally all filing fees in connection with
any filings pursuant to this Section 9.02(b).
SECTION 9.03. THIRD PARTY CONSENTS; CLOSING CONDITIONS. (a) Seller
covenants and agrees to use its best efforts to obtain all consents and
approvals necessary for the transfer or assignment to Purchaser of the Assumed
Contracts. In addition, with respect to each real property lease identified on
SCHEDULE 2.01(d), Seller agrees that the instrument whereby Seller requests the
consent, estoppel and waiver of the lessor thereunder to the assignment of such
lease to such Purchaser shall be substantially in the form of the letter
attached hereto as SCHEDULE 9.03 and that Seller shall use its best efforts to
obtain each such lessor's consent to such assignment by having each such lessor
countersign such letter in the space provided. Purchaser covenants and agrees
to use commercially reasonable efforts to assist Seller 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. Notwithstanding the foregoing, to the extent that any Assumed
Contracts listed on SCHEDULE 2.01(a) to be sold, assigned, transferred or
conveyed to Purchaser, or any claim, right or benefit arising thereunder or
resulting therefrom (individually, an "Interest" and collectively, the
"Interests"), is not capable of being sold, assigned, transferred or conveyed
without the approval, consent or waiver of the issuer thereof or the other party
thereto, or any third Person (including a government or governmental unit), and
such approval, consent or waiver has not been obtained, or if such sale,
assignment, transfer or conveyance or
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attempted assignment, transfer or conveyance would constitute a breach
thereof, and such approval, consent or waiver has not been obtained, this
Agreement shall not constitute a sale, assignment, transfer or conveyance
thereof, or an attempted assignment, transfer or conveyance thereof; provided
Seller shall use its best efforts to provide Purchaser the benefits of any
such Interest as provided in Section 17.01(b).
(b) Purchaser and Seller 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 X hereof and the
Seller in Article XI hereof prior to the Closing Date.
SECTION 9.04. ACCESS. (a) Purchaser shall have the right, itself or
through its representatives, during normal business hours, after reasonable
notice (which may be oral) and without undue disruption to Seller's normal
business activities, to inspect the Assets and properties of Seller and to
inspect and make abstracts and reproductions of all books and records of
Seller including, without limitation, applications and reports to the FCC,
all financial information relevant to the Business, employee records, and
engineering and environmental reports and Seller shall furnish Purchaser with
such information respecting the Assets and Business and financial records as
Purchaser may, from time to time, reasonably request.
(b) Seller acknowledges and agrees, 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 (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 the
Assets is advisable, the Purchaser may elect, at its own expense and subject
to any restrictions placed thereon by an owner or lessor of the real property
involved, elect to cause its agents to conduct such testing and analysis.
Seller will use its commercially reasonable efforts to comply with any
reasonable request for information made by Purchaser or its agents in
connection with any such investigation. Seller covenants that any response
to any such request for information will be complete and correct in all
material respects. Seller will afford Purchaser and its agents access to all
operations of the Seller at all reasonable times and in a reasonable manner
in connection with any such investigation subject to any required approval of
Seller's landlords, which approval Seller will use its commercially
reasonable efforts to obtain. Should Purchaser commission such an
investigation, such investigation will have no effect upon the
representations and warranties made by Seller 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 Seller's
representations or warranties herein, Seller shall not have breached such
representation or warranty if Seller cures such breach in accordance with the
provisions of this Agreement.
(c) Seller shall allow Purchaser the opportunity to conduct an
engineering review of the Assets to confirm that the Assets comply with the
FCC Authorization and the regulations of the FCC and are otherwise in good
condition and repair, reasonable wear and tear excepted.
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SECTION 9.05. CONDUCT OF BUSINESS. From and after the date hereof Seller
shall:
(a) operate the Cellular System in accordance with the FCC
Authorization, and comply in all material respect with all laws, rules
and regulations applicable to Seller, including the regulations of the
FCC;
(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 other than in connection with
replacements with assets of like use and value, or with the prior
written approval of Purchaser;
(c) refrain from modifying, amending or altering in any
material respect, or terminating any of the Assumed Contracts, and
from waiving or canceling any default or breach or modifying, altering
or terminating any right or asset relating to or included in the
Assets without Purchaser's prior written approval, which approval will
not be unreasonably withheld;
(d) maintain insurance on the Assets comparable to that
maintained prior to the date hereof, and subject to Article XII, 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 which may be damaged by fire or
other casualty, all as soon as reasonably possible;
(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, provided, however, Seller
shall promptly repair the items of equipment set forth on SCHEDULE
9.05 so that they are in good working order or replace such equipment
with like equipment which is in good working order; 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) refrain from changing the Cellular System's agents'
commission rate, sales practices (including the quality of the credit
of subscribers contracting for cellular telephone and paging service)
or marketing practices without Purchaser's approval, which approval
will not be unreasonably withheld;
(g) refrain from increasing the compensation payable or to
become payable to any employee or agent without Purchaser's approval,
which approval will not be unreasonably withheld;
(h) refrain from entering into any contract or renewal of any
existing contract for the employment of any employee or agent of
Seller other than "at-will" employees and agents;
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(i) use its commercially reasonable efforts to (x) keep its
business organization 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 its Charter or by-laws in any way
which would materially adversely affect its power or authority to
enter into and perform this Agreement, or which would otherwise
materially adversely affect its performance of this Agreement;
(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, at least the amounts set forth in the
Operating Budget and consult regularly with Purchaser on the status
and effectiveness of promotions and on any modifications to promotions
to increase the number of subscribers to the Cellular System;
(l) refrain from subjecting any of the Assets to any new Lien
other than Permitted Liens;
(m) refrain from doing or omitting to do any act which will
cause a material breach of, or material default under, or termination
of (except in accordance with its terms), any Assumed Contract;
(n) provide to the Purchaser, concurrently with filing
thereof, copies of all reports to and other filings with the FCC;
(o) not permit the FCC Authorization to expire or to be
surrendered or voluntarily modified in a manner adverse to the
Business, or take any action which would reasonably be expected to
cause the FCC Authorization or any other governmental authority to
institute proceedings for the suspension, revocation or limitation of
rights under the FCC Authorization; 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 Seller in any
court, or any action against Seller before the FCC or any other
governmental agency, and notify Purchaser in writing promptly upon
receipt of any administrative or court order relating to the Assets or
the Business;
(q) if Seller deems it to be prudent, promptly replace any
employee who leaves the employ of the Cellular System; notify
Purchaser of the hiring of any new employee, any material change in
job function of an employee, and the
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termination of any employee, provided that all such actions shall be in
compliance with the terms and conditions of the CBA;
(r) pay or cause to be paid or provide for all Taxes of or
relating to Seller, the Assets and the employees required to be paid
to city, county, state, Federal and other governmental units up to the
Closing Date;
(s) refrain from taking any action not in Seller's usual
course of business regarding the Cellular System or the Assets without
Purchaser's prior approval, which approval will not be unreasonably
withheld; and
(t) cooperate with Purchaser in connection with (x)
Purchaser's efforts to identify the current employees of Seller that
Purchaser would like to hire following the Closing consistent with all
applicable federal, state and/or local employment laws, rules and
regulations, and (y) the prompt and efficient transition of billing
services after Closing to Purchaser's billing system and (z)
Purchaser's efforts to upgrade equipment (at Purchaser's cost) after
Closing.
SECTION 9.06. NO SHOPPING. Prior to the Closing or earlier termination of
this Agreement, neither Seller nor any of its 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, sale of all
or substantially all of the Assets, acquisition of a substantial equity interest
in Seller or any similar transaction involving Seller.
SECTION 9.07. EMPLOYEES. (a) Nothing contained in this Agreement shall
confer upon any employee of Seller any right with respect to continued
employment by Seller 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.
(b) During the term of the Management Agreement, Purchaser shall treat all
employees in accordance with applicable labor and employment laws.
SECTION 9.08. SUPPLEMENTAL DISCLOSURE. (a) Seller 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 Seller made in this Agreement unless Purchaser fails to object in writing to
Seller to any such supplemental disclosure within ten (10) business days after
Purchaser's receipt thereof.
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(b) From the date hereof until the Closing Date, Purchaser shall promptly
notify Seller if Purchaser obtains actual knowledge of any actual breach of any
representation, warranty, covenant or obligation of Seller, or any actual
failure of a condition hereunder of which Purchaser obtains actual knowledge.
SECTION 9.09. MANAGEMENT AGREEMENT. Simultaneously with the execution of
this Agreement, the Manager and Seller shall enter into the Management Agreement
in the form attached hereto as EXHIBIT D (the "Management Agreement") pursuant
to which the Manager will provide management services to Seller prior to the
Closing.
SECTION 9.10. PURCHASER'S FINANCIAL CONDITION. From the date hereof until
the date of Closing, there shall have been no material adverse change in
Purchaser's balance sheet attached as SCHEDULE 8.05.
ARTICLE X
CONDITIONS PRECEDENT TO PURCHASER'S OBLIGATION TO CLOSE
The obligation of Purchaser under this Agreement with respect to the
purchase and sale of the Assets 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 10.01. ACCURACY OF REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF
THIS AGREEMENT. All of the representations and warranties made by Seller 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 13.01) in excess of $10,000 in the aggregate (a "Material
Loss") or otherwise result in a Material Adverse Effect. Seller shall have
complied with and performed all of the agreements and covenants required by this
Agreement to be performed or complied with by it on or prior to the Closing
except for such noncompliances which, in the aggregate, have not caused and
would not reasonably be expected to cause a Material Loss or otherwise result in
a Material Adverse Effect. Purchaser shall have been furnished with a
certificate or certificates of Seller's President, dated as of the Closing,
certifying to the fulfillment of the foregoing conditions. As used in this
Agreement, the term "Material Adverse Effect" means a material adverse effect on
the Assets or the Business taken as a whole, other than due to changes affecting
the cellular telephone industry generally.
SECTION 10.02. RESOLUTIONS. Seller shall deliver to Purchaser copies of
the resolutions of the board of directors and shareholders of Seller 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 Seller.
SECTION 10.03. INCUMBENCY CERTIFICATE. Purchaser shall have received a
certificate or certificates of an officer of Seller, certifying as to the
genuineness of the signatures of officers of Seller authorized to take certain
actions or execute any certificate, document, instrument or
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agreement to be delivered pursuant to this Agreement, which incumbency
certificate shall include the true signatures of such officers.
SECTION 10.04. THIRD PARTY CONSENTS; FCC; XXXX-XXXXX ACT. Seller shall
have delivered to Purchaser such instruments, consents and approvals (the
form and substance of which shall be reasonably satisfactory to Purchaser) as
are necessary to assign to Purchaser without modification thereof, as of the
Closing, the Assets and the Assumed Contracts. Prior to Closing Date, the
FCC's grant of its consent to the assignment of the FCC Authorization to
Purchaser shall have become a Final Order, each without any material
conditions, excepting conditions applied on an industry-wide basis, which the
Purchaser reasonably deems to be adverse. Anything herein to the contrary
notwithstanding, but subject to the provisions of Section 17.01, the
Purchaser shall have the right (in its sole discretion) to waive the
requirement set forth in the preceding sentence by delivery to Seller of a
written notice to such effect (the "Finality Waiver Notice"). In addition,
all applicable waiting periods under the Xxxx-Xxxxx Act 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 10.05. NO MATERIAL ADVERSE CHANGE. Other than changes affecting
the cellular telephone industry generally, there shall not have been any
Material Adverse Effect in the financial condition, assets, business,
properties or prospects of the Cellular System or Assets, from December 31, 1998
to the Closing.
SECTION 10.06. OPINION OF COUNSEL TO SELLER. Purchaser shall have been
furnished with opinions of Xxxxx, Xxxxx & Xxxx, counsel to Seller, 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 E hereto.
SECTION 10.07. OPINIONS OF FCC COUNSEL TO SELLER. Purchaser shall have
been furnished with opinions of Wiley, Rein & Fielding, FCC counsel for Seller,
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 F attached hereto.
SECTION 10.08. CLOSING ESCROW AGREEMENT. Seller and the Escrow Agent
each shall have executed and delivered the Closing Escrow Agreement.
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SECTION 10.09. TITLE INSURANCE; ESTOPPEL. Seller shall have provided to
Purchaser, at Seller's expense, and in a form satisfactory to Purchaser and its
lenders, all of the title commitments, title policies (including endorsements
thereto) and surveys required by Purchaser's lenders with respect to the leased
real property identified on SCHEDULE 2.01(D). In addition, with respect to each
real property lease identified on SCHEDULE 2.01(D), Seller agrees that the
instrument whereby Seller requests the consent, estoppel and waiver of the
lessor thereunder to the assignment of such lease to such Purchaser shall be
substantially in the form of the letter attached hereto as SCHEDULE 9.03 and
that Seller shall use its commercially reasonable efforts to obtain each such
lessor's consent to such assignment by having each such lessor countersign such
letter in the space provided.
SECTION 10.10. OPERATION OF CELLULAR SYSTEM. Seller shall have continued
to operate the Cellular System and market the Cellular System's services in the
normal course of business and in accordance with past practice.
ARTICLE XI
CONDITIONS PRECEDENT TO
SELLER'S OBLIGATION TO CLOSE
The obligations of Seller under this Agreement with respect to the sale of
the Assets 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
Seller:
SECTION 11.01. 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.
Seller 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 11.02. DIRECTORS' RESOLUTIONS. Purchaser shall deliver to Seller
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 11.03. INCUMBENCY CERTIFICATE. Seller shall have received a
certificate of a secretary of Purchaser, certifying as to the genuineness of the
signatures of 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 11.04. FCC; XXXX-XXXXX ACT. The FCC shall have issued an order
granting its consent to the assignment of the FCC Authorization to Purchaser.
In addition, all applicable
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waiting periods under the Xxxx-Xxxxx Act shall have expired or been
terminated and no objection shall have been made by the FTC or DOJ.
SECTION 11.05. OPINION OF COUNSEL TO PURCHASER. Seller shall have been
furnished with an opinion of Xxxxxxx & Xxxxxx, LLP, counsel to Purchaser, dated
as of the Closing and addressed to Seller in substantially the form of EXHIBIT G
hereto.
SECTION 11.06. CLOSING ESCROW AGREEMENT . Purchaser and the Escrow Agent
each shall have executed and delivered the Closing Escrow Agreement.
ARTICLE XII
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 that becomes known to
Seller, Seller will promptly notify Purchaser of such event. Seller shall, to
the extent practicable, repair, rebuild or replace the portion of the Assets
damaged, destroyed or lost prior to the Closing Date. To the extent the repair,
rebuild or replacement of the portion of the Assets damaged, destroyed or lost
prior to the Closing Date is not practicable, then the Purchase Price shall be
reduced by the amount, mutually acceptable to Purchaser and Seller, which is
estimated by the parties to equal the out-of-pocket costs and expenses that
Purchaser is reasonably likely to incur to repair, rebuild or replace, in
accordance with cellular telephone industry practices, such damaged, destroyed
or lost Assets after the Closing Date, and Seller shall retain all insurance
proceeds payable as a result of the occurrence of the event resulting in such
loss or damage.
ARTICLE XIII
INDEMNIFICATION
Notwithstanding anything in this Agreement to the contrary, Seller's
obligation for pre-closing liabilities, debts, contracts and agreements
including, without limitation, any environmental liabilities related to or
arising from Seller's and its predecessors operation ownership, operation or
control of the Assets, the Cellular System or the Business, shall be governed by
the provisions of this Article XIII.
SECTION 13.01. INDEMNIFICATION BY SELLER. (a) After 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
XIII, Seller 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), suits, demands, judgments and diminutions in value
suffered or incurred (each a "Loss" and collectively "Losses") by Purchaser
arising from or related to:
(i) Any Non-Assumed Liability, whether or not known or
asserted at or prior to Closing, relating to or arising from the
ownership, operation, control or
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sale of the Assets, the Cellular System or the Business or any other
state of facts which existed at or prior to Closing, including, without
limitation, any environmental liabilities arising out of Seller's or
its predecessors' interests in real property or any fines or
forfeitures imposed or threatened to be imposed by the FCC for the
operation, at or prior to Closing, of the Cellular System or the
Business;
(ii) Any misrepresentation or breach of warranty in, or
omission from, any representation or warranty of Seller in this
Agreement, the Schedules or Exhibits hereto, the Closing Escrow
Agreement, the Management Agreement, the Xxxx of Sale, the Assumption
Agreement or in any closing certificate delivered by Seller to
Purchaser pursuant to Article X hereof;
(iii) Any breach or non-fulfillment of any covenant or agreement
on the part of Seller under this Agreement to be performed on or
following the Closing Date; and
(iv) 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 Seller in this Agreement.
(b) In addition and subject to the terms of this Article XIII,
Seller shall indemnify Purchaser against and hold it harmless from any and all
Losses which Purchaser may incur by reason of the failure (if any) of Seller to
comply with the Bulk Transfers Article of the Uniform Commercial Code of any
state.
SECTION 13.02. INDEMNIFICATION BY PURCHASER. After the Closing, and
regardless of any investigation made at any time by or on behalf of Seller or
any information Seller may have, but subject to the terms of this Article XIII,
Purchaser agrees to indemnify and to hold Seller, and its directors, officers,
stockholders, employees, representatives and agents harmless from and against
and in respect of any Losses incurred by Seller from:
(i) All liabilities and obligations of Purchaser, and all
claims and demands made in respect thereof relating to or arising
from, Purchaser's ownership, operation or control of the Assets or the
Business after the Closing, including on account of the Assumed
Liabilities; and
(ii) 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 Closing
Escrow Agreement, the Management Agreement, the Assumption Agreement
or in any closing certificate delivered by Purchaser to Seller
pursuant to Article XI hereof;
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(iii) 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; and
(iv) All reasonable costs and expenses (including reasonable
attorneys' fees) incurred by Seller in connection with any action,
suit, proceeding, demand, assessment or judgment incident to any of
the matters Seller is indemnified against by Purchaser in this
Agreement.
SECTION 13.03. NOTICE OF CLAIMS; DEFENSE OF THIRD PARTY. A party claiming
indemnification under this Article XIII (the "Asserting Party") must notify (in
writing, in reasonable detail and within a reasonable period of time after the
Asserting Party becomes aware of such claim) 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 13.03,
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 13.03, the Asserting Party shall have the right (i) to control the
defense thereof and (ii), if the Asserting Party shall have notified the
Defending Party of the Asserting Party's intention to negotiate a settlement of
the Third Party Claim (at the Defending Party's expense
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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 13.03 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 XIII.
SECTION 13.04. LIMITATIONS. The Defending Party's obligations to
indemnify the Asserting Party pursuant to this Article XIII 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 $25,000 (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) Seller's obligation to indemnify Purchaser for Non-Assumed
Liabilities, (ii) Purchaser's obligation to indemnify Seller for Losses arising
from or related to the matters described in Section 13.02(i), (iii) adjustments
to the Purchase Price provided for in Section 5.05, (iv) a breach by Seller of
its representations set forth in Section 7.02, the first sentence of
Section 7.04, and Section 7.15 or (v) Losses resulting from fraud.
(b) Notwithstanding any other provisions of this Agreement to the
contrary, the aggregate indemnification obligations for any party shall not
exceed $4,500,000; provided, however, that the foregoing "cap" shall not apply
to (i) any breach by Seller of any representations and warranties contained in
Sections 7.09 and 7.12 of this Agreement with respect to the Eilson Air Force
Base and North Pole cell sites, or (ii) subject to the last sentence of Article
III, any obligation to indemnify Purchaser for Non-Assumed Liabilities.
(c) All representations and warranties contained in this Agreement
shall survive the Closing until the second anniversary thereof; provided,
however, that notwithstanding the foregoing, (x) the representations and
warranties contained in Section 7.02, the first sentence of Section 7.04, and
Section 7.15 shall survive the Closing for an unlimited duration and (y) the
representations and warranties contained in Sections 7.09 and 7.12 (as it may
relate to Environmental Laws) shall survive the Closing until the third
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
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such claim is finally determined or settled. Each party shall be precluded
from asserting claims against the other party after the applicable Survival
Period.
(d) In addition, the liability of any indemnitor with respect to
any Losses shall be determined on a basis that is net of the amount actually
paid to the indemnified party in respect of any such Losses pursuant to a policy
of insurance maintained by such indemnified party.
ARTICLE XIV
CONFIDENTIALITY AND PRESS RELEASES
SECTION 14.01. 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 14.03. If the Recipient Party breaches, or threatens to commit a breach
of, any of the provisions of this Article XIV, 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 14.02. 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 Seller without the consent of the other subject to
the provisions of Section 14.03, and Purchaser and Seller 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 or Seller, as the case may be, proposes to make such press
release.
SECTION 14.03. DISCLOSURES REQUIRED BY LAW. This Article XIV 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 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 XV
TERMINATION
SECTION 15.01. 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 30 days from the receipt of such notice to cure such breach to the
reasonable satisfaction of the Non-Breaching 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 sixty (60) days to
cure such breach, PROVIDED, HOWEVER, that the cure period for a breach shall
in no event extend beyond the Outside Date. 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 15.02). 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 15.02. 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 mutual written consent of Seller and Purchaser;
(b) by either Purchaser or Seller, 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 Assets to Purchaser (which Seller 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 15.01, by Purchaser, if Seller shall
have breached any of its representations herein and such breaches, in
the aggregate, would reasonably be expected to have a Material Adverse
Effect or if Seller shall have materially breached any of its
covenants;
(d) subject to Section 15.01, by Seller, if Purchaser shall
have materially breached any of its representations or covenants
herein and such breaches, in the aggregate, would reasonably be
expected to have a Material Adverse Effect; or
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(e) by either Seller or Purchaser if the Closing shall not
have occurred on or before April 30, 2000 (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.
ARTICLE XVI
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 XIII
hereof.
ARTICLE XVII
MISCELLANEOUS
SECTION 17.01. 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 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 Seller's
right, title and interest in and to the Assets. Such efforts and assistance
shall be at the cost of the requesting party.
(b) Anything in this Agreement to the contrary notwithstanding,
Seller is not obligated to sell, assign, transfer or convey to Purchaser any
of its rights and obligations in and to any Interest without first obtaining
all necessary approvals, consents or waivers. To the extent any of the
approvals, consents or waivers have not been obtained by Seller as of the
Closing and Purchaser elects to proceed with the Closing, Seller shall, for
the remaining term of such Interest, use its commercially reasonable efforts
to (i) obtain the consent of any such third party; (ii) cooperate with
Purchaser in any reasonable and lawful arrangements designed to provide the
benefits (including, without limitation, the payment to Purchaser of any
monies received by Seller in connection therewith) of such Interest to
Purchaser so long as Purchaser performs all obligations with respect to the
Interest (and the payment of all expenses in connection therewith); and (iii)
enforce, at the request of Purchaser and at the expense and for the account
of Purchaser, any rights of Seller arising from such Interest against such
issuer thereof or the other party or parties thereto (including the right to
elect to terminate any such Interest in accordance with the terms thereof
upon the request of Purchaser); provided, however, that neither of Purchaser
nor Seller shall be obligated to pay any consideration or other sums therefor
(except for filing fees and other ordinary administrative charges and except
as set forth above) to the third party, or to commence any proceedings
against the third party, from whom such approval, consent or waiver is
requested.
SECTION 17.02. 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,
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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 X. Xxxxxx
Facsimile No.: (000) 000-0000
with a required copy to:
Xxxxxxx & Xxxxxx, LLP
0000 XxxxXxxxxx Xxxxx
Xxxxxxxxxx, Xxxxx Xxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxx, Xx., Esq.
Facsimile No.: (000) 000-0000
(ii) If to Seller:
Pacific Telecom Cellular of Alaska RSA #1, Inc.
000 Xxxxxxx Xxxx Xxxxx
Xxxxxx, XX 00000
Attention: R. Xxxxxxx Xxxxx, Xx. and Xxxxxx X. Xxxx, Esq.
Facsimile No.: (000) 000-0000
with a required copy to:
Xxxxx, Xxxxx & Xxxx
0000 Xxxxx Xxxxx
Xxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx, Xx.
Facsimile No.: (000) 000-0000
Notices delivered personally shall be effective upon delivery against
receipt. Notices transmitted by telecopy shall be effective when received,
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 mail 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 seventy-two (72) hours
after mailing, whichever is earlier.
SECTION 17.03. 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
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of this Agreement and the consummation of the transactions contemplated
hereby; provided that Seller and Purchaser shall bear equally FCC, Xxxx-Xxxxx
Act and other governmental filing fees.
SECTION 17.04. TRANSFER TAXES. Seller and Purchaser shall bear equally
all use, sales and transfer taxes, if any, imposed in connection with the
sale and delivery of the Assets acquired by Purchaser under this Agreement.
Notwithstanding anything else to the contrary set forth in this Section
17.04, Purchaser shall in no event be responsible in any manner for the
payment of any Taxes on any income or gain which Seller may realize as a
result of the sale of the Assets or otherwise related to the transactions
contemplated by this Agreement.
SECTION 17.05. COLLECTION PROCEDURES. From and after the Closing,
Purchaser shall have the right and authority, at its expense, to collect for
its account all items to which it is entitled as provided in this Agreement
and to endorse with the name of the Seller any checks or drafts received on
account of any such items.
SECTION 17.06. SPECIFIC PERFORMANCE. The parties recognize and
acknowledge that in the event Seller or Purchaser shall fail to perform their
respective obligations under the terms of this Agreement, money damages alone
will not be adequate to compensate the other party hereto. The parties,
therefore, agree and acknowledge that in the event the Seller or Purchaser
fails to perform its obligations under this Agreement prior to Closing, the
Purchaser or Seller, as the case may be, 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 and of the covenants and obligations hereunder.
SECTION 17.07. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Oklahoma (without
application of principles of conflicts of law).
SECTION 17.08. ASSIGNMENT. Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any of the
parties hereto (by merger or other operation of law or otherwise) without the
prior written consent of the other party, which consent will not be
unreasonably withheld except that Purchaser shall have the right to assign
this Agreement at any time to any of its affiliates and its rights under this
Agreement after the Closing to any institutional lender.
SECTION 17.09. 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 17.10. 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
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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 17.11. 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 17.12. 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 17.13. 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 17.14. 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 17.15. 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 17.16. FURTHER ASSURANCES. For a period of twelve (12) months
after Closing, Seller agrees to provide to Purchaser from time to time any
information that Seller possesses with respect to the operation of the
Business and Assets 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.
SECTION 17.17. 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 17.18. WAIVER OF JURY. 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 REST OF THIS PAGE IS LEFT BLANK INTENTIONALLY]
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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.
SELLER:
PACIFIC TELECOM CELLULAR OF ALASKA RSA #1, INC.
By: /s/ R. Xxxxxxx Xxxxx, Xx.
-----------------------------
Print Name: R. Xxxxxxx Xxxxx, Xx.
------------------------
Title:
-----------------------------
PURCHASER:
XXXXXX CELLULAR SYSTEMS, INC.
By: /s/ G. Xxxxxx Xxxxx
-----------------------------
Print Name: G. Xxxxxx Xxxxx
------------------------
Title: President
-----------------------------
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