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EXHIBIT 10.89
ASSET PURCHASE AGREEMENT
Texas-7 Rural Service Area
This Asset Purchase Agreement (this "Agreement") is entered into on
August 25, 1999 by and among KO Communications, Inc., a Texas Corporation
("Seller"), and WWC Texas RSA Limited Partnership, a Delaware Limited
Partnership ("Purchaser"), Western Wireless Corporation, a Delaware corporation,
as "Guarantor." Purchaser and Seller are sometimes referred to herein
collectively as the "Parties" and each as a "Party."
RECITALS
WHEREAS, Seller is he holder of the non-wireline cellular radio
telephone license granted by the Federal Communications Commission (the "FCC")
and certain assets necessary for the operation of the non-wireline cellular
radio telephone service system in the Texas-7 Rural Service Area (the "System");
WHEREAS, Purchaser desires to purchase the cellular radio telephone
service system, including the licenses necessary to operate such system, in the
Texas-7 Rural Service Area;
WHEREAS, the Parties desire that Purchaser acquire from Seller all of
the assets of the System including, among other things, all of the
authorizations issued by the FCC for the operation of the System, all in
accordance with the terms and conditions set forth in this Agreement; and
WHEREAS, the Parties have determined that it would further the
development of competitive cellular radio telephone service systems in the
United States to consummate the transactions contemplated hereby;
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the Parties hereto agree as follows:
ARTICLE 1.
DEFINITIONS
As used herein, the terms below shall have the following meanings:
"Action" shall have the meaning set forth in Section 5.11.
"Affiliate" of a Person shall mean any Person which directly or
indirectly, through one or more intermediaries, owns, controls, or is controlled
by, or is under common control with, such Person. The term "control" (including,
with correlative meaning, the terms "controlling," "controlled by" and "under
common control with"), as used with respect to any Person, shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the
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management and policies of such Person, whether through the ownership of voting
securities, by contract or otherwise.
"Applicable Laws" shall mean all federal, state and local statutes,
ordinances, rules, and regulations of any Governmental Authority that govern,
regulate or otherwise apply to the Assets, the Business or operation of the
System.
"Assets" shall mean all assets, properties and rights, both tangible
and intangible, that are owned by, leased or licensed to, Seller for use in the
System, and are otherwise necessary for the operation of the Business in a
manner consistent with the present operations and with past practices of the
System, including, without limitation, the Real Property, Equipment,
Authorizations, Contracts, Subscriber Agreements, Intellectual Property and
Books and Records; provided, however, that the Assets shall not include the
Excluded Assets.
"Assignment Applications" shall mean those joint applications filed
with the FCC relating to the assignment of the FCC Authorizations to Purchaser
in the manner contemplated by this Agreement.
"Assumed Liabilities" shall have the meaning set forth in Section 3.2
hereof.
"Auditor" shall have the meaning set forth in Section 2.3.4 hereof.
"Authorizations" shall mean the approvals, consents, authorizations,
permits and licenses issued to Seller by any Governmental Authority relating to
the System.
"Books and Records" shall mean all the books and records related to
the Assets, the Business and the System, including without limitation, (a) books
and records relating to the purchase of materials and supplies, invoices,
Subscriber lists, supplier lists, personnel records, and Subscriber information,
and (b) computer software (to the extent such software is included in the
Assets) and data in computer readable and/or human readable form used to
maintain such books and records together with the media on which such software
and data are stored and all documentation relating thereto, but shall not
include books and records relating to the Excluded Assets or Seller's corporate
books and records or stock ledgers.
"Business" shall mean all of the business and operations relating to
the System as currently conducted by Seller.
"CERCLA" shall have the meaning set forth in the Section defining
Environmental Laws.
"Closing Date" shall mean the next business day that is ten or more
days after the date on which the FCC Consent becomes a Final Order; provided
that if such date is within five days of the end of a calendar month, the
Closing Date shall be the last business day of that calendar month.
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"Closing Place" shall mean such location agreed upon by the Parties or,
in the absence of such an agreement, the offices of Xxxxxx Xxxxxxxx, P.S., 000
Xxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxxxx 00000-0000.
"Closing" shall mean the consummation of the assignment, transfer,
conveyance and delivery of the Assets and the Purchase Price as contemplated
hereunder.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Consents" shall mean any and all consents, approvals, authorizations
or waivers of any Governmental Authority, including, without limitation, the FCC
Consent, and any and all consents, approvals or waivers from parties to
Contracts that are (i) required for the consummation of the transactions
contemplated by this Agreement or (ii) necessary in order that Purchaser (or its
designee) can conduct the Business after the Closing Date substantially in the
same manner as before the Closing Date.
"Contracts" shall mean all leases, contracts, commitments, and other
binding agreements relating to the System to which Seller is a party and which
are set forth on SCHEDULE 5.7, whether written or oral.
"DOJ" shall mean the United States Department of Justice.
"Employees" shall mean all persons employed on a full or part-time
basis together with all persons retained as "independent contractors" who are
the functional equivalent of employees.
"Environmental Laws" shall mean Applicable Laws relating to pollution,
the environment or the Handling of Regulated Substances, including without
limitation, the Comprehensive Environmental Response, Compensation and Liability
Act of 1980 ("CERCLA").
"Equipment" shall mean all of the furniture, fixtures, furnishings,
machinery, computer hardware, antennas, transmitters, and other personal
property used in connection with the Business and the System.
"ERISA" shall have the meaning set forth in Section 5.9 hereof.
"Escrow Agreement" shall have the meaning set forth in Section 11.2.2
hereof.
"Escrow Amount" shall have the meaning set forth in Section 2.2 hereof.
"Excluded Assets" shall mean those assets set forth on SCHEDULE 1
hereto.
"FCC" shall mean the Federal Communications Commission.
"FCC Authorization" shall mean the Authorizations from the FCC relating
to the operation of the System.
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"FCC Consent" shall mean the action of the FCC granting its consent to
the assignment of the FCC Authorization from Seller to Purchaser.
"FTC" shall mean the Federal Trade Commission.
"Final Order" shall mean a Preliminary Order which is not reversed,
stayed, enjoined, set aside, annulled, or suspended, and with respect to which
no timely request for stay, motion or petition for reconsideration or rehearing,
application or request for review, or notice of appeal or other judicial
petition for review is pending, and as to which the time for filing any such
request, motion, petition, application, appeal, or notice, and for the entry of
an order staying, reconsidering, or reviewing on the FCC's or other regulatory
authorities' own motion, has expired. If a Preliminary Order is subject to
conditions which may have a material adverse effect on a party, such party must
either timely file a petition for reconsideration with respect to such
conditions or accept such conditions. If such party timely files a petition for
reconsideration with respect to such conditions, the Preliminary Order shall not
become or be deemed a Final Order unless and until such conditions are removed
from the Preliminary Order or the party affected thereby has notified the other
Party in writing of its willingness to accept such conditions.
"Final Settlement" shall have the meaning set forth in Section 2.3.3
hereof.
"Financial Statements" shall have the meaning set forth in Section 5.10
hereof.
"Governmental Authority" shall mean any court or any federal, state,
county, or local governmental, legislative or regulatory body, agency,
department, authority, instrumentality or other subdivision thereof, including,
without limitation, the FCC and the PUC.
"Handling" shall mean the production, use, generation, storage,
treatment, recycling, disposal, discharge, release, or other handling or
disposition at any time on or prior to the Closing Date of any Regulated
Substance either in, on, or under any Operating Site.
"HSR Act" shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act
of 1976, as amended.
"Intellectual Property" shall mean all patents, trademarks, service
marks, trade names, copyrights, licenses, formulas, computer software,
advertising slogans, know-how, data and other intellectual property rights or
intangible property rights of Seller which are used or intended for use in
connection with the System.
"Inventory" shall mean all usable and non-obsolete merchandise owned
and intended for resale in connection with the Business, whether or not located
on the premises, on consignment to a third party, or in transit or storage.
"Liabilities" shall mean liabilities, obligations or commitments of any
nature, absolute, accrued, contingent or otherwise, known or unknown, whether
matured or unmatured.
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"Lien" shall mean any contract for sale (except for the sale of
cellular telephone service and rentals of cellular telephone equipment to
Subscribers), claim, lien, pledge, option, charge, covenant, restriction,
encroachment, easement, security interest, mortgage, deed of trust,
right-of-way, encumbrance or adverse interest of any kind or character of any
other Person.
"Losses" shall have the meaning set forth in Section 11.2.1 hereof.
"Operating Data Statements" shall have the meaning set forth in Section
5.10 hereof.
"Operating Site" shall mean any real property or facility owned, leased
or used at any time by Seller in connection with the System.
"Person" shall mean an individual, a corporation, a partnership, an
association, a joint-stock company, a trust, any unincorporated organization, or
a government or a political subdivision thereof.
"Preliminary Order" shall mean an action by the FCC and any other
applicable state regulatory authority consenting to or authorizing the
assignment of the FCC Authorization to Purchaser (or its designee), which action
has not yet become a Final Order.
"PUC" shall mean the Texas Public Utilities Commission.
"Purchase Price" shall have the meaning set forth in Section 2.2
hereof.
"Purchaser's Closing Certificate" shall have the meaning set forth in
Section 7.1 hereof.
"Real Property" shall mean all real property owned or leased by or
used, or intended by Seller for use, in connection with the System, together
with all buildings, improvements, fixtures, easements, licenses, options,
insurance proceeds and condemnation awards and all other rights of Seller in or
appurtenant thereto, but does not include the property listed on SCHEDULE 1.
"Regulated Substance" shall mean (i) any "hazardous substance" as
defined in CERCLA, (ii) any petroleum or petroleum substance, and (iii) any
other pollutant, waste, contaminant, or other substance regulated under
Environmental Laws.
"Representative" shall mean any officer, director, principal, attorney,
agent, employee or other representative of any Person.
"Seller's Closing Certificate" shall have the meaning set forth in
Section 8.1 hereof.
"Service" shall mean the provision of the System's cellular telephone
service to Subscribers.
"Subscribers" shall mean customers of Seller that subscribe to the
Service.
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"Subscriber Agreements" shall mean Contracts whereby Seller has agreed
to provide Service.
"Survival Period" shall have the meaning set forth in Section 11.1
hereof.
"Taxes" shall mean all taxes, charges, fees, levies or other
assessments or charges of any kind whatsoever, including without limitation,
income, excise, use, transfer, payroll, occupancy, property, sales, franchise,
unemployment and withholding taxes, imposed by any Governmental Authority, and
any assessments against Real Property together with any interest, penalties or
additional taxes attributable to such taxes and other assessments.
"To the knowledge" or "knowledge" of a Party (or similar phrases) shall
mean (i) with respect to Seller, to the extent of matters which are actually
known by any of the officers, directors or employees of Seller or which, based
on facts of which such parties are aware, would be known to a reasonable Person
in similar circumstances and (ii) with respect to Purchaser, to the extent of
matters which are actually known by any of the officers, directors or employees
of Purchaser, or which, based on facts of which such parties are aware, would be
known to a reasonable Person in similar circumstances.
ARTICLE 2.
PURCHASE OF ASSETS
2.1. Transfer of Assets. Subject to the terms and upon satisfaction of
the conditions contained in this Agreement, at the Closing, Seller shall sell,
convey, transfer, assign and deliver to Purchaser (or its designee), and
Purchaser (or its designee) will accept and acquire, the Assets.
2.1.1. The towers on which transmitting and receiving equipment
for the System are located are on land that is owned by Affiliates of Seller.
Such sites are leased to Seller on non-standard terms and conditions. The
parties acknowledge that Purchaser will not assume any such leases as a part of
the sale contemplated by this Agreement, but that Purchaser's acquisition of
rights to use such sites on terms substantially the same as those contained in
the form set forth in SCHEDULE 2.1.2 are a necessary part of the transactions
contemplated by this Agreement.
2.1.2. Purchaser and Seller agree to negotiate new leases for all
sites and properties that are owned by Affiliates of Seller, with the terms and
conditions of such leases to be in substantially the same form as attached as
SCHEDULE 2.1.2. All such new leases will take effect on or before the Closing
Date.
2.2. Purchase Price. The purchase price for the Assets shall be One
Hundred Forty Five Million Dollars ($145,000,000), subject to adjustment
pursuant to this Article (the "Purchase Price"), which shall be paid by
Purchaser to Seller (or its designee) on the Closing Date as follows: (i) Four
Million Dollars ($4,000,000) of such Purchase Price (the "Escrow Amount") shall
be delivered to the Escrow Agent as defined in Section 11.2.2 and held pursuant
to the terms
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of Section 11.2.2; and (iii) the balance of such Purchase Price shall be paid by
Purchaser to Seller by wire transfer of immediately available funds.
2.3. Other Adjustments and Prorations.
2.3.1. The Purchase Price shall be adjusted in accordance with
the following:
(a) The Purchase Price shall be increased by an amount equal
to any cash, adjusted accounts receivable, Inventory (valued at book value),
prepaid expenses and any other current assets transferred to Purchaser. For the
purposes of this Section the "adjusted accounts receivable" shall equal the sum
of the following:
(i) 90% of the accounts receivable from carriers (not
including any clearinghouse receivables) and resellers,
and of receivables from Subscribers which remain unpaid
by Subscribers for less than thirty-one (31) days from
the date such receivable first comes due
("Outstanding"); plus
(ii) 70% of the amount of all Subscriber accounts receivable
that are Outstanding for more than thirty (30) days but
less than sixty-one (61) days; plus
(iii) 50% of the amount of all Subscriber accounts receivable
that are Outstanding for more than sixty (60) days, but
less than ninety-one (91) days; and
(iv) There shall be no adjustment (i.e. 0%) for the amount
of any Subscriber accounts receivable that are
Outstanding more than ninety (90) days.
(b) The Purchase Price shall be decreased by an amount equal
to (x) amounts collected by Seller from Subscribers on or prior to the Closing
Date (net of liabilities associated with deferred access revenue included in
such amounts), which relate to Services to be provided after the Closing Date
(hereinafter referred to as "Advance Receipts"), and (y) liabilities associated
with deferred access revenue assumed by Purchaser.
2.3.2. Except as otherwise specifically provided for herein, all
revenues and all expenses arising from the Business and ownership of the Assets,
including resale charges and other expenses payable in respect to Service,
utility charges, Taxes levied against the Assets, property and equipment
rentals, sales and service charges, Taxes (except for Taxes arising from the
transfer of the Assets), and similar prepaid and deferred items, shall be
prorated between Seller and Purchaser in accordance with the principle that
Seller shall receive the benefit of all revenues, and be responsible for all
expenses, costs, obligations and Liabilities allocable to the Business and the
ownership of the Assets for the period on and prior to the Closing Date, and
Purchaser shall receive the benefit of all revenues, and be responsible for all
expenses, costs, obligations and Liabilities allocable to the Business and the
ownership of the Assets after the Closing Date.
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2.3.3. A final settlement (the "Final Settlement") of all
adjustments or prorations made under this Section, with payment being made by
the appropriate Party in cash (but without any interest thereon), shall occur no
later than one hundred twenty (120) days after the Closing Date.
2.3.4. In the event that the Parties cannot agree on the amount
of the Final Settlement, the determination shall be made by a mutually agreed
upon national accounting firm selected jointly by Purchaser and Seller that has
not, during the prior three (3) years, been employed by any of the Parties (the
"Auditor"). The Auditor shall make its determination of the Final Settlement
based on the express provisions of this Agreement; provided, however, that if
the Auditor finds that the express terms of this Agreement are not sufficient to
resolve any issue or issues, the Auditor shall rely upon generally accepted
accounting principles then in effect. Any Party may invoke the use of the
Auditor by notifying the other Party in writing, provided that a Party may not
invoke the use of the Auditor to determine the Final Settlement earlier than one
hundred eighty (180) days after the Closing Date. The Auditor shall be required
to render a decision within twenty-one (21) days after the Auditor is requested
to render a determination under this Section. The decision of the Auditor shall
be binding on the Parties and not subject to any judicial challenge by the
Parties. Within five (5) business days after the Auditor provides the
determination to the Parties, the payment of the Final Settlement shall be made
in accordance with that determination. The expenses of the Auditor shall be paid
by Seller and Purchaser in reverse proportion to the Auditor's determination
with respect to the allocation to Seller and Purchaser of the amount in
disagreement. For example, if the amount in disagreement is One Hundred Thousand
Dollars ($100,000) and the Auditor determines that the Seller should receive
Seventy Thousand Dollars ($70,000) and the Purchaser should receive Thirty
Thousand Dollars ($30,000), then Seller shall pay thirty percent (30%) of the
Auditor's expenses, and Purchaser shall pay seventy percent (70%).
ARTICLE 3.
ASSUMED OBLIGATIONS
3.1. No Assumption of Liabilities by Purchaser, Exceptions. Except as
set forth in Section 3.2 below, Purchaser expressly does not, and shall not,
assume or be deemed to have assumed under this Agreement or by reason of any
transactions contemplated hereunder, any Liabilities of any nature whatsoever
relating to the System or of Seller, or any of Seller's stockholders or
partners, as the case may be.
3.2. Assumed Liabilities. At the Closing, Purchaser shall assume and
shall timely pay, perform, fulfill and discharge all of Seller's liabilities and
obligations due after the Closing Date on those Contracts and Liabilities set
forth on SCHEDULE 3.2 (the "Assumed Liabilities").
ARTICLE 4.
COVENANTS AND AGREEMENTS
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4.1. Covenants of Seller. Seller covenants and agrees that from the
time of the execution and delivery of this Agreement until (and including) the
Closing Date:
4.1.1. Consummate Transactions. Seller shall use its best efforts
to cause the transactions contemplated by this Agreement to be consummated in
accordance with the terms hereof, and, without limiting the generality of the
foregoing, use best efforts to obtain all necessary approvals, consents,
permits, licenses and other authorizations required in connection with this
Agreement and the transactions contemplated hereby from Governmental
Authorities, and to make all filings with and to give all notices to third
parties, which may be necessary or reasonably required of Seller in order to
consummate the transactions contemplated hereby.
4.1.2. Full Access and Purchaser Due Diligence. Seller shall
allow Purchaser and its agents and representatives (including, without
limitation, its independent auditors and attorneys) reasonable access during
normal business hours to all of Seller's personnel, premises, properties,
assets, financial statements and records, books, contracts, documents and
commitments of or relating to the Business, and shall furnish Purchaser and its
agents and representatives with all such information concerning the affairs of
the System as Purchaser may reasonably request.
4.1.3. Ordinary Course. Seller shall cause the Business and
affairs of the System to be conducted only in the ordinary course and consistent
with past practices. Without limiting the foregoing, Seller shall continue to
pay its bills and other obligations, all in the ordinary course of business
consistent with past practices, but shall not, without the prior written consent
of Purchaser, perform or do any of the following if the same would have a
material adverse effect on the Business, the System or the Assets: (a) incur any
material Liability other than obligations to Seller's brokers, attorneys and
accountants, all of which shall be paid by Seller; (b) assume, guarantee, change
any existing guarantee, endorse, act as an accommodation party, or otherwise
become responsible for, the obligations of any other Person; (c) make any loans
or advances to any Person; (d) sell, transfer, convey, mortgage, pledge,
hypothecate or place any Liens on any of the Assets; (e) waive or compromise any
right or claim for any amount; (f) cancel any note, loan or other material
obligation owing to Seller; (g) enter into any Contract with any Person,
including, without limitation, the stockholders of Seller or any of its
Affiliates, consultants, agents or assigns; (h) except as otherwise provided in
this Agreement, increase or modify compensation of any type currently paid to
any of its employees, officers, directors, agents or consultants; (i) make any
new arrangement for any profit-sharing plan, retirement plan, bonus plan,
severance arrangement, employee benefit plan, or any similar plan except for
modifications of existing plans that are required by law, or contemplated to be
implemented at the time of the execution of this Agreement; (j) except as
required by law, enter into any collective bargaining agreement, or make any
commitment whatsoever to any union or other representative or party which
intends to represent any of Seller's employees subsequent to the Closing; (k)
except as permitted under Section 5.9 hereof, hire any employees; (l) except as
required by law, enter into any additional reseller agreements; or (m) enter
into any Contract involving payments, assets, or liabilities with a value
greater than $25,000 individually or $100,000 in the aggregate, excluding
noncapital expenditures incurred in the ordinary course of business consistent
with past practices. Notwithstanding the foregoing, nothing in this Section
shall prevent Seller from taking
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appropriate action as may be necessary to maintain its ability to control and
manage the System and to comply with the rules, regulations or directives of any
Governmental Authority.
4.1.4. Retention of Records. On the Closing Date, Seller shall
deliver to Purchaser all of the Books and Records relating to the System and the
Business. In addition, for a period of three (3) years after the Closing Date,
Seller shall retain and make available to Purchaser copies of any documents not
theretofore delivered to Purchaser relating to System, the Business or the
Assets.
4.1.5. No Amendments or Issuance of Additional Shares. Seller
shall not amend its charter, by-laws, or comparable governing instrument, which
amendment would have a material adverse effect on the Assets, the Business or
the transactions contemplated by this Agreement or which would require any
additional consents or approvals of the transactions contemplated by this
Agreement. Seller shall not issue or sell any shares of its capital stock or
other securities, or issue options, warrants or rights of any kind to acquire,
or any securities convertible into, exchangeable for or representing a right to
purchase or receive, any stock-based or stock-related awards or other
equity-based awards, shares of its capital stock or other equity or other
securities, or enter into any arrangement or contract with respect to the
purchase or voting of shares of its capital stock or other equity, or adjust,
split, combine or reclassify any of its securities, or make any other changes in
its capital structure, if any such issuance, sale, contract, plan,
understanding, arrangement, adjustment, split, combination, reclassification or
changes would require any additional approvals of the transactions contemplated
by this Agreement or would otherwise have a material adverse effect on the
transactions contemplated by this Agreement.
4.1.6. No Termination or Settlement. Without the prior written
consent of Purchaser, which consent shall not be unreasonably withheld, Seller
shall not terminate any agent, or settle any dispute with any agent if such
termination or settlement would cause Purchaser to have any continuing
obligation after the Closing with respect thereto.
4.1.7. Preserve Business and Goodwill. Seller shall use its
diligent efforts to keep the System intact, to preserve and maintain the Assets,
to preserve the Business and to preserve the goodwill of suppliers, Subscribers
and others dealing with Seller.
4.1.8. Compliance with Law. Seller shall comply in all material
respects with Applicable Laws relating to the System, the Business and the
Assets.
4.1.9. Approvals; Consents. Seller shall obtain and maintain in
full force and effect, and shall not take any action which might have a material
adverse effect on, any Authorizations that are required for the operation of the
Business as presently conducted, except where such Authorizations are
administrative in nature, and the failure to obtain or maintain such
Authorizations would not adversely impact the continued operation of any part of
the System or any component thereof, as currently operated. The Parties shall
consult with one another as to the approach to be taken with any Governmental
Authority with respect to obtaining any Authorization to the transactions
contemplated hereby, and each of the Parties shall keep each other Party
reasonably informed as to the status of any such communications with any
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Governmental Authority. Seller shall not make any material commitments with
respect to any Authorizations that would have a material adverse effect on the
Business, the System or the Assets without Purchaser's prior written consent.
4.1.10. Insurance. From the date hereof through the Closing Date,
Seller shall maintain in full force and effect (including necessary renewals
thereof), all of the insurance policies that Seller currently maintains relating
to System, or other functionally equivalent policies. The policies currently
maintained by Seller are set forth on SCHEDULE 4.1.10. From and after the
Closing Date, Seller shall take all actions that may be necessary to cause the
coverage under such policies to continue in full force and effect after the
Closing Date with respect to liability occurrences prior to the Closing Date and
shall take all actions necessary to preserve or protect rights under any such
policies with respect to any claim against Seller arising out of the Assets or
Business of Seller prior to the Closing Date. Seller will provide Purchaser with
information and records regarding all claims pending with respect to the Assets
or Business of Seller and agrees to provide to Purchaser any additional
information and records Purchaser may reasonably require regarding such claims.
4.1.11. Books and Records. Seller shall continue to maintain the
Books and Records in the manner and on a basis consistent with prior years.
4.1.12. Notice of Claims. Seller shall give written notice to
Purchaser promptly upon the commencement of any action, investigation,
arbitration or proceeding (including any proceeding before any Governmental
Authority), or promptly upon obtaining knowledge of any facts giving rise to a
threat of any such action, investigation, arbitration or proceeding which, if
adversely determined, would have a material adverse effect on (a) Seller's
ability to consummate the transactions contemplated hereby; (b) the Business; or
(c) the Assets.
4.1.13. Notice of Breaches. Seller shall promptly after obtaining
knowledge of the occurrence of, or the impending or threatened occurrence of,
any event which would cause or constitute a breach of any warranties,
representations, covenants or agreements of the Seller contained in this
Agreement, give notice in writing of such event or occurrence or impending or
threatened event or occurrence, to Purchaser and use its diligent efforts to
prevent or to promptly remedy such breach.
4.1.14. Notice of Change. Except for events occurring in the
communications industry generally, Seller shall use reasonable efforts to notify
Purchaser promptly in writing of any event, condition or state of facts, which
has had or would reasonably be expected to have a material adverse effect on the
System, the Business, the Assets, or on the transaction contemplated by this
Agreement.
4.1.15. Training / Transition Assistance.
(a) Before the Closing, and at the request of Purchaser,
Seller hereby agrees to use commercially reasonable efforts to instruct
Purchaser's employees and agents in the use of Seller's billing system. Such
instruction will be provided at Seller's premises at mutually
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convenient times so as not to disrupt the operation of Seller's businesses and
shall be provided at no cost to Purchaser.
(b) The Parties agree to use diligent efforts and to direct
their respective employees, agents, and subcontractors to cooperate in the
conversion and transfer of the Subscribers to Purchaser's billing system so that
upon the Closing Date, or as soon thereafter as is reasonably practicable, all
of the System's customer billing information shall have been transferred and
converted to Purchaser's billing system. The costs associated with converting
and transferring the information to Purchaser's billing system shall be the sole
responsibility of Purchaser. In the event Purchaser desires to retain Seller's
assistance in such matters after the Closing, the parties agree to enter into an
agreement having terms substantially the same as those contained in the document
attached as SCHEDULE 4.1.15(b).
4.1.16. Interim Financial Statements and Statistical Summaries.
Between the date of this Agreement and the Closing Date, Seller shall deliver to
Purchaser (i) as soon as practicable, but no later than forty-five (45) days
after the end of each calendar month, unaudited financial statements ("Interim
Financial Statements") for the most recent month and the interim period then
ended, and (ii) as soon as practicable, but no later than forty-five (45) days
after the end of each calendar month, interim operating data summaries (the
"Interim Operating Data Statements") for the most recent month and interim
period then ended, which summaries will be in scope and format substantially
identical to the Operating Data Statements.
4.1.17. Material Contracts. Seller shall not (a) default in any
material respect under, or breach any term or provision of, or suffer or permit
to exist any condition or event which, after notice or lapse of time, or both,
would constitute a material default under, any material Contract, or (b) cause
or permit the termination, modification or amendment of any material Contract of
Seller.
4.1.18. Condition of Assets. Seller shall use diligent efforts to
preserve the Assets intact and, from time to time, make all necessary repairs
thereto, so that the Business may be conducted in the ordinary course consistent
with past practices.
4.2. Covenants of Purchaser. Purchaser covenants and agrees that from
the time of the execution and delivery of this Agreement until (and including)
the Closing Date:
4.2.1. Consummate Transaction. Purchaser shall use its best
efforts to cause the transactions contemplated by this Agreement to be
consummated in accordance with the terms hereof, and, without limiting the
generality of the foregoing, to assist Seller in obtaining all necessary
Consents of third parties, including, without limitation, the approval of this
Agreement and the transactions contemplated hereby as required by any
Governmental Authority, and to make all filings with and to give all notices to
third parties which may be necessary or reasonably required of Purchaser in
order to consummate the transactions contemplated hereby.
4.2.2. Purchaser Not to Control. Notwithstanding any provision of
this Agreement that may be construed to the contrary, pending the consummation
of the Closing, Seller shall maintain actual (de facto) and legal (de jure)
control over the System. Specifically,
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and without limitation, the responsibility for the operation of the Business and
the System shall, pending the Closing Date, reside with the Board of Directors
and management of Seller, including, but not limited to, responsibility for the
following matters: (a) access to and the use of the facilities of and equipment
owned by Seller; (b) control of the daily operation of the System; (c) creation
and implementation of policy decisions; (d) employment and supervision of
employees; (e) payment of financing obligations and expenses incurred in the
operation of the System; (f) receipt and distribution of monies and profits
derived from the operation of the System; and (g) execution and approval of all
contracts and applications prepared and filed before Governmental Authorities.
4.2.3. Notice of Breaches. Purchaser shall promptly after
obtaining knowledge of the occurrence of, or the impending or threatened
occurrence of, any event which would cause or constitute a breach of any
warranties, representations, covenants or agreements of the Purchaser contained
in this Agreement, give notice in writing of such event or occurrence or
impending or threatened event or occurrence, to Seller and use its diligent
efforts to prevent or to promptly remedy such breach.
4.2.4. Qualification to Hold Authorizations. Purchaser shall
remain an entity qualified to hold the Authorizations under the rules and
regulations of the FCC.
4.3. Mutual Covenants of Seller and Purchaser. Seller and Purchaser
have filed with the FCC, and, if necessary, will file with the PUC or any other
Governmental Authority, as soon as practicable following the date hereof, joint
applications requesting the approval of the assignment of the Authorizations to
Purchaser, and, if applicable, will file all necessary applications with the DOJ
and/or the FTC pursuant to the HSR Act. Seller and Purchaser agree to use their
best efforts to make all such filings as have not yet been made within ten (10)
business days of the execution of this Agreement. Seller and Purchaser shall
diligently take or cooperate in the taking of all steps which are necessary or
appropriate to expedite the prosecution and favorable consideration of such
applications. Purchaser shall the pay filing fees associated with the filings
required by this Section. Seller and Purchaser covenant and agree to undertake
all actions and file such material as shall be necessary or required in order to
obtain any necessary waivers or other authority in connection with the foregoing
applications.
ARTICLE 5.
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby makes the following representations and warranties to
Purchaser, all of which have been relied upon by Purchaser in entering into this
Agreement and the truth and accuracy of which shall constitute a condition
precedent to the obligations of Purchaser hereunder:
5.1. Organization and Standing. Seller (a) is a corporation duly
organized, validly existing and in good standing under the laws of the state of
Texas, (b) has full corporate power and authority to enter into and perform this
Agreement, to own and lease the Assets, and operate the System and to carry on
the Business as now being conducted and proposed to be conducted
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by it, and (c) is duly qualified to do business and is in good standing as a
foreign corporation in every jurisdiction in which the nature of the business
conducted by it requires such qualification, except where the failure to so
qualify would not have a material adverse effect on the System, the Business, or
the Assets.
5.2. Authorization and Binding Obligations. The execution, delivery and
performance of this Agreement by Seller has been duly and validly authorized by
all necessary corporate action, including approval of the entire transaction by
vote of its shareholders and Board of Directors. This Agreement has been duly
executed and delivered by Seller and constitutes a valid and binding obligation
of Seller enforceable against it in accordance with its terms, except as its
enforceability may be limited by bankruptcy, insolvency, moratorium or other
laws relating to or affecting creditors' rights generally and the exercise of
judicial discretion in accordance with general equitable principles.
5.3. No Contravention. Except as otherwise contemplated hereunder, the
execution, delivery and performance of this Agreement, the consummation of the
transactions contemplated hereby and the compliance with the provisions hereof
by Seller will not (a) violate any provisions of the corporate charter or
by-laws of Seller (b) result in the breach of, or constitute a default under, or
result in the creation of any Lien upon any of the Assets, under the provisions
of any agreement or other instrument to which Seller is a party or by which any
Asset is bound or affected or (c) with respect to Seller, violate any Applicable
Laws.
5.4. Title to Assets.
5.4.1. SCHEDULE 5.4.1 is a list of all tangible personal property
included in the Assets. Seller has good and marketable title to all the tangible
personal property to be transferred by it hereunder, free and clear of all
Liens, charges or any other encumbrances, except for and subject only to liens
for Taxes not yet due or payable ("Permitted Liens").
5.4.2. SCHEDULE 5.4.2 is a list of all the Real Property. Seller
has good and marketable title to all of the Real Property to be transferred by
it hereunder, free and clear of all Liens, and without reservation or exclusion
of any mineral, timber or other rights or interests, except for and subject only
to (a) Permitted Liens, (b) those matters set forth in SCHEDULE 5.4.2 including
the leases listed thereon (whether as lessor or lessee), none of which is
violated by existing structures or impairs Seller's use and none of which
materially impairs or pursuant to its terms would materially impair the present
operations of the System or the present use of such property, and (c) those
Liens set forth in SCHEDULE 5.4.2. The Liens set forth on SCHEDULE 5.4.2 will be
removed on or prior to the Closing Date.
5.4.3. The Assets include all assets (except the Excluded Assets)
which are used to conduct the Business and operations of the System as presently
conducted .
5.5. Condition of the Assets. All tangible Assets are in reasonable
operating condition and repair, ordinary wear and tear excepted, are reasonably
suitable for the uses and purposes for which they are being used, and are in
compliance with all Applicable Laws, except where failure of such compliance
would not have a material adverse effect on the Assets, the System, or the
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Business, and Seller has no knowledge and has received no notice that it or the
present use of the Assets is in violation in any material respect of any
Applicable Laws.
5.6. Authorizations. The Authorizations listed on SCHEDULE 5.6 are all
of the Authorizations necessary to operate the System, the Business and the
Assets as they are now operated. The Authorizations are validly issued in the
name of Seller and are in full force and effect. Except as set forth on SCHEDULE
5.6, all material Authorizations are unimpaired by any acts or omissions of
Seller (or any of its Representatives) and the Authorizations are free and clear
of any restrictions which might limit the full operation of the System. All
material ownership reports, employment reports, and other documents required to
be filed by Seller with the FCC with respect to the System have been filed or
the time period for such filing has not lapsed. All such reports and documents
since the date that Seller acquired the System are correct in all material
respects. The FCC actions granting the current FCC Authorization to operate the
System together with all underlying construction permits have not been reversed,
stayed, enjoined, set aside, annulled, or suspended, and no timely request for
stay, motion or petition for reconsideration or rehearing, application or
request for review, or notice of appeal or other judicial petition for review is
pending. The time for filing any such request, motion, petition, application,
appeal, or notice, and for the entry of an order staying, reconsidering, or
reviewing on the FCC's or other regulatory authorities' own motion, has expired.
5.7. Contracts. SCHEDULE 5.7 is a list of all Contracts, other than
Subscriber Agreements and Contracts with Seller's Affiliates which will not
survive the Closing. Each such Contract is in full force and effect, paid
currently, and has not been materially impaired by any acts or omissions of
Seller or any of its Representatives. Except as set forth on SCHEDULE 5.7, no
Contract requires the consent of any other party to the transactions
contemplated by this Agreement. Seller is not (and, to the best of its
knowledge, no other party is) in material breach or violation of, or default
under any of the Contracts. Seller is not aware of any intent by any party to
any Contract to terminate or amend the terms thereof or to refuse to renew any
Contract upon expiration of its term.
5.8. Intellectual Property. SCHEDULE 5.8 is a list of all Intellectual
Property. Except as indicated on SCHEDULE 5.8, Seller has properly licensed and
has the right to use all of the Intellectual Property. No person has a right to
receive a royalty or similar payment in respect of any Intellectual Property
other than as indicated on SCHEDULE 5.8. Seller has no licenses granted by or to
it, or any other agreements to which it is a party, relating in whole or in part
to any of the Intellectual Property other than as indicated on SCHEDULE 5.8. To
Seller's knowledge, except as disclosed on SCHEDULE 5.8, Seller's use of the
Intellectual Property is not infringing upon or otherwise violating the rights
of any third party, and no proceedings have been instituted against or notices
received by Seller alleging that such use of its Intellectual Property infringes
upon or otherwise violates any rights of a third party.
5.9. Employees; Employment Obligations. Seller and/or the System
currently employs those persons in those positions and at those salaries
(including benefits) as are listed on SCHEDULE 5.9 Seller shall hire no further
employees without the prior written consent of Purchaser, provided that Seller
may, as the need arises, hire employees to replace existing employees without
the consent of Purchaser. Except as otherwise set forth on such SCHEDULE 5.9,
Seller and the
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System are not bound, and at no time have been bound, by any oral or written
collective bargaining agreement, severance, pension, retirement, profit-sharing,
401(k), "employee benefit plan" (within the meaning of Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA")), or other
employment agreement (other than any agreements terminable on thirty (30) days'
or less notice without penalty or severance obligation) with any officer,
employee or consultant, nor does Seller or the System have any liability under
any such agreement which was terminated previously. Seller has complied in all
material respects with all applicable laws, rules and regulations which relate
to prices, wages, hours, discrimination in employment and collective bargaining
and is not liable for any arrears of wages or any taxes or penalties for failure
to comply with any of the foregoing. With respect to each "employee benefit
plan," if any, within the meaning of Section 3(3) of ERISA, which is now, or
ever has been, maintained, contributed to, or required to be contributed to by
Seller, such employee benefit plan has been established and maintained in all
material respects in accordance with its terms and in material compliance with
all applicable laws, statutes, orders, rules and regulations, including but not
limited to ERISA. Seller is not a party to, and is not affected by or threatened
with, any dispute or controversy with a union or with respect to unionization or
collective bargaining involving the Employees of Seller or the System.
5.10. Financial Statements. Attached hereto as SCHEDULE 5.10 are the
unaudited financial statements of Seller for the periods indicated on such
Schedule (the "Financial Statements"), which statements have been compiled by
X.X. Xxxxxxxxx & Co. SCHEDULE 5.10 also lists key statistical summary
information and other documents which set forth the subscriber history for the
last three years, and local and roaming minutes of use data of the System for a
designated calendar months (the "Operating Data Statements"). A sample Operating
Data Statement is attached hereto as SCHEDULE 5.10. All Financial Statements are
true and correct in all material respects, have been prepared from the Books and
Records and fairly represent the financial position of Seller in a manner
consistent with the prior periods prepared in accordance with generally accepted
accounting principles. To Seller's knowledge, Seller has not incurred nor is it
subject to any Liabilities, whether accrued or absolute, which are not disclosed
in the Financial Statements or elsewhere in this Agreement. All Operating Data
Statements listed on such SCHEDULE 5.10 are accurate in all material respects.
5.11. Litigation. Except as set forth on SCHEDULE 5.11, there is no
action, order, writ, injunction, judgment or decree outstanding or claim, suit,
litigation, proceeding, or labor dispute ("Action"), other than rule-making
proceedings affecting the cellular telephone industry generally, pending or, to
the knowledge of Seller, threatened, relating to or affecting (a) Seller, (b)
the Assets, (c) the Business, or (d) the transactions contemplated by this
Agreement which if adversely determined, could have a material adverse effect on
the Business. Seller is not in default with respect to any judgment, order,
writ, injunction or decree of any court or governmental agency, and there are no
unsatisfied judgments against Seller or the Assets. There is not a reasonable
likelihood of an adverse determination of any pending Action which would,
individually or in the aggregate, have a material adverse effect on the Assets
or the Business or the financial condition of Seller.
5.12. Complaints. There is not, to the best of Seller's knowledge, any
FCC investigation, notice of apparent liability or order of forfeiture pending
or outstanding against
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Seller or the System respecting any violation, or allegation thereof, of any FCC
rule, regulation or policy, or, to the best of Seller's knowledge, any complaint
before the FCC as a result of which an investigation, notice of apparent
liability or order of forfeiture may issue from the FCC relating to the System.
5.13. Reports. Except as set forth in SCHEDULE 5.13 hereto, all
material returns, reports and statements currently required to be filed by
Seller with the FCC or with any other Governmental Authority with respect to the
System have been filed and materially complied with and shall continue to be
filed and be in substantial compliance on a current basis until the Closing
Date. All such reports, returns and statements are (or will be, in the case of
future reports) substantially complete and materially correct as filed.
5.14. Taxes. Except as noted below, Seller has paid in full or
discharged all Taxes relating to the ownership and operation of the Assets and
all Taxes the non-payment of which could result in a Lien on the Assets in the
hands of the Purchaser, excepting in each case such Taxes which are not yet due
or which are being contested and for which adequate reserves have been made. No
event has occurred that could impose on Purchaser any liability for any Taxes,
due or to become due, from Seller to any taxing authority.
Seller has not yet paid state sales Taxes associated with certain
out collect revenues. Seller acknowledges that all such Taxes, and all penalties
and interest associated with such taxes, are and will remain Seller's
responsibility. Seller shall have paid all such Taxes, penalties and interest
before the Closing Date.
5.15. No Other Agreements to Sell the System or the Assets. Seller has
no other legal obligation, absolute or contingent, to any other Person to sell,
or offer to sell (including any right of first refusal or other similar
agreement) the Assets or any capital stock of Seller or to effect any merger,
consolidation or other reorganization of Seller or to enter into any contract
with respect thereto.
5.16. Resale and Roaming Agreements. SCHEDULE 5.16 contains a list of
all resale agreements to which Seller is a party, both as reseller and as a
provider of resale services to others. SCHEDULE 5.16 also contains a list of all
roaming agreements to which Seller is a party. All such resale and roaming
agreements are in full force and effect and, subject to rates which may be
imposed upon Seller beyond Seller's control, are on terms reasonable and
customary in the cellular telephone industry.
5.17. Environmental Matters. Except as set forth in SCHEDULE 5.17, to
Seller's knowledge the Operating Sites, and all existing and prior uses of the
Operating Sites, comply and have at all times complied with the Environmental
Laws. Except as set forth in SCHEDULE 5.17, Seller has not used, generated
manufactured, refined, transported, treated, stored, leaked, poured, emitted,
emptied, released, discharged, disposed, spilled or Handled any Regulated
Substance on or under any Operating Site. To Seller's knowledge (a) there is and
has been no Handling of any Regulated Substances at, on, or from any Operating
Site; (b) there is and has been no presence of Regulated Substances on or under
any Operating Site regardless of how the Regulated Substance or Regulated
Substances came to rest there; (c) no underground tanks, PCBs or
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asbestos-containing materials are or have been located on or under any Operating
Site; (d) no Liens have been, or are, imposed on any of the Assets under any
Environmental Laws; (e) no action, proceeding, revocation proceeding, amendment
procedure, writ, injunction or claim is pending, or threatened concerning any
environmental permit, Regulated Substance or activity related thereto. Neither
Seller nor any Person acting on behalf of Seller has released any other Person
from any claims Seller might have, or have had, for any matter relating to
presence or Handling of Regulated Substances at any Operating Site. Seller has
obtained all permits, licenses, registrations, and other approvals and has made
all reports and notifications required under any Environmental Laws in
connection with the Assets, and is in compliance in all material respects with
all applicable Environmental Laws. There are no present actions, activities,
circumstances, conditions, events, or incidents that would be expected to
involve Seller (or any Person whose liability Seller has retained or assumed,
either by contract or operation of law) in any litigation under the
Environmental Laws, or impose upon Seller (or any Person whose liability Seller
has retained or assumed, either by contract or operation of law) any
environmental liability including, without limitation, common law tort
liability. SCHEDULE 5.17 hereto also contains a list and brief description of
all Environmental Law filings by Seller with, notices to Seller from, and
related reports to all Governmental Authorities administering Environmental
Laws, within three years prior to the date hereof, including without limitation,
filings made, corrective action taken, or citations received by Seller.
5.18. Brokers. Seller has entered into a Contract with Xxxxxxx and
Associates which will result in the obligation of Seller to pay a brokerage
commission or similar payment in connection with the transactions contemplated
hereby. Seller shall be responsible for making any and all such payments, and
Purchaser shall have no obligation therefor.
5.19. No Material Adverse Change. Except as set forth on SCHEDULE 5.19,
since the date of the most recent Financial Statements, there has not been:
5.19.1. any material adverse change in the rate of Seller's
generation of cash flow from operations (as opposed to cash flow from financing
operations and investment activities) after giving effect to customary seasonal
fluctuations of cash flow generation;
5.19.2. any occurrence, assumption or guarantee by Seller of a
material indebtedness other than pursuant to Contracts in existence on the date
hereof and set forth or described on the Schedules annexed hereto;
5.19.3. any creation by Seller of any Lien or encumbrance on any
material Asset other than pursuant to Contracts in existence on the date hereof
and set forth or described on the Schedules annexed hereto;
5.19.4. any making of any material loan, advance or capital
contribution to or investment in any Person by Seller;
5.19.5. any damage, destruction or other casualty loss affecting
the Business or the Assets which, after giving effect to payments to Seller
under applicable insurance policies, has had or is likely to have a material
adverse effect on the financial condition of Seller or the System; or
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5.19.6. any change by Seller in accounting principles or methods
not required by law or year end changes.
5.20. Year 2000 Compliance. Seller has performed the necessary testing
to determine whether all material software and computer systems used in the
operation of the System are Year 2000 Compliant. To the extent that such testing
indicated that Seller's software or computer systems are not Year 2000
Compliant, such software and/or computer systems were modified or will be
modified prior to the Closing Date so they are Year 2000 Compliant. For purposes
of this Section, "Year 2000 Compliant" means that Seller's software or computer
systems receive, record, store, process, rout, transfer or present calendar
dates and any related information falling on or after January 1, 2000 with
similar functionality, in all material respects, as such software or computer
systems perform such functions for calendar dates and related information
falling prior to January 1, 2000.
5.21. Miscellaneous. No representation or warranty made by Seller in
this Agreement, and no statement made in any schedule, exhibit, certificate or
other document furnished pursuant to this Agreement, contains any untrue
statement of a material fact or knowingly omits or fails to state, or will
knowingly omit or fail to state, any material fact or information necessary to
make such representation or warranty or any such statement not materially
misleading; provided however, that nothing contained in this Section shall alter
the standard of those representations or warranties which are made "to Seller's
knowledge" or "to the best of Seller's knowledge" or phrases of similar import.
ARTICLE 6.
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby makes the following representations and warranties to
Seller, all of which have been relied upon by Seller in entering into this
Agreement and the truth and accuracy of which shall constitute a condition
precedent to the obligations of Seller hereunder:
6.1. Organization and Standing. Purchaser (a) is a limited partnership
duly organized, validly existing and in good standing under the laws of the
state of its organization, (b) has full power and authority to enter into and
perform this Agreement, to own the Assets, and to carry on the Business upon
consummation of the transactions contemplated by this Agreement, and (c) is duly
qualified to do business and is in good standing as a foreign entity in every
jurisdiction in which the nature of the business conducted by it requires such
qualification, except where the failure to so qualify would not materially
adversely affect Purchaser or the transactions contemplated by this Agreement.
6.2. Authorization and Binding Obligations. The execution, delivery and
performance by Purchaser of this Agreement has been or will be within five (5)
business days of the date of this Agreement, duly and validly authorized by all
necessary partnership action, including approval of the entire transaction by
the general partner of Purchaser. This Agreement has been duly executed and
delivered by Purchaser and constitutes a valid and binding obligation of
Purchaser,
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enforceable against Purchaser in accordance with its terms except as its
enforceability may be limited by bankruptcy, insolvency, moratorium or other
laws relating to or affecting creditors' rights generally and the exercise of
judicial discretion in accordance with general equitable principles.
6.3. No Contravention. Except as otherwise contemplated hereunder, the
execution, delivery and performance of this Agreement, the consummation of the
transactions contemplated hereby and the compliance with the provisions hereof
by Purchaser will not (a) violate any provisions of the organizational documents
of Purchaser, (b) result in the breach of, or constitute a default under or
result in the creation of any Lien upon any assets of Purchaser, under the
provisions of any agreement or other instrument to which Purchaser is a party or
by which the property of Purchaser is bound or affected or (c) with respect to
Purchaser, violate any Applicable Laws.
6.4. Litigation. Except as set forth on SCHEDULE 6.4, there is no
Action, other than rule-making proceedings affecting the cellular telephone
industry generally, pending or, to the knowledge of Purchaser, threatened or
anticipated against, relating to or affecting Purchaser that would have a
material adverse effect on Purchaser or Purchaser's ability to consummate the
transactions contemplated by this Agreement. Purchaser is not in material
default with respect to any material judgment, order, writ, injunction or decree
of any court or governmental agency, and there are no unsatisfied judgments
against Purchaser. There is not a reasonable likelihood of an adverse
determination of any pending Action which would, individually or in the
aggregate, have a material adverse effect on Purchaser or Purchaser's ability to
consummate the transactions contemplated by this Agreement.
6.5. Authority to hold Authorizations. Purchaser is an entity that is
qualified to hold the Authorizations under the rules and regulations of the FCC.
6.6. No Brokers. Neither Purchaser nor any of its Affiliates has
entered into or will enter into any contract, agreement, arrangement or
understanding with any person or firm which will result in the obligation of
Seller to pay any finder's fee, brokerage commission or similar payment in
connection with the transactions contemplated hereby.
6.7. Financial Capacity. Purchaser has now, and will have on the
Closing Date, the financial capacity or resources to acquire and operate the
System and Assets as contemplated by this Agreement.
6.8. Miscellaneous. No representation or warranty made by Purchaser in
this Agreement, and no statement made in any schedule, exhibit, certificate or
other document furnished pursuant to this Agreement, contains any untrue
statement of a material fact or knowingly omits or fails to state, or will
knowingly omit or fail to state, any material fact or information necessary to
make such representation or warranty or any such statement not materially
misleading; provided however, that nothing contained in this Section shall alter
the standard of those representations or warranties which are made "to
Purchaser's knowledge" or "to the best of Purchaser's knowledge" or phrases of
similar import.
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ARTICLE 7.
CONDITIONS TO SELLER'S OBLIGATIONS
The obligations of Seller to sell the Assets and to otherwise
consummate the transactions contemplated by this Agreement are subject, in the
discretion of Seller, to the satisfaction or waiver, on or prior to the Closing
Date, of each of the following conditions:
7.1. Representations, Warranties and Covenants. All representations and
warranties of Purchaser contained in this Agreement that do not otherwise
reference a specific date shall be true and correct in all material respects at
and as of the Closing Date as if such representations and warranties were made
at and as of the Closing Date, and Purchaser shall have performed in all
material respects all agreements and covenants required hereby to be performed
by Purchaser prior to or at the Closing Date. There shall be delivered to Seller
a certificate (signed by an authorized Officer of Purchaser) to the foregoing
effect ("Purchaser's Closing Certificate").
7.2. Closing Documents. Seller shall have received from Purchaser the
documents and other items to be delivered by Purchaser pursuant to Section 9.2
of this Agreement.
7.3. Opinion of Purchaser's Counsel. Purchaser shall have delivered to
Seller an opinion of in-house counsel for Purchaser in substantially the form
attached hereto as SCHEDULE 7.3.
7.4. Compliance with Advance Agreement. Purchaser shall not be in
material default under the terms of the Advance Agreement.
7.5. Certificates. Purchaser shall furnish Seller with such
certificates of the officers of Purchaser and others to evidence compliance with
the conditions set forth in this Article as may be reasonably requested by
Seller.
7.6. Purchase Price. Seller shall have received payment of the Purchase
Price in accordance with Section 2.2.
7.7. HSR Waiting Period. Any waiting period required by the HSR Act
shall have lapsed or been terminated, and any investigation of the transactions
contemplated by this Agreement commenced by the DOJ and/or the FTC pursuant to
the HSR Act shall have been terminated.
7.8. No Restraint. There shall not be any pending suit or proceeding to
restrain or invalidate, in whole or in part, this Agreement or the transaction
contemplated herein.
7.9. Authorization. Purchaser shall have delivered evidence,
satisfactory to Seller, that the authorizations contemplated by Section 6.2
hereof has been timely obtained.
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7.10. FCC Consent. The FCC Consent to the assignment of the
Authorizations to Purchaser shall have been obtained.
ARTICLE 8.
CONDITIONS TO PURCHASER'S OBLIGATIONS
The obligations of Purchaser to purchase the Assets and to otherwise
consummate the transactions contemplated by this Agreement are subject, in the
discretion of Purchaser, to the satisfaction or waiver, on or prior to the
Closing Date, of each of the following conditions:
8.1. Representations, Warranties and Covenants. All representations and
warranties of Seller contained in this Agreement that otherwise do not reference
a specified date shall be true and correct in all material respects at and as of
the Closing Date as if such representations and warranties were made at and as
of the Closing Date, and Seller shall have performed in all material respects
all agreements and covenants required hereby to be performed by Seller prior to
or at the Closing Date. There shall be delivered to Purchaser a certificate
(signed by an authorized officer of Seller) to the foregoing effect ("Seller's
Closing Certificate").
8.2. Consent. The FCC shall have consented to the transfer of the
Assets to Purchaser and such consents shall have become a Final Order.
8.3. Board / Stockholder Approval. The transactions contemplated herein
shall have been approved by the necessary number of stockholders and directors
of Seller.
8.4. Leases. The new leases referenced in Section 2.1.2 shall have been
entered into by Purchaser and Seller.
8.5. Closing Documents. Purchaser shall have received from Seller the
documents and other items to be delivered by Seller pursuant to Section 9.1
hereof.
8.6. Opinion of Seller's Corporate Counsel. Seller shall have delivered
to Purchaser an opinion or opinions of corporate counsel for Seller in
substantially the form attached hereto as SCHEDULE 8.6.
8.7. Opinion of Seller's FCC and PUC Counsel. Seller shall have
delivered to Purchaser an opinion or opinions of FCC and, if applicable, PUC
counsel for Seller in substantially the form attached hereto as SCHEDULE 8.7.
8.8. Certificates. Seller shall furnish Purchaser with such
certificates of the respective officers of Seller and others to evidence
compliance with the conditions set forth in this Article as may be reasonably
requested by Purchaser.
8.9. HSR Waiting Period. Any waiting period required by the HSR Act
shall have lapsed or been terminated, and any investigation of the transactions
contemplated by this
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Agreement commenced by the DOJ and/or the FTC pursuant to the HSR Act shall have
been terminated.
8.10. FCC Consent. The FCC Consent shall have become a Final Order;
provided that Purchaser may waive the condition that such Consent be by Final
Order.
ARTICLE 9.
THE CLOSING
On the Closing Date at the Closing Place:
9.1. Deliveries by Seller to Purchaser. Seller shall deliver to
Purchaser:
9.1.1. one or more assignments transferring to Purchaser (or its
designee) all of Seller's interest in and to the Authorizations;
9.1.2. one or more instruments of conveyance transferring to
Purchaser (or its designee) all of Seller's interest in and to the Equipment and
the Books and Records;
9.1.3. one or more assignments or other instruments of conveyance
that may be reasonably requested by Purchaser transferring to Purchaser (or its
designee) Seller's interest in and to the Intellectual Property;
9.1.4. one or more instruments of conveyance transferring to
Purchaser (or its designee) the Contracts in effect on the Closing Date;
9.1.5. one or more executed warranty deeds and assignments in
recordable form, transferring to Purchaser (or its designee) Seller's interest
in and to the Real Property;
9.1.6. one or more instruments of conveyance transferring to
Purchaser (or its designee) any of the other Assets not otherwise conveyed as
provided above;
9.1.7. the opinions of Seller's counsel referenced in Sections
8.6 and 8.7 hereof;
9.1.8. a lien and judgment search from (a) the offices of the
Secretaries of State of the state of incorporation of Seller and the state in
which Seller is conducting business, and (b) the office of the county clerk of
the applicable counties therein, dated not earlier than fifteen (15) business
days prior to the Closing Date, the results of which are consistent with
Seller's representations in this Agreement;
9.1.9. an affidavit certifying as to Seller's non-foreign status
in accordance with Section 1445(b)(2) of the Code;
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9.1.10. a copy of the resolutions of the board of directors and
the consent of all shareholders of Seller approving the transactions
contemplated by this Agreement certified by an appropriate officer of Seller,
together with copies of the Certificate of Incorporation and By-Laws of Seller,
certified by an appropriate officer of Seller;
9.1.11. Seller's Closing Certificate; and
9.1.12. an executed Escrow Agreement.
9.2. Deliveries by Purchaser to Seller. Purchaser shall deliver to
Seller (or its designee):
9.2.1. one or more agreements whereby Purchaser (or its designee)
assumes and agrees to perform Seller's obligations, liabilities and duties under
the Assumed Liabilities;
9.2.2. the opinion of Purchaser's counsel referenced in Sections
7.3 hereof;
9.2.3. copy of the resolutions of the board of directors of
Purchaser approving the transactions contemplated by this Agreement certified by
an appropriate officer of Purchaser;
9.2.4. Purchaser's Closing Certificate;
9.2.5. an executed Escrow Agreement; and
9.2.6. payment of the Purchase Price.
ARTICLE 10.
ACTIONS BY THE PARTIES AFTER THE CLOSING
10.1. Further Assurances. On and after the Closing Date, the Parties
will take all appropriate action and execute all documents, instruments, or
conveyances of any kind which may be reasonably necessary or advisable to carry
out any of the provisions hereof, including without limitation, putting
Purchaser (or its designee) in possession and operating control of the Assets
and the System.
10.2. Post-Closing Tax Covenant. Seller shall promptly pay Taxes
payable with respect to the operation of the System arising prior to Closing for
which Seller is responsible that become due or otherwise have given rise to, or
could give rise to, any Lien on the Assets.
10.3. Access to Records. For a period of three (3) years after the
Closing Purchaser shall retain and make available to Seller any and all records
provided to Purchaser by Seller within a reasonable period of time after receipt
of a written request for the same. Seller shall have the right to make copies of
the same at its own expense.
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ARTICLE 11.
INDEMNIFICATION
11.1. Survival. The several representations, warranties, covenants, and
agreements of the Parties contained in this Agreement (or in any document
delivered in connection herewith) shall be (i) deemed to have been made on the
date of this Agreement and on the Closing Date, (ii) shall be deemed to be
material and to have been relied upon by the Parties notwithstanding any
investigation made by the Parties, and (iii) shall survive the Closing Date (the
"Survival Period") for a period of two (2) years following the Closing Date;
provided, however, that the representations, warranties and agreements of Seller
contained in Sections 5.4 (Title to Assets), 5.6 (Authorizations), 5.14 and 10.2
(Taxes), and 5.17 (Environmental Matters) shall continue to survive for the
duration of any applicable statute of limitations. Any claim for breach of a
representation or warranty (an "Indemnity Claim") for which written notice shall
have been provided prior to the termination of the applicable survival period to
the Party which made such representation or warranty shall be deemed to be
timely made within the applicable indemnification period.
11.2. Seller's Indemnity.
11.2.1. During the indemnification Survival Period (or thereafter
solely with respect to any Indemnity Claim made prior to the expiration of the
applicable Survival Period), Seller shall indemnify and hold harmless Purchaser
and its Affiliates from and against any and all demands, claims, losses,
liabilities, actions or causes of action, assessments, damages, fines, Taxes,
penalties, reasonable costs and expenses (including, without limitation,
interest, reasonable expenses of investigation, reasonable fees and
disbursements of counsel, accountants and other experts (whether such reasonable
fees and disbursements of counsel, accountants and other experts relate to
claims, actions or causes of action asserted by Purchaser against Seller or
asserted by third parties)) (collectively "Losses") incurred or suffered by
Purchaser, its Affiliates, and their respective officers, directors, employees,
agents and Representatives, arising out of, resulting from, or relating to:
(a) Any breach of any of the representations or warranties
made by Seller in this Agreement or in any agreement, certificate, exhibit or
other instrument delivered by the Seller pursuant to this Agreement;
(b) Any failure by Seller to perform any of its covenants or
agreements contained in this Agreement or in any agreement, certificate or other
instrument delivered by the Seller pursuant to this Agreement;
(c) Any violation by Seller or any of its Affiliates of any
Environmental Laws; and
(d) Any claims by third parties arising from, relating to or
out of the ownership or operation of the System or the Assets prior to the
Closing Date.
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11.2.2. Escrow. As collateral security for Seller's
indemnification obligations under this Agreement, at the Closing, in accordance
with Section 2.2 hereof, Purchaser shall deliver to the Escrow Agent, the Escrow
Amount (as defined in Section 2.2), to be held in an interest bearing account
pursuant to the terms of an escrow agreement, in substantially the form of
SCHEDULE 11.2.2 attached hereto (the "Escrow Agreement"). The Escrow Amount
shall be held by the Escrow Agent until the date that is eighteen (18) months
after the Closing Date, at which time the Escrow Amount, plus any accrued but
undistributed interest, shall be released to Seller, subject to a continuing
hold back of the Escrow Amount for any asserted and outstanding indemnification
claims at such time. Nothing contained in this Section or in the Escrow
Agreement shall limit in any way Seller's indemnification obligations under this
Agreement; it being understood that if the Escrow Amount is not sufficient to
satisfy such indemnifications obligations as set forth in this Agreement, then
Seller shall remain liable for such indemnification obligations until expiration
of the applicable Survival Periods and the absence of any pending Indemnity
Claims.
11.3. Purchaser's Indemnity.
11.3.1. During the Survival Period (or thereafter solely with
respect to any Indemnity Claim made prior to the expiration of the applicable
Survival Period), from and after the Closing Date, Purchaser shall indemnify and
hold harmless Seller and its Affiliates from and against any and all Losses
incurred or suffered by Seller, its Affiliates, and their respective officers,
directors, employees, agents and Representatives, arising out of, resulting
from, or relating to:
(a) Any breach of any of the representations or warranties
made by Purchaser in this Agreement or in any agreement, certificate or other
instrument delivered by Purchaser pursuant to this Agreement;
(b) Any failure by Purchaser to perform any of its covenants
or agreements contained in this Agreement or in any agreement, certificate or
other instrument delivered by Purchaser pursuant to this Agreement;
(c) Any claims by third parties arising from, relating to,
or out of the ownership or operation of the System or the Assets after the
Closing Date; or
(d) Any claims with respect to the Assumed Liabilities.
11.4. Procedure. In the event that any Party hereto shall sustain or
incur any Losses in respect of which indemnification may be sought by such Party
pursuant to this Article, the Party seeking such indemnification (the
"Indemnitee") shall assert an Indemnification Claim by giving prompt written
notice thereof (the "Notice") which shall describe in reasonable detail the
facts and circumstances upon which the Indemnification Claim is based, along
with a copy of the claim or complaint, to the Party required to provide
indemnification (the "Indemnitor"), and shall thereafter keep the Indemnitor
reasonably and promptly informed with respect thereto; provided that failure of
the Indemnitee to give the Indemnitor prompt notice as provided herein shall not
relieve the Indemnitor of any of its obligations hereunder, except to the extent
that the Indemnitor
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is materially prejudiced by such failure. For purposes of this paragraph, any
Notice which is sent within fifteen (15) days of the date upon which the
Indemnitee obtained actual knowledge of such Loss shall be deemed to have been a
"prompt notice."
11.4.1. If the Indemnitor wishes to defend any claim for any
Losses for which such Indemnitor is or may be liable, and such Indemnitor first
establishes (to the reasonable satisfaction of the Indemnitee) the Indemnitor's
financial ability to pay for any such Losses, then such Indemnitor may, at its
own expense, defend such claim; provided that the Indemnitee may retain counsel
(at the Indemnitee's expense) to monitor the defense of such claim, and may take
over such defense if, during the course thereof, it reasonably appears that the
Indemnitor has lost its ability to pay for any Losses threatened by such claim.
If an Indemnitor assumes the defense of such an action, no compromise or
settlement thereof may be effected by the Indemnitor without the Indemnitee's
consent, which consent shall not be unreasonably withheld. If an Indemnitor
fails, within thirty (30) days after the date of the Notice, to give notice to
the Indemnitee of said Indemnitor's election to assume the defense thereof, said
Indemnitor shall be bound by any determination made in such action or any
compromise or settlement thereof effected by the Indemnitee.
11.4.2. Amounts payable by the Indemnitor to the Indemnitee in
respect of any Losses for which any Party is entitled to indemnification
hereunder shall be payable by the Indemnitor as incurred by the Indemnitee,
unless such Indemnification Claim is reasonably disputed by the Indemnitor.
11.5. Limitation on Indemnification. No Party shall be entitled to
indemnification in accordance with the provisions of this Article until such
time as the value of the aggregate loss or liability for which indemnification
is sought exceeds the sum of Fifty Thousand Dollars ($50,000). At such time as
the aggregate loss or liability for which indemnification may be sought exceeds
Fifty Thousand Dollars ($50,000), the Party to be indemnified may seek
indemnification for all such losses or liabilities, including the first Fifty
Thousand Dollars ($50,000). This limitation on claims shall not apply to any
indemnification for claims made by Purchaser relating to Purchaser's failure to
pay any taxes that were due and payable on or before the Closing Date. This
limitation shall not apply to any of the Taxes, penalties or interest referred
to in the second paragraph of Section 5.14.
11.6. Indemnification Payments in Cash. All payments in respect to any
undisputed or resolved Indemnification Claims shall be made in cash.
11.7. Investigations: Waivers. The Survival Periods and rights to
indemnification provided for in this Article shall remain in effect
notwithstanding any investigation at any time by or on behalf of any Party
hereto or any waiver by any Party hereto of any condition to such Party's
obligations to consummate the transactions contemplated hereby.
ARTICLE 12.
DEFAULT AND REMEDIES
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12.1. Opportunity to Cure. If any Party believes another to be in
material default hereunder for breach of representations and warranties or any
other reason, such Party shall provide the other with written notice specifying
in reasonable detail the nature of such default. If the default has not been
cured by the earlier of: (a) the Closing Date, or (b) within thirty (30) days
after delivery of that notice, then the Party giving such notice may terminate
this Agreement by notifying the defaulting Party and/or exercise the remedies
available to such Party pursuant to this Article, subject to the right of the
other Party to contest either such action through appropriate proceedings;
provided, however, that if such breach is not capable of being cured within such
period and if the breaching Party shall have commenced action to cure such
breach within such period and is diligently attempting to cure such breach and
such breach can reasonably be expected to be cured during the additional time
period, the breaching Party shall be afforded an additional reasonable amount of
time to cure such breach but not to exceed an additional sixty (60) days;
provided, further, that Purchaser shall have no opportunity to cure the breach
of its obligation to deliver any required portion of the Purchase Price to be
delivered to Seller at Closing.
12.2. Remedies/Arbitration.
12.2.1. Any claim under this Agreement brought after the Closing
Date, and any claim under this Agreement brought prior to the Closing Date in
which the Party bringing the claim is praying solely for monetary damages, shall
be submitted to binding arbitration in accordance with the commercial
arbitration rules of the American Arbitration Association and the provisions
contained herein. The arbitration shall be conducted in Dallas, Texas by a panel
of three arbitrators. All claims between the Parties shall be arbitrated in a
single proceeding, to the full extent practicable.
12.2.2. The Party initiating arbitration shall give the other
Party written notice of the matter in dispute and the name of the arbitrator
appointed by it. Within fourteen (14) days after receipt of such notice, the
non-initiating Party shall give notice to the initiating Party of the arbitrator
appointed by it. If the non-initiating Party fails to designate its arbitrator
within the said fourteen (14) day period, the American Arbitration Association
shall select an arbitrator for such Party. Within fourteen (14) days after the
appointment of the second arbitrator, the two arbitrators so appointed shall
agree on a third arbitrator. If the two arbitrators are unable to agree on a
third arbitrator within said 14-day period, then the American Arbitration
Association shall appoint the third arbitrator.
12.2.3. All determinations in the final decision of the
arbitration panel shall be made by majority vote. The fees and expenses of the
arbitration panel shall be awarded by the arbitrators in their discretion as
part of their award. The arbitrators' award will be binding on the Parties
hereto and may be entered in any court of competent jurisdiction, and shall not
be subject to appeal.
12.2.4. Notwithstanding the foregoing, the Parties agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the Parties shall be entitled
to an injunction or injunctions to prevent breaches or this Agreement and
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to enforce specifically the terms and provisions hereof in any court of the
United States or any state having jurisdiction, this being in addition to any
other remedy to which they are entitled at law or in equity. Each Party agrees
that it will not assert, as a defense against a claim for specific performance,
that the Party seeking specific performance has an adequate remedy at law.
ARTICLE 13.
TERMINATION
13.1. Absence of FCC Consent. This Agreement may be terminated by
either Party by giving written notice thereof to the other if the Assignment
Applications have not been granted by Final Order within twelve (12) months
after the date of this Agreement. Neither Party may terminate this Agreement
pursuant to this Section if such Party is in material default hereunder.
13.2. Mutual Consent. This Agreement may be terminated by the mutual
consent of the Parties.
ARTICLE 14.
DAMAGE; RISK OF LOSS
14.1. Risk of Loss. The risk of loss or damage to the Assets shall be
upon Seller at all times prior to the Closing Date. In the event of material
loss or damage to the Assets prior to the Closing Date, Seller shall promptly
notify Purchaser thereof and, unless otherwise agreed by the Parties, Seller
shall use best efforts to repair, replace or restore the lost or damaged
property to its former condition as soon as practicable. If such repair,
replacement, or restoration has not been completed prior to the Closing Date,
Purchaser may, at its option:
14.1.1. elect to consummate the Closing and make such
arrangements as the Parties may reasonably agree upon to remedy such loss or
damage; or
14.1.2. elect to postpone the Closing Date, with prior consent of
the FCC if necessary, for such reasonable period of time (not to exceed ninety
(90) days) as is necessary for Seller to repair, replace, or restore (or to
cause to be repaired, replaced or restored) the lost or damaged property to its
former condition. If, after the expiration of that extension period, the lost or
damaged property has not been adequately repaired, replaced or restored,
Purchaser may terminate this Agreement or elect to consummate the Closing as
provided in Section 14.1.1.
For purposes of this Section, loss or damage shall be deemed "material"
if the reasonable cost to repair, replace, or restore the lost or damaged
property exceeds $100,000.00.
14.2. Resolution of Disagreements. If the Parties are unable to agree
upon the extent of any loss or damage, the cost to repair, replace or restore
any lost or damaged property, the adequacy of any repair, replacement, or
restoration of any lost or damaged property, or any other matter arising under
this Section, the disagreement shall be referred to a qualified consulting
communications engineer mutually acceptable to Seller and Purchaser who is a
member of the
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Association of Federal Communications Consulting Engineers, whose decision shall
be final, and whose fees and expenses shall be paid one-half by Seller and
one-half by Purchaser.
ARTICLE 15.
EMPLOYEES
15.1. Employees. For purposes of this Article, the term "Employees"
shall include all full-time and part-time employees, employees on workers'
compensation, military leave, maternity leave, leave under the Family and
Medical Leave Act of 1993, short-term and long-term disability (including a
disability pension), non-occupational disability, layoff with recall rights, and
employees on other approved leaves of absence with a legal or contractual right
to reinstatement.
15.2. Responsibility for Employees on or Before the Closing. All
medical, dental, vision, travel accident, accidental death and dismemberment,
and life insurance expenses incurred by Employees and their dependents on or
before the Closing Date, pursuant to any employee plan, irrespective of the time
such claims are presented, shall be the responsibility of Seller on the Closing
Date. Seller shall be responsible for any medical, dental or life insurance
coverage due to any Employees and their dependents who retired on or before the
Closing Date. Seller agrees to fulfill its obligations under continuation
coverage rules of COBRA with respect to a "qualifying event," with the meaning
or Section 4980B(f) of the Code or Section 603 or ERISA, occurring on or before
the Closing Date with respect to any Employees who are not hired by Purchaser
and their dependents. All short-term, long-term and extended disability benefits
payable to Employees and their dependents who became disabled on or before the
Closing Date are the responsibility of Seller and shall be paid directly by
Seller or their insurance carrier to such Employees and their dependents. If any
Employee is terminated from employment on or before the Closing Date by Seller
as result of the transactions contemplated by this Agreement or otherwise, any
obligations arising out of such termination, including severance, accrued
vacation pay, COBRA obligations, employment discrimination complaints, unfair
labor practice charges, grievance under any collective bargaining agreement,
wrongful termination and related tort claims and breach of contract claims shall
be the sole responsibility of Seller. Purchaser shall have the sole
responsibility for the items listed in the preceding sentences for any actions
taken by Purchaser with respect to Employees it hires after the Closing Date.
ARTICLE 16.
MISCELLANEOUS
16.1. Assignment. Neither this Agreement nor any of the rights or
obligations hereunder may be assigned by Seller or Purchaser without the prior
written consent of the others. Purchaser may assign its right, title and
interest in, to and under this Agreement to an Affiliate; provided that
Purchaser must first obtain Seller's consent to any such assignment (which
consent shall not be unreasonably withheld) if such assignment could reasonably
be expected to delay the Closing. Subject to the foregoing, this Agreement shall
be binding upon and inure to the benefit of the
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Parties hereto and their respective successors and assigns, and no other person
shall have any right, benefit or obligation hereunder.
16.2. Notices. Unless otherwise provided herein, any notice, request,
instruction or other document to be given hereunder by any Party to the other
shall be in writing and delivered in person or by courier, by facsimile
transmission, or mailed by registered or certified mail, postage prepaid, return
receipt requested or overnight courier, as follows:
If to Purchaser or Guarantor:
WWC Texas RSA Limited Partnership
0000 - 000xx Xxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx
Fax No: (000) 000-0000
With a copy (which copy shall not constitute notice or service of
process) to:
Xxxxxx Xxxxxxxx, P.S.
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000-0000
Attention: Xxxxxxx X. Xxxxxxxx, Esq.
Fax No: (000) 000-0000
If to Seller:
KO Communications Inc.
0000 Xxxx Xxxxxxxx Xxxx
Xxxxxx, XX 00000
Attention: Xxxx X. Xxxxx
Fax No. (000) 000-0000
With a copy (which copy shall not constitute notice or service of
process) to:
Lukas, Nace, Xxxxxxxxx & Sachs
0000 - 00xx Xxxxxx, XX, Xxxxx 0000
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxxx Xxxxxxxxx, Esq.
Fax No: (000) 000-0000
or to such other place and with such other copies as a Party may designate as to
itself by written notice to the others. All such notices and communications
shall be deemed to have been duly given at the time delivered by hand, if
personally delivered; three business days after being deposited in the mail as
provided above; when receipt confirmed, if sent by facsimile; and the next
business day after timely delivery to the courier, if sent by an over-night air
courier service guaranteeing next day delivery.
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16.3. Choice of Law. This Agreement shall be construed, interpreted and
the rights of the Parties determined in accordance with the laws of the State of
Delaware, except with respect to matters of law concerning the internal affairs
of any entity which is a Party to or the subject of this Agreement, and as to
those matters the law of the jurisdiction under which the respective entity
derives its powers shall govern.
16.4. Entire Agreement; Amendments and Waivers. This Agreement,
together with all exhibits and schedules hereto, constitutes the entire
agreement among the Parties pertaining to the subject matter hereof and
supersedes all prior agreements, understandings, negotiations and discussions,
whether oral or written, of the Parties. No supplement, modification or waiver
of this Agreement shall be binding unless executed in writing by the Party to be
bound thereby. No waiver of any of the provisions of this Agreement shall be
deemed, or shall constitute, a waiver of any other provision hereof (whether or
not similar), nor shall such waiver constitute a continuing waiver unless
otherwise expressly provided.
16.5. Allocation of the Purchase Price. The Purchase Price shall be
allocated in accordance with SCHEDULE 16.5, to be prepared on or before the
Closing, and Purchaser and Seller agree to cooperate reasonably in the
preparation of such Schedule. Each of the Parties agrees that (i) such
allocation represents the fair market value of the Assets and shall be binding
upon it; (ii) no filings made by it with any taxing or other authority shall
reflect an allocation other than in the manner agreed upon; and (iii) it shall
timely make all filings required by any taxing authority, including the filing
of Internal Revenue Service Form 8594.
16.6. Bulk Sales. Purchaser and Seller each waive any obligation of the
other Party which may arise under the provision of any applicable "Bulk Sales"
laws.
16.7. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
16.8. Invalidity. In the event that any one or more of the provisions
contained in this Agreement or in any other instrument referred to herein,
shall, for any reason, be held to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect any
other provision of this Agreement or any other such instrument unless such
invalidity materially affects the benefit of the bargain of a Party as
originally contracted for in this Agreement.
16.9. Headings. The headings of the Articles and Sections herein are
inserted for convenience of reference only and are not intended to be a part of
or to affect the meaning or interpretation of this Agreement.
16.10. Expenses. Except as otherwise provided herein, Seller and
Purchaser shall bear equally any transfer or excise taxes arising from the
transactions contemplated herein. Seller shall pay the cost of any recording and
transfer fees arising from the purchase and sale of the Assets pursuant to this
Agreement. Seller and Purchaser will each be liable for its own expenses
incurred
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in connection with the negotiation, preparation, execution or performance of
this Agreement. Seller and Purchaser will each be liable for one-half of any
expenses incurred in obtaining the FCC Consent. Purchaser shall be responsible
for any filing fees associated with the HSR filing.
16.11. Schedules and Exhibits. The Schedules and Exhibits to this
Agreement are a material part hereof and shall be treated as if fully
incorporated into the body of the Agreement.
16.12. Publicity. Except as required by Applicable Law or on advice of
counsel, no Party shall issue any press release or make any public statement
regarding the transactions contemplated hereby without the prior approval of the
other Party. Any press release or the text of any public statement to be made by
one party shall be provided to the other in advance of its release, and no such
release or statement shall be made public without the consent of the other
party.
16.13. Confidential Information. The Parties acknowledge that the
transaction described herein is of a confidential nature and shall not be
disclosed except to Representatives, advisors and Affiliates, or as required by
law, until such time as the Parties make a public announcement regarding the
transaction as provided in Section 16.12. The Parties shall not make any public
disclosure of the specific terms of this Agreement, except as required by law.
In connection with the negotiation of this Agreement and the preparation for the
consummation of the transactions contemplated hereby, the Parties acknowledge
that they will have access to confidential information relating to the other
Parties. Each Party shall treat such information as confidential, preserve the
confidentiality thereof and not duplicate or use such information, except to
Representatives, consultants and Affiliates in connection with the transactions
contemplated hereby provided such advisors, Representatives and Affiliates also
agree to keep such information confidential. In the event of the termination of
this Agreement for any reason whatsoever, each Party shall return to the others
all documents, work papers and other material (including all copies thereof)
obtained in connection with the transactions contemplated hereby and will use
all reasonable efforts, including instructing any of its Employees and others
who have had access to such information, to keep confidential and not to use any
such information, unless such information is now, or is hereafter disclosed,
through no act or omission of such Party, in any manner making it available to
the general public.
16.14. No Third Party Beneficiaries. All of the rights and obligations
included in this Agreement are intended to inure to the benefit of the Parties
and their Affiliates alone. Nothing contained in this agreement shall be
construed as creating any rights in any other third parties.
16.15. Parent Guarantee. Guarantor hereby absolutely, unconditionally,
directly, irrevocably, completely, and immediately guarantees the performance of
Purchaser or any of its assignees with respect to the payment of the Purchase
Price at the time and in the manner called for in this Agreement. Guarantor's
obligation of payment and performance is not contingent upon Seller first
pursuing any remedies against Purchaser or any of its successors in interest. In
the event Purchaser or its assignee fails to make any such payment when due,
within five (5) business days of receipt of written notice from Seller of
Purchaser's failure to so perform Guarantor shall make such payment to Seller,
subject to all defenses and objections that might otherwise be available to
Purchaser. Except as expressly stated in this Section, Guarantor shall have no
other responsibility or obligation under this Agreement.
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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
duly executed on its behalf by its officer thereunto duly authorized as of the
day and year first above written.
KO COMMUNICATIONS, INC.
By: /s/ Xxxx Xxxxx
--------------------------------
Its: President
-------------------------------
WWC TEXAS RSA LIMITED PARTNERSHIP
By: /s/ Xxxxx Xxxxxx
--------------------------------
Its: Vice President
-------------------------------
SOLELY AS GUARANTOR
UNDER THE PROVISIONS OF
SECTION 16.15 ABOVE
WESTERN WIRELESS CORPORATION
By: /s/ Xxxxx Xxxxxx
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Its: Vice President
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