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EXHIBIT 10
PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT (this "Agreement") is made and entered into
this ___ day of _______, 1999, by and among AESCO SYSTEMS, INC. a Pennsylvania
corporation ("Seller"), AMERICAN TELECASTING OF PORTLAND, INC., a Delaware
corporation ("Buyer"), and AMERICAN TELECASTING, INC., a Delaware corporation
("ATI").
WHEREAS, Seller holds the authorization issued by the Federal
Communications Commission ("FCC") for Multichannel Multipoint Distribution
Service ("MMDS") Station WHT647, the four E-Group channels, in Portland, Oregon
(the "Station");
WHEREAS, Buyer desires to purchase from Seller and Seller desires to
sell to Buyer all rights of Seller to operate the Station under its FCC
authorization; and
NOW, THEREFORE, in consideration of the premises and promises herein
contained, the parties agree as set forth below.
Section 1. Purchase and Sale of Assets.
(a) Assets. At the Closing (as defined in Section 3(a)
below), Seller shall sell, transfer, assign and deliver to Buyer, and
Buyer shall purchase, accept, assume and receive, all right, title and
interest in, to or arising from the Assets. The "Assets" are (a) all
of Seller's ownership rights in the Station, including all of Seller's
rights as the holder of the FCC authorization for the Station (the
"Authorization"), and (b) all transferable documents and records owned
by, held by, or under the control of the Seller, if any, used in the
operation of the Station. The "Assets" do not include, and Seller has
no obligation to transfer, assign, sell or deliver to Buyer, any
rights or claims under this Agreement or against any third party,
whether arising under a contract, in tort or otherwise, including
rights to receivables (e.g., accounts receivable from ATI, tax
refunds, etc.).
(b) Liabilities. Neither party shall assume or be liable or
responsible for any debt, obligation or liability of the other party,
or any affiliate, successor, heir or assign of the other party, or any
claim against any of the foregoing, of any kind, whether known or
unknown, contingent, absolute, or otherwise.
Section 2. Purchase Price. The purchase price for the Assets shall be
(i) the amount determined pursuant to Section 2(a) (the "Fixed Payment") plus
(ii) the Deferred Payment, as defined below.
(a) Fixed Payment. The Fixed Payment shall be paid by Buyer
to Seller via wire transfer of immediately available funds to Seller
in accordance with instructions provided by Seller at least 2 business
days before Closing upon the latter to occur of (A) the closing of
sales after December 31, 1998 of wireless spectrum or wireless
markets, other than a sale to BellSouth or any of its affiliates, in
which ATI and its affiliates realize $5,000,000 or more in the
aggregate, and (B) FCC approval by Final Order (as defined in
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Section 8(a) below) of the Assignment Application (as defined in
Section 7 below); provided, however, that Buyer may in its sole
discretion waive in writing either or both of the conditions set forth
above and may choose to close notwithstanding their non-satisfaction.
The date upon which the conditions set forth in the prior sentence
have been satisfied or waived is referred to as the "Closing Trigger
Date." The amount of the Fixed Payment shall be $2,250,000; provided,
however, if such amount has not been paid in full prior to July 1,
1999, then the amount due as the Fixed Payment shall thereafter be
increased at a rate of $22,500 per month until the date of payment.
(b) Deferred Payment.
(i) Seller shall be entitled to receive the Deferred
Payment from Buyer in respect of any transaction which closes
within five years after the date of this Agreement (the
"Deferred Transaction") in which Buyer or its shareholders or
affiliates, but not any unrelated assignee or successor,
transfers rights in the Station (directly or indirectly,
including through any transfer of interests in the Buyer or
it affiliates (other than American Telecasting, Inc. or
stockholders of American Telecasting, Inc.), whether by
merger, consolidation, share exchange, issuance or sale of
securities, purchase or redemption of securities,
recapitalization, reorganization, division, liquidation or
any other individual or series of transactions of similar
substantive effect), either by itself or in conjunction with
other wireless stations owned or leased by Buyer, including
any transaction which requires FCC approval pursuant to
Section 310(d) of the Communications Act. Buyer shall notify
Seller of any Deferred Transaction, and shall provide Seller
with the necessary information regarding such transaction to
calculate the Deferred Payment. The Deferred Payment shall be
equal to (x) one-third of the purchase price (whether in cash
or in-kind) received by Buyer or its shareholders or
affiliates for all Portland, Oregon wireless stations sold or
assigned in the Deferred Transaction multiplied by a
fraction, the numerator of which is 4 and the denominator of
which is (1) the total number of Portland, Oregon MMDS and
Multichannel Distribution Service ("MDS") wireless channels
assigned, or the leases for which are assigned, in the
Deferred Transaction, plus (2) one-half of the number of
Portland, Oregon Instructional Television Fixed Service
("ITFS") wireless channels assigned, or the leases for which
are assigned, in the Deferred Transaction, minus (y)
$2,500,000. In the event the Deferred Payment as calculated
above is equal to or less than zero, no payment shall be
made. The Deferred Payment, or any portion thereof, shall be
paid only with respect to cash or other in-kind proceeds
actually received by Buyer, subject to Section 2(b)(iii)(a),
and shall be paid by Buyer to Seller within 15 days after
such receipt.
(ii) If assets outside of the Portland, Oregon
wireless stations are also transferred in the Deferred
Transaction, the portion of the purchase price to be
allocated to the Portland, Oregon wireless stations for
purposes of the calculation in Section 2(b)(i) will be
determined based upon the relative fair market values of the
assets transferred (and in comparing the value of wireless
stations,
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consideration of the relative number of households within the
protected service areas of the respective markets and the
number of channels transferred in the respective markets). If
the parties do not agree upon an appropriate allocation, an
independent appraiser shall be selected by the parties within
ten days after written notification by either party to the
other of the dispute. The appraiser shall make a final
binding allocation within 60 days of appointment. The cost of
the appraisal will be shared equally by Buyer and Seller. For
purposes of Sections 2(b)(i) and 2(b)(ii), non-cash
consideration will be valued at the fair market value of such
consideration.
(iii) For purposes of calculating the purchase price
received in a Deferred Transaction:
(a) To the extent the purchase price received in a Deferred
Transaction is in the form of a note (or other obligation to make
payment) issued within five years after the date of this Agreement by
a party to the Deferred Transaction or an affiliate thereof, the
receipt of such note shall not be treated as the receipt of purchase
price, but all payments received in respect of such note (whether
characterized as principal, interest or otherwise) shall be treated as
receipt of purchase price, even if received more than five years after
the date of this Agreement.
(b) If in connection with a Deferred Transaction the buyer or
any of its shareholders or affiliates receives consideration for any
rights or services in excess of the fair market value thereof or
receives a dividend or distribution in excess of its or his
proportionate share of the stock or interests on which such dividend
or distribution is made, such excess shall be treated as purchase
price for the wireless stations that are the subject of the Deferred
Transaction.
(iv) As hypothetical examples, the following
represents the method for calculating the Deferred Payment if
Buyer were to sell, or assign the leases for, 13 MMDS and MDS
wireless cable channels and 20 ITFS wireless cable channels
in the Portland, Oregon market for a total price of (A) $43.1
million or (B) $53.1 million:
Hypothetical Deferred Payment A = (1/3) x ($43.1 million x (4/23)) - $2,500,000
= (1/3) x ($43.1 million x 0.1739) - $2,500,000
= $2,498,551 - $2,500,000
Deferred Payment A = $0
Hypothetical Deferred Payment B = (1/3) x ($53.1 million x (4/23)) - $2,500,000
= (1/3) x ($53.1 million x 0.1739) - $2,500,000
= $3,078,261 - $2,500,000
Deferred Payment B = $578,261
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(v) If the Buyer fails to pay the Deferred Payment
within 15 days after the Deferred Transaction closing, the
Buyer shall pay compound interest at the rate of 1 1/2 % per
month (or, if less, the maximum rate permitted by law) on the
outstanding balance due until the payment is completed in
full. All payments will be paid in cash by Buyer to Seller by
wire transfer of immediately available funds to Seller in
accordance with Seller's instructions.
Section 3. The Closing and the Transfer of Assets.
(a) The Closing. Subject to the delivery of the documents set
forth in Sections 3(c) and (d) below and the satisfaction of the
conditions precedent set forth in Section 8 below, the transfer of
Assets contemplated by this Agreement (the "Closing") shall occur at
10:00 a.m. on the date determined by the mutual consent of the parties
hereto, which date shall be within three business days after the
Closing Trigger Date (the "Closing Date"), at the offices of
XxXxxxxxx, Will & Xxxxx, 000 00xx Xxxxxx, X.X., Xxxxxxxxxx, X.X. or at
such other location as mutually agreed upon by Buyer and Seller.
(b) Deliveries by Buyer. At the Closing, Buyer shall deliver
to Seller against receipt of the deliveries from Seller required by
Section 3(c), or shall cause to be delivered to Seller:
(i) the portion of the Fixed Payment, if any, then
owed by Buyer to Seller;
(ii) a certificate, dated the Closing Date, executed
by an executive officer of Buyer stating that all of Buyer's
representations and warranties made in this Agreement are
true and correct in all material respects on the Closing
Date, as if made on such date, and that Buyer has complied in
all material respects with all its covenants and agreements
set forth in this Agreement;
(iii) such other instruments or documents as may be
reasonably necessary to carry out the transactions
contemplated hereby.
(c) Deliveries by Seller. At the Closing, Seller shall
deliver to Buyer against receipt of the deliveries from Buyer required
by Section 3(b):
(i) a General Assignment and Xxxx of Sale, in
substantially the form of Schedule 3(c)(i) attached hereto;
(ii) a certificate, dated the Closing Date, executed
by an executive officer of Seller stating that all of
Seller's representations and warranties made in this
Agreement are true and correct in all material respects on
the Closing Date, as if made on such date, and that Seller
has complied in all material respects with all its covenants
and agreements set forth in this Agreement;
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(iii) such other instruments or documents as may be
reasonably necessary to carry out the transactions
contemplated hereby; and
(iv) a letter addressed to the FCC stating that the
FCC assignment has been consummated.
(d) Termination of Communications Services Agreement. Upon
consummation of the Closing, the existing Communications Services
Agreement between ATI and Seller dated July 30, 1993 (the
"Communications Services Agreement") shall terminate, and Seller, on
the one hand, and Buyer and ATI, on the other hand, effective as of
the Closing, irrevocably and unconditionally release and forever
discharge the other(s) and its/their affiliates and subsidiaries, and
the officers, directors, employees, representatives, agents, servants,
successors and assigns thereof, from any and all claims, liabilities,
promises, controversies, damages, actions, causes of action, suits,
demands, obligations and the like, whether known or unknown, arising
out of or related to obligations under the Communications Services
Agreement.
Section 4. Expiration. Notwithstanding any breach hereof by either one
or both parties, this Agreement and the parties' respective obligations to
consummate the Closing shall expire, without the necessity of any action by
either party, on March 15, 2000. Such expiration of this Agreement shall be
without prejudice to any right to seek or obtain any legal or equitable remedy
(including specific performance hereof) which may have arisen from a
misrepresentation or breach committed prior to the termination, subject to
Section 8(c).
Section 5. Representations and Warranties of Seller. Seller represents
and warrants to Buyer as of the date hereof, and as of the Closing, as set
forth below.
(a) Authority. Seller has full legal right, and corporate
power and authority, without the consent of any other person, to
execute and deliver this Agreement and, other than the requirement for
FCC approval of assignment of the Authorization, to carry out the
transactions contemplated hereby. All corporate acts or proceedings
required to be taken by Seller to authorize the execution, delivery
and performance of this Agreement and all transactions contemplated
hereby have been duly and properly taken, other than the requirement
for FCC approval of assignment of the Authorization which is required
to be obtained prior to the Closing.
(b) Validity. This Agreement has been, and the documents to
be delivered at the Closing will be, duly executed and delivered and
constitute lawful, valid and legally binding obligations of Seller,
enforceable in accordance with their respective terms. The execution
and delivery of this Agreement and the consummation of the
transactions contemplated hereby will not result in the creation of
any lien, charge or encumbrance of any kind against any of the Assets
or the acceleration of any indebtedness or other obligation of Seller
and are not prohibited by, do not violate or conflict with any
provision of, and do not constitute a default under or a breach of (a)
the articles of incorporation or bylaws of Seller, (b) any contract,
agreement or other instrument to which Seller is a party or by which
Seller or any of the Assets are bound, (c) any order,
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writ, injunction, decree or judgment of any court or governmental
agency, or (d) any law, rule or regulation applicable to Seller.
Except for the prior approval of the FCC, no approval, authorization,
consent or other order or action of or filing with any court,
administrative agency or other governmental authority is required for
the execution and delivery by Seller of this Agreement or such other
agreements and instruments or the consummation by Seller of the
transactions contemplated hereby or thereby.
(c) Due Organization. Seller is a corporation, validly
existing and in good standing under the laws of the Commonwealth of
Pennsylvania and has full power and authority and all requisite
licenses, permits and franchises to own, lease and operate the
Station. Seller is duly licensed and qualified to do business and is
in good standing in all jurisdictions where failure to be so licensed
or qualified would adversely affect the ability of Buyer to enforce
any material rights included in the Assets.
(d) Title to Assets. Seller is the sole and exclusive legal
and equitable owner of all right, title and interest in and has good
and marketable title to all of the Assets, subject to any requirements
for FCC approval of assignment of the Authorization. None of the
Assets which Seller purports to own or hold are subject to (i) any
contract, lease (other than the existing lease with Buyer), license or
sale, (ii) any security interest, mortgage, pledge, lien, or charge of
any kind or character, direct or indirect, whether accrued, absolute,
contingent or otherwise, (iii) any royalty or commission arrangements,
or (iv) any adverse claims, covenants or restrictions (other than
those proposed by applicable law or FCC requirements).
(e) Litigation. As of the date hereof, there are no legal or
administrative proceedings of any kind pending or, to the knowledge of
Seller, threatened in any manner involving Seller which might have a
material adverse effect on the Assets or Seller. If between the date
hereof and the Closing Date Seller acquires knowledge of any
litigation, proceeding or investigation that is pending or threatened
and, if existing and known by Seller on the date hereof would make the
representation stated in the preceding sentence false, Seller shall
disclose to Buyer the existence of such proceeding and such additional
information as Buyer may reasonably request to determine whether the
condition set forth in Section 8(a)(c) hereof has been satisfied.
Seller is not in default with respect to any judgment, order, decree,
or similar instrument applicable to it which might have a material
adverse effect on the Assets or Seller.
(f) Compliance with Law. The Assets conform in all material
respects to all applicable laws, ordinances, codes, licensing
requirements, rules and regulations, and Seller has not received any
notice to the contrary. Seller has complied in all material respects
with all laws, ordinances, regulations, licensing requirements, rules,
decrees, awards or orders, and there is not and will not be any
liability arising from or relating to any violations thereof.
(g) Authorization. Schedule 5(g) contains an accurate and
complete copy of the Authorization. The Authorization is in full force
and effect, and bears the full license term granted for MMDS licenses,
expiring on May 1, 2001. Except as disclosed in
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Schedule 5(g) hereto, the Authorization is unimpaired by any act or
omission of the Seller. The facilities authorized by the Authorization
have been timely constructed in accordance with the construction
authorization granted therefor and a certification of completion of
construction was timely filed with the FCC. The issuance and
assignment of the Authorization to the Seller has been approved by the
FCC, by actions which can no longer be appealed by petitioners or set
aside by the FCC by its own action. Except as disclosed in Schedule
5(g) hereto, the Station has, since the initial certification of
completion of construction was filed with the FCC, provided service as
authorized in compliance with the FCC's Rules, including Section
21.303(d) thereof. Seller has not agreed to accept any interference
from any third party or to take any action to protect any third
party's reception from interference. With regard to the Authorization,
there is no complaint, inquiry, investigation or proceeding pending
before the FCC or, to Seller's knowledge, threatened, other than
proceedings of general applicability and not directed specifically at
the Authorization, which, if determined as requested by the moving
party or as indicated in any document initiating any inquiry,
investigation or proceeding, could result in the revocation,
modification, restriction, cancellation, termination or non-renewal of
the Authorization, the dismissal or denial of an application, or other
action which is adverse to Seller or the imposition of a monetary
forfeiture. The Authorization is freely assignable to Buyer, subject
to FCC consent. The FCC has not concluded in writing, nor to Seller's
knowledge has it been alleged in writing, that Seller has violated any
FCC rules or policies with regard to the Station.
Section 6. Representations and Warranties of Buyer. Buyer and ATI
hereby represent and warrant to Seller as of the date hereof, and as of the
Closing, as follows:
(a) Authority. Buyer has full legal right, power and
authority, without the consent of any other person, to execute and
deliver this Agreement and to carry out the transactions contemplated
hereby. All corporate and other acts or proceedings required to be
taken by Buyer to authorize the execution, delivery and performance of
this Agreement and all transactions contemplated hereby have been duly
and properly taken.
(b) Validity. This Agreement has been, and the documents to
be delivered at the Closing will be, duly executed and delivered and
constitute lawful, valid and legally binding obligations of Buyer,
enforceable in accordance with their respective terms. The execution
and delivery of this Agreement and the consummation of the
transactions contemplated hereby are not prohibited by, do not violate
or conflict with any provision of, and do not constitute a default
under or a breach of (a) the certificate of incorporation or bylaws of
Buyer, (b) any contract, agreement or other instrument to which Buyer
is a party or by which Buyer is bound, (c) any order, writ,
injunction, decree or judgment of any court or governmental agency, or
(d) any law, rule or regulation applicable to Buyer. Except for the
prior approval of the FCC, no approval, authorization, consent or
other order or action of or filing with any court, administrative
agency or other governmental authority is required for the execution
and delivery by Buyer of this Agreement or such other agreements and
instruments or the consummation by Buyer of the transactions
contemplated hereby or thereby.
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(c) Due Organization. Buyer is a Delaware corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization.
(d) Litigation. There are no legal or administrative
proceedings of any kind now pending, or, to the knowledge of Buyer,
threatened in any manner involving Buyer which might have a material
adverse effect on Buyer's ability to consummate the transactions
contemplated herein. Buyer is not in default with respect to any
judgment, order, decree, or similar instrument applicable to it which
might have a material adverse effect on Buyer' ability to consummate
the transactions contemplated herein.
(e) Qualification to Hold Authorization. Buyer is qualified
under the rules of the FCC to hold the Authorization without the need
for waiver of any FCC rule.
Section 7. Covenants. The parties indicated below hereby agree to
keep, perform and fully discharge the following covenants and agreements which
are applicable to them.
(a) No Shop. From the date hereof until the Closing or the
termination or expiration of this Agreement (as applicable), Seller
shall not take any action to seek, encourage, solicit or support any
inquiry, proposal, expression of interest or offer from any other
person or entity with respect to an acquisition, combination or
similar transaction involving the Assets. In consideration for
Seller's covenant pursuant to this Section 7(a), Buyer shall pay
$250,000 to Seller via wire transfer of immediately available funds
upon the execution and delivery of this Agreement by both parties
hereto.
(b) Interim Conduct. From the date hereof until the Closing
Date, Seller shall use all reasonable efforts to preserve, protect and
maintain its rights and interests in and to the Assets, it being
acknowledged by the parties that Seller's ability to do so with
respect to the Authorization and those Assets which are leased to
Buyer is subject to some extent to Buyer's compliance with the
provisions of the channel lease agreement. Without limiting the
generality of the foregoing, as pertains to or in any way affects the
Assets, from the date hereof until the Closing Date, except for
transactions expressly approved in writing by Buyer, Seller shall:
(i) not enter into, amend or terminate, or agree to
enter into, amend or terminate, any contract included within
or related to the Assets, except in the ordinary course of
business or in accordance with Section 7(c);
(ii) not sell, lease or otherwise dispose of or
agree to sell, lease or otherwise dispose of, any of the
Assets, or the rights or claims related thereto;
(ii) not incur or become subject to, nor agree to
incur or become subject to, any debt, obligation or
liability, contingent or otherwise that encumbers the Assets,
except current liabilities and contractual obligations in the
ordinary course of business; and
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(iii) not to modify the Station Authorization in any
way except as agreed between Seller and Buyer.
(c) Communications Services Agreement. The parties
specifically acknowledge that (i) Seller has asserted a claim that the
amount of the monthly payment (payable to Seller pursuant to paragraph
C.4 of the Communications Services Agreement) should have increased
and other payments should have been made pursuant to paragraph F.1 as
a result of other agreements entered into by ATI prior to the date
hereof (such claim, the "Seller's Claim") and (ii) ATI and Buyer have
disputed the Seller's Claim. From the date hereof until the expiration
or termination of this Agreement (as applicable), Seller agrees not,
based on the Seller's Claim, to terminate the Communications Services
Agreement, cease to perform any of its obligations thereunder or
initiate any suit or action thereunder, provided that ATI and Buyer
completely and timely (A) make all monthly payments required by the
Communications Services Agreement, but without giving effect to any
increase claimed pursuant to the Seller's Claim, (B) perform all other
obligations of the "Customer" under the Communications Services
Agreement and (C) perform all of their respective obligations under
this Agreement. Seller, Buyer and ATI further agree that, should the
Seller file a suit or action asserting the Seller's Claim after the
expiration or termination of this Agreement, ATI hereby waives any
defense based on the statute of limitations or laches as to the
Seller's Claim with respect to the period between the date hereof and
the date of expiration or termination, as appropriate.
(d) Access to Information Pertaining to the Assets. From the
date hereof through the Closing Date, Seller shall give Buyer and its
representatives full and free access to all properties, facilities,
personnel, books, contracts, leases, commitments and records relating
to the Assets, to the extent reasonably requested by Buyer in
connection with its due diligence, preparation for the consummation of
the transactions contemplated hereby or the operation of Station after
the Closing; provided, however, Buyer shall exercise its rights only
during normal business hours, after reasonable advance notice and in a
manner that minimizes disruption to Seller's business. All information
acquired by Buyer pursuant to this Section 7(c) shall be considered
the confidential information of Seller. Notwithstanding anything in
this Agreement to the contrary, nothing herein shall require Seller to
provide Buyer with access to information to the extent that so doing
would either (1) constitute violation of applicable law (e.g., as in
the case of disclosure of the contents of employee files required to
be kept confidential under the Americans With Disability Act) or (2)
cause a forfeiture of Seller's privilege to protect communications
(oral or written) between Seller's counsel, on the one hand, and
Seller's directors, officers and/or employees, on the other hand
(including communications relating to any claims Seller may have
against ATI or Buyer).
(e) FCC Filings.
(i) Within five days after the date hereof, Seller
and Buyer shall join in an application to the FCC, to be
filed on FCC form 702 (the "Assignment Application"),
requesting the FCC's written consent to the assignment of the
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Authorization from Seller to Buyer. Each party shall pay its
own costs in preparing the Assignment Application. Buyer
shall pay any FCC filing fees associated with the Assignment
Application. Each of Seller and Buyer shall, at its own
expense, cooperate in providing all information and taking
all steps necessary, desirable or appropriate to expedite the
preparation, filing, prosecution and granting of such
application. In the event any person requests the FCC to deny
the Assignment Application, or otherwise challenges the grant
of the Assignment Application, or in the event the FCC
consents to the assignment of the Authorization to Buyer and
any person appeals or otherwise challenges such consent
before the FCC, each of Seller and Buyer shall, at its own
expense, oppose such petition or challenge, or defend such
action and the order of the FCC, diligently and in good faith
to the end that the transactions contemplated by this
Agreement may be finally consummated.
(ii) Seller shall cooperate with Buyer and shall
promptly. and in any event within five business days, after
requested by Buyer execute and file with the FCC all
documents reasonably requested by Buyer in connection with
filing and prosecuting any other applications with the FCC
for digital emissions, it being agreed that there shall be no
digital emissions or other modification to the Station
implemented prior to Closing.
(iii) During the two year period following the
Closing, Seller agrees that it will not file any petitions,
objections, competing proposals, applications or other
documents that would have as their purpose, intent, effect or
result the denial, dismissal, rejection or delay in the
granting of the applications or other requests to the FCC
filed on behalf of the Station.
(f) Best Efforts. Each party shall act in good faith and use
its best efforts to consummate the transactions contemplated by this
Agreement and shall not take any other action inconsistent with its
obligations hereunder or which could hinder or delay the consummation
of the transactions contemplated hereby.
(g) Information Regarding Subsequent Sales. Buyer shall
notify Seller in writing of any sales of the types specified in
Section 2(b) and in such notice shall inform Seller of the proceeds
and the net proceeds of any such sale. Seller acknowledges that such
information may not be publicly available and, unless and until it has
been publicly disclosed by ATI. Buyer agrees to treat the information
as confidential, not disclose it to any other party, and not use it in
any way, except for purposes of determining eligibility to receive the
payment set forth in Section 2(b). Seller further agrees to comply
with all applicable securities laws with respect to use of such
information, and agrees not to trade in ATI securities, or securities
of any successor or assign of ATI, while in possession of such
information or to provide such information to other persons for such
purposes.
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(h) Confidentiality.
(i) After the date hereof, except as may be required for tax
purposes or other regulatory purposes, no party nor any affiliate of a
party nor any of their respective successors and assigns shall use,
publish or disclose, or permit others to use or disclose any
information regarding this Agreement or regarding another party or its
affiliates obtained in the negotiation and performance of this
Agreement. In the event of any termination of this Agreement, (a) each
party and its affiliates shall treat as confidential and proprietary
and shall not disclose or use, directly or indirectly, in any manner
whatsoever, or permit others under their control to disclose or to
use, any information concerning this Agreement or concerning another
party or its affiliates or their business or products obtained
pursuant to or in connection with the transactions which are the
subject matter of this Agreement, unless such information (i) was
known when received, (ii) is or thereafter becomes lawfully obtainable
from other sources, (iii) is necessary or appropriate to disclose to
any regulatory authority having jurisdiction or as otherwise required
by law, or (iv) is or becomes a matter of public knowledge without
violation of this Section 7(h), and (b) each party shall promptly
return to the other parties upon written request all written
information and documents received from them and their affiliates, and
their accountants or counsel, in connection with such transactions,
including all copies thereof. The provisions of this Section 7(h)(i)
shall survive the Closing and any expiration or termination of this
Agreement.
(ii) In addition, after the date hereof Seller and its
affiliates shall not use, publish, disclose, or permit others to use,
publish or disclose any information regarding the Communications
Services Agreement, the Seller's Claim, or prices paid by Buyer and
its affiliates to channel lessors, except as may be required in
connection with any suit or action the Seller may initiate, in
accordance with the terms hereof, alleging breach of the
Communications Services Agreement. The provisions of this Section
7(h)(ii) shall survive the Closing for a period of two years, but
shall not survive any expiration or termination of this Agreement.
Section 8. Conditions Precedent.
(a) Conditions Precedent to Obligations of Buyer. Each and
all of the obligations of Buyer to consummate the transactions
contemplated by this Agreement are subject to fulfillment prior to or
at the Closing of the following conditions: (a) the representations
and warranties of Seller contained herein shall be accurate in all
material respects as if made on and as of the Closing Date; (b) Seller
shall in all material respects have performed all of the obligations
and complied with each and all of the covenants, agreements and
conditions required to be performed or complied with on or prior to
the Closing; (c) no action, suit, proceeding or investigation before
any court, administrative agency or other governmental authority shall
be pending or threatened which seeks to restrain, prohibit, invalidate
or obtain damages as the result of any of the transactions
contemplated by this Agreement; and (d) all regulatory consents
required for the Seller to consummate the transactions contemplated
hereby shall have been granted and such
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consents shall remain in full force and effect, including, but not
limited to, the FCC grant of the application for assignment of the
Authorization by Final Order. For purposes of this Agreement, a "Final
Order" is an FCC action granting an application as to which the time
for filing for administrative or judicial review or reconsideration or
for the FCC to set aside such grant on its own motion has expired
without any such filing having been made or FCC action taken, or, in
the event of such filing or FCC action, the FCC grant has been
reaffirmed or upheld and the time for seeking further administrative
or judicial review with respect thereto has expired without any such
request for such further review having been filed.
(b) Conditions Precedent to Obligations of Seller. Each and
all of the obligations of Seller to consummate the transactions
contemplated by this Agreement are subject to fulfillment prior to or
at the Closing of the following conditions: (a) the representations
and warranties of Buyer contained herein shall be accurate in all
material respects as if made on and as of the Closing Date; (b) Buyer
shall in all material respects have performed all of the obligations
and complied with each and all of the covenants, agreements and
conditions required to be performed or complied with on or prior to
the Closing; (c) no action, suit, proceeding or investigation before
any court, administrative agency or other governmental authority shall
be pending or threatened which seeks to restrain, prohibit, invalidate
or obtain damages as the result of any of the transactions
contemplated by this Agreement; (d) all regulatory consents required
for the Buyer to consummate the transactions contemplated hereby shall
have been granted and such consents shall remain in full force and
effect, including, but not limited to, the FCC grant of the
application for assignment of the Authorization by Final Order; (e)
ATI and Buyer have completely and timely made all monthly payments
required by the Communications Services Agreement, but without giving
effect to any increase claimed pursuant to the Seller's Claim, and
performed all of other obligations of the "Customer" under the
Communications Services Agreement, and (f) the Fixed Payments shall
have been paid to Seller in accordance with and to the extent required
by this Agreement.
(c) Disclosure of Breach or Futility. If any party acquires
knowledge of (i) an event, occurrence or circumstance making
satisfaction of a condition in Section 8(a) or (b) hereof unlikely,
the party acquiring such knowledge shall give prompt written notice
thereof to the other party in sufficient detail to permit a reasonable
analysis thereof. In the event of a material misrepresentation or a
material breach of any warranty or covenant made in this Agreement and
the breaching party's failure to rectify such material
misrepresentation or material breach within twenty (20) days after
receipt of written notice thereof from the non-breaching party, then
the non-breaching party shall have the right, upon written notice to
the breaching party given within ten (10) days after the expiration of
said twenty (20)-day period, to terminate this Agreement; provided,
however, if the non-breaching party does not terminate this Agreement
by the expiration of said ten (10)-day period, the non-breaching party
shall be deemed to have waived such misrepresentation or breach.
Termination of this Agreement pursuant to the preceding sentence shall
be without prejudice to the non-breaching party's right to seek and
obtain damages resulting from such misrepresentation or breach. In
addition, in the event of a material misrepresentation or material
breach by Seller, the Buyer may, in its discretion,
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seek specific performance of this Agreement in lieu of termination.
This Section 8(c) sets forth the sole and exclusive remedies of each
party based on any misrepresentation or breach of this Agreement
discovered prior to the Closing.
Section 9. Survival and Indemnification.
(a) Survival. All representations, warranties, covenants and
agreements contained in this Agreement (including any Schedules
hereto), shall survive the Closing and shall be fully effective and
enforceable for a period of 12 months following the Closing Date, but
shall thereafter be of no further force or effect, except as they
relate to (i) claims for indemnification timely made (pursuant to the
next sentence), (ii) claims involving fraud on the part of a party
hereto or (iii) covenants, agreements and claims relating to the
Deferred Payment. Any claim for indemnification asserted in writing,
setting forth the nature, basis and amount of the claim in sufficient
detail to permit a reasonable analysis thereof, within 12 months after
the Closing Date shall survive until resolved or judicially
determined; provided, however, once a party has asserted a claim for
indemnification hereunder, such party must initiate appropriate
judicial action in a court of competent jurisdiction (or in
arbitration, if the parties to the dispute over indemnification so
agree) prior to the latter of (i) the end of the ensuing ninety (90)
days and (ii) 12 months after the Closing Date, or the claim for
indemnification shall be deemed to have been waived. The
representations and warranties set forth in this Agreement shall not
be affected by any investigation, verification or examination by any
party hereto or by anyone on behalf of any such party, except as
specifically set forth herein or in an Exhibit, Schedule or document
delivered pursuant to this Agreement.
(b) Indemnification.
(i) Each party shall indemnify and hold harmless the
other from and against any and all loss, damage, expense
(including court costs, amounts paid in settlement,
judgments, reasonable attorneys' fees or other expenses for
investigating and defending), suit, action, claim, liability
or obligation related to, caused by or arising from any
misrepresentation, breach of warranty or failure to perform
any covenant or agreement contained herein, together with
interest at a floating interest rate equal at all times to
the rate of interest publicly announced from time to time by
First Union National Bank as its corporate base rate from the
date upon which such loss, damage, expense or liability was
incurred to the date of payment, plus the amount of all
expenses incurred in enforcing this indemnification right,
including court costs, reasonable attorney's fees, and other
expenses for investigating and defending.
(ii) Any party seeking indemnification (the
"Indemnified Party") shall give prompt written notice to the
indemnifying party (the "Indemnifying Party")of the facts and
circumstances giving rise to the claim (the "Notice"). The
loss, damage and expense incurred by a party shall be
determined on a net after-tax basis and shall take into
account any insurance proceeds received by such party.
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(c) Defense Against Asserted Claims. The Indemnified Party
shall not settle or compromise any claim by a third party for which
the Indemnified Party is entitled to indemnification hereunder without
the prior written consent of the Indemnifying Party, unless legal
action shall have been instituted against the Indemnified Party and
the Indemnifying Party shall not have taken control of such suit
within 60 days after notification thereof as provided herein. In
connection with any claim giving rise to indemnification hereunder
resulting from or rising out of any claim or legal proceeding by a
person other than the Indemnified Party, the Indemnifying Party, at
its sole cost and expense, may, upon written notice to the Indemnified
Party, assume the defense of any such claim or legal proceeding
without prejudice to the right of the Indemnifying Party thereafter to
contest its obligation to indemnify the Indemnified Party in respect
to the claims asserted therein. If the Indemnifying Party assumes the
defense of any such claim or legal proceeding, the Indemnifying Party
shall select counsel to conduct the defense in such claims and legal
proceedings and at its sole cost and expense shall take all steps
necessary in the defense or settlement thereof. The Indemnifying Party
shall not consent to a settlement of, or the entry of any judgment
arising from, any claim or legal proceeding, without the prior written
consent of the Indemnified Party, unless the Indemnifying Party admits
in writing its liability to hold the Indemnified Party harmless from
and against any losses, damages, expenses and liabilities arising out
of such settlement and concurrently with such settlement, Indemnifying
Party pays into the court the full amount of all losses, damages,
expenses and liabilities to be paid by the Indemnifying Party in
connection with such settlement and, if such settlement would impose
or affect ongoing obligations of the Indemnified Party, the
Indemnified Party consents thereto, which consent shall not be
unreasonably withheld. The Indemnified Party shall be entitled to
participate in the defense of any such action with its own counsel and
at its own expense. If the Indemnifying Party does not assume the
defense of any such claim or litigation resulting therefrom in
accordance with the terms hereof, the Indemnified Party may defend
such claim or litigation in such a manner as it may deem appropriate,
including settling such claim or litigation after giving notice of the
same to Indemnifying Party on such terms as the Indemnified Party may
deem appropriate and any action by the Indemnified Party seeking
indemnification from Indemnifying Party in accordance with the
provisions of this Section, Indemnifying Party shall not be entitled
to question the manner in which the Indemnified Party defended such
claim or litigation or the amount or nature of any such settlement. In
the event of a claim by a third party, the Indemnified Party shall
cooperate with the Indemnifying Party in the defense of such action
(including making a personal contact with the third party if deemed
beneficial) and the relevant records of each party shall be made
available on a timely basis.
(d) Failure to Close Because of Default. In the event that
the Closing is not consummated on or before the earlier of the Closing
Date or the first anniversary of the date of this Agreement by virtue
of a default made by a party in the observance or in the due and
timely performance of any of its covenants or agreements herein
contained, the parties shall have and retain all of the rights
afforded them at law or in equity by reason of that default, subject
to Section 8(c). In addition, Seller acknowledges that the Assets are
unique, that a failure by either party to complete the transactions
contemplated by this Agreement will cause irreparable and continuing
damage to the other party, and that
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actual damages for any such failure may be difficult to ascertain and
may be inadequate and that the other party will have no adequate
remedy at law. Consequently, each party agrees that the other party,
its affiliates, successors and assigns shall be entitled, at such
party's sole election, to specific performance of any of the
provisions of this Agreement in addition to any other legal or
equitable remedies to which such party may otherwise be entitled.
(e) Survival. The provisions set forth in this Section 9
shall survive the Closing. The rights of indemnification set forth in
this Section 9 shall be the sole and exclusive rights and remedies of
the parties hereto and their respective affiliates arising out of or
relating to any misrepresentation or breach of this Agreement
discovered after the Closing.
Section 10. Miscellaneous.
(a) ATI's Guaranty. ATI hereby guarantees and acts as surety
for the complete and timely payment, performance and discharge of all
obligations of Buyer hereunder.
(b) Amendments and Waivers. Any term of this Agreement may be
amended and the observance of any term of this Agreement may be waived
only with the written consent of (i) both parties in the case of an
amendment, and (ii) the party waiving any term or condition hereof in
the case of waiver. Any amendment or waiver effected in accordance
with this Section shall be binding only in the specific instance for
the specific purpose for which given.
(c) Entire Agreement. This Agreement supersedes any and all
oral or written agreements and understandings heretofore made relating
to the subject matter hereof and contains the entire agreement of the
parties relating to the subject matter hereof. Without limiting the
generality of the preceding sentence, the parties specifically
acknowledge that this Agreement contains all of the representations,
warranties, conditions, covenants and agreements relating to the
transactions contemplated hereby and to the rights and remedies of the
parties with respect thereto.
(d) Construction; Counterparts. All references herein to the
masculine gender shall also include the feminine and neuter, and vice
versa, and all references herein to the singular form shall also
include the plural, and vice versa, all as the context may require.
References in this Agreement to particular firms, agencies,
departments, statutes, regulations and the like shall be considered as
including references to any successors thereto. The word "include"
(and correlative terms, such as "includes" and "including") shall be
construed as if followed by the words "without limitation." All
references for purposes hereof, in computing the number of days, other
than "business days," all days shall be counted, including Saturdays,
Sundays and legal holidays; provided, however, if the final day of any
time period falls on a date that is not a business day, the final day
shall be deemed to be the immediately following business day. A
"business day" means any day that is not a Saturday, Sunday or legal
holiday in the State of Delaware. This
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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.
(e) Expenses. Each party to this Agreement shall pay its own
costs and expenses in connection with the transactions contemplated
hereby. Any sales, transfer or other taxes or fees applicable to the
conveyance and transfer from Seller to Buyer of the Assets shall be
borne equally by Seller and Buyer, except that any fees payable to the
FCC for any application contemplated hereby shall be paid by Buyer..
(f) Successors and Assigns. This Agreement shall bind and
inure to the benefit of the parties named herein and their respective
successors and assigns. Buyer shall be entitled to assign its rights
and duties hereunder to any Affiliate with the prior written consent
of Seller, which shall not be unreasonably withheld, conditioned or
delayed. Seller shall not be entitled to assign its rights and duties
hereunder without the prior written consent of Buyer. No assignment
shall relieve the assignor of any duty or liability hereunder.
(g) Applicable Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of
Delaware.
(h) Partial Invalidity. In the event that any provision of
this Agreement, other than any of the economic terms, shall be held
invalid or unenforceable by any court of competent jurisdiction, such
holding shall not invalidate or render unenforceable any other
provision hereof.
(i) Brokers. Each party hereto represents that it has not
retained any broker or finder or incurred any liability or obligation
for any brokerage fees, commissions or finders fees with respect to
this Agreement or the transactions contemplated hereby.
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IN WITNESS WHEREOF, the parties have each caused this Agreement to be
duly executed as of the day and year first above written.
SELLER BUYER
AESCO Systems, Inc. American Telecasting of Portland, Inc.
By:
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Name: Name:
Title: Title:
ATI
American Telecasting, Inc.
By:
--------------------------------
Name:
Title:
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LIST OF SCHEDULES
Schedule 3(c)(i) General Assignment and Xxxx of Sale
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Schedule 3(c)(1)
ASSIGNMENT AND XXXX OF SALE
The undersigned, AESCO Systems, Inc. (the "Seller"), for good and
valuable consideration, the receipt of which is hereby acknowledged, does
hereby GRANT, SELL, AND DELIVER to American Telecasting of Portland, Inc., a
Delaware corporation (the "Buyer") its successors and assigns, all of (a)
Seller's rights and interests as the holder of that certain Federal
Communications Commission authorization for the E-Group station in Portland,
Oregon licensed under MMDS Station WHT647 (the "Authorization"), and (b) all
transferable documents and records owned by, held by, or under the control of
Seller used in the operation of said Station (collectively, the "Assets"), and
does hereby ASSIGN, TRANSFER AND CONVEY to the Buyer all of its right, title
and interest in and to the Assets.
This Assignment and Xxxx of Sale has been given pursuant to, and to
effect certain transactions contemplated by, that certain Purchase Agreement
dated ______, 1999 by and among Seller, Buyer and American Telecasting, Inc.
The Seller expressly confirms that the representations, warranties, covenants
and agreement set forth in said Purchase Agreement shall survive the execution
and delivery hereof in accordance with its terms.
IN WITNESS WHEREOF, AESCO Systems, Inc. has caused this Assignment and
Xxxx of Sale to be executed as of this _____ day of __________________, 1999.
AESCO Systems, Inc.
By:
-------------------------------
Name:
Title:
