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Exhibit 10.28
MEMBERSHIP INTERESTS CONTRIBUTION AGREEMENT
BY AND AMONG
INTEGRATED SITE DEVELOPMENT, INC.
AND
XXX X. XXXXXX, III, XXXXXXXX X. XXXXXX, XXXXXX FAMILY LIMITED PARTNERSHIP,
THE CENTRAL ARKANSAS OPPORTUNITY FOUNDATION, TELESITE SERVICES, LLC AND
METROSITE MANAGEMENT, LLC
DATED
MAY 12, 1997
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MEMBERSHIP INTERESTS CONTRIBUTION AGREEMENT
THIS MEMBERSHIP INTERESTS CONTRIBUTION AGREEMENT (together with the
Schedules and Exhibits hereto, the "Agreement"), dated May 12, 1997, is
entered into by and among Integrated Site Development, Inc., a Delaware
corporation ("ISD"), and Xxx X. Xxxxxx, III ("Xxxxxx"), Xxxxxxxx X. Xxxxxx
("Xxxxxxxx Xxxxxx") Xxxxxx Family Limited Partnership, an Arkansas limited
partnership (the "Partnership"), The Central Arkansas Opportunity
Foundation, a charitable trust organized under the laws of the State of
Arkansas ("CAOF") (Finely, the Partnership, and CAOF are collectively
referred to as, the "Members") and Telesite Services, LLC, an Arkansas
limited liability company ("Telesite"), and Metrosite Management, LLC, an
Arkansas limited liability company ("Metrosite").
WHEREAS, the Partnership and CAOF are the owners of all of the
membership interests, and are the sole members, of Telesite;
WHEREAS, Telesite is engaged in site acquisition, marketing, and
consulting for the telecommunications industry (the "Telesite Business");
WHEREAS, Telesite and Xxxxxx are the owners of all of the membership
interests, and are the sole members, of Metrosite;
WHEREAS, Metrosite is engaged in marketing and management of
governmental and public properties of the telecommunications industry (the
"Metrosite Business");
WHEREAS, Xxxxxx and Xxxxxxxx Xxxxxx are husband and wife;
WHEREAS, pursuant to Section 351 of the Internal Revenue Code of 1986,
as amended (the "Code"), the Members desire to contribute and transfer all
of their membership interests in Telesite (the "Telesite Interests") to ISD
in exchange for shares of the Common Stock, par value $0.001 per share, of
ISD (the "ISD Common Stock") and certain other consideration as provided
herein;
WHEREAS, pursuant to Section 351 of the Code, the Members desire to
cause Telesite to, and Xxxxxx desires to, contribute and transfer all of
their and his, as the case may be, membership interests in Metrosite (the
"Metrosite Interests") to ISD in exchange for shares of ISD Common Stock and
certain other consideration as provided herein; and
WHEREAS, the foregoing contributions and transfers are part of a
single plan pursuant to Section 351 of the Code in which: (i) the foregoing
contributions and transfers will be made; (ii) Xxxxxxx X. Xxxxx ("Xxxxx")
and Xxxxxx X. Xxxx ("Long") will contribute and transfer all of the shares
of the capital stock of US Towers, Inc., a Delaware corporation ("US
Towers") to ISD in exchange for shares of ISD Common Stock; (iii) Whitney
Equity Partners, L.P., a Delaware limited partnership ("Whitney"), Kitty
Hawk Capital Limited Partnership, III, a Delaware limited partnership
("Kitty Hawk") will contribute and transfer cash to ISD in exchange for
shares of 8% Series A Cumulative Convertible Redeemable Preferred Stock, par
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value $0.001 per share, of ISD; and (iv) PCX Corporation, a Delaware
corporation ("PCX"), has agreed to contribute its warrant to purchase 1,500
shares of the Common Stock, par value $0.001 per share, of US Towers (the
"PCX Warrant") to ISD in exchange for a warrant to purchase 150,000 shares
of ISD Common Stock (the "ISD Warrant").
NOW, THEREFORE, in consideration of the mutual agreements, covenants,
representations, and warranties set forth herein, the parties agree as
follows:
ARTICLE I
DEFINITIONS
In addition to the other terms defined herein, the following
definitions will apply throughout this Agreement:
1.1 ACM's. The term "ACM's" has the meaning set forth in Section
5.19(b).
1.2 Affiliate. The term "Affiliate" has the meaning set forth in
Rule 405 of the Securities Act of 1933, as amended.
1.3 Claims. The term "Claims" has the meaning set forth in Section
5.15.
1.4 Closing. The term "Closing" has the meaning set forth in Section
12.1.
1.5 Closing Date. The term "Closing Date" has the meaning set forth
in Section 12.1.
1.6 Consideration. The term "Consideration" has the meaning set
forth in Section 3.1.
1.7 Effective Time. The term "Effective Time" has the meaning set
forth in Section 12.1.
1.8 Environmental Laws. The term "Environmental Laws" has the
meaning set forth in Section 5.19.
1.9 ERISA. The term "ERISA" means the Employee Retirement Income
Security Act of 1974, as amended.
1.10 Hazardous Materials. The term "Hazardous Materials" has the
meaning set forth in Section 5.19(b).
1.11 Indemnified Party. The term "Indemnified Party" has the meaning
set forth in Section 13.3.
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1.12 Indemnity Obligor. The term "Indemnity Obligor" has the meaning
set forth in Section 13.3.
1.13 ISD Agreements. The term "ISD Agreements" means all agreements,
documents and other instruments executed and delivered by ISD in connection
with the consummation of the transaction contemplated by this Agreement.
1.14 Loss. The term "Loss" has the meaning set forth in Section 13.1.
1.15 Member Agreements. The term "Member Agreements" means all
agreements, documents and other instruments executed and delivered by the
Members in connection with the consummation of the transactions contemplated
by this Agreement.
1.16 Metrosite Assets. The term "Metrosite Assets" means all of the
properties and assets of Metrosite, including, without limitation, the
Metrosite Intellectual Property, the Metrosite Inventory, the Metrosite
Receivables, and the Metrosite Tangible Personal Property.
1.17 Metrosite Contracts. The term "Metrosite Contracts" has the
meaning set forth in Section 6.11.
1.18 [Intentionally Omitted]
1.19 Metrosite Intellectual Property. The term "Metrosite
Intellectual Property" has the meaning set forth in Section 6.13.
1.20 Metrosite Inventory. The term "Metrosite Inventory" has the
meaning set forth in Section 6.10.
1.21 Metrosite Leased Real Property. The term "Metrosite Leased Real
Property" has the meaning set forth in Section 6.8.
1.22 Metrosite Liens. The term "Metrosite Liens" has the meaning set
forth in Section 6.7.
1.23 [Intentionally Omitted]
1.24 Metrosite Marks. The term "Metrosite Marks" has the meaning set
forth in Section 6.13.
1.25 Metrosite Permits. The term "Metrosite Permits" has the meaning
set forth in Section 6.17.
1.26 Metrosite Real Property Leases. The term "Metrosite Real
Property Leases" has the meaning set forth in Section 6.8.
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1.27 Metrosite Receivables. The term "Metrosite Receivables" has the
meaning set forth in Section 6.12.
1.28 Metrosite Required Consents. The term "Metrosite Required
Consents" has the meaning set forth in Section 6.4.
1.29 Metrosite Tangible Personal Property. The term "Metrosite
Tangible Personal Property" has the meaning set forth in Section 6.9.
1.30 Metrosite Tax Returns. The term "Metrosite Tax Returns" has the
meaning set forth in Section 6.18.
1.31 [Intentionally Omitted]
1.32 PBGC. The term "PBGC" means the Pension Benefit Guaranty
Corporation.
1.33 Person. The term "person" means any individual, firm,
corporation, limited liability company, partnership, trust, incorporated or
unincorporated association, joint venture, joint stock company, governmental
authority or other entity of any kind, and shall include any successor (by
merger or otherwise) of such entity.
1.34 Plans. The term "Plans" has the meaning set forth in Section
5.22(b)(i).
1.35 Promissory Note. The term "Promissory Note" has the meaning set
forth in Section 3.2.
1.36 Real Estate Lease. The term "Real Estate Lease" means the Real
Estate Lease, dated as of the Closing Date, between Telesite and the
Partnership in substantially the form attached as Exhibit A.
1.37 Representatives. The term "Representatives" has the meaning set
forth in Section 8.2.
1.38 Rules. The term "Rules" has the meaning set forth in Section
5.16.
1.39 Stockholders' Agreement. The term "Stockholders' Agreement"
means the Stockholders' Agreement, dated as of the Closing Date, between ISD,
Clark, Long, the Partnership, PCX and Whitney in substantially the form
attached as Exhibit B.
1.40 Stock Restriction Agreement. The term "Stock Restriction
Agreement" means the Stock Restriction Agreement, dated as of the Closing
Date, between ISD and the Partnership in substantially the form attached as
Exhibit C.
1.41 Taxes. The term "Taxes" has the meaning set forth in Section
5.18.
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1.42 Telesite Agreements. The term "Telesite Agreements" means all
agreements, documents and other instruments executed and delivered by
Telesite in connection with the consummation of the transactions contemplated
by this Agreement.
1.43 Telesite Assets. The term "Telesite Assets" means all of the
properties and assets of Telesite, including, without limitation, the
Telesite Intellectual Property, the Telesite Inventory, the Telesite
Receivables, the Telesite Tangible Personal Property, the Telesite Contracts,
the Telesite Leased Real Property, and the Telesite Real Property Leases.
1.44 Telesite Contracts. The term "Telesite Contracts" has the
meaning set forth in Section 5.11.
1.45 Telesite Excluded Real Property. The term "Telesite Excluded
Real Property" means the real property owned by Telesite and described on
Exhibit D attached hereto.
1.46 Telesite Financial Statements. The term "Telesite Financial
Statements" has the meaning set forth in Section 5.5.
1.47 Telesite Intellectual Property. The term "Telesite Intellectual
Property" has the meaning set forth in Section 5.13.
1.48 Telesite Inventory. The term "Telesite Inventory" has the
meaning set forth in Section 5.10.
1.49 Telesite Leased Real Property. The term "Telesite Leased Real
Property" has the meaning set forth in Section 5.8.
1.50 Telesite Liens. The Term "Telesite Liens" has the meaning set
forth in Section 5.7.
1.51 Telesite March 1997 Balance Sheet. The term "Telesite March 1997
Balance Sheet" has the meaning set forth in Section 5.5.
1.52 Telesite Marks. The term "Telesite Marks" has the meaning set
forth in Section 5.13.
1.53 Telesite Permits. The term "Telesite Permits" has the meaning
set forth in Section 5.17.
1.54 Telesite Permitted Liens. The term "Telesite Permitted Liens"
has the meaning set forth in Section 5.7.
1.55 Telesite Real Property Leases. The term "Telesite Real Property
Leases" has the meaning set forth in Section 5.8.
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1.56 Telesite Receivables. The term "Telesite Receivables" has the
meaning set forth in Section 5.12.
1.57 Telesite Required Consents. The term "Telesite Required
Consents" has the meaning set forth in Section 5.4.
1.58 Telesite Tangible Personal Property. The term "Telesite Tangible
Personal Property" has the meaning set forth in Section 5.9.
1.59 Telesite Tax Returns. The term "Telesite Tax Returns" has the
meaning set forth in Section 5.18.
1.60 Whitney Letter of Intent. The term "Whitney Letter of Intent"
means the Letter of Intent, dated March 27, 1997, between Whitney and US
Towers, a copy of which is attached as Exhibit E.
ARTICLE II
CONTRIBUTION OF MEMBERSHIP INTERESTS
2.1 Contribution of Telesite Interests. The Members agree to
contribute, transfer and deliver to ISD, at the Closing, all of the Telesite
Interests owned by them in exchange for the Consideration.
2.2 Contribution of Metrosite Interests. The Members agree to cause
Telesite to, and Xxxxxx agrees to, contribute, transfer and deliver to ISD,
at the Closing, all of the Metrosite Interests owned by them or him, as the
case may be, in exchange for the Consideration.
2.3 Intent of Contributions. The parties agree that the intent of
the contributions and transfers of the Telesite Interests and the Metrosite
Interests to ISD pursuant to this Agreement will constitute a transfer of
property to a controlled corporation in accordance with the provisions of
Section 351 of the Code.
ARTICLE III
CONSIDERATION
3.1 Consideration. The aggregate consideration (the "Consideration")
for the Telesite Interests and the Metrosite Interests will be an amount
equal to an aggregate of $7,262,000 and 490,517 shares of ISD Common Stock.
3.2 Payment of Consideration. At the Closing, the Consideration will
be satisfied and paid by ISD as follows: (a) ISD will wire transfer
immediately available funds in the aggregate amount of $2,000,000.00 to the
bank account designated by CAOF and $2,850,000.00 to the bank account
designated by the Partnership, (b) ISD will make and deliver to the
Partnership a
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promissory note, payable to the Partnership, in the aggregate principal
amount of $2,412,000.00, which will bear interest at the rate of seven
percent (7%) per annum and will be in the form attached hereto as Exhibit F
(the "Promissory Note") and (c) subject to the terms and conditions of the
Stockholders' Agreement and the Stock Restriction Agreement, ISD will issue
to the Partnership a certificate or certificates evidencing 490,517 shares of
the ISD Common Stock.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES REGARDING MEMBERS
The Members and Xxxxxxxx Xxxxxx jointly and severally represent and
warrant to ISD as follows:
4.1 Authority. Each of the Members and Xxxxxxxx Xxxxxx has all
requisite power and authority to execute and deliver this Agreement and the
Member Agreements and to perform the transactions contemplated hereby and
thereby. The execution, delivery, and performance of this Agreement and the
Member Agreements by the Partnership has been duly and validly authorized by
all necessary partnership and partner action. The execution, delivery, and
performance of this Agreement and the Member Agreements by CAOF has been duly
and validly authorized by all necessary trust and trustee action. This
Agreement and the Member Agreements have been, or with respect to the Member
Agreement to be executed at the Closing, will be duly executed and delivered
by the Members and Xxxxxxxx Xxxxxx and each constitutes, or will constitute
when executed and delivered, a valid and binding obligation of the Members
and Xxxxxxxx Xxxxxx, enforceable against the Members and Xxxxxxxx Xxxxxx, as
the case may be, in accordance with its terms.
4.2 Telesite Interests. The Partnership and CAOF are the sole
beneficial and record owners of the Telesite Interests in the percentages set
forth on Schedule 4.2, free and clear of all liens, encumbrances, claims,
security interests, mortgages, restrictions or pledges of any nature. There
are no outstanding subscriptions, options, warrants, calls, puts or other
agreements or instruments which may entitle or obligate Telesite or any other
person to acquire any membership interest in Telesite.
4.3 Metrosite Interests. Xxxxxx and Telsite are the sole beneficial
and record owners of the Metrosite Interests in the percentages set forth on
Schedule 4.3, free and clear of all liens, encumbrances, claims, security
interests, mortgages, restrictions or pledges of any nature. There are no
outstanding subscriptions, options, warrants, calls, puts or other agreements
or instruments which may entitle or obligate Metrosite or any other person to
acquire any membership interest in Metrosite.
4.4 Securities Matters. The Partnership seeks to acquire the shares
of ISD Common Stock issued to it for its own account and beneficial interest
for investment purpose only and not with the view to the resale, assignment,
transfer or distribution thereof, except in accordance with applicable
federal and state securities laws. The Partnership acknowledges and agrees
that, as the owner of the shares of ISD Common Stock, it must bear the
economic risks of investment in
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ISD for an indefinite period of time, as the securities have not been
registered under the Securities Act of 1933, as amended (the "Securities
Act"), or the securities laws of any state, and therefore cannot be sold
unless registered thereunder or unless, in the opinion of counsel
satisfactory to ISD, an exemption from registration is available. The
Partnership acknowledges and agrees that the shares of ISD Common Stock
issued to it will be subject to certain restrictions on transfer as set forth
in the Stockholders' Agreement and that the certificates evidencing such
shares will bear legends referring to such restrictions. The Partnership has
such knowledge and experience in financial and business matters that they are
capable of evaluating the merits and risks of an investment in the ISD and
that they are able to bear the economic risks for such investment. The
Partnership is sophisticated and knowledgable investors, as well as
accredited investors (as such term is defined in Rule 501(a) of Regulation D
promulgated under the Securities Act). The Partnership acknowledges that it
and its representatives (a) has had adequate opportunity to ask for and
receive any information from ISD and its officers that the Partnership
believes to be material or relevant to their investment hereunder and (b) has
had a due diligence investigation conducted by its legal counsel and other
professional advisors.
4.5 Stock Purchase Agreement. The representations and warranties
made by Telesite and Metrosite in the Stock Purchase Agreement, dated as of
the Closing Date, by and among ISD, US Towers, Telesite, Metrosite and
Whitney are true and correct.
ARTICLE V
REPRESENTATIONS AND WARRANTIES REGARDING TELESITE
The Members, Xxxxxxxx Xxxxxx and Telesite jointly and severally
represent and warrant to ISD as follows:
5.1 Organization and Good Standing: Governing Documents. Telesite is
a limited liability company duly organized, validly existing and in good
standing under the laws of the State of Arkansas. Telesite has all requisite
power and authority to own, operate and lease the Telesite Assets and to
conduct the operations of the Telesite Business as presently conducted.
Telesite is duly qualified to conduct business as a foreign limited liability
company and is in good standing in all jurisdictions in which the character
of the property owned, leased or operated by it or the nature of the business
conducted by it makes such qualification necessary, and such jurisdictions
are listed on Schedule 5.1. Telesite has previously delivered to ISD true
and complete copies of its Articles of Organization and Operating Agreement,
including all amendments thereto. Except as set forth on Schedule 5.1,
Telesite does not, directly or indirectly, own or control or have any
capital, equity, partnership, participation or other interest in any
corporation, partnership, limited liability company, joint venture or other
business association or entity.
5.2 Authority. Telesite has all requisite power and authority to
execute and deliver this Agreement and the Telesite Agreements and to perform
the transactions contemplated hereby and thereby. The execution, delivery
and performance of this Agreement and the Telesite Agreements have been duly
and validly authorized by all necessary action on the part of Telesite,
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its managers and the Members. This Agreement has been and the Telesite
Agreements have been, or, with respect to the Telesite Agreements to be
executed at the Closing, will be duly executed and delivered by Telesite and
each constitutes or will constitute when executed and delivered a valid and
binding obligation of Telesite, enforceable against Telesite in accordance
with its terms.
5.3 No Conflict or Breach. The execution, delivery and performance
of this Agreement does not and will not:
(a) conflict with the Articles of Organization or Operating
Agreement of Telesite;
(b) violate any law, statute, judgment, order, decree or
regulation of any legislative body, court, administrative agency,
governmental authority or arbitrator applicable to or relating to Telesite or
the Telesite Assets;
(c) conflict with, constitute a default under, result in a
breach or acceleration of or, except as set forth on Schedule 5.3, require
notice to or the consent of any third party under any contract, agreement,
commitment, mortgage, note, license or other instrument or obligation to
which Telesite is party or by which it is bound or by which the Telesite
Assets are affected; or
(d) result in the creation or imposition of any lien, charge or
encumbrance of any nature whatsoever on any of the Telesite Assets.
5.4 Consents and Approvals. Schedule 5.4 describes (a) each consent,
approval, authorization, registration or filing with any federal, state or
local judicial or governmental authority or administrative agency and (b)
each consent, approval, authorization of or notice to any other third party,
which is required in connection with the valid execution and delivery of this
Agreement or the consummation of the transactions contemplated herein or
therein (the items described in clauses (a) and (b), collectively, the
"Telesite Required Consents").
5.5 Financial Statements. Telesite has previously delivered to ISD
true and complete copies of (a) its unaudited Consolidated Income Statement
for the fiscal year ended December 31, 1995, unauditied Consolidated Balance
Sheet as of December 31, 1995, audited Consolidated Income Statement for the
fiscal year ended December 31, 1996, and audited Consolidated Balance Sheet
as of December 31, 1996, and the related statement of operations, members'
equity and cash flows for such fiscal years then ended, including the
footnotes thereto, additional or supplemental information supplied therewith
and the report prepared in connection therewith by the independent certified
public accountants reviewing or auditing, as the case may be, such financial
statements and (b) the interim unaudited Consolidated Balance Sheet (the
"Telesite March 1997 Balance Sheet") and the related consolidated statement
of operations, member's equity and cash flows prepared for the quarter ended
March 31, 1997. The documents described in clauses (a), and (b),
collectively, the "Telesite Financial Statements":
(a) are true, complete and correct;
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(b) are in accordance with the books and records of Telesite;
(c) present fairly the assets, liabilities and financial
condition of Telesite as of the respective dates thereof, and the results of
operations for the periods then ending; and
(d) have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis throughout the periods
involved.
Telesite has no liability or obligation, whether accrued, absolute, or
contingent that is not reflected or reserved against in the Telesite March
1997 Balance Sheet, except for those that are not required by generally
accepted accounting principles to be included therein. Any items of income
or expense which are unusual or of a nonrecurring nature are separately
disclosed in the Telesite Financial Statements.
Telesite has not received from any of its certified public accountants
letters to the management of Telesite other than the auditors' opinion letter
accompanying the Telesite Financial Statements.
5.6 Books and Records. The books and records of Telesite relating to
the Telesite Business and the Telesite Assets are true, accurate and complete
in all material respects.
5.7 Title to and Sufficiency of Assets. Telesite has good and
marketable title to all of the Telesite Assets, free and clear of any liens,
encumbrances, claims, security interests, mortgages, restrictions or pledges
of any nature (collectively, "Telesite Liens"), other than the Telesite Liens
described on Schedule 5.7. All Telesite Liens that will not be removed at or
prior to the Closing are set forth on Schedule 5.7 (the "Telesite Permitted
Liens"). Except for the Telesite Excluded Real Property, the Telesite Assets
constitute all of the assets, tangible and intangible, of any nature
whatsoever, required to operate the Telesite Business in the manner presently
operated by Telesite.
5.8 Leased Real Property. Schedule 5.8 contains a true and correct
description of all real property leased by Telesite and used or useful in
connection with the Telesite Business (the "Telesite Leased Real Property").
Telesite has previously delivered to ISD true and complete copies of each of
the leases, including all amendments thereto, for such leased real property
(the "Telesite Real Property Leases"). Each of the Telesite Real Property
Leases is valid, binding and enforceable in accordance with its terms and is
in full force and effect, and there are no offsets or defenses by either
landlord or tenant thereunder. There are no existing defaults, and no events
or circumstances have occurred which, with or without notice of lapse of time
or both, would constitute defaults, under any of the Telesite Real Property
Leases. The execution, delivery and performance of this Agreement does not
and will not, with respect to any such Telesite Real Property Lease: (i)
permit the landlord to accelerate the rent or cause the lease terms to be
renegotiated, (ii) constitute a default thereunder or (iii) require the
consent of the landlord or any third party.
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5.9 Tangible Personal Property. Set forth on Schedule 5.9 is a list
of all machinery, equipment, tools, furniture, office equipment, supplies,
materials, vehicles and other items of tangible personal property of every
kind owned by Telesite and used or useful in connection with the Telesite
Business (wherever located and whether or not carried on Telesite's books)
(the "Telesite Tangible Personal Property"). Each item of Telesite Tangible
Personal Property, and each item of tangible personal property leased under
the Telesite Contracts, is in good operating order, condition and ordinary
wear and tear excepted, is suitable for immediate use in the ordinary course
of business of the Telesite Business, is free from defects, is merchantable
and is of a quality and quantity presently usable in the ordinary course of
business of the Telesite Business. No item of Telesite Tangible Personal
Property is in need of repair or replacement other than as part of routine
maintenance in the ordinary course of business.
5.10 Inventory. Set forth on Schedule 5.10 is a list and approximation
of, and the location of, all inventory of the Telesite Business as of the
date hereof, including without limitation, all finished goods, work in
process, raw materials, spare parts and all other materials and supplies to
be used or consumed in the production of finished goods (the "Telesite
Inventory"). All items included in the Telesite Inventory; (i) are in good
condition, not obsolete and nondefective, (ii) are useable or saleable in the
ordinary course of business of the Telesite Business and at the current
operating profit margins of Telesite, (iii) are located at the locations
listed on Schedule 5.10 and (iv) have been acquired by Telesite only in bona
fide transactions entered into in the ordinary course of business.
5.11 Contracts. Schedule 5.11 lists all contracts, commitments,
agreements (including, without limitation, agreements for the borrowing of
money or the extension of credit, licenses, understandings and obligations)
whether written or oral, to which Telesite is party or by which Telesite or
the Telesite Assets are bound or affected, other than purchase orders in the
ordinary course of business and any other contracts agreements and
commitments that do not extend beyond one (1) year or involve the receipt of
payment of not more than $25,000 (the "Telesite Contracts"). Telesite has
delivered to ISD true and complete copies of all written Telesite Contracts
and true and complete memoranda of all oral Telesite Contracts, including any
and all amendments and other modifications thereto. Each of the Telesite
Contracts is valid, binding and enforceable in accordance with its terms and
is in full force and effect. There are no existing defaults, and no events
or circumstances have occurred which, with or without notice or lapse of time
or both, would constitute defaults, under any of the Telesite Contracts. The
execution, delivery and performance of this Agreement and the Member
Agreements does not and will not, with respect to any Telesite Contract: (i)
constitute a default thereunder, (ii) require the consent of any person or
party, except for the Required Telesite Consents or (iii) affect the
continuation, validity and effectiveness thereof or the terms thereof.
5.12 Receivables. All accounts receivable and trade accounts due to
Telesite in connection with the Telesite Business (the "Telesite
Receivables") reflected on the Telesite March 1997 Balance Sheet (less any
such receivable collected since the date of such financial statement) and all
Telesite Receivables presently owing and to be owing at the Effective Time,
are, and at the Closing Date will be, legal, valid and binding obligations,
of the respective
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account debtors. All Telesite Receivables presently owing and to be owing at
the Effective Time are collectible in full at face value within ninety (90)
days, of the Closing Date (in the case of the accounts receivable due from
Sprint Spectrum, L.P. in connection with invoices dated prior to December 31,
1996 related to the Sprint Dallas project, net of a $450,000 allowance for
doubtful accounts established and reflected on the Telesite March 1997
Balance Sheet). All such Telesite Receivables were created in the ordinary
course of business of the Telesite Business. There are no set-offs,
counterclaims or disputes asserted with respect to any Telesite Receivable
(other than those of Sprint Spectrum, L.P. in connection with invoices dated
prior to December 31, 1996 related to the Sprint Dallas project which are
reflected in the $450,000 allowance for doubtful amounts established and
reflected on the Telesite 1997 Balance Sheet), and no discount or allowance
from any Telesite Receivable has been made or agreed to except discounts for
prompt payment granted in the ordinary course of business and reflected in
documents evidencing such account.
5.13 Intellectual Property. Set forth on Schedule 5.13 is a list of
all of the intellectual property rights that are owned or used by Telesite in
connection with the Telesite Business, including the following: (i) all
trademarks, service marks, trade names, logos and other designations and all
registrations (the "Telesite Marks"), including the date of first use of each
such Telesite Xxxx, all United States, foreign and state registrations
relating thereto, and a list of all of the goods and services with respect to
which each such Telesite Xxxx is used, (ii) all copyrighted works and
registrations therefor, (iii) all inventions that are the subject of letters
patent or applications therefor and (iv) all confidential or proprietary
processes, formulas, technical data and other information that is of
commercial value to the Telesite Business (collectively the "Telesite
Intellectual Property"). Each of the Telesite Marks has been in continuous
use since the date of first use set forth in Schedule 5.13, and each of the
Telesite Marks is now in use in interstate or intrastate commerce as
specified on said Schedule. Telesite is the record owner of each of the
trademark registrations, copyright registrations and patents listed on such
Schedule, and all required maintenance filings, tax payments, annuities and
maintenance fee payments have been timely completed with respect to each.
Schedule 5.13 sets forth the patent number, application number, application
date and issue date with respect to each payment and patent application.
Telesite has not licensed any of the Telesite Intellectual Property to any
third party, and no third party has any right to use any of the Telesite
Intellectual Property. There are no claims or suits challenging Telesite's
ownership or right to use any of the Telesite Intellectual Property, or
alleging that any of the Telesite Intellectual Property infringes any rights
of any third parties, nor does there exist any basis therefor.
5.14 Major Suppliers and Customers. Each supplier of goods or
services to the Telesite Business to whom Telesite paid more than $100,000,
in the aggregate, during the 12 months ended on March 31, 1997, and each
customer of the Telesite Business who paid Telesite more than $1,000,000, in
the aggregate, during such period, is listed on Schedule 5.14, which Schedule
reflects in each case the amounts so paid. Except as set forth on Schedule
5.14, there exists no actual or threatened termination, cancellation or
limitation of, or any adverse modification or change in, the business
relationship of Telesite or its business with any customer or any group of
customers whose purchases are individually in the aggregate material to the
business of Telesite, or with any material supplier, and there exists no
present condition or state
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of facts or circumstances that would materially adversely affect the assets,
business, properties, operations or financial condition of Telesite or
prevent Telesite from conducting the Telesite Business after the consummation
of the transactions contemplated by this Agreement, in substantially the same
manner in which it has heretofore been conducted. Telesite has no reason to
believe that the execution, delivery and performance of this Agreement will
have any adverse effect on the business relationship of any such suppliers or
customers with the Telesite Business.
5.15 Litigation. Except as set forth on Schedule 5.15, there are no
claims, actions, suits, arbitration proceedings, inquiries, hearings,
injunctions or investigations ("Claims") pending, or to the best knowledge of
Telesite, threatened, against Telesite, its operations or the Telesite
Business. No Claims have been brought within the last two years against
Telesite or the Telesite Business, or affecting the Telesite Assets, or
relating to Telesite's ownership, use or operation of the Telesite Assets.
There are no facts or circumstances which could serve as the basis for any
Claim against Telesite involving the Telesite Business or the Telesite
Assets, or, by virtue of the execution, delivery and performance of this
Agreement, against ISD.
5.16 Compliance with Decrees and Laws. There is no outstanding or, to
the best knowledge of Telesite, threatened, any order, writ, injunction or
decree of any court, governmental agency or arbitration tribunal against or
involving Telesite, the Telesite Business or the Telesite Assets. Telesite
is currently, and has been at all times in full compliance with all laws,
statutes (including, without limitation, the Federal Communications Act of
1934, as amended, and the rules and regulations promulgated pursuant
thereto), rules, regulations, orders and licensing requirements ("Rules") of
federal, state, local and foreign agencies and authorities applicable to the
business, properties and operations of the Telesite Business (including,
without limitation, those relating to antitrust and trade regulation, civil
rights, labor and discrimination, safety and health). To the best knowledge
of Telesite, there has been no allegation of any violation of any such Rules,
and no investigation or review by any federal, state or local body or agency
is pending, threatened or planned with respect to Telesite, the Telesite
Business or the Telesite Assets.
5.17 Permits. Telesite has obtained all permits, authorizations,
certificates, approvals, licenses, exemptions and classifications required
for the conduct of the Telesite Business and the ownership and operation of
the Telesite Assets (the "Telesite Permits"). Telesite is not in violation
of any of the Telesite Permits, and no proceedings are pending or, to the
best knowledge of Telesite, threatened, to revoke or limit any Telesite
Permit.
5.18 Taxes. Except as set forth in Schedule 5.18, Telesite has
properly completed, duly and timely filed in correct form with the
appropriate United States, state and local governmental agencies and with the
appropriate foreign countries and political subdivisions thereof, all tax
returns, reports and declarations of estimated tax (the "Telesite Tax
Returns") required to be filed before the Effective Time. All Telesite Tax
Returns are accurate, complete and correct as filed, and Telesite has paid in
full or made adequate provision in its financial statements for all amounts
shown to be due thereon. All United States, state and local income, profits,
franchise, sales, use, occupancy, property, severance, excise, value added,
withholding and other taxes, and all taxes owing to any foreign countries and
political subdivisions thereof
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(including, without limitation, interest, penalties and any additions to tax)
("Taxes") due from or claimed to be due by each taxing authority in respect
of Telesite, the Telesite Business or the Telesite Assets, for all periods
through the date of this Agreement, have been, and for all periods through
the Effective Time will be, fully paid or adequately provided for in the
financial statements of Telesite. Telesite has timely made and will timely
make all withholdings of Taxes required to be made under all applicable
United States, state and local tax regulations, and such withholdings have
either been paid or will be paid to the respective governmental agencies or
set aside in accounts for such purpose or accrued, reserved against and
entered upon the books of Telesite. Estimated income taxes which are not yet
due to be paid to the Internal Revenue Service or any state or local taxing
authoirty have been accrued, reserved against and entered upon the books of
Telesite. All Telesite Tax Returns required to be filed after the date
hereof by Telesite, shall, in each case, be prepared and filed by Telesite in
a manner consistent in all respects (including, without limitation, elections
and accounting methods and conventions) with such Telesite Tax Return most
recently filed by Telesite, in the relevant jurisdiction prior to the date
hereof, except as otherwise required by law or regulation or agreed to by
ISD. If any such Telesite Tax Return required to be filed after the date
hereof shall reflect any new elections or the adoption of any new accounting
methods or conventions or other similar items, the reflection or adoption of
any such items shall, except to the extent such particular reflection or
adoption is required to comply with any law or regulation, be subject to the
prior written approval of ISD. All deficiencies asserted as a result of any
examinations of the Telesite Tax Returns have been paid or adequately
provided for in the Telesite Financial Statements, and no issue has been
raised by a taxing authority in any such examination which, if raised with
regard to any other period not so examined, would be expected to result in a
proposed deficiency for any other period not so examined. Telesite will not
have any liability, either in its own right or as a transferee, for Taxes in
excess of the amount paid or reserved for any period prior to the Closing.
There are no outstanding agreements or waivers extending the statutory period
of limitation applicable to any Telesite Tax Return, or the period for
assessment or collection of any Taxes. Telesite is not a party to any
pending action or proceeding, nor to the best knowledge of Telesite, is there
threatened any action or proceeding, by any governmental authority for
assessment or collection of taxes, and Telesite is not currently under audit
or review and has not been notified by any governmental authority that an
audit or review of any tax matter is contemplated. There are no tax liens
(other than liens for taxes for current and subsequent years which are not
yet due and payable) upon any of the Telesite Assets. Telesite has not
agreed, nor is it required, to make any adjustment under Section 481(a) of
the Code, by reason of a change in accounting method or otherwise. Telesite
has not consented to the application to it of Section 341 (f)(2) of the
Code. Telesite is, and since its formation has been, properly classified as
a "partnership" for Federal income tax purposes rather than as an association
taxable as a corporation, and will maintain such classification through the
Effective Date.
5.19 Environmental Protection. The existing and prior uses of the
Telesite Assets and the Telesite Excluded Real Property and the operation of
the Telesite Business comply with, and at all times have complied with, and
Telesite is not in violation of, and have not violated, in connection with
the ownership, use, maintenance or operation of the Telesite Assets and the
Telesite Excluded Real Property and the operation of the Telesite Business,
any applicable federal, state, county or local statues, laws, regulations,
rules, ordinances, codes, licenses or
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permits of any governmental authorities relating to environmental matters,
including, without limitation, the Comprehensive Environmental Response,
Compensation and Liability Act as amended, the Resource Conservation Recovery
Act as amended, the Clean Air Act, the Clean Water Act, the Occupational
Safety and Health Act, the Toxic Substances Control Act, and "Superfund" or
"Superlien" law, the North Carolina Oil Pollution and Hazardous Substances
Control Act of 1978, or any other federal, state or local statue, law,
ordinance, code, rule, regulation, order, decree or guideline (whether
published or unpublished) regulating, relating to or imposing liability or
standards of conduct concerning any petroleum, petroleum by-product
(including but not limited to crude oil, diesel oil, fuel oil, gasoline,
lubrication oil, oil refuse, oil mixed with other waste, oil sludge, and all
other liquid hydrocarbons, regardless of specific gravity), natural or
synthetic gas, hazardous substance or materials, toxic or dangerous waste,
substance or material, pollutant or contaminant (collectively "Environmental
Laws"). Specifically, but not in limitation of the foregoing:
(a) Telesite has obtained and is in full compliance with the
terms and provisions of all licenses and permits necessary for
compliance with the Environmental Laws with respect to the Telesite
Business, all of which are listed on Schedule 5.17;
(b) The Telesite Assets and the Telesite Excluded Real Property
are free of asbestos containing materials ("ACM's"), and are free of
Hazardous Materials except for current inventories of gasoline, diesel
fuel, fuel oil greases, motor oils and other lubricants. As used in
this Agreement, "Hazardous Material" means and includes asbestos,
ACM's, polychlorinated biphenyls, lead-based paints, any petroleum
product, petroleum by-products (including but not limited to crude oil
or any fraction of it, diesel oil, fuel oil, gasoline, lubrication oil,
oil refuse, oil mixed with other wastes, oil sludge and all other
liquid hydrocarbons, regardless of specific gravity), natural or
synthetic gas products and/or hazardous substance or materials, waste,
pollutant or contaminant, and all other material defined as such in (or
for the purposes of) the Environmental Laws.
(c) Telesite and its predecessors in interest have operated the
Telesite Assets and the Telesite Excluded Real Property, and have at
all times received, handled, used, stored, treated and disposed of all
Hazardous Materials, in strict compliance with all Environmental Laws.
Telesite has not transported or arranged for the transport of any
Hazardous Materials to or from any real property included in the
Telesite Leased Real Property or the Telesite Excluded Real Property.
(d) No Hazardous Material has been released, deposited,
discharged, placed, disposed of or originated on or under the Telesite
Assets, nor has any real estate included in the Telesite Leased Real
Property or the Telesite Excluded Real Property been used at any time
by any person as a landfill or a waste disposal site.
(e) There is no electrical equipment, including transformers,
containing polychlorinated biphenyls ("PCB's") included in the Telesite
Assets or the Telesite Excluded Real Property.
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(f) There are no monitoring xxxxx on any real property included
in the Leased Real Property or the Telesite Excluded Real Property for
monitoring any Hazardous Materials.
(g) There are no underground or above-ground tanks situated on
the real property included in the Telesite Leased Real Property or the
Telesite Excluded Real Property.
(h) There are no liens on any of the Telesite Assets or the
Telesite Excluded Real Property resulting from any cleanup or proposed
cleanup under the Environmental Laws.
(i) No part of the real estate included in the Telesite Leased
Real Property or the Telesite Excluded Real Property constitutes
"wetlands" as defined under any Environmental Law or other law or
regulation.
(j) No Environmental Law, and to the best of Telesite's
knowledge, no proposed Environmental Law, imposes standards or
requirements, or will impose standards or requirements, which will
require the owner or operator of the Telesite Business to engage in any
work, repairs, construction or capital expenditures in excess of $5,000
in the aggregate in order to comply with such Environmental Law or such
proposed Environmental Law.
(k) No notices of any violation, inquiries or requests for
information relating to any of the matters referred to in Subsections
(a) through (k) above relating to the Telesite Assets, the Telesite
Leased Real Property or the Telesite Excluded Real Property or their
use have been received by Telesite or Metrosite.
5.20 Insurance. Schedule 5.20 describes all insurance policies
maintained by Telesite with respect to the Telesite Business and the Telesite
Assets. Such policies are valid, binding and enforceable in accordance with
their terms, are in full force and effect, and all premiums due thereon have
been paid and will be paid through the Effective Time. Such policies provide
adequate coverage for all risks customarily insured against by insured of
similar size and in similar business. Telesite has not been refused any
insurance by any insurance carrier during the past two years.
5.21 Labor and Employment Matters. With respect to employment matters:
(a) No employees of Telesite who work in the Telesite Business
are or have been represented by a union or other labor organization or
covered by any collective bargaining agreement, and to the best knowledge of
Telesite, no union is attempting to organize any such employees.
(b) There is no labor strike, dispute, slowdown, stoppage or
similar labor difficulty pending or, to the best knowledge of Telesite,
threatened against or affecting Telesite
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or the Telesite Business, nor have there been any such events pending or
threatened since December 31, 1996.
(c) Telesite is in compliance with all federal, state and local
laws and regulations respecting employment and employment practices, terms
and conditions of employment and wages and hours, and there is no unfair
labor practice complaint against Telesite pending or, to the best knowledge
of Telesite, threatened.
(d) No representations have been made by Telesite or its
employees or agents to employees of Seller with respect to ISD's intentions
to employ, or not to employ, Telesite's employees or with respect to the
conditions of any such employment.
5.22 Employees; Compensation; Benefit Plans.
(a) Compensation. Telesite has previously given to ISD a
complete and correct list of the name, age, position, rate of compensation
and any incentive compensation arrangements, bonuses or commissions or fringe
or other benefits, whether payable in cash or in kind, of each current
employee, director, independent contractor, consultant and agent of Telesite
who is associated with the Telesite Business and each other person to whom
Telesite pays or provides, or has an obligation, agreement (written or
unwritten), policy or practice of paying or providing, retirement, health,
welfare or other benefits of any kind or description whatsoever.
(b) Employee Benefit Plans.
(i) Schedule 5.22 contains an accurate and complete list
of all Plans contributed to, maintained or sponsored by Telesite, to which
Telesite is obligated to contribute or with respect to which Telesite has any
liability or potential liability, whether direct or indirect, including,
without limitation, all Plans contributed to, maintained or sponsored by each
member of the controlled group of companies, within the meaning of Sections
414(b), 414(c), and 414(m) of the Code, of which Telesite is a member to the
extent Telesite has any potential liability with respect to such Plans. For
purposes of this Agreement, the term "Plans" shall mean: (A) employee benefit
plans as defined in Section 3(3) of the ERISA, whether or not funded and
whether or not terminated, (B) employment agreements, and (C) personnel
policies or fringe benefit plans, policies, programs and arrangements,
whether or not subject to ERISA, whether or not funded, and whether or not
terminated, including without limitation, stock bonus, deferred compensation,
pension, severance, bonus, vacation, travel, incentive, and health,
disability and welfare plans.
(ii) Except as disclosed in Schedule 5.22, Telesite does
not contribute to, has no obligation to contribute to or otherwise has no
liability or potential liability with respect to (A) any Multiemployer Plan
(as such term is defined in Section 3(37) of ERISA), (B) any Plan of the type
described in Sections 4063 and 4064 of ERISA or in Section 413 of the Code
(and regulations promulgated thereunder), or (C) any plan which provides
health, life insurance, accident or other "welfare-type" benefits to current
or future retirees or current former
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employees, their spouses or dependents, other than in accordance with Section
4980B of the Code or applicable state continuation coverage law.
(iii) Except as disclosed in Schedule 5.22, none of the
Plans obligates Telesite to pay separation, severance, termination or
similar-type benefits solely as a result of any transaction contemplated by
this Agreement or solely as a result of a "change in control," as such term
is used in Section 280G of the Code (and regulations promulgated thereunder).
(iv) Each Plan and all related trusts, insurance
contracts, and funds have been maintained, funded and administered in
compliance in all respects with all applicable laws and regulations,
including but not limited to ERISA and the Code. None of Telesite, any
trustee or administrator of any Plan, or any other person has engaged in any
transaction with respect to any Plan which could subject Telesite, or any
trustee or administrator of any Plan, or any party dealing with any Plan, or
ISD to any tax or penalty imposed by ERISA or the Code. No actions, suits,
claims, complaints, charges, proceedings, hearings, investigations, or
demands with respect to the Plans (other than routine claims for benefits)
are pending or threatened, and Telesite has no knowledge of any facts which
could give rise to or be expected to give rise to any actions, suits, claims,
complaints, charges, proceedings, hearings, investigations, or demands. No
Plan that is subject to the funding requirements of Section 412 of the Code
or Section 302 of ERISA has incurred any "accumulated funding deficiency" as
such term is defined in such Sections of ERISA and the Code, whether or not
waived. No liability to PBGC (except for routine payment of premiums) has
been or is expected to be incurred with respect to any Plan that is subject
to Title IV of ERISA, no reportable event (as such term is defined in Section
4043 of ERISA) has occurred with respect to any such Plan, and the PBGC has
not commenced or threatened the termination of any Plan. None of the assets
of Telesite is the subject of any lien arising under Section 302(f) or ERISA
or Section 412(n) of the Code, Telesite has not been required to post any
security pursuant to Section 307 of ERISA or Section 401 (a)(29) of the Code,
and Telesite has no knowledge of any facts which could be expected to give
rise to such lien or such posting of security.
(v) Each Plan that is intended to be qualified under
Section 401(a) of the Code, and each trust (if any) forming a part thereof,
has received a favorable determination letter from the Internal Revenue
Service as to the qualification under the Code of such Plan and the tax
exempt status of such related trust, and nothing has occurred since the date
of such determination letter that could adversely affect the qualification of
such Plan or the tax exempt status of such related trust.
(vi) No underfunded "defined benefit plan" (as such term
is defined in Section 3(35) of ERISA) has been, during the five years
preceding the Closing Date, transferred out of the controlled group of
companies (within the meaning of Sections 414(b), (c) and (m) of the Code) of
which Telesite is a member or was a member during such five-year period.
(vii) As of the Closing Date, the fair market value of the
assets of each Plan that is a defined benefit pension plan equals or exceeds
the present value of all vested and non-vested liabilities thereunder
determined in accordance with applicable PBGC methods,
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factors and assumptions applicable to a defined benefit pension plan
terminating on such date. With respect to each Plan that is subject to the
funding requirements of Section 412 of the Code and Section 302 of ERISA, all
required or recommended contributions for all periods ending prior to or as
of the Closing Date (including periods from the first day of the then-current
plan year to the Closing Date and including all quarterly contributions
required in accordance with Section 412(m) of the Code) shall have been
made. With respect to each other Plan, all required or recommended payments,
premiums, contributions, reimbursements or accruals for all periods ending
prior to or as of the Closing Date shall have been made. No Plan has any
material unfunded liabilities.
(viii) With respect to each Plan, Telesite has
provided ISD with true, complete and correct copies, to the extent
applicable, of (A) all documents pursuant to which the Plans are maintained,
funded and administered, (B) the 1996 annual report (Form 5500 series) filed
with the Internal Revenue Service (with attachments), (C) the 1996 financial
statements, (D) all governmental rulings, determinations, and opinions (and
pending requests for governmental rulings, determinations, and opinions), and
(E) the most recent valuation (but in any case at least one that has been
completed within the last calendar year) of the present and future
obligations under each Plan that provides post-retirement or post-employment
health, life insurance, accident or other "welfare-type" benefits.
5.23 Absence of Certain Changes. Except as described in Schedule
5.23, since March 31, 1997, Telesite has conducted the operations and
business of the Telesite Business only in the ordinary course, and has not:
(a) Suffered any damage, destruction or loss to any asset of
the Telesite Business, whether or not covered by insurance;
(b) Sold, transferred, distributed or otherwise disposed of any
assets used in the operation of the Telesite Business other than the Telesite
Excluded Real Property;
(c) Made or entered into any general wage or salary increase
for its employees as a group;
(d) Declared, made or paid any distribution or dividend to the
Members;
(e) Amended or terminated any contract, lease, license or
commitment relating to the conduct of the Telesite Business or the Telesite
Assets;
(f) Incurred any obligation or liability (whether absolute,
accrued, contingent or otherwise and whether due or to become due) except
normal trade or business obligations incurred in the ordinary course of
business;
(g) Introduced any new method of management, operations or
accounting;
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(h) Suffered any adverse change in the condition (financial or
otherwise), results of operations or business of the Telesite Business or the
Telesite Assets, or any other event or condition of any character that might
reasonably be expected to have an adverse effect on the Telesite Business or
the Telesite Assets; or
(i) Agreed, whether in writing or otherwise, to take any action
described in this Section.
5.24 Product Warranties. There are no continuing or outstanding
warranties applicable to goods or products manufactured or sold by Telesite
except for warranties implied by law, with which all such products are in
conformity.
5.25 Brokers. No finder, broker, agent or other intermediary has
acted for or on behalf of Telesite in connection with the negotiation or
consummation of this Agreement, and there are no claims for any brokerage
commission, finder's fee or similar payment due from Telesite.
5.26 Disclosure. No representation, warranty or statement made by
Telesite in this Agreement, or any document furnished or to be furnished to
ISD pursuant to this Agreement, contains or will contain any untrue statement
of a material fact, or omits or will omit to state any material fact
necessary to make the statements contained herein or therein not misleading.
The fact that Telesite has delivered copies of certain documents to ISD shall
not alone constitute disclosure of facts required to be disclosed on any
Schedule to this Agreement, unless such document is expressly referenced in
such Schedule. Receipt by ISD of such documents and notice of their contents
(other than by reference on a Schedule) shall in no way limit Telesite's
other obligations or ISD's other rights under this Agreement.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES REGARDING METROSITE
The Members, Xxxxxxxx Xxxxxx and Metrosite jointly and severally
represent and warrant to ISD as follows:
6.1 Organization and Good Standing: Governing Documents. Metrosite
is a limited liability company duly organized, validly existing and in good
standing under the laws of the State of Arkansas. Metrosite has all
requisite power and authority to own, operate and lease the Metrosite Assets
and to conduct the operations of the Metrosite Business as presently
conducted. Metrosite is duly qualified to conduct business as a foreign
limited liability company and is in good standing in all jurisdictions in
which the character of the property owned, leased or operated by it or the
nature of the business conducted by it makes such qualification necessary,
and such jurisdictions are listed on Schedule 6.1. Metrosite has previously
delivered to ISD true and complete copies of its Articles of Organization and
Operating Agreement, including all amendments thereto. Except as set forth
on Schedule 6.1, Metrosite does not, directly or indirectly, own or control
or have any capital, equity, partnership, participation or other interest
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in any corporation, partnership, limited liability company, joint venture or
other business association or entity.
6.2 Authority. Metrosite has all requisite power and authority to
execute and deliver this Agreement and the Metrosite Agreements and to
perform the transactions contemplated hereby and thereby. The execution,
delivery and performance of this Agreement and the Metrosite Agreements have
been duly and validly authorized by all necessary action on the part of
Metrosite, its managers and the Members. This Agreement has been and the
Metrosite Agreements have been, or, with respect to the Metrosite Agreements
to be executed at the Closing, will be duly executed and delivered by
Metrosite and each constitutes or will constitute when executed and delivered
a valid and binding obligation of Metrosite, enforceable against Metrosite in
accordance with its terms.
6.3 No Conflict or Breach. The execution, delivery and performance
of this Agreement does not and will not:
(a) conflict with the Articles of Organization or Operating
Agreement of Metrosite;
(b) violate any law, statute, judgment, order, decree or
regulation of any legislative body, court, administrative agency,
governmental authority or arbitrator applicable to or relating to Metrosite
or the Metrosite Assets;
(c) conflict with, constitute a default under, result in a
breach or acceleration of or, except as set forth on Schedule 6.3, require
notice to or the consent of any third party under any contract, agreement,
commitment, mortgage, note, license or other instrument or obligation to
which Metrosite is party or by which it is bound or by which the Metrosite
Assets are affected; or
(d) result in the creation or imposition of any lien, charge or
encumbrance of any nature whatsoever on any of the Metrosite Assets.
6.4 Consents and Approvals. Schedule 6.4 describes (a) each consent,
approval, authorization, registration or filing with any federal, state or
local judicial or governmental authority or administrative agency and (b)
each consent, approval, authorization of or notice to any other third party,
which is required in connection with the valid execution and delivery of this
Agreement or the consummation of the transactions contemplated herein or
therein (the items described in clauses (a) and (b), collectively, the
"Metrosite Required Consents").
6.5 Financial Statements. Metrosite does not have separate financial
statements. The results of the operations of Metrosite are included in the
Telesite Financial Statements.
6.6 Books and Records. The books and records of Metrosite relating
to the Metrosite Business and the Metrosite Assets are true, accurate and
complete in all material respects.
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6.7 Title to and Sufficiency of Assets. Metrosite has good and
marketable title to all of the Metrosite Assets, free and clear of any liens,
encumbrances, claims, security interests, mortgages, restrictions or pledges
of any nature (collectively, "Metrosite Liens"), other than the Metrosite
Liens described on Schedule 6.7, all of which will be removed at or prior to
the Closing. The Metrosite Assets constitute all of the assets, tangible and
intangible, of any nature whatsoever, required to operate the Metrosite
Business in the manner presently operated by Metrosite.
6.8 Leased Real Property. Schedule 6.8 contains a true and correct
description of all real property leased by Metrosite and used or useful in
connection with the Metrosite Business (the "Metrosite Leased Real
Property"). Metrosite has previously delivered to ISD true and complete
copies of each of the leases, including all amendments thereto, for such
leased real property (the "Metrosite Real Property Leases"). Each of the
Metrosite Real Property Leases is valid, binding and enforceable in
accordance with its terms and is in full force and effect, and there are no
offsets or defenses by either landlord or tenant thereunder. There are no
existing defaults, and no events or circumstances have occurred which, with
or without notice of lapse of time or both, would constitute defaults, under
any of the Metrosite Real Property Leases. The execution, delivery and
performance of this Agreement does not and will not, with respect to any such
Metrosite Real Property Lease: (i) permit the landlord to accelerate the rent
or cause the lease terms to be renegotiated (ii) constitute a default
thereunder or (iii) require the consent of the landlord or any third party.
6.9 Tangible Personal Property. Set forth on Schedule 6.9 is a list
of all machinery, equipment, tools, furniture, office equipment, supplies,
materials, vehicles and other items of tangible personal property of every
kind owned by Metrosite and used or useful in connection with the Metrosite
Business (wherever located and whether or not carried on Metrosite's books)
(the "Metrosite Tangible Personal Property"). Each item of Metrosite
Tangible Personal Property, and each item of tangible personal property
leased under the Metrosite Contracts, is in good operating order, condition
and ordinary wear and tear excepted, is suitable for immediate use in the
ordinary course of business of the Metrosite Business, is free from defects,
is merchantable and is of a quality and quantity presently usable in the
ordinary course of business of the Metrosite Business. No item of Metrosite
Tangible Personal Property is in need of repair or replacement other than as
part of routine maintenance in the ordinary course of business.
6.10 Inventory. Set forth on Schedule 6.10 is a list and approximation
of, and the location of, all inventory of the Metrosite Business as of the
date hereof, including without limitation, all finished goods, work in
process, raw materials, spare parts and all other materials and supplies to
be used or consumed in the production of finished goods (the "Metrosite
Inventory"). All items included in the Metrosite Inventory: (i) are in good
condition, not obsolete and nondefective, (ii) are useable or saleable in the
ordinary course of business of the Metrosite Business and at the current
operating profit margins of Metrosite, (iii) are located at the locations
listed on Schedule 6.10 and (iv) have been acquired by Metrosite only in bona
fide transactions entered into in the ordinary course of business.
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6.11 Contracts. Schedule 6.11 lists all contracts, commitments,
agreements (including, without limitation, agreements for the borrowing of
money or the extension of credit, licenses, understandings and obligations)
whether written or oral, to which Metrosite is party or by which Metrosite or
the Metrosite Assets are bound or affected, other than purchase orders in the
ordinary course of business and any other contracts agreements and
commitments that do not extend beyond one (1) year or involve the receipt of
payment of not more than $25,000 (the "Metrosite Contracts"). Metrosite has
delivered to ISD true and complete copies of all written Metrosite Contracts
and true and complete memoranda of all oral Metrosite Contracts, including
any and all amendments and other modifications thereto. Each of the Metrosite
Contracts is valid, binding and enforceable in accordance with its terms and
is in full force and effect. There are no existing defaults, and no events
or circumstances have occurred which, with or without notice or lapse of time
or both, would constitute defaults, under any of the Metrosite Contracts.
The execution, delivery and performance of this Agreement and the Member
Agreements does not and will not, with respect to any Metrosite Contract: (i)
constitute a default thereunder, (ii) require the consent of any person or
party, except for the Required Metrosite Consents or (iii) affect the
continuation, validity and effectiveness thereof or the terms thereof.
6.12 Receivables. All accounts receivable and trade accounts due to
Metrosite in connection with the Metrosite Business (the "Metrosite
Receivables") reflected on the Telesite March 1997 Balance Sheet (less any
such receivable collected since the date of such financial statement) and all
Receivables presently owing and to be owing at the Effective Time, are, and
at the Closing Date will be, legal, valid and binding obligations, and are
collectible in full at face value. All such Metrosite Receivables were
created in the ordinary course of business of the Metrosite Business. There
are no set-offs, counterclaims or disputes asserted with respect to any
Metrosite Receivable, and no discount or allowance from any Metrosite
Receivable has been made or agreed to except discounts for prompt payment
granted in the ordinary course of business and reflected in documents
evidencing such account.
6.13 Intellectual Property. Set forth on Schedule 6.13 is a list of
all of the intellectual property rights that are owned or used by Metrosite
in connection with the Metrosite Business, including the following: (i) all
trademarks, service marks, trade names, logos and other designations and all
registrations (the "Metrosite Marks"), including the date of first use of
each such Metrosite Xxxx, all United States, foreign and state registrations
relating thereto, and a list of all of the goods and services with respect to
which each such Metrosite Xxxx is used, (ii) all copyrighted works and
registrations therefor, (iii) all inventions that are the subject of letters
patent or applications therefor and (iv) all confidential or proprietary
processes, formulas, technical data and other information that is of
commercial value to the Metrosite Business (collectively the "Metrosite
Intellectual Property"). Each of the Metrosite Marks has been in continuous
use since the date of first use set forth in Schedule 6.13, and each of the
Metrosite Marks is now in use in interstate or intrastate commerce as
specified on said Schedule. Metrosite is the record owner of each of the
trademark registrations, copyright registrations and patents listed on such
Schedule, and all required maintenance filings, tax payments, annuities and
maintenance fee payments have been timely completed with respect to each.
Schedule 6.13 sets
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forth the patent number, application number, application date and issue date
with respect to each payment and patent application. Metrosite has not
licensed any of the Metrosite Intellectual Property to any third party, and
no third party has any right to use any of the Metrosite Intellectual
Property. There are no claims or suits challenging Metrosite's ownership or
right to use any of the Metrosite Intellectual Property, or alleging that any
of the Metrosite Intellectual Property infringes any rights of any third
parties, nor does there exist any basis therefor.
6.14 Major Suppliers and Customers. Each supplier of goods or
services to the Metrosite Business to whom Metrosite paid more than $100,000,
in the aggregate, during the 12 months ended on March 31, 1997, and each
customer of the Metrosite Business who paid Metrosite more than $1,000,000,
in the aggregate, during such period, is listed on Schedule 6.14, which
Schedule reflects in each case the amounts so paid. Except as set forth on
Schedule 6.14, there exits no actual or threatened termination, cancellation
or limitation of, or any adverse modification or change in, the business
relationship of Metrosite or its business with any customer or any group of
customers whose purchases are individually or in the aggregate material to
the business of Metrosite, or with any material supplier, and there exists no
present condition or state of facts or circumstances that would materially
affect the assets, business properties, operations or financial condition of
Metrosite to prevent Metrosite from conducting the Metrosite Business after
the consummation of the transactions contemplated by this Agreement, in
substantially the same manner in which it has heretofore been conducted.
Metrosite has no reason to believe that the execution, delivery and
performance of this Agreement will have any adverse effect on the business
relationship of any such suppliers or customers with the Metrosite Business.
6.15 Litigation. Except as set forth on Schedule 6.15, there are no
Claims pending, or to the best knowledge of Metrosite, threatened, against
Metrosite, its operations or the Metrosite Business. No Claims have been
brought within the last two years against Metrosite or the Metrosite
Business, or affecting the Metrosite Assets, or relating to Metrosite's
ownership, use or operation of the Metrosite Assets. There are no facts or
circumstances which could serve as the basis for any Claim against Metrosite
involving the Metrosite Business or the Metrosite Assets, or, by virtue of
the execution, delivery and performance of this Agreement, against ISD.
6.16 Compliance with Decrees and Laws. There is no outstanding or, to
the best knowledge of Metrosite, threatened, any order, writ, injunction or
decree of any court, governmental agency or arbitration tribunal against or
involving Metrosite, the Metrosite Business or the Metrosite Assets.
Metrosite is currently, and has been at all times in full compliance with all
Rules of federal, state, local and foreign agencies and authorities
applicable to the business, properties and operations of the Metrosite
Business (including, without limitation, those relating to antitrust and
trade regulation, civil rights, labor and discrimination, safety and
health). To the best knowledge of Metrosite, there has been no allegation of
any violation of any such Rules, and no investigation or review by any
federal, state or local body or agency is pending, threatened or planned with
respect to Metrosite, the Metrosite Business or the Metrosite Assets.
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6.17 Permits. Metrosite has obtained all permits, authorizations,
certificates, approvals, licenses, exemptions and classifications required
for the conduct of the Metrosite Business and the ownership and operation of
the Metrosite Assets (the "Metrosite Permits"). Metrosite is not in
violation of any of the Metrosite Permits, and no proceedings are pending or,
to the best knowledge of Metrosite, threatened, to revoke or limit any
Metrosite Permit.
6.18 Taxes. Metrosite has not filed, and has not been required to
file with any United States, state and local governmental agencies or with
any foreign countries and political subdivisions thereof, any tax returns,
reports and declarations of estimated tax (the "Metrosite Tax Returns")
required to be filed before the Effective Time. All Taxes due from or
claimed to be due by each taxing authority in respect of Metrosite, the
Metrosite Business or the Metrosite Assets, for all periods through the date
of this Agreement, have been, and for all periods through the Effective Time
will be, fully paid or adequately provided for in the Telesite March 1997
Balance Sheet. Metrosite has timely made and will timely make all
withholdings of tax required to be made under all applicable United States,
state and local tax regulations, and such withholdings have either been paid
or will be paid to the respective governmental agencies or set aside in
accounts for such purpose or accrued, reserved against and entered upon the
books of Metrosite or Telesite. Metrosite is, and since its formation has
been, properly classified as a "partnership" for Federal income tax purposes
rather than as an association taxable as a corporation, and will maintain
such classification through the Effective Date.
6.19 Environmental Protection. The existing and prior uses of the
Metrosite Assets and the operation of the Metrosite Business comply with, and
at all times have complied with, and Metrosite is not in violation of, and
have not violated, in connection with the ownership, use, maintenance or
operation of the Metrosite Assets, any Environmental Laws. Specifically, but
not in limitation of the foregoing:
(a) Metrosite has obtained and is in full compliance with the
terms and provisions of all licenses and permits necessary for
compliance with the Environmental Laws with respect to the Metrosite
Business, all of which are listed on Schedule 6.17;
(b) The Metrosite Assets are free of ACM's, and are free of
Hazardous Materials except for current inventories of gasoline, diesel
fuel, fuel oil greases, motor oils and other lubricants.
(c) Metrosite and its predecessors in interest have operated
the Metrosite Assets have at all times received, handled, used, stored,
treated and disposed of all Hazardous Materials, in strict compliance
with all Environmental Laws. Metrosite has not transported or arranged
for the transport of any Hazardous Materials to or from any real
property included in the Metrosite Leased Real Property.
(d) No Hazardous Material has been released, deposited,
discharged, placed, disposed of or originated on or under the Metrosite
Assets, nor has any real estate included in the Metrosite Leased Real
Property been used at any time by any person as a landfill or a waste
disposal site.
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(e) There is no electrical equipment, including transformers,
containing PCB's included in the Metrosite Assets or the Metrosite
Leased Real Property.
(f) There are no monitoring xxxxx on any real property included
in the Metrosite Leased Real Property for monitoring any Hazardous
Materials.
(g) There are no underground or above-ground tanks situated on
the real property included in the Metrosite Leased Real Property.
(h) There are no liens on any of the Metrosite Assets resulting
from any cleanup or proposed cleanup under the Environmental Laws.
(i) No part of the real estate included in the Metrosite Leased
Real Property constitutes "wetlands" as defined under any Environmental
Law or other law or regulation.
(j) No Environmental Law, and to the best of Metrosite's
knowledge, no proposed Environmental Law, imposes standards or
requirements, or will impose standards or requirements, which will
require the owner or operator of the Metrosite Business to engage in
any work, repairs, construction or capital expenditures in excess of
$5,000 in the aggregate in order to comply with such Environmental Law
or such proposed Environmental Law.
(k) No notices of any violation, inquiries or requests for
information relating to any of the matters referred to in Subsections
(a) through (k) above relating to the Metrosite Assets or the Metrosite
Leased Real Property or their use have been received by Metrosite or
Telesite.
6.20 Insurance. Schedule 6.20 describes all insurance policies
maintained by Metrosite with respect to the Metrosite Business and the
Metrosite Assets. Such policies are valid, binding and enforceable in
accordance with their terms, are in full force and effect, and all premiums
due thereon have been paid and will be paid through the Effective Time. Such
policies provide adequate coverage for all risks customarily insured against
by insured of similar size and in similar business. Metrosite has not been
refused any insurance by any insurance carrier during the past two years.
6.21 Labor and Employment Matters. With respect to employment matters:
(a) No employees of Metrosite who work in the Metrosite
Business are or have been represented by a union or other labor organization
or covered by any collective bargaining agreement, and to the best knowledge
of Metrosite, no union is attempting to organize any such employees.
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(b) There is no labor strike, dispute, slowdown, stoppage or
similar labor difficulty pending or, to the best knowledge of Metrosite,
threatened against or affecting Metrosite or the Metrosite Business, nor have
there been any such events pending or threatened since December 31, 1996.
(c) Metrosite is in compliance with all federal, state and
local laws and regulations respecting employment and employment practices,
terms and conditions of employment and wages and hours, and there is no
unfair labor practice complaint against Metrosite pending or, to the best
knowledge of Metrosite, threatened.
(d) No representations have been made by Metrosite or its
employees or agents to employees of Seller with respect to ISD's intentions
to employ, or not to employ, Metrosite's employees or with respect to the
conditions of any such employment.
6.22 Employees; Compensation; Benefit Plans.
(a) Compensation. Metrosite has previously given to ISD a
complete and correct list of the name, age, position, rate of compensation
and any incentive compensation arrangements, bonuses or commissions or fringe
or other benefits, whether payable in cash or in kind, of each current
employee, director, independent contractor, consultant and agent of Metrosite
who is associated with the Metrosite Business and each other person to whom
Metrosite pays or provides, or has an obligation, agreement (written or
unwritten), policy or practice of paying or providing, retirement, health,
welfare or other benefits of any kind or description whatsoever.
(b) Employee Benefit Plans.
(i) Schedule 6.22 contains an accurate and complete list
of all Plans contributed to, maintained or sponsored by Metrosite, to which
Metrosite is obligated to contribute or with respect to which Metrosite has
any liability or potential liability, whether direct or indirect, including,
without limitation, all Metrosite Plans contributed to, maintained or
sponsored by each member of the controlled group of companies, within the
meaning of Sections 414(b), 414(c), and 414(m) of the Code, of which
Metrosite is a member to the extent Metrosite has any potential liability
with respect to such Plans.
(ii) Except as disclosed in Schedule 6.22, Metrosite does
not contribute to, has no obligation to contribute to or otherwise has no
liability or potential liability with respect to (A) any Multiemployer Plan
(as such term is defined in Section 3(37) of ERISA), (B) any Plan of the type
described in Sections 4063 and 4064 of ERISA or in Section 413 of the Code
(and regulations promulgated thereunder), or (C) any plan which provides
health, life insurance, accident or other "welfare-type" benefits to current
or future retirees or current former employees, their spouses or dependents,
other than in accordance with Section 4980B of the Code or applicable state
continuation coverage law.
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(iii) Except as disclosed in Schedule 6.22, none of the
Plans obligates Metrosite to pay separation, severance, termination or
similar-type benefits solely as a result of any transaction contemplated by
this Agreement or solely as a result of a "change in control," as such term
is used in Section 280G of the Code (and regulations promulgated thereunder).
(iv) Each Plan and all related trusts, insurance
contracts, and funds have been maintained, funded and administered in
compliance in all respects with all applicable laws and regulations,
including but not limited to ERISA and the Code. None of Metrosite, any
trustee or administrator of any Plan, or any other person has engaged in any
transaction with respect to any Plan which could subject Metrosite, or any
trustee or administrator of any Plan, or any party dealing with any Plan, or
ISD to any tax or penalty imposed by ERISA or the Code. No actions, suits,
claims, complaints, charges, proceedings, hearings, investigations, or
demands with respect to the Plans (other than routine claims for benefits)
are pending or threatened, and Metrosite has no knowledge of any facts which
could give rise to or be expected to give rise to any actions, suits, claims,
complaints, charges, proceedings, hearings, investigations, or demands. No
Plan that is subject to the funding requirements of Section 412 of the Code
or Section 302 of ERISA has incurred any "accumulated funding deficiency" as
such term is defined in such Sections of ERISA and the Code, whether or not
waived. No liability to PBGC (except for routine payment of premiums) has
been or is expected to be incurred with respect to any Plan that is subject
to Title IV of ERISA, no reportable event (as such term is defined in Section
4043 of ERISA) has occurred with respect to any such Plan, and the PBGC has
not commenced or threatened the termination of any Plan. None of the assets
of Metrosite is the subject of any lien arising under Section 302(f) or ERISA
or Section 412(n) of the Code, Metrosite has not been required to post any
security pursuant to Section 307 of ERISA or Section 401 (a)(29) of the Code,
and Metrosite has no knowledge of any facts which could be expected to give
rise to such lien or such posting of security.
(v) Each Plan that is intended to be qualified under
Section 401(a) of the Code, and each trust (if any) forming a part thereof,
has received a favorable determination letter from the Internal Revenue
Service as to the qualification under the Code of such Plan and the tax
exempt status of such related trust, and nothing has occurred since the date
of such determination letter that could adversely affect the qualification of
such Plan or the tax exempt status of such related trust.
(vi) No underfunded "defined benefit plan" (as such term
is defined in Section 3(35) of ERISA) has been, during the five years
preceding the Closing Date, transferred out of the controlled group of
companies (within the meaning of Sections 414(b), (c) and (m) of the Code) of
which Metrosite is a member or was a member during such five-year period.
(vii) As of the Closing Date, the fair market value of the
assets of each Plan that is a defined benefit pension plan equals or exceeds
the present value of all vested and non-vested liabilities thereunder
determined in accordance with applicable PBGC methods, factors and
assumptions applicable to a defined benefit pension plan terminating on such
date. With respect to each Plan that is subject to the funding requirements
of Section 412 of the Code and Section 302 of ERISA, all required or
recommended contributions for all periods ending
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prior to or as of the Closing Date (including periods from the first day of
the then-current plan year to the Closing Date and including all quarterly
contributions required in accordance with Section 412(m) of the Code) shall
have been made. With respect to each other Plan, all required or recommended
payments, premiums, contributions, reimbursements or accruals for all periods
ending prior to or as of the Closing Date shall have been made. No Plan has
any material unfunded liabilities.
(viii) With respect to each Plan, Metrosite has
provided ISD with true, complete and correct copies, to the extent
applicable, of (A) all documents pursuant to which the Plans are maintained,
funded and administered, (B) the two most recent annual reports (Form 5500
series) filed with the Internal Revenue Service (with attachments), (C) the
two most recent actuarial reports, (D) the two most recent financial
statements, (E) all governmental rulings, determinations, and opinions (and
pending requests for governmental rulings, determinations, and opinions), and
(F) the most recent valuation (but in any case at least one that has been
completed within the last calendar year) of the present and future
obligations under each Plan that provides post-retirement or post-employment
health, life insurance, accident or other "welfare-type" benefits.
6.23 Absence of Certain Changes. Except as described in Schedule
6.23, since March 31, 1997, Metrosite has conducted the operations and
business of the Metrosite Business only in the ordinary course, and has not:
(a) Suffered any damage, destruction or loss to any asset of
the Metrosite Business, whether or not covered by insurance;
(b) Sold, transferred, distributed or otherwise disposed of any
assets used in the operation of the Metrosite Business;
(c) Made or entered into any general wage or salary increase
for its employees as a group;
(d) Declared, made or paid any distribution or dividend to the
Members;
(e) Amended or terminated any contract, lease, license or
commitment relating to the conduct of the Metrosite Business or the Metrosite
Assets;
(f) Incurred any obligation or liability (whether absolute,
accrued, contingent or otherwise and whether due or to become due) except
normal trade or business obligations incurred in the ordinary course of
business;
(g) Introduced any new method of management, operations or
accounting;
(h) Suffered any adverse change in the condition (financial or
otherwise), results of operations or business of the Metrosite Business or
the Metrosite Assets, or any other
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event or condition of any character that might reasonably be expected to have
an adverse effect on the Metrosite Business or the Metrosite Assets; or
(i) Agreed, whether in writing or otherwise, to take any action
described in this Section.
6.24 Product Warranties. There are no continuing or outstanding
warranties applicable to goods or products manufactured or sold by Metrosite
except for warranties implied by law, with which all such products are in
conformity.
6.25 Brokers. No finder, broker, agent or other intermediary has
acted for or on behalf of Metrosite in connection with the negotiation or
consummation of this Agreement, and there are no claims for any brokerage
commission, finder's fee or similar payment due from Metrosite.
6.26 Disclosure. No representation, warranty or statement made by
Metrosite in this Agreement, or any document furnished or to be furnished to
ISD pursuant to this Agreement, contains or will contain any untrue statement
of a material fact, or omits or will omit to state any material fact
necessary to make the statements contained herein or therein not misleading.
The fact that Metrosite has delivered copies of certain documents to ISD
shall not alone constitute disclosure of facts required to be disclosed on
any Schedule to this Agreement, unless such document is expressly referenced
in such Schedule. Receipt by ISD of such documents and notice of their
contents (other than by reference on a Schedule) shall in no way limit
Metrosite's other obligations or ISD's other rights under this Agreement.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF ISD
ISD represents and warrants to the Members, Telesite and Metrosite as
follows:
7.1 Organization and Good Standing. ISD is a corporation duly
organized, validly existing and in good standing under the laws of the State
of Delaware. Prior to the Effective date, ISD has not, and will not, conduct
any significant activities other than those incident to its formation and the
consummation of the transactions contemplated by this Agreement.
7.2 Authority. ISD has all requisite power and authority to execute,
deliver and perform this Agreement and the ISD Agreements and transactions
contemplated hereby and thereby. The execution, delivery and performance of
this Agreement and the ISD Agreements, and the consummation of the
transactions contemplated hereby and thereby, have been duly and validly
authorized by all necessary corporate action on the part of ISD. This
Agreement and the ISD Agreements, have been, or, with respect to ISD
Agreements to be executed at the Closing, will be duly executed and delivered
by ISD and each constitutes, or will constitute when executed and delivered,
a valid and binding obligation of ISD, enforceable against ISD in accordance
with its terms.
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7.3 Capital Stock and Shares of ISD Stock. The shares of ISD Common
Stock to be issued to the Members at the Closing will, upon issuance, be duly
authorized and validly issued, fully paid and nonassessable. Except as
provided in the Stockholders' Agreement and the Stock Restriction Agreement,
the shares of ISD Stock to be issued to the Members at the Closing will, upon
issuance, be free and clear of any liens, encumbrances, claims, security
interests, restrictions or pledges of any nature.
The authorized capital stock of ISD (which has the rights and
preferences set forth on the Certificate of Amendment to the Certificate of
Incorporation of ISD which will be filed with the Delaware Secretary of State
at the Closing, a true and correct copy of which is attached as Schedule
7.3(a) (the "Certificate of Amendment")), after giving effect to the issuance
of the shares of ISD Common Stock to the Members and the transactions
contemplated by the Whitney and Kitty Hawk contributions and transfers and
the US Towers contribution and transfer, consists of 12,000,000 shares of ISD
Common Stock, of which 1,340,517 shares are issued and outstanding, and
5,680,000 shares of preferred stock, par value $0.001, of ISD (the "Preferred
Stock"), 5,680,000 shares of which have been designated as 8% Series A
Cumulative Convertible Redeemable Preferred Stock, par value $0.001 per share
(the "Series A Stock") of which 3,462,830 shares (the "Shares") are issued
and outstanding. After giving effect to the issuance of the shares of ISD
Common Stock to the Members and the transactions contemplated by the Whitney
and Kitty Hawk contributions and transfers and the US Towers contribution and
transfer, (a) 3,462,830 shares of Common Stock have been reserved by
appropriate corporate action for issuance upon conversion of the Shares, (b)
2,217,170 shares of Series A Stock have been reserved for issuance, which
shares may be issued by ISD, at its election, as payment-in-kind dividends on
the Series A Stock, in accordance with the terms of the Certificate of
Amendment, (c) 2,217,170 shares of Common Stock have been reserved for
issuance upon conversion of the Series A Stock described in clause (b)
hereof, (d) 967,700 shares of Common Stock have been reserved for issuance
upon the exercise of stock options issuable under one or more stock option
plans of ISD, which plans shall have been approved by the Board of Directors
of ISD, and (e) 150,000 shares of Common Stock have been reserved for
issuance upon the exercise of the ISD Warrant.
7.4 No Conflict or Breach. The execution, delivery and performance
of this Agreement and the ISD Agreements do not and will not: (a) conflict
with or constitute a violation of the Certificate of Incorporation or Bylaws
of ISD or (b) conflict with or constitute a violation of any statute,
judgment, order, decree or regulation of any court, administrative agency,
governmental authority or arbitrator applicable to or relating to ISD.
7.5 Governmental Approvals. No consent, approval, authorization,
registration or filing with any federal, state or local judicial or
governmental authority or administrative agency is required in connection
with the valid execution and delivery by ISD of this Agreement and the ISD
Agreements or the consummation by ISD of the transactions contemplated herein
or therein.
7.6 Brokers. No finder, broker, agent or other intermediary has
acted for or on behalf of ISD in connection with the negotiation or
consummation of this Agreement, and there are no claims for any brokerage
commission, finder's fee or similar payment due from ISD.
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7.7 Due Diligence Review. ISD has had an opportunity to conduct such
due diligence and other investigations concerning Telesite, Metrosite and
their respective businesses and assets as it deemed necessary in connection
with the consummation of the transactions contemplated hereunder. In
connection with such examination, ISD, its representatives and advisors, were
given unlimited access to Telesite, Metrosite, their assets, books and
records and access to key employees and had an opportunity to ask such
questions and request information. To that end, ISD acknowledges that
Telesite and Metrosite supplied all such requested information.
ARTICLE VIII
COVENANTS OF MEMBERS, XXXXXXXX XXXXXX, TELESITE AND METROSITE
The Members, Xxxxxxxx Xxxxxx, Telesite and Metrosite covenant and agree
with ISD as follows:
8.1 Conduct of Business. Between the date of this Agreement and the
Effective Time, the Members, Telesite and Metrosite shall except as otherwise
specifically consented to in writing by ISD:
(a) Conduct the operations of the Telesite Business and the
Metrosite Business in the normal and customary manner in the ordinary course
of business;
(b) Maintain and keep the tangible Telesite Assets and the
Metrosite Assets, and any tangible assets leased under leases by Telesite or
Metrosite, in good operating order, repair and condition ordinary wear and
tear excepted;
(c) Keep in full force and effect the insurance described in
Sections 5.20 and 6.20;
(d) Perform all of its obligations under all Telesite Contracts
and Metrosite Contracts, Telesite Real Property Leases and Metrosite Real
Property Leases, and not amend, alter or modify any provision thereof;
(e) Use its best efforts to preserve Telesite's and Metrosite's
organization intact and maintain their relationships with their employees,
suppliers and customers;
(f) Promptly advise ISD of any adverse change in the condition
(financial or otherwise) of the Telesite Business, the Telesite Assets, the
Metrosite Business or the Metrosite Assets;
(g) Promptly advise ISD of the occurrence of any event or
circumstance which affects the consummation of the transactions contemplated
by this Agreement or which, if in existence on the date of this Agreement,
would have been required to have been disclosed in a Schedule to this
Agreement;
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(h) Not create or permit to exist any security interest,
mortgage, pledge, lien, charge, encumbrance or adverse claim of any kind or
nature with respect to any of the Telesite Assets or the Metrosite Assets,
except for the Telesite Liens and the Metrosite Liens, all of which will be
removed at or prior to the Closing;
(i) Not sell or dispose of any Telesite Assets or the Metrosite
Assets, except in the ordinary course of business and except that prior to
the Closing Telesite will transfer the Telesite Excluded Real Estate to the
Partnership;
(j) Promptly advise ISD of any change in the list of employees
referred to in Sections 5.21(a) and 6.21(a) or in the compensation payable to
any such employee;
(k) Not declare, make or pay any distribution or dividend to
the Members; and
(l) Not make any capital improvement or expenditure other than
in the ordinary course of business.
8.2 Intellectual Property. Except as provided in Section 8.3 hereof,
the Members, Telesite and Metrosite and their respective shareholders,
partners, members, directors, managers, officers, employees, consultants,
professional representatives and agents (collectively, "Representatives")
will not disclose to any Person the Telesite Intellectual Property or the
Metrosite Intellectual Property.
8.3 Access and Information. The Members, Telesite and Metrosite will
permit ISD and its Representatives full access during normal business hours
to all the properties, assets, books, records, agreements and other documents
of Telesite, the Telesite Assets, Metrosite and the Metrosite Assets. The
Members, Telesite and Metrosite will furnish to ISD and its Representatives
all information concerning Telesite, the Telesite Assets, Metrosite and the
Metrosite Assets as ISD may request. The Members, Telesite, and Metrosite
will permit and facilitate communications between ISD and Telesite's and
Metrosite's suppliers, customers, and other persons having relationships with
the Telesite Business and Metrosite Business.
8.4 No Other Solicitations. Until the earlier of the Closing Date or
the termination of this Agreement, the Members, Telesite and Metrosite and
their respective Representatives will not directly or indirectly initiate
contact with or solicit or encourage any inquiries or proposal from, or
solicit, initiate, encourage or participate in any discussion or negotiations
with, or provide any confidential information to, any corporation,
partnership, person or other entity or group (other than ISD, US Towers and
Whitney and their Representatives) in connection with any possible proposal
regarding a sale of the Telesite Interests or Metrosite Interests, or a sale
of all or a substantial portion of the assets of Telesite or Metrosite, a
merger of Telesite or Metrosite with or into any other corporation, or any
equity transaction similar to any of the foregoing.
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ARTICLE IX
MUTUAL COVENANTS
Each of ISD, the Members, Xxxxxxxx Xxxxxx, Telesite and Metrosite
covenants and agrees with the other as follows:
9.1 Best Efforts. Each of ISD, the Members, Telesite and Metrosite
will use its best efforts to make or obtain all consents, approvals,
authorizations, registrations and filings with all federal, state or local
judicial or governmental authorities or administrative agencies as are
required in connection with the consummation of the transactions contemplated
by this Agreement In addition, each of the Members, Telesite, and Metrosite
will use its best efforts to obtain as promptly as possible all other
Telesite Required Consents and Metrosite Required Consents.
9.2 Confidentiality. In recognition of the confidential nature of
certain of the information which will be provided to any party by the other
parties, each of ISD, the Members, Telesite and Metrosite agrees to retain in
confidence, and to require its Representatives to retain in confidence all
information transmitted or disclosed to it by any other party, and further
agrees that it will not use for its own benefit and will not use or disclose
to any third party, or permit the use or disclosure to any third party of,
any information obtained from or revealed by any other party, except that
each of ISD, the Members, Telesite and Metrosite may disclose the information
to those of its Representatives who need the information for the proper
performance of their assigned duties with respect to the consummation of the
transactions contemplated hereby. In making such information available to
its Representatives, each of ISD, the Members, Telesite and Metrosite will
take any and all precautions necessary to ensure that its Representatives use
the information only as permitted hereby. Notwithstanding anything to the
contrary in the foregoing provisions, such information may be disclosed: (a)
where it is necessary to any regulatory authorities or governmental agencies,
(b) if it is required by court order or decree or applicable law, (c) if it
is ascertainable or obtained from public or published information, (d) if it
is received from a third party not known to the recipient to be under an
obligation to keep such information confidential or (e) if the recipient can
demonstrate that such information was in its possession prior to disclosure
thereof in connection with this Agreement. If any party is required to make
disclosure of any such information by operation of law, such disclosing party
will give the other parties prior notice of the making of such disclosure and
will use all reasonable efforts to afford such other parties an opportunity
to contest the making of such disclosure. In the event that the Closing does
not occur, each of ISD, the Members, Telesite and Metrosite will immediately
deliver, or cause to be delivered, to the other (without retaining any copies
thereof) any and all documents, statements or other written information
obtained from the other that contain confidential information.
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ARTICLE X
CONDITIONS PRECEDENT TO ISD's OBLIGATIONS
The obligations of ISD to consummate the transactions contemplated by
this Agreement are subject to the satisfaction of the following conditions on
or before the Closing Date, unless specifically waived in writing by ISD
prior to the Closing Date:
10.1 Representations and Warranties. The representations and
warranties of each of the Members, Xxxxxxxx Xxxxxx, Telesite and Metrosite
contained in this Agreement shall have been true and correct on the date of
this Agreement and shall be true and correct on the Closing Date as though
made on and as of the Closing Date.
10.2 Compliance with Covenants. Each of the Members, Xxxxxxxx Xxxxxx,
Telesite and Metrosite shall have duly performed and complied with all
covenants, agreements and obligations required by this Agreement to be
performed or complied with by it on or prior to the Closing.
10.3 Absence of Litigation. No action or proceeding shall be pending
or, in the reasonable opinion of ISD, threatened by or before any court or
other governmental body or agency seeking to restrain, prohibit or invalidate
the transactions contemplated by this Agreement or which would adversely
affect the right of ISD to operate or control the Telesite Business or the
Metrosite Business after the Closing Date.
10.4 Absence of Changes. Between the date of this Agreement and the
Closing, no material adverse change shall have occurred in the business,
operations or financial or other condition of the Telesite Business, the
Metrosite Business, the Telesite Assets or the Metrosite Assets, nor shall
there have occurred any casualty loss or destruction of, or damage to, any of
the Telesite Assets or the Metrosite Assets.
10.5 Consents and Approvals. All: (a) Telesite Consents and Metrosite
Consents, (b) licenses, (c) other orders or notifications of, or
registrations, declarations or filings with, or expiration of waiting periods
imposed by, any applicable governmental or judicial authority and (d)
consents, approvals, authorizations or notifications of any other third
parties, all as required in connection with consummation of the transactions
contemplated by this Agreement, shall have been made or obtained or shall
have occurred.
10.6 Removal of Liens. All Telesite Liens and Metrosite Liens, other
than the Permitted Telesite Liens, shall have been removed, and the Members,
Telesite and Metrosite shall have provided evidence satisfactory to ISD of
such removal.
10.7 Whitney and Kitty Hawk Contribution and Transfer. ISD, Whitney
and Kitty Hawk shall have simultaneously consummated Tranche A of Whitney's
and Xxxxx Xxxx'x contribution and transfer to ISD pursuant to Section 351 of
the Code and in accordance with the Whitney Letter of Intent and such other
agreements between Whitney and Kitty Hawk.
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10.8 US Towers Contribution and Transfer. Xxxxx and Long shall have
simultaneously contributed their shares of capital stock of US Towers to ISD
solely in exchange for shares of ISD Common Stock pursuant to Section 351 of
the Code and upon such terms and conditions as may be acceptable to Xxxxx and
Long and ISD in their sole discretion.
10.9 Stockholders' Agreement. Each of the Members shall have executed
and delivered the Stockholders' Agreement.
10.10 Real Estate Lease. Telesite and the Partnership shall have
executed and delivered the Real Estate Lease.
10.11 Employment Agreements. ISD and Xxxxxx and Telesite and Xxxxx
Xxxx shall have executed and delivered to the Executive Employment Agreement
in the form attached hereto as Exhibit G and the Employment Agreement in the
form attached hereto as Exhibit H, respectively.
10.12 Assumption of Indebtedness. Finely shall have, in a form
satisfactory to ISD: (a) assumed Telesite's existing construction loan from
Merchantile Bank of Arkansas (the "Merchantile Loan"); (b) obtained a full
release of Telesite, of all of its obligations under the Merchantile Loan;
and (c) obtained a full release of Telesite's $100,000 Certificate of Deposit
that is being held as security for the Merchantile Loan.
10.13 Legal Opinion. ISD shall have received from Friday, Xxxxxxxx &
Xxxxx, counsel to the Members, Telesite and Metrosite, an opinion, dated the
Closing Date, in the form of Exhibit I.
10.14 Stock Restriction Agreement. The Partnership shall have executed
and delivered the Stock Restriction Agreement.
10.15 Xxxxxxx'x Commitment. Telesite shall have received a commitment,
in a form and upon terms and conditions satisfactory to ISD, to extend
Telesite's existing line of credit with Xxxxxxx'x National Bank of Arkansas
until August 31, 1997 (the "Xxxxxxx'x Line of Credit").
10.16 PCX Settlement and Release. US Towers shall have entered into a
Release and Settlement Agreement, in a form and upon terms and conditions
satisfactory to ISD, with PCX releasing US Towers with respect to the PCX
tower business corporate opportunity.
10.17 Exchange of UST Warrant. PCX shall have simultaneously exchanged
the UST Warrant for the ISD Warrant.
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ARTICLE XI
CONDITIONS PRECEDENT TO MEMBER'S, XXXXXXXX XXXXXX'X,
TELESITE'S, AND METROSITE'S OBLIGATIONS
The obligations of the Members, Xxxxxxxx Xxxxxx, Telesite and Metrosite
to consummate the transaction contemplated by this Agreement are subject to
the satisfaction of each of the following conditions on or before the Closing
Date, unless specifically waived in writing by the Members, Telesite and
Metrosite prior to the Closing:
11.1 Representations and Warranties. The representations and
warranties of ISD contained in this Agreement shall have been true and
correct on the date of this Agreement, and shall be true and correct on the
Closing Date as through made on and as of the Closing Date.
11.2 Compliance with Covenants. ISD shall have duly performed and
complied with all covenants, agreements and obligations required by this
Agreement to be performed or complied with by it on or before the Closing
Date.
11.3 Absence of Litigation. No action or proceeding shall be pending
by or before any court or other governmental body or agency seeking to
restrain, prohibit or invalidate the transactions contemplated by this
Agreement.
11.4 Consents and Approvals. All Telesite Required Consents and
Metrosite Required Consents shall have been obtained prior to or at the
Closing.
11.5 Whitney and Kitty Hawk Contribution and Transfer. ISD, Whitney
and Kitty Hawk shall have simultaneously consummated Tranche A of Whitney's
and Xxxxx Xxxx'x contribution and transfer to ISD pursuant to Section 351 of
the Code and in accordance with the Whitney Letter of Intent and such other
agreements between Whitney and Kitty Hawk.
11.6 US Towers Contribution and Transfer. Xxxxx and Long shall have
simultaneously contributed their shares of capital stock of US Towers to ISD
solely in exchange for shares of ISD Stock pursuant to Section 351 of the
Code and upon such terms and conditions as may be acceptable to Xxxxx and
Long and ISD in their sole discretion.
11.7 Real Estate Lease. Telesite and the Partnership shall have
executed and delivered the Real Estate Lease.
11.8 Employment Agreements. ISD and Xxxxxx and Telesite and Xxxxx
Xxxx shall have executed and delivered the Executive Employment Agreement in
the form attached hereto as Exhibit G and the Employment Agreement in the
form attached hereto as Exhibit H, respectively.
11.9 Legal Opinion. The Members, Telesite and Metrosite shall have
received from Xxxxxxxxx & Xxxxx PLLC, counsel to ISD, an opinion, dated the
Closing Date, in the form of Exhibit J.
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11.10 Exchange of UST Warrant. PCX shall have simultaneously exchanged
the UST Warrant for the ISD Warrant.
ARTICLE XII
CLOSING
12.1 Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of Friday, Xxxxxxxx
& Xxxxx, in Little Rock, Arkansas at 10:00 am., local time, on May 9, 1997,
or such other date as may be mutually agreed upon by the parties hereto;
provided, however, as follows: (a) if one or more conditions to this
Agreement is not satisfied by such date, the party benefiting from such
condition may elect, in its sole discretion, one or more postponements of the
Closing for the purpose of enabling such condition to be satisfied and (b)
notwithstanding the provisions of the preceding clause (a), in no event may
the Closing be postponed beyond May 31, 1997. The date of the Closing is
referred to as the "Closing Date." For the purposes of passage of title and
risk of loss, allocation of expenses, adjustments and other economic or
financial effects of the transactions contemplated hereby, the Closing when
completed shall be deemed to have occurred at 12:01 am., local time, on the
Closing Date (the "Effective Time").
12.2 Deliveries by Members, Xxxxxxxx Xxxxxx, Telesite and Metrosite.
At the Closing, the Members, Xxxxxxxx Xxxxxx, Telesite, and Metrosite shall
deliver or cause to be delivered to ISD the following:
(a) A certificate of the Members and the Presidents of each of
Telesite and Metrosite confirming the satisfaction of the conditions set
forth in Sections 10.1 and 10.2 hereof as to representations, warranties and
covenants of the Members, Telesite and Metrosite and Section 10.4 hereof as
to absence of changes.
(b) A copy of all resolutions of Telesite and Metrosite
authorizing the execution, delivery and performance of this Agreement, and
the consummation of the transactions contemplated herein, accompanied by the
certification of the Secretaries of each of Telesite and Metrosite to the
effect that such resolutions are in full force and effect and have not been
amended, modified or rescinded.
(c) A Good Standing Certificate from the Secretary of State of
Arkansas for each of Telesite and Metrosite.
(d) Evidence of the removal of Telesite Liens and Metrosite
Liens, other than the Permitted Telesite Liens, as described in Section 10.6.
(e) The legal opinion referred to in Section 10.13.
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(f) Evidence of that all Telesite Required Consents and
Metrosite Required Consents have been obtained or satisfied.
(g) Assignments to ISD evidencing the Telesite Interests and
the Metrosite Interests and such documents and instruments as may be required
to substitute ISD as the sole member of each of Telesite and Metrosite;
(h) The Real Estate Lease.
(i) Such other documents and instruments as ISD may reasonably
request to effect and evidence the consummation of the transaction
contemplated by this Agreement.
12.3 Deliveries by ISD. At the Closing, ISD will deliver or cause to
be delivered to Seller the following:
(a) A certificate of the President of ISD confirming the
satisfaction of the conditions set forth in Sections 11.1 and 11.2 as to
representations, warranties and covenants of ISD.
(b) A copy of all corporate resolutions authorizing the
execution, delivery and performance of this, and the consummation of the
transactions contemplated herein, accompanied by the certification of the
Secretary of ISD to the effect that such resolutions are in full force and
effect and have not been amended, modified or rescinded.
(c) The legal opinion referred to in Section 11.9.
(d) The cash portion of the Purchase Price, evidenced by a wire
transfers of immediately available funds.
(e) The Promissory Note.
(f) Such other documents and instruments as any of the Members,
Telesite or Metrosite may reasonably request to effect and evidence the
consummation of the transactions contemplated by this Agreement.
12.4 Further Assurances. The Members will, at any time on or after
the Closing Date, take all actions requested by ISD effect and evidence the
transfer to and reduction to possession of Buyer, or its successors or
assigns, of the Telesite Interests and Metrosite Interests.
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ARTICLE XIII
INDEMNIFICATION
13.1 Indemnification by Members, Xxxxxxxx Xxxxxx, Telesite and
Metrosite.
(a) In addition to all other sums due hereunder or provided for
in this Agreement, the Members, Xxxxxxxx Xxxxxx, Telesite and Metrosite
jointly and severally agree to indemnify and hold harmless ISD and its
Affiliates and each of their respective officers, directors, agents,
employees, subsidiaries, partners, attorneys, accountants and controlling
persons (each, an "ISD Indemnified Party") to the fullest extent permitted by
law from and against any and all losses, claims, damages, expenses
(including, without limitation, reasonable fees, disbursements and other
charges of counsel incurred by an ISD Indemnified Party in any action or
proceeding between any of the Members, Xxxxxxxx Xxxxxx, Telesite or Metrosite
and such ISD Indemnified Party (or ISD Indemnified Parties) or between an ISD
Indemnified Party (or ISD Indemnified Parties) and any third party or
otherwise) or other liabilities, losses, or diminution in value of Telesite,
Metrosite, or ISD (collectively, "Loss") resulting from or arising out of the
Merchantile Loan and the assumption thereof by Xxxxxx, any amounts payable to
Llama Company or otherwise, pursuant to the Agreement, dated November 15,
1996 (the "Llama Agreement"), by and between Llama Company (other than any
"Disengagement Fee," as defined in the Llama Agreement, payable as a result
of the termination of the Llama Agreement by ISD or Telesite after the
Closing), and Telesite any breach of any representation or warranty
(including, without limitation, if any of the Telesite Receivables or
Metrosite Receivables are not collected with the periods set forth in
Sections 5.12 and 6.12, respectively), any breach of any covenant or
agreement of any of the Members, Xxxxxxxx Xxxxxx, Telesite or Metrosite in
this Agreement or in any Member Agreement, including, without limitation, the
failure to make payment when due of amounts owing pursuant to this Agreement
or any Member Agreement, on the due date thereof (whether at the scheduled
maturity, by acceleration or otherwise) or any legal, administrative or other
actions (including actions brought by ISD, Metrosite or Telesite or any
equity holders of Telesite or Metrosite or derivative actions brought by any
Person claiming through or in Telesite's or Metrosite's name), proceedings or
investigations (whether formal or informal), or written threats thereof,
based upon, relating to or arising out of this Agreement or any Member
Agreement, the transactions contemplated hereby or thereby, or any ISD
Indemnified Party's role therein or in the transactions contemplated thereby,
any and all liabilities and obligations of the Members, Xxxxxxxx Xxxxxx,
Telesite and Metrosite, of any kind or nature whatsoever, whether accrued,
absolute, contingent or otherwise, known or unknown, that are not set forth
on the Telesite Financial Statements or the Metrosite Financial Statements;
or the Member's ownership and operation of the Telesite Business and the
Metrosite Business prior to the Closing Date; provided, however, that none of
the Members, Xxxxxxxx Xxxxxx, Telesite or Metrosite shall be liable under
this Section 13.1 to an ISD Indemnified Party: (a) for any amount paid by the
ISD Indemnified Party in settlement of claims by the ISD Indemnified Party
without the consent of the Members (which consent shall not be unreasonably
withheld), (b) to the extent that it is finally judicially determined that
such Loss resulted primarily from the willful misconduct or gross negligence
of such ISD Indemnified Party or (c) to the extent that it is finally
judicially determined that such Loss resulted primarily from the breach by
such ISD Indemnified Party of any representation, warranty, covenant or other
agreement of such ISD
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Indemnified Party contained in this Agreement or any ISD Agreement; provided,
further, that if and to the extent that such indemnification is unenforceable
for any reason, the Members, Xxxxxxxx Xxxxxx, Telesite and Metrosite will
make the maximum contribution to the payment and satisfaction of such Loss
which shall be permissable under applicable laws. In connection with the
obligation of the Members, Xxxxxxxx Xxxxxx, Telesite and Metrosite to
indemnify for expenses as set forth above, the Members, Xxxxxxxx Xxxxxx,
Telesite and Metrosite further jointly and severally agree, upon presentation
of appropriate invoices containing reasonable detail, to reimburse each ISD
Indemnified Party for all such expenses (including, without limitation, fees,
disbursements and other charges of counsel incurred by an ISD Indemnified
Party in any action or proceeding between ISD and such ISD Indemnified Party
(or ISD Indemnified Parties) or between an ISD Indemnified Party (or ISD
Indemnified Parties) and any third party or otherwise) as they are incurred
by such ISD Indemnified Party; provided, however, that if an ISD Indemnified
Party is reimbursed hereunder for any expenses, such reimbursement of
expenses shall be refunded to the extent it is finally judicially determined
that the Loss in question resulted primarily from (i) the willful misconduct
or gross negligence of such ISD Indemnified party or (ii) the breach by such
ISD Indemnified Party of any representation, warranty, covenant or other
agreement of such ISD Indemnified Party contained in this Agreement or any
ISD Agreement.
(b) Notwithstanding the foregoing, from and after the Closing
Date, the Members and Xxxxxxxx Xxxxxx will be primarily responsible for the
obligations under this Article XIII and will have no right of contribution or
other rights against Telesite or Metrosite with respect to such obligations.
13.2 Indemnification by ISD. In addition to all other sums due
hereunder or provided for in this Agreement, ISD agrees to indemnify and hold
harmless the Members and each of their respective officers, directors,
agents, employees, partners, attorneys, accountants and controlling persons
(each, a "Member Indemnified Party") to the fullest extent permitted by law
from and against any and all losses, claims, damages, expenses (including,
without limitation, reasonable fees, disbursements and other charges of
counsel incurred by a Member Indemnified Party in any action or proceeding
between ISD and such Member Indemnified Party (or Member Indemnified Parties)
or between a Member Indemnified Party (or Member Indemnified Parties) and any
third party or otherwise) or other liabilities, losses, or diminution in
value (collectively, "Loss") resulting from or arising out of any breach of
any representation or warranty, covenant or agreement of ISD in this
Agreement or in any ISD Agreement, including, without limitation, the failure
to make payment when due of amounts owing pursuant to this Agreement or any
ISD Agreement, on the due date thereof (whether at the scheduled maturity, by
acceleration or otherwise) or any legal, administrative or other actions
(including actions brought by ISD, or any equity holders of ISD or derivative
actions brought by any Person claiming through or in ISD's name), proceedings
or investigations (whether formal or informal), or written threats thereof,
based upon, relating to or arising out of this Agreement or any ISD
Agreement, the transactions contemplated hereby or thereby, or any Member
Indemnified Party's role therein or in the transactions contemplated thereby
or any loss suffered by Xxxxxx under the Commercial Continuing Guaranty,
dated May 31, 1996 (the "Xxxxxx Guarantee"), as a result of or arising from a
default after the Closing by Telesite under the Xxxxxxx'x Line of Credit;
provided, however, that ISD shall be liable under this Section 13.2 to a
Member Indemnified Party: (a) for any amount paid by the Member Indemnified
Party in settlement of claims by the Member
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Indemnified Party without the consent of ISD (which consent shall not be
unreasonably withheld), (b) to the extent that it is finally judicially
determined that such Loss resulted primarily from the willful misconduct or
gross negligence of such Member Indemnified Party or (c) to the extent that
it is finally judicially determined that such Loss resulted primarily from
the breach by such Member Indemnified Party of any representation, warranty,
covenant or other agreement of such Member Indemnified Party contained in
this Agreement or any Member Agreement; provided, further, that if and to the
extent that such indemnification is unenforceable for any reason, ISD will
make the maximum contribution to the payment and satisfaction of such Loss
which shall be permissable under applicable laws. In connection with the
obligation of ISD to indemnify for expenses as set forth above, ISD further
agrees, upon presentation of appropriate invoices containing reasonable
detail, to reimburse each Member Indemnified Party for all such expenses
(including, without limitation, fees, disbursements and other charges of
counsel incurred by a Member Indemnified Party in any action or proceeding
between a Member and such Member Indemnified Party (or Member Indemnified
Parties) or between a Member Indemnified Party (or Member Indemnified
Parties) and any third party or otherwise) as they are incurred by such
Member Indemnified Party; provided, however, that if a Member Indemnified
Party is reimbursed hereunder for any expenses, such reimbursement of
expenses shall be refunded to the extent it is finally judicially determined
that the Loss in question resulted primarily from (i) the willful misconduct
or gross negligence of such Member Indemnified Party or (ii) the breach by
such Member Indemnified Party of any representation, warranty, covenant or
other agreement of such Member Indemnified Party contained in this Agreement
or any Member Agreement.
13.3 Notification. Each party entitled to indemnification under this
Article XIII (an "Indemnified Party") will, promptly after the receipt of
notice of the commencement of any action, investigation, claim or other
proceeding against such Indemnified Party in respect of which indemnity may
be sought from any other party under this Article XIII (the "Indemnity
Obligor"), notify the Indemnity Obligor in writing of the commencement
thereof. The omission of any Indemnified Party so to notify the Indemnity
Obligor of any such action shall not relieve any Indemnity Obligor from any
liability which it may have to such Indemnified Party (a) other than pursuant
to this Article XIII or (b) under this Article XIII unless, and only to the
extent that, such omission results in the Indemnity Obligor's forfeiture of
material substantive rights or defenses. In case any such action, claim or
other proceeding shall be brought against any Indemnified Party and it shall
notify the Indemnity Obligor of the commencement thereof, the Indemnity
Obligor shall be entitled to assume the defense thereof at their own expense,
with counsel satisfactory to such Indemnified Party in its reasonable
judgment; provided, however, that any Indemnified Party may, at its own
expense, retain separate counsel to participate in such defense.
Notwithstanding the foregoing, in any action, claim or proceeding in which
any Indemnity Obligor, on the one hand, and an Indemnified Party, on the
other hand, is, or is reasonably likely to become, a part, such Indemnified
Party shall have the right to employ separate counsel at the Indemnity
Obligor's expense and to control its own defense of such action, claim or
proceeding; if, in the reasonable opinion of counsel to such Indemnified
Party, a conflict or potential conflict exists between any Indemnity Obligor,
on the one hand, and such Indemnified Party, on the other hand, that would
make such separate representation advisable; provided, however, that in no
event shall the Indemnity Obligors be required to pay fees and expenses under
this Article XIII for more than one firm of attorneys in any jurisdiction in
any
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one legal action or group of related legal actions. The Indemnity Obligors
jointly and severally agree that they will not, without the prior written
consent of the Indemnified Parties, settle, compromise or consent to the
entry of any judgment in any pending or threatened claim, action or
proceeding relating to the matters contemplated hereby (if any Indemnified
Party is a party thereto or has been actually threatened to be made a party
thereto) unless such settlement, compromise or consent includes an
unconditional release of the Indemnified Party and each other Indemnified
Party from all liability arising or that may arise out of such claim, action
or proceeding. No Indemnity Obligor shall be liable for any settlement of
any claim, action or proceeding effected against an Indemnified Party without
its written consent, which consent shall not be unreasonably withheld. The
rights accorded to Indemnified Parties hereunder shall be in addition to any
rights that any Indemnified Party may have at common law, by separate
agreement or otherwise.
13.4 Limitations on Indemnification.
(a) Subject to Section 13.4(b) hereof, no Indemnity Obligor
shall have no liability hereunder with respect to a breach of any
representation or warranty, unless written notice asserting a claim for
indemnification based thereon is given to the Indemnity Obligor within the
applicable survival period for such representation or warranty as set forth
in Section 13.5 hereof.
(b) No Indemnified Party shall be entitled to indemnification
hereunder, unless such Indemnified Party has sustained losses in excess of
Fifty Thousand Dollars ($50,000) in the aggregate, and then only to the
extent such losses exceed Twenty-Five Thousand Dollars ($25,000). The
foregoing provision will not apply to any indemnification claim under Section
13.1 related to the Llama Agreement or under Section 13.2 related to the
Xxxxxx Guarantee.
13.5 Survival of Representations and Warranties. All of the
representations and warranties made herein shall survive the execution and
delivery of this Agreement until November 30, 1999, except for the
representations and warranties set forth in Section 5.18, 5.19, 5.22(b),
6.18, 6.19, and 6.22(b), which shall survive for the applicable statute of
limitation periods (including extensions or waivers thereof).
13.6 Other Remedies. The foregoing indemnification provisions are in
addition to, and not in derogation of, any statutory, equitable or common law
remedy any party may have as a result of a Loss.
13.7 Right to Offset. Subject to the limitations set forth in Article
XIII, the Members agree that, if ISD should suffer any Loss described in
Section 13.1 above, then, in addition to and without limitation of any other
rights or remedies to which ISD may be entitled as a result of such Loss, ISD
shall have the unconditional right to offset (dollar for dollar) the amount
of such Loss against the principal amount and accrued interest owed pursuant
to the Promissory Note. Notwithstanding any other provision of this
Agreement, the amount of any Loss related to the uncollectibility of any of
the Telesite Receivables and the Metrosite Receivables (and the amount
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of any resulting offset against the Promissory Note) shall be the actual
dollar amount of any such Telesite Receivable or Metrosite Receivable that is
uncollectible.
ARTICLE XIV
TERMINATION
14.1 Termination. This Agreement may be terminated at any time prior
to the Closing:
(a) By the mutual written consent of all of the parties to this
Agreement;
(b) By the Members, Xxxxxxxx Xxxxxx, Telesite and Metrosite (if
they are not then in breach of any term of this Agreement), if ISD: (i) fails
to perform in any material respect its agreements contained herein required
to be performed on or prior to the Closing Date or (ii) materially breaches
any of its representations or warranties contained herein, which failure or
breach is not cured within ten days after the Members, Telesite, and
Metrosite have notified ISD of their intent to terminate this Agreement
pursuant to this subparagraph;
(c) By ISD (if ISD is not then in breach of any term of this
Agreement), if the Members, Telesite, and Metrosite (i) fails to perform in
any material respect its agreements contained herein required to be performed
on or prior to the Closing Date, or (ii) materially breaches any of its
representations or warranties contained herein , which failure or breach is
not cured within ten days after ISD has notified them of its intent to
terminate this Agreement pursuant to this subparagraph;
(d) By any of the parties, if there is any order, writ,
injunction or decree of any court or governmental or regulatory agency
binding on such party which prohibits or restrains such party from
consummating the transactions contemplated hereby; or
(e) By any of the parties, if the Closing has not occurred by
May 31, 1997, for any reason other than delay or nonperformance of the party
seeking such termination.
14.2 Effect on Obligations. Termination of this Agreement pursuant to
this Article shall terminate all obligation of the parties hereunder, except
for the obligations under Sections 15.3 (with respect to expenses), 15.4
(with respect to publicity) and 9.2 (with respect to confidentiality);
provided, however, that termination pursuant to subparagraphs (b) or (c) of
Section 14.1 will not relieve the defaulting or breaching party from any
liability to the other party hereto. In the event of termination under
subsection (c), ISD will have the rights and remedies with respect to
specific performance as set forth in Section 15.13 hereof, in addition to any
other remedies that may be available at law or in equity.
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ARTICLE XV
MISCELLANEOUS
15.1 Survival of Representations. All representations and warranties
of the parties hereto contained in this Agreement or otherwise made in
writing in connection with the transactions contemplated hereby shall survive
the execution and delivery of this Agreement and the Closing hereunder for
the periods described in Section 13.5. All of the other covenants and
agreements of the parties hereto contained in this Agreement or otherwise
made in writing in connection with the transactions contemplated hereby shall
survive the execution and delivery of this Agreement and the Closing
hereunder.
15.2 Risk of Loss. The risk of loss, damage or condemnation of any of
the Telesite Assets and the Metrosite Assets from any cause whatsoever will
be borne by the Members, Xxxxxxxx Xxxxxx, Telesite and Metrosite at all times
prior to the completion of the Closing. In the event of any loss, damage or
condemnation of any of the Telesite Assets or the Metrosite Assets prior to
completion of the Closing, ISD shall have the option, in its sole discretion,
to:
(a) terminate this Agreement by written notice to the Members,
Telesite and Metrosite;
(b) postpone the Closing for a period of up to five (5) days to
permit the Members, Telesite and Metrosite to repair, replace or restore such
Telesite Assets or Metrosite Assets to their prior condition; or
(c) proceed to close this Agreement and complete the
restoration and replacement of such damaged Telesite Assets or Metrosite
Assets after the Closing Date, in which event the Members, Telesite and
Metrosite shall assign to ISD the right to receive all insurance proceeds
payable in connection with such damage.
15.3 Expenses. All costs and expenses incurred in connection with
this Agreement and the transactions contemplated hereby shall be paid by the
party incurring such expense, whether or not the transactions contemplated by
this Agreement are consummated.
15.4 Publicity. Each of the parties agrees it will not make any press
releases or other announcements prior to the Closing with respect to the
transactions contemplated hereby, except as required by applicable law,
without the prior approval of the other parties.
15.5 Best Efforts. Each party hereto agrees to use its best efforts
to satisfy the conditions to the Closing set forth in this Agreement and
otherwise to consummate the transactions contemplated by this Agreement.
15.6 Notices. All notices, demands and other communications made
hereunder will be in writing and shall be given either by personal delivery,
by nationally recognized overnight courier (with charges prepaid) or by
telecopy (with telephone confirmation), and will be deemed to have been given
or made when personally delivered, the day following the date deposited with
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such overnight courier service or when transmitted to telecopy machine and
confirmed by telephone, addressed to the respective parties at the following
addresses (or such other address for a party as shall be specified by like
notice):
If to the Members, Xxxxxxxx Xxxxxx, Telesite or Metrosite:
Xxx X. Xxxxxx, III
00000 Xxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
With a copy (which shall not constitute notice) to:
Friday, Xxxxxxxx & Xxxxx
Attention: Price X. Xxxxxxx, Esq.
000 Xxxx Xxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx Xxxx, Xxxxxxxx 00000
Telephone : (000) 000-0000
Telecopy : (000) 000-0000
If to ISD:
US Towers, Inc.
Attention: Xxxxxxx X. Xxxxx
0000 Xxxxxxxx Xxxx Xxxx
Xxxxx 000
Xxxx, Xxxxx Xxxxxxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
With a copy (which shall not constitute notice) to:
Xxxxxxxxx & Xxxxx PLLC
Attention: Xxxx X. Xxxxxxxxx, Esq.
0000 Xxxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx Xxxxxxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
15.7 Obligations of the Parties. All obligations of the Members,
Xxxxxxxx Xxxxxx, Telesite and Metrosite hereunder shall be joint and several.
15.8 Knowledge. All references to the knowledge of a party or to
facts known by a party means the actual knowledge of such party, if such
party is a natural person, and the actual
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knowledge of the Chairman, Chief Executive Officer, President or Chief
Financial Officer of such party, if such party is not a natural person.
15.9 Governing Law. This agreement will be governed by the laws of
the State of Delaware without regard to its rules regarding choice of law.
15.10 Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
15.11 Assignment. This Agreement will be binding upon and inure to the
benefit of the parties hereto and their respective successors and permitted
assigns. Neither this Agreement nor any of the rights, interest or
obligations hereunder may be assigned by any of the parties hereto without
the prior written consent of all other parties hereto, and any purported
assignment without such consent shall be void.
15.12 Third Party Beneficiaries. None of the provisions of this
Agreement or any document contemplated hereby is intended to grant any right
or benefit to any person or entity which is not a party to this Agreement.
15.13 Headings. The Article and Section headings contained in this
Agreement are solely for the purpose of reference, are not part of this
Agreement and shall not in any way affect the meaning or interpretation of
this Agreement.
15.14 Amendments. Any waiver, amendment, modification or supplement of
or to any term or condition of this Agreement will be effective only if in
writing and signed by all parties hereto, and the parties hereto waive the
right to amend the provisions of this Section orally.
15.15 Specific Performance. The Members, Telesite and Metrosite
acknowledge that the Telesite Interests and the Metrosite Interests are
unique and that if the Members, Telesite and Metrosite fail to consummate the
transactions contemplated by this Agreement such failure will cause
irreparable harm to ISD for which there will be no adequate remedy at law.
Buyer shall be entitled, in addition to its other remedies at law or at
equity, to specific performance of this Agreement if the Members, Xxxxxxxx
Xxxxxx, Telesite and Metrosite will, without cause, refuse to consummate the
transactions contemplated by this Agreement.
15.16 Severability. In the event that any provision in this Agreement
shall be determined to be invalid, illegal or unenforceable in any respect,
the remaining provisions of this Agreement will not be in any way impaired,
and the illegal, invalid or unenforceable provision shall be fully severed
from this Agreement and there will be automatically added in lieu thereof a
provision as similar in terms and intent to such severed provision as may be
legal, valid and enforceable.
15.17 Entire Agreement. This Agreement and the Schedules and Exhibits
hereto constitute the entire agreement between the parties hereto pertaining
to the subject matter hereof,
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and supersede all prior and contemporaneous agreements and understandings
between the parties with respect to such subject matter including without
limitation the letter of intent dated March 19, 1997, as amended, between
Telesite and US Towers are hereby expressly terminated.
[The remainder of this page is left blank intentionally.]
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IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be signed by its duly authorized officer as of the date first
above written.
INTEGRATED SITE DEVELOPMENT, INC.
By: /s/ XXXXXXX X. XXXXX
----------------------------------
Xxxxxxx X. Xxxxx
President
/s/ XXX X. XXXXXX, III
--------------------------------------
Xxx X. Xxxxxx, III
/s/ XXXXXXXX X. XXXXXX
--------------------------------------
Xxxxxxxx X. Xxxxxx
XXXXXX FAMILY LIMITED PARTNERSHIP
By: /s/ XXX X. XXXXXX, III
----------------------------------
Xxx X. Xxxxxx, III
General Partnership
THE CENTRAL ARKANSAS OPPORTUNITY
FOUNDATION
By: /s/ XXX X. XXXXXX, III
----------------------------------
Xxx X. Xxxxxx, III
Trustee
TELESITE SERVICES, LLC
By: /s/ XXX X. XXXXXX, III
------------------------------------
Xxx X. Xxxxxx, III
President
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METROSITE MANAGEMENT, LLC
By: /s/ XXX X. XXXXXX, III
------------------------------------
Xxx X. Xxxxxx, III
President
50
