EXHIBIT 2.1
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ASSET PURCHASE AGREEMENT
(Optional Service Area)
This Asset Purchase Agreement (the "Agreement") is made and entered into as
of January 10, 2001, by SPRINT SPECTRUM L.P. and its subsidiaries SPRINT
SPECTRUM EQUIPMENT COMPANY, L.P. and SPRINT SPECTRUM REALTY COMPANY, L.P., all
of which are Delaware limited partnerships (together "Seller"), and iPCS
Wireless, Inc., a Delaware corporation ("Buyer").
Recitals
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I. Seller owns or leases that equipment and property of Seller located
in the Iowa City and Cedar Rapids BTAs and identified on attached Exhibit A,
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together with the contract rights, accounts receivable and rights to collect
unbilled amounts relating thereto (the "Assets").
II. Buyer and Seller have entered into that certain Amended and
Restated Addendum III dated March 8, 2000 ("Addendum III") to the Sprint PCS
Management Agreement dated January 22, 1999 (the "Management Agreement"), that
provides, among other things, that upon exercise by Buyer of an option granted
to it therein (the "Option"), Buyer will purchase and Seller will sell the
Assets, upon the terms and conditions set forth in this Agreement.
III. On January 10, 2001, Buyer exercised the Option.
Agreements
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NOW, THEREFORE, in consideration of the mutual covenants and
agreements contained in this Agreement the parties hereto agree as follows:
1. Transfer of Assets. Subject to the terms and conditions of this
Agreement, Seller agrees to sell, convey and assign to Buyer, and Buyer agrees
to purchase from Seller, all of Seller's right, title and interest in the
Assets, free and clear from all liens created by the Seller other than those
arising from the Assumed Liabilities (as defined below). The parties agree
that:
(i) on February 28, 2001 (the "Initial Closing"), Seller will transfer
to Buyer (A) all Assets shown on Exhibit B;
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(ii) at the Initial Closing, Buyer will pay an amount equal to
$31,632,225.89, as detailed in Exhibit C;
(iii) within 10 business days after the end of each calendar month after
the Initial Closing and until all of the remaining Assets listed on
Exhibit D have been transferred to Buyer, Seller will transfer to
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Buyer all Assets for which the required consents have been obtained
during the preceding calendar month (each a "Subsequent Closing"
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and together with the Initial Closing, the "Closing");
(iv) at each Subsequent Closing, Buyer will pay an amount equal to the
sum of $1000, the accrued lease amount since the Initial Closing
and 13.5% per year interest on such lease amount for each Cell Site
transferred at such Subsequent Closing.
2. Purchase Price. The purchase price of the Assets (the "Purchase
Price") will be the sum of (i) $19,945,600, plus (ii) the amounts set forth
below as determined by the month this Agreement is executed:
Month of Execution Additional Purchase Price
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March, 2000 $4,054,400
April, 2000 $4,542,400
May, 2000 $5,030,400
June, 2000 $5,518,400
July, 2000 $6,006,400
August, 2000 $6,494,400
September, 2000 $6,982,400
October, 2000 $7,470,400
November, 2000 $7,958,400
December, 2000 $8,446,400
January, 2001 $8,854,400
provided, however, that if on the date of the exercise of the Option the number
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of Sprint PCS subscribers based in the BTAs that are subject to the Option,
multiplied by $700, is more than the amount in the column entitled "Additional
Purchase Price" above, the number in that column shall be replaced by the
product of the number of Sprint PCS subscribers in the BTAs that are subject to
the Option, multiplied by $700. Based on Seller's estimate of the number of
Sprint PCS subscribers in the BTAs that are subject to the Option (equal to
13,667 on January 10, 2001), the Purchase Price shall be $29,512,500, subject to
adjustment as set forth in the following paragraph. Exhibit C sets forth the
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Purchase Price.
The Purchase Price will be increased by the sum of the accounts receivable
and unbilled amounts for the sale of Sprint PCS Products and Services (as
defined in the Management Agreement) existing and accrued as of the date of the
Initial Closing (less 7% of this sum to reflect an agreed upon discount for
future uncollected amounts). The parties agree that they will consummate the
Initial Closing based upon actual accounts receivable and unbilled amount
balances as of the end of the calendar month prior to the calendar month in
which the Initial Closing occurs, subject to post-Closing adjustment. The post-
Closing adjustment will be based on actual accounts receivable and unbilled
amount balances as of the date of the Initial Closing Date, to be provided
promptly after month-end by Sprint PCS.
The parties agree that, on or before the date of the Initial Closing, and
insofar as it has not been calculated as part of the Purchase Price, they shall
determine an allocation of the Purchase Price among the Assets, which allocation
will be the result of arms-length negotiations between the parties as to the
price of each item or category of items including in the Assets, and neither
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party will make any claim or treat any item on its tax returns in a manner that
is inconsistent with such allocation.
3. Review Period. For a period extending for thirty (30) days after this
Agreement has been executed by both parties ("Review Period"), Buyer may review
such documents and make, or cause to be made by agents or contractors of Buyer's
choosing, any and all physical, mechanical, environmental, structural or other
inspections of the Assets as Buyer deems appropriate. If, in Buyer's reasonable
discretion, based upon the results of Buyer's inspections, Buyer determines that
the Assets are unsatisfactory to Buyer, Buyer may by written notice to Seller
within the Review Period, terminate this Agreement, and upon such termination,
neither party will have any further rights or obligations under this Agreement.
Any termination notice provided to Seller must contain a specific description of
the condition on which Buyer bases such termination. If Buyer does not
terminate this Agreement by such notice within the Review Period, this Agreement
will remain in full force and effect in accordance with its terms. Buyer may
not elect to purchase less than all of the Assets.
4. Assumption of Liabilities. Buyer agrees to assume the liabilities,
debts, expenses and obligations of Seller that relate to the Assets with respect
to the period from and after the date of each Closing and that are set forth on
Exhibit E (the "Assumed Liabilities"), and to pay and perform the Assumed
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Liabilities when due. Buyer's assumption of the Assumed Liabilities does not
enlarge any rights of third parties under contracts or arrangements with Buyer
or Seller. Nothing in this Agreement prevents Buyer from contesting in good
faith any of the Assumed Liabilities. Other than the Assumed Liabilities, Buyer
assumes no liabilities whatsoever relating to the Assets or the business and
operations of Seller.
5. Condition of Assets. It is understood and agreed that Seller is not
making, and Seller specifically disclaims, any warranties or representations of
any kind or character, express or implied, with respect to the Assets,
including, but not limited to, warranties or representations as to matters of
title (except that Seller represents and warrants that Seller has not previously
conveyed, pledged, encumbered, hypothecated or assigned that Asset to any other
party), zoning, tax consequences, physical or environmental conditions,
availability of access, operating history or projections, valuation,
governmental approvals, governmental regulations or any other matter or thing
relating to or affecting the Assets, including, without limitation: (i) the
value, condition, merchantability, marketability, profitability, suitability or
fitness for a particular use or purpose of the Assets; (ii) the manner or
quality of the construction or materials incorporated into any of the Assets;
and (iii) the manner, quality, state of repair or lack of repair of the Assets.
Buyer agrees that with respect to the Assets, Buyer has not relied upon and will
not rely upon, either directly or indirectly, any representation or warranty of
Seller or any agent of Seller other than as specifically set forth in this
Agreement.
Buyer represents that it is a knowledgeable purchaser and that it is
relying solely on its own expertise and that of Buyer's consultants, and that
Buyer will conduct such inspections and investigations of the Assets as it deems
necessary or advisable, including, but not limited to, the physical and
environmental conditions thereof, and shall rely upon same, and, upon Closing,
shall assume the risk that adverse matters, including, but not limited to,
adverse physical and environmental conditions, may not have been revealed by
Buyer's inspections and
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investigations. Buyer acknowledges and agrees that upon Closing, Seller shall
sell and convey to Buyer and Buyer shall accept the Assets "as is, where is"
with all faults, and Buyer further acknowledges and agrees that there are no
oral agreements, warranties or representations, collateral to or affecting the
Assets by Seller, any agent of Seller or any third party except as specifically
set forth in this Agreement. The terms and conditions of this Section 5 shall
expressly survive the Closing.
6. Damage or Destruction. If prior to the date of each Closing, any of
the Assets to be transferred are destroyed or substantially damaged by fire,
lightning or any other cause, or all or any part of the Assets is taken by
eminent domain (or is the subject of a pending or contemplated taking which has
not been consummated), Seller will immediately deliver to Buyer written notice
of such event or condition, and Buyer will have the option of (a) enforcing this
Agreement and retaining any insurance proceeds or proceeds of the taking by
eminent domain, or (b) terminating this Agreement by written notice within
twenty (20) days after receiving written notice from Seller of such destruction,
damage or claim. If this Agreement is terminated, neither party will have any
further obligation under this Agreement. The risk of loss will be borne by
Seller until the particular Assets are transferred to Buyer at each Closing.
7. Closing. If Buyer does not terminate the Agreement pursuant to
Paragraph 3 or 6 of this Agreement, on the date of each Closing:
(a) Seller and Buyer shall execute and deliver to each other an Assignment
of Leases and Xxxx of Sale in the form attached hereto as Exhibit F;
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(b) Buyer shall pay the applicable Purchase Price to Seller in immediately
available funds (subject to post-Closing adjustment as described in the second
paragraph of Section 2);
(c) Buyer shall provide copies of all necessary consents, if any, for the
conveyance or assignment of the Assets and the assumption by Buyer of the
Assumed Liabilities. Such consents shall be in the form of the Consent and
Release attached hereto as Exhibit G, with such changes as shall be approved by
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Seller (which approval shall not be unreasonably withheld). Set forth on
Exhibit H is a true and correct list of all consents and releases required with
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respect to the assignment of the Assets and the assumption of the Assumed
Liabilities. Seller's obligations hereunder, and Buyer's obligation to
consummate the Closing, shall be subject to receipt of the consents as set forth
on Exhibit H, except as provided below.
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Buyer is responsible for paying or causing to be paid all transfer, stamp,
recording, sales, use, excise or similar taxes, fees or duties payable in
connection with the sale, assignment or conveyance of Seller's interest in and
to the Assets or the assumption of the Assumed Liabilities.
Buyer is also responsible for reporting all taxable property to the
appropriate taxing authority for ad valorem tax purposes. Buyer will pay as and
when due all taxes, assessments, liens, encumbrances, levies, and other charges
against real estate, personal property and intangible property that is sold,
transferred, assigned or otherwise conveyed to Buyer pursuant to this agreement,
other than those relating to the transferred Assets during the period prior to
the date of each Closing, which shall remain the responsibility of Seller.
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8. Further Assurances. Seller will from time to time at the request of
Buyer, do, make, execute, acknowledge and deliver all such other instruments of
conveyance, assignment, and transfer, in form and substance reasonably
satisfactory to Seller, as Buyer may reasonably require for the more effective
conveyance and transfer of any of the Assets.
9. Indemnification; Survival. Breaches of this Agreement by either Buyer
or Seller will be a breach for which the nonbreaching party is entitled to
indemnification utilizing the procedures set forth in the Management Agreement.
This Agreement shall survive the Closing.
10. Entire Agreement and Assignment. This Agreement and the exhibits and
schedules attached to this Agreement (which are incorporated by this reference)
and the Management Agreement, including all addenda thereto, contain the entire
agreement between the parties hereto with respect to the acquisition of the
Assets and the other transactions contemplated herein, and supersedes all prior
agreements or understandings between the parties hereto relating to the subject
matter hereof. All exhibits attached hereto are incorporated herein by this
reference. Buyer may assign its rights and obligations under this Agreement to
any legal entity that assumes all, and not less than all, of Buyer's obligations
under the Management Agreement.
11. Severability. In the event any one or more of the provisions
contained in this Agreement or any application thereof is valid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions of this Agreement and any other application thereof will
not in any way be affected or impaired thereby. Paragraph headings herein or in
any exhibit hereto have no legal significance and are used solely for
convenience or reference.
12. No Other Representation and Warranties. Seller makes no
representation or warranty to Buyer with respect to the Assets, except as
expressly set forth in this Agreement.
13. Waivers and Notices. Any term or condition of this Agreement may be
waived at any time by the party entitled to the benefit thereof by a written
instrument. No delay or failure on the part of any party in exercising any
rights hereunder, and no partial or single exercise thereof, will constitute a
waiver of such rights or of any other rights hereunder. All notices, consents,
requests, instructions, approvals and other communications provided for herein
will be validly given, made or served if given, made or served in accordance
with the Management Agreement. For purposes of this Agreement, notices to
Seller will be sent to the notice address for Sprint PCS stated in the
Management Agreement, and notices to Buyer will be sent to the notice address
set forth for Manager in the Management Agreement.
14. Counterparts. This Agreement may be executed in any number of
counterparts, each of which will constitute an original but all of such
counterparts taken together will constitute only one Agreement.
15. Governing Law. The internal laws of the State of Missouri (without
regard to principles of conflicts of law) govern the validity of this Agreement,
the construction of its terms, and the interpretation of the rights and duties
of the parties.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
SELLER: SPRINT SPECTRUM L.P.
By: /s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
Vice President - Affiliates
SPRINT SPECTRUM EQUIPMENT
COMPANY, L.P.
By: /s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
Vice President - Affiliates
SPRINT SPECTRUM REALTY
COMPANY, L.P.
By: /s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
Vice President - Affiliates
BUYER: iPCS WIRELESS, INC.
By: /s/ Xxxxxxx X. Xxxxx
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Name: Xxxxxxx X. Xxxxx
Title: President and CEO
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Set forth below is a list of exhibits to the Asset Purchase Agreement. iPCS,
Inc. agrees to furnish supplementally a copy of any omitted exhibit to the
Securities and Exchange Commission upon request.
Exhibit A
The Assets
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The following sets forth the Assets:
1. Cell site and base station assets:
Listed by Cascade Number and state of development as follows:
(See attached inventory for available On Air sites (all but DM13XC112 which
just recently came On Air))
2. Retail Assets as follows:
SPCS Retail Store:
0000 Xxxxx Xxxx XX, Xxxxx 0X0
Xxxxx Xxxxxx, XX 00000
(See attached inventory)
3. Certain assets which may be physically located in the Iowa City and Cedar
Rapids BTA but are maintained by Sprint PCS as part of its national asset base
are not included in the transfer. These assets include, for example, the
following:
-Portable generators
-Any Cell on Wheels (COW)
-HP Test Equipment
4. The parties agree that the inventory lists provided by Sprint PCS under and
as part of this exhibit have not been confirmed by a physical inventory of the
assets by Sprint PCS but simply reflect the asset inventories as maintained in
the books and records of Sprint PCS. Buyer shall assume all risk of any
discrepancy between the inventory list as provided by Sprint PCS and the actual
assets, equipment and spares as may be found in the Iowa City and Cedar Rapids
BTAs. Buyer shall have the right of inspection prior to the Initial Closing as
provided for under this Agreement to determine the extent, if any, of this risk.
5. The parties agree that Sprint PCS shall retain ownership and control of any
cell site located in the Iowa City and Cedar Rapids BTAs which is (a) owned in
fee simple, (b) for which Sprint PCS has a ground lease, or (c) for which Sprint
PCS has the right to co-locate any users of the site in addition to Sprint PCS
or Manager. For each such site Sprint PCS shall sell the equipment located at
the site as provided for under the terms of the Agreement and, after Closing,
Sprint PCS shall lease the site to Manager at market lease rates for sites of a
similar nature located in the Iowa City or Cedar Rapids BTAs subject to the
execution of a Master Lease Agreement between Manager and Sprint Sites USA.
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Exhibit B
Assets to be Transferred at the Initial Closing
[12 cell sites listed by Cascade Number on inventory list.]
Exhibit C
Initial Closing Purchase Price
[Calculation of purchase price]
Exhibit D
Assets to be Transferred at Subsequent Closings
[10 cell sites listed by Cascade Number on inventory list.]
Exhibit E
Assumed Liabilities
[22 cell sites listed by Cascade Number on inventory list.]
Exhibit F
FORM OF
ASSIGNMENT OF LEASES AND XXXX OF SALE
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[12 cell sites listed by Cascade Number on inventory list.]
THIS ASSIGNMENT OF LEASES AND XXXX OF SALE ("Assignment") is made and
entered into as of the ______ day of _________________, 200__ by and between
__________________, a __________________ ("Assignor"), and ____________________,
a _______________________ ("Assignee").
1. For good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Assignor does hereby sell, assign,
transfer and set over unto Assignee all of Assignor's right, title and
interest in and to those certain leases (collectively the "Leases")
described in Exhibit A attached hereto and made a part hereof.
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2. In addition to the Assignment described above, for good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Assignee hereby agrees to assume all obligations and
liabilities of Assignor arising under or pursuant to the Leases from and
after the date hereof, and Assignee further agrees to perform and abide by
each and every term, provision, covenant and condition contained in the
Leases to be observed or performed on or after the date hereof. Assignor
will not be responsible to the lessors under each of the Leases for the
discharge or performance of any duties or obligations to be performed or
discharged by the lessee thereunder after the date hereof.
3. Assignee hereby agrees to indemnify and hold harmless Assignor
from and against any and all loss, cost or expense (including, without
limitation, reasonable attorney's fees) resulting by reason of Assignee's
failure to perform any of the obligations of the lessee under the Leases
after the assignment thereof to Assignee. Assignor hereby agrees to
indemnify and hold harmless Assignee from and against any and all loss,
cost or expense (including, without limitation, reasonable attorney's fees)
resulting by reason of the failure of Assignor to perform any of the
obligations of the lessee under the Leases which arise prior to the
assignment thereof to Assignee.
4. Assignor does hereby assign, sell, convey and deliver to Assignee,
its successors and assigns, all of Assignor's right, title and interest in
and to the fixtures, equipment, machinery and other personal property owned
by Assignor (the "Personal Property") placed or installed on or about the
real property described in the leases.
5. ASSIGNEE TAKES THE PROPERTY DESCRIBED IN THIS ASSIGNMENT "AS IS-
WHERE IS" AND WITH ALL FAULTS. ASSIGNOR HAS NOT MADE AND DOES NOT MAKE ANY
REPRESENTATIONS AS TO THE PHYSICAL CONDITION, OPERATION OR ANY OTHER MATTER
AFFECTING OR RELATED TO THE SUCH PROPERTY, EXCEPT AS HEREIN SPECIFICALLY
SET FORTH OR REFERRED TO, AND ASSIGNEE HEREBY EXPRESSLY ACKNOWLEDGES THAT
NO SUCH REPRESENTATIONS HAVE BEEN MADE.
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ASSIGNOR EXPRESSLY DISCLAIMS AND ASSIGNEE ACKNOWLEDGES AND ACCEPTS THAT
ASSIGNOR HAS DISCLAIMED TO THE MAXIMUM EXTENT PERMITTED BY LAW, ANY AND ALL
REPRESENTATIONS, WARRANTIES OR GUARANTIES OF ANY KIND, ORAL OR WRITTEN,
EXPRESS OR IMPLIED, CONCERNING THE PROPERTY, INCLUDING, WITHOUT LIMITATION,
(i) THE VALUE, CONDITION, MERCHANTABILITY, MARKETABILITY, PROFITABILITY,
SUITABILITY OR FITNESS FOR A PARTICULAR USE OR PURPOSE OF THE PROPERTY,
(ii) THE MANNER OR QUALITY OF THE CONSTRUCTION OF THE MATERIALS, IF ANY,
INCORPORATED INTO ANY OF THE PROPERTY AND (iii) THE MANNER, QUALITY, STATE
OF REPAIR OR LACK OF REPAIR OF THE PROPERTY. ASSIGNOR IS NOT LIABLE OR
BOUND IN ANY MANNER BY ANY VERBAL OR WRITTEN STATEMENTS, REPRESENTATIONS OR
INFORMATION PERTAINING TO THE PROPERTY FURNISHED BY ANY REAL ESTATE BROKER,
AGENT, EMPLOYEE, SERVANT OR OTHER PERSON, UNLESS THE SAME ARE SPECIFICALLY
SET FORTH OR REFERRED TO HEREIN.
6. Assignor hereby covenants and agrees that Assignor will execute
and deliver to Assignee upon demand, from time to time, any further
instrument or instruments which are reasonably necessary to reaffirm,
correct and/or perfect this Assignment and the transfer to Assignee of the
items described in this Assignment.
7. This Assignment inures to the benefit of and is binding upon the
successors and assigns of the parties hereto.
8. This Assignment may be executed in a number of identical
counterparts which, taken together, constitute collectively one agreement.
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IN WITNESS WHEREOF, Assignor and Assignee have executed this Assignment as
of the day and year first written above.
ASSIGNOR:
______________________________________,
a ____________________________________
By:
Name:
Title:
ASSIGNEE:
_______________________________________,
a ______________________________________
By:
Name:
Title:
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Exhibit G
FORM OF
CONSENT AND RELEASE
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THIS CONSENT AND RELEASE (this "Consent") is made and delivered as of
the _____ day of _____________, 200__, by _________________________________, a
_______________________________________ ("Lessor"), to and for the benefit of
___________________________, a _____________________________ ("Lessee").
Recitals
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A. Lessor and Lessee entered into that certain lease dated
_______________ (the "Lease"), pursuant to which Lessee leased from Lessor
certain premises located at ______________________________________________ (the
"Premises").
B. Lessee and ___________________, a __________________ ("Assignee"),
have entered into a Purchase and Sale agreement whereby Lessee may sell to
Assignee certain assets of Lessee ("Assets"), including, without limitation, the
Lease. If the sale of the Asset is completed, Lessee will assign to Assignee
all of Lessee's right, title and interest, as lessee, in, under and to the
Lease, and Assignee will assume all of the duties, obligations and liabilities
of Lessee under the Lease which arise from and after the assignment of the Lease
from Lessee to Assignee.
C. Lessee has requested that Lessor grant its consent to the
assignment of the Lease and that Lessor release Lessee from all duties,
obligations and liabilities arising under the Lease from and after the
assignment of the Lease from Lessee to Assignee.
X. Xxxxxx has agreed to give such consent and release in accordance
with the terms, and conditions of this Consent.
Terms and Conditions
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Based upon the foregoing Recitals, for good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, and
intending to be legally bound hereby, Lessor hereby agrees as follows:
Lessor's Consent to Assignment. If Lessee completes the sale of the
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Assets to Assignee, Lessor hereby consents to the assignment of the Lease by
Lessee to Assignee upon the terms and conditions set forth in the Assignment.
Release of Lessee. If Lessee completes the sale of the Assets to
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Assignee, Lessor hereby releases Lessee from all duties, obligations and
liabilities under the Lease which arise from and after the effective date of
this Assignment and agrees to recognize Assignee as the lessee under the Lease
for all purposes with respect to the performance of all duties, obligations and
liabilities of the lessee which arise under the Lease from and after the
effective date of the Assignment. By
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executing this Consent, Lessor hereby acknowledges, agrees to and reaffirms its
continuing rights, powers, duties, obligations and liabilities under the Lease.
Consent to Assignment Only. The consent of Lessor which is given
--------------------------
hereby extends only to the assignment of the Lease to Assignee, and shall not
apply to any further assignment of the Lease. Any future assignment of the
Lease or subletting of the Premises, either in whole or in part, is subject to
the consent requirements of the Lease.
Status of Lease. The Lease is in full force and effect and there are
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not defaults under the Lease as of the date of this Consent.
Governing Law. This Consent is to be governed by, and construed and
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enforced in accordance with, the laws of the State of ___________________.
IN WITNESS WHEREOF, Lessor has executed this Consent for delivery of
the date first above written.
LESSOR:
___________________________,
a__________________________
By:________________________________
Name:______________________________
Title:_______________________________
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Exhibit H
Consents
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I. Buyer Consents.
1. Consent under Amended and Restated Credit Agreement.
II. Seller Consents.
[22 cell sites listed by Cascade Number on inventory list.]
