MEMBERSHIP INTEREST PURCHASE AGREEMENT by and among West Coast PCS Structures, LLC PCS Structures Towers, LLC West Coast PCS LLC, as Seller, and GTP Towers I, LLC, as Purchaser Dated as of October 10, 2008
by
and among
West
Coast PCS Structures, LLC
PCS
Structures Towers, LLC
West
Coast PCS LLC,
as
Seller,
and
GTP
Towers I, LLC,
as
Purchaser
Dated
as of October 10, 2008
NO
AGREEMENT, ORAL OR WRITTEN, REGARDING OR RELATING TO ANY OF THE MATTERS COVERED
BY THIS DRAFT HAS BEEN ENTERED INTO BETWEEN THE PARTIES. THIS DOCUMENT, IN
ITS
PRESENT FORM OR AS IT MAY BE HEREAFTER REVISED BY ANY PARTY, WILL NOT BECOME
A
BINDING AGREEMENT OF THE PARTIES UNLESS AND UNTIL, WITH ALL SCHEDULES AND
EXHIBITS ATTACHED, IT HAS BEEN EXECUTED BY ALL PARTIES AND COMPLETE EXECUTED
COPIES HAVE BEEN DELIVERED. THE EFFECT OF THIS LEGEND MAY NOT BE CHANGED BY
ANY
ACTION OF THE PARTIES.
This
MEMBERSHIP INTEREST PURCHASE AGREEMENT (as amended, supplemented or otherwise
modified from time to time, this “Agreement”),
dated
as of October 10, 2008 (the “Effective
Date”),
is
entered into by and among West Coast PCS Structures, LLC, a Delaware limited
liability company (“West
Coast PCS”),
PCS
Structures Towers, LLC, a Delaware limited liability company (“PCS
Towers”
and,
together with West Coast PCS, the “Companies”),
West
Coast PCS LLC, a California limited liability company (“Seller”),
and
GTP Towers I, LLC, a Delaware limited liability company (“Purchaser”).
A. Seller
is
the sole member of and owns 100% of the outstanding membership interests of
West
Coast PCS (the “Membership
Interests”)
and
West Coast PCS is the sole member of and owns 100% of the outstanding membership
interests of PCS Towers.
B. Purchaser
desires to purchase from Seller, and Seller desires to sell to Purchaser, the
Membership Interests on the terms and subject to the conditions set forth in
this Agreement.
In
consideration of the premises and the representations, warranties, covenants
and
agreements herein contained and other valuable consideration, the receipt and
adequacy whereof are hereby acknowledged, the parties hereby, intending to
be
legally bound, represent, warrant, covenant and agree as follows:
ARTICLE
1.
DEFINED
TERMS
1.1. As
used
herein, unless the context otherwise requires, the terms defined in Appendix
A
attached
hereto and made a part hereof shall have the respective meanings set forth
therein.
ARTICLE
2.
PURCHASE
AND SALE OF MEMBERSHIP INTERESTS; CONTRIBUTION
2.1. Purchase
and Sale of Membership Interests.
On the
terms and subject to the conditions of this Agreement, Purchaser agrees to
purchase the Membership Interests from Seller, and Seller agrees to sell,
assign, transfer, convey and deliver to Purchaser, free and clear of all Liens,
all of its right, title and interest in and to the Membership Interests (the
“Purchase”).
2.2. Contribution.
On the
Effective Date, the Companies do not own any assets (other than the membership
interests of PCS Towers owned by West Coast PCS) or conduct any business. Prior
to the Initial Closing and any Subsequent Closing (as hereinafter defined),
the
applicable Tower Assets will be contributed to PCS Towers (the “Contribution”)
by
Seller, SureWest Broadband and/or SureWest Telephone (collectively,
“Contributors”)
through a Contribution Agreement (each, a “Contribution
Agreement”)
in
substantially the form attached hereto as Exhibit
D.
Pursuant to the Contribution Agreement, PCS Towers will assume all liabilities
related to the applicable Tower Assets.
2
2.3. Tower
Assets.
For
purposes of this Agreement, the term “Tower
Assets”
means,
individually, and collectively, all of the real and personal tangible and
intangible assets, properties and rights owned by the Tower Owners, wherever
situated and located, that are used in, or accounted for as a part of, the
ownership and operation of the Towers (as defined below), and the operation
of
the business related thereto, including without limitation the
following:
a. fifty-two
(52) wireless communications towers (the “Towers”)
located at the sites set forth in Section
2.3(a) of the Disclosure Schedule
(the
“Sites”);
b. the
Ground Leases relating to the Sites (the “Ground
Leases”)
set
forth in Section
2.3(b) of the Disclosure Schedule;
c. all
Tenant Leases relating to the Sites existing as of the Closing, including
without limitation those set forth in Section
2.3(c) of the Disclosure Schedule;
d. all
buildings, structures, improvements and fixtures located at the Sites and owned
and exclusively used by the Tower Owners in connection with the ownership and
operation of the Tower Assets, including without limitation all of those listed
in Section
2.3(d) of the Disclosure Schedule
(the
“Improvements”);
e. all
physical assets (other than the Towers, the Improvements and other real property
and interests therein), owned and exclusively used by the Tower Owners in
connection with the ownership and operation of the Tower Assets and located
at
the Sites, including without limitation all of the items listed in Section
2.3(e) of the Disclosure Schedule
(the
“Equipment”);
f. (A)
the
security deposits (if any) from tenants paid to the Tower Owners under the
Tenant Leases and to Ground Lessors under the Ground Leases relating to the
Sites (collectively, the “Security
Deposits”)
and
all of which are disclosed in Section
2.3(f) of the Disclosure Schedule,
(B) all
rights to any warranties held by the Tower Owners or any of its Affiliates
with
respect to the Tower Assets, including without limitation the Towers, (C) all
rights under any Governmental Authorizations held by the Tower Owners
exclusively with respect to the Tower Owners’ ownership or the operation of the
Tower Assets, (D) utility deposits and reservation fees paid by or on behalf
of
the Tower Owners with respect to the Sites and (E) any condemnation or eminent
domain proceeds received by the Tower Owners after the date hereof with respect
to the Sites;
g. all
rent
received or receivable by the Tower Owners under the Tenant Leases relating
to
the period following the applicable Closing;
h. all
Easements disclosed in Section
2.3(h) of the Disclosure Schedule;
and
i. the
Due
Diligence Items (to the extent assignable).
3
ARTICLE
2A.
INSPECTION
PERIOD
2A.1
Duration.
Purchaser shall have the right, commencing on the Effective Date, and ending
on
the earlier to occur of (i) the close of business thirty (30) days after such
date, and (ii) the Initial Closing Date (the “Inspection
Period”),
to
enter upon, inspect, investigate and conduct legal, financial, environmental,
technical and any other due diligence that Purchaser determines reasonably
necessary with respect to the ownership and operation of the Tower Assets,
subject to the terms and conditions of this Article
2A.
2A.2
Entry
and Inspection.
During
the Inspection Period, the Tower Owners shall permit Purchaser and its
representatives reasonable access to (during normal business hours) all of
the
Tower Assets, and the Tower Owners shall furnish to Purchaser all reports,
documents, records and information, including electronic copies thereof, that
the Tower Owners have in their possession or can obtain without unreasonable
effort or expense as Purchaser may reasonably request, to permit Purchaser
to
perform its due diligence investigation with respect to the ownership and
operation of the Tower Assets. Purchaser may undertake a complete physical
inspection of the Tower Assets; provided, however, that any such physical
inspection shall not result in any damage to the same. Except as otherwise
provided herein, no such inspections, investigations or examinations shall
unreasonably interfere with the Tower Owners’ business or operations. After
completing any physical inspections of the Site and Tower Assets, Purchaser
shall restore and repair any damage to the same caused by such inspections
to
the condition existing prior to Purchaser’s entry. Purchaser agrees to indemnify
and hold the Tower Owners harmless from any and all costs, expenses, fees and
damages, including reasonable attorney’s fees, related to any claims made
against any Tower Owner resulting from the activities of Purchaser in conducting
any of the inspections, investigations or examinations of the Tower Assets.
This
indemnification shall survive the Closing for a period of six (6) months or
the
termination of this Agreement for a period of one (1) year. In addition,
Purchaser shall have the right and privilege to enter upon any real property
leased under a Ground Lease, upon reasonable advance notice to the applicable
Tower Owner, to conduct, at Purchaser’s sole expense and risk, Phase I
environmental assessment reports. The applicable Tower Owner shall be entitled
to have representatives present at the time such site assessments are conducted
and to receive copies of all correspondence with the consultants conducting
such
assessments. The cost and expense of the inspection by Purchaser shall be borne
by Purchaser. Any inspections shall be arranged at times mutually convenient
to
the parties.
2A.3 Seller’s
Disclosures and Deliveries.
Not
more than two (2) Business Days following the Effective Date, Seller shall
make
available to Purchaser, true, correct and complete copies of such of the
following items as are in Tower Owners’ possession or control, including
electronic versions (if any) (the “Due
Diligence Items”):
a. all
structural analyses, engineering reports and condition reports for the Towers,
and all environmental reports and NEPA reports relating to the Sites;
b. all
Ground Leases, Tenant Leases and Related Contracts presently in force covering
the Tower Assets or any part thereof;
4
c. with
respect to the Sites, the most recent surveys, title commitments, title policies
or abstracts of title together with all copies of all documents and instruments
(as recorded where applicable) referred to or identified in the title
commitment, title policies or abstracts, including, but not limited to, all
deeds and other conveyance documents evidencing transfer of title into the
applicable Tower Owner, lien instruments, leases, plats, reservations,
restrictions and easements, and all curative documentation executed subsequent
to the commitment, policy or abstract;
d. the
most
recent construction, engineering, architectural or other plans or drawings
and
related site plans, plats and approved drawings pertaining to the construction
of the Towers, as well as zoning permits, variances, building and other permits,
which have been gained or for which the Tower Owners have made application
with
respect to the Tower Assets, and the FCC and FAA applications, responses,
approvals and registration numbers submitted or received for each Tower;
e. the
most
recent real estate and personal property tax xxxx for each Tower
Asset;
f. current
tenant contact information; the most current list of amounts past due under
Tenant Leases, aged based on due date, and by tower and tenant;
g. cash
receipts supporting the most recent months collection of rental income, for
each
Tenant Lease. For annual or other frequencies, the latest cash receipt
collected; cash disbursements supporting the most recent months payment of
rent,
for each Ground Lease. For annual or other frequencies, the latest cash
disbursement made; and
h. cash
disbursement and invoice supporting the most recent annual property tax expense
recorded with respect to the Sites.
In
the
event that Seller fails to deliver or make available to Purchaser any of the
Due
Diligence Items within two (2) Business Days following the Effective Date,
the
Inspection Period shall be extended by an amount of time equal to any such
delay.
2A.4 Purchaser’s
Rights to Reject Assets.
a. If
Purchaser discovers a Defect with respect to any Tower Asset during the
Inspection Period, Purchaser will be entitled to reject such Tower Asset,
subject to Seller’s option to Cure such Defect as listed below. If Purchaser
rejects a Tower Asset, it will provide Seller with written notice of such
rejection (a “Rejection
Notice”)
promptly after discovering it and in no event later than the expiration of
the
Inspection Period. Each Rejection Notice must set forth with reasonable detail
the nature of the Defect. Seller will have the option to Cure any Defects that
are alleged by Purchaser pursuant to this Section
2A.4
within
twenty (20) Business Days after the receipt of the Rejection Notice (the
“Initial
Cure Period”),
and,
if the Cure extends beyond expiration of the Inspection Period, the option
to
either extend the Anticipated Closing Date or proceed to close the transaction
and Cure such Defect after such Closing in accordance with Section
2A.4(b);
provided
that
the
Anticipated Closing Date shall not be extended if, on the Anticipated Closing
Date, all of the conditions with respect to the purchase and sale of not less
than thirty-four (34) Sites shall have been satisfied, including without
limitation, that at least thirty-four (34) Sites do not contain a Defect. In
the
event that Seller desires to Cure a Defect, Seller will provide Purchaser with
written notice of such proposed Cure (the “Proposed
Cure”)
within
the Initial Cure Period. Purchaser will review all Proposed Cures and either
approve or reject (in Purchaser’s reasonable discretion) Seller’s Proposed Cure
within five (5) Business Days following Purchaser’s receipt thereof. In the
event that Purchaser determines, in its reasonable discretion, that Seller
has
not Cured a Defect, then the applicable Tower Assets will be deemed rejected,
shall not be assigned to PCS Towers pursuant to the Contribution Agreement
and
shall be removed from the determination of the Purchase Price, which shall
be
adjusted in accordance with Section
3.2(b).
If
Purchaser approves the Proposed Cure within such five (5) Business Day period,
such Tower Assets will be transferred to Purchaser at the Initial Closing,
provided that such Defect is remediated by Seller prior to the Initial Closing
in accordance with the Proposed Cure.
5
i. Subsequent
Cure Period.
Seller
will have the right to Cure any Defects in Rejected Assets as soon as reasonably
practicable after the end of the Initial Cure Period, but in no event later
than
ninety (90) days after the expiration of the Initial Cure Period (the
“Subsequent
Cure Period”).
If
all Defects affecting any Rejected Asset are Cured by Seller during the
Subsequent Cure Period (as reasonably determined by Purchaser), then such
Rejected Asset will be assigned to PCS Towers pursuant to the Contribution
Agreement at the subsequent Closing(s) in accordance with Section
3.2(b).
2A.5 Tower
Cash Flow and Purchase Price Adjustments.
a. If
Purchaser discovers during the Inspection Period that the Tower Cash Flow with
respect to a Site is less than or greater than the Tower Cash Flow for such
Site
set forth on Section
4.5 of the Disclosure Schedule
(the
“Seller
Tower Cash Flow”),
then
Purchaser shall notify Seller in writing of its determination of the Tower
Cash
Flow for such Site, including the basis for such determination and all
supporting documentation (the “Purchaser
Tower Cash Flow Notice”);
provided,
however,
that in
the event Purchaser determines that the actual Tower Cash Flow for such Site(s)
is less than the Seller Tower Cash Flow, the Tower Cash Flow shall not be
reduced if Seller provides to Purchaser on or before the date that is five
(5)
days prior to Closing, evidence reasonably satisfactory to Purchaser that the
actual Tower Cash Flow for a Site is not less than the Seller Tower Cash Flow.
b. If
Seller
disputes the Purchaser’s determination of the actual Tower Cash Flow for such
Sites by providing timely written notice of such dispute (a “Notice
of Disagreement”)
within
five (5) days of the date of the Purchaser Tower Cash Flow Notice, then Seller
and Purchaser shall attempt in good faith to resolve and finally determine
the
amount of the actual Tower Cash Flow. The Notice of Disagreement delivered
by
Seller shall set forth in reasonable detail the basis for the disagreement.
If
Seller and Purchaser are unable to resolve the disagreement within ten
(10) calendar
days following the delivery of the Notice of Disagreement, then Seller and
Purchaser shall select a mutually acceptable, nationally recognized independent
accounting firm that does not then have a relationship with Seller, the
Companies or Purchaser, or any of their respective Affiliates (the “Independent
Accountant”),
to
resolve the disagreement and make a determination with respect thereto. Such
determination will be made, and written notice thereof given to Seller and
Purchaser, within twenty (20) calendar
days after such selection. The determination by the Independent Accountant
shall
be final, binding and conclusive upon Seller and Purchaser. The scope of the
Independent Accountant’s engagement (which will not be an audit) shall be
limited to the resolution of the disputed items described in the Notice of
Disagreement, and the recalculation, if any, of the actual Tower Cash Flow
in
light of such resolution. If an Independent Accountant is engaged pursuant
to
this Section
2A.5(b),
the
fees and expenses of the Independent Accountant shall be borne in the
same
proportion that the Purchaser’s position on the one hand, and Seller’s position
on the other hand, initially presented to the Independent Accountant (based
on
the aggregate of all differences taken as a whole) bear to the final resolution
as determined by the Independent Accountant.
6
ARTICLE
3.
PURCHASE
PRICE; CLOSING
3.1. Purchase
Price; Deposit Escrow.
a. Purchase
Price.
The
aggregate purchase price for the Membership Interests (the “Purchase
Price”) shall
be
based on and equal to the product of (i) Tower Cash Flow for all Sites and
Tower
Assets contributed to PCS Structures (as finally determined in accordance with
Section 2A.5) and (ii) 16.5. Purchaser shall pay the sum of the Purchase Price
at the Closing by wire transfer of immediately available funds to such account
(or accounts) designated by Seller in written instructions to Purchaser at
least
one (1) day prior to the Closing.
b. Included
Tenant Agreements Not Commenced as of Closing.
In the
event that any Included Tenant Agreement has not Commenced as of the Initial
Closing Date, and does not Commence within 90 days following the Initial Closing
Date, Seller shall remit to Purchaser, within five Business Days after such
90th
day, the portion of the Purchase Price previously paid by Purchaser with respect
to such Included Tenant Agreement (such amount, the “Remitted
Purchase Price”);
provided
that in
the event that such Included Tenant Agreement Commences on or prior to the
date
that is 180 days after the Initial Closing Date, Purchaser shall pay to Seller
the Remitted Purchase Price with respect to such Included Tenant Agreement
within five Business Days after the date that such Included Tenant Agreement
Commences. Purchaser shall use its commercially reasonable efforts after the
Initial Closing Date to cause any Included Tenant Agreement that has not
Commenced to Commence as soon as reasonably practicable after the Initial
Closing. In addition, after the Initial Closing Date, Purchaser shall (i)
participate in biweekly conference calls with Seller to review the Commenced
status of each such Included Tenant Agreement, (ii) permit Seller, upon
reasonable notice and during normal business hours, to inspect the Sites covered
by such Included Tenant Agreements to confirm the substantial completion of
installation of the Tenant’s equipment on the Tower relating to such Included
Tower Agreement, (iii) at the request of Purchaser, permit Seller to assist
Purchaser in causing each such Included Tenant Agreement to Commence and (iv)
provide a monthly report to Seller showing the Commenced status of each such
Included Tenant Agreement (the “Tenant
Lease Commencement Report”).
Purchaser shall reasonably assist Seller and its agents in their review of
the
Tenant Lease Commencement Reports.
c. Deposit
Escrow.
On or
prior to the Effective Date, Purchaser will deliver to the Escrow Agent the
aggregate amount of $500,000 (the
“Deposit
Escrow”),
which
amount shall be held by the Escrow Agent pursuant to the terms of the Escrow
Agreement. In
the
event that this Agreement is terminated by Seller in accordance with
(a) Section 8.1(d)(i),
or
(b) Section 8.1(c)
if
Purchaser’s failure to fulfill any obligation or condition hereunder was the
cause of the Closing not occurring by the Termination Date, Escrow Agent shall
deliver the Escrow Balance to Seller as liquidated damages. The parties agree
that the Escrow Deposit (or a portion thereof) is a fair and reasonable
approximation of the damages that would be incurred by Seller in the event
of
such a pre-Closing breach by Purchaser and that it would not be possible to
quantify the actual damages which may be incurred due to such breach.
Notwithstanding any provision herein to the contrary, the recovery of the Escrow
Deposit (or a portion thereof) is the sole and exclusive remedy available to
Seller due to such a pre-Closing breach by Purchaser and all other remedies
are
hereby waived.
7
3.2. Closing.
a. Unless
this Agreement shall have been terminated pursuant to Section
8.1
and
subject to the satisfaction or, to the extent permitted by Applicable Law,
waiver of the conditions set forth in Article
7,
the
initial closing of the Purchase (the “Initial
Closing”)
shall
take place on the date that is 45 days after the Effective Date (the
“Anticipated
Closing Date”).
The
parties intend to exchange executed documents prior to the Closing, to be held
in escrow by counsel, with such closing to be conducted by telephone conference
call, provided that if a physical meeting for the execution or exchange of
documents is requested by either party, such meeting shall take place at the
offices of Seller’s counsel. In the event that all of the closing conditions set
forth in Article
7
have not
been met or waived by the Anticipated Closing Date, the Initial Closing shall
take place on the fifth (5th) Business Day following the satisfaction or waiver
of all such conditions, or on such other date and the Seller and Purchaser
shall
mutually agree. The date the Initial Closing occurs shall be referred to as
the
“Initial
Closing Date”.
b. For
each
Tower that constitutes a Rejected Asset and that is not assigned to PCS Towers
pursuant to a Contribution Agreement at the Initial Closing, as specified in
Section 3.1(a), the Purchase Price shall exclude an amount equal to the product
of (x) 16.5 and (y) Tower Cash Flow for such Tower (as finally determined in
accordance with Section
2A.5).
If,
within the Subsequent Cure Period, the Defect(s) in the Rejected Assets have
been Cured, and the conditions to closing with respect thereto fulfilled (or
waived), a subsequent closing (the “Subsequent
Closing,”
and
together with the Initial Closing, the “Closing”
or
“Closings”)
shall
occur for such Tower and any related Tower Assets (“Additional
Tower Assets”)
on the
date which is five (5) Business Days after satisfaction of such conditions
(the
“Subsequent
Closing Date,”
and
together with the Initial Closing Date, each a “Closing
Date”),
with
the purchase price for such Additional Tower Assets being the product of (x)
16.5 and (y) the Tower Cash Flow for such Additional Tower Assets (as finally
determined in accordance with Section
2A.5).
At
each Subsequent Closing, such Additional Tower Assets will be contributed to
PCS
Towers through a Contribution Agreement on such Subsequent Closing
Date.
c. At
or
prior to each Closing, (i) the applicable Contributor(s) shall assign and
transfer to PCS Towers all of its right, title and interest in and to the
applicable Tower Assets, free and clear of all Liens other than Permitted Liens,
(ii) Purchaser shall pay to Seller an amount equal to the product of (x) 16.5
and (y) the Tower Cash Flow for each Site being contributed to PCS Towers,
and
(iii) each of the parties shall deliver such instruments and documents as are
described in this Agreement or as are reasonably requested by the parties.
d. If
all of
the conditions to the Initial Closing as set forth in Article 7 have been
satisfied or waived other than the CPUC Condition, the parties agree to close
with respect to all of the Tower Assets for which all such conditions have
been
met, other than the Tower Assets owned by SureWest Telephone (the “Telephone
Tower Assets”)
and
the Rejected Assets (if any). In such event, at the Initial Closing (i) Seller
and SureWest Broadband shall assign and transfer to PCS Towers all of their
right, title and interest in and to the Tower Assets other than the Rejected
Assets, free and clear of all Liens other than Permitted Liens, (ii) Purchaser
shall pay to Seller an amount equal to the product of (x) 16.5 and (y) the
Tower
Cash Flow for each Site being contributed to PCS Towers by Seller and SureWest
Broadband, and (iii) each of the parties shall deliver such instruments and
documents as are described in this Agreement. The parties acknowledge and agree
that neither party shall have the right to terminate this Agreement pursuant
to
Section 8.1(c) if the transfer of the Telephone Tower Assets does not occur
prior to the Termination Date, and in such event, the Termination Date with
respect to the transfer of the Telephone Tower Assets only shall be extended
to
April 30, 2009.
8
3.3. Post-Closing
Tenant Leases and Payments.
a. On
the
fifth (5th)
Business Day prior to the Initial Closing, Seller shall deliver to Purchaser
a
schedule of all tenant lease applications that have been signed and for which
deposits have been received by the Tower Owners (collectively, the “Pending
Tenant Applications”)
as of
such date. To the extent that any of the Pending Tenant Applications convert
into a Post-Closing Tenant Lease following the Initial Closing Date and up
to
180 days thereafter, Purchaser shall pay to Seller the following amount (the
“Allocable
Post-Closing Purchase Price”)
(a)
16.5 times an amount equal to the product of twelve (12) times the monthly
rent
under each Post-Closing Tenant Lease (less any revenue share payable to the
landlords) executed within 120 days after the Initial Closing Date and (b)
8.25
times an amount equal to the product of twelve (12) times the monthly rent
under
each Post-Closing Tenant Lease (less any revenue share payable to the landlords)
executed between 121 and 180 days after the Initial Closing Date (each of such
payment dates being referred to herein as a “Post-Closing
Payment Date”).
Purchaser shall use its commercially reasonable efforts after the Initial
Closing Date to convert the Pending Tenant Applications into Post-Closing Tenant
Leases as soon as reasonably practicable after the Initial Closing Date. In
addition, after the Initial Closing Date, Purchaser shall (i) participate in
biweekly conference calls with Seller to review the status of each Pending
Tenant Application, (ii) permit Seller, upon reasonable notice and during normal
business hours, to inspect the Sites covered by such Pending Tenant Applications
to confirm the substantial completion of installation of the Tenant’s equipment
on the Tower relating to such Pending Tenant Application, (iii) at the request
of Purchaser, permit Seller to assist Purchaser in causing each such Pending
Tenant Application to convert into a Post-Closing Tenant Lease and (iv) and
shall provide a monthly report to Seller showing the status of each Pending
Tenant Application. Within five (5) Business Days prior to each Post-Closing
Payment Date, Purchaser shall submit a schedule showing the Allocable
Post-Closing Purchase Price payable on such Post-Closing Payment Date
(“Post-Closing
Schedule”).
Purchaser shall reasonably assist Seller in its review of the Post Closing
Schedule.
b. Any
amounts due to the Seller pursuant to Section
3.3(a)
with
respect to a Post-Closing Tenant Lease shall be paid by the Purchaser as
follows: (i) 1/3rd
of such
amount shall be paid upon the full execution of such Post-Closing Tenant Lease;
(ii) 1/3rd
of such
amount shall be paid when the Tenant thereunder installs its communications
equipment at the Site; provided that such installation occurs prior to the
applicable Post-Closing Payment Date; and (iii) 1/3rd
of such
amount shall be paid when the Tenant commences regularly scheduled rental
payments in accordance with the terms of such Post-Closing Tenant Lease,
provided that rental payments are received by Purchaser prior to the applicable
Post-Closing Payment Date.
9
c. Purchaser
shall pay the portion of the Allocable Post-Closing Purchase Price that is
due
to Seller at each Post-Closing Payment Date by wire transfer of immediately
available funds to such account (or accounts) designated by Seller in written
instructions to Purchaser at least one (1) day prior to the Post-Closing Payment
Date.
3.4. Apportionment
of Real Estate Taxes, Rent, Utilities.
Appropriate prorations shall be made on a daily basis as of the close of
business on the applicable Closing Date with respect to rental and lease
payments, security deposits, utilities, current year real and personal property
taxes and all other items of income and expense due or payable under the Ground
Leases and Tenant Leases, in each case, of a nature ordinarily prorated as
of
closing in real estate transactions (and not separately addressed elsewhere
in
this Agreement) with Seller being entitled to all such income and responsible
for all such expenses relating to the Tower Assets then being conveyed for
all
periods on or prior to the applicable Closing Date and Purchaser being entitled
to all such income and responsible for all such expenses relating to the Tower
Assets then being conveyed for all periods subsequent to the applicable Closing
Date. A reasonable estimate of such pro-rations shall be agreed to by Seller
and
Purchaser at least five (5) Business Days prior to the applicable Closing Date
(the “Pro-Rations
Estimate”),
and
shall be settled in immediately available funds at the applicable Closing.
All
past due real estate and personal property taxes, if any, shall be paid by
Seller at or before the applicable Closing. Seller expressly agrees that if
it
receives any rents, revenues or other payments under the Tenant Leases and
Related Contracts included in the Tower Assets after the applicable Closing
Date, it shall remit to Purchaser the moneys so received within five (5)
Business Days after receipt thereof and Purchaser shall promptly apportion
such
amounts in accordance with the terms of this Section
3.4
and
deliver to such Seller the amount, if any, to which Seller is entitled pursuant
to the terms hereof. Notwithstanding the foregoing, at each Closing, Purchaser
shall receive a credit for the full amount of all rent due under the Tenant
Leases for the month immediately following such Closing and Seller shall be
entitled to keep all such amounts that it receives from Tenants for such month.
Purchaser agrees to use commercially reasonable efforts to assist Seller and
the
Companies, as applicable, in collecting any outstanding rent due under the
Tenant Leases for which it has received credit pursuant to the foregoing
sentence. Purchaser expressly agrees that if it receives any rents, revenues
or
other payments under the Tenant Leases and Related Contracts for which it has
received a credit at the applicable Closing, it shall remit to Seller the moneys
so received within five (5) Business Days after receipt thereof.
10
ARTICLE
4.
REPRESENTATIONS
AND WARRANTIES OF COMPANIES AND SELLER
Except
as
set forth in the Disclosure Schedule, each Company and Seller hereby represents
and warrants to Purchaser as follows:
4.1. Organization
and Business; Power and Authority; Capitalization; Effect of
Transaction.
a. West
Coast PCS and PCS Towers are each a limited liability company, duly organized,
validly existing and in good standing under the laws of the State of Delaware
and has all requisite power and authority to own or lease all of its properties
and assets. Each Company and Seller has all requisite power and authority
necessary to enable it to execute and deliver, and to perform its obligations
under, this Agreement and each Seller Collateral Document and to consummate
the
Purchase, and the execution, delivery and performance by each Company and Seller
of this Agreement and each Seller Collateral Document have been duly authorized
by all requisite action on the part of such Company and Seller.
b. Seller
owns all of the issued and outstanding membership interests of West Coast PCS
and West Coast PCS owns all of the issued and outstanding membership interests
of PCS Towers, in each case, free and clear of any Liens. None of the Membership
Interests are subject to pre-emptive or similar rights. The Membership Interests
constitute 100% of the outstanding membership interests of West Coast PCS,
and
the Membership Interests are duly authorized, validly issued, and fully paid.
Other than the Membership Interests and this Agreement, there are no other
issued and outstanding membership interests in West Coast PCS and there are
no
outstanding or authorized options, warrants, rights, agreements or commitments
to which any of the Companies or the Seller is a party and which is binding
upon
any of the Companies or the Seller relating to the issuance, disposition or
acquisition of any membership interests of West Coast PCS or membership
interests of PCS Towers. There are no outstanding or authorized appreciation,
phantom shares or similar rights with respect to any of the Companies. None
of
the Membership Interests were issued in violation of any Applicable Law.
c. Neither
the execution and delivery by either Company or Seller of this Agreement or
any
Seller Collateral Document, nor the consummation of the Purchase, nor compliance
with the terms, conditions and provisions hereof or thereof by either Company
or
Seller will conflict in any material respect with, or result in a material
breach or violation of, or constitute a material default under, any Organic
Document of either Company or Seller or, to the Seller Parties’ knowledge, any
Applicable Law.
4.2. Ordinary
Course of Business.
Each
Tower Owner has conducted its business related to the Tower Assets in the usual
and ordinary course, and has not disposed of any of the Tower Assets, except
in
the Ordinary Course of Business. Since July 1, 2008, there has been no Material
Adverse Change in the Tower Assets.
4.3. Legal
Actions.
Except
as set forth in Section
4.3 of the Disclosure Schedule,
there
are no legal actions, orders or stipulations of or by any Authority of any
kind
pending or, to the Seller Party’s knowledge, threatened at law, in equity or
before any Authority against either Company or the Tower Assets or relating
to
the ownership and operation of the Tower Assets.
4.4. Properties.
Section
4.4 of the Disclosure Schedule
contains
a true and accurate description of all real property associated with the Tower
Assets, including without limitation the nature of the applicable Tower Owner’s
interest in such real property. Except as set forth in Section
4.4 of the Disclosure Schedule
and for
Permitted Liens: (a) the Tower Owners own the Tower Assets, free and clear
of
all Liens other than Permitted Liens; and (b) no Tower Owner nor Seller has
received notice that a Site is subject to any condemnation or eminent domain
proceedings or that any Site, including the operations thereof, is not in
compliance in all material respects with Applicable Laws. To the Seller Party’s
knowledge, the Sites are in compliance in all material respects with all
Applicable Laws.
11
4.5. Tower
Cash Flow; Indebtedness.
a. Section
4.5 of the Disclosure Schedule
contains: (i) a list of each Tenant Lease that has Commenced as of the Effective
Date, (ii) a list of each Tenant Lease that has been fully executed but has
not
Commenced as of the Effective Date; (iii) a list of each Pending Tenant
Application as of the Effective Date, and
(iv)
the true and correct Tower Cash Flow for each Site as of the date that is five
(5) Business Days prior to the Initial Closing Date and has been calculated
in
accordance with the definition of Tower Cash Flow set forth herein (the
“TCF
Schedule”);
provided, that, for Purchaser’s convenience only, Seller and the Companies shall
provide a preliminary good faith estimate of the TCF Schedule as of the
Effective Date (“Preliminary
TCF Schedule”),
for
which Seller and the Companies shall not be liable for errors or breaches
therein.
b. No
Company has incurred or has any, nor at Closing will any Company have any,
indebtedness for borrowed money, has issued any debt securities or assumed,
guaranteed or endorsed or otherwise become responsible for the obligations
of
another Person.
4.6. Broker
or Finder.
Except
for UBS Securities, LLC, whose fee shall be paid solely by Seller, no agent,
broker, investment banker, financial advisor or other firm or Person engaged
by
or on behalf of Seller or any of its Affiliates is or will be entitled to a
fee
or commission in connection with the Purchase.
4.7. Approvals,
Other Authorizations, Consents, Reports, Etc.
Except
as set forth in Section
4.7 of the Disclosure Schedule:
a. Each
Site
has been owned and operated by the Tower Owners in all material respects in
accordance with all material Governmental Authorizations; no consents are
required to be obtained by the Tower Owners from any Authority under any
Governmental Authorization in order to consummate the Purchase or the
Contribution. All improvements of the Tower Owners included in the Tower Assets
on each Site are in compliance in all material respects with applicable zoning,
wetlands, NEPA, FCC, FAA, the National Historic Preservation Act and any related
or similar state laws, land use Laws and applicable title covenants, conditions,
restrictions and reservations in all material respects, now and at the time
of
development of the Sites as communications facilities; to the Seller Parties’
knowledge, no such Governmental Authorization is the subject of any proceeding
to revoke or terminate any such Governmental Authorization or to fine the
applicable Tower Owner; none of the Seller, any Tower Owner, nor any Site is
charged by any Authority with any material breach or violation of, or material
default in the performance, observance or fulfillment of, any Applicable Law
relating to the Tower Owners’ ownership, use, occupancy management, repair, or
and operation of the Sites;
b. Except
for the third party consents set forth on Section
4.7(b) of the Disclosure Schedule
(collectively, the “Third
Party Consents”),
no
consent, approval or authorization of, or registration or filing with any Person
is required to be obtained in connection with the execution and delivery of
this
Agreement or the consummation of the transactions contemplated hereby; and
12
c. To
the
Seller Parties’ knowledge, no event exists or has occurred during the last two
(2) years of the Tower Owners’ ownership of the Sites, which constitutes, or but
for any requirement of giving of notice or passage of time or both would
constitute, such a material breach, violation or default, under any Governmental
Authorization or any Applicable Law.
4.8. Insurance.
Set
forth on Section
4.8 of the Disclosure Schedule
is a
list and description (including coverages) of all insurance policies or binders
of insurance that relate to the Tower Assets. No notice of reduction in
coverage, increase in premium, or cancellation or non-renewal with respect
to,
or disallowance of any material claim under, any such policy or binder has
been
received by Seller or the Tower Owners.
4.9. Taxes;
Utilities.
a. (i) Each
of the Companies, Seller, the Contributors, and the common parent of the
affiliated group of corporations which any of the Contributors are current
members (the “Parent”,
and
collectively with the Companies and the Contributors the “Taxpayers”)
has
(A) duly and timely filed (taking into account applicable extensions) all
Tax Returns required to be filed by it, and such Tax Returns are true, correct
and complete in all material respects, and (B) paid in full all Taxes
required to be paid by it, whether or not shown as due on such Tax Returns;
(ii) no material deficiencies for any Taxes have been proposed, asserted or
assessed in writing against any of the Taxpayers which deficiencies have not
since been resolved; and (iii) there are no Liens for Taxes upon the assets
of any of the Companies or the Contributors except for statutory liens for
current Taxes not yet due. None of the Companies or the Contributors is or
may
be liable for the Taxes of another Person (other than the affiliated group
of
corporations of which the Companies are current members of) (A) under Treasury
Regulations Section 1.1502-6 (or comparable provisions of state, local or
foreign law), (B) as a transferee or successor or (C) by contract or indemnity
or otherwise. Each of the Companies will be properly treated as a disregarded
entity for federal and California state income and franchise tax purposes as
of
the Initial Closing Date.
b. None
of
the Taxpayers has received written notice of (i) any pending or proposed audit
or administrative or judicial proceeding with respect to any Tax Return of
or
with respect to any of the Companies or the Contributors or (ii) any proposed
deficiency for or final adjustment of Taxes against any of the Taxpayers. No
closing agreement pursuant to Section 7121 of the Internal Revenue Code of
1986, as amended (the “Code”),
(or
any similar provision of state, local or foreign law) has been entered into
by
or with respect to any of the Companies or the Contributors.
c. All
Taxes
required to be withheld, collected or deposited by or with respect to each
of
the Companies and the Contributors has been timely withheld, collected or
deposited as the case may be, and to the extent required, have been paid to
the
relevant taxing authority.
d. None
of
the Taxpayers has granted any waiver of any federal, state, local or foreign
statute of limitations with respect to, or granted any extension of a period
for
the assessment of, any Tax, which waiver or extension has not since expired.
None of the Taxpayers is currently the beneficiary of any extension of time
in
which to file a Tax Return.
13
e. None
of
the Companies or the Contributors has participated in any transaction giving
rise to a disclosure obligation as a “reportable transaction” under
Section 6011 of the Code and the regulations thereunder.
f. The
beneficial owner of the equity interests in Seller is not a “foreign person”
within the meaning of Section 1445 of the Code and the regulations
thereunder.
g. None
of
the Companies is a party to or bound by any Tax indemnity agreement, Tax sharing
agreement or Tax allocation agreement which will be in effect after the
Closing.
4.10. Access.
Each
Site has all easements and rights-of-way that are necessary to provide access
to
and from such Site subject to the restrictions set forth in such easements
or
rights-of-way and no action is pending or, to the Seller Parties’ knowledge,
threatened which would have the effect of terminating or limiting such access.
4.11. Material
Agreements.
Section
4.11 of the Disclosure Schedule
contains
a true and correct list of (i) the Ground Leases, all Tenant Leases, and Related
Contracts, complete copies of which have been made available to Purchaser,
and
(ii) all consents required thereunder in order to consummate the Purchase.
Except as set forth in Section
4.11 of the Disclosure Schedule:
a. Each
Tenant Lease, Ground Lease and Related Contract is in full force and effect,
has
been duly authorized, executed and delivered by the applicable Tower Owner
and,
to the Seller Parties’ knowledge, the other parties thereto, and is a legal,
valid and binding obligation of the applicable Tower Owner, enforceable in
accordance with its terms, except as enforcement may be limited by general
principles of equity whether applied in a court of law or a court of equity
and
by bankruptcy, insolvency and similar laws affecting creditors’ rights and
remedies generally;
b. No
Tower
Owner nor, to the Seller Parties’ knowledge, any other party to a Ground Lease,
Tenant Lease or Related Contract has failed to duly comply with all of the
material terms and conditions of each such lease or contract or has done or
performed, or failed to do or perform (and no claim is pending or, to the Seller
Parties’ knowledge, threatened to the effect that the applicable Tower Owner,
the other party thereto or any of their Affiliates has not so complied, done
and
performed or failed to do and perform) any act which would invalidate or provide
grounds for the other party thereto to terminate (with or without notice,
passage of time or both) any of them;
14
c. Neither
Seller nor any Tower Owner has received any correspondence or notice from any
party to a Ground Lease, Tenant Lease or Related Contract regarding the
termination or expiration of the term of such agreement;
d. The
applicable Tower Owner is the original lessee (or has validly succeeded to
the
rights of the original lessee) under each of the Ground Leases, holds the
leasehold interest created under the Ground Leases, and is the sole owner of
the
Improvements located on the real property being leased thereunder. To the Seller
Parties’ knowledge, the Ground Leases and Improvements are free and clear of all
Liens, excepting only the Permitted Liens. Furthermore: (i) the applicable
Tower
Owner is in actual possession of the leased premises under each of the Ground
Leases; (ii) the applicable Tower Owner has paid the rent set forth in each
of
the Ground Leases on a current basis and there are no past due amounts; (iii)
except as expressly set forth in each of the Ground Leases, the applicable
Tower
Owner is not obligated to pay any additional rent or charges to any of the
Ground Lessors for any period subsequent to the Closing Date; (iv) the Tower
Owners have not received notice from or given notice to any of the Ground
Lessors claiming that such Ground Lessor or the applicable Tower Owner is in
default under any of the Ground Leases, except for any such default that has
been cured or waived and, to the Seller Parties’ knowledge, there is no event
which, with the giving of notice or the passage of time or both, would
constitute such a default; (v) none of the Ground Leases provides for
non-monetary rent or other consideration to the Ground Lessor thereunder; (vi)
except as set forth Section
4.11(d) of the Disclosure Schedule,
none of
the Ground Lessors is an Affiliate of Seller; and (vii) except as set forth
Section
4.11(d) of the Disclosure Schedule,
the
Tower Owners have not prepaid any rent under any of the Ground Leases more
than
1 month in advance;
e. The
applicable Tower Owner is the original lessor (or has validly succeeded to
the
rights of the original lessor) under each of the Tenant Leases. To the Seller
Parties’ knowledge, the Tenant Leases are free and clear of all Liens, excepting
only the Permitted Liens. Other than the Tenant Leases, there are no leases,
subleases, licenses or other occupancy agreements (written or oral) which grant
any possessory interest in or to the Tower Sites or the Improvements thereon,
or
which grant other rights with respect to the use of any of the Tower Assets.
Furthermore: (i) the applicable Tower Owner is collecting the rent set forth
in
each Tenant Lease on a current basis and there are no past due amounts
thereunder; (ii) no Tenant is entitled to any rental concessions or abatements
in rent for any period subsequent to the Closing Date; (iii) the applicable
Tower Owner has not given notice to any Tenant claiming that the Tenant is
in
default under its Tenant Lease, and, to the Seller Parties’ knowledge, there is
no event which, with the giving of notice or the passage of time or both, would
constitute such a default; (iv) the Tower Owners have not received notice from
any Tenant claiming that the Tower Owners are in default under the Tenant Lease,
or claiming that there are defects in the improvements, which default or defect
remains in any manner uncured; (v) no Tower Owner has received notice from
any
Tenant asserting any Claims, offsets or defenses of any nature whatsoever to
the
performance of its obligations under its Tenant Lease and, to the Seller
Parties’ knowledge, there is no event which, with the giving of notice or the
passage of time or both, would constitute the basis of such Claim, offset or
defense; (vi) no Tenant Lease provides for non-monetary rent or other
consideration to the lessor thereunder; (vii) no Tenant is an Affiliate of
Seller; and except as expressly set forth in the Tenant Leases or in
Section
4.11(e) of the Disclosure Schedule,
there
are no security deposits under any of the Tenant Leases; and
15
f. There
are
no agreements to which a third party has the right to market or lease space
to
any Person at a Site pursuant to a marketing or management agreement; there
are
no rights of first refusal or similar pre-emptive rights with respect to any
of
the Tenant Leases or Ground Leases; and
g. Except
as
set forth Section
4.11(g) of the Disclosure Schedule,
there
are no (i) prepaid rental, lease, sublease, license, sublicense, occupancy
or
use payments under the Tenant Leases in respect of any period exceeding one
(1)
calendar month, or (ii) rental, lease, sublease, license, sublicense, occupancy
or use payments under Tenant Leases required to be made to the Tower Owners
or
any of their Affiliates with respect to a period exceeding one (1) calendar
month; or (iii) removal bonds, cash deposits, letters of credit or other
security that the Tower Owners have posted relative to the Towers or the Sites.
4.12. Environmental
Matters.
a. No
Tower
Owner has entered into or received any consent decree, compliance order or
administrative order issued pursuant to any Environmental Law relating to its
ownership or operation of the Tower Assets and no Tower Owner is a party in
interest with respect to any judgment, order, writ, injunction or decree issued
pursuant to any Environmental Law relating to its ownership or operation of
the
Tower Assets;
b. Each
Tower Owner is in compliance in all material respects with, and has all permits
required by, all Environmental Laws relating to its ownership or operation
of
the Tower Assets; no Tower Owner is the subject of or, to Seller Parties’
knowledge, threatened with any legal action involving a demand for damages
or
other potential liability with respect to violations or breaches of any
Environmental Law relating to its ownership or operation of the Tower
Assets;
c. No
Tower
Owner has received any written notice that (i) any Environmental Permit required
in connection with the ownership or operation of the Tower Assets is not in
full
force and effect or (ii) it is not in compliance in all material respects with
the terms of all of its Environmental Permits required in connection with the
ownership or operation of the Tower Assets;
d. The
Tower
Owners will provide Purchaser with access to a true, complete and correct copy
of all surveys, reports, assessments, audits, evaluations, investigations,
sampling results or other documents relating to the presence, migration or
disposal of any Hazardous Substance or noncompliance with Environmental Law
prepared for or at the request of the Companies that are in its possession
or
control relating to the Tower Assets. Section
4.12 of the Disclosure Schedule
sets
forth a true and correct list of all Xxxxx 0, Xxxxx I and Phase II environmental
site assessment reports and any other third party reports showing the existence
of a Hazardous Substance or non-compliance with Environmental Law existing
in
the files of the Tower Owners relating to the Tower Assets.
e. Notwithstanding
any other provision of this Agreement to the contrary, the representations
and
warranties of the Companies in this Section
4.12
constitute the sole representations and warranties of the Companies with respect
to any matter (including any liability) relating to Environmental Laws.
16
4.13. Bankruptcy
Matters.
No
Company has (a) changed its name or suspended its business, (b) had proceedings
pending or threatened by or against it in bankruptcy or reorganization in any
state or Federal court, (c) resolved or otherwise agreed to file a case in
bankruptcy or reorganization in any state or Federal court, or (d) admitted
in
writing its inability to pay its debts as they become due. Each Company is, and
after giving effect to the transactions contemplated hereby will be,
solvent.
4.14. No
Third Party Rights.
No
Person other than Purchaser by reason of this Agreement has any contractual
or
other right of first refusal or any other right or option to acquire the Tower
Assets or any portion thereof, including through any merger, consolidation,
liquidation, dissolution or other reorganization.
4.15. Past
Due Tenant Lease Payments.
The
amounts past due under the Tenant Leases reflected on Section
4.15 of the Disclosure Schedule
(the
“Past
Due Tenant Lease Payments”)
represent (and the Past Due Tenant Lease Payments created thereafter will
represent) bona fide claims of the Tower Owners against the tenants under the
Tenant Leases. The Past Due Tenant Lease Payments are, to the Seller Parties’
knowledge, subject to no defenses, counterclaims or rights of set-off.
Section
4.15 of the Disclosure Schedule
sets
forth a true, complete and accurate list of the Past Due Tenant Lease Payments
and the aging of such Past Due Tenant Lease Payments based on the following
schedule: 0-30 days, 31-60 days, 61-90 days and over 90 days, as of the Cash
Flow Report Date. There have been no reversals or write-offs of accounts
receivable with respect to the Sites during the past 12 months.
4.16. Employees;
Employee Benefit Plans.
a. None
of
the Companies has and has never had any employees.
b. None
of
the Companies has any Employee Benefit Plan for which Purchaser or any of the
Companies might become liable as a result of the transaction contemplated hereby
or which might encumber the Tower Assets after the Closing.
4.17. Officers
and Directors.
Set
forth on Section
4.17 of the Disclosure Schedule
is a
list of the officers and directors of each Company.
4.18. Bank
Accounts and Powers of Attorney.
None of
the Companies has an account or safe deposit box with any bank, savings
institution and other financial institution. Each person holding a power of
attorney or similar grant of authority on behalf of any Company is identified
on
Section
4.18 of the Disclosure Schedule.
Except
as disclosed on such Schedule, none of the Companies has given any revocable
or
irrevocable powers of attorney to any person, firm, corporation or organization
relating to its business for any purpose whatsoever.
4.19. No
Other Representations or Warranties.
Except
for the representations and warranties set forth in this Article
4,
none of
Companies nor Seller makes any other express or implied representation or
warranty on behalf of itself or any of its properties or
businesses.
17
ARTICLE
5.
REPRESENTATIONS
AND WARRANTIES OF PURCHASER
Purchaser
hereby represents and warrants to Seller as follows:
5.1. Organization
and Business; Power and Authority; Effect of Transaction.
Purchaser is a limited liability company duly organized, validly existing and
in
good standing under the laws of its jurisdiction of organization, has all
requisite power and authority to own and operate the Tower Assets and will,
prior to the Closing Date, be duly qualified and in good standing as a foreign
limited liability company in each other jurisdiction in which the ownership
and
operation of the Tower Assets requires such qualification except for such
qualifications the failure of which to obtain, individually or in the aggregate,
would be reasonably likely not to have a Material Adverse Effect on Purchaser.
Neither the execution and delivery by Purchaser of this Agreement or any
Collateral Document, nor the consummation of the Purchase, nor compliance with
the terms, conditions and provisions hereof or thereof by Purchaser will
conflict with, or result in a breach or violation of, or constitute a default
under, any Organic Document of Purchaser or any Applicable Law.
5.2. Broker
or Finder.
No
agent, broker, investment banker, financial advisor or other firm or Person
engaged by or on behalf of Purchaser or any of its Affiliates is or will be
entitled to a fee or commission in connection with the Purchase.
5.3. Legal
Proceedings.
Neither
Purchaser nor any of its subsidiaries is a party to any, and there are no
pending or, to the knowledge of Purchaser, threatened, material legal,
administrative, arbitral or other material proceedings, claims, actions or
governmental or regulatory investigations of any nature challenging the validity
of the transactions contemplated by this Agreement and other agreements and
certificates that are required to be executed pursuant to this Agreement.
5.4. Financial
Capability.
Purchaser will have available at the Closing Date sufficient immediately
available funds to enable Purchaser to pay in full the Purchase Price and all
fees and expenses payable by Purchaser in connection with this Agreement and
the
transactions contemplated hereby. Without limiting the generality of the
foregoing, Purchaser’s ability to consummate the transactions contemplated by
this Agreement is not contingent on Purchaser’s ability to complete any public
offering or private placement of equity or debt securities or to obtain any
other type of financing prior to or on the Closing Date.
5.5. Investment
Intent.
Purchaser acknowledges that the Membership Interests have not been registered
under the Securities Act of 1933, as amended, any successor statute thereto,
and
the rules and regulations promulgated thereunder (the “Securities
Act”),
and
may not be resold absent registration under the Securities Act or an applicable
exemption from the registration and prospectus delivery requirements of the
Securities Act. Purchaser further acknowledges that neither Seller nor the
Companies are under any obligation, nor assume any obligation pursuant to the
terms hereof, or the terms of any other certificate, instrument or other
document executed and delivered by Seller or the Companies in connection with
the transactions contemplated hereby, to register the Membership Interests
under
the Securities Act or any state securities or “blue sky” Laws. Purchaser is
acquiring the Membership Interests for its own account, for investment purposes
only and not with a view toward any resale or other distribution thereof (within
the meaning of the Securities Act). Purchaser qualifies as an “accredited
investor” as that term is defined in Rule 501 of Regulation D promulgated under
the Securities Act. Purchaser is knowledgeable, sophisticated and experienced
in
making decisions with respect to investments in shares presenting an investment
decision like that involved in the purchase of the Membership Interests, and
has
requested, received, reviewed and considered all information it deemed relevant
in making an informed decision to purchase the Membership
Interests.
18
5.6. No
Other Representations or Warranties.
Except
for the representations and warranties set forth in this Section
5,
Purchaser does not make any other express or implied representation or warranty
on behalf of itself, any of its Subsidiaries or any of their respective
properties or businesses.
ARTICLE
6.
COVENANTS
6.1. Agreement
to Cooperate; Certain Other Covenants.
Each of
the parties shall use commercially reasonable efforts to take, or cause to
be
taken, all actions and to do, or cause to be done, all things necessary under
Applicable Law to consummate the Purchase on and subject to the terms and
conditions of this Agreement.
6.2. Conduct
of Business by Seller Pending the Closing.
After
the date hereof and prior to the Closing Date or earlier termination of this
Agreement, unless Purchaser shall otherwise consent in writing, which consent
shall not be unreasonably withheld, delayed or conditioned, Seller and the
Tower
Owners shall:
a. own
and
operate the Tower Assets in the Ordinary Course of Business which shall include,
without limitation, (i) keeping each of the Tower Assets free of debris and
excessive vegetation, in good commercial working order (including all gates,
work, doors, locks and fences), and NOTAM free; (i) not selling, disposing
of or
otherwise transferring the Sites; and (iii) maintaining insurance on the Tower
Assets in such amounts and against such risks and losses as are consistent
with
past practice.
b. except
as
set forth in Section
6.5
below,
not enter into, cancel, modify, consent to the assignment of or terminate any
contracts, arrangements, understandings or agreements that will materially
and
adversely affect any of the Tower Assets, including but not limited to any
amendment, renewal, modification, assignment, termination or other alteration
of
any Tenant Lease, Ground Lease or Related Contract; and
c. not
add,
change, modify or remove any equipment at the Tower outside of the Ordinary
Course of Business; and not make, grant or suffer any Liens with respect to
any
of the Tower Assets or any portion thereof that will not be discharged at or
prior to Closing, other than Permitted Liens; not undertake or commence any
renovations or alterations on the Tower Assets outside of the Ordinary Course
of
Business; not apply any of the security deposits relating to the Tenant Leases,
whether to a default of a tenant or otherwise, except as permitted pursuant
to
the terms and conditions of the Tenant Leases.
19
6.3. Non-solicitation.
From
the Effective Date until the earlier to occur of (i) the termination of this
Agreement in accordance with its terms and (ii) the Closing Date, Seller and
the
Companies will not (and cause any of its respective members, employees,
representatives or agents not to), directly or indirectly, solicit, initiate,
encourage or participate in negotiations in any manner with respect to, or
furnish or cause or permit to be furnished any information to any Person (other
than Purchaser or Purchaser’s representatives) in connection with, any inquiry
or offer for any purchase or sale of any interest in the Tower Assets, or any
merger, acquisition, combination, sale or other disposition or similar
transaction involving Seller, the Companies or the Tower Assets (collectively,
a
“Third-Party
Proposal”).
Seller shall promptly inform Purchaser of the occurrence of a Third-Party
Proposal and, unless prohibited by a confidentiality or non-disclosure
agreement, the terms thereof. If Seller (or any of their respective members,
partners, employees, representatives or agents) breaches or threatens to commit
a breach of, any of the provisions of Section
5.3,
Purchaser shall have the right (in addition to any other rights and remedies
available to Purchaser at law or in equity) to equitable relief (including
injunctions) against such breach or threatened breach, it being acknowledged
and
agreed that any such breach or threatened breach will cause irreparable harm
to
Purchaser and that money damages would not be an adequate remedy to Purchaser.
6.4. Pre-Closing
Inspection.
Prior
to the Closing, the Tower Owners shall afford Purchaser and its representatives
access to the Sites to ensure that Seller and the Companies have complied with
their obligations herein.
6.5. Form
of Tenant Lease.
To the
extent that a Tower Owner proposes to enter into any new Tenant Lease between
the Effective Date and the applicable Closing Date, such Tower Owner shall
use
Purchaser’s form of tenant lease agreement attached hereto as Exhibit
C,
except
for the Pending Tenant Applications set forth on Section
4.5(a)(iii) of the Disclosure Schedule
for
which a Tower Owner has previously delivered a proposed form of tenant lease
to
the proposed Tenant thereunder. In each instance, Seller shall submit such
new
Tenant Lease to Purchaser for its approval, which approval shall not be
unreasonably withheld, delayed or conditioned. Purchaser will review all
proposed new Tenant Leases and either approve or reject (in Purchaser’s
reasonable discretion) such new Tenant Leases within five (5) Business Days
following Purchaser’s receipt thereof.
6.6. Co-Marketing
of Sites.
From
and after the Effective Date until the earlier to occur of (i) the termination
of this Agreement in accordance with its terms and (ii) the Closing Date, Seller
shall permit Purchaser to co-market the Sites for the purpose of leasing space
thereon.
6.7. Tenant
Estoppel Certificates.
From
and after the Effective Date until the earlier to occur of (i) the termination
of this Agreement in accordance with its terms and (ii) the Closing Date,
Purchaser shall be entitled to contact the Tenants under the Tenant Leases
for
the purpose of obtaining an estoppel certificate in a form reasonably acceptable
to Purchaser.
20
6.8. Tax
Matters.
a. Tax
Periods Ending on or before the Initial Closing Date.
Seller
shall prepare or cause to be prepared and file or cause to be filed all Tax
Returns for or
with
respect to the Companies for all Tax periods ending on or prior to the Initial
Closing Date which are filed after the Initial Closing Date. To the extent
permitted by applicable law with respect to any particular Tax regarding the
Companies, the Companies shall elect to treat the Initial Closing Date as the
last day of the taxable period. All such Tax Returns for the Companies (if
any)
shall be prepared and filed on a basis consistent with prior Tax Returns filed
for the Companies (except to the extent counsel for Seller determines that
a Tax
Return cannot be so prepared and filed or an item so reported without being
subject to penalties). Seller shall permit Purchaser to review and comment
on
each such Tax Return described in the preceding sentence prior to filing and
shall make such revisions to such Tax Returns as are reasonably requested by
Purchaser; provided, however, that for the avoidance of doubt, any Tax Returns
which are required to be filed with respect to the Companies on a consolidated,
unitary or other combined basis with Seller or the appropriate parent shall
not
be delivered to Purchaser and subject to review and comment, but in lieu thereof
prior to such filing Seller will provide Purchaser with adequate information
to
review the manner in which transactions of the Companies will be reported on
such Tax Returns and any changes in accounting methods, basis, or other material
changes reflected therein, Purchaser shall have the opportunity to comment
thereon, and Seller shall make such revisions as are reasonably requested by
Purchaser. Seller shall pay all Taxes of the Companies with respect to tax
periods ending on or before the Initial Closing Date. Seller shall have the
right to control all audits or examinations of Tax Returns of or relating to
Seller or the Taxpayers for periods ending on or before the Initial Closing
Date, but to the extent Tax liabilities of the Companies or Purchaser for
Taxable periods after the Initial Closing Date may be affected thereby, Seller
will provide Purchaser with adequate information to review the manner in which
transactions of the Companies will be reflected in any proposed settlement
of
any such audit or examination and any changes in accounting methods, basis,
or
other material changes reflected therein, and Purchaser shall have the
opportunity to comment thereon, and Seller shall make such revisions as are
reasonably requested by Purchaser; provided, however, that Purchaser shall
not
be permitted to participate in any audits or examinations of Tax Returns that
are prepared on a consolidated, unitary or other combined basis.
b. Tax
Periods Beginning Before and Ending After the Initial Closing
Date.
Purchaser shall prepare or cause to be prepared and file or cause to be filed
any Tax Returns of the Companies for Tax periods which begin before the Initial
Closing Date and end after the Initial Closing Date. All such Tax Returns for
the Companies shall be prepared and filed on a basis consistent with prior
Tax
Returns filed for the Companies (except to the extent counsel for Purchaser
determines that a Tax Return cannot be so prepared and filed or an item so
reported without being subject to penalties). Purchaser shall permit Seller
to
review and comment on each such Tax Return described in the preceding sentence
prior to filing and shall make such revisions to such Tax Returns as are
reasonably requested by Seller. Purchaser shall pay all Taxes of the Companies
with respect to such Tax Returns, and Seller shall reimburse Purchaser within
fifteen (15) days after the date on which Taxes are paid with respect to such
periods an amount equal to the portion of such Taxes which relates to the
portion of such Tax period ending on the Initial Closing Date. For purposes
of
the preceding sentence, Taxes shall be allocated in the manner set forth in
Section
6.8(g).
Purchaser shall have the right to control all audits or examinations of Tax
Returns of or relating to Purchaser or the Companies for Taxable periods ending
after the Initial Closing Date, but to the extent Tax liabilities for periods
prior to the Initial Closing Date may be affected thereby, Purchaser will
provide Seller with adequate information to review the manner in which
transactions of the Companies will be reflected in any proposed settlement
of
any such audit or examination and any changes in accounting methods, basis,
or
other material changes reflected therein, and Seller shall have the opportunity
to comment thereon, and Purchaser shall make such revisions as are reasonably
requested by Seller. Purchaser shall not enter into any compromise or agree
to
settle any claim pursuant to any audit or examinations which could result in
a
liability to Taxpayers without the consent of Seller, which consent may not
be
unreasonably withheld.
21
c. Refunds.
Any Tax
refunds with respect to the Companies that are received by Purchaser or the
Companies, and any amounts credited against Tax to which Purchaser or the
Companies become entitled, that relate to Tax periods or portions thereof ending
on or before the Initial Closing Date or allocable to the period up to and
including the Initial Closing Date for a straddle period (allocated in a manner
set forth in Section
6.8(g))
shall
be for the account of Seller, and Purchaser shall pay over to Seller any such
refund or the amount of any such credit within fifteen (15) days after receipt
or entitlement thereto. Refunds and amounts credited against Tax shall be taken
into account only to the extent that they permanently reduce the amount of
Tax
payable by Purchaser or the Companies, and would not result in an increase
in
Tax payable for a period ending after the Initial Closing Date. In the event
any
such refund or credit is subsequently reduced or eliminated as a result of
an
examination, audit, or amended Tax Return, and such reduction or elimination
would not result in deferral of a tax benefit to a later period, Seller will
within fifteen (15) days after demand therefore repay the amount of such
reduction or elimination to Purchaser.
d. Cooperation
on Tax Matters.
Purchaser, the Companies, the Contributors and Seller shall cooperate fully,
as
and to the extent reasonably requested by the other party, in connection with
the filing of Tax Returns pursuant to this Agreement and any audit, litigation
or other proceeding with respect to Taxes. Such cooperation shall include the
retention and (upon the other party’s request) the provision of records and
information which are reasonably relevant to any such audit, litigation or
other
proceeding and making employees available on a mutually convenient basis to
provide additional information and explanation of any material provided
hereunder. The Companies and Seller agree to retain or cause to be retained
all
books and records with respect to Tax matters pertinent to the Companies or
their assets relating to any taxable period beginning before the Initial Closing
Date until the expiration of the statute of limitations (and, to the extent
notified by Purchaser or Seller, any extensions thereof) of the respective
taxable periods, and to abide by all record retention agreements entered into
with any taxing authority. Purchaser and Seller further agree, upon request,
to
use their commercially reasonable efforts to obtain any certificate or other
document from any Governmental entity or any other Person as may be necessary
to
mitigate, reduce or eliminate any Tax that could be imposed (including, but
not
limited to, with respect to the transactions contemplated hereby).
e. Certain
Taxes.
All
transfer, documentary, sales, use, stamp, registration and other such Taxes
and
fees (including any penalties and interest) incurred in connection with this
Agreement (collectively, “Transfer
Taxes”)
shall
be paid one-half by Seller and one-half by Purchaser when they become due;
provided
that,
notwithstanding the foregoing, any Transfer Taxes resulting from the
contribution of the Tower Assets to PCS Structures shall be borne solely by
the
Seller. The party responsible shall file all necessary Tax Returns and other
documentation with respect to all such Transfer Taxes and, if required by
applicable law, the other party will, and will cause its Affiliates to, join
in
the execution of any such Tax Returns and other documentation. The parties
shall
cooperate in obtaining any available exemptions with respect to Transfer
Taxes.
22
f. Characterization
of Payments.
Any
payments made to Seller, the Companies or Purchaser pursuant to Section
9.2,
shall
constitute an adjustment of the consideration paid for the Membership Interests
for Tax purposes and shall be treated as such by Purchaser, the Companies and
Seller on their Tax Returns to the extent permitted by law.
g. Allocation
of Straddle Period Tax.
To the
extent permitted by applicable law with respect to any particular Tax regarding
the Companies, the Companies shall elect to treat the Initial Closing Date
as
the last day of the taxable period. For purposes of determining the amount
of
Taxes that are attributable to the portion of the period up to and including
the
Initial Closing Date with respect to a Tax period beginning before and ending
after the Initial Closing Date (i) in the case of any Taxes other than Taxes
based upon or related to income or receipts, be deemed to be the amount of
such
Tax for the entire Tax period (excluding any increase in Taxes for the period
as
a result of the transfer of the Membership Interests pursuant to this Agreement)
multiplied by a fraction the numerator of which is the number of days in the
Tax
period ending on the Initial Closing Date and the denominator of which is the
number of days in the entire Tax period, and (ii) in the case of any Tax based
upon or related to income or receipts, be deemed equal to the amount which
would
by payable if the relevant Tax period ended on the Initial Closing
Date.
h. Purchase
Price Allocation.
The
parties hereto agree to treat for federal income tax purposes the purchase
of
the Membership Interests as a purchase of assets by the Purchaser, unless
otherwise required by a taxing authority. The Purchase Price shall be allocated
among the purchased assets in accordance with Section 1060 of the Code as
jointly determined by the Purchaser and the Seller. Each party agrees to report
the federal, state, local and other Tax consequences of the transactions
contemplated by this Agreement in a manner consistent with such allocation
(including any modifications thereto as a result of any payments or other
adjustments made after the Initial Closing Date pursuant to this
Agreement). If the Seller and the Purchaser are unable to reach
agreement as to the allocation of the Purchase Price among the purchased
assets, the Seller and the Purchaser shall submit the disputed items to an
agreeable independent certified public accounting firm for resolution, which
resolution shall be binding upon the parties. The cost of such accounting
firm shall be split one-half by the Seller and one-half by the
Purchaser.
i. Tax
Liabilities.
The
Companies will not take, and the Purchaser will not permit the Companies to
take, any action after the Initial Closing and through the Initial Closing
Date
that could result in any Tax liability to the Companies other than any action
taken in the ordinary course of business consistent with past practices of
the
Companies.
ARTICLE
7.
CLOSING
CONDITIONS
7.1. Conditions
to Obligations of Each Party.
The
respective obligations of each party to consummate the Purchase shall be subject
to the satisfaction of the following conditions at or prior to the applicable
Closing Date, which may be waived, in whole or in part, to the extent permitted
by Applicable Law:
23
a. no
order,
injunction, statute, rule, regulation or decree shall have been issued, enacted,
entered, promulgated or enforced by an Authority that prohibits or makes illegal
the consummation of the transactions contemplated hereby.
b. With
respect to the Initial Closing, all of the conditions with respect to the
purchase and sale of not less than thirty-four (34) Sites shall have been
satisfied, including without limitation, that at least thirty-four (34) Sites
do
not contain a Defect.
c. With
respect to Sites 5, 7, 11, 16, and 24 only, SureWest Telephone and PCS Towers
shall have entered into an easement and/or other agreements, in form and
substance reasonably satisfactory to Purchaser and Seller, addressing access
and
shared facilities at the Sites owned by SureWest Telephone, which are Sites
5,
7, 11, 16, and 24. For the avoidance of doubt, failure to meet this condition
shall only entitle the parties to remove Sites 5, 7, 11, 16, and 24 from the
applicable Closing and shall not be a condition to Closing with respect to
any
other Sites for which all other conditions to Closing have been met.
d. With
respect to Site 176 only, the Purchaser, Seller, PCS Towers and SureWest
Broadband shall have entered into a mutually agreeable agreement addressing
the
assignment and bifurcation of the license rights under the Telecommunications
Facility License Agreement between the Regents of the University of California
(“UC
Regents”)
and
SureWest Broadband, dated April 13, 2003 (Site 176). Such agreement shall
provide that, subject to the UC Regents cooperation and agreement, (i) SureWest
Broadband will retain its license to construct, install and operate a controlled
environmental facility on the UC Regents’ south Xxxxx campus to house fiber
optic related equipment and (ii) PCS Towers will be assigned the license rights
to the Tower on Site 176. For the avoidance of doubt, failure to meet this
condition shall only entitle the parties to remove Site 176 from the applicable
Closing and shall not be a condition to Closing with respect to any other Sites
for which all other conditions to Closing have been met.
e. With
respect to the Sites set forth on Section
7.1(e) of the Disclosure Schedule
only
(the “Leaseback
Sites”),
the
parties shall have entered into tenant lease agreements, on substantially the
form attached hereto as Exhibit
C,
providing the for the lease of Towers on the leaseback Sites by PCS Structures
to Seller and its Affiliates, as applicable, for certain equipment that will
remain on such Towers following the applicable Closing Date. For the avoidance
of doubt, failure to meet this condition shall only entitle the parties to
remove the Leaseback Sites from the applicable Closing and shall not be a
condition to Closing with respect to any other Sites for which all other
conditions to Closing have been met.
f.
SureWest
Telephone shall have made all necessary filings and received all necessary
approvals from the California Public Utilities Commission with respect to the
Contribution by SureWest Telephone of the Telephone Tower Assets to PCS Towers
(the “CPUC
Condition”).
7.2. Conditions
to Obligations of Purchaser.
The
obligation of Purchaser to consummate the Purchase shall be subject to the
satisfaction of the following conditions, any or all of which may be waived,
in
whole or in part, by Purchaser to the extent permitted by Applicable
Law:
24
a. (i)
the
representations and warranties of Seller and the Companies contained herein
shall be true and correct in all material respects (except for representations
and warranties that are qualified as to materiality, which shall be true and
correct, and except for the Preliminary TCF Schedule); and (ii) Seller and
the
Companies shall have performed in all material respects all agreements contained
herein required to be performed by them, as applicable, at or before the
applicable Closing; provided, however, that in connection with any Subsequent
Closing, only the representations and warranties of the Seller and the Companies
related to the additional Tower Assets that are transferred at such Closing
are
required to be true and correct in all material respects as of the applicable
Subsequent Closing Date.
b. Purchaser
shall have obtained from each of the Ground Lessors under each Ground Lease
that
is contributed to PCS Towers in connection with any applicable Closing, the
estoppel and consent certificate in the form attached hereto as Exhibit
A
(the
“Ground
Lessor Estoppel”).
In
addition, if there is no recorded evidence of a Ground Lease that is contributed
to PCS Towers in connection with any applicable Closing, Purchaser shall also
have obtained, other than for Site 176, a memorandum of such Ground Lease in
recordable form and otherwise in form and substance reasonably acceptable to
Purchaser.
c. Seller
and the Companies shall have executed and delivered all documents contemplated
by this Agreement to which it is a party, including the following, each in
form
and substance reasonably acceptable to Purchaser (collectively, the
“Seller Collateral
Documents”):
(i) Assignment
and Assumption of Ground Lease.
If
required by the terms of the applicable Ground Lease that is contributed to
PCS
Towers in connection with any applicable Closing, an assignment and assumption
of all of PCS Tower’s right, title and interest in and to each of such Ground
Leases to which it is a party;
(ii) Assignment
and Assumption of Tenant Leases.
If
required by the terms of the applicable Tenant Lease that is contributed to
PCS
Towers in connection with any applicable Closing, an assignment and assumption
of all of PCS Tower’s right, title and interest in and to such Tenant
Leases;
(iii) Title
Affidavits.
Any
reasonable and customary affidavits required by, and satisfactory to, the title
company in order that any leasehold title insurance policy with respect to
any
Ground Lease that is contributed to PCS Towers in connection with any Applicable
Closing may be issued free and clear of the standard exceptions which a title
company customarily, and in accordance with applicable law, removes or
modifies;
(iv) FIRPTA
Certificate.
In
connection with each applicable Closing, a certificate certifying that
beneficial owner of the equity interest in Seller is not a foreign person for
purposes of FIRPTA;
(v) Certificates.
Original certificates for each Company and the Seller signed by one of its
executive officers certifying that (A) it has performed and complied in all
material respects with all agreements and covenants required to be performed
or
complied with by it, as the case may be, under the Seller Collateral Documents
at or prior to the Closing, (B) subject to the proviso in 7.2(a)(i) above,
each
of the representations and warranties of each Company and Seller, as applicable,
are remade and restated as of the applicable Closing, and (C) each of the
persons executing and delivering this Agreement and the Seller Collateral
Documents on behalf of each Company and Seller, as applicable, has or have
the
authority to execute, deliver and consummate this Agreement and each of the
Seller Collateral Documents;
25
(vi) Resolutions.
In
connection with the Initial Closing, a copy of resolutions of the governing
body
of Seller and each Company authorizing the execution, delivery and performance
of this Agreement and the Seller Collateral Documents by Seller and each
Company; and
(vii) Due
Diligence Items.
In
connection with the Initial Closing, originals of all Due Diligence Items to
the
extent available.
d. Purchaser
shall have received, at Purchaser’s expense, a marked commitment for leasehold
title insurance, in form reasonably acceptable to Purchaser, insuring leasehold
title with respect to any Ground Lease that is contributed to PCS Towers in
connection with the applicable Closing.
e. In
connection with the Initial Closing, Purchaser shall have received certificates
representing the Membership Interests, duly endorsed or accompanied by stock
powers duly endorsed in blank, with any required transfer stamps affixed
thereto.
f. In
connection with the Initial Closing, Purchaser shall have received the
resignations of all officers and directors of the Companies.
7.3. Conditions
to the Obligations of Seller.
The
obligation of Seller to consummate the Purchase shall be subject to the
satisfaction of the following conditions, any or all of which may be waived,
in
whole or in part, by Seller to the extent permitted by Applicable
Law:
a. the
representations and warranties of Purchaser contained herein shall be true
and
correct in all material respects (except for representations and warranties
that
are qualified as to materiality, which shall be true and correct); and Purchaser
shall have performed in all material respects all agreements contained herein
required to be performed by it at or before the Closing.
b. Purchaser
shall have executed and delivered all documents contemplated by this Agreement
to which it is a party, including the following (collectively, the “Purchaser Collateral
Documents”
and,
together with the Seller Collateral Documents, the “Collateral
Documents”):
(i) Assignment
and Assumption of Leases.
If
required by the terms of the applicable Ground Lease or Tenant Lease, an
assignment and assumption of the such Ground Lease or Tenant Lease, as
applicable.
(ii) Certificates.
Original certificates for the Purchaser signed by one of its executive officers
certifying that (A) it has performed and complied in all material respects
with
all agreements and obligations required to be performed or complied with by
it,
as the case may be, under the Purchaser Collateral Documents at or prior to
the
Closing, (B) each of the representations and warranties of Purchaser are remade
and restated as of the Closing, and (C) each of the persons executing and
delivering this Agreement and the Purchaser Collateral Documents on behalf
of
Purchaser has or have the authority to execute, deliver and consummate this
Agreement and each of the Purchaser Collateral Documents.
26
ARTICLE
8.
TERMINATION,
AMENDMENT AND WAIVER
8.1. Termination.
This
Agreement may be terminated at any time prior to the Closing only pursuant
to
the following provisions:
a. by
mutual
consent of Seller and Purchaser; or
b. by
Seller
or Purchaser if any permanent injunction, decree or judgment of any Authority
preventing consummation of the Purchase shall have become final and
nonappealable; or
c. by
Seller
or Purchaser, in the event the Termination Date has occurred without the
occurrence of the Initial Closing; provided that the right to terminate this
Agreement under this Section
8.1(c)
shall
not be available to any party whose failure to fulfill any obligation or
condition under this Agreement shall have been the cause of the failure of
the
Closing to occur by the Termination Date; or
d. (i)
by
Seller in the event that Purchaser is in breach of the representations,
warranties, covenants or agreements of Purchaser contained in this Agreement
or
any Collateral Document, in each case, in any manner that would cause any of
the
conditions set forth in Section
7.3
not to
be satisfied, and such a breach is not capable of being cured or is not cured
within twenty (20) Business Days of written notice and (ii) by Purchaser in
the
event that Seller is in breach of any of the representations, warranties,
covenants or agreements of the Seller contained in this Agreement or in any
Collateral Document, in each case, in any manner that would cause any of the
conditions set forth in Section
7.2
not to
be satisfied, and such a breach is not capable of being cured or is not cured
within twenty (20) Business Days of written notice; provided that the right
to
terminate this Agreement pursuant to this Section
7.1(d)
shall
not be available to any party who at such time is in material breach of any
of
its obligations.
Subject
to the provisions of the preceding paragraph, the term “Termination
Date”
means
December 31, 2008 or such other date as the parties may, from time to time,
mutually agree.
8.2. Effect
of Termination.
Except
as provided herein, in the event of the termination of this Agreement pursuant
to Section
8.1,
this
Agreement shall forthwith become void, there shall be no liability on the part
of either party, or any of their respective stockholders, officers or directors,
to the other and all rights and obligations of each party shall cease; provided,
however, that (a) such termination shall not relieve either party from liability
or obligation for any willful breach by such party of this Agreement, (b) this
Section
8.2
shall
continue in accordance with its terms, and (c) the foregoing provisions shall
not limit or restrict the availability of injunctive relief and specific
performance set forth in Section
9.4.
27
ARTICLE
9.
INDEMNIFICATION
9.1. Representations
and Warranties; Survival.
Anything in this Agreement to the contrary notwithstanding, the representations
and warranties of the parties contained in or made pursuant to this Agreement
or
any Collateral Document shall survive each Closing and shall remain operative
and in full force and effect for a period of twelve (12) months after such
Closing Date (each such 12 month period a “Representations Survival
Period”),
regardless of any investigation or statement as to the results thereof made
by
or on behalf of either party hereto except that the representations and
warranties contained in Sections
4.1(a)
(Organization and Business; Power and Authority; Capitalization; Effect of
Transaction), 4.4(a)
(Properties), 4.6
(Broker
or Finder), 4.9
(Taxes),
4.13
(Bankruptcy Matters), and 4.14
(No
Third Party Rights) will survive the applicable Closing and will remain in
full
force and effect until the expiration of the applicable statute of limitations
relating thereto. For the avoidance of doubt, the parties hereby agree and
acknowledge that the Representations Survival Period is a contractual statute
of
limitations and any claim brought by any party to this Agreement pursuant to
this Article
9
must be
brought or filed prior to the expiration of the Representations Survival Period.
The covenants and agreements of the parties contained in or made pursuant to
this Agreement or any Collateral Document shall survive each Closing (unless
any
such covenant or agreement by its express terms in this Agreement does not
so
survive) and shall remain operative and in full force and effect for the statute
of limitations applicable to contractual obligations (“Covenant
Survival Period”
together with the Representations Survival Period, the “Indemnity
Period”).
9.2. Indemnification.
a. Seller
agrees that on and after the Closing it shall indemnify and hold harmless
Purchaser and its members, stockholders, directors, officers, employees, agents
and representatives (collectively, the “Purchaser
Indemnified Parties”)
from
and against any and all damages, claims, losses, expenses, costs, obligations,
and liabilities, including without limitation reasonable fees and expenses
of
attorneys, accountants, and other experts and those incurred to enforce the
terms of this Agreement or any Collateral Document (collectively, “Loss
and Expense”),
suffered by the Purchaser Indemnified Parties by reason of or arising out of
(i)
any misrepresentation or breach of warranty made by Seller pursuant to this
Agreement or any Collateral Document (except for any misrepresentations in
the
Preliminary TCF Schedule, for which Seller and the Companies shall not be
liable), (ii) any failure by Seller to perform or fulfill any of its covenants
or agreements set forth in this Agreement or any Collateral Document, (iii)
any
liability for Taxes with respect to the Companies or the Tower Assets for any
period prior to the Initial Closing Date (determined in accordance with Section
6.8(g) with respect to a straddle period), including, without limitation, Taxes
arising under Treasury Regulations Section 1502-6 (or any equivalent state,
local, or foreign provision), and Taxes imposed on any Company or Purchaser
as a
transferee from any of the Taxpayers, and (iv) Seller’s portion of any Transfer
Taxes.
b. Purchaser
agrees that on and after the Closing it will indemnify and hold harmless Seller
and its members, stockholders, directors, officers, employees, agents and
representatives (collectively, the “Seller
Indemnified Parties”)
from
and against all Loss and Expense suffered by any of them by reason of or arising
out of (i) any misrepresentation or breach of warranty made by Purchaser
pursuant to this Agreement or any Collateral Document, (ii) any failure by
Purchaser to perform or fulfill any of its covenants or agreements set forth
in
this Agreement or any Collateral Document, (iii) the conduct and operation
of
the business of the Companies on or after the Closing, and (iv) Purchaser’s
portion of any Transfer Taxes.
28
9.3. Limitations
of Liability.
a. No
indemnification for the matters set forth in Sections
9.2(a)(i) or (ii)
or
9.2(b)(i)
or (ii),
as the
case may be, shall be required to be made by the indemnifying party (i) until
the aggregate amount of the indemnified parties’ Losses and Expenses under this
Agreement in the aggregate exceeds $250,000, at which point indemnification
shall be required to be made to the extent of all Loss and Expense relating
back
to the first dollar (the “Indemnification
Basket”);
and
(ii) for the amount of the indemnified parties’ Losses and Expenses that in the
aggregate is in excess of an amount equal to 15% of the Purchase Price (the
“Indemnification
Cap”).
b. The
limitations imposed by the Indemnification Basket and the Indemnification Cap
shall not apply to Loss and Expense resulting from fraud (other than negligent
misrepresentation), willful misconduct or intentional or knowing breaches of
this Agreement by any party, or liability for Taxes (including Transfer
Taxes).
c. Subject
to the limitations set forth in this Article
9,
consideration must be given to the amount that any party recovers as proceeds
of
insurance in respect of Losses and Expenses, net of any costs of collection,
deductible, retroactive premium adjustment, reimbursement obligation or other
cost directly related to the insurance claim in respect of such Losses.
Purchaser agrees that it will use commercially reasonable efforts to prosecute
all claims against its insurers diligently and in good faith with regard to
matters for which Losses or Expenses are claimed under this Article
9.
Should
Purchaser recover Losses or Expenses and subsequently recover any amount from
an
insurer with respect to the matter for which such Losses or Expenses were paid,
Purchaser shall refund the lesser of (i) the Losses or Expenses paid by Seller
and (ii) the amount recovered from the insurer.
d. Except
as
set forth in Section 10.4, the parties’ sole and exclusive remedy with respect
to any and all claims relating to this Agreement, the Collateral Documents
and
the transactions contemplated hereby or thereby (other than claims based on
fraud but excluding negligent misrepresentation claims) shall be pursuant to
the
indemnification provisions set forth in this Article
9.
e. Seller
shall not have any liability for Losses or Expenses to the extent arising out
of
(i) the conduct and operation of the business of the Companies on or after
the
Closing Date; (ii) changes not required by Applicable Law in accounting methods
or policies of any Company after the Closing Date; or (iii) the passing of,
or
any change in, after the Closing Date, any law or administrative practice of
any
Authority in any such case not actually in force as of the Effective Date (even
if retroactive in effect), including any increase in the tax rates in effect
on
the Effective Date, any real property tax reassessments or the imposition of
any
tax not in effect on the Effective Date. In addition, in the event Purchaser
has
knowledge at the time of a Closing that any of the representations, warranties
or covenants of Seller in this Agreement relating to a Tower are not true (a
“Known
Breach”),
and
Purchaser nonetheless proceeds with Closing, then Seller shall not have any
liability for Losses or Expenses arising from or relating to such Known Breach.
For the purpose of this provision only, “knowledge
of the Purchaser”
shall
mean that either Xxxx X. Xxxxx, Xxxxx Xxxxx or Xxxxx Xxxxxxxx: (i) has actual
personal knowledge prior to a Closing of specific facts that constitute a Known
Breach, and (ii) has an actual understanding prior to the a Closing that those
facts constitute a breach of a representation, warranty or covenant of Seller
under this Agreement.
29
f. No
party
hereto shall have any obligation to indemnify any indemnified party for
consequential damages, special damages, incidental damages, indirect damages,
lost profits, unrealized expectations or other similar items (other than to
the
extent paid to a third party), nor shall any damages be calculated using a
“multiplier” or any other similar method having a similar effect.
g. No
claim
for indemnification, other than with respect to fraud (other than negligent
misrepresentation), may be asserted after the expiration of the applicable
Indemnity Period, it being understood that any Claim relating to any
misrepresentation or breach of warranties, covenants or agreements that is
asserted in writing prior to the expiration of the applicable Indemnity Period
shall survive with respect to such Claim or any dispute with respect thereto
until the final resolution thereof.
9.4. Notice
of Claims.
If an
indemnified party believes that it has suffered or incurred any Loss and
Expense, including as a result of any legal action instituted by a third party,
it shall notify the indemnifying party, in writing, within thirty (30) days
of
becoming aware that it has suffered such Loss and Expense or of such third
party
action, describing such Loss and Expense in reasonable detail and referring
to
the provisions of this Agreement in respect of which such Loss and Expense
shall
have occurred.
9.5. Defense
of Third Party Claims.
Except
as otherwise provided in Section
6.8,
the
indemnifying party shall have the right to conduct and control, through counsel
of its own choosing, reasonably acceptable to the indemnified party, any third
party legal action or other Claim, but the indemnified party may, at its
election, participate in the defense thereof at its sole cost and expense;
provided, however, that if the indemnifying party shall fail to defend any
such
legal action or other Claim, then the indemnified party may defend, through
counsel of its own choosing, such legal action or other Claim, and (so long
as
it gives the indemnifying party at least fifteen (15) days’ notice of the terms
of the proposed settlement thereof and permits the indemnifying party to then
undertake the defense thereof) settle such legal action or other Claim and
to
recover the amount of such settlement or of any judgment and the reasonable
costs and expenses of such defense. The indemnifying party shall not compromise
or settle any such legal action or other Claim without the prior written consent
of the indemnified party, which consent shall not unreasonably be withheld,
delayed or conditioned if the terms and conditions of such compromise or
settlement proposed by the indemnifying party and agreed to in writing by the
claimant in such legal action or other Claim. The indemnified and indemnifying
parties shall cooperate in the defense or prosecution thereof.
30
ARTICLE
10.
GENERAL
PROVISIONS
10.1. Waivers;
Amendments.
At any
time prior to the Closing Date, except to the extent not permitted by Applicable
Law, the parties may, either generally or in a particular instance and either
retroactively or prospectively, (a) extend the time for the performance of
any
of the obligations or other acts of the other, subject, however, to the
provisions of Section
8.1,
(b)
waive any inaccuracies in the representations and warranties of the other
contained herein or in any document delivered pursuant hereto, (c) waive
compliance by the other with any of the agreements, covenants, conditions
or
other provision contained herein, and (d) make additions to, deletions from
or
changes in, or otherwise amend, the provisions of this Agreement. Any such
extension or waiver shall be valid only if set forth in an instrument in
writing
signed by the party or parties to be bound thereby.
10.2. Notices.
All
notices and other communications which by any provision of this Agreement are
required or permitted to be given shall be given in writing and shall be sent
by
first class mail as set forth below or to such other person(s), address(es)
or
facsimile number(s) as the party to receive any such notice or communication
may
have designated by written notice to the other party.
a. If
to
Purchaser:
GTP
Towers I, LLC
0000
Xxxxx Xxxxx Xxxx, Xxxxx 000
Xxxx
Xxxxx, XX 00000
Attention: Xx.
Xxxx
Xxxxx, Chief Executive Officer
Telecopier
No. 000-000-0000
with
a
copy to (which shall not constitute notice to Purchaser):
Kleinbard
Xxxx & Xxxxxxx LLP
One
Liberty Place
0000
Xxxxxx Xxxxxx / 00xx
Xxxxx
Xxxxxxxxxxxx,
Xxxxxxxxxxxx 00000
Attention:
Xxxxxxx X. Xxxxxxxx, Esq.
Telecopier
No: 000-000-0000
b. If
to the
Companies or Seller:
000
Xxxxxx Xxxxxx
Xxxxxxxxx,
XX 00000
Attention:
Xxxxxx
X.
Xxxxxx
President
and CEO
Fax:
(000) 000-0000
with
a
copy to (which shall not constitute notice to the Companies or
Seller):
Xxxxxxx
Xxxxxxxx, Esq.
General
Counsel
31
000
Xxxxxx Xxxxxx
Xxxxxxxxx,
XX 00000
Fax:
(000) 000-0000
and
Xxxxxx,
Xxxxxxxxxx & Xxxxxxxxx LLP
000
Xxxxxx Xxxxxx
Xxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Attention:
Xxxx Xxxx, Esq.
Fax:
(000) 000-0000
10.3. Severability;
Counterparts; Governing Law.
If any
term or provision of this Agreement shall be held or deemed to be, or shall
in
fact be, invalid, inoperative, illegal or unenforceable as applied, such
circumstance shall not have the effect of rendering the provision or provisions
in question invalid, inoperative, illegal or unenforceable but this Agreement
shall be reformed and construed in any such jurisdiction or case as if such
provision had never been contained herein. This Agreement may be executed in
several counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument, binding upon all
of
the parties. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement. The validity, interpretation, construction and
performance of this Agreement shall be governed by, and construed in accordance
with the laws of the State of Delaware.
10.4. Specific
Performance.
Seller
acknowledges and agrees that the Membership Interests and Tower Assets are
unique assets that cannot be readily obtained on the open market and that
Purchaser will be irreparably injured if this Agreement is not specifically
enforced and the remedy under Applicable Law would be inadequate for breach
of
Seller’s performance hereunder. Therefore, notwithstanding anything to the
contrary contained herein or otherwise, Purchaser shall have the right to
enforce specifically Seller’s obligation to close the transactions contemplated
under this Agreement if all conditions precedent have been satisfied or waived
in accordance with Article 7. The remedy described in this section shall be
in
addition to, and not in lieu of, any other remedies that Purchaser may elect
to
pursue.
10.5. Assignment.
This
Agreement shall not be assignable by either party and any such assignment shall
be null and void, except that Purchaser may assign this agreement to any
Affiliate, any successor to either party by operation of law, or by way of
merger, consolidation or sale of all or substantially all of its assets, and
this Agreement shall inure to the benefit of and be binding upon any such
permitted assignee; provided, that no such assignment shall relieve the
assigning party of its obligations or liabilities hereunder.
32
IN
WITNESS WHEREOF,
the
parties have caused this Agreement to be executed by their respective officers
duly authorized as of the date first written above.
|
SELLER:
|
WEST
COAST PCS LLC,
a
California limited liability company
|
|
|
By:
|
/s/
Xxxxxx X. Xxxxxx
|
|
|
Xxxxxx
X. Xxxxxx
President
and Chief Executive Officer
|
||
|
COMPANIES:
|
WEST
COAST PCS STRUCTURES, LLC,
a
Delaware limited liability company
|
||
|
By:
WEST COAST PCS LLC,
a
California limited liability company,
Its
Manager
|
|||
|
By:
|
/s/
Xxxxxx X. Xxxxxx
|
||
|
Xxxxxx
X. Xxxxxx
President
and Chief Executive Officer
|
|||
|
PCS
STRUCTURES TOWERS, LLC,
a
Delaware limited liability company
|
|||
|
By:
WEST COAST PCS STRUCTURES, LLC,
a
Delaware limited liability company, Its
ManagerBy:
WEST COAST PCS LLC,
a
California limited liability company,
Its
Manager
|
|||
|
By:
|
/s/
Xxxxxx X. Xxxxxx
|
||
|
Xxxxxx
X. Xxxxxx
President
and Chief Executive Officer
|
|||
|
PURCHASER:
|
GTP
TOWERS I, LLC,
a
Delaware limited liability company
|
|
|
By:
|
/s/
Xxxx X. Xxxxx
|
|
|
Xxxx
X. Xxxxx
Chief
Executive Officer
|
||
33
APPENDIX
A
DEFINITIONS
Affiliate,
Affiliated
means,
with respect to any Person, (a) any other Person at the time directly or
indirectly controlling, controlled by or under direct or indirect common control
with such Person, (b) any executive officer or director of such Person, (c)
with
respect to any partnership, joint venture, limited liability company, or similar
entity, any general partner or manager thereof, and (d) when used with respect
to an individual, shall include any member of such individual’s immediate family
or a family trust.
Applicable
Law
means
any law of any Authority, whether domestic or foreign, to which a Person is
subject or by which it or any of its business or operations is subject or any
of
its property or assets is bound.
Authority
means
any governmental or quasi-authority, whether administrative, executive,
judicial, legislative or other, or any combination thereof.
Business
Day means
any
day other than Saturday, Sunday or a day on which banking institutions in San
Francisco, California are required by law to be closed.
Claims
means
any
and all debts, liabilities, obligations, losses, damages, deficiencies,
assessments and penalties, together with all legal actions, pending or
threatened, claims and judgments of whatever kind and nature relating thereto,
and all fees, costs, expenses and disbursements (including without limitation
reasonable attorneys’ and other legal fees, costs and expenses) relating to any
of the foregoing.
Commenced
shall
mean, with respect to any Tenant Lease, the Tenant thereunder has commenced
paying regularly scheduled installments of rent pursuant to the terms thereof
and has substantially completed installation of its equipment on the Tower
relating thereto.
Cure
or
Cured
means,
with respect to any Defect: (i) with respect to any Defect relating to a title
matter, Seller will procure for the benefit of Purchaser an irrevocable
commitment from a title company to insure against any and all loss incurred
or
that may be incurred by Purchaser as a result of such Defect (with all costs
and
expenses relating to such title insurance to be paid by Seller); (ii) Seller
agrees, in writing, to reimburse Purchaser (or provide Purchaser with a credit
against the Purchase Price at the applicable Closing) an amount equal to the
cost to repair the Defect or the loss in the value of the Tower Asset as a
result of the Defect, as mutually agreed upon by Purchaser and Seller; or (iii)
Seller has taken any other action with respect to the Defect that causes such
condition or matter to no longer constitute a Defect, as determined in
Purchaser’s reasonable discretion.
Defect
means
one of the following defects in any Tower Asset:
(a) Tower
Structural or Physical Defects.
The
existence of any physical or structural defects in a Tower that either makes
commercially impracticable Purchaser’s
intended use of the Tower or is reasonably anticipated to cost in excess of
twelve thousand five hundred dollars ($12,500) to Cure.
34
(b) Environmental
and Regulatory Matters.
Any
environmental condition or non-compliance with FAA or FCC requirements currently
affecting a Tower that: (i) makes commercially impracticable Purchaser’s
intended use of the Tower; or (ii) is reasonably anticipated to cost in excess
of twelve thousand five hundred dollars ($12,500) to Cure.
(c) Inspection
of Title; Surveys; Zoning; Condemnation.
With
respect to any Site: (i) any exceptions to title appearing on a title commitment
for a Site or any matters on a survey for a Site which are not Permitted Liens
and make commercially impracticable Purchaser’s intended use of the Tower, or
(ii) any Lien that encumbers the applicable Tower Owner’s interest in the Tower
or Site, other than Permitted Liens; or (iii) a survey reveals any encroachment
onto any of the Sites, any encroachment of the buildings, Towers or Equipment
onto other lands, or any other matter that prohibits or makes commercially
impracticable Purchaser’s intended use of the Tower or Site; or (iv) the
intended use and operation of any Tower is prohibited or rendered impracticable
by the applicable Law of any Authority, or (v) any present or pending legal
or
administrative proceedings relating to condemnation or other taking by any
Authority that prohibits or make commercially impracticable Purchaser’s intended
use of the Site.
(d) Ground
Leases.
Any of
the following conditions exists with respect to a Ground Lease: (i) the
applicable Tower Owner fails to hold a valid, other than for Site 176, insurable
leasehold interest under the applicable Ground Lease; (ii) such Ground Lease
is
not in full force and effect in all material respects; (iii) any material
default on the part of the applicable Tower Owner exists under such Ground
Lease; or (iv) the applicable Tower Owner fails to obtain a Ground Lessor
Consent.
(e) Tenant
Leases.
Any of
the following conditions exists with respect to a Tenant Lease: (i) the
applicable Tower Owner does not have a valid landlord’s, lessor’s or licensor’s
interest under such Tenant Lease; (ii) such Tenant Lease is not in full force
and effect in all material respects; (iii) the term of such lease has expired
or
been terminated; or (iv) any material default on the part of the applicable
Tower Owner or such tenant exists under the applicable Tenant Lease, including
any monetary default by a tenant greater than ninety (90) days. For the
avoidance of doubt, any of the aforementioned conditions in existence with
respect to a Tenant Lease shall not give the Purchaser the right to reject
the
entire applicable Tower Asset or Tower covered by the Tenant Lease, but shall
instead entitle the Purchaser to reject only such defective Tenant Lease, absent
other Defects.
(f) Third
Party Rights.
The
applicable Tower Owner shall have failed to obtain any of the following with
respect to a Site or Tower: (i) any Third Party Consents that lack of which
prohibits or makes commercially impracticable Purchaser’s intended use of the
Tower, (ii) waivers of rights of first refusal and/or non-disturbance agreements
from all Persons, and (iii) evidence of all terminations of lien rights granted
in favor of Seller’s creditors.
(g) Litigation.
Any
pending or threatened litigation with respect to any Site that: (i) makes
commercially impracticable Purchaser’s intended use of the Site; or (ii) is
reasonably anticipated to result in Losses more than twelve thousand five
hundred dollars ($12,500) per Site, as the case may be.
Disclosure
Schedule
means
the Disclosure Schedule dated as of the date hereof delivered by
Seller.
35
Easements
means
all
of Seller’s rights, title and interest in all easements, licenses and agreements
belonging to or in any way appertaining to the Sites, buildings and/or Towers,
including, without limitation, all easements, licenses and agreements providing
access to the Sites, buildings, and/or Towers from public streets, roads and
ways, all easements, licenses and agreements for location, maintenance, repair
and replacement of and for cables, utilities, utility lines, wires and anchors,
and all easements, licenses and agreements for parking.
Employee
Benefit Plans
means
any employee benefit, including without limitation, any pension, profit-sharing,
or other retirement plan, deferred compensation plan, bonus plan, severance
plan, fringe benefit plan, health, group insurance, or other welfare benefit
plan or other similar plan, agreement, policy, or understanding, including
any
“employee benefit plan” within the meaning of Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended.
Environmental
Law
means
any law applicable to the management, generation, storage, disposal,
transportation, release, recycling, treatment, and other handling of, Hazardous
Substances, the investigation, removal, remediation or other clean-up or
corrective action for Hazardous Substances, the protection of persons, natural
resources or the environment with respect to Hazardous Substances, or other
activities involving Hazardous Substances.
Environmental
Permit
means
any Governmental Authorization required by or pursuant to any Environmental
Law.
Escrow
Agent means
Lawyers Title Insurance Corporation.
Escrow
Agreement means
the
Escrow Agreement, dated as of the Effective Date, among Seller, Purchaser and
the Escrow Agent, substantially in the form attached hereto as Exhibit
B.
FAA
means
the United States Federal Aviation Administration, or any successor
Authority.
FCC
means
the United States Federal Communications Commission, or any successor
Authority.
Governmental
Authorizations
means
all approvals, concessions, consents, franchises, licenses, permits,
registrations and other authorizations of all Authorities, in connection with
Tower Assets.
Ground
Lease
means
any lease, easement, right of way, license, permit or other right of use
agreement pursuant to which Seller holds a leasehold interest, leasehold estate
or other real property interest or other right of use agreement for any Site,
including, without limitation, the associated access easements and rights of
way.
Ground
Lessor
means
the “grantor” or “lessor” or “landlord” or “licensor” under the Ground
Lease.
Hazardous
Substance
means
any substance that is deemed by any Environmental Law to be “hazardous,”
“toxic,” a “contaminant” or “waste” or is otherwise regulated by an
Environmental Law.
36
Included
Tenant Agreement means
a
Tenant Lease that meets all of the following criteria as of 5 Business Days
prior to the Closing Date: (a) the applicable Tower Owner has a valid
landlord’s, lessor’s or licensor’s interest under such Tenant Lease, (b) that is
executed in writing and in full force and effect in all material respects,
(c)
that has not expired and will not expire within three (3) months from the date
hereof in accordance with its terms, (d) the Tenant thereunder is not currently
involved in a bankruptcy proceeding, (e) that has not otherwise been terminated
(and Seller shall not have received any notice of termination), and (f) with
respect to which there are no material defaults on the part of any Seller or
the
tenant thereunder, including, without limitation, any monetary default by such
tenant for greater than sixty (60) days.
Lien
means
any of the following: mortgage, lien (statutory or other) or other security
agreement, arrangement or interest; hypothecation, pledge or other deposit
arrangement; assignment; charge; levy; executory seizure; attachment;
garnishment; encumbrance (including any easement, exception, reservation or
limitation, right of way, and the like); conditional sale, title retention
or
other similar agreement, arrangement, device or restriction; preemptive or
similar right; any financing lease involving substantially the same economic
effect as any of the foregoing; the filing of any financing statement under
the
Uniform Commercial Code or comparable law of any jurisdiction; restriction
on
sale, transfer, assignment, disposition or other alienation; or any option,
equity, claim or right of or obligation to, any other Person, of whatever kind
and character.
Material
Adverse Change or
Material Adverse Effect means
a
change, event or occurrence that, individually or together with any other
change(s), event(s) or occurrence(s), has had or would be reasonably expected
to
have a material adverse change or effect on the cash flow position or results
of
operations of the Companies or the Purchaser or the Tower Assets, as applicable;
provided,
however,
that in
determining whether a Material Adverse Effect has occurred, there shall be
excluded any effect the cause of which is (A) the negotiation (including
activities relating to due diligence), execution, delivery or public
announcement or the pendency of this Agreement or the transactions contemplated
hereby or any actions taken in compliance herewith or otherwise with the written
consent of the other party, including the impact thereof on the relationships
of
a Company with its tenants, landlords, suppliers or independent contractors
or
other third parties with whom a Company has any relationship, (B) any
change in federal or state law, regulations, policies or procedures, or
interpretations thereof of general application, regulatory conditions or GAAP,
(C) changes generally affecting the telecommunications industry, (D)
changes in economic conditions (including changes in the prevailing interest
rates) in the United States, in any region thereof, or in any non-U.S. or global
economy, (E) changes in financial, banking or securities markets (including
any
disruption thereof and any decline in the price of any security or any market
index) or (F) any attack on, or by, outbreak or escalation of hostilities or
acts of terrorism involving, the United States, or any declaration of war by
the
United States Congress.
NEPA
means
the National Environmental Policy Act of 1969, as amended.
NOTAM
means a
“Notice to Airman” issued by and as such term is used by the FAA.
Ordinary
Course of Business
means
the usual and ordinary course of business consistent with past custom and
industry practice relating to the Tower Assets.
Organic
Document
means,
with respect to a Person which is a corporation, its charter, its by-laws and
all shareholder agreements, and similar arrangements applicable to any of its
capital stock, with respect to a Person which is a partnership, its agreement
and certificate of partnership, any agreements among partners, and any
management and similar agreements between the partnership and any general
partners and with respect to a Person which is a limited liability company,
its
certificate of formation or articles of organization, its limited liability
company agreement, any agreements among members of such Person and similar
agreements.
37
Permitted
Liens
means
(a) Liens on real estate or other property for taxes not yet delinquent and
those the non-payment of which is being diligently contested in good faith
by
appropriate proceedings and for which adequate reserves have been set aside
on
the books of Seller; (b) Liens of carriers, warehousemen, mechanics, vendors
(solely to the extent arising by operation of law), and materialmen or other
similar encumbrances incurred in the Ordinary Course of Business for sums not
yet due or being diligently contested in good faith; (c) such encumbrances
and
imperfections of title, if any, as do not materially detract from the value
of
the Tower Assets and do not materially interfere with the present or proposed
use of such Tower Assets or otherwise materially impair such operations and
(d)
existing building restrictions, ordinances, easements of roads, privileges,
or
rights of public service companies.
Person
means
any
natural individual or any entity.
Post-Closing
Tenant Lease
means
any Pending Tenant Application that converts into and meets all of the criteria
of an Included Tenant Agreement as of five (5) Business Days prior to the
applicable Post-Closing Payment Date.
Purchaser’s
Knowledge (or
similar words) means the actual knowledge of the persons listed in Schedule
A.
Related
Contract
means an
agreement between Seller or an Affiliate and a third party pursuant to which
a
third party provides goods or services to, or which otherwise relates to, the
Site (e.g., a maintenance agreement).
Seller
Party’s knowledge
(or
similar words) means the actual knowledge of the persons listed in Section
4.19 of the Disclosure Schedule.
Tax,
means,
with respect to any Person, (a) all taxes, including without limitation any
income (net, gross or other including recapture of any tax items such as
investment tax credits), alternative or add-on minimum tax, gross income, gross
receipts, gains, sales, use, leasing, lease, user, ad valorem, transfer,
recording, franchise, profits, property, fuel, license, withholding on amounts
paid to or by such Person, payroll, employment, unemployment, social security,
excise, severance, stamp, occupation, custom, duty or other tax, or other like
assessment or charge of any kind whatsoever, together with any interest, levies,
assessments, charges, penalties, additions to tax or additional amount imposed
by any Authority, (b) any joint or several liability of such Person with any
other Person for the payment of any amounts of the type described in (a), and
(c) any liability of such Person for the payment of any amounts of the type
described in (a) as a result of any express or implied obligation to indemnify
any other Person.
Tax
Return or Returns means
all
returns, consolidated or otherwise (including without limitation information
returns), required to be filed with any Authority with respect to
Taxes.
Tenant means
a
sublessee or tenant under a Tenant Lease.
Tenant
Lease
means
any written lease agreement pursuant to which Seller has demised a leasehold
interest, leasehold estate or other real property interest in a Site to a
sublessee or tenant, including pursuant to a Master Site Lease, including,
without limitation, the associated access easements and rights of
way.
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Tower
Cash Flow
means,
with respect to any Tower, the difference
of: (A)
an amount equal to the product of twelve (12) times the monthly rent as of five
(5) Business Days prior to the applicable Closing Date of each Included Tenant
Agreement, in each case without giving effect to any free rent provided for
therein; provided, however, such amount (a) shall not include any security
deposits, prepaid rents (unless taken into income by Purchaser), refunds to
tenants, sales, property, excise or similar taxes imposed by Authorities and
collected from subtenants and pass through expenses collected from any tenants,
and (b) shall include, in the case of prepaid rent, an apportioned amount of
such prepaid rent attributable to such monthly period; minus
(B) an
amount equal to the product of twelve (12) times the sum of (i) the aggregate
monthly amount of easement “rent” or ground rent as of the Closing Date
(including any revenue share payable to the landlords thereunder) (ii) an
assumed amount of $100.00 for monitoring and utility expenses (including
telephone charges) for those Towers that require monitoring under either FAA
Law, landlord requirements, zoning requirements, or any other Applicable
Law, (iii)
an
assumed amount of $170.00 for the monthly amount of real estate taxes and
personal property taxes (or similar type taxes), (iv) an assumed monthly
insurance expense of $25.00, and (v) an assumed monthly maintenance expense
of
$50.00. Notwithstanding the actual amount of the foregoing costs, the assumed
amount of such expenses shall be used in lieu of the actual amount.
Tower
Owner
means
(a) prior to the date of the Contribution, the Contributors and (b) on or after
the date of the Contribution, PCS Towers.
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