EXHIBIT 10.20
BUILD-TO-SUIT AGREEMENT
This Build-To-Suit Agreement (the "Agreement") is made as of this 29
day of June, 2001 (the "Effective Date"), by and between Conestoga Enterprises,
Inc., a Pennsylvania corporation, on behalf of itself and its wholly-owned
subsidiaries, Conestoga Mobile Systems, Inc., a Pennsylvania corporation, and
Conestoga Wireless Company, a Pennsylvania corporation, (hereinafter
collectively referred to as "Conestoga"), with offices located at 000 Xxxxx
Xxxx, Xxxxx 000, Xxxx xx Xxxxxxx, Xxxxxxxxxxxx, and MOUNTAIN UNION TELECOM, LLC,
a Delaware limited liability company (hereinafter referred to as "Mountain
Union"), with offices located at 000 X. Xxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxx,
XX 00000.
RECITALS
WHEREAS, Mountain Union is in the business of identifying, acquiring,
constructing and maintaining sites (collectively the "Sites", and individually a
"Site") on which it operates and maintains radio and communications towers,
buildings, and related equipment; and
WHEREAS, Mountain Union, in connection with its construction of
communications towers, enters into license agreements with various tenants to
utilize space thereon; and
WHEREAS, Conestoga Wireless Company ("CWC") has been licensed by the
Federal Communications Commission ("FCC") to provide certain wireless services
in ten (10) counties located in eastern and central Pennsylvania. In connection
therewith, Conestoga desires that, pursuant to the terms of this Agreement,
Mountain Union identify, acquire, and construct communications towers upon which
Conestoga will locate certain wireless equipment and facilities pursuant to the
terms of license agreements to be executed by Conestoga and Mountain Union; and
WHEREAS, the parties are entering into this Agreement in conjunction
with, and as an integral part of, the closing of the transactions contemplated
by that certain Asset Acquisition Agreement dated as of March 15, 2001 by and
between, among others, the parties hereto (the "Asset Acquisition Agreement");
and
WHEREAS, as a material inducement to Mountain Union's agreement to
enter into the transactions contemplated by this Agreement and the Asset
Acquisition Agreement, Conestoga has entered into the Conestoga Minimum Tower
Commitment as defined in this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing recitals, the mutual
promises, covenants and conditions contained herein, as well as other good and
valuable consideration, the receipt, adequacy, and sufficiency of which is
hereby acknowledged, the parties hereby agree as follows:
1. Definitions.
(a) Notwithstanding the meaning ascribed to it in the Asset
Acquisition Agreement, as used herein, a "Collocation Tower" means a tower
within an Active Search Ring, as defined in Section 4(b) hereof, that is located
on real estate zoned (whether prior to or during the Term of this Agreement and
whether by zoning classification, variance, or otherwise) to permit the
construction and operation of a communications tower with a capacity for use by
not less than four (4) FCC-licensed broadband carriers, one of which shall be
CWC;
(b) The "Conestoga Minimum Tower Commitment" has the meaning
ascribed to it in Section 7.
(c) As used herein, the "Territory" means the counties within the
State of Pennsylvania in which CWC is licensed or becomes licensed during the
Term of this Agreement to operate its PCS Business, as defined in the Asset
Acquisition Agreement. As of the Effective Date, the "Territory" consists of the
ten (10) counties in eastern and central Pennsylvania identified on Exhibit "D"
hereto.
(d) As used herein, "Site" means a tower, including its equipment,
improvements, and the real estate on which it is located.
(e) As used herein, "Tower" means a tower constructed (or acquired,
as the case may be), maintained and operated by Mountain Union pursuant to the
terms of this Agreement. "Tower" includes, but is not limited to, a "Collocation
Tower" as defined in Section 1(a) above.
2. Incorporation of Recitals and Exhibits; Exclusivity/Right of First
Refusal.
(a) The above recitals are true and correct and, together with all
Exhibits referenced in this Agreement, are hereby incorporated herein and made a
part hereof.
(b) During the Term of this Agreement, as defined below, and any
renewal(s) thereof, Conestoga shall exclusively refer all of its requirements
for new towers and related facilities required for the build out of its Personal
Communications Services ("PCS") network in the Territory to Mountain Union and
shall be prohibited from becoming a tenant on any tower owned or operated by any
tower company other than Mountain Union in the Territory to the extent that such
tenancy would involve or require Conestoga to support or otherwise be involved
in the application of the tower company for any zoning, planning, permitting, or
other approval in the Territory. In addition, Conestoga shall refer its tower
requirements in the Territory to Mountain Union during the period commencing on
the Effective Date of the Asset Acquisition Agreement through and including the
closing of the transactions thereunder provided, however, that the parties first
execute a Confidentiality Agreement in both form and substance mutually
acceptable to the parties pursuant to which Mountain Union will agree to treat
such requirements as the confidential information of Conestoga pursuant to the
terms thereof in the event that the transactions contemplated in the Asset
Acquisition Agreement do not close pursuant thereto. If Mountain Union declines
the opportunity to build or purchase any such Tower(s) in writing pursuant to
the terms of this Agreement (a "Declination" hereunder), then Conestoga may,
thereafter, have such tower(s) constructed on Conestoga's behalf for its use and
ownership thereof (collectively, the "New
Conestoga Towers"). Mountain Union shall have the right of first refusal to
purchase the New Conestoga Tower(s) pursuant to the terms set forth in Section 8
of this Agreement. The parties agree and acknowledge that during the Term of
this Agreement and any renewal(s) thereof, Conestoga shall be prohibited from
entering into any agreement of any kind or nature with a third party pursuant to
which such third party (or an assignee or designee thereof) would construct a
tower(s) (including, without limitation, Collocation Tower(s) and/or related
facility(s)) for Conestoga's use in the Territory to the extent that such
tower(s)/related facility(s) would be owned and/or operated by any third party
following the completion of the same, unless prior to the commencement of the
construction -thereof, all of the following have occurred:
(i) Conestoga has referred its requirements for such tower to
Mountain Union pursuant to the terms of this Agreement; and
(ii) Mountain Union has declined the opportunity to build such
tower as provided in Section 4(b) below after Mountain Union's receipt and
rejection of the Search Ring submitted by Conestoga; and
(iii) Conestoga has given Mountain Union not less than ten (10)
business days prior written notice of its intention to have such third party
construct or acquire such Tower; and
(iv) Conestoga's tenancy on the tower will not require
Conestoga, during the Term of this Agreement, to support or otherwise be
involved in any tower company's (other than Mountain Union) application for
zoning, planning, permitting, or other approvals for a Site to be owned or
operated by such tower company.
In the event that during the Term of this Agreement a Site is built or acquired
by Conestoga pursuant to the terms of this Section 2(b), Conestoga reserves the
right to hire a contractor of its choice to install and maintain all of
Conestoga's equipment at such Site(s).
3. Term of Agreement.
(a) This Agreement shall commence on the Effective Date, and shall,
unless earlier terminated pursuant to the terms hereof, continue through and
including the date which is three (3) years thereafter (the "Term"). In the
event that Mountain Union has substantially complied with its obligations
hereunder, the parties will, not later than thirty (30) days prior to the end of
the Term hereof, negotiate in good faith with respect to the renewal of this
Agreement.
(b) Upon the occurrence of an Event of Default, as defined in
Section 10 hereof, this Agreement may be terminated immediately by the
non-defaulting party upon written notice to the defaulting party.
(c) Neither a termination nor the expiration of this Agreement shall
affect:
(i) The term of any Site License (as defined in Section 6
hereof) entered into by the parties, which shall continue in accordance with its
terms and conditions;
(ii) any duties or obligations for payment or performance that
are or become owing hereunder prior to the effective date of such termination or
expiration;
(iii) any other duties or obligations that expressly survive the
termination or expiration hereof; and
(iv) any obligations, covenants, representations, and warranties
under the Asset Acquisition Agreement that survive the expiration or earlier
termination thereof.
4. Designation of Search Ring.
(a) From time to time during the Term, Conestoga shall identify in
writing for Mountain Union Search Rings (as defined herein) within which
Conestoga desires to locate wireless telecommunications antennae and related
equipment. The parties agree that not later than the Closing Date set forth in
Section 2.10 of the Asset Acquisition Agreement Conestoga shall provide to
Mountain Union all Search Rings designated by Conestoga as of such date
(collectively, the "Batch Search Ring Submission"). Each Search Ring submitted
to Mountain Union by Conestoga shall include the following: (i) a map,
topographical drawing, or other rendering, and general latitude and longitude
information sufficiently describing the geographic area constituting the Search
Ring; (ii) the applicable number or other specified means of designation by
which Conestoga identifies the Ring; and (iii) the type and desired number of
antennas Conestoga desires to install, the desired mounting height thereof, and
any other technical data needed by Mountain Union to evaluate the viability of
the Search Ring Request. As used herein, "Search Ring" means a geographic area
within the Territory created by Conestoga RF engineer(s) with close attention to
technical feasibility, and which shall have the radius designated by CWC (in its
commercially reasonable discretion) as being necessary for the deployment of
CWC's PCS system. Provided that such are known to Conestoga, each Search Ring
shall identify any existing, fully-constructed towers or other communications
facilities in operation and readily available for use by CWC in connection with
the deployment of its PCS system as of the date of Conestoga's submission of the
Search Ring to Mountain Union (each, an "Existing Communications Facility"
herein). Nothing in this Agreement shall be construed as prohibiting Conestoga
from independently pursuing a collocation opportunity on an Existing
Communications Facility provided that Conestoga informs Mountain Union of such
election in writing. As part of its submission of each Search Ring to Mountain
Union, Conestoga shall use good faith efforts to identify for Mountain Union
potentially viable existing structures (for example, buildings, water towers,
and the like) that may be used for tower collocation opportunities in the given
geographic area.
(b) Within a commercially reasonable time after Mountain Union's
receipt of Conestoga's Batch Search Ring Submission, Mountain Union shall,
pursuant to the terms of this paragraph, accept or decline the Site location
opportunity within each Search Ring that is a part of such submission.
Thereafter (and provided that not more three (3) Search Rings are delivered by
Conestoga within a given calendar week, in which case Mountain Union shall have
a commercially reasonable period of time in which to respond), Mountain Union
shall, pursuant to the terms of this paragraph, accept or decline the Site
location opportunity within each Search Ring within ten (10) business days after
its receipt thereof. In determining whether to accept or reject a Search Ring,
Mountain Union shall utilize the "Search Ring Evaluation Criteria" set forth in
Exhibit "E" hereto, and shall act in good faith (not
arbitrarily or capriciously) in applying such criteria to each Search Ring
submitted by Conestoga. In the event that Mountain Union accepts the Search Ring
(an "Active Search Ring" herein) in writing, Mountain Union will perform the
Tower Development Services that are the subject of this Agreement with respect
thereto. The parties agree and acknowledge that if Mountain Union's Search Ring
acceptance notice identifies a Potential Site as being viable for the
construction or acquisition of a Collocation Tower (as defined in Section 1(a)
above) such determination shall be binding on Mountain Union in the event that
(i) the Site is zoned to allow the construction of a Collocation Tower either
prior to or during the Term of this Agreement, and (ii) a Tower is constructed
or acquired by Mountain Union on the Site pursuant to the terms of this
Agreement, whether or not such Tower is a Collocation Tower. In the event that
Mountain Union declines the Search Ring after evaluating the Search Ring in
accordance with the requirements of this paragraph and the Search Ring
Evaluation Criteria, and Conestoga, within two (2) years after its initial
tendering of the Search Ring to Mountain Union, constructs (or has constructed)
a tower(s) therein, Mountain Union shall have the right of first refusal to
purchase such tower(s) pursuant to the terms of Section 8 below.
5. Tower Development Services. Mountain Union shall perform the
following services (the "Tower Development Services" or the "Services" herein)
for each Active Search Ring:
(a) Phase I Services. Within a commercially reasonable time (which
time shall not exceed forty-five (45) business days) after its acceptance of any
Search Ring that is a part of Conestoga's Batch Search Ring Submission, Mountain
Union shall, for each such Active Search Ring, identify for Conestoga in
writing: (i) the location of at least three (3) potential Site(s) within the
Active Search Ring (each, a "Potential Site"), together with the address,
latitude, longitude and ground elevation thereof; (ii) a photo of each Potential
Site; and (iii) the property zoning designation applicable to each Potential
Site (collectively, the "Phase I Data"). Within a commercially reasonable time
after its receipt of the Phase I Data for the Search Rings that are a part of
the Batch Search Ring Submission, Conestoga shall inform Mountain Union in
writing as to whether it accepts or rejects the Potential Site(s) ("Site
Acceptance Notice"). With respect to Search Rings submitted to Mountain Union on
an individual basis, within ten (10) business days after its acceptance of a
Search Ring, Mountain Union shall identify the requisite Phase I Data therefor
in writing. With respect to such individually submitted Search Rings, Conestoga
shall provide the Site Acceptance Notice to Mountain Union not later than ten
(10) business days after its receipt of the Phase I Data therefor. In the event
that Conestoga accepts a Potential Site, Mountain Union shall promptly commence
the performance of Phase II Services with respect thereto.
(b) Phase II Services. Within a commercially reasonable period of
time after it receives a Site Acceptance Notice pertaining to a Potential Site
that resulted from Conestoga's Batch Search Ring Submission, and upon receipt of
the Testing Data from Conestoga, Mountain Union shall obtain permission from the
owner of the Potential Site for drive testing and/or site visits ("Initial Site
Tests") and provide Conestoga with such other information and documentation as
may be reasonably requested by Conestoga with respect to the Initial Site Tests.
For Site Acceptance Notices received by Conestoga on an individual basis,
Mountain Union shall, within ten (10) business days after it receives the Site
Acceptance Notice and the relevant Testing Data from Conestoga, obtain the
requisite authorization from the Potential Site Owner for the Initial Site Test
pertaining thereto. As used herein, "Testing Data" means: (i) requested dates
and times for the performance of the
Initial Site Tests; (ii) the proposed scope of the testing (as determined by
Conestoga in its commercially reasonable discretion); (iii) the power
requirements applicable to the Initial Site Tests; (iv) the execution of all
documents required by the Potential Site owner with respect to the Initial Site
Tests; and (v) making the appropriate personnel available to participate in the
Initial Site Tests with Mountain Union. Mountain Union shall, in conjunction
with Conestoga personnel, conduct the Initial Site Tests on a schedule to be
agreed upon by the Potential Site Owner, Conestoga, and Mountain Union.
(c) Phase III Services. Not later than twenty (20) business days
following the completion of the Initial Site Tests, Conestoga shall inform
Mountain Union in writing as to whether the Potential Site is approved by
Conestoga, which approval shall not be unreasonably withheld ("Site Approval
Notice" or "Site Rejection Notice," as the case may be). Upon Mountain Union's
receipt of a Site Approval Notice from Conestoga, Mountain Union shall promptly
commence commercially reasonable Site Acquisition Efforts with a goal (but not a
requirement) toward acquiring such Site within seventy-five (75) business days
after the receipt of the Site Approval Notice (the "Site Acquisition Period").
Notwithstanding anything to the contrary in the previous sentence, in the event
that, despite Mountain Union's prompt and commercially reasonable Site
Acquisition Efforts, it is not able to acquire a Potential Site within the Site
Acquisition Period, the parties shall either extend the site acquisition period
or work together in good faith to identify an alternative Potential Site within
the applicable Search Ring ("Alternate Site"). As used herein, "Site Acquisition
Efforts" means good faith, commercially reasonable efforts: (i) to reach an
agreement with the Potential Site owner as to the terms on which Mountain Union
will acquire via license, easement, leasehold, or purchase of the fee (as
determined by Mountain Union in its sole discretion) rights with respect to the
Site that will permit the use of the Site for the construction, maintenance, and
operation of a Tower and related improvements and facilities; and (ii) to obtain
access/egress and utility/telecommunications easements or licenses necessary for
Site operation. Mountain Union shall not be obligated to enter into any lease,
license, purchase or other agreement of any kind or nature on terms that are not
substantially similar to the commercial terms of the Land Leases assigned to
Mountain Union pursuant to the Asset Acquisition Agreement or on economic terms
that are not acceptable to Mountain Union in its sole reasonable discretion.
(d) Phase IV Services. In the event that Mountain Union's Site
Acquisition Efforts are successful, Mountain Union shall thereafter promptly
commence commercially reasonable efforts to obtain all applicable regulatory
authorizations for the construction of any improvements located on the Site,
including, without limitation, Federal Aviation Administration ("FAA") and FCC
approvals, planning and zoning approvals, and such other approvals (e.g.,
building permits and the like) as may be required to construct and operate the
Tower (hereinafter collectively referred to herein as the "Approvals"). Mountain
Union shall use commercially reasonable efforts to acquire all Approvals as soon
as is commercially practicable provided, however, that Conestoga shall (without
cost to Mountain Union) provide reasonable assistance to Mountain Union in
seeking the Approvals including, without limitation, the provision of RF
support, RF propagation studies, and the provision of testimony and other
statements by Conestoga's RF professionals. If Mountain Union, despite its use
of commercially reasonable efforts, is not successful in acquiring all Approvals
necessary to construct and operate the tower (as well as the acquisition of
license/leasehold/easement rights or title to the Site), within one (1) year
following its receipt of Conestoga's Site Acceptance Notice ("Approval Period"),
Conestoga may, without in any way limiting Conestoga's
Minimum Tower Commitment, as set forth in Section 7 of this Agreement, revoke
such Acceptance upon written notice to Mountain Union. Provided that (i)
Mountain Union is not in default of any material obligation hereunder and that
Mountain Union has made a bona fide, good faith effort to obtain the Approvals
(and to acquire the necessary and appropriate license/leasehold/easement/fee
ownership rights for the Site), and (ii) the parties, despite good faith efforts
to do so, are unable to agree upon an Alternate Site, Conestoga shall, within
thirty (30) days of its receipt of Mountain Union's invoice therefor, pay to
Mountain Union fifty percent (50%) of the out-of-pocket costs reasonably
incurred by Mountain Union in seeking approvals for the Site. If Mountain Union
is successful in obtaining the Approvals prior to the expiration of the Approval
Period, the following provisions shall apply.
(e) Phase V Services. Not later than thirty (30) business days after
its receipt of all required Approvals pertaining to a Site, Mountain Union shall
commence the construction of the Site. Mountain Union shall construct all Towers
in conformance with the Standard Build Parameters, as defined below, in a good
and workmanlike manner in accordance with applicable industry standards. Not
later than sixty (60) business days following the commencement of the
construction, Mountain Union shall complete the construction of the Site, obtain
all Approvals necessary for the use and occupancy thereof, and deliver a
Completion Notice to Conestoga in the form attached hereto and incorporated
herein as Exhibit "A". Prior to the commencement of Phase V Services pursuant to
this Paragraph, Mountain Union shall give Conestoga written notice of any
anticipated unusual costs of the type referenced in Section 6 hereof and the
anticipated increase in the monthly rental payment or the appropriate capital
contribution by Conestoga as a result thereof (the "Additional Cost Notice"). In
the event that the parties reach agreement with respect thereto, such shall be
referenced in the applicable Site License Agreement. In the event that the
parties are not able to reach agreement with respect thereto, Conestoga shall
have ten (10) business days after the receipt of the Additional Cost Notice to
terminate the Site with respect to which the Phase V Services would be
performed. In the event that Conestoga elects to terminate the Site and the
parties, despite their use of good faith efforts to do so, are unable to agree
upon an Alternate Site, Conestoga shall, within thirty (30) days of its receipt
of Conestoga's invoice therefor, pay to Mountain Union fifty percent (50%) of
the reasonable out-of-pocket costs incurred by Mountain Union with respect to
the Site prior to Conestoga's election to termination Site Acquisition efforts
with respect thereto.
(f) Familiarity with Scope of Work. Mountain Union represents and
warrants that it is familiar with the development and construction of
communications towers, is or will become familiar with Conestoga's
specifications applicable to Collocation Towers, will visit and examine each
Site and the surrounding locale, and knows or will know the working conditions
in and around each Site.
(g) Quality Standard. Mountain Union agrees to perform its
obligations and furnish its services hereunder properly, diligently, and in good
faith in accordance with applicable industry standards, and in accordance with
all applicable federal, state, and local laws, regulations, rules and ordinances
(collectively "Laws" herein) .
6. Site License Agreement. Not later than ten (10) business days
following Mountain Union's delivery of the Completion Notice to Conestoga, the
parties shall enter into a Site License Agreement pertaining to the Tower and
related equipment and improvements (each, a "Site License" herein). Such Site
License shall be in the form attached hereto and incorporated herein as Exhibit
"B". The
monthly rental payment to be paid by Conestoga under the Site License shall be
not less than $1,500.00, exclusive of utility and related charges, and such
rental obligation shall commence on the earlier of (i) the date of Conestoga's
placement of equipment on the Site, or (ii) thirty (30) days after Mountain
Union's delivery of the Certificate of Completion for the Site to Conestoga. In
the event that: (a) there are extraordinary development costs pertaining to a
Site (e.g., the required installation of a "stealth" or other specialty tower,
unusual and material costs incurred in bringing power and or telecommunications
services to the Site, etc.); or (b) Conestoga's build requirements for the Site
materially exceed the parameters set forth in Exhibit "C"("Standard Build
Parameters"), the parties shall negotiate in good faith to determine any
appropriate increase(s) to the monthly rental payment and/or appropriate capital
contribution(s) to be made by Conestoga with respect thereto. The Site License
shall designate the specific equipment and antennas that Conestoga may place on
the Tower and elsewhere on the Site (the "Customer Equipment" herein), as well
as the location on the Tower and the Site on which such shall be placed. In the
event that, following the execution of the Site License, Conestoga requests that
the Customer Equipment be modified and or relocated, Mountain Union shall use
commercially reasonable efforts to accommodate such request provided, however,
that (i) the implementation of such request will not, in Mountain Union's
commercially reasonable judgment, interfere with the use of the Site by other
customers already located thereon; (ii) the implementation of such request would
not, in Mountain Union's commercially reasonable judgment, have a material,
adverse effect upon the marketability of the Site; and (iii) the parties agree
upon the terms (including, without limitation, payment terms) applicable to the
modification/relocation of the Customer Equipment. The parties acknowledge and
agree that any request (a) to change the location of Customer Equipment on a
Tower, (b) to expand the footprint of Customer Equipment elsewhere on the Site,
(c) to modify the antenna(s) located on a Tower or the placement thereof in such
a way as to increase Conestoga's usage of the Site, or (d) to change the radio
frequencies operated on the Site in such a way as to increase Conestoga's usage
of the Site may, in Mountain Union's sole reasonable discretion, result in an
increase to the monthly rental payment under the applicable Site License, which
increase, if any, shall be mutually-agreed upon by the parties in writing.
7. Conestoga Minimum Tower Commitment. Conestoga agrees and
acknowledges that Mountain Union would not enter into in this Agreement or the
Asset Acquisition Agreement absent Conestoga's commitment to, within the first
twenty-four (24) months of the Term of this Agreement, refer a sufficient number
of Site needs and opportunities that will result in Conestoga becoming the
anchor tenant (as such term is commonly used in the real estate industry) on not
less than twenty (20) Collocation Towers to be constructed or acquired by
Mountain Union pursuant to the terms of this Agreement (the "Conestoga Minimum
Tower Commitment"). IN THE EVENT THAT CONESTOGA BREACHES ITS OBLIGATIONS UNDER
THIS SECTION 7 AND PROVIDED THAT MOUNTAIN UNION HAS (i) NOT ACTED IN BAD FAITH,
(ii) NOT UNREASONABLY DELAYED IN THE PERFORMANCE OF ITS OBLIGATIONS HEREUNDER,
OR (iii) COMPLIED WITH ITS OBLIGATIONS UNDER SECTION 4(b) HEREOF, CONESTOGA
SHALL, WITHIN THIRTY (30) DAYS OF ITS RECEIPT OF MOUNTAIN UNION'S INVOICE
THEREFOR, PAY TO MOUNTAIN UNION AS LIQUIDATED DAMAGES (A) THE DIFFERENCE BETWEEN
TWENTY (20) AND THE ACTUAL NUMBER OF NEWLY-CONSTRUCTED OR ACQUIRED COLLOCATION
SITES WITH RESPECT TO WHICH CONESTOGA ENTERED INTO A SITE LICENSE WITH MOUNTAIN
UNION PURSUANT TO THIS AGREEMENT, MULTIPLIED BY (B) $100,000.00 PER SITE.
NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THE PREVIOUS SENTENCE, IN THE EVENT
THAT CONESTOGA BREACHES ITS
OBLIGATIONS UNDER THIS PARAGRAPH BY FAILING TO MEET THE CONESTOGA MINIMUM TOWER
COMMITMENT BY FIVE (5) SITES OR LESS, THE APPLICABLE FEE TO BE USED IN THE
LIQUIDATED DAMAGES CALCULATION SET FORTH IN THE PREVIOUS SENTENCE SHALL BE
$50,000.00 PER SITE, NOT $100,000.00 PER SITE.
8. Right of First Refusal to Purchase. In the event that, Mountain
Union declines a Search Ring proposed by Conestoga or the opportunity to
construct or acquire a tower hereunder and, in doing so, has complied with its
obligations under Section 4(b) of this Agreement and, within two (2) years after
its initial tendering of the Search Ring to Mountain Union, Conestoga acquires
or construct a tower(s) therein, Mountain Union shall have an option to purchase
such tower(s) within a period of twelve (12) months immediately following
Conestoga's commercial deployment of the Site on the following terms and
conditions:
(a) the price shall be, with respect to the first five (5)
Sites, Conestoga's Cost plus ten percent (10%), and with respect to all
other towers, the Current Market Value of the Site ;
(b) transaction expenses, taxes and rentals shall be divided
or apportioned between the parties in accordance with standard practice
in Pennsylvania;
(c) closing (which closing shall be subject to the same
conditions precedent to closing as those set forth in Sections 5.1
through 5.8, 6.1 and 6.2 of the Asset Acquisition Agreement) shall be
held on the purchase and sale of the Site within thirty (30) days after
Mountain Union gives Conestoga notice of its exercise of the option to
purchase; and
(d) Conestoga and Mountain Union shall enter into a Site
License in accordance with Section 6 of this Agreement with respect to
the Site.
As used in Section 8(a) of this Agreement, "Cost" shall mean the out-of-pocket
costs incurred by Conestoga in (A) acquiring the Site, (B) constructing the
Tower, and (C) obtaining all required approvals (including, without limitation,
occupancy permits) therefor required by Law without markup. As used in Section
8(a) of this Agreement, "Current Market Value" shall mean either: (1) the
current market value of the Site as mutually agreed upon by the parties in
writing; or (2) if the parties are unable to reach agreement pursuant to clause
(1) within fifteen (15) business days, the arithmetic average of three (3)
appraisals issued, respectively, by three (3) qualified real estate appraisers
in the business of appraising communications towers. In the event that the
Current Market Value is determined pursuant to clause (2) of the preceding
sentence, one (1) appraiser shall be selected by Conestoga, one (1) appraiser
shall be selected by Mountain Union, and the third appraiser shall be selected,
respectively, by the mutual designation of the appraisers selected by Conestoga
and Mountain Union.
9. Office Space. During the Term of this Agreement and to further the
purposes hereof, Conestoga shall make available to Mountain Union office space
in the offices of CWC (or any permitted successor-in-interest thereto) in
Boyertown, Pennsylvania for up to two (2) Mountain Union employees ("Mountain
Union Personnel"). Such office space shall be provided to Mountain Union without
charge except that Mountain Union will reimburse Conestoga for long distance
telecommunications charges incurred by Mountain Union Personnel.
10. Default. Either party shall be in default of this Agreement (each,
an "Event of Default") if: (i) any representation or warranty made by such party
in this Agreement is or becomes false or erroneous in any material respect; or
(ii) any material covenant or material obligation (including, without
limitation, payment obligations) made or undertaken by either party hereunder is
not timely, adequately, or properly performed in accordance with the terms of
this Agreement, and applicable industry standards and is not cured within
forty-five (45) days after the breaching party's receipt of written notice of
the breach from the non-breaching party or, in the case of a party's failure to
comply with a monetary obligation hereunder, within ten business (10) days after
the breaching party's receipt of written notice of the breach from the
non-breaching party (the "Cure Period"). Notwithstanding anything to the
contrary in this paragraph, in the event of a non-monetary breach, so long as
the defaulting party commences appropriate curative action within the Cure
Period and thereafter diligently prosecutes such cure to completion within
ninety (90) days after the breaching party's receipt of written notice of the
breach from the non-breaching party, such breach shall not be deemed to
constitute an Event of Default hereunder. Upon the occurrence of an Event of
Default, the terms of Section 3(b) of this Agreement shall apply.
11. Representations and Warranties of Mountain Union with respect to
each Site. As of the effective date of each Site License executed pursuant to
this Agreement, Mountain Union hereby represents and warrants to Conestoga that
Mountain Union shall have good and marketable title to a fee simple estate or a
valid leasehold, easement, or license interest in the real property on which the
Site is located, free and clear of all liens and encumbrances that would
interfere with Conestoga's rights under the Site License (unless any such liens
or encumbrances are waived by Conestoga in writing).
12. Indemnification. Each party (the "Indemnifying Party") will defend,
indemnify and hold harmless the other party (the "Indemnified Party"), and the
respective directors, officers, employees and agents of the Indemnified Party,
from and against any and all third party claims, costs, losses, damages,
judgments and expenses (including reasonable attorneys' fees and court costs)
(collectively, "Claims") arising out of or in connection with any alleged breach
of the Indemnifying Party's obligations, representations, warranties and/or
covenants set forth in this Agreement. The Indemnified Party agrees that the
Indemnifying Party shall have sole and exclusive control over the defense and
settlement of any such third party claim with counsel reasonably acceptable to
the Indemnified Party. The Indemnified Party shall promptly notify the
Indemnifying Party of any such claim of which it becomes aware and shall: (a) at
the Indemnifying Party's expense, provide reasonable cooperation to the
Indemnifying Party in connection with the defense or settlement of any such
claim; and (b) at the Indemnified Party's expense, be entitled to participate in
the defense of any such claim. Except with respect to a settlement solely
requiring the payment of money by the Indemnifying Party, the Indemnifying Party
shall not acquiesce to any judgment or enter into any settlement or any other
resolution without the prior written consent of the Indemnified Party, which
consent shall not be unreasonably withheld.
13. Insurance. Mountain Union shall maintain the following insurance
policies throughout the Term (and any extension(s) thereof, if applicable) of
this Agreement:
Workers' Compensation Statutory Limit
Comprehensive General Liability:
Bodily Injury and $500,000 per person
Property Damage $2,000,000 each occurrence
$2,000,000 aggregate
Comprehensive Automobile Liability:
Bodily Injury $500,000 each person
Property Damage $2,000,000 each occurrence.
The insurance specified above shall: (i) name Conestoga as an "Additional
Insured" in matters covered by this Agreement; (ii) provide that said insurance
is primary coverage with respect to all insureds; (iii) contain a Standard Cross
Liability Endorsement or severability of interest clause which provides that the
liability insurance applies separately to each insured and that the policies
cover claims or suits by one insured against the other; and (iv) not be
terminated, canceled, lapsed, or materially changed without thirty (30) days
prior written notice to Conestoga. If requested by Conestoga, Mountain Union
shall provide Conestoga with certification by a properly qualified
representative of the insurer that Mountain Union's insurance coverage complies
with this Section.
14. Compliance with Laws and Agreements. Both parties shall comply with
all applicable laws, ordinances, regulations, statutes, rules and restrictions
pertaining to their obligations hereunder.
15. Corporate Authorizations. Each party has received all appropriate
authorizations and consents to enter into this Agreement and to perform its
obligations hereunder.
16. Captions. The captions contained herein are for convenience only
and are not a part of this Agreement.
17. Entire Agreement. This Agreement, Exhibits A, B, C, D and E hereto,
and the Asset Acquisition Agreement together with the documents incorporated by
reference therein (collectively, the "Transaction Documents") contain the entire
agreement between Conestoga and Mountain Union with respect to the subject
matter contained therein and all other representations, negotiations and
agreements, whether written and oral, are superseded thereby and are of no force
or effect. This Agreement may be amended and modified only in a writing signed
by duly-authorized representatives of both parties to the Agreement.
18. Survival. The following Sections of this Agreement shall survive
the expiration or earlier termination hereof: 5(d), 5(e) (to the extent that
sums due and owing thereunder remain unpaid as of the expiration or effective
date of termination of this Agreement) 7, 8, (to the extent that this Agreement
is not terminated by Conestoga as a result of an Event of Default by Mountain
Union), 12, 14, 15, 16, 17, 18, 20, 21, 22, 23, 24, 25, 27, 28 and 29.
Notwithstanding anything to the contrary in the previous sentence, if Conestoga
terminates this Agreement in accordance with Section 2(b) as the result of an
Event of Default hereunder by Mountain Union, Section 7 shall be null and void
and shall not survive the termination of this Agreement. If Mountain Union
terminates this Agreement in accordance with Section 2(b) as the result of an
Event of Default hereunder by Conestoga, Section 7 shall survive termination and
remain in full force and effect.
19. Assignment. This Agreement shall be binding upon and inure to the
benefit of the successors and permitted assigns of the parties to this
Agreement. Neither party may transfer or otherwise assign this Agreement or any
of its rights or obligations hereunder without the other party's prior written
consent, which consent will not be unreasonably withheld. Notwithstanding the
foregoing, either party may assign this Agreement or its rights and obligations
hereunder by merger or otherwise in whole or in part, without the consent of the
other party, to any entity controlled by, controlling or under common control
with it or to any entity which acquires (by merger, consolidation, stock or
otherwise) substantially all of the assets of such party. In addition, Mountain
Union may enter into such subcontracts as Mountain Union deems to be necessary
and appropriate to the fulfillment of its obligations hereunder provided,
however, that Mountain Union shall be responsible to Conestoga for the
performance or failure to perform of all subcontractors engaged by Mountain
Union, their employees, and agents.
20. Dispute Resolution. Except for the right of any party to apply to a
court for a temporary restraining order, a preliminary injunction, or other
equitable relief to preserve the status quo or prevent irreparable harm, any
controversy or claim arising out of or relating to this Agreement or to its
breach (a "Dispute") will be resolved by the process set forth in this Section
20, which Conestoga and Mountain Union agree will be the sole and exclusive
process for the resolution of such Disputes.
(a) Negotiation. The parties will attempt in good faith to resolve
any Dispute promptly by negotiations involving at least one (1) duly-authorized
representative of each party. Any party may give the other party written notice
of any Dispute not resolved by such representatives in the normal course of
business ("Notice of Dispute"), requesting a meeting that will be attended by at
least one (1) executive representing each party who has decision-making
authority with respect to the Dispute ("Dispute Resolution Meeting"). The
Dispute Resolution Meeting shall occur not later than ten (10) business days
following the date of such Notice. If either party intends to be accompanied at
the Dispute Resolution Meeting by an attorney, the Notice of Dispute shall so
state and the other party, at its option, may also be accompanied by an
attorney. All negotiations pursuant to this Section 20(a) are confidential and
will be treated as compromise and settlement negotiations for purposes of the
Federal Rules of Evidence and applicable state rules of evidence.
(b) Arbitration. Any dispute that has not been resolved pursuant to
the previous paragraph for any reason within twenty (20) business days of the
Dispute Resolution Notice will be finally settled by binding arbitration by a
single arbitrator. The arbitration shall take place in King of Prussia,
Pennsylvania. Arbitration will be conducted in accordance with the
then-prevailing commercial arbitration rules of the American Arbitration
Association (the "Rules") with the following exception if such conflicts with
the Rules: the arbitration may proceed in the absence of any party if written
notice (pursuant to the Rules) of the proceedings has been given to such party.
The parties hereto agree to abide by all decisions and awards rendered in such
proceedings. Such decision and awards rendered by the arbitrator(s) will be
final and conclusive and may be entered in any court having jurisdiction thereof
as a basis of judgment and of the issuance of execution for its collection. All
such controversies, claims or disputes will be settled in this manner in lieu of
any action at law or equity. The arbitrator will not have the power or authority
to award punitive damages, consequential damages, or speculative damages.
21. Applicable Law. This Agreement shall be construed by and controlled
under the laws of the Commonwealth of
Pennsylvania without regard to its
conflicts of laws principles.
22. Construction of Agreement. All parties agree that the provisions of
this Agreement shall not be construed or interpreted against any party to the
Agreement based upon authorship.
23. Counterparts. This Agreement may be executed via facsimile and in
any number of counterparts, each of which when executed and delivered shall be
an original, but all counterparts shall constitute one and the same instrument.
24. Parties Bound. The rights and obligations under this Agreement
shall be binding upon and inure to the benefit of the parties to the Agreement,
their heirs, successors, administrators and assigns (where assignment is
permitted pursuant to the terms hereof). The use of any gender shall be deemed
to refer to the appropriate gender, whether masculine, feminine or neuter, and
the singular shall be deemed to refer to the plural where appropriate, and vice
versa.
25. Limitation of Liability. Except as set forth in Section 12 hereof
entitled "Indemnification," IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR ANY
LOSS OF DATA, OR ANY INDIRECT, SPECIAL, INCIDENTAL, OR CONSEQUENTIAL DAMAGES OF
ANY KIND REGARDLESS OF THE FORM OF ACTION, WHETHER IN CONTRACT, TORT (INCLUDING
NEGLIGENCE), STRICT PRODUCT LIABILITY, OR OTHERWISE, EVEN IF IT HAS BEEN ADVISED
OF THE POSSIBILITY OF SUCH DAMAGES.
26. Notices. All notices, requests, demands, claims and other
communications hereunder shall be in writing and shall delivered by (i)
certified or registered mail, return receipt requested, which shall be deemed
received three (3) business days after posting, (ii) by a guarantied overnight
delivery which shall be deemed received one (1) business day after dispatch,
(iii) by personal service which shall be deemed received on the date of personal
service, or (iv) by facsimile which shall be deemed received on the date of
transmission if a transmission receipt from the transmitting machines verifies
that transmission has been completed, to the following addresses and telecopy
numbers (or to such other addresses or telecopy numbers which any party shall
designate in writing to the other parties in accordance with this Section 26).
If to Mountain Union to: Mountain Union Telecom, LLC
000 X. Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxx
Telecopy: (000) 000-0000
With a copy to: Mountain Union Telecom, LLC
0000 Xxxx 0xx Xxxxxx, 0xx Xxxxx
Xxxx xx Xxxxxxx, XX 00000
Attn: X. Xxxxxxxx
Telecopy: (000) 000-0000
And to: Xxxx X. Xxxxxxx, Esq.
Bainbridge Group
00000 Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxx, XX 00000
Telecopy: (000) 000-0000
If to Conestoga, to: Conestoga Wireless Company
000 X. Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: President
Telecopy: (000) 000-0000
With a copy to: Barley, Snyder, Xxxxx & Xxxxx
000 Xxxxxxxxxx Xxxxxx
X.X, Xxx 000
Xxxxxxx, XX 00000-0000
Attn: Xxxx Xxxxxxxxx
Telecopy: (000) 000-0000
27. Force Majeure. In no event shall a party have any claim or right
against the other party for any delay or failure of performance due to causes
beyond its reasonable control, including, but not limited to: acts of God, fire,
explosion, vandalism, cable cut, storm, flood or other similar occurrences;
national emergencies; unavailability or shortages of materials or rights of way;
insurrections; riots, wars; or strikes, lock-outs, work stoppages, or other
labor difficulties.
28. Confidentiality; Press Release. Each party agrees to keep
confidential and to use only for purposes of performing under this Agreement any
information disclosed by the other party (whether orally or in writing, in
tangible or in-tangible form) which is identified by the disclosing party at or
about the time of disclosure as confidential ("Confidential Information"). The
parties agree that the terms of this Agreement and all negotiations relating
thereto are deemed to be Confidential Information jointly owned by the parties
that may not be disclosed by either party without the prior written approval of
the other, which approval will not be unreasonably withheld. The obligation of
confidentiality shall not apply to information which is publicly available
through authorized disclosure, is known by the receiving party at the time of
disclosure as evidenced by a writing produced by the receiving party, is
rightfully obtained from a third party who has the right to disclose it, or is
required by law to be disclosed. Upon any termination of this Agreement, each
party shall return to the other party all Confidential Information of the other
party, and all copies thereof, in the possession, custody or control of such
party. Following the execution of this Agreement, the parties agree to execute a
press release in mutually acceptable form summarizing the relationship created
hereby (the "Press Release"). No Press Release shall be executed without the
written approval of each party hereto, provided that Conestoga, as a publicly
traded company, has legal obligations to make public disclosures, and Mountain
Union's right of approval shall be exercised timely in a manner not unreasonably
to interfere with Conestoga's public disclosure obligations.
29. Partial Invalidity. In the event that any paragraph or portion of
this Agreement is held to be invalid with respect to any particular Site
referenced herein, such paragraph or portion of this Agreement shall be stricken
from and construed for all purposes as not constituting a part of this
Agreement, and the remaining portion of this Agreement shall remain in full
force and effect pursuant to its terms.
30. Key Employees. In the event that Conestoga employs the Key
Employees, as defined in and pursuant to the terms of Section 3.18 of the Asset
Acquisition Agreement, Conestoga shall make the Key Employees available to
Mountain Union on an as-needed basis and at commercially reasonable rates to
assist Mountain Union in its performance under this Agreement. In the event that
Mountain Union employs the Key Employees, as defined in and pursuant to the
terms of Section 3.18 of the Asset Acquisition Agreement, Mountain Union shall
make the Key Employees available to CWC on an as-needed basis at commercially
reasonable rates to perform services with respect to site location and
development necessary for the build-out of CWC's PCS system.
31. Standard of Conduct. Both parties shall, in their performance
hereunder, act in good faith without unreasonable delay.
IN WITNESS WHEREOF, the parties have caused this Build-To-
Suit
Agreement to be executed by their duly authorized representatives as of the
Effective Date first above written.
CONESTOGA ENTERPRISES, INC.
By: /s/Xxxxxxxx X. Xxxxxxx, Xx.
-------------------------------
Title: Senior Vice President
-----------------------------
CONESTOGA MOBILE SYSTEMS, INC.
By: /s/Xxxxxxxx X. Xxxxxxx, Xx.
------------------------------
Title: President
----------------------------
CONESTOGA WIRELESS COMPANY
By: /s/ Xxxxxxx X. Xxxxxxxx, III
-------------------------------
Title: President
----------------------------
MOUNTAIN UNION TELECOM, LLC
By: /s/ Xxxxx X. Xxxxxxx
-------------------------------
Xxxxx X. Xxxxxxx
President
