Exhibit 10.5
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AGREEMENT
FOR PURCHASE AND SALE OF ASSETS
BY AND BETWEEN
PINNACLE TOWERS INC., SELLER
AND
PINNACLE TOWERS III INC., PURCHASER
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AGREEMENT
FOR
PURCHASE AND SALE OF ASSETS
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THIS AGREEMENT is effective as of the 31/st/ day of August, 1999, by and
between PINNACLE TOWERS III INC., a Florida corporation ("Purchaser") and
PINNACLE TOWERS INC., a Delaware corporation ("Seller").
WHEREAS, Seller has acquired from Motorola, Inc., a Delaware corporation
("Motorola"), certain antenna sites listed on Schedule 1.2(b) (the "Sites") and
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the Rooftop Assets (as defined below) (collectively the "Rooftop Business")
pursuant to the Agreement for Purchase and Sale of Assets by and between Seller
and Motorola, Inc., a Delaware corporation ("Motorola"), dated June 29, 1999 (as
amended, the "Motorola Purchase Agreement");
WHEREAS, Purchaser desires to purchase from Seller and Seller desires to
sell to Purchaser, subject to the assumption of the associated liabilities and
obligations, the Rooftop Assets;
NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements herein contained, the parties agree as follows:
ARTICLE I
THE TRANSACTION
1.1. Purchase and Sale of Rooftop Assets. At the Closing (as defined
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below), Seller shall sell, transfer, assign and deliver to Purchaser, and
Purchaser shall purchase, accept and receive, all of Seller's right, title and
interest in and to the Rooftop Assets as they exist at the Closing.
1.2. Rooftop Assets. The "Rooftop Assets" are all of Seller's right, title
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and interest in and to the following:
(a) the accounts and notes receivable of the Rooftop Business;
(b) the Rooftop Assets listed on Schedule 1.2(b);
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(c) the deposits and prepaid assets of the Rooftop Business
related to the Sites;
(d) the performance and other bonds, security and other deposits, and
advances maintained solely for use in the conduct of the Rooftop Business
related to the Sites;
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(e) the customer files and all lists of customers, suppliers and
vendors of the Rooftop Business related to the Sites;
(f) the rights and claims under lease, management or sale contracts,
customer orders, service agreements and other similar commitments of the
Rooftop Business related to the Sites;
(g) rights in, to and under agreements directly and solely relating
to the Rooftop Business, including the Material Contracts (as defined
below), the Rooftop Agreements (as defined below), and the Tenant Leases
(as defined below);
(h) documents and records directly and solely relating to the Sites,
including accounts receivable and accounts payable ledgers, records and
files;
(i) master customer and vendor lists directly and solely relating to
the operation of the Sites; and
(j) to the extent assignable and transferable to Purchaser, permits
and licenses (and pending applications for any thereof) related to the
operation of the Sites;
provided, however, that the definition of Rooftop Assets shall not include any
items defined as Excluded Assets in Section 1.3 below.
1.3. Excluded Assets. Seller will retain and not transfer, and Purchaser
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will not acquire any assets of Seller, other than the Rooftop Assets,
(collectively, the "Excluded Assets"), including the following assets which
shall not be sold or transferred to Purchaser:
(a) all cash and cash equivalents, including cash on hand or in bank
accounts;
(b) corporate accounting journals and corporate books of account
which comprise Seller's permanent accounting or tax records;
(c) corporate minute books, stock records and corporate seals of
Seller;
(d) refunds pertaining to any Tax obligations of Seller;
(e) software and information systems;
(f) any cash management or other treasury services, legal, patent,
tax, insurance administration, corporate accounting, audit, human resources
or other services provided to the Rooftop Business by Seller;
(g) certain assets listed on Schedule 1.3; and
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(h) items sold, transferred, disposed of or consumed in the ordinary
course prior to the Closing;
provided, however, that the definition of Excluded Assets shall not include any
items defined as Rooftop Assets in Section 1.2.
1.4. Assumed Liabilities and Obligations. At the Closing, Purchaser shall
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assume and agrees to discharge promptly as they become due any and all
liabilities and obligations and agreements related to or arising from the
operation of Rooftop Business or the ownership of the Rooftop Assets, including
all contracts and obligations which constitute Rooftop Assets or to which the
Rooftop Assets are subject or by which they are bound (the "Assumed
Liabilities"); provided, however, that notwithstanding the foregoing, none of
the Excluded Liabilities (as defined below) shall be included as Assumed
Liabilities. Purchaser shall forever defend, indemnify and hold harmless Seller
from and against any and all liabilities, obligations, claims, damages, costs
and expenses (including court costs and reasonable attorneys' fees) related to
or arising from Purchaser's failure to fully perform and discharge the
responsibilities of Seller with respect to the Assumed Liabilities. Purchaser
further agrees to pay and discharge all such liabilities and obligations as they
become due.
1.5. Excluded Liabilities and Obligations. Purchaser shall not assume any
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liabilities or obligations of Seller or the Rooftop Business for Federal, state
or local taxes on income for all periods prior to the Closing (the "Excluded
Liabilities"). Seller shall forever defend, indemnify and hold harmless
Purchaser from and against any and all liabilities, obligations, claims,
damages, costs and expenses (including court costs and reasonable attorneys'
fees) related to or arising from Seller's failure to fully perform and discharge
the Excluded Liabilities. Seller further agrees to pay and discharge all such
liabilities and obligations as they become due.
1.6. Assignment of Contracts. Anything contained in this Agreement to the
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contrary notwithstanding, this Agreement shall not constitute an agreement to
assign the right, title or interest of Seller in, to or under any contract or
any claim or right of any benefit arising thereunder or resulting therefrom if
any attempted assignment thereof, without the consent of a third party thereto,
would constitute a breach thereof or in any way adversely affect the rights of
Purchaser or Seller thereunder or if by its nature such contract cannot be
assigned. Seller shall use its reasonable commercial efforts to obtain, and
Purchaser agrees to cooperate with Seller in its efforts to obtain, the consent
of each such third party to the assignment or transfer thereof to Purchaser in
all cases in which such consent is required for assignment or transfer. If such
consent is not obtained, Seller and Purchaser shall cooperate in any reasonable
arrangements on mutually acceptable terms designed to provide Purchaser the
obligations and benefits thereunder such as, by example, entering into a
subcontract, operating agreement or other similar relationship, which
arrangements shall include self-operative provisions for transfer of the
affected agreements to Purchaser after Closing upon receipt of the applicable
consents. Notwithstanding the foregoing, the obligations of Seller under this
Section shall not include any obligation to make any payment or incur any
economic burden.
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1.7. Bulk Transfer. Purchaser hereby waives compliance by Seller with all
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applicable bulk transfer, bulk sales and similar laws and requirements of all
jurisdictions in connection with the transactions contemplated hereby.
ARTICLE II
CONSIDERATION FOR TRANSFER
2.1. Consideration
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(a) The aggregate consideration for the Rooftop Assets shall be:
(i) Forty Nine Million Dollars $49,000,000 (the "Purchase
Price"); and
(ii) assumption by Purchaser of the Assumed Liabilities.
(b) All payments hereunder shall be made in U.S. dollars by wire
transfer or other immediately-available funds, and all currency amounts
referred to throughout this Agreement are to U.S. dollars.
2.2. Payment of Consideration. At Closing, Purchaser shall pay the Purchase
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Price to an account designated by Seller in immediately available funds.
2.3. Purchase Price Allocation. The consideration for the Rooftop Assets
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shall be allocated by Purchaser and Seller as mutually agreed upon by the
parties prior to Closing.
2.4. [Intentionally Omitted].
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2.5. Costs. The parties shall share equally the costs of the following:
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(a) all Taxes arising in connection with any deed or other conveyance document
relating to the Rooftop Assets, and (b) all recording costs arising in
connection with the transactions contemplated hereby.
2.6. [Intentionally Omitted].
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ARTICLE III
THE CLOSING AND TRANSFER OF ROOFTOP ASSETS
3.1. Closing. The transfer of assets contemplated by this Agreement (the
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"Closing") shall occur at the offices of Holland & Knight LLP, 000 Xxxxx Xxxxxx
Xxxxx, Xxxxx, Xxxxxxx 00000 on the date this Agreement is executed (the "Closing
Date"). Upon consummation, the Closing shall be deemed to take place as of the
close of business on the Closing Date.
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3.2. Deliveries by Purchaser. At the Closing, Purchaser shall deliver the
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following:
(a) an amount equal to the Purchase Price payable in immediately
available funds to the account designated by Seller; and
(b) such other instruments or documents as may be reasonably
necessary or appropriate to carry out the transactions contemplated hereby
or as specifically required to fulfill Purchaser's covenants hereunder.
3.3. Deliveries by Seller. At the Closing, Seller shall deliver such
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instruments or documents as may be reasonably necessary or appropriate to carry
out the transactions contemplated by this Agreement or as specifically required
to fulfill Seller's covenants hereunder.
3.4. Deliveries by Purchaser and Seller. At the Closing, Purchaser and
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Seller shall deliver the following:
(a) General Assignment, Xxxx of Sale and Assumption of Liabilities in
substantially the form attached hereto as Attachment I; and
(b) Services Agreement in substantially the form attached hereto as
Attachment II, providing for, if necessary, the provision of certain
services at an appropriate cost.
3.5. Mutual Assurances. At the Closing, the parties shall execute,
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acknowledge and deliver such other instruments or documents as may be reasonably
necessary or appropriate to carry out the transactions contemplated by this
Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Purchaser, as of the date hereof,
and as of the Closing Date, as set forth below. All of the representations and
warranties herein (except those set forth in Section 4.1, 4.2 and 4.3) are based
solely upon those representations and warranties made by Motorola to Seller
pursuant to the Motorola Purchase Agreement. To the extent that any
representation or warranty made hereunder by Seller is based upon or is subject
to the representations or warranties of Motorola under the Motorola Purchase
Agreement, and to the knowledge of Seller such representation is true and
correct, Seller shall have no liability or obligation to Purchaser regarding
such representation or warranty if the corresponding representation or warranty
from Motorola actually is not true or correct. Also, Seller shall have no
liability or obligation to Purchaser regarding any representation or warranty to
the extent information provided or made available to Seller or Purchaser
resulting from the Due Diligence contradicts such representation or warranty or
otherwise indicates such representation or warranty is not true or correct. For
purposes of this Agreement, a "Material Adverse Effect" shall mean any effect
which is materially adverse to the Rooftop Assets when taken as a whole. For
purposes of this Agreement, the phrase "to the knowledge of Seller," or other
language of
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similar effect, shall mean to the actual knowledge at the time of execution of
this Agreement of the persons listed on Schedule 4.0. No further due diligence
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or investigation shall be attributed to or required of such persons. The
exceptions, modifications, descriptions and disclosures in any Schedule attached
hereto are made for all purposes of this Agreement and are exceptions to all
representations and warranties set forth in this Agreement or in any agreement
or instrument delivered pursuant to or in connection with this Agreement.
Disclosure of an item in response to one Section of this Agreement shall
constitute disclosure in response to every Section of this Agreement
notwithstanding the fact that no express cross-reference is made. Disclosure of
any items not otherwise required to be disclosed shall not create any inference
of materiality.
4.1. Authority. Seller has the full right, power and authority, without
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the consent of any other person, to execute and deliver this Agreement and the
agreements contemplated hereby to which it is a party and to consummate the
transactions contemplated on its part hereby and thereby. All corporate acts
required to be taken by Seller to authorize the execution and delivery of this
Agreement and all agreements and transactions contemplated hereby have been duly
and properly taken.
4.2. Validity. This Agreement has been, and the agreements and other
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documents to be delivered by Seller at Closing will be, duly executed and
delivered and constitute the valid and legally binding obligations of Seller
enforceable in accordance with their respective terms. The execution and
delivery by Seller of this Agreement and the agreements contemplated hereby to
which it is a party and the consummation of the transactions contemplated hereby
and thereby will not (immediately, with notice, the passage of time or both)
result in the creation of any lien, charge or encumbrance or the acceleration of
any indebtedness or other obligation of Seller and are not prohibited by, do not
violate or conflict with any provision of, and do not and will not (immediately,
with notice, the passage of time or both) constitute a default under or a breach
of (a) the charter or by-laws of Seller, (b) any note, bond, indenture,
contract, agreement, permit, license or other instrument to which Seller is a
party or by which Seller is bound, (c) any order, writ, injunction, decree or
judgment of any court or governmental agency, or (d) any law, rule or regulation
applicable to Seller, except in each of the foregoing cases for such creations,
accelerations, terminations, violations, conflicts, breaches, defaults, charges
or encumbrances which in the aggregate will not have an adverse effect on
Seller's ability to consummate the transactions contemplated hereby.
4.3. Due Organization. Seller is a corporation in good standing and
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validly existing under the laws of Delaware.
4.4. [Intentionally Omitted].
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4.5. [Intentionally Omitted].
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4.6. Title to Rooftop Assets. To the knowledge of Seller, Seller has
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good and marketable title to the personal property included in the Rooftop
Assets it purports to own. To the knowledge of Seller, at the Closing,
Purchaser will receive the Rooftop Assets free and clear of any liens, claims or
encumbrances except for (a) liens, claims or encumbrances which will be
discharged upon payment by Purchaser of the associated Assumed Liabilities, (b)
liens, claims
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and encumbrances which do not detract from the value or interfere with the
present use of the Rooftop Assets in such manner as could reasonably be expected
to have, in the aggregate, a Material Adverse Effect, (c) materialmen's,
mechanics', carriers', workmen's, repairmen's and other like liens arising in
the ordinary course of business, (d) liens for current Taxes not yet due or
payable or any Taxes being contested in good faith by Seller, or (e) liens in
favor of Seller's senior lenders described on the attached Schedule 4.6. To the
knowledge of Seller, the Rooftop Assets are in good operating condition and
repair (reasonable wear and tear excepted).
4.7. Utilities. To Seller's knowledge, all utilities necessary for the
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operation of the Rooftop Assets are installed and operating, except for such
instances as could not reasonably be expected to result, in the aggregate, in a
Material Adverse Effect.
4.8. Rooftop Agreements. To the knowledge of Seller, Schedule 1.2(b) sets
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forth a list of all rooftop sites for which there may exist rooftop agreements
(the "Rooftop Agreements") included in the Rooftop Assets, pursuant to which
Seller leases\occupies real property.
4.9. [Intentionally Omitted].
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4.10. Material Contracts. To the knowledge of Seller, Schedule 4.10
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sets forth an accurate list of all sites for which there may exist written
contracts and agreements solely related to the Rooftop Assets meeting any of the
descriptions set forth below (the "Material Contracts"):
(a) all Site agreements and lease agreements (the "Tenant Leases")
with an annual revenue in excess of $100,000;
(b) all management and service contracts and purchase orders and
other contracts for the purchase of materials or services relating to the
Sites requiring annual payments in excess of $100,000;
(c) all machinery leases, equipment leases and other personal
property leases relating to the Sites requiring annual payments in excess
of $100,000; and
(d) all other contracts, commitments, agreements, arrangements and
understandings relating to the Sites which provide for annual payment to or
from Seller having an aggregate value of $100,000 or more.
To the knowledge of Seller, except as set forth on Schedule 4.10, each Material
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Contract is valid and binding and is in full force and effect as to Seller,
assuming the other party thereto is bound which, to Seller's knowledge, is the
case for each Material Contract, except that Seller makes no representation or
warranty with respect to the remaining term of any Material Contract, the
expiration of any Material Contract, or the status of any Material Contract as a
month-to-month agreement. To the knowledge of Seller, no event has occurred
which is or, after the giving of notice or passage of time, or both, would
constitute a material default under or a material breach of any Material
Contract by Seller or, to the knowledge of Seller, by any other party thereto
which could reasonably be expected to result in a Material Adverse Effect. To
Seller's knowledge, no defenses, off-sets, or counterclaims have been asserted
by any party thereto,
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which could reasonably be expected to result, in the aggregate, in a Material
Adverse Effect. To Seller's knowledge, (i) Seller has not waived any material
rights under any Material Contracts and (ii) there are no disputes with respect
to any Material Contract, which could reasonably be expected to result, in the
aggregate, in a Material Adverse Effect. Except as set forth on Schedule 4.10,
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to Seller's knowledge, Seller has not received notice of any plan or intention
of any other party to any Material Contract to exercise any right to cancel or
terminate any Material Contract, except for such cancellations or terminations
which could not reasonably be expected to result, in the aggregate, in a
Material Adverse Effect. Notwithstanding the foregoing, Seller makes no
representation or warranty regarding the initial, renewal or remaining term of
any Material Contract or the status of any such term being month to month.
4.11. [Intentionally Omitted].
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4.12. Legal Proceedings. Except as set forth in Schedule 4.12, (a)
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Seller is not engaged in or a party to or, to the knowledge of Seller,
threatened with any action, suit or other legal proceeding involving the Rooftop
Assets, (b) Seller has no knowledge of any investigation threatened by any
governmental or regulatory authority with respect to the Rooftop Assets, and (c)
to the knowledge of Seller, the Rooftop Assets are not subject to any judgment,
order, writ, injunction, stipulation or decree of any court or any governmental
agency.
4.13. Compliance with Law. Except as set forth on Schedule 4.13, to the
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knowledge of Seller, the operation of the Rooftop Business and the Rooftop
Assets complies as of the date hereof in all material respects with all
applicable statutes, codes, laws, ordinances, rules and regulations (including
all Federal Aviation Administration and Federal Communications Commission rules
and regulations), except where non-compliance could not reasonably be expected
to result, in the aggregate, in a Material Adverse Effect.
4.14. Permits. To the knowledge of Seller, Seller currently has all the
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permits from all Federal, state, local and foreign authorities as are necessary
for the conduct of the Rooftop Business as currently conducted as of the date
hereof, except where the failure to have any permit could not reasonably be
expected to result in a Material Adverse Effect.
4.15. Taxes. To the knowledge of Seller, Seller has filed, or will file
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when due, all reports and returns ("Tax Returns") of all Federal, state, local
and provincial and other foreign net or gross income, gross receipts, sales,
use, ad valorem, value added, franchise, withholding, payroll, employment,
excise, property, transfer or other taxes and assessments, together with any
penalties, additions to or additional amounts with respect thereto and any
interest (collectively referred to as "Taxes" and individually as a "Tax")
required to be filed relating to the Rooftop Assets for the periods up to the
Closing, except where failure to file could not reasonably be expected to
result, in the aggregate, in a Material Adverse Effect. With respect to the
Rooftop Business and the Rooftop Assets, to the knowledge of Seller (a) Seller
has paid all material amounts of Taxes when due, except to the extent Seller is
disputing such Taxes with the applicable Tax authority in the manner permitted
by the local Tax authority (including posting any required deposits), (b) there
is no Tax deficiency or delinquency in any material amount asserted or
threatened against Seller, except to the extent Seller is disputing such Taxes
with the applicable Tax authority and (c) there is no unpaid Tax in any material
amount that could be
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asserted by a Tax authority for which Purchaser may become liable or the
liability for which might encumber the Rooftop Assets after the Closing as a
result of the transactions contemplated by this Agreement.
4.16. [Intentionally Omitted].
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4.17. [Intentionally Omitted].
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4.18. [Intentionally Omitted].
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4.19. Brokers' Fees. Seller has no liability or obligation to pay any fees
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or commissions to any broker, finder or agent with respect to the transactions
contemplated by this Agreement for which Purchaser could become liable or
obligated.
4.20. Disclaimer. The representations and warranties set forth in this
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Article IV are the only representations and warranties made by Seller with
respect to the Rooftop Business and the Rooftop Assets. Except as specifically
set forth herein, Seller is selling the Rooftop Assets to Purchaser "as is" and
"where is" and with all faults. EXCEPT AS SPECIFICALLY SET FORTH HEREIN, ALL
WARRANTIES, EXPRESS OR IMPLIED, ARE HEREBY DISCLAIMED AND EXCLUDED, INCLUDING
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. IN NO EVENT
SHALL SELLER BE LIABLE FOR SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES. Seller
makes no representation or warranty as to the accuracy or reliability of any
forecasts or projections of revenues, sales, expenses or profits of the Rooftop
Business.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to Seller as of the date hereof,
and as of the Closing Date, as set forth below.
5.1. Authority. Purchaser has full right, power and authority, without the
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consent of any other person, to execute and deliver this Agreement and the
agreements contemplated hereby and to consummate the transactions contemplated
hereby and thereby. All corporate acts required to be taken by Purchaser to
authorize the execution and delivery of this Agreement and the agreements
contemplated hereby and all transactions contemplated hereby and thereby have
been duly and properly taken.
5.2. Validity. This Agreement has been, and the agreements and other
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documents to be delivered by Purchaser at Closing will be, duly executed and
delivered by Purchaser and will constitute lawful, valid and legally binding
obligations of Purchaser, enforceable in accordance with their respective terms.
The execution and delivery by Purchaser of this Agreement and the agreements
contemplated hereby and the consummation of the transactions contemplated hereby
and thereby will not (immediately, with notice, the passage of time or both)
result in the creation of any lien, charge or encumbrance or the acceleration of
any indebtedness or other obligation of
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Purchaser and are not prohibited by, do not violate or conflict with any
provision of, and do not and will not (immediately, with notice, the passage of
time or both) result in a default under or a breach of (a) the charter or by-
laws of Purchaser, (b) any contract, agreement, permit, license or other
instrument to which Purchaser is a party or by which either is bound, (c) any
order, writ, injunction, decree or judgment of any court or governmental agency,
or (d) any law, rule or regulation applicable to Purchaser, except for such
creations, accelerations, terminations, violations, conflicts, breaches,
defaults, charges or encumbrances which, in the aggregate will not have an
adverse effect on Purchaser's ability to consummate the transactions
contemplated hereby.
5.3. Due Organization. Purchaser is a corporation duly organized, in good
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standing and validly existing under the laws of Florida.
5.4. Brokers' Fees. Purchaser has no liability or obligation to pay any
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fees or commissions to any broker, finder or agent with respect to the
transactions contemplated by this Agreement for which Seller could become liable
or obligated.
5.5. [Intentionally Omitted].
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5.6. Due Diligence. Purchaser has obtained or has otherwise been provided
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access to and reviewed to its satisfaction all Due Diligence materials.
ARTICLE VI
COVENANTS OF SELLER
6.1. [Intentionally Omitted].
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6.2. [Intentionally Omitted].
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6.3. Records and Documents. Following the Closing Date, Seller shall
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grant to Purchaser and its representatives, at Purchaser's reasonable request,
reasonable access to and the right to make copies at its expense of those
records and documents in Seller's possession related to the Rooftop Assets as
may be reasonably necessary for litigation, preparation of financial statements,
Tax returns and audits or other valid business purposes, or otherwise related to
Purchaser's operation of the Rooftop Assets after the Closing and which do not
constitute Rooftop Assets.
6.4. Consummation. Subject to the terms and conditions provided herein,
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Seller agrees to use all commercially reasonable efforts to take, or cause to be
taken all actions and to do, or cause to be done all things necessary, proper or
advisable under applicable laws and regulations to consummate and make effective
the transactions contemplated by this Agreement in accordance with its terms;
except that this covenant shall not require Seller to make any payment or incur
any economic burden not provided for herein.
6.5. [Intentionally Omitted].
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6.6. [Intentionally Omitted].
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6.7. Confidentiality. Seller agrees that it will not disclose, nor will
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it permit any of its employees, agents or representatives to disclose, to any
third party any confidential information obtained from Purchaser in connection
with this Agreement, except as needed in connection with obtaining any consents
with respect to any Material Contracts, Rooftop Agreements, and Tenant Leases
and as otherwise contemplated by this Agreement.
6.8. Contracts. Seller will provide to Purchaser correct and complete
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copies of substantially all of the Rooftop Agreements, in Seller's possession,
within seven (7) business days of the date hereof. Seller will provide to
Purchaser correct and complete copies of substantially all of the Material
Contracts (other than those set forth in the immediately preceding sentence and
customer licenses) in Seller's possession within 30 days of the date hereof.
6.9. Audits. Seller will cooperate reasonably with Purchaser and,
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subject to Section 6.7, will make accessible to Purchaser and Purchaser's
accountants Seller's financial books and records regarding the Rooftop Assets in
connection with any audits of Purchaser or its business pertaining to financings
done by Purchaser; provided, however, that Purchaser shall pay all out-of-pocket
expenses incurred by Seller in connection with the foregoing.
6.10. [Intentionally Omitted].
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ARTICLE VII
COVENANTS OF PURCHASER
7.1. Consummation. Subject to the terms and conditions provided herein,
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Purchaser agrees to use all commercially reasonable efforts to take, or cause to
be taken all actions and to do, or cause to be done all things necessary, proper
or advisable under applicable laws and regulations to consummate and make
effective the transactions contemplated by this Agreement in accordance with its
terms, including maintaining any financing commitments related to funding the
consideration for the Rooftop Assets.
7.2. [Intentionally Omitted].
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7.3. Confidentiality. Purchaser agrees that it will not disclose, nor
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will it permit any of its employees, agents or representatives to disclose, to
any third party any confidential information obtained from Seller in connection
with this Agreement, except as needed in connection with obtaining any consents
with respect to any Material Contracts, Rooftop Agreements and Tenant Leases and
as otherwise contemplated by this Agreement.
7.4. Records and Documents. Following the Closing Date, Purchaser shall
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grant to Seller and its representatives, at Seller's reasonable request,
reasonable access to and the right to make copies at its expense of those
records and documents included in the Rooftop Assets covering any period prior
to the Closing related to the Rooftop Business or the Rooftop Assets as
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may be reasonably necessary for litigation, preparation of financial statements,
tax returns and audits or other valid business purposes. If Purchaser elects to
dispose of such records, Purchaser shall first give Seller sixty (60) days'
written notice, during which period Seller shall have the right to take such
records without further consideration.
7.5. Insurance. Purchaser shall procure and maintain general liability
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insurance with carriers and in a form and with such limits as set forth on
Schedule 7.5. All premiums, assessments and other charges incurred in
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maintaining such insurance in full force and effect, as well as the payment of
any deductibles or self-insured retentions, shall be the sole responsibility of
Purchaser.
7.6. Termination of Contracts. For a period of one (1) year from the
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Closing Date, Purchaser agrees not to terminate any contract or agreement with
any existing customer of the Rooftop Business without providing such customer
and Seller with at least 90 days prior written notice of such termination;
provided, however, that Purchaser shall have the right to terminate any contract
or agreement with any existing customer of the Rooftop Business, if such
customer is more than 30 days delinquent in paying any amounts owed to Purchaser
from the normal payment date set forth in such contract or agreement. Purchaser
shall give Seller at least ten (10) days prior written notice of any termination
pursuant to the immediately preceding sentence.
7.7. [Intentionally Omitted].
-----------------------
7.8. Non-Solicitation. For the period beginning on the date hereof and
----------------
ending on the earlier to occur of the Closing neither Purchaser nor any of its
representatives will (a) solicit for employment or employ any employees of the
Rooftop Business or cause any employees of the Rooftop Business to leave the
employment of Seller and work for Purchaser or any of its Representatives;
provided, however, that the foregoing shall not apply to employees of the
Rooftop Business hired by Purchaser or any of its Representatives as a result of
the use of general solicitation (such as an advertisement) not specifically
directed to employees of the Rooftop Business or (b) interfere with any
relationships with any customers, lessors, lessees or suppliers of the Rooftop
Business.
7.9. [Intentionally Omitted].
-----------------------
ARTICLE VIII
[INTENTIONALLY OMITTED]
ARTICLE IX
[INTENTIONALLY OMITTED]
-13-
ARTICLE X
[INTENTIONALLY OMITTED]
ARTICLE XI
SURVIVAL AND INDEMNIFICATION
11.1. Survival. All representations and warranties contained in this
--------
Agreement or in any agreement or other document delivered pursuant hereto shall
terminate at Closing and shall be of no further force and effect.
Notwithstanding the foregoing, the covenants and agreements to the parties
contained in this Agreement that are to be performed following Closing shall
survive Closing until such covenant is performed or unless specifically provided
otherwise in this Agreement or any agreement or document delivered pursuant
hereto.
11.2. Indemnification.
---------------
(a) Purchaser shall indemnify and hold harmless Seller from and against
any and all loss, damage, cost or expense (including reasonable attorneys' fees
and expenses), judgments and fines (collectively, "Damages") (i) caused by any
failure to fulfill any covenant or agreement of Purchaser contained herein or in
any other agreement or document delivered pursuant hereto, (ii) arising from the
Assumed Liabilities, (iii) arising from any action or inaction of Purchaser
after the Closing, other than in accordance with the terms hereof (provided,
however, that the foregoing shall not relieve Seller of any of its obligations
hereunder unless and to the extent, Purchaser's actions or inactions expand or
increase Seller's obligations and liabilities hereunder) or (iv) arising as a
result of, in connection with, or related to the operation of the Rooftop
Business and the Rooftop Assets following Closing.
(b) Seller shall indemnify and hold harmless Purchaser from and against
any Damages (i) caused by any failure to fulfill any covenant or agreement of
Seller contained herein, or in any other agreement or document delivered
pursuant hereto or (ii) arising from the Excluded Liabilities.
11.3. General Provisions Relating to Indemnification.
----------------------------------------------
(a) Seller shall not be required to make any payments pursuant to this
Article XI, unless and until the aggregate amount of all claims pursuant to this
Article XI shall exceed an amount equal to three percent (3%) of the total cash
consideration for the Rooftop Assets (the "Threshold Amount"), as to which
Seller shall be responsible only for the excess over Three Million Dollars
($3,000,000) with respect to any other indemnification claims. The maximum
aggregate amount recoverable from Seller with respect to any claims relating to
this Agreement or the transactions contemplated hereby shall not exceed an
amount equal to twenty-five percent (25%) of the total cash consideration for
the Rooftop Assets (the "Cap").
-14-
(b) The party seeking indemnification shall give written notice to the
indemnifying party of the facts and circumstances giving rise to any claim for
indemnification as soon as reasonably possible but in any event within thirty
(30) days after it obtains knowledge of the basis for a claim for
indemnification hereunder. The party entitled to indemnification shall take all
reasonable steps to mitigate all indemnifiable liabilities and damages upon and
after becoming aware of any event which could reasonably be expected to give
rise to any liabilities and damages that are indemnifiable hereunder. No party
shall be entitled to indemnification to the extent of any insurance, tax or
other benefits (if applicable, computed on a present value basis using a 6%
discount rate) resulting from or which may be claimed as a result of the facts
and circumstances relating to any indemnifiable claim. If any Damages are
covered by insurance, Purchaser shall use all reasonable efforts to recover the
amount of such Damages from the insurer of such insurance which recovery (net of
any retroactive premium adjustments and the aggregate amount of reasonably
anticipated (based or written advice from insurance brokers or providers)
increased insurance premiums over the following two policy years) shall reduce
the amount of Damages hereunder; provided, however, that Purchaser shall not be
required to obtain such recovery as a condition to making a claim against Seller
pursuant to this Article XI.
(c) With respect to each claim by a third party which could give rise to
an indemnification obligation under this Article XI (a "Third Party Claim"), the
party seeking indemnification (the "Indemnified Party") must give prompt notice
to the indemnifying party (the "Indemnifying Party") of the Third Party Claim.
The Indemnifying Party may, at its sole cost and expense, upon notice to the
Indemnified Party within thirty (30) days after the Indemnifying Party receives
notice of the Third Party Claim, assume the defense of the Third Party Claim,
with counsel of its choice. The Indemnifying Party shall not consent to a
settlement of, or the entry of any judgment arising from, any Third Party Claim,
unless (i) the settlement or judgment is solely for money damages, or (ii) the
Indemnified Party consents thereto, which consent shall not be unreasonably
withheld. The Indemnifying Party shall provide the Indemnified Party with
fifteen (15) days prior notice before it consents to a settlement of, or the
entry of a judgment arising from, any Third Party Claim. The Indemnified Party
shall be entitled to participate in the defense of (but not control) any Third
Party Claim, the defense of which is assumed by the Indemnifying Party, with its
own counsel and at its own expense. The parties shall cooperate in the defense
of any Third Party Claim and the relevant records of each party shall be made
available on a timely basis. If the Indemnifying Party does not assume the
defense of any such claim or proceeding resulting therefrom in accordance with
the terms hereof, the Indemnified Party may defend such claim or proceeding in a
reasonable manner, including settling such claim or proceeding on such terms as
the Indemnified Party may deem appropriate after giving fifteen (15) days'
notice of the same to the Indemnifying Party and obtaining the written consent
of the Indemnifying Party, which consent shall not be unreasonably withheld. To
the extent applicable, the Indemnified Party shall keep the Indemnifying Party
reasonably informed, in writing, as to the defense of any such matter hereunder.
(d) Neither party shall have any obligation to indemnify the other party
or otherwise have liability to the other party for consequential damages,
special damages, incidental damages, indirect damages, lost profits or similar
items.
-15-
(e) Seller shall have no liability under this Article XI to the extent
arising from (i) actions taken or not taken by Purchaser or its affiliates after
the Closing Date (provided, however, that the foregoing shall not relieve Seller
of any obligations hereunder unless and to the extent, Purchaser's actions or
inactions expand or increase Seller's obligations and liabilities hereunder) or
(ii) matters disclosed or available to Purchaser as a result of the Due
Diligence.
(f) To the extent that Seller discharges any claim for indemnification
hereunder, Seller shall be subrogated to all rights of Purchaser against third
parties.
(g) After the Closing, the indemnification rights provided hereunder
shall be the exclusive remedy of Seller and Purchaser and each of their
respective affiliates and their officers, directors, employees, stockholders,
affiliates, agents or representatives with respect to any dispute arising out of
or related to this Agreement.
ARTICLE XII
[INTENTIONALLY OMITTED]
ARTICLE XIII
[INTENTIONALLY OMITTED]
ARTICLE XIV
DEFINITIONS
(a) "ADR" has the meaning assigned to such term in Section 15.11(b).
(b) "Apportioned Obligations" has the meaning assigned to such term in
Section 15.4(a).
(c) "Assumed Liabilities" has the meaning assigned to such term in
Section 1.4.
(d) "Cap" has the meaning assigned to such term in Section 11.3(a).
(e) "Closing" has the meaning assigned to such term in Section 3.1.
(f) "Closing Date" has the meaning assigned to such term in Section 3.1.
(g) ""Code" shall mean the Internal Revenue Code of 1986, as amended.
(h) "Damages" has the meaning assigned to such term in Section 11.2.(a).
(i) "Due Diligence" means the due diligence regarding the Purchased
Assets (as defined in the Motorola Purchase Agreement) conducted pursuant to the
Motorola Purchase Agreement..
(j) "Excluded Assets" has the meaning assigned to such term in Section
1.3.
-16-
(k) "Excluded Liabilities" has the meaning assigned to such term in
Section 1.5.
(l) "Indemnified Party" has the meaning assigned to such term in Section
11.3(c).
(m) "Indemnifying Party" has the meaning assigned to such term in Section
11.3(c).
(n) "IRS" shall mean the Internal Revenue Service.
(o) "Material Adverse Effect" has the meaning assigned to such term in
Article IV.
(p) "Material Contracts" has the meaning assigned to such term in Section
4.10.
(q) "Motorola" has the meaning assigned to such term in the preamble.
(r) "Motorola Purchase Agreement" has the meaning assigned to such term
in the preamble.
(s) "Post-Closing Tax Period" has the meaning assigned to such term in
Section 15.4(a).
(t) "Pre-Closing Tax Period" has the meaning assigned to such term in
Section 15.4(a).
(u) "Purchase Price" has the meaning assigned to such term in Section
2.1.
(v) "Purchaser" has the meaning assigned to such term in the preamble
(w) "Rooftop Agreements" has the meaning assigned to such term in Section
4.8.
(x) "Rooftop Assets" has the meaning assigned to such term in Section
1.2.
(y) "Seller" has the meaning assigned to such term in the preamble.
(z) "Sites" shall mean the sites listed on Schedule 1.0.
------------
(aa) "Tax" has the meaning assigned to such term in Section 4.15.
(bb) "Tax Returns" has the meaning assigned to such term in Section 4.15.
(cc) "Taxes" has the meaning assigned to such term in Section 4.15.
(dd) "Tenant Leases" has the meaning assigned to such term in Section
4.10(b).
(ee) "Third Party Claim" has the meaning assigned to such term in Section
11.3(c).
(ff) "Threshold Amount" has the meaning assigned to such term in Section
11.3(a).
-17-
(gg) "To the knowledge of Seller" has the meaning assigned to such term
in Article IV.
ARTICLE XV
GENERAL PROVISIONS
15.1. Amendments and Waiver. No amendment, waiver or consent with
---------------------
respect to any provision of this Agreement shall in any event be effective,
unless the same shall be in writing and signed by the parties hereto, and then
such amendment, waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.
15.2. Notices. All notices, requests, demands and other communications
-------
hereunder shall be in writing and shall be, personally delivered or sent by
facsimile transmission with confirming copy sent by overnight courier (such as
Express Mail, Federal Express, etc.) and a delivery receipt obtained and
addressed to the intended recipient as follows:
(a) If to Seller:
Pinnacle Towers Inc.
0000 Xxxxxxxx Xxxxxxxxx
Xxxxx Xxxxx
Xxxxxxxx, Xxxxxxx 00000
Attention: Xxx Xxxxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
(b) If to Purchaser:
Pinnacle Towers III Inc.
0000 Xxxxxxxx Xxxxxxxxx
Xxxxx Xxxxx
Xxxxxxxx, Xxxxxxx 00000
Attention: Xxxxx Xxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Any party may change its address or add or change parties for receiving notice
by written notice given to the others named above. Notices shall be deemed
given as of the date of receipt.
15.3. Expenses. Except as otherwise expressly provided herein, each
--------
party to this Agreement shall pay its own costs and expenses in connection with
the transactions contemplated hereby; provided that the cost of all permit,
license or other similar fees (including any penalties and interest) incurred in
connection with this Agreement shall be paid by Purchaser when due, and
Purchaser will, at its own expense, file all necessary Tax Returns and other
-18-
documentation with respect to all such permit, license or other similar fees,
and, if required by applicable law, Seller will, and will cause its affiliates
to, join in the execution of any such Tax Returns and other documentation
15.4. Tax Matters. The following provisions shall govern the allocation
-----------
of responsibility as between Purchaser and Seller for certain tax matters
following the Closing Date:
(a) Prorations. All real property taxes, personal property
----------
taxes, ad valorem obligations and similar Taxes imposed on a
----------
periodic basis, in each case levied with respect to the Rooftop
Assets, other than conveyance taxes provided for in Section 2.5,
for a taxable period which includes (but does not end on) the
Closing Date (collectively, the "Apportioned Obligations") shall
be apportioned between Seller and Purchaser as of the Closing
Date based on the number of days of such taxable period occurring
prior to the Closing Date (the "Pre-Closing Tax Period") and the
number of days of such taxable period occurring on or after the
Closing Date (the "Post-Closing Tax Period"). Seller shall be
liable for the proportionate amount of such Taxes that is
attributable to the Pre-Closing Tax Period. As soon as practical
after the Closing Date, Seller and Purchaser shall present a
statement for reimbursement for such Taxes with respect to which
each is entitled to reimbursement under this Section 15.4(a),
together with such supporting evidence as is reasonably necessary
to calculate the proration amount. The proration amount shall be
paid by the party owing it to the other within ten (10) days
after delivery of such statement. Thereafter, Seller shall notify
Purchaser upon receipt of any xxxx for such Taxes relating to the
Rooftop Assets, part or all of which are attributable to the Post-
Closing Tax Period, and shall promptly deliver such xxxx to
Purchaser who shall pay the same to the appropriate Taxing
authority, provided that if such xxxx covers the Pre-Closing Tax
Period, Seller shall also remit to Purchaser prior to the due
date of assessment payment the proportionate amount of such xxxx
that is attributable to the Pre-Closing Tax Period. In the event
that either Seller or Purchaser shall thereafter make a payment
for which it is entitled to reimbursement under this Section
15.4(a), the other party shall make such reimbursement promptly
but in no event later than thirty (30) days after the
presentation of a statement setting forth the amount of
reimbursement to which the presenting party is entitled along
with such supporting evidence as is reasonably necessary to
calculate the amount of reimbursement. Any payment required under
this Section and not made within ten (10) days of delivery of the
statement shall bear interest at the rate per annum determined,
from time to time, under the provisions of Section 6621(a)(2) of
the Code for each day until paid.
(b) Cooperation on Tax Matters. Purchaser and Seller
--------------------------
shall cooperate fully, as and to the extent reasonably requested
by the other party, in connection with 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
-19-
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.
Purchaser and Seller agree (i) to retain all books and records
with respect to Tax matters relating to any taxable period
beginning before the 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 Tax authority, and (ii) to give the other party
reasonable written notice prior to transferring, destroying or
discarding any such books and records and, if the other party so
requests, Purchaser or Seller, as the case may be, shall allow
the other party to take possession of such books and records.
15.5. Counterparts. This Agreement may be executed in counterparts,
------------
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
15.6. Successors and Assigns; Beneficiaries This Agreement shall bind
-------------------------------------
and inure to the benefit of the parties named herein and their respective
successors and assigns. Purchaser shall be entitled to assign its right and
duties (in whole or in part) under this Agreement to one or more subsidiaries of
Purchaser or an affiliate of Purchaser which subsidiary or affiliate is
controlled, directly or indirectly, by Purchaser or such other arrangement,
pursuant to a mutually acceptable agreement between Seller and Purchaser;
provided, however, that Purchaser shall in all events remain liable hereunder.
Except as provided in the foregoing sentence, no party may assign any rights,
benefits, duties or obligations under this Agreement without the prior written
consent of the other party. No third party shall be entitled to enforce any
provision hereof; and no third party is intended to benefit from this Agreement.
15.7. Entire Agreement. This Agreement and the documents referred to
----------------
herein contain the entire agreement and understanding among the parties with
respect to the transactions contemplated hereby and supersede all other
agreements, understandings and undertakings among the parties on the subject
matter hereof.
15.8. Announcements. No announcement of the specific terms of this
-------------
Agreement shall be made by any party without the written approval of the other
party (which approval shall not be unreasonably withheld).
15.9. Partial Invalidity. In the event that any provision of this
------------------
Agreement shall be held invalid or unenforceable by any court or competent
jurisdiction, such holding shall not invalidate or render unenforceable any
other provision hereof.
15.10. Governing Law; Jurisdiction. This Agreement shall be interpreted
---------------------------
in accordance with the substantive laws of the State of Florida applicable to
contracts made and to be performed wholly within said state. Except as set
forth in Section 15.11, all disputes, legal actions, suits and proceedings
arising out of or relating to this Agreement shall be brought in a federal
district or state court located in Tampa, Florida. Each party hereby consents
to the jurisdiction of the federal district or state court in Tampa, Florida.
Each party hereby irrevocably
-20-
waives all claims of immunity from jurisdiction and any right to object on the
basis that any dispute, action, suit or proceeding brought in the federal
district or state court of Tampa, Florida has been brought in an improper or
inconvenient venue or forum.
15.11. Disputes.
---------
(a) Seller and Purchaser mutually desire that friendly collaboration will
develop between themselves. Accordingly, they shall try to resolve in a
friendly manner all disagreements and misunderstandings connected with their
respective rights and obligations under this Agreement, including any amendments
hereof.
(b) (i) To the extent that any misunderstanding or dispute cannot be
resolved agreeably in a friendly manner, the dispute will be mediated by a
mutually acceptable mediator to be chosen by Seller and Purchaser within forty-
five (45) days after written notice by one of the parties demanding mediation.
Neither party may unreasonably withhold consent to the selection of a mediator,
however, by mutual agreement Seller and Purchaser may postpone mediation until
each has completed specified but limited discovery with respect to a dispute.
The parties may also agree to attempt some other form of alternative dispute
resolution ("ADR") in lieu of mediation, including by way of example and without
limitation, neutral fact-finding or a mini-trial.
(ii) Any dispute which the parties cannot resolve through
negotiation, mediation or other form of ADR within six (6) months of the date of
the initial demand for it by one of the parties may then be submitted to the
courts for resolution. The use of any ADR procedures will not be construed under
the doctrine of laches, waiver or estoppel to affect adversely the rights of
either party. Nothing in this Section 15.11 will prevent either party from
resorting to judicial proceedings if (A) good faith efforts to resolve the
dispute under these procedures have been unsuccessful or (B) interim relief from
a court is necessary to prevent serious and irreparable injury to one party or
to others.
(c) Each of Purchaser and Seller shall bear their own respective costs of
mediation or ADR but Purchaser and Seller agree to share the costs of the
mediation or ADR equally.
15.12. Further Assurances. In case at any time after the Closing any
------------------
further commercially reasonable action is necessary to carry out the purposes of
this Agreement, each of the parties shall take such further commercially
reasonable action (including the execution and delivery of such further
instruments and documents) as the other party may reasonably request, all at the
sole cost and expense of the requesting party.
15.13. Other Rules of Construction. References in this Agreement to
---------------------------
sections, schedules, attachments and exhibits are to sections of, and
schedules, attachments and exhibits to, this Agreement unless otherwise
indicated. Words in the singular include the plural and in the plural include
the singular. The word "including" shall mean including, without limitation.
The Section and other headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.
-21-
15.14. Authorship. The parties hereto agree that the terms and language
----------
of this Agreement were the result of negotiations between the parties and, as a
result, there shall be no presumption that any ambiguities in this Agreement
shall be resolved against either party. Any controversy over construction of
this Agreement shall be decided without regard to events of authorship or
negotiation.
* * *
-22-
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed on its behalf by a duly authorized officer all as of the date first
written above.
PINNACLE TOWERS INC., PINNACLE TOWERS III INC.,
a Delaware corporation a Florida corporation
______________________________ __________________________________________
Xxxxxxx Xxxxxxx, President Xxxxxx X. Day, Vice President, Chief
Financial Officer and Secretary
-23-
SCHEDULE 1.2(b)
(See attached)
-24-
SCHEDULE 1.3
None.
-25-
SCHEDULE 4.0
Persons Who Have Actual Knowledge
1. Xxx Xxxxxx
2. Xxxxxx Xxx
3. Xxx Xxxxxx
4. Xxx Xxxxxxx
-26-
SCHEDULE 4.6
1. Liens arising in connection with the Fifth Amended and Restated Credit
Agreement executed September 17, 1999, by and between Seller and Bank of
America, N.A.
-27-
SCHEDULE 4.10
(See attached)
-28-
SCHEDULE 4.12(a)
None.
-29-
SCHEDULE 4.13
Compliance With Laws
To the knowledge of the Seller, with respect to the Sites located in the United
States, to the extent that Seller is required to comply with the United States
Federal Communications Commission Rules and Regulations relating to
ElectroMagnetic Emissions ("EME") at antenna sites [47 CFR. 1.1307(b)] ("FCC EME
Rules"), Seller is currently in compliance in all material respects (or shall be
in compliance in all material respects as of the Closing Date) with the FCC EME
Rules.
Additionally, to the knowledge of Seller, with respect to the sites located in
Canada, to the extent that Seller is required to comply with the Health Canada's
Rules and Regulations relating to ElectroMagnetic Emissions ("EME") at antenna
sites [Health Canada Safety Code 6] ("Safety Code 6"), Seller is currently in
compliance in all material respects (or shall be in compliance in all material
respects as of the Closing Date) with Safety Code 6.
Pinnacle Towers Inc. is not a licensed real estate broker.
-30-
SCHEDULE 7.5
(See attached)
-31-