ASSET PURCHASE AGREEMENT
DATED DECEMBER 23, 1996
by and among
RURAL CELLULAR CORPORATION,
UNITY CELLULAR SYSTEMS, INC.,
INTERCEL LICENSES, INC.
and
INTERCEL, INC.
TABLE OF CONTENTS
ARTICLE 1: PURCHASE OF ASSETS . . . . . . . . . . . . . . . . . . . . . . . . 2
1.1 Agreement to Purchase and Sell Assets of Seller. . . . . . . . . . . . 2
1.2 Excluded Assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.3 Agreement to Purchase and Seller Assets of Shareholder . . . . . . . . 6
1.4 Agreement to Purchase and Sell Assets of Licensee. . . . . . . . . . . 6
1.5 Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE 2: PURCHASE PRICE AND WORKING CAPITAL . . . . . . . . . . . . . . . . 6
2.1 Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.2 Allocation of Purchase Price . . . . . . . . . . . . . . . . . . . . . 6
2.3 Payment of Purchase Price. . . . . . . . . . . . . . . . . . . . . . . 7
2.4 Adjustment to Purchase Price, Closing Schedules; Prorations. . . . . . 7
ARTICLE 3: ASSUMPTION OF LIABILITIES. . . . . . . . . . . . . . . . . . . . .10
3.1 Limitation on Assumption of Liabilities. . . . . . . . . . . . . . . .10
3.2 Assumption of Certain Liabilities. . . . . . . . . . . . . . . . . . .11
ARTICLE 4: TITLE AND RISK OF LOSS . . . . . . . . . . . . . . . . . . . . . .12
4.1 Title and Risk of Loss . . . . . . . . . . . . . . . . . . . . . . . .12
ARTICLE 5: REPRESENTATIONS AND WARRANTIES OF SELLER, LICENSEE AND
SHAREHOLDER. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13
5.1 Due Incorporation. . . . . . . . . . . . . . . . . . . . . . . . . . .13
5.2 Due Authorization. . . . . . . . . . . . . . . . . . . . . . . . . . .13
5.3 No Breach. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14
5.4 Clear Title. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15
5.5 Condition of Assets; Inventory . . . . . . . . . . . . . . . . . . . .15
5.6 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16
5.7 Labor Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . .16
5.8 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
5.9 Employee Benefits. . . . . . . . . . . . . . . . . . . . . . . . . . .17
5.10 Full Disclosure. . . . . . . . . . . . . . . . . . . . . . . . . . . .18
5.11 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . .18
5.12 Absence of Certain Developments. . . . . . . . . . . . . . . . . . . .19
5.13 Proprietary Rights and Software. . . . . . . . . . . . . . . . . . . .20
5.14 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . .21
5.15 Operating Contracts and Customer Contracts . . . . . . . . . . . . . .21
5.16 Real Estate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22
5.17 Receivables. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .28
5.18 Books and Records. . . . . . . . . . . . . . . . . . . . . . . . . . .28
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5.19 Key Employees. . . . . . . . . . . . . . . . . . . . . . . . . . . . .29
5.20 Licenses and Permits . . . . . . . . . . . . . . . . . . . . . . . . .29
5.21 Sufficiency of Assets. . . . . . . . . . . . . . . . . . . . . . . . .29
5.22 Other Material Contracts and Obligations . . . . . . . . . . . . . . .30
5.23 Insolvency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .31
5.24 Shareholder. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .31
5.25 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . .31
5.26 Customers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .31
5.27 Products Liability Claims. . . . . . . . . . . . . . . . . . . . . . .31
5.28 Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .32
5.29 Brokers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .32
5.30 CGSA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .32
5.31 Network. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .32
5.32 Net Pops and Coverage. . . . . . . . . . . . . . . . . . . . . . . . .32
5.33 Relationship with Related Persons. . . . . . . . . . . . . . . . . . .33
5.34 The Partnership. . . . . . . . . . . . . . . . . . . . . . . . . . . .33
5.35 Seller's Partnership Capital Account . . . . . . . . . . . . . . . . .34
5.36 Exclusivity of Representations . . . . . . . . . . . . . . . . . . . .34
ARTICLE 6: REPRESENTATIONS AND WARRANTIES OF PURCHASER. . . . . . . . . . . .34
6.1 Due Incorporation. . . . . . . . . . . . . . . . . . . . . . . . . . .34
6.2 Due Authorization. . . . . . . . . . . . . . . . . . . . . . . . . . .35
6.3 No Breach. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .35
6.4 Full Disclosure. . . . . . . . . . . . . . . . . . . . . . . . . . . .36
6.5 Qualifications of Purchaser. . . . . . . . . . . . . . . . . . . . . .36
6.6 Brokers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .36
ARTICLE 7: PERFORMANCE BY SELLER, LICENSEE AND SHAREHOLDER PENDING
CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .36
7.1 Access to Information. . . . . . . . . . . . . . . . . . . . . . . . .37
7.2 Business As Usual. . . . . . . . . . . . . . . . . . . . . . . . . . .37
7.3 Encumbrances . . . . . . . . . . . . . . . . . . . . . . . . . . . . .37
7.4 Pay Increases. . . . . . . . . . . . . . . . . . . . . . . . . . . . .37
7.5 Restrictions on New Contracts. . . . . . . . . . . . . . . . . . . . .38
7.6 Preservation of Business and Non-Solicitation of Employees . . . . . .38
7.7 Payment and Performance of Obligations . . . . . . . . . . . . . . . .38
7.8 Restrictions on Sale of Assets . . . . . . . . . . . . . . . . . . . .39
7.9 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .39
7.10 Capital Expenditures . . . . . . . . . . . . . . . . . . . . . . . . .39
7.11 No Solicitation of Other Offers or Negotiation . . . . . . . . . . . .39
7.12 Accounts Receivable. . . . . . . . . . . . . . . . . . . . . . . . . .39
7.13 Inventory. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .40
7.14 Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .40
7.15 Filing Reports and Making Payments . . . . . . . . . . . . . . . . . .40
7.16 Environmental Assessments. . . . . . . . . . . . . . . . . . . . . . .40
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7.17 Capital Expenditures . . . . . . . . . . . . . . . . . . . . . . . . .42
7.18 Monthly Financials . . . . . . . . . . . . . . . . . . . . . . . . . .42
7.19 COBRA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .42
7.20 The Partnership. . . . . . . . . . . . . . . . . . . . . . . . . . . .43
7.21 Construct Station. . . . . . . . . . . . . . . . . . . . . . . . . . .43
7.22 Colicensed Sites . . . . . . . . . . . . . . . . . . . . . . . . . . .43
ARTICLE 8: MUTUAL COVENANTS AND CONDITIONS PRECEDENT TO OBLIGATIONS . . . . .43
8.1 Federal Communications Commission. . . . . . . . . . . . . . . . . . .43
8.2 Proceedings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .43
8.3 The Partnership. . . . . . . . . . . . . . . . . . . . . . . . . . . .44
8.4 HSR Act. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .44
8.5 Prompt Notice. . . . . . . . . . . . . . . . . . . . . . . . . . . . .44
8.6 Mutual Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . .45
ARTICLE 9: CONDITIONS PRECEDENT TO PURCHASER'S OBLIGATIONS. . . . . . . . . .45
9.1 Accuracy of Representations and Warranties . . . . . . . . . . . . . .45
9.2 Compliance with Covenants and Agreements . . . . . . . . . . . . . . .45
9.3 No Adverse Change. . . . . . . . . . . . . . . . . . . . . . . . . . .46
9.4 Approval by Counsel. . . . . . . . . . . . . . . . . . . . . . . . . .46
9.5 Consents and Approvals . . . . . . . . . . . . . . . . . . . . . . . .46
9.6 Financing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .46
9.7 Survey . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .47
9.8 Employee Stock Options . . . . . . . . . . . . . . . . . . . . . . . .47
9.9 Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .47
9.10 Title Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . .47
ARTICLE 10: CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER, LICENSEE AND
SHAREHOLDER. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .49
10.1 Accuracy of Representations and Warranties . . . . . . . . . . . . . .49
10.2 Compliance with Covenants and Agreements . . . . . . . . . . . . . . .49
10.3 Approval by Counsel. . . . . . . . . . . . . . . . . . . . . . . . . .49
10.4 Required Governmental Approvals. . . . . . . . . . . . . . . . . . . .49
10.5 Purchaser's Financing. . . . . . . . . . . . . . . . . . . . . . . . .49
ARTICLE 11: INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . .50
11.1 Indemnification by Seller, Licensee and Shareholder. . . . . . . . . .50
11.2 Indemnification by Purchaser . . . . . . . . . . . . . . . . . . . . .52
11.3 Procedure for Indemnification. . . . . . . . . . . . . . . . . . . . .52
11.4 Limitations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .54
11.5 Arbitration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .54
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ARTICLE 12: CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . .56
12.1 Date of Closing. . . . . . . . . . . . . . . . . . . . . . . . . . . .56
12.2 Documents to be Delivered by Seller, Licensee and Shareholder. . . . .56
12.3 Documents to be Delivered by Purchaser . . . . . . . . . . . . . . . .59
ARTICLE 13: PERFORMANCE FOLLOWING THE DATE OF CLOSING . . . . . . . . . . . .60
13.1 Collection of Receivables. . . . . . . . . . . . . . . . . . . . . . .60
13.2 Further Acts and Assurances. . . . . . . . . . . . . . . . . . . . . .60
13.3 Change of Name . . . . . . . . . . . . . . . . . . . . . . . . . . . .61
13.4 Billing Services Provided by Shareholder . . . . . . . . . . . . . . .61
13.5 Preservation of and Access to Records. . . . . . . . . . . . . . . . .61
ARTICLE 14: TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . .61
14.1 Termination. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .61
14.2 Cure by Seller, Licensee or Shareholder. . . . . . . . . . . . . . . .62
14.3 Return of Documents and Nondisclosure. . . . . . . . . . . . . . . . .63
ARTICLE 15: MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . .63
15.1 Survival of Representations, Warranties and Covenants. . . . . . . . .63
15.2 Brokers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .63
15.3 Cooperation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .64
15.4 Public Announcements . . . . . . . . . . . . . . . . . . . . . . . . .64
15.5 Sales, Use and Deed Taxes. . . . . . . . . . . . . . . . . . . . . . .64
15.6 Break Up Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . .64
15.7 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .64
15.8 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . .65
15.9 Remedies Cumulative. . . . . . . . . . . . . . . . . . . . . . . . . .65
15.10 Specific Performance . . . . . . . . . . . . . . . . . . . . . . . . .65
15.11 Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .65
15.12 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . .65
15.13 Costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .66
15.14 Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . .66
15.15 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . .66
15.16 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .66
15.17 Scope of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . .66
15.18 Number and Gender. . . . . . . . . . . . . . . . . . . . . . . . . . .66
15.19 Knowledge. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .67
15.20 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . .67
15.21 Parties in Interest. . . . . . . . . . . . . . . . . . . . . . . . . .67
15.22 Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .67
15.23 Other Acquisitions by Purchaser. . . . . . . . . . . . . . . . . . . .67
15.24 Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . .68
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT ("AGREEMENT") is made and entered into as of
the 23rd day of December, 1996, by and among Rural Cellular Corporation, a
Minnesota corporation (the "PURCHASER"), Unity Cellular Systems, Inc., a Maine
corporation (the "SELLER" or "UNITY"), InterCel Licenses, Inc., a Delaware
corporation (the "LICENSEE"), and InterCel, Inc., a Delaware corporation (the
"SHAREHOLDER").
WHEREAS, Unity is engaged in the business of providing cellular telephone
and related services in the Bangor, Maine MSA and Maine RSA 3 under the name
"Unicel" and is the managing general partner (with a 51% interest) in Northern
Maine Cellular Partnership, a Maine general partnership (the "PARTNERSHIP"),
which is engaged in the business of providing cellular telephone and related
services in Maine RSA 2 under the name "Unicel" (which business of Unity and,
subject to Section 2.1 below, the Partnership are collectively referred to as
the "BUSINESS");
WHEREAS, the Seller desires to sell and assign and Purchaser desires to
purchase and assume, or cause one or more Affiliates (as hereinafter defined) of
the Purchaser to assume certain obligations and purchase substantially all of
the assets and rights of Seller, including, but not limited to, (i) the rights
to use licenses held by Licensee to provide microwave and cellular service in
the Bangor, Maine MSA and Maine RSA 3, (ii) the entire right, title and interest
of Seller in and to the Partnership, (iii) the rights to provide management and
other services to the Partnership, and (iv) certain liabilities incurred in the
Business, on the terms and conditions set forth in this Agreement;
WHEREAS, the Licensee desires to assign, and Purchaser desires to assume or
cause one or more of its Affiliates to assume, certain assets of Licensee,
including, but not limited to, the licenses held by Licensee to provide cellular
and microwave service in the Bangor, Maine MSA and Maine RSA 3 and to provide
microwave service in Maine RSA 2.
WHEREAS, Shareholder is the owner of all of the issued and outstanding
shares of each class and series of capital stock of Unity and Licensee
(collectively, the "Shares"), and joins in this Agreement as a party for the
purpose of (i) making certain representations, warranties, covenants and
agreements regarding the Business, the Seller, the Licensee, the Partnership,
the Assets (as hereinafter defined), the RSA 2 Assets (as hereinafter defined)
and itself, and (ii) obligating itself to sell and assign to Purchaser or an
Affiliate of Purchaser the assets and rights listed on SCHEDULE 1.3; and
WHEREAS, Licensee joins in this Agreement as a party for the purposes of
(i) obligating itself to sell and assign to Purchaser or an Affiliate of
Purchaser such of the Licenses (as
1
hereinafter defined) as are held by it and required to operate the Business
together with such other assets and rights used in the Business, and listed on
SCHEDULE 1.4, and (ii) making certain representations, warranties, covenants and
agreements with respect to such Licenses, assets and rights listed on
SCHEDULE 1.4.
NOW, THEREFORE, in consideration of the foregoing premises, the mutual
covenants contained herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
ARTICLE 1: PURCHASE OF ASSETS
1.1 AGREEMENT TO PURCHASE AND SELL ASSETS OF SELLER. On the Date of
Closing (as hereinafter defined), Purchaser agrees to purchase, or cause one or
more Affiliates of Purchaser to which this Agreement has been assigned pursuant
to Section 15.13 hereof to purchase, from Seller and Seller agrees to sell,
assign, transfer, convey and deliver to Purchaser or to such Affiliate(s) of
Purchaser, on the terms and subject to the conditions set forth in this
Agreement, all of the assets, properties, contract rights, operations and
business of Unity of every kind, nature and description whatsoever and wherever
the same may be located (but excluding the assets specifically identified as
"EXCLUDED ASSETS" in Section 1.2 hereof). The assets, properties, contracts,
operations and business to be purchased from and sold by Seller pursuant to this
Agreement (collectively the "UNITY ASSETS") include, without limitation:
a. All of Seller's right, title and interest in and to any and all
cell sites and other real property owned or leased by Seller together with
all of Seller's right, title and interest, if any, in and to the
improvements, fixtures, hereditaments and appurtenances thereto, including
but not limited to that real property which is legally described on
SCHEDULE 1.1(a) hereto (the "SELLER REAL ESTATE");
b. All of Seller's right, title and interest in and to any and all
federal, state, foreign and common law trademarks, trademark registrations
and applications therefor, service marks, service xxxx registrations and
applications therefor, copyrights, copyright registrations and applications
therefor, trade names, assumed names, logos, patents, patent applications,
technology, know-how, trade secrets, processes, formulas, drawings, designs
and similar intellectual property and proprietary rights of any kind, as
well as Seller's transferable interests in any and all federal, state and
foreign common law rights protecting the same, including, but not limited
to, those proprietary rights described on SCHEDULE 1.1(b) hereto (the
"PROPRIETARY RIGHTS"), but excluding those listed on SCHEDULE 1.2(c);
2
c. All of Seller's right, title and interest in and to any and all
equipment, machinery, cell site equipment, testing equipment, furniture,
fixtures, furnishings, tooling, personal property, shelving, patterns,
molds, office equipment, computer hardware, trade fixtures, leasehold
improvements, tools and other tangible personal property owned or leased by
Seller, including, but not limited to, those items described in
SCHEDULE 1.1(c) hereto, together with any manufacturer, vendor or
installer warranties thereon;
d. All of Seller's right, title and interest in and to any
vehicles, including, but not limited to, those vehicles described on
SCHEDULE 1.1(d) hereto (the "VEHICLES");
e. All of Seller's telephone numbers, telephone directory
advertisements and NXX blocks, including but not limited to those items
listed on SCHEDULE 1.1(e);
f. All of Seller's business records which relate to, arise from or
which are used in connection with the operation of the Business, including,
but not limited to, customer lists, lists of suppliers, accounting records
(including work papers related thereto), correspondence, files, research
data, advertising data, contracts and other records and information
necessary or desirable for Purchaser to carry on the Business on and after
the Date of Closing, whether held by Seller or by Shareholder on behalf of
Seller or the Partnership;
g. All of Seller's contract rights and benefits in and to the
contracts (including contracts for provisions of services to customers
("CUSTOMER CONTRACTS")), contracts in progress, commitments, leases,
licenses and other agreements which relate to, arise from or are used in
connection with the operation of the Business (including contracts, if any,
between the Partnership and Seller) and any amendments thereto
(collectively, other than Customer Contracts and other than leases,
licenses and other agreements relating to or creating a leasehold interest
or right to use the Real Estate governed pursuant to other provisions of
this Agreement, the "OPERATING CONTRACTS") in effect on the Date of
Closing. SCHEDULE 1.1(g) lists (x) all Operating Contracts which are in
effect on the Date of Closing, which are material, in Seller's reasonable
judgment, and (y) all agreements which by their terms require aggregate
annual payments by any party thereto in excess of $12,000.00 or have a
duration in excess of one (1) year after the date hereof. SCHEDULE 1.1(g)
describes for each of such contracts the contracting parties, date, title,
and nature of contract;
h. All of Seller's cellular and other governmental licenses,
certificates, franchises, registrations, permits, consents and approvals or
rights to use licenses, including, but not limited to, those described in
SCHEDULE 1.1(h) hereto (the "LICENSES");
3
i. All of Seller's prepaid expenses, credit memos and deposits,
the categories of which are described in SCHEDULE 1.1(i) hereto;
j. All of Seller's office, shop and other supplies which are on
hand as of the Date of Closing;
k. All of Seller's accounts receivable, notes receivable and other
rights to the payment of money which remain uncollected on the Date of
Closing, whether or not evidenced by a writing or reflected on the balance
sheets to be delivered by Seller to Purchaser pursuant to Sections 5.11
and/or 7.18 hereof (the "RECEIVABLES");
l. All of Seller's inventory which is on hand as of the Date of
Closing, including raw materials, work in process and finished goods, the
categories of such inventory together with their approximate aggregate
value as set forth on the books of Seller as of November 30, 1996 are
described in SCHEDULE 1.1(l) hereto (the "INVENTORY");
m. All of Seller's right, title and interest in and to the plans,
specifications, blueprints, surveys, repair and operating manuals,
warranties, guaranties, maintenance records, information regarding real
estate taxes, assessments and/or insurance and other written information
relating to any of the Assets or RSA 2 Assets (as hereinafter defined) or
to the improvements on any parcel of Seller Real Estate or Partnership Real
Estate (as hereinafter defined) as well as copies of the certificates of
occupancy for such improvements, and Seller's custodial rights, to the
extent transferable, to such documentation and information relating to
RSA 2 Assets (as hereinafter defined) or Partnership Real Estate (as
hereinafter defined);
n. All of Seller's rights, in computer software and software
program documentation in computer readable and hard-copy forms reasonably
acceptable to Purchaser, (except for shrink-wrapped software), which will
be transferred only to the extent transferable including, but not limited
to, the software described in SCHEDULE 1.1(n) hereto (the "SOFTWARE");
o. All of Seller's rights, if any, in and to any easements and
permits, including, but not limited to, the easements and permits described
in SCHEDULE 1.1(o) hereto (the "EASEMENTS");
p. All of Seller's rights and claims against third parties other
than Purchaser or its Affiliates;
q. All of Seller's supply of brochures, displays, models and other
marketing materials on hand as of the Date of Closing, as well as the
camera ready art, negatives, proofs and other reproduction materials for
the same;
r. All of Seller's goodwill as a going concern and other
intangible personal property, to the extent transferable;
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s. Subject to Section 1.2(e) below, all of Seller's ownership
interests in and other rights with respect to the Partnership (the
"PARTNERSHIP INTEREST");
t. Cash of Seller in an amount equal to all deposits and all
prepayments by customers of the Business for services to be rendered on and
after the Date of Closing;
u. All accretions and additions to the Unity Assets that occur
prior to the Date of Closing, less property disposed of or consumed in the
ordinary course of business without breach of the terms of this Agreement
prior to the Date of Closing; and
v. All other assets and rights of Seller not specifically
enumerated or excluded herein.
1.2 EXCLUDED ASSETS. Notwithstanding anything contained in this
Agreement to the contrary, Purchaser will not purchase, and Seller will not
sell, any of the following assets (the "EXCLUDED ASSETS"):
a. The corporate minute books, stock books and other corporate
records of Seller having exclusively to do with the corporate organization
and capitalization of Seller as well as Seller's tax records;
b. All cash and cash equivalents of the Seller on hand or on
deposit in bank accounts as of the Date of Closing in excess of an amount
equal to customer deposits and prepayments for services to be rendered on
and after the Date of Closing;
c. Those assets listed on Schedule 1.2(c) hereto;
d. Original insurance contracts that are not transferable to
Purchaser on the Date of Closing as an insured; and
e. The parties to this Agreement acknowledge that the transfer of
the Partnership Interest is subject to the right of first refusal by Cellco
Partnership as set forth in the Partnership Agreement, and the parties have
made provision in Section 2.1 of this Agreement for a reduction in the
consideration due to Seller if the Partnership Interest is not transferred
at Closing. Accordingly, in the event the Purchase Price as defined in the
first sentence of Section 2.1 is not paid, (i) every reference in this
Agreement to the Business, Assets, Operating Contracts and Customer
Contracts shall exclude the business of the Partnership, the Partnership
Interest, the RSA 2 Assets, the Partnership Real Estate and the other
contracts and assets of the Partnership, and every action or delivery to be
taken or made at the Closing shall exclude the Partnership Interest, the
RSA 2 Assets, the Partnership Real Estate and related rights and
obligations, except for Seller's, Licensee's and Shareholder's interests in
contracts with the Partnership, and (ii) each Schedule to this Agreement
shall be deemed amended accordingly.
f. Two (2) parcels of Seller Real Estate commonly known as 000
Xxxxxxx Xxxxxx, Xxxxxxx, and 000 Xxxx Xxxxxx, Xxxxxxxx, may be excluded
from the Assets and
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the Purchase Price adjusted, as (but only as) provided in Sections 7.16(b)
and 7.16(c) below.
1.3 AGREEMENT TO PURCHASE AND SELL ASSETS OF SHAREHOLDER. On the Date
of Closing, Purchaser agrees to purchase, or cause one or more Affiliates of
Purchaser to which this Agreement has been assigned pursuant to Section 15.12
hereof to purchase, from Shareholder and Shareholder agrees to sell, assign,
transfer, convey and deliver to Purchase or such Affiliate(s) of Purchaser, on
the terms and subject to the conditions set forth in this Agreement, all of the
assets, properties, contracts, rights, operations and business of Shareholder
listed on SCHEDULE 1.3.
1.4 AGREEMENT TO PURCHASE AND SELL ASSETS OF LICENSEE. On the Date of
Closing, Purchaser agrees to purchase, or cause one or more Affiliates of
Purchaser to which this Agreement has been assigned pursuant to Section 15.12
hereof to purchase, from Licensee and Licensee agrees to sell, assign, transfer,
convey and deliver to Purchaser or such Affiliate(s) of Purchaser, on the terms
and subject to the conditions set forth in this Agreement, all of the assets,
properties, contract rights, operations and business of Licensee as listed on
SCHEDULE 1.4.
1.5 ASSETS. The Unity Assets, assets of Shareholder as defined in
Section 1.3 above and the assets of Licensee as described in Section 1.4 above
all to be transferred to Purchaser or its Affiliates hereunder shall be referred
to collectively as "ASSETS."
ARTICLE 2: PURCHASE PRICE AND WORKING CAPITAL
2.1 PURCHASE PRICE. The purchase price for the Assets and the Agreement
Not To Compete provided for in Section 12.2(m) hereof (the "AGREEMENT NOT TO
COMPETE") shall be the sum of Seventy-seven Million Three Hundred Fifty-five
Thousand Two Hundred Fifty and 00/100 Dollars ($77,355,250.00) (the "PURCHASE
PRICE"), subject to adjustment as provided herein. In the event that Cellco
Partnership, a Delaware partnership ("Cellco"), elects to purchase all or any
part of Unity's Partnership Interest, and Purchaser elects not to purchase the
Partnership Interest because the entire Partnership Interest cannot be
transferred to the Purchaser without the imposition of any adverse conditions or
diminution in the rights associated with such Partnership Interest (including,
but not limited to, the right to manage the Partnership), then the Purchase
Price shall be reduced by the sum of Twelve Million Seven Hundred Sixty-two
Thousand Seven Hundred Fifty and No/100 Dollars ($12,762,750.00). The Purchase
Price, reduced pursuant to the preceding sentence, is referred to herein as the
"ALTERNATE PURCHASE PRICE."
2.2 ALLOCATION OF PURCHASE PRICE. Purchaser shall, in a reasonable
manner after appropriate consultation with Seller, determine the fair market
value of the Assets and Purchaser
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shall allocate the Purchase Price or Alternate Purchase Price, as the case may
be, among the Assets and the Agreement Not to Compete in accordance with said
determination and Section 1060 of the Internal Revenue Code of 1986, as amended
(the "CODE"). Such allocation shall be communicated by Purchaser to Seller as
soon as practical after it is available. The Purchaser, Seller, Shareholder and
Licensee, as appropriate, shall file, in accordance with Section 1060 of the
Code, an Asset Allocation Statement on Form 8594 (which conforms with such
allocation) with its federal income tax return for the tax year in which the
Date of Closing occurs and shall contemporaneously provide the other party with
a copy of the Form 8594 being filed. Each party agrees not to assert, in
connection with any tax return, audit or other similar proceeding, any
allocation of the Purchase Price or Alternate Purchaser Price, as the case may
be, which differs from the allocation determined by Purchaser hereunder.
2.3 PAYMENT OF PURCHASE PRICE. An amount equal to ninety-three percent
(93%) of the Purchase Price or Alternate Purchase Price, as the case may be (the
"CASH PORTION OF THE PURCHASE PRICE"), shall be paid by Purchaser to Seller by
wire transfer of immediately available funds to Seller's designated account(s)
on the Date of Closing. The balance of the Purchase Price or Alternate Purchase
Price, as the case may be (the "INDEMNITY FUND"), shall be deposited on the Date
of Closing with a financial institution which is reasonably acceptable to
Purchaser and selected by Seller (the "ESCROW AGENT") to be held in escrow
pursuant to a Post Closing Escrow Agreement in substantially the form of
EXHIBIT D attached hereto (the "POST CLOSING ESCROW AGREEMENT"). The Indemnity
Fund shall be held for a period of six (6) months after the Date of Closing,
which period is subject to increase as provided for in Section 2.4(g) hereof
(the "HOLD BACK PERIOD"), to protect Purchaser with respect to (i) the matters
as to which Seller, Shareholder and Licensee are required to indemnify Purchaser
against hereunder pursuant to the provisions of ARTICLE 11 hereof, and (ii) any
reduction in the Purchase Price or Alternate Purchase Price, as the case may be,
pursuant to the provisions of Section 2.4 hereof. The Indemnity Fund, less
(x) the amount of all claims validly made by the Purchaser for indemnification
and determined to be payable pursuant to ARTICLE 11 hereof, (y) the amount of
any reduction in the Purchase Price or Alternate Purchase Price, as the case may
be, pursuant to the provisions of Section 2.4 hereof, and (z) any interest or
income on the amounts specified in items (x) and (y), shall be paid to Seller
together with any interest or income thereon on the business day immediately
following the expiration of the Hold Back Period.
2.4 ADJUSTMENT TO PURCHASE PRICE; CLOSING SCHEDULES; PRORATIONS.
a. Within one hundred eighty (180) days following the Date of
Closing and after appropriate consultation with Seller, Purchaser shall
prepare or cause to be prepared and deliver to Seller a schedule of certain
of the current assets of Unity transferred to Purchaser and certain of the
current liabilities of Unity assumed by Purchaser, prepared as
7
set forth herein (the "UNITY CLOSING SCHEDULE"). The Unity Closing
Schedule shall be prepared as of the opening of business on the Date of
Closing in accordance with generally accepted accounting principles and on
a basis consistent with the procedures used in preparing the December 31,
1995 audited balance sheet of Unity identified on SCHEDULE 5.11 hereto, but
shall include only the following selected current assets, current
liabilities and accruals:
(i) Only the following current assets of Unity shall be
included in the Unity Closing Schedule (the "SCHEDULED ASSETS"):
(1) The Inventory which is on hand as of the opening of
business on the Date of Closing and which consists of
reasonably current models, undamaged, and usable and saleable
at customary prices in the ordinary course of business, valued
in accordance with generally accepted accounting principles;
(2) The Receivables reflected on Seller's books as of
the Date of Closing which remain uncollected as of the opening
of business on the Date of Closing, less an appropriate
allowance for bad debts consistent with past practices of
Seller; and
(3) Prepaid insurance and other prepaid expenses which
are transferable to and are transferred to Purchaser.
(ii) Only the following current liabilities of Unity shall be
included in the Unity Closing Schedule (the "SCHEDULED
LIABILITIES"):
(1) The trade accounts payable of Unity assumed by the
Purchaser pursuant to Section 3.2(a) hereof;
(2) The payroll related expenses assumed by the
Purchaser pursuant to Section 3.2(c) hereof;
(3) All accrued liabilities and operating expenses of
Seller and the Partnership described in Section 2.4(a)(iii)
hereof; and
(4) All liabilities assumed by Purchaser pursuant to
Sections 3.2(b), 3.2(e) and 3.2(f) hereof to the extent the
same may be reflected on the opening balance sheets of
Purchaser in accordance with generally accepted accounting
principles consistently applied.
(iii) In addition, the Unity Closing Schedule shall reflect
such adjustments as are necessary to fairly prorate operating
expenses between Seller and Purchaser as of the opening of business
on the Date of Closing, and appropriate adjustments to or
eliminations of intercompany accounts.
8
(iv) In addition, the Closing Schedules for both Unity and the
Partnership shall reflect adjustments arising out of breaches of the
representation and warranties set forth in Sections 5.8, 5.12(h),
5.16(f) and (h) and 5.17.
b. Within ninety (90) days following the Date of Closing,
Purchaser shall prepare or cause to be prepared and delivered to Seller a
schedule of all of the Partnership's current assets and all of the
Partnership's current liabilities as of the opening of business on the Date
of Closing (the "PARTNERSHIP CLOSING SCHEDULE"). The Partnership Closing
Schedule shall be prepared in accordance with generally accepted accounting
principals and on a basis consistent with the procedures used in preparing
the December 31, 1995 audited balance sheet of the Partnership identified
on SCHEDULE 5.11 hereto.
c. The Unity Closing Schedule and the Partnership Closing Schedule
(collectively, the "CLOSING SCHEDULES") shall reflect such adjustments as
are reasonably necessary to eliminate intercompany accounts. The Unity
Closing Schedule shall not include or reflect any Excluded Assets or any
liabilities of Unity which are not assumed by Purchaser, including any
expenses or costs of Unity described in Section 15.13. The Unity Closing
Schedule shall reflect the NET UNITY SCHEDULED ASSETS (i.e., Scheduled
Assets less Scheduled Liabilities) for Unity and the Partnership Closing
Schedule shall reflect the NET PARTNERSHIP SCHEDULED ASSETS (i.e., current
assets less current liabilities) of the Partnership, in each case adjusted
as set forth above. In the event that Purchaser does not purchase the
Partnership Interest, the Partnership Closing Schedule need not be
prepared.
d. After Seller's receipt of the Closing Schedules, Seller shall
have thirty (30) days within which to review and confirm the accuracy of
the Closing Schedules. Purchaser shall allow Seller and its representatives
to review such books, records and documents, including work papers, as may
be reasonably necessary or helpful for Seller to determine the accuracy of
the Closing Schedules. In the event the Seller disagrees in good faith
with any aspect of the Closing Schedules, Seller shall, within the thirty
(30) day review period, notify Purchaser in writing of the disagreement,
specifying the item or items in question and the nature of the disagreement
and the amount of any proposed good faith adjustments thereto. If Seller
fails to give such notice to Purchaser of an objection or the intention of
making such an objection within the specified period, then Seller shall be
deemed to have accepted the Closing Schedules. If, however, Seller gives
such notice to Purchaser and Purchaser does not accept any of the Seller's
proposed adjustments, Purchaser shall notify Seller in writing of the same
within fifteen (15) days of Purchaser's receipt of Seller's proposed
adjustments. Purchaser's failure to object to Seller's proposed
adjustments within the specified period shall be deemed to constitute
acceptance of Seller's proposed
9
adjustments and such adjustments shall be deemed to be incorporated into
the Closing Schedules.
e. In the event that Purchaser does not accept any of the Seller's
proposed adjustments, any outstanding issues not resolved through
negotiations in good faith within ten (10) business days after Purchaser's
notice to Seller shall be resolved through arbitration as set forth in
Section 11.5 hereof.
f. As soon as the final Closing Schedules have been approved by
the parties or prepared at the direction of the arbitrators, as the case
may be, the Purchase Price or Alternate Purchase Price, as the case may be,
shall be adjusted downward, on a dollar for dollar basis, as follows: To
the extent that the Net Unity Scheduled Assets plus fifty-one percent (51%)
of the Net Partnership Scheduled Assets is less than zero (0), the Purchase
Price or Alternate Purchase Price, as the case may be shall be adjusted
downward dollar for dollar by the amount of any such deficit, and Purchaser
and Seller shall instruct the Escrow Agent to distribute to the Purchaser
that portion of the Indemnity Fund equal to the deficit together with any
interest or income thereon. In the event that the parties agree on the
final Closing Schedules or receive the arbitrators' final decision after
the first anniversary of the Date of Closing, Seller or Shareholder shall
pay to Purchaser an amount equal to the downward adjustment together with
interest from the Date of Closing to the end of the escrow period at the
rate earned on the escrow funds and from the end of the escrow period to
the date of payment at the rate of 7.5% per annum. Such distribution or
payment pursuant to this Subsection 2.4(f) shall be Purchaser's exclusive
remedy on account of the deficit, provided, however, that the rights and
remedies for breaches of the representations, warranties and covenants set
forth in this Agreement shall not thereby be diminished.
g. If arbitration is used to resolve any issue hereunder and if
the time period to complete the arbitration process will end more than six
(6) months after the Date of Closing, the expiration of the Hold Back
Period shall be extended to the date ten (10) business days after the
arbitrators' final decision is delivered to Purchaser and Seller but in no
event shall such period be extended past the first anniversary of the Date
of Closing.
ARTICLE 3: ASSUMPTION OF LIABILITIES
3.1 LIMITATION ON ASSUMPTION OF LIABILITIES. Except as specifically set
forth in Section 3.2 hereof, Seller, Shareholder and Licensee shall transfer the
Assets to Purchaser on the Date of Closing free and clear of all Encumbrances
(as hereinafter defined) other than Permitted Encumbrances (as hereinafter
defined), and Purchaser shall not, by virtue of its purchase of the
10
Assets, assume or become responsible for any debts, liabilities or obligations
of Seller, Shareholder or Licensee, whether fixed, contingent, known, unknown or
otherwise.
3.2 ASSUMPTION OF CERTAIN LIABILITIES. Notwithstanding the provisions
of Section 3.1 hereof to the contrary, Purchaser covenants and agrees that on
the Date of Closing, it shall execute and deliver to Seller an Assumption
Agreement in substantially the form of EXHIBIT A hereto (the "ASSUMPTION
AGREEMENT"), pursuant to which it will assume and agree to perform and discharge
the following debts, liabilities and obligations of Seller:
a. All of Unity's trade accounts payable (being maintained by
Unity consistent with its past practices) arising out of the operation of
the Business in the ordinary course of business which (i) are reflected on
Unity's books and records as of the Date of Closing and (ii) remain unpaid
as of the opening of business on the Date of Closing;
b. All debts, liabilities and obligations of Unity arising under
the Operating Contracts (i) which are listed on SCHEDULE 1.1(g), or
(ii) which require aggregate annual payments of less than $12,000.00 or
which have a duration of less than one year after the date of this
Agreement except that Purchaser does not assume any liabilities for
products sold or services rendered in connection with the operation of the
Business under such Operating Contracts prior to the Date of Closing
PROVIDED that liabilities assumed hereunder are only assumed to the extent
they accrue after the Date of Closing and are not attributable to any
default of Seller thereunder, except for trade payables assumed pursuant to
subsection (a), above;
c. All amounts accrued as of the opening of business on the Date
of Closing for wages, salary and benefits, including vacation and sick
leave, payable to those employees of Seller who provide services in
connection with the operation of the Business and who are employed by the
Purchaser on the Date of Closing;
d. Unity's obligation to provide cellular telephone and related
services to its customers in accord with the Customer Contracts in effect
on and after the Date of Closing; and
e. INTENTIONALLY OMITTED
f. All liabilities and obligations of Seller for Seller Leased
Real Estate or in respect of Permitted Encumbrances listed on SCHEDULE
5.16(d), including, without limitation, Encumbrances or Permitted
Encumbrances in respect of or relating to Seller Real Estate, but only to
the extent that said liabilities and obligations accrue following the Date
of Closing and are not attributable to any default of Seller thereunder.
11
g. Obligations of the Seller under the Partnership Agreement, but
only to the extent they accrue after the Date of Closing and are not
attributable to any default of Seller thereunder.
ARTICLE 4: TITLE AND RISK OF LOSS
4.1 TITLE AND RISK OF LOSS.
a. Seller, Licensee and Shareholder shall bear all costs and
expenses and assume and bear all risk of loss, damage or destruction of or
to the Assets due to theft, expropriation, seizure, destruction, damage,
fire, earthquake, flood or other cause or casualty until title thereto is
passed to Purchaser at the Closing (as hereinafter defined).
b. If, after September 30, 1996 but prior to the Date of Closing,
any material Assets shall have suffered, sustained or incurred any material
loss, damage or destruction, including, without limitation, any
environmental contamination or pollution, and Seller shall not have elected
at its sole option and expense to wholly repair or replace and has not
repaired or replaced the Assets which suffered, sustained or incurred the
material loss, damage or destruction on or before the Date of Closing with
assets which are as nearly identical as practicable in value, form and
function, Purchaser shall have the right, at its sole discretion and
election, to either (i) terminate this Agreement, or (ii) complete the
purchase contemplated by this Agreement, in which event:
(x) Seller shall assign and transfer to Purchaser and
Purchaser shall be entitled to receive all insurance proceeds
(including any business interruption insurance proceeds relating to
periods following the Closing) and other compensation collected by
reason of such loss, damage or destruction, together with any rights
to receive any uncollected insurance proceeds or other compensation
relating to such loss, damage or destruction and an amount equal to
the sum of the aggregate amount of any applicable deductibles under
any insurance policies covering the lost, damaged or destroyed
Assets plus any self-insured retentions; or
(y) Purchaser shall be entitled to reduce the Purchase Price
or Alternate Purchase Price, as the case may be, by an amount equal
to the lesser of the cost of repair, or the replacement cost of the
Asset; or
(z) Purchaser shall be entitled to utilize alternatives (x)
and (y) concurrently but not with respect to any single Asset.
If Purchaser elects to complete the purchase contemplated hereby
notwithstanding any such loss, damage or destruction, and if Seller assigns such
insurance proceeds and other
12
compensation and any other rights thereto to Purchaser, then Seller shall be
released from any and all liability or responsibility with respect to such loss,
damage or destruction, but shall reasonably cooperate with Purchaser, at no cost
or expense to Purchaser, in collecting all insurance proceeds and other
compensation with respect thereto. The Purchase Price or Alternate Purchase
Price, as the case may be, in such event shall be reduced by the amount of any
deductible amounts under such insurance policies and self-insured retentions
which are not paid by Seller to Purchaser.
ARTICLE 5: REPRESENTATIONS AND WARRANTIES OF SELLER, LICENSEE AND SHAREHOLDER
As an inducement for Purchaser to enter into this Agreement and consummate
the transactions contemplated hereby, intending that Purchaser rely thereon in
entering into and performing this Agreement, Seller, Licensee (to the extent a
representation or warranty relates to the assets set forth on SCHEDULE 1.4,
Licensee or its properties, assets, revenues, business, operations, financial
condition or prospects) and Shareholder jointly and severally warrant and
represent to Purchaser that each and all of the following are true and correct
in all material respects as of the date of this Agreement and will be true and
correct in all material respects at and as of the Closing:
5.1 DUE INCORPORATION. Unity, Licensee and Shareholder are each
corporations which are duly organized, validly existing and in good standing
under the laws of the States of Maine, Delaware and Delaware, respectively, and
have all requisite power and authority, corporate and otherwise, to own, operate
and lease their respective properties and assets and, respectively, to conduct
the Business as it is now being conducted, to hold the Licenses and to hold the
Shares. Unity, Licensee and Shareholder are each duly qualified to transact
business as foreign corporations and are in good standing under the laws of
every state or jurisdiction in which the nature of their respective activities
or of their respective properties owned, leased or operated makes such
qualification necessary and in which the failure to be so qualified could
reasonably be expected to have an adverse effect in an aggregate amount in
excess of $25,000.00 on the properties, assets, revenues, business, operations,
financial condition or prospects of Unity, Licensee, Shareholder, Partnership
and/or the Business (a "MATERIAL ADVERSE EFFECT"). Neither Seller nor the
Partnership is subject to any agreement, commitment or understanding which
materially restricts or may materially restrict the conduct of the Business in
any jurisdiction or location.
5.2 DUE AUTHORIZATION. The execution, delivery and performance of this
Agreement, including the documents, instruments and agreements to be executed
and/or delivered by any of
13
Seller, Licensee or Shareholder pursuant to this Agreement, and the consummation
of the transactions contemplated hereby and thereby have been duly and validly
authorized by all necessary corporate action on the part of Seller, Licensee or
Shareholder, as appropriate. The respective obligations of Unity, Licensee and
Shareholder hereunder and thereunder are or will be upon such execution or
delivery valid and legally binding, and this Agreement and the documents,
instruments and agreements to be executed and/or delivered by Unity, Licensee
and/or Shareholder pursuant to this Agreement are or will be upon such execution
and delivery enforceable against Unity, Licensee and Shareholder, as applicable,
in accordance with their respective terms, except as such enforcement may be
limited by applicable bankruptcy, reorganization, insolvency, moratorium or
other similar laws presently or hereafter in effect affecting the enforcement of
creditors' rights generally and by general principles of equity (regardless of
whether such enforceability is considered in a proceeding at law or in equity),
including, among others, limitations on the availability of equitable remedies.
5.3 NO BREACH. Unity, Licensee and Shareholder each have full corporate
power and authority to sell, assign, transfer, convey and deliver to Purchaser
the Assets to be sold hereunder and to otherwise perform their respective
obligations under this Agreement and the documents, instruments and agreements
to be executed and/or delivered by them pursuant hereto, in each case except as
provided in SCHEDULE 5.3. The execution and delivery of this Agreement,
including the documents, instruments and agreements to be executed and/or
delivered by any of Seller, Licensee or Shareholder pursuant to this Agreement,
and the consummation of the transactions contemplated hereby and thereby will
not: (i) violate any provision of the Articles of Incorporation or Bylaws (or
comparable governing documents or instruments) of any of Seller, Licensee,
Shareholder or the Partnership other than as set forth in Section 8.3;
(ii) violate any applicable law, statute, ordinance, rule, regulation, code,
license, certificate, franchise, permit, writ, ruling, award, executive order,
directive, requirement, injunction (whether temporary, preliminary or
permanent), judgment, decree or other order (collectively "APPLICABLE LAWS")
issued, enacted, entered or deemed applicable by any court or any other federal,
state, county, municipal or other governmental department, commission, board,
agency or instrumentality, whether domestic or foreign (collectively a
"GOVERNMENTAL AUTHORITY"), having jurisdiction over any of Seller, Licensee,
Shareholder, the Partnership or any of their respective properties or assets;
(iii) except as provided in SCHEDULE 5.3 hereto, require any filing with, permit
from, consent or approval of, or the giving of any notice to, any Governmental
Authority or any third party; (iv) except as provided in SCHEDULE 5.3 hereto,
result in a violation or breach of, or constitute (with or without due notice or
lapse of time or both) a default (or give another party any rights of
termination, cancellation or acceleration) under any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, license, franchise, permit,
lease, contract,
14
agreement or other instrument or obligation to which any of Seller, Licensee,
Shareholder or the Partnership is a party, or by which it or any of its
respective properties or assets may be bound, including the Operating Contracts,
the RSA 2 Contracts (as hereinafter defined) and the Partnership Agreement; or
(v) result in the creation or imposition of any Encumbrance, except for
Permitted Encumbrances, on any of the Assets or on any of the Partnership's
properties and assets (the "RSA 2 ASSETS"), excluding from the foregoing clauses
(ii), (iii), (iv) and (v) violations, breaches, defaults, and Encumbrances
which, and filings, notices, permits, consents and approvals the absence of
which, individually or in the aggregate, could not reasonably be expected to
have a Material Adverse Effect or prevent or materially delay the Closing.
5.4 CLEAR TITLE. On the Date of Closing, Seller, Licensee and
Shareholder will convey to Purchaser good and marketable title to all of the
Assets (excluding, however, for purposes of this Section 5.4, the Seller Real
Estate and Partnership Real Estate which is covered by Section 5.16 of this
Agreement), free and clear of any and all liens, encumbrances, security devices,
security interests, financing statements, mortgages, pledges, conditional sales
agreements, factor's liens, environmental liens, charges, leases, leasehold
interests, licenses, sales taxes, use taxes, tax claims, judgments,
restrictions, covenants, easements, attachments, equities, liabilities or claims
of any kind, nature or description whatsoever (collectively "ENCUMBRANCES"),
except (i) Encumbrances for current taxes not yet due and payable, (ii) minor
Encumbrances incurred in the ordinary course of business which in the aggregate
do not materially impair the value or use of the Assets in a manner consistent
with their present use, and (iii) the Encumbrances described in SCHEDULE 5.4;
provided, however, that the Seller Real Estate may be subject to the Permitted
Encumbrances as set forth in Section 5.16(d) below. Except as described in
SCHEDULE 5.4 hereto, on the Date of Closing, the Partnership will hold good and
marketable title to all of the RSA 2 Assets free and clear of any and all
Encumbrances, except (i) Encumbrances for current taxes not yet due and payable,
(ii) minor Encumbrances incurred in the ordinary course of business which in the
aggregate do not materially impair the value or use of the Assets in a manner
consistent with their present use, and (iii) the Encumbrances described in
SCHEDULE 5.4; provided, however, that the Partnership Real Estate may also be
subject to the Permitted Encumbrances as set forth in Section 5.16 below.
5.5 CONDITION OF ASSETS; INVENTORY. All of the Assets to be purchased
and sold hereunder and all of the RSA 2 Assets (i) have been maintained in all
material respects in accordance with general industry practices, (ii) are in
good operating condition and repair, subject only to ordinary wear and tear, and
(iii) are usable and fit in all material respects in accordance with general
industry practices for their intended purpose. Seller, Licensee and Shareholder
shall use their respective reasonable efforts and shall cooperate with Purchaser
with
15
respect to the transfer to Purchaser of all existing manufacturers', vendors',
installers' or other warranties for the Assets which are in effect as of the
Date of Closing.
All of the Inventory being purchased and sold hereunder and all inventory
of the Partnership, including raw materials, work in process and finished goods
(the "RSA 2 INVENTORY"), consists of items which are reasonably current models,
undamaged and of a type and quantity saleable at customary prices in the
ordinary course of business. The Inventory and the RSA 2 Inventory have been
purchased in the ordinary course of business and are consistent, in the
reasonable judgment of Seller and Shareholder, with the anticipated requirements
of the Business, and the volume of purchases thereof and of orders therefor have
not been reduced or increased in anticipation of the consummation of the
transactions contemplated hereby.
5.6 LITIGATION. Except as described in SCHEDULE 5.6 hereto, there are
no claims, demands, actions, suits or other proceedings at law or in equity
which are pending or, to the knowledge of Seller, Licensee or Shareholder, no
pending or threatened investigations, nor claims, demands, actions, suits or
other proceedings at law or in equity which are threatened against or affecting
any of Seller, the Partnership, the Assets, the RSA 2 Assets, the Business, or
Licensee or Shareholder with respect to the Business before or by any court,
Governmental Authority or other person or entity wherein an unfavorable
decision, ruling or finding could, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect or impair the ability of any of
Seller, Licensee and Shareholder to consummate the transactions contemplated
hereby. Except as provided in SCHEDULE 5.6 hereto, neither the Partnership nor
any of Seller, Licensee and Shareholder is a party to or subject to the
provisions of any writ, ruling, award, executive order, directive, requirement,
injunction (whether temporary, preliminary or permanent), judgment, decree or
other order issued, enacted, entered or deemed applicable by any court or other
Governmental Authority which could, individually or in the aggregate, have a
Material Adverse Effect or impair the ability of any of Seller, Licensee and
Shareholder to consummate the transactions contemplated hereby.
5.7 LABOR MATTERS. There are no pending or, to the knowledge of Seller,
Licensee or Shareholder, threatened labor disputes, disturbances, claims,
grievances, arbitrations or other proceedings of any character with respect to
the Business and the employees of Seller and/or the Partnership, which,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect. Except as described in SCHEDULE 5.7 hereto, with
respect to the Business and the employees of Seller and/or the Partnership, none
of the Seller, Licensee and Shareholder or the Partnership is a party to any
collective bargaining agreement or is obligated to contribute, currently or as a
result of any withdrawal, with respect to any pension or health or welfare fund
pursuant to any collective bargaining agreement or otherwise. In addition,
except
16
as described in SCHEDULE 5.7 hereto, during the last three (3) years with
respect to the Business and the employees of Seller and/or the Partnership:
a. None of Seller, Licensee and Shareholder or the Partnership has
been involved in any discussion with any unit or group of employees seeking
to become the bargaining unit for any of its employees nor, to the
knowledge of Seller, Licensee or Shareholder, has there been any threat of
such discussions;
b. None of Seller, Licensee or Shareholder or the Partnership has
experienced any work stoppages, walkouts, strikes or other material labor
disputes, disturbances or proceedings; and
c. No claims have been made against any of Seller, Licensee,
Shareholder or the Partnership by any former or present employee who worked
in the Business based on employment discrimination, wrongful discharge or
unfair labor practices.
5.8 TAXES. Except as set forth on SCHEDULE 5.8 hereto, all federal,
state, county, local and foreign income, ad valorem, excise, transfer, sales and
use, gross receipts, gross revenue, withholding, franchise, payroll, property,
Social Security, unemployment, customs, duties and other taxes (including any
interest and penalties relating thereto) and assessments of any kind whatsoever
(collectively "TAXES") attributable to the Assets, the RSA 2 Assets and/or the
Business which are due and payable by any of Seller, Licensee, Shareholder
and/or the Partnership have been duly reported, fully paid and discharged as
reported and there are no unpaid Taxes currently due and payable which are or
could become an Encumbrance on any of the Assets or RSA 2 Assets. Except as set
forth on SCHEDULE 5.8 hereto, all tax returns and other documents of every kind
required to be filed by or on behalf of Seller, Licensee, Shareholder and/or the
Partnership with respect to the Business and operations of Seller and the
Partnership have been timely filed on or before their due dates with the
appropriate Governmental Authority and the taxes shown thereon as due have been
timely paid and all such tax returns filed by or on behalf of Seller and the
Partnership have been accurately prepared and have been made on a proper basis.
Where required, timely estimated payments or installment payments of tax
liabilities have been made to each appropriate Governmental Authority in amounts
sufficient to avoid underpayment penalties or late payment penalties applicable
thereto. None of Seller, Licensee, Shareholder or the Partnership has waived
any restrictions on assessment or collection of any Taxes or consented to the
extension of any statute of limitations relating to any Taxes with respect to
the Business or operations of Seller and/or the Partnership.
5.9 EMPLOYEE BENEFITS. Except as described in SCHEDULE 5.9 hereto with
respect to the Business or the employees of the Seller and/or the Partnership,
neither Seller nor the Partnership maintains or contributes to any bonus, stock
option, restricted stock, stock purchase, profit-sharing, deferred compensation,
severance, pension, retirement, disability, medical, dental,
17
health or life insurance, death benefit, incentive or other compensation or
retirement plans, policies, arrangements or agreements which are currently in
effect. Without limiting the generality of the foregoing provision of this
Section, except as described in SCHEDULE 5.9 hereto, there are no pension plans,
welfare plans or employee benefit plans qualified under Section 401(a) of the
Code to which any of Seller, Licensee, Shareholder or the Partnership are/is
required to contribute. Except as described in SCHEDULE 5.9 hereto or reflected
on the Closing Schedules, none of Seller, Licensee, Shareholder or the
Partnership has or will have any unfunded liability for services rendered in
connection with the Business as of the Date of Closing under any pension, profit
sharing, medical benefit or disability plan or any other similar plan and the
Purchaser will not incur any liability under any such plans as a result of the
consummation of the transactions contemplated hereby. None of Seller, Licensee,
Shareholder or the Partnership or any of their respective "subsidiaries"
contributes to or has any liability (including but not limited to withdrawal
liability) with respect to any multi-employer plan. For purposes of this
Section, "subsidiaries" shall include all corporations and all trades or
businesses (whether or not incorporated) which may be liable for any income tax,
loss of tax deduction, excise taxes, penalties or other similar consequences
under the Employee Retirement Income Security Act of 1974, as amended, or under
the Code by reason of its ownership affiliation with any of Seller, Licensee,
Shareholder or the Partnership. SCHEDULE 5.9 hereto describes all grants of
option for shares of common stock of Shareholder pursuant to the 1995 Employee
Restricted Stock Plan or the 1991 Employee Stock Option Plan or otherwise held
by each of the current employees of Seller or the Partnership who perform
services in connection with the Business.
5.10 FULL DISCLOSURE. No representation or warranty made by Seller,
Licensee or Shareholder in this Agreement contains or will contain any untrue
statement of a material fact or omits or will omit, to state a material fact
necessary to make the statements contained herein and therein not misleading.
All written information and materials provided by or on behalf of Seller,
Licensee or Shareholder to the Purchaser or its agents or employees in
connection with Purchaser's examination of the Business, Assets and RSA 2 Assets
have in each case, been true and correct in all material respects or have fairly
summarized or described the subject matter of the writing in light of the
information made available to Purchaser.
5.11 FINANCIAL STATEMENTS. Shareholder has furnished true and correct
copies of the financial statements identified in SCHEDULE 5.11 hereto to
Purchaser. All of said financial statements, including any notes thereto,
fairly present the financial position and condition of Unity and the Partnership
as of their respective dates and the results of their respective operations for
the periods covered in accordance with generally accepted accounting principles
applied on a basis consistent with that of periods; provided, however, that the
unaudited financial statements do not contain the footnotes required by
generally accepted accounting principles, are condensed
18
and are subject to year end audit adjustments which are of normal size and type.
Subsequent to the respective dates of said financial statements, there have been
no material adverse changes in the properties, assets, liabilities, revenues,
expenses, operations, financial condition or prospects of Unity, the Partnership
and/or Business taken as a whole from that reflected in said financial
statements or the Schedules to this Agreement. Except for debts, liabilities
and obligations (i) reflected or reserved against in the balance sheets of Unity
and the Partnership as of September 30, 1996 (the "BALANCE SHEET DATE") or in
the notes thereto, (ii) incurred in the ordinary course of business since the
Balance Sheet Date, and/or (iii) described on SCHEDULE 5.11(iii) hereto, neither
Unity nor the Partnership has any debts, liabilities or obligations of any
nature, whether secured, unsecured, known, unknown, accrued, absolute, fixed,
contingent or otherwise, whether due or to become due which are material,
individually or in the aggregate.
5.12 ABSENCE OF CERTAIN DEVELOPMENTS. Except for the transactions
contemplated by this Agreement or as otherwise set forth on SCHEDULE 5.12
hereto, since the Balance Sheet Date, Seller, Licensee, Shareholder and the
Partnership have conducted the Business only in the ordinary course and have
not:
a. Sold, assigned or otherwise transferred any properties or
assets with an individual or aggregate value in excess of $10,000, except
in the ordinary course of business;
b. Suffered any material loss or waived or released any material
right or claim, whether or not in the ordinary course of business;
c. Suffered, sustained or incurred any material damage,
destruction or casualty loss to any properties or assets, whether or not
covered by insurance;
d. Engaged in any transaction not in the ordinary course of
business;
e. Made any capital expenditure exceeding $10,000 individually or
$25,000 in the aggregate, except in the ordinary course of business;
f. Mortgaged, pledged or otherwise encumbered any of its
properties or assets, whether or not in the ordinary course of business;
g. Incurred any debts, liabilities or obligations, absolute or
contingent, known or unknown in an aggregate amount in excess of
$12,000.00, except current liabilities incurred in the ordinary course of
business;
h. Declared, set aside or paid a dividend or other distribution
with respect to any class or series of capital stock of Seller, or directly
or indirectly redeemed, purchased or otherwise acquired any shares of any
class or series of its capital stock or made any distribution of
Partnership assets or cash to the partners of the Partnership;
i. Other than in ordinary course of business, increased the
salary, wage or other compensation or level of benefits payable or to
become payable by any of the Seller
19
or the Partnership to any of their respective officers, directors,
employees or agents, except as provided in SCHEDULE 5.19;
j. Loaned money to any person or entity, or guaranteed any loan to
any person or entity, whether or not in the ordinary course of business
other than Accounts Receivable in the ordinary course of business;
k. Except as described in SCHEDULES 1.1(g) OR 5.15 hereto, amended
or terminated any of the Operating Contracts, RSA 2 Contracts (as
hereinafter defined), Licenses or RSA 2 Licenses (as hereinafter defined),
except in the ordinary course of business;
l. Changed accounting methods or practices (including, without
limitation, any change in depreciation, amortization or cost accounting
policies or rates);
m. Suffered, sustained or incurred any Material Adverse Effect in
the properties, assets, revenues, business, operations, financial condition
or prospects of any of the Seller, Licensee or the Partnership;
n. Received notice from any customer, supplier, vendor,
Governmental Authority or any other person or entity which could reasonably
be expected to have, give rise to or result in a Material Adverse Effect;
or
o. Entered into any agreement or understanding to do any of the
foregoing.
5.13 PROPRIETARY RIGHTS AND SOFTWARE. The Proprietary Rights listed on
SCHEDULE 1.1(b) hereto include all of the federal, state, foreign and common law
trademarks, trademark registrations and applications therefor, service marks,
service xxxx registrations and applications therefor, copyrights, copyright
registrations and applications therefor, trade names, assumed names, logos,
patents, patent applications, technology, know-how, trade secrets, processes,
formulas, drawings, designs and other similar intellectual property and/or
proprietary rights of any kind (collectively "INTELLECTUAL PROPERTY") used by
Seller, Licensee, Shareholder and/or the Partnership, other than Excluded
Assets, in connection with the operation of the Business, whether owned by
Unity, Licensee or Shareholder, all of which will be transferred to Purchaser on
Date of Closing. All Intellectual Property owned or used by the Partnership in
connection with the operation of the Business is listed on SCHEDULE 5.13 hereto
(the "RSA 2 PROPRIETARY RIGHTS"). There is no Intellectual Property used in
connection with the operation of the Business which is not listed on
SCHEDULES 1.1(B) AND/OR 5.15 hereto and which will not be transferred to the
Purchaser or retained by the Partnership on the Date of Closing.
SCHEDULE 1.1(N) hereto contains a list of all of the computer software and
software programs used by Seller, Licensee, Shareholder or the Partnership in
the conduct of the Business and identifies which such software and software
documentation will be transferred to Purchaser on the Date of Closing (except
for shrink-wrapped software, which will be transferred only to the extent
20
transferable). None of Seller, Licensee and Shareholder have knowledge of any
asserted claim that the operations of the Business or the possession or use in
the Business of any of the Assets or RSA 2 Assets, including the Proprietary
Rights, RSA 2 Proprietary Rights and/or Software, infringes any Intellectual
Property rights of another; Seller, Licensee and Shareholder have no reason to
believe that the operation of the Business or the possession or use in
connection with the operation of the Business of any of the Assets or RSA 2
Assets, including the Proprietary Rights, RSA 2 Proprietary Rights and/or
Software, infringes any valid and enforceable Intellectual Property rights of
another; Seller and the Partnership have the right to use all of the Proprietary
Rights and RSA 2 Proprietary Rights, respectively; neither Seller nor the
Partnership has entered into any agreements, contracts or licenses that would
impair their rights to transfer their rights in and to the Proprietary Rights,
RSA 2 Proprietary Rights and/or Software to Purchaser; Seller, Licensee and
Shareholder have no reason to believe that any of the Proprietary Rights or
RSA 2 Proprietary Rights are, or are claimed to be, invalid; and, except as
provided in SCHEDULES 1.1(n) OR 5.13 hereto, none of Seller, Licensee,
Shareholder or the Partnership are obligated under any license, agreement or
otherwise to pay royalties, fees or other payments with respect to any of the
Proprietary Rights or RSA 2 Proprietary Rights and/or Software. Except as
provided in SCHEDULE 5.3 hereto, the sale and/or assignment of the Proprietary
Rights and Software and the right to use the same to Purchaser on the Date of
Closing does not require any filing with, permit from, consent or approval of,
or the giving of any notice to, any Governmental Authority or any third party.
5.14 COMPLIANCE WITH LAWS. The Business has been operated and the Assets
and RSA 2 Assets, have been used in compliance with all requirements of
insurance carriers, the Licenses, the RSA 2 Licenses and of all Applicable Laws
issued, enacted, entered or deemed applicable by any court or other Governmental
Authority having jurisdiction over Seller, Licensee, Shareholder and/or the
Partnership or any of their respective properties or assets, including full
compliance with the terms and conditions in all Federal Aviation Administration
determinations of no hazard to air traffic safety relating to any tower or other
structure on which any antennas of any of the Seller, Licensee, Shareholder or
the Partnership are mounted, except where failure to comply would not have a
Material Adverse Effect on the Business; and none of Seller, Licensee,
Shareholder or the Partnership has received any actual notice of, and has no
reasonable basis to anticipate that any presently existing circumstances are
likely to result in, any violation of a material nature of any Applicable Laws
issued, enacted, entered or deemed applicable by any court or other Governmental
Authority respecting the Assets, the RSA 2 Assets or the Business.
5.15 OPERATING CONTRACTS AND CUSTOMER CONTRACTS. SCHEDULE 1.1(g) hereto
includes (i) all material contracts, commitments, leases, licenses and other
agreements of Unity,
21
Licensee and/or Shareholder which relate to or are used in connection with the
operation of the Business, and (ii) all contracts which require aggregate annual
payments by any party thereto in excess of $12,000.00 or expire automatically or
with notice more than one (1) year after the date hereof. SCHEDULE 5.15 hereto
includes (i) all material contracts, commitments, leases, licenses and other
agreements to which the Partnership is a party, and (ii) all contracts which
require aggregate annual payments by any party thereto in excess of $12,000.00
or expire automatically or with notice more than one (1) year after the date
hereof (the "RSA 2 CONTRACTS"). All of the Operating Contracts, Customer
Contracts and RSA 2 Contracts were made in the ordinary course of business, are
valid, binding and currently in full force and effect, and the performance by
the parties thereto will not, individually or in the aggregate, have a Material
Adverse Effect. None of Seller, Licensee, Shareholder or the Partnership is in
default in any material respect under any of the Operating Contracts, Customer
Contracts or RSA 2 Contracts, and no event has occurred which, through the
passage of time or the giving of notice, or both, would constitute a default or
give rise to a right of termination or cancellation under any of the Operating
Contracts or RSA 2 Contracts, or cause the acceleration of an obligation of
Seller, Licensee, Shareholder or the Partnership, or result in the creation of
any Encumbrance (other than a Permitted Encumbrance) upon any of the Assets or
RSA 2 Assets. To the knowledge of Seller, Licensee and Shareholder, no other
party is in default under any of the Operating Contracts or RSA 2 Contracts, nor
has any event occurred which, through the passage of time or the giving of
notice, or both, would constitute a default or give rise to a right of
termination or cancellation under any of the Operating Contracts or RSA 2
Contracts, or cause the acceleration of any obligation owed to Seller, Licensee,
Shareholder or the Partnership. Except as described on SCHEDULES 1.1(g) OR 5.15
hereto, none of the Operating Contracts or RSA 2 Contracts have been canceled,
terminated, amended or modified and, to the best of the knowledge of Seller,
Licensee and Shareholder, all parties to such Operating Contracts and RSA 2
Contracts are in all material respects in compliance therewith. Except as
provided in SCHEDULE 5.3 hereto, all of the Operating Contracts, including
Unity's rights under the Partnership Agreement, are assignable to and assumable
by Purchaser without the consent or approval of any person or entity and such
consents and approval for Operating Contracts designated as Material Contracts
on SCHEDULES 1.1(g) AND 5.15, if any, as are required shall be obtained by
Seller prior to the Date of Closing.
5.16 REAL ESTATE.
a. As used in this Agreement, the following terms shall have the
following meanings:
(i) "Seller Real Estate" refers to all of the categories of
real estate owned or leased by the Seller listed on SCHEDULE 1.1(a).
22
(ii) "Partnership Real Estate" refers to all of the
categories of real estate owned or leased by the Partnership listed
on SCHEDULE 5.16(a).
(iii) "Real Estate" refers to all of the Seller Real Estate
and the Partnership Real Estate.
(iv) "Seller Owned Real Estate" refers to the parcels of real
estate listed in "Category I" on SCHEDULE 1.1(a).
(v) "Partnership Owned Real Estate" refers to the parcels of
real estate listed in Category I on SCHEDULE 5.16(a).
(vi) "Owned Real Estate" refers to the Seller Owned Real
Estate and the Partnership Owned Real Estate.
(vii) "Seller Leased Real Estate" refers to the Seller Real
Estate listed in Categories II, III and IV on SCHEDULE 1.1(a).
(viii) "Partnership Leased Real Estate" refers to the
Partnership Real Estate listed in Categories II, III, IV on SCHEDULE
5.16(a).
(ix) "Leased Real Estate" refers to the Seller Leased Real
Estate and the Partnership Leased Real Estate.
(x) "Seller Owned/Leased Land" refers to the Seller Owned
Real Estate listed under Category I and the leased interests listed
under Category II on SCHEDULE 1.1(a).
(xi) "Partnership Owned/Leased Land" refers to the
Partnership Owned Real Estate listed under Category I and the leased
interests listed under Category II on SCHEDULE 5.16(a).
(xii) "Owned/Leased Land" refers to the Seller Owned/Leased
Land and the Partnership Owned/Leased Land.
(xiii) "Seller Land Leases" refers to the leased parcels listed
under Category II on SCHEDULE 1.1(a).
(xiv) "Partnership Land Leases" refers to the leased parcels
listed under Category II on SCHEDULE 5.16(a).
(xv) "Land Leases" refers to the Seller Land Leases and the
Partnership Land Leases.
(xvi) "Tower Space Leases" refers to the leasehold interests
listed under Category IV on SCHEDULES 1.1(a) AND 5.16(a).
(xvii) "Retail Leases" refers to the leasehold interests listed
under Category III on SCHEDULES 1.1(a) AND 5.16(a).
b. SCHEDULE 1.1(a) contains a complete listing and accurate legal
description (or Seller has undertaken to provide such accurate legal
description prior to the Date of
23
Closing) of all Seller Real Estate, which is each parcel and interest in
real estate owned, leased and/or used by Seller in connection with the
operation of the Business. The Seller Real Estate consists of all parcels
owned by Seller (all of which are listed under Category I); all parcels
leased by Seller and on which it has constructed cell sites (all of which
are listed under Category II); all leases by Seller as tenant of retail
and/or office space (all of which are listed under Category III); and all
leases by Seller as tenant of space on towers, including space for
appurtenant structures (all of which are listed under Category IV).
c. SCHEDULE 5.16(a) contains a complete listing and accurate legal
description (or Seller has undertaken to provide such accurate legal
description prior to the Date of Closing) of all Partnership Real Estate,
which is each parcel and interest in real estate owned, leased and/or used
by the Partnership in connection with the operations of the Business. The
Partnership Real Estate consists of all parcels owned by the Partnership
(all of which are listed under Category I); all parcels leased by the
Partnership and on which it has constructed cell sites (all of which are
listed under Category II); all leases of retail and/or office space (all of
which are listed under Category III); and all leases by Partnership as
tenant of space on towers including space for appurtenant structures (all
of which are listed under Category IV).
d. Seller is or at Closing shall be the sole owner in fee simple
title of the Seller Owned Real Estate and will convey good and marketable
title to such Seller Owned Real Estate to Purchaser on the Date of Closing
by quit claim deed with covenant in substantially the form attached hereto
as EXHIBIT B (the "DEED"), free and clear of any and all Encumbrances (as
defined in Section 5.4), except (i) municipal zoning ordinances, (ii) the
lien for general real estate taxes levied in the year of Closing and not
yet due and payable and (iii) the matters set forth in SCHEDULE 5.16(d)
hereto (collectively, the "PERMITTED ENCUMBRANCES"). The Partnership is or
at Closing shall be the sole owner in fee simple title of the Partnership
Owned Real Estate and each parcel of Partnership Owned Real Estate is free
and clear of all Encumbrances, except for Permitted Encumbrances. As of
the Closing, those parcels of the Real Estate leased pursuant to the Land
Leases shall be free and clear of any Encumbrances except for Permitted
Encumbrances, and except for any mortgage created by the owner of such
parcel. The Permitted Encumbrances do not individually or in the aggregate
impair or prohibit Seller's or the Partnership's current use of any Real
Estate.
e. With respect to the Leased Real Estate:
(i) SCHEDULE 1.1(a), Categories II, III and IV, and SCHEDULE
5.16(a), Categories II, III and IV, contain a complete and accurate
listing (naming the landlord and tenant, giving date of the lease
and any and all amendments thereto,
24
and giving the legal description and street address, if any, of the
premises leased) of each lease for all Seller Leased Real Estate and
Partnership Leased Real Estate, respectively, used by Seller or
Partnership in the State of Maine in connection with the operation
of the Business.
(ii) Each Land Lease, Tower Space Lease and Retail Lease is
in full force and effect and none has been canceled, terminated or
modified.
(iii) Neither Seller nor Partnership (as applicable) is in
default under the terms of any Land Lease, Tower Space Lease or
Retail Lease, and, to the knowledge of Seller, the landlord under
each Land Lease, Tower Space Lease or Retail Lease is not in
default, and no event has occurred which through the passage of time
or the giving of notice, or both, would constitute a default by any
party or give rise to a right or termination or cancellation to any
other party;
(iv) Seller or Shareholder has provided Purchaser with a
complete and accurate copy of each Land Lease, Tower Space Lease and
Retail Lease, including any and all amendments or modifications
thereto; and
(v) Each Land Lease, Tower Space Lease and Retail Lease is
assignable to and assumable by Purchaser without the consent or
approval of any person or entity, or such consents, as are required,
shall be obtained by Seller prior to the Date of Closing.
f. Seller, Licensee and Shareholder have no knowledge of any
special assessments (payable by Seller or Partnership as owner or tenant of
Real Estate) levied or assessed on or against any parcel of Real Estate (or
any such special assessments shall be paid by Seller on or before the Date
of Closing);
g. Seller, Licensee and Shareholder have no knowledge of any
planned public improvement which may result in an assessment in a material
amount against or otherwise materially affect any of the Real Estate;
h. Seller, Licensee and Shareholder have no knowledge of any
deferred property taxes or assessments with respect to any of the
Owned/Leased Land which may or will become due and payable as a result of
the consummation of the transactions contemplated hereby;
i. There are no condemnation proceedings pending or, to the
knowledge of Seller, Licensee or Shareholder, threatened with respect to
all or any part of the Owned/Leased Land;
j. Except for Permitted Encumbrances, there are no private
restrictions, covenants, reservations or agreements which have a Materially
Adverse Effect on the
25
present use or occupancy by the Seller or the Partnership, as applicable,
of any parcel of Owned/Leased Land.
k. Each parcel of the Owned/Leased Land has been operated and is
in full compliance with and with respect to all Real Estate the Business
has been operated and is in full compliance with all Applicable Laws,
including but not limited to, statutes, regulations and ordinances issued,
enacted, entered or deemed applicable by any Governmental Authority
regulating the use, treatment, generation, transportation, storage, control
or disposal of any Hazardous Substance (as hereinafter defined), the
Comprehensive Environmental Response, Compensation and Liability Act (42
U.S.C. Section 9601 ET SEQ.), the Resource Conservation and Recovery Act
(42 U.S.C. Section 6901 ET SEQ.), the Hazardous Materials Transportation
Act (49 U.S.C. Section 1801 ET SEQ.), the Federal Water Pollution Control
Act (33 U.S.C. Section 1251 ET SEQ.), the Clean Water Act (33 U.S.C.
Section 1251 ET SEQ.), the Clean Air Act (42 U.S.C. Section 7401 ET SEQ.),
the Toxic Substances Control Act (15 U.S.C. Section 2601 ET SEQ.),
analogous statutes and regulations of the State of Maine and any similar
applicable state and local laws (collectively "ENVIRONMENTAL LAWS"), except
where failure to comply would not reasonably be expected to have a Material
Adverse Effect on the Business. Except as described in SCHEDULE 5.16(k)
hereto, no Hazardous Substances are located in, on, under or about any
parcel of the Owned/Leased Land or property leased pursuant to the Retail
Leases, except for the presence of any substance of a type and quantity
which would not reasonably be expected to have a Material Adverse Effect.
For purposes of this agreement, the term "HAZARDOUS SUBSTANCE" means
(i) any dangerous, toxic or hazardous pollutant, contaminant, chemical,
waste, material or substance listed or identified in, or regulated by, any
Environmental Law, and (ii) any of the following, whether or not included
in the foregoing: polychlorinated biphenyls, asbestos, urea-formaldehyde,
petroleum and petroleum products, including crude oil or any fraction
thereof, natural gas, natural gas liquids, liquefied natural gas, synthetic
gas usable for fuel or mixtures thereof, nuclear fuels or materials,
chemical wastes, radioactive materials, radon, explosives and known
possible carcinogens. Excluded from this Section 5.16(k) are any claims or
allegations arising from or related to the emissions of electromagnetic
fields ("EMF") or radio frequency ("RF") emissions in connection with the
operation of cellular service, including claims relating to transmission
towers located on the Real Estate or used in connection with the operation
of the Business; however, Seller, Licensee and Shareholder represent that
there are no such claims or allegations pending or, to their knowledge,
threatened with respect to the Business.
l. None of Seller, Licensee, Shareholder or the Seller with
respect to the Partnership has received any actual notice of, and has no
reasonable basis to anticipate
26
that any presently existing circumstances are likely to result in, any
investigations, claims, demands, actions, suits or other proceedings at law
or in equity with respect to the Assets, the RSA 2 Assets or Business
brought or instigated by any Governmental Authority or any other person or
entity in connection with any environmental pollution or contamination or
Environmental Law, including without limitation, civil, criminal and/or
administrative proceedings, and whether or not seeking costs, expenses,
damages, penalties or equitable relief.
m. All of the Seller's and the Partnership's buildings, structure,
fixtures and other improvements located on the Real Estate are in good
repair, free of defects (latent or patent) (except for minor defects which
in the aggregate do not have a Material Adverse Effect) and are fit for
their current uses. All such buildings, structures, fixtures and
improvements conform in all material respects to Applicable Laws
(including, but not limited to, for purposes hereof, zoning and land use
laws, ordinances and regulations, and building codes), and, together with
any to the improvements thereto, lie entirely within the boundaries of each
parcel of Real Estate as specified in the legal description set forth in
SCHEDULE 1.1(a) and SCHEDULE 5.16(a). No structures of any kind encroach
on the Owned/Leased Land.
n. All of the towers and transmission equipment constructed or
placed by Seller or the Partnership on the Owned/Leased Land and all
equipment installed by Seller or the Partnership at the site of each Tower
Space Lease has been constructed and installed in accordance with the
specifications set forth in the FCC filing relating thereto [if any], and
has been constructed and is operated in compliance with their respective
forms 489 (Notification of Completing Construction) filed with the FCC [if
applicable].
o. None of Seller, Licensee and Shareholder are foreign persons
within the meaning of Section 1445 of the Code.
p. Except for the Permitted Encumbrances, on the Date of Closing,
each parcel of Owned/Leased Real Estate will be vacant, unoccupied, and
have no person or party in possession of all or any part thereof, other
than Seller and/or the Partnership, and shall be free from all leasehold
and possessory interests.
q. The Seller's and the Partnership's present uses of the
improvements located on the Real Estate do not in any material respect
infringe upon the material rights of any other person or entity.
r. Except as described on SCHEDULE 5.16(k) hereto, to the
knowledge of Seller and Shareholder there are not currently and never have
been any underground and/or above ground storage tanks (whether or not
currently in use) on any parcel of
27
Owned/Leased Real Estate and all such tanks are now and have never been in
unsound condition and have not leaked.
s. Except as set forth in SCHEDULE 5.16(k) hereto, each parcel of
Real Estate has legal rights of access to a publicly dedicated and
maintained road.
t. The Owned/Leased Real Estate has access to, and is served by,
utilities adequate for the use to which each such parcel is currently
dedicated. The installation of all such utilities (including hook-up
charges) has been or will be on or before the Date of Closing fully paid
for by Seller, at its sole cost and expense.
u. Seller has not leased or granted an option to lease or buy all
or any part of any parcel of Seller Owned/Leased Real Estate and the
Partnership has not leased or granted an option to lease or buy all or any
part of any parcel of Partnership Owned/Leased Real Estate;
v. Except as set forth on SCHEDULE 5.16(k), no part of any parcel
of Owned/Leased Real Estate ever has been used, nor is it being used now,
as a landfill, dump or other disposal, storage, transfer, treating or
handling area for any Hazardous Substance, nor as a gasoline service
station or a facility for selling, dispensing, storing, transferring,
treating or handling Hazardous Substance.
5.17 RECEIVABLES. The Receivables and all of the Partnership's accounts
receivable (the "RSA 2 RECEIVABLES") reflected as of the Closing Date on the
books and records of Seller and of the Partnership, respectively, arose from
bona fide transactions in the ordinary course of business and are not subject to
any claim, defense or set-off. Except to the extent specifically or generally
reserved against in the books of account and records of Seller and the
Partnership, respectively, all of said Receivables and RSA 2 Receivables will be
collectable in the normal course of business without suit or reference to an
attorney or collection agency at the aggregate face amount of such Receivables
and RSA 2 Receivables, less any applicable reserves reflected on such books.
5.18 BOOKS AND RECORDS All of the books of account and other financial
and corporate records of the Seller, Licensee, Shareholder and the Partnership
relating to the Business have been made available to Purchaser and its
representatives. Such books of account and records are current, complete, true
and correct in all material respects and reflect in all material respects all
items of income and expense with respect to the Business and all assets,
liabilities and accruals with respect to the Business in accordance with
generally accepted accounting principles, consistently applied. Seller,
Licensee, Shareholder and the Partnership have filed all reports relating to the
Business required by any and all Applicable Laws to be filed, and it has duly
paid or accrued on its books of account all applicable duties and charges due or
assessed against it pursuant to such reports, except where any failure to file
reports or to pay or accrue
28
amounts could not reasonably be expected individually or in the aggregate to
have a Material Adverse Effect.
5.19 KEY EMPLOYEES. SCHEDULE 5.19 hereto contains a list of the names,
positions, annual salary or hourly wage rates and severance benefits as of the
Date of Closing, of all present directors, officers and key employees of Seller
and/or the Partnership (including those on furlough or leave of any kind) who
perform services in connection with the Business, or whose salaries or hourly
wages from any of the Seller and/or the Partnership for calendar year 1996 are
individually expected to equal or exceeded $45,000, together with a statement of
their respective annual salary or hourly wage rates for the current calendar
year. SCHEDULE 5.19 also sets forth a description of any written agreement,
other than the employee benefit plans described on SCHEDULE 5.9 hereto, with
respect to the conditions of employment of any of the employees of any of the
Seller and/or the Partnership who perform services in connection with the
Business, including such key employees.
5.20 LICENSES AND PERMITS. The Seller, Licensee, Shareholder and the
Partnership have obtained all material licenses, certificates, franchises,
permits, consents and approvals of each and every Governmental Authority having
jurisdiction over Seller, Licensee, Shareholder or the Partnership or any of
their respective properties or assets necessary or appropriate to own the Assets
and RSA 2 Assets, respectively, and to operate and carry on the Business as it
is now being conducted. All such licenses, certificates, franchises, permits,
consents and approvals which are owned or held by any of Seller, Licensee or
Shareholder are described on SCHEDULES 1.1(h) AND 1.4 hereto, all of those which
are owned or held by the Partnership are described on SCHEDULE 5.20 hereto (the
"RSA 2 LICENSES"), and all of said Licenses and RSA 2 Licenses are valid and in
full force and effect. Except as set forth in SCHEDULE 5.20 or any other
Schedule hereto, none of Seller, Licensee, Shareholder or the Partnership is a
party to or bound by any agreement relating in any manner to the Licenses or the
RSA 2 Licenses.
5.21 SUFFICIENCY OF ASSETS. Except as listed on SCHEDULE 1.2, the Assets
to be transferred to Purchaser on the Date of Closing will include all assets,
tangible or intangible, (including but not limited to assets, properties,
franchises, licenses, permits, contracts, operations and business) that relate
to, arise from, or are used for the operation of the Business as presently
operated by the Seller, except for the Excluded Assets. The RSA 2 Assets owned
or leased by the Partnership on the Date of Closing will include all assets,
tangible or intangible, (including but not limited to assets, properties,
franchises, licenses, permits, contracts, operations and businesses) that relate
to, arise from, or are used or held by or are necessary for the operation of the
Partnership's business as it is presently being operated, except for the
Excluded Assets. All Assets and RSA 2 Assets owned by Shareholder or Licensee
are listed on SCHEDULES 1.3 AND 1.4, respectively. The instruments and
documents to be executed and/or delivered by any of Seller,
29
Licensee or Shareholder to Purchaser pursuant to Section 12.2 hereof at or
following the Closing shall be adequate and sufficient to vest in Purchaser all
of Seller's, Licensee's and Shareholder's rights, titles and interests in or to
the Assets. All of the Assets listed on SCHEDULES 1.3 AND 1.4 will be conveyed
and transferred to Purchaser by the Shareholder and Licensee, respectively, at
the Closing.
5.22 OTHER MATERIAL CONTRACTS AND OBLIGATIONS. Except for the Operating
Contracts, Customer Contracts, RSA 2 Contracts, the Partnership Agreement, non-
assignable insurance policies, leases and other agreements in respect of the
Seller Leased Real Estate and Partnership Leased Real Estate and the contracts,
commitments, leases and agreements disclosed on SCHEDULE 5.22 hereto, none of
Seller, Licensee and Shareholder or the Partnership is a party to or bound by
any material written agreement relating to the Business, including any:
a. Dealer, distributorship or sales agency agreements, excluding
purchase orders with respect to the purchase or sale of products or
services in the ordinary course of business;
b. Advertising contracts;
c. Contract, commitment or arrangement for capital expenditures
having a remaining balance in excess of $12,000.00;
d. Leases with respect to any property, real or personal, whether
as lessor or lessee, except for any lease having a term of one year or less
or aggregate rents payable over its life of $12,000.00 or less;
e. Contract, commitment or arrangement containing covenants by the
Seller or the Partnership not to compete in any lines of business or with
any person or entity;
f. Franchise or license agreements;
g. Loan or credit agreements, promissory notes or other evidences
of indebtedness, including all agreements or commitments for future loans,
extensions of credit or financing, excluding inter-company loans and credit
extended by the Business to its customers;
h. Guarantees;
i. Agreement, contract, commitment or purchase order for the
purchase of any services, raw materials, supplies or equipment involving
payments of more than $12,000.00 per annum, excluding purchase orders for
the purchase of products or services entered into in the ordinary course of
business;
j. Partnership agreement, joint ventures or shareholder
agreements, or any other agreement relating to securities or interests in
any other organization or entity owned directly or indirectly by Seller or
the Partnership; or
30
k. Agreement, contract or commitment for the sale of any
properties, assets or services involving a value estimated at more than
$12,000.00 excluding purchase orders or agreements, contracts and
commitments for the sale of products or services in the ordinary course of
business.
Seller has furnished Purchaser with a true, complete and accurate copy of
each Operating Contract, RSA 2 Contract and any additional contract, lease,
license, agreement or other commitment listed on SCHEDULE 5.22 hereto.
5.23 INSOLVENCY. None of Seller, Licensee, Shareholder or the
Partnership is insolvent nor will be rendered insolvent by reason of the
consummation of the transactions contemplated by this Agreement, and Seller,
Licensee, Shareholder and the Partnership are, and will be following the
consummation of the transactions contemplated hereby, able to meet their
respective obligations as they become due and payable in the ordinary course of
business.
5.24 SHAREHOLDER. Shareholder is the holder of all of the issued and
outstanding shares of each and every class and series of capital stock of Unity
and Licensee. There are no outstanding subscriptions, warrants, options,
agreements, convertible securities or other commitments pursuant to which Unity
and/or Licensee is or may be obligated to issue any shares of any class or
series of its capital stock or other securities to any other person or entity.
5.25 SUBSIDIARIES. Neither Unity nor the Partnership has any
subsidiaries and, except as listed on SCHEDULE 5.25, neither owns any shares of
stock or other securities or interests, directly or indirectly, in any other
corporation, partnership, joint venture or other organization or entity. Except
as listed on SCHEDULE 5.25 or otherwise disclosed herein, neither Unity nor the
Partnership is subject to any obligation or requirement to provide funds to, or
invest in, any such entity.
5.26 CUSTOMERS. Except for intercarrier roaming revenues, no single
customer of the Business accounted for over five percent (5%) of the revenues of
the Business during the fiscal year of Unity and/or the Partnership ending
immediately prior to the date of this Agreement. In addition, no significant
customer of the Business, vendor or communication carrier has indicated to
Seller, Licensee, Shareholder or the Partnership that it intends to cease doing
business with the Business or materially alter the amount of business it does
with the Business by reason of the consummation of the transactions contemplated
hereby or otherwise. As of October 31, 1996, Unity had approximately 19,802
subscribers and the Partnership had approximately 4,546 subscribers, and as of
said date 76% of the accounts receivable from said customers were less than 30
days old.
5.27 PRODUCTS LIABILITY CLAIMS. Except as set forth on SCHEDULE 5.27,
all products which Seller or the Partnership have sold through the Business have
been, at the time of sale,
31
covered by standard manufacturer's limited product warranties, and the terms of
such warranties have not been expanded nor have limitations on such warranties
been waived by Seller.
5.28 INSURANCE. Shareholder, Seller and the Partnership have maintained
and will continue to maintain until the Date of Closing the insurance described
in SCHEDULE 5.28, which insurance covers the Assets and the RSA 2 Assets, in
each case, whether owned or leased, against loss or damage by fire or other
casualty, in amounts equal to or in excess of one hundred percent (100%) of the
replacement cost thereof, except for vehicles, which are not covered for full
replacement cost. As of the Date of Closing, all such insurance will be in full
force and effect and is carried with reputable insurers. Seller and the
Partnership have promptly and adequately notified Seller's and the Partnership's
insurance carriers of any and all claims known to any of them with respect to
the operations or products of Seller and/or the Partnership for which any of the
Shareholder, Seller and/or the Partnership is insured. Neither Seller nor the
Partnership has been refused any insurance coverage by any insurance carrier to
which it has applied for insurance during the past three (3) years with respect
to the Assets, the RSA 2 Assets or the Business.
5.29 BROKERS. None of Seller, Licensee, Shareholder or the Partnership
employed or engaged any broker, finder, agent, banker or third party, nor have
they otherwise dealt with anyone purporting to act in the capacity of a finder
or broker in connection with the transactions contemplated hereby. To the
extent that Seller, Licensee, Shareholder or the Partnership engages such
assistance, the engaging party shall pay all related fees and commissions, if
any, and shall hold the other parties and the Partnership harmless for any such
fees and commissions after Closing.
5.30 CGSA. A true and complete copy of maps depicting the location of
each cell site and each of the licensed Cellular Geographic Service Areas
("CGSA") of the Business is attached hereto as SCHEDULE 5.30. All agreements
relating to the coverage areas of the Business, including, but not limited to
border extensions, are listed on SCHEDULES 1.1(g) OR 5.15.
5.31 NETWORK. A true and complete diagram and description of all of the
communications transmission facilities, cell sites and other components
comprising Unity's and the Partnership's cellular networks ("NETWORK") is
attached hereto as SCHEDULE 5.31.
5.32 NET POPS AND COVERAGE. The population base substantially
encompassed by the service areas of the Business, as reported in The 1996
Cellular/PCS Pop Book by Xxxx Xxxxx & Associates, Inc., are as follows:
32
Population
----------
Maine RSA 2 (Aroostock, Piscataquis and Somerset Counties) 143,000
Maine RSA 3 (Kennebec, Xxxx, Lincoln and Waldo Counties) 222,100
Bangor, Maine MSA (Penobscot County) 147,000
----------
512,100
To the knowledge of Seller, Licensee and Shareholder, the population
numbers shown above are a fair representation of the population base in the
service area.
Unity's and the Partnership's licensed service areas include the geographic
service areas identified to them on the System Information Updates set forth in
Schedule 5.32 attached hereto.
5.33 RELATIONSHIP WITH RELATED PERSONS. To Seller's Licensee's and
Shareholder's Knowledge, transactions (if any) entered into by the Seller with
any Related Person (as defined below) have been arm's length transactions
entered into in the ordinary course of business. As used herein, the term
"RELATED PERSON", when used with respect to a specified person which is an
individual, means:
(i) each other member of such individual's family; and
(ii) any person or entity that is, directly or indirectly, controlled by
one or more members of such individual's family.
As used herein, the term "RELATED PERSON", when used with respect to a
specified person or entity other than an individual, means:
(i) any person or entity that, directly or indirectly, controls, is
controlled by, or is under common control with such specified person
or entity; and
(ii) each person or entity that serves as a director, governor, officer,
manager, general partner, executor or trustee of such specified
person or entity (or in a similar capacity).
5.34 THE PARTNERSHIP. The Partnership is a general partnership duly
organized, validly existing and in good standing under the laws of the State of
Maine, and has all requisite partnership power and authority to own, operate and
lease its properties and assets and to conduct the Business of the Partnership
as it is now being conducted. The Partnership was organized and exists pursuant
to a Partnership Agreement dated as of June 1, 1992, by and between NYGSA (since
assigned to Cellco Partnership ("Cellco")) and Unity (the "PARTNERSHIP
AGREEMENT"). The Partnership Agreement set forth all of the rights, duties and
obligations of NYGSA and Unity with respect to the Partnership to the extent
required by applicable law or as is customary in partnership agreements among
participants in the cellular telephone industry, and the Partnership Agreement
has not been modified or amended in any respect, except for amendments listed on
Schedule 5.34 and except for any amendments set forth in the Partnership's
management
33
committee minutes listed on Schedule 5.34. Cellco and Unity constitute all of
the partners of the Partnership with each having the percentage interest in all
of the Partnership's items of income, gain, loss, deduction and credit set out
opposite their respective names below:
Name of Partner Percentage of Interest
--------------- ----------------------
Unity 51%
Cellco 49%
Neither Cellco nor any other person or entity has any right, option or
obligation, pursuant to the Partnership Agreement or otherwise, to purchase all
or any part of Unity's Partnership Interest unless all of Unity's Partnership
Interest is purchased, nor any right or option to dilute, directly or
indirectly, Unity's percentage interest in the Partnership as set forth above
without Unity's consent in accordance with the Partnership Agreement. Neither
Unity nor, to the knowledge of Seller, Cellco is in default in any material
respect under the Partnership Agreement, and no event has occurred which,
through the passage of time or the giving of notice, or both, would constitute a
default or give rise to a right of termination or cancellation under the
Partnership Agreement, or cause the acceleration of an obligation of either
Unity or, to the knowledge of Seller, Cellco, or result in the creation of any
Encumbrance, other than a Permitted Encumbrance, whatsoever upon any of the
Assets or RSA 2 Assets. Neither Cellco nor any other entity has any right or
option pursuant to Section 12.10 of the Partnership Agreement or otherwise to
purchase any or all of the Assets except as set forth in Section 8.3. Unity has
given all required notices under Section 12.10 of the Partnership Agreement.
5.35 SELLER'S PARTNERSHIP CAPITAL ACCOUNT. The capital account of Seller
in the Partnership as of October 31, 1996 was $3,911,208.
5.36 EXCLUSIVITY OF REPRESENTATIONS. The representations and warranties
made by Seller, Licensee and Shareholder in this Agreement are in lieu of all
other representations and warranties, including without limitation any implied
warranties.
ARTICLE 6: REPRESENTATIONS AND WARRANTIES OF PURCHASER
As an inducement for Seller, Licensee and Shareholder to enter into this
Agreement and consummate the transactions contemplated hereby, intending that
Seller, Licensee and Shareholder rely thereon in entering into and performing
this Agreement, Purchaser warrants and represents to Seller, Licensee and
Shareholder that each and all of the following are true and correct in all
material respects as of the date of this Agreement and will be true and correct
in all material respects at and as of the Closing:
6.1 DUE INCORPORATION. Purchaser is a corporation duly organized,
validly existing and in good standing under the laws of the State of Minnesota,
and has all requisite power and
34
authority, corporate and otherwise, to own, operate and lease its properties and
assets and to conduct its business as it is now being conducted.
6.2 DUE AUTHORIZATION. The execution, delivery and performance of this
Agreement, including the documents, instruments and agreements to be executed
and/or delivered by Purchaser pursuant to this Agreement, and the consummation
of the transactions contemplated hereby and thereby have been duly and validly
authorized by all necessary corporate action on the part of Purchaser. This
Agreement and the documents, instruments and agreements to be executed by
Purchaser pursuant to this Agreement have been, or will be on or before the Date
of Closing, duly and validly authorized, executed and delivered by Purchaser and
the obligations of Purchaser hereunder and thereunder are or will be valid and
legally binding, and this Agreement and the documents, instruments and
agreements to be executed and delivered by Purchaser pursuant to this Agreement
are or will be upon such execution and delivery enforceable against Purchaser in
accordance with their respective terms, except as such enforcement may be
limited by applicable bankruptcy, reorganization, insolvency, moratorium or
other similar laws presently or hereafter in effect affecting the enforcement of
creditors' rights generally and by general principles of equity (regardless of
whether such enforceability is considered in a proceeding at law or in equity),
including, among others, limitations on the availability of equitable remedies.
6.3 NO BREACH. Purchaser has full corporate power and authority to
purchase the Assets being purchased hereunder and to otherwise perform its
obligations under this Agreement and the documents, instruments and agreements
to be executed by the Purchaser pursuant hereto. The execution and delivery of
this Agreement, including the documents, instruments and agreements to be
executed by the Purchaser pursuant to this Agreement, and the consummation of
the transactions contemplated hereby and thereby will not: (i) violate any
provision of the Articles of Incorporation or Bylaws (or comparable governing
documents or instruments) of Purchaser; (ii) violate any Applicable Laws issued,
enacted, entered or deemed applicable by any court or other Governmental
Authority having jurisdiction over Purchaser or any of its properties or assets;
(iii) require any filing with, or permit, consent or approval of, or the giving
of any notice to, any Governmental Authority or any person or entity, other than
the Federal Communications Commission (the "FCC") or (iv) except as provided in
Schedule 6.3 hereto, result in a violation or breach of or constitute (with or
without due notice or lapse of time or both) a default (or give another party
any rights of termination, cancellation or acceleration) under any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, license,
franchise, permit, lease, contract, agreement, or other instrument or obligation
to which the Purchaser is a party, or by which it or any of its respective
properties or assets may be bound, excluding from the foregoing clauses (ii),
(iii) and (iv) violations, which, and filings, notices, permits, consents and
approvals the absence of which, individually or in the aggregate, could not
35
reasonably be expected to have a Material Adverse Effect on the Purchaser or its
assets, properties, revenues, business, operations, financial conditions or
prospects and would not prevent or delay the consummation of the transactions
contemplated hereby.
6.4 FULL DISCLOSURE. No representation or warranty made by Purchaser in
this Agreement contains or will contain any untrue statement of a material fact
or omits or will omit to state a material fact necessary to make the statements
contained herein and therein not misleading. All written information materials
provided by or on behalf of Purchaser to Seller, Licensee or Shareholder or its
agents or employees in connection with the subject matter of this Agreement have
in each case been true and correct in all material respects or have fairly
summarized or described the subject matter of the writing in light of the
information made available to Seller, Licensee and Shareholder.
6.5 QUALIFICATIONS OF PURCHASER. Except as provided on SCHEDULE 6.5
hereto, Purchaser is legally and technically qualified to acquire control of the
Licenses, the RSA 2 Licenses and the Partnership Interest and to operate the
Business as required by the Communications Act of 1934, as amended (the
"COMMUNICATIONS ACT"), and by the rules, regulations and policies of the FCC;
and Purchaser does not know of any facts, circumstances or proceedings which
could disqualify it under the Communications Act or the FCC's rules, regulations
or policies from acquiring control of the Licenses, the RSA 2 Licenses and the
Partnership Interest or operating the Business. Purchaser has such knowledge
and experience in the communications industry specifically, and in financial and
business matters generally, to enable Purchaser to evaluate the relative merits
and risks of the transactions contemplated by this Agreement. Purchaser
acknowledges receipt of and the opportunity to review those documents and items
referenced on Schedule 6.5(a) (the "Due Diligence Documents"), and Purchaser
represents that it has had adequate opportunity to review such Due Diligence
Documents.
6.6 BROKERS. Purchaser has engaged The Xxxxxxxx-Xxxxxxxx Company, Inc.
to represent it in connection with the transactions contemplated hereby and
shall pay all fees associated with services they may provide to Purchaser.
Purchaser has not engaged or allowed any other investment advisor, broker,
finder or similar consultant to represent it in connection with the transactions
contemplated hereby.
ARTICLE 7: PERFORMANCE BY SELLER, LICENSEE AND SHAREHOLDER PENDING CLOSING
Seller, Licensee and Shareholder jointly and severally covenant and agree
that from and after the date of this Agreement and until the earlier of Date of
Closing or the termination of this Agreement in accordance with ARTICLE 14
hereof:
36
7.1 ACCESS TO INFORMATION. At the request of Purchaser, Seller, Licensee
and Shareholder shall, from time to time, give or cause to be given to
Purchaser, its officers, employees, counsel, accountants and other
representatives, upon reasonable notice to Seller or Shareholder and for the
purposes specified in the Nondisclosure Agreement between the parties dated as
of September 25, 1996 (the "NONDISCLOSURE AGREEMENT"), full access during normal
business hours to the Business, the properties and assets and all of the books,
minute books, title papers, records, files, contracts, commitments, insurance
policies, Licenses, RSA 2 Licenses, agreements and documents of every character
of any of Seller, Licensee, Shareholder and/or the Partnership reasonably
relating to the Business, and Seller shall furnish or cause to be furnished to
Purchaser, its officers, employees, counsel, accountants and other
representatives all of the information with respect to the Business, the Assets
and/or the RSA 2 Assets as any of them may reasonably request. Purchaser, its
officers, employees, counsel, accountants and other representatives shall have
the authority upon prior notice to Seller to interview all employees, customers,
vendors, suppliers and other parties having relationships with any of Seller,
Licensee, Shareholder, the Partnership and/or Business, and Seller or
Shareholder shall make such introductions as may be requested. In addition,
Purchaser may, at its sole cost and expense, at any time prior to the Date of
Closing, through its officers, employees, counsel, accountants and other
representatives, conduct such investigations and examinations of the Assets
and/or the RSA 2 Assets as it deems necessary or advisable, and Seller and
Shareholder will cooperate fully in such investigations.
7.2 BUSINESS AS USUAL. Seller, Licensee and Shareholder shall carry on
the Business and cause the Partnership to carry on the Business in the usual and
ordinary course and substantially in the same manner as heretofore conducted and
will keep and maintain the Assets and cause the RSA 2 Assets to be kept and
maintained in good and safe repair and condition consistent with past practices,
reasonable wear and tear excepted.
7.3 ENCUMBRANCES. Seller, Licensee and Shareholder shall not, directly or
indirectly, perform or fail to perform any act which might reasonably be
expected to result in the creation or imposition of any Encumbrance (other than
Permitted Encumbrances) of any nature whatsoever on any of the Assets or any of
the RSA 2 Assets or otherwise adversely affect the marketability of the
Seller's, Licensee's, Shareholder's and the Partnership's title to any of the
Assets or the RSA 2 Assets, respectively.
7.4 PAY INCREASES. Except increases described on SCHEDULE 5.9 hereto,
Seller shall not, without the prior written consent of Purchaser, grant any
general or uniform increase in the salaries or rate of pay to any employees of
any of the Seller or the Partnership who regularly provide any services in
connection with the Business, grant any increase in any benefits or establish,
adopt, enter into, make any new grants or awards under, or amend any collective
37
bargaining, employment, bonus, stock option, restricted stock, stock purchase,
profit-sharing, deferred compensation, severance, pension, retirement,
disability, medical, dental, health or life insurance, death benefit, incentive
or other compensation or retirement plan, arrangement, agreement, trust, fund,
policy or arrangement for the benefit of such employees.
7.5 RESTRICTIONS ON NEW CONTRACTS. With respect to the Business or the
transaction contemplated hereunder, none of Seller, Licensee and Shareholder
shall enter into or, to the extent allowed under the Partnership Agreement,
permit the Partnership to enter into any contract, commitment, lease, license or
other agreement, incur any liability, absolute or contingent, assume, guarantee
or otherwise become liable or responsible for the obligations of any other
person or entity, make any loans, advances or capital contributions to any other
person or entity (except for extensions of credit to its customers in the
ordinary course of business), or waive any right or enter into any other
transaction, in each case other than in the usual and ordinary course of
business and consistent with Seller's and the Partnership's normal business
practices.
7.6 PRESERVATION OF BUSINESS AND NON-SOLICITATION OF EMPLOYEES. Seller,
Licensee and Shareholder shall use commercially reasonable efforts to preserve
Seller's business organization and the business organization of the Partnership
intact, to keep available to Purchaser the present employees of Seller and the
Partnership who perform services in connection with the Business and to preserve
for Purchaser the Business and the present goodwill and relationships of Unity
and the Partnership with their vendors, suppliers, customers and others having
business relationships with the Business. Seller, Licensee and Shareholder
shall reasonably cooperate with Purchaser in Purchaser's efforts to cause any of
Seller's employees who perform services in connection with the Business and
which Purchaser desires to employ to become Purchaser's employees on the Date of
Closing. Seller and Shareholder agree that neither Seller, Shareholder nor any
of their respective subsidiaries shall offer alternate employment to any of the
employees of any of Seller or the Partnership who perform services in connection
with the Business prior to the Closing without Purchaser's written consent
unless such employees are not offered employment by Purchaser within thirty (30)
days after the date of this Agreement or at such future time as such employees
are no longer employed by Purchaser and have not been employed by Purchaser for
a period of six (6) months since termination of such employment. Nothing
contained in this Agreement shall constitute or be construed as a contract of
employment between Purchaser and such employees of Seller, and any such
employee(s) hired by Purchaser shall remain subject to discharge and lay-off by
Purchaser at any time.
7.7 PAYMENT AND PERFORMANCE OF OBLIGATIONS. Seller will timely pay and
discharge and cause the Partnership to timely pay and discharge all invoices,
bills and other monetary
38
obligations as they become due and payable and shall not perform or fail to
perform any act which will cause a material breach of any of the Operating
Contracts or RSA 2 Contracts.
7.8 RESTRICTIONS ON SALE OF ASSETS. Seller, Licensee and Shareholder
shall not sell, assign, transfer, lease, sublease, pledge or otherwise encumber
or dispose of any of the Assets or permit the Partnership to sell, assign,
transfer, lease, sublease, pledge or otherwise encumber or dispose of any of the
RSA 2 Assets, except for the sale of inventory in the ordinary course of
business and at customary prices. Without limiting the generality of the
foregoing, Seller, Licensee and Shareholder shall not permit any of the material
Proprietary Rights or material RSA 2 Proprietary Rights to lapse or dispose of
or otherwise lose the right to use any of the material Proprietary Rights or
material RSA 2 Proprietary Rights.
7.9 CONSENTS. As soon as reasonably practicable and in any event on or
before the Date of Closing, unless otherwise indicated on SCHEDULE 5.3 hereto,
Seller, Licensee and Shareholder with Purchaser's reasonable cooperation will
obtain or cause to be obtained all of the consents and approvals of all
necessary persons and entities to the assignment and transfer to the Purchaser
of all of the Assets, the Partnership Interest, all of the Seller Real Estate,
including leasehold interests and easements, and including the Operating
Contracts listed on SCHEDULE 1.1(g) and the Licenses, herein provided to be
sold, assigned and transferred to Purchaser, including the consents and
approvals listed on SCHEDULE 5.3 hereto.
7.10 CAPITAL EXPENDITURES. Upon written request by Purchaser and subject
to Seller's approval which will not be unreasonably withheld, Seller shall make
major capital expenditures for expansion of the network, for example, for the
acquisition and construction of an additional cell site, only upon the written
request and approval of Purchaser. Purchaser shall reimburse Seller for such
preapproved capital expenditures on the Date of Closing. Seller shall make
other minor capital expenditures, for example, the addition of radio channels
and equipment upgrades, as are reasonably necessary in the normal course of
business to maintain the current quality level of service to customers and to
accommodate the level of growth projected by Seller. Such minor capital
expenditures shall be at Seller's expense and shall not be reimbursed by
Purchaser.
7.11 NO SOLICITATION OF OTHER OFFERS OR NEGOTIATION. None of Seller,
Licensee, and Shareholder or any of their representatives shall provide
information except as required by law to any other person or entity or enter
into any negotiations with or solicit any offer, inquiry or proposal from any
other person or entity with respect to the sale, merger or other acquisition of
the Business except as required with respect to Cellco under Section 6.0 of the
Partnership Agreement.
7.12 ACCOUNTS RECEIVABLE. Seller shall not accelerate or permit the
Partnership to accelerate the collection of any accounts receivable arising out
of the operation of the Business in a manner which would be inconsistent with
past practice.
39
7.13 INVENTORY. Seller shall maintain and cause the Partnership to
maintain the levels of inventory, materials and supplies used in the Business
consistent with past practice.
7.14 INSURANCE. Seller will maintain and cause the Partnership to maintain
in full force and effect all insurance coverages for the Assets and RSA 2 Assets
substantially comparable to coverages existing on the date hereof.
7.15 FILING REPORTS AND MAKING PAYMENTS. Seller, Licensee and/or
Shareholder, as applicable, shall timely file and cause the Partnership to
timely file all required reports and notices with each and every applicable
Governmental Authority and timely make all payments due and owing to each such
Governmental Authority, including, but not by way of limitation, any filings,
notices and/or payments required by reason of the transactions contemplated by
this Agreement.
7.16 ENVIRONMENTAL ASSESSMENTS.
a. Subject to the other provisions contained in this Section, Seller
shall permit and cause the Partnership to permit Purchaser or any
reasonably qualified environmental consultant designated by Purchaser (the
"ENVIRONMENTAL CONSULTANT") to conduct environmental site assessments (the
"SITE ASSESSMENTS") of the Business, and the Real Estate prior to Closing.
Beginning immediately after the execution hereof, the Environmental
Consultant shall have full and free access, upon reasonable notice, to the
Business, and the Real Estate in order to conduct the Site Assessments.
Purchaser shall obtain a Phase I Environmental Site Assessment ("PHASE I
ASSESSMENT") for (i) each parcel of Owned Real Estate; and (ii) such
parcels of Leased Real Estate as Purchaser deems appropriate. Purchaser
shall pay all fees and expenses of the Environmental Consultant. All
Phase I Assessments shall be completed on or before February 15, 1997, and
Purchaser shall furnish Seller with a copy of all written reports relating
to the Phase I Assessments provided by the Environmental Consultant.
Purchaser shall have the right to terminate this Agreement if the Site
Assessment of any of the parcels of Owned/Leased Land or premises leased
pursuant to a Retail Lease discloses facts or conditions which could
reasonably be expected to have a Material Adverse Effect; provided, that no
such right of termination shall exist if (x) Seller, Licensee or
Shareholder actually remedies such facts or conditions to Purchaser's
reasonable satisfaction at Seller's expense prior to the Closing or (y) if
Seller shall retain the affected Real Estate, adjust the Purchase Price by
an amount equal to the book value of the affected Real Estate, and enter
into a long-term lease (with annual rent equal to 10% of the price
reduction) with Purchaser for the affected Real Estate on terms and
conditions reasonably acceptable to Purchaser, and indemnify Purchaser for
the term of the lease for any and all claims of any nature whatsoever
originating prior to the date of Closing with respect to the affected Real
40
Estate in a manner similar to that provided for in Section 11.1(g) hereof;
provided that the maximum liability of Seller under such indemnity shall be
subject to the aggregate limit set forth in Section 11.4 hereof.
b. As stated in SCHEDULE 5.16(k), Seller has disclosed to Purchaser
information concerning past contamination of the parcel of Seller Owned
Real Estate commonly known as 000 Xxxxxxx Xxxxxx, Xxxxxxx (the "Augusta
Office"). Seller agrees to fully cooperate with Purchaser's efforts to
obtain, prior to the Date of Closing, a written assurance from the Maine
Department of Environmental Protection (the "DEP"), reasonably satisfactory
to Purchaser's Maine legal counsel, that Purchaser is not, and shall not be
deemed to be, a "responsible party" (as defined in applicable state
environmental statutes and regulations) with respect to the contamination
previously identified at the Augusta Office. In the event Purchaser and
Seller are unable to obtain, prior to Closing, a written assurance from DEP
which is reasonably satisfactory to Purchaser's Maine legal counsel, then
at Closing, (i) the Purchase Price shall be reduced by Seller's book value
of the Augusta Office (excluding all inventory and other items of personal
property located at the Augusta Office); (ii) the Schedules to this
Agreement shall be adjusted accordingly; and (iii) Seller and Purchaser
shall enter into a "triple-net" lease pursuant to which Seller shall lease
the Augusta Office to Purchaser for a term of ten (10) years (and with a
renewal option on the same terms and conditions for one (1) additional ten
(10) year term); base rent payable at a rate of one-tenth (.10) of book
value annually; a purchase option granted to Purchaser to be exercised at
any time during the term of the lease; provided, however, that Purchaser
shall be obligated to exercise such option and to purchase the Augusta
Office at an amount equal to the Seller's book value plus any unpaid rent
accrued through the date of the closing on said purchase promptly upon
receipt of the written assurance from the DEP described above, (and with
title matters warranted consistent with the terms of this Agreement);
permitting Purchaser to terminate the lease upon a transfer or sale of all
or substantially all of its assets in the State of Maine; a provision
pursuant to which Seller and Shareholder agree to indemnify and hold
Purchaser harmless from and against any liability arising from any
contamination occurring or originating prior to the commencement date of
the lease, subject to the limitations stated in Section 11.4 below but
which shall continue in force for the term of the lease; and such other
terms and conditions as are customary in a triple-net lease for comparable
commercial office space in Augusta, Maine and not inconsistent with the
foregoing.
c. Purchaser has obtained information that the parcel of Seller
Leased Real Estate, leased under a Retail Lease and commonly known as 000
Xxxx Xxxxxx, Xxxxxxxx
41
(the "Rockland Store") may be subject to environmental contamination.
Prior to closing, (i) Purchaser shall attempt to obtain additional
environmental assessment information in order to be assured, to Purchaser's
satisfaction, that the Rockland Store is not likely to be affected by
environmental contamination and (ii) Seller shall attempt to obtain the
lease amendment for the Rockland Store as described in Section 9.9 below.
In the event neither of these conditions occur prior to Closing, at Closing
Seller's rights and obligations under the lease for the Rockland Store
shall not be assigned to and assumed by Purchaser; the Schedules hereto
shall be amended accordingly; there shall be no adjustment to the Purchase
Price; and Seller and Purchaser shall enter into a sublease for the
Rockland Store pursuant to which Seller, with the written consent of
Seller's landlord, subleases the Rockland Store to Purchaser upon all of
the same terms and conditions provided for under Seller's lease for the
Rockland Store (and specifically including all rent payment obligations),
EXCEPT the sublease shall not require Purchaser to indemnify Seller or
Seller's landlord under the lease for the Rockland Store, for any costs,
expenses or damages relating to contamination occurring or originating
prior to the commencement date of the sublease. In addition, the sublease
shall provide that Seller [and Shareholder] shall indemnify and hold
Purchaser harmless from and against any liability arising from any
contamination occurring or originating prior to the commencement date of
the sublease, subject to the limitations stated in Section 11.4 below. In
the event that after the Date of Closing either (i) Purchaser obtains
additional environmental assessment information which assures Purchaser, to
Purchaser's reasonable satisfaction, that the Rockland Store is not likely
to be affected by environmental contamination or (ii) Seller obtains the
lease amendment for the Rockland Store as described in Section 9.9 below,
then Seller's lease for the Rockland Store shall be assigned to and assumed
by Purchaser and the sublease shall be terminated.
7.17 CAPITAL EXPENDITURES. Seller shall not make or permit the Partnership
to make any capital expenditures in excess of $12,000.00 individually without
the Purchaser's prior written consent.
7.18 MONTHLY FINANCIALS. Pending the Closing, within twenty-five (25) days
of the close of each month, Seller shall deliver to Purchaser consolidated and
consolidating balance sheets and income statements for Unity and the
Partnership, disclosing the financial position and results of operations of the
Business for the preceding month and year-to-date which shall be prepared on a
basis consistent with the financial statements identified on SCHEDULE 5.11
hereof and consistent with the prior months and year-to-date financial
statements.
7.19 COBRA. Seller shall at its sole cost and expense supply its employees
employed in the operation of the Business with any and all notices and other
information with respect to
42
such employees' rights to continue their health and other insurance upon the
termination of their employment upon consummation of the transactions
contemplated hereby, all in accordance with the Applicable Laws of applicable
Governmental Authorities.
7.20 THE PARTNERSHIP. Unity shall take all necessary steps to maintain its
ownership percentage at fifty-one percent (51%) or greater in the Partnership.
A transfer of all of Unity's Partnership Interest to Cellco pursuant to
Article 6.0 of the Partnership Agreement as a result of the execution of this
Agreement shall not be a violation of this Section 7.20. Seller shall make all
required capital contributions for amounts accrued pursuant to the applicable
terms of the Partnership Agreement through the Date of Closing.
7.21 RSA 2 UNSERVED AREA APPLICATION. Prior to the Closing and prior to
applicable licensing deadlines, Unity shall cause the Partnership, with respect
to the Phase II unserved area radio station authorization in File
No 05066-CL-P2-96, to properly report necessary construction or coverage changes
to the FCC with a copy of the notification to Purchaser.
7.22 WALLAGRASS CELL SITE. Seller shall obtain a reasonable replacement
site for the Wallagrass cell site prior to the termination of the Wallagrass
tower lease and shall be responsible for the relocation expenses.
ARTICLE 8: MUTUAL COVENANTS AND CONDITIONS PRECEDENT TO OBLIGATIONS
8.1 FEDERAL COMMUNICATIONS COMMISSION. Promptly following the execution
of this Agreement,] Purchaser, Seller, Licensee and Shareholder shall join in
applications to the FCC for approval of the sale and transfer of the Licenses
and a transfer of control of the Partnership and the RSA 2 Licenses to the
Purchaser. Thereafter, Purchaser, Seller, Licensee and Shareholder shall
cooperate with each other and shall take such actions as are reasonably
necessary to obtain the required approvals of the FCC, including, with respect
to Purchaser, assigning this Agreement to a wholly owned subsidiary and
structuring said subsidiary in such commercially reasonable manner as the FCC
may require. Neither party shall take any action before the FCC which is
inconsistent with or would delay action on the approval applications.
Furthermore, each of the parties hereto shall use its commercially reasonable
efforts to prevent the filing of adverse pleadings with the FCC concerning the
approval applications. Purchaser shall bear the fees of the FCC charged in
connection with or incidental to the filing and processing of such applications.
8.2 PROCEEDINGS. The obligations of Purchaser, to consummate this Closing
under this Agreement are subject to there being no (i) investigations, claims,
demands, actions, suits or other proceedings which have been brought, asserted,
commenced or threatened against the Seller, Licensee and Shareholder and/or the
Partnership by any court, Governmental Authority or
43
other person or entity which could reasonably be expected to have a Material
Adverse Effect or prohibit or materially delay the Closing, or (ii) Applicable
Laws issued, enacted, entered or deemed applicable by any court or other
Governmental Authority restraining or enjoining or which may reasonably be
expected to nullify or render ineffective this Agreement or the consummation of
the transactions contemplated hereby. The obligations of Seller, Licensee and
Shareholder to consummate this Closing under this Agreement are subject to there
being no (i) investigations, claims, demands, actions, suits or other
proceedings which have been brought, asserted, commenced or threatened against
the Purchaser by any court, governmental agency or other person or entity which
could reasonably be expected to prohibit or materially delay the Closing or
(ii) applicable laws issued, enacted, entered or deemed applicable by any court
or governmental authority restraining or enjoining or which may reasonably be
expected to nullify or render ineffective this Agreement or the consummation of
the transactions contemplated hereby.
8.3 THE PARTNERSHIP. Seller shall promptly take all steps required under
the Partnership Agreement to comply with the provisions of Article 6.0,
"Transfers of Partnership Interests, Etc." ("ARTICLE 6.0") thereof. Prior to
the Closing, Cellco shall have either (i) elected to purchase Unity's entire 51%
Partnership Interest in the Partnership by exercising its right of first refusal
or (ii) waived its rights under Article 6.0 or permitted all its rights under
Article 6.0 to lapse so as to permit the entire 51% Partnership Interest of
Unity to be transferred hereunder to Purchaser without further conditions or
diminution of rights.
8.4 HSR ACT. As soon as practicable after execution of this Agreement,
Purchaser and Seller, Licensee and Shareholder shall join in applications to the
Federal Trade Commission (the "FTC") and the United States Department of Justice
(the "DOJ") pursuant to the pre-merger notification procedures of the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 0000 (xxx "XXX XXX").
Thereafter, Purchaser and Seller, Licensee and Shareholder shall cooperate with
each other and shall take such actions as are necessary to obtain the expiration
or early termination of the waiting period prescribed by the HSR Act. Purchaser
and Shareholder shall each pay one-half of any fees of the FTC and DOJ charged
in connection with or incidental to the filing and processing of such
applications. The obligations of the Purchaser and Seller, Licensee and
Shareholder to consummate the Closing under this Agreement are subject to the
expiration or early termination of the waiting period prescribed by the HSR Act
without objection of the FTC or the DOJ.
8.5 PROMPT NOTICE. Shareholder shall promptly notify Purchaser and
Purchaser shall promptly notify Shareholder in writing upon becoming aware of
any of the following: (i) any investigation, claim, demand, action, suit or
other proceeding that may be brought, threatened, asserted or commenced against
any of Seller, Licensee and Shareholder, the Partnership or the
44
Purchaser, as the case may be, its officers, managers or directors involving in
any way the Business, the Assets or the RSA 2 Assets, (ii) any changes in
accuracy of the representations and warranties made by Purchaser or any of
Seller, Licensee and Shareholder in this Agreement, (iii) any order or decree or
any complaint praying for an order or decree restraining or enjoining the
consummation of the transactions contemplated hereby, or (iv) any notice from
any Governmental Authority of its intention to institute an investigation into,
or institute a suit, action or other proceeding to restrain or enjoin the
consummation of the transactions contemplated hereby or to nullify or render
ineffective this Agreement or such transactions if consummated.
8.6 MUTUAL COVENANTS. Purchaser and Shareholder shall each give notice to
the other promptly after it receives information which could cause a reasonable
business transaction party to believe that the other party has breached a
representation or warranty herein or that a covenant of the other party has been
breached or is impossible of performance.
ARTICLE 9: CONDITIONS PRECEDENT TO PURCHASER'S OBLIGATIONS
Unless waived by Purchaser in writing, each and every obligation of
Purchaser to be performed at the Closing shall be subject to the satisfaction at
or prior thereto of each and all of the following conditions precedent:
9.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties made by Seller, Licensee and Shareholder in this Agreement, including
the documents, instruments and agreements to be executed and/or delivered by any
of them pursuant to this Agreement, shall be true and correct in all material
respects at and as of the Closing with the same force and effect as though such
representations and warranties had been made or given at and as of the Closing.
Representations and warranties included in updated Schedules accepted by the
Purchaser shall be deemed made in the Agreement.
9.2 COMPLIANCE WITH COVENANTS AND AGREEMENTS.
a. Subject to the provisions of Subsection 9.2(b) below, Seller,
Licensee and Shareholder shall have performed and complied with all of
its/their covenants, agreements and obligations under this Agreement which
are to be performed or complied with by it/ them at or prior to the
Closing, including the execution and/or delivery of the documents,
instruments and agreements specified in Section 12.2 hereof or in such
documents, instruments and agreements, all of which shall be reasonably
satisfactory in form and substance to counsel for Purchaser provided,
however, that it shall be the obligation of Seller, Licensee and
Shareholder to promptly remedy any such failure after Closing and hold
Purchaser harmless from any adverse effect relating thereto.
45
b. The Purchaser's performance of its obligations under the
Agreement shall not be excused as a result of any failure(s) by Seller,
Licensee or Shareholder to perform their obligations pursuant to
Subsections 9.1 and 9.2(a) above, unless (i) said failure(s) can reasonably
be expected, individually or in the aggregate, to result in an adverse
effect in excess of $100,000 or unless (ii) said failure relates to one of
the sites designated as High Priority on Schedules 1.1(a) and 5.16(a).
c. The obligation of Seller, Licensee and Shareholder to perform
pursuant to Subsection 9.2(a) shall survive the Closing.
9.3 NO ADVERSE CHANGE. As of the Date of Closing, nothing shall have
occurred which, individually or in the aggregate, could reasonably be expected
to have an adverse effect in excess of $100,000 or materially impair the ability
of Seller, Licensee, Shareholder and/or the Partnership to conduct the Business
in the same manner as in the past.
9.4 APPROVAL BY COUNSEL. Except as set forth in Schedule 9.2, counsel for
Purchaser shall have been furnished with such certified copies of actions and
proceedings and such other instruments and documents as they shall have
reasonably requested with respect to all actions, proceedings, instruments and
documents required of Seller, Licensee and Shareholder to carry out the
transactions contemplated by this Agreement or incidental thereto.
9.5 CONSENTS AND APPROVALS. Except as set forth in Section 9.2, Purchaser
shall have received evidence, in form and substance reasonably satisfactory to
counsel for Purchaser, that all material consents, waivers, releases,
authorizations, approvals, licenses, certificates, permits and franchises of all
persons and entities (including each and every Governmental Authority) as may be
necessary to consummate the transactions contemplated by this Agreement and for
the Purchaser to carry on and continue the Business as it is now conducted by
Seller and the Partnership have been obtained. All consents of the FCC shall be
by Final Order (as hereinafter defined); provided, however, that if Purchaser
waives the condition of FCC consents by Final Order, the parties shall consider
FCC consent without Final Order sufficient to proceed to Closing according to
the other terms of this Agreement. "FINAL ORDER" means an action or decision of
the FCC as to which (i) no request for a stay is pending, no stay is in effect,
and any deadline for filing such request that may be designated by statute or
regulation has passed, (ii) no petition for rehearing or reconsideration or
application for review is pending and the time for the filing of such petition
or application has passed, (iii) the FCC does not have the action or decision
under reconsideration on its own motion and the time within which it may effect
such reconsideration has passed and (iv) no judicial appeal is pending or in
effect and any deadline for filing any such appeal that may be designated by
statute or rule has passed.
9.6 FINANCING. Purchaser shall have obtained commitments from responsible
financial institutions to enable it to borrow such funds, as are needed to pay
the Purchase Price or
46
Alternate Purchase Price, as the case may be, in cash on the Date of Closing,
and such commitments shall be in effect and all conditions thereto satisfied on
the Date of Closing.
9.7 SURVEY. Seller shall have obtained at its sole cost and expense from
a licensed registered land surveyor and delivered to Purchaser three (3) copies
of a current as built survey of each parcel of Owned/Leased Land prepared in
full compliance with the customary standard detail requirements for land title
surveys, as adopted by the American Title Association and the American Congress
on Surveying and Mapping. Each survey shall be certified to Purchaser and
Purchaser's lenders, shall locate all easements and similar matters which are
listed on the title commitments.
9.8 EMPLOYEE STOCK OPTIONS. Shareholder shall have caused all options for
shares of common stock of Shareholder pursuant to the 1995 Employee Restricted
Stock Plan or the 1991 Employee Stock Option Plan or otherwise held by employees
employed with respect to the Business who accept an offer of employment from
Purchaser to vest on or before the date of Closing.
c. 9.9 LEASES. On or before the Date of Closing, Seller shall at its
sole cost have caused the amendment of certain leases of Leased Real Estate, as
listed on EXHIBIT C, to include, where necessary, extensions of the lease term
(including exercisable renewal options through at least December 31, 2001 and
deletion of any provision permitting a lessor to terminate the lease prior to
December 31, 2001 in the absence of a default by lessee), landlord's consent to
assignment to RCC or other FCC-approved licensee, and collateral assignment of
such leases to a lender. Seller shall use their commercially reasonable best
efforts to obtain lease amendments substantially in the form of EXHIBIT C-1
attached hereto, which, if obtained, shall be deemed acceptable to Purchaser.
In addition, Purchaser shall use reasonable efforts to obtain the lease
amendment for the "Rockland Retail Lease" in a form substantially similar to
EXHIBIT C-2 attached hereto and incorporated herein by this reference.
9.10 TITLE MATTERS.
a. As soon as practicable following the execution hereof, Seller
shall provide to Purchaser A.L.T.A. Form 1992 title insurance commitments
from a title insurance company reasonably acceptable to Purchaser for each
parcel of Owned/Leased Land agreeing to insure title as owner or tenant (as
applicable) in the amount of $200,000 for each such parcel of Owned/Leased
Land, except for the Seller Owned Real Estate parcel commonly known as the
Augusta site, which shall be $700,000, with standard exceptions waived,
together with copies of all documents mentioned in said title insurance
commitments. In each case, the amounts purchased shall be increased as
necessary to comply with co-insurance provisions of the policies or to
qualify for waivers or "agreed-amount" endorsements. Seller also agrees to
procure for Purchaser Owner's or Leasehold
47
Owner's policies of title insurance, as applicable, on A.L.T.A.
Form 1992 for each parcel of Owned/Leased Land. Seller shall bear the cost
of obtaining the title insurance commitments and Seller and Purchaser shall
each pay one-half of the cost of the title insurance policies. The
policies shall include waivers of the co-insurance clause reasonably
acceptable to Purchaser. Purchaser shall be allowed twelve (12) business
days after receipt of complete commitments for the examination thereof and
the making and delivering of any written objections to the marketability of
title. If no title objections are made within such twelve (12) business
day period, such objections shall be deemed to have been waived by
Purchaser. Purchaser shall not have the right, however, to object to
Seller's or the Partnership's title to any parcel of Owned/Leased Land by
reason of any of the Permitted Encumbrances. If any written objections to
the marketability of title to any parcel of Owned/Leased Land are made by
Purchaser within said twelve (12) day period, Seller shall use its
reasonable best efforts, at its sole cost and expense, to cure said
marketable title objections within thirty (30) days after said objections
have been raised. If title to the Owned/Leased Land is not made marketable
to Purchaser's reasonable satisfaction within such thirty (30) day period,
Purchaser shall have the right during the ten (10) business day period
(following the expiration of such thirty (30) day period) to terminate this
Agreement by giving written notice of termination to Seller, Licensee and
Shareholder.
b. All matters disclosed on the surveys provided pursuant to
Section 9.7 and all exceptions to title listed in the title insurance
commitments furnished pursuant to Section 9.10 (and the title insurance
policies issued pursuant thereto) shall be deemed Permitted Encumbrances
unless: (a) Purchaser makes a specific, timely (i.e., within twelve (12)
business days after receipt of all of the title report, survey and document
copy for the item in question) objection thereto; and (b) such matter(s) or
exceptions impair marketable title to a parcel of Owned/Leased Real Estate
(unless such matter(s) or exception(s) are covered by title insurance
(including, without limitation, affirmative title insurance coverage) or
are otherwise cured or corrected at or prior to Closing.)
In addition, the Permitted Encumbrances listed on Schedule 5.16(d) have
been provisionally approved by Purchaser subject to the following; each
easement of record burdening Owned/Leased Real Estate shall be located on
the surveys to be provided pursuant to Section 9.7, if described in such a
manner that it can be located, and thereupon shall be deemed approved
unless (a) Purchaser makes a specific, timely (i.e., within twelve (12)
business days after receipt of all of the title report, survey and document
copy for the item in question) objection thereto; and (b) such location
impairs marketable title to a parcel of Owned/Leased Real Estate (unless
such matter(s) is
48
covered by title insurance (including, without limitation, affirmative
title insurance coverage) or is not otherwise covered, cured or corrected
at or prior to Closing).
ARTICLE 10: CONDITIONS PRECEDENT TO OBLIGATIONS
OF SELLER, LICENSEE AND SHAREHOLDER
Unless waived by Seller, Licensee and Shareholder in writing, each and
every obligation of Seller, Licensee and Shareholder to be performed at the
Closing shall be subject to the satisfaction at or prior thereto of each and all
of the following conditions precedent:
10.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties made by Purchaser in this Agreement, including the documents,
instruments and agreements to be executed and/or delivered by Purchaser pursuant
to this Agreement, shall be true and correct in all material respects at and as
of the Closing with the same force and effect as though such representations and
warranties had been made or given at and as of the Closing.
10.2 COMPLIANCE WITH COVENANTS AND AGREEMENTS. Purchaser shall have
performed and complied with all of its covenants, agreements and obligations
under this Agreement which are to be performed or complied with by it at or
prior to the Closing, including (i) the execution and/or delivery of the
documents, instruments and agreements specified in Section 12.3 hereof or in
such documents, instruments and agreements, all of which shall be reasonably
satisfactory in form and substance to counsel for Seller, Licensee and
Shareholder; and (ii) payment of the Purchase Price or Alternate Purchase Price,
as the case may be, in the manner provided for in this Agreement.
10.3 APPROVAL BY COUNSEL. Counsel for Seller, Licensee and Shareholder
shall have been furnished with such certified copies of actions and proceedings
and such other instruments and documents as they shall have reasonably requested
with respect to all actions, proceedings, instruments and documents required of
Purchaser to carry out the transactions contemplated by this Agreement or
incidental thereto.
10.4 REQUIRED GOVERNMENTAL APPROVALS. All consents and approvals of each
and every Governmental Authority necessary for the consummation of the
transactions contemplated hereby shall have been obtained. All consents of the
FCC shall be by Final Order; provided, however, that if Purchaser waives the
condition of FCC consents by Final Order, the parties shall consider FCC consent
without Final Order sufficient to proceed to Closing according to the other
terms of this Agreement.
10.5 PURCHASER'S FINANCING. In the event Purchaser has not obtained and
delivered to Seller copy(s) of written commitments for financing reasonably
satisfactory to Seller, Licensee and Shareholder by January 31, 1997, Seller may
thereafter terminate this Agreement upon five (5) days' written notice to
Purchaser unless Purchaser has obtained and delivered to Seller copies
49
of written commitments for financing reasonably acceptable to Seller prior to
the expiration of such five (5) day period. Such commitments shall remain in
full force and effect at all times during the period beginning when such
commitments are obtained and continuing until the Closing. Upon lapse of any
such commitment, Seller may thereafter terminate this Agreement upon five (5)
days' written notice to Purchaser unless Purchaser obtains and delivers to
Seller a commitment in effect prior to the expiration of such five (5) days
period.
ARTICLE 11: INDEMNIFICATION
11.1 INDEMNIFICATION BY SELLER, LICENSEE AND SHAREHOLDER. Seller, Licensee
and Shareholder (including their respective successors and assigns) jointly and
severally covenant and agree to pay and perform and indemnify and hold
Purchaser, its officers, directors, employees, affiliates, shareholders and
agents, and each of their respective heirs, personal representatives, successors
and assigns (collectively the "PURCHASER INDEMNIFIED PARTIES"), harmless from,
against and in respect of any and all losses, costs, expenses (including without
limitation, reasonable attorneys' fees and disbursements of counsel),
liabilities, damages, fines, penalties, charges, assessments, judgments,
settlements, claims, causes of action and other obligations of any nature
whatsoever (collectively "LOSSES") that any of the Purchaser Indemnified Parties
may at any time, directly or indirectly, suffer, sustain, incur or become
subject to, arising out of, based upon or resulting from or on account of each
and all of the following:
a. The breach or falsity of any representation or warranty made by
Seller, Licensee or Shareholder in this Agreement, including the documents,
instruments and agreements to be executed and/or delivered by Seller,
Licensee or Shareholder pursuant hereto or thereto, except to the extent
the Purchaser had actual knowledge (excluding, however, any matters
relating to representations or warranties relating to Real Estate) of such
breach or falsity based on the Due Diligence Documents delivered by Seller,
Licensee or Shareholder and failed to advise Seller, Licensee and
Shareholder of such breach or falsity prior to the date of this Agreement.
b. The breach or nonperformance of any covenant or agreement made by
Seller, Licensee or Shareholder in this Agreement, including the documents,
instruments and agreements to be executed and/or delivered by any of them
pursuant hereto or thereto.
c. Any claims by or liabilities to any of the Seller's or the
Partnership's present or former employees on account of all sums due to
such employees or otherwise arising from acts or omissions allegedly
occurring on or before the Date of Closing,
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including, but not limited to, salaries, pension or profit sharing
benefits, wages, vacation and sick pay and other employee benefits accrued
as of the open of business on the Date of Closing as well as all severance
pay payable by any of Seller or the Partnership to any of their respective
present and former employees.
d. All claims, demands, liabilities, debts and/or Encumbrances,
except Permitted Encumbrances, which may be asserted by any creditors of
Seller, Licensee or Shareholder, except to the extent that Purchaser has
assumed such liabilities under the provisions of Section 3.2 of this
Agreement and all claims, demands, liabilities, debts and/or encumbrances
which may be asserted by any creditors of the Partnership, and except to
the extent reflected on the Partnership Closing Schedules.
e. All claims, demands, liabilities, debts and/or Encumbrances,
except Permitted Encumbrances, that may be asserted against Purchaser, the
Partnership, any of the RSA 2 Assets or any of the Assets at any time or
from time to time resulting from or arising out of the ownership, use,
maintenance or operation of the Assets, the RSA 2 Assets, or Business with
respect to any period of time prior to the Closing (excluding only any
liability assumed by Purchaser under the provisions of Section 3.2 of this
Agreement or reflected on the Partnership Closing Schedule).
f. All other liabilities of or claims against Seller, Licensee or
Shareholder of any kind, to the extent not specifically assumed by the
Purchaser under the provisions of Section 3.2 of this Agreement or
identified on a Schedule hereto resulting from or arising out of the
ownership, use, maintenance or operation of the Assets, the RSA 2 Assets,
or Business with respect to any period of time prior to the Closing.
g. Breach by Seller of the warranty and representations set forth in
Section 5.16(k). The foregoing indemnification includes, without
limitation, indemnification against all costs, pursuant to the order,
direction or request of a Governmental Authority or otherwise, of removal,
remediation of any kind, and disposal of Hazardous Substances, all costs
associated with claims for damages to persons, property, or natural
resources, and the Purchaser's reasonable attorneys' and consultants' fees,
court costs and expenses incurred in connection with any thereof.
Notwithstanding anything in this Section 11.1(g) to the contrary, this
indemnification shall not apply to any Losses incurred by the Purchaser as
a direct result of affirmative actions of the Purchaser as owner or
operator of the Real Estate after the Purchaser has acquired title to or a
leasehold interest in the Real Estate on the Date of Closing if such
affirmative actions of the Purchaser cause the introduction and initial
release of a Hazardous Substance in, about, under or near the Real Estate.
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h. Any reduction in the Purchase Price or Alternate Purchase Price,
as the case may be, provided for under Section 2.4 hereof.
i. The indemnification provided for in this Section 11.1 shall
remain in full force and effect until the date two years after the Date of
Closing.
11.2 INDEMNIFICATION BY PURCHASER. Purchaser (including its successors and
assigns) covenants and agrees to pay and perform and indemnify and hold Seller,
Licensee and Shareholder, their officers, directors, employees, affiliates,
shareholders and agents, and each of their respective heirs, personal
representatives, successors and assigns, harmless from, against and in respect
of any and all Losses that any of them may at any time, directly or indirectly,
suffer, sustain, incur or become subject to, arising out of, based upon or
resulting from or on account of or relating to each and all of the following:
a. The breach or falsity (or in the case of any covenant,
nonperformance) of any representation, warranty, covenant or agreement made
by Purchaser in this Agreement, including the documents, instruments and
agreements to be executed and/or delivered by Purchaser pursuant hereto and
thereto.
b. The use or ownership of the Assets or the operation of the
Business by Purchaser after the Closing, including any claims by or
liabilities to any of the Purchaser's employees arising from acts allegedly
occurring after the Date of Closing, except to the extent such claims or
liabilities arise from or relate to acts or omissions of Seller, Licensee,
Shareholder or Partnership allegedly occurring on or before the Date of
Closing.
c. The failure of Purchaser to pay or perform the debts, liabilities
and obligations it agreed to assume pursuant to Section 3.2 hereof.
d. The existence, use, handling, storage, transportation,
manufacture, release, discharge, spillage, leakage, pumping, pouring,
emitting, dumping or disposal of any Hazardous Substance in, about, under
or near any parcel of Real Estate, to the extent caused by the Purchaser a
direct result of affirmative actions of the Purchaser as owner or operator
of the Real Estate after the Purchaser has acquired title to or a leasehold
interest in the Real Estate on the Date of Closing. The foregoing
indemnification includes, without limitation, indemnification against all
costs, pursuant to the order, direction or request of a Governmental
Authority or otherwise, of removal, remediation of any kind, and disposal
of Hazardous Substances, all costs associated with claims for damages to
persons, property, or natural resources, and the Seller's reasonable
attorneys' and consultants' fees, court costs and expenses incurred in
connection with any thereof.
11.3 PROCEDURE FOR INDEMNIFICATION. In the event a party intends to seek
indemnification pursuant to the provisions of Sections 11.1 or 11.2 hereof (the
"INDEMNIFIED
52
PARTY"), the Indemnified Party shall promptly give notice hereunder to the other
party (the "INDEMNIFYING PARTY") after obtaining written notice of any claim or
the service of a summons or other initial legal process in any action instituted
against the Indemnified Party as to which recovery may be sought against the
Indemnifying Party because of the indemnification provided for in Section 11.1
or 11.2 hereof, and, if such indemnity shall arise from the claim of a third
party, the Indemnified Party shall permit the Indemnifying Party to assume the
defense of any such claim and any litigation resulting from such claim;
PROVIDED, HOWEVER, that the Indemnified Party shall not be required to permit
such an assumption of the defense of any claim or litigation which, if not first
paid, discharged or otherwise complied with, would result in an interruption or
disruption of the business of the Indemnified Party or any material part
thereof. Notwithstanding the foregoing, the right to indemnification hereunder
shall not be affected by any failure of the Indemnified Party to give such
notice (or by delay by the Indemnified Party in giving such notice) unless, and
then only to the extent that, the rights and remedies of the Indemnifying Party
shall have been prejudiced as a result of the failure to give, or delay in
giving, such notice. Failure by the Indemnifying Party to notify the
Indemnified Party of its election to defend any such claim or action by a third
party within ten (10) days after notice thereof shall have been given to the
Indemnifying Party shall be deemed a waiver by the Indemnifying Party of its
right to defend such claim or action.
If the Indemnifying Party assumes the defense of such claim or litigation
resulting therefrom, the obligations of the Indemnifying Party hereunder as to
such claim or litigation shall include taking all steps necessary in the defense
or settlement of such claim or litigation and holding the Indemnified Party
harmless from and against any and all damages caused by or arising out of any
settlement approved by the Indemnifying Party or any judgment entered in
connection with such claim or litigation. The Indemnifying Party shall not, in
the defense of such claim or any litigation resulting therefrom, consent to
entry of any judgment (other than a judgment of dismissal on the merits without
costs) except with the written consent of the Indemnified Party or enter into
any settlement (except with the written consent of the Indemnified Party) which
does not include as an unconditional term thereof the giving by the claimant or
the plaintiff to the Indemnified Party a release from all liability in respect
to such claim or litigation.
If the Indemnifying Party does not assume the defense of any such claim by
a third party or litigation resulting therefrom after receipt of notice from the
Indemnified Party, the Indemnified Party may defend against such claim or
litigation in such manner as it deems appropriate, and unless the Indemnifying
Party shall deposit with the Indemnified Party a sum equivalent to the total
amount demanded in such claim or litigation plus the Indemnified Party's
estimate of the cost (including attorneys' fees) of defending the same, the
Indemnified Party may
53
settle such claim or litigation on such terms as it may deem appropriate and the
Indemnifying Party shall promptly reimburse the Indemnified Party for the amount
of such settlement and for all costs (including attorneys' fees), expenses and
damages incurred by the Indemnified Party in connection with the defense against
or settlement of such claim or litigation, or if any such claim or litigation is
not so settled, the Indemnifying Party shall promptly reimburse the Indemnified
Party for the amount of any judgment rendered with respect to any claim by a
third party in such litigation and for all costs (including attorneys' fees),
expenses and damage incurred by the Indemnified Party in connection with the
defense against such claim or litigation, whether or not resulting from, arising
out of, or incurred with respect to, the act of a third party.
11.4 LIMITATIONS. Notwithstanding any provision of this ARTICLE 11 to the
contrary, Seller, Licensee, Shareholder and their respective successors and
assigns shall not be required to indemnify the Purchaser Indemnified Parties
pursuant to the provisions of Section 11.1(a) hereof unless and until the
aggregate of all such claims exceeds the sum of $100,000 (the "THRESHOLD
AMOUNT"). Once such cumulative Losses equal or exceed the Threshold Amount,
Seller, Licensee and Shareholder and their respective successors and assigns
shall be required to provide indemnification pursuant to Section 11.1(a) for all
such Losses. Notwithstanding the foregoing provisions of this Section 11.4 to
the contrary, losses arising out of the breach or falsity of the representations
or warranties contained in Section 5.8 of this Agreement shall not be subject to
the foregoing provisions of this Section 11.4. Notwithstanding any provision in
this Agreement to the contrary, (i) indemnification pursuant to this Section 11
shall be the exclusive monetary remedy for all Losses that any of the Purchaser
Indemnified parties may at any time, directly or indirectly, suffer, sustain,
incur or become subject to, arising out of, based upon or resulting from or on
account of each and all of the items set forth in Section 11.1(a)-(i),
inclusive, and (ii) in no event will the indemnification obligations of Seller,
Licensee and Shareholder and their respective successors and assigns under
ARTICLE 11 hereof exceed in the aggregate the sum of Five Million Four Hundred
Fourteen Thousand Nine Hundred and no/100 Dollars ($5,414,900.00).
11.5 ARBITRATION.
a. All claims, disputes or other matters in question between the
parties to this Agreement, including for matters arising under Section 2.4
hereof, arising out of or relating to this Agreement shall be submitted
for, subject to and decided by arbitration in accordance with the
Commercial Arbitration Rules of the American Arbitration Association
currently in effect as of the date of this Agreement ("AAA Rules"), except
to the extent those rules are inconsistent with this Section 11.5. Any
arbitration must be held in Chicago, Illinois by a single arbitrator
mutually selected by the parties hereto or, if the parties hereto cannot
agree on the appointment of such arbitrator within ten (10)
54
days following the date notice of the dispute is given by Purchaser or one
of the Seller, Licensee or Shareholder to the adverse party, an arbitrator
selected according to the AAA Rules.
The arbitrator's award shall be final, conclusive and binding upon all
parties to this Agreement, and judgment may be entered upon it in
accordance with the Federal Arbitration Act any court of general
jurisdiction in Chicago, Illinois, or in any United States District Court
having jurisdiction in Chicago, Illinois. The arbitrator shall be required
to provide in writing to the parties the basis for the award or order of
such arbitrator, and a court reporter shall record all hearings (unless
otherwise agreed to by the parties), with such record constituting the
official transcript of such proceedings. Each of Seller, Licensee,
Shareholder and the Purchaser specifically desires this Arbitration clause
to be governed by the United States Federal Arbitration Act, and not by the
Arbitration Code of any state.
b. Each of Seller, Licensee, Shareholder and the Purchaser agrees
and consents that any legal action, suit or proceeding seeking to enforce
this Section 11.5 or to confirm or contest any arbitration award shall be
instituted and adjudicated solely and exclusively in any court of general
jurisdiction in Chicago, Illinois, or in the United States District Court
having jurisdiction in Chicago, Illinois, and each of Seller, Licensee,
Shareholder and the Purchaser agrees that venue will be proper in such
courts and waives any objection which they may have now or hereafter to the
venue of any such suit, action or proceeding in such courts, and
irrevocably consents and agrees to the jurisdiction of said courts in any
such suit, action or proceeding. Each of Seller, Licensee, Shareholder and
the Purchaser further agrees to accept and acknowledge service of any and
all process which may be served in any such suit, action or proceeding in
said courts, and also agrees that service of process or notice upon them
shall be deemed in every respect effective service of process or notice
upon them, in any suit, action, proceeding or arbitration demand, if given
or made: (i) according to applicable law; (ii) according to the AAA Rules;
(iii) by a person over the age of eighteen who personally serves such
notice or service of process on any of Seller, Licensee, Shareholder or
Purchaser, as the case may be; or (iv) by certified mail, return receipt
requested, mailed to any of Seller, Licensee, Shareholder or Purchaser, as
the case may be, at their respective addresses set forth in this Agreement.
c. In the event of arbitration filed or instituted between the
parties pursuant to this Section 11.5, the prevailing party will be
entitled to receive from the adverse party all costs, damages and expenses,
including reasonable attorney's fees, incurred by the prevailing party in
connection with that action or proceeding whether or not the
55
controversy is reduced to judgment or award. The prevailing party will be
that party who is determined by the arbitrator to have prevailed on the
major disputed issues.
ARTICLE 12: CLOSING
12.1 DATE OF CLOSING. Subject to the satisfaction or waiver of the
conditions precedent contained in ARTICLES 8, 9 and 10 hereof, the closing of
the transactions contemplated by this Agreement (the "CLOSING") shall be held at
9:00 a.m., on the last day of the month which is at least ten (10) days after
the receipt of the last required consent, at the offices Xxxx & Xxxxxxx in
Minneapolis, Minnesota, or at such other day, time and place as may be mutually
agreed upon in writing by Purchaser and Seller and shall be as of the opening of
business on such day. Such date is referred to in this Agreement as the "DATE
OF CLOSING."
12.2 DOCUMENTS TO BE DELIVERED BY SELLER, LICENSEE AND SHAREHOLDER. At the
Closing, Seller, Licensee and Shareholder shall execute, where necessary or
appropriate, and deliver to Purchaser each and all of the following:
a. A certificate in the form of EXHIBIT E hereto signed by duly
authorized officers of each of Seller, Licensee and Shareholder, and dated
as of the Date of Closing, to the effect that the representations and
warranties made by Seller, Licensee and Shareholder in this Agreement are
true and correct in all material respects at and as of the Closing with the
same force and effect as though such representations and warranties had
been made on or given at and as of the Closing and that Seller, Licensee
and Shareholder have each performed and complied with all of its/their
covenants, agreements and obligations under this Agreement which are to be
performed and complied with by them at or prior to the Closing;
b. A copy certified by the Secretary of each of Seller, Licensee and
Shareholder of the duly adopted resolutions of each of Seller's, Licensee's
and Shareholder's Boards of Directors and Shareholder approving this
Agreement and authorizing the execution and delivery of this Agreement,
including the documents, instruments and agreements to be executed and/or
delivered by any of Seller, Licensee and Shareholder pursuant to this
Agreement, and the consummation of the transactions contemplated hereby and
thereby;
c. A Xxxx of Sale to all of the Assets in the form of EXHIBIT F
hereto duly executed by Seller and Licensee;
d. Duly executed assignments by Seller and Licensee to Purchaser
with respect to the Licenses, Proprietary Rights, Software and (except as
otherwise
56
contemplated by Section 2.1 hereof) Partnership Interest in a form
reasonably satisfactory to counsel for Purchaser and in compliance with all
Applicable Laws;
e. Releases, satisfactions, or terminations of all mortgages,
financing statements or other evidences of Encumbrances, other than
Permitted Encumbrances, filed with the Maine Secretary of State, any county
recorder and/or any other similar office in the State of Maine evidencing
an Encumbrance on any of the Assets;
f. A duly executed Quit Claim Deed with Covenant with respect to
each parcel of Seller Owned Real Estate and assignments of all leases for
Seller Leased Real Estate and, if necessary for the Partnership Leased Real
Estate, together with any necessary consents therefore, in recordable form
in substantially the form of EXHIBIT O hereto for each parcel of Seller
Leased Real Estate, together with any necessary consents;
g. Policies of title insurance for each parcel of Owned/Leased Real
Estate or appropriate commitments for title insurance, in the form required
by Section 9.10 hereof;
h. Any document or certificate that the title insurance company may
reasonably require to issue the title insurance policies on the
Owned/Leased Real Estate in the form required by Section 9.10 hereof;
i. Evidence of compliance with applicable zoning laws for the
improvements located on each parcel of Owned/Leased Real Estate, which may
consist for each parcel of (i) a zoning letter from the applicable zoning
authority in the form of Exhibit P; or (ii) at Seller's expense, a zoning
endorsement to the title policy for the parcel of Owned/Leased Real Estate
which includes coverage for regulation by the Land Use Regulatory
Commission; or (iii) at Seller's expense, an opinion of counsel reasonably
acceptable to Purchaser from Xxxxxx & Xxxxxxxx or other counsel reasonably
acceptable to Purchaser to the effect that the parcel of Owned/Leased Real
Estate complies with applicable zoning laws. "Compliance with applicable
zoning laws" as used herein refers to compliance with applicable statutes
of the State of Maine, regulations (if applicable) of the Land Use
Regulatory Commission and applicable municipal ordinances.
j. An affidavit signed by Seller in the form of EXHIBIT G hereto
complying with Section 1445 of the Code;
k. Unless the failure to do so would not create a Material Adverse
Effect, Seller shall furnish Purchaser with estoppel letters dated within a
reasonable number of calendar days of the Date of Closing with respect to
all of the Operating Contracts listed on SCHEDULE 1.1(g) hereto, all of the
RSA 2 Contracts listed on SCHEDULE 5.15, hereto, and all Leased Real
Estate, which shall be signed by each party thereto other than Seller,
Licensee, Shareholder and/or the Partnership and which shall state that
there are no defaults in and that there have been no modifications of any
such Operating Contract,
57
RSA 2 Contract or such leases for the Leased Real Estate, and that each is
each still in full force and effect;
l. All consents, releases, assignments and permissions of any kind
or nature, whether from a Governmental Authority or otherwise, which
reasonably may be required to effectively sell, assign and transfer the
Assets to Purchaser, all in a form reasonably satisfactory to counsel for
Purchaser;
m. The Agreement Not To Compete within the State of Maine duly
executed by Seller, Licensee, Shareholder and Xxxxxxx X. X'Xxxxxx, and each
entity controlled by Shareholder, in the forms attached hereto as EXHIBIT H
and EXHIBIT H-1;
n. Certificates of title and assignments thereof for all Vehicles;
o. The duly executed Assumption Agreement;
p. Any disclosure statement required for the transfer of any parcel
of Real Estate which complies with the requirements of applicable
Governmental Authorities;
q. An estoppel letter from Cellco dated within fifteen (15) calendar
days of Closing which states that Unity has complied with all requirements
of Article 6.0 of the Partnership Agreement for the Partnership and that
Unity is in compliance with the Partnership Agreement;
r. Such other documents as are reasonably necessary or appropriate
to effect the consummation of the transactions contemplated hereby and
which are customary under local law;
s. A duly executed written opinion letter by Nelson, Mullins, Xxxxx
& Xxxxxxxxxxx, L.L.P., counsel for Seller, Licensee and Shareholder, dated
as of the Date of Closing, addressed to Purchaser, reasonably satisfactory
in form and substance to counsel for Purchaser, addressing the matters set
forth on EXHIBIT I;
t. A duly executed written opinion letter of FCC counsel of Seller,
Licensee and Shareholder, dated as of the Date of Closing, addressed to
Purchaser, reasonably satisfactory in form and substance to counsel for
Purchaser, addressing the matters set forth on EXHIBIT J hereto;
u. The Post Closing Escrow Agreement duly executed by Seller,
Licensee and Shareholder;
v. A duly executed written opinion letter of Seller's state
regulatory counsel in Maine, addressed to the Purchaser, reasonably
satisfactory in form and substance to counsel for the Purchaser, addressing
the matters set forth on EXHIBIT K attached hereto;
w. If Shareholder is to provide Billing Service to Purchaser, a
billing services agreement in a mutually agreeable form, pursuant to
Section 13.4 below, to Purchaser and Shareholder duly executed by
Shareholder; and
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x. Copies of such documents in form and substance reasonably
acceptable to counsel for Purchaser admitting the Purchaser as the managing
general partner of the Partnership.
12.3 DOCUMENTS TO BE DELIVERED BY PURCHASER. At the closing, Purchaser
shall execute, where necessary or appropriate, and deliver to Seller, Licensee
and/or Shareholder, as appropriate, each and all of the following:
a. A wire transfer of immediately available funds to Seller's,
Licensee's and Shareholder's designated account(s) and to the Post Closing
Escrow Account in the total amount provided for in Section 2.3 hereof;
b. A certificate in the form of EXHIBIT L hereto signed by a duly
authorized officer of Purchaser, and dated as of the Date of Closing, to
the effect that the representations and warranties made by Purchaser in
this Agreement are true and correct in all material respects at and as of
the Closing with the same force and effect as though such representations
and warranties had been made on or given at and as of the Closing and the
Purchaser has performed and complied with all of its covenants, agreements
and obligations under this Agreement which are to be performed and complied
with by Purchaser at or prior to on the Closing;
c. A copy certified by the Secretary of Purchaser of the duly
adopted resolutions of the Board of Directors of Purchaser approving this
Agreement and authorizing the execution and delivery of this Agreement,
including the documents, instruments and agreements to be executed and/or
delivered by the Purchaser pursuant hereto, and the consummation of the
transactions contemplated hereby and thereby;
d. The Assumption Agreement hereto duly executed by Purchaser;
e. A duly executed written opinion letter by Xxxx & Xxxxxxx, a
Professional Association, counsel for Purchaser, dated as of the Date of
Closing, addressed to Seller, Licensee and Shareholder, reasonably
satisfactory in form and substance to counsel for Seller, Licensee and
Shareholder addressing the matters set forth in EXHIBIT M hereto;
f. The Post Closing Escrow Agreement duly executed by Purchaser;
g. A duly executed written opinion of FCC counsel of Purchaser,
dated as of Closing, addressed to Seller, Licensee and Shareholder,
reasonably satisfactory in form and substance to counsel for Seller,
Licensee and Shareholder addressing the matters set forth in EXHIBIT N
hereto.
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ARTICLE 13: PERFORMANCE FOLLOWING THE DATE OF CLOSING
The following covenants and agreements are to be performed after the
Closing by the parties and shall continue in effect for the periods respectively
indicated or, where no indication is made, until performed:
13.1 COLLECTION OF RECEIVABLES. After the Closing, Purchaser shall be
empowered to collect all Receivables and other items transferred to Purchaser
hereunder and to endorse with the name of Seller any checks or other instrument
received on account of any such Receivables or other items. Seller, Licensee
and Shareholder agree to promptly transfer to Purchaser any cash, checks or
other property that they may receive in respect of the Receivables. At the
written request of Purchaser, Seller, Licensee and Shareholder will cooperate,
and will use commercially reasonable efforts to have the officers, directors,
and other employees of Seller and Shareholder cooperate, with Purchaser on and
after the Date of Closing in endeavoring to effect the collection of all
Receivables and with respect to other actions, proceedings, arrangements or
disputes involving Seller, Licensee or Shareholder or Purchaser based upon
contracts, arrangements or acts of Seller, Licensee or Shareholder which were in
effect or occurred on or prior to the Date of Closing. To the extent Seller,
Licensee or Shareholder makes a payment to Purchaser in satisfaction of a claim
pursuant to ARTICLE 11 or 2.3(a)(iv) for breach of the representation and
warranty in Section 5.17 above, and in the event Purchaser receives payment on
or before a date two years after the Date of Closing of any of the Receivables
which constituted the basis for such claim, Purchaser shall pay an amount equal
to such payments to Seller.
13.2 FURTHER ACTS AND ASSURANCES. Purchaser, Unity, Licensee and
Shareholder each agrees that its officers will, at any time and from time to
time, on and after the Date of Closing, upon the reasonable request of the other
party, do all such further acts and things and execute, acknowledge and deliver,
or cause to be executed, acknowledged and delivered to Purchaser any and all
papers, documents, instruments, agreements, deeds, assignments, transfers,
assurances and conveyances as may be necessary or desirable to vest, perfect and
confirm of record in Purchaser, its successors and assigns, the title to any of
the Assets or otherwise to carry out and give effect to the provisions and
intent of this Agreement. In addition, from and after the Date of Closing,
Purchaser, Unity, Licensee and Shareholder will each afford to the other party
and its attorneys, accountants and other representatives access, during normal
business hours, to such personnel, books and records relating to the Assets and
the Business as may reasonably be required in connection with the preparation of
financial information or the filing of tax returns and will cooperate in all
reasonable respects with the other party in connection with claims and
litigation asserted by or against third parties, relating to the transactions
contemplated hereby. In the event Seller, Licensee or Shareholder is unable to
provide documentation, instruments or
60
agreements specified in Section 12.2 hereof prior to the Date of Closing and the
parties close the transaction contemplated by this Agreement, Seller, Licensee
or Shareholder, as appropriate, shall provide such documentation, instruments or
agreements to Purchaser as promptly as is practicable, but in any event, within
two years of the Date of Closing.
13.3 CHANGE OF NAME. Seller will provide Purchaser with such consents and
shall perform such other acts (including changing Seller's names and assumed
names) as may be necessary to give the Purchaser the exclusive right to use the
name "Unicel" in the jurisdictions in which Seller or the Partnership heretofore
has done business. From and after the Date of Closing the Seller, Licensee and
Shareholder agree that they will not use such name for any purpose whatsoever.
13.4 BILLING SERVICES PROVIDED BY SHAREHOLDER. It is the parties intention
to convert the billing operations currently provided by Shareholder to Seller
related to the Business to the billing services platform to be chosen by the
Purchaser. The Shareholder, Seller and Purchaser agree to provide each other
with all reasonable cooperation to effect such conversion as of the Date of
Closing. In the event that a full conversion of such billing services cannot be
completed as of the Date of Closing, Shareholder agrees to continue to provide
the level of billing services currently being provided to Seller [at $______ per
customer per month] [at cost as incurred by Seller in providing such services]
for a period of up to ninety (90) days from the Date of Closing.
13.5 PRESERVATION OF AND ACCESS TO RECORDS. All books and records of
Seller, Licensee and Shareholder conveyed to Purchaser hereunder shall be
preserved by Purchaser for a period of six (6) years after the Date of Closing;
provided, however, Purchaser may destroy any part or parts of such records upon
obtaining written consent of Shareholder for such destruction, which consent
shall not be unreasonably withheld. Such records shall be made available to
Seller, Licensee and Shareholder and their representatives at all reasonable
times during normal business hours of Purchaser during said six-year period with
the right at their expense to make abstracts from and copies thereof. Purchaser
may return such records to Seller, Licensee and Shareholder at any time and
Purchaser's obligation to preserve or make available such records shall
thereupon terminate.
ARTICLE 14: TERMINATION.
14.1 TERMINATION. This Agreement may be terminated and the transactions
contemplated herein may be abandoned after the date of this Agreement, but not
later than the Closing:
a. By mutual written consent of all parties hereto;
61
b. By Purchaser or jointly by Seller, Licensee and Shareholder if
(i) any of the conditions provided for in ARTICLE 8 of this Agreement have
not been met and have not been waived in writing by the party seeking to
terminate on or before the Date of Closing; or (ii) the FCC has denied or
has not approved the application described in Section 8.1 herein by
July 31, 1996;
c. By Purchaser if any of the conditions provided for in ARTICLE 9
of this Agreement have not been met and have not been waived in writing by
Purchaser on or before the Date of Closing;
d. Jointly by Seller, Licensee and Shareholder if any of the
conditions provided for in ARTICLE 10 of this Agreement have not been met
and have not been waived in writing by Seller, Licensee and Shareholder on
or before the Date of Closing;
e. By Purchaser pursuant to Sections 4.1(b) and/or 7.16 hereof; and
f. By either Seller or Purchaser if the Closing has not occurred for
any reason, on or before September 30, 1996.
In the event of termination or abandonment by any party as provided in this
Section 14.1, written notice shall forthwith be given to the other party and
each party shall pay its own expenses incident to preparation for consummation
of this Agreement and the transactions contemplated hereunder and neither party
shall have any obligation or liability to the other hereunder except such
liability as may arise as a result of a breach hereof.
14.2 CURE BY SELLER, LICENSEE OR SHAREHOLDER. Notwithstanding the
foregoing, if Purchaser claims the right to terminate or abandon this Agreement
pursuant to clause (b), (c) or (e) of Section 14.1, then Purchaser must provide
Seller with written notice of its intention to terminate or abandon the
Agreement, which notice shall identify the condition or event giving rise to
Purchaser's right to terminate or abandon the Agreement and shall include the
dollar amount attributed to the Balance Sheet and prospective Income Statement
impacts such condition or event. Seller will have ten (10) business days from
receipt of such notice to deliver to Purchaser a notice that Seller, Licensee
and Shareholder have elected to do one of the following: (i) delay the Closing
for up to 30 days during which Seller, Licensee and Shareholder attempt to cure
such condition or event; or (ii) proceed to closing and, pursuant to an escrow
agreement satisfactory to the parties, escrow the dollar amount identified in
Purchaser's election notice pending the resolution of such condition or event.
In the event that Seller shall fail to deliver to Purchaser an election notice,
or if the parties cannot agree upon a mutually satisfactory escrow agreement,
this Agreement shall terminate in accordance with the provisions of this
Section 14.2.
The limitations set forth in Section 11.4 shall not apply to any matters
addressed in an escrow agreement entered into pursuant to the preceding
paragraph. Seller, Licensee and
62
Shareholder agree that by proceeding to Closing, Purchaser shall not be deemed
to have waived any rights or remedies available to it under this Agreement, with
respect to any matter known to it prior to the Closing.
The provisions of this Section 14.2 shall not apply to termination pursuant
to Sections 9.6, 14.1(b)(ii) or 14.1(f).
14.3 RETURN OF DOCUMENTS AND NONDISCLOSURE. If this Agreement is
terminated for any reason pursuant to Section 14.2 hereto, each party shall
return all documents and materials which shall have been furnished by or on
behalf of the other party, and each party hereby covenants that it will not
disclose to any person or entity any confidential or proprietary information
about the other party or any information about the transactions contemplated
hereby, except insofar as may be necessary to assert its rights hereunder.
ARTICLE 15: MISCELLANEOUS
15.1 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS. Each of the
representations, warranties, covenants, agreements and indemnities of the
parties contained in this Agreement and in any Exhibit, Schedule, certificate,
instrument or document delivered by or on behalf of any of the parties hereto
pursuant to this Agreement and the transactions contemplated hereby shall
survive the Closing of the transactions contemplated hereby and any
investigation made by the parties or their agents either prior to or after the
date hereof for a period ending two years after the Date of Closing, after which
no claim for an incorrect statement or representation, or for the breach of any
warranty, covenant, agreement or indemnity under this Agreement may be brought,
and no litigation with respect thereto may be commenced, and no party shall have
any liability or obligation with respect thereto, unless the indemnified party
gave written notice to the indemnifying party specifying with particularity the
incorrect statement or representation or breach of warranty, covenant, agreement
or indemnity claimed on or before the expiration of such period.
15.2 BROKERS. Purchaser hereby represents and warrants to Seller, Licensee
and Shareholder that it has retained The Xxxxxxxx-Xxxxxxxx Company, Inc. (the
"BROKER") to assist it in purchasing the Assets and the Business and that the
Broker is entitled to a commission as a result of the consummation of the
transactions contemplated hereby. Purchaser agrees that it shall pay and hold
Seller, Licensee and Shareholder, their officers, directors, shareholders and
affiliates harmless from any and all fees, commissions and other sums which may
be due to the Broker or any other broker, investment advisor, finder or similar
consultant for the services provided for or on behalf of the Purchaser.
63
15.3 COOPERATION. The parties hereto shall cooperate with each other in
all respects, including using their commercially reasonable efforts to assist
each other in satisfying the conditions precedent to their respective
obligations under this Agreement, to the end that the transactions contemplated
hereby will be consummated. Without limiting the generality of the foregoing,
the Shareholder will vote all of its Stock in Unity and Licensee in favor of the
consummation of the transactions contemplated hereby.
15.4 PUBLIC ANNOUNCEMENTS. The timing and content of all public
announcements relating to the execution of this Agreement and the consummation
of the transactions contemplated hereby shall be approved by both Purchaser and
Shareholder prior to the release of such public announcements, and each party
agrees to cooperate with the other party as appropriate to comply with all
Applicable Laws. Subsequent to the Date of Closing, Purchaser may make such
announcements and/or advertisements as Purchaser, in its sole discretion, deems
necessary to all customers and/or potential customers and suppliers of the
Business.
15.5 SALES, USE AND DEED TAXES. Seller, Licensee and Shareholder jointly
and severally agree to pay in full any and all federal, state, local and foreign
sales taxes, use taxes, deed taxes, mortgage registrations, personal property
taxes or other similar taxes (including any interest or penalty thereon) as and
when the same may be due, which may be imposed upon or arise out of the sale of
the Assets by the Seller, Licensee or Shareholder to the Purchaser or the
consummation of the transactions contemplated hereby. Purchaser and Seller each
shall pay one-half of the real estate transfer taxes arising on consummation of
the transactions contemplated hereunder.
[15.6 INTENTIONALLY OMITTED.
15.7 NOTICES. All notices, demands and other communications provided for
hereunder shall be in writing and shall be given by personal delivery, via
facsimile transmission (receipt telephonically confirmed), by nationally
recognized overnight courier (prepaid), or by certified or registered first
class mail, postage prepaid, return receipt requested, sent to each party, at
its/his address as set forth below or at such other address or in such other
manner as may be designated by such party in written notice to each of the other
parties. All such notices, demands and communications shall be effective when
personally delivered, one (1) business day after delivery to the overnight
courier, upon telephone confirmation of facsimile transmission or upon receipt
after dispatch by mail to the party to whom the same is so given or made:
If to Seller, Licensee or: InterCel, Inc.
Shareholder 0000 X.X. Xxxxxxx Xxxxx
Xxxx Xxxxx, Xxxxxxx 00000
Attn: Xxxxx Xxxxx and Xxxx Xxxxxx
64
With a copy to: Nelson, Mullins, Xxxxx & Scarborough, L.L.P.
000 Xxxxxx Xxxxxx, Xxxxx 0000
0000 Xxxxxxxxx Xxxxxx Xxxxxxxxx
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxx Xxxxx, Esq.
If to Purchaser: Rural Cellular Corporation
X.X. Xxx 0000
Xxxxxxxxxx, Xxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxxx, President
With a copy to: Xxxx & Xxxxxxx, A Professional Association
0000 Xxxxxxx Xxxxxx
00 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attn: Xxx X. Xxxxxxx, Esq.
15.8 ENTIRE AGREEMENT. This Agreement, including the documents,
instruments, and agreements to be executed by the parties pursuant hereto,
contains the entire agreement of the parties hereto and supersedes all prior or
contemporaneous agreements and understandings, oral or written, between the
parties hereto with respect to the subject matter hereof, except for the
Nondisclosure Agreement.
15.9 REMEDIES CUMULATIVE. Remedies herein provided are cumulative and not
exclusive of any other remedies provided by law.
15.10 SPECIFIC PERFORMANCE. Seller, Licensee and Shareholder
acknowledge and agree that the Assets are unique and that Purchaser will have no
adequate remedy at law if Seller, Licensee and Shareholder shall fail to perform
any of its/their obligations hereunder. In such event, Purchaser shall have the
right, in addition to any other rights it may have, to specific performance of
this Agreement.
15.11 AMENDMENTS. No purported amendment, modification or waiver of
any provision of this Agreement or any of the documents, instruments or
agreements to be executed by the parties pursuant hereto shall be effective
unless in a writing specifically referring to this Agreement and signed by all
of the parties.
15.12 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns, but except as hereinafter provided in this Section, nothing
in this Agreement is to be construed as an authorization or right of any party
to assign its rights or delegate its duties under this Agreement without the
prior written consent of the other parties hereto. In its sole discretion,
Purchaser may assign its rights in and/or delegate its duties under this
Agreement to one or more wholly-owned subsidiaries (an "AFFILIATE" or
"AFFILIATES"); provided, that Purchaser shall remain responsible to
65
diligently pursue financing in accord with Section 9.6 hereof. No such
assignment and/or delegation shall relieve Purchaser of any of its duties or
obligations hereunder. In the event of such an assignment of rights and/or
delegation of duties, all references to the Purchaser in this Agreement shall
also be deemed to be references to the Affiliate to which this Agreement is
assigned.
15.13 COSTS. Except as otherwise provided herein, each party hereto
shall pay its own costs and expenses incurred in connection with negotiating and
preparing this Agreement and consummating the transactions contemplated hereby,
including but not limited to fees and disbursements of their attorneys and
accountants. None of Seller's obligations for payment of such costs and
expenses shall be considered as current liabilities for the purpose of
Section 2.4 above.
15.14 GOVERNING LAW. This Agreement, including the conveyancing and
transfer documents, instruments and agreements to be executed and/or delivered
by the parties pursuant hereto, shall be construed, governed by and enforced in
accordance with the laws of the State of Delaware, without giving effect to the
principals of conflicts of laws thereof, except for real estate conveyancing and
transfer issues, which shall be governed by the State of Maine.
15.15 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same Agreement.
15.16 HEADINGS. The headings of the articles, sections and subsections
of this Agreement are intended for the convenience of the parties only and shall
in no way be held to explain, modify, construe, limit, amplify or aid in the
interpretation of the provisions hereof. The terms "this Agreement," "hereof,"
"herein," "hereunder," "hereto" and similar expressions refer to this Agreement
as a whole and not to any particular article, section, subsection or other
portion hereof and include the Schedules and Exhibits hereto and any document,
instrument or agreement executed and/or delivered by the parties pursuant
hereto.
15.17 SCOPE OF AGREEMENT. Unless the context otherwise requires, all
references in this Agreement or in any Schedule or Exhibit hereto, to the
assets, properties, operations, business, financial statements, employees, books
and records, accounts receivable, accounts payable, contracts, agreements or
other attributes of the business of Seller, Licensee, Shareholder and/or the
Partnership shall mean such items or attributes as they are used in, apply to,
or relate to Seller's, Licensee's, Shareholder's and the Partnership's Business.
15.18 NUMBER AND GENDER. Unless the context otherwise requires, words
importing the singular number shall include the plural and vice versa and words
importing the use of any gender shall include all genders.
66
15.19 KNOWLEDGE. Knowledge, as used in this Agreement and the
Schedules and Exhibits attached hereto, means actual knowledge of a fact or
constructive knowledge if a reasonably prudent person in a like position would
have known or should have known, the fact; provided that no party shall have any
greater duty to investigate or acquire knowledge because of the existence of
this Agreement than would apply if this Agreement had never been executed and
delivered, except that when such term is used to qualify the matter set forth on
the Schedules to this Agreement, Seller, Licensee and Shareholder must make such
investigation in preparing such Schedules as is reasonable under the
circumstances, giving due consideration to the size and nature of the
transaction contemplated herein. Seller shall be deemed to have knowledge of
matters known to its officers, directors and those of its employees listed on
Schedule 5.19 hereto or of matters which reasonably prudent persons in their
respective positions would have known.
15.20 SEVERABILITY. In the event that any provision of this Agreement
is declared or held by any court of competent jurisdiction to be invalid or
unenforceable, such provision shall be severable from, and such invalidity or
unenforceability shall not be construed to have any effect on, the remaining
provisions of this Agreement, unless such invalid or unenforceable provision
goes to the essence of this Agreement, in which case the entire Agreement may be
declared invalid and not binding upon any of the parties.
15.21 PARTIES IN INTEREST. Nothing expressed or implied in this
Agreement is intended or shall be construed to confer any rights or remedies
under or by reason of this Agreement upon any person or entity other than
Purchaser, Seller, Licensee and Shareholder or their respective successors and
permitted assigns. Nothing in this Agreement is intended to relieve or
discharge the obligations or liabilities of any third person or entity to
Purchaser or Seller, Licensee and Shareholder.
15.22 WAIVER. The terms, conditions, warranties, representations and
indemnities contained in this Agreement, including the documents, instruments
and agreements executed and/or delivered by the parties pursuant hereto, may be
waived only by a written instrument executed by the party waiving compliance.
Any such waiver shall only be effective in the specific instance and for the
specific purpose for which it was given and shall not be deemed a waiver of any
other provision hereof or of the same breach or default upon any recurrence
thereof. No failure on the part of a party hereto to exercise and no delay in
exercising any right hereunder shall operate as a waiver thereof nor shall any
single or partial exercise of any right hereunder preclude any other or further
exercise thereof or the exercise of any other right.
15.23 OTHER ACQUISITIONS BY PURCHASER. Purchaser agrees that until the
Closing shall have occurred or this Agreement shall have been terminated,
Purchaser shall not acquire, or permit any of its subsidiaries (or, to the
extent within Purchaser's control, any other person or entity affiliated with
the Purchaser) to acquire any attributable interest in any FCC license if such
67
acquisition, together with the other interests of Purchaser, its subsidiaries
and other affiliates, would make the consummation of this Agreement contrary to
the Communications Act or the rules, regulations or policies of the FCC.
15.24 CONSTRUCTION. The parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties and no presumption or burden of proof shall
arise favoring or disfavoring any party by virtue of the authorship of any of
the provisions of this Agreement. The word "including" shall mean including
without limitation. The parties intend that each representation, warranty and
covenant contained herein shall have independent significance. If any party has
breached any representation, warranty or covenant relating to the same subject
matter (regardless of the relative levels of specificity) which the party has
not breached shall not detract from or mitigate the fact that the party is in
breach of the first representation, warranty or covenant.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by duly authorized representations as of the day, month and year first
above written.
PURCHASER:
RURAL CELLULAR CORPORATION
By
--------------------------------------
Xxxxxxx X. Xxxxxxxx
Its President
UNITY:
UNITY CELLULAR SYSTEMS, INC.
By
--------------------------------------
--------------------------------------
Its
-----------------------------------
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SHAREHOLDER:
INTERCEL, INC.
By
--------------------------------------
--------------------------------------
Its
-----------------------------------
LICENSEE:
INTERCEL LICENSES, INC.
By
--------------------------------------
--------------------------------------
Its
-----------------------------------
69
LIST OF SCHEDULES AND EXHIBITS
Schedule 1.1(a) Description of Seller Real Estate
Schedule 1.1(b) List of Proprietary Rights
Schedule 1.1(c) List of Tangible Personal Property
Schedule 1.1(d) List of Vehicles
Schedule 1.1(e) List of Telephone Numbers, Etc.
Schedule 1.1(g) List of Material Operating Contracts
Schedule 1.1(h) List of Licenses, Certificates, Franchises, Permits,
Consents and Approvals
Schedule 1.1(i) Categories of Pre-Paid Expenses
Schedule 1.1(l) Categories and Aggregate Value of Inventory
Schedule 1.1(n) List of Computer Software
Schedule 1.1(o) List of Easements and Permits
Schedule 1.2(c) List of Excluded Assets
Schedule 1.3 List of Shareholder Assets, Properties, Contracts and
Rights
Schedule 1.4 List of Licensee Assets, Properties, Contracts and
Rights
Schedule 5.3 List of Required Filings, Permits, Consents, Approvals
and Notices
Schedule 5.4 List of Certain Encumbrances
Schedule 5.6 List of Pending and Threatened Litigation
Schedule 5.7 Description of Certain Labor Matters
Schedule 5.8 Description of Certain Tax Matters
Schedule 5.9 Description of Certain Employee Benefits
Schedule 5.11 List of Financial Statements and Certain Liabilities
Schedule 5.11(iii) List of Certain Financial Matters
Schedule 5.12 List of Certain Developments
Schedule 5.13 List of RSA 2 Proprietary Rights
Schedule 5.15 List of RSA 2 Contracts
Schedule 5.16(a) Description of Partnership Real Estate
Schedule 5.16(d) List of Permitted Encumbrances
Schedule 5.16(k) Description of Certain Real Estate Matters Affecting
Seller Real Estate and Partnership Real Estate
Schedule 5.19 List of Key Employees and Employment Agreements
Schedule 5.20 List of RSA 2 Licenses
Schedule 5.22 List of Other Material Contracts
Schedule 5.25 List of Subsidiaries
Schedule 5.27 Product Liability Claims
Schedule 5.28 List of Insurance
70
Schedule 5.30 CGSA Maps
Schedule 5.31 Network Diagram and Description
Schedule 5.32 System Information Updates
Schedule 5.33 List of Related Transactions
Schedule 5.34 List of Partnership Minutes
*Schedule 6.5 Exceptions to Purchaser's Qualifications
Schedule 6.5(a) Due Diligence Letters
Schedule 15.19 Key Employees
*Exhibit A Form of Assignment and Assumption Agreement
Exhibit B Form of Quit Claim Deed with Covenant
*Exhibit C Form of Certain Lease Terms
*Exhibit C-1 List of Leases
*Exhibit C-2 Rockland Lease Amendment
*Exhibit D Form of Post Closing Escrow Agreement
Exhibit E Form of Closing Certificates of Seller, Licensee and
Shareholder
*Exhibit F Form of Xxxx of Sale
Exhibit G Form of Seller's Section 1445 Affidavit
*Exhibit H Form of Agreement Not To Compete of Seller, Licensee
and Shareholder
*Exhibit H-1 Form of Agreement Not to Compete of Xxxxxxx X'Xxxxxx
Exhibit I Form of Opinion of Sellers' Corporate Counsel
Exhibit J Form of Opinion of Sellers' FCC Counsel
Exhibit K Form of Opinion of Sellers' State Regulatory Counsel
Exhibit L Form of Purchaser's Closing Certificate
Exhibit M Form of Opinion of Purchaser's Counsel
Exhibit N Form of Opinion of Purchaser's FCC Counsel
* Filed with this Report. Remaining schedules and exhibits have not been
filed, but the Registrant shall supplementally furnish any such omitted item
to the Commission upon request.
71
DIRECTORY OF CERTAIN DEFINED TERMS
TERM SECTION
Affiliate . . . . . . . . . . . . . . . . . . . . . . . . .15.12
Agreement . . . . . . . . . . . . . . . . . . . . . . . . .Preamble
Agreement Not to Compete. . . . . . . . . . . . . . . . . .2.1
Alternate Purchase Price. . . . . . . . . . . . . . . . . .2.1
Applicable Laws . . . . . . . . . . . . . . . . . . . . . .5.3
Article 6.0 . . . . . . . . . . . . . . . . . . . . . . . .8.3
Assets. . . . . . . . . . . . . . . . . . . . . . . . . . .1.5
Assumption Agreement. . . . . . . . . . . . . . . . . . . .3.2
Balance Sheet Date. . . . . . . . . . . . . . . . . . . . .5.11
Broker. . . . . . . . . . . . . . . . . . . . . . . . . . .15.2
Business. . . . . . . . . . . . . . . . . . . . . . . . . .Preamble
Cash Portion of the Purchase Price. . . . . . . . . . . . .2.3
CGSA. . . . . . . . . . . . . . . . . . . . . . . . . . . .5.30
Closing . . . . . . . . . . . . . . . . . . . . . . . . . .12.1
Closing Schedules . . . . . . . . . . . . . . . . . . . . .2.4(c)
COBRA Laws. . . . . . . . . . . . . . . . . . . . . . . . .7.19
Code. . . . . . . . . . . . . . . . . . . . . . . . . . . .2.2
Communications Act. . . . . . . . . . . . . . . . . . . . .6.5
Competing Business. . . . . . . . . . . . . . . . . . . . .5.34
Customer Contracts. . . . . . . . . . . . . . . . . . . . .1.1(g)
Date of Closing . . . . . . . . . . . . . . . . . . . . . .12.1
Deed. . . . . . . . . . . . . . . . . . . . . . . . . . . .5.16(d)
DOJ . . . . . . . . . . . . . . . . . . . . . . . . . . . .8.4
Easements . . . . . . . . . . . . . . . . . . . . . . . . .1.1(o)
Encumbrances. . . . . . . . . . . . . . . . . . . . . . . .5.4
Environmental Audit Firm. . . . . . . . . . . . . . . . . .7.16
Environmental Laws. . . . . . . . . . . . . . . . . . . . .5.16(i)
Escrow Agent. . . . . . . . . . . . . . . . . . . . . . . .2.3, 11.4(a)
72
Excluded Assets . . . . . . . . . . . . . . . . . . . . . .1.2
Family. . . . . . . . . . . . . . . . . . . . . . . . . . .5.34
FCC . . . . . . . . . . . . . . . . . . . . . . . . . . . .6.3
Final Order . . . . . . . . . . . . . . . . . . . . . . . .9.5
FTC . . . . . . . . . . . . . . . . . . . . . . . . . . . .8.4
Governmental Authority. . . . . . . . . . . . . . . . . . .5.3
Hazardous Substances. . . . . . . . . . . . . . . . . . . .5.16(i)
Hold Back Period. . . . . . . . . . . . . . . . . . . . . .2.3, 11.4(a)
HSR Act . . . . . . . . . . . . . . . . . . . . . . . . . .8.4
Indemnified Party . . . . . . . . . . . . . . . . . . . . .11.3
Indemnifying Party. . . . . . . . . . . . . . . . . . . . .11.3
Indemnity Fund. . . . . . . . . . . . . . . . . . . . . . .2.3
Intellectual Property . . . . . . . . . . . . . . . . . . .5.13
Inventory . . . . . . . . . . . . . . . . . . . . . . . . .1.1(l)
Licensee. . . . . . . . . . . . . . . . . . . . . . . . . .Preamble
Licenses. . . . . . . . . . . . . . . . . . . . . . . . . .1.1(h)
Losses. . . . . . . . . . . . . . . . . . . . . . . . . . .11.1
Majority Shareholder. . . . . . . . . . . . . . . . . . . .5.33
Material Adverse Effect . . . . . . . . . . . . . . . . . .5.1
Net Partnership Scheduled Assets. . . . . . . . . . . . . .2.4(c)
Net Pops. . . . . . . . . . . . . . . . . . . . . . . . . .5.32
Net Unity Scheduled Assets. . . . . . . . . . . . . . . . .2.4(c)
Network . . . . . . . . . . . . . . . . . . . . . . . . . .5.31
Nondisclosure Agreement . . . . . . . . . . . . . . . . . .7.1
Operating Contracts . . . . . . . . . . . . . . . . . . . .1.1(g)
Partnership Agreement . . . . . . . . . . . . . . . . . . .5.1; 5.34
Partnership Closing Schedule. . . . . . . . . . . . . . . .2.4(b)
Partnership Interest. . . . . . . . . . . . . . . . . . . .1.1(t)
Partnership Real Estate . . . . . . . . . . . . . . . . . .5.16(a)
Permitted Encumbrances. . . . . . . . . . . . . . . . . . .5.16(d)
Proprietary Rights. . . . . . . . . . . . . . . . . . . . .1.1(b)
Purchase Price. . . . . . . . . . . . . . . . . . . . . . .2.1
73
Purchaser . . . . . . . . . . . . . . . . . . . . . . . . .Preamble
Purchaser Indemnified Party . . . . . . . . . . . . . . . .11.1
Real Estate . . . . . . . . . . . . . . . . . . . . . . . .1.1(a), 5.16(a)
Receivables . . . . . . . . . . . . . . . . . . . . . . . .1.1(k)
Related Person. . . . . . . . . . . . . . . . . . . . . . .5.34
RSA 2 Assets. . . . . . . . . . . . . . . . . . . . . . . .5.3
RSA 2 Contracts . . . . . . . . . . . . . . . . . . . . . .5.15
RSA 2 Inventory . . . . . . . . . . . . . . . . . . . . . .5.5
RSA 2 Licenses. . . . . . . . . . . . . . . . . . . . . . .5.20
RSA 2 Proprietary Rights. . . . . . . . . . . . . . . . . .5.13
RSA 2 Receivables . . . . . . . . . . . . . . . . . . . . .5.17
Scheduled Assets. . . . . . . . . . . . . . . . . . . . . .2.4(a)(i)
Scheduled Liabilities . . . . . . . . . . . . . . . . . . .2.4(a)(ii)
Seller. . . . . . . . . . . . . . . . . . . . . . . . . . .Preamble
Seller Owned Real Estate. . . . . . . . . . . . . . . . . .5.16(a)(iv)
Seller Real Estate. . . . . . . . . . . . . . . . . . . . .5.16(a)(i)
Shareholder . . . . . . . . . . . . . . . . . . . . . . . .Preamble
Software. . . . . . . . . . . . . . . . . . . . . . . . . .1.1(n)
Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . .5.8
Threshold Amount. . . . . . . . . . . . . . . . . . . . . .11.4
Unity Closing Schedule. . . . . . . . . . . . . . . . . . .2.4(a)
Vehicles. . . . . . . . . . . . . . . . . . . . . . . . . .1.1(d)
Warranty Deeds. . . . . . . . . . . . . . . . . . . . . . .5.16(e)
74
SCHEDULE 6.5
EXCEPTIONS TO PURCHASER'S QUALIFICATIONS
Purchaser's legal qualifications to acquire control of the Licenses and the
Partnership Interest are subject to FCC review of ownership in Rural Cellular
Corporation ("RCC") by certain affiliates of Telephone & Data Systems, Inc.
("TDS"), and a determination by the FCC that such interests "...pose no
substantial threat to competition" pursuant to Section 22.942 of the FCC Rules
and Regulations in light of the fact that TDS controls competing, Block A,
cellular systems in Bangor, Xxxxx, Xxxxx XXX 0 xxx Xxxxx XXX 0.
The disclosure in this Schedule may be over-inclusive, taking into consideration
the materiality standard that may be contained in the representation or warranty
relating to this Schedule. The fact that any item or matter is disclosed on this
Schedule shall not be deemed to set or establish a different standard of
materiality than the one set forth in the applicable representation or warranty.
The disclosure on this Schedule includes, to the extent applicable, the
disclosures on all other schedules to the Agreement.
EXHIBIT A
ASSIGNMENT AND ASSUMPTION AGREEMENT
THIS ASSIGNMENT AND ASSUMPTION AGREEMENT is made and entered into as of the
____ day of ____________, 199__, by and among Unity Cellular Systems, Inc., a
Maine corporation ("Unity"), InterCel, Inc., a Delaware corporation
("Shareholder"), InterCel Licenses, Inc., a Delaware corporation ("Licensee"),
and ________________________, a _________ corporation ("Purchaser").
WHEREAS, Purchaser, Unity, Licensee and Shareholder have entered into an
Asset Purchase Agreement dated December ___, 1996 (the "Purchase Agreement").
Unless otherwise defined herein, capitalized terms which are not proper nouns
shall have the meanings ascribed to them in the Purchase Agreement.
WHEREAS, Purchaser has taken over the operation of the Business as of the
open of business on the date hereof; and
WHEREAS, Purchaser, Unity, Licensee and Shareholder desire to enter into
this Agreement to set forth the terms and conditions on which Purchaser will
assume certain of the debts, liabilities and obligations of Unity, Licensee and
Shareholder related to the Business.
NOW, THEREFORE, in consideration of the purchase and sale of the Assets,
and for other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereto agree as follows:
1. ASSIGNMENT AND ASSUMPTION OF CONTRACTS. Unity hereby sells, assigns,
transfers, conveys and delivers to Purchaser all of its right, title and
interest in and to the Operating Contracts. Purchaser does hereby assume and
agree to pay, perform and discharge in accordance with their terms all of the
obligations and commitments of Unity which accrue or first become performable on
or after the date hereof with respect to and concerning the Operating Contracts;
PROVIDED, HOWEVER, that Purchaser does not assume any liabilities for (i)
products sold or services rendered by Unity in connection with the Business
under such Operating Contracts before the date hereof, or (ii) any debts,
liabilities or obligations arising as a result of a breach or default by Unity
under any of such Operating Contracts occurring before the date hereof or as a
result of the consummation of the transactions contemplated by the Purchase
Agreement. Notwithstanding any provision of this Agreement to the contrary,
this Agreement shall not constitute an assignment or an agreement to assign any
of the Operating Contracts, or any benefit arising thereunder or resulting
therefrom, if such an assignment or agreement to assign without a consent
required or necessary for such assignment would constitute a breach thereof or
in any way adversely affect the rights of Unity or Purchaser thereunder. If
such consent is not obtained, or if an attempted assignment would be ineffective
or would adversely affect the rights of Unity thereunder so that Purchaser would
not in fact receive all such rights, Unity, Licensee and
Shareholder shall use their commercially reasonable best efforts, and shall
cooperate in any arrangement which Purchaser may reasonably request in writing,
to provide to Purchaser the benefits under any such Operating Contract,
including (a) entering into subcontracts, subleases, sale and leasebacks, use
and occupancy agreements or other contractual arrangements which will provide
such benefits to Purchaser; (b) agreeing with the person whose consent is
required to be obtained that Unity will remain liable under any such Operating
Contract to the same extent as if such assignment had not occurred; and (c)
enforcing, at the cost of Unity, Shareholder and Licensee, and for the benefit
of Purchaser, all rights of Unity against any other party thereto arising out of
the breach thereof by such party. Any transfer or assignment to Purchaser of
any of the Operating Contracts which shall require the consent or approval of
any other party shall be made subject to such consent or approval being
obtained; PROVIDED, HOWEVER, that nothing contained in this paragraph 1 shall
affect the rights of Purchaser, pursuant to the Purchase Agreement or otherwise,
arising out of Unity, Licensee or Shareholder's failure to have disclosed the
need for such consent or approval or for failing to have it obtained.
2. ASSIGNMENT AND ASSUMPTION OF LICENSES, CERTIFICATES, FRANCHISES AND
PERMITS. Unity, Licensee and Shareholder hereby sell, assign, transfer and
convey to Purchaser, all of their respective rights, title and interest in and
to all of their governmental licenses, certificates, franchises, permits,
registrations, concessions, consents and approvals including, but not limited
to, those described on SCHEDULE 1.1(H) to the Purchase Agreement (collectively,
the "Licenses and Permits"). Purchaser does hereby agree to be bound by and to
assume and discharge in accordance with their terms all of the obligations and
commitments of Unity, Licensee or Shareholder arising with respect to periods
commencing after the date hereof, with respect to and concerning the Licenses
and Permits.
3. ASSUMPTION OF OTHER LIABILITIES. Purchaser does hereby assume and
agree to pay, perform and discharge, the following debts, liabilities and
obligations of Seller:
a. All of Unity's trade accounts payable (being maintained by Unity
consistent with past practices) arising out of the operation of the
Business in the ordinary course, which are (i) reflected on Unity's books
and records and (ii) remain unpaid as of the opening of business on the
date hereof;
b. All amounts accrued as of the opening of business on the date
hereof for wages, salary and benefits, including vacation and sick leave,
payable to those employees of Unity who provide services in connection with
the operation of the Business and who are employed by the Purchaser on the
date hereof;
c. Unity's obligation to provide cellular telephone and related
services to its customers in accordance with the Customer Contracts in
effect on the date hereof;
d. All debts, liabilities and obligations of Unity, Licensee and
Shareholder identified on SCHEDULE 3.2 to the Purchase Agreement; and
2
e. All liabilities and obligations of Unity for Seller Leased Real
Estate or in respect of Permitted Encumbrances listed on SCHEDULE 5.16(d)
to the Purchase Agreement, including, without limitation, Encumbrances or
Permitted Encumbrances in respect of or relating to Seller Real Estate, but
only to the extent that said liabilities and obligations accrue following
the date hereof.
4. LIABILITIES NOT ASSUMED. Except as specifically set forth in herein,
Purchaser shall not, by virtue of its purchase of the Assets or otherwise,
assume or become responsible for any debts, liabilities or obligations of any of
Unity, Licensee or Shareholder, whether fixed, contingent, known, unknown or
otherwise.
5. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same agreement.
6. ASSIGNEES. This Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective successors and assigns.
7. SCOPE. This Agreement is executed and delivered in connection with
the Purchase Agreement. Notwithstanding anything herein to the contrary,
nothing herein shall in any way vary the promises, agreements, representations,
warranties and covenants of any of the parties to and set forth in the Purchase
Agreement, all of which survive the closing and shall not be merged therein..
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day, month and year first above written.
SELLERS:
UNITY CELLULAR SYSTEMS, INC.
By
-----------------------------------
Its
-----------------------------
INTERCEL LICENSES, INC.
By
-----------------------------------
Its
------------------------------
[ASSIGNMENT AND ASSUMPTION OF PARTNERSHIP RIGHTS AND OBLIGATIONS, IF ANY, WILL
BE HANDLED IN A SEPARATE ASSIGNMENT AND ASSUMPTION DOCUMENT.]
3
INTERCEL, INC.
By
--------------------------------
Its
-----------------------------
PURCHASER:
------------------------------------
By
--------------------------------
Its
------------------------------
4
AMENDMENT TO LEASE AGREEMENT
THIS AMENDMENT TO LEASE AGREEMENT, dated the ____ day of _______________ ,
1996 (this "Amendment"), is made by and between ____________________, a
___________ corporation with its principal office located in Augusta, Maine
(hereinafter "Landlord") and Unity Cellular Systems, Inc., a Maine corporation
with its principal office located in Bangor, Penobscot County, Maine, and its
successors and assigns ("Tenant") (collectively, the "Parties").
W I T N E S S E T H
WHEREAS, Landlord owns property located in _______________________ (the
"Premises"); and
WHEREAS, the parties hereto have previously entered into that certain Lease
Agreement (the "Agreement"), dated ___________ whereby the Tenant would be
permitted to use the Premises for communication services; and
WHEREAS, the parties have reached an agreement whereby the Agreement shall
be modified and amended.
NOW, THEREFORE, in consideration of the recitals above, and the mutual
promises set forth herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged by the parties, the
parties hereto, intending to be legally bound, agree as follows:
1. TERMS. All terms used in this Amendment and not otherwise defined
herein, shall have the meanings ascribed to them in the Agreement, unless the
context clearly requires otherwise.
2. EXTENSION OF TERM. Notwithstanding anything in this Agreement to
the contrary, if the term of this Agreement (including any options to extend the
term) ends prior to December 31, 2001, then Tenant shall have the option and
right, upon not less than thirty (30) days notice given to Landlord at least
thirty (30) days prior to the expiration of the term (or then-occurring renewal
term, if applicable) of the Agreement, to renew or extend the term of the
Agreement until December 31, 2001, at the rental and upon the same terms and
conditions as apply to Tenant's leasing of the Premises immediately prior to the
giving of such notice.
3. CANCELLATION. Section __________ of the Agreement is hereby amended
by deleting the Landlord's cancellation right as provided therein in its
entirety. The deleted language reads as follows:
[INSERT DELETED LANGUAGE]
4. The Agreement is hereby amended by inserting the following as
Section __:
__. CONSENT TO ASSIGNMENT.
(a) Notwithstanding anything in this Agreement to the contrary,
Landlord agrees that its consent shall not be required for any assignment
by Tenant of the Agreement to a person or entity approved as a licensee by
the Federal Communications Commission to conduct cellular radio
transmissions, or to the affiliate of any such approved licensee. Landlord
agrees timely to execute all documents and to take any other necessary
action reasonably requested by Tenant to facilitate such assignment.
(b) Landlord agrees to cooperate with any financing by Tenant of its
interests in, to and under the Agreement and in any personalty located at
the Premises and further agrees that Landlord's consent shall not be
required for a collateral assignment of Tenant's interests in the Agreement
to a lender. Landlord agrees that it will execute such instruments as may
be requested by Tenant in order to evidence Landlord's agreements stated in
this section, including an estoppel from Landlord to Tenant's lender; an
agreement to give notice to Tenant's lender and a right to cure in favor of
such lender with respect to defaults by Tenant under the Agreement; and
agreement to permit Tenant's lender (and any subsequent assignee of such
lender) to assume this Agreement and Tenant's rights and obligations
hereunder as of the date of such assumption; and a waiver or subordination
of any statutory or common law landlord lien rights.
5. MEMORANDUM OF LEASE. If requested by Tenant, a short form
memorandum of this Agreement shall be executed by Landlord and Tenant and
recorded in the land title records of the county in which the Premises are
located.
6. CONSENTS. Wherever in the Agreement (as amended hereby) the
consent of any party to an action is required, such party shall not unreasonably
withhold or delay such consent.
7. AGREEMENT TO REMAIN IN FULL FORCE AND EFFECT. Except as herein
provided, all terms and conditions of said Agreement dated ________, shall
remain in full force and effect and Landlord and Tenant hereby ratify and
confirm the terms and conditions of the Agreement, as modified herein.
8. ENTIRE AGREEMENT. This Amendment is the entire agreement of the
parties with respect to the subject matter hereof.
IN WITNESS WHEREOF, Landlord and Tenant have respectively caused their names and
seals to be hereunto affixed the day and year first written above.
LANDLORD:
--------------------------
BY:
------------------------- ---------------------
Witness
ITS:
------------------------- ------------------------------
Print Name
TENANT:
UNITY CELLULAR SYSTEMS,
INC., a Maine corporation
BY:
------------------------- ----------------------
Witness
ITS:
------------------------- -------------------------------
Print Name
Then personally appeared the above named ____________________ and
___________________ and severally acknowledged the foregoing instrument to be
their free act and deed.
SWORN to and subscribed before me
this _____ day of ______________, 19____.
----------------------------------------(L.S.)
Notary Public for Maine
My Commission Expires:------------------
EXHIBIT C-1
LEASED CELLULAR SITES - UNICEL
Pork Barrel Hill/
Millinocket site,
Penobscot County, Maine
Old Town site,
Old Town,
Penobscot County, Maine
Northport site,
Waldo County,
Maine
Newcastle site,
Lincoln County, Maine
Mt. Pisgah site, Winthrop,
Kennebec County,
Maine
Fish Hill Site,
Lincoln,
Penobscot County, Maine
Dixmont site,
Dixmont,
Penobscot County, Maine
Clinton site,
Clinton,
Kennebec County, Maine
Camden site,
Camden,
Xxxx County, Maine
Xxxxxx Hill site,
Rockland,
Xxxx County, Maine
Sears Island site,
Searsport,
Waldo County, Maine
Xxxx Xxxx site,
Vassalboro,
Kennebec County, Maine
Gardiner site,
Gardiner,
Kennebec County, Maine
Union site,
Xxxx County, Maine
Liberty site,
Waldo County, Maine
LEASED CELLULAR SITES - PARTNERSHIP
Greenville site,
Piscataquis County, Maine
Wallagrass site,
Aroostook County,
Maine
Ludlow (Smyrna) site,
Aroostook County, Maine
Mountain # 9,
TDR2 WELS site,
Maine
Xxxxxxxxx (Xxxxxxx Xxxx,
Presque Isle) site,
Aroostook County, Maine
Athens site,
Athens,
Somerset County, Maine
Charleston site,
Penobscot County, Maine
Xxxxxxx Mountain site,
Skowhegan,
Somerset County, Maine
AMENDMENT TO LEASE AGREEMENT
THIS AMENDMENT TO LEASE AGREEMENT, dated the ____ day of _____________,
1996 (this "Amendment"), is made by and between Maritime Energy, which has an
office located in Rockland, Maine (hereinafter "Landlord") and Unity Cellular
Systems, Inc., a Maine corporation with its principal office located in Bangor,
Penobscot County, Maine, and its successors and assigns ("Tenant")
(collectively, the "Parties").
W I T N E S S E T H
WHEREAS, Landlord owns or leases property located at 000 Xxxx Xxxxxx,
Xxxxxxxx, Xxxxx, and which is more particularly described on Exhibit "A" hereto
which is by this reference made a part hereof, (the "Premises"); and
WHEREAS, the parties hereto have previously entered into that certain Lease
Agreement (the "Agreement"), dated March 8, 1994; and
WHEREAS, the parties have reached an agreement whereby the Agreement shall
be modified and amended.
NOW, THEREFORE, in consideration of the recitals above, and the mutual
promises set forth herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged by the parties, the
parties hereto, intending to be legally bound, agree as follows:
1. TERMS. All terms used in this Amendment and not otherwise defined
herein, shall have the meanings ascribed to them in the Agreement, unless the
context clearly requires otherwise.
2. The Agreement is hereby amended by adding the following paragraphs:
Notwithstanding anything in this Agreement to the contrary, Maritime Energy
(hereinafter "Landlord") agrees that its consent shall not be required for
any assignment by Tenant of the Agreement to a person or entity approved as
a licensee by the Federal Communications Commission to conduct cellular
radio transmissions, or to the affiliate of any such approved licensee.
Landlord agrees timely to execute all documents and to take any other
necessary action reasonably requested by Tenant to facilitate such
assignment.
Landlord agrees to cooperate with any financing by Tenant of its interests
in, to and under the Agreement and in any personalty located at the
Premises and further agrees that Landlord's consent shall not be required
for a collateral assignment of Tenant's interests in the Agreement to a
lender. Landlord agrees that it will execute such instruments as may be
requested by Tenant in order to evidence Landlord's agreements stated in
this section, including an estoppel from Landlord to Tenant's lender; an
agreement to give notice to Tenant's lender and a right to cure in favor of
such lender with respect to defaults by Tenant under the Agreement; and
agreement to permit Tenant's lender (and any subsequent assignee of such
lender) to assume this Agreement and Tenant's rights and obligations
hereunder as of the date of such assumption; and a waiver or subordination
of any statutory or common law landlord lien rights.
3. THE AGREEMENT IS HEREBY FURTHER AMENDED BY DELETING THE FOLLOWING
LANGUAGE:
You agree to hold us harmless and to indemnify us for any claims or
liabilities which arise out of the premises, operation or use during
the term of this lease.
and by adding, in its place, the following language:
As to any liability for environmental conditions, laws or regulations
arising out of or connected with circumstances which occurred or originated
prior to the commencement of the Lease, Landlord agrees that Tenant shall
not be responsible for and it shall hold Tenant harmless from and against
the same. As to matters originating after the commencement date of this
Lease, each party shall indemnify and hold the other party harmless from
any and all claim of liability or loss from personal injury or property
damage resulting from or arising out of the indemnifying party's negligent
acts or omissions or willful misconduct, or those of its servants or
agents, in connection with the premises, except to the extent due to the
indemnified party's negligent acts or omissions or those of its servants or
agents.
4. MEMORANDUM OF LEASE. If requested by Tenant, a short form
memorandum of this Agreement shall be executed by Landlord and Tenant and
recorded in the land title records of the county in which the Premises are
located.
5. CONSENTS. Wherever in the Agreement (as amended hereby) the
consent of any party to an action is required, such party shall not unreasonably
withhold or delay such consent.
AGREEMENT TO REMAIN IN FULL FORCE AND EFFECT. Except as herein provided,
all terms and conditions of said Agreement dated March 8, 1994, shall remain in
full force and effect and Landlord and Tenant hereby ratify and confirm the
terms and conditions of the Agreement, as modified herein.
6. ENTIRE AGREEMENT. This Amendment is the entire agreement of the
parties with respect to the subject matter hereof.
IN WITNESS WHEREOF, Landlord and Tenant have respectively caused their names and
seals to be hereunto affixed the day and year first written above.
LANDLORD:
MARITIME ENERGY
BY:
---------------------------- -------------------------
Witness
ITS:
---------------------------- -------------------------------
Print Name
TENANT:
UNITY CELLULAR SYSTEMS,
INC., a Maine corporation
BY:
---------------------------------
ITS:
---------------------------- ------------------------------------
Witness
----------------------------
Print Name
Then personally appeared the above named ____________________ and
___________________ and severally acknowledged the foregoing instrument to be
their free act and deed.
SWORN to and subscribed before me
this ______ day of _________________, 19____.
------------------------------------------(L.S.)
Notary Public for Maine
My Commission Expires:
---------------------
EXHIBIT D
POST CLOSING ESCROW AGREEMENT
THIS POST CLOSING ESCROW AGREEMENT is made and entered into as of the ____
day of _____________, 199__, by and among _________________________, a
____________ corporation ("Purchaser"), Unity Cellular Systems, Inc., a Maine
corporation ("Unity"), InterCel Licenses, Inc., a Delaware corporation
("Licensee"), InterCel, Inc., a Delaware corporation ("Shareholder"), and
_____________ ("Escrow Agent").
WHEREAS, Purchaser, Unity, Licensee and Shareholder have entered into an
Asset Purchase Agreement dated December ___, 1996 (the "Purchase Agreement")
pursuant to which Unity, Licensee and Shareholder have sold and Purchaser has
purchased substantially all of Unity's assets used in connection with the
operation of a business providing cellular telephone and related services in the
Bangor, Maine MSA and Maine RSA 3 under the name "Unicel" and, subject to
Section 2.1 of the Purchase Agreement, of serving as the managing general
partner in Northern Maine Cellular Partnership, a Maine general partnership that
is engaged in the business of providing cellular telephone and related services
in Maine RSA 2;
WHEREAS, Section 2.3 of the Purchase Agreement provides for the escrow of
certain funds to protect the Purchaser with respect to the matters Unity,
Licensee and Shareholder have agreed to indemnify the Purchaser against pursuant
to ARTICLE 11 of the Purchase Agreement and with respect to certain reductions
in the Purchase Price or Alternate Purchase Price provided for in Section 2.4 of
the Purchase Agreement; and
WHEREAS, Purchaser, Unity, Licensee ,Shareholder, and Escrow Agent desire
to enter into this Agreement to set forth the terms and conditions of such
escrow.
1. DEFINED TERMS. As used herein, all defined terms not otherwise
defined herein have the meanings ascribed to them in the Purchase Agreement.
2. DEPOSIT OF FUNDS. The Purchaser warrants that it has deposited with
the Escrow Agent, on the date hereof, the sum of _______________________ and
____/100 Dollars ($_________ ) (the "Principal") in immediately available funds
pursuant to Section 2.3 of the Purchase Agreement.
3. PURPOSE OF ESCROW. The Principal and any accrued interest thereon
(collectively the "Deposit") shall be held by the Escrow Agent to protect the
Purchaser with respect to (i) the matters as to which Unity, Licensee and
Shareholder are required to indemnify Purchaser
against pursuant to the provisions of ARTICLE 11 of the Purchase Agreement
("Indemnification Claims"), and (ii) any reduction in the Purchase Price or
Alternate Purchase Price, as the case may be, pursuant to the provisions of
Section 2.4 of the Purchase Agreement ("Purchase Price Reduction Claims").
4. INVESTMENT OF FUNDS. The Escrow Agent shall invest the Principal in
accordance with Unity's instructions in _________, _____________, and __________
and in any other investments in accordance with Unity's and Purchaser's joint
written instructions.
5. RELEASE OF FUNDS. The Principal, less (x) the total amount of all
Indemnity Claims validly made by Purchaser pursuant to ARTICLE 11 of the
Purchase Agreement, less (y) the amount of any Purchase Price Reduction Claims
validly made pursuant to the provisions of Section 2.4 of the Purchase
Agreement, and (z) any interest on the total of the amounts specified in (x) and
(y) shall be paid to Unity together with any interest or income thereon on the
business day immediately following the expiration of the Hold Back Period. If,
prior to the expiration of the Hold Back Period, the Purchaser has given notice
of any Indemnification Claims and/or Purchase Price Reduction Claims, the Escrow
Agent shall retain Principal in an amount equal to the aggregate of all such
Indemnification Claims and Purchase Price Reduction Claims together with any
interest or income thereon (collectively the "Retained Portion"). The Escrow
Agent shall retain the Retained Portion together with any interest or income
thereon, in escrow, and the Hold Back Period shall be extended with respect
thereto, until the earlier of: [(i) twelve months from the date hereof; or] (i)
five (5) business days following the delivery to the Escrow Agent of written
instructions signed by Purchaser and Unity directing the Escrow Agent as to whom
all or any part of the Retained Portion and any interest or income thereon is to
be distributed, and/or (ii) ten (10) business days after a copy of an
arbitrator's final decision with respect to any Indemnification Claims and or
Purchase Price Reduction Claims has been delivered to the Escrow Agent to the
extent said arbitrator's final decision contains instructions as to whom to
disburse all or part of the Retained Portion together with interest or income
thereon, PROVIDED HOWEVER, the Escrow Agent shall have notified the parties
hereto and provided them with copies of said arbitrator's final decision at
least four (4) business days before the Escrow Agent proposes to release all or
part of the Retained Portion pursuant to said arbitrator's final decision.
6. NOTICES. All notices, instructions and other communications provided
for herein shall be in writing and shall be deemed validly given, made or
served, on the date of delivery in
2
the case of personal delivery, or forty-eight (48) hours after deposit with the
U.S. Postal Service if sent by certified mail, return receipt requested,
addressed as follows:
if to Purchaser: Rural Cellular Corporation
X.X. Xxx 0000
Xxxxxxxxxx, Xxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxxx, President
with a copy to: Xxxx & Xxxxxxx, A Professional Association
0000 Xxxxxxx Xxxxxx
00 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attn: Xxx X. Xxxxxxx, Esq.
if to Sellers: InterCel, Inc.
0000 X.X. Xxxxxxx Xxxxx
Xxxx Xxxxx, Xxxxxxx 00000
Attn: Xxxxx Xxxxx and Xxxx Xxxxxx, Esq.
with a copy to: Nelson, Mullins, Xxxxx & Scarborough, L.L.P.
000 Xxxxxx Xxxxxx, Xxxxx 0000
0000 Xxxxxxxxx Xxxxxx Xxxxxxxxx
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxx Xxxxx, Esq.
if to Escrow Agent: -------------------
-------------------
-------------------
or to such other addresses as the parties may designate.
7. FEES. All fees payable to the Escrow Agent for holding the Deposit in
escrow, investing the Principal, disbursing the Deposit and acting as escrow
agent hereunder shall be paid by Sellers.
3
8. DUTIES OF ESCROW AGENT. The Escrow Agent's duties and
responsibilities shall be limited to those expressly set forth in this Agreement
and the Escrow Agent shall not be subject to, nor obliged to recognize, any
other agreement between, or direction or instruction of, any or all of the
parties hereto even though reference thereto may be made herein; provided,
however, with the Escrow Agent's written consent, this Agreement may be amended
at any time or times by an instrument in writing signed by all of the then
parties in interest. The duties and obligations of the Escrow Agent hereunder
shall be determined solely by the express provisions of this Agreement and no
implied duties or obligations shall be read into this Agreement against the
Escrow Agent. The Escrow Agent shall be under no obligation to refer to the
Purchase Agreement or any other documents between or among the parties related
in any way to this Agreement.
9. LIMITATION ON LIABILITY. The Escrow Agent shall not be liable to
anyone by reason of any error of judgment, or for any act done or step taken or
omitted by it in good faith, or for any mistake of fact or law, or for anything
which it may do or refrain from doing in connection herewith, unless caused by
or arising out of its own gross negligence or bad faith.
10. RELIANCE. The Escrow Agent shall be entitled to rely and shall be
protected in acting in reliance upon any writing furnished to it by any party
hereto in accordance with the terms hereof, and shall be entitled to treat as
genuine, and as the document it purports to be, any letter, paper or other
document furnished to it by any party and believed by the Escrow Agent in good
faith to be genuine and to have been signed by the proper party. The Escrow
Agent may consult with counsel with respect to any question relating to its
duties or responsibilities hereunder and shall not be liable for any action
taken or omitted in good faith on advice of such counsel.
11. CONFLICTING CLAIMS. In the event of any disagreement between the
parties hereto resulting in conflicting claims and demands being made in
connection with or against the Deposit, the Escrow Agent shall be entitled, at
its option, to refuse to comply with the claims or demands of any party until
such disagreement is finally resolved in the manner provided in paragraph 4
hereof, but shall continue to comply with the other terms and conditions of this
Agreement, and in so doing the Escrow Agent shall not be or become liable to any
party.
12. ATTACHMENT, GARNISHMENT, ETC. If all or any part of the Deposit is at
any time attached, garnished or levied upon, or in case the payment, assignment,
transfer, conveyance or delivery of all or any part of the Deposit shall be
stayed or enjoined by any court order, or in
4
case any order, judgment or decree shall be made or entered by any court
affecting all or any part of the Deposit, then in any of such events, the Escrow
Agent is authorized, in its sole discretion, to rely upon and comply with any
such order, writ, judgment or decree, which it believes in good faith is binding
upon it, and if it complies with any such order, writ, judgment or decree, it
shall not be liable to any of the parties hereto or to any other person, firm or
corporation by reason of such compliance, even though such order, writ, judgment
or decree may be subsequently reversed, modified, annulled, set aside or
vacated.
13. GOVERNING LAW. This Agreement shall be construed, governed, enforced
and administered in accordance with the laws of the State of ______________,
without giving effect to the conflicts of law principles thereof.
14. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day, month and year first above written.
PURCHASER:
RURAL CELLULAR CORPORATION
By
----------------------------
Xxxxxxx X. Xxxxxxxx
Its President
UNITY:
UNITY CELLULAR SYSTEMS, INC.
By
---------------------------
Its
-----------------------
5
SHAREHOLDER:
INTERCEL, INC.
By
--------------------------
Its
---------------------
LICENSEE:
INTERCEL LICENSES, INC.
By
--------------------------
Its
--------------------------
ESCROW AGENT:
-------------------------------
By
--------------------------
Its
--------------------------
The disclosure in this Schedule may be over-inclusive, taking into consideration
the materiality standard that may be contained in the representation or warranty
relating to this Schedule. The fact that any item or matter is disclosed on
this Schedule shall not be deemed to set or establish a different standard of
materiality than the one set forth in the applicable representation or warranty.
The disclosure on this Schedule includes, to the extent applicable, the
disclosures on all other schedules to the Agreement.
6
EXHIBIT F
XXXX OF SALE
KNOW ALL MEN BY THESE PRESENTS:
That for value received, Unity Cellular Systems, Inc. a Maine corporation
("Unity"), InterCel Licenses, Inc., a Delaware corporation ("Licensee"), and
InterCel, Inc., a Delaware corporation ("Shareholder") do hereby sell, assign,
grant, bargain, convey, transfer, set over, deliver and confirm unto
___________________, a _____________ corporation ("Purchaser"), its successors
and assigns, forever, all of their right, title and interest in and to the
Assets, as described and defined in that certain Asset Purchase Agreement dated
as of December ___, 1996, by and among Rural Cellular Corporation, a Minnesota
corporation, and Unity, Licensee and Shareholder (the "Purchase Agreement") free
and clear of all liens, encumbrances and charges of every nature. This Xxxx of
Sale transfers no interest in the Excluded Assets specifically identified in
Section 1.2 of the Purchase Agreement.
This Xxxx of Sale is executed and delivered in connection with the Purchase
Agreement. Notwithstanding anything herein to the contrary, nothing herein
shall in any way vary the promises, agreements, representations, warranties and
covenants of the parties to and set forth in the Purchase Agreement, all of
which shall survive the Closing and not be merged herein.
Unity, Licensee and Shareholder hereby binds themselves, their successors
and assigns, to warrant and defend the title to all the herein described Assets
unto Purchaser, its successor and assigns to the extent they are obligated to do
so under the terms of the Purchase Agreement.
Unity, Licensee and Shareholder hereby name and irrevocably constitute and
appoint Purchaser, its successors and assigns, their true and lawful attorney,
with full power of substitution, in the name of Purchaser, or in the name of
Unity, Licensee or Shareholder but on behalf and for the benefit of Purchaser,
its successors and assigns, to demand and receive from time to time any and all
Assets hereby sold, assigned, transferred, conveyed and delivered to Purchaser
and to give receipts, releases and acquaintances for and in respect of the same
or any part thereof; from time to time to institute and prosecute in the name of
Seller or otherwise, but for the benefit of Purchaser, its successors and
assigns, any and all proceedings at law, in equity or otherwise which Purchaser,
its successors or assigns, may deem proper in order to collect, assert or
enforce any claim, right, title or interest of any kind in or to the assets
hereby sold, assigned, transferred, conveyed and delivered, or intended so to
be, to defend or compromise any and all actions, suits or proceedings, in
respect of any of said Assets and to do all such acts and things in relation
thereto as Purchaser, its successors or assigns, shall deem desirable. Unity,
Licensee and Shareholder hereby declare that the foregoing powers are coupled
with an interest and are and shall be irrevocable by them.
This instrument shall be effective at the opening of business, Eastern
Standard Time, on the date hereof, and shall be binding upon Unity, Shareholder,
Licensee and their successors and assigns and shall inure to the benefit of the
Purchaser and its successors and assigns.
IN WITNESS WHEREOF, as of the _____ day of ____________, 199__, Unity,
Licensee and Shareholder have caused this Xxxx of Sale to be executed and
delivered by their duly authorized representatives.
UNITY:
Unity Cellular Systems, Inc.
By
---------------------------
Its
----------------------
SHAREHOLDER:
InterCel, Inc.
By
---------------------------
Its
----------------------
LICENSEE:
InterCel Licenses, Inc.
By
---------------------------
Its
----------------------
2
EXHIBIT H
AGREEMENT NOT TO COMPETE
THIS AGREEMENT NOT TO COMPETE is made and entered into this ____ day of
_____________, 1997, by and among ___________________________________________, a
_________________ corporation ("Company"), Unity Cellular Systems, Inc., a Maine
corporation ("Unity"), InterCel, Inc., a Delaware corporation ("Shareholder"),
InterCel Licenses, Inc., a Delaware corporation ("Licensee"), and the
undersigned subsidiaries of Shareholder whose names and addresses for purposes
of notice hereunder are shown on SCHEDULE A hereto and incorporated herein by
reference (such subsidiaries of Shareholder, together with Unity, Licensee and
Shareholder, are referred to collectively herein as the "Covenantors").
RECITALS:
A. Unity has heretofore been engaged in the business of
providing cellular telephone and related services in the Bangor, Maine
MSA and Maine RSA 3 under the name "Unicel" and was the managing
general partner in Northern Maine Cellular Partnership, a Maine
general partnership (the "Partnership"), which is engaged in the
business of providing cellular telephone and related services in Maine
RSA 2 under the name "Unicel" (which business of Unity and the
Partnership are collectively referred to herein as the "Business");
B. Pursuant to the terms of an Asset Purchase Agreement dated
December ___, 1996, by and among Unity, Shareholder, Licensee and Rural
Cellular Corporation (the "Purchase Agreement"), the Company has purchased,
and Unity and Licensee have sold, all of the assets, properties, contract
rights, operations and business of Unity of every kind, nature and
description whatsoever and certain assets, contract rights and Licenses of
Licensee as set forth in the Purchase Agreement);
C. Shareholder is the sole shareholder of Unity and Licensee;
D. The Company would not have entered into the Purchase
Agreement in the absence of Covenantors' agreement herein not to
compete with the Company.
NOW, THEREFORE, in consideration of the foregoing premises and for other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows:
1. NON-COMPETITION AGREEMENT. During the period of two (2) years from
and after the date hereof, Covenantors jointly and severally covenant and agree
that, without the Company's prior written consent, they will not, directly or
indirectly, individually or collectively, lend their credit, advice or
assistance, or engage in any activity or act in any manner, including but not
limited to, as an individual, owner, partner, joint venturer, shareholder,
officer, director, manager, employer, licensor, licensee, principal, agent,
investor or otherwise, for the purpose of establishing, operating or managing
any business or entity that is engaged in activities competitive with the
Business in the State of Maine. For the purposes of this Agreement, competitive
activities shall mean the provision of wireless (including, without limitation,
cellular) telecommunications services and both sales and resales of wireless
access, airtime and equipment.
2. NONSOLICITATION AGREEMENT. During the period of two (2) years from
and after the date hereof, Covenantors, jointly and severally, agree that they
will not, whether for their own account or for the account of any other person
or entity, directly or indirectly, or individually or collectively, interfere
with Company's relationship with or endeavor to divert or entice away from the
Company any person or entity which at any time during the term of the
Covenantors' prior relationship with the Business is or was an employee or
customer of the Business except as set forth in the Purchase Agreement.
3. CONFIDENTIAL INFORMATION. Covenantors understand and agree that the
assets and the Business acquired by the Company pursuant to the Purchase
Agreement are unique and specialized and that, in connection with their
respective ownership or affiliations with the Business, they received or had
access to Confidential Information (as hereinafter defined). Covenantors
jointly and severally agree that at all times from and after the date of this
Agreement, they shall keep secret all such Confidential Information and will
not, except as required by law, directly or indirectly, or individually or
collectively, "Use" (as hereinafter defined) or "Disclose" (as hereinafter
defined) the same to any person or entity without first obtaining the written
consent of the Company. At any time the Company may so request, Covenantors
shall turn over to the Company all books, notes, memoranda, manuals, notebooks,
tables, drawings, calculations, records and other documents made, compiled by or
delivered to them containing or concerning any Confidential Information,
including copies thereof except
2
such copies as are reasonably necessary for historical purposes for Unity, in
their possession, it being agreed that the same and all information contained
therein are at all times the exclusive property of the Company.
As used in this Agreement, the term "Confidential Information" means any
information or compilation of information not generally known to the public or
the industry, which was previously proprietary to Unity, Licensee and/or
Shareholder, relating to procedures, techniques, methods, concepts, ideas,
affairs, products, processes and services related solely to the Business,
including, but not limited to, information relating to marketing, merchandising,
selling, research, development, purchasing, costs, customers, plans, pricing,
billing, needs of customers and services used by customers of the Business.
Confidential Information for purposes of this Agreement shall also include all
lists of customers, addresses, prospects, sales calls, products, services,
prices and the like as well as any specifications, formulas, plans, drawings,
accounts or sales records, sales brochures, books, code books, records, manuals,
trade secrets, knowledge, know-how, pricing strategies, operating costs, sales
margins, methods of operation in Maine and the like related solely to the
Business. All information disclosed to Covenantors during the term of their
prior relationship to the Business which they have a reasonable basis to believe
to be Confidential Information, which was previously treated by Unity, Licensee
and/or Shareholder as Confidential Information, shall be presumed to be
Confidential Information.
As used in this Agreement, the term "Disclose" means to reveal, deliver,
divulge, disclose, publish, copy, communicate, show or otherwise make known or
available to any other person or entity, or in any way to copy, any of the
Confidential Information.
As used in this Agreement, the term "Use" means to appropriate any of the
Confidential Information for the benefit of any person or entity other than the
Company.
4. REASONABLENESS OF COVENANTS. Covenantors acknowledge and agree that
the geographic scope and period of duration of the restrictive covenants
contained in this Agreement are both fair and reasonable and that the interests
sought to be protected by the Company are legitimate business interests entitled
to be protected. Covenantors further acknowledge and agree that the Company
would not have agreed to enter into the Purchase Agreement unless they entered
into this Agreement.
5. COMPENSATION. The Covenantors shall receive no separate monetary
consideration for the restrictive covenants contained in this Agreement but the
Covenantors
3
acknowledge receipt of consideration in the form of the purchase of assets from
Unity, Licensee and the Shareholder pursuant to the Purchase Agreement.
6. INJUNCTIVE RELIEF. The parties agree that the remedy of damages at
law for the breach by Covenantors of any of the covenants contained in this
Agreement is an inadequate remedy. In recognition of the irreparable harm that
a violation by Covenantors of any of the covenants, agreements or obligations
arising under this Agreement would cause the Company, Covenantors agree that, in
addition to any other remedies or relief afforded by law, an injunction against
an actual or threatened violation or violations may be issued against them and
every other person and entity concerned thereby, it being the understanding of
the parties that both damages and an injunction shall be proper modes of relief
and are not to be considered alternative remedies. In the event of any such
actual or threatened violation, the prevailing party in any legal proceeding
shall be reimbursed by the other party for all costs, expenses and reasonable
attorneys' fees incurred in pursuing or defending in such legal proceedings any
of its rights with respect to such actual or threatened violation.
7. BLUE PENCIL DOCTRINE. In the event that any of the restrictive
covenants contained in this Agreement shall be found by a court of competent
jurisdiction to be unreasonable by reason of its extending for too great a
period of time or over too great a geographic area or by reason of its being too
extensive in any other respect, then such restrictive covenant shall be deemed
modified to the minimum extent necessary to make it reasonable and enforceable
under the circumstances.
8. NOTICE. All notices, demands and other communications provided for in
this Agreement shall be in writing and shall be given by personal delivery or by
certified or registered first class mail, postage prepaid, return receipt
requested, sent to the Covenantors at the addresses designated on SCHEDULE A or
to the Company at 0000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxxx 00000, attention
Xxxxxxx X. Xxxxxxxx, President, or at such other address as may be designated by
a party in written notice delivered to the other parties in accordance with this
paragraph. All such notices, demands and communications shall be effective when
delivered.
9. ENTIRE AGREEMENT. This Agreement, together with the Purchase
Agreement, contains the entire agreement of the parties hereto and supersedes
all prior or contemporaneous agreements and understandings, oral or written,
between the parties hereto and thereto with respect to the subject matter hereof
and thereof.
4
10. AMENDMENT. No amendment or waiver of any provision of this Agreement
shall be effective unless the same shall be in writing and signed by all of the
parties and then such waiver shall only be effective in the specific instance
and for the specific purpose for which it was given.
11. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective heirs, personal
representative(s), successors and permitted assigns, but nothing in this
Agreement is to be construed as an authorization or right of any party to assign
its/his rights or delegate its/his duties under this Agreement without the prior
written consent of the other party hereto.
12. GOVERNING LAW. This Agreement shall be construed, governed by and
enforced in accordance with the laws of the State of Maine, without giving
effect to the principles of conflicts of laws thereof.
13. HEADINGS. The headings to the paragraphs of this Agreement are
intended for the convenience of the parties only and shall in no way be held to
explain, modify, amplify or aid in the interpretation of the provisions hereof.
14. SEVERABILITY. The provisions of this Agreement shall be deemed
severable and if any portion hereof shall be held invalid, illegal or
unenforceable for any reason, the remainder shall not thereby be invalidated but
shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day, month and year first above written.
COMPANY:
--------------------------------------
By:
---------------------------------
Its
----------------------------
5
COVENANTORS:
UNITY CELLULAR SYSTEMS, INC.
By:
--------------------------------
Its
---------------------------
INTERCEL, INC.
By:
--------------------------------
Its
---------------------------
INTERCEL LICENSES, INC.
By:
-------------------------------
Its
--------------------------
[Add other Covenantors, as appropriate]
Schedule A - Names and Addresses of Covenantors
6
EXHIBIT H-1
AGREEMENT NOT TO COMPETE
THIS AGREEMENT NOT TO COMPETE is made and entered into this ____ day of
_____________, 1997, by and among _______________________________, a
_____________ corporation ("Company"), and Xxxxxxx X. X'Xxxxxx, an individual
(the "X'Xxxxxx").
RECITALS:
A. Unity Cellular Systems, Inc. ("Unity") has heretofore been
engaged in the business of providing cellular telephone and related
services in the Bangor, Maine MSA and Maine RSA 3 under the name
"Unicel" and was the managing general partner in Northern Maine
Cellular Partnership, a Maine general partnership (the "Partnership"),
which is engaged in the business of providing cellular telephone and
related services in Maine RSA 2 under the name "Unicel" (which
business of Unity and the Partnership are collectively referred to
herein as the "Business");
B. The Company has purchased certain assets and licenses comprising
the Business from Unity and its affiliates, pursuant to an Asset Purchase
Agreement dated December ___, 1996 ("Purchase Agreement");
X. X'Xxxxxx has been employed as the Vice President and General
Manager of Unity and has accepted similar employment with
____________________;
D. The Company would not have entered into the Purchase
Agreement in the absence of X'Xxxxxx'x agreement herein not to compete
with the Company.
NOW, THEREFORE, in consideration of the foregoing premises and for other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows:
1. NON-COMPETITION AGREEMENT. During the period of two (2) years from
and after the date hereof, X'Xxxxxx covenants and agrees that, without the
Company's prior written consent, he will not, directly or indirectly,
individually or collectively, lend his credit, advice or assistance, or engage
in any activity or act in any manner, including but not limited to, as an
individual, owner, partner, joint venturer, shareholder, officer, director,
manager, employer,
licensor, licensee, principal, agent, investor or otherwise, for the purpose of
establishing, operating or managing any business or entity that is engaged in
activities competitive with the Business in the State of Maine. For the
purposes of this Agreement, competitive activities shall mean the provision of
wireless (including, without limitation, cellular) telecommunications services
and both sales and resales of wireless access, airtime and equipment.
2. NONSOLICITATION AGREEMENT. During the period of two (2) years from
and after the date hereof, X'Xxxxxx, agrees that he will not, whether for his
own account or for the account of any other person or entity, directly or
indirectly, or individually or collectively, interfere with Purchaser's
relationship with or endeavor to divert or entice away from the Purchaser any
person or entity which at any time during the term of the X'Xxxxxx'x prior
relationship with Unity or the Company is or was an employee or customer of the
Business.
3. CONFIDENTIAL INFORMATION. X'Xxxxxx understands and agrees that the
assets and the Business acquired by the Company pursuant to the Purchase
Agreement are unique and specialized and that, in connection with his employment
with Unity, he received or had access to Confidential Information (as
hereinafter defined). X'Xxxxxx agrees that at all times from and after the date
of this Agreement, he shall keep secret all such Confidential Information and
will not, except as required by law or as an employee of the Company, directly
or indirectly, or individually or collectively, "Use" (as hereinafter defined)
or "Disclose" (as hereinafter defined) the same to any person or entity without
first obtaining the written consent of the Company. At any time the Company may
so request, X'Xxxxxx shall turn over to the Company all books, notes, memoranda,
manuals, notebooks, tables, drawings, calculations, records and other documents
made, compiled by or delivered to them containing or concerning any Confidential
Information, including copies thereof, in his possession, it being agreed that
the same and all information contained therein are at all times the exclusive
property of the Company.
As used in this Agreement, the term "Confidential Information" means any
information or compilation of information not generally known to the public or
the industry, which was previously proprietary to Unity, relating to procedures,
techniques, methods, concepts, ideas, affairs, products, processes and services
related to the Business, including, but not limited to, information relating to
marketing, merchandising, selling, research, development, purchasing, costs,
customers, plans, pricing, billing, needs of customers and services used by
customers of the Business. Confidential Information for purposes of this
Agreement shall also include all lists of customers, addresses, prospects, sales
calls, products, services, prices and the like as
2
well as any specifications, formulas, plans, drawings, accounts or sales
records, sales brochures, books, code books, records, manuals, trade secrets,
knowledge, know-how, pricing strategies, operating costs, sales margins, methods
of operation in Maine and the like. All information disclosed to X'Xxxxxx
during the term of his prior employment with Unity in the Business which he has
a reasonable basis to believe to be Confidential Information, which was
previously treated by Unity, or currently treated by the Company as Confidential
Information, shall be presumed to be Confidential Information.
As used in this Agreement, the term "Disclose" means to reveal, deliver,
divulge, disclose, publish, copy, communicate, show or otherwise make known or
available to any other person or entity, or in any way to copy, any of the
Confidential Information.
As used in this Agreement, the term "Use" means to appropriate any of the
Confidential Information for the benefit of any person or entity other than the
Company.
4. REASONABLENESS OF COVENANTS. X'Xxxxxx acknowledges and agrees that
the geographic scope and period of duration of the restrictive covenants
contained in this Agreement are both fair and reasonable and that the interests
sought to be protected by the Company are legitimate business interests entitled
to be protected. X'Xxxxxx further acknowledges and agrees that the Company
would not have agreed to enter into the Purchase Agreement unless he entered
into this Agreement.
5. COMPENSATION. The X'Xxxxxx shall receive no separate monetary
consideration for the restrictive covenants contained in this Agreement but the
X'Xxxxxx acknowledges receipt of consideration in the form of the vesting of
certain options for shares of common stock of InterCel, Inc. and the Shareholder
pursuant to Section 9.8 of the Purchase Agreement.
6. INJUNCTIVE RELIEF. The parties agree that the remedy of damages at
law for the breach by X'Xxxxxx of any of the covenants contained in this
Agreement is an inadequate remedy. In recognition of the irreparable harm that
a violation by X'Xxxxxx of any of the covenants, agreements or obligations
arising under this Agreement would cause the Company, X'Xxxxxx agree that, in
addition to any other remedies or relief afforded by law, an injunction against
an actual or threatened violation or violations may be issued against them and
every other person and entity concerned thereby, it being the understanding of
the parties that both damages and an injunction shall be proper modes of relief
and are not to be considered alternative remedies. In the event of any such
actual or threatened violation, the prevailing party in any legal proceeding
shall be reimbursed by the other party for all costs, expenses and
3
reasonable attorneys' fees incurred in pursuing or defending in such legal
proceedings any of its rights with respect to such actual or threatened
violation.
7. BLUE PENCIL DOCTRINE. In the event that any of the restrictive
covenants contained in this Agreement shall be found by a court of competent
jurisdiction to be unreasonable by reason of its extending for too great a
period of time or over too great a geographic area or by reason of its being too
extensive in any other respect, then such restrictive covenant shall be deemed
modified to the minimum extent necessary to make it reasonable and enforceable
under the circumstances.
8. NOTICE. All notices, demands and other communications provided for in
this Agreement shall be in writing and shall be given by personal delivery or by
certified or registered first class mail, postage prepaid, return receipt
requested, sent to the X'Xxxxxx at ________________ or to the Company at 0000
Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxxx 00000, attention Xxxxxxx X. Xxxxxxxx,
President, or at such other address as may be designated by a party in written
notice delivered to the other parties in accordance with this paragraph. All
such notices, demands and communications shall be effective when delivered.
9. ENTIRE AGREEMENT. This Agreement, together with the Employment
Agreement between X'Xxxxxx and ________________ dated _______________, 1997,
contains the entire agreement of the parties hereto and supersedes all prior or
contemporaneous agreements and understandings, oral or written, between the
parties hereto and thereto with respect to the subject matter hereof and
thereof.
10. AMENDMENT. No amendment or waiver of any provision of this Agreement
shall be effective unless the same shall be in writing and signed by all of the
parties and then such waiver shall only be effective in the specific instance
and for the specific purpose for which it was given.
11. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective heirs, personal
representative(s), successors and permitted assigns, but nothing in this
Agreement is to be construed as an authorization or right of any party to assign
its/his rights or delegate its/his duties under this Agreement without the prior
written consent of the other party hereto.
12. GOVERNING LAW. This Agreement shall be construed, governed by and
enforced in accordance with the laws of the State of Maine, without giving
effect to the principles of conflicts of laws thereof.
4
13. HEADINGS. The headings to the paragraphs of this Agreement are
intended for the convenience of the parties only and shall in no way be held to
explain, modify, amplify or aid in the interpretation of the provisions hereof.
14. SEVERABILITY. The provisions of this Agreement shall be deemed
severable and if any portion hereof shall be held invalid, illegal or
unenforceable for any reason, the remainder shall not thereby be invalidated but
shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day, month and year first above written.
COMPANY:
--------------------------------
By:
---------------------------
Its
----------------------
X'XXXXXX:
By:
---------------------------
Xxxxxxx X. X'Xxxxxx
5
