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EXHIBIT 2.2
CLOSING MEMORANDUM
This Closing Memorandum, dated April 30, 1999, is entered into by and
among Public Service Cellular, Inc., a Georgia corporation ("Purchaser"),
InterCel Licenses, Inc., a Delaware corporation ("ICL"), ICEL, Inc., a Delaware
corporation ("ICEL"), and Powertel, Inc., a Delaware corporation ("Powertel").
Powertel and ICEL are collectively referred to herein as "Seller."
R E C I T A L S
The parties hereto entered into an Asset Purchase Agreement dated
January 5, 1999 (the "Agreement"). In connection with the closing of the
transaction contemplated by the Agreement (the "Closing"), which is occurring
simultaneously with the execution of this Closing Memorandum, the parties hereto
desire to confirm and memorialize certain agreements and amend and supplement
the Agreement in certain respects, all as set forth herein.
In consideration of the premises, the parties hereto agree as follows:
A G R E E M E N T
1. Status of Agreement. Except as set forth herein, the Agreement
shall remain in full force and effect. All capitalized terms used and not
defined in this Closing Memorandum shall have the meanings assigned to them in
the Agreement. In the event of any conflict as to any matter between the
Agreement and this Closing Memorandum, the terms of this Closing Memorandum
shall control. In all other respects, this Closing Memorandum shall be
considered a supplement to and construed as a part of the Agreement. The
disclosure set forth herein and on the exhibits hereto shall be deemed to update
and amend all Schedules to the Agreement as of the Date of Closing.
2. No Default. Purchaser and Seller acknowledge and agree that:
(i) consent has not been obtained to assign the agreements listed in paragraph
(a) and (b) below to Purchaser; (ii) a corrective amendment to the lease for the
"Auburn University" site referred to in paragraph (c) below has not been
obtained; (iii) the failure to obtain consent to the assignment of such
agreements or to obtain the corrective amendment shall not constitute a breach
of the Agreement or cause an adjustment of the Purchase Price under the
Agreement; and (iv) Purchaser hereby waives any breach of the Agreement that may
arise from the failure to obtain the corrective amendment or the consents to the
assignment of such agreements:
(a) Collocation Agreement dated October 7, 1997 between
Powertel, Inc. and City of Opelika (assignment
approved by counsel to City of Opelika; awaiting
signature of mayor following city council approval on
May 4, 1999);
(b) Term Lease Master Agreement No. FMC998 between IBM
Credit Corporation and InterCel, Inc. and related
Term Lease Supplement (Purchaser and Seller have
executed IBM's form of consent, and IBM has indicated
in writing that it has "completed its approval of the
contemplated transfer" and is currently performing
the "purely administrative" task of changing the
billing information and executing the consent); and
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(c) Corrective First Amendment to Option and Lease
Agreement between E.L. Xxxxxxx, Jr., in his capacity
as Executor of the Estate of Xxxxxxxx X. Xxxxxxx, and
Powertel/Atlanta, Inc. (landlord is currently
reviewing form of corrective amendment).
provided, however, that Seller and Purchaser agree to continue to use
commercially reasonable efforts for a period of 180 days following the Date of
Closing to obtain consent to the assignment of the agreements in paragraphs (a)
and (b) above to Purchaser and the corrective amendment to the lease in
paragraph (c) above, and Seller agrees that any amounts paid to Seller with
respect to the agreement referenced in paragraph (a) above that relate to the
period after the Date of Closing shall be received on behalf of, and promptly
paid to, Purchaser.
3. Domain Name. The "xxxx.xxx" and "xxxxxxxx.xxx" domain names
have not yet been transferred. Seller and Purchaser shall work together, each
using commercially reasonable efforts, for a period of 180 days after the Date
of Closing to transfer these domain names.
4. Filing of UCC Termination Statement. Seller agrees to use its
commercially reasonable efforts after the Date of Closing to obtain a UCC-3
Termination Statement executed by Matsushita Electric Corp. of America and to
file the same in order to terminate the UCC-1 financing statement that was filed
with the State of Alabama on December 10, 1996 with respect to a purchase money
security interest in cellular telephones.
5. Purchase of Generators. Schedule 1.1(b) to the Agreement
contemplates that the Purchaser would purchase certain generators on the Date of
Closing. Exhibit A attached hereto amends the list of generators that was set
forth on Schedule 1.1(b) to the Agreement in order to add a 30 Kw generator at
each of the "Xxxxx'x Station" and "North Auburn" sites. Purchaser agrees to pay
to Seller on the Date of Closing an aggregate of $54,000 in cash for the
generators set forth on Schedule 1.1(b), as amended by Exhibit A hereto.
6. Capital Expenditures.
(a) Pursuant to Section 7.10(a) of the Agreement, Purchaser has
heretofore authorized Seller to make certain capital expenditures which were
desirable (but not required under the terms of the Agreement) in connection with
the operation of the Cellular Business. Purchaser has agreed to pay Seller in
cash on the Date of Closing in reimbursement of such expenditures, which total
$276,559. Exhibit B attached hereto contains invoices which support Seller's
payments for these capital expenditures.
(b) Pursuant to Section 7.10(b) of the Agreement, Seller agreed to
spend at least $2,288,945 on or prior to the Date of Closing for budgeted
capital expenditures for the calendar year ended December 31, 1998. As set forth
in the revised Schedule 7.10(b), as amended by Exhibit A attached hereto, Seller
has indicated that it may have spent $14,315 less on capital expenditures than
is required by Section 7.10(b) of the Agreement, which deficit shall be due to
Purchaser upon completion of the final audit as set forth in Section 6(c) below.
In connection with Schedule 7.10(b) and the prospective audit of capital
expenditures pursuant to this Section 6, Purchaser acknowledges that Seller has
indicated that it has paid $169,271 for certain Northern Telecom, Inc.
("Nortel") MDS Equipment (the "Nortel Equipment"), which is included in the line
item "MIS Equipment, etc. (MDS, Alltel billing sys.)" on Schedule 7.10(b).
Purchaser has agreed to acquire the Nortel Equipment "as is" and to credit
Seller for the expenditures made with respect to the Nortel Equipment pursuant
to
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Schedule 7.10(b) (subject to such expenditures being verified by the audit
described above). Purchaser acknowledges that the amount paid by Powertel to
Nortel for the Nortel Equipment is $18,807 less than the amount invoiced by
Nortel to Powertel, due to Powertel's belief that the Nortel Equipment does not
fully conform to Nortel's description of the Nortel Equipment. Powertel will
retain all claims and potential claims against Nortel, and will indemnify and
hold harmless Purchaser, with respect to such dispute as relating to the Nortel
Equipment.
(c) Purchaser and Seller agree that Purchaser will cause the total
amount of expenditures made pursuant to Sections 7.10(a) and 7.10(b) to be
audited at Purchaser's expense by Ernst & Young or, at Purchaser's option,
another accounting firm of similar size and stature. Such audit must be
completed within 120 days after the Date of Closing and shall include all items
(but only such items) that may be properly characterized as capital expenditures
in accordance with Generally Accepted Accounting Principles. Upon completion,
such audit shall be forwarded promptly to Powertel in accordance with the notice
provisions of the Agreement, and Powertel shall, within 10 days of its receipt
of such audit, provide Purchaser with written notice of its agreement or
disagreement with the results of such audit. If Powertel disagrees with the
results of such audit, Powertel and Purchaser agree to meet promptly to attempt
to resolve such disagreement. If, within 10 days following such meeting, the
disagreement has not been resolved, the disagreement shall be resolved by
arbitration in accordance with the Agreement. Any deficit in capital
expenditures that is finally determined to exist pursuant to this Section 6
shall be promptly paid by Powertel to Purchaser. In no event shall Purchaser be
obligated to pay Powertel or Seller any amount pursuant to Section 7.10 or
pursuant to this Section 6. Powertel and Purchaser agree to reasonably cooperate
with each other and to do all reasonable things, and to accord the other party
reasonable access to each other's books and records, as may be necessary to
carry out the intent and purposes of this Section 6.
7. Sharing of Propane Tanks. Seller and Purchaser will both have
certain equipment, including generators, located at the cell site called
"Xxxxx'x Station," which is located in Xxx County, Alabama (the "Property").
Given that the leased premises at this location do not provide sufficient space
for the installation of two separate propane fuel tanks to be used by each of
the parties, the parties have agreed to share the existing propane fuel tank
located on the Property and owned by Seller on the terms set forth below:
(a) Seller will allow Purchaser to share the propane fuel
tank at the Property for an initial period of 5
years, with automatic renewals for additional
one-year periods; provided, however, that either
party may terminate this arrangement at any time by
providing 90 days prior written notice to the other
party.
(b) Seller shall be responsible for the maintenance,
repair and refueling of the propane tank at the
Property. Seller shall invoice to Purchaser on a
quarterly basis an amount equal to 60.0% of the costs
of such maintenance, repair and refueling of the
propane tank.
(c) Purchaser shall pay in full each such quarterly
invoice within 30 days after receipt.
(d) Purchaser acknowledges that the obligations under
this Section 7 are independent of the rental and
other obligations set forth under the parties' lease
for tower and ground space at the Property. Unless
Purchaser is otherwise notified, Seller anticipates
that the rights and duties under this Section 7 will
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remain with Seller and will not be assigned in
connection with the pending sale and transfer of the
tower and related assets by Seller to a subsidiary of
Crown Castle International Corporation.
8. Pine Mountain. Purchaser and Seller acknowledge that Seller
may in the future construct a new tower at the "Pine Mountain (Callaway)" site,
as such site is described in the lease dated September 1, 1992 by and between
the Xxx Xxxxx Xxxxxxxx Foundation and Intercel, Inc., as such lease is in effect
on the date hereof . If Seller constructs a new tower at the Pine Mountain
(Callaway) site, Purchaser agrees to cooperate with Seller to relocate its
cellular equipment and antennae from the current tower and tower site to the new
tower and tower site; provided, however, that Seller shall pay all reasonable
costs incurred by Purchaser in connection with the relocation of this cellular
equipment (including, without limitation, the cost of any new or replacement
equipment required in order to effect such relocation, which equipment shall in
all cases be of a quality at least equal to Purchaser's equipment at the Pine
Mountain (Callaway) site at the time of such relocation); provided, further,
that Seller shall do all things necessary to ensure that any such relocation
shall not adversely affect Purchaser's ability to provide services in connection
with the Cellular Business; and provided further, however, that Purchaser shall
not be required to relocate its cellular equipment if such relocation would
cause a degradation in the quality of the Purchaser's coverage from the Pine
Mountain cell site.
9. Vehicle Titles. Seller has informed Purchaser that certain of
the vehicles that it owns are titled in the name of "Eastern Telecom, Inc."
which is an entity that purchased vehicles for various affiliated companies
under a fleet purchasing arrangement. These vehicles are: (i) a 1992 GMC Van
(VIN 1GTDM15Z1NB51 7015); (ii) a 1992 GMC Van (VIN 1GTDM15Z 8NB516718); (iii) a
1992 GMC Van (VIN 0XXXX00X0XX000000); and (iv) a 1995 GMC Van (VIN
0XXXX00X0XX000000). ITC DeltaCom, Inc., the successor to Eastern Telecom, Inc.,
will execute these titles on or about May 4, 1999, and Seller will file the
transfer documents with the State of Alabama. Seller shall thereafter, as
promptly as reasonably possible, cause such titles to be transferred into the
name of Purchaser.
10. Additions to Legal Descriptions. Following the Closing,
Purchaser and Seller shall add to the legal descriptions contained in the Tower
Space Leases the following language: "together with a non-exclusive right of
ingress and egress over any access easements appertaining to the Lessor's
Property" (as defined in the attached Tower Attachment Lease Agreement).
11. Post-Closing Changes to Tower Space Leases. Purchaser
acknowledges that Powertel has entered into an asset purchase agreement with
Crown Castle International Corporation ("Crown Castle") to sell certain of the
towers that are the subject of the Tower Space Leases. Powertel agrees, pending
the closing of the transaction with Crown Castle, to reasonably facilitate any
negotiations between Crown Castle and Purchaser regarding proposed amendments to
the Tower Space Leases.
12. Wire Transfer Overage. Seller acknowledges that the amount
paid to it by Purchaser by wire transfer upon the Date of Closing included an
overage of $8,000.00. In repayment of this overage, Purchaser shall be entitled
to, and shall, subtract an aggregate of $8,000 from the first month's rent
payments due to Seller following the Date of Closing.
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IN WITNESS WHEREOF, the parties have executed this Closing Memorandum
this 30th day of April, 1999.
PURCHASER:
Public Service Cellular, Inc.
By: /s/ Xxx X. Xxxx
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Name: Xxx X. Xxxx
Title: President
SELLER:
Powertel, Inc.
By: /s/ Xxxxx X. Xxxxx
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Name: Xxxxx X. Xxxxx
Title: President
ICEL:
ICEL, Inc.
By: /s/ Xxxxx X. Xxxxx
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Name: Xxxxx X. Xxxxx
Title: President
ICL:
InterCel Licenses, Inc.
By: /s/ Xxxxx X. Xxxxx
---------------------------------
Name: Xxxxx X. Xxxxx
Title: President
