AGREEMENT FOR
PURCHASE AND SALE
OF EXCHANGES
DATED AS OF DECEMBER 15, 1995
BETWEEN
NORTHLAND TELEPHONE COMPANY
D/B/A PTI COMMUNICATIONS
A WHOLLY-OWNED SUBSIDIARY OF PACIFIC TELECOM, INC.,
PACIFIC TELECOM, INC.
AND
U S WEST COMMUNICATIONS, INC.
AGREEMENT FOR PURCHASE AND SALE OF EXCHANGES
This Agreement for Purchase and Sale of Exchanges ("Agreement") is made
and entered into as of the 15th day of December, 1995 by and between U S WEST
Communications, Inc., a Colorado corporation ("Seller"), and Northland
Telephone Company, d/b/a PTI Communications, a corporation organized and
existing under the laws of the State of Minnesota, a wholly-owned subsidiary
of Pacific Telecom, Inc. ("Buyer") and Pacific Telecom, Inc., ("PTI").
RECITALS
A. Seller currently has certain rights to provide and operate wireline
telecommunication services and owns certain assets used to provide
such services in Minnesota, pursuant to a grant of operating authority
issued by the Minnesota Public Utilities Commission ("MPUC"), which
have been offered for sale.
B. Buyer desires to acquire the right to provide and operate wireline
telecommunication services and to purchase certain of Seller's assets
in the telephone exchanges, listed in Exhibit A, in the State of
Minnesota (the "Exchanges"), and Seller wishes to sell, assign and
transfer the aforesaid right to provide and operate the wireline
telecommunication service and assets in the Exchanges to Buyer.
C. Each defined term shall have the meaning set forth in this Agreement where
such term is first used or, if no definition is so set forth, the
meaning set forth in the "Glossary of Terms," attached hereto and
incorporated orherein by this reference.
NOW, THEREFORE, for and in consideration of the foregoing and the mutual
covenants and agreements set forth in this Agreement, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Seller and Buyer, agree as follows:
ARTICLE 1
PURCHASE AND SALE OF ASSETS
1.1 Sale and Transfer. Upon the terms and subject to the
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conditions hereinafter set forth, Seller agrees to sell, convey, transfer,
assign and deliver all of the Exchanges and Assets, except for the Excluded
Assets, to Buyer, and Buyer agrees to purchase and receive the Exchanges and
Assets from the Seller and assume Liabilities after the Closing Date.
1.2 Purchase Price. Buyer shall pay to Seller as consideration
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for the transfer of the right to provide and operate wireline
telecommunication service in the Exchanges and sale of the Assets, a total
purchase price of One Hundred Three Million Dollars ($103,000,000) (the
"Purchase Price").
1.3 Payment. The Purchase Price shall be paid as follows:
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X. Xxxxxxx Money. On the execution date of this Agreement,
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or three (3) business days thereafter, Buyer shall deposit, in a financial
institution acceptable to Seller, an amount equal to Five Million Dollars
($5,000,000) (the "Xxxxxxx Money") in the form of a wire transfer of federal
funds payable to the order of Seller, for disposition in accordance with the
terms of this Section. Buyer shall be responsible for all fees and costs
associated with the Xxxxxxx Money. At Closing, the Xxxxxxx Money and
interest accrued thereon, shall be applied towards the payment of the
Purchase Price. In the event Buyer fails to finalize the transaction for any
reason, except as set forth in Sections 8.1 or 8.3(ii), and in view of the
difficulty of determining the amount of damages which may result to Seller
from such failure to finalize the Agreement, Buyer and Seller have mutually
agreed that the Xxxxxxx Money shall be delivered to Seller as liquidated
damages, and not as a penalty, and this Agreement shall thereafter become
null and void. In the event Seller fails to finalize the transaction, except
as set forth in Sections 8.2 or 8.3(ii), then Seller shall, as soon as
reasonably practicable thereafter and upon Buyer providing reasonable proof
thereof, reimburse Buyer for all of its reasonable costs and fees incurred
from and after the
execution date of this Agreement, not to exceed Two Hundred Thousand Dollars
($200,000), in negotiating and seeking Governmental Approval for this
transaction, and this Agreement will thereafter become null and void. In
the event the transaction is not finalized for reasons set forth in Section
8.1 or 8.3(ii), Buyer shall receive the Xxxxxxx Money and interest accrued
thereon.
B. Remaining Balance. On the Closing Date, the Purchase Price,
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minus the Xxxxxxx Money, plus or minus the adjustments, as set forth in
Section 1.3(C), shall be payable to Seller by wire transfer of immediately
available funds to such bank account(s) as Seller shall designate prior to
Closing.
C. Adjustment to the Purchase Price. Any taxes, utilities,
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leases and such other items as shall be mutually agreed upon shall be
prorated as of the Closing Date and the Purchase Price shall be adjusted by
such proration multiplied by a factor of 1.0.
1.4. Appraisal of the Assets. No later than sixty (60) days
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after Closing, the Buyer and Seller shall mutually agree to the appraised
value of the depreciable tangible Assets.
1.5. Allocation of the Purchase Price. The Purchase Price for
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the Assets, the covenants set forth in Section 6.2(H), and grant of
operating authority (which includes, but is not limited to all applicable
state and federal certificates, licenses, or franchises necessary for
operating the Business) shall be allocated as mutually agreed upon between
Buyer and Seller no later than sixty (60) days after Closing. In addition,
it is understood and agreed between Buyer and Seller that the Purchase
Price reflects among other things the availability of additional revenue
sources (excluding those amounts obtained under traditional regulatory
practices) to support the operation of the Exchanges. Such allocation shall
provide, by line item, proration for taxes, utilities, leases, and such other
items as shall be mutually agreed to between Buyer and Seller.
1.6. Excise Taxes and Recording Costs. Buyer shall pay the excise
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taxes in accordance with Sections 297A of the Minnesota
Revised Code. Buyer shall pay any and all recording fees, notarial fees and
other similar costs of Closing incurred in connection with the sale, transfer,
or assignment of the Exchanges and Assets or otherwise on account of this
Agreement or the transaction contemplated hereby.
1.7. Guaranty. PTI guarantees Buyer's obligations and ability to pay
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the Purchase Price and Buyer's performance under this Agreement.
ARTICLE 2
CLOSING
2.1 Closing. The Closing of the purchase and sale of Exchanges
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and Assets (the "Closing") shall take place at Seller's offices at 10:00
o'clock a.m., local time, on the second Tuesday of the second full month
following the satisfaction or waiver of all the conditions precedent to
Closing set forth in Section 3 or on such other date as the parties
mutually agree but in no event later than the second anniversary date of
this Agreement. The date that the Closing actually occurs is referred
to as the "Closing Date." If the Closing is postponed, all references to
the Closing Date in this Agreement shall refer to the postponed date.
2.2 Documents to be Delivered by Seller to Buyer. At or prior to
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the Closing, Seller will deliver to Buyer:
A. certified copies of all Seller's resolutions pertaining to the
authorizations of this Agreement and the consummation of the transaction
contemplated herein by Seller;
B. duly executed bills of sale, assignments, and other instruments
of transfer, in form sufficient to convey to Buyer all of the rights, title
and interest of Seller in and to the Assets in accordance with the terms
hereof;
C. a certificate of Seller certifying as to the accuracy of
Seller's representations and warranties at and as of the
Closing and that Seller has materially performed and complied with all of
the terms, provisions and conditions to be performed and complied with at or
before the Closing, the form of which shall be mutually agreed upon between
Seller and Buyer and furnished at least 30 days prior to the Closing;
D. a certificate of Seller certifying as to certain corporate
matters with respect to Seller, together with all of the attachments
referred to therein, the form of which shall be mutually agreed upon between
Seller and Buyer and furnished at least 30 days prior to the Closing;
E. the opinion of counsel to Seller, dated as of Closing Date, the
form of which will be furnished to Buyer at least 30 days prior to the
Closing; and
F. such other certificates and documents as Buyer or its counsel may
reasonably request.
2.3 Documents to be Delivered by Buyer to Seller. At or prior to the
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Closing, Buyer will deliver to Seller:
A. the payment of the Purchase Price;
B. certified copies of all Buyer's resolutions pertaining to the
authorization of this Agreement and the consummation of the transactions
contemplated herein by Buyer;
C. a certificate of Buyer certifying as to the accuracy of Buyer's
representations and warranties at and as of the Closing and that Buyer has
materially performed and complied with all of the terms, provisions and
conditions to be performed and complied with it at or before the Closing,
the form of which shall be mutually agreed upon between Buyer and Seller and
furnished at least 30 days prior to the Closing;
D. a certificate of Buyer certifying as to certain corporate matters,
together with all of the attachments referred to therein, the form of which
shall be mutually agreed upon
between Buyer and Seller and furnished at least 30 days prior to the Closing;
E. the opinion of counsel to Buyer, dated as of the Closing Date,
the form of which will be furnished to Seller at least 30 days prior to the
Closing; and
F. such other certificates and documents as Seller or its counsel
may reasonably request.
2.4 Documents to be Delivered by Seller and Buyer to Each Other. At or
____________________________________________________________
prior to the Closing, Seller and Buyer will execute and deliver or cause to
be executed and delivered to each other the Agreements set forth in Schedule
2.4, regarding the Exchanges, upon mutually agreed terms and conditions.
2.5 Further Assurance. Except as otherwise provided herein, all
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instruments of conveyance, assignment or transfer referred to herein, all
sums of money, and all records and data to be delivered as specified in this
Agreement shall be delivered at Closing (or if previously delivered so
acknowledged). The transfer of telecommunications service from Seller to
Buyer shall occur at 11:59 p.m. on the Closing Date or as otherwise mutually
agreed.
ARTICLE 3
CONDITIONS
3.1 Conditions to Buyer's Obligations. The obligation of Buyer to
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consummate the transactions contemplated by this Agreement shall be subject
to the satisfaction, on or prior to the Closing Date, of each of the
following conditions, any of which may, be waived by Buyer:
A. Representations and Warranties. All representations and warranties
______________________________
of Seller made in this Agreement shall be true and correct in all material
respects on and as of the Closing Date as though made at such time, other
than changes contemplated by this Agreement or approved by Buyer in writing,
and there shall have
been delivered to Buyer a certificate of Seller to that effect, dated as of
the Closing Date, signed by an authorized officer of Seller.
B. Covenants. Seller shall have performed and complied in all
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material respects with all covenants and agreements required by this
Agreement to be performed by it on or prior to the Closing Date.
C. Consents. All authorizations, consents and approvals of, filings
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and registrations with, and notifications to (collectively "Governmental
Approvals") any United States, state, or local governmental entity or
municipality or subdivision thereof or any authority, department, MPUC,
board, bureau, agency, court or instrumentality thereof the FCC, NECA,
or RUS (collectively, "Governmental Authorities") necessary to consummate
the transaction contemplated shall have been obtained or made and shall be
in full force and effect. The terms and conditions of all Governmental
Approvals shall be acceptable to Buyer, in Buyer's sole discretion.
D. No Governmental or Other Proceeding or Litigation. No preliminary or
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permanent injunction or other order or decree by any Governmental Authority
shall have been issued and remain in effect which prevents the transactions
contemplated by this Agreement, or which could reasonably be expected to have
a material adverse effect on the Exchanges and Assets, nor shall there have
been instituted any action or proceeding by any Governmental Authority, nor
shall there have been instituted any action or proceeding by any other person
challenging the acquisition by Buyer or the sale by Seller of the Exchanges
and Assets, or otherwise seeking to restrain or prohibit the consummation of
the transaction contemplated hereby, or seeking material damages in
connection therewith, or which could reasonably be expected to have a
material adverse effect on the Exchanges and Assets.
X. Xxxx-Xxxxx-Xxxxxx Act. All filings required to be made under the
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Xxxx-Xxxxx-Xxxxxx Act ("H-S-R") shall have been made,
and the waiting period thereunder shall have expired or early termination
thereof shall have been granted.
F. Certificates; Documents. Seller shall have delivered the
________________________
certificates, opinions of counsel and other documents required by Sections
2.2 and 2.4.
3.2 Conditions to Seller's Obligations. The obligations of Seller to
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consummate the transactions contemplated by this Agreement shall be subject
to the satisfaction, on or prior to the Closing Date, of each of the
following conditions, any of which may be waived by Seller:
A. Representations and Warranties. All representations and warranties
______________________________
of Buyer made in this Agreement shall be true and correct in all material
than respects on and as of the Closing Date as though made at such time,
other changes contemplated by this Agreement or approved by Seller in writing,
and there shall have been delivered to Seller a Certificate of Buyer to
that effect, dated the Closing Date, signed by authorized officers of Buyer.
B. Covenants. Buyer shall have performed and complied in all material
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respects with all covenants and agreements required by this Agreement to be
performed by it on or prior to the Closing Date.
C. Consents. All Governmental Approvals of any Governmental Authority
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necessary to consummate the transaction contemplated hereunder shall have
been obtained or made and shall be in full force and effect. The terms
and conditions of all Governmental Approvals must be acceptable to Seller,
in Seller's sole discretion.
D. No Governmental Proceeding or Litigation. No preliminary or permanent
________________________________________
injunction by any Government Authority shall have been issued and remain in
effect which prevents or delays the transactions contemplated by this
Agreement, nor shall there have been instituted any actions or proceeding by
any Governmental Authority, nor shall there have been instituted any action
or proceeding by any other person challenging the
acquisition by Buyer or the sale by Seller of the Exchanges and Assets
or otherwise seeking to prohibit the consummation of the transaction
contemplated hereby or seeking material damages in connection therewith.
E. H-S-R Act. All filings required to be made under the
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H-S-R Act shall have been made, and the waiting period thereunder shall have
expired or early termination thereof shall have been granted.
F. Corporate Approvals. This transaction shall have received all necessary
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corporate and Board of Director approval(s)on or before January 19, 1996.
G. Certificates; Documents. Buyer shall have delivered the Certificates,
_______________________
Opinion of Counsel and other documents required by Section 2.3 and Buyer
shall have delivered the agreements required by Section 2.4.
ARTICLE 4
ENVIRONMENTAL CONDITIONS; EXCHANGES AND ASSETS "AS IS"
4.1 Central Office; Asbestos, Hazardous Materials. Buyer acknowledges
_____________________________________________
that it knows that the central office buildings and adjacent structures,
including but not limited to the Central Office site, garages and parking
lots, (the "Central Offices") appurtenances, facilities and improvements
thereon of the Exchanges and Assets may have been found to contain asbestos-
containing materials, and that Buyer has independently investigated the
presence of asbestos-containing materials in the Central Offices. In
addition, Buyer acknowledges that it knows that the Central Office and
equipment may contain Hazardous Materials. Buyer also acknowledges that
it is aware that certain Hazardous Materials are used in maintenance and
operations related to the equipment and related to the Property, and that
such Hazardous Materials may be present in the Central Offices. Except
as expressly provided for in this Agreement, SELLER HEREBY DISCLAIMS
ALL WARRANTIES, WHETHER EXPRESSED OR IMPLIED, WITH
REGARD TO THE CONDITION OR SAFETY OR PRESENCE OF HAZARDOUS MATERIALS AND
ASBESTOS IN SAID CENTRAL OFFICES.
Except as provided for in Section 6.3(H), Buyer agrees to take the
Exchanges and Assets "AS IS" and without any warranty of merchantability or
fitness or any other warranties expressed or implied as it relates to the
environmental condition of the Central Offices. Except as provided for in
Section 6.3(H), Buyer understands and agrees that any responsibility for
compliance with Environmental Laws applicable to the ownership or use of the
Central Offices following the Closing, including the costs of any remediation
or cleanup associated with the Central Offices, or environmental Claim or
Liability associated with the Central Offices, irrespective of when
contamination occurred, is assumed by Buyer at the Closing. Except as
provided for in this Agreement, BUYER UNDERSTANDS THAT THE SELLER MAKES NO
REPRESENTATIONS, WARRANTIES, OR GUARANTEES, WHETHER EXPRESS OR IMPLIED, OF
ANY KIND, NATURE OR TYPE WHATSOEVER WITH RESPECT TO THE CENTRAL OFFICES, OR
THE VALUE, MARKETABILITY, FEASIBILITY, DESIRABILITY OR ADAPTABILITY THEREOF
OR THE COMPLIANCE WITH ENVIRONMENTAL LAWS. Buyer has made all legal, factual
and other inquiries and investigations as Buyer deems necessary, desirable or
appropriate with respect to the Central Offices and the appurtenances,
facilities and improvements thereon, and Buyer is purchasing the Central
Offices based on Buyer's or its agent's inspection and examination thereof.
In addition, Buyer has relied on information and documentation provided by
Seller as well as Seller's representations set forth in this Agreement.
Except as it relates to those documents to be provided pursuant to Section
6.3(H), Buyer acknowledges that Seller has informed Buyer of the potential
presence of asbestos-containing materials in the Exchanges and in the Central
Offices as well as other Hazardous Materials, and Buyer acknowledges that the
purchase Price reflects the potential presence of the asbestos-containing
materials and the Hazardous Materials and environmental Claims or Liabilities
that may be associated with the Central Offices.
4.2 Outside Plant. Except as expressly provided for in this Agreement,
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Buyer acknowledges that it knows that operations in the outside plant
may trigger certain environmental, industrial
hygiene and safety concerns relating to Environmental Laws. EXCEPT AS
EXPRESSLY PROVIDED FOR IN THIS AGREEMENT, SELLER HEREBY DISCLAIMS ALL
WARRANTIES, EXPRESS OR IMPLIED, WITH REGARD TO THE CONDITION OR SAFETY OF
SAID OUTSIDE PLANT CONSISTENT WITH PUBLIC POLICY.
Except as expressly provided for in this Agreement, Buyer takes the
outside plant "AS IS" and without any warranty of merchantability or fitness
or any other warranties expressed or implied as it relates to the
environmental condition of the outside plant. Except as provided for
in Section 6.3 (H), Buyer understands and agrees that any responsibility for
compliance with Environmental Laws applicable to the ownership or use of the
Exchanges and Assets following the Closing, including the costs of any
remediation or cleanup associated with the Exchanges and Assets, irrespective
of when contamination occurred, is assumed by Buyer at the Closing. Seller
agrees that all outside plant environmental Claims or Liabilities which are
incurred or based on facts which arise on or before Closing, are the
responsibility of Seller for the time period set forth in Section 7.6. Except
as expressly provided for in this Agreement, Buyer understands that Seller
makes no warranties, representations or guarantees, whether express or
implied, of any kind, nature or type whatsoever with respect to the Exchanges
and Assets or the value, marketability, feasibility, desirability or
adaptability thereof, or the compliance with Environmental Laws. Buyer has
made all legal, factual and other inquiries and investigations as Buyer deems
necessary, desirable or appropriate with respect to the outside plant, and
Buyer is purchasing the Exchanges and Assets based on Buyer's own, or its
agent's inspection and examination thereof. In making such investigation and
inquires, Buyer has relied on information and documentation provided by
Seller as well as Seller's representations expressly set forth in this
Agreement.
4.3 DISCLAIMER, OF WARRANTIES. SELLER HEREBY DISCLAIMS ANY AND ALL
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REPRESENTATIONS OR WARRANTIES, EXPRESSED OR IMPLIED, EXCEPT AS SPECIFICALLY
SET FORTH HEREIN. SELLER IS NOT WARRANTING THE CONDITION OR USEFULNESS OF
THE EXCHANGES AND ASSETS, OR THEIR VALUE.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES
5.1 Buyer's Representations and Warranties. Buyer represents and warrants
______________________________________
to Seller that:
A. Organization. Buyer is a corporation duly incorporated, validly
____________
existing and in good standing under the laws of the State of Minnesota. Except
as provided in Section 3.1(G) Buyer has full corporate power and authority to
execute and deliver this Agreement and Buyer has obtained all corporate
approvals necessary to consummate this transaction, and authorize the
execution, delivery and performance of this Agreement and the agreements
and contracts mentioned herein. Neither the execution and delivery of, nor
the consummation of the transaction contemplated herein will result in a
default or an event that would constitute a default, breach or violation of
any contracts involving the Buyer.
B. Authorization, Execution, and Delivery. Except as provided in 3.1(G)
______________________________________
this Agreement and all other agreements and instruments to be executed by
Buyer in connection herewith shall be duly and validly executed and delivered
by Buyer. Except as provided in 3.1(G) this Agreement and the transaction
contemplated hereby, when executed by Buyer, shall constitute a valid and
binding agreement of Buyer enforceable against Buyer in accordance with its
terms except to the extent that such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other laws
relating to creditors' rights generally and by principles of equity.
C. Governmental Authorizations. Except as set forth in Schedule 5.1(C),
___________________________
Buyer's execution and delivery of this Agreement or Buyer's consummation of
the transactions contemplated hereby does not require authorization or
approval of, or filing with, any governmental agency, authority or other body
or any other third persons.
D. Funds. On the Closing Date, Buyer shall have sufficient funds
_____
available to pay the Purchase Price and to consummate the transaction
contemplated hereby.
E. Litigation. Except as set forth in Schedule 5.1(E), to the best of
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Buyer's knowledge, there are no Claims, either at law or in equity, on or
before any Governmental Authority, of any kind now pending or threatened or
could reasonably form the basis of any such Claim involving Buyer or any of
its properties or assets that (i) question the validity of this Agreement; or
(ii) seeks to delay, prohibit or restrict in any manner any actions taken or
contemplated to be taken by Buyer under this Agreement.
F. Investigation. Buyer, through its accountants, attorneys, agents,
_____________
employees', and others, has made prior to the Closing, such investigations of
the Exchanges and Assets and of the financial, legal, and other condition and
location of the Exchanges and Assets that it deems necessary or advisable
with respect to the transaction contemplated by this Agreement. Buyer
has diligently requested and has received all information which it has deemed
pertinent, necessary or appropriate to an evaluation of this transaction, and,
except for those documents requested in Schedule 6.3(H), has conducted a
thorough and independent investigation of all material aspects of the
Exchanges and Assets. The Buyer has carefully read and scrutinized all
information provided to it by Seller and its representatives, or which Buyer
has obtained through its independent investigation, and understands the fair
implications of this information. In making such investigation, Buyer has
relied on information and documentation provided by Seller as well as
Seller's representations and warranties expressly set forth in this Agreement.
The Buyer has not received from the Seller or from anyone acting or claiming
to act on behalf of the Seller, any accounting, tax, legal, or other advice
with respect to this transaction, and Buyer is relying solely on advice of
its own accounting, tax, legal, and other advisors. The Buyer has such
knowledge, experience and sophistication in financial and business matters
as to enable it to evaluate all of the merits and risks associated with this
transaction.
G. Exchanges in Existing Study Areas for USF Purposes. Buyer shall include
__________________________________________________
the Exchanges and Assets in its existing Study Area for USF purposes.
H. Assets "As Is, Where Is". Buyer acknowledges that it is acquiring the
________________________
Exchanges and Assets in their "AS IS, WHERE IS" condition, and without any
warranty of merchantability or fitness or any other warranties expressed or
implied, except as expressly provided herein.
5.2 Seller's Representations and Warranties. Seller represents and
_______________________________________
warrants to Buyer that:
A. Organization. Seller is a corporation duly incorporated, validly
____________
existing and in good standing under the laws of the State of Colorado and has
full power and authority to execute and deliver this Agreement. Seller has
authority to complete the transactions contemplated by this Agreement.
Neither the execution and delivery of, nor the consummation of the transaction
contemplated herein will result in a default or an event that would constitute
a default, breach or violation of any contracts involving the Seller.
B. Authorization, Execution and Delivery. Except as set forth in Section
_____________________________________
3.2(F), this Agreement and all other agreements and instruments to be executed
by Seller in connection herewith shall be duly and validly executed and
delivered by Seller. Except as set forth in Section 3.2(F) this Agreement
and the transaction contemplated hereby, when executed by Seller, shall
constitute a valid, legal, and binding agreement by Seller enforceable
against Seller in accordance with its terms except to the extent that such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws relating to creditors' rights
generally and by principles of equity.
C. Title to Assets. Except as provided in Section 6.2(E), the Assets, at
_______________
the time of Closing, will be owned and transferred by Seller to Buyer free
and clear of all liens, and encumbrances.
D. Governmental Authorization. Except as set forth in Schedule 5.2(D), no
__________________________
authorization or approval of, or filing with, any governmental agency,
authority or other body or any other third persons will be required in
connection with Seller's execution and delivery of this Agreement or Seller's
consummation of the transactions contemplated hereby except for those
authorizations or approvals which would not have a material adverse impact on
the Buyer's use of the Assets.
E. Litigation. Except as set out in Schedule 5.2(E), to the best of
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Seller's knowledge, there are no Claims, either at law or in equity, on or
before any Governmental Authority, of any kind now pending, or threatened,
involving Seller or any of its properties or assets that (i) question the
validity of this Agreement; or (ii) seeks to delay, prohibit or restrict in
any manner any actions taken or contemplated to be taken by Seller under this
Agreement.
F. Tax Matters. All taxesc of any kind whatsoever due and payable by the
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Seller with respect to the Exchanges and Assets through the Closing Date will
have been paid in full. There are no liens for federal, state or local taxes
upon the Exchanges or Assets, except for statutory liens for taxes or
assessments not yet delinquent or the validity of which is being contested in
good faith by appropriate proceedings.
Seller has filed or will cause to be filed, all federal, state and local
tax returns and reports of any kind (including, without limitation, income,
franchise, sales, use, excise, employment and real and personal property)
which Seller is obligated to file with respect to the Assets for all periods
up to and including the Closing Date and shall pay all taxes due on such
returns.
G. Offering Memorandum. To the best of Seller's knowledge as of
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September 13, 1994, Sections 3.3.3 and 3.3.4 and 5.2 of Seller's Offering
Memorandum for the Sale of Selected Telephone Exchanges in the State of
Minnesota issued September 13, 1994, as amended, are true and correct in all
material respects.
ARTICLE 6
COVENANTS
6.1 Covenants of Buyer. Buyer hereby covenants and agrees that from the
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execution date hereof to the Closing Date:
A. Continued Efforts. Buyer will use its continual best efforts to (I)
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cause to be fulfilled and satisfied all of the conditions to the Closing to
be performed or satisfied by Buyer; (ii) cause to be performed all of the
matters required of Buyer at the Closing; and (iii) take such steps and
do all such acts as may be necessary to make all of its warranties and
representations of Buyer true and correct as of the Closing Date with the
same effect as if the same had been made, and this Agreement had been dated,
as of the Closing Date.
B. Cooperation. Buyer agrees to cooperate with Seller with respect to
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(I) Seller's assignment to Buyer of the Exchanges and Assets hereunder and
(ii) Seller's restructuring of this transaction as an Internal Revenue Code
sec. 1031 transaction, at no additional expense to Buyer; such cooperation to
include, without limitation, purchase of the Assets from an intermediary
corporation of Seller's choice, and execution of an Assignment and Conditional
Rescission Agreement and such other documents in connection with the
transaction as Seller may reasonably request. If Seller elects to pursue this
transaction as an Internal Revenue Code Sec. 1031 transaction, notwithstanding
anything in this Agreement to the contrary, Seller shall fully indemnify,
defend and hold Buyer harmless from and against any and all liabilities
resulting therefrom, including but not limited to any tax impacts on Buyer or
the Assets, and further provided that Seller shall remain directly and
primarily bound by all other conditions, representations, warranties and
covenants contained herein and remedies related thereto.
C. Contracts. Within thirty (30) days after the execution date of this
_________
Agreement, Seller shall provide to Buyer a schedule of all agreements that
Buyer shall assume, from and after the Closing Date, provided such agreements
are within the normal course of business. In addition, at least thirty (30)
days prior
to Closing, Seller shall provide Buyer with a final schedule of all agreements
to be reviewed and assumed by Buyer provided such agreements are within the
normal course of business.
D. Accounting Practices. Buyer shall comply with all FCC and State
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Regulatory accounting practices. Buyer will not seek recovery of an
acquisition adjustment through its interstate or intrastate rates including
revenues received from federal or state Universal Service Funds. Provided,
however, that Buyer will not be precluded from recovering an acquisition
adjustment in the interstate jurisdiction, if such recovery becomes possible
as a result of FCC policy.
E. Extended Area Service ("EAS") Arrangement. Buyer agrees to implement
___________________________________________
any future EAS Arrangements in the Exchanges pursuant to MPUC order.
6.2 Covenant of Seller. Seller hereby covenants and agrees that from the
__________________
execution date hereof to the Closing Date:
A. Access to Information and Facilities. Seller will afford Buyer and its
____________________________________
representatives, at Buyers own expense, reasonable access during normal
business hours to all facilities, properties, books, accounts, records,
contracts and documents of or relating to the Exchanges and Assets in Seller's
possession or control. Seller shall exercise its reasonable efforts to
furnish or cause to be furnished to Buyer and its representatives all data
and information concerning the Exchanges and Assets as shall reasonably be
requested or required by Buyer, including, but not limited to, the information
that may be necessary for compliance with Federal Security and Exchange
Commission requirements.
B. Continued Efforts. Seller will use its continual best efforts to: (i)
________________
cause to be fulfilled and satisfied all of the conditions to the Closing to
be performed or satisfied by Seller; (ii) cause to be performed all of the
matters required of Seller at the Closing; and (iii) take such steps and do
such acts as may be necessary to make all of its warranties and
representations true and correct as of the Closing Date with the same effect
as if
the same had been made, and this Agreement had been dated, as of the Closing
Date.
C. Cooperation. Seller agrees prior to and if necessary after Closing, to
___________
cooperate with Buyer with respect to Seller's assignment to Buyer of the
Assets hereunder.
D. Maintenance of Assets. Seller shall keep all Assets in a normal state
_____________________
of repair and operating efficiency and Seller shall maintain its books and
records in the normal and usual manner applied on a consistent basis.
E. Real Property. Seller shall convey, by Quit Claim Deed or if recognized
_____________
in Minnesota a Special Warranty Deed, its real property located in the
Exchanges to Buyer, together with the rights of ways which are by their terms
assignable; provided, however, that in the event Seller's facilities are
located in any right- of-way to be transferred hereunder, the right-of-way
shall be treated as joint use property.
F. Consent to Assignment. To the extent that the assignment of any
_____________________
contract or any permit shall require the consent of another person, this
Agreement shall not constitute an agreement to assign the contract or permit
if an attempted assignment would constitute a breach thereof. Seller shall
use its reasonable efforts to obtain the consent of any other party to a
contract, or the issuer of a permit or the assignment thereof to Buyer. If
any such consent is not obtained, to the extent permitted by applicable law,
Seller shall cooperate with Buyer to provide for Buyer the benefit under
such contract or permit, including enforcement, at the cost of and for the
benefit of Buyer, of any and all rights of Seller against any other Party.
G. Closing Report. Seller shall prepare and deliver to Buyer, within
______________
sixty (60) days after Closing, a report for the limited purpose of assisting
Buyer in establishing the closing Net Book Value of the Assets, as of the
Closing Date.
H. Wireline Telecommunications. Seller shall not install (except that
___________________________
Buyer and Seller have agreed that Seller may install
fiber optic and other facilities which transit through the Exchanges to other
locations) or operate, in the Exchanges, any wireline telecommunications
physical plant providing comparable services to those which are in place on
the execution date of this Agreement, for a period of three (3) years from
the Closing.
6.3 Mutual Covenants.
________________
A. Confidentiality. Each party to this Agreement agrees to hold all
_______________
Confidential Information (as defined in the "Glossary of Terms"), whether
received before or after entering into this Agreement, in confidence for a
period of two (2) years from the Closing Date, and agrees that during such
period each party will use the same solely for the purposes of this Agreement.
Each party agrees to make no more copies of such Confidential Information than
is reasonably necessary for the purposes, consistent with this Agreement, for
which it will be used. Each party agrees that it will not make disclosure of
any such Confidential Information received from the other party to anyone
except as specifically permitted by this Agreement and as required by law,
including but not limited to Securities and Exchange Commission. Each party
may disclose Confidential Information to its employees to whom disclosure is
necessary for the purposes set forth above, provided that the disclosing party
shall notify each such employee that disclosure is made in confidence and
instructs such employees that such Confidential Information shall be kept in
confidence by such employee in accordance with this Agreement. Furthermore,
each party may disclose such Confidential Information to consultants and
attorneys engaged by such party, to partners and prospective partners, and to
lenders, but only pursuant to a written confidentiality agreement with such
consultants and attorneys, partners, prospective partners, and lenders the
terms of which are substantially the same as this Section 6.3(A), except that
according to such confidentiality agreement no further disclosure of the
Confidential Information shall be permitted. Each party also agrees that it
will make requests for Confidential Information of the other only if necessary
to accomplish the purposes set forth in this Agreement. The obligations set
forth herein shall be satisfied by each party through the exercise of
the same degree of care used to protect its own information of like
importance.
If the sale contemplated by this Agreement is not consummated for any
reason, each party agrees to return to the other party all such Confidential
Information, including all copies thereof, immediately on request. The
obligations arising under this section shall survive any termination or
abandonment of this Agreement.
This Agreement will be filed on a confidential basis with the MPUC.
B. Public Announcements. No public announcement of the execution of this
____________________
Agreement, except as necessary to obtain regulatory approval or as otherwise
required by law, shall be made before the Closing without the mutual prior
approvals of both Seller and Buyer, which approval shall not be unreasonably
withheld.
C. Cooperation. Each party covenants to use all reasonable efforts,
___________
commencing promptly on the execution and delivery of this Agreement, to take,
or cause to be taken in good faith, all actions, and to do, or cause to be
done, all things necessary, proper or advisable under applicable laws and
regulations, expeditiously and practicably to consummate and make effective
the transactions contemplated by this Agreement, including but not limited to
using its reasonable efforts to obtain all necessary actions, waivers,
consents and approvals from third parties or governmental or regulatory
bodies, to effect all necessary filings with Governmental Authorities and to
consummate the agreements required in Schedule 2.4.
D. MPUC filings. Within ten (10) days after the execution of this
____________
Agreement, or on such other date as the parties shall mutually agree, Seller
and Buyer agree to file any required application and to take such reasonable
action as may be necessary or helpful (including, but not limited to making
available witnesses, information, documents, and data requested by the MPUC)
to apply for and receive approval by the MPUC and any other
applicable regulatory authorities for the transfer of Assets and the grant of
operating authority or issuance of a Certificate of Convenience and Necessity
to Buyer and any other necessary MPUC approvals.
E. FCC Filings. Ten (10) days after the MPUC approval which meets the
___________
requirements of 3.1(C) and 3.2(C), or on such other date as the parties shall
mutually agree, Buyer and Seller agree to commence the process to jointly file
such applications and to take such reasonable actions as may be necessary or
appropriate to apply for and receive approval by the FCC for the transfer of
Assets, to Buyer. The FCC approval includes but is not limited to,
Section 214 approval, Study Area approval, Price Cap Waiver approval and
radio license approval.
F. Tax Liabilities. Buyer and Seller agree that Seller will be liable for
_______________
all tax liabilities accrued or imputed by any tax or regulatory authority for
periods prior to Closing and Buyer will be liable for all tax liabilities
accrued or imputed by any tax or regulatory authority for periods on or after
Closing, except as set forth in Section 6.1(B).
G. Costs. Except as otherwise specifically provided herein, each Party
_____
shall bear its own costs incurred in connection with this Agreement and the
other agreements and transactions contemplated hereby.
H. Environmental Assessment. Buyer and Seller have agreed that Seller
________________________
shall only perform, at its sole expense, the environmental projects which
shall be mutually agreed upon by Buyer and Seller within sixty (60) days of
the date Buyer receives from Seller copies of the Phase I Environmental
Assessment Reports which projects shall be set forth in Schedule 6.3(H).
Such projects shall be performed in conformance with state and federal
requirements (save and except that Buyer and Seller have acknowledged and
mutually agreed that Seller shall not remediate or xxxxx asbestos containing
materials or Hazardous Materials from Central Offices in the Exchanges).
Seller further agrees, at its sole cost, to: remove, replace or close all
underground storage tanks as applicable and remove all storage drums located
within
the Exchanges, as set forth in Schedule 6.3(H), in conformance with state and
federal requirements prior to Closing or such other date as mutually agreed
to by the Buyer and Seller.
ARTICLE 7
INDEMNIFICATION
7.1 Indemnification by Buyer. From and after the Closing Date, Buyer
________________________
shall indemnify, defend and hold Seller harmless from and against any and all
Claims and Liabilities, that may be incurred by Seller arising from: (i) any
breach of any representation or warranty; or (ii) any breach of any covenant,
obligation or agreement of Buyer contained herein; or (iii) any and all Claims
or Liabilities arising out of or relating to the ownership or operation of the
Exchanges and Assets after the Closing provided such Claims or Liabilities are
incurred or based on facts after the Closing Date.
7.2 Buyer's Indemnification Threshold. Buyer shall not be required to
_________________________________
indemnify, defend or hold Seller harmless from and against any Claims or
Liabilities, incurred after the Closing Date, unless and until such amount
exceeds $250,000 per incident (the "Indemnity Threshold"), and Buyer shall
only be obligated to indemnify Seller with respect to amounts that exceed the
Indemnity Threshold and then only to the extent provided herein.
7.3 Indemnification by Seller. From and after the Closing Date, Seller
__________________________
shall indemnify, defend and hold Buyer harmless from and against any and all
Claims or Liabilities that may be incurred by Buyer arising from: (i) any
breach of any representation or warranty; or (ii) any breach of any covenant,
obligation or agreement of Seller contained herein; or (iii) except as
provided in Article 4, any and all Claims or Liabilities arising out of or
relating to the ownership or operation of the Exchanges and Assets prior to
Closing provided such Claims or Liabilities are incurred on or prior to the
Closing Date.
7.4 Seller's Indemnification Threshold. Except for liabilities
__________________________________
referenced in Section 6.1(B), Seller shall not be required to indemnify,
defend or hold Buyer harmless from and
against any Claims or Liabilities, incurred on or before the Closing Date,
unless and until such amount exceeds the "Indemnity Threshold", and Seller
shall only be obligated to indemnify Buyer with respect to amounts that exceed
the Indemnity Threshold and then only to the extent provided herein.
7.5 Maximum Amount. Except for liabilities referenced in Section
______________
6.1(B), the maximum aggregate amount of indemnification under Sections 7.1 or
7.3 that can be required of Seller or Buyer hereunder shall not exceed in the
aggregate 10% of the Purchase Price (the "Maximum Amount").
7.6 Time Limitation. The respective rights of Seller and Buyer to
_______________
indemnification for Claims or Liabilities arising under Section 7.1 or 7.3,
as the case may be, shall apply only to those claims for indemnification,
notice of which is given pursuant to this Agreement to the other party on or
before the expiration of the eighteen ( 18) month anniversary date of the
Closing, except that the indemnification which relates to tax matters shall
remain in effect until the expiration of the applicable statute of limitation
period. The respective rights of Seller or Buyer to indemnification for
environmental Claims and Liabilities shall only apply to those Claims or
Liabilities for outside plant indemnification, notice of which is given
pursuant to this Agreement to the other party on or before the expiration of
the third (3rd) anniversary date of the Closing. Upon expiration of the time
limitations set forth in this Section 7.6, Seller shall have no liability for
any environmental Claims, or Liabilities based on Environmental Laws,
incidents, exposures occurring prior to the Closing. In addition, upon
expiration of the time limitations set forth in this Section 7.6, it shall be
conclusively presumed that the Buyer has accepted and assumed all
responsibilities for all Claims or Liabilities including but not limited to
environmental Claims and Liabilities, occurring prior to Closing.
7.7 Notice of Indemnification. Notwithstanding any other provision
_________________________
contained in this Agreement, any party entitled to indemnification hereunder
(the "Indemnified Party") shall be deemed to have waived any right thereto
unless such party gives to
the party from whom indemnification is sought (the "Indemnifying Party")
written notice of the Claim or Liability, within 60 business days, and,
when known, the facts constituting the basis for such Claim. In the event
that any notice of a right for indemnification is made hereunder as a result
of or in connection with any Claim or Liability by a person who is not a
party to this Agreement, the notice to the Indemnifying Party shall specify,
if known, the amount or an estimate of the amount of the Claim or Liability
arising therefrom. The Indemnified Party shall not settle or compromise any
Claim or Liability by a third party for which it is entitled to
indemnification hereunder without the prior written consent of the
Imdemnifying Party, unless suit shall have been instituted against the
Party Idemnified and the Indemnifying Party shall not have taken control of
such suit after notification thereof as provided in Section 7.7.
7.8 Defense by Indemnifying Party. In connection with any Claim or
_____________________________
Liability giving rise to indemnity hereunder resulting from or arising out
of any claim or legal proceeding by a person who is not a party to this
Agreement, the Indemnifying Party at its sole cost and expense may (but
shall not be required to), upon written notice to the Indemnified Party,
assume the defense of any such claim or legal proceeding if it acknowledges
to the Indemnified Party in writing its obligation to indemnify the
Indemnified Party with respect to such claim. The Indemnified Party shall be
entitled to participate in (but not control) the defense of any such action,
with its counsel and at its own expense. If the Indemnifying Party does not
assume the defense of any such Claim or Liability resulting therefrom, (a)
the Indemnified Party may defend against such Claim or Liability, in such
manner as it may deem appropriate, including, but not limited to, settling
such Claim or Liability (after giving 5 business days written notice of the
same to the Indemnifying Party) on such terms as the Indemnified Party may
deem appropriate, and (b) the Indemnifying Party shall be entitled to
participate in (but not control) the defense of such action, with its own
counsel and at its own expense.
7.9 Manner of Indemnification. All indemnification payments under
_________________________
Article 7 shall be effected by payment of cash or delivery
of a certified or official bank check or, at payee's request, by wire transfer
of immediately available funds to anaccount designated by payee, in the amount
of the indemnified liability.
7.10 Remedies. The indemnity rights under Sections 7.1 and 7.3 shall be
________
the sole remedy for any breach of the representations and warranties of Seller
or Buyer as the case may be. In the event of a breach, or a threatened or
attempted breach, of any covenant of this Agreement by either party, the other
party shall, in addition to the indemnification provisions set forth in
Article 7, be entitled to (i) a temporary or permanent injunction against such
breach without the necessity of showing any actual damages, and (ii) a decree
for the specific performance of this Agreement.
7.11 Insurance. Prior to asserting any claim under this Agreement (other
_________
than with respect to Taxes), each Indemnified Party shall file, or cause to
be filed, a claim with respect to the indemnified Claims or Liabilities in
question under any insurance policies that may be maintained by such
Indemnified Party or any subsidiary, division or affiliate thereof. In the
event that any insurance policies maintained by the Indemnified Party would
cover any indemnified Claims or Liabilities, then the Indemnified Party's
indemnification for Claims or Liabilities shall be limited to any deductible
and amounts in excess of the amounts actually collected by the Indemnified
Party for such Claims or Liabilities.
ARTICLE 8
TERMINATION
8.1 Termination By Buyer.
____________________
A. If any condition precedent to Buyer's obligation to effect the
Closing, as set forth in Section 3.1, is not satisfied and such condition is
not waived, if waivable, by Buyer on or prior to the Closing Date, Buyer
shall not be obligated to effect the Closing and may terminate this
Agreement.
B. If any Governmental Approval contains terms and conditions
unacceptable to Buyer, in Buyer's sole discretion, Buyer shall not be
obligated to effect the Closing and may terminate this Agreement.
8.2 Termination By Seller.
_____________________
A. If any condition precedent to Seller's obligation to effect the
Closing, as set forth in Section 3.2, is not satisfied and such condition is
not waived, if waivable, by Seller on or prior to the Closing Date, Seller
shall not be obligated to effect the Closing and may terminate this Agreement.
B. If any Governmental Approval contains terms and conditions
unacceptable to Seller, in Seller's sole discretion, Seller shall not be
obligated to effect the Closing and may terminate this Agreement.
8.3 Termination By Buyer or Seller. (i) If Buyer or Seller have
______________________________
discovered that any of the representations and warranties of the other party
is inaccurate in any material respect and, after consultation with such
breaching party, a satisfactory accommodation with respect to such inaccuracy
shall not have been reached; or (ii) if an order is issued by any Governmental
Authority to restrain, enjoin or prohibit the consummation of the transactions
contemplated by this Agreement, Buyer or Seller shall not be obligated to
effect the Closing and may terminate this Agreement.
8.4 Effect of Termination. In the event of the termination of this
_____________________
Agreement pursuant to Sections 8.1, 8.2 or 8.3, this Agreement shall
thereafter become void except as set forth in Section 1.3(A) and for the
provisions of Section 6.3(A), 6.3(B), and 6.3(C), without further liability
on the part of any party hereto or its respective shareholders, directors,
officers or employees in respect thereof, except as follows: (i) nothing
herein shall relieve any party from liability for any breach of this Agreement
prior to termination under Sections 8.1, 8.2 or 8.3, and (ii) the obligations
of the parties hereto set forth in
Section 11.6 shall not be affected by a termination of this Agreement.
ARTICLE 9
POST CLOSING MATTERS
9.1 Post Closing. In order to effectuate an orderly transition in the
____________
provisioning of telecommunications services to customers in the Exchanges,
Buyer and Seller agree to utilize the measures set forth below:
A. Notice to Customers. Seller and Buyer, shall jointly provide
___________________
written notification in Seller's final xxxx to each customer affected by
this Purchase and Sale of Assets that Seller is no longer the customer's
telecomunications provider and advising the customer of the name,
address and telephone number of the Buyer.
B. Customer Relations. From and after the Closing, any service
__________________
related customer complaint due to telephone service provided prior to Closing
which can be reasonably resolved by Buyer, shall be resolved by Buyer, without
contribution or adjustment from Seller; provided, in the event that Buyer
cannot reasonably resolve such complaints, Buyer shall refer those customers
to Seller and Buyer shall promptly advise Seller in writing, of the steps it
took to resolve the complaint.
ARTICLE 10
ARBITRATION
10.1 Claims. All Claims by Buyer or Seller by one against the other
______
arising out of or related in any manner to this Agreement or any of the
Exchanges and Assets shall be resolved by arbitration, as prescribed herein.
The Federal Arbitration Act, 9 U.S.C. Sections 1 to 15, not state law, will
govern the arbitrability of all Claims.
10.2 Rules. A single arbitrator engaged in the practice of law, who is
_____
knowledgeable about the telecommunications industry, telecommunications law
and who has at least eight (8) years of experience litigating in federal
district court, shall conduct the arbitration under the then current
commercial arbitration rules of the American Arbitration Association ("AAA"),
unless otherwise provided herein. The arbitrator shall be selected in
accordance with AAA procedures. The arbitration shall be conducted in the
AAA office in Minneapolis, Minnesota.
10.3 No Discovery; Damages; Expenses. The Buyer and Seller shall allow and
_______________________________
participate in discovery in accordance with the Federal Rules of Civil
Procedure. The arbitrator shall rule on unresolved discovery disputes. The
arbitrator shall only have authority to award contractual damages and shall
not have the authority to award punitive or exemplary damages, other non-
compensatory damages or any other form of relief. Each Party shall bear its
own costs and attorneys' fees. The arbitrator's decision and award shall be
final and binding, and judgment upon the award rendered by the arbitrator may
be entered in any court having jurisdiction thereof.
10.4 Judicial or Administrative Action. If any party files a judicial or
_________________________________
administrative action asserting Claims subject to arbitration, as prescribed
herein, and the other party successfully stays such action and/or compels
arbitration of said Claims, the party filing said action shall pay the other
party's costs and expenses incurred in seeking such stay and/or compelling
arbitration, including reasonable attorneys' fees.
ARTICLE 11
GENERAL
11.1 Time of the Essence. Time is of the essence with respect to each and
___________________
every term, condition, obligation and provision hereof, and failure to timely
perform or remedy any of the terms, conditions, obligations or provisions
hereof by either party shall constitute a material breach of and a noncurable
default under this Agreement by the party so failing to perform (but which may
be waived by the nonbreaching party).
11.2 Bulk Sales. For purposes of any Minnesota uniform commercial code
__________
requirements, Buyer hereby waives compliance with the provisions of any
applicable laws relating to bulk transfers in connection with the transactions
contemplated by this Agreement, including without limitation the provisions of
the Minnesota Revised Code regarding bulk transfers.
11.3 Notices. All notices hereunder will be in writing and served by
_______
certified mail, return receipt requested. Notice shall be deemed to have been
duly given on the date mailed by the notifying party. Notices shall be sent
as follows:
If to Seller:
U S WEST Communications, Inc.
0000 Xxxx Xxxxx, Xxxx 0000
Xxxxxxx, Xxxxxxxxxx 00000
Manager-Exchange Carrier Properties,
Exchange Carrier Services
with a copy (which shall not constitute notice) to:
U S WEST, Inc.
0000 Xxxx Xxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Attention: Associate General Counsel
Corporation Transactions
If to Buyer:
Pacific Telecom, Inc.
000 Xxxxxxxx
X.X. Xxx 0000
Xxxxxxxxx, Xxxxxxxxxx 00000-0000
Attention: Chief Financial Officer
with a copy (which shall not constitute notice) to:
Pacific Telecom, Inc.
000 Xxxxxxxx
X.X. Xxx 0000
Xxxxxxxxx, Xxxxxxxxxx 00000-0000
Attention: Vice President Regulatory Affairs
11.4 Waivers. No failure of a party to enforce a provision of this
_______
Agreement will be construed as a general or a specific waiver of that
provision, or of a party's right to enforce that provision, or of a party's
right to enforce any other provision of this Agreement. No waiver of any
breach of any covenant or other provision herein contained shall be deemed
to be a waiver of any preceding or succeeding breach, or of any other
covenant or provision herein contained. No extension of time for performance
of any obligation or act shall be deemed to be an extension of the time for
performance of any other obligation or act.
11.5 Commissions. Each party represents and warrants that it has dealt
___________
with no broker or finder in connection with this Agreement and, insofar as it
knows, no broker or other person is entitled to any commission or finder's fee
in connection with the consummation of the transactions contemplated by this
Agreement.
11.6 Payment of Expenses. Except as otherwise provided herein, each of
___________________
the parties shall pay all costs and expenses incurred or to be incurred by it
in the negotiation and preparation of this Agreement and in consummating and
carrying out the transactions contemplated by this Agreement, whether or not
the transactions contemplated by this Agreement are consummated.
11.7 Headings. The subject headings of the sections and subsections of
________
this Agreement are included only for purposes of convenience, and shall not
the construction or interpretation of any of its provisions.
11.8 Counterparts. This Agreement may be executed in one or more
___________
counterparts, each of which shall be deemed an original, and when each
of the parties hereto has executed and delivered to the other party one or
more counterparts this Agreement shall be binding and effective, even though
no single counterpart has been executed by both of the parties.
11.9 Successors and Assigns. This Agreement shall be binding on and shall
______________________
inure to the benefit of the parties hereto and their permitted successors and
assigns; provided, however, that no assignment shall be permitted except as
provided for in this Agreement.
11.10 Assignment. Except as set forth in Section 6.1(B), the rights and
__________
obligations of the parties to this Agreement or any interest in this Agreement
shall not be assigned, transferred, hypothecated, pledged or otherwise
disposed of without the prior written consent of the non-assigning party
which consent may be withheld in such party's sole discretion; provided,
however, that any party hereto may, without prior consent of the other party
hereto, assign this Agreement in its entirety to any parent or subsidiary
entity.
11.11 Additional Instruments and Assistance. Each party hereto shall from
_____________________________________
time to time execute and deliver such further instruments, provide additional
information and render such further assistance as the other party or its
counsel may reasonably request in order to complete and perfect the
transactions contemplated herein.
11.12 Seller's Control over Authorized Facilities. No provision of this
___________________________________________
Agreement shall be construed to abrogate Seller's control of and
responsibility for the operation of the authorized facilities of the Business
prior to the actual transfer of control of those facilities hereunder to the
Buyer as approved by the FCC and the MPUC.
11.13 Governing Law. This Agreement shall be construed in accordance
_____________
with the laws of the State of Minnesota.
11.14 Severability. If any term or provision of this Agreement is, to
____________
any extent, held or deemed to be invalid or unenforceable when applied to any
person or circumstance, the remaining provisions of this Agreement and the
enforcement of such provision to other persons or circumstances, or to another
extent, shall not be affected thereby, and each provision of this Agreement
shall be enforced to the fullest extent allowed by law.
11.15 Amendments. This Agreement may not be modified, changed,
__________
supplemented or terminated, nor may any obligations hereunder be waived by a
party, except by written instrument signed by the party to be charged or by
its agent duly authorized in writing or as otherwise expressly permitted
herein.
11.16 No Construction Against the Drafting Party. Each party hereto
__________________________________________
acknowledges that such party and its counsel have reviewed this Agreement and
participated in its drafting. This Agreement shall not be construed against
either party for having prepared it.
11.17 Integration. This Agreement, and the SOWs and all schedules and
___________
exhibits attached hereto, constitutes the entire agreement between the
parties, and there are no agreements, understandings, warranties or
representations between the parties except as set forth or noted herein.
This Agreement is not made for the benefit of any person, firm, corporation
or association other than the parties hereto. The parties do not intend
to confer any benefit hereunder on any person, firm or corporation other than
the parties hereto.
IN WITNESS WHEREOF, the parties to this Agreement have executed it as
of the date first above written.
BUYER:
NORTHLAND TELEPHONE COMPANY, PACIFIC TELECOM, INC.,
a Minnesota Corporation a Washington corporation
/s/Xxxxx X. Xxxxxxx /s/Xxxxx X. Xxxxxxx
____________________________ ___________________________________
By: Xxxxx X. Xxxxxxx By: Xxxxx X. Xxxxxxx
Its: Executive Vice President Its: Executive Vice President
and Chief Financial Officer and Chief Financial Officer
Date: December 15, 1995 Date: December 15, 1995
SELLER:
U S WEST COMMUNICATIONS, INC.,
a Colorado corporation
/s/ Xxxxxxx X. Xxxxxxxx
______________________________________
By: Xxxxxxx X. Xxxxxxxx
Its: President and Chief Executive
Officer
Date: December 15, 1995
GLOSSARY OF TERMS
For purposes of this Agreement, certain terms used in this Agreement and
not otherwise defined herein shall have the meanings designated below:
"Agreement" means all or any part of this Agreement, including Schedules
and Exhibits, as any of the foregoing may be amended, modified or
supplemented in writing from time to time.
"Assets" shall mean, to the extent that they are by their terms
assignable, all of Seller's assets and properties in the Exchanges, all
assets as identified on Seller's Continuing Property Records (CPRs) and such
other assets as set forth in Schedule 6.3(J), except the Excluded Assets,
of whatever kind, character and description, and those assets whether
intangible, real, personal or mixed:
(a) "Authorities" means (1) construction permits, licenses or
authorizations granted by the FCC owned by Seller and used to develop and
operate the System; and (2) the licenses or operating right granted by the
MPUC to operate the System in the State of Minnesota. For purposes of this
Agreement, Authorities does not include Seller's applications for Authorities
before the FCC and MPUC.
(b) "Interests" means all rights, privileges, benefits and interests
under all contracts, agreements, consents, or licenses, permits or
certificates (except those included as Authorities and Realty), including
agreements, permits, leases and arrangements with respect to intangible or
personal property or interests therein; equipment leases; consents; agreements
with suppliers, customers and subscribers; business licenses; prepaid
expenses; any sales agent or sales affiliate agreements used or owned in
connection with the Operation of which it is a part.
(c) "Property" means all of Seller's physical facilities located
within the Exchanges and other assets necessary to conduct the business as
shall be mutually agreed upon between Buyer and Seller (including all of
Seller's coin station sets presently installed in the Exchanges except as set
forth in the Excluded Assets) that are in Seller's plant in service accounts
in accordance with Part 32 of the FCC Uniform System of Accounts ("USOA").
(d) "Realty" means all real property, or mixed real and personal
property within the Exchanges, including, without limitation: land,
structures, buildings, tower sites or antenna sites, easements, rights of way,
servitudes, licenses, agreements, arrangements or leases with respect to real
property interests; leasehold improvements, building improvements, or other
improvements or fixtures; and rights-of-way and other or similar properties
owned by Seller and used in the Business of which it is a part.
(e) "Records" means all records, including copies (or the originals at
Seller's election) of all outside plant records, all central office equipment
records, all service records kept in the ordinary course of Seller's business
which identify and describe the customers being served by Seller in the
Exchanges, the service that is being provided to such customers, and those
records which identify and describe the physical property (including, but not
limited to, cables, wires, and central office equipment) being sold hereby.
"Business" means the wireline telecommunications business of the
Exchanges as related to the Assets, the Property and the Authorities in the
State of Minnesota.
"Claims" shall mean any and all liabilities, obligations, losses, damages,
deficiencies, demands, claims, penalties, settlements, judgments, actions,
proceedings and suits of whatever kind and nature and all reasonable costs and
expenses, including reasonable attorneys' fees.
"Closing" shall have the meaning specified in Section 2.1.
"Closing Date" shall have the meaning specified in Section 2.1.
"Communications Act" means the Federal Communications Act of 1934, as
amended, and all rules and regulations promulgated thereunder, which are in
effect at the date of this Agreement.
"Confidential Information" shall mean any and all technical or business
information furnished, in whatever form or medium, or disclosed by one party
to the other, including but not limited to, product and service specifications,
prototypes, computer programs, models, drawings, marketing plans, financial
data, and personnel statistics, which are marked as confidential or
proprietary by the
disclosing party, or, for information which is disclosed orally, the
disclosing party indicates to the other at the time of disclosure the
confidential or proprietary nature of the information and confirms in writing
to the receiving party within 30 days after such disclosure that such
information is confidential. For purposes of this Agreement, any
technical or business information of a third person furnished or disclosed by
one party to the other, and which is marked as confidential or proprietary or
which is indicated orally by the disclosing party to be confidential,
shall be deemed Confidential Information of the disclosing party unless
otherwise specifically indicated in writing to the contrary.
"Encumbrances" means any and all encumbrances, security interests, liens,
taxes, claims, liabilities, options, commitments, charges, restrictions or
other obligations of whatsoever kind, quantity or nature, whether accrued,
absolute, contingent or otherwise, except the lien for ad valorem taxes or
other taxes not yet due and payable or being contested in good faith,
governmental conditions and restrictions under the Authorities and contractual
terms and conditions regarding the Interests and Realty of the Business.
"Environmental Law" means the National Environmental Policy Act ("NEPA")
and mandated environmental assessments, Resource Conservation and Recovery Act
of 1976, 42 U.S.C. Section 6901-6987, as amended by the Hazardous and Solid
Waste Amendments of 1984, the Compensation and Liability Act, as amended by
the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C. Section
9601-9657, the Hazardous Materials Transportation Act of 1975, 49 U.S.C.
Section 1801-1812, the Toxic Substances Control Act, the Clean Air Act, 42
U.S.C. Section 7401 et seq., the Federal Insecticide, Fungicide and
Rodenticide Act, 7 U.S.C. Section 136 et seq., the Clean Water Act, 33 U.S.C.
Section 1251 et seq., the Comprehensive Environmental Response, Compensation
and Liability Act, 42 U.S.C. Section 9601 et seq., the Comprehensive
Environmental Response Compensation and Liability Act ("CERCLA"), and any
substantially similar state or local environmental law and any of these law(s)
as may be amended from time to time.
"Exchange Area" means the geographical areas set forth and described in
Exhibit A.
"Excluded Assets" means (a) Seller's cash on hand at the Closing; (b)
the properties, assets, privileges, rights and interests (whether tangible or
intangible, real, personal or mixed), if any, as being excluded from the Assets
to be transferred to Buyer; (c) any insurance policy, bond, letter of credit,
or other similar item, and any cash surrender value in regard thereto; (d) all
books and records that Seller is required by law to retain or that relate
solely to internal corporate matters; (e) all claims, rights and interests in
and to any refunds for Federal, state or local franchise, income or other taxes
or fees of any nature whatsoever for periods prior to the Closing Date; (f) any
pension, profit sharing or employee benefit plans; (g) any assets, interests
or property of Seller used in the operation of any business conducted by Seller
other than the operation of the Assets; (h) the name U S WEST and all similar
names and related marks and logos used or owned in connection with the
provision of telecommunications services in the Exchanges; (i) all portable
test equipment; (j) motor vehicles and associated motor vehicle general stock;
(k) materials and supplies and tools; provided, however, that Seller shall make
available to Buyer all materials, supplies and specialized tools reasonably
required for the operation of the assets at no additional cost to Buyer; (l)
FCC licenses for air-to-ground, cellular, or paging services held by either
Seller, or any affiliate of Seller; and (m) all maintenance radio equipment and
antennas; (n) backbone transiting toll facilities and associated fiber
equipment as shall be mutually agreed to between Buyer and Seller and as shall
be set forth on Schedule 1.1 within sixty (60) days prior to Closing.
The parties expressly agree that no assets relating to Yellow Pages or
classified directory advertising activities of Seller or any affiliate of
Seller shall be transferred in this transaction.
"FCC" means the Federal Communications Commission or any other Federal
agency which succeeds in whole or in part to its jurisdiction so far as the
subject matter of this Agreement is concerned.
"FCC Approval" means the issuance on the release date of the FCC public
notice of the FCC's grant of consent to the assignment of the FCC Authorities.
"Hazardous Materials" shall mean any substance, including, without
limitation, any asbestos, formaldehyde, flammables,
explosives, and any hazardous substance or toxic material which could presently
or at any time in the future cause a detriment to or impair the value or
beneficial use of any of the Assets, or constitute or cause a health, safety
or environmental hazard to any of the Assets or to any person or require
remediation at the behest of any federal, state, or local governmental agency
under any Environmental Law.
"Liabilities," except as otherwise provided in this Agreement, any and all
obligations for Claims arising out of or relating to Buyer's ownership or
operation of the Assets.
"MFJ" shall mean the Modification of Final Judgment entered August 24,
1982 in United States v. Western Electric, et al., Case No. 82-0192, United
States District Court, District of Columbia, and all subsequent orders of such
court in such action, and any judicial, legislative or regulatory amendments
or modifications thereof.
"MPUC" means the Minnesota Public Utilities Commission.
"System" means, as the context requires, Seller's service delivery
components in the Exchanges, including, without limitation, all equipment,
facilities, assets, properties, licenses, permits, grant of operating authority
and other rights and authorities and related technical knowledge and
information, necessary for conduct of Seller's wireline telecommunications
services within the particular Exchanges.
"USF" means the federal Universal Service Fund.
EXHIBITS
MINNESOTA - EXHIBIT A
List of Exchanges
The above mentioned exhibit has been omitted. The Company agrees to furnish
supplementally a copy of the omitted exhibit to the Commission upon request.
SCHEDULES
2.4 ADDITIONAL AGREEMENTS
5.1(C) BUYER Governmental Authorizations Necessary to Consummate the
Transactions
5.1(E) Buyer's Litigation
5.2(C) SELLER Governmental Authorizations Necessary to Consummate the
Transactions
5.2(E) Seller's Litigation
6.1(C) Contracts to be assumed by the Buyer
6.3(J) Telephone Plant In Service
The above mentioned schedules have been omitted. The Company agrees to
furnish supplementally a copy of any omitted schedule to the Commission
upon request.
