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EXHIBIT 10.12
ASSET PURCHASE AND SALE AGREEMENT
BETWEEN
CERTAIN OF THE SUBSIDIARIES
OF
ARCH COMMUNICATIONS GROUP, INC.
AS SELLERS
AND
OMNIAMERICA, INC.
AS BUYER
APRIL 10, 1998
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TABLE OF CONTENTS
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1. DEFINITIONS____________________________________________________________________________________________________1
2. BASIC TRANSACTION______________________________________________________________________________________________9
3. REPRESENTATIONS AND WARRANTIES OF THE SELLERS_________________________________________________________________12
4. REPRESENTATIONS AND WARRANTIES OF THE BUYER___________________________________________________________________17
5. PRE-CLOSING COVENANTS_________________________________________________________________________________________18
6. POST-CLOSING COVENANTS________________________________________________________________________________________21
7. CONDITIONS TO OBLIGATION TO CLOSE_____________________________________________________________________________22
8. INDEMNIFICATION_______________________________________________________________________________________________26
9. TERMINATION___________________________________________________________________________________________________29
10. MISCELLANEOUS________________________________________________________________________________________________29
Exhibit A List of Leased Sites
Exhibit B List of Owned Sites
Exhibit C Defects as of the Date of Agreement
Exhibit D Master Tower Space Lease
Exhibit E Site Lease
Exhibit E-1 Sites where the relevant Seller will enter a Site Lease with the Buyer
Exhibit F Site Sublease
Exhibit F-1 Sites where the relevant Seller will enter a Site Sublease with the Buyer
Exhibit G Allocation Schedule
Exhibit H Financial Information
Exhibit I Schedule of Repurchase Options
Exhibit J Form of Opinion of Counsel to the Sellers
Exhibit K Form of Noncompetition Agreement
Exhibit L Form of Opinion of Counsel to the Buyer
Disclosure Schedule
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ASSET PURCHASE AND SALE AGREEMENT
Agreement entered into as of April 10, 1998, by and between
OmniAmerica, Inc., a Delaware corporation (the "Buyer"), and certain
wholly-owned subsidiaries of Arch Communications Group, Inc., a Delaware
corporation ("ACG") which own or lease or manage the communications facility
sites included in the Acquired Assets, which subsidiaries are identified on the
signature pages of this Agreement. Such subsidiaries are referred to
collectively herein as the "Sellers", and each individually as a "Seller". The
Buyer and the Sellers are referred to collectively herein as the "Parties".
R E C I T A L S
A. The Sellers operate communications facilities consisting of
communications towers or roof-mounted antenna mounts and tower supporting
systems, electric power facilities, equipment shelter buildings and related
equipment and facilities.
B. The Sellers (i) utilize their communications facilities to operate
transmitters/antennas in connection with their wireless messaging businesses and
(ii) lease space on the communications facilities to third parties which have a
need for transmitters/antenna locations.
C. The Sellers are willing to sell and assign their interests in the
communications facilities identified in this Agreement to the Buyer, and the
Buyer is willing to pay for, and acquire such facilities, upon the terms and
conditions herein set forth.
Now, therefore, in consideration of the premises and the mutual
promises herein made, and in consideration of the representations, warranties,
and covenants herein contained, the Parties agree as follows.
1. DEFINITIONS.
"ACG" has the meaning set forth in the preamble above.
"Acquired Assets" means all of the right, title, and interest that the
Sellers possess in and to the following assets:
(i) the communications Sites leased by the Sellers pursuant to
ground or rooftop leases, held by Sellers pursuant to easements or (with respect
to three Sites) which will be leased by a Seller to the Buyer, all of which are
listed on Exhibit A; except for Sites identified in Exhibit A as Managed Sites,
at each Site on Exhibit A, the relevant Seller leases the land (or rooftop
space), or holds an easement for the land and owns the communications tower and
equipment necessary to operate the tower, or (with respect to three Sites) the
relevant Seller owns the fee interest. At "Managed Sites" the relevant Sellers
lease the land and/or lease or manage the communications tower and related
equipment. All Sites listed on Exhibit A are referred to herein as the "Leased
Sites".
(ii) the communications Sites listed on Exhibit B, which are
owned by the Sellers; such Sites are referred to herein as the "Owned Sites".
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For each Site "Acquired Assets" includes:
(i) all communications towers, equipment shelter buildings,
guy wires and other support structures related to a tower located at the Site,
electrical wiring from the local utility connection point to such Site, electric
meters owned by the Seller at the Site which measure electricity either to the
tower only or jointly to the tower, and other equipment, fixtures and fittings
owned by a Seller related to the operation of a Site; provided that at Managed
Sites, such equipment is leased and not owned;
(ii) emergency generators owned by the Sellers and located at
a Site if (and only if) such generators are presently wired so as to provide
back-up power to the tower structure at such Site (as contrasted with generators
used to provide back-up power only to the Sellers' transmitters and antennas),
except that the emergency generator at the 00000 Xxxxxxx Xxxx, Xxx Xxxxxx, Xxxx
Site is excluded from the Acquired Assets;
(iii) with respect to each of the Owned Sites, fee simple
title to the real property at such Site, together with any buildings and
improvements located at such Site that are deemed real property and together
with the right to the use of any easement, right-of-way and other rights
appurtenant to each Owned Site for purposes of access to the Site and any other
purposes;
(iv) with respect to each of the Leased Sites, all of the
tenant's rights and interest under the lease, easement or management agreement
pursuant to which the Seller holds the Leased Site (including, with respect to
each of the Managed Sites, the Seller's interest in any equipment leased in
connection therewith);
(v) fences, gates, locks and keys and similar items related to
each Site to the extent owned by a Seller;
(vi) all permits, licenses, registrations and approvals owned
by or granted to the Sellers by any federal, state or local governmental entity
or other jurisdiction or instrumentality and related to (or necessary for) the
ownership and operation of a Site (other than FCC authorizations for operation
of specific equipment on specified frequencies at a Site, which will be retained
by each Seller), including, without limitation, the antenna structure
registration required by 47 C.F.R. Part 17.4 (1996); and any pending
applications for any new or modified registrations, approvals, licenses or
permits pending on the Closing Date, including, without limitation, those items
identified in Section 3(k) of the Disclosure Schedule;
(vii) each Seller's respective rights and interest under tower
space leases or license agreements pursuant to which third parties (other than
Sellers or affiliates of Sellers) lease antenna space at any Site for the
operation of a communications facility at such Site;
(viii) any security or similar deposits or unearned prepaid
rent held by Sellers pursuant to tower space leases or license agreements with
third parties at any Site;
(ix) all rights and interest of Sellers in and to all
contracts, agreements, understandings, options, commitments, personal property
leases, product warranty agreements and service agreements relating to the Owned
Sites and the Leased Sites and the towers (collectively the "Contracts")
including, without limitation, those of the foregoing listed on
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Section 3(r) of the Disclosure Schedule, but in each case only to the extent
such Contracts are chosen to be included in the Acquired Assets by the Buyer;
(x) all records relating to the Owned Sites, the Leased Sites
and the towers and the maintenance thereof, including, but not limited to, all
engineering data, logs, consultants' reports and correspondence used or held for
use in the operation of the Owned Sites, the Leased Sites and the towers or
necessary or desirable to show compliance with any law or regulation applicable
to the Owned Sites, the Leased Sites, the towers or the operation of the towers
or relating to the ownership, use, maintenance or repair of any of the Acquired
Assets and not pertaining solely to Sellers' internal corporate affairs or their
other interests (including their wireless messaging businesses), it being
understood that Sellers shall have the right to retain copies of any such
records necessary for the operation of their business and filing of tax papers
after the Closing Date; and
(xi) all of the other tangible and intangible property and
rights that are owned by Sellers and used principally in connection with the
Owned Sites, the Leased Sites and the towers.
The Acquired Assets shall not include the following ("Excluded
Assets"):
(i) any FCC authorizations for the operation of specific
equipment on specified frequencies at any Leased Site or Owned Site;
(ii) any transmitter, antenna, cabling, wiring, accessions,
devices or equipment related to the operation of transmitters and antennas which
is used to operate a broadcast facility at a Site;
(iii) any Cash, accounts receivable or deposits made by
Sellers with any third parties related to any Site; provided that there shall be
included in the Acquired Assets any accounts receivable or cash received by
Sellers related to occupancy by third parties of space on any Site during
periods after the Closing Date;
(iv) any generator located at a Site which is wired to provide
back-up power only to the transmitters and antennas at such Site, and the
emergency generation at 00000 Xxxxxxx Xxxx, Xxx Xxxxxx, Xxxx; and
(v) any electric meters owned by a Seller at a Site where the
meter exclusively measures electric power provided to Seller's antennas and
transmitters.
"Adjusted Purchase Price" has the meaning set forth in Section 2(d)
below.
"Adverse Consequences" means all actions, suits, proceedings, hearings,
investigations, charges, complaints, claims, demands, injunctions, judgments,
orders, decrees, rulings, damages, dues, penalties, fines, costs, reasonable
amounts paid in settlement, liabilities, obligations, taxes, liens, losses,
expenses, and fees, including court costs and reasonable attorneys' fees and
expenses.
"Affiliate" has the meaning set forth in Rule 12b-2 of the regulations
promulgated under the Securities Exchange Act.
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"Affiliated Group" means any affiliated group within the meaning of
Code Section 1504 or any similar group defined under a similar provision of
state, local, or foreign law.
"Annualized Operating Cash Flow" means the annualized Arch Rent
Revenues and Third-Party Rent Revenues derived from tenants for which the
Sellers have written or oral leases or licenses for the Sites as set forth in
Exhibit H1, minus annualized land lease expense, utilities, maintenance and
managed site expenses of the Sites as set forth on Exhibit H1.
"Arch Towers Business" means Sellers' operation of the Sites as
communications facilities for the leasing of tower space to third parties for
such third parties' operation of communications facilities, or the use of tower
space by the Sellers for operation of their wireless messaging Business.
"Assumed Liabilities" means all liabilities and obligations of the
Sellers related to the Acquired Assets under the agreements, contracts, leases,
licenses, and other arrangements referred to in the definition of Acquired
Assets and included in the Disclosure Schedule (including leases pursuant to
which the Sellers hold Leased Sites), to the extent such liabilities and
obligations relate to or arise during periods after the Effective Time;
provided, however, that the Assumed Liabilities shall not include:
(i) any liability or obligation of the Sellers under this
Agreement (or under any side agreement between the Sellers on the one hand and
the Buyer on the other hand entered into on or after the date of this
Agreement);
(ii) any claims, liabilities, losses, damages or expenses
relating to Sellers' operation of their wireless messaging business;
(iii) any claims, liabilities, losses, damages or expenses
relating to any litigation, proceeding or investigation of any nature arising
out of the Owned Sites, the Leased Sites or the operation of the towers by
Sellers, including, without limitation, any claims against or any liabilities
for injury to or death of persons or damage to or destruction of property, any
workers' compensation claims, and any warranty claims;
(iv) tax liabilities of any and all kinds (federal, state,
local and foreign) of Sellers or their Affiliates or their Affiliated Group,
including, without limitation, taxes with respect to the Acquired Assets, any
liabilities for taxes on or measured by income, liabilities for withheld federal
and state income and employee F.I.C.A. (Federal Insurance Contribution Act) or
employer F.I.C.A. and liabilities for income taxes arising as a result of the
transfer of the transferred assets or otherwise by virtue of the consummation of
the transactions contemplated hereby except for taxes for the period after the
Closing Date to be prorated as specifically set forth in Section 2(d)(ii) of
this Agreement, and except that sales taxes arising by reason of the
transactions contemplated by this Agreement shall be payable as provided in
Section 10(l);
(v) any liabilities of Sellers or their Affiliates or members
of their Affiliated Group as an employer, including, without limitation,
liabilities for wages, supplemental unemployment benefits, vacation benefits,
severance benefits, retirement benefits, COBRA benefits, FAMLA benefits, WARN
obligations and liabilities, or any other employee benefits, withholding tax
liabilities, workers' compensation, or unemployment compensation benefits or
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premiums, hospitalization or medical claims, occupational disease or disability
claims or other claims attributable in whole or in part to employment by Sellers
or arising out of any labor matter;
(vi) any accounts payable or other indebtedness of Sellers or
their Affiliates or obligations to any persons who have lent money to Sellers;
(vii) any liabilities or obligations resulting from the
failure to comply with any environmental protection, health or safety laws or
regulations or resulting from the generation, storage, treatment,
transportation, handling, disposal, release of hazardous substances, solid
wastes, and liquid and gaseous matters by Sellers or their Affiliates and by any
other person in relation to Sellers or their Affiliates, including, without
limitation, any liability or obligation for cleaning up waste disposal sites
(provided that the exclusion of liabilities described in this clause (vii) from
the definition of "Assumed Liabilities" shall not relieve the Buyer from such
liabilities arising from such activities at the Sites after the Closing); or
(viii) any fees and expenses incurred by Sellers in connection
with negotiating, preparing, closing and carrying out this Agreement and the
transactions contemplated by this Agreement, including, without limitation, the
fees and expenses of Sellers' attorneys, accountants and consultants.
"Base Purchase Price" has the meaning set forth in Section 2(d) below.
"Buyer" has the meaning set forth in the preface above.
"Cash" means cash and cash equivalents (including marketable securities
and short term investments) calculated in accordance with GAAP applied on a
basis consistent with the preparation of the Financial Statements.
"Closing" has the meaning set forth in Section 2(e) below.
"Closing Date" has the meaning set forth in Section 2(e) below.
"Code" means the Internal Revenue Code of 1986, as amended.
"Confidential Information" means any information concerning the
businesses and affairs of the Arch Towers Business or the Sellers that is not
already generally available to the public.
"Defects" means any of the following, unless any such item is a
Permitted Encumbrance:
(i) defects in title to any Sites;
(ii) with respect to Leased Sites, a lease, management
agreement or easement which has expired prior to the Closing Date or will expire
prior to December 31, 1998 and has not been renewed or extended (unless prior to
the Closing such lease, management agreement or easement shall have been renewed
or extended in a manner reasonably acceptable to the Buyer);
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(iii) with respect to Leased Sites, a lease, management
agreement or easement wherein the term has expired and the relevant Seller does
not have written evidence of exercise (or confirmation of exercise) of an
extension or renewal right contained in the Lease (unless prior to the Closing
the Seller provides to the Buyer written evidence of renewal or extension of
such lease, management agreement or easement reasonably acceptable to the
Buyer);
(iv) with respect to Leased Sites, a lease, management
agreement or easement pursuant to which a Seller holds the Site which is oral or
invalid (unless prior to the Closing the Seller provides written evidence of
such agreement signed by the lessor or grantor, reasonably acceptable to the
Buyer);
(v) with respect to Leased Sites, leases, management
agreements or easements in which the description of the premises is missing or
so ambiguous as to make it extremely difficult to tell whether the premises
consist of land, a rooftop or a tower (unless prior to the Closing the Sellers
provide written clarification of such ambiguity signed by the lessor or grantor,
reasonably acceptable to the Buyer);
(vi) encroachments of any portion of the improvements
(including guy wires and anchors) on any Site beyond the boundaries of such Site
or similar problems revealed by a survey of a Site meeting the minimum standard
detail requirements for ALTA/ACSM Land Title Surveys (unless prior to the
Closing the Sellers provide written evidence of correction of such encroachment
reasonably acceptable to the Buyer);
(vii) violations of zoning or other Laws or failure to
receive, prior to the Closing, a zoning compliance letter in respect of any Site
for which such a letter has been requested within twenty days after the date
hereof;
(viii) Sites which are subject to the threat or expectation of
condemnation or taking by eminent domain;
(ix) restrictions on the use of any Site which prevent the use
of such Site as a communications facility with a tower in its present or a
substantially similar configuration (unless prior to the Closing such
restrictions are modified or amended so as to permit the use of the affected
Site as a communications facility in its present or a substantially similar
configuration); and
(x) Sites requiring easements that are unrecorded;
(xi) Managed Sites where the Buyer's rights would be unclear
with respect to successors to the underlying property;
(xii) Sites which are in material violation of Environmental,
Health and Safety Requirements;
(xiii) Sites identified on Exhibit C as having specific
miscellaneous problems until the specified issue is resolved (e.g. pending
litigation, missing documentation, etc.); and
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(xiv) Leased Sites (other than those which the Sellers hold
pursuant to recorded easements) for which the applicable landlord fails or
refuses to provide a consent (if required) or an estoppel certificate to the
Buyer prior to the Closing; provided that if the Buyer has received estoppel
certificates (including estoppels which are part of consents) from landlords of
Leased Sites representing 90% of the Adjusted Operating Cash Flow of all Leased
Sites, the Buyer shall waive any Defect arising from the failure to obtain
estoppel certificates from the remaining 10% of such Leased Site landlords.
Exhibit C identifies Sites which have Defects of which the Buyer is
aware as of the date of this Agreement, based on the Buyer's review of
documentation related to the Sites. The listing on Exhibit C does not preclude
the Buyer from identifying additional Defects during the course of obtaining
title commitments, surveys, consents, estoppel certificates and environmental
assessments in respect of Sites.
"Disclosure Schedule" has the meaning set forth in Section 3 below.
"Effective Time" means 12:01 a.m. on the Closing Date.
"Environmental, Health, and Safety Requirements" shall mean all
federal, state, local and foreign statutes, regulations, and ordinances
concerning public health and safety, worker health and safety, and pollution or
protection of the environment, including without limitation all those relating
to the presence, use, production, generation, handling, transportation,
treatment, storage, disposal, distribution, labeling, testing, processing,
discharge, release, threatened release, control, or cleanup of any hazardous
materials, substances or wastes, as such requirements are enacted and in effect
on or prior to the Closing Date.
"FAA" means the Federal Aviation Administration.
"FCC" means the Federal Communications Commission.
"GAAP" means United States generally accepted accounting principles as
in effect from time to time.
"Xxxx-Xxxxx-Xxxxxx Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended.
"Indemnified Party" has the meaning set forth in Section 8(d) below.
"Indemnifying Party" has the meaning set forth in Section 8(d) below.
"Initial Closing Date" has the meaning set forth in Section 2(e) below.
"Knowledge" means actual knowledge. When used in reference to Sellers,
Knowledge means the actual knowledge of Xxxx X. Xxxxx and/or Xxxxxx X. Xxxxxxx
after such persons have made inquiry of those management personnel in the
Sellers' organization responsible for administration and management of the Arch
Towers Business as a whole.
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"Laws" means statutes, laws, rules, regulations, codes, judgments,
orders, decrees and rulings thereunder of federal, state and local governments
and agencies thereof.
"Master Tower Space Lease" means the tower space lease substantially in
the form annexed hereto as Exhibit D.
"Ordinary Course of Business" means the ordinary course of business
consistent with past custom and practice (including with respect to quantity and
frequency).
"Party" has the meaning set forth in the preface above.
"Permitted Encumbrances" means (i) taxes and assessments, both general
and special, which are a lien but not yet due and payable; (ii) the existence of
tower space leases or license agreements pursuant to which space for
transmitting facilities is leased or licensed to third-party tenants that are
identified in Section 3(l) of the Disclosure Schedule; (iii) matters described
in clauses (i), (v), (vi), (vii), (viii), (x), (xi) and (xiii) of the definition
of "Defects", that could not reasonably be expected to impair materially the use
or operation of any Site or any tower as a communications facility in its
present configuration or in a substantially similar configuration.
"Person" means an individual, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization, or a governmental entity (or any department, agency, or political
subdivision thereof).
"Second Closing Date" has the meaning set forth in Section 2(e) below.
"Security Interest" means any mortgage, pledge, lien, encumbrance,
charge, or other security interest, other than (a) mechanic's, materialmen's,
and similar inchoate liens arising between the date of performance of services
and the date when payment is due, provided such payments are made in full at or
prior to the Closing by the party which requested the service, (b) liens for
taxes not yet due and payable or for taxes that the taxpayer is contesting in
good faith through appropriate proceedings, and (c) purchase money and similar
liens arising between the date of acquisition of assets and the date of payment,
provided such payments are made in full at or prior to the Closing by the party
which acquired the goods.
"Seller" or "Sellers" has the meaning set forth in the preface above.
"Site" means either a Leased Site or an Owned Site.
"Site Lease" means a lease substantially in the form of Exhibit E,
which will be entered by the relevant Seller and the Buyer for each Site listed
on Exhibit E-1.
"Site Sublease" means a sublease substantially in the form of Exhibit
F, which will be entered by the relevant Seller and the Buyer for each Site
listed on Exhibit F-1.
"Subsidiary" means any corporation with respect to which a specified
Person (or a Subsidiary thereof) owns a majority of the common stock or has the
power to vote or direct the voting of sufficient securities to elect a majority
of the directors.
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"Third Party Claim" has the meaning set forth in Section 8(d) below.
"Tower Space Lease" has the meaning set forth in Section 3(l) below.
2. BASIC TRANSACTION.
(a) Purchase and Sale of Assets. On and subject to the terms
and conditions of this Agreement, the Buyer agrees to purchase from the Sellers,
and the Sellers agree to sell, transfer, convey, and deliver to the Buyer, all
of the Acquired Assets at the Closing for the consideration specified below in
this Section 2, free and clear of any Security Interest or Defect other than
Defects which the Buyer elects to accept as herein provided. As provided in
Section 2(d)(iii), in the event that on the date which is five business days
prior to the Initial Closing Date there are Sites for which the Buyer has
identified Defects which the Buyer is unwilling to accept and which Sellers have
not cured (each a "Defect Site"), the Buyer shall not buy, and the Sellers shall
not sell, such Sites, but as to Defect Sites a Second Closing will occur which
is sixty days after the Initial Closing. References herein to the "Closing" or
the "Closing Date" shall mean the closing which occurs on the Initial Closing
Date or the Second Closing Date, as the context requires.
(b) Assumption of Liabilities. On and subject to the terms and
conditions of this Agreement, the Buyer agrees to assume and become responsible
for all of the Assumed Liabilities at the Closing. The Buyer will not assume or
have any responsibility, however, with respect to any other obligation or
liability of the Sellers not included within the definition of Assumed
Liabilities.
(c) Related Agreements. At the Closing the Buyer and the
Sellers will enter (i) the Master Tower Site Lease, (ii) Site Subleases for each
of the Sites indicated on Exhibit E-1 (unless the Buyer is able to negotiate a
direct lease with the master lessor for the space required for the
communications facility at such Site) and (iii) Site Leases for Sites owned by
the Sellers which will be leased to the Buyer as indicated in Exhibit F-1.
(d) Purchase Price.
(i) The Buyer agrees to pay to the Sellers at the
Closing Thirty-eight Million Dollars ($38,000,000) (the "Base Purchase Price")
adjusted as provided herein (as adjusted, the "Adjusted Purchase Price") by
delivery of cash payable by wire transfer or other delivery of immediately
available funds. In the event there are Defect Sites as of the date which is
five business days prior to the Initial Closing Date, the portion of the Base
Purchase Price payable on the Initial Closing Date shall be adjusted as provided
in Section 2(d)(iii).
(ii) All income and expenses arising from the conduct
of the business and operations of the Arch Tower Business shall be prorated
between the Buyer and the Sellers in accordance with generally accepted
accounting principles as of the Effective Time and shall, except as otherwise
expressly provided in this Agreement, be for the account of the Sellers up to
the Effective Time and from and after the Effective Time shall be for the
account of the Buyer. Such prorations shall include, without limitation, all ad
valorem, real estate, tangible and intangible personal property and other
property taxes (but excluding taxes arising by reason of the transfer of the
Acquired Assets as contemplated hereby, which shall be paid as set forth in
Section 10(l) of this Agreement), business and license fees, other license fees
(including any retroactive adjustments
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thereof), utility expenses, rents and similar prepaid and deferred items, and
all other income and expenses attributable to the Sellers' operation of the
business of leasing space to install and operate communications equipment at the
Sites. In the case of the deposits or prepaid expenses of the Sellers held by
third parties, the Sellers shall be entitled to an adjustment equal to the sum
of all such deposits or prepaid expenses the benefit of which shall accrue to
the Buyer following the Closing.
Any adjustments or prorations will, insofar as
feasible, be determined and paid on the Closing Date. Within sixty (60) days
after the Closing Date, the Buyer shall deliver to the Sellers a certificate
(the "Closing Certificate"), signed by a senior officer of the Buyer, providing
a compilation of the adjustments and prorations to be made pursuant to this
Section 2(d)(ii), including any adjustments and prorations made at Closing,
together with a copy of any working papers relating to such Closing Certificate
and such other supporting evidence as the Sellers may reasonably request. If the
Sellers conclude that the Closing Certificate does not accurately reflect the
adjustments and prorations to be made pursuant to this Section 2(d)(ii), the
Sellers shall, within thirty (30) days after receipt thereof, provide to the
Buyer their written statement of any discrepancies believed to exist. The
Sellers and the Buyer shall attempt jointly to resolve the discrepancies within
fifteen (15) days after receipt of the Sellers' discrepancy statement, which
resolution, if achieved, shall be binding upon all parties to this Agreement and
not subject to dispute or review. If the Sellers and the Buyer cannot resolve
the discrepancies within such fifteen (15) day period, the Buyer and Sellers
shall jointly designate a nationally known independent public accounting firm to
be retained to review the Closing Certificate together with the Sellers'
discrepancy statement and any other relevant documents. The cost of retaining
such accounting firm shall be borne by the party found to be more in error. Such
firm shall report its conclusions as to adjustments pursuant to this Section
2(d)(ii), which shall be conclusive and not subject to dispute or review. Once
the Closing Certificate has been approved by both parties, if the Buyer shall
have been determined to owe an amount to the Sellers, the Buyer shall within
five (5) days of the date the Closing Certificate shall have been approved by
both the Buyer and the Sellers pay such amount thereof to the Sellers, or if the
Sellers shall have been determined to owe an amount to the Buyer, the Sellers
shall within five (5) days of the date the Closing Certificate shall have been
approved by both the Buyer and the Sellers pay such amount thereof to the Buyer.
(iii) In addition to the adjustments to the Base
Purchase Price made pursuant to Section 2(d)(ii) above, if any particular Site
is, on the date which is five business days prior to the Closing Date, subject
to any Security Interest or Defect, then, at the Buyer's election, such Site
shall be dealt with as described in this clause (iii):
(A) the Buyer may notify the Sellers that it
wishes to postpone the purchase of any such Site until the Second Closing Date,
in which event the Base Purchase Price payable at the Initial Closing shall be
reduced for each such Defect Site by an amount equal to the greater of (i) the
product of 11.8 multiplied by the Annualized Operating Cash Flow for each Defect
Site which the Buyer elects not to purchase at the Initial Closing or (ii)
$100,000; or
(B) the Buyer may notify the Sellers that it
wishes to include such Defect Site in the Acquired Assets on the Initial Closing
Date, subject to the Sellers' indemnification for the Security Interest or
Defect as provided in Section 8(g). If the Buyer elects to have such Defect
Sites included in the Acquired Assets, the Buyer shall notify the Sellers not
less than eight business days prior to the Initial Closing Date, and the Sellers
shall thereupon
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indemnify the Buyer in respect of the identified Defects as provided in Section
8(g) unless the Sellers notify the Buyer in writing prior to the date which is
five business days before the Initial Closing Date that they will not so
indemnify the Buyer. If the Sellers elect not to indemnify the Buyer, the Buyer
may then elect either to accept the Defect Sites without the Sellers'
indemnification under Section 8(g) or postpone the purchase of such Defect Sites
until the Second Closing, in which case the Base Purchase Price at the Initial
Closing Date shall be reduced as provided in clause (a) of this subsection.
(iv) On the Second Closing Date, the Buyer shall
purchase any Sites which were Defect Sites as of the Initial Closing Date if the
Defects attributable to such Sites have been cured to the Buyer's reasonable
satisfaction not later than the five business days prior to the Second Closing
Date. Notwithstanding any other provision contained in this Agreement, the Buyer
shall not be obligated to acquire any Sites at the Initial Closing or the Second
Closing unless any Defects for such Site have been cured to the Buyer's
reasonable satisfaction. The purchase price in respect of each Site purchased at
the Second Closing will be equal to the Base Purchase Price reduction made in
respect of such Site at the Initial Closing.
(v) If on the date which is five business days prior
to the Second Closing Date any Defect Site continues to be subject to a Security
Interest or an uncured Defect, then, at the Buyer's election:
(A) the Buyer may notify the Sellers that it
wishes to exclude such Site from the Acquired Assets, in which event such Site
shall not be transferred to the Buyer; or
(B) the Buyer may notify the Sellers that it
wishes to include such Defect Site in the Acquired Assets on the Second Closing
Date, subject to the Sellers' indemnifications for the Security Interest or
Defect as provided in Section 8(g). If the Buyer elects to have such Defect
Sites included in the Acquired Assets, the Buyer shall notify the Sellers not
less than eight business days prior to the Second Closing Date, and the Sellers
shall thereupon indemnify the Buyer in respect of the identified Defects as
provided in Section 8(g) unless the Sellers notify the Buyer in writing prior to
the date which is five business days prior to the Second Closing Date that they
will not so indemnify the Buyer. If the Sellers elect not to indemnify the
Buyer, the Buyer may then elect either to accept the Defect Sites without the
Sellers' indemnification under Section 8(g) or not to acquire such Defect Sites.
The Parties shall have no further obligations to each
other in respect of Defect Sites which the Buyer elects not to acquire on the
Second Closing Date. No further adjustment to the Base Purchase Price (in
addition to the adjustment to the Base Purchase Price effected at the Initial
Closing) shall be made in respect of Defect Sites which the Buyer elects not to
acquire at the Second Closing.
(e) The Closing. The closing of the transactions contemplated
by this Agreement (the "Closing") shall take place on June 30, 1998 (the
"Initial Closing Date") at the offices of Xxxxxxxx, Xxxx & Xxxxx, 0000 Xxx
Xxxxxx, Xxxxxxxxx, Xxxx 00000, commencing at 9:00 a.m. local time, provided the
conditions identified in Section 7 below have been satisfied (except for
conditions to be satisfied at the Closing) on or before such date. A second
Closing will be held on the date (the "Second Closing Date") which is sixty days
after the Initial Closing Date in
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respect of Sites which have uncured Defects or Security Interests as of the
Initial Closing Date. The "Initial Closing Date" and the "Second Closing Date"
are collectively referred to herein as the "Closing Date".
(f) Deliveries at the Closing. At the Closing, (i) the Sellers
will deliver to the Buyer the various deeds, assignments, certificates,
instruments and documents referred to in Section 7(a) below; (ii) the Buyer will
deliver to the Sellers the various certificates, instruments, and documents
referred to in Section 7(b) below; (iii) the Sellers will execute, acknowledge
(if appropriate), and deliver to the Buyer such instruments of sale, transfer,
conveyance, and assignment as the Buyer and its counsel reasonably may request
(including a deed for each Owned Site with statutory warranties regarding
encumbrances created by the relevant Seller); (iv) the Buyer and the Sellers
will execute and deliver the Master Tower Space Lease and Site Subleases
substantially in the forms annexed hereto; (v) the Buyer will execute,
acknowledge (if appropriate), and deliver to the Sellers such instruments of
assumption as the Sellers and their counsel reasonably may request; and (vi) the
Buyer will deliver to the Sellers the consideration specified in Section 2(d)
above.
(g) Allocation. The Parties agree to allocate the Purchase
Price (and all other capitalizable costs) among the Acquired Assets for all
purposes (including financial, accounting and tax purposes) in accordance with
the allocation schedule attached hereto as Exhibit G. The Sellers shall allocate
the Purchase Price among the Sellers as directed by Arch Communications Group,
Inc.
3. REPRESENTATIONS AND WARRANTIES OF THE SELLERS. The Sellers represent
and warrant to the Buyer that the statements contained in this Section 3 are
correct and complete as of the date of this Agreement and will be correct and
complete as of the Closing Date (as though made then and as though the Closing
Date were substituted for the date of this Agreement throughout this Section 3),
except as set forth in the disclosure schedule accompanying this Agreement and
initialed by the Parties (the "Disclosure Schedule"). The Disclosure Schedule
will be arranged in paragraphs corresponding to the lettered and numbered
paragraphs contained in this Section 3. The Sellers make no representations or
warranties concerning the Acquired Assets or the Arch Towers Business except as
set forth in this Section 3.
(a) Organization of the Sellers. Each of the Sellers is a
corporation duly organized, validly existing, and in good standing under the
laws of the jurisdiction of its incorporation as indicated on the signature
pages hereof. Each of the Sellers has full power to carry on its business as now
conducted and is qualified to do business as a foreign entity in each
jurisdiction where failure to so qualify would have a material adverse affect on
the Acquired Assets.
(b) Authorization of Transaction. Each of the Sellers has full
power and authority (including full corporate power and authority) to execute
and deliver this Agreement and to perform its obligations hereunder. Without
limiting the generality of the foregoing, the board of directors of each of the
Sellers has duly authorized the execution, delivery, and performance of this
Agreement by the respective Seller. This Agreement constitutes the valid and
legally binding obligation of each of the Sellers, enforceable in accordance
with its terms and conditions, except as such enforcement may be limited by
applicable bankruptcy, insolvency, reorganization or similar laws from time to
time in effect affecting creditors' rights generally and by legal and equitable
limitations on the availability of specific remedies (the "Enforceability
Exceptions").
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(c) Noncontravention. Neither the execution and the delivery
of this Agreement, nor the consummation of the transactions contemplated hereby
(including the assignments and assumptions referred to in Section 2 above), will
(i) violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which any of the Sellers is subject or any
provision of the charter or bylaws of any of the Sellers or (ii) except as to
required notice described in Section 3(c) of the Disclosure Schedule, conflict
with, result in a breach of, constitute a default under, result in the
acceleration of, create in any party the right to accelerate, terminate, modify,
or cancel, or require any notice under any agreement, contract, lease, license,
instrument, or other arrangement to which any of the Sellers is a party or by
which it is bound or to which any of its assets is subject (or result in the
imposition of any Security Interest upon any of its assets), except where the
violation, conflict, breach, default, acceleration, termination, modification,
cancellation or failure to give notice, would not have a material adverse effect
on any of the Acquired Assets or on the ability of the Parties to consummate the
transactions contemplated by this Agreement. Except as set forth in Section 3(c)
of the Disclosure Schedule, none of the Sellers needs to give any notice to,
make any filing with, or obtain any authorization, consent, or approval of any
government or governmental agency or of any private party in order for the
Parties to consummate the transactions contemplated by this Agreement (including
the assignments and assumptions referred to in Section 2 above).
(d) Brokers' Fees. The Sellers have no liability or obligation
to pay any fees or commissions to any broker, finder, or agent with respect to
the transactions contemplated by this Agreement for which the Buyer could become
liable or obligated. The Sellers have engaged the services of Xxxxxxx &
Associates, L. P. as an agent of the Sellers in connection with this Agreement,
and the Sellers will be solely responsible for any fees or commissions payable
to such agent.
(e) Financial Information. The financial information set forth
in Exhibit H is the only financial information provided by the Sellers to the
Buyer in connection with this Agreement. The information in Exhibit H1 under the
items entitled "Third Party Rent Revenue" and "Annual Land Lease Expenses" are
Sellers' estimates for such items for the twelve month period ending March 31,
1998, based on actual rent revenues from third parties and actual land lease
expenses during the month of March, 1998. Exhibit H2 also sets forth actual
Third Party Rent Revenue for the Sites for the months of June, 1997 through
March, 1998. The information in Exhibit H concerning Arch Rent Revenue correctly
reflects the annual rent which Sellers will pay to the Buyer pursuant to the
Master Tower Space Lease during the first twelve months after the Closing Date,
subject to adjustments permitted under the Master Tower Space Lease. The
"Squatters Rent Increase" reflected in Exhibit H1, and expenses of maintenance
and utilities, are the Sellers' estimates; the Sellers do not warrant the
correctness or reasonableness of such estimates.
(f) Events Since March 31, 1998. Since March 31, 1998, there
has not been any material adverse change in the financial condition of the Arch
Towers Business taken as a whole or any material adverse change in the condition
or operation of any tower. Without limiting the generality of the foregoing,
since that date none of the Sellers has engaged in any practice, taken any
action, or entered into any transaction outside the Ordinary Course of Business
with respect to the Arch Towers Business except in connection with the sale of
the Arch Towers Business.
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(g) Legal Compliance. Each of the Sellers has complied with
all applicable Laws, except where the failure to comply would not have a
material adverse effect upon the financial condition of any particular Site. The
Sellers have received no notice to the effect that any Site is not in compliance
with applicable Laws.
(h) Tax Matters. Sellers have filed with the appropriate
governmental agencies all tax returns and tax reports pertaining to excise
taxes, sales and use taxes, payroll taxes, real property taxes and assessments
and tangible and intangible personal property taxes required to be filed by them
relating to the Owned Sites, the Leased Sites and towers and operation thereof
("Applicable Taxes"), and all taxes, interest and penalties shown or claimed to
be due thereon have been paid. Sellers do not have any liability, contingent or
otherwise, for any Applicable Taxes or any interest or penalties thereon except
to the extent disclosed in Section 3(i) of the Disclosure Schedule. To the
Knowledge of the Sellers, the consummation of the transactions contemplated by
this Agreement will not result in any transferee tax liability to Buyer, other
than possible sales taxes on sales of personal property included in the Acquired
Assets. None of the Sellers has waived any statute of limitations in respect of
Applicable Taxes or agreed to any extension of time with respect to an
Applicable Tax assessment or deficiency.
(i) Property.
(i) Sellers do not have any interest in any real
property in connection with the operation of the towers other than as described
on Exhibit A and Exhibit B. Each Seller is, or will be, at the time of Closing,
in possession of each of its Sites. Each Seller has, or will have at the time of
Closing, (A) good, marketable, and fee simple title to its Owned Sites and all
the improvements, (B) good and valid leasehold estates or good and valid
easements as to its Leased Sites, (C) good and valid easement rights providing
all necessary access and utilities to and from the improvements and the Sites to
public roads, and (D) good and marketable legal title to all personal property
included in the Acquired Assets, in each case, free and clear of all (i)
Security Interests except for (i) Security Interests described in the Disclosure
Schedule, which will be released and discharged prior to the Closing, (ii)
Permitted Encumbrances and (iii) Defects which, if the affected Site is conveyed
to the Buyer will be discharged or cured prior to the Closing or will be a
matter for which the Buyer is indemnified pursuant to Section 8(g).
(ii) No Seller has voluntarily granted any, is not a
party to any agreement providing for, and no Seller has any knowledge of,
easements, conditions, reservations, covenants, restrictions, leases, subleases,
rights, options or any other matters that would adversely affect the use of any
of the towers and the Sites for the same purposes and uses as the towers and
Sites have been used by such Seller, except for (i) Security Interests described
in Section 3(i) of the Disclosure Schedule, which will be released and
discharged prior to the Closing, (ii) Permitted Encumbrances and (iii) Defects
which, if the affected Site is conveyed to the Buyer, will be discharged or
cured prior to the Closing or will be a matter for which the Buyer is
indemnified pursuant to Section 8(g).
(iii) To the best of each Seller's knowledge, there
are no improvements planned by any public authority any part of the cost of
which might be assessed against such Seller.
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(iv) To each Seller's knowledge, with respect to its
Sites, there are no (A) applications, ordinances, petitions, resolutions or
other matters pending before any governmental agency having jurisdiction to act
on zoning changes that would prohibit or make nonconforming the use of any of
the Sites for the operation of the towers; or (B) pending or threatened
condemnation or eminent domain proceedings, or proposed sale in lieu thereof.
(v) To each Seller's knowledge (except as reported by
the Buyer), the improvements, including the towers, are in good condition and
repair, ordinary wear and tear excepted, and do not have any structural or
material defects except as described on Section 3(j) of the Disclosure Schedule.
(vi) Exhibit A lists all of the Leased Sites, and
identifies the lease date and the lessor thereunder and the current monthly
rental paid by Sellers. To the extent that written leases, management agreements
or easements exist and are in the Sellers' possession, the Sellers have
delivered to the Buyer correct and complete copies thereof. The Sellers do not
possess written documents for all of Leased Sites, and the leases, management
agreements or easements for some locations have expired, as indicated in Exhibit
A; provided, however, the Sellers will use their commercially reasonable best
efforts to remove these Defects prior to Closing. To the Knowledge of the
Sellers, there are no disputes with the lessor or sublessor of any of the
leases, management agreements or easements listed on Exhibit A except as
described in Section 3(i) of the Disclosure Schedule or where such dispute would
not have a material adverse effect on the financial condition of any particular
tower; provided however, the Sellers will use their commercially reasonable best
efforts to remove these Defects prior to Closing. Each lease or sublease listed
on Exhibit A which is written and has not expired by its terms (as indicated on
Exhibit A) is valid and in full force and effect, unless otherwise noted in
Section 3(i) of the Disclosure Schedule. Any lease or sublease listed on Exhibit
A which is not written and in full force and effect on the Closing Date will be
considered to have a Defect, and may be dealt with as provided in Section
2(d)(iii). Except as described on 3(i) of the Disclosure Schedule, the leases
are freely assignable to the Buyer without the consent of any landlord, tenant
or third party and there are no defaults on the part of Sellers or, to the
Knowledge of the Sellers, their landlords.
(j) Intellectual Property. None of the Sellers owns or has an
interest in any patent or registration or any pending patent application or
application for registration related to the Acquired Assets or the Arch Towers
Business.
(k) Governmental Authorizations. To the knowledge of the
Sellers, there are no licenses or other governmental authorizations required for
the operation of the Acquired Assets which the Sellers do not hold; Sellers are
in compliance therewith; and such licenses and governmental authorizations are
in full force and effect. To the extent required by regulations of the FCC, the
towers owned by the Sellers on the Sites are registered with the FCC. The towers
are in compliance with all applicable FAA and FCC rules and regulations.
(l) Tenant Leases and Other Contracts. Exhibit H3 lists all
tower space leases, tower license agreements and similar agreements (and the
rental and security deposits relating thereto) pursuant to which the Sellers
have leased space on any of the communications towers included in the Acquired
Assets to third parties (each a "Tower Space Lease"). In addition, except as set
forth in Section 3(l) of the Disclosure Schedule, there are no other tower space
leases, licenses or similar occupancy agreements to which any Seller is a party
related to the operation of
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the Arch Towers Business. To the extent that written documents constituting
Tower Space Leases exist and are in the Sellers' possession, the Sellers have
delivered to the Buyer a correct and complete copy of each such document (as
amended to date) listed in Exhibit H3. Each Tower Space Lease listed in Exhibit
H3 which has not expired by its terms is valid and in full force and effect and
there are no material defaults pending caused by the Sellers or their tenants
(other than late payment defaults by such tenants the aggregate amount of which
as of March, 1998 is set forth in Exhibit H3. The Sellers do not possess written
documents for all the Tower Space Leases listed in Exhibit H3, and some of the
written documents so listed have expired. One of the Sellers is the sole owner
of the landlord's or licensor's interest in the Tower Space Leases, and the
Sellers' interest in the Tower Space Leases, are fully assignable to the Buyer
without the consent or approval of any landlord, tenant or other third party. As
of the Closing Date, no rents due under, or other interest in, any of the Tower
Space Leases will have been assigned to any other party other than the Buyer or
otherwise pledged or encumbered in any way. Except as set forth in Exhibit H3,
the Sellers have not received any notice from any tenant or licensee under a
Tower Space Lease of any impending cancellation or breach of its Tower Space
Lease or of any termination of its Tower Space Lease in advance of the scheduled
expiration date. Exhibit H3 and Section 3(l) of the Disclosure Schedule will be
updated as of a date within 15 days prior to the Closing Date.
(m) Litigation. None of the Sellers (i) is subject to any
outstanding injunction, judgment, order, decree, ruling, or charge or (ii) is a
party to any action, suit, proceeding, hearing, or investigation of, in, or
before any court or quasi-judicial or administrative agency of any federal,
state, local, or foreign jurisdiction, where the injunction, judgment, order,
decree, ruling, action, suit, proceeding, hearing, or investigation affects the
Arch Towers Business or the Acquired Assets.
(n) Environmental, Health, and Safety Matters.
(i) To the Knowledge of the Sellers, the Sellers are
in compliance with Environmental, Health, and Safety Requirements.
(ii) The Sellers have not received any written
notice, report or other information regarding any actual or alleged violation of
Environmental, Health, and Safety Requirements, or any liabilities or potential
liabilities (whether accrued, absolute, contingent, unliquidated or otherwise),
including any investigatory, remedial or corrective obligations, relating to the
Sellers or their facilities included in the Acquired Assets arising under
Environmental, Health, and Safety Requirements.
(iii) The Sellers are not aware of any underground
storage tanks on any of the land included in the Acquired Assets except as
described in Section 3(n) of the Disclosure Schedule. To the extent Sellers own
any underground storage tanks, Sellers are in compliance with all laws, rules
and regulations relating thereto.
(iv) This Section 3(n) contains the sole and
exclusive representations and warranties of the Sellers with respect to any
environmental, health, or safety matters, including without limitation any
arising under any Environmental, Health, and Safety Requirements.
(o) Certain Business Relationships with Sellers. After the
Closing, the sole contractual relationships between the Sellers and the Buyer
with respect to the Acquired Assets will be this Agreement, the Master Tower
Space Lease, the Site Subleases and the Site Leases.
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(p) Sufficiency of Assets. The Acquired Assets include all
Site-related equipment and real property rights used by the Sellers to operate
the Arch Towers Business, except for any generators that are specifically
excluded from the definition of "Acquired Assets" which would be necessary for
the operations of the Arch Towers Business. The Acquired Assets do not,
however, include any personnel, computers, technical expertise, vehicles,
maintenance and repair equipment or other non-Site-specific assets required to
operate the Arch Towers Business.
(q) No Condemnation. To the knowledge of the Sellers none of
the Owned Sites is the subject of any pending or proposed condemnation
proceedings by any public authority. The Sellers have not received any notice
from the owner of any Leased Site to the effect that such Site is the subject of
any pending or proposed condemnation proceedings by any public authority.
(r) Contracts. Section 3(r) of the Disclosure Schedule
constitutes a complete and accurate list of all material contracts (other than
(i) leases or other agreements pursuant to which the Sellers hold real property
included in the Acquired Assets and (ii) Tower Space Leases) (the "Contracts")
relating to the Acquired Assets or the operation of the Sites to which Seller is
a party or by which it is bound. The Contracts are in full force and effect.
Except as set forth in Section 3(r) of the Disclosure Schedule, there has been
no material default by the Sellers or, to the Sellers' knowledge, by the other
party, and no event has occurred or failed to occur which with the giving of
notice, the passage of time, or both, would constitute a material default by the
Sellers, or, to the best of their knowledge, by the other party, under any of
the Contracts. Except as set forth in Section 3(l) of the Disclosure Schedule,
to the Sellers' knowledge, none of the Contracts is subject to any impending
cancellation or breach that will result in a substantial loss or otherwise
materially and adversely affect the Sites or the Acquired Assets.
(s) Disclaimer of other Representations and Warranties. Except
as expressly set forth in this Section 3, the Sellers make no representation or
warranty, express or implied, at law or in equity, in respect of any of their
assets (including, without limitation, the Acquired Assets), liabilities or
operations, including, without limitation, with respect to merchantability or
fitness for any particular purpose, and any such other representations or
warranties are hereby expressly disclaimed. The Buyer hereby acknowledges and
agrees that, except to the extent specifically set forth in this Section 3, the
Buyer is purchasing the Acquired Assets on an "as-is, where-is" basis. Without
limiting the generality of the foregoing, the Sellers make no representation or
warranty regarding any assets other than the Acquired Assets, and none shall be
implied at law or in equity.
(t) Information Concerning the Redding, California Site.
Information provided by the Sellers in respect of the Redding, California Site
is based on information provided to the Sellers by the current owners of the
Site. The Sellers do not represent or warrant the correctness of such
information. The Sellers will represent and warrant such information at the
Closing.
4. REPRESENTATIONS AND WARRANTIES OF THE BUYER. The Buyer represents
and warrants to the Sellers that the statements contained in this Section 4 are
correct and complete as of the date of this Agreement and will be correct and
complete as of the Closing Date (as though made then and as though the Closing
Date were substituted for the date of this Agreement throughout this Section 4),
except as set forth in the Disclosure Schedule. The Disclosure Schedule will be
arranged in paragraphs corresponding to the lettered and numbered paragraphs
contained in this Section 4.
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(a) Organization of the Buyer. The Buyer is a corporation duly
organized, validly existing, and in good standing under the laws of the
jurisdiction of its incorporation.
(b) Authorization of Transaction. The Buyer has full power and
authority (including full corporate power and authority) to execute and deliver
this Agreement and to perform its obligations hereunder. This Agreement
constitutes the valid and legally binding obligation of the Buyer, enforceable
in accordance with its terms and conditions, except as such enforcement may be
limited by the Enforceability Exceptions.
(c) Noncontravention. Neither the execution and the delivery
of this Agreement, nor the consummation of the transactions contemplated hereby
(including the assignments and assumptions referred to in Section 2 above), will
(i) violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which the Buyer is subject or any provision of
its charter or bylaws or (ii) conflict with, result in a breach of, constitute a
default under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice under any
agreement, contract, lease, license, instrument, or other arrangement to which
the Buyer is a party or by which it is bound or to which any of its assets is
subject. The Buyer does not need to give any notice to, make any filing with, or
obtain any authorization, consent, or approval of any government or governmental
agency, except pursuant to the Xxxx-Xxxxx-Xxxxxx Act, in order for the Parties
to consummate the transactions contemplated by this Agreement (including the
assignments and assumptions referred to in Section 2 above).
(d) Brokers' Fees. The Buyer has no liability or obligation to
pay any fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement for which the Sellers could become
liable or obligated.
5. PRE-CLOSING COVENANTS. The Parties agree as follows with respect to
the period between the execution of this Agreement and the Closing.
(a) General. Each of the Parties will use its reasonable best
efforts to take all actions and to do all things necessary, proper or advisable
in order to consummate and make effective the transactions contemplated by this
Agreement (including satisfaction, but not waiver, of the closing conditions set
forth in Section 7 below).
(b) Notices and Consents.
(i) The Sellers will give any notices to third
parties reasonably requested by the Buyer; without limiting the generality of
the foregoing, the Sellers will use their commercially reasonable best efforts
(including the expenditure of up to $100 per Site) to obtain any third party
consents and estoppel certificates from each lessor of a Leased Site (other than
Leased Sites held pursuant to a recorded easement).
(ii) Each of the Parties will give any notices to,
make any filings with, and use its reasonable best efforts to obtain any
authorizations, consents, and approvals of governments and governmental agencies
in connection with the matters referred to in Section 3(c) and Section 4(c)
above. Without limiting the generality of the foregoing, each of the Parties
will file
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any Notification and Report Forms and related material that it may be required
to file with the Federal Trade Commission and the Antitrust Division of the
United States Department of Justice under the Xxxx-Xxxxx-Xxxxxx Act, will use
its reasonable best efforts to obtain an early termination of the applicable
waiting period, and will make any further filings pursuant thereto that may be
necessary, proper, or advisable in connection therewith. The Buyer and the
Sellers will use their commercially reasonable best efforts to file the
Notification and Report Form within fifteen business days after the date of this
Agreement.
(c) Operation of Business. The Sellers will not engage in
any practice, take any action, or enter into any transaction outside the
Ordinary Course of Business. The Sellers will use their commercially
reasonable efforts, consistent with past practice, to maintain and preserve the
Arch Towers Business.
(d) Full Access. The Sellers will permit representatives
of the Buyer to have full access at all reasonable times, and in a manner so as
not to interfere with the normal business operations of the Sellers, or Sellers'
activities undertaken to perform their obligations under this Agreement, to all
premises, properties, personnel, books, records (including tax records),
contracts, surveys, title reports and environmental and engineering reports, and
documents of or pertaining to that portion of the Arch Towers Business owned by
each of the Sellers. The Buyer will keep confidential and hold as such any
Confidential Information it receives from any of the Sellers in the course of
the reviews contemplated by this Section 5(d) or otherwise, will not use any of
the Confidential Information except in connection with this Agreement, and, if
this Agreement is terminated for any reason whatsoever, will return to the
Sellers all tangible embodiments (and all copies) of the Confidential
Information which are in its possession.
(e) Notice of Developments. Each Party will give prompt
written notice to the other Party of any material adverse development, including
a breach of any of its own representations and warranties in Section 3 and
Section 4 above. No disclosure by any Party pursuant to this Section 5(e),
however, shall be deemed to amend or supplement the Disclosure Schedule or to
prevent or cure any misrepresentation or breach of warranty.
(f) Exclusivity. The Sellers will not solicit, initiate,
accept, or encourage the submission of any proposal or offer from any Person
relating to the acquisition of any, all or substantially all of the Acquired
Assets (including any acquisition structured as a merger, consolidation, or
share exchange) or disclose any nonpublic information regarding any of the
Acquired Assets.
(g) Title; Surveys; Correction of Defects.
(i) The Buyer shall use its commercially reasonable
best efforts to order all title and surveys within 10 business days of the date
hereof. The Buyer shall use its commercially reasonable best efforts to order
all environmental assessments within 15 business days of the date hereof. The
Buyer will provide to the Sellers copies of all letters requesting titles,
surveys, environmental assessments and zoning compliance letters as such request
letters are issued.
(ii) If the Buyer believes a Site has a Defect which
makes the Site subject to Section 2(d)(iii), it shall notify the Sellers within
five business days after discovering
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the Defect. (The Buyer hereby notifies the Sellers that the items disclosed in
Exhibit A, B and C and Section 3(i) of the Disclosure Schedule which constitute
Defects are subject to Section 2(d)(iii).).
(iii) Sellers shall use their commercially reasonable
best efforts to correct all Defects, whether or not such Defect is shown on
Exhibits A, B and C or the Disclosure Schedule, prior to the Initial Closing
Date or, if unable to do so by the Initial Closing Date, by the Second Closing
Date. The Sellers shall, if the circumstances require, expend up to $5,000 per
Site to cure or correct Defects if it is reasonably expected that such amount
will cure the Defect applicable to such Site to the reasonable satisfaction of
the Buyer. The Sellers may, but shall not be required hereby to, expend more
than $5,000 to cure Defects at any Site.
(iv) The Sellers shall promptly notify the Buyer in
writing of each Defect which the Sellers believe has been cured, and the Buyer
shall promptly notify the Sellers if it agrees that a Defect has been cured to
its satisfaction. The Buyer and the Sellers shall work cooperatively to
coordinate the Defect notification and cure process so that cures sought by the
Sellers will be acceptable to the Buyer if effected.
(v) Not less than five business days prior to the
Initial Closing Date the Buyer and the Sellers shall compile lists of Sites for
which no Defects exist, and Sites for which Defects continue to exist, and shall
identify such Sites with uncured Defects (if any) which the Buyer elects to
accept notwithstanding the Defect, such of those Sites which the Buyer has
elected to accept for which the Sellers will indemnify the Buyer pursuant to
Section 8(g), such of those Sites which the Buyer has elected to accept for
which the Sellers will not indemnify the Buyer pursuant to Section 8(b), and (of
the latter group) any Sites which the Buyer will nonetheless purchase on the
Initial Closing Date.
(vi) Any Defect Sites not acquired by the Buyer on
the Initial Closing Date shall be subject to the same
notification/cure/acceptance/rejection procedures described in clause (v) prior
to the Second Closing Date.
(vii) The Sellers shall use their commercially
reasonable best efforts (but without the requirement of expending in excess of
$100 per Site) to obtain a nondisturbance agreement with each landlord of the
Sites listed on Exhibit F-1 or to obtain a direct lease between the landlord and
the Buyer for the tower and transmitter space at each such Site.
(h) If Sites representing Annualized Operating Cash Flow in
excess of 10% of the Annualized Operating Cash Flow of all the Sites have
uncured Defects and the Buyer has elected not to acquire such Sites (or, if the
Buyer has elected to acquire such Sites, the Sellers have declined to indemnify
the Buyer pursuant to Section 8(g) and the Buyer has therefore elected not to
acquire such Site) as of the date which is five business days prior to the
Initial Closing Date, either Party may terminate this Agreement in accordance
with Section 9.
(i) The Sellers will use their reasonable best efforts, and
cooperate with the Buyer, to obtain extensions or new leases with respect to
Leased Sites for which current leases expire in calendar 1999.
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6. POST-CLOSING COVENANTS. The Parties agree as follows with respect to
the period following the Closing.
(a) General. In case at any time after the Closing any further
action is necessary or desirable to carry out the purposes of this Agreement,
each of the Parties will take such further action (including the execution and
delivery of such further instruments and documents) as the other Party
reasonably may request, all at the sole cost and expense of the requesting Party
(unless the requesting Party is entitled to indemnification therefor under
Section 8 below). The Sellers will cooperate with the Buyer, at the Buyer's sole
expense, to the extent the Buyer needs assistance with or access to the Sellers'
accountants and books and records in preparing, verifying, auditing, reviewing
or certifying financial information.
(b) Litigation Support. In the event and for so long as any
Party actively is contesting or defending against any action, suit, proceeding,
hearing, investigation, charge, complaint, claim, or demand in connection with
(i) any transaction contemplated under this Agreement or (ii) any fact,
situation, circumstance, status, condition, activity, practice, plan,
occurrence, event, incident, action, failure to act, or transaction on or prior
to the Closing Date involving any of the Sellers, the other Party will cooperate
with the contesting or defending Party and its counsel in the contest or
defense, make available its personnel, and provide such testimony and access to
its books and records as shall be necessary in connection with the contest or
defense, all at the sole cost and expense of the contesting or defending Party
(unless the contesting or defending Party is entitled to indemnification
therefor under Section 8 below). This provision shall not require the Buyer's
participation in litigation between the Sellers and any person which had
previously agreed to purchase the Acquired Assets.
(c) Transition. The Sellers will not take any action that is
designed or intended to have the effect of discouraging any lessor, licensor,
lessee, licensee, customer, supplier, or other business associate of any of the
Sellers from maintaining the same business relationships with the Buyer after
the Closing as it maintained with the Sellers prior to the Closing.
(d) Repurchase Options. Sellers shall have the option to
repurchase portions of the Acquired Assets in forty quarterly segments
commencing on June 30, 1998 and continuing on each September 30 1, December 31,
March 31 and June 30 thereafter. The portion of the Acquired Assets which is
subject to such purchase option on each of the forty dates (each an "option
block") is described in Exhibit I. Exhibit I also sets forth the portion of the
Purchase Price allocable to each such portion of the Acquired Assets. The option
price for each option block is equal to the operating cash flow (determined by
multiplying the Sites' cash flow for the month most recently ended as of the
exercise date by 12) for the Sites included in the option block multiplied by
28; provided, that in no event shall the option price be less than $250,000 for
any one Site. This option may not be assigned by the Sellers other than to
persons controlling, controlled by or under common control with the Sellers. The
Sellers may exercise an option by, and only by, delivering written notice of
exercise of such option no later than the exercise date. The Sellers may elect
at any time, or from time to time, to terminate the exercisability of one or
more of the quarterly option segments. If the Sellers fail to exercise a
quarterly option on an exercise date, the option with respect to the next option
group on Exhibit I shall lapse and shall no longer be exercisable. The purchase
price under each option shall be paid in cash. If an option is exercised, the
terms of sale shall include no representations or warranties by the Buyer except
the absence of Security Interests with respect to the assets purchased.
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7. CONDITIONS TO OBLIGATION TO CLOSE.
(a) Conditions to Obligation of the Buyer. The obligation of
the Buyer to consummate the transactions to be performed by it in connection
with the Closing is subject to satisfaction of the following conditions:
(i) the representations and warranties of the Sellers
set forth in Section 3 above shall be true and correct in all material respects
at and as of the Closing Date;
(ii) the Sellers shall have performed and complied
with all of their covenants hereunder in all material respects through the
Closing;
(iii) there shall not be any injunction, judgment,
order, decree or ruling in effect preventing consummation of any of the
transactions contemplated by this Agreement or materially adversely affecting
any Site or Tower (provided, that if any such injunction, judgment, order,
decree or ruling should be in effect, the Site or Sites to which it applies
would not be transferred to the Buyer at the Initial Closing but would be
transferred at the Second Closing (provided the injunction, judgment, order,
decree or ruling had then been vacated) with a net reduction in the Base
Purchase Price as provided in Section 2(d)(iii) at the Initial Closing, and the
Closing would be held as to the remainder of the Acquired Assets);
(iv) the Sellers shall have delivered to the Buyer a
certificate to the effect that each of the conditions specified above in Section
7(a)(i)-(iii) is satisfied in all respects;
(v) all applicable waiting periods (and any
extensions thereof) under the Xxxx-Xxxxx-Xxxxxx Act shall have expired or
otherwise been terminated, and the Sellers and the Buyer shall have received all
other authorizations, consents, and approvals of governments and governmental
agencies and private parties identified in Section 3(c) of the Disclosure
Schedule; provided that with respect to any Leased Site the terms of the lease
for which require the consent of the landlord or other contract party, if such
landlord or other contract party shall not have consented to the transactions
contemplated hereby, if the Buyer so elects, the Buyer may elect not to purchase
such Site at the Initial Closing, and the purchase of such Site shall be
postponed to the Second Closing as provided in Section 2(d)(iii) unless the
Buyer elects to include such Site, subject to the Sellers' agreement to
indemnify the Buyer in respect of any cost, damage or expense arising from the
failure to obtain such consent as provided in Section 8(g); and further provided
that if the Buyer has received estoppel certificates (including estoppels which
are part of consents) from landlords of Leased Sites representing 90% of the
Adjusted Operating Cash Flow of all Leased Sites, the Buyer shall not require
estoppel certificates as a closing condition for the remaining 10% of the Leased
Sites.
(vi) The Buyer shall have received from Lawyer's
Title Insurance Corporation (the "Title Company") (and be reasonably satisfied
with) a commitment to issue an ALTA Owner's Policy of Title Insurance (Form B,
amended 10-17-70) for the Owned Sites and a commitment to issue a Leasehold
Owner's Policy of Title Insurance for certain of the Leased Sites, both in forms
acceptable to the Buyer, dated no earlier than the date of this Agreement,
naming the Buyer as the proposed insured in an amount equal to the fair market
value of each Site and reflecting the results of a special tax search with
respect to each of the Owned Sites. The title commitment(s) shall (i) set forth
a state of title to each of the Sites, together with all
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exceptions or conditions to such title, including, but not limited to, all
easements, restrictions, rights-of-way, covenants, reservations, and other
encumbrances affecting each of the Sites and (ii) contain the express commitment
of the Title Company to issue the Owner's and Leasehold Policies of Title
Insurance without the standard customary printed exceptions of such policies
with respect to survey, parties in possession (except tenants of the Sellers)
and mechanics' liens, specifically stating any condition or requirement to
affect the removal thereof from such policy, if issued, (iii) include any
endorsements or affirmative insurance the Buyer may have reasonably required as
of the date the Title Commitment is issued by the Title Company, and (iv) have
attached true, correct and legible copies of each instrument referred to in the
Title Commitment as conditions or exceptions to title to the Sites;
(vii) The Title Company shall be in the position to
issue an ALTA Owner's Policy of Title Insurance (Form B Amended 10-17-70) as to
the Owned Sites and a Leasehold Owner's Policy of Title Insurance as to the
Leased Sites. The Title Policies shall be issued in the amount of the fair
market value of the Buyer's interest in the covered sites, shall insure
marketable fee simple, indefeasible title to the Owned Sites to be in the Buyer,
subject only to the Permitted Encumbrances, and such Defects as have been
expressly approved by the Buyer and shall insure a good leasehold estate to the
Leased Sites to be in the Buyer, subject only to Permitted Exceptions and such
Defects as have been expressly approved by the Buyer. The Buyer shall have the
right to require such endorsements to the Title Policies for the Owned Sites as
the Buyer reasonably deems necessary or appropriate, including, but not limited
to, zoning, survey, contiguity and access, as well as such affirmative insurance
as the Buyer or the Buyer's counsel may reasonably require;
(viii) The Buyer shall have obtained and approved a
survey of each Site by a registered surveyor reasonably satisfactory to the
Buyer. The Seller shall cooperate with the Buyer and the surveyor in
coordinating such survey. The survey shall be certified as of a date no earlier
than December 1, 1997, and should be prepared in accordance with the "minimum
standard detail requirements for ALTA/ACSM Land Title Surveys" as revised
through 1992 for an Urban survey, including any Table A optional survey items
which the Buyer may select, or in accordance with such lesser standards that the
Buyer may approve. The surveyor's certification shall run to the Buyer, the
Seller and the Title Company, as well as any lender to the Buyer that the Buyer
may designate.
(ix) any title examinations and surveys of the Sites
conducted by the Buyer shall not have shown any liens, encumbrances,
encroachments, lack of access or other matters which would have a material
adverse effect on the use of such Site as a communications tower facility
(provided, that if any such title examination or survey reveals a condition
which constitutes a Defect and is unsatisfactory to the Buyer, the Buyer may
elect not to purchase such Site at the Initial Closing and to purchase such Site
at the Second Closing (provided such Defect shall then have been cured) as
provided in Section 2(d)(iii) unless the Buyer elects to include such Site,
subject to the Sellers' agreement to indemnify the Buyer in respect of any cost,
damage or expense arising from such matters as provided in Section 8(g);
(x) Arch Communications Enterprises, Inc. shall have
entered into the Master Tower Space Lease substantially in the form attached
hereto as Exhibit D, and the same shall be in full force and effect and all of
the Sellers shall have guaranteed the obligations of Arch Communications
Enterprises, Inc. thereunder;
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(xi) the relevant Sellers shall have entered Site
Leases for Iota, Louisiana, Forest Avenue, Portland, Maine and Hebron, Maine
substantially in the form of Exhibit E;
(xii) the landlords of the Sites listed in Exhibit
F-1 shall have entered into direct leases with Buyer for the tower and
transmitter space for the Sites listed in Exhibit F-1 or shall have entered
nondisturbance agreements with the Buyer, or shall have entered into the Site
Subleases substantially in the form of Exhibit F hereto, and the same shall be
in full force and effect (provided that if the lessor of any of the Sites
subject to the Site Subleases refuses to enter a direct lease or to enter a
nondisturbance agreement with the Buyer and refuses to consent to the Site
Sublease, the Buyer may elect not to purchase such Site at the Initial Closing
and to purchase such Site at the Second Closing (provided such landlord shall by
that date have entered a direct lease, executed a nondisturbance agreement or
consented to a Site Sublease) as provided in Section 2(d)(iii) unless the Buyer
elects to include such Site, subject to the Sellers' agreement to indemnify the
Buyer in respect of any cost, damage or expenses arising from the failure to
obtain such consent as provided in Section 8(g);
(xiii) the Buyer shall not have determined that any
of the Seller's representations or warranties are untrue or incorrect in any
material respect;
(xiv) there shall have occurred no material adverse
change in the Acquired Assets, taken as a whole, the Sellers' tower leasing
business or the business, prospects or financial results of the Sellers since
March 31, 1998 or in the business, prospects or financial results of Arch
Communications Group, Inc., taken as a whole, since December 31, 1997;
(xv) the Buyer shall not be dissatisfied, in its
reasonable discretion, with the results of environmental assessments which
discover a Defect with respect to any Site for which it has chosen to conduct an
assessment (provided that if the Buyer notifies the Seller that it is
dissatisfied with the results of any such assessment, the Buyer may elect to
exclude such Site from the transaction pursuant to Section 2(d)(iii) or elect to
include the Site in the transaction subject to the Sellers' agreement to
indemnify the Buyer in respect of any cost, damage or expense arising from such
matter as provided in Section 8(g);
(xvi) the Buyer shall have received from counsel to
the Sellers an opinion substantially in the form and substance as set forth in
Exhibit J attached hereto, addressed to the Buyer, and dated as of the Closing
Date;
(xvii) all actions to be taken by the Sellers in
connection with consummation of the transactions contemplated hereby and all
certificates, opinions, instruments, and other documents required to effect the
transactions contemplated hereby will be reasonably satisfactory in form and
substance to the Buyer;
(xviii) Each Seller shall deliver to the Buyer good
standing certificates or certificates of continued existence, dated as of a date
within 30 days of the Closing Date, from the state of incorporation of such
Seller and from each state in which such Seller is qualified to do business;
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(xix) The Sellers and the Buyer shall have executed
and delivered to the Buyer a cooperation and noncompetition agreement (the
"Noncompetition Agreement") substantially in the form of the agreement outline
attached hereto as Exhibit K and made a part hereof.
(xx) The Sellers shall deliver such other customary
closing certificates and documents as the Buyer may reasonably request.
(xxi) The Sellers shall have entered into an
agreement with the Buyer pursuant to which the Seller shall have agreed to
provide paging and similar communications services to the lessor under each
lease, management agreement or easement which requires such services as partial
or full consideration for the remainder of the term of each such agreement and
all extensions thereof provided for in existing agreements, but in no event
longer than ten years after the Closing Date.
The Buyer may waive any condition specified in this Section 7(a) if it
executes a written instrument so stating at or prior to the Closing.
(b) Conditions to Obligation of the Sellers. The obligation of
the Sellers to consummate the transactions to be performed by them in connection
with the Closing is subject to satisfaction of the following conditions:
(i) the representations and warranties set forth in
Section 4 above shall be true and correct in all material respects at and as of
the Closing Date;
(ii) the Buyer shall have performed and complied with
all of its covenants hereunder in all material respects through the Closing;
(iii) there shall not be any injunction, judgment,
order, decree, ruling, or charge in effect preventing consummation of any of the
transactions contemplated by this Agreement;
(iv) the Buyer shall have delivered to the Sellers a
certificate to the effect that each of the conditions specified above in Section
7(b)(i)-(iii) is satisfied in all respects;
(v) all applicable waiting periods (and any
extensions thereof) under the Xxxx-Xxxxx-Xxxxxx Act shall have expired or
otherwise been terminated and the Sellers and the Buyer shall have received all
other authorizations, consents, and approvals of governments and governmental
agencies and private parties identified in Section 4(c) of the Disclosure
Schedule;
(vi) the Buyer shall have entered into the Master
Tower Space Lease, the Sites Leases and the Site Subleases (to the extent
landlords thereunder have not executed direct lease with the Buyer)
substantially in the form of Exhibits D, E and F, respectively, and the same
shall be in full force and effect;
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(vii) the Sellers shall have received from the
Buyer's counsel an opinion substantially in the form as set forth in Exhibit L
attached hereto, addressed to the Sellers, and dated as of the Closing Date; and
(viii) all actions to be taken by the Buyer in
connection with consummation of the transactions contemplated hereby and all
certificates, opinions, instruments, and other documents required to effect the
transactions contemplated hereby will be reasonably satisfactory in form and
substance to the Sellers.
The Sellers may waive any condition specified in this Section 7(b) if
it executes a written instrument so stating at or prior to the Closing.
8. INDEMNIFICATION.
(a) Survival of Representations and Warranties. All of the
representations and warranties of the Sellers and the Buyer contained in
Section 3 and Section 4 of this Agreement shall survive the Closing and continue
in full force and effect for a period of twelve months, except (i) in the case
of representations and warranties pertaining to authority and taxes, and the
Sellers' representation that personal property included in the Acquired Assets
is free of Security Interests, which shall survive indefinitely and (ii) the
Sellers' representations and warranties as to title to the real property at the
Owned Sites, which shall terminate at the Closing.
(b) Indemnification Provisions for Benefit of the Buyer.
(i) In the event the Sellers breach any of their
representations, warranties, and covenants contained in this Agreement, and,
provided that the Buyer makes a written claim for indemnification against the
Sellers pursuant to Section 10(g) below with respect to Sellers' representations
and warranties within the survival period pursuant to Section 8(a) above, then
the Sellers jointly and severally agree to indemnify the Buyer from and against
the entirety of any Adverse Consequences the Buyer shall suffer through and
after the date of the claim for indemnification caused by the breach; provided,
however, that the Sellers shall not have any obligation to indemnify the Buyer
from and against any Adverse Consequences caused by the breach of any
representation or warranty of the Sellers: (A) until the Buyer has suffered
Adverse Consequences by reason of all such breaches in excess of a deductible in
the amount of $100,000 in the aggregate (after which point the Sellers will be
obligated only to indemnify the Buyer from and against further such Adverse
Consequences) or thereafter (B) to the extent the Adverse Consequences the Buyer
has suffered by reason of all such breaches exceeds $5,000,000 in the aggregate
(after which point the Sellers will have no obligation to indemnify the Buyer
from and against further such Adverse Consequences).
(ii) The Sellers agree jointly and severally to
indemnify the Buyer from and against the entirety of any Adverse Consequences
the Buyer shall suffer caused proximately by any liability of the Sellers which
is not an Assumed Liability (including any liability of the Sellers that becomes
a liability of the Buyer under any bulk transfer law of any jurisdiction, under
any common law doctrine of de facto merger or successor liability, or otherwise
by operation of law) or by Sellers' ownership or operation of any of the
Acquired Assets on or prior to the Closing Date.
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(c) Indemnification Provisions for Benefit of the Sellers.
(i) In the event the Buyer breaches any of its
representations, warranties, and covenants contained in this Agreement, and
provided that, with respect to representations and warranties, the Sellers make
a written claim for indemnification against the Buyer pursuant to 10(g) below
within the survival period set forth in Section 8(a) above, the Buyer agrees to
indemnify the Sellers from and against the entirety of any Adverse Consequences
the Sellers shall suffer through and after the date of the claim for
indemnification (but excluding any Adverse Consequences the Sellers shall suffer
after the end of any applicable statute of limitations).
(ii) The Buyer agrees to indemnify the Sellers from
and against the entirety of any Adverse Consequences the Sellers shall suffer
caused by any liability of the Sellers which is an Assumed Liability.
(d) Matters Involving Third Parties.
(i) If any third party shall notify any Party (the
"Indemnified Party") with respect to any matter (a "Third Party Claim") which
may give rise to a claim for indemnification against the other Party (the
"Indemnifying Party") under this Section 8, then the Indemnified Party shall
promptly (and in any event within ten business days after receiving notice of
the Third Party Claim) notify the Indemnifying Party thereof in writing;
provided, however, that any failure to give timely notice shall limit a party's
right to indemnification only to the extent of any prejudice caused by such
delay.
(ii) The Indemnifying Party will have the right at
any time to assume and thereafter conduct the defense of the Third Party Claim
with counsel of its choice reasonably satisfactory to the Indemnified Party;
provided, however, that the Indemnifying Party will not consent to the entry of
any judgment or enter into any settlement with respect to the Third Party Claim
without the prior written consent of the Indemnified Party (not to be withheld
unreasonably) unless the judgment or proposed settlement involves only the
payment of money damages and does not impose an injunction or other equitable
relief upon the Indemnified Party.
(iii) Unless and until the Indemnifying Party assumes
the defense of the Third Party Claim as provided in Section 8(d)(ii) above,
however, the Indemnified Party may defend against the Third Party Claim in any
manner it reasonably may deem appropriate.
(iv) In no event will the Indemnified Party consent
to the entry of any judgment or enter into any settlement with respect to the
Third Party Claim without the prior written consent of the Indemnifying Party
(not to be withheld unreasonably).
(e) Determination of Adverse Consequences. The Parties shall
make appropriate adjustments for tax benefits and insurance coverage and take
into account the time cost of money (using 10% as the discount rate) in
determining Adverse Consequences for purposes of this Section 8. All
indemnification payments under this Section 8 shall be deemed adjustments to the
Purchase Price.
(f) Exclusive Remedy. The Buyer and the Sellers acknowledge
and agree that after the Closing Date the foregoing indemnification provisions
in this Section 8 shall be the exclusive
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remedy of the Buyer and the Sellers with respect to the Arch Tower Business, the
Acquired Assets, and the transactions contemplated by this Agreement; provided,
however, that the Buyer has the right as provided in this Agreement to cause the
Sellers to reacquire certain Sites as provided in Section 2(d)(iii) above; and
further provided this clause shall not operate to exclude other rights the Buyer
may have in respect of the Sellers' breach of Section 3(n).
(g) Indemnification with Respect to Certain Matters.
(i) To the extent the Buyer notifies the Seller in
writing prior to the Closing it wishes to avail itself of the provisions of
Section 2(d)(iii)(b) in respect of matters described in clause (ii) hereof, and
the Sellers elect to indemnify the Buyer in respect of such matters and
therefore an affected Site is included in the transaction, the provisions of
this Section 8(g) shall apply.
(ii) Matters covered by this Section 8(g) are
Security Interests and Defects existing as of the Closing Date and conditions to
closing with respect to any Site which have not been satisfied as of the Closing
Date.
(iii) If the Sellers elect not to indemnify the Buyer
as to Defects or Security Interests in respect of a Site, the Base Purchase
Price shall be adjusted as provided in Section 2(d)(iii).
(iv) With respect to any matter for which the Sellers
have elected in writing to indemnify the Buyer pursuant to this Section 8(g),
the Sellers shall jointly and severally indemnify the Buyer and hold the Buyer
harmless from and against any cost, liability, damage or expense related to the
indemnified matter, provided that:
(A) the Buyer promptly notifies the Seller
in respect of any third party claims related to such matter as provided in
Section 8(d),
(B) the Sellers' obligation to indemnify the
Buyer shall be without regard to the $100,000 "deductible" and the $5,000,000
maximum amount set forth in Section 8(b),
(C) the maximum amount of the Sellers'
indemnification obligation with respect to each Site shall be equal to the sum
of:
(i) the greater of (x) the
Annualized Operating Cash Flow of such Site, as set forth on Exhibit H1,
multiplied by 11.8, or (y) $100,000, which amount shall decline by 20% for each
year, or portion thereof (pro rated as to such percentage for any portion of a
partial year), that has passed between the Closing Date and the date of any
claim under this Section 8(g), plus
(ii) the net book value of all of
the Buyer's improvements to such Site, provided that the maximum indemnification
amount under this clause (ii) for any Site shall be $300,000.
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If the Sellers pay the Buyer as
indemnification under this Section 8(g) in respect of any Site an amount equal
to the greater of (i) the Adjusted Operating Cash Flow of the Site multiplied by
11.8 or (ii) $100,000, plus the net book value of all the Buyer's improvements
to the Site, the Buyer shall reconvey such Site to the Sellers for no additional
consideration.
(D) the Buyer shall have given written
notice to the Sellers of such claim on or before the fifth anniversary of the
Closing Date.
9. TERMINATION.
(a) Termination of Agreement. Certain of the Parties may
terminate this Agreement as provided below:
(i) the Buyer and the Sellers may terminate this
Agreement by mutual written consent at any time prior to the Closing;
(ii) the Buyer may terminate this Agreement by giving
written notice to the Sellers at any time prior to the Closing (A) in the event
the Sellers have breached any material representation, warranty, or covenant
contained in this Agreement in any material respect, the Buyer has notified the
Sellers of the breach, and the breach has continued without cure for a period of
20 days after the notice of breach, (B) if the Closing shall not have occurred
on or before June 30, 1998, by reason of the failure of any condition precedent
under Section 7(a) hereof (unless the failure results primarily from the Buyer
itself breaching any representation, warranty, or covenant contained in this
Agreement) or (C) in accordance with Section 5(g); and
(iii) the Sellers may terminate this Agreement by
giving written notice to the Buyer at any time prior to the Closing (A) in the
event the Buyer has breached any material representation, warranty, or covenant
contained in this Agreement in any material respect, the Sellers have notified
the Buyer of the breach, and the breach has continued without cure for a period
of 20 days after the notice of breach, (B) if the Closing shall not have
occurred on or before June 30, 1998, by reason of the failure of any condition
precedent under Section 7(b) hereof (unless the failure results primarily from
the Sellers themselves breaching any representation, warranty, or covenant
contained in this Agreement), or (C) in accordance with Section 5(g).
(b) Effect of Termination. If any Party terminates this Agreement
pursuant to Section 9(a) above, all rights and obligations of the Parties
hereunder shall terminate without any liability of any Party to the other Party
(except for any liability of any Party then in breach); provided, however, that
the confidentiality provisions contained in Section 5(d) above shall survive
termination.
10. MISCELLANEOUS.
(a) Press Releases and Public Announcements. During the term
of this Agreement, no Party shall issue any press release or make any public
announcement relating to the subject matter of this Agreement prior to the
Closing without the prior written approval of the other Party (which shall not
be unreasonably withheld or delayed); provided, however, that any Party may make
any public disclosure it believes in good faith is required by applicable law or
any listing or trading agreement concerning its publicly-traded securities (in
which case the disclosing Party will use its reasonable best efforts to advise
the other Party prior to making the disclosure). The parties
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will cooperate in developing a description of the transactions contemplated
hereby for purposes of any public announcement related to the signing of this
Agreement or the closing of the transactions contemplated hereby.
(b) No Third-Party Beneficiaries. This Agreement shall not
confer any rights or remedies upon any Person other than the Parties and their
respective successors and permitted assigns.
(c) Entire Agreement. This Agreement (including the documents
referred to herein) constitutes the entire agreement between the Parties and
supersedes any prior understandings, agreements, or representations by or
between the Parties, written or oral, to the extent they related in any way to
the subject matter hereof.
(d) Succession and Assignment. This Agreement shall be binding
upon and inure to the benefit of the Parties named herein and their respective
successors and permitted assigns. No Party may assign either this Agreement or
any of its rights, interests, or obligations hereunder without the prior written
approval of the other Party. Notwithstanding the foregoing, (i) the Buyer may
(a) assign any or all of its rights and interests hereunder to one or more of
its Affiliates and (b) designate one or more of its Affiliates to perform its
obligations hereunder, and (ii) the Sellers may assign their rights and
obligations hereunder to any entity or entities into which they are merged or to
which all or substantially all of their assets are transferred, provided that
any such transferee or assignee shall be a wholly-owned direct or indirect
subsidiary of Arch Communications Group, Inc. Notwithstanding any assignment
permitted hereunder, the original parties hereto shall remain responsible for
the performance of all their respective obligations hereunder.
(e) Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
(f) Headings. The section headings contained in this Agreement
are inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
(g) Notices. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request, demand, claim,
or other communication hereunder shall be deemed duly given if (and then three
business days after) it is sent by registered or certified mail, return receipt
requested, postage prepaid, and addressed to the intended recipient as set forth
below:
If to the Sellers:
Arch Communications Group, Inc.
0000 Xxxx Xxxx Xxxxx, Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxx, Vice President-Corporate Development
Telecopier: (000) 000-0000
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Copy to:
Xxxxx X. Xxxxxx, Esq.
000 Xxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000-0000
Telecopier: (000) 000-0000
If to the Buyer:
OmniAmerica, Inc.
Xxx Xxxxxx Xxxx Xxxxx, Xxxxx 000
Xxxxxxxxx, Xxxx 00000
Attn: F. Xxxxxx Xxxxxx, Vice President and General Counsel
Telecopier: (000) 000-0000
Copy to:
Xxxxx X. Xxxxx, Esq.
Xxxxxxxx Xxxx & Xxxxx
0000 Xxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Telecopier: (000) 000-0000
Any Party may send any notice, request, demand, claim, or other communication
hereunder to the intended recipient at the address set forth above using any
other means (including personal delivery, expedited courier, messenger service,
telecopy, telex, ordinary mail, or electronic mail), but no such notice,
request, demand, claim, or other communication shall be deemed to have been duly
given unless and until it actually is received by the intended recipient. Any
Party may change the address to which notices, requests, demands, claims, and
other communications hereunder are to be delivered by giving the other Party
notice in the manner herein set forth.
(h) Governing Law. This Agreement shall be governed by and
construed in accordance with the domestic laws of the Commonwealth of
Massachusetts without giving effect to any choice or conflict of law provision
or rule (whether of the Commonwealth of Massachusetts or any other jurisdiction)
that would cause the application of the laws of any jurisdiction other than the
Commonwealth of Massachusetts.
(i) Amendments and Waivers. No amendment of any provision of
this Agreement shall be valid unless the same shall be in writing and signed by
the Buyer and the Sellers. No waiver by any Party of any default,
misrepresentation, or breach of warranty or covenant hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation, or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior or subsequent such
occurrence.
(j) Action by Sellers. Any right, action or notice which may
be taken exercised or given by the Sellers hereunder may be taken on behalf of
all the Sellers by Arch Communications Enterprises ("ACE"). Each of the Sellers
hereby appoints ACE as its agent to take any action for and on behalf of such
Seller necessary or appropriate to carry out the transactions contemplated by
this Agreement.
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(k) Severability. Any term or provision of this Agreement that
is invalid or unenforceable in any situation in any jurisdiction shall not
affect the validity or enforceability of the remaining terms and provisions
hereof or the validity or enforceability of the offending term or provision in
any other situation or in any other jurisdiction.
(l) Expenses. Each of the Sellers and the Buyer will bear its
own costs and expenses (including legal fees and expenses) incurred in
connection with this Agreement and the transactions contemplated hereby. The
Sellers shall bear one-half, and the Buyer shall bear one-half, of the expenses
of filing a Notification and Report Form under the Xxxx-Xxxxx-Xxxxxx Act with
the Federal Trade Commission and the Antitrust Division of the United States
Department of Justice; provided, that if either party shall default in its
obligations hereunder, the other party's damages shall include the portion of
such expenses paid by the non-defaulting party. The Buyer and the Sellers shall
bear equally the costs of recording fees, filing fees, deed stamps, realty
transfer taxes and similar real estate transfer costs. The Buyer shall be
responsible for any sales taxes arising under state law in respect of the
transactions contemplated by this Agreement.
(m) Construction. The Parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the Parties and no presumption or burden of proof shall
arise favoring or disfavoring any Party by virtue of the authorship of any of
the provisions of this Agreement. Any reference to any federal, state, local, or
foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise. The
word "including" shall mean including without limitation.
(n) Incorporation of Exhibits and Schedules. The Exhibits and
Schedules identified in this Agreement are incorporated herein by reference and
made a part hereof.
(o) Bulk Transfer Laws. The Buyer acknowledges that the
Sellers will not comply with the provisions of any bulk transfer laws of any
jurisdiction in connection with the transactions contemplated by this Agreement.
(p) Destruction of Assets. In the event of loss or damage to
any Site or tower in an amount greater than $5,000 between the date hereof and
the Closing Date, the Sellers shall promptly notify the Buyer thereof and use
their commercially reasonable best efforts to repair, replace or restore the
lost or damaged property to its former condition as soon as possible. If such
repair, replacement or restoration has not been completed prior to the Closing
Date, the Parties shall consummate the transaction in respect of the damaged
Site at the Initial Closing (unless a Defect shall exist as to such Site) and
the Base Purchase Price shall be decreased by the amount of the loss or damage
less amounts expended by the Sellers prior to the Closing on such repair,
replacement or restoration (or, if the Sellers have not undertaken any repair,
the adjustment to the Base Purchase Price shall be equal to the estimated cost
of repair, as determined by a reasonable third-party estimate obtained by the
Sellers).
(q) Specific Performance. The Parties acknowledge that the
towers and the Acquired Assets are of a unique and extraordinary character and
that money damages would not be a sufficient remedy for a breach by any Party of
its obligations under this Agreement; therefore, in addition to any other rights
or remedies a nondefaulting Party may have, the nondefaulting Party
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shall be entitled to the remedies of specific performance or injunctive relief
in connection with a breach of a Party's obligations contained in this
Agreement.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on
as of the date first above written.
BUYER:
OmniAmerica, Inc.
By: /s/ F. XXXXXX XXXXXX
------------------------------------
F. Xxxxxx Xxxxxx, Vice President
and Assistant Secretary
SELLERS:
The Westlink Company, Q Media Company-Paging, Inc.
a Delaware corporation a Kansas corporation
By: /s/ XXXXXX X. XXXXXXX By: /s/ XXXXXX X. XXXXXXX
--------------------------------- ----------------------------------
Title: V.P BUSINESS DEVELOPMENT Title: V.P. BUSINESS DEVELOPMENT
------------------------------ -------------------------------
USA Mobile Communications, Inc. II, Arch Communications Enterprises, Inc.,
a Delaware corporation a Delaware corporation
By: /s/ XXXXXX X. XXXXXXX By: /s/ XXXXXX X. XXXXXXX
--------------------------------- ----------------------------------
Title: V.P BUSINESS DEVELOPMENT Title: V.P. BUSINESS DEVELOPMENT
------------------------------ -------------------------------
Arch Capitol District, Inc., Arch Michigan, Inc.
a New York corporation a Delaware corporation
BBy: /s/ XXXXXX X. XXXXXXX By: /s/ XXXXXX X. XXXXXXX
--------------------------------- ----------------------------------
Title: V.P BUSINESS DEVELOPMENT Title: V.P. BUSINESS DEVELOPMENT
------------------------------ -------------------------------
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Arch Southeast Communications, Inc., Professional Communications, Inc.
a Delaware corporation a Pennsylvania corporation
By: /s/ XXXXXX X. XXXXXXX By: /s/ XXXXXX X. XXXXXXX
--------------------------------- ----------------------------------
Title: V.P BUSINESS DEVELOPMENT Title: V.P. BUSINESS DEVELOPMENT
------------------------------ -------------------------------
The Beeper Company of America, Inc. Answer Iowa, Inc.
a Colorado corporation an Iowa corporation
By: /s/ XXXXXX X. XXXXXXX By: /s/ XXXXXX X. XXXXXXX
--------------------------------- ----------------------------------
Title: V.P BUSINESS DEVELOPMENT Title: V.P. BUSINESS DEVELOPMENT
------------------------------ -------------------------------
Arch Connecticut Valley, Inc., Q Media Paging-Alabama, Inc.
a Massachusetts corporation a Delaware corporation
By: /s/ XXXXXX X. XXXXXXX By: /s/ XXXXXX X. XXXXXXX
--------------------------------- ----------------------------------
Title: V.P BUSINESS DEVELOPMENT Title: V.P. BUSINESS DEVELOPMENT
------------------------------ -------------------------------
The obligations of the Sellers under this Agreement are fully guaranteed by Arch
Communications Group, Inc., including the prompt payment of all amounts that may
be owing pursuant to Section 8.
Arch Communications Group, Inc.
By: /s/ XXXXXX X. XXXXXXX
----------------------------------
Title: V.P. BUSINESS DEVELOPMENT
---------------------------------
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