EXHIBIT 10.1
ASSET PURCHASE AGREEMENT
by and between
AMERICAN TOWER SYSTEMS, INC.
and
TUCSON COMMUNICATIONS COMPANY, L.P.
Dated October 4, 1997
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (the "Agreement") is entered into as of
the 4th day of October, 1997 by and between AMERICAN TOWER SYSTEMS, INC., a
Delaware corporation ("Buyer") and TUCSON COMMUNICATIONS COMPANY, a California
limited partnership ("Seller").
RECITALS
A. Seller owns, leases and operates communication towers in Tucson,
Arizona (the "Business").
B. Seller desires to sell and assign and Buyer desires to purchase
substantially all of the assets of Seller used or held for use in the operation
of the Business.
AGREEMENT
In consideration of the foregoing and of the mutual promises and
covenants set forth below, the adequacy of which are acknowledged, the parties
agree as follows:
1. DEFINITIONS. As used in this Agreement, the following terms will
have the meaning set forth below:
1.1 Affiliate. "Affiliate" means any person or entity who
directly or indirectly controls, is controlled by, or is under common control
with, such person or entity. The term "control" (including, with correlative
meaning, the terms "controlled by" and "under common control with"), as used
with respect to any person or entity, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of such person or entity, whether through the ownership of voting
securities, by contract or otherwise.
1.2 Assumed Contracts. "Assumed Contracts" means those
Contracts that are listed on Schedule 1.2 hereto.
1.3 Business Records. "Business Records" means all records of
Seller including, but not limited to, all Tower maintenance and compliance
records and all books of account, customer lists, supplier lists, employee
personnel files, file materials, logs, consultants' reports, budgets, financial
reports and sales, operating and business plans, relating to or used or held for
use in the operation of the Business and not pertaining solely to Seller's
internal corporate affairs.
1.4 Code. "Code" means the Internal Revenue Code of 1986, as
amended.
1.5 Contracts. "Contracts" means all contracts, agreements,
and Leases (as defined in Section 4.19 below), written or oral (including any
amendments and other modifications thereto) to which any Seller is a party or
which are binding upon any Seller and relate to the Assets or the Business, and
(i) which are in effect on the date hereof and listed on
Schedule 1.2, or (ii) which are entered into by any Seller in the ordinary
course of business between the date hereof and the Closing Date.
1.6 Improvements. "Improvements" means all transmitting
buildings and related improvements and fixtures located on the Real Property.
1.7 Intangible Property. "Intangible Property" means all of
Seller's computer programs, business lists, trade secrets, sales and operating
plans and other intangible property rights used or held for use in the operation
of the Business, and all goodwill associated with the foregoing, as listed on
Schedule 1.7.
1.8 Knowledge. "Knowledge" means the actual Knowledge of such
party's partners, officers, directors, principals, Affiliates or agents after
having made a good faith effort to ascertain the fact(s) in question by inquiry
to such partners, officers or employees of such party as would be reasonably
likely to have the information relating to the fact(s) in question.
1.9 Liens. "Liens" means mortgages, deeds of trust,
collateral assignments, security interests, conditional or other sales
agreements, claims, options, restrictions, liens, pledges, hypothecations,
easements, rights of way, encumbrances and adverse interest or other defects of
title of any kind.
1.10 Material Adverse Effect. "Material Adverse Effect"
means, with respect to any person or entity, any event, fact, condition,
occurrence or effect, which is materially adverse to the business, properties,
assets, liabilities, capitalization, stockholders' equity, financial condition,
operations, licenses or other franchises or results of operations of such person
or entity, considered as a whole.
1.11 Permits. "Permits" means all licenses, permits,
franchises, approvals, authorizations, consents or orders of, or filings with,
any governmental authority, whether federal, state or local, or any other
person, necessary or desirable for the operation of the Business and/or the
construction, ownership, operation, leasing, occupancy, maintenance or use of
the Real Property and listed on Schedule 1.11.
1.12 Personal Property. "Personal Property" means all of the
machinery, equipment, tools, vehicles, furniture, leasehold improvements, office
equipment, plant, spare parts, surveys, title insurance policies, plans,
specifications and drawings, insurance policies and other tangible personal
property which are owned or leased by the Seller and used or useful as of the
date hereof in the conduct of the business or the operations of the Business,
and are identified on Schedule 1.12, plus such additions thereto and deletions
therefrom arising in the ordinary course of business between the date hereof and
the Closing Date.
1.13 Real Property. "Real Property" means all real property
owned or leased by Seller, as described more fully on Schedule 1.13, including
the Towers and the Improvements, together with all easements, rights,
privileges, remainders, revisions and appurtenances thereunto belonging or in
any way appertaining, and all of Seller's estate, right, title, interest, claim
and
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demand therein, in the streets and ways adjacent thereto and in the beds
thereof, either at law or in equity, in possession or expectancy.
1.14 Towers. "Towers" means all towers, ground radials, guy
anchors and related equipment located on the Real Property.
1.15 Warranties. "Warranties" means all of Seller's rights
under manufacturers' and vendors' warranties relating to (i) the Towers; (ii)
the Improvements; and (iii) the Personal Property.
2. ASSETS TO BE CONVEYED; ASSUMED LIABILITIES.
2.1 Assets to be Conveyed. Subject to the terms and
conditions of this Agreement, on the Closing Date (as defined below), Seller
will assign, transfer and deliver to Buyer and Buyer shall purchase from Seller
all of Seller's right, title and interest in and to all of the assets described
in this Section 2.1 (collectively, the "Assets"):
(a) Assumed Contracts;
(b) Business Records;
(c) Intangible Property;
(d) Permits;
(e) Personal Property;
(f) Real Property;
(g) Warranties.
2.2 Excluded Assets. The following assets are "Excluded
Assets" and are not among the Assets purchased or transferred pursuant to this
Agreement:
(a) Seller's cash, cash equivalents, certificates of
deposit, money market funds and other marketable securities on hand or in banks
or other financial institutions;
(b) Any Contracts other than the Assumed Contracts;
(c) All of the accounts receivable of the Seller arising
prior to the Closing Date; and
(d) Seller's record books and charter documents and
other books and records pertaining solely to Seller's internal partnership
affairs, including tax matters, or financing arrangements.
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2.3 Assumed Liabilities.
(a) As of the Closing Date, Buyer shall assume all
obligations and liabilities under the Assumed Contracts accruing, arising or
relating to activities, events or occurrences happening on or after the Closing
Date (collectively, the "Assumed Liabilities"). Buyer shall assume no
obligations or liabilities of Seller, its predecessors or Affiliates whatsoever,
including any taxes (the "Retained Liabilities") except for the Assumed
Liabilities.
(b) Without limiting the generality of the foregoing,
Buyer shall have no obligation to hire any employees of Seller and Seller shall
be solely responsible for all salaries, benefits, severance and other
compensation which will or may become payable to all of Seller's employees in
respect of any period of employment by Seller prior to the Closing Date and
Seller shall make such payments at or before the Closing. Buyer will not assume
any obligations under Seller's existing vacation, sick leave, severance or other
employee welfare or benefit plans or policies with respect to Seller's
employees.
3. CONSIDERATION; PRORATIONS.
3.1 Consideration. The consideration for the purchase of the
Assets (the "Purchase Price") shall consist of a cash payment by Buyer to Seller
in the amount of $12,000,000 (the "Cash Payment") payable at Closing.
3.2 Prorations and Adjustments. The operation of the Business
and the income and normal operating expenses, including without limitation
Assumed Liabilities and prepaid expenses, attributable thereto through 12:01
a.m. on the date of the Closing shall be for the account of Seller and
thereafter for the account of Buyer. Adjustments shall be made and paid at
Closing to the extent feasible. A final accounting of prorated items shall be
made by Buyer and Seller, and the sum due from one party to the other pursuant
to this Section 3.2 shall be paid in cash, within sixty (60) days after the
Closing Date.
3.3 Allocation of Purchase Price. The Purchase Price shall be
allocated among the Assets in accordance with an independent appraisal to be
performed by BIA Consulting, Inc., at the expense of Buyer. Should the
independent appraisal result in an allocation of (a) not more than $1,500,000.00
to Code ss. 1231 depreciable real property, being of the class commonly
identified as buildings and other Improvements of a type requiring a capital
gain rate to Seller for the recaptured portion thereof to be taxable under the
Code at 25% nominal rates; (b) in the aggregate not more than $330,000.00 to
Code ss. 1245 or personal property, being of the class commonly identified as
Towers, fuel tanks and other similar Improvements, fixtures, appurtenances and
other property, whether personal or real, of a type requiring the recaptured
portion thereof or, with respect to personal property, the allocated amount
thereof, to be taxable under the Code to Seller at ordinary income tax rates,
and (c) the balance of the Purchase Price to be allocated to either
non-depreciable real property and/or going concern value (or goodwill) taxable
only as capital gain under the Code to Seller at 20% nominal rates, then Buyer
and Seller shall agree thereto and use such allocations as are so established by
the independent appraisal.
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Should the appraisal result in recommended allocations differing from the above
parameters, (i) Seller shall have the right to approve of such differing
allocations, or (ii) within three (3) days of notice by Seller of Seller's
unwillingness to agree to such differing allocations, or should Buyer not agree
to utilize allocations within the above parameters, then either Seller or Buyer
shall have the right to terminate this Agreement without further liability.
Buyer and Seller shall file with its respective federal income tax return for
the tax year in which the Closing occurs, IRS Form 8594 containing the
information set forth in the allocation. Buyer agrees to report the purchase of
the Assets, and Seller agrees to report the sale of such Assets, for income tax
purposes in a manner consistent with the information provided pursuant to this
Section 3.3 and contained in IRS Form 8594.
3.4 No Assignment of Accounts Receivable. On and after the
Closing Date, (i) Seller shall be responsible for collecting all of Seller's
accounts receivable arising from Seller's operation of the Business prior to the
Closing Date and (ii) Buyer shall be responsible for collecting all of Buyer's
accounts receivable arising from Buyer's operation of the Business on and after
the Closing Date.
4. SELLER'S REPRESENTATIONS AND WARRANTIES. Seller represents and
warrants to Buyer as follows, which representations and warranties have been
relied upon by Buyer in entering into this Agreement.
4.1 Organization. Seller is a limited partnership duly
formed, validly existing and in good standing under the laws of the State of
California, and is qualified to do business and is qualified or registered to do
business in the State of Arizona and in each other jurisdiction where it is
required to do so. Seller has full partnership power and authority to carry on
its business as now conducted and to enter into and to perform this Agreement.
4.2 Partnership Authorization. The execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby have
been duly authorized by all requisite partnership action of Seller.
4.3 Binding Agreement. This Agreement has been duly executed
by Seller and delivered to Buyer and constitutes the valid and binding agreement
of Seller, enforceable against Seller in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency or other laws affecting
creditors' rights generally and the exercise of judicial discretion in
accordance with general equitable principles.
4.4 No Breach. Subject to the necessity for obtaining
consents of third parties to the assignment of those Assumed Contracts listed on
Schedule 1.2, the execution, delivery and performance of this Agreement by
Seller will not violate or conflict with Seller's Certificate of Limited
Partnership or partnership agreement or any Law to which Seller or the Assets is
subject, or by which Seller or the Assets may be bound, or (with or without
giving notice or the lapse of time or both) breach or conflict with any
contract, agreement, or other commitment to which Seller is a party or by which
Seller or the Assets may be bound or result in the imposition of a Lien on the
Assets.
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4.5 Permits. Schedule 1.11 contains a true and complete list
of all Permits of Seller. Seller has all Permits required to conduct the
Business as now being conducted. All Permits of Seller are valid and in full
force and effect. Buyer will proceed, at its own expense, to obtain any Permits
and approvals necessary to consummate the transaction contemplated herein;
provided, if the transaction is not consummated, Buyer shall restore all such
filings to their original condition and reverse any filings made in order to
consummate the transaction, and Buyer shall hold Seller harmless from any
liability or expense arising from such filings. No notice to, declaration,
filing or registration with, or Permit from, any domestic or foreign
governmental or regulatory body or authority, or any other person or entity, is
required to be made or obtained by Seller in connection with the execution,
delivery or performance of this Agreement and the consummation of the
transactions contemplated hereby.
4.6 Compliance With Laws. Except as set forth in Schedule
4.6, Seller has complied in all material respects with all statutes, laws,
rules, regulations, ordinances, codes, directives, writs, injunctions, decrees,
judgments, and orders of any governmental (whether foreign, federal, state,
local, or otherwise) agency, court or other body applicable to the Business and
the Assets.
4.7 Title to and Sufficiency of Assets. Seller has good and
marketable title to all of the Assets (other than the Real Property, which is
addressed in Section 4.19) free and clear of all Liens, except for Liens
described on Schedule 4.7 (which will be removed on or before the Closing Date).
Seller has all necessary partnership authority to transfer ownership of the
Assets to Buyer free and clear of all Liens. Other than the Excluded Assets, the
Assets to be transferred hereunder constitute all of the assets, rights and
properties that are required for the operation of the Business as they are now
conducted or that are used or held by Seller for use in the operation of the
Business.
4.8 Condition of Personal Property. All Personal Property
used or useful in the operation of the Business is listed on Schedule 1.2 and,
except as specifically indicated on Schedule 1.2, is in good operating condition
and repair (reasonable wear and tear excepted), is performing satisfactorily and
is suitable for its intended use.
4.9 Intangible Property. Schedule 1.7 contains a true and
complete list of all Intangible Property. Seller has delivered to Buyer or made
available for inspection by Buyer copies of (i) all documents (if any)
establishing Seller's rights to use the Intangible Property; and (ii) all
customer lists and accounts of Seller. Seller has, and after the Closing, Buyer
will have, the right to use such Intangible Property, free and clear of any
royalty or other payment obligations. Seller's use of the Intangible Property
does not conflict with, violate or infringe upon any rights of any other Person,
and no Person is violating or infringing on any of Seller's rights with respect
to the Intangible Property.
4.10 Contracts. Schedule 1.2 identifies all of the Contracts,
and such schedule separately identifies the Assumed Contracts (including the
Leases to be assumed). Sellers shall deliver to Buyer true and complete copies
of all written Contracts and true and complete memoranda of all oral Contracts
(including any and all amendments and other modifications to such Contracts).
Other than the Assumed Contracts, Seller requires no contract or agreement to
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enable Seller to carry on the Business in all material respects as presently and
heretofore conducted. All of the Assumed Contracts are in full force and effect,
and are valid, binding, and enforceable in accordance with their terms, except
to the extent that the enforceability thereof may be affected by bankruptcy,
insolvency, or similar laws affecting creditors' rights generally or by
court-applied equitable principles. Seller is not in material breach, nor to the
Knowledge of Seller is any other party in material breach, of the terms of any
such Assumed Contracts. Except as expressly set forth in Schedule 1.2, Seller is
not aware of any intention by any party to any Assumed Contract (i) to terminate
such contract or amend the terms thereof, (ii) to refuse to renew the same upon
expiration of its term, or (iii) to renew the same upon expiration only on terms
and conditions which are more onerous than those pertaining to such existing
contract. Except for any third party consents, which Seller agrees to obtain
from such third parties where required (in accordance with Section 6.7 hereto),
Seller has full legal power and authority to assign its rights under the Assumed
Contracts to Buyer in accordance with this Agreement, and such assignment will
not affect the validity, enforceability, and continuation of any of the Assumed
Contracts.
4.11 Litigation. Except as described on Schedule 4.11, there
is no litigation, proceeding (arbitral or otherwise), claim or investigation of
any nature pending or, to Seller's Knowledge, threatened against Seller, the
Business or the Assets. There are no writs, injunctions, decrees, arbitration
decisions, unsatisfied judgments or similar orders outstanding against Seller,
the Business or the Assets.
4.12 Financial Statements. Schedule 4.12 sets forth true,
correct and complete copies of (i) the unaudited balance sheet and related
statements of Seller for the two (2) years ended December 31, 1996 (the "Annual
Financials"), and (ii) the unaudited monthly balance sheets and related
statements for Seller for the period January through September 1997 (the
"Monthly Financials," and together with the Annual Financials, the "Financial
Statements"). The Financial Statements are in accordance with the books and
records of Seller, and present fairly the financial condition of Seller at the
respective dates thereof.
4.13 Liabilities. Seller has no material liabilities,
obligations or commitments of any nature (whether absolute, accrued, contingent
or otherwise and whether matured or unmatured), including without limitations
tax liabilities due or to become due, except liabilities that are reflected and
reserved against on the Financial Statements.
4.14 Tax Matters. Except as disclosed on Schedule 4.14
hereto: (a) Seller has filed all tax returns and reports required to have been
filed by or for it; (b) all material information set forth in such returns or
reports is accurate and complete; (c) Seller has paid or made adequate provision
for all taxes, additions to tax, penalties, and interest payable by the Seller;
(d) no unpaid tax deficiency has been asserted against or with respect to Seller
by any taxing authority; and (e) Seller has collected or withheld all amounts
required to be collected or withheld by it for any taxes, and all such amounts
have been paid to the appropriate governmental agencies or set aside in
appropriate accounts for future payment when due.
4.15 Insolvency Proceedings. Neither Seller nor any of the
Assets is the subject of any pending or, to Seller's Knowledge, threatened,
insolvency proceedings of any character.
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Seller has not made an assignment for the benefit of creditors or taken any
action with a view to or that would constitute a valid basis for the institution
of any such insolvency proceedings. Seller is not insolvent and will not become
insolvent as a result of entering into this Agreement.
4.16 Employees; Employee Benefit Plans.
(a) Schedule 4.16 contains a true and complete list of
all of the employees of Seller, each such employee's title or capacity in which
employed, and such employee's annual salary or wages, and a complete list and
summary of Seller's employee benefit plans and any bonus compensation plans or
policies (including all retirement, pension, profit sharing, bonus, severance
pay, disability, health, vacation and sick leave benefits). Seller is not a
party to any collective bargaining agreement covering any of its employees.
There is no material dispute between Seller and any of its employees related to
compensation, severance pay, vacation or pension benefits, or discrimination.
(b) Except as set forth on Schedule 4.16, Seller does
not maintain, sponsor or contribute to, nor has Seller maintained, sponsored or
been obligated to contribute to, within the last six years, any "employee
benefit plan" which is subject to Title IV of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA") and Section 412 of the Code.
4.17 Insurance. Schedule 4.17 lists all insurance policies
(by policy number, insurer, location or property insured, annual premium,
premium payment dates, expiration date and type of coverage) held by Seller
relating to the business, properties and employees of the Business, copies of
which have been provided to Buyer. All such insurance policies are in full force
and effect and in such amounts and provide coverages that are reasonable and
customary in light of the business, operations and properties of the Business.
4.18 Environmental Matters.
(a) As used in this Agreement "Hazardous Material" shall
mean: (i) any "hazardous substance" as now defined pursuant to the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 ("CERCLA"), 42
U.S.C. ss. 9601(14); (ii) any "pollutant or contaminant" as defined in 42 U.S.C.
ss. 9601(33); (iii) any material now defined as "hazardous waste" pursuant to 40
C.F.R. Part 261; (iv) any petroleum, including crude oil and any fraction
thereof; natural or synthetic crude oil and any fraction thereof; (v) natural or
synthetic gas usable for fuel; (vi) any "hazardous chemical" as defined pursuant
to 29 C.F.R. Part 1910; (vii) any asbestos, polychlorinated biphenyl ("PCB"), or
isomer of dioxin, or any material or thing containing or composed of such
substance or substances; (viii) any infectious organism or biological or medical
waste; or (ix) any other substance, regardless of physical form, that is subject
to any Environmental Laws.
(b) As used in this Agreement, "Environmental Laws"
shall mean any statutes, regulations, requirements, orders, ordinances, rules of
liability or standards of conduct of any foreign, federal, state, local
government, or common law relating to the protection of human health, plant
life, animal life, natural resources, the environment or property from the
presence in
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the environment of any solid, liquid, gas, odor or any form of energy, from
whatever source, including, without limitation, any emissions, discharges,
releases, or threatened releases of Hazardous Material into the environment
(including, without limitation, ambient air, surface water, groundwater, land
surface or subsurface or building structures), or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, generation,
disposal, transport or handling of pollutants, contaminants, chemicals, or
industrial, toxic or hazardous substances or wastes.
(c) Except as set forth on Schedule 4.18, and to the
best of Seller's Knowledge and without any independent investigation by Seller,
(i) there are no environmental conditions related to the Real Property or the
business and other assets of Seller that could have a Material Adverse Effect on
Seller, including any such conditions relating to the use, treatment, storage,
release or disposal of any Hazardous Material; (ii) Seller has not manufactured,
processed, distributed, used, treated, stored, disposed of, transported or
handled any Hazardous Material in a manner that could have a Material Adverse
Effect on such entity; (iii) there is no ambient air, surface water, groundwater
or land contamination or contamination within building structures, within,
under, originating from or relating to any Real Property or any other location
related to the Real Property such that the contamination affects such other
locations and none of such properties has been used for the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of any Hazardous Material in a manner that could have a Material
Adverse Effect on Seller; and (iv) Seller has no obligation or liability, known
or unknown, matured or not matured, absolute or contingent, assessed or
unassessed, imposed or based upon the failure to comply with any provision under
any federal, state or local law, rule, or regulation or common law, or under any
code, order, decree, judgment or injunction applicable to Seller and Seller has
not received any notice, or request for information issued, promulgated,
approved or entered thereunder, or under the common law, or any tort, nuisance
or absolute liability theory, relating to public health or safety, worker health
or safety, or pollution, damage to or protection of the environment, including,
without limitation, the Environmental Laws, where such obligation or liability
could have a Material Adverse Effect on Seller.
(d) To the best of Seller's Knowledge, Seller possesses
and is in compliance in all material respects with all permits, licenses,
certificates, franchises and other authorizations relating to the Environmental
Laws necessary to conduct their businesses or required by environmental
regulations.
4.19. Real Property.
(a) Leased Real Property. Schedule 1.2 contains a
complete and accurate list of all Contracts pursuant to which Seller is either
the lessor or lessee of Real Property, including all leases associated with the
Towers ("Leases"). All such Leases are valid, binding and enforceable in
accordance with their terms and are in full force and effect; no event of
default has occurred which (whether with or without notice, lapse of time or
both or the happening or occurrence of any other event) would constitute a
default thereunder on the part of Seller; and Seller has no Knowledge of the
occurrence of any event of default which (whether with or without notice, lapse
of time or both or the happening or occurrence of any other event) would
constitute a default thereunder by any other party. Seller has provided Buyer
with a
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complete and correct copy of all of the Leases. Seller has not received notice
of any claim for free or reduced rent or for reduction, deduction or set-off
against Seller of the rent due or to become due under any of the Leases, and
except as set forth in the Leases Seller has granted no rental concessions or
abatements. Seller has the sole right to collect the rent under the Leases and
neither such right nor any of the Leases has been assigned, pledged,
hypothecated (except Leases that would be hypothecated by Seller's, lenders, to
be cleared at or before Closing), or otherwise encumbered. Except as is
otherwise indicated on Schedule 1.2, Seller has received no payment of rent more
than 30 days in advance of the due date therefor.
(b) Owned Real Property. Schedule 1.13 contains a
complete and accurate list of all Real Property owned by Seller ("Owned Real
Property") and contains accurate and complete copies of preliminary title
reports covering all of the Owned Real Property. At the Closing, Seller has and
will transfer to Buyer good and marketable fee simple title to all Owned Real
Property subject only to the following matters (the "Permitted Liens"): (i)
liens for current taxes not yet due; (ii) Liens set forth on Schedule 1.13
(which will be removed on or before the Closing Date); and (iii) any other Liens
and other matters affecting title to the Owned Real Property, which do not in
the sole judgment of Buyer (A) breach any covenant, representation or warranty
of Seller in this Agreement, (B) adversely affect the use or value of the Owned
Real Property, (C) render title to the Owned Real Property unmarketable, (D)
constitute a Lien in the nature of a mortgage, deed of trust, UCC financing
statement, monetary encumbrance or other similar Lien or (E) constitute a lease
(other than those Leases listed in Schedule 1.2 and any Leases pending or being
negotiated by Seller with new tenants, but unconsummated prior to Closing Date),
sublease or other occupancy agreement that gives any third party any right to
occupy or use all or any portion of the Owned Real Property. Seller enjoys
peaceful and undisturbed possession of all Owned Real Property, to be evidenced
by Seller's delivery of tenant estoppel certificates.
(c) Improvements, Fixtures and Equipment. The Towers and
the Improvements, including without limitation all leasehold improvements, and
all fixtures and equipment and other tangible assets owned, leased or used by
Seller at the Real Property are (i) insured to the extent and in a manner
customary in the industry, (ii) structurally sound with no known material
defects, (iii) in good operating condition and repair, subject to ordinary wear
and tear, (iv) not in need of maintenance or repair except for ordinary routine
maintenance and repair, the cost of which would not be material, (v) sufficient
for the operation of the Business as presently conducted and (vi) in conformity
with all applicable laws, ordinances, orders, regulations and other requirements
relating thereto currently in effect. None of the Towers or the Improvements is
subject to any commitment or other arrangement for their sale or use by any
Affiliate of Seller or third parties, except with respect to leases being
negotiated in Seller's ordinary course of business. Except as disclosed on
Schedule 1.13, all of the Towers on the Real Property are located entirely on
such Real Property.
(d) Other Real Property Representations and Warranties.
(i) The Seller has no Knowledge, nor to its
Knowledge has it received notice within the past three years, of any existing or
threatened violation of any provision of any applicable building, zoning,
subdivision, environmental or other governmental ordinance,
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resolution, statute, rule, order or regulation, including but not limited to
those of environmental agencies or insurance underwriters, with respect to the
ownership, operation, use, maintenance or condition of the Owned Real Property
or any part thereof, or requiring any repairs or alterations other than those
that have been made prior to the date hereof.
(ii) Seller is the sole owner of full legal,
equitable and beneficial title to the Owned Real Property and no consent of or
joinder by any other person is required for Seller to convey the full legal,
equitable and beneficial title to and ownership of the Owned Real Property to
Buyer in accordance with this Agreement. There are no outstanding agreements
(written or oral) pursuant to which Seller (or any predecessor to or
representative of Seller) has agreed to sell or has granted an option or right
of first refusal to purchase the Owned Real Property or any part thereof
(iii) Seller has no Knowledge of, nor to its
Knowledge has it received any notice of, any special taxes or assessments
relating to the Owned Real Property or any part thereof or any planned public
improvements that may result in a special tax or assessment against the Owned
Real Property.
(iv) Seller has received no notice of any
condemnation or eminent domain proceeding pending or threatened against the
Owned Real Property or any part thereof. The Seller has no Knowledge of any
change or proposed change in the route, grade or width of, or otherwise
affecting, any street or road adjacent to or serving the Owned Real Property.
(v) The Owned Real Property complies with all zoning
and land use laws, ordinances, regulations and restrictions, and the
Improvements and Towers are permitted as a matter of right as a principal use
under all laws applicable thereto without the necessity of any special use
permit, special exception or other special permit, permission or consent.
(vi) All utilities necessary for the proper and
efficient operation of the Real Property in their current manner are installed
in and operating at the Real Property.
4.20. FAA Compliance.
(a) Prior to construction of all Towers, (i) the Federal
Aviation Administration ("FAA") issued a Determination of No Hazard to Air
Navigation ("FAA Tower Clearance"), a true and correct copy of which has been
delivered to Buyer or made available for inspection by Buyer prior to the date
hereof; and (ii) the Antenna Survey Branch of the Federal Communications
Commission ("FCC") issued a clearance (the "FCC Tower Clearance"), a true and
correct copy of which has been provided to Buyer or made available for
inspection by Buyer prior to the date hereof.
(b) The FAA Tower Clearance and the FCC Tower Clearance
are valid, in good standing, and in full force and effect, and constitutes (i)
all Permits required by the federal Communications Act of 1934, as amended, and
all rules and regulations promulgated
11
thereunder (the "Communications Act"), for the construction and operation of the
Tower and (ii) all of the Permits issued by the FCC and FAA to Seller for or in
connection with the Tower.
(c) The Towers were constructed in full compliance with
all applicable municipal, state and federal laws, rules and regulations,
including, without limitation, the Communications Act, and all FAA's rules and
regulations. The Towers have at all times operated in full compliance with all
applicable municipal, state and federal laws, rules and regulations, including,
without limitation, the Communications Act, and the FAA's rules and regulations.
(d) Seller has no outstanding requests for information
from either the FAA or FCC. Seller has responded fully and timely to each past
inquiry or request for information from the FAA or the FCC. Seller has no
Knowledge of any condition imposed by the FCC or the FAA on the Towers which is
not (i) set forth on the face of the FAA Tower Clearance or the FCC Tower
Clearance as issued by the FAA or FCC or (ii) applicable to communications
towers generally. Each Tower currently is and at all relevant times has been
painted and lighted in accordance with all FAA and FCC rules, regulations and
policies, and all relevant permits and clearances issued by the FAA or the FCC.
Each Tower is not now and never has been operating under a Notice of
Extinguishment or Improper Functioning of Lights, as specified in the FCC's
rules.
4.21. No Brokers. Seller has not entered into any contract,
agreement, arrangement or understanding with any Person to act as a finder or
broker in connection with the transactions contemplated hereby.
4.22. No Other Agreements to Sell. Seller has no legal
obligation, absolute or contingent, to any other Person to sell the Assets or
the Business (in whole or in part), or effect any merger, consolidation or other
reorganization of Seller, or to enter into any agreement with respect thereto.
4.23. Financing Statements. All of the Assets to be conveyed
are and have been located in the State of Arizona since the Assets were acquired
by Seller. To Seller's Knowledge, and assuming that any current UCC filing
searches required to consummate the transaction contemplated herein have been
conducted by Buyer, all unreleased UCC financing statements filed by any person
with respect to the Assets are listed on Schedule 4.23.
4.24. Transactions with Certain Persons. No partner, officer,
director or employee of Seller nor any member of any such person's immediate
family is presently, or within the three (3) years has been, a party to any
transaction with Seller relating to the Business, including without limitation,
any contract, agreement or other arrangement (a) providing for the furnishing of
services by, (b) providing for the rental of real or personal property from, or
(c) otherwise requiring payments to (other than for services as partners,
officers, directors, consultants or employees of Seller) any such person or
corporation, partnership, trust or other entity in which any such person has an
interest as a shareholder, officer, director, trustee or partner.
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4.25. Bulk Sales. Seller represents, in accordance with
opinion of Seller's local counsel, that "bulk sales" laws do not apply to this
transaction.
4.26 Disclosure. To Seller's Knowledge and without any
independent investigation by Seller, no representations or warranties by Seller
in this Agreement, nor any document, exhibit, statement, certificate or schedule
heretofore or hereinafter furnished to Buyer pursuant hereto, or in connection
with the transactions contemplated hereby, including without limitation the
Schedules, contains or will contain any untrue statement of a material fact, or
omits or will omit to state any material fact necessary to make the statements
or facts contained therein not misleading. To Seller's Knowledge and without any
independent investigation by Seller, Seller has disclosed all events, conditions
and facts materially affecting the Business, prospects and financial condition
of Seller.
5. BUYER'S REPRESENTATIONS AND WARRANTIES. Buyer represents and
warrants to Seller as follows, which representations and warranties have been
relied upon by Seller in entering into this Agreement.
5.1 Organization. Buyer is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware,
and is qualified to do business and is qualified or registered to do business in
each jurisdiction where it is required to do so. Buyer has full corporate power
and authority to carry on its business as now conducted and to enter into and to
perform this Agreement.
5.2 Corporate Authorization. The execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby have
been duly authorized by Buyer's board of directors.
5.3 Binding Agreement. This Agreement has been duly executed
by Buyer and delivered to Seller and constitutes the valid and binding
agreements of Buyer, enforceable against Buyer in accordance with its respective
terms, except as enforceability may be limited by bankruptcy, insolvency or
other laws affecting creditors' rights generally and the exercise of judicial
discretion in accordance with general equitable principles.
5.4 No Breach. The execution, delivery and performance of
this Agreement by Buyer will not violate Buyer's certificate of incorporation or
bylaws or any Law to which Buyer is subject or by which Buyer may be bound or
(with or without giving notice or the lapse of time or both) breach or conflict
with any contract, agreement, or other commitment to which Buyer is a party or
by which Buyer is or may be bound.
5.5 Litigation; Compliance with Law. There is no litigation,
proceeding (arbitral or otherwise), claim or investigation of any nature,
pending or, to Buyer's Knowledge, threatened, against Buyer that reasonably
could be expected to adversely affect Buyer's ability to perform in accordance
with the terms of this Agreement.
5.6 No Brokers. Other than a brokerage agreement with ▇▇▇▇▇ &
Company, Inc. (for which Buyer shall be responsible), Buyer has not entered into
any contract, agreement,
13
arrangement or understanding with any person or entity to act as a finder or
broker in connection with the transactions contemplated hereby.
6. COVENANTS. Between the date of this Agreement and the Closing Date:
6.1 Maintenance of Business. Seller shall conduct the
operations of the Business and use the Assets only in the ordinary course of
business, consistent with past practices with the intent of preserving the
ongoing operations of the Business and the Assets, including, without
limitation, maintaining in its employ all key employees of the Business who are
performing satisfactorily. Seller shall not sell or agree to sell or otherwise
dispose of any of the Assets except in the ordinary course of business,
consistent with past practice.
6.2 Adverse Developments. Seller shall promptly notify Buyer
of any materially adverse developments that occur prior to Closing with respect
to the Assets or the operation of the Business. Seller shall keep Buyer informed
of all material operational matters and business developments with respect to
the Business and its markets.
6.3 Potential Breach. Each party will promptly notify the
other party of the occurrence of any event, or the existence of any fact, of
which such party becomes aware that is not permitted by this Agreement and that
results in the inaccuracy in any material respect of any representation or
warranty of such party in this Agreement as of any time prior to the Closing,
and such party will use its reasonable best efforts to cure such matter.
6.4 Access. Seller will provide Buyer, its counsel,
accountants, financing sources and other representatives ("Buyer's
Representatives") with access to the books and records of the Business, to the
Assets and to the officers, employees, agents and accountants of Seller with
respect to matters relating to the Business during normal business hours, upon
reasonable notice and at a mutually agreeable time, provided that such access
does not materially disrupt the operations of the Business and will provide
Buyer and Buyer's Representatives with such information concerning the Assets
and the Business as they reasonably may request.
6.5 Financial Statements and Other Reports. Between the date
of this Agreement and the Closing Date, as soon as the same are available,
Seller will provide Buyer with copies of the Business' regularly prepared sales
reports and any periodic financial statements or reports.
6.6 No Negotiations. Seller will refrain, and will cause each
other person acting for or on behalf of Seller to refrain, from taking, directly
or indirectly, any action (a) to seek or encourage any offer or proposal from
any person to acquire any assets (other than in ordinary course of business
consistent with past practices) or shares of capital stock or other securities
of Seller or any interests therein (other than in connection with intra-family
transfers for the purpose of estate-planning purposes, or in connection with
transfers to corporations or other entities wholly-owned by Sellers or its
limited partners, provided that any such transfer be made expressly subject to
this Agreement); and (b) to merge, consolidate, or combine, or to permit any
other person to merge, consolidate or combine, with Seller.
14
6.7 Third Party Consents. Seller shall use its best efforts
to obtain the third party consents identified on Schedule 1.2 as being necessary
for the assignment of the Assumed Contracts to Buyer and to satisfy all other
conditions precedent thereof.
6.8 Updated Schedules. Not less than five (5) days before the
date scheduled for the Closing, Seller shall deliver to Buyer a list of any
changes to Schedule 1.2 which are necessary to reflect the termination,
expiration or entry into Contracts, or any changes to Schedule 4.16 relating to
employee matters, occurring in accordance with the provisions of this Agreement
following the date hereof.
6.9 Leases; Security Interests. Seller will cooperate in all
reasonable respects with (i) Buyer's efforts to record any and all Leases in the
appropriate land records so that Buyer may seek to obtain leasehold title
insurance or grant leasehold mortgages on such Leases at Buyer's expense; (ii)
Buyer's efforts to obtain the consents of any parties to the grant by Buyer to
its lenders of a security interest in the Assumed Contracts, Real Property or
other Assets at Buyer's expense; and (iii) Buyer's efforts to obtain title
insurance and a survey with respect to the Real Property at Buyer's expense.
6.10 Tax, Lien, and Judgment Searches. No earlier than
fifteen (15) days prior to the Closing Date, Buyer shall have the right to
obtain at Buyer's expense a report on the results of a search for UCC financing
statements, tax liens, judgment liens, and similar filings in the Secretary of
State's records for the State of Arizona and in the records of those
jurisdictions where the Assets are located.
6.11 Environmental Assessments.
(a) Buyer shall be permitted to conduct an environmental
site assessment for each parcel of Real Property (the "Site Assessments"). Any
Site Assessments shall be prepared by Buyer's environmental consultant at
Buyer's expense , and Buyer shall furnish Seller with the name, address and
telephone number of its environmental consultant preparing such Site
Assessments. Buyer shall furnish Seller with a copy of any Site Assessments
within ten (10) days of Buyer's receipt of such Site Assessments.
(b) In conducting any Site Assessments, Buyer shall keep
the Real Property free of all mechanics or similar liens and shall not interfere
with the normal operation of Seller's business. Buyer shall restore the Real
Property to its former condition following the completion of any Site
Assessments. Buyer shall hold Seller harmless for any claim that may arise as a
result of the acts or omissions of Buyer's environmental consultant in
conducting any Site Assessments.
(c) If the Site Assessments conclude that environmental
remediation is required, Seller hereby agrees to pay the first $25,000 towards
remediation expense. Seller shall perform all such remediation as is required to
satisfy any Environmental Laws relating to Hazardous Materials, under the
supervision of a licensed site professional and to the reasonable satisfaction
of Buyer, provided that Seller shall not be required to expend more than
$25,000. If the cost of required remediation exceeds $25,000, then Buyer at its
option may accept a credit of
15
$25,000 on the purchase price and complete remediation at its own expense, or
terminate the Agreement by giving written Notice to Buyer within ten (10) days
of receipt of the Site Assessments.
6.12 Governmental Consents. Promptly following the execution
of this Agreement, Seller and Buyer, at Buyer's expense and with Seller's
reasonable cooperation, shall proceed to prepare and file with the appropriate
governmental authorities such requests for approvals or waivers, reports or
notifications as may be required in connection with this Agreement; provided, if
the transaction is not consummated, Buyer shall restore all such filings to
their original condition and reverse any filings made in order to consummate the
transaction, and Buyer shall hold Seller harmless from any liability or expense
arising from such filings.
6.13 Confidentiality. Buyer and Seller shall each keep
confidential and not directly or indirectly reveal, report, publish, disclose or
transfer any information obtained by it with respect to the other in connection
with this Agreement and the negotiations preceding this Agreement (the
"Confidential Information"), and each will use such Confidential Information
solely in connection with the transactions contemplated by this Agreement, and
if the transactions contemplated hereby are not consummated for any reason, each
shall return to the other, without retaining any copies thereof, any schedules,
documents or other written information obtained from the other in connection
with this Agreement and the transactions contemplated hereby and shall cause all
of its officers, employees, agents, accountants, attorneys and other
representatives to whom it may have disclosed such Confidential Information to
do the same. Notwithstanding the foregoing limitation, neither party shall be
required to keep confidential or return any Confidential Information that (i) is
known or available through other lawful sources, not bound by a confidentiality
agreement with the disclosing party, (ii) is or becomes publicly known or
generally known in the industry through no fault of the receiving party or its
agents, (iii) is required to be disclosed pursuant to Law (provided the other
party is given reasonable prior notice), and (iv) is developed by the receiving
party independently of the disclosure by the disclosing party.
6.14 No Inconsistent Action. Neither Buyer nor Seller shall
take any action which is materially inconsistent with its obligations under this
Agreement or that would hinder or delay the consummation of the transaction
contemplated by this Agreement.
6.15 Audited Financials. Following execution of this
Agreement, the Financial Statements will be audited by a nationally-recognized
independent accounting firm selected by Buyer, at the expense of Buyer, and
Seller will cooperate fully in such audit.
7. CONDITIONS TO BUYER'S OBLIGATION. The obligation of Buyer to
consummate this Agreement is subject to the satisfaction of each of the
following conditions on or prior to the Closing Date:
7.1 Representations and Warranties. The representations and
warranties of Seller to Buyer contained herein and in any certificates delivered
by Seller pursuant hereto will be true and correct in all material respects as
of the Closing Date (except for representations and warranties that are
qualified as to materiality, which shall be true and correct in all respects),
in each case as if made again on and as of such date.
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7.2 Compliance with Covenants. All of the covenants to be
complied with or performed by Seller on or before the Closing Date shall have
been duly complied with and performed in all material respects.
7.3 Closing Documents. On the Closing Date, Seller shall have
delivered to Buyer duly executed closing documents as specified in Section 10.1
in a form reasonably acceptable to Buyer. Buyer shall receive a legal opinion of
Seller's counsel in form and substance reasonably satisfactory to Buyer and
substantially in the form attached hereto as Schedule 7.3.
7.4 Receipt of Third Party Consents. For each Contract that
is identified on Schedule 1.2, Seller shall have obtained all required consents
of third parties, whether actual or deemed, waived or approved by such third
parties in the absence of estoppel certificates (as indicated on Schedule 1.2),
in a form reasonably acceptable to Buyer without modification of any material
provision of any such Contract, to Buyer's assumption thereof.
7.5 Governmental Consents. Any approval required pursuant to
Section 6.12 shall have been obtained prior to Closing. Seller shall have
registered the Towers with the FCC pursuant to the Communications Act. Buyer
shall use reasonable efforts to cooperate with Seller in obtaining all approvals
required under this Section 7.5. Such approvals and registrations required to
consummate the transaction shall be Buyer's responsibility and shall be obtained
at Buyer's expense with Seller's reasonable cooperation.
7.6 Absence of Litigation. As of the Closing Date, no action,
claim, suit or proceeding seeking to enjoin, restrain, or prohibit the
consummation of this Agreement shall be pending before any court or any other
governmental authority; provided, however, that this condition may not be
invoked by Buyer if any such action, suit or proceeding was solicited or
encouraged by, or instituted as a result of any act or omission of Buyer.
7.7 No Material Adverse Development. There shall not have
been any material adverse change in the business or prospects of any of the
Business or the condition of the Assets. No material adverse development shall
have occurred with respect to the Business that results in a significant
impairment to the ability of the Business to operate as they are currently
operated or represents a substantial impairment of the aggregate value of the
Business or Assets being conveyed.
7.8 Settlement of Claims. Seller shall have settled any and
all pending or threatened claims, litigation or proceedings against Seller that
affect or concern the Assets.
7.9 Release of Liens. Buyer shall be reasonably satisfied
that all Liens on the Assets have been released and removed. Without limiting
the generality of the foregoing, Seller shall have delivered to Buyer executed
releases or terminations under the UCC and any other applicable laws of any
financing or similar statements filed against any Assets in (a) the
jurisdictions in which the Assets are and have been located since such Assets
were acquired by Seller, and (b) any other location specified or required by
applicable Law. A UCC search, as of the Closing Date, of the public records of
the State of Arizona and the counties where the Assets are located shall reveal
no inconsistencies with Seller's representations and warranties hereunder.
17
7.10 Title Policy. The title insurance company shall be
irrevocably committed to issue to Buyer, at Buyer's expense, an ALTA Owner's
Policy of Title Insurance (1970 Form) at its regular rate dated as of the exact
date and time of the recording of the deed insuring Buyer's good and marketable
fee simple title to the Owned Real Property, subject only to those exceptions
permitted under this Agreement, and with such endorsements as Buyer shall
require.
7.11 Survey. Buyer shall have received, at Buyer's expense, a
survey which shall be certified to Buyer and the title company, which survey
shall show no matters which materially adversely affect the use or value of the
Owned Real Property or render title thereto unmarketable and shall show (i) no
encroachments that materially impair the value or use of the Owned Real
Property, (ii) that the Improvements are entirely located on the owned Real
Property to be conveyed to Buyer, and (iii) that the Owned Real Property has
access to all adjacent roads and that such roads are publicly dedicated.
7.12 Site Assessments. Any remediation required by Section
6.11 shall have been completed to Buyer's reasonable satisfaction or the cost of
any remediation required by Section 6.11 shall not exceed the amounts set forth
therein.
7.13 Nonforeign Affidavit. Seller shall furnish Buyer an
affidavit, stating, under penalty of perjury, the transferor's United States
taxpayer identification number and that the transferor is not a foreign person,
pursuant to Section 1445(b)(2) of the Code.
7.14 Board Approval. Buyer shall have obtained approval of
its Board of Directors to consummate the transactions contemplated by this
Agreement within five (5) business days of Seller's execution of this Agreement.
7.15 Bank Approval. Buyer shall have obtained approval of its
lenders to consummate the transactions contemplated by this Agreement within
five (5) business days of Seller's execution of this Agreement.
7.16 Audited Financials. Buyer shall have received the
audited Financial Statements contemplated by Section 6.15 and such audited
Financial Statements shall not deviate in any material respect from the
Financial Statements furnished by Seller pursuant to Section 4.12 herein.
8. CONDITIONS TO SELLER'S OBLIGATION. Buyer shall have used its best
efforts in conducting its due diligence investigations into the matters
contained herein, such that Buyer shall have acquired Knowledge (as defined
herein) of Seller's representations and warranties. The obligation of Seller to
consummate this Agreement is subject to the satisfaction of each of the
following conditions on or prior to the Closing Date:
8.1 Representations and Warranties. The representations and
warranties of Buyer to Seller contained herein and in any certificates delivered
by Buyer pursuant hereto shall be true and correct in all material respects as
of the Closing Date (except for representations and warranties that are
qualified as to materiality which shall be true and correct in all respects), in
each case as if made again on and as of such date.
18
8.2 Compliance with Covenants. All of the covenants to be
complied with or performed by Buyer on or before the Closing Date shall have
been duly complied with and performed in all material respects.
8.3 Closing Documents. On the Closing Date, Buyer shall have
delivered to Seller duly executed closing documents as specified in Section 10.2
below in a form reasonably acceptable to Seller.
8.4 Governmental Consents. Any approval required pursuant to
the Section 6.12 shall have been obtained by Buyer as a condition to Seller's
obligations under this Agreement.
8.5 Absence of Litigation. As of the Closing Date, no action,
claim, suit or proceeding seeking to enjoin, restrain, or prohibit the
consummation of this Agreement shall be pending before any court or any other
governmental authority; provided, however, that this condition may not be
invoked by Seller if any such action, suit, or proceeding was solicited or
encouraged by, or instituted as a result of any act or omission of, Seller.
8.6 Payment. At the Closing, Buyer shall deliver to Seller
the Cash Payment, as provided in Section 3.1. First American Title Company, Inc.
in Tucson, Arizona shall serve as escrow agent with respect to the Cash Payment
and with respect to the general warranty deed conveying title to the Owned Real
Property to Buyer.
9. CLOSING.
9.1 Timing.
(a) The closing of the purchase and sale of the
Assets (the "Closing") shall take place on November 1, 1997 or another date
mutually agreed to by Buyer and Seller (the "Closing Date"). The Closing will
commence on the Closing Date at 10:00 (local time) at the offices of First
American Title Company, Inc., ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇, telephone (▇▇▇) ▇▇▇-▇▇▇▇, telecopy (▇▇▇) ▇▇▇-▇▇▇▇, or such other place as
Buyer and Seller may agree in writing. By mutual agreement of the parties,
Closing may take place by conference call and telecopy with exchange of original
signatures by overnight mail.
(b) If, as of the Closing Date, any condition
precedent described in Section 7 or 8 has not been satisfied, the party who is
entitled to require such condition be satisfied may (in its sole discretion)
notify the other party(ies) of the absence of such condition precedent at or
before the Closing and simultaneously therewith postpone the Closing until a
date ten (10) days after all such conditions have been (or are able to be)
performed, but not later than December 31, 1997, and such postponed date shall
constitute the new Closing Date for all purposes hereunder.
9.2 Deliveries. On the Closing Date, (a) Seller shall deliver
or cause to be delivered to Buyer good and marketable title to and ownership of
the Assets, free and clear of all Liens free and clear of all Liens except for
Permitted Liens; (b) Buyer shall deliver to Seller the
19
Cash Payment; and (c) the parties shall deliver to each other the closing
documents described in Section 10.
10. CLOSING DOCUMENTS.
10.1 Closing Documents To Be Delivered by Seller. On the
Closing Date, Seller shall deliver to Buyer (in form and substance reasonably
satisfactory to Buyer), and acknowledge with cross-receipts therefore:
(a) one or more bills of sale conveying to Buyer all of
the Personal Property;
(b) One or more general warranty deeds conveying the
Owned Real Property to Buyer in a form usual and customary in the jurisdiction
where such property is located; the description of the Owned Real Property shall
be by courses and distances as shown upon Buyer's survey, and shall include any
and all appurtenant easements or other beneficial appurtenant rights;
(c) One or more assignments assigning the Assumed
Contracts to Buyer, together with each consent obtained by Seller necessary for
the assignments of those Assumed Contracts identified on Schedule 1.2;
(d) Certified copies of resolutions of Seller's limited
and general partner authorizing the execution, delivery and performance of this
Agreement and of Seller's partnership agreement;
(e) One or more assignments conveying to Buyer the
Permits, Intangible Property and Business Records;
(f) A certificate executed by Seller attesting to
Seller's compliance with the matters set forth in Sections 7.1 and 7.2;
(g) The Business Records;
(h) A general assignment by Seller to Buyer of all the
Assets to be conveyed hereunder, other than the Excluded Assets;
(i) Such agreements, affidavits or other documents as
may be required by Buyer's title company to issue the title policies required
hereunder;
(j) An affidavit of the Seller under section 1445 of the
Code certifying that Seller is not a foreign corporation, foreign partnership,
foreign trust, foreign estate or foreign person (as those terms are defined in
the Code and the related regulations), and a certificate of Seller as to the
reporting of certain real estate transactions as required by section 6045(e) of
the Code, each in form and substance satisfactory to Buyer and its title
company;
20
(k) Estoppel letters from all of the tenants under the
Leases in a form reasonably acceptable to Buyer or any document setting forth an
appropriate "deemed estoppel" or tenant waiver provision;
(l) Written notice executed by Seller notifying all
interested parties, including all tenants under the Leases, that the Real
Property has been conveyed to Buyer and directing that all payments, inquiries
and the like be forwarded to Buyer at the address to be provided by Buyer;
(m) Payoff letters for all monetary Liens at Closing
authorizing the title company to pay off all such encumbrances on behalf of
Seller and confirming the amounts required to pay off each such encumbrance;
(n) Clearance certificates or similar document(s) that
may be required by any state taxing authority in order to relieve Buyer of any
obligation to withhold any portion of the Purchase Price;
(o) Such other instruments and further assurances of
conveyance and such other certificates or other documentation as Buyer may
reasonably request; and
(p) a legal opinion of Seller's counsel in form and
substance reasonably satisfactory to Buyer and substantially in the form
attached hereto as Schedule 7.3.
10.2 Closing Documents To Be Delivered By Buyer. On the
Closing Date, Buyer shall deliver to Seller (in form and substance reasonably
satisfactory to Seller) and acknowledge with cross-receipts therefore:
(a) one or more agreements by which Buyer assumes the
Assumed Liabilities and agrees to perform, from and after the Closing Date, all
of the Assumed Liabilities;
(b) certified copies of resolutions of Buyer's Board of
Directors authorizing the execution, delivery and performance of this Agreement,
and of Buyer's bylaws and articles of incorporation;
(c) a certificate executed by Buyer attesting to Buyer's
compliance with the matters set forth in Sections 8.1 and 8.2;
(d) the Cash Payment to Seller; and
(e) a legal opinion of Buyer's counsel in form and
substance reasonably satisfactory to Seller and substantially in the form
attached hereto as Schedule 10.2.
10.3 Other Closing Documents. The parties will also execute
such other documents and perform such other acts, before and after Closing, as
may be necessary for the implementation and consummation of this Agreement.
21
11 RISK OF LOSS. The risk of loss or damage to the Assets shall be upon
Seller at all times prior to the Closing Date unless caused by an act of Buyer.
In the event of such loss or damage, Seller will promptly notify Buyer and
Seller shall use its best efforts to repair, replace or restore the Assets to
their former condition as soon as possible.
12 BREACH; TERMINATION.
12.1 Breach. If either party believes the other to be in
breach hereunder, the nonbreaching party shall provide the breaching party with
notice specifying in reasonable detail the nature of such breach. If such breach
has not been cured by the earlier of: (a) the Closing Date, or (b) within seven
(7) days after delivery of such notice, then the party giving such notice may
(i) terminate this Agreement for breach; (ii) extend the Closing Date if such
breach has not been cured by the Closing Date (but no such extension shall
constitute a waiver of such nondefaulting party's right to terminate as a result
of such default) to no later than December 31, 1997; (iii) exercise the remedies
available to such party pursuant to Section 12.2, subject to the right of the
other party to contest such action through appropriate proceedings; and/or (iv)
proceed to Closing, but such Closing shall not constitute a waiver of such
breach, and the nondefaulting party may seek indemnification from the breaching
party pursuant to Section 13 of this Agreement.
12.2 Effect of Termination.
(a) If this Agreement is terminated pursuant to Section
12.1, neither Seller nor Buyer shall be relieved of any liability hereunder for
its breach of this Agreement prior to termination.
(b) Seller agrees that the Assets include unique
property that cannot be readily obtained on the open market and that Buyer would
be irreparably injured if this Agreement is not specifically enforced after
breach if a Seller shall have committed a material breach. Therefore, Buyer
shall have the right to specifically enforce Seller's obligation to convey the
Assets to Buyer under this Agreement, and Seller agrees to waive the defense in
any such suit that Buyer has an adequate remedy at law and to interpose no
opposition, legal or otherwise, as to the propriety of specific performance as a
remedy. Buyer shall be entitled to seek to recover the damages it incurs
resulting from either Seller's default.
13. INDEMNIFICATION.
13.1 Representations and Warranties. All representations and
warranties contained in this Agreement shall be deemed continuing
representations and warranties, and together with the covenants contained
herein, shall survive the Closing Date for a period of two (2) years after the
Closing Date (the "Survival Period"). No claim for indemnification may be made
under this Article 13 (except for claims under Section 13.3(b)) after the
expiration of the Survival Period. Any investigations by or on behalf of a party
hereto shall not constitute a waiver of such party's right to enforce any
representation or warranty by the other party contained herein, unless a party
shall have actual Knowledge of any misrepresentation or breach of warranty at
the Closing on the part of the other party, and such Knowledge shall (i) have
been discoverable
22
during Buyer's due diligence investigation, or (ii) have been assured by third
party reports or surveys obtained by Buyer, or (iii) have been obtained by Buyer
from Buyer's physical inspection of the premises, or (iv) be documented in
writing at the Closing, in which case the party having such Knowledge shall be
deemed to have waived such misrepresentation or breach.
13.2 Indemnification by Sellers. Seller shall indemnify and
hold Buyer harmless against and with respect to, and shall reimburse Buyer for:
(a) Any and all losses, liabilities, or damages
resulting from any untrue representation, breach of warranty, or nonfulfillment
of any covenants by Seller contained herein or in any certificate delivered to
Buyer hereunder;
(b) Any and all obligations of Seller not assumed by
Buyer pursuant to the terms hereof;
(c) Any and all losses, liabilities, or damages
resulting from Seller's operation of the Business or ownership of the Assets
prior to the Closing Date, including any and all liabilities arising under the
Assumed Contracts which relate to events occurring or conditions existing prior
to the Closing Date; and
(d) Any and all actions, suits, proceedings, claims,
demands, assessments, judgments, and reasonable costs and expenses incident to
any of the foregoing or incurred in investigating or attempting to avoid the
same or to oppose the imposition thereof.
13.3. Indemnification by Buyer. Buyer shall indemnify and hold
Seller harmless against and with respect to, and shall reimburse Seller for:
(a) Any and all losses, liabilities, or damages
resulting from any untrue representation, breach of warranty, or nonfulfillment
of any covenants by Buyer contained herein or in any certificate delivered to
Seller hereunder;
(b) Any damage to the Real Property resulting from the
Site Assessments performed by Buyer in accordance with Section 6.11(b) above;
(c) Any and all losses, liabilities, or damages
resulting from Buyer's operation of the Business or ownership of the Assets on
or after the Closing Date, including any and all liabilities or obligations
arising under the Assumed Contracts which relate to events occurring or
conditions existing on or after the Closing Date or otherwise assumed by Buyer
under this Agreement; and
(d) Any and all actions, suits, proceedings, claims,
demands, assessments, judgments, and reasonable costs and expenses, including
reasonable legal fees and expenses, incident to any of the foregoing or incurred
in investigating or attempting to avoid the same or to oppose the imposition
thereof.
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13.4. Procedures for Indemnification. The procedures for
indemnification shall be as follows:
(a) The party claiming the indemnification (the
"Indemnified Party") shall promptly give notice to the party from whom the
indemnification is claimed (the "Indemnifying Party") of any claim, whether
between the parties or brought by a third party against the Indemnified Party,
specifying (i) the factual basis for such claim, and (ii) the amount of the
claim. If the claim relates to an action, suit, or proceeding filed by a third
party against the Indemnified Party such notice shall be given by the
Indemnified Party to the Indemnifying Party within five (5) days after written
notice of such action, suit, or proceeding shall have been given to the
Indemnified Party.
(b) Following receipt of notice from the Indemnified
Party of a claim, the Indemnifying Party shall have thirty (30) days in which to
make such investigation of the claim as the Indemnifying Party shall deem
necessary or desirable. For the purposes of such investigation, the Indemnified
Party agrees to make available to the Indemnifying Party and/or its authorized
representative(s) the information relied upon by the Indemnified Party to
substantiate the claim. If the Indemnified Party and the Indemnifying Party
agree at or prior to the expiration of said thirty (30) day period (or any
agreed upon extension thereof) to the validity and amount of such claim, or if
the Indemnifying Party does not respond to such notice, the Indemnifying Party
shall immediately pay to the Indemnified Party the full amount of the claim.
Buyer shall be entitled to apply any or all of the Accounts Receivable collected
on behalf of Sellers to a claim as to which Buyer is entitled to indemnification
hereunder. If the Indemnified Party and the Indemnifying Party do not agree
within said period (or within any agreed-upon extension thereof), the
Indemnified Party may seek appropriate legal remedy.
(c) With respect to any claim by a third party as to
which the Indemnified Party is entitled to indemnification hereunder, the
Indemnifying Party shall have the right at its own expense to participate in or
to assume control of the defense of such claim, and the Indemnified Party shall
cooperate fully with the Indemnifying Party, subject to reimbursement for
reasonable actual out-of-pocket expense incurred by the Indemnified Party as the
result of a request by the Indemnifying Party to so cooperate. If the
Indemnifying Party elects to assume control of the defense of any third-party
claim, the Indemnified Party shall have the right to participate in the defense
of such claim at its own expense.
(d) If a claim, whether between the parties or by a
third party, requires immediate action, the parties will make all reasonable
efforts to reach a decision with respect thereto as expeditiously as possible.
(e) If the Indemnifying Party does not elect to assume
control or otherwise participate in the defense of any third-party claim, the
Indemnifying Party shall be bound by the results obtained in good faith by the
Indemnified Party with respect to such claim.
(f) The indemnification rights provided in Sections 13.2
and 13.3 hereof shall extend to the partners, shareholders, directors, officers,
members, partners, agents, employees,
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and representatives of the Indemnified Party, although for the purpose of the
procedures set forth in this Section 13.4, any indemnification claims by such
parties shall be made by and through the Indemnified Party.
14 POST CLOSING MATTERS.
(a) Books and Records. Each party agrees that it will
cooperate with and make available (or cause to be made available) to the other
party, during normal business hours, all books and records, information and
employees (without substantial disruption of employment) retained and remaining
in existence after the Closing which are necessary or useful in connection with
any tax inquiry, audit, or dispute, any litigation or investigation or any other
matter requiring any such books and records, information or employees for any
reasonable business purpose (a "Permitted Use"). The party requesting any such
books and records, information or employees shall bear all of the out-of-pocket
costs and expenses reasonably incurred in connection with providing such books
and records, information or employees. All information received pursuant to this
Section 14(a) shall be kept confidential pursuant to Section 6.12 by the party
receiving it, except to the extent that disclosure is reasonably necessary in
connection with any Permitted Use.
(b) Cooperation and Records Retention. Seller and Buyer
shall each (i) provide the other with such assistance as may reasonably be
requested by either of them in connection with the preparation of any return,
audit, or other examination by any taxing authority or judicial or
administrative proceedings relating to liability for any taxes; (ii) retain and
provide the other with any records or other information that may be relevant to
such return, audit or examination, proceeding or determination; and (iii)
provide the other with any final determination of any such audit or examination,
proceeding, or determination that affects any amount required to be shown on any
Tax return of the other for any period.
(c) Payments. Following the Closing Date, Seller shall
pay promptly when due all of their debts and liabilities, including any
liability for taxes with respect to periods ending on or before the Closing
Date.
15. ADDITIONAL INSURANCE. Buyer shall cause any of its employees or
agents entering the premises to conduct any Site Assessments or other due
diligence investigations to carry adequate injury/accident insurance, and Buyer
shall hold Seller harmless for any claims arising from such due diligence
investigations.
16. EXPENSES. Except as otherwise expressly set forth in this
Agreement, each party shall bear its own legal and other fees and expenses
incurred in connection with its negotiating, executing and performing this
Agreement. Buyer shall pay all expenses specifically in connection with Closing.
Buyer shall bear all applicable sales, transfer or similar taxes, if any (other
than income or capital gains taxes which shall have come due to Seller under
federal or state laws), which are due as a result of the transfer of the Assets
in accordance herewith.
17. FURTHER ASSURANCES. From time to time at or after the Closing, at
the request of the other, Seller and Buyer will execute and deliver such other
instruments of
25
conveyance, assignment, transfer and delivery and take such other action as the
other reasonably may request in order to consummate, complete and carry out the
purposes of the transactions contemplated hereby, including the execution and
delivery of such instruments and agreements as may be reasonably necessary or
advisable to fully effect the transfer to Buyer of the Assets.
18. BENEFIT AND ASSIGNABILITY. This Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their respective
successors and permitted assigns, and no other person or entity shall have any
right (whether third party beneficiary or otherwise) hereunder. This Agreement
may not be assigned by any party without the prior written consent of the other
party; provided, however, that Buyer may assign all or any portion of this
Agreement to any Affiliate of Buyer, provided that Buyer shall remain obligated
for the performance of this Agreement.
19. NOTICES. All notices demands and other communications pertaining
to this Agreement ("Notices") shall be in writing addressed as follows:
If to Seller: Tucson Communications Company, L.P.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
with a copy to: ▇▇▇▇▇ ▇▇▇▇▇▇▇, Jr., Esquire
Attorney at Law
▇.▇. ▇▇▇ ▇▇▇▇
▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
and a copy to: H. ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
If to Buyer American Tower Systems, Inc.
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ Box
26
with a copy to: Hunton & ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esquire
Notices shall be deemed given three (3) business days after being mailed by
certified or registered United States mail, postage prepaid, return receipt
requested, or on the first business day after being sent, prepaid, by nationally
recognized overnight courier that issues a receipt or other confirmation of
delivery, or upon oral confirmation of receipt of a telecopy transmission of any
Notices. Any party may change the address to which Notices under this Agreement
are to be sent to it by giving written notice of a change of address in the
manner provided in this Agreement for giving Notice.
20. WAIVER. Unless otherwise specifically agreed in writing to the
contrary: (i) the failure of any party at any time to require performance by the
other of any provision of this Agreement shall not affect such party's right
thereafter to enforce the same; (ii) no waiver by any party of any default by
any other shall be valid unless in writing and acknowledged by an authorized
representative of the nondefaulting party, and no such waiver shall be taken or
held to be a waiver by such party of any other preceding or subsequent default;
and (iii) no extension of time granted by any party for the performance of any
obligation or act by any other party shall be deemed to be an extension of time
for the performance of any other obligation or act hereunder.
21. ENTIRE AGREEMENT. This Agreement (including the Exhibits and
Schedules hereto, which are incorporated by reference herein) constitutes the
entire agreement between the parties with respect to the subject matter hereof
and referenced herein, and supersede and terminate any prior agreements between
the parties (written or oral) with respect to the subject matter hereof. This
Agreement may not be altered or amended except by an instrument in writing
signed by the party against whom enforcement of any such change is sought.
22. COUNTERPARTS. This Agreement may be signed in any number of
counterparts with the same effect as if the signature on each such counterpart
were on the same instrument.
23. CONSTRUCTION. The headings of the Articles and Sections of this
Agreement are for convenience only and in no way modify, interpret or construe
the meaning of specific provisions of the Agreement.
24. EXHIBITS AND SCHEDULES. The Exhibits and Schedules to this
Agreement are a material part of this Agreement.
25. SEVERABILITY. In case any one or more of the provisions contained
in this Agreement should be held invalid, illegal or unenforceable in any
respect, the validity, legality, and enforceability of the remaining provisions
will not in any way be affected or impaired. Any illegal
27
or unenforceable term shall be deemed to be void and of no force and effect only
to the minimum extent necessary to bring such term within the provisions of
applicable law and such term, as so modified, and the balance of this Agreement
shall then be fully enforceable.
26. CHOICE OF LAW; VENUE. This Agreement is to be construed and
governed by the laws of the State of Arizona, without regard for the choice of
law rules utilized in that state. Subject to the provisions of Section 12.2, if
there is any dispute between the parties to this Agreement which remains
unresolved for thirty (30) days or more, either party may, upon written notice
to the other, submit such dispute to binding arbitration in Tucson, Arizona in
accordance with the commercial rules of the American Arbitration Association
("AAA") before a panel of three arbitrators Knowledgeable in the tower
communications industry, one arbitrator chosen by Buyer, one chosen by Seller
and the third as mutually agreed upon by the two arbitrators so appointed, or in
the absence of such agreement, by the President of the Arizona Chapter of the
AAA, and the decision of such panel shall, in the absence of fraud, be
conclusively binding on the parties.
27. PUBLIC STATEMENTS. Prior to the Closing Date, neither Seller nor
Buyer shall, without the prior written approval of the other party, make any
press release or other public announcement concerning the transactions
contemplated by this Agreement, except (i) Seller and Buyer shall issue a
mutually agreeable press release promptly after the signing of this Agreement;
and (ii) to the extent required by law, in which case the other party shall be
so advised as far in advance as possible.
28. ATTORNEYS' FEES. If any party initiates any litigation against any
other party involving this Agreement, the prevailing party in such action shall
be entitled to receive reimbursement from the other party for all reasonable
attorneys' fees and other costs and expenses incurred by the prevailing party in
respect of that litigation, including any appeal, and such reimbursement may be
included in the judgment or final order issued in that proceeding.
29. COUNSEL. Each party has been represented by its own counsel in
connection with the negotiation and preparation of this Agreement and,
consequently, each party hereby waives the application of any rule of law that
would otherwise be applicable in connection with the interpretation of this
Agreement, including but not limited to any rule of law to the effect that any
provision of this Agreement shall be interpreted or construed against the party
whose counsel drafted that provision.
30. DELIVERY OF SCHEDULES. The parties acknowledge that as of the date
of execution of this Agreement, the Seller has not delivered to the Buyer the
scheduled called for in Section 4 of this Agreement (the "Schedules"). Within
five (5) business days after the date of execution of this Agreement, the Seller
shall deliver the Schedules to the Buyer and the Buyer shall have five (5)
business days thereafter (the "Review Period") to review the Schedules. If (1)
during the Review Period, the Buyer shall notify the Seller in writing that the
Schedules are not acceptable (in the Buyer's sole discretion), or (2) the Seller
shall fail required five (5) business day period, then this Agreement shall
immediately terminate without liability to any party hereto.
[SIGNATURE PAGE FOLLOWS.]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
AMERICAN TOWER SYSTEMS, INC.
By: /s/ ▇▇▇▇ Box
▇▇▇▇ Box
President
TUCSON COMMUNICATIONS COMPANY,
a California limited partnership
By: Delta Development I, a California limited
partnership, its General Partner
By: Dyna-Plex, Inc., a California corporation,
its General Partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇,
▇▇▇▇▇▇ ▇. ▇▇▇▇▇,
President
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Assistant Secretary
By: /s/ H. ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇.
H. ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇.
An individual General Partner of Tuscon
Communications Company, a California limited
partnership
29
SCHEDULES
Schedule 1.2 Contracts; Assumed Contracts
Schedule 1.7 Intangible Property
Schedule 1.11 Permits
Schedule 1.13 Real Property
Schedule 1.12 Personal Property
Schedule 4.6 Compliance with Laws
Schedule 4.7 Asset Liens
Schedule 4.11 Litigation
Schedule 4.12 Financial Statements
Schedule 4.14 Tax Matters
Schedule 4.16 Employees; Employee Benefit Plans
Schedule 4.17 Insurance
Schedule 4.18 Environmental Matters
Schedule 4.23 Financing Statements
Schedule 7.3 Form of Legal Opinion of Seller's Counsel
Schedule 10.2 Form of Legal Opinion of Buyer's Counsel