EXHIBIT 99.1
ASSET PURCHASE AGREEMENT
AS OF DECEMBER 19, 2002
BY AND AMONG
NORTHCOAST COMMUNICATIONS, L.L.C.
AND
BOSTON HOLDING, LLC
AND
NEW YORK PCS HOLDING, LLC
AND
CELLCO PARTNERSHIP d/b/a VERIZON WIRELESS
TABLE OF CONTENTS
Page
1. Definitions............................................................. 1
1.01 Certain Definitions........................................... 1
1.02 Other Definitional Provisions................................. 6
2. Purchase and Sale....................................................... 6
2.01 Transfer of Assets............................................ 6
2.02 Purchase Price................................................ 6
2.03 Purchase Price Adjustment..................................... 7
2.04 Payment of Purchase Price and Assumption of Liabilities....... 9
2.05 Escrow........................................................ 9
2.06 Sales and Transfer Taxes...................................... 9
3. Representations and Warranties of Sellers............................... 10
3.01 Organization and Authority of Sellers......................... 10
3.02 Legal Capacity; Approvals and Consents........................ 10
3.03 Tax Matters................................................... 10
3.04 PCS Assets.................................................... 11
3.05 Labor Contracts and Actions................................... 12
3.06 Employee Benefits and Arrangements............................ 12
3.07 Defaults...................................................... 13
3.08 Legal and Governmental Proceedings and Judgments.............. 13
3.09 Insolvency.................................................... 13
3.10 Finders and Brokers........................................... 13
3.11 Books of Account; Pro Forma Balance Sheet; Indebtedness....... 13
3.12 Material Changes.............................................. 14
3.13 Intellectual Property......................................... 14
4. Representations and Warranties of Buyer................................. 14
4.01 Organization and Authority of Buyer........................... 14
4.02 Legal Capacity; Approvals and Consents........................ 14
4.03 Legal and Governmental Proceedings and Judgments.............. 14
4.04 Finders and Brokers........................................... 15
4.05 Buyer Consents................................................ 15
4.06 Insolvency.................................................... 15
4.07 Acquisition of Rights......................................... 15
4.08 Buyer's Financial Capability.................................. 15
5. Covenants Pending Closing............................................... 15
5.01 Business of Sellers........................................... 15
5.02 Access to Information......................................... 16
5.03 Non-solicitation.............................................. 16
5.04 Certain Employee Matters...................................... 16
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5.05 Transferring Subsidiaries..................................... 16
5.06 Termination of Cell Site Leases............................... 17
6. Deliveries at Closing................................................... 17
6.01 Deliveries by Sellers......................................... 17
6.02 Deliveries by Buyer to Sellers................................ 18
6.03 Additional Deliveries by Buyer and Sellers.................... 19
7. Conditions to the Obligations of Buyer.................................. 19
7.01 Receipt of Consents........................................... 19
7.02 Sellers' Authority............................................ 19
7.03 Performance by Sellers........................................ 19
7.04 Absence of Breach of Warranties and Representations........... 19
7.05 Absence of Proceedings........................................ 20
7.06 Repayment of Indebtedness..................................... 20
7.07 FCC Payoff Letter............................................. 20
8. Conditions to the Obligations of Sellers................................ 20
8.01 Receipt of Consents........................................... 20
8.02 Buyer's Authority............................................. 20
8.03 Performance by Buyer.......................................... 20
8.04 Absence of Breach of Representations and Warranties........... 20
8.05 Absence of Proceedings........................................ 20
8.06 Repayment of Indebtedness..................................... 20
9. Covenants............................................................... 21
9.01 Compliance with Conditions.................................... 21
9.02 Compliance with HSR Act and Rules............................. 21
9.03 Application for Assignment of Contracts and PCS Licenses...... 22
9.04 Records, Taxes and Related Matters............................ 22
9.05 Non-Assignment................................................ 22
9.06 Access by Sellers............................................. 22
10. Survival of Representations, Warranties, Covenants and Other
Agreements; Indemnification........................................... 23
10.01 Survival of Representations and Warranties.................... 23
10.02 Indemnification by Sellers.................................... 23
10.03 Indemnification by Buyer...................................... 24
10.04 Third Party Claims; Etc....................................... 25
10.05 Replacement of Escrow Fund.................................... 26
11. Further Assurances...................................................... 26
12. Closing................................................................. 26
12.01 Closing....................................................... 26
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12.02 Termination................................................... 27
13. Miscellaneous........................................................... 28
13.01 Amendments; Waivers........................................... 28
13.02 Entire Agreement.............................................. 28
13.03 Binding Effect; Assignment.................................... 28
13.04 Construction; Counterparts.................................... 28
13.05 Notices....................................................... 29
13.06 Expenses of the Parties....................................... 30
13.07 Non-Recourse.................................................. 30
13.08 Third Party Beneficiary....................................... 30
13.09 Governing Law................................................. 30
13.10 Press Releases................................................ 30
13.11 Bulk Transfer Laws............................................ 31
13.12 Severability.................................................. 31
13.13 Specific Performance for Buyer................................ 31
13.14 Specific Performance for Sellers.............................. 31
13.15 Confidentiality of Business Information....................... 31
EXHIBIT A - PCS Licenses
EXHIBIT B - Escrow Agreement
EXHIBIT C - Assumption Agreement
EXHIBIT D - ▇▇▇▇ of Sale and General Assignment
EXHIBIT E - FCC Opinion
EXHIBIT F - Additional Notices
Schedule 1.01(a) - Assumed Liabilities
Schedule 1.01(b) - Excluded Assets
Schedule 1.01(c) - Excluded Liabilities
Schedule 1.01(d) - PCS Assets
Schedule 1.01(e) - Permitted Encumbrances
Schedule 2.03(f) - Working Capital
Schedule 3.02 - Consents and Approvals
Schedule 3.03 - Tax Notices and Assessments
Schedule 3.04(b) - Real Property
Schedule 3.04(d) - Environmental Matters
Schedule 3.04(e) - PCS Licenses
Schedule 3.04(f) - Microwave Clearance Liabilities
Schedule 3.04(g) - Material Contracts
Schedule 3.04(h) - Compliance with Law
Schedule 3.07 - Notice of Claims or Purported Defaults
Schedule 3.08 - Legal Proceedings
Schedule 3.10 - Seller's Brokers
Schedule 3.11(b) - Financial Statement
Schedule 3.11(c) - Indebtedness
Schedule 3.12 - No MAE
Schedule 3.13 - Intellectual Property
Schedule 4.05 - Consents
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ASSET PURCHASE AGREEMENT
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This Asset Purchase Agreement is made and entered into as of December
19, 2002, by and among Northcoast Communications, L.L.C., a Delaware limited
liability company ("Northcoast"), Boston Holding, LLC, a Delaware limited
liability company ("Boston LLC") and New York PCS Holding, LLC, a Delaware
limited liability company ("New York LLC" and together with Northcoast and
Boston LLC, "Sellers"), and Cellco Partnership d/b/a Verizon Wireless, a
Delaware general partnership ("Buyer").
R E C I T A L S
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WHEREAS, Sellers are collectively the FCC licensees of certain personal
communications services ("PCS") licenses identified on Exhibit A (the "PCS
Licenses") and hold certain related build-out assets (as such term is further
defined below, the "PCS Assets").
WHEREAS, Sellers desire to sell to Buyer, and Buyer desires to purchase
from Sellers, the PCS Assets in accordance with the terms and conditions
contained herein.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the parties agree as follows, each intending to be
legally bound as and to the extent herein provided.
1. Definitions.
1.01 Certain Definitions. For the purposes of this Agreement, the
following terms shall have the meanings set forth below:
Agreement means this Agreement and the Exhibits and Schedules attached
hereto.
Ancillary Documents means the ▇▇▇▇ of Sale and General Assignment, the
Assumption Agreement and the Escrow Agreement.
Asserted Claim has the meaning set forth in Section 10.04.
Assumed Liabilities means (i) each liability, obligation and commitment
listed or described on Schedule 1.01(a), (ii) the Clearance Liabilities, (iii)
all Current Liabilities in the final Working Capital Statement, (iv) accrued ad
valorem, real and tangible personal property taxes, whether incurred prior to,
on or subsequent to the Closing Date, on the PCS Assets, to the extent included
in Current Liabilities in the Final Working Capital Schedule, (v) all
obligations pursuant to the Contracts assigned to Buyer included within the PCS
Assets, provided that with respect to the period prior to Closing, Buyer shall
assume obligations and liabilities under the Contracts only to the extent that
they are Current Liabilities in the Final Working Capital Schedule, and (vi) all
other liabilities, obligations and commitments relating to the PCS Assets
arising after the Closing (and attributable to periods after the Closing)
whether direct or indirect, matured or unmatured, known or unknown, absolute,
accrued, contingent or otherwise. For the avoidance of doubt, the Assumed
Liabilities do not include any items set forth on Schedule 1.01(c).
Assumption Agreement has the meaning set forth in Section 2.04.
Auditor Notice has the meaning set forth in Section 2.03(d).
▇▇▇▇ of Sale and General Assignment has the meaning set forth in
Section 6.01(a).
Boston LLC has the meaning set forth in the Recitals.
Buyer has the meaning set forth in the Preamble to this Agreement.
Cancellation Notice has the meaning set forth in Section 5.06(a).
Clearance Liabilities means amounts payable to microwave operators in
connection with the clearance by such operators of operations from the spectrum
covered by the PCS Licenses.
Closing means a meeting for the purpose of concluding the transactions
contemplated by this Agreement held at the place and on the date fixed in
accordance with Section 12.01.
Closing Date means the date fixed for the Closing in accordance with
Section 12.01.
Contract means each contract, mortgage, deed of trust, bond, indenture,
lease, license (other than the PCS Licenses), note, certificate, option,
warrant, right, or other instrument, document or written agreement relating to
the PCS Assets to which any of Sellers is a party or by which any of Sellers or
the PCS Assets are bound, and in each case which is listed or described on
Schedule 3.04(g) or which is entered into after the date hereof and prior to the
Closing in accordance with Section 5.01 and which is consistent with the types
of Contracts listed or described on Schedule 3.04(g).
Current Assets has the meaning set forth in Section 2.03(h).
Current Liabilities has the meaning set forth in Section 2.03(i).
Deductible has the meaning set forth in Section 10.02(c).
De Minimis has the meaning set forth in Section 10.02(c).
DOJ means the Antitrust Division of the United States Department of
Justice.
Encumbrances means liens, charges, encumbrances, security interests,
options, restrictions or any other similar third party rights, other than liens
for taxes not yet due and payable.
Environmental Law means any law or regulation governing the protection
of the environment (including air, water, soil and natural resources) or the
use, generation, storage, handling, release, treatment, discharge, emission or
disposal of any hazardous or toxic substance.
Environmental Permits means all permits, licenses, approvals,
authorizations or consents required by any Governmental Authority under any
applicable Environmental Law and includes any and all orders, consent orders or
binding agreements issued or entered into by Sellers with a Governmental
Authority under any applicable Environmental Law.
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ERISA means the Employee Retirement Income Security Act of 1974, as
amended, and the rules and regulations promulgated thereunder.
ERISA Affiliate means any entity which, with a Seller, would be treated
as a single employer under Section 414 of the Code or under ERISA.
Escrow Agent means any financial institution designated by Sellers
prior to the Closing Date to serve as escrow agent under the Escrow Agreement
and reasonably satisfactory to Buyer.
Escrow Agreement means the Escrow Agreement to be dated as of the
Closing Date by and among the Buyer, the Sellers and the Escrow Agent named
therein, which shall be substantially in the form set forth in Exhibit B, with
such changes as may be reasonably agreed upon by Buyer, the Sellers and the
Escrow Agent.
Escrow Deposit has the meaning set forth in Section 2.05(a).
Escrow Fund has the meaning set forth in Section 2.05(a).
Excluded Assets means (i) all assets and properties of Sellers other
than the PCS Assets, including, without limitation, the assets and properties
listed or described on Schedule 1.01(b) and (ii) all PCS Assets of a type
determined in accordance with GAAP to be current assets other than "deposits"
and "prepaid expenses" and not included in Current Assets in the Final Working
Capital Schedule; provided that to the extent "prepaid expenses" includes
"prepaid insurance," such "prepaid insurance" shall be an Excluded Asset.
Excluded Liabilities means all liabilities, obligations and commitments
(whether direct or indirect, matured or unmatured, known or unknown, absolute,
accrued, contingent or otherwise) of Sellers other than the Assumed Liabilities,
including, without limitation, the liabilities, obligations and commitments
listed or described on Schedule 1.01(c) and all liabilities, obligations and
commitments of a type determined in accordance with GAAP to be "current
liabilities" and not included in Current Liabilities in the final Working
Capital Schedule.
FCC means the Federal Communications Commission.
FCC Bidding Credit Repayment Obligations means the obligations of
Sellers to satisfy the obligations of Section 1.2111(d) of Title 47 of the Code
of Federal Regulations with respect to any of the PCS Licenses held by Sellers
obtained with a bidding credit.
FCC Installment Payment Obligations means the obligations of Sellers to
satisfy the obligations of Section 1.2111(c) of Title 47 of the Code of Federal
Regulations with respect to any of the PCS Licenses held by Sellers obtained
with installment financing.
FCC Payoff Amount means the FCC Bidding Credit Repayment Obligations,
the FCC Installment Payment Obligations, and any other debts or liabilities,
including accrued and unpaid interest, fees or penalties, owed to the FCC by
Sellers with respect to the PCS Licenses, as shall be set forth in the FCC
Payoff Letters.
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FCC Payoff Letters means one or more letters from the FCC to Sellers,
to be delivered to Sellers prior to the Closing, which shall designate the FCC
Payoff Amount owed for the PCS Licenses.
Final Calculation has the meaning set forth in Section 2.03(g)(i).
Final Order means action by the FCC as to which (i) no request for stay
by such authority of the action is pending, no such stay is in effect, and, if
any deadline for filing any such request is designated by statute or regulation,
it has passed; (ii) no petition for rehearing or reconsideration of the action
is pending before such authority, and the time for filing any such petition has
passed; (iii) such authority does not have the action under reconsideration on
its own motion and the time for such reconsideration has passed; and (iv) no
appeal to a court, or request for stay by a court, of such authority's action is
pending or in effect, and, if any deadline for filing any such appeal or request
is designated by statute or rule, it has passed.
FTC means the Federal Trade Commission.
Governmental Authority means the Federal government, any state, county,
municipal, local or foreign government and any governmental agency, bureau,
commission, authority or body.
Hazardous Substance means any substance listed, defined, designated or
classified as hazardous, toxic or radioactive under any applicable Environmental
Law, including petroleum products.
HSR Act and Rules means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements
Act of 1976 and the rules and regulations promulgated thereunder, as from time
to time in effect prior to the Closing.
HSR Report means the Notification and Report Form for certain mergers
and acquisitions mandated by the HSR Act and Rules.
Indemnified Buyer Party has the meaning set forth in Section 10.02(a).
Indemnified Seller Party has the meaning set forth in Section 10.03(a).
Indemnitee has the meaning set forth in Section 10.04.
Indemnitor has the meaning set forth in Section 10.04.
Independent Accountant has the meaning set forth in Section 2.03(d).
Initial Adjustments Amount has the meaning set forth in Section
2.03(b).
Judgment means judgment, writ, order, injunction, award or decree of or
by any court, or judge, justice or magistrate, including any bankruptcy court or
judge, and any order of or by any Governmental Authority.
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Law means the common law and any statute, ordinance, code or other law,
rule, regulation, order, technical or other standard, requirement or procedure
enacted, adopted, promulgated, applied or followed by any Governmental Authority
or court.
Losses has the meaning set forth in Section 10.02(a).
Material Adverse Effect means a material adverse effect on the PCS
Assets taken as a whole, other than any such effect resulting from changes in
general economic or political conditions or legal, governmental, regulatory or
competitive factors affecting PCS operators generally.
Material Contracts has the meaning set forth in Section 3.04(g).
New York LLC has the meaning set forth in the Recitals.
Northcoast has the meaning set forth in the Recitals.
Outside Date has the meaning set forth in Section 12.01.
PCS has the meaning set forth in the Preamble to this Agreement.
PCS Assets means (i) those licenses, properties, assets, privileges,
rights and interests, real and personal, tangible and intangible, including
Sellers' leasehold interests or rights to possession, that are listed or
described on Schedule 1.01(d), including, without limitation, the PCS Licenses
and the Contracts other than assets of a type determined in accordance with GAAP
to be current assets and (ii) those Current Assets in the final Working Capital
Schedule; provided that the PCS Assets shall exclude the Excluded Assets and any
assets disposed of prior to the Closing in the usual and ordinary course of
business and not in violation of this Agreement and any cell site leases
terminated not in violation of this Agreement.
PCS Licenses has the meaning set forth in the Preamble to this
Agreement.
PCS Operations means the operations conducted by the Sellers with
respect to the PCS Assets.
Permitted Encumbrances means those Encumbrances set forth in Schedule
1.01(e) hereto, the FCC Bidding Credit Repayment Obligations, the FCC
Installment Payment Obligations and all other Encumbrances, if any, that are not
material in character or amount, that do not materially detract from the value
of the tangible property subject thereto and that do not materially interfere
with the present and continued use of such property in the operation of the PCS
Assets.
Person means any natural person, Governmental Authority, corporation,
general or limited partnership, joint venture, limited liability company, trust,
association, or unincorporated entity of any kind.
Preliminary Purchase Price has the meaning set forth in Section 2.02.
Preliminary Closing Date Working Capital Schedule has the meaning set
forth in Section 2.03(b).
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Purchase Price has the meaning set forth in Section 2.02.
Purchase Price Adjustment has the meaning set forth in Section 2.03(a).
Real Property means all realty, fixtures, easements, rights-of-way,
leasehold and other interests in real property, buildings and improvements.
Reference Number has the meaning set forth in Section 2.03(a).
Resolution Period has the meaning set forth in Section 2.03(d).
Second Transaction has the meaning set forth in Section 12.01(b).
Seller Employee Benefits Plan means any bonus, deferred compensation,
incentive compensation, stock purchase, stock option, employment, consulting,
severance or termination pay, hospitalization or other medical, life or other
insurance, supplemental unemployment benefits, profit-sharing, pension or
retirement plan, program, agreement or arrangement, and including, without
limitation, each "employee benefit plan" (within the meaning of Section 3(3) of
ERISA), whether formal or informal, written or oral, to which any Seller or any
ERISA Affiliate is a party, or that is sponsored, maintained or contributed to
by any Seller or any ERISA Affiliate, or with respect to which any Seller or any
ERISA Affiliate has any obligation to contribute, or any liability with respect
thereto, for the benefit of any of the employees or former employees of any
Seller or of any ERISA Affiliate, or any present or former beneficiary,
dependent or assignee of any such employee or former employee.
Sellers has the meaning set forth in the Preamble to this Agreement.
Sellers' Closing Payment has the meaning set forth in Section 2.04.
Tax Returns has the meaning set forth in Section 3.03.
Working Capital Schedule has the meaning set forth in Section 2.03(c).
1.02 Other Definitional Provisions. Terms defined in the singular shall
have a comparable meaning when used in plural, and vice versa.
2. Purchase and Sale.
2.01 Transfer of Assets. At the Closing, upon the terms and conditions
set forth in this Agreement, Sellers shall sell, convey, transfer, assign and
deliver to Buyer, and Buyer shall purchase, accept and receive, all of Sellers'
right, title and interest in and to the PCS Assets, such transaction to be
effective as of the opening of business on the Closing Date.
2.02 Purchase Price. The aggregate purchase price to be paid by Buyer
to Sellers for the PCS Assets shall be $750,000,000 (the "Preliminary Purchase
Price"), subject to adjustment at and following Closing as provided in Section
2.03 below (as so adjusted, the "Purchase Price"), and payable by Buyer to
Sellers in accordance with Section 2.04 below.
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2.03 Purchase Price Adjustment.
(a) The Preliminary Purchase Price shall be increased or
decreased (the "Purchase Price Adjustment") on a dollar-for-dollar
basis for the adjustments described in this Section 2.03. In the event
that Current Liabilities exceed Current Assets by less than
$10,162,000 (the "Reference Number"), the Preliminary Purchase Price
shall be increased by the amount that such excess is less than the
Reference Number; and in the event that Current Liabilities exceed
Current Assets by more than the Reference Number, the Preliminary
Purchase Price shall be decreased by the amount that such excess is
greater than the Reference Number. The Purchase Price Adjustment shall
be initially calculated as of the Closing as described in Section
2.03(b) and reflected in Sellers' Closing Payment made pursuant to
Section 2.04, and finally calculated as described in Section 2.03(c)
and 2.03(d).
(b) Not more than five and not less than three business days
prior to the Closing Date, Sellers shall deliver to Buyer (i) a
schedule dated as of the opening of business on the Closing Date
showing Current Assets and Current Liabilities based on information
reasonably available to Sellers not more than five business days prior
to the Closing Date, prepared by Sellers in accordance with GAAP and
on an estimated basis (the "Preliminary Closing Date Working Capital
Schedule"); and (ii) a good faith estimate prepared by Sellers of the
dollar amount of the Purchase Price Adjustment to the Preliminary
Purchase Price (the "Initial Adjustments Amount"), taking account of
all provisions establishing the basis for calculating such adjustment
set forth herein. The Preliminary Purchase Price shall be increased or
decreased at Closing by the Initial Adjustments Amount. Not more than
30 days after the Closing Date, Sellers shall deliver to Buyer a
calculation prepared by Sellers of the dollar amount of the Purchase
Price Adjustment to the Preliminary Purchase Price, taking account of
all provisions establishing the basis for calculating such adjustment
set forth herein.
(c) As promptly as practicable after the Closing Date (but in no
event later than 90 days thereafter) Buyer shall prepare and deliver
to Sellers for their review and comment a schedule prepared in
accordance with GAAP and dated as of the opening of business on the
Closing Date showing Current Assets and Current Liabilities (the
"Working Capital Schedule"). The Working Capital Schedule shall be
prepared as set forth in Section 2.03(f). If Sellers object to any
amounts reflected on the Working Capital Schedule, Sellers must,
within 20 business days after Sellers' receipt thereof, give written
notice (the "Dispute Notice") to Buyer specifying in reasonable detail
Sellers' objections. If Sellers have not given a Dispute Notice with
respect to the Working Capital Schedule by the end of the 20 business
day period after Sellers have received such Working Capital Schedule,
Buyer's determination of the Purchase Price Adjustment shall be final,
binding and conclusive on the parties. Any disputes with respect to
the Working Capital Schedule shall be resolved pursuant to the
procedures of Section 2.03(d).
(d) With respect to any disputed amounts concerning the Working
Capital Schedule, the parties shall meet in person and negotiate in
good faith during the 20 business day period (the "Resolution Period")
after the date of Buyer's receipt of the Dispute Notice to resolve any
such disputes. If the parties are unable to resolve all such disputes
within the Resolution Period, then at any time thereafter, either
party may
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require that the disputes be submitted to an independent accounting
firm, to be mutually and reasonably agreed upon by Buyer and Sellers
(the "Independent Accountant"), such action to be triggered by the
requesting party providing written notice to the other party (an
"Auditor Notice"). In the event an Auditor Notice is given, the
Independent Accountant shall be engaged to provide a final and
conclusive resolution of all unresolved disputes within 45 days after
such engagement, which resolution shall be based on the express
provisions of this Agreement; provided, however, that if the
Independent Accountant finds the express terms of this Agreement are
not sufficient to resolve any issue or issues, the Independent
Accountant shall rely upon GAAP as then in effect. The determination
of the Independent Accountant shall be final, binding and conclusive
on the parties hereto, and the fees and expenses of the Independent
Accountant shall be borne by the party who is not the substantially
prevailing party, as determined by the Independent Accountant based on
the Independent Accountant's resolution of the issues. If the
Independent Accountant is unable to make a determination of which
party is the substantially prevailing party, Buyer, on the one hand,
and Sellers, on the other hand, shall share the expenses of the
Independent Accountant equally.
(e) From and after the Closing Date, Buyer shall provide Sellers
and their representatives (and the Independent Accountant, if one has
been appointed), upon reasonable notice, with free and full access to
the books, records and personnel of Buyer reasonably requested by
Sellers or their representatives (or the Independent Accountants) to
assist Sellers or their representatives (or the Independent
Accountants) in the review of the Working Capital Schedule or
resolution of any disputes relating thereto.
(f) The Working Capital Schedule shall set forth the (x) Current
Assets and Current Liabilities of Sellers existing as of the opening
of business on the Closing Date, (y) extent to which such Current
Liabilities exceed Current Assets as of the opening of business on the
Closing Date, and (z) the amount that such excess was less than or
greater than the Reference Number. For clarification purposes,
Schedule 2.03(f) sets forth the format for the Working Capital
Schedule.
(g) In the event the Purchase Price Adjustment (as finally
determined in accordance with the provisions set forth above) differs
from the Initial Adjustments Amount:
(i) if the Current Liabilities minus Current Assets plus the
Initial Adjustments Amount (if the Initial Adjustments Amount was
made in Sellers' favor) or minus the Initial Adjustments Amount
(if the Initial Adjustments Amount was made in Buyer's favor)
(the "Final Calculation") is less than the Reference Number, then
Buyer shall pay to Sellers the amount by which the Reference
Number exceeds the Final Calculation; and
(ii) if the Final Calculation is greater than the Reference
Number, then Sellers shall pay to Buyer the amount by which the
Final Calculation exceeds the Reference Number.
All payments hereunder shall be paid promptly (within five business
days) in immediately available funds. All references in this Section
2.03(g) to Current Liabilities or Current Assets shall be to the
Current Liabilities or Current Assets, as the case may be,
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set forth in the Working Capital Schedule as finally determined in
accordance with this Section 2.03.
(h) Current Assets shall mean: all PCS Assets of a type
determined in accordance with GAAP as of the Closing Date to be
"deposits" or "prepaid expenses," provided that such prepaid expenses
shall not include prepaid insurance.
(i) Current Liabilities shall mean all liabilities, obligations
and commitments that relate to the PCS Assets and are of a type
determined to be "current liabilities" in accordance with GAAP as of
the Closing Date, and shall for purposes hereof include the Clearance
Liabilities whether or not they constitute current liabilities in
accordance with GAAP.
2.04 Payment of Purchase Price and Assumption of Liabilities. On the
Closing Date, Buyer shall (i) pay towards the Purchase Price, to Sellers, an
amount equal to the Preliminary Purchase Price, minus the FCC Payoff Amount,
minus the amount of the Escrow Deposit, and less or plus the amount of any
Initial Adjustments Amount (the "Sellers' Closing Payment"), payable by wire
transfer of immediately available funds to such account(s) as Sellers shall
designate prior to the Closing Date, (ii) pay to the FCC, the FCC Payoff Amount,
payable by wire transfer of immediately available funds to such accounts(s) as
the FCC shall designate prior to the Closing Date, and (iii) assume and agree to
pay, discharge and perform the Assumed Liabilities as and when due in accordance
with the assumption agreement attached as Exhibit C hereto (the "Assumption
Agreement").
2.05 Escrow.
(a) Deposit in Escrow. Concurrently with the Closing, Buyer shall
deposit in escrow (the "Escrow Deposit") with the Escrow Agent
$60,000,000 (such amount and any proceeds and including interest
accrued thereon and any additions, substitutions or other property in
which the same may be invested to be referred to herein as the "Escrow
Fund"), to be held in escrow by the Escrow Agent pursuant to the
Escrow Agreement. The Escrow Fund shall be used to satisfy the
Sellers' obligations to indemnify and hold the Indemnified Buyer
Parties harmless pursuant to Article 10 of this Agreement.
(b) Settlement of Escrow. To the extent that the Escrow Fund has
not been distributed to the Indemnified Buyer Parties pursuant to the
terms of the Escrow Agreement and to the extent the Escrow Fund is not
required to be retained by the Escrow Agent in connection with any
pending claims as provided for by the Escrow Agreement, a portion of
the Escrow Fund shall be distributed to the Sellers on the first
business day following the six month anniversary of the Closing Date,
and the remainder of the Escrow Fund shall be distributed to the
Sellers on the first business day following the first anniversary of
the Closing Date, all in accordance with the terms of the Escrow
Agreement.
2.06 Sales and Transfer Taxes. Sellers (collectively) and Buyer shall
each pay or cause to be paid at the Closing or, if due thereafter, promptly when
due, one-half of the sum of all sales, use, transfer and documentary taxes
applicable to the transfer of the PCS Assets to Buyer at Closing.
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3. Representations and Warranties of Sellers.
To induce Buyer to enter into this Agreement, Sellers represent and
warrant to Buyer as follows:
3.01 Organization and Authority of Sellers. Each Seller is duly
organized. validly existing and in good standing under the laws of its
jurisdiction of organization.
3.02 Legal Capacity; Approvals and Consents.
(a) Authority and Binding Effect. Subject to Section 9.02 hereof
and the consents and approvals set forth on Schedule 3.02, Sellers
have all requisite power and authority to execute, deliver and perform
this Agreement. Sellers have duly taken all limited liability company
and member actions necessary to authorize the execution, delivery and
performance of this Agreement. This Agreement has been, and the
Ancillary Documents will be, duly executed and delivered by Sellers,
and this Agreement is, and the Ancillary Documents will be, the valid
and binding obligation of Sellers, enforceable against each of them in
accordance with their terms, except as such enforceability may be
affected by laws of bankruptcy, insolvency, reorganization and
creditors' rights generally and by the availability of equitable
remedies.
(b) No Breach. Subject only to obtaining the consents and
approvals set forth on Schedule 3.02, the execution, delivery and
performance of this Agreement does not and will not, and the
execution, delivery and performance of the Ancillary Documents will
not, (i) contravene or conflict with the relevant organizational
documents of Sellers, (ii) violate, breach or conflict with any
provision of or constitute a default under or permit the termination,
suspension, modification or impairment of any PCS License, Law,
Judgment, or Material Contract to which any of Sellers is a party or
by which any of Sellers or any of the PCS Assets is subject or bound;
or (iii) create or impose any Encumbrance upon any of the PCS Assets
other than a Permitted Encumbrance, except, in the case of clauses
(ii) through (iii) above, for those exceptions which would not,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
(c) Required Consents. Other than approvals and filings under the
HSR Act and Rules, the consent of the FCC to the assignment of the PCS
Licenses and the consent of the parties listed in Schedule 3.02, there
are no parties whose approval or consent, or with whom the filing of
any certificate, notice, application, report or other document, is
legally or contractually required or otherwise is necessary in
connection with the execution, delivery or performance of this
Agreement by Sellers, except (i) notice filings required to be made in
certain states which Sellers covenant shall be timely made and (ii)
where failure to obtain such consent or approval or failure to make
such filing would not reasonably be expected to have a Material
Adverse Effect.
3.03 Tax Matters. Sellers have duly filed all material Federal, state,
local and foreign income, information, franchise, sales, use, property, excise
and payroll and other tax returns or reports (herein "Tax Returns") required to
be filed by Sellers on or prior to the date hereof. All material taxes, fees and
assessments that are shown on such Tax Returns as due or payable by Sellers on
or before the date hereof and that might result in an Encumbrance upon any of
the PCS
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Assets have been duly paid. Except as set forth in Schedule 3.03, Sellers have
received no notice or assessment to the effect that there is any unpaid tax,
interest, penalty or addition to tax due or claimed to be due from Sellers in
respect of such Tax Returns; Sellers have received no notice of the assertion or
threatened assertion of any Encumbrances with respect to any PCS Assets on
account of any unpaid taxes; and no audits of such Tax Returns by any
Governmental Authority are pending or, so far as Sellers know, threatened. None
of the Sellers is a corporation for Federal income tax purposes. Each Seller
which is a disregarded entity for Federal income tax purposes is neither (i)
directly owned by an entity which is a corporation for Federal income tax
purposes, nor (ii) indirectly wholly owned by an entity which is a corporation
for Federal income tax purposes.
3.04 PCS Assets.
(a) Title; Encumbrances. Sellers have, or will have at Closing:
(i) good, valid and marketable title to all of the tangible personal
property and fixtures and Real Property owned in fee included in the
PCS Assets and (ii) the right and authority (subject to the required
consents specified herein) to transfer to Buyer all of Sellers' right,
title and interest in and to the other property or rights included in
the PCS Assets, in each instance free and clear of any Encumbrances or
defects in title except Permitted Encumbrances.
(b) Real Property. Schedule 3.04(b) sets forth a list of all Real
Property owned or leased by Sellers that is included in the PCS
Assets.
(c) Condition of Tangible Assets. All of the tangible PCS Assets,
including without limitation all network equipment, are in good
working condition and repair, subject to normal wear and maintenance.
(d) Environmental Matters. Except as disclosed in Schedule
3.04(d), (i) to the knowledge of Sellers, the PCS Assets comply with
applicable Environmental Laws; (ii) to the knowledge of Sellers,
Sellers have obtained all Environmental Permits which are required to
operate the PCS Assets; (iii) Sellers have not received any written
notice from any Governmental Authority alleging that the PCS Assets
are in violation of, or require remediation under, any applicable
Environmental Law; (iv) to the knowledge of Sellers, the PCS Assets
are not the subject of any court order, administrative order, notice,
demand letter, investigation or decree arising under any Environmental
Law; (v) to the knowledge of Sellers, except in compliance with
Environmental Laws, there has been no release, generation, storage,
discharge or disposal of any Hazardous Substances at, to or from the
PCS Assets as a result of any actions or omissions by Persons other
than Sellers, and (vi) except in compliance with Environmental Laws,
there has been no release, generation, storage, discharge or disposal
of any Hazardous Substances at, to or from the PCS Assets as a result
of any actions or omissions by Sellers.
(e) PCS Licenses. Exhibit A sets forth a list of all PCS
Licenses. Each of the PCS Licenses is valid and in full force and
effect. Sellers are in compliance with the terms and conditions of all
such PCS Licenses except where such non-compliance would not
reasonably be expected to have a Material Adverse Effect. Except as
disclosed in Schedule 3.04(e), Sellers have not received any notice of
any claimed or purported default with respect to any PCS License and
there are no proceedings pending, or, to the
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knowledge of Sellers, threatened, to cancel, modify or change any such
PCS License, except in each case as would not reasonably be expected
to have a Material Adverse Effect. Except as set forth in Schedule
3.04(e), Sellers have submitted to the FCC all filings and payments
that are required under the rules and regulations of the FCC. Sellers
have made available to Buyer copies of all reports and filings since
January 1, 2002, made or filed pursuant to FCC rules and regulations.
(f) Microwave Clearance Liabilities. Except for such liabilities
and obligations as are set forth on Schedule 3.04(f), to the knowledge
of Sellers, no Clearance Liabilities will be due and payable as of the
Closing Date.
(g) Material Contracts. Schedule 3.04(g) identifies all Material
Contracts in effect on the date of this Agreement. "Material
Contracts" means any contract, mortgage, deed of trust, bond,
indenture, lease, license (other than the PCS Licenses), note,
certificate, option, warrant, right or other instrument, document or
agreement to which any of Sellers is a party or by which any of the
Sellers or the PCS Assets are bound that does not relate exclusively
to the Excluded Assets and that (i) requires in any calendar year
payments aggregating $25,000 or more, (ii) cannot be terminated within
six months without penalty, or (iii) is related to cell site or tower
rental, retail, reseller or roaming services, agency, distribution or
similar arrangements, interconnection or political contributions.
Except as set forth on Schedule 3.04(g), Sellers have made available
to Buyer true, accurate and complete copies of each such Material
Contract, including all amendments thereto.
(h) Compliance with Law. Except as set forth in Schedule 3.04(h),
the PCS Assets are owned and used by Sellers in compliance with all
applicable laws, regulations and other requirements of Governmental
Authorities, PCS Licenses and Material Contracts except where the
violation of any of the foregoing would not reasonably be expected to
have a Material Adverse Effect, including, but not limited to,
compliance in all material respects with the Communications Act of
1934, as amended, and the rules and regulations promulgated
thereunder.
3.05 Labor Contracts and Actions.
(a) No Seller is a party to any contract with any labor
organization, nor has any Seller agreed to recognize any union or
other collective bargaining unit, nor has any union or other
collective bargaining unit been certified as representing any of the
employees of any Seller with respect to the operation of the PCS
Assets, and no organizational effort is being made or, to the
knowledge of Sellers, is threatened by or on behalf of any labor union
or any employee with respect to the PCS Operations.
(b) As of the date of this Agreement, no Seller is experiencing
any strikes, work stoppages, significant grievance proceedings or, to
the knowledge of Sellers, claims of unfair labor practices filed with
respect to the PCS Operations.
3.06 Employee Benefits and Arrangements. Under no circumstances (other
than Buyer's voluntary assumption of such liability) will Buyer have any
liability for benefits or otherwise under any Seller Employee Benefit Plan, and
neither any Seller nor any ERISA Affiliate has agreed with or represented to any
third party (including, but not limited to current or
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former employees) that any buyer or transferee of the PCS Assets will assume or
be liable for any benefits or compensation obligations under any Seller Employee
Benefit Plan.
3.07 Defaults. Except as set forth in Schedule 3.07, there are no
defaults by Sellers under any of the Material Contracts (nor have Sellers
received written notice of a threatened default or notice of default) which
could reasonably be expected to have a Material Adverse Effect.
3.08 Legal and Governmental Proceedings and Judgments. Except as may
affect the PCS industry generally in the United States, or as set forth on
Schedule 3.08, there is no legal action or proceeding pending or, to the
knowledge of Sellers, any investigation pending or threatened against Sellers or
the PCS Assets, nor is there any Judgment outstanding against Sellers or to or
by which Sellers or the PCS Assets is subject or bound, which (i) results in any
modification, termination, suspension, impairment or reformation of any PCS
License or Contract or any right or privilege thereunder in a manner that could
reasonably be expected to have a Material Adverse Effect or (ii) materially
adversely affects the ability of Sellers to consummate any of the transactions
contemplated hereby.
3.09 Insolvency. None of the Sellers has initiated any insolvency or
bankruptcy proceeding.
3.10 Finders and Brokers. Sellers have employed the broker or brokers
named in Schedule 3.10 in the sale provided herein and will pay and discharge
the claim thereof for commission or expense reimbursement in connection
therewith. Sellers have not entered into any other contract, arrangement or
understanding with any Person or firm, nor are they aware of any claim or basis
for any claim based upon any act or omission of Sellers or any of their
affiliates which may result in the obligation of Buyer to pay any finder's fees,
brokerage or agent's commissions or other like payments in connection with the
negotiations leading to this Agreement or the consummation of the transactions
contemplated hereby.
3.11 Books of Account; Pro Forma Balance Sheet; Indebtedness.
(a) With respect to the PCS Operations, the books of account and
related records of Sellers fairly reflect in all material respects in
reasonable detail their assets, liabilities and results of operations
on a consistent basis. Sellers have not engaged in any operations or
used funds of Sellers with respect to the PCS Operations except for
operations or funds that have been and are reflected in all material
respects in the normally maintained books and records of Sellers.
(b) Set forth in Schedule 3.11(b) is a true and complete copy of
the Pro Forma Balance Sheet for Northcoast Communications, L.L.C. on
September 30, 2002 (the "Pro Forma Balance Sheet"). The Pro Forma
Balance Sheet includes all of the assets of Sellers that are utilized
principally by the PCS Operations and all of the liabilities of the
Sellers that relate principally to the PCS Operations on September 30,
2002, to the extent that such assets and liabilities are required to
be reflected thereon pursuant to GAAP (except that footnote disclosure
normally presented in financial statements prepared in accordance with
GAAP has been condensed or omitted), and do not reflect any other
assets or liabilities.
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(c) Schedule 3.11(c) sets forth a true and complete list of all
liabilities for indebtedness for borrowed money related to the PCS
Assets, including the name of the lender and the amount of principal
owed as of September 30, 2002.
3.12 Material Changes. Except as disclosed on Schedule 3.12, since
September 30, 2002, no event has occurred that would be reasonably likely to
have a Material Adverse Effect.
3.13 Intellectual Property. Except as disclosed on Schedule 3.13, (i)
in conducting the PCS Operations as presently conducted, to the knowledge of
Sellers, none of the Sellers, nor any of their affiliates, is infringing upon or
unlawfully or wrongfully using any patent, trademark, trade name, service ▇▇▇▇,
copyright or any other form of intellectual property or, to the knowledge of
Sellers, any trade secret, owned or claimed by another and (ii) no Seller is in
default under, or has received any written notice of any claim of infringement
or any other claim or proceeding relating to, any such patent, trademark, trade
name, service ▇▇▇▇, copyright, trade secret or any other form of intellectual
property or any agreement relating thereto.
4. Representations and Warranties of Buyer.
To induce Sellers to enter into this Agreement, Buyer represents and
warrants to Sellers as follows:
4.01 Organization and Authority of Buyer. Buyer is a general
partnership duly organized and validly existing under the laws of the State of
Delaware.
4.02 Legal Capacity; Approvals and Consents.
(a) Authority; Binding Effect. Buyer has all requisite power and
authority to execute, deliver and perform this Agreement. Buyer has
duly taken all actions necessary to authorize the execution, delivery
and performance of this Agreement. This Agreement has been, and the
Ancillary Documents will be, duly executed and delivered by Buyer, and
this Agreement is, and the Ancillary Documents will be, the valid and
binding obligation of Buyer, enforceable against it in accordance with
its terms, except as such enforceability may be affected by laws of
bankruptcy, insolvency, reorganization and creditors' rights generally
and by the availability of equitable remedies.
(b) No Breach or Violation. The execution, delivery and
performance of this Agreement does not and will not, and the
execution, delivery and performance of the Ancillary Documents will
not, (i) contravene or conflict with the relevant organizational
documents of Buyer or (ii) violate, breach or conflict with or result
in a breach or violation by Buyer of, or constitute a default under,
any Law, Judgment, material contract, arrangement or understanding to
which Buyer is a party or by which Buyer is subject or bound except,
in the case of clause (ii), for those exceptions which would not,
individually or in the aggregate, reasonably be expected to be
material.
4.03 Legal and Governmental Proceedings and Judgments. There is no
legal action, proceeding, investigation or controversy pending or, to the
knowledge of Buyer, threatened against or otherwise involving Buyer, nor are
there any Judgments outstanding against Buyer or to or by which Buyer is, or may
be, subject or bound which materially adversely affect the ability of Buyer to
consummate any of the transactions contemplated hereby.
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4.04 Finders and Brokers. Buyer has not entered into any contract,
arrangement or understanding with any Person, and is not aware of any claim or
basis for any claim based upon any act or omission of Buyer or any of its
affiliates, which may result in the obligation of Sellers to pay any finder's
fees, brokerage or agent's commissions or other like payments in connection with
the negotiations leading to this Agreement or the consummation of the
transactions contemplated hereby.
4.05 Buyer Consents. Other than approvals and filings as required under
the HSR Act and Rules, the consent of the FCC to the transfer of the PCS
Licenses or as set forth on Schedule 4.05, no consent, order, authorization,
waiver, approval or any other action by, or registration, declaration or filing
with, any third party or Governmental Authority is required for Buyer to execute
and deliver this Agreement and consummate the transactions contemplated hereby
except (i) for notice filings required to be made in certain states which Buyer
covenants shall be timely made and (ii) where failure to obtain such consent or
approval or failure to make such filing would not reasonably be expected to be
material.
4.06 Insolvency. Buyer has not initiated any insolvency or bankruptcy
proceeding.
4.07 Acquisition of Rights. Buyer is not aware of, and has no reason to
believe there is, any reason relating to Buyer that any Governmental Authority
whose consent is required or contemplated hereunder, would refuse to consent to
the transfer of the PCS Licenses or the other PCS Assets to Buyer hereunder or
would condition granting of any such consent on the performance by Sellers or
Buyer of any material obligation not expressly set forth herein.
4.08 Buyer's Financial Capability. Buyer has the financial capability,
including all financing, necessary to consummate the transactions contemplated
in this Agreement and pay the Purchase Price.
5. Covenants Pending Closing.
5.01 Business of Sellers. From the date hereof to the Closing Date, and
except as otherwise consented to or approved by Buyer in writing (which consent
shall not be unreasonably withheld or delayed), Sellers covenant and agree as
follows:
(a) Business in Ordinary Course. Except as otherwise provided
herein, Sellers shall conduct the PCS Operations in the ordinary
course, consistent with past practices, and will not engage in any
material transaction, including, without limitation, entering into or
amending in any material respect any PCS License or Contract, other
than in the ordinary course of business, nor change in any material
respect its business policies or practices. Subject to the foregoing,
and except as otherwise provided herein, Sellers shall use their
reasonable commercial efforts to preserve the PCS Assets, including
the PCS Licenses, intact. Sellers shall pay before delinquent all
taxes and other charges upon or against Sellers or any of their
properties or income, file when due all tax returns and other reports
required by Governmental Authorities and pay when due all liabilities
except those which they choose to contest in good faith and by
appropriate proceedings. Sellers shall maintain their right and
interest in and the validity of, the PCS Licenses, and shall not
engage in any action or omit to take any action which would be
reasonably likely to result in a material adverse effect on the PCS
Licenses. Sellers shall comply with all laws, rules and regulations
applicable to the PCS Licenses except to the
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extent that any non-compliance would not be reasonably likely to have
a Material Adverse Effect. Sellers shall promptly provide Buyer with
copies of all applications or other correspondence to the FCC and any
notices, orders or correspondence received from the FCC with respect
to the PCS Licenses.
(b) Litigation During Interim Period. Sellers will advise Buyer
in writing promptly of the assertion, commencement or threat of any
claim, litigation, labor dispute, proceeding or investigation in which
any Seller is a party or by which the PCS Assets may be affected and
which could reasonably be expected to have a Material Adverse Effect
or which relates to the transactions contemplated hereby.
(c) Material Contracts. Sellers shall deliver to Buyer copies of
all Material Contracts that are entered into after the date hereof and
prior to the Closing, promptly after their execution and delivery by
all the parties thereto.
5.02 Access to Information. Between the date of this Agreement and the
Closing, Buyer shall have reasonable access during normal business hours to the
employees, properties, books, reports, records, PCS Licenses and Contracts of
Sellers, and Sellers shall furnish Buyer with all information it may reasonably
request. All information obtained by Buyer pursuant to this Agreement and in
connection with the negotiation hereof shall be used by Buyer solely for
purposes related to this Agreement and the acquisition of the PCS Assets and, in
the case of non-public information, shall, except as may be required for the
performance of this Agreement or by Law, be kept in strict confidence by Buyer
in accordance with the terms of the Confidentiality Agreement dated September
18, 2002, between Buyer and Northcoast.
5.03 Non-solicitation. Prior to the Closing, none of the Sellers shall,
directly or indirectly, sell, agree to sell, solicit inquiries or proposals or
furnish any non-public information with respect to a sale or inquiry or proposal
for sale, or initiate or participate in any negotiations or discussions
whatsoever concerning any acquisition or purchase of, outside of the ordinary
course of business, any or all of the PCS Assets. The Sellers shall instruct
their officers, affiliates, employees and agents to refrain from doing any of
the above.
5.04 Certain Employee Matters.
(a) For the avoidance of doubt, Buyer does not intend to, and
will not, offer employment to any employees of the Sellers or their
affiliates in connection with the consummation of the transactions
contemplated hereby, and nothing contained in this Agreement shall
confer upon any employees of Sellers or their affiliates any right
with respect to continued employment by any Seller or any affiliate of
a Seller or to commence employment with Buyer or any affiliate of
Buyer.
(b) Sellers shall deliver any notice required under COBRA as a
result of the termination of any of their employees.
5.05 Transferring Subsidiaries. To the extent any of the PCS Assets are
owned by subsidiaries of Northcoast other than Boston LLC, New York LLC or
Cleveland PCS, LLC, Northcoast, Boston LLC and New York LLC shall cause such
subsidiaries to sell, convey, transfer, assign and deliver all of such
subsidiaries' right, title and interest to such PCS Assets to Buyer at the
Closing. Each such subsidiary shall be deemed a "Seller" for purposes hereof.
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5.06 Termination of Cell Site Leases.
(a) Notwithstanding Sections 5.01(a) and 9.03, Sellers shall be
permitted to deliver to Buyer written notice (a "Cancellation Notice)
of its intent to terminate any cell site lease at least ten (10)
business days prior to the date Sellers intend to notify the landlord
for such cell site lease of its intent to effect a termination
thereof. Buyer shall, within five (5) business days of the delivery of
such notice, notify Sellers in writing if it objects to such
termination.
(b) If Buyer does not timely object to Sellers' determination to
effect such a termination, Buyer shall be deemed to have accepted
Seller's intent to effect such a termination, and Seller may terminate
such cell site lease in a manner which does not result in any
additional liability to Buyer.
(c) If Buyer timely objects to the proposed termination of such
cell site lease, Sellers shall not effect such termination, and Buyer
shall reimburse Sellers for all expenses under such cell site lease
from the date Buyer delivered a Cancellation Notice through and until
the Closing Date. Buyer and Sellers shall cooperate in obtaining any
consent needed to effectuate the assignment of the lease for such cell
site to Buyer at the Closing. In the event such consent is not
obtained, such lease shall not be assigned to Buyer at Closing and
Sellers may elect to either terminate such cell site lease or to
cooperate with Buyer in any commercially reasonable arrangement
designed to provide the benefits of such cell site lease to Buyer with
Buyer reimbursing Sellers for their costs incurred in providing such
benefits.
(d) Sellers shall not be deemed to have breached any
representation or warranty, set forth in Sections 3.02(b), 3.04(a),
3.04(b), 3.04(g) or 3.12 as a result of the termination of any cell
site lease, provided that Sellers have complied with this Section
5.06.
6. Deliveries at Closing.
6.01 Deliveries by Sellers. At the Closing, Sellers will deliver or
cause to be delivered to Buyer:
(a) such warranty deeds, bills of sale, endorsements, and other
good and sufficient instruments of conveyance, transfer and assignment
as are necessary to vest in Buyer the right, title and interest of
Sellers in accordance herewith in and to the PCS Assets in a form
reasonably satisfactory to Buyer, which shall include, without
limitation, a ▇▇▇▇ of sale and general assignment, substantially in
the form of Exhibit D hereto (the "▇▇▇▇ of Sale and General
Assignment"), duly executed by Sellers.
(b) The Assumption Agreement, substantially in the form of
Exhibit C hereto, duly executed by Sellers.
(c) A certificate signed by a principal officer of each Seller,
dated as of the Closing, representing and certifying to Buyer as to
the matters set forth in Sections 7.03 and 7.04.
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(d) Evidence in a form and substance reasonably satisfactory to
Buyer that the consents and approvals listed in Schedule 3.02 as
required as conditions to the transactions contemplated hereunder have
been obtained.
(e) An opinion as to FCC matters substantially in the form set
forth as Exhibit E hereto.
(f) An opinion of counsel reasonably satisfactory to Buyer,
addressed to Buyer, in form reasonably satisfactory to Buyer,
containing customary provisions and qualifications as to the
organization of Sellers, the authorization of this Agreement by
Sellers, the due execution and delivery of this Agreement by Sellers
and the enforceability of this Agreement against Sellers.
(g) An affidavit from each Seller (or, for each Seller which is a
disregarded entity for Federal income tax purposes, from the
applicable owner of such Seller which is not a disregarded entity)
stating, under penalty of perjury, such Person's United States
taxpayer identification number and that such Person is not a foreign
person, pursuant to section 1445(b)(2) of the Internal Revenue Code.
(h) One or more clearance certificates or similar documents which
are required by any state taxing authority in order to relieve Buyer
of any obligation to withhold any portion of the Purchase Price;
provided, that this requirement shall apply only to the extent that
the failure to obtain such a certificate or similar document would
violate state law.
6.02 Deliveries by Buyer to Sellers. At the Closing, Buyer will deliver
or cause to be delivered to Sellers:
(a) The Preliminary Purchase Price less the FCC Payoff Amount
less the Escrow Deposit plus or minus the Initial Adjustments Amount
as provided in Section 2.03.
(b) The ▇▇▇▇ of Sale and General Assignment, substantially in the
form of Exhibit D hereto, duly executed by Buyer.
(c) The Assumption Agreement, substantially in the form of
Exhibit C hereto, duly executed by Buyer.
(d) A certificate signed by a principal officer of Buyer, dated
as of the Closing, representing and certifying to Sellers as to the
matters set forth in Sections 8.03 and 8.04.
(e) Evidence in a form and substance reasonably satisfactory to
Sellers that the consents and approvals referred to in Section 4.05
have been obtained.
(f) An opinion of counsel reasonably satisfactory to Sellers (it
being understood that either of Messrs. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ or ▇▇▇▇▇▇
▇▇▇▇▇▇▇ is acceptable for these purposes), addressed to Sellers, in
form reasonably satisfactory to Sellers, containing customary
provisions and qualifications as to the organization of Buyer, the
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authorization of this Agreement by Buyer, the due execution and
delivery of this Agreement by Buyer and the enforceability of this
Agreement against Buyer.
6.03 Additional Deliveries by Buyer and Sellers.
(a) At the Closing, Buyer and Sellers will deliver or cause to be
delivered to each other and to the Escrow Agent, the Escrow Agreement,
duly executed by Buyer or the Sellers, as the case may be, and Buyer
shall deliver to the Escrow Agent the Escrow Deposit.
(b) At the Closing, Buyer shall pay the FCC Payoff Amount to the
FCC.
7. Conditions to the Obligations of Buyer.
The obligations of Buyer to complete the transactions provided for
herein are subject to the fulfillment of all of the following conditions, any of
which may be waived in writing by Buyer:
7.01 Receipt of Consents. The conditions specified in Section 9.02
shall have been satisfied and all of the approvals and consents described in
Schedule 4.05 required as conditions to the Closing shall have been obtained and
shall be in full force and effect. The FCC's consent to the assignment of the
PCS Licenses from Sellers to Buyer shall have become a Final Order, and shall
not contain any restrictions, conditions or limitations that are material and
adverse, other than any such restrictions, conditions or limitations imposed as
a result of any actions or omissions of Buyer or any of its affiliates.
7.02 Sellers' Authority. All actions under the documents governing
Sellers necessary to authorize (i) the execution and delivery of this Agreement
by Sellers and the performance by Sellers of their obligations under this
Agreement and (ii) the consummation of the transactions contemplated hereby,
shall have been duly and validly taken by Sellers and shall be in full force and
effect on the Closing Date.
7.03 Performance by Sellers. Sellers shall have performed in all
material respects their agreements and covenants hereunder (including, without
limitation, their covenants in Articles 5 and 6) to the extent such are required
to be performed at or prior to the Closing.
7.04 Absence of Breach of Warranties and Representations. The
representations and warranties of Sellers contained in this Agreement shall be
true and correct in all respects (disregarding the terms "material,"
"materially," "materiality," "in all material respects," "material adverse
effect," "Material Adverse Effect" or similar qualifications as to materiality
contained therein) on and as of the Closing Date with the same force and effect
as if made on and as of such date, except (i) to the extent that such
representations and warranties describe a condition on a specified time or date
or are affected by the conclusion of the transactions permitted or contemplated
hereby or the conduct of the Sellers' business insofar as it relates to the PCS
Assets in accordance with Article 5 hereof between the date hereof and the
Closing Date, or (ii) where the failure of such representations and warranties
to be true and correct, individually or in the aggregate, does not have, has not
had and would not reasonably be expected to have, a Material Adverse Effect.
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7.05 Absence of Proceedings. No Judgment shall have been issued, and no
action or proceeding shall have been instituted by any Governmental Authority,
enjoining or preventing the consummation of the transactions contemplated hereby
or which has had or would be reasonably likely to have a Material Adverse
Effect.
7.06 Repayment of Indebtedness. At or prior to the Closing, Sellers
shall have repaid or caused to repaid and discharged all indebtedness for
borrowed money of Sellers relating to the PCS Assets other the FCC Payoff
Amount.
7.07 FCC Payoff Letter. The FCC shall have issued the FCC Payoff Letter
prior to Closing, and the Sellers shall have provided Buyer with a copy of such
FCC Payoff Letter.
8. Conditions to the Obligations of Sellers.
The obligations of Sellers to complete the transactions provided for
herein are subject to the fulfillment of all of the following conditions, any of
which may be waived in writing by Sellers:
8.01 Receipt of Consents. The conditions specified in Section 9.02
shall have been satisfied and all of the approvals and consents described in
Schedule 3.02 required as conditions to the Closing shall have been obtained and
shall be in full force and effect. The FCC's consent to the assignment of the
PCS Licenses from Sellers to Buyer shall have become a Final Order.
8.02 Buyer's Authority. All actions under the documents governing Buyer
necessary to authorize (i) the execution and delivery of this Agreement by Buyer
and the performance by Buyer of its obligations under this Agreement and (ii)
the consummation of the transactions contemplated hereby, shall have been duly
and validly taken by Buyer and shall be in full force and effect on the Closing
Date.
8.03 Performance by Buyer. Buyer shall have performed in all material
respects all covenants and agreements to be performed by it hereunder to the
extent such are required to be performed at or prior to the Closing.
8.04 Absence of Breach of Representations and Warranties. The
representations and warranties of Buyer contained in this Agreement shall be
true and correct in all respects (disregarding the terms "material,"
"materially," "materiality," "in all material respects," "material adverse
effect" or similar qualifications as to materiality contained therein) on and as
of the Closing Date with the same force and effect as if made on and as of such
date, except where the failure of such representations and warranties to be true
and correct, individually or in the aggregate, was not, is not and would not
reasonably be expected to be material.
8.05 Absence of Proceedings. No Judgment shall have been issued, and no
action or proceeding shall have been instituted by any Governmental Authority,
enjoining or preventing the consummation of the transactions contemplated
hereby.
8.06 Repayment of Indebtedness. Buyer shall have paid to the FCC the
FCC Payoff Amount.
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9. Covenants.
9.01 Compliance with Conditions. Each of the parties hereto covenants
and agrees with the other to exercise reasonable commercial efforts to perform,
comply with and otherwise satisfy each and every one of the conditions to be
satisfied by such party hereunder, and each party shall use reasonable
commercial efforts to notify promptly the other if it shall learn that any
conditions to performance of either party will not be fulfilled.
9.02 Compliance with HSR Act and Rules.
(a) The performance of the obligations of all parties under this
Agreement is subject to the condition that, if the HSR Act and Rules
are applicable to the transactions contemplated hereby, the waiting
period specified therein, as the same may be extended, shall have
expired without action taken to prevent the consummation of the
transactions contemplated hereby.
(b) Each of the parties hereto will use its reasonable commercial
efforts to comply promptly with any applicable requirements under the
HSR Act and Rules relating to filing and furnishing of information to
the FTC and the DOJ, the parties' actions to include, without
limitation, (i) filing or causing to be filed the HSR Report required
to be filed by them, or by any other Person that is part of the same
"person" (as defined in the HSR Act and Rules) or any of them, and
taking all other action required by the HSR Act or Rules; (ii)
coordinating the filing of such HSR Reports (and exchanging mutual
information required to be disclosed therein) so as to present both
HSR Reports to the FTC and the DOJ at the time selected by the mutual
agreement of Sellers and Buyer, and to avoid substantial errors or
inconsistencies between the two in the description of the transaction;
and (iii) using their reasonable commercial efforts to comply
reasonably promptly with any additional request for documents or
information made by the FTC or the DOJ or by a court and assisting the
other parties to so comply.
(c) Notwithstanding anything herein to the contrary, in the event
that the consummation of the transactions contemplated hereby is
challenged by the FTC or the DOJ by an action to stay or enjoin such
consummation, then either Buyer or Sellers shall have the right to
terminate this Agreement unless the party seeking such termination has
materially breached its obligations under this Agreement, and unless
the other of such parties, at its sole cost and expense, elects to
contest such action, in which case the noncontesting party shall
cooperate with the contesting party and assist the contesting party,
as reasonably requested, to contest such action until such time as
either party terminates this Agreement under this Section or Article
12. In the event that such a stay or injunction or a temporary
restraining order is granted (preliminary or otherwise) by a Federal
court then either Buyer or Sellers may terminate this Agreement by
prompt written notice to the other. To effectuate the intent of the
foregoing provisions of this Section 9.02, the parties agree to
exchange requested or required information in making the filings and
in complying as above provided, and the parties agree to take all
necessary steps to preserve the confidentiality of the information set
forth in any filings including, without limitation, limiting
disclosure of exchanged information to counsel for the nondisclosing
party, provided that the parties shall not be required to disclose to
each other confidential information regarding the valuation of the PCS
Assets, it being understood that the foregoing shall not restrict the
disclosure of such information on a
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confidential basis to the other parties' outside counsel or up to two
in-house counsel with responsibility for regulatory approval of the
transaction.
9.03 Application for Assignment of Contracts and PCS Licenses. Subject
to Sellers' right to terminate cell site leases pursuant to Section 5.06, in
order to secure requisite consents or approvals of the assignments to Buyer of
the Contracts and PCS Licenses, Sellers shall proceed as promptly as practicable
and in good faith and using reasonable commercial efforts, to prepare, file and
prosecute such application or applications as may be necessary to obtain each
consent or approval of the assignments of Contracts to Buyer that by its terms
requires such consent, and Buyer and Sellers shall proceed as promptly as
practicable and in good faith and using reasonable commercial efforts, to
prepare and file no later than 10 business days after the date hereof and
prosecute such application or applications as may be necessary to obtain each
consent or approval of the FCC of the assignments of the PCS Licenses to Buyer.
Buyer and Sellers shall use reasonable commercial efforts to promptly assist
each other and shall take such prompt and affirmative actions as may be
reasonably necessary in obtaining such approvals and shall cooperate with each
other in the preparation, filing and prosecution of such applications as may be
reasonably necessary, and agree to furnish all information required by the
approving entity, and to be represented at such meetings or hearings as may be
scheduled to consider such applications. In the event that at any time after the
date hereof Buyer or Sellers, or any of their respective affiliates, take any
action or enter into any transaction that would have the effect of materially
impeding, delaying or preventing the receipt of any regulatory approvals
necessary to effect the assignments to Buyer of the Contracts and the PCS
Licenses pursuant to this Agreement, such party or parties shall use its or
their best efforts to eliminate or otherwise mitigate as fully as possible any
such adverse effect on obtaining such approvals.
9.04 Records, Taxes and Related Matters. Sellers and Buyer shall each
make their respective books and records (including work papers in the possession
of their respective accountants) available for inspection by the other parties,
or by their duly authorized representatives, for reasonable business purposes at
all reasonable times during normal business hours, for a seven-year period after
the Closing Date with respect to all transactions relating to the PCS Assets
occurring prior to or relating to the Closing, and the historical financial
condition, assets, liabilities, results of operations and cash flows of the
business conducted in connection with PCS Assets for any period prior to the
Closing. In the case of records owned by Sellers, such records shall be made
available at the relevant Seller's executive office, and in the case of records
owned by Buyer, such records shall be made available at the office at which such
records are maintained. As used in this Section 9.04, the right of inspection
includes the right to make copies for reasonable business purposes.
9.05 Non-Assignment. Notwithstanding any provision to the contrary
contained herein (but not in limitation of Sellers' obligations under Section
9.03 or the conditions set forth in Section 7.01) but subject to Sellers' right
to terminate cell site leases pursuant to Section 5.06, Sellers shall not assign
to Buyer at Closing any Contract which provides that it may not be assigned
without the consent of the other party thereto and for which such consent is not
obtained, but in any such event, Sellers shall, to the extent reasonably
necessary and at Buyer's cost, cooperate with Buyer in any commercially
reasonable arrangement designed to provide the benefits thereof to Buyer.
9.06 Access by Sellers. Subsequent to the Closing, Buyer shall preserve
and provide Sellers reasonable access during normal business hours to all of the
books, reports, records, PCS
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Licenses and Contracts from files and records transferred to Buyer at the time
of Closing, for the purposes of the preparation of tax returns, the defense of
any claims asserted or which may be asserted with respect to which any Seller is
the Indemnitor as contemplated by the Agreement, or other proper business
purposes. Buyer shall give Sellers prior written notice of any intended
destruction or disposal of any such books, reports, records, PCS Licenses and
Contracts and, at Sellers' request, shall deliver any such books, reports,
records, PCS Licenses and Contracts to Sellers, provided that Sellers shall
reimburse Buyer for any out-of-pocket expenses incurred for copying and
shipping.
10. Survival of Representations, Warranties, Covenants and Other Agreements;
Indemnification.
10.01 Survival of Representations and Warranties. All representations
and warranties made by the parties in this Agreement shall survive the Closing
for a period of one year, and shall thereafter terminate. Any claim by an
Indemnitee against Sellers based upon breach of any such representation or
warranty made pursuant to this Article 10 must be submitted to the Indemnitor
prior to or at the expiration of the survival period, and in the case of claims
for indemnification against Sellers, in accordance with the terms and provisions
of the Escrow Agreement. There shall be no remedy, under this Agreement or
otherwise, for any claim made by an Indemnitee for breaches of representations
or warranties following the survival period. In the case of any claim submitted
within such time period, the right of the Indemnitee to recover from the
Indemnitor with respect to such claim shall not be dependent on the claim being
resolved or the Losses being incurred within such time period. Notwithstanding
any investigation or audit conducted before or after the Closing or the decision
of any party to complete the Closing, each party shall be entitled to rely upon
the representations, warranties, covenants and agreements set forth herein. The
waiver of any condition regarding the accuracy of any representation or
warranty, regarding the performance of or compliance with any covenant or
obligation or regarding any other matter, will not affect the right of
indemnification of the waiving party after the Closing based on the inaccuracy
of such representation or warranty or the nonperformance of or noncompliance
with such covenant or obligation, provided, however, that Buyer shall promptly
notify Sellers following its discovery (through actual knowledge) of such
inaccuracy of such representation or warranty or such nonperformance of or
noncompliance with such covenant or obligation.
10.02 Indemnification by Sellers.
(a) Indemnity. Subject to Section 10.01, and Section 10.02(b),
Sellers agree to indemnify, defend and hold harmless Buyer and its
affiliates and their respective shareholders, directors, officers,
members, partners, employees, agents, successors and assigns (an
"Indemnified Buyer Party"), for, from and against all losses, damages,
liabilities, deficiencies or obligations, including, without
limitation, all claims, actions, suits, proceedings, demands,
judgments, assessments, fines, interest, penalties, costs and expenses
(including, without limitation, settlement costs and reasonable legal
fees) (collectively, "Losses") to which they may become subject, incur
or suffer as a result of (i) the Excluded Liabilities, (ii) any and
all misrepresentations or breaches of a representation or warranty of
Sellers set forth in Article 3, or (iii) the nonperformance or breach
of any covenants or agreements of Sellers contained herein or in the
Ancillary Documents. All references to the terms "material,"
"materially," "materiality," "in all material respects," "material
adverse effect," "Material Adverse Effect" and similar
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qualifications as to materiality contained in any representation or
warranty of Sellers shall be ignored for purposes of Section
10.02(a)(ii).
(b) Payment from Escrow Fund.
(i) If any Indemnified Buyer Party shall become entitled to
any payments from the Sellers with respect to any matter for
which the Sellers have indemnified such party hereunder, such
Indemnified Buyer Party shall be entitled to receive from the
Escrow Fund (and in the case of breaches of representations and
warranties, only to the extent thereof) a cash payment equal to
the amount due to such Indemnified Buyer Party in accordance with
the terms and conditions of the Escrow Agreement. The amount of
such payment (and adjustment) shall be equal to the amount of
Loss incurred by the Indemnified Buyer Party on account of the
matter for which indemnification is required hereunder, less the
net amount of any payments made or to be made to the Indemnified
Buyer Party under any insurance, indemnity or similar policy or
arrangement. Following the distribution of the entire Escrow Fund
in accordance with the Escrow Agreement, payments to be made by
Sellers to an Indemnified Buyer Party pursuant to Section
10.02(a)(i) or Section 10.02(a)(iii) shall be made by the
Sellers.
(ii) Buyer acknowledges that except as provided by Section
13.13 its sole and exclusive remedy after the Closing with
respect to any and all claims relating to this Agreement shall be
pursuant to the indemnification provisions set forth in this
Article 10 and Buyer hereby waives, on behalf of itself and all
other Indemnified Buyer Parties, from and after the Closing, any
and all rights, claims and causes of action it may have against
the Sellers or any of their respective affiliates, members,
directors, officers or employees arising under or based upon any
law or arising under or based upon common law or otherwise
(except pursuant to the indemnification provisions set forth in
this Article 10), provided, however, that nothing in this Article
10 shall limit any claim Buyer may have in respect of fraud.
(c) Any obligations of the Sellers under this Section 10 shall
represent a retrospective adjustment to the Purchase Price.
Notwithstanding anything contained herein to the contrary, the
indemnification provided pursuant to Section 10.02(a)(ii) shall only
apply to the extent that, and not until, the aggregate of all amounts
subject to indemnification under Section 10.02(a)(ii) exceeds
$7,500,000 (the "Deductible") and as to any particular indemnity claim
or series of related indemnity claims under Section 10.02(a)(ii) only
to the extent that, and only if, such indemnity claim or series of
related indemnity claims equals or exceeds $25,000 (the "De Minimis").
In any event, the maximum, and only, amount that all Buyer Indemnified
Parties shall be entitled to in respect of all claims by all parties
pursuant to Section 10.02(a)(ii) is the amount of the Escrow Fund.
10.03 Indemnification by Buyer.
(a) Indemnity. Buyer agrees to indemnify, defend and hold
harmless Sellers and their affiliates and their respective
shareholders, members, partners, directors, officers, employees,
agents, successors and assigns (an "Indemnified Seller Party"), from
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and against all Losses to which they may become subject, incur or
suffer as a result of (i) the Assumed Liabilities, (ii) any and all
misrepresentations or breaches of a representation or warranty set
forth in Article 4 or in any Ancillary Document or (iii) the
nonperformance or breach of any covenants or agreements of Buyer
contained. All references to the terms "material", "materially",
"materiality", "in all material respects", "material adverse effect"
and similar qualifications as to materiality contained in any
representation or warranty of Buyer shall be ignored for purposes of
Section 10.03(a)(ii).
(b) Payment. Any obligations of Buyer under the provisions of
this Article 10 shall be paid promptly to the applicable Indemnified
Seller Party by Buyer and shall represent a retrospective adjustment
to the Purchase Price. The amount of such payment (and adjustment)
shall be equal to the amount of the Loss incurred by such Indemnified
Seller Party on account of the matter for which indemnification is
required hereunder, less the net amount of any payments made or to be
made to such Indemnified Seller Party under any insurance, indemnity
or similar policy or arrangement. Notwithstanding anything contained
herein to the contrary, the indemnification provided above shall only
apply to the extent that, and not until, the aggregate of all amounts
subject to indemnification under this Section 10.03(a)(ii) exceeds the
Deductible and as to any particular indemnity claim or series of
related indemnity claims only to the extent that, and only if, such
indemnity claim or series of related indemnity claims equals or
exceeds the De Minimis. In any event, the maximum amount that Buyer
will be required to pay under this Section 10.03 in respect of all
claims by all parties pursuant to Section 10.03(a)(ii) is $60,000,000.
10.04 Third Party Claims; Etc.
(a) If any claim ("Asserted Claim") covered by the foregoing
indemnities is asserted against any indemnified party ("Indemnitee"),
it shall be a condition to the obligations under this Article that the
Indemnitee shall promptly give the indemnifying party ("Indemnitor")
notice thereof in accordance with Section 13.05. The Indemnitee shall
give Indemnitor an opportunity to control negotiations toward
resolution of such claim without the necessity of litigation, and, if
litigation ensues, to defend the same with counsel reasonably
acceptable to Indemnitee, at Indemnitor's expense, and Indemnitee
shall extend reasonable cooperation in connection with such defense.
In addition, the Indemnitee shall be permitted to join in the defense
and settlement of the Asserted Claim and to employ counsel at its
expense. If the Indemnitor fails to assume control of the negotiations
prior to litigation or to defend such action within a reasonable time,
Indemnitee shall be entitled, but not obligated, to assume control of
such negotiations or defense of such action, and Indemnitor shall be
liable to the Indemnitee for its expenses reasonably incurred in
connection therewith which Indemnitor shall promptly pay. Neither
Indemnitor nor Indemnitee shall settle, compromise, or make any other
disposition of any Asserted Claims, which would or might result in any
liability to Indemnitee or Indemnitor, respectively, under this
Article 10 without the written consent of Indemnitee or Indemnitor,
respectively, which shall not be unreasonably withheld.
(b) If an Asserted Claim occurs, the indemnification provided for
in this Article 10 shall be the exclusive remedy of any party in
respect of any inaccuracy in any representations and warranties
contained herein.
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10.05 Replacement of Escrow Fund. At any time during the term of the
Escrow Agreement, Sellers may elect to terminate the Escrow Agreement and
replace the Escrow Fund with an irrevocable letter of credit, issued by a
commercial banking institution reasonably acceptable to Buyer and in form
reasonably acceptable to Buyer, in amount and with such documentary conditions
so as to duplicate mutatis mutandis the term and remaining amount of the Escrow
Fund as the source of indemnification to the Indemnified Buyer Parties by
Sellers under Section 10.02, in which case, upon the issuance of such letter of
credit to and for the Buyer, as beneficiary, the Escrow Agent shall pay to
Sellers the full balance of the Escrow Fund without regard to any amounts set
forth in any outstanding Notice(s) of Claim (as defined in the Escrow
Agreement), and references to the Escrow Fund in this Article 10 shall be deemed
to refer to such letter of credit as the context so indicates.
11. Further Assurances.
From time to time after the Closing, each party will execute and
deliver such other instruments of conveyance and transfer, fully cooperate with
the other party and take such other actions as the other party reasonably may
request to effect the purposes and intent of this Agreement. Subsequent to the
Closing, Sellers shall provide to Buyer a copy of any FCC lien release letter or
other evidence supplied to Sellers by the FCC that the notes associated with the
FCC Installment Payment Obligations have been cancelled.
12. Closing.
12.01 Closing.
(a) The Closing shall take place at the offices of Sellers'
outside counsel at 10:00 a.m., local time, on the fifth business day
after all conditions to the sale as provided in Articles 7 and 8 have
been satisfied other than those conditions which are to be satisfied
at the Closing, but in contemplation of the satisfaction of such
conditions (the "Closing Date"); provided, however, that (i) if the
Closing shall not have occurred prior to the first anniversary of the
date hereof (as the same may be extended under Section 12.01(b), the
"Outside Date"), this Agreement may be terminated by either Sellers or
Buyer unless Section 12.01(b) applies (provided that the failure to
achieve the Closing by the Outside Date has not proximately resulted
from a material breach of this Agreement by a party seeking to
terminate under this Section 12.01), and (ii) if the originally
scheduled Outside Date is extended pursuant to Section 12.01(b) and
the Closing shall not have occurred by the extended Outside Date, this
Agreement may be terminated by either Sellers or Buyer (provided that
the failure to achieve the Closing by the extended Outside Date has
not proximately resulted from a material breach of this Agreement by a
party seeking to terminate under this Section 12.01).
(b) Notwithstanding the foregoing, if after the date hereof and
prior to the originally scheduled Outside Date, Buyer or any of its
affiliates (excluding any such affiliate that is a member of the
Vodafone Group) enters into any agreement whereby it would acquire PCS
licenses in any market covered by the PCS Licenses and Closing does
not occur by such Outside Date solely by reason of the failure to
obtain a Final Order evidencing the FCC's consent to the assignment of
the PCS Licenses under this Agreement, Sellers may (so long as Sellers
did not breach their obligations with respect to efforts to seek the
FCC consent or approval under Section 9.03), at their election,
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terminate this Agreement by written notice to Buyer on or prior to the
originally scheduled Outside Date. If Sellers do not elect to so
terminate the Agreement, Buyer may, at its election, terminate this
Agreement by written notice to Sellers within two business days after
the receipt of Sellers' written notice or the originally scheduled
Outside Date, as applicable. If Buyer does not elect to so terminate
the Agreement, the Outside Date shall be extended by six months (and
for purposes of this Agreement, the Outside Date shall be the Outside
Date as so extended) and, if the Closing occurs, at the Closing Buyer
shall pay to Sellers in addition to the Purchase Price interest
accrued on the Purchase Price from the period starting on the first
anniversary of the date hereof through and including the Closing Date
at an annual rate of 10%. If Buyer elects to so terminate the
Agreement, Sellers shall use all reasonable commercial efforts in good
faith to sell the PCS Assets (or substantially all of the PCS Assets)
as expeditiously as reasonably possible to a bona fide purchaser
unaffiliated to Sellers with a view to maximizing value, it being
understood that the foregoing will not require the Sellers to enter
into any obligations more burdensome in the aggregate than those
contained in this Agreement (the "Second Transaction"), and at the
consummation of such Second Transaction Buyer shall pay to Sellers, by
wire transfer of immediately available funds, an amount equal to the
difference, if any, between (i) the sum of $750,000,000 together with
interest accrued thereon from the date this Agreement is terminated
through and including the closing date of such Second Transaction at
an annual rate of 10% and (ii) the purchase price paid to Sellers in
such Second Transaction.
(c) If, as of the Outside Date, the Agreement is so terminated by
either Sellers or Buyer under Sections 12.01(a) or (b), all parties
hereto shall be released from all obligations hereunder, other than
obligations under the second sentence of Section 5.02 (and the
Confidentiality Agreement referred to therein), the last sentence of
Section 12.01(b) and Section 13.10, and each party hereto will bear
expenses as provided in Section 13.06 hereof, provided that no such
termination shall release any party from any obligation arising from a
breach or default hereunder prior to such termination.
(d) At the Closing, the parties hereto shall execute and deliver
all instruments and documents as shall be necessary in the reasonable
opinion of counsel for the respective parties to consummate the
transactions contemplated herein.
12.02 Termination. In addition to the termination provided for in
Section 12.01, this Agreement may be terminated and the transactions
contemplated hereby may be abandoned (provided, however, that no such
termination shall release any party from any obligations arising from a breach
or default hereunder prior to such termination):
(a) At any time, by the mutual written agreement of Buyer and
Sellers;
(b) By Buyer, upon and effective as of the date of written notice
to Seller, if events occur or conditions exist which would render
impossible the satisfaction of one or more conditions to the
obligation of the Buyer to consummate the transactions contemplated by
this Agreement as set forth in Article 7, and the impossibility of the
satisfaction of such condition(s) has not proximately resulted from
the Buyer's material breach of this Agreement;
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(c) By Sellers, upon and effective as of the date of written
notice to Buyer, if events occur or conditions exist which would
render impossible the satisfaction of one or more conditions to the
obligation of the Sellers to consummate the transactions contemplated
by this Agreement as set forth in Article 8, and the impossibility of
the satisfaction of such condition(s) has not proximately resulted
from the Sellers' material breach of this Agreement;
(d) By Buyer, at any time if Sellers failed to comply in any
material respect with any of the covenants or obligations set forth
herein, provided that Buyer shall have promptly given Sellers written
notice of the same and Sellers shall not have cured same within 30
days of receipt of said notice;
(e) By Sellers, at any time if Buyers failed to comply in any
material respect with any of the covenants or obligations set forth
herein, provided that Sellers shall have promptly given Buyer written
notice of the same and Buyer shall not have cured same within 30 days
of receipt of said notice; or
(f) By Sellers or Buyer, upon and effective as of the date of
written notice to the other, pursuant to the termination provisions of
Section 9.02(c).
13. Miscellaneous.
13.01 Amendments; Waivers. This Agreement cannot be changed or
terminated orally and no waiver of compliance with any provision or condition
hereof and no consent provided for herein shall be effective unless evidenced by
an instrument in writing duly executed by the party hereto sought to be charged
with such waiver or consent. No waiver of any term or provision hereof shall be
construed as a further or continuing waiver of such term or provision or any
other term or provision. Any condition to the performance of any party hereto
which may legally be waived at or prior to the Closing may be waived in writing
at any time by the party or parties entitled to the benefit thereof.
13.02 Entire Agreement. This Agreement sets forth the entire
understanding and agreement of the parties and supersedes any and all prior
agreements, memoranda, arrangements and understandings relating to the subject
matter hereof other than the Confidentiality Agreement referred to in Section
5.02. No representation, warranty, promise, inducement or statement of intention
has been made by any party which is not contained in this Agreement, and no
party shall be bound by, or be liable for, any alleged representation, promise,
inducement or statement of intention not contained herein or therein.
13.03 Binding Effect; Assignment. This Agreement shall be binding upon
and inure to the benefit of the parties and their respective successors and
permitted assigns. This Agreement may not be assigned other than (a) with the
prior written consent of the other parties hereto, or (b) after the Closing to a
Person that acquires all or substantially all of a party's assets and assumes
all of the party's obligations hereunder, including by way of merger,
consolidation, transfer of all or substantially all of such party's assets and
liabilities, or otherwise. Any purported assignment made other than as provided
in this Section 13.03 shall be null and void.
13.04 Construction; Counterparts. The Article and Section headings of
this Agreement are for convenience of reference only and do not form a part
hereof and do not in any way
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modify, interpret or construe the intentions of the parties. This Agreement may
be executed in one or more separate counterparts, and all such counterparts
shall constitute one and the same instrument.
13.05 Notices. All notices and communications hereunder shall be in
writing and shall be deemed to have been duly given to a party when delivered in
person, faxed (with confirmation) or three business days after such notice is
enclosed in a properly sealed envelope, certified or registered, and deposited
(postage and certification or registration prepaid) in a post office or
collection facility regularly maintained by the United States Postal Service, or
one business day after delivery to a nationally recognized overnight courier
service, and addressed as follows:
If to Sellers: Northcoast Communications, L.L.C.
Boston Holding, LLC
New York PCS Holding, LLC
▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇
copies to: Cablevision Systems Corporation
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: General Counsel
and
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Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, Esq.
and
Winston & ▇▇▇▇▇▇
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Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
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If to Buyer: Cellco Partnership
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Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
copies to: Cellco Partnership
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▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Any party may change its address for the purpose of notice by giving notice in
accordance with the provisions of this Section 13.05. Notwithstanding the
foregoing, notices to be delivered under Section 5.06(a) shall also be delivered
to the persons set forth on Exhibit F.
13.06 Expenses of the Parties. Except as otherwise provided herein, all
expenses incurred by or on behalf of the parties hereto in connection with the
authorization, preparation and consummation of this Agreement, including,
without limitation, all fees and expenses of agents, representatives, counsel
and accountants employed by the parties hereto in connection with the
authorization, preparation, execution and consummation of this Agreement shall
be borne solely by the party who shall have incurred the same.
13.07 Non-Recourse. No partner, officer, director, manager, member,
shareholder or other holder of an ownership interest of or in any party to this
Agreement shall have any personal liability in respect of any such party's
obligations under this Agreement by reason of his or its status as such partner,
officer, director, shareholder or other holder.
13.08 Third Party Beneficiary. This Agreement is entered into only for
the benefit of the parties hereto and their respective successors and permitted
assigns, and nothing hereunder shall be deemed to constitute any Person that is
not a party to this Agreement a third party beneficiary to this Agreement.
13.09 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE INTERNAL LAWS, AND NOT THE LAW OF CONFLICTS, OF THE STATE
OF NEW YORK.
13.10 Press Releases. No press release or other public information
relating to the purchase and sale contemplated in this Agreement shall be made
or disclosed by any party hereto without the consent of the other parties;
provided, however, that any party may disclose such information if reasonably
deemed to be required by Law by the legal counsel for such party; provided,
further, that such party shall notify the others as soon as reasonably
practicable prior to the issuance of such press release.
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13.11 Bulk Transfer Laws. The parties hereby waive compliance with any
bulk transfer provisions of the Uniform Commercial Code (or any similar Laws)
that may be applicable to the transactions contemplated by this Agreement.
13.12 Severability. If any provision of this Agreement is finally
determined to be illegal, void or unenforceable, such determination shall not,
of itself, nullify this Agreement which shall continue in full force and effect
subject to the conditions and provisions hereof.
13.13 Specific Performance for Buyer. Sellers acknowledge and agree
that the PCS Assets, including without limitation the PCS Licenses, are unique
and that remedies at law, including monetary damages, will be inadequate in the
event of a breach by Sellers in the performance of their obligations under this
Agreement. Accordingly, Sellers agree that in the event of any such breach by
Sellers, Buyer shall be entitled to a decree of specific performance pursuant to
which the Sellers are ordered to affirmatively carry out its obligations under
this Agreement, without the necessity of proving actual damages or posting a
bond.
13.14 Specific Performance for Sellers. Buyer acknowledges and agrees
that the PCS Assets, including without limitation the PCS Licenses, are unique
and that remedies at law, including monetary damages, will be inadequate in the
event of a breach by Buyer in the performance of its obligations under this
Agreement. Accordingly, Buyer agrees that in the event of any such breach by
Buyer, Sellers shall be entitled to a decree of specific performance pursuant to
which the Buyer is ordered to affirmatively carry out its obligations under this
Agreement, without the necessity of proving actual damages or posting a bond.
13.15 Confidentiality of Business Information. From and after the
consummation of the Closing, none of the Sellers shall disclose to any third
party of any information about the PCS Assets or any information provided to
Sellers pursuant to Section 9.06, provided no Seller shall be required to
maintain confidential any information which: (a) is in the published literature
or known to the public prior to the date hereof or becomes published in the
literature or known to the public after the date hereof through no fault of any
Seller; (b) is obtained from a third party, provided that such third party is
not known by Sellers to be bound by any confidentiality obligation prohibiting
the disclosure of such information; or (c) is required by law or judicial or
administrative process to be disclosed; or (d) is related to the enforcement of
Sellers' rights under, or the defense against any claims made under, this
Agreement or the Ancillary Documents.
(SIGNATURE PAGE FOLLOWS)
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
SELLERS:
NORTHCOAST COMMUNICATIONS, L.L.C.
By: /s/ ▇▇▇▇ ▇▇▇▇▇
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Name: ▇▇▇▇ ▇▇▇▇▇
Title: Chief Executive Officer
BOSTON HOLDING, LLC
By: /s/ ▇▇▇▇ ▇▇▇▇▇
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Name: ▇▇▇▇ ▇▇▇▇▇
Title: Chief Executive Officer
NEW YORK PCS HOLDING, LLC
By: /s/ ▇▇▇▇ ▇▇▇▇▇
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Name: ▇▇▇▇ ▇▇▇▇▇
Title: Chief Executive Officer
BUYER:
CELLCO PARTNERSHIP d/b/a VERIZON
WIRELESS
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chief Executive Officer
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chief Financial Officer