EXHIBIT 99.3
ASSET PURCHASE AND SALE AGREEMENT
BETWEEN
CERTAIN OF THE SUBSIDIARIES
OF
ARCH COMMUNICATIONS GROUP, INC.
AS SELLERS
AND
OMNIAMERICA, INC.
AS BUYER
APRIL 10, 1998
TABLE OF CONTENTS
1. DEFINITIONS______________________________________________________________1
2. BASIC TRANSACTION________________________________________________________9
3. REPRESENTATIONS AND WARRANTIES OF THE SELLERS____________________________13
4. REPRESENTATIONS AND WARRANTIES OF THE BUYER______________________________19
5. PRE-CLOSING COVENANTS____________________________________________________19
6. POST-CLOSING COVENANTS___________________________________________________22
7. CONDITIONS TO OBLIGATION TO CLOSE________________________________________23
8. INDEMNIFICATION__________________________________________________________28
9. TERMINATION______________________________________________________________31
10. MISCELLANEOUS___________________________________________________________31
Exhibit A List of Leased Sites
Exhibit B List of Owned Sites
Exhibit C Defects as of the Date of Agreement
Exhibit D Master Tower Space Lease
Exhibit E Site Lease
Exhibit E-1 Sites where the relevant Seller will enter a Site Lease with the
Buyer
Exhibit F Site Sublease
Exhibit F-1 Sites where the relevant Seller will enter a Site Sublease with
the Buyer
Exhibit G Allocation Schedule
Exhibit H Financial Information
Exhibit I Schedule of Repurchase Options
Exhibit J Form of Opinion of Counsel to the Sellers
Exhibit K Form of Noncompetition Agreement
Exhibit L Form of Opinion of Counsel to the Buyer
Disclosure Schedule
ASSET PURCHASE AND SALE AGREEMENT
Agreement entered into as of April 10, 1998, by and between OmniAmerica,
Inc., a Delaware corporation (the "Buyer"), and certain wholly-owned
subsidiaries of Arch Communications Group, Inc., a Delaware corporation ("ACG")
which own or lease or manage the communications facility sites included in the
Acquired Assets, which subsidiaries are identified on the signature pages of
this Agreement. Such subsidiaries are referred to collectively herein as the
"Sellers", and each individually as a "Seller". The Buyer and the Sellers are
referred to collectively herein as the "Parties".
R E C I T A L S
A. The Sellers operate communications facilities consisting of
communications towers or roof-mounted antenna mounts and tower supporting
systems, electric power facilities, equipment shelter buildings and related
equipment and facilities.
B. The Sellers (i) utilize their communications facilities to operate
transmitters/antennas in connection with their wireless messaging businesses and
(ii) lease space on the communications facilities to third parties which have a
need for transmitters/antenna locations.
C. The Sellers are willing to sell and assign their interests in the
communications facilities identified in this Agreement to the Buyer, and the
Buyer is willing to pay for, and acquire such facilities, upon the terms and
conditions herein set forth.
Now, therefore, in consideration of the premises and the mutual promises
herein made, and in consideration of the representations, warranties, and
covenants herein contained, the Parties agree as follows.
1. DEFINITIONS.
"ACG" has the meaning set forth in the preamble above.
"ACQUIRED ASSETS" means all of the right, title, and interest that the
Sellers possess in and to the following assets:
(i) the communications Sites leased by the Sellers pursuant to ground
or rooftop leases, held by Sellers pursuant to easements or (with respect to
three Sites) which will be leased by a Seller to the Buyer, all of which are
listed on Exhibit A; except for Sites identified in Exhibit A as Managed Sites,
at each Site on Exhibit A, the relevant Seller leases the land (or rooftop
space), or holds an easement for the land and owns the communications tower and
equipment necessary to operate the tower, or (with respect to three Sites) the
relevant Seller owns the fee interest. At "Managed Sites" the relevant Sellers
lease the land and/or lease or manage the communications tower and related
equipment. All Sites listed on Exhibit A are referred to herein as the "Leased
Sites".
(ii) the communications Sites listed on Exhibit B, which are owned by
the Sellers; such Sites are referred to herein as the "Owned Sites".
For each Site "Acquired Assets" includes:
(i) all communications towers, equipment shelter buildings, guy wires
and other support structures related to a tower located at the Site, electrical
wiring from the local utility connection point to such Site, electric meters
owned by the Seller at the Site which measure electricity either to the tower
only or jointly to the tower, and other equipment, fixtures and fittings owned
by a Seller related to the operation of a Site; provided that at Managed Sites,
such equipment is leased and not owned;
(ii) emergency generators owned by the Sellers and located at a Site
if (and only if) such generators are presently wired so as to provide back-up
power to the tower structure at such Site (as contrasted with generators used to
provide back-up power only to the Sellers' transmitters and antennas), except
that the emergency generator at the ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ Site is
excluded from the Acquired Assets;
(iii) with respect to each of the Owned Sites, fee simple title to the
real property at such Site, together with any buildings and improvements located
at such Site that are deemed real property and together with the right to the
use of any easement, right-of-way and other rights appurtenant to each Owned
Site for purposes of access to the Site and any other purposes;
(iv) with respect to each of the Leased Sites, all of the tenant's
rights and interest under the lease, easement or management agreement pursuant
to which the Seller holds the Leased Site (including, with respect to each of
the Managed Sites, the Seller's interest in any equipment leased in connection
therewith);
(v) fences, gates, locks and keys and similar items related to each
Site to the extent owned by a Seller;
(vi) all permits, licenses, registrations and approvals owned by or
granted to the Sellers by any federal, state or local governmental entity or
other jurisdiction or instrumentality and related to (or necessary for) the
ownership and operation of a Site (other than FCC authorizations for operation
of specific equipment on specified frequencies at a Site, which will be retained
by each Seller), including, without limitation, the antenna structure
registration required by 47 C.F.R. Part 17.4 (1996); and any pending
applications for any new or modified registrations, approvals, licenses or
permits pending on the Closing Date, including, without limitation, those items
identified in Section 3(k) of the Disclosure Schedule;
(vii) each Seller's respective rights and interest under tower space
leases or license agreements pursuant to which third parties (other than Sellers
or affiliates of Sellers) lease antenna space at any Site for the operation of a
communications facility at such Site;
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(viii) any security or similar deposits or unearned prepaid rent held
by Sellers pursuant to tower space leases or license agreements with third
parties at any Site;
(ix) all rights and interest of Sellers in and to all contracts,
agreements, understandings, options, commitments, personal property leases,
product warranty agreements and service agreements relating to the Owned Sites
and the Leased Sites and the towers (collectively the "Contracts") including,
without limitation, those of the foregoing listed on Section 3(r) of the
Disclosure Schedule, but in each case only to the extent such Contracts are
chosen to be included in the Acquired Assets by the Buyer;
(x) all records relating to the Owned Sites, the Leased Sites and the
towers and the maintenance thereof, including, but not limited to, all
engineering data, logs, consultants' reports and correspondence used or held for
use in the operation of the Owned Sites, the Leased Sites and the towers or
necessary or desirable to show compliance with any law or regulation applicable
to the Owned Sites, the Leased Sites, the towers or the operation of the towers
or relating to the ownership, use, maintenance or repair of any of the Acquired
Assets and not pertaining solely to Sellers' internal corporate affairs or their
other interests (including their wireless messaging businesses), it being
understood that Sellers shall have the right to retain copies of any such
records necessary for the operation of their business and filing of tax papers
after the Closing Date; and
(xi) all of the other tangible and intangible property and rights that
are owned by Sellers and used principally in connection with the Owned Sites,
the Leased Sites and the towers.
The Acquired Assets shall not include the following ("Excluded Assets"):
(i) any FCC authorizations for the operation of specific equipment on
specified frequencies at any Leased Site or Owned Site;
(ii) any transmitter, antenna, cabling, wiring, accessions, devices or
equipment related to the operation of transmitters and antennas which is used to
operate a broadcast facility at a Site;
(iii) any Cash, accounts receivable or deposits made by Sellers with
any third parties related to any Site; provided that there shall be included in
the Acquired Assets any accounts receivable or cash received by Sellers related
to occupancy by third parties of space on any Site during periods after the
Closing Date;
(iv) any generator located at a Site which is wired to provide back-up
power only to the transmitters and antennas at such Site, and the emergency
generation at ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇; and
(v) any electric meters owned by a Seller at a Site where the meter
exclusively measures electric power provided to Seller's antennas and
transmitters.
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"ADJUSTED PURCHASE PRICE" has the meaning set forth in ss.2(d) below.
"ADVERSE CONSEQUENCES" means all actions, suits, proceedings, hearings,
investigations, charges, complaints, claims, demands, injunctions, judgments,
orders, decrees, rulings, damages, dues, penalties, fines, costs, reasonable
amounts paid in settlement, liabilities, obligations, taxes, liens, losses,
expenses, and fees, including court costs and reasonable attorneys' fees and
expenses.
"AFFILIATE" has the meaning set forth in Rule 12b-2 of the regulations
promulgated under the Securities Exchange Act.
"AFFILIATED GROUP" means any affiliated group within the meaning of Code
ss.1504 or any similar group defined under a similar provision of state, local,
or foreign law.
"ANNUALIZED OPERATING CASH FLOW" means the annualized Arch Rent Revenues
and Third-Party Rent Revenues derived from tenants for which the Sellers have
written or oral leases or licenses for the Sites as set forth in Exhibit H1,
minus annualized land lease expense, utilities, maintenance and managed site
expenses of the Sites as set forth on Exhibit H1.
"ARCH TOWERS BUSINESS" means Sellers' operation of the Sites as
communications facilities for the leasing of tower space to third parties for
such third parties' operation of communications facilities, or the use of tower
space by the Sellers for operation of their wireless messaging business.
"ASSUMED LIABILITIES" means all liabilities and obligations of the Sellers
related to the Acquired Assets under the agreements, contracts, leases,
licenses, and other arrangements referred to in the definition of Acquired
Assets and included in the Disclosure Schedule (including leases pursuant to
which the Sellers hold Leased Sites), to the extent such liabilities and
obligations relate to or arise during periods after the Effective Time;
provided, however, that the Assumed Liabilities shall not include:
(i) any liability or obligation of the Sellers under this Agreement
(or under any side agreement between the Sellers on the one hand and the Buyer
on the other hand entered into on or after the date of this Agreement);
(ii) any claims, liabilities, losses, damages or expenses relating to
Sellers' operation of their wireless messaging business;
(iii) any claims, liabilities, losses, damages or expenses relating to
any litigation, proceeding or investigation of any nature arising out of the
Owned Sites, the Leased Sites or the operation of the towers by Sellers,
including, without limitation, any claims against or any liabilities for injury
to or death of persons or damage to or destruction of property, any workers'
compensation claims, and any warranty claims;
(iv) tax liabilities of any and all kinds (federal, state, local and
foreign) of Sellers or their Affiliates or their Affiliated Group, including,
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without limitation, taxes with respect to the Acquired Assets, any liabilities
for taxes on or measured by income, liabilities for withheld federal and state
income and employee F.I.C.A. (Federal Insurance Contribution Act) or employer
F.I.C.A. and liabilities for income taxes arising as a result of the transfer of
the transferred assets or otherwise by virtue of the consummation of the
transactions contemplated hereby except for taxes for the period after the
Closing Date to be prorated as specifically set forth in Section 2(d)(ii) of
this Agreement, and except that sales taxes arising by reason of the
transactions contemplated by this Agreement shall be payable as provided in
ss.10(l);
(v) any liabilities of Sellers or their Affiliates or members of their
Affiliated Group as an employer, including, without limitation, liabilities for
wages, supplemental unemployment benefits, vacation benefits, severance
benefits, retirement benefits, COBRA benefits, FAMLA benefits, WARN obligations
and liabilities, or any other employee benefits, withholding tax liabilities,
workers' compensation, or unemployment compensation benefits or premiums,
hospitalization or medical claims, occupational disease or disability claims or
other claims attributable in whole or in part to employment by Sellers or
arising out of any labor matter;
(vi) any accounts payable or other indebtedness of Sellers or their
Affiliates or obligations to any persons who have lent money to Sellers;
(vii) any liabilities or obligations resulting from the failure to
comply with any environmental protection, health or safety laws or regulations
or resulting from the generation, storage, treatment, transportation, handling,
disposal, release of hazardous substances, solid wastes, and liquid and gaseous
matters by Sellers or their Affiliates and by any other person in relation to
Sellers or their Affiliates, including, without limitation, any liability or
obligation for cleaning up waste disposal sites (provided that the exclusion of
liabilities described in this clause (vii) from the definition of "Assumed
Liabilities" shall not relieve the Buyer from such liabilities arising from such
activities at the Sites after the Closing); or
(viii) any fees and expenses incurred by Sellers in connection with
negotiating, preparing, closing and carrying out this Agreement and the
transactions contemplated by this Agreement, including, without limitation, the
fees and expenses of Sellers' attorneys, accountants and consultants.
"BASE PURCHASE PRICE" has the meaning set forth in ss.2(d) below.
"BUYER" has the meaning set forth in the preface above.
"CASH" means cash and cash equivalents (including marketable securities and
short term investments) calculated in accordance with GAAP applied on a basis
consistent with the preparation of the Financial Statements.
"CLOSING" has the meaning set forth in ss.2(e) below.
"CLOSING DATE" has the meaning set forth in ss.2(e) below.
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"CODE" means the Internal Revenue Code of 1986, as amended.
"CONFIDENTIAL INFORMATION" means any information concerning the businesses
and affairs of the Arch Towers Business or the Sellers that is not already
generally available to the public.
"DEFECTS" means any of the following, unless any such item is a Permitted
Encumbrance:
(i) defects in title to any Sites;
(ii) with respect to Leased Sites, a lease, management agreement or
easement which has expired prior to the Closing Date or will expire prior to
December 31, 1998 and has not been renewed or extended (unless prior to the
Closing such lease, management agreement or easement shall have been renewed or
extended in a manner reasonably acceptable to the Buyer);
(iii) with respect to Leased Sites, a lease, management agreement or
easement wherein the term has expired and the relevant Seller does not have
written evidence of exercise (or confirmation of exercise) of an extension or
renewal right contained in the Lease (unless prior to the Closing the Seller
provides to the Buyer written evidence of renewal or extension of such lease,
management agreement or easement reasonably acceptable to the Buyer);
(iv) with respect to Leased Sites, a lease, management agreement or
easement pursuant to which a Seller holds the Site which is oral or invalid
(unless prior to the Closing the Seller provides written evidence of such
agreement signed by the lessor or grantor, reasonably acceptable to the Buyer);
(v) with respect to Leased Sites, leases, management agreements or
easements in which the description of the premises is missing or so ambiguous as
to make it extremely difficult to tell whether the premises consist of land, a
rooftop or a tower (unless prior to the Closing the Sellers provide written
clarification of such ambiguity signed by the lessor or grantor, reasonably
acceptable to the Buyer);
(vi) encroachments of any portion of the improvements (including guy
wires and anchors) on any Site beyond the boundaries of such Site or similar
problems revealed by a survey of a Site meeting the minimum standard detail
requirements for ALTA/ACSM Land Title Surveys (unless prior to the Closing the
Sellers provide written evidence of correction of such encroachment reasonably
acceptable to the Buyer);
(vii) violations of zoning or other Laws or failure to receive, prior
to the Closing, a zoning compliance letter in respect of any Site for which such
a letter has been requested within twenty days after the date hereof;
(viii) Sites which are subject to the threat or expectation of
condemnation or taking by eminent domain;
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(ix) restrictions on the use of any Site which prevent the use of such
Site as a communications facility with a tower in its present or a substantially
similar configuration (unless prior to the Closing such restrictions are
modified or amended so as to permit the use of the affected Site as a
communications facility in its present or a substantially similar
configuration); and
(x) Sites requiring easements that are unrecorded;
(xi) Managed Sites where the Buyer's rights would be unclear with
respect to successors to the underlying property;
(xii) Sites which are in material violation of Environmental, Health
and Safety Requirements;
(xiii) Sites identified on Exhibit C as having specific miscellaneous
problems until the specified issue is resolved (e.g. pending litigation, missing
documentation, etc.); and
(xiv) Leased Sites (other than those which the Sellers hold pursuant
to recorded easements) for which the applicable landlord fails or refuses to
provide a consent (if required) or an estoppel certificate to the Buyer prior to
the Closing; provided that if the Buyer has received estoppel certificates
(including estoppels which are part of consents) from landlords of Leased Sites
representing 90% of the Adjusted Operating Cash Flow of all Leased Sites, the
Buyer shall waive any Defect arising from the failure to obtain estoppel
certificates from the remaining 10% of such Leased Site landlords.
Exhibit C identifies Sites which have Defects of which the Buyer is aware
as of the date of this Agreement, based on the Buyer's review of documentation
related to the Sites. The listing on Exhibit C does not preclude the Buyer from
identifying additional Defects during the course of obtaining title commitments,
surveys, consents, estoppel certificates and environmental assessments in
respect of Sites.
"DISCLOSURE SCHEDULE" has the meaning set forth in ss.3 below.
"EFFECTIVE TIME" means 12:01 a.m. on the Closing Date.
"ENVIRONMENTAL, HEALTH, AND SAFETY REQUIREMENTS" shall mean all federal,
state, local and foreign statutes, regulations, and ordinances concerning public
health and safety, worker health and safety, and pollution or protection of the
environment, including without limitation all those relating to the presence,
use, production, generation, handling, transportation, treatment, storage,
disposal, distribution, labeling, testing, processing, discharge, release,
threatened release, control, or cleanup of any hazardous materials, substances
or wastes, as such requirements are enacted and in effect on or prior to the
Closing Date.
"FAA" means the Federal Aviation Administration.
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"FCC" means the Federal Communications Commission.
"GAAP" means United States generally accepted accounting principles as in
effect from time to time.
"▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ ACT" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements
Act of 1976, as amended.
"INDEMNIFIED PARTY" has the meaning set forth in ss.8(d) below.
"INDEMNIFYING PARTY" has the meaning set forth in ss.8(d) below.
"INITIAL CLOSING DATE" has the meaning set forth in ss.2(e) below.
"KNOWLEDGE" means actual knowledge. When used in reference to Sellers,
Knowledge means the actual knowledge of ▇▇▇▇ ▇. ▇▇▇▇▇ and/or ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
after such persons have made inquiry of those management personnel in the
Sellers' organization responsible for administration and management of the Arch
Towers Business as a whole.
"LAWS" means statutes, laws, rules, regulations, codes, judgments, orders,
decrees and rulings thereunder of federal, state and local governments and
agencies thereof.
"MASTER TOWER SPACE LEASE" means the tower space lease substantially in the
form annexed hereto as Exhibit D.
"ORDINARY COURSE OF BUSINESS" means the ordinary course of business
consistent with past custom and practice (including with respect to quantity and
frequency).
"PARTY" has the meaning set forth in the preface above.
"PERMITTED ENCUMBRANCES" means (i) taxes and assessments, both general and
special, which are a lien but not yet due and payable; (ii) the existence of
tower space leases or license agreements pursuant to which space for
transmitting facilities is leased or licensed to third-party tenants that are
identified in Section 3(l) of the Disclosure Schedule; (iii) matters described
in clauses (i), (v), (vi), (vii), (viii), (x), (xi) and (xiii) of the definition
of "Defects", that could not reasonably be expected to impair materially the use
or operation of any Site or any tower as a communications facility in its
present configuration or in a substantially similar configuration.
"PERSON" means an individual, a partnership, a corporation, an association,
a joint stock company, a trust, a joint venture, an unincorporated organization,
or a governmental entity (or any department, agency, or political subdivision
thereof).
"SECOND CLOSING DATE" has the meaning set forth in ss.2(e) below.
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"SECURITY INTEREST" means any mortgage, pledge, lien, encumbrance, charge,
or other security interest, other than (a) mechanic's, materialmen's, and
similar inchoate liens arising between the date of performance of services and
the date when payment is due, provided such payments are made in full at or
prior to the Closing by the party which requested the service, (b) liens for
taxes not yet due and payable or for taxes that the taxpayer is contesting in
good faith through appropriate proceedings, and (c) purchase money and similar
liens arising between the date of acquisition of assets and the date of payment,
provided such payments are made in full at or prior to the Closing by the party
which acquired the goods.
"SELLER" or "SELLERS" has the meaning set forth in the preface above.
"SITE" means either a Leased Site or an Owned Site.
"SITE LEASE" means a lease substantially in the form of Exhibit E, which
will be entered by the relevant Seller and the Buyer for each Site listed on
Exhibit E-1.
"SITE SUBLEASE" means a sublease substantially in the form of Exhibit F,
which will be entered by the relevant Seller and the Buyer for each Site listed
on Exhibit F-1.
"SUBSIDIARY" means any corporation with respect to which a specified Person
(or a Subsidiary thereof) owns a majority of the common stock or has the power
to vote or direct the voting of sufficient securities to elect a majority of the
directors.
"THIRD PARTY CLAIM" has the meaning set forth in ss.8(d) below.
"TOWER SPACE LEASE" has the meaning set forth in ss.3(l) below.
2. BASIC TRANSACTION.
(a) PURCHASE AND SALE OF ASSETS. On and subject to the terms and
conditions of this Agreement, the Buyer agrees to purchase from the Sellers, and
the Sellers agree to sell, transfer, convey, and deliver to the Buyer, all of
the Acquired Assets at the Closing for the consideration specified below in this
ss.2, free and clear of any Security Interest or Defect other than Defects which
the Buyer elects to accept as herein provided. As provided in ss.2(d)(iii), in
the event that on the date which is five business days prior to the Initial
Closing Date there are Sites for which the Buyer has identified Defects which
the Buyer is unwilling to accept and which Sellers have not cured (each a
"Defect Site"), the Buyer shall not buy, and the Sellers shall not sell, such
Sites, but as to Defect Sites a Second Closing will occur which is sixty days
after the Initial Closing. References herein to the "Closing" or the "Closing
Date" shall mean the closing which occurs on the Initial Closing Date or the
Second Closing Date, as the context requires.
(b) ASSUMPTION OF LIABILITIES. On and subject to the terms and
conditions of this Agreement, the Buyer agrees to assume and become responsible
for all of the Assumed Liabilities at the Closing. The Buyer will not assume or
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have any responsibility, however, with respect to any other obligation or
liability of the Sellers not included within the definition of Assumed
Liabilities.
(c) RELATED AGREEMENTS. At the Closing the Buyer and the Sellers will
enter (i) the Master Tower Site Lease, (ii) Site Subleases for each of the Sites
indicated on Exhibit E-1 (unless the Buyer is able to negotiate a direct lease
with the master lessor for the space required for the communications facility at
such Site) and (iii) Site Leases for Sites owned by the Sellers which will be
leased to the Buyer as indicated in Exhibit F-1.
(d) PURCHASE PRICE.
(i) The Buyer agrees to pay to the Sellers at the Closing
Thirty-eight Million Dollars ($38,000,000) (the "Base Purchase Price") adjusted
as provided herein (as adjusted, the "Adjusted Purchase Price") by delivery of
cash payable by wire transfer or other delivery of immediately available funds.
In the event there are Defect Sites as of the date which is five business days
prior to the Initial Closing Date, the portion of the Base Purchase Price
payable on the Initial Closing Date shall be adjusted as provided in
ss.2(d)(iii).
(ii) All income and expenses arising from the conduct of the
business and operations of the Arch Tower Business shall be prorated between the
Buyer and the Sellers in accordance with generally accepted accounting
principles as of the Effective Time and shall, except as otherwise expressly
provided in this Agreement, be for the account of the Sellers up to the
Effective Time and from and after the Effective Time shall be for the account of
the Buyer. Such prorations shall include, without limitation, all ad valorem,
real estate, tangible and intangible personal property and other property taxes
(but excluding taxes arising by reason of the transfer of the Acquired Assets as
contemplated hereby, which shall be paid as set forth in ss.10(l) of this
Agreement), business and license fees, other license fees (including any
retroactive adjustments thereof), utility expenses, rents and similar prepaid
and deferred items, and all other income and expenses attributable to the
Sellers' operation of the business of leasing space to install and operate
communications equipment at the Sites. In the case of the deposits or prepaid
expenses of the Sellers held by third parties, the Sellers shall be entitled to
an adjustment equal to the sum of all such deposits or prepaid expenses the
benefit of which shall accrue to the Buyer following the Closing.
Any adjustments or prorations will, insofar as feasible, be
determined and paid on the Closing Date. Within sixty (60) days after the
Closing Date, the Buyer shall deliver to the Sellers a certificate (the "Closing
Certificate"), signed by a senior officer of the Buyer, providing a compilation
of the adjustments and prorations to be made pursuant to this ss.2(d)(ii),
including any adjustments and prorations made at Closing, together with a copy
of any working papers relating to such Closing Certificate and such other
supporting evidence as the Sellers may reasonably request. If the Sellers
conclude that the Closing Certificate does not accurately reflect the
adjustments and prorations to be made pursuant to this ss.2(d)(ii), the Sellers
shall, within thirty (30) days after receipt thereof, provide to the Buyer their
written statement of any discrepancies believed to exist. The Sellers and the
Buyer shall attempt jointly to resolve the discrepancies within fifteen (15)
days after receipt of the Sellers' discrepancy statement, which resolution, if
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achieved, shall be binding upon all parties to this Agreement and not subject to
dispute or review. If the Sellers and the Buyer cannot resolve the discrepancies
within such fifteen (15) day period, the Buyer and Sellers shall jointly
designate a nationally known independent public accounting firm to be retained
to review the Closing Certificate together with the Sellers' discrepancy
statement and any other relevant documents. The cost of retaining such
accounting firm shall be borne by the party found to be more in error. Such firm
shall report its conclusions as to adjustments pursuant to this ss.2(d)(ii),
which shall be conclusive and not subject to dispute or review. Once the Closing
Certificate has been approved by both parties, if the Buyer shall have been
determined to owe an amount to the Sellers, the Buyer shall within five (5) days
of the date the Closing Certificate shall have been approved by both the Buyer
and the Sellers pay such amount thereof to the Sellers, or if the Sellers shall
have been determined to owe an amount to the Buyer, the Sellers shall within
five (5) days of the date the Closing Certificate shall have been approved by
both the Buyer and the Sellers pay such amount thereof to the Buyer.
(iii) In addition to the adjustments to the Base Purchase Price
made pursuant to Section 2(d)(ii) above, if any particular Site is, on the date
which is five business days prior to the Closing Date, subject to any Security
Interest or Defect, then, at the Buyer's election, such Site shall be dealt with
as described in this clause (iii):
(A) the Buyer may notify the Sellers that it wishes to
postpone the purchase of any such Site until the Second Closing Date, in which
event the Base Purchase Price payable at the Initial Closing shall be reduced
for each such Defect Site by an amount equal to the greater of (i) the product
of 11.8 multiplied by the Annualized Operating Cash Flow for each Defect Site
which the Buyer elects not to purchase at the Initial Closing or (ii) $100,000;
or
(B) the Buyer may notify the Sellers that it wishes to
include such Defect Site in the Acquired Assets on the Initial Closing Date,
subject to the Sellers' indemnification for the Security Interest or Defect as
provided in ss.8(g). If the Buyer elects to have such Defect Sites included in
the Acquired Assets, the Buyer shall notify the Sellers not less than eight
business days prior to the Initial Closing Date, and the Sellers shall thereupon
indemnify the Buyer in respect of the identified Defects as provided in Section
8(g) unless the Sellers notify the Buyer in writing prior to the date which is
five business days before the Initial Closing Date that they will not so
indemnify the Buyer. If the Sellers elect not to indemnify the Buyer, the Buyer
may then elect either to accept the Defect Sites without the Sellers'
indemnification under Section 8(g) or postpone the purchase of such Defect Sites
until the Second Closing, in which case the Base Purchase Price at the Initial
Closing Date shall be reduced as provided in clause (a) of this subsection.
(iv) On the Second Closing Date, the Buyer shall purchase any
Sites which were Defect Sites as of the Initial Closing Date if the Defects
attributable to such Sites have been cured to the Buyer's reasonable
satisfaction not later than the five business days prior to the Second Closing
Date. Notwithstanding any other provision contained in this Agreement, the Buyer
shall not be obligated to acquire any Sites at the Initial Closing or the Second
Closing unless any Defects for such Site have been cured to the Buyer's
reasonable satisfaction. The purchase price in respect of each Site purchased at
11
the Second Closing will be equal to the Base Purchase Price reduction made in
respect of such Site at the Initial Closing.
(v) If on the date which is five business days prior to the
Second Closing Date any Defect Site continues to be subject to a Security
Interest or an uncured Defect, then, at the Buyer's election:
(A) the Buyer may notify the Sellers that it wishes to
exclude such Site from the Acquired Assets, in which event such Site shall not
be transferred to the Buyer; or
(B) the Buyer may notify the Sellers that it wishes to
include such Defect Site in the Acquired Assets on the Second Closing Date,
subject to the Sellers' indemnifications for the Security Interest or Defect as
provided in ss.8(g). If the Buyer elects to have such Defect Sites included in
the Acquired Assets, the Buyer shall notify the Sellers not less than eight
business days prior to the Second Closing Date, and the Sellers shall thereupon
indemnify the Buyer in respect of the identified Defects as provided in ss.8(g)
unless the Sellers notify the Buyer in writing prior to the date which is five
business days prior to the Second Closing Date that they will not so indemnify
the Buyer. If the Sellers elect not to indemnify the Buyer, the Buyer may then
elect either to accept the Defect Sites without the Sellers' indemnification
under ss.8(g) or not to acquire such Defect Sites.
The Parties shall have no further obligations to each other in
respect of Defect Sites which the Buyer elects not to acquire on the Second
Closing Date. No further adjustment to the Base Purchase Price (in addition to
the adjustment to the Base Purchase Price effected at the Initial Closing) shall
be made in respect of Defect Sites which the Buyer elects not to acquire at the
Second Closing.
(e) THE CLOSING. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place on June 30, 1998 (the "Initial
Closing Date") at the offices of ▇▇▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇, ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, commencing at 9:00 a.m. local time, provided the
conditions identified in Section 7 below have been satisfied (except for
conditions to be satisfied at the Closing) on or before such date. A second
Closing will be held on the date (the "Second Closing Date") which is sixty days
after the Initial Closing Date in respect of Sites which have uncured Defects or
Security Interests as of the Initial Closing Date. The "Initial Closing Date"
and the "Second Closing Date" are collectively referred to herein as the
"Closing Date".
(f) DELIVERIES AT THE CLOSING. At the Closing, (i) the Sellers will
deliver to the Buyer the various deeds, assignments, certificates, instruments
and documents referred to in ss.7(a) below; (ii) the Buyer will deliver to the
Sellers the various certificates, instruments, and documents referred to in
ss.7(b) below; (iii) the Sellers will execute, acknowledge (if appropriate), and
deliver to the Buyer such instruments of sale, transfer, conveyance, and
assignment as the Buyer and its counsel reasonably may request (including a deed
for each Owned Site with statutory warranties regarding encumbrances created by
the relevant Seller); (iv) the Buyer and the Sellers will execute and deliver
12
the Master Tower Space Lease and Site Subleases substantially in the forms
annexed hereto; (v) the Buyer will execute, acknowledge (if appropriate), and
deliver to the Sellers such instruments of assumption as the Sellers and their
counsel reasonably may request; and (vi) the Buyer will deliver to the Sellers
the consideration specified in ss.2(d) above.
(g) ALLOCATION. The Parties agree to allocate the Purchase Price (and
all other capitalizable costs) among the Acquired Assets for all purposes
(including financial, accounting and tax purposes) in accordance with the
allocation schedule attached hereto as Exhibit G. The Sellers shall allocate the
Purchase Price among the Sellers as directed by Arch Communications Group, Inc.
3. REPRESENTATIONS AND WARRANTIES OF THE SELLERS. The Sellers represent and
warrant to the Buyer that the statements contained in this ss.3 are correct and
complete as of the date of this Agreement and will be correct and complete as of
the Closing Date (as though made then and as though the Closing Date were
substituted for the date of this Agreement throughout this ss.3), except as set
forth in the disclosure schedule accompanying this Agreement and initialed by
the Parties (the "Disclosure Schedule"). The Disclosure Schedule will be
arranged in paragraphs corresponding to the lettered and numbered paragraphs
contained in this ss.3. The Sellers make no representations or warranties
concerning the Acquired Assets or the Arch Towers Business except as set forth
in this ss.3.
(a) ORGANIZATION OF THE SELLERS. Each of the Sellers is a corporation
duly organized, validly existing, and in good standing under the laws of the
jurisdiction of its incorporation as indicated on the signature pages hereof.
Each of the Sellers has full power to carry on its business as now conducted and
is qualified to do business as a foreign entity in each jurisdiction where
failure to so qualify would have a material adverse affect on the Acquired
Assets.
(b) AUTHORIZATION OF TRANSACTION. Each of the Sellers has full power
and authority (including full corporate power and authority) to execute and
deliver this Agreement and to perform its obligations hereunder. Without
limiting the generality of the foregoing, the board of directors of each of the
Sellers has duly authorized the execution, delivery, and performance of this
Agreement by the respective Seller. This Agreement constitutes the valid and
legally binding obligation of each of the Sellers, enforceable in accordance
with its terms and conditions, except as such enforcement may be limited by
applicable bankruptcy, insolvency, reorganization or similar laws from time to
time in effect affecting creditors' rights generally and by legal and equitable
limitations on the availability of specific remedies (the "Enforceability
Exceptions").
(c) NONCONTRAVENTION. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby
(including the assignments and assumptions referred to in ss.2 above), will (i)
violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which any of the Sellers is subject or any
provision of the charter or bylaws of any of the Sellers or (ii) except as to
required notice described in Section 3(c) of the Disclosure Schedule, conflict
with, result in a breach of, constitute a default under, result in the
13
acceleration of, create in any party the right to accelerate, terminate, modify,
or cancel, or require any notice under any agreement, contract, lease, license,
instrument, or other arrangement to which any of the Sellers is a party or by
which it is bound or to which any of its assets is subject (or result in the
imposition of any Security Interest upon any of its assets), except where the
violation, conflict, breach, default, acceleration, termination, modification,
cancellation or failure to give notice, would not have a material adverse effect
on any of the Acquired Assets or on the ability of the Parties to consummate the
transactions contemplated by this Agreement. Except as set forth in Section 3(c)
of the Disclosure Schedule, none of the Sellers needs to give any notice to,
make any filing with, or obtain any authorization, consent, or approval of any
government or governmental agency or of any private party in order for the
Parties to consummate the transactions contemplated by this Agreement (including
the assignments and assumptions referred to in ss.2 above).
(d) BROKERS' FEES. The Sellers have no liability or obligation to pay
any fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement for which the Buyer could become
liable or obligated. The Sellers have engaged the services of ▇▇▇▇▇▇▇ &
Associates, L. P. as an agent of the Sellers in connection with this Agreement,
and the Sellers will be solely responsible for any fees or commissions payable
to such agent.
(e) FINANCIAL INFORMATION. The financial information set forth in
Exhibit H is the only financial information provided by the Sellers to the Buyer
in connection with this Agreement. The information in Exhibit H1 under the items
entitled "Third Party Rent Revenue" and "Annual Land Lease Expenses" are
Sellers' estimates for such items for the twelve month period ending March 31,
1998, based on actual rent revenues from third parties and actual land lease
expenses during the month of March, 1998. Exhibit H2 also sets forth actual
Third Party Rent Revenue for the Sites for the months of June, 1997 through
March, 1998. The information in Exhibit H concerning Arch Rent Revenue correctly
reflects the annual rent which Sellers will pay to the Buyer pursuant to the
Master Tower Space Lease during the first twelve months after the Closing Date,
subject to adjustments permitted under the Master Tower Space Lease. The
"Squatters Rent Increase" reflected in Exhibit H1, and expenses of maintenance
and utilities, are the Sellers' estimates; the Sellers do not warrant the
correctness or reasonableness of such estimates.
(f) EVENTS SINCE MARCH 31, 1998. Since March 31, 1998, there has not
been any material adverse change in the financial condition of the Arch Towers
Business taken as a whole or any material adverse change in the condition or
operation of any tower. Without limiting the generality of the foregoing, since
that date none of the Sellers has engaged in any practice, taken any action, or
entered into any transaction outside the Ordinary Course of Business with
respect to the Arch Towers Business except in connection with the sale of the
Arch Towers Business.
(g) LEGAL COMPLIANCE. Each of the Sellers has complied with all
applicable Laws, except where the failure to comply would not have a material
adverse effect upon the financial condition of any particular Site. The Sellers
have received no notice to the effect that any Site is not in compliance with
applicable Laws.
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(h) TAX MATTERS. Sellers have filed with the appropriate governmental
agencies all tax returns and tax reports pertaining to excise taxes, sales and
use taxes, payroll taxes, real property taxes and assessments and tangible and
intangible personal property taxes required to be filed by them relating to the
Owned Sites, the Leased Sites and towers and operation thereof ("Applicable
Taxes"), and all taxes, interest and penalties shown or claimed to be due
thereon have been paid. Sellers do not have any liability, contingent or
otherwise, for any Applicable Taxes or any interest or penalties thereon except
to the extent disclosed in Section 3(i) of the Disclosure Schedule. To the
Knowledge of the Sellers, the consummation of the transactions contemplated by
this Agreement will not result in any transferee tax liability to Buyer, other
than possible sales taxes on sales of personal property included in the Acquired
Assets. None of the Sellers has waived any statute of limitations in respect of
Applicable Taxes or agreed to any extension of time with respect to an
Applicable Tax assessment or deficiency.
(i) PROPERTY.
(i) Sellers do not have any interest in any real property in
connection with the operation of the towers other than as described on Exhibit A
and Exhibit B. Each Seller is, or will be, at the time of Closing, in possession
of each of its Sites. Each Seller has, or will have at the time of Closing, (A)
good, marketable, and fee simple title to its Owned Sites and all the
improvements, (B) good and valid leasehold estates or good and valid easements
as to its Leased Sites, (C) good and valid easement rights providing all
necessary access and utilities to and from the improvements and the Sites to
public roads, and (D) good and marketable legal title to all personal property
included in the Acquired Assets, in each case, free and clear of all (i)
Security Interests except for (i) Security Interests described in the Disclosure
Schedule, which will be released and discharged prior to the Closing, (ii)
Permitted Encumbrances and (iii) Defects which, if the affected Site is conveyed
to the Buyer will be discharged or cured prior to the Closing or will be a
matter for which the Buyer is indemnified pursuant to ss.8(g).
(ii) No Seller has voluntarily granted any, is not a party to any
agreement providing for, and no Seller has any knowledge of, easements,
conditions, reservations, covenants, restrictions, leases, subleases, rights,
options or any other matters that would adversely affect the use of any of the
towers and the Sites for the same purposes and uses as the towers and Sites have
been used by such Seller, except for (i) Security Interests described in ss.3(i)
of the Disclosure Schedule, which will be released and discharged prior to the
Closing, (ii) Permitted Encumbrances and (iii) Defects which, if the affected
Site is conveyed to the Buyer, will be discharged or cured prior to the Closing
or will be a matter for which the Buyer is indemnified pursuant to ss.8(g).
(iii) To the best of each Seller's knowledge, there are no
improvements planned by any public authority any part of the cost of which might
be assessed against such Seller.
(iv) To each Seller's knowledge, with respect to its Sites, there
are no (A) applications, ordinances, petitions, resolutions or other matters
15
pending before any governmental agency having jurisdiction to act on zoning
changes that would prohibit or make nonconforming the use of any of the Sites
for the operation of the towers; or (B) pending or threatened condemnation or
eminent domain proceedings, or proposed sale in lieu thereof.
(v) To each Seller's knowledge (except as reported by the Buyer),
the improvements, including the towers, are in good condition and repair,
ordinary wear and tear excepted, and do not have any structural or material
defects except as described on Section 3(j) of the Disclosure Schedule.
(vi) Exhibit A lists all of the Leased Sites, and identifies the
lease date and the lessor thereunder and the current monthly rental paid by
Sellers. To the extent that written leases, management agreements or easements
exist and are in the Sellers' possession, the Sellers have delivered to the
Buyer correct and complete copies thereof. The Sellers do not possess written
documents for all of Leased Sites, and the leases, management agreements or
easements for some locations have expired, as indicated in Exhibit A; provided,
however, the Sellers will use their commercially reasonable best efforts to
remove these Defects prior to Closing. To the Knowledge of the Sellers, there
are no disputes with the lessor or sublessor of any of the leases, management
agreements or easements listed on Exhibit A except as described in ss.3(i) of
the Disclosure Schedule or where such dispute would not have a material adverse
effect on the financial condition of any particular tower; provided however, the
Sellers will use their commercially reasonable best efforts to remove these
Defects prior to Closing. Each lease or sublease listed on Exhibit A which is
written and has not expired by its terms (as indicated on Exhibit A) is valid
and in full force and effect, unless otherwise noted in ss.3(i) of the
Disclosure Schedule. Any lease or sublease listed on Exhibit A which is not
written and in full force and effect on the Closing Date will be considered to
have a Defect, and may be dealt with as provided in ss.2(d)(iii). Except as
described on 3(i) of the Disclosure Schedule, the leases are freely assignable
to the Buyer without the consent of any landlord, tenant or third party and
there are no defaults on the part of Sellers or, to the Knowledge of the
Sellers, their landlords.
(j) INTELLECTUAL PROPERTY. None of the Sellers owns or has an interest
in any patent or registration or any pending patent application or application
for registration related to the Acquired Assets or the Arch Towers Business.
(k) GOVERNMENTAL AUTHORIZATIONS. To the knowledge of the Sellers,
there are no licenses or other governmental authorizations required for the
operation of the Acquired Assets which the Sellers do not hold; Sellers are in
compliance therewith; and such licenses and governmental authorizations are in
full force and effect. To the extent required by regulations of the FCC, the
towers owned by the Sellers on the Sites are registered with the FCC. The towers
are in compliance with all applicable FAA and FCC rules and regulations.
(l) TENANT LEASES AND OTHER CONTRACTS. Exhibit H3 lists all tower
space leases, tower license agreements and similar agreements (and the rental
and security deposits relating thereto) pursuant to which the Sellers have
leased space on any of the communications towers included in the Acquired Assets
to third parties (each a "Tower Space Lease"). In addition, except as set forth
in Section 3(l) of the Disclosure Schedule, there are no other tower space
16
leases, licenses or similar occupancy agreements to which any Seller is a party
related to the operation of the Arch Towers Business. To the extent that written
documents constituting Tower Space Leases exist and are in the Sellers'
possession, the Sellers have delivered to the Buyer a correct and complete copy
of each such document (as amended to date) listed in Exhibit H3. Each Tower
Space Lease listed in Exhibit H3 which has not expired by its terms is valid and
in full force and effect and there are no material defaults pending caused by
the Sellers or their tenants (other than late payment defaults by such tenants
the aggregate amount of which as of March, 1998 is set forth in Exhibit H3). The
Sellers do not possess written documents for all the Tower Space Leases listed
in Exhibit H3, and some of the written documents so listed have expired. One of
the Sellers is the sole owner of the landlord's or licensor's interest in the
Tower Space Leases, and the Sellers' interest in the Tower Space Leases, are
fully assignable to the Buyer without the consent or approval of any landlord,
tenant or other third party. As of the Closing Date, no rents due under, or
other interest in, any of the Tower Space Leases will have been assigned to any
other party other than the Buyer or otherwise pledged or encumbered in any way.
Except as set forth in Exhibit H3, the Sellers have not received any notice from
any tenant or licensee under a Tower Space Lease of any impending cancellation
or breach of its Tower Space Lease or of any termination of its Tower Space
Lease in advance of the scheduled expiration date. Exhibit H3 and Section 3(l)
of the Disclosure Schedule will be updated as of a date within 15 days prior to
the Closing Date.
(m) LITIGATION. None of the Sellers (i) is subject to any outstanding
injunction, judgment, order, decree, ruling, or charge or (ii) is a party to any
action, suit, proceeding, hearing, or investigation of, in, or before any court
or quasi-judicial or administrative agency of any federal, state, local, or
foreign jurisdiction, where the injunction, judgment, order, decree, ruling,
action, suit, proceeding, hearing, or investigation affects the Arch Towers
Business or the Acquired Assets.
(n) ENVIRONMENTAL, HEALTH, AND SAFETY MATTERS.
(i) To the Knowledge of the Sellers, the Sellers are in
compliance with Environmental, Health, and Safety Requirements.
(ii) The Sellers have not received any written notice, report or
other information regarding any actual or alleged violation of Environmental,
Health, and Safety Requirements, or any liabilities or potential liabilities
(whether accrued, absolute, contingent, unliquidated or otherwise), including
any investigatory, remedial or corrective obligations, relating to the Sellers
or their facilities included in the Acquired Assets arising under Environmental,
Health, and Safety Requirements.
(iii) The Sellers are not aware of any underground storage tanks
on any of the land included in the Acquired Assets except as described in
ss.3(n) of the Disclosure Schedule. To the extent Sellers own any underground
storage tanks, Sellers are in compliance with all laws, rules and regulations
relating thereto.
(iv) This Section 3(n) contains the sole and exclusive
representations and warranties of the Sellers with respect to any environmental,
health, or safety matters, including without limitation any arising under any
Environmental, Health, and Safety Requirements.
17
(o) CERTAIN BUSINESS RELATIONSHIPS WITH SELLERS. After the Closing,
the sole contractual relationships between the Sellers and the Buyer with
respect to the Acquired Assets will be this Agreement, the Master Tower Space
Lease, the Site Subleases and the Site Leases.
(p) SUFFICIENCY OF ASSETS. The Acquired Assets include all
Site-related equipment and real property rights used by the Sellers to operate
the Arch Towers Business, except for any generators that are specifically
excluded from the definition of "Acquired Assets" which would be necessary for
the operations of the Arch Towers Business. The Acquired Assets do not, however,
include any personnel, computers, technical expertise, vehicles, maintenance and
repair equipment or other non-Site-specific assets required to operate the Arch
Towers Business.
(q) NO CONDEMNATION. To the knowledge of the Sellers none of the Owned
Sites is the subject of any pending or proposed condemnation proceedings by any
public authority. The Sellers have not received any notice from the owner of any
Leased Site to the effect that such Site is the subject of any pending or
proposed condemnation proceedings by any public authority.
(r) CONTRACTS. Section 3(r) of the Disclosure Schedule constitutes a
complete and accurate list of all material contracts (other than (i) leases or
other agreements pursuant to which the Sellers hold real property included in
the Acquired Assets and (ii) Tower Space Leases) (the "Contracts") relating to
the Acquired Assets or the operation of the Sites to which Seller is a party or
by which it is bound. The Contracts are in full force and effect. Except as set
forth in Section 3(r) of the Disclosure Schedule, there has been no material
default by the Sellers or, to the Sellers' knowledge, by the other party, and no
event has occurred or failed to occur which with the giving of notice, the
passage of time, or both, would constitute a material default by the Sellers,
or, to the best of their knowledge, by the other party, under any of the
Contracts. Except as set forth in ss.3(l) of the Disclosure Schedule, to the
Sellers' knowledge, none of the Contracts is subject to any impending
cancellation or breach that will result in a substantial loss or otherwise
materially and adversely affect the Sites or the Acquired Assets.
(s) DISCLAIMER OF OTHER REPRESENTATIONS AND WARRANTIES. Except as
expressly set forth in this Section 3, the Sellers make no representation or
warranty, express or implied, at law or in equity, in respect of any of their
assets (including, without limitation, the Acquired Assets), liabilities or
operations, including, without limitation, with respect to merchantability or
fitness for any particular purpose, and any such other representations or
warranties are hereby expressly disclaimed. The Buyer hereby acknowledges and
agrees that, except to the extent specifically set forth in this Section 3, the
Buyer is purchasing the Acquired Assets on an "as-is, where-is" basis. Without
limiting the generality of the foregoing, the Sellers make no representation or
warranty regarding any assets other than the Acquired Assets, and none shall be
implied at law or in equity.
(t) INFORMATION CONCERNING THE REDDING, CALIFORNIA SITE. Information
provided by the Sellers in respect of the Redding, California Site is based on
information provided to the Sellers by the current owners of the Site. The
Sellers do not represent or warrant the correctness of such information. The
Sellers will represent and warrant such information at the Closing.
18
4. REPRESENTATIONS AND WARRANTIES OF THE BUYER. The Buyer represents and
warrants to the Sellers that the statements contained in this ss.4 are correct
and complete as of the date of this Agreement and will be correct and complete
as of the Closing Date (as though made then and as though the Closing Date were
substituted for the date of this Agreement throughout this ss.4), except as set
forth in the Disclosure Schedule. The Disclosure Schedule will be arranged in
paragraphs corresponding to the lettered and numbered paragraphs contained in
this ss.4.
(a) ORGANIZATION OF THE BUYER. The Buyer is a corporation duly
organized, validly existing, and in good standing under the laws of the
jurisdiction of its incorporation.
(b) AUTHORIZATION OF TRANSACTION. The Buyer has full power and
authority (including full corporate power and authority) to execute and deliver
this Agreement and to perform its obligations hereunder. This Agreement
constitutes the valid and legally binding obligation of the Buyer, enforceable
in accordance with its terms and conditions, except as such enforcement may be
limited by the Enforceability Exceptions.
(c) NONCONTRAVENTION. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby
(including the assignments and assumptions referred to in ss.2 above), will (i)
violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which the Buyer is subject or any provision of
its charter or bylaws or (ii) conflict with, result in a breach of, constitute a
default under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice under any
agreement, contract, lease, license, instrument, or other arrangement to which
the Buyer is a party or by which it is bound or to which any of its assets is
subject. The Buyer does not need to give any notice to, make any filing with, or
obtain any authorization, consent, or approval of any government or governmental
agency, except pursuant to the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act, in order for the Parties
to consummate the transactions contemplated by this Agreement (including the
assignments and assumptions referred to in ss.2 above).
(d) BROKERS' FEES. The Buyer has no liability or obligation to pay any
fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement for which the Sellers could become
liable or obligated.
5. PRE-CLOSING COVENANTS. The Parties agree as follows with respect to the
period between the execution of this Agreement and the Closing.
(a) GENERAL. Each of the Parties will use its reasonable best efforts
to take all actions and to do all things necessary, proper or advisable in order
to consummate and make effective the transactions contemplated by this Agreement
(including satisfaction, but not waiver, of the closing conditions set forth in
ss.7 below).
(b) NOTICES AND CONSENTS.
19
(i) The Sellers will give any notices to third parties reasonably
requested by the Buyer; without limiting the generality of the foregoing, the
Sellers will use their commercially reasonable best efforts (including the
expenditure of up to $100 per Site) to obtain any third party consents and
estoppel certificates from each lessor of a Leased Site (other than Leased Sites
held pursuant to a recorded easement).
(ii) Each of the Parties will give any notices to, make any
filings with, and use its reasonable best efforts to obtain any authorizations,
consents, and approvals of governments and governmental agencies in connection
with the matters referred to in ss.3(c) and ss.4(c) above. Without limiting the
generality of the foregoing, each of the Parties will file any Notification and
Report Forms and related material that it may be required to file with the
Federal Trade Commission and the Antitrust Division of the United States
Department of Justice under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act, will use its reasonable
best efforts to obtain an early termination of the applicable waiting period,
and will make any further filings pursuant thereto that may be necessary,
proper, or advisable in connection therewith. The Buyer and the Sellers will use
their commercially reasonable best efforts to file the Notification and Report
Form within fifteen business days after the date of this Agreement.
(c) OPERATION OF BUSINESS. The Sellers will not engage in any
practice, take any action, or enter into any transaction outside the Ordinary
Course of Business. The Sellers will use their commercially reasonable efforts,
consistent with past practice, to maintain and preserve the Arch Towers
Business.
(d) FULL ACCESS. The Sellers will permit representatives of the Buyer
to have full access at all reasonable times, and in a manner so as not to
interfere with the normal business operations of the Sellers, or Sellers'
activities undertaken to perform their obligations under this Agreement, to all
premises, properties, personnel, books, records (including tax records),
contracts, surveys, title reports and environmental and engineering reports, and
documents of or pertaining to that portion of the Arch Towers Business owned by
each of the Sellers. The Buyer will keep confidential and hold as such any
Confidential Information it receives from any of the Sellers in the course of
the reviews contemplated by this ss.5(d) or otherwise, will not use any of the
Confidential Information except in connection with this Agreement, and, if this
Agreement is terminated for any reason whatsoever, will return to the Sellers
all tangible embodiments (and all copies) of the Confidential Information which
are in its possession.
(e) NOTICE OF DEVELOPMENTS. Each Party will give prompt written notice
to the other Party of any material adverse development, including a breach of
any of its own representations and warranties in ss.3 and ss.4 above. No
disclosure by any Party pursuant to this ss.5(e), however, shall be deemed to
amend or supplement the Disclosure Schedule or to prevent or cure any
misrepresentation or breach of warranty.
(f) EXCLUSIVITY. The Sellers will not solicit, initiate, accept, or
encourage the submission of any proposal or offer from any Person relating to
the acquisition of any, all or substantially all of the Acquired Assets
(including any acquisition structured as a merger, consolidation, or share
20
exchange) or disclose any nonpublic information regarding any of the Acquired
Assets.
(g) TITLE; SURVEYS; CORRECTION OF DEFECTS.
(i) The Buyer shall use its commercially reasonable best efforts
to order all title and surveys within 10 business days of the date hereof. The
Buyer shall use its commercially reasonable best efforts to order all
environmental assessments within 15 business days of the date hereof. The Buyer
will provide to the Sellers copies of all letters requesting titles, surveys,
environmental assessments and zoning compliance letters as such request letters
are issued.
(ii) If the Buyer believes a Site has a Defect which makes the
Site subject to Section 2(d)(iii), it shall notify the Sellers within five
business days after discovering the Defect. (The Buyer hereby notifies the
Sellers that the items disclosed in Exhibit A, B and C and Section 3(i) of the
Disclosure Schedule which constitute Defects are subject to Section 2(d)(iii).).
(iii) Sellers shall use their commercially reasonable best
efforts to correct all Defects, whether or not such Defect is shown on Exhibits
A, B and C or the Disclosure Schedule, prior to the Initial Closing Date or, if
unable to do so by the Initial Closing Date, by the Second Closing Date. The
Sellers shall, if the circumstances require, expend up to $5,000 per Site to
cure or correct Defects if it is reasonably expected that such amount will cure
the Defect applicable to such Site to the reasonable satisfaction of the Buyer.
The Sellers may, but shall not be required hereby to, expend more than $5,000 to
cure Defects at any Site.
(iv) The Sellers shall promptly notify the Buyer in writing of
each Defect which the Sellers believe has been cured, and the Buyer shall
promptly notify the Sellers if it agrees that a Defect has been cured to its
satisfaction. The Buyer and the Sellers shall work cooperatively to coordinate
the Defect notification and cure process so that cures sought by the Sellers
will be acceptable to the Buyer if effected.
(v) Not less than five business days prior to the Initial Closing
Date the Buyer and the Sellers shall compile lists of Sites for which no Defects
exist, and Sites for which Defects continue to exist, and shall identify such
Sites with uncured Defects (if any) which the Buyer elects to accept
notwithstanding the Defect, such of those Sites which the Buyer has elected to
accept for which the Sellers will indemnify the Buyer pursuant to ss.8(g), such
of those Sites which the Buyer has elected to accept for which the Sellers will
not indemnify the Buyer pursuant to ss.8(b), and (of the latter group) any Sites
which the Buyer will nonetheless purchase on the Initial Closing Date.
(vi) Any Defect Sites not acquired by the Buyer on the Initial
Closing Date shall be subject to the same notification/cure/acceptance/rejection
procedures described in clause (v) prior to the Second Closing Date.
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(vii) The Sellers shall use their commercially reasonable best
efforts (but without the requirement of expending in excess of $100 per Site) to
obtain a nondisturbance agreement with each landlord of the Sites listed on
Exhibit F-1 or to obtain a direct lease between the landlord and the Buyer for
the tower and transmitter space at each such Site.
(h) If Sites representing Annualized Operating Cash Flow in excess of
10% of the Annualized Operating Cash Flow of all the Sites have uncured Defects
and the Buyer has elected not to acquire such Sites (or, if the Buyer has
elected to acquire such Sites, the Sellers have declined to indemnify the Buyer
pursuant to ss.8(g) and the Buyer has therefore elected not to acquire such
Site) as of the date which is five business days prior to the Initial Closing
Date, either Party may terminate this Agreement in accordance with ss.9.
(i) The Sellers will use their reasonable best efforts, and cooperate
with the Buyer, to obtain extensions or new leases with respect to Leased Sites
for which current leases expire in calendar 1999.
6. POST-CLOSING COVENANTS. The Parties agree as follows with respect to the
period following the Closing.
(a) GENERAL. In case at any time after the Closing any further action
is necessary or desirable to carry out the purposes of this Agreement, each of
the Parties will take such further action (including the execution and delivery
of such further instruments and documents) as the other Party reasonably may
request, all at the sole cost and expense of the requesting Party (unless the
requesting Party is entitled to indemnification therefor under ss.8 below). The
Sellers will cooperate with the Buyer, at the Buyer's sole expense, to the
extent the Buyer needs assistance with or access to the Sellers' accountants and
books and records in preparing, verifying, auditing, reviewing or certifying
financial information.
(b) LITIGATION SUPPORT. In the event and for so long as any Party
actively is contesting or defending against any action, suit, proceeding,
hearing, investigation, charge, complaint, claim, or demand in connection with
(i) any transaction contemplated under this Agreement or (ii) any fact,
situation, circumstance, status, condition, activity, practice, plan,
occurrence, event, incident, action, failure to act, or transaction on or prior
to the Closing Date involving any of the Sellers, the other Party will cooperate
with the contesting or defending Party and its counsel in the contest or
defense, make available its personnel, and provide such testimony and access to
its books and records as shall be necessary in connection with the contest or
defense, all at the sole cost and expense of the contesting or defending Party
(unless the contesting or defending Party is entitled to indemnification
therefor under ss.8 below). This provision shall not require the Buyer's
participation in litigation between the Sellers and any person which had
previously agreed to purchase the Acquired Assets.
(c) TRANSITION. The Sellers will not take any action that is designed
or intended to have the effect of discouraging any lessor, licensor, lessee,
licensee, customer, supplier, or other business associate of any of the Sellers
from maintaining the same business relationships with the Buyer after the
Closing as it maintained with the Sellers prior to the Closing.
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(d) REPURCHASE OPTIONS. Sellers shall have the option to repurchase
portions of the Acquired Assets in forty quarterly segments commencing on June
30, 1998 and continuing on each September 30 1, December 31, March 31 and June
30 thereafter. The portion of the Acquired Assets which is subject to such
purchase option on each of the forty dates (each an "option block") is described
in Exhibit I. Exhibit I also sets forth the portion of the Purchase Price
allocable to each such portion of the Acquired Assets. The option price for each
option block is equal to the operating cash flow (determined by multiplying the
Sites' cash flow for the month most recently ended as of the exercise date by
12) for the Sites included in the option block multiplied by 28; provided, that
in no event shall the option price be less than $250,000 for any one Site. This
option may not be assigned by the Sellers other than to persons controlling,
controlled by or under common control with the Sellers. The Sellers may exercise
an option by, and only by, delivering written notice of exercise of such option
no later than the exercise date. The Sellers may elect at any time, or from time
to time, to terminate the exercisability of one or more of the quarterly option
segments. If the Sellers fail to exercise a quarterly option on an exercise
date, the option with respect to the next option group on Exhibit I shall lapse
and shall no longer be exercisable. The purchase price under each option shall
be paid in cash. If an option is exercised, the terms of sale shall include no
representations or warranties by the Buyer except the absence of Security
Interests with respect to the assets purchased.
7. CONDITIONS TO OBLIGATION TO CLOSE.
(a) CONDITIONS TO OBLIGATION OF THE BUYER. The obligation of the Buyer
to consummate the transactions to be performed by it in connection with the
Closing is subject to satisfaction of the following conditions:
(i) the representations and warranties of the Sellers set forth
in ss.3 above shall be true and correct in all material respects at and as of
the Closing Date;
(ii) the Sellers shall have performed and complied with all of
their covenants hereunder in all material respects through the Closing;
(iii) there shall not be any injunction, judgment, order, decree
or ruling in effect preventing consummation of any of the transactions
contemplated by this Agreement or materially adversely affecting any Site or
Tower (provided, that if any such injunction, judgment, order, decree or ruling
should be in effect, the Site or Sites to which it applies would not be
transferred to the Buyer at the Initial Closing but would be transferred at the
Second Closing (provided the injunction, judgment, order, decree or ruling had
then been vacated) with a net reduction in the Base Purchase Price as provided
in ss.2(d)(iii) at the Initial Closing, and the Closing would be held as to the
remainder of the Acquired Assets);
(iv) the Sellers shall have delivered to the Buyer a certificate
to the effect that each of the conditions specified above in ss.7(a)(i)-(iii) is
satisfied in all respects;
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(v) all applicable waiting periods (and any extensions thereof)
under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act shall have expired or otherwise been terminated,
and the Sellers and the Buyer shall have received all other authorizations,
consents, and approvals of governments and governmental agencies and private
parties identified in ss.3(c) of the Disclosure Schedule; provided that with
respect to any Leased Site the terms of the lease for which require the consent
of the landlord or other contract party, if such landlord or other contract
party shall not have consented to the transactions contemplated hereby, if the
Buyer so elects, the Buyer may elect not to purchase such Site at the Initial
Closing, and the purchase of such Site shall be postponed to the Second Closing
as provided in ss.2(d)(iii) unless the Buyer elects to include such Site,
subject to the Sellers' agreement to indemnify the Buyer in respect of any cost,
damage or expense arising from the failure to obtain such consent as provided in
ss.8(g); and further provided that if the Buyer has received estoppel
certificates (including estoppels which are part of consents) from landlords of
Leased Sites representing 90% of the Adjusted Operating Cash Flow of all Leased
Sites, the Buyer shall not require estoppel certificates as a closing condition
for the remaining 10% of the Leased Sites.
(vi) The Buyer shall have received from Lawyer's Title Insurance
Corporation (the "Title Company") (and be reasonably satisfied with) a
commitment to issue an ALTA Owner's Policy of Title Insurance (Form B, amended
10-17-70) for the Owned Sites and a commitment to issue a Leasehold Owner's
Policy of Title Insurance for certain of the Leased Sites, both in forms
acceptable to the Buyer, dated no earlier than the date of this Agreement,
naming the Buyer as the proposed insured in an amount equal to the fair market
value of each Site and reflecting the results of a special tax search with
respect to each of the Owned Sites. The title commitment(s) shall (i) set forth
a state of title to each of the Sites, together with all exceptions or
conditions to such title, including, but not limited to, all easements,
restrictions, rights-of-way, covenants, reservations, and other encumbrances
affecting each of the Sites and (ii) contain the express commitment of the Title
Company to issue the Owner's and Leasehold Policies of Title Insurance without
the standard customary printed exceptions of such policies with respect to
survey, parties in possession (except tenants of the Sellers) and mechanics'
liens, specifically stating any condition or requirement to affect the removal
thereof from such policy, if issued, (iii) include any endorsements or
affirmative insurance the Buyer may have reasonably required as of the date the
Title Commitment is issued by the Title Company, and (iv) have attached true,
correct and legible copies of each instrument referred to in the Title
Commitment as conditions or exceptions to title to the Sites;
(vii) The Title Company shall be in the position to issue an ALTA
Owner's Policy of Title Insurance (Form B Amended 10-17-70) as to the Owned
Sites and a Leasehold Owner's Policy of Title Insurance as to the Leased Sites.
The Title Policies shall be issued in the amount of the fair market value of the
Buyer's interest in the covered sites, shall insure marketable fee simple,
indefeasible title to the Owned Sites to be in the Buyer, subject only to the
Permitted Encumbrances, and such Defects as have been expressly approved by the
Buyer and shall insure a good leasehold estate to the Leased Sites to be in the
Buyer, subject only to Permitted Exceptions and such Defects as have been
expressly approved by the Buyer. The Buyer shall have the right to require such
endorsements to the Title Policies for the Owned Sites as the Buyer reasonably
deems necessary or appropriate, including, but not limited to, zoning, survey,
24
contiguity and access, as well as such affirmative insurance as the Buyer or the
Buyer's counsel may reasonably require;
(viii) The Buyer shall have obtained and approved a survey of
each Site by a registered surveyor reasonably satisfactory to the Buyer. The
Seller shall cooperate with the Buyer and the surveyor in coordinating such
survey. The survey shall be certified as of a date no earlier than December 1,
1997, and should be prepared in accordance with the "minimum standard detail
requirements for ALTA/ACSM Land Title Surveys" as revised through 1992 for an
Urban survey, including any Table A optional survey items which the Buyer may
select, or in accordance with such lesser standards that the Buyer may approve.
The surveyor's certification shall run to the Buyer, the Seller and the Title
Company, as well as any lender to the Buyer that the Buyer may designate.
(ix) any title examinations and surveys of the Sites conducted by
the Buyer shall not have shown any liens, encumbrances, encroachments, lack of
access or other matters which would have a material adverse effect on the use of
such Site as a communications tower facility (provided, that if any such title
examination or survey reveals a condition which constitutes a Defect and is
unsatisfactory to the Buyer, the Buyer may elect not to purchase such Site at
the Initial Closing and to purchase such Site at the Second Closing (provided
such Defect shall then have been cured) as provided in ss.2(d)(iii) unless the
Buyer elects to include such Site, subject to the Sellers' agreement to
indemnify the Buyer in respect of any cost, damage or expense arising from such
matters as provided in ss.8(g);
(x) Arch Communications Enterprises, Inc. shall have entered into
the Master Tower Space Lease substantially in the form attached hereto as
Exhibit D, and the same shall be in full force and effect and all of the Sellers
shall have guaranteed the obligations of Arch Communications Enterprises, Inc.
thereunder;
(xi) the relevant Sellers shall have entered Site Leases for
Iota, Louisiana, Forest Avenue, Portland, Maine and Hebron, Maine substantially
in the form of Exhibit E;
(xii) the landlords of the Sites listed in Exhibit F-1 shall have
entered into direct leases with Buyer for the tower and transmitter space for
the Sites listed in Exhibit F-1 or shall have entered nondisturbance agreements
with the Buyer, or shall have entered into the Site Subleases substantially in
the form of Exhibit F hereto, and the same shall be in full force and effect
(provided that if the lessor of any of the Sites subject to the Site Subleases
refuses to enter a direct lease or to enter a nondisturbance agreement with the
Buyer and refuses to consent to the Site Sublease, the Buyer may elect not to
purchase such Site at the Initial Closing and to purchase such Site at the
Second Closing (provided such landlord shall by that date have entered a direct
lease, executed a nondisturbance agreement or consented to a Site Sublease) as
provided in ss.2(d)(iii) unless the Buyer elects to include such Site, subject
to the Sellers' agreement to indemnify the Buyer in respect of any cost, damage
or expenses arising from the failure to obtain such consent as provided in
ss.8(g);
25
(xiii) the Buyer shall not have determined that any of the
Seller's representations or warranties are untrue or incorrect in any material
respect;
(xiv) there shall have occurred no material adverse change in the
Acquired Assets, taken as a whole, the Sellers' tower leasing business or the
business, prospects or financial results of the Sellers since March 31, 1998 or
in the business, prospects or financial results of Arch Communications Group,
Inc., taken as a whole, since December 31, 1997;
(xv) the Buyer shall not be dissatisfied, in its reasonable
discretion, with the results of environmental assessments which discover a
Defect with respect to any Site for which it has chosen to conduct an assessment
(provided that if the Buyer notifies the Seller that it is dissatisfied with the
results of any such assessment, the Buyer may elect to exclude such Site from
the transaction pursuant to ss.2(d)(iii) or elect to include the Site in the
transaction subject to the Sellers' agreement to indemnify the Buyer in respect
of any cost, damage or expense arising from such matter as provided in ss.8(g);
(xvi) the Buyer shall have received from counsel to the Sellers
an opinion substantially in the form and substance as set forth in Exhibit J
attached hereto, addressed to the Buyer, and dated as of the Closing Date;
(xvii) all actions to be taken by the Sellers in connection with
consummation of the transactions contemplated hereby and all certificates,
opinions, instruments, and other documents required to effect the transactions
contemplated hereby will be reasonably satisfactory in form and substance to the
Buyer;
(xviii)Each Seller shall deliver to the Buyer good standing
certificates or certificates of continued existence, dated as of a date within
30 days of the Closing Date, from the state of incorporation of such Seller and
from each state in which such Seller is qualified to do business;
(xix) The Sellers and the Buyer shall have executed and delivered
to the Buyer a cooperation and noncompetition agreement (the "Noncompetition
Agreement") substantially in the form of the agreement outline attached hereto
as Exhibit K and made a part hereof.
(xx) The Sellers shall deliver such other customary closing
certificates and documents as the Buyer may reasonably request.
(xxi) The Sellers shall have entered into an agreement with the
Buyer pursuant to which the Seller shall have agreed to provide paging and
similar communications services to the lessor under each lease, management
agreement or easement which requires such services as partial or full
consideration for the remainder of the term of each such agreement and all
extensions thereof provided for in existing agreements, but in no event longer
than ten years after the Closing Date.
26
The Buyer may waive any condition specified in this ss.7(a) if it executes
a written instrument so stating at or prior to the Closing.
(b) CONDITIONS TO OBLIGATION OF THE SELLERS. The obligation of the
Sellers to consummate the transactions to be performed by them in connection
with the Closing is subject to satisfaction of the following conditions:
(i) the representations and warranties set forth in ss.4 above
shall be true and correct in all material respects at and as of the Closing
Date;
(ii) the Buyer shall have performed and complied with all of its
covenants hereunder in all material respects through the Closing;
(iii) there shall not be any injunction, judgment, order, decree,
ruling, or charge in effect preventing consummation of any of the transactions
contemplated by this Agreement;
(iv) the Buyer shall have delivered to the Sellers a certificate
to the effect that each of the conditions specified above in ss.7(b)(i)-(iii) is
satisfied in all respects;
(v) all applicable waiting periods (and any extensions thereof)
under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act shall have expired or otherwise been terminated
and the Sellers and the Buyer shall have received all other authorizations,
consents, and approvals of governments and governmental agencies and private
parties identified in ss.4(c) of the Disclosure Schedule;
(vi) the Buyer shall have entered into the Master Tower Space
Lease, the Sites Leases and the Site Subleases (to the extent landlords
thereunder have not executed direct lease with the Buyer) substantially in the
form of Exhibits D, E and F, respectively, and the same shall be in full force
and effect;
(vii) the Sellers shall have received from the Buyer's counsel an
opinion substantially in the form as set forth in Exhibit L attached hereto,
addressed to the Sellers, and dated as of the Closing Date; and
(viii) all actions to be taken by the Buyer in connection with
consummation of the transactions contemplated hereby and all certificates,
opinions, instruments, and other documents required to effect the transactions
contemplated hereby will be reasonably satisfactory in form and substance to the
Sellers.
The Sellers may waive any condition specified in this ss.7(b) if it
executes a written instrument so stating at or prior to the Closing.
27
8. INDEMNIFICATION.
(a) SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All of the
representations and warranties of the Sellers and the Buyer contained in ss.3
and ss.4 of this Agreement shall survive the Closing and continue in full force
and effect for a period of twelve months, except (i) in the case of
representations and warranties pertaining to authority and taxes, and the
Sellers' representation that personal property included in the Acquired Assets
is free of Security Interests, which shall survive indefinitely and (ii) the
Sellers' representations and warranties as to title to the real property at the
Owned Sites, which shall terminate at the Closing.
(b) INDEMNIFICATION PROVISIONS FOR BENEFIT OF THE BUYER.
(i) In the event the Sellers breach any of their representations,
warranties, and covenants contained in this Agreement, and, provided that the
Buyer makes a written claim for indemnification against the Sellers pursuant to
ss.10(g) below with respect to Sellers' representations and warranties within
the survival period pursuant to ss.8(a) above, then the Sellers jointly and
severally agree to indemnify the Buyer from and against the entirety of any
Adverse Consequences the Buyer shall suffer through and after the date of the
claim for indemnification caused by the breach; provided, however, that the
Sellers shall not have any obligation to indemnify the Buyer from and against
any Adverse Consequences caused by the breach of any representation or warranty
of the Sellers: (A) until the Buyer has suffered Adverse Consequences by reason
of all such breaches in excess of a deductible in the amount of $100,000 in the
aggregate (after which point the Sellers will be obligated only to indemnify the
Buyer from and against further such Adverse Consequences) or thereafter (B) to
the extent the Adverse Consequences the Buyer has suffered by reason of all such
breaches exceeds $5,000,000 in the aggregate (after which point the Sellers will
have no obligation to indemnify the Buyer from and against further such Adverse
Consequences).
(ii) The Sellers agree jointly and severally to indemnify the
Buyer from and against the entirety of any Adverse Consequences the Buyer shall
suffer caused proximately by any liability of the Sellers which is not an
Assumed Liability (including any liability of the Sellers that becomes a
liability of the Buyer under any bulk transfer law of any jurisdiction, under
any common law doctrine of de facto merger or successor liability, or otherwise
by operation of law) or by Sellers' ownership or operation of any of the
Acquired Assets on or prior to the Closing Date.
(c) INDEMNIFICATION PROVISIONS FOR BENEFIT OF THE SELLERS.
(i) In the event the Buyer breaches any of its representations,
warranties, and covenants contained in this Agreement, and provided that, with
respect to representations and warranties, the Sellers make a written claim for
indemnification against the Buyer pursuant to 10(g) below within the survival
period set forth in ss.8(a) above, the Buyer agrees to indemnify the Sellers
from and against the entirety of any Adverse Consequences the Sellers shall
suffer through and after the date of the claim for indemnification (but
EXCLUDING any Adverse Consequences the Sellers shall suffer after the end of any
applicable statute of limitations).
28
(ii) The Buyer agrees to indemnify the Sellers from and against
the entirety of any Adverse Consequences the Sellers shall suffer caused by any
liability of the Sellers which is an Assumed Liability.
(d) MATTERS INVOLVING THIRD PARTIES.
(i) If any third party shall notify any Party (the "Indemnified
Party") with respect to any matter (a "Third Party Claim") which may give rise
to a claim for indemnification against the other Party (the "Indemnifying
Party") under this ss.8, then the Indemnified Party shall promptly (and in any
event within ten business days after receiving notice of the Third Party Claim)
notify the Indemnifying Party thereof in writing; provided, however, that any
failure to give timely notice shall limit a party's right to indemnification
only to the extent of any prejudice caused by such delay.
(ii) The Indemnifying Party will have the right at any time to
assume and thereafter conduct the defense of the Third Party Claim with counsel
of its choice reasonably satisfactory to the Indemnified Party; provided,
however, that the Indemnifying Party will not consent to the entry of any
judgment or enter into any settlement with respect to the Third Party Claim
without the prior written consent of the Indemnified Party (not to be withheld
unreasonably) unless the judgment or proposed settlement involves only the
payment of money damages and does not impose an injunction or other equitable
relief upon the Indemnified Party.
(iii) Unless and until the Indemnifying Party assumes the defense
of the Third Party Claim as provided in ss.8(d)(ii) above, however, the
Indemnified Party may defend against the Third Party Claim in any manner it
reasonably may deem appropriate.
(iv) In no event will the Indemnified Party consent to the entry
of any judgment or enter into any settlement with respect to the Third Party
Claim without the prior written consent of the Indemnifying Party (not to be
withheld unreasonably).
(e) DETERMINATION OF ADVERSE CONSEQUENCES. The Parties shall make
appropriate adjustments for tax benefits and insurance coverage and take into
account the time cost of money (using 10% as the discount rate) in determining
Adverse Consequences for purposes of this ss.8. All indemnification payments
under this ss.8 shall be deemed adjustments to the Purchase Price.
(f) EXCLUSIVE REMEDY. The Buyer and the Sellers acknowledge and agree
that after the Closing Date the foregoing indemnification provisions in this
ss.8 shall be the exclusive remedy of the Buyer and the Sellers with respect to
the Arch Tower Business, the Acquired Assets, and the transactions contemplated
by this Agreement; provided, however, that the Buyer has the right as provided
in this Agreement to cause the Sellers to reacquire certain Sites as provided in
ss.2(d)(iii) above; and further provided this clause shall not operate to
exclude other rights the Buyer may have in respect of the Sellers' breach of
Section 3(n).
(g) INDEMNIFICATION WITH RESPECT TO CERTAIN MATTERS.
29
(i) To the extent the Buyer notifies the Seller in writing prior
to the Closing it wishes to avail itself of the provisions of Section
2(d)(iii)(b) in respect of matters described in clause (ii) hereof, and the
Sellers elect to indemnify the Buyer in respect of such matters and therefore an
affected Site is included in the transaction, the provisions of this ss.8(g)
shall apply.
(ii) Matters covered by this ss.8(g) are Security Interests and
Defects existing as of the Closing Date and conditions to closing with respect
to any Site which have not been satisfied as of the Closing Date.
(iii) If the Sellers elect not to indemnify the Buyer as to
Defects or Security Interests in respect of a Site, the Base Purchase Price
shall be adjusted as provided in ss.2(d)(iii).
(iv) With respect to any matter for which the Sellers have
elected in writing to indemnify the Buyer pursuant to this ss.8(g), the Sellers
shall jointly and severally indemnify the Buyer and hold the Buyer harmless from
and against any cost, liability, damage or expense related to the indemnified
matter, provided that:
(A) the Buyer promptly notifies the Seller in respect of any
third party claims related to such matter as provided in ss.8(d),
(B) the Sellers' obligation to indemnify the Buyer shall be
without regard to the $100,000 "deductible" and the $5,000,000 maximum amount
set forth in ss.8(b),
(C) the maximum amount of the Sellers' indemnification
obligation with respect to each Site shall be equal to the sum of:
(i) the greater of (x) the Annualized Operating Cash
Flow of such Site, as set forth on Exhibit H1, multiplied by 11.8, or (y)
$100,000, which amount shall decline by 20% for each year, or portion thereof
(pro rated as to such percentage for any portion of a partial year), that has
passed between the Closing Date and the date of any claim under this ss.8(g),
plus
(ii) the net book value of all of the Buyer's
improvements to such Site, provided that the maximum indemnification amount
under this clause (ii) for any Site shall be $300,000.
If the Sellers pay the Buyer as indemnification under this
ss.8(g) in respect of any Site an amount equal to the greater of (i) the
Adjusted Operating Cash Flow of the Site multiplied by 11.8 or (ii) $100,000,
plus the net book value of all the Buyer's improvements to the Site, the Buyer
shall reconvey such Site to the Sellers for no additional consideration.
30
(D) the Buyer shall have given written notice to the Sellers
of such claim on or before the fifth anniversary of the Closing Date.
9. TERMINATION.
(a) TERMINATION OF AGREEMENT. Certain of the Parties may terminate
this Agreement as provided below:
(i) the Buyer and the Sellers may terminate this Agreement by
mutual written consent at any time prior to the Closing;
(ii) the Buyer may terminate this Agreement by giving written
notice to the Sellers at any time prior to the Closing (A) in the event the
Sellers have breached any material representation, warranty, or covenant
contained in this Agreement in any material respect, the Buyer has notified the
Sellers of the breach, and the breach has continued without cure for a period of
20 days after the notice of breach, (B) if the Closing shall not have occurred
on or before June 30, 1998, by reason of the failure of any condition precedent
under ss.7(a) hereof (unless the failure results primarily from the Buyer itself
breaching any representation, warranty, or covenant contained in this Agreement)
or (C) in accordance with ss.5(g); and
(iii) the Sellers may terminate this Agreement by giving written
notice to the Buyer at any time prior to the Closing (A) in the event the Buyer
has breached any material representation, warranty, or covenant contained in
this Agreement in any material respect, the Sellers have notified the Buyer of
the breach, and the breach has continued without cure for a period of 20 days
after the notice of breach, (B) if the Closing shall not have occurred on or
before June 30, 1998, by reason of the failure of any condition precedent under
ss.7(b) hereof (unless the failure results primarily from the Sellers themselves
breaching any representation, warranty, or covenant contained in this
Agreement), or (C) in accordance with ss.5(g).
(b) EFFECT OF TERMINATION. If any Party terminates this Agreement
pursuant to ss.9(a) above, all rights and obligations of the Parties hereunder
shall terminate without any liability of any Party to the other Party (except
for any liability of any Party then in breach); provided, however, that the
confidentiality provisions contained in ss.5(d) above shall survive termination.
10. MISCELLANEOUS.
(a) PRESS RELEASES AND PUBLIC ANNOUNCEMENTS. During the term of this
Agreement, no Party shall issue any press release or make any public
announcement relating to the subject matter of this Agreement prior to the
Closing without the prior written approval of the other Party (which shall not
be unreasonably withheld or delayed); provided, however, that any Party may make
any public disclosure it believes in good faith is required by applicable law or
any listing or trading agreement concerning its publicly-traded securities (in
which case the disclosing Party will use its reasonable best efforts to advise
the other Party prior to making the disclosure). The parties will cooperate in
developing a description of the transactions contemplated hereby for purposes of
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any public announcement related to the signing of this Agreement or the closing
of the transactions contemplated hereby.
(b) NO THIRD-PARTY BENEFICIARIES. This Agreement shall not confer any
rights or remedies upon any Person other than the Parties and their respective
successors and permitted assigns.
(c) ENTIRE AGREEMENT. This Agreement (including the documents referred
to herein) constitutes the entire agreement between the Parties and supersedes
any prior understandings, agreements, or representations by or between the
Parties, written or oral, to the extent they related in any way to the subject
matter hereof.
(d) SUCCESSION AND ASSIGNMENT. This Agreement shall be binding upon
and inure to the benefit of the Parties named herein and their respective
successors and permitted assigns. No Party may assign either this Agreement or
any of its rights, interests, or obligations hereunder without the prior written
approval of the other Party. Notwithstanding the foregoing, (i) the Buyer may
(a) assign any or all of its rights and interests hereunder to one or more of
its Affiliates and (b) designate one or more of its Affiliates to perform its
obligations hereunder, and (ii) the Sellers may assign their rights and
obligations hereunder to any entity or entities into which they are merged or to
which all or substantially all of their assets are transferred, provided that
any such transferee or assignee shall be a wholly-owned direct or indirect
subsidiary of Arch Communications Group, Inc. Notwithstanding any assignment
permitted hereunder, the original parties hereto shall remain responsible for
the performance of all their respective obligations hereunder.
(e) COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
(f) HEADINGS. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
(g) NOTICES. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request, demand, claim,
or other communication hereunder shall be deemed duly given if (and then three
business days after) it is sent by registered or certified mail, return receipt
requested, postage prepaid, and addressed to the intended recipient as set forth
below:
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If to the Sellers:
Arch Communications Group, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Vice President-Corporate Development
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Copy to:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Buyer:
OmniAmerica, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attn: F. ▇▇▇▇▇▇ ▇▇▇▇▇▇, Vice President and General Counsel
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Copy to:
▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Any Party may send any notice, request, demand, claim, or other communication
hereunder to the intended recipient at the address set forth above using any
other means (including personal delivery, expedited courier, messenger service,
telecopy, telex, ordinary mail, or electronic mail), but no such notice,
request, demand, claim, or other communication shall be deemed to have been duly
given unless and until it actually is received by the intended recipient. Any
Party may change the address to which notices, requests, demands, claims, and
other communications hereunder are to be delivered by giving the other Party
notice in the manner herein set forth.
(h) GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the domestic laws of the Commonwealth of Massachusetts
without giving effect to any choice or conflict of law provision or rule
(whether of the Commonwealth of Massachusetts or any other jurisdiction) that
would cause the application of the laws of any jurisdiction other than the
Commonwealth of Massachusetts.
(i) AMENDMENTS AND WAIVERS. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by the
Buyer and the Sellers. No waiver by any Party of any default, misrepresentation,
or breach of warranty or covenant hereunder, whether intentional or not, shall
be deemed to extend to any prior or subsequent default, misrepresentation, or
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breach of warranty or covenant hereunder or affect in any way any rights arising
by virtue of any prior or subsequent such occurrence.
(j) ACTION BY SELLERS. Any right, action or notice which may be taken
exercised or given by the Sellers hereunder may be taken on behalf of all the
Sellers by Arch Communications Enterprises ("ACE"). Each of the Sellers hereby
appoints ACE as its agent to take any action for and on behalf of such Seller
necessary or appropriate to carry out the transactions contemplated by this
Agreement.
(k) SEVERABILITY. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
(l) EXPENSES. Each of the Sellers and the Buyer will bear its own
costs and expenses (including legal fees and expenses) incurred in connection
with this Agreement and the transactions contemplated hereby. The Sellers shall
bear one-half, and the Buyer shall bear one-half, of the expenses of filing a
Notification and Report Form under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act with the Federal
Trade Commission and the Antitrust Division of the United States Department of
Justice; provided, that if either party shall default in its obligations
hereunder, the other party's damages shall include the portion of such expenses
paid by the non-defaulting party. The Buyer and the Sellers shall bear equally
the costs of recording fees, filing fees, deed stamps, realty transfer taxes and
similar real estate transfer costs. The Buyer shall be responsible for any sales
taxes arising under state law in respect of the transactions contemplated by
this Agreement.
(m) CONSTRUCTION. The Parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the Parties and no presumption or burden of proof shall
arise favoring or disfavoring any Party by virtue of the authorship of any of
the provisions of this Agreement. Any reference to any federal, state, local, or
foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise. The
word "including" shall mean including without limitation.
(n) INCORPORATION OF EXHIBITS AND SCHEDULES. The Exhibits and
Schedules identified in this Agreement are incorporated herein by reference and
made a part hereof.
(o) BULK TRANSFER LAWS. The Buyer acknowledges that the Sellers will
not comply with the provisions of any bulk transfer laws of any jurisdiction in
connection with the transactions contemplated by this Agreement.
(p) DESTRUCTION OF ASSETS. In the event of loss or damage to any Site
or tower in an amount greater than $5,000 between the date hereof and the
Closing Date, the Sellers shall promptly notify the Buyer thereof and use their
commercially reasonable best efforts to repair, replace or restore the lost or
damaged property to its former condition as soon as possible. If such repair,
replacement or restoration has not been completed prior to the Closing Date, the
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Parties shall consummate the transaction in respect of the damaged Site at the
Initial Closing (unless a Defect shall exist as to such Site) and the Base
Purchase Price shall be decreased by the amount of the loss or damage less
amounts expended by the Sellers prior to the Closing on such repair, replacement
or restoration (or, if the Sellers have not undertaken any repair, the
adjustment to the Base Purchase Price shall be equal to the estimated cost of
repair, as determined by a reasonable third-party estimate obtained by the
Sellers).
(q) SPECIFIC PERFORMANCE. The Parties acknowledge that the towers and
the Acquired Assets are of a unique and extraordinary character and that money
damages would not be a sufficient remedy for a breach by any Party of its
obligations under this Agreement; therefore, in addition to any other rights or
remedies a nondefaulting Party may have, the nondefaulting Party shall be
entitled to the remedies of specific performance or injunctive relief in
connection with a breach of a Party's obligations contained in this Agreement.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on as
of the date first above written.
BUYER:
OmniAmerica, Inc.
By: _____________________, President
SELLERS:
The Westlink Company, Q Media Company-Paging, Inc.
a Delaware corporation a Kansas corporation
By: ___________________________ By: ________________________________
Title: ________________________ Title: _____________________________
USA Mobile Communications, Inc. II, Arch Communications Enterprises, Inc.,
a Delaware corporation a Delaware corporation
By: ___________________________ By: ________________________________
Title: ________________________ Title: _____________________________
▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇., Arch Michigan, Inc.
a New York corporation a Delaware corporation
By: ___________________________ By: ________________________________
Title: ________________________ Title: _____________________________
Arch Southeast Communications, Inc., Professional Communications, Inc.
a Delaware corporation a Pennsylvania corporation
By: ____________________________ By: _______________________________
Title: _________________________ Title: ____________________________
The Beeper Company of America, Inc. Answer Iowa, Inc.
a Colorado corporation an Iowa corporation
By: _____________________________ By: _______________________________
Title: __________________________ Title: ____________________________
Arch Connecticut Valley, Inc., Q Media Paging-Alabama, Inc.
a Massachusetts corporation a Delaware corporation
By: ______________________________ By: _______________________________
Title: ___________________________ Title: ____________________________
The obligations of the Sellers under this Agreement are fully guaranteed by Arch
Communications Group, Inc., including the prompt payment of all amounts that may
be owing pursuant to Section 8.
Arch Communications Group, Inc.
By: _______________________________
Title: ____________________________
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