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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): December 23, 1996
INTERCEL, INC.
(Exact name of registrant
as specified in its charter)
Delaware 0-23102 58-1944750
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(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
1233 O.G. Skinner Dr., West Point, GA 31833
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (706) 645-9520
1239 O.G. Skinner Dr., West Point, GA 31833
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(Former name or former address, if changed since last report.)
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ITEM 5. ACQUISITION OR DISPOSITION OF ASSETS.
Pursuant to an Asset Purchase Agreement dated December 23, 1996 (the
"Agreement") by and among Rural Cellular Corporation (the "Purchaser"), Unity
Cellular Systems, Inc. ("Unicel"), InterCel Licenses, Inc. ("Licensee") and
InterCel, Inc. ("InterCel"), the Purchaser agreed to purchase and assume from
the Seller and the Licensee, and the Seller and the Licensee respectively agreed
to sell and assign to the Purchaser: (i) substantially all of the assets and
rights of Seller, including Seller's 51% general partnership interest (the
"Partnership Interest") in the Northern Maine Cellular Partnership (the
"Partnership") which Partnership is licensed to provide cellular service in
Maine RSA2; and (ii) the FCC licenses held by Licensee to provide cellular and
microwave service in the Bangor, Maine MSA and Maine RSA3 and to provide
microwave service in Maine RSA2. Seller and Licensee are wholly-owned
subsidiaries of InterCel. This transaction, if consummated, will constitute a
sale by InterCel of all of its cellular telephone operations in the State of
Maine.
Consummation of the transaction contemplated by the Agreement is subject to
certain conditions, including: (i) financing being obtained by Purchaser; (ii)
receipt by Seller of various consents from third parties, including landlords
and other parties to contracts with Seller; and (iii) receipt of various
regulatory approvals, including the approval of the Federal Communications
Commission.
The purchase price for the assets to be sold pursuant to the Agreement is
$77,355,250 (the "Purchase Price"). The Purchase Price was determined to be fair
and reasonable by the Boards of Directors of InterCel, Unicel and Licensee based
upon various factors, including the results of operations of Unicel and the
recent market prices of similar assets sold by others. The sale of the
Partnership Interest to the Purchaser is subject to a right of first refusal in
favor of Cellco Partnership ("Cellco"), which owns the remaining 49% interest in
the Partnership. If Cellco exercises its right of first refusal, the Purchase
Price paid by the Purchaser will be reduced by $12,762,750. The price that would
be paid by Cellco for the Partnership Interest upon the exercise of its right of
first refusal has not yet been determined. If Cellco and the Seller are unable
to agree upon a purchase price, the purchase price for the Partnership Interest
may, as contemplated in the agreement governing the Partnership (the
"Partnership Agreement"), be determined by appraisal.
The descriptions set forth herein of the terms and conditions of the
Agreement and the transactions contemplated by the Agreement are qualified in
their entirety by reference to the full text of the Agreement and the exhibits
thereto, copies of which are filed as an Exhibit to this Current Report on Form
8-K. Descriptions of the Partnership and related rights and obligations of the
partners are qualified in their entirety by reference to the full text of the
Partnership Agreement (filed as Exhibit 10(qq) to InterCel's Registration
Statement on Form S-1 (File No. 33-72734)).
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) EXHIBITS.
99.1. Asset Purchase Agreement dated December 23, 1996, by and among Rural
Cellular Corporation, Unity Cellular Systems, Inc., InterCel
Licenses, Inc. and InterCel, Inc.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
INTERCEL, INC.
By:/s/ Allen E. Smith
-----------------------------
Allen E. Smith
Chief Executive Officer
Dated: January 8, 1997
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EXHIBIT INDEX
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99.1. Asset Purchase Agreement dated December 23, 1996, by and among Rural
Cellular Corporation, Unity Cellular Systems, Inc., InterCel Licenses,
Inc. and InterCel, Inc....................................................... 5
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EXHIBIT 99.1
ASSET PURCHASE AGREEMENT
DATED DECEMBER 23, 1996
by and among
RURAL CELLULAR CORPORATION,
UNITY CELLULAR SYSTEMS, INC.,
INTERCEL LICENSES, INC.
and
INTERCEL, INC.
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TABLE OF CONTENTS
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ARTICLE 1: PURCHASE OF ASSETS ............................................. 2
1.1 Agreement to Purchase and Sell Assets of Seller ................ 2
1.2 Excluded Assets ................................................ 5
1.3 Agreement to Purchase and Seller Assets of Shareholder ......... 6
1.4 Agreement to Purchase and Sell Assets of Licensee .............. 6
1.5 Assets ......................................................... 6
ARTICLE 2: PURCHASE PRICE AND WORKING CAPITAL ............................. 6
2.1 Purchase Price ................................................. 6
2.2 Allocation of Purchase Price ................................... 6
2.3 Payment of Purchase Price ...................................... 7
2.4 Adjustment to Purchase Price, Closing Schedules; Prorations .... 7
ARTICLE 3: ASSUMPTION OF LIABILITIES ......................................10
3.1 Limitation on Assumption of Liabilities ........................10
3.2 Assumption of Certain Liabilities ..............................11
ARTICLE 4: TITLE AND RISK OF LOSS .........................................12
4.1 Title and Risk of Loss .........................................12
ARTICLE 5: REPRESENTATIONS AND WARRANTIES OF SELLER, LICENSEE AND
SHAREHOLDER ....................................................13
5.1 Due Incorporation ..............................................13
5.2 Due Authorization ..............................................13
5.3 No Breach ......................................................14
5.4 Clear Title ....................................................15
5.5 Condition of Assets; Inventory .................................15
5.6 Litigation .....................................................16
5.7 Labor Matters ..................................................16
5.8 Taxes ..........................................................17
5.9 Employee Benefits ..............................................17
5.10 Full Disclosure ................................................18
5.11 Financial Statements ...........................................18
5.12 Absence of Certain Developments ................................19
5.13 Proprietary Rights and Software ................................20
5.14 Compliance with Laws ...........................................21
5.15 Operating Contracts and Customer Contracts .....................21
5.16 Real Estate ....................................................22
5.17 Receivables ....................................................28
5.18 Books and Records ..............................................28
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5.19 Key Employees ..................................................29
5.20 Licenses and Permits ...........................................29
5.21 Sufficiency of Assets ..........................................29
5.22 Other Material Contracts and Obligations .......................30
5.23 Insolvency .....................................................31
5.24 Shareholder ....................................................31
5.25 Subsidiaries ...................................................31
5.26 Customers ......................................................31
5.27 Products Liability Claims ......................................31
5.28 Insurance ......................................................32
5.29 Brokers ........................................................32
5.30 CGSA ...........................................................32
5.31 Network ........................................................32
5.32 Net Pops and Coverage ..........................................32
5.33 Relationship with Related Persons ..............................33
5.34 The Partnership ................................................33
5.35 Seller's Partnership Capital Account ...........................34
5.36 Exclusivity of Representations .................................34
ARTICLE 6: REPRESENTATIONS AND WARRANTIES OF PURCHASER ....................34
6.1 Due Incorporation ..............................................34
6.2 Due Authorization ..............................................35
6.3 No Breach ......................................................35
6.4 Full Disclosure ................................................36
6.5 Qualifications of Purchaser ....................................36
6.6 Brokers ........................................................36
ARTICLE 7: PERFORMANCE BY SELLER, LICENSEE AND SHAREHOLDER PENDING
CLOSING ........................................................36
7.1 Access to Information ..........................................37
7.2 Business As Usual ..............................................37
7.3 Encumbrances ...................................................37
7.4 Pay Increases ..................................................37
7.5 Restrictions on New Contracts ..................................38
7.6 Preservation of Business and Non-Solicitation of Employees .....38
7.7 Payment and Performance of Obligations .........................38
7.8 Restrictions on Sale of Assets .................................39
7.9 Consents .......................................................39
7.10 Capital Expenditures ...........................................39
7.11 No Solicitation of Other Offers or Negotiation .................39
7.12 Accounts Receivable ............................................39
7.13 Inventory ......................................................40
7.14 Insurance ......................................................40
7.15 Filing Reports and Making Payments .............................40
7.16 Environmental Assessments ......................................40
7.17 Capital Expenditures ...........................................42
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7.18 Monthly Financials .............................................42
7.19 COBRA ..........................................................42
7.20 The Partnership ................................................43
7.21 Construct Station ..............................................43
7.22 Colicensed Sites ...............................................43
ARTICLE 8: MUTUAL COVENANTS AND CONDITIONS PRECEDENT TO
OBLIGATIONS ....................................................43
8.1 Federal Communications Commission ..............................43
8.2 Proceedings ....................................................43
8.3 The Partnership ................................................44
8.4 HSR Act ........................................................44
8.5 Prompt Notice ..................................................44
8.6 Mutual Covenants ...............................................45
ARTICLE 9: CONDITIONS PRECEDENT TO PURCHASER'S OBLIGATIONS ................45
9.1 Accuracy of Representations and Warranties .....................45
9.2 Compliance with Covenants and Agreements .......................45
9.3 No Adverse Change ..............................................46
9.4 Approval by Counsel ............................................46
9.5 Consents and Approvals .........................................46
9.6 Financing ......................................................46
9.7 Survey .........................................................47
9.8 Employee Stock Options .........................................47
9.9 Leases .........................................................47
9.10 Title Matters ..................................................47
ARTICLE 10: CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER, LICENSEE
AND SHAREHOLDER ................................................49
10.1 Accuracy of Representations and Warranties .....................49
10.2 Compliance with Covenants and Agreements .......................49
10.3 Approval by Counsel ............................................49
10.4 Required Governmental Approvals ................................49
10.5 Purchaser's Financing ..........................................49
ARTICLE 11: INDEMNIFICATION ................................................50
11.1 Indemnification by Seller, Licensee and Shareholder ............50
11.2 Indemnification by Purchaser ...................................52
11.3 Procedure for Indemnification ..................................52
11.4 Limitations ....................................................54
11.5 Arbitration ....................................................54
ARTICLE 12: CLOSING ........................................................56
12.1 Date of Closing ................................................56
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12.2 Documents to be Delivered by Seller, Licensee and Shareholder ..56
12.3 Documents to be Delivered by Purchaser .........................59
ARTICLE 13: PERFORMANCE FOLLOWING THE DATE OF CLOSING ......................60
13.1 Collection of Receivables ......................................60
13.2 Further Acts and Assurances ....................................60
13.3 Change of Name .................................................61
13.4 Billing Services Provided by Shareholder .......................61
13.5 Preservation of and Access to Records ..........................61
ARTICLE 14: TERMINATION ....................................................61
14.1 Termination ....................................................61
14.2 Cure by Seller, Licensee or Shareholder ........................62
14.3 Return of Documents and Nondisclosure ..........................63
ARTICLE 15: MISCELLANEOUS ..................................................63
15.1 Survival of Representations, Warranties and Covenants ..........63
15.2 Brokers ........................................................63
15.3 Cooperation ....................................................64
15.4 Public Announcements ...........................................64
15.5 Sales, Use and Deed Taxes ......................................64
15.6 Break Up Fee ...................................................64
15.7 Notices ........................................................64
15.8 Entire Agreement ...............................................65
15.9 Remedies Cumulative ............................................65
15.10 Specific Performance ...........................................65
15.11 Amendments .....................................................65
15.12 Successors and Assigns .........................................65
15.13 Costs ..........................................................66
15.14 Governing Law ..................................................66
15.15 Counterparts ...................................................66
15.16 Headings .......................................................66
15.17 Scope of Agreement .............................................66
15.18 Number and Gender ..............................................66
15.19 Knowledge ......................................................67
15.20 Severability ...................................................67
15.21 Parties in Interest ............................................67
15.22 Waiver .........................................................67
15.23 Other Acquisitions by Purchaser ................................67
15.24 Construction ...................................................68
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT ("Agreement") is made and entered into as
of the 23rd day of December, 1996, by and among Rural Cellular Corporation, a
Minnesota corporation (the "Purchaser"), Unity Cellular Systems, Inc., a Maine
corporation (the "Seller" or "Unity"), InterCel Licenses, Inc., a Delaware
corporation (the "Licensee"), and InterCel, Inc., a Delaware corporation (the
"Shareholder").
WHEREAS, Unity is engaged in the business of providing cellular
telephone and related services in the Bangor, Maine MSA and Maine RSA 3 under
the name "Unicel" and is the managing general partner (with a 51% interest) in
Northern Maine Cellular Partnership, a Maine general partnership (the
"Partnership"), which is engaged in the business of providing cellular telephone
and related services in Maine RSA 2 under the name "Unicel" (which business of
Unity and, subject to Section 2.1 below, the Partnership are collectively
referred to as the "Business");
WHEREAS, the Seller desires to sell and assign and Purchaser desires to
purchase and assume, or cause one or more Affiliates (as hereinafter defined) of
the Purchaser to assume certain obligations and purchase substantially all of
the assets and rights of Seller, including, but not limited to, (i) the rights
to use licenses held by Licensee to provide microwave and cellular service in
the Bangor, Maine MSA and Maine RSA 3, (ii) the entire right, title and interest
of Seller in and to the Partnership, (iii) the rights to provide management and
other services to the Partnership, and (iv) certain liabilities incurred in the
Business, on the terms and conditions set forth in this Agreement;
WHEREAS, the Licensee desires to assign, and Purchaser desires to assume
or cause one or more of its Affiliates to assume, certain assets of Licensee,
including, but not limited to, the licenses held by Licensee to provide cellular
and microwave service in the Bangor, Maine MSA and Maine RSA 3 and to provide
microwave service in Maine RSA 2.
WHEREAS, Shareholder is the owner of all of the issued and outstanding
shares of each class and series of capital stock of Unity and Licensee
(collectively, the "Shares"), and joins in this Agreement as a party for the
purpose of (i) making certain representations, warranties, covenants and
agreements regarding the Business, the Seller, the Licensee, the Partnership,
the Assets (as hereinafter defined), the RSA 2 Assets (as hereinafter defined)
and itself, and (ii) obligating itself to sell and assign to Purchaser or an
Affiliate of Purchaser the assets and rights listed on Schedule 1.3; and
WHEREAS, Licensee joins in this Agreement as a party for the purposes of
(i) obligating itself to sell and assign to Purchaser or an Affiliate of
Purchaser such of the Licenses (as hereinafter defined) as are held by it and
required to operate the Business together with such other
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assets and rights used in the Business, and listed on Schedule 1.4, and (ii)
making certain representations, warranties, covenants and agreements with
respect to such Licenses, assets and rights listed on Schedule 1.4.
NOW, THEREFORE, in consideration of the foregoing premises, the mutual
covenants contained herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
ARTICLE 1: PURCHASE OF ASSETS
1.1 AGREEMENT TO PURCHASE AND SELL ASSETS OF SELLER. On the Date of
Closing (as hereinafter defined), Purchaser agrees to purchase, or cause one or
more Affiliates of Purchaser to which this Agreement has been assigned pursuant
to Section 15.13 hereof to purchase, from Seller and Seller agrees to sell,
assign, transfer, convey and deliver to Purchaser or to such Affiliate(s) of
Purchaser, on the terms and subject to the conditions set forth in this
Agreement, all of the assets, properties, contract rights, operations and
business of Unity of every kind, nature and description whatsoever and wherever
the same may be located (but excluding the assets specifically identified as
"Excluded Assets" in Section 1.2 hereof). The assets, properties, contracts,
operations and business to be purchased from and sold by Seller pursuant to this
Agreement (collectively the "Unity Assets") include, without limitation:
a. All of Seller's right, title and interest in and to any and
all cell sites and other real property owned or leased by Seller
together with all of Seller's right, title and interest, if any, in and
to the improvements, fixtures, hereditaments and appurtenances thereto,
including but not limited to that real property which is legally
described on Schedule 1.1(a) hereto (the "Seller Real Estate");
b. All of Seller's right, title and interest in and to any and
all federal, state, foreign and common law trademarks, trademark
registrations and applications therefor, service marks, service mark
registrations and applications therefor, copyrights, copyright
registrations and applications therefor, trade names, assumed names,
logos, patents, patent applications, technology, know-how, trade
secrets, processes, formulas, drawings, designs and similar intellectual
property and proprietary rights of any kind, as well as Seller's
transferable interests in any and all federal, state and foreign common
law rights protecting the same, including, but not limited to, those
proprietary rights described on Schedule 1.1(b) hereto (the "Proprietary
Rights"), but excluding those listed on Schedule 1.2(c);
c. All of Seller's right, title and interest in and to any and
all equipment, machinery, cell site equipment, testing equipment,
furniture, fixtures, furnishings, tooling,
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personal property, shelving, patterns, molds, office equipment,
computer hardware, trade fixtures, leasehold improvements, tools and
other tangible personal property owned or leased by Seller, including,
but not limited to, those items described in Schedule 1.1(c) hereto,
together with any manufacturer, vendor or installer warranties thereon;
d. All of Seller's right, title and interest in and to any
vehicles, including, but not limited to, those vehicles described on
Schedule 1.1(d) hereto (the "Vehicles");
e. All of Seller's telephone numbers, telephone directory
advertisements and NXX blocks, including but not limited to those items
listed on Schedule 1.1(e);
f. All of Seller's business records which relate to, arise from
or which are used in connection with the operation of the Business,
including, but not limited to, customer lists, lists of suppliers,
accounting records (including work papers related thereto),
correspondence, files, research data, advertising data, contracts and
other records and information necessary or desirable for Purchaser to
carry on the Business on and after the Date of Closing, whether held by
Seller or by Shareholder on behalf of Seller or the Partnership;
g. All of Seller's contract rights and benefits in and to the
contracts (including contracts for provisions of services to customers
("Customer Contracts")), contracts in progress, commitments, leases,
licenses and other agreements which relate to, arise from or are used in
connection with the operation of the Business (including contracts, if
any, between the Partnership and Seller) and any amendments thereto
(collectively, other than Customer Contracts and other than leases,
licenses and other agreements relating to or creating a leasehold
interest or right to use the Real Estate governed pursuant to other
provisions of this Agreement, the "Operating Contracts") in effect on
the Date of Closing. Schedule 1.1(g) lists (x) all Operating Contracts
which are in effect on the Date of Closing, which are material, in
Seller's reasonable judgment, and (y) all agreements which by their
terms require aggregate annual payments by any party thereto in excess
of $12,000.00 or have a duration in excess of one (1) year after the
date hereof. Schedule 1.1(g) describes for each of such contracts the
contracting parties, date, title, and nature of contract;
h. All of Seller's cellular and other governmental licenses,
certificates, franchises, registrations, permits, consents and approvals
or rights to use licenses, including, but not limited to, those
described in Schedule 1.1(h) hereto (the "Licenses");
i. All of Seller's prepaid expenses, credit memos and deposits,
the categories of which are described in Schedule 1.1(i) hereto;
j. All of Seller's office, shop and other supplies which are on
hand as of the Date of Closing;
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k. All of Seller's accounts receivable, notes receivable and
other rights to the payment of money which remain uncollected on the
Date of Closing, whether or not evidenced by a writing or reflected on
the balance sheets to be delivered by Seller to Purchaser pursuant to
Sections 5.11 and/or 7.18 hereof (the "Receivables");
l. All of Seller's inventory which is on hand as of the Date of
Closing, including raw materials, work in process and finished goods,
the categories of such inventory together with their approximate
aggregate value as set forth on the books of Seller as of November 30,
1996 are described in Schedule 1.1(l) hereto (the "Inventory");
m. All of Seller's right, title and interest in and to the
plans, specifications, blueprints, surveys, repair and operating
manuals, warranties, guaranties, maintenance records, information
regarding real estate taxes, assessments and/or insurance and other
written information relating to any of the Assets or RSA 2 Assets (as
hereinafter defined) or to the improvements on any parcel of Seller Real
Estate or Partnership Real Estate (as hereinafter defined) as well as
copies of the certificates of occupancy for such improvements, and
Seller's custodial rights, to the extent transferable, to such
documentation and information relating to RSA 2 Assets (as hereinafter
defined) or Partnership Real Estate (as hereinafter defined);
n. All of Seller's rights, in computer software and software
program documentation in computer readable and hard-copy forms
reasonably acceptable to Purchaser, (except for shrink-wrapped
software), which will be transferred only to the extent transferable
including, but not limited to, the software described in Schedule 1.1(n)
hereto (the "Software");
o. All of Seller's rights, if any, in and to any easements and
permits, including, but not limited to, the easements and permits
described in Schedule 1.1(o) hereto (the "Easements");
p. All of Seller's rights and claims against third parties other
than Purchaser or its Affiliates;
q. All of Seller's supply of brochures, displays, models and
other marketing materials on hand as of the Date of Closing, as well as
the camera ready art, negatives, proofs and other reproduction materials
for the same;
r. All of Seller's goodwill as a going concern and other
intangible personal property, to the extent transferable;
s. Subject to Section 1.2(e) below, all of Seller's ownership
interests in and other rights with respect to the Partnership (the
"Partnership Interest");
t. Cash of Seller in an amount equal to all deposits and all
prepayments by customers of the Business for services to be rendered on
and after the Date of Closing;
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u. All accretions and additions to the Unity Assets that occur
prior to the Date of Closing, less property disposed of or consumed in
the ordinary course of business without breach of the terms of this
Agreement prior to the Date of Closing; and
v. All other assets and rights of Seller not specifically
enumerated or excluded herein.
1.2 Excluded Assets. Notwithstanding anything contained in this
Agreement to the contrary, Purchaser will not purchase, and Seller will not
sell, any of the following assets (the "Excluded Assets"):
a. The corporate minute books, stock books and other corporate
records of Seller having exclusively to do with the corporate
organization and capitalization of Seller as well as Seller's tax
records;
b. All cash and cash equivalents of the Seller on hand or on
deposit in bank accounts as of the Date of Closing in excess of an
amount equal to customer deposits and prepayments for services to be
rendered on and after the Date of Closing;
c. Those assets listed on Schedule 1.2(c) hereto;
d. Original insurance contracts that are not transferable to
Purchaser on the Date of Closing as an insured; and
e. The parties to this Agreement acknowledge that the transfer
of the Partnership Interest is subject to the right of first refusal by
Cellco Partnership as set forth in the Partnership Agreement, and the
parties have made provision in Section 2.1 of this Agreement for a
reduction in the consideration due to Seller if the Partnership Interest
is not transferred at Closing. Accordingly, in the event the Purchase
Price as defined in the first sentence of Section 2.1 is not paid, (i)
every reference in this Agreement to the Business, Assets, Operating
Contracts and Customer Contracts shall exclude the business of the
Partnership, the Partnership Interest, the RSA 2 Assets, the Partnership
Real Estate and the other contracts and assets of the Partnership, and
every action or delivery to be taken or made at the Closing shall
exclude the Partnership Interest, the RSA 2 Assets, the Partnership Real
Estate and related rights and obligations, except for Seller's,
Licensee's and Shareholder's interests in contracts with the
Partnership, and (ii) each Schedule to this Agreement shall be deemed
amended accordingly.
f. Two (2) parcels of Seller Real Estate commonly known as 269
Western Avenue, Augusta, and 532 Main Street, Rockland, may be excluded
from the Assets and the Purchase Price adjusted, as (but only as)
provided in Sections 7.16(b) and 7.16(c) below.
1.3 AGREEMENT TO PURCHASE AND SELL ASSETS OF SHAREHOLDER. On the Date of
Closing, Purchaser agrees to purchase, or cause one or more Affiliates of
Purchaser to which this
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Agreement has been assigned pursuant to Section 15.12 hereof to purchase, from
Shareholder and Shareholder agrees to sell, assign, transfer, convey and deliver
to Purchase or such Affiliate(s) of Purchaser, on the terms and subject to the
conditions set forth in this Agreement, all of the assets, properties,
contracts, rights, operations and business of Shareholder listed on Schedule
1.3.
1.4 AGREEMENT TO PURCHASE AND SELL ASSETS OF LICENSEE. On the Date of
Closing, Purchaser agrees to purchase, or cause one or more Affiliates of
Purchaser to which this Agreement has been assigned pursuant to Section 15.12
hereof to purchase, from Licensee and Licensee agrees to sell, assign, transfer,
convey and deliver to Purchaser or such Affiliate(s) of Purchaser, on the terms
and subject to the conditions set forth in this Agreement, all of the assets,
properties, contract rights, operations and business of Licensee as listed on
Schedule 1.4.
1.5 ASSETS. The Unity Assets, assets of Shareholder as defined in
Section 1.3 above and the assets of Licensee as described in Section 1.4 above
all to be transferred to Purchaser or its Affiliates hereunder shall be referred
to collectively as "Assets."
ARTICLE 2: PURCHASE PRICE AND WORKING CAPITAL
2.1 PURCHASE PRICE. The purchase price for the Assets and the Agreement
Not To Compete provided for in Section 12.2(m) hereof (the "Agreement Not to
Compete") shall be the sum of Seventy-seven Million Three Hundred Fifty-five
Thousand Two Hundred Fifty and 00/100 Dollars ($77,355,250.00) (the "Purchase
Price"), subject to adjustment as provided herein. In the event that Cellco
Partnership, a Delaware partnership ("Cellco"), elects to purchase all or any
part of Unity's Partnership Interest, and Purchaser elects not to purchase the
Partnership Interest because the entire Partnership Interest cannot be
transferred to the Purchaser without the imposition of any adverse conditions or
diminution in the rights associated with such Partnership Interest (including,
but not limited to, the right to manage the Partnership), then the Purchase
Price shall be reduced by the sum of Twelve Million Seven Hundred Sixty-two
Thousand Seven Hundred Fifty and No/100 Dollars ($12,762,750.00). The Purchase
Price, reduced pursuant to the preceding sentence, is referred to herein as the
"Alternate Purchase Price."
2.2 ALLOCATION OF PURCHASE PRICE. Purchaser shall, in a reasonable
manner after appropriate consultation with Seller, determine the fair market
value of the Assets and Purchaser shall allocate the Purchase Price or Alternate
Purchase Price, as the case may be, among the Assets and the Agreement Not to
Compete in accordance with said determination and Section 1060 of the Internal
Revenue Code of 1986, as amended (the "Code"). Such allocation shall be
communicated by Purchaser to Seller as soon as practical after it is available.
The Purchaser, Seller, Shareholder and Licensee, as appropriate, shall file, in
accordance with Section 1060 of the Code, an Asset Allocation Statement on Form
8594 (which conforms with such allocation) with
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its federal income tax return for the tax year in which the Date of Closing
occurs and shall contemporaneously provide the other party with a copy of the
Form 8594 being filed. Each party agrees not to assert, in connection with any
tax return, audit or other similar proceeding, any allocation of the Purchase
Price or Alternate Purchaser Price, as the case may be, which differs from the
allocation determined by Purchaser hereunder.
2.3 PAYMENT OF PURCHASE PRICE. An amount equal to ninety-three percent
(93%) of the Purchase Price or Alternate Purchase Price, as the case may be (the
"Cash Portion of the Purchase Price"), shall be paid by Purchaser to Seller by
wire transfer of immediately available funds to Seller's designated account(s)
on the Date of Closing. The balance of the Purchase Price or Alternate Purchase
Price, as the case may be (the "Indemnity Fund"), shall be deposited on the Date
of Closing with a financial institution which is reasonably acceptable to
Purchaser and selected by Seller (the "Escrow Agent") to be held in escrow
pursuant to a Post Closing Escrow Agreement in substantially the form of Exhibit
D attached hereto (the "Post Closing Escrow Agreement"). The Indemnity Fund
shall be held for a period of six (6) months after the Date of Closing, which
period is subject to increase as provided for in Section 2.4(g) hereof (the
"Hold Back Period"), to protect Purchaser with respect to (i) the matters as to
which Seller, Shareholder and Licensee are required to indemnify Purchaser
against hereunder pursuant to the provisions of ARTICLE 11 hereof, and (ii) any
reduction in the Purchase Price or Alternate Purchase Price, as the case may be,
pursuant to the provisions of Section 2.4 hereof. The Indemnity Fund, less (x)
the amount of all claims validly made by the Purchaser for indemnification and
determined to be payable pursuant to ARTICLE 11 hereof, (y) the amount of any
reduction in the Purchase Price or Alternate Purchase Price, as the case may be,
pursuant to the provisions of Section 2.4 hereof, and (z) any interest or income
on the amounts specified in items (x) and (y), shall be paid to Seller together
with any interest or income thereon on the business day immediately following
the expiration of the Hold Back Period.
2.4 ADJUSTMENT TO PURCHASE PRICE; CLOSING SCHEDULES; PRORATIONS.
a. Within one hundred eighty (180) days following the Date of
Closing and after appropriate consultation with Seller, Purchaser shall
prepare or cause to be prepared and deliver to Seller a schedule of
certain of the current assets of Unity transferred to Purchaser and
certain of the current liabilities of Unity assumed by Purchaser,
prepared as set forth herein (the "Unity Closing Schedule"). The Unity
Closing Schedule shall be prepared as of the opening of business on the
Date of Closing in accordance with generally accepted accounting
principles and on a basis consistent with the procedures used in
preparing the December 31, 1995 audited balance sheet of Unity
identified on Schedule 5.11 hereto, but shall include only the following
selected current assets, current liabilities and accruals:
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(i) Only the following current assets of Unity shall be
included in the Unity Closing Schedule (the "Scheduled Assets"):
(1) The Inventory which is on hand as of the
opening of business on the Date of Closing and which
consists of reasonably current models, undamaged, and
usable and saleable at customary prices in the ordinary
course of business, valued in accordance with generally
accepted accounting principles;
(2) The Receivables reflected on Seller's books
as of the Date of Closing which remain uncollected as of
the opening of business on the Date of Closing, less an
appropriate allowance for bad debts consistent with past
practices of Seller; and
(3) Prepaid insurance and other prepaid expenses
which are transferable to and are transferred to
Purchaser.
(ii) Only the following current liabilities of Unity
shall be included in the Unity Closing Schedule (the "Scheduled
Liabilities"):
(1) The trade accounts payable of Unity assumed
by the Purchaser pursuant to Section 3.2(a) hereof;
(2) The payroll related expenses assumed by the
Purchaser pursuant to Section 3.2(c) hereof;
(3) All accrued liabilities and operating
expenses of Seller and the Partnership described in
Section 2.4(a)(iii) hereof; and
(4) All liabilities assumed by Purchaser
pursuant to Sections 3.2(b), 3.2(e) and 3.2(f) hereof to
the extent the same may be reflected on the opening
balance sheets of Purchaser in accordance with generally
accepted accounting principles consistently applied.
(iii) In addition, the Unity Closing Schedule shall
reflect such adjustments as are necessary to fairly prorate
operating expenses between Seller and Purchaser as of the
opening of business on the Date of Closing, and appropriate
adjustments to or eliminations of intercompany accounts.
(iv) In addition, the Closing Schedules for both Unity
and the Partnership shall reflect adjustments arising out of
breaches of the representation and warranties set forth in
Sections 5.8, 5.12(h), 5.16(f) and (h) and 5.17.
b. Within ninety (90) days following the Date of Closing,
Purchaser shall prepare or cause to be prepared and delivered to Seller
a schedule of all of the Partnership's current assets and all of the
Partnership's current liabilities as of the opening of business on the
Date of Closing (the "Partnership Closing Schedule"). The Partnership
Closing Schedule shall be
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prepared in accordance with generally accepted accounting principals and
on a basis consistent with the procedures used in preparing the December
31, 1995 audited balance sheet of the Partnership identified on Schedule
5.11 hereto.
c. The Unity Closing Schedule and the Partnership Closing
Schedule (collectively, the "Closing Schedules") shall reflect such
adjustments as are reasonably necessary to eliminate intercompany
accounts. The Unity Closing Schedule shall not include or reflect any
Excluded Assets or any liabilities of Unity which are not assumed by
Purchaser, including any expenses or costs of Unity described in Section
15.13. The Unity Closing Schedule shall reflect the Net Unity Scheduled
Assets (i.e., Scheduled Assets less Scheduled Liabilities) for Unity and
the Partnership Closing Schedule shall reflect the Net Partnership
Scheduled Assets (i.e., current assets less current liabilities) of the
Partnership, in each case adjusted as set forth above. In the event that
Purchaser does not purchase the Partnership Interest, the Partnership
Closing Schedule need not be prepared.
d. After Seller's receipt of the Closing Schedules, Seller shall
have thirty (30) days within which to review and confirm the accuracy of
the Closing Schedules. Purchaser shall allow Seller and its
representatives to review such books, records and documents, including
work papers, as may be reasonably necessary or helpful for Seller to
determine the accuracy of the Closing Schedules. In the event the Seller
disagrees in good faith with any aspect of the Closing Schedules, Seller
shall, within the thirty (30) day review period, notify Purchaser in
writing of the disagreement, specifying the item or items in question
and the nature of the disagreement and the amount of any proposed good
faith adjustments thereto. If Seller fails to give such notice to
Purchaser of an objection or the intention of making such an objection
within the specified period, then Seller shall be deemed to have
accepted the Closing Schedules. If, however, Seller gives such notice to
Purchaser and Purchaser does not accept any of the Seller's proposed
adjustments, Purchaser shall notify Seller in writing of the same within
fifteen (15) days of Purchaser's receipt of Seller's proposed
adjustments. Purchaser's failure to object to Seller's proposed
adjustments within the specified period shall be deemed to constitute
acceptance of Seller's proposed adjustments and such adjustments shall
be deemed to be incorporated into the Closing Schedules.
e. In the event that Purchaser does not accept any of the
Seller's proposed adjustments, any outstanding issues not resolved
through negotiations in good faith within ten (10) business days after
Purchaser's notice to Seller shall be resolved through arbitration as
set forth in Section 11.5 hereof.
f. As soon as the final Closing Schedules have been approved by
the parties or prepared at the direction of the arbitrators, as the case
may be, the Purchase Price or Alternate Purchase Price, as the case may
be, shall be adjusted downward, on a dollar for dollar basis, as
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follows: To the extent that the Net Unity Scheduled Assets plus
fifty-one percent (51%) of the Net Partnership Scheduled Assets is less
than zero (0), the Purchase Price or Alternate Purchase Price, as the
case may be shall be adjusted downward dollar for dollar by the amount
of any such deficit, and Purchaser and Seller shall instruct the Escrow
Agent to distribute to the Purchaser that portion of the Indemnity Fund
equal to the deficit together with any interest or income thereon. In
the event that the parties agree on the final Closing Schedules or
receive the arbitrators' final decision after the first anniversary of
the Date of Closing, Seller or Shareholder shall pay to Purchaser an
amount equal to the downward adjustment together with interest from the
Date of Closing to the end of the escrow period at the rate earned on
the escrow funds and from the end of the escrow period to the date of
payment at the rate of 7.5% per annum. Such distribution or payment
pursuant to this Subsection 2.4(f) shall be Purchaser's exclusive remedy
on account of the deficit, provided, however, that the rights and
remedies for breaches of the representations, warranties and covenants
set forth in this Agreement shall not thereby be diminished.
g. If arbitration is used to resolve any issue hereunder and if
the time period to complete the arbitration process will end more than
six (6) months after the Date of Closing, the expiration of the Hold
Back Period shall be extended to the date ten (10) business days after
the arbitrators' final decision is delivered to Purchaser and Seller but
in no event shall such period be extended past the first anniversary of
the Date of Closing.
ARTICLE 3: ASSUMPTION OF LIABILITIES
3.1 LIMITATION ON ASSUMPTION OF LIABILITIES. Except as specifically set
forth in Section 3.2 hereof, Seller, Shareholder and Licensee shall transfer the
Assets to Purchaser on the Date of Closing free and clear of all Encumbrances
(as hereinafter defined) other than Permitted Encumbrances (as hereinafter
defined), and Purchaser shall not, by virtue of its purchase of the Assets,
assume or become responsible for any debts, liabilities or obligations of
Seller, Shareholder or Licensee, whether fixed, contingent, known, unknown or
otherwise.
3.2 ASSUMPTION OF CERTAIN LIABILITIES. Notwithstanding the provisions of
Section 3.1 hereof to the contrary, Purchaser covenants and agrees that on the
Date of Closing, it shall execute and deliver to Seller an Assumption Agreement
in substantially the form of Exhibit A hereto (the "Assumption Agreement"),
pursuant to which it will assume and agree to perform and discharge the
following debts, liabilities and obligations of Seller:
a. All of Unity's trade accounts payable (being maintained by
Unity consistent with its past practices) arising out of the operation
of the Business in the ordinary course
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of business which (i) are reflected on Unity's books and records as of
the Date of Closing and (ii) remain unpaid as of the opening of business
on the Date of Closing;
b. All debts, liabilities and obligations of Unity arising under
the Operating Contracts (i) which are listed on Schedule 1.1(g), or (ii)
which require aggregate annual payments of less than $12,000.00 or which
have a duration of less than one year after the date of this Agreement
except that Purchaser does not assume any liabilities for products sold
or services rendered in connection with the operation of the Business
under such Operating Contracts prior to the Date of Closing provided
that liabilities assumed hereunder are only assumed to the extent they
accrue after the Date of Closing and are not attributable to any default
of Seller thereunder, except for trade payables assumed pursuant to
subsection (a), above;
c. All amounts accrued as of the opening of business on the Date
of Closing for wages, salary and benefits, including vacation and sick
leave, payable to those employees of Seller who provide services in
connection with the operation of the Business and who are employed by
the Purchaser on the Date of Closing;
d. Unity's obligation to provide cellular telephone and related
services to its customers in accord with the Customer Contracts in
effect on and after the Date of Closing; and
e. INTENTIONALLY OMITTED
f. All liabilities and obligations of Seller for Seller Leased
Real Estate or in respect of Permitted Encumbrances listed on Schedule
5.16(d), including, without limitation, Encumbrances or Permitted
Encumbrances in respect of or relating to Seller Real Estate, but only
to the extent that said liabilities and obligations accrue following the
Date of Closing and are not attributable to any default of Seller
thereunder.
g. Obligations of the Seller under the Partnership Agreement,
but only to the extent they accrue after the Date of Closing and are not
attributable to any default of Seller thereunder.
ARTICLE 4: TITLE AND RISK OF LOSS
4.1 TITLE AND RISK OF LOSS.
a. Seller, Licensee and Shareholder shall bear all costs and
expenses and assume and bear all risk of loss, damage or destruction of
or to the Assets due to theft, expropriation, seizure, destruction,
damage, fire, earthquake, flood or other cause or casualty until title
thereto is passed to Purchaser at the Closing (as hereinafter defined).
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b. If, after September 30, 1996 but prior to the Date of
Closing, any material Assets shall have suffered, sustained or incurred
any material loss, damage or destruction, including, without limitation,
any environmental contamination or pollution, and Seller shall not have
elected at its sole option and expense to wholly repair or replace and
has not repaired or replaced the Assets which suffered, sustained or
incurred the material loss, damage or destruction on or before the Date
of Closing with assets which are as nearly identical as practicable in
value, form and function, Purchaser shall have the right, at its sole
discretion and election, to either (i) terminate this Agreement, or (ii)
complete the purchase contemplated by this Agreement, in which event:
(x) Seller shall assign and transfer to Purchaser and
Purchaser shall be entitled to receive all insurance proceeds
(including any business interruption insurance proceeds relating
to periods following the Closing) and other compensation
collected by reason of such loss, damage or destruction,
together with any rights to receive any uncollected insurance
proceeds or other compensation relating to such loss, damage or
destruction and an amount equal to the sum of the aggregate
amount of any applicable deductibles under any insurance
policies covering the lost, damaged or destroyed Assets plus any
self- insured retentions; or
(y) Purchaser shall be entitled to reduce the Purchase
Price or Alternate Purchase Price, as the case may be, by an
amount equal to the lesser of the cost of repair, or the
replacement cost of the Asset; or
(z) Purchaser shall be entitled to utilize alternatives
(x) and (y) concurrently but not with respect to any single
Asset.
If Purchaser elects to complete the purchase contemplated hereby
notwithstanding any such loss, damage or destruction, and if Seller assigns
such insurance proceeds and other compensation and any other rights thereto to
Purchaser, then Seller shall be released from any and all liability or
responsibility with respect to such loss, damage or destruction, but shall
reasonably cooperate with Purchaser, at no cost or expense to Purchaser, in
collecting all insurance proceeds and other compensation with respect thereto.
The Purchase Price or Alternate Purchase Price, as the case may be, in such
event shall be reduced by the amount of any deductible amounts under such
insurance policies and self-insured retentions which are not paid by Seller to
Purchaser.
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ARTICLE 5: REPRESENTATIONS AND WARRANTIES OF SELLER, LICENSEE AND
SHAREHOLDER
As an inducement for Purchaser to enter into this Agreement and
consummate the transactions contemplated hereby, intending that Purchaser rely
thereon in entering into and performing this Agreement, Seller, Licensee (to the
extent a representation or warranty relates to the assets set forth on Schedule
1.4, Licensee or its properties, assets, revenues, business, operations,
financial condition or prospects) and Shareholder jointly and severally warrant
and represent to Purchaser that each and all of the following are true and
correct in all material respects as of the date of this Agreement and will be
true and correct in all material respects at and as of the Closing:
5.1 DUE INCORPORATION. Unity, Licensee and Shareholder are each
corporations which are duly organized, validly existing and in good standing
under the laws of the States of Maine, Delaware and Delaware, respectively, and
have all requisite power and authority, corporate and otherwise, to own, operate
and lease their respective properties and assets and, respectively, to conduct
the Business as it is now being conducted, to hold the Licenses and to hold the
Shares. Unity, Licensee and Shareholder are each duly qualified to transact
business as foreign corporations and are in good standing under the laws of
every state or jurisdiction in which the nature of their respective activities
or of their respective properties owned, leased or operated makes such
qualification necessary and in which the failure to be so qualified could
reasonably be expected to have an adverse effect in an aggregate amount in
excess of $25,000.00 on the properties, assets, revenues, business, operations,
financial condition or prospects of Unity, Licensee, Shareholder, Partnership
and/or the Business (a "Material Adverse Effect"). Neither Seller nor the
Partnership is subject to any agreement, commitment or understanding which
materially restricts or may materially restrict the conduct of the Business in
any jurisdiction or location.
5.2 DUE AUTHORIZATION. The execution, delivery and performance of this
Agreement, including the documents, instruments and agreements to be executed
and/or delivered by any of Seller, Licensee or Shareholder pursuant to this
Agreement, and the consummation of the transactions contemplated hereby and
thereby have been duly and validly authorized by all necessary corporate action
on the part of Seller, Licensee or Shareholder, as appropriate. The respective
obligations of Unity, Licensee and Shareholder hereunder and thereunder are or
will be upon such execution or delivery valid and legally binding, and this
Agreement and the documents, instruments and agreements to be executed and/or
delivered by Unity, Licensee and/or Shareholder pursuant to this Agreement are
or will be upon such execution and delivery enforceable against Unity, Licensee
and Shareholder, as applicable, in accordance with their
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respective terms, except as such enforcement may be limited by applicable
bankruptcy, reorganization, insolvency, moratorium or other similar laws
presently or hereafter in effect affecting the enforcement of creditors' rights
generally and by general principles of equity (regardless of whether such
enforceability is considered in a proceeding at law or in equity), including,
among others, limitations on the availability of equitable remedies.
5.3 NO BREACH. Unity, Licensee and Shareholder each have full corporate
power and authority to sell, assign, transfer, convey and deliver to Purchaser
the Assets to be sold hereunder and to otherwise perform their respective
obligations under this Agreement and the documents, instruments and agreements
to be executed and/or delivered by them pursuant hereto, in each case except as
provided in Schedule 5.3. The execution and delivery of this Agreement,
including the documents, instruments and agreements to be executed and/or
delivered by any of Seller, Licensee or Shareholder pursuant to this Agreement,
and the consummation of the transactions contemplated hereby and thereby will
not: (i) violate any provision of the Articles of Incorporation or Bylaws (or
comparable governing documents or instruments) of any of Seller, Licensee,
Shareholder or the Partnership other than as set forth in Section 8.3; (ii)
violate any applicable law, statute, ordinance, rule, regulation, code, license,
certificate, franchise, permit, writ, ruling, award, executive order, directive,
requirement, injunction (whether temporary, preliminary or permanent), judgment,
decree or other order (collectively "Applicable Laws") issued, enacted, entered
or deemed applicable by any court or any other federal, state, county, municipal
or other governmental department, commission, board, agency or instrumentality,
whether domestic or foreign (collectively a "Governmental Authority"), having
jurisdiction over any of Seller, Licensee, Shareholder, the Partnership or any
of their respective properties or assets; (iii) except as provided in Schedule
5.3 hereto, require any filing with, permit from, consent or approval of, or the
giving of any notice to, any Governmental Authority or any third party; (iv)
except as provided in Schedule 5.3 hereto, result in a violation or breach of,
or constitute (with or without due notice or lapse of time or both) a default
(or give another party any rights of termination, cancellation or acceleration)
under any of the terms, conditions or provisions of any note, bond, mortgage,
indenture, license, franchise, permit, lease, contract, agreement or other
instrument or obligation to which any of Seller, Licensee, Shareholder or the
Partnership is a party, or by which it or any of its respective properties or
assets may be bound, including the Operating Contracts, the RSA 2 Contracts (as
hereinafter defined) and the Partnership Agreement; or (v) result in the
creation or imposition of any Encumbrance, except for Permitted Encumbrances, on
any of the Assets or on any of the Partnership's properties and assets (the "RSA
2 Assets"), excluding from the foregoing clauses (ii), (iii), (iv) and (v)
violations, breaches, defaults, and Encumbrances which, and filings, notices,
permits, consents and approvals
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the absence of which, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect or prevent or materially delay the
Closing.
5.4 CLEAR TITLE. On the Date of Closing, Seller, Licensee and
Shareholder will convey to Purchaser good and marketable title to all of the
Assets (excluding, however, for purposes of this Section 5.4, the Seller Real
Estate and Partnership Real Estate which is covered by Section 5.16 of this
Agreement), free and clear of any and all liens, encumbrances, security devices,
security interests, financing statements, mortgages, pledges, conditional sales
agreements, factor's liens, environmental liens, charges, leases, leasehold
interests, licenses, sales taxes, use taxes, tax claims, judgments,
restrictions, covenants, easements, attachments, equities, liabilities or claims
of any kind, nature or description whatsoever (collectively "Encumbrances"),
except (i) Encumbrances for current taxes not yet due and payable, (ii) minor
Encumbrances incurred in the ordinary course of business which in the aggregate
do not materially impair the value or use of the Assets in a manner consistent
with their present use, and (iii) the Encumbrances described in Schedule 5.4;
provided, however, that the Seller Real Estate may be subject to the Permitted
Encumbrances as set forth in Section 5.16(d) below. Except as described in
Schedule 5.4 hereto, on the Date of Closing, the Partnership will hold good and
marketable title to all of the RSA 2 Assets free and clear of any and all
Encumbrances, except (i) Encumbrances for current taxes not yet due and payable,
(ii) minor Encumbrances incurred in the ordinary course of business which in the
aggregate do not materially impair the value or use of the Assets in a manner
consistent with their present use, and (iii) the Encumbrances described in
Schedule 5.4; provided, however, that the Partnership Real Estate may also be
subject to the Permitted Encumbrances as set forth in Section 5.16 below.
5.5 CONDITION OF ASSETS; Inventory. All of the Assets to be purchased
and sold hereunder and all of the RSA 2 Assets (i) have been maintained in all
material respects in accordance with general industry practices, (ii) are in
good operating condition and repair, subject only to ordinary wear and tear, and
(iii) are usable and fit in all material respects in accordance with general
industry practices for their intended purpose. Seller, Licensee and Shareholder
shall use their respective reasonable efforts and shall cooperate with Purchaser
with respect to the transfer to Purchaser of all existing manufacturers',
vendors', installers' or other warranties for the Assets which are in effect as
of the Date of Closing.
All of the Inventory being purchased and sold hereunder and all
inventory of the Partnership, including raw materials, work in process and
finished goods (the "RSA 2 Inventory"), consists of items which are reasonably
current models, undamaged and of a type and quantity saleable at customary
prices in the ordinary course of business. The Inventory and the RSA 2 Inventory
have been purchased in the ordinary course of business and are consistent, in
the reasonable judgment of Seller and Shareholder, with the anticipated
requirements of the Business,
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and the volume of purchases thereof and of orders therefor have not been reduced
or increased in anticipation of the consummation of the transactions
contemplated hereby.
5.6 LITIGATION. Except as described in Schedule 5.6 hereto, there are no
claims, demands, actions, suits or other proceedings at law or in equity which
are pending or, to the knowledge of Seller, Licensee or Shareholder, no pending
or threatened investigations, nor claims, demands, actions, suits or other
proceedings at law or in equity which are threatened against or affecting any of
Seller, the Partnership, the Assets, the RSA 2 Assets, the Business, or Licensee
or Shareholder with respect to the Business before or by any court, Governmental
Authority or other person or entity wherein an unfavorable decision, ruling or
finding could, individually or in the aggregate, reasonably be expected to have
a Material Adverse Effect or impair the ability of any of Seller, Licensee and
Shareholder to consummate the transactions contemplated hereby. Except as
provided in Schedule 5.6 hereto, neither the Partnership nor any of Seller,
Licensee and Shareholder is a party to or subject to the provisions of any writ,
ruling, award, executive order, directive, requirement, injunction (whether
temporary, preliminary or permanent), judgment, decree or other order issued,
enacted, entered or deemed applicable by any court or other Governmental
Authority which could, individually or in the aggregate, have a Material Adverse
Effect or impair the ability of any of Seller, Licensee and Shareholder to
consummate the transactions contemplated hereby.
5.7 LABOR MATTERS. There are no pending or, to the knowledge of Seller,
Licensee or Shareholder, threatened labor disputes, disturbances, claims,
grievances, arbitrations or other proceedings of any character with respect to
the Business and the employees of Seller and/or the Partnership, which,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect. Except as described in Schedule 5.7 hereto, with
respect to the Business and the employees of Seller and/or the Partnership, none
of the Seller, Licensee and Shareholder or the Partnership is a party to any
collective bargaining agreement or is obligated to contribute, currently or as a
result of any withdrawal, with respect to any pension or health or welfare fund
pursuant to any collective bargaining agreement or otherwise. In addition,
except as described in Schedule 5.7 hereto, during the last three (3) years with
respect to the Business and the employees of Seller and/or the Partnership:
a. None of Seller, Licensee and Shareholder or the Partnership
has been involved in any discussion with any unit or group of employees
seeking to become the bargaining unit for any of its employees nor, to
the knowledge of Seller, Licensee or Shareholder, has there been any
threat of such discussions;
b. None of Seller, Licensee or Shareholder or the Partnership
has experienced any work stoppages, walkouts, strikes or other material
labor disputes, disturbances or proceedings; and
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c. No claims have been made against any of Seller, Licensee,
Shareholder or the Partnership by any former or present employee who
worked in the Business based on employment discrimination, wrongful
discharge or unfair labor practices.
5.8 TAXES. Except as set forth on Schedule 5.8 hereto, all federal,
state, county, local and foreign income, ad valorem, excise, transfer, sales and
use, gross receipts, gross revenue, withholding, franchise, payroll, property,
Social Security, unemployment, customs, duties and other taxes (including any
interest and penalties relating thereto) and assessments of any kind whatsoever
(collectively "Taxes") attributable to the Assets, the RSA 2 Assets and/or the
Business which are due and payable by any of Seller, Licensee, Shareholder
and/or the Partnership have been duly reported, fully paid and discharged as
reported and there are no unpaid Taxes currently due and payable which are or
could become an Encumbrance on any of the Assets or RSA 2 Assets. Except as set
forth on Schedule 5.8 hereto, all tax returns and other documents of every kind
required to be filed by or on behalf of Seller, Licensee, Shareholder and/or the
Partnership with respect to the Business and operations of Seller and the
Partnership have been timely filed on or before their due dates with the
appropriate Governmental Authority and the taxes shown thereon as due have been
timely paid and all such tax returns filed by or on behalf of Seller and the
Partnership have been accurately prepared and have been made on a proper basis.
Where required, timely estimated payments or installment payments of tax
liabilities have been made to each appropriate Governmental Authority in amounts
sufficient to avoid underpayment penalties or late payment penalties applicable
thereto. None of Seller, Licensee, Shareholder or the Partnership has waived any
restrictions on assessment or collection of any Taxes or consented to the
extension of any statute of limitations relating to any Taxes with respect to
the Business or operations of Seller and/or the Partnership.
5.9 EMPLOYEE BENEFITS. Except as described in Schedule 5.9 hereto with
respect to the Business or the employees of the Seller and/or the Partnership,
neither Seller nor the Partnership maintains or contributes to any bonus, stock
option, restricted stock, stock purchase, profit-sharing, deferred compensation,
severance, pension, retirement, disability, medical, dental, health or life
insurance, death benefit, incentive or other compensation or retirement plans,
policies, arrangements or agreements which are currently in effect. Without
limiting the generality of the foregoing provision of this Section, except as
described in Schedule 5.9 hereto, there are no pension plans, welfare plans or
employee benefit plans qualified under Section 401(a) of the Code to which any
of Seller, Licensee, Shareholder or the Partnership are/is required to
contribute. Except as described in Schedule 5.9 hereto or reflected on the
Closing Schedules, none of Seller, Licensee, Shareholder or the Partnership has
or will have any unfunded liability for services rendered in connection with the
Business as of the Date of Closing under any pension, profit sharing, medical
benefit or disability plan or any other similar plan and the Purchaser will not
incur
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any liability under any such plans as a result of the consummation of the
transactions contemplated hereby. None of Seller, Licensee, Shareholder or the
Partnership or any of their respective "subsidiaries" contributes to or has any
liability (including but not limited to withdrawal liability) with respect to
any multi-employer plan. For purposes of this Section, "subsidiaries" shall
include all corporations and all trades or businesses (whether or not
incorporated) which may be liable for any income tax, loss of tax deduction,
excise taxes, penalties or other similar consequences under the Employee
Retirement Income Security Act of 1974, as amended, or under the Code by reason
of its ownership affiliation with any of Seller, Licensee, Shareholder or the
Partnership. Schedule 5.9 hereto describes all grants of option for shares of
common stock of Shareholder pursuant to the 1995 Employee Restricted Stock Plan
or the 1991 Employee Stock Option Plan or otherwise held by each of the current
employees of Seller or the Partnership who perform services in connection with
the Business.
5.10 FULL DISCLOSURE. No representation or warranty made by Seller,
Licensee or Shareholder in this Agreement contains or will contain any untrue
statement of a material fact or omits or will omit, to state a material fact
necessary to make the statements contained herein and therein not misleading.
All written information and materials provided by or on behalf of Seller,
Licensee or Shareholder to the Purchaser or its agents or employees in
connection with Purchaser's examination of the Business, Assets and RSA 2 Assets
have in each case, been true and correct in all material respects or have fairly
summarized or described the subject matter of the writing in light of the
information made available to Purchaser.
5.11 FINANCIAL STATEMENTS. Shareholder has furnished true and correct
copies of the financial statements identified in Schedule 5.11 hereto to
Purchaser. All of said financial statements, including any notes thereto, fairly
present the financial position and condition of Unity and the Partnership as of
their respective dates and the results of their respective operations for the
periods covered in accordance with generally accepted accounting principles
applied on a basis consistent with that of periods; provided, however, that the
unaudited financial statements do not contain the footnotes required by
generally accepted accounting principles, are condensed and are subject to year
end audit adjustments which are of normal size and type. Subsequent to the
respective dates of said financial statements, there have been no material
adverse changes in the properties, assets, liabilities, revenues, expenses,
operations, financial condition or prospects of Unity, the Partnership and/or
Business taken as a whole from that reflected in said financial statements or
the Schedules to this Agreement. Except for debts, liabilities and obligations
(i) reflected or reserved against in the balance sheets of Unity and the
Partnership as of September 30, 1996 (the "Balance Sheet Date") or in the notes
thereto, (ii) incurred in the ordinary course of business since the Balance
Sheet Date, and/or (iii) described on Schedule 5.11(iii) hereto, neither Unity
nor the Partnership has any debts, liabilities or obligations of any
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nature, whether secured, unsecured, known, unknown, accrued, absolute, fixed,
contingent or otherwise, whether due or to become due which are material,
individually or in the aggregate.
5.12 ABSENCE OF CERTAIN DEVELOPMENTS. Except for the transactions
contemplated by this Agreement or as otherwise set forth on Schedule 5.12
hereto, since the Balance Sheet Date, Seller, Licensee, Shareholder and the
Partnership have conducted the Business only in the ordinary course and have
not:
a. Sold, assigned or otherwise transferred any properties or
assets with an individual or aggregate value in excess of $10,000,
except in the ordinary course of business;
b. Suffered any material loss or waived or released any material
right or claim, whether or not in the ordinary course of business;
c. Suffered, sustained or incurred any material damage,
destruction or casualty loss to any properties or assets, whether or not
covered by insurance;
d. Engaged in any transaction not in the ordinary course of
business;
e. Made any capital expenditure exceeding $10,000 individually
or $25,000 in the aggregate, except in the ordinary course of business;
f. Mortgaged, pledged or otherwise encumbered any of its
properties or assets, whether or not in the ordinary course of business;
g. Incurred any debts, liabilities or obligations, absolute or
contingent, known or unknown in an aggregate amount in excess of
$12,000.00, except current liabilities incurred in the ordinary course
of business;
h. Declared, set aside or paid a dividend or other distribution
with respect to any class or series of capital stock of Seller, or
directly or indirectly redeemed, purchased or otherwise acquired any
shares of any class or series of its capital stock or made any
distribution of Partnership assets or cash to the partners of the
Partnership;
i. Other than in ordinary course of business, increased the
salary, wage or other compensation or level of benefits payable or to
become payable by any of the Seller or the Partnership to any of their
respective officers, directors, employees or agents, except as provided
in Schedule 5.19;
j. Loaned money to any person or entity, or guaranteed any loan
to any person or entity, whether or not in the ordinary course of
business other than Accounts Receivable in the ordinary course of
business;
k. Except as described in Schedules 1.1(g) or 5.15 hereto,
amended or terminated any of the Operating Contracts, RSA 2 Contracts
(as hereinafter defined), Licenses or RSA 2 Licenses (as hereinafter
defined), except in the ordinary course of business;
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l. Changed accounting methods or practices (including, without
limitation, any change in depreciation, amortization or cost accounting
policies or rates);
m. Suffered, sustained or incurred any Material Adverse Effect
in the properties, assets, revenues, business, operations, financial
condition or prospects of any of the Seller, Licensee or the
Partnership;
n. Received notice from any customer, supplier, vendor,
Governmental Authority or any other person or entity which could
reasonably be expected to have, give rise to or result in a Material
Adverse Effect; or
o. Entered into any agreement or understanding to do any of the
foregoing.
5.13 PROPRIETARY RIGHTS AND SOFTWARE. The Proprietary Rights listed on
Schedule 1.1(b) hereto include all of the federal, state, foreign and common law
trademarks, trademark registrations and applications therefor, service marks,
service mark registrations and applications therefor, copyrights, copyright
registrations and applications therefor, trade names, assumed names, logos,
patents, patent applications, technology, know-how, trade secrets, processes,
formulas, drawings, designs and other similar intellectual property and/or
proprietary rights of any kind (collectively "Intellectual Property") used by
Seller, Licensee, Shareholder and/or the Partnership, other than Excluded
Assets, in connection with the operation of the Business, whether owned by
Unity, Licensee or Shareholder, all of which will be transferred to Purchaser on
Date of Closing. All Intellectual Property owned or used by the Partnership in
connection with the operation of the Business is listed on Schedule 5.13 hereto
(the "RSA 2 Proprietary Rights"). There is no Intellectual Property used in
connection with the operation of the Business which is not listed on Schedules
1.1(b) and/or 5.15 hereto and which will not be transferred to the Purchaser or
retained by the Partnership on the Date of Closing. Schedule 1.1(n) hereto
contains a list of all of the computer software and software programs used by
Seller, Licensee, Shareholder or the Partnership in the conduct of the Business
and identifies which such software and software documentation will be
transferred to Purchaser on the Date of Closing (except for shrink-wrapped
software, which will be transferred only to the extent transferable). None of
Seller, Licensee and Shareholder have knowledge of any asserted claim that the
operations of the Business or the possession or use in the Business of any of
the Assets or RSA 2 Assets, including the Proprietary Rights, RSA 2 Proprietary
Rights and/or Software, infringes any Intellectual Property rights of another;
Seller, Licensee and Shareholder have no reason to believe that the operation of
the Business or the possession or use in connection with the operation of the
Business of any of the Assets or RSA 2 Assets, including the Proprietary Rights,
RSA 2 Proprietary Rights and/or Software, infringes any valid and enforceable
Intellectual Property rights of another; Seller and the Partnership have the
right to use all of the Proprietary Rights and RSA 2 Proprietary Rights,
respectively; neither Seller nor the Partnership has entered
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into any agreements, contracts or licenses that would impair their rights to
transfer their rights in and to the Proprietary Rights, RSA 2 Proprietary Rights
and/or Software to Purchaser; Seller, Licensee and Shareholder have no reason to
believe that any of the Proprietary Rights or RSA 2 Proprietary Rights are, or
are claimed to be, invalid; and, except as provided in Schedules 1.1(n) or 5.13
hereto, none of Seller, Licensee, Shareholder or the Partnership are obligated
under any license, agreement or otherwise to pay royalties, fees or other
payments with respect to any of the Proprietary Rights or RSA 2 Proprietary
Rights and/or Software. Except as provided in Schedule 5.3 hereto, the sale
and/or assignment of the Proprietary Rights and Software and the right to use
the same to Purchaser on the Date of Closing does not require any filing with,
permit from, consent or approval of, or the giving of any notice to, any
Governmental Authority or any third party.
5.14 COMPLIANCE WITH LAWS. The Business has been operated and the Assets
and RSA 2 Assets, have been used in compliance with all requirements of
insurance carriers, the Licenses, the RSA 2 Licenses and of all Applicable Laws
issued, enacted, entered or deemed applicable by any court or other Governmental
Authority having jurisdiction over Seller, Licensee, Shareholder and/or the
Partnership or any of their respective properties or assets, including full
compliance with the terms and conditions in all Federal Aviation Administration
determinations of no hazard to air traffic safety relating to any tower or other
structure on which any antennas of any of the Seller, Licensee, Shareholder or
the Partnership are mounted, except where failure to comply would not have a
Material Adverse Effect on the Business; and none of Seller, Licensee,
Shareholder or the Partnership has received any actual notice of, and has no
reasonable basis to anticipate that any presently existing circumstances are
likely to result in, any violation of a material nature of any Applicable Laws
issued, enacted, entered or deemed applicable by any court or other Governmental
Authority respecting the Assets, the RSA 2 Assets or the Business.
5.15 OPERATING CONTRACTS AND CUSTOMER CONTRACTS. Schedule 1.1(g) hereto
includes (i) all material contracts, commitments, leases, licenses and other
agreements of Unity, Licensee and/or Shareholder which relate to or are used in
connection with the operation of the Business, and (ii) all contracts which
require aggregate annual payments by any party thereto in excess of $12,000.00
or expire automatically or with notice more than one (1) year after the date
hereof. Schedule 5.15 hereto includes (i) all material contracts, commitments,
leases, licenses and other agreements to which the Partnership is a party, and
(ii) all contracts which require aggregate annual payments by any party thereto
in excess of $12,000.00 or expire automatically or with notice more than one (1)
year after the date hereof (the "RSA 2 Contracts"). All of the Operating
Contracts, Customer Contracts and RSA 2 Contracts were made in the ordinary
course of business, are valid, binding and currently in full force and effect,
and the performance by the parties thereto will not, individually or in the
aggregate, have a Material Adverse Effect. None of
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Seller, Licensee, Shareholder or the Partnership is in default in any material
respect under any of the Operating Contracts, Customer Contracts or RSA 2
Contracts, and no event has occurred which, through the passage of time or the
giving of notice, or both, would constitute a default or give rise to a right of
termination or cancellation under any of the Operating Contracts or RSA 2
Contracts, or cause the acceleration of an obligation of Seller, Licensee,
Shareholder or the Partnership, or result in the creation of any Encumbrance
(other than a Permitted Encumbrance) upon any of the Assets or RSA 2 Assets. To
the knowledge of Seller, Licensee and Shareholder, no other party is in default
under any of the Operating Contracts or RSA 2 Contracts, nor has any event
occurred which, through the passage of time or the giving of notice, or both,
would constitute a default or give rise to a right of termination or
cancellation under any of the Operating Contracts or RSA 2 Contracts, or cause
the acceleration of any obligation owed to Seller, Licensee, Shareholder or the
Partnership. Except as described on Schedules 1.1(g) or 5.15 hereto, none of the
Operating Contracts or RSA 2 Contracts have been canceled, terminated, amended
or modified and, to the best of the knowledge of Seller, Licensee and
Shareholder, all parties to such Operating Contracts and RSA 2 Contracts are in
all material respects in compliance therewith. Except as provided in Schedule
5.3 hereto, all of the Operating Contracts, including Unity's rights under the
Partnership Agreement, are assignable to and assumable by Purchaser without the
consent or approval of any person or entity and such consents and approval for
Operating Contracts designated as Material Contracts on Schedules 1.1(g) and
5.15, if any, as are required shall be obtained by Seller prior to the Date of
Closing.
5.16 REAL ESTATE.
a. As used in this Agreement, the following terms shall have the
following meanings:
(i) "Seller Real Estate" refers to all of the categories
of real estate owned or leased by the Seller listed on Schedule
1.1(a).
(ii) "Partnership Real Estate" refers to all of the
categories of real estate owned or leased by the Partnership
listed on Schedule 5.16(a).
(iii) "Real Estate" refers to all of the Seller Real
Estate and the Partnership Real Estate.
(iv) "Seller Owned Real Estate" refers to the parcels of
real estate listed in "Category I" on Schedule 1.1(a).
(v) "Partnership Owned Real Estate" refers to the
parcels of real estate listed in Category I on Schedule 5.16(a).
(vi) "Owned Real Estate" refers to the Seller Owned Real
Estate and the Partnership Owned Real Estate.
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(vii) "Seller Leased Real Estate" refers to the Seller
Real Estate listed in Categories II, III and IV on Schedule
1.1(a).
(viii) "Partnership Leased Real Estate" refers to the
Partnership Real Estate listed in Categories II, III, IV on
Schedule 5.16(a).
(ix) "Leased Real Estate" refers to the Seller Leased
Real Estate and the Partnership Leased Real Estate.
(x) "Seller Owned/Leased Land" refers to the Seller
Owned Real Estate listed under Category I and the leased
interests listed under Category II on Schedule 1.1(a).
(xi) "Partnership Owned/Leased Land" refers to the
Partnership Owned Real Estate listed under Category I and the
leased interests listed under Category II on Schedule 5.16(a).
(xii) "Owned/Leased Land" refers to the Seller
Owned/Leased Land and the Partnership Owned/Leased Land.
(xiii) "Seller Land Leases" refers to the leased parcels
listed under Category II on Schedule 1.1(a).
(xiv) "Partnership Land Leases" refers to the leased
parcels listed under Category II on Schedule 5.16(a).
(xv) "Land Leases" refers to the Seller Land Leases and
the Partnership Land Leases.
(xvi) "Tower Space Leases" refers to the leasehold
interests listed under Category IV on Schedules 1.1(a) and
5.16(a).
(xvii) "Retail Leases" refers to the leasehold interests
listed under Category III on Schedules 1.1(a) and 5.16(a).
b. Schedule 1.1(a) contains a complete listing and accurate
legal description (or Seller has undertaken to provide such accurate
legal description prior to the Date of Closing) of all Seller Real
Estate, which is each parcel and interest in real estate owned, leased
and/or used by Seller in connection with the operation of the Business.
The Seller Real Estate consists of all parcels owned by Seller (all of
which are listed under Category I); all parcels leased by Seller and on
which it has constructed cell sites (all of which are listed under
Category II); all leases by Seller as tenant of retail and/or office
space (all of which are listed under Category III); and all leases by
Seller as tenant of space on towers, including space for appurtenant
structures (all of which are listed under Category IV).
c. Schedule 5.16(a) contains a complete listing and accurate
legal description (or Seller has undertaken to provide such accurate
legal description prior to the Date of Closing) of all Partnership Real
Estate, which is each parcel and interest in real estate
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owned, leased and/or used by the Partnership in connection with the
operations of the Business. The Partnership Real Estate consists of all
parcels owned by the Partnership (all of which are listed under Category
I); all parcels leased by the Partnership and on which it has
constructed cell sites (all of which are listed under Category II); all
leases of retail and/or office space (all of which are listed under
Category III); and all leases by Partnership as tenant of space on
towers including space for appurtenant structures (all of which are
listed under Category IV).
d. Seller is or at Closing shall be the sole owner in fee simple
title of the Seller Owned Real Estate and will convey good and
marketable title to such Seller Owned Real Estate to Purchaser on the
Date of Closing by quit claim deed with covenant in substantially the
form attached hereto as Exhibit B (the "Deed"), free and clear of any
and all Encumbrances (as defined in Section 5.4), except (i) municipal
zoning ordinances, (ii) the lien for general real estate taxes levied in
the year of Closing and not yet due and payable and (iii) the matters
set forth in Schedule 5.16(d) hereto (collectively, the "Permitted
Encumbrances"). The Partnership is or at Closing shall be the sole owner
in fee simple title of the Partnership Owned Real Estate and each parcel
of Partnership Owned Real Estate is free and clear of all Encumbrances,
except for Permitted Encumbrances. As of the Closing, those parcels of
the Real Estate leased pursuant to the Land Leases shall be free and
clear of any Encumbrances except for Permitted Encumbrances, and except
for any mortgage created by the owner of such parcel. The Permitted
Encumbrances do not individually or in the aggregate impair or prohibit
Seller's or the Partnership's current use of any Real Estate.
e. With respect to the Leased Real Estate:
(i) Schedule 1.1(a), Categories II, III and IV, and
Schedule 5.16(a), Categories II, III and IV, contain a complete
and accurate listing (naming the landlord and tenant, giving
date of the lease and any and all amendments thereto, and giving
the legal description and street address, if any, of the
premises leased) of each lease for all Seller Leased Real Estate
and Partnership Leased Real Estate, respectively, used by Seller
or Partnership in the State of Maine in connection with the
operation of the Business.
(ii) Each Land Lease, Tower Space Lease and Retail Lease
is in full force and effect and none has been canceled,
terminated or modified.
(iii) Neither Seller nor Partnership (as applicable) is
in default under the terms of any Land Lease, Tower Space Lease
or Retail Lease, and, to the knowledge of Seller, the landlord
under each Land Lease, Tower Space Lease or Retail Lease is not
in default, and no event has occurred which through the passage
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of time or the giving of notice, or both, would constitute a
default by any party or give rise to a right or termination or
cancellation to any other party;
(iv) Seller or Shareholder has provided Purchaser with a
complete and accurate copy of each Land Lease, Tower Space Lease
and Retail Lease, including any and all amendments or
modifications thereto; and
(v) Each Land Lease, Tower Space Lease and Retail Lease
is assignable to and assumable by Purchaser without the consent
or approval of any person or entity, or such consents, as are
required, shall be obtained by Seller prior to the Date of
Closing.
f. Seller, Licensee and Shareholder have no knowledge of any
special assessments (payable by Seller or Partnership as owner or tenant
of Real Estate) levied or assessed on or against any parcel of Real
Estate (or any such special assessments shall be paid by Seller on or
before the Date of Closing);
g. Seller, Licensee and Shareholder have no knowledge of any
planned public improvement which may result in an assessment in a
material amount against or otherwise materially affect any of the Real
Estate;
h. Seller, Licensee and Shareholder have no knowledge of any
deferred property taxes or assessments with respect to any of the
Owned/Leased Land which may or will become due and payable as a result
of the consummation of the transactions contemplated hereby;
i. There are no condemnation proceedings pending or, to the
knowledge of Seller, Licensee or Shareholder, threatened with respect to
all or any part of the Owned/Leased Land;
j. Except for Permitted Encumbrances, there are no private
restrictions, covenants, reservations or agreements which have a
Materially Adverse Effect on the present use or occupancy by the Seller
or the Partnership, as applicable, of any parcel of Owned/Leased Land.
k. Each parcel of the Owned/Leased Land has been operated and is
in full compliance with and with respect to all Real Estate the Business
has been operated and is in full compliance with all Applicable Laws,
including but not limited to, statutes, regulations and ordinances
issued, enacted, entered or deemed applicable by any Governmental
Authority regulating the use, treatment, generation, transportation,
storage, control or disposal of any Hazardous Substance (as hereinafter
defined), the Comprehensive Environmental Response, Compensation and
Liability Act (42 U.S.C. ss. 9601 et seq.), the Resource Conservation
and Recovery Act (42 U.S.C. ss. 6901 et seq.), the Hazardous Materials
Transportation Act (49 U.S.C. ss. 1801 et seq.), the Federal Water
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Pollution Control Act (33 U.S.C. ss. 1251 et seq.), the Clean Water Act
(33 U.S.C. ss. 1251 et seq.), the Clean Air Act (42 U.S.C. ss. 7401 et
seq.), the Toxic Substances Control Act (15 U.S.C. ss. 2601 et seq.),
analogous statutes and regulations of the State of Maine and any similar
applicable state and local laws (collectively "Environmental Laws"),
except where failure to comply would not reasonably be expected to have
a Material Adverse Effect on the Business. Except as described in
Schedule 5.16(k) hereto, no Hazardous Substances are located in, on,
under or about any parcel of the Owned/Leased Land or property leased
pursuant to the Retail Leases, except for the presence of any substance
of a type and quantity which would not reasonably be expected to have a
Material Adverse Effect. For purposes of this agreement, the term
"Hazardous Substance" means (i) any dangerous, toxic or hazardous
pollutant, contaminant, chemical, waste, material or substance listed or
identified in, or regulated by, any Environmental Law, and (ii) any of
the following, whether or not included in the foregoing: polychlorinated
biphenyls, asbestos, urea-formaldehyde, petroleum and petroleum
products, including crude oil or any fraction thereof, natural gas,
natural gas liquids, liquefied natural gas, synthetic gas usable for
fuel or mixtures thereof, nuclear fuels or materials, chemical wastes,
radioactive materials, radon, explosives and known possible carcinogens.
Excluded from this Section 5.16(k) are any claims or allegations arising
from or related to the emissions of electromagnetic fields ("EMF") or
radio frequency ("RF") emissions in connection with the operation of
cellular service, including claims relating to transmission towers
located on the Real Estate or used in connection with the operation of
the Business; however, Seller, Licensee and Shareholder represent that
there are no such claims or allegations pending or, to their knowledge,
threatened with respect to the Business.
l. None of Seller, Licensee, Shareholder or the Seller with
respect to the Partnership has received any actual notice of, and has no
reasonable basis to anticipate that any presently existing circumstances
are likely to result in, any investigations, claims, demands, actions,
suits or other proceedings at law or in equity with respect to the
Assets, the RSA 2 Assets or Business brought or instigated by any
Governmental Authority or any other person or entity in connection with
any environmental pollution or contamination or Environmental Law,
including without limitation, civil, criminal and/or administrative
proceedings, and whether or not seeking costs, expenses, damages,
penalties or equitable relief.
m. All of the Seller's and the Partnership's buildings,
structure, fixtures and other improvements located on the Real Estate
are in good repair, free of defects (latent or patent) (except for minor
defects which in the aggregate do not have a Material Adverse Effect)
and are fit for their current uses. All such buildings, structures,
fixtures
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and improvements conform in all material respects to Applicable Laws
(including, but not limited to, for purposes hereof, zoning and land use
laws, ordinances and regulations, and building codes), and, together
with any to the improvements thereto, lie entirely within the boundaries
of each parcel of Real Estate as specified in the legal description set
forth in Schedule 1.1(a) and Schedule 5.16(a). No structures of any kind
encroach on the Owned/Leased Land.
n. All of the towers and transmission equipment constructed or
placed by Seller or the Partnership on the Owned/Leased Land and all
equipment installed by Seller or the Partnership at the site of each
Tower Space Lease has been constructed and installed in accordance with
the specifications set forth in the FCC filing relating thereto [if
any], and has been constructed and is operated in compliance with their
respective forms 489 (Notification of Completing Construction) filed
with the FCC [if applicable].
o. None of Seller, Licensee and Shareholder are foreign persons
within the meaning of Section 1445 of the Code.
p. Except for the Permitted Encumbrances, on the Date of
Closing, each parcel of Owned/Leased Real Estate will be vacant,
unoccupied, and have no person or party in possession of all or any part
thereof, other than Seller and/or the Partnership, and shall be free
from all leasehold and possessory interests.
q. The Seller's and the Partnership's present uses of the
improvements located on the Real Estate do not in any material respect
infringe upon the material rights of any other person or entity.
r. Except as described on Schedule 5.16(k) hereto, to the
knowledge of Seller and Shareholder there are not currently and never
have been any underground and/or above ground storage tanks (whether or
not currently in use) on any parcel of Owned/Leased Real Estate and all
such tanks are now and have never been in unsound condition and have not
leaked.
s. Except as set forth in Schedule 5.16(k) hereto, each parcel
of Real Estate has legal rights of access to a publicly dedicated and
maintained road.
t. The Owned/Leased Real Estate has access to, and is served by,
utilities adequate for the use to which each such parcel is currently
dedicated. The installation of all such utilities (including hook-up
charges) has been or will be on or before the Date of Closing fully paid
for by Seller, at its sole cost and expense.
u. Seller has not leased or granted an option to lease or buy
all or any part of any parcel of Seller Owned/Leased Real Estate and the
Partnership has not leased or granted an option to lease or buy all or
any part of any parcel of Partnership Owned/Leased Real Estate;
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v. Except as set forth on Schedule 5.16(k), no part of any
parcel of Owned/Leased Real Estate ever has been used, nor is it being
used now, as a landfill, dump or other disposal, storage, transfer,
treating or handling area for any Hazardous Substance, nor as a gasoline
service station or a facility for selling, dispensing, storing,
transferring, treating or handling Hazardous Substance.
5.17 RECEIVABLES. The Receivables and all of the Partnership's accounts
receivable (the "RSA 2 Receivables") reflected as of the Closing Date on the
books and records of Seller and of the Partnership, respectively, arose from
bona fide transactions in the ordinary course of business and are not subject to
any claim, defense or set-off. Except to the extent specifically or generally
reserved against in the books of account and records of Seller and the
Partnership, respectively, all of said Receivables and RSA 2 Receivables will be
collectable in the normal course of business without suit or reference to an
attorney or collection agency at the aggregate face amount of such Receivables
and RSA 2 Receivables, less any applicable reserves reflected on such books.
5.18 BOOKS AND RECORDS All of the books of account and other financial
and corporate records of the Seller, Licensee, Shareholder and the Partnership
relating to the Business have been made available to Purchaser and its
representatives. Such books of account and records are current, complete, true
and correct in all material respects and reflect in all material respects all
items of income and expense with respect to the Business and all assets,
liabilities and accruals with respect to the Business in accordance with
generally accepted accounting principles, consistently applied. Seller,
Licensee, Shareholder and the Partnership have filed all reports relating to the
Business required by any and all Applicable Laws to be filed, and it has duly
paid or accrued on its books of account all applicable duties and charges due or
assessed against it pursuant to such reports, except where any failure to file
reports or to pay or accrue amounts could not reasonably be expected
individually or in the aggregate to have a Material Adverse Effect.
5.19 KEY EMPLOYEES. Schedule 5.19 hereto contains a list of the names,
positions, annual salary or hourly wage rates and severance benefits as of the
Date of Closing, of all present directors, officers and key employees of Seller
and/or the Partnership (including those on furlough or leave of any kind) who
perform services in connection with the Business, or whose salaries or hourly
wages from any of the Seller and/or the Partnership for calendar year 1996 are
individually expected to equal or exceeded $45,000, together with a statement of
their respective annual salary or hourly wage rates for the current calendar
year. Schedule 5.19 also sets forth a description of any written agreement,
other than the employee benefit plans described on Schedule 5.9 hereto, with
respect to the conditions of employment of any of the employees of any of the
Seller and/or the Partnership who perform services in connection with the
Business, including such key employees.
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5.20 LICENSES AND PERMITS. The Seller, Licensee, Shareholder and the
Partnership have obtained all material licenses, certificates, franchises,
permits, consents and approvals of each and every Governmental Authority having
jurisdiction over Seller, Licensee, Shareholder or the Partnership or any of
their respective properties or assets necessary or appropriate to own the Assets
and RSA 2 Assets, respectively, and to operate and carry on the Business as it
is now being conducted. All such licenses, certificates, franchises, permits,
consents and approvals which are owned or held by any of Seller, Licensee or
Shareholder are described on Schedules 1.1(h) and 1.4 hereto, all of those which
are owned or held by the Partnership are described on Schedule 5.20 hereto (the
"RSA 2 Licenses"), and all of said Licenses and RSA 2 Licenses are valid and in
full force and effect. Except as set forth in Schedule 5.20 or any other
Schedule hereto, none of Seller, Licensee, Shareholder or the Partnership is a
party to or bound by any agreement relating in any manner to the Licenses or the
RSA 2 Licenses.
5.21 SUFFICIENCY OF ASSETS. Except as listed on Schedule 1.2, the Assets
to be transferred to Purchaser on the Date of Closing will include all assets,
tangible or intangible, (including but not limited to assets, properties,
franchises, licenses, permits, contracts, operations and business) that relate
to, arise from, or are used for the operation of the Business as presently
operated by the Seller, except for the Excluded Assets. The RSA 2 Assets owned
or leased by the Partnership on the Date of Closing will include all assets,
tangible or intangible, (including but not limited to assets, properties,
franchises, licenses, permits, contracts, operations and businesses) that relate
to, arise from, or are used or held by or are necessary for the operation of the
Partnership's business as it is presently being operated, except for the
Excluded Assets. All Assets and RSA 2 Assets owned by Shareholder or Licensee
are listed on Schedules 1.3 and 1.4, respectively. The instruments and documents
to be executed and/or delivered by any of Seller, Licensee or Shareholder to
Purchaser pursuant to Section 12.2 hereof at or following the Closing shall be
adequate and sufficient to vest in Purchaser all of Seller's, Licensee's and
Shareholder's rights, titles and interests in or to the Assets. All of the
Assets listed on Schedules 1.3 and 1.4 will be conveyed and transferred to
Purchaser by the Shareholder and Licensee, respectively, at the Closing.
5.22 OTHER MATERIAL CONTRACTS AND OBLIGATIONS. Except for the Operating
Contracts, Customer Contracts, RSA 2 Contracts, the Partnership Agreement,
non-assignable insurance policies, leases and other agreements in respect of the
Seller Leased Real Estate and Partnership Leased Real Estate and the contracts,
commitments, leases and agreements disclosed on Schedule 5.22 hereto, none of
Seller, Licensee and Shareholder or the Partnership is a party to or bound by
any material written agreement relating to the Business, including any:
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a. Dealer, distributorship or sales agency agreements, excluding
purchase orders with respect to the purchase or sale of products or
services in the ordinary course of business;
b. Advertising contracts;
c. Contract, commitment or arrangement for capital expenditures
having a remaining balance in excess of $12,000.00;
d. Leases with respect to any property, real or personal,
whether as lessor or lessee, except for any lease having a term of one
year or less or aggregate rents payable over its life of $12,000.00 or
less;
e. Contract, commitment or arrangement containing covenants by
the Seller or the Partnership not to compete in any lines of business or
with any person or entity;
f. Franchise or license agreements;
g. Loan or credit agreements, promissory notes or other
evidences of indebtedness, including all agreements or commitments for
future loans, extensions of credit or financing, excluding inter-company
loans and credit extended by the Business to its customers;
h. Guarantees;
i. Agreement, contract, commitment or purchase order for the
purchase of any services, raw materials, supplies or equipment involving
payments of more than $12,000.00 per annum, excluding purchase orders
for the purchase of products or services entered into in the ordinary
course of business;
j. Partnership agreement, joint ventures or shareholder
agreements, or any other agreement relating to securities or interests
in any other organization or entity owned directly or indirectly by
Seller or the Partnership; or
k. Agreement, contract or commitment for the sale of any
properties, assets or services involving a value estimated at more than
$12,000.00 excluding purchase orders or agreements, contracts and
commitments for the sale of products or services in the ordinary course
of business.
Seller has furnished Purchaser with a true, complete and accurate copy
of each Operating Contract, RSA 2 Contract and any additional contract, lease,
license, agreement or other commitment listed on Schedule 5.22 hereto.
5.23 INSOLVENCY. None of Seller, Licensee, Shareholder or the
Partnership is insolvent nor will be rendered insolvent by reason of the
consummation of the transactions contemplated by this Agreement, and Seller,
Licensee, Shareholder and the Partnership are, and will be following the
consummation of the transactions contemplated hereby, able to meet their
respective obligations as they become due and payable in the ordinary course of
business.
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5.24 SHAREHOLDER. Shareholder is the holder of all of the issued and
outstanding shares of each and every class and series of capital stock of Unity
and Licensee. There are no outstanding subscriptions, warrants, options,
agreements, convertible securities or other commitments pursuant to which Unity
and/or Licensee is or may be obligated to issue any shares of any class or
series of its capital stock or other securities to any other person or entity.
5.25 SUBSIDIARIES. Neither Unity nor the Partnership has any
subsidiaries and, except as listed on Schedule 5.25, neither owns any shares of
stock or other securities or interests, directly or indirectly, in any other
corporation, partnership, joint venture or other organization or entity. Except
as listed on Schedule 5.25 or otherwise disclosed herein, neither Unity nor the
Partnership is subject to any obligation or requirement to provide funds to, or
invest in, any such entity.
5.26 CUSTOMERS. Except for intercarrier roaming revenues, no single
customer of the Business accounted for over five percent (5%) of the revenues of
the Business during the fiscal year of Unity and/or the Partnership ending
immediately prior to the date of this Agreement. In addition, no significant
customer of the Business, vendor or communication carrier has indicated to
Seller, Licensee, Shareholder or the Partnership that it intends to cease doing
business with the Business or materially alter the amount of business it does
with the Business by reason of the consummation of the transactions contemplated
hereby or otherwise. As of October 31, 1996, Unity had approximately 19,802
subscribers and the Partnership had approximately 4,546 subscribers, and as of
said date 76% of the accounts receivable from said customers were less than 30
days old.
5.27 PRODUCTS LIABILITY CLAIMS. Except as set forth on Schedule 5.27,
all products which Seller or the Partnership have sold through the Business have
been, at the time of sale, covered by standard manufacturer's limited product
warranties, and the terms of such warranties have not been expanded nor have
limitations on such warranties been waived by Seller.
5.28 INSURANCE. Shareholder, Seller and the Partnership have maintained
and will continue to maintain until the Date of Closing the insurance described
in Schedule 5.28, which insurance covers the Assets and the RSA 2 Assets, in
each case, whether owned or leased, against loss or damage by fire or other
casualty, in amounts equal to or in excess of one hundred percent (100%) of the
replacement cost thereof, except for vehicles, which are not covered for full
replacement cost. As of the Date of Closing, all such insurance will be in full
force and effect and is carried with reputable insurers. Seller and the
Partnership have promptly and adequately notified Seller's and the Partnership's
insurance carriers of any and all claims known to any of them with respect to
the operations or products of Seller and/or the Partnership for which any of the
Shareholder, Seller and/or the Partnership is insured. Neither Seller nor the
Partnership has
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been refused any insurance coverage by any insurance carrier to which it has
applied for insurance during the past three (3) years with respect to the
Assets, the RSA 2 Assets or the Business.
5.29 BROKERS. None of Seller, Licensee, Shareholder or the Partnership
employed or engaged any broker, finder, agent, banker or third party, nor have
they otherwise dealt with anyone purporting to act in the capacity of a finder
or broker in connection with the transactions contemplated hereby. To the extent
that Seller, Licensee, Shareholder or the Partnership engages such assistance,
the engaging party shall pay all related fees and commissions, if any, and shall
hold the other parties and the Partnership harmless for any such fees and
commissions after Closing.
5.30 CGSA. A true and complete copy of maps depicting the location of
each cell site and each of the licensed Cellular Geographic Service Areas
("CGSA") of the Business is attached hereto as Schedule 5.30. All agreements
relating to the coverage areas of the Business, including, but not limited to
border extensions, are listed on Schedules 1.1(g) or 5.15.
5.31 NETWORK. A true and complete diagram and description of all of the
communications transmission facilities, cell sites and other components
comprising Unity's and the Partnership's cellular networks ("Network") is
attached hereto as Schedule 5.31.
5.32 NET POPS AND COVERAGE. The population base substantially
encompassed by the service areas of the Business, as reported in The 1996
Cellular/PCS Pop Book by Paul Kagen & Associates, Inc., are as follows:
<TABLE>
<CAPTION>
Population
----------
<S> <C>
Maine RSA 2 (Aroostock, Piscataquis and Somerset Counties) 143,000
Maine RSA 3 (Kennebec, Knox, Lincoln and Waldo Counties) 222,100
Bangor, Maine MSA (Penobscot County) 147,000
----------
512,100
</TABLE>
To the knowledge of Seller, Licensee and Shareholder, the population
numbers shown above are a fair representation of the population base in the
service area.
Unity's and the Partnership's licensed service areas include the
geographic service areas identified to them on the System Information Updates
set forth in Schedule 5.32 attached hereto.
5.33 RELATIONSHIP WITH RELATED PERSONS. To Seller's Licensee's and
Shareholder's Knowledge, transactions (if any) entered into by the Seller with
any Related Person (as defined below) have been arm's length transactions
entered into in the ordinary course of business. As used herein, the term
"Related Person", when used with respect to a specified person which is an
individual, means:
(i) each other member of such individual's family; and
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each other member of such individual's family; and
(ii) any person or entity that is, directly or indirectly,
controlled by one or more members of such individual's family.
As used herein, the term "Related Person", when used with respect to a
specified person or entity other than an individual, means:
(i) any person or entity that, directly or indirectly, controls,
is controlled by, or is under common control with such
specified person or entity; and
(ii) each person or entity that serves as a director, governor,
officer, manager, general partner, executor or trustee of such
specified person or entity (or in a similar capacity).
5.34 THE PARTNERSHIP The Partnership. The Partnership is a general
partnership duly organized, validly existing and in good standing under the laws
of the State of Maine, and has all requisite partnership power and authority to
own, operate and lease its properties and assets and to conduct the Business of
the Partnership as it is now being conducted. The Partnership was organized and
exists pursuant to a Partnership Agreement dated as of June 1, 1992, by and
between NYGSA (since assigned to Cellco Partnership ("Cellco")) and Unity (the
"Partnership Agreement"). The Partnership Agreement set forth all of the rights,
duties and obligations of NYGSA and Unity with respect to the Partnership to the
extent required by applicable law or as is customary in partnership agreements
among participants in the cellular telephone industry, and the Partnership
Agreement has not been modified or amended in any respect, except for amendments
listed on Schedule 5.34 and except for any amendments set forth in the
Partnership's management committee minutes listed on Schedule 5.34. Cellco and
Unity constitute all of the partners of the Partnership with each having the
percentage interest in all of the Partnership's items of income, gain, loss,
deduction and credit set out opposite their respective names below:
Name of Partner Percentage of Interest
--------------- ----------------------
Unity 51%
Cellco 49%
Neither Cellco nor any other person or entity has any right, option or
obligation, pursuant to the Partnership Agreement or otherwise, to purchase all
or any part of Unity's Partnership Interest unless all of Unity's Partnership
Interest is purchased, nor any right or option to dilute, directly or
indirectly, Unity's percentage interest in the Partnership as set forth above
without Unity's consent in accordance with the Partnership Agreement. Neither
Unity nor, to the knowledge of Seller, Cellco is in default in any material
respect under the Partnership Agreement, and no event has occurred which,
through the passage of time or the giving of notice, or both, would constitute a
default or give rise to a right of termination or cancellation under the
Partnership Agreement, or cause the acceleration of an obligation of either
Unity or, to the knowledge of Seller, Cellco, or
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<PAGE> 39
result in the creation of any Encumbrance, other than a Permitted Encumbrance,
whatsoever upon any of the Assets or RSA 2 Assets. Neither Cellco nor any other
entity has any right or option pursuant to Section 12.10 of the Partnership
Agreement or otherwise to purchase any or all of the Assets except as set forth
in Section 8.3. Unity has given all required notices under Section 12.10 of the
Partnership Agreement.
5.35 SELLER'S PARTNERSHIP CAPITAL ACCOUNT. The capital account of
Seller in the Partnership as of October 31, 1996 was $3,911,208.
5.36 EXCLUSIVITY OF REPRESENTATIONS. The representations and warranties
made by Seller, Licensee and Shareholder in this Agreement are in lieu of all
other representations and warranties, including without limitation any implied
warranties.
ARTICLE 6: REPRESENTATIONS AND WARRANTIES OF PURCHASER
As an inducement for Seller, Licensee and Shareholder to enter into
this Agreement and consummate the transactions contemplated hereby, intending
that Seller, Licensee and Shareholder rely thereon in entering into and
performing this Agreement, Purchaser warrants and represents to Seller, Licensee
and Shareholder that each and all of the following are true and correct in all
material respects as of the date of this Agreement and will be true and correct
in all material respects at and as of the Closing:
6.1 DUE INCORPORATION. Purchaser is a corporation duly organized,
validly existing and in good standing under the laws of the State of Minnesota,
and has all requisite power and authority, corporate and otherwise, to own,
operate and lease its properties and assets and to conduct its business as it is
now being conducted.
6.2 DUE AUTHORIZATION. The execution, delivery and performance of this
Agreement, including the documents, instruments and agreements to be executed
and/or delivered by Purchaser pursuant to this Agreement, and the consummation
of the transactions contemplated hereby and thereby have been duly and validly
authorized by all necessary corporate action on the part of Purchaser. This
Agreement and the documents, instruments and agreements to be executed by
Purchaser pursuant to this Agreement have been, or will be on or before the Date
of Closing, duly and validly authorized, executed and delivered by Purchaser and
the obligations of Purchaser hereunder and thereunder are or will be valid and
legally binding, and this Agreement and the documents, instruments and
agreements to be executed and delivered by Purchaser pursuant to this Agreement
are or will be upon such execution and delivery enforceable against Purchaser in
accordance with their respective terms, except as such enforcement may be
limited by applicable bankruptcy, reorganization, insolvency, moratorium or
other similar laws presently or hereafter in effect affecting the enforcement of
creditors' rights generally and by general
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principles of equity (regardless of whether such enforceability is considered in
a proceeding at law or in equity), including, among others, limitations on the
availability of equitable remedies.
6.3 NO BREACH. Purchaser has full corporate power and authority to
purchase the Assets being purchased hereunder and to otherwise perform its
obligations under this Agreement and the documents, instruments and agreements
to be executed by the Purchaser pursuant hereto. The execution and delivery of
this Agreement, including the documents, instruments and agreements to be
executed by the Purchaser pursuant to this Agreement, and the consummation of
the transactions contemplated hereby and thereby will not: (i) violate any
provision of the Articles of Incorporation or Bylaws (or comparable governing
documents or instruments) of Purchaser; (ii) violate any Applicable Laws issued,
enacted, entered or deemed applicable by any court or other Governmental
Authority having jurisdiction over Purchaser or any of its properties or assets;
(iii) require any filing with, or permit, consent or approval of, or the giving
of any notice to, any Governmental Authority or any person or entity, other than
the Federal Communications Commission (the "FCC") or (iv) except as provided in
Schedule 6.3 hereto, result in a violation or breach of or constitute (with or
without due notice or lapse of time or both) a default (or give another party
any rights of termination, cancellation or acceleration) under any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, license,
franchise, permit, lease, contract, agreement, or other instrument or obligation
to which the Purchaser is a party, or by which it or any of its respective
properties or assets may be bound, excluding from the foregoing clauses (ii),
(iii) and (iv) violations, which, and filings, notices, permits, consents and
approvals the absence of which, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect on the Purchaser or its
assets, properties, revenues, business, operations, financial conditions or
prospects and would not prevent or delay the consummation of the transactions
contemplated hereby.
6.4 FULL DISCLOSURE. No representation or warranty made by Purchaser in
this Agreement contains or will contain any untrue statement of a material fact
or omits or will omit to state a material fact necessary to make the statements
contained herein and therein not misleading. All written information materials
provided by or on behalf of Purchaser to Seller, Licensee or Shareholder or its
agents or employees in connection with the subject matter of this Agreement have
in each case been true and correct in all material respects or have fairly
summarized or described the subject matter of the writing in light of the
information made available to Seller, Licensee and Shareholder.
6.5 QUALIFICATIONS OF PURCHASER. Except as provided on Schedule 6.5
hereto, Purchaser is legally and technically qualified to acquire control of the
Licenses, the RSA 2 Licenses and the Partnership Interest and to operate the
Business as required by the Communications Act of 1934, as amended (the
"Communications Act"), and by the rules,
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<PAGE> 41
regulations and policies of the FCC; and Purchaser does not know of any facts,
circumstances or proceedings which could disqualify it under the Communications
Act or the FCC's rules, regulations or policies from acquiring control of the
Licenses, the RSA 2 Licenses and the Partnership Interest or operating the
Business. Purchaser has such knowledge and experience in the communications
industry specifically, and in financial and business matters generally, to
enable Purchaser to evaluate the relative merits and risks of the transactions
contemplated by this Agreement. Purchaser acknowledges receipt of and the
opportunity to review those documents and items referenced on Schedule 6.5(a)
(the "Due Diligence Documents"), and Purchaser represents that it has had
adequate opportunity to review such Due Diligence Documents.
6.6 BROKERS. Purchaser has engaged The Robinson-Humphrey Company, Inc.
to represent it in connection with the transactions contemplated hereby and
shall pay all fees associated with services they may provide to Purchaser.
Purchaser has not engaged or allowed any other investment advisor, broker,
finder or similar consultant to represent it in connection with the transactions
contemplated hereby.
ARTICLE 7: PERFORMANCE BY SELLER, LICENSEE AND SHAREHOLDER PENDING
CLOSING
Seller, Licensee and Shareholder jointly and severally covenant and
agree that from and after the date of this Agreement and until the earlier of
Date of Closing or the termination of this Agreement in accordance with ARTICLE
14 hereof:
7.1 ACCESS TO INFORMATION. At the request of Purchaser, Seller,
Licensee and Shareholder shall, from time to time, give or cause to be given to
Purchaser, its officers, employees, counsel, accountants and other
representatives, upon reasonable notice to Seller or Shareholder and for the
purposes specified in the Nondisclosure Agreement between the parties dated as
of September 25, 1996 (the "Nondisclosure Agreement"), full access during normal
business hours to the Business, the properties and assets and all of the books,
minute books, title papers, records, files, contracts, commitments, insurance
policies, Licenses, RSA 2 Licenses, agreements and documents of every character
of any of Seller, Licensee, Shareholder and/or the Partnership reasonably
relating to the Business, and Seller shall furnish or cause to be furnished to
Purchaser, its officers, employees, counsel, accountants and other
representatives all of the information with respect to the Business, the Assets
and/or the RSA 2 Assets as any of them may reasonably request. Purchaser, its
officers, employees, counsel, accountants and other representatives shall have
the authority upon prior notice to Seller to interview all employees, customers,
vendors, suppliers and other parties having relationships with any of Seller,
Licensee, Shareholder, the Partnership and/or Business, and Seller or
Shareholder shall make such introductions as may be requested. In addition,
Purchaser may, at its sole cost and expense, at
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<PAGE> 42
any time prior to the Date of Closing, through its officers, employees, counsel,
accountants and other representatives, conduct such investigations and
examinations of the Assets and/or the RSA 2 Assets as it deems necessary or
advisable, and Seller and Shareholder will cooperate fully in such
investigations.
7.2 BUSINESS AS USUAL. Seller, Licensee and Shareholder shall carry on
the Business and cause the Partnership to carry on the Business in the usual and
ordinary course and substantially in the same manner as heretofore conducted and
will keep and maintain the Assets and cause the RSA 2 Assets to be kept and
maintained in good and safe repair and condition consistent with past practices,
reasonable wear and tear excepted.
7.3 ENCUMBRANCES. Seller, Licensee and Shareholder shall not, directly
or indirectly, perform or fail to perform any act which might reasonably be
expected to result in the creation or imposition of any Encumbrance (other than
Permitted Encumbrances) of any nature whatsoever on any of the Assets or any of
the RSA 2 Assets or otherwise adversely affect the marketability of the
Seller's, Licensee's, Shareholder's and the Partnership's title to any of the
Assets or the RSA 2 Assets, respectively.
7.4 PAY INCREASES. Except increases described on Schedule 5.9 hereto,
Seller shall not, without the prior written consent of Purchaser, grant any
general or uniform increase in the salaries or rate of pay to any employees of
any of the Seller or the Partnership who regularly provide any services in
connection with the Business, grant any increase in any benefits or establish,
adopt, enter into, make any new grants or awards under, or amend any collective
bargaining, employment, bonus, stock option, restricted stock, stock purchase,
profit-sharing, deferred compensation, severance, pension, retirement,
disability, medical, dental, health or life insurance, death benefit, incentive
or other compensation or retirement plan, arrangement, agreement, trust, fund,
policy or arrangement for the benefit of such employees.
7.5 RESTRICTIONS ON NEW CONTRACTS. With respect to the Business or the
transaction contemplated hereunder, none of Seller, Licensee and Shareholder
shall enter into or, to the extent allowed under the Partnership Agreement,
permit the Partnership to enter into any contract, commitment, lease, license or
other agreement, incur any liability, absolute or contingent, assume, guarantee
or otherwise become liable or responsible for the obligations of any other
person or entity, make any loans, advances or capital contributions to any other
person or entity (except for extensions of credit to its customers in the
ordinary course of business), or waive any right or enter into any other
transaction, in each case other than in the usual and ordinary course of
business and consistent with Seller's and the Partnership's normal business
practices.
7.6 PRESERVATION OF BUSINESS AND NON-SOLICITATION OF EMPLOYEES. Seller,
Licensee and Shareholder shall use commercially reasonable efforts to preserve
Seller's business
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organization and the business organization of the Partnership intact, to keep
available to Purchaser the present employees of Seller and the Partnership who
perform services in connection with the Business and to preserve for Purchaser
the Business and the present goodwill and relationships of Unity and the
Partnership with their vendors, suppliers, customers and others having business
relationships with the Business. Seller, Licensee and Shareholder shall
reasonably cooperate with Purchaser in Purchaser's efforts to cause any of
Seller's employees who perform services in connection with the Business and
which Purchaser desires to employ to become Purchaser's employees on the Date of
Closing. Seller and Shareholder agree that neither Seller, Shareholder nor any
of their respective subsidiaries shall offer alternate employment to any of the
employees of any of Seller or the Partnership who perform services in connection
with the Business prior to the Closing without Purchaser's written consent
unless such employees are not offered employment by Purchaser within thirty (30)
days after the date of this Agreement or at such future time as such employees
are no longer employed by Purchaser and have not been employed by Purchaser for
a period of six (6) months since termination of such employment. Nothing
contained in this Agreement shall constitute or be construed as a contract of
employment between Purchaser and such employees of Seller, and any such
employee(s) hired by Purchaser shall remain subject to discharge and lay-off by
Purchaser at any time.
7.7 PAYMENT AND PERFORMANCE OF OBLIGATIONS. Seller will timely pay and
discharge and cause the Partnership to timely pay and discharge all invoices,
bills and other monetary obligations as they become due and payable and shall
not perform or fail to perform any act which will cause a material breach of any
of the Operating Contracts or RSA 2 Contracts.
7.8 RESTRICTIONS ON SALE OF ASSETS. Seller, Licensee and Shareholder
shall not sell, assign, transfer, lease, sublease, pledge or otherwise encumber
or dispose of any of the Assets or permit the Partnership to sell, assign,
transfer, lease, sublease, pledge or otherwise encumber or dispose of any of the
RSA 2 Assets, except for the sale of inventory in the ordinary course of
business and at customary prices. Without limiting the generality of the
foregoing, Seller, Licensee and Shareholder shall not permit any of the material
Proprietary Rights or material RSA 2 Proprietary Rights to lapse or dispose of
or otherwise lose the right to use any of the material Proprietary Rights or
material RSA 2 Proprietary Rights.
7.9 CONSENTS. As soon as reasonably practicable and in any event on or
before the Date of Closing, unless otherwise indicated on Schedule 5.3 hereto,
Seller, Licensee and Shareholder with Purchaser's reasonable cooperation will
obtain or cause to be obtained all of the consents and approvals of all
necessary persons and entities to the assignment and transfer to the Purchaser
of all of the Assets, the Partnership Interest, all of the Seller Real Estate,
including leasehold interests and easements, and including the Operating
Contracts listed on
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Schedule 1.1(g) and the Licenses, herein provided to be sold, assigned and
transferred to Purchaser, including the consents and approvals listed on
Schedule 5.3 hereto.
7.10 CAPITAL EXPENDITURES. Upon written request by Purchaser and
subject to Seller's approval which will not be unreasonably withheld, Seller
shall make major capital expenditures for expansion of the network, for example,
for the acquisition and construction of an additional cell site, only upon the
written request and approval of Purchaser. Purchaser shall reimburse Seller for
such preapproved capital expenditures on the Date of Closing. Seller shall make
other minor capital expenditures, for example, the addition of radio channels
and equipment upgrades, as are reasonably necessary in the normal course of
business to maintain the current quality level of service to customers and to
accommodate the level of growth projected by Seller. Such minor capital
expenditures shall be at Seller's expense and shall not be reimbursed by
Purchaser.
7.11 NO SOLICITATION OF OTHER OFFERS OR NEGOTIATION. None of Seller,
Licensee, and Shareholder or any of their representatives shall provide
information except as required by law to any other person or entity or enter
into any negotiations with or solicit any offer, inquiry or proposal from any
other person or entity with respect to the sale, merger or other acquisition of
the Business except as required with respect to Cellco under Section 6.0 of the
Partnership Agreement.
7.12 ACCOUNTS RECEIVABLE. Seller shall not accelerate or permit the
Partnership to accelerate the collection of any accounts receivable arising out
of the operation of the Business in a manner which would be inconsistent with
past practice.
7.13 INVENTORY. Seller shall maintain and cause the Partnership to
maintain the levels of inventory, materials and supplies used in the Business
consistent with past practice.
7.14 INSURANCE. Seller will maintain and cause the Partnership to
maintain in full force and effect all insurance coverages for the Assets and RSA
2 Assets substantially comparable to coverages existing on the date hereof.
7.15 FILING REPORTS AND MAKING PAYMENTS. Seller, Licensee and/or
Shareholder, as applicable, shall timely file and cause the Partnership to
timely file all required reports and notices with each and every applicable
Governmental Authority and timely make all payments due and owing to each such
Governmental Authority, including, but not by way of limitation, any filings,
notices and/or payments required by reason of the transactions contemplated by
this Agreement.
7.16 ENVIRONMENTAL ASSESSMENTS.
a. Subject to the other provisions contained in this Section,
Seller shall permit and cause the Partnership to permit Purchaser or
any reasonably qualified environmental consultant designated by
Purchaser (the "Environmental Consultant") to conduct environmental
site assessments (the "Site Assessments") of the Business, and the Real
Estate prior to Closing. Beginning immediately after the execution
hereof, the
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Environmental Consultant shall have full and free access, upon
reasonable notice, to the Business, and the Real Estate in order to
conduct the Site Assessments. Purchaser shall obtain a Phase I
Environmental Site Assessment ("Phase I Assessment") for (i) each
parcel of Owned Real Estate; and (ii) such parcels of Leased Real
Estate as Purchaser deems appropriate. Purchaser shall pay all fees and
expenses of the Environmental Consultant. All Phase I Assessments shall
be completed on or before February 15, 1997, and Purchaser shall
furnish Seller with a copy of all written reports relating to the Phase
I Assessments provided by the Environmental Consultant. Purchaser shall
have the right to terminate this Agreement if the Site Assessment of
any of the parcels of Owned/Leased Land or premises leased pursuant to
a Retail Lease discloses facts or conditions which could reasonably be
expected to have a Material Adverse Effect; provided, that no such
right of termination shall exist if (x) Seller, Licensee or Shareholder
actually remedies such facts or conditions to Purchaser's reasonable
satisfaction at Seller's expense prior to the Closing or (y) if Seller
shall retain the affected Real Estate, adjust the Purchase Price by an
amount equal to the book value of the affected Real Estate, and enter
into a long-term lease (with annual rent equal to 10% of the price
reduction) with Purchaser for the affected Real Estate on terms and
conditions reasonably acceptable to Purchaser, and indemnify Purchaser
for the term of the lease for any and all claims of any nature
whatsoever originating prior to the date of Closing with respect to the
affected Real Estate in a manner similar to that provided for in
Section 11.1(g) hereof; provided that the maximum liability of Seller
under such indemnity shall be subject to the aggregate limit set forth
in Section 11.4 hereof.
b. As stated in Schedule 5.16(k), Seller has disclosed to
Purchaser information concerning past contamination of the parcel of
Seller Owned Real Estate commonly known as 265 Western Avenue, Augusta
(the "Augusta Office"). Seller agrees to fully cooperate with
Purchaser's efforts to obtain, prior to the Date of Closing, a written
assurance from the Maine Department of Environmental Protection (the
"DEP"), reasonably satisfactory to Purchaser's Maine legal counsel,
that Purchaser is not, and shall not be deemed to be, a "responsible
party" (as defined in applicable state environmental statutes and
regulations) with respect to the contamination previously identified at
the Augusta Office. In the event Purchaser and Seller are unable to
obtain, prior to Closing, a written assurance from DEP which is
reasonably satisfactory to Purchaser's Maine legal counsel, then at
Closing, (i) the Purchase Price shall be reduced by Seller's book value
of the Augusta Office (excluding all inventory and other items of
personal property located at the Augusta Office); (ii) the Schedules to
this Agreement shall be adjusted accordingly; and (iii) Seller and
Purchaser shall enter into a "triple-net" lease pursuant to which
Seller
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shall lease the Augusta Office to Purchaser for a term of ten
(10) years (and with a renewal option on the same terms and conditions
for one (1) additional ten (10) year term); base rent payable at a rate
of one-tenth (.10) of book value annually; a purchase option granted to
Purchaser to be exercised at any time during the term of the lease;
provided, however, that Purchaser shall be obligated to exercise such
option and to purchase the Augusta Office at an amount equal to the
Seller's book value plus any unpaid rent accrued through the date of
the closing on said purchase promptly upon receipt of the written
assurance from the DEP described above, (and with title matters
warranted consistent with the terms of this Agreement); permitting
Purchaser to terminate the lease upon a transfer or sale of all or
substantially all of its assets in the State of Maine; a provision
pursuant to which Seller and Shareholder agree to indemnify and hold
Purchaser harmless from and against any liability arising from any
contamination occurring or originating prior to the commencement date
of the lease, subject to the limitations stated in Section 11.4 below
but which shall continue in force for the term of the lease; and such
other terms and conditions as are customary in a triple-net lease for
comparable commercial office space in Augusta, Maine and not
inconsistent with the foregoing.
c. Purchaser has obtained information that the parcel of
Seller Leased Real Estate, leased under a Retail Lease and commonly
known as 532 Main Street, Rockland (the "Rockland Store") may be
subject to environmental contamination. Prior to closing, (i) Purchaser
shall attempt to obtain additional environmental assessment information
in order to be assured, to Purchaser's satisfaction, that the Rockland
Store is not likely to be affected by environmental contamination and
(ii) Seller shall attempt to obtain the lease amendment for the
Rockland Store as described in Section 9.9 below. In the event neither
of these conditions occur prior to Closing, at Closing Seller's rights
and obligations under the lease for the Rockland Store shall not be
assigned to and assumed by Purchaser; the Schedules hereto shall be
amended accordingly; there shall be no adjustment to the Purchase
Price; and Seller and Purchaser shall enter into a sublease for the
Rockland Store pursuant to which Seller, with the written consent of
Seller's landlord, subleases the Rockland Store to Purchaser upon all
of the same terms and conditions provided for under Seller's lease for
the Rockland Store (and specifically including all rent payment
obligations), EXCEPT the sublease shall not require Purchaser to
indemnify Seller or Seller's landlord under the lease for the Rockland
Store, for any costs, expenses or damages relating to contamination
occurring or originating prior to the commencement date of the
sublease. In addition, the sublease shall provide that Seller [and
Shareholder] shall indemnify and hold Purchaser harmless from and
against any liability arising from any contamination occurring or
originating prior to the commencement date of the sublease,
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subject to the limitations stated in Section 11.4 below. In
the event that after the Date of Closing either (i) Purchaser obtains
additional environmental assessment information which assures
Purchaser, to Purchaser's reasonable satisfaction, that the Rockland
Store is not likely to be affected by environmental contamination or
(ii) Seller obtains the lease amendment for the Rockland Store as
described in Section 9.9 below, then Seller's lease for the Rockland
Store shall be assigned to and assumed by Purchaser and the sublease
shall be terminated.
7.17 CAPITAL EXPENDITURES. Seller shall not make or permit the
Partnership to make any capital expenditures in excess of $12,000.00
individually without the Purchaser's prior written consent.
7.18 MONTHLY FINANCIALS. Pending the Closing, within twenty-five (25)
days of the close of each month, Seller shall deliver to Purchaser consolidated
and consolidating balance sheets and income statements for Unity and the
Partnership, disclosing the financial position and results of operations of the
Business for the preceding month and year-to-date which shall be prepared on a
basis consistent with the financial statements identified on Schedule 5.11
hereof and consistent with the prior months and year-to-date financial
statements.
7.19 COBRA. Seller shall at its sole cost and expense supply its
employees employed in the operation of the Business with any and all notices and
other information with respect to such employees' rights to continue their
health and other insurance upon the termination of their employment upon
consummation of the transactions contemplated hereby, all in accordance with the
Applicable Laws of applicable Governmental Authorities.
7.20 THE PARTNERSHIP. Unity shall take all necessary steps to maintain
its ownership percentage at fifty-one percent (51%) or greater in the
Partnership. A transfer of all of Unity's Partnership Interest to Cellco
pursuant to Article 6.0 of the Partnership Agreement as a result of the
execution of this Agreement shall not be a violation of this Section 7.20.
Seller shall make all required capital contributions for amounts accrued
pursuant to the applicable terms of the Partnership Agreement through the Date
of Closing.
7.21 RSA 2 UNSERVED AREA APPLICATION. Prior to the Closing and prior to
applicable licensing deadlines, Unity shall cause the Partnership, with respect
to the Phase II unserved area radio station authorization in File No
05066-CL-P2-96, to properly report necessary construction or coverage changes to
the FCC with a copy of the notification to Purchaser.
7.22 WALLAGRASS CELL SITE. Seller shall obtain a reasonable replacement
site for the Wallagrass cell site prior to the termination of the Wallagrass
tower lease and shall be responsible for the relocation expenses.
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ARTICLE 8: MUTUAL COVENANTS AND CONDITIONS PRECEDENT TO OBLIGATIONS
8.1 FEDERAL COMMUNICATIONS COMMISSION. Promptly following the execution
of this Agreement, Purchaser, Seller, Licensee and Shareholder shall join in
applications to the FCC for approval of the sale and transfer of the Licenses
and a transfer of control of the Partnership and the RSA 2 Licenses to the
Purchaser. Thereafter, Purchaser, Seller, Licensee and Shareholder shall
cooperate with each other and shall take such actions as are reasonably
necessary to obtain the required approvals of the FCC, including, with respect
to Purchaser, assigning this Agreement to a wholly owned subsidiary and
structuring said subsidiary in such commercially reasonable manner as the FCC
may require. Neither party shall take any action before the FCC which is
inconsistent with or would delay action on the approval applications.
Furthermore, each of the parties hereto shall use its commercially reasonable
efforts to prevent the filing of adverse pleadings with the FCC concerning the
approval applications. Purchaser shall bear the fees of the FCC charged in
connection with or incidental to the filing and processing of such applications.
8.2 PROCEEDINGS. The obligations of Purchaser, to consummate this
Closing under this Agreement are subject to there being no (i) investigations,
claims, demands, actions, suits or other proceedings which have been brought,
asserted, commenced or threatened against the Seller, Licensee and Shareholder
and/or the Partnership by any court, Governmental Authority or other person or
entity which could reasonably be expected to have a Material Adverse Effect or
prohibit or materially delay the Closing, or (ii) Applicable Laws issued,
enacted, entered or deemed applicable by any court or other Governmental
Authority restraining or enjoining or which may reasonably be expected to
nullify or render ineffective this Agreement or the consummation of the
transactions contemplated hereby. The obligations of Seller, Licensee and
Shareholder to consummate this Closing under this Agreement are subject to there
being no (i) investigations, claims, demands, actions, suits or other
proceedings which have been brought, asserted, commenced or threatened against
the Purchaser by any court, governmental agency or other person or entity which
could reasonably be expected to prohibit or materially delay the Closing or (ii)
applicable laws issued, enacted, entered or deemed applicable by any court or
governmental authority restraining or enjoining or which may reasonably be
expected to nullify or render ineffective this Agreement or the consummation of
the transactions contemplated hereby.
8.3 THE PARTNERSHIP. Seller shall promptly take all steps required
under the Partnership Agreement to comply with the provisions of Article 6.0,
"Transfers of Partnership Interests, Etc." ("Article 6.0") thereof. Prior to the
Closing, Cellco shall have either (i) elected to purchase Unity's entire 51%
Partnership Interest in the Partnership by exercising its right of first
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refusal or (ii) waived its rights under Article 6.0 or permitted all its rights
under Article 6.0 to lapse so as to permit the entire 51% Partnership Interest
of Unity to be transferred hereunder to Purchaser without further conditions or
diminution of rights.
8.4 HSR ACT. As soon as practicable after execution of this Agreement,
Purchaser and Seller, Licensee and Shareholder shall join in applications to the
Federal Trade Commission (the "FTC") and the United States Department of Justice
(the "DOJ") pursuant to the pre-merger notification procedures of the
Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the "HSR Act").
Thereafter, Purchaser and Seller, Licensee and Shareholder shall cooperate with
each other and shall take such actions as are necessary to obtain the expiration
or early termination of the waiting period prescribed by the HSR Act. Purchaser
and Shareholder shall each pay one-half of any fees of the FTC and DOJ charged
in connection with or incidental to the filing and processing of such
applications. The obligations of the Purchaser and Seller, Licensee and
Shareholder to consummate the Closing under this Agreement are subject to the
expiration or early termination of the waiting period prescribed by the HSR Act
without objection of the FTC or the DOJ.
8.5 PROMPT NOTICE. Shareholder shall promptly notify Purchaser and
Purchaser shall promptly notify Shareholder in writing upon becoming aware of
any of the following: (i) any investigation, claim, demand, action, suit or
other proceeding that may be brought, threatened, asserted or commenced against
any of Seller, Licensee and Shareholder, the Partnership or the Purchaser, as
the case may be, its officers, managers or directors involving in any way the
Business, the Assets or the RSA 2 Assets, (ii) any changes in accuracy of the
representations and warranties made by Purchaser or any of Seller, Licensee and
Shareholder in this Agreement, (iii) any order or decree or any complaint
praying for an order or decree restraining or enjoining the consummation of the
transactions contemplated hereby, or (iv) any notice from any Governmental
Authority of its intention to institute an investigation into, or institute a
suit, action or other proceeding to restrain or enjoin the consummation of the
transactions contemplated hereby or to nullify or render ineffective this
Agreement or such transactions if consummated.
8.6 MUTUAL COVENANTS. Purchaser and Shareholder shall each give notice
to the other promptly after it receives information which could cause a
reasonable business transaction party to believe that the other party has
breached a representation or warranty herein or that a covenant of the other
party has been breached or is impossible of performance.
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ARTICLE 9: CONDITIONS PRECEDENT TO PURCHASER'S OBLIGATIONS
Unless waived by Purchaser in writing, each and every obligation of
Purchaser to be performed at the Closing shall be subject to the satisfaction at
or prior thereto of each and all of the following conditions precedent:
9.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties made by Seller, Licensee and Shareholder in this Agreement, including
the documents, instruments and agreements to be executed and/or delivered by any
of them pursuant to this Agreement, shall be true and correct in all material
respects at and as of the Closing with the same force and effect as though such
representations and warranties had been made or given at and as of the Closing.
Representations and warranties included in updated Schedules accepted by the
Purchaser shall be deemed made in the Agreement.
9.2 COMPLIANCE WITH COVENANTS AND AGREEMENTS
a. Subject to the provisions of Subsection 9.2(b) below,
Seller, Licensee and Shareholder shall have performed and complied with
all of its/their covenants, agreements and obligations under this
Agreement which are to be performed or complied with by it/ them at or
prior to the Closing, including the execution and/or delivery of the
documents, instruments and agreements specified in Section 12.2 hereof
or in such documents, instruments and agreements, all of which shall be
reasonably satisfactory in form and substance to counsel for Purchaser
provided, however, that it shall be the obligation of Seller, Licensee
and Shareholder to promptly remedy any such failure after Closing and
hold Purchaser harmless from any adverse effect relating thereto.
b. The Purchaser's performance of its obligations under the
Agreement shall not be excused as a result of any failure(s) by Seller,
Licensee or Shareholder to perform their obligations pursuant to
Subsections 9.1 and 9.2(a) above, unless (i) said failure(s) can
reasonably be expected, individually or in the aggregate, to result in
an adverse effect in excess of $100,000 or unless (ii) said failure
relates to one of the sites designated as High Priority on Schedules
1.1(a) and 5.16(a).
c. The obligation of Seller, Licensee and Shareholder to
perform pursuant to Subsection 9.2(a) shall survive the Closing.
9.3 NO ADVERSE CHANGE. As of the Date of Closing, nothing shall have
occurred which, individually or in the aggregate, could reasonably be expected
to have an adverse effect in excess of $100,000 or materially impair the ability
of Seller, Licensee, Shareholder and/or the Partnership to conduct the Business
in the same manner as in the past.
9.4 APPROVAL BY COUNSEL. Except as set forth in Schedule 9.2, counsel
for Purchaser shall have been furnished with such certified copies of actions
and proceedings and such other
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instruments and documents as they shall have reasonably requested with respect
to all actions, proceedings, instruments and documents required of Seller,
Licensee and Shareholder to carry out the transactions contemplated by this
Agreement or incidental thereto.
9.5 CONSENTS AND APPROVALS. Except as set forth in Section 9.2,
Purchaser shall have received evidence, in form and substance reasonably
satisfactory to counsel for Purchaser, that all material consents, waivers,
releases, authorizations, approvals, licenses, certificates, permits and
franchises of all persons and entities (including each and every Governmental
Authority) as may be necessary to consummate the transactions contemplated by
this Agreement and for the Purchaser to carry on and continue the Business as it
is now conducted by Seller and the Partnership have been obtained. All consents
of the FCC shall be by Final Order (as hereinafter defined); provided, however,
that if Purchaser waives the condition of FCC consents by Final Order, the
parties shall consider FCC consent without Final Order sufficient to proceed to
Closing according to the other terms of this Agreement. "Final Order" means an
action or decision of the FCC as to which (i) no request for a stay is pending,
no stay is in effect, and any deadline for filing such request that may be
designated by statute or regulation has passed, (ii) no petition for rehearing
or reconsideration or application for review is pending and the time for the
filing of such petition or application has passed, (iii) the FCC does not have
the action or decision under reconsideration on its own motion and the time
within which it may effect such reconsideration has passed and (iv) no judicial
appeal is pending or in effect and any deadline for filing any such appeal that
may be designated by statute or rule has passed.
9.6 FINANCING. Purchaser shall have obtained commitments from
responsible financial institutions to enable it to borrow such funds, as are
needed to pay the Purchase Price or Alternate Purchase Price, as the case may
be, in cash on the Date of Closing, and such commitments shall be in effect and
all conditions thereto satisfied on the Date of Closing.
9.7 SURVEY. Seller shall have obtained at its sole cost and expense
from a licensed registered land surveyor and delivered to Purchaser three (3)
copies of a current as built survey of each parcel of Owned/Leased Land prepared
in full compliance with the customary standard detail requirements for land
title surveys, as adopted by the American Title Association and the American
Congress on Surveying and Mapping. Each survey shall be certified to Purchaser
and Purchaser's lenders, shall locate all easements and similar matters which
are listed on the title commitments.
9.8 EMPLOYEE STOCK OPTIONS. Shareholder shall have caused all options
for shares of common stock of Shareholder pursuant to the 1995 Employee
Restricted Stock Plan or the 1991 Employee Stock Option Plan or otherwise held
by employees employed with respect to the Business who accept an offer of
employment from Purchaser to vest on or before the date of Closing.
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9.9 LEASES. On or before the Date of Closing, Seller shall at its sole
cost have caused the amendment of certain leases of Leased Real Estate, as
listed on Exhibit C, to include, where necessary, extensions of the lease term
(including exercisable renewal options through at least December 31, 2001 and
deletion of any provision permitting a lessor to terminate the lease prior to
December 31, 2001 in the absence of a default by lessee), landlord's consent to
assignment to RCC or other FCC-approved licensee, and collateral assignment of
such leases to a lender. Seller shall use their commercially reasonable best
efforts to obtain lease amendments substantially in the form of Exhibit C-1
attached hereto, which, if obtained, shall be deemed acceptable to Purchaser. In
addition, Purchaser shall use reasonable efforts to obtain the lease amendment
for the "Rockland Retail Lease" in a form substantially similar to Exhibit C-2
attached hereto and incorporated herein by this reference.
9.10 TITLE MATTERS.
a. As soon as practicable following the execution hereof,
Seller shall provide to Purchaser A.L.T.A. Form 1992 title insurance
commitments from a title insurance company reasonably acceptable to
Purchaser for each parcel of Owned/Leased Land agreeing to insure title
as owner or tenant (as applicable) in the amount of $200,000 for each
such parcel of Owned/Leased Land, except for the Seller Owned Real
Estate parcel commonly known as the Augusta site, which shall be
$700,000, with standard exceptions waived, together with copies of all
documents mentioned in said title insurance commitments. In each case,
the amounts purchased shall be increased as necessary to comply with
co-insurance provisions of the policies or to qualify for waivers or
"agreed-amount" endorsements. Seller also agrees to procure for
Purchaser Owner's or Leasehold Owner's policies of title insurance, as
applicable, on A.L.T.A. Form 1992 for each parcel of Owned/Leased Land.
Seller shall bear the cost of obtaining the title insurance commitments
and Seller and Purchaser shall each pay one-half of the cost of the
title insurance policies. The policies shall include waivers of the
co-insurance clause reasonably acceptable to Purchaser. Purchaser shall
be allowed twelve (12) business days after receipt of complete
commitments for the examination thereof and the making and delivering
of any written objections to the marketability of title. If no title
objections are made within such twelve (12) business day period, such
objections shall be deemed to have been waived by Purchaser. Purchaser
shall not have the right, however, to object to Seller's or the
Partnership's title to any parcel of Owned/Leased Land by reason of any
of the Permitted Encumbrances. If any written objections to the
marketability of title to any parcel of Owned/Leased Land are made by
Purchaser within said twelve (12) day period, Seller shall use its
reasonable best efforts, at its sole cost and expense, to cure said
marketable title objections within thirty (30) days after said
objections have been raised. If
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title to the Owned/Leased Land is not made marketable to
Purchaser's reasonable satisfaction within such thirty (30) day period,
Purchaser shall have the right during the ten (10) business day period
(following the expiration of such thirty (30) day period) to terminate
this Agreement by giving written notice of termination to Seller,
Licensee and Shareholder.
b. All matters disclosed on the surveys provided pursuant to
Section 9.7 and all exceptions to title listed in the title insurance
commitments furnished pursuant to Section 9.10 (and the title insurance
policies issued pursuant thereto) shall be deemed Permitted
Encumbrances unless: (a) Purchaser makes a specific, timely (i.e.,
within twelve (12) business days after receipt of all of the title
report, survey and document copy for the item in question) objection
thereto; and (b) such matter(s) or exceptions impair marketable title
to a parcel of Owned/Leased Real Estate (unless such matter(s) or
exception(s) are covered by title insurance (including, without
limitation, affirmative title insurance coverage) or are otherwise
cured or corrected at or prior to Closing.)
In addition, the Permitted Encumbrances listed on Schedule
5.16(d) have been provisionally approved by Purchaser subject to the
following; each easement of record burdening Owned/Leased Real Estate
shall be located on the surveys to be provided pursuant to Section 9.7,
if described in such a manner that it can be located, and thereupon
shall be deemed approved unless (a) Purchaser makes a specific, timely
(i.e., within twelve (12) business days after receipt of all of the
title report, survey and document copy for the item in question)
objection thereto; and (b) such location impairs marketable title to a
parcel of Owned/Leased Real Estate (unless such matter(s) is covered by
title insurance (including, without limitation, affirmative title
insurance coverage) or is not otherwise covered, cured or corrected at
or prior to Closing).
ARTICLE 10: CONDITIONS PRECEDENT TO OBLIGATIONS
OF SELLER, LICENSEE AND SHAREHOLDER
Unless waived by Seller, Licensee and Shareholder in writing, each and
every obligation of Seller, Licensee and Shareholder to be performed at the
Closing shall be subject to the satisfaction at or prior thereto of each and all
of the following conditions precedent:
10.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES. The representations
and warranties made by Purchaser in this Agreement, including the documents,
instruments and agreements to be executed and/or delivered by Purchaser pursuant
to this Agreement, shall be true and correct in all material respects at and as
of the Closing with the same force and effect as though such representations and
warranties had been made or given at and as of the Closing.
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10.2 COMPLIANCE WITH COVENANTS AND AGREEMENTS. Purchaser shall have
performed and complied with all of its covenants, agreements and obligations
under this Agreement which are to be performed or complied with by it at or
prior to the Closing, including (i) the execution and/or delivery of the
documents, instruments and agreements specified in Section 12.3 hereof or in
such documents, instruments and agreements, all of which shall be reasonably
satisfactory in form and substance to counsel for Seller, Licensee and
Shareholder; and (ii) payment of the Purchase Price or Alternate Purchase Price,
as the case may be, in the manner provided for in this Agreement.
10.3 APPROVAL BY COUNSEL. Counsel for Seller, Licensee and Shareholder
shall have been furnished with such certified copies of actions and proceedings
and such other instruments and documents as they shall have reasonably requested
with respect to all actions, proceedings, instruments and documents required of
Purchaser to carry out the transactions contemplated by this Agreement or
incidental thereto.
10.4 REQUIRED GOVERNMENTAL APPROVALS. All consents and approvals of
each and every Governmental Authority necessary for the consummation of the
transactions contemplated hereby shall have been obtained. All consents of the
FCC shall be by Final Order; provided, however, that if Purchaser waives the
condition of FCC consents by Final Order, the parties shall consider FCC consent
without Final Order sufficient to proceed to Closing according to the other
terms of this Agreement.
10.5 PURCHASER'S FINANCING. In the event Purchaser has not obtained and
delivered to Seller copy(s) of written commitments for financing reasonably
satisfactory to Seller, Licensee and Shareholder by January 31, 1997, Seller may
thereafter terminate this Agreement upon five (5) days' written notice to
Purchaser unless Purchaser has obtained and delivered to Seller copies of
written commitments for financing reasonably acceptable to Seller prior to the
expiration of such five (5) day period. Such commitments shall remain in full
force and effect at all times during the period beginning when such commitments
are obtained and continuing until the Closing. Upon lapse of any such
commitment, Seller may thereafter terminate this Agreement upon five (5) days'
written notice to Purchaser unless Purchaser obtains and delivers to Seller a
commitment in effect prior to the expiration of such five (5) days period.
ARTICLE 11: INDEMNIFICATION
11.1 INDEMNIFICATION BY SELLER, LICENSEE AND SHAREHOLDER. Seller,
Licensee and Shareholder (including their respective successors and assigns)
jointly and severally covenant and agree to pay and perform and indemnify and
hold Purchaser, its officers, directors, employees, affiliates, shareholders and
agents, and each of their respective heirs, personal representatives,
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successors and assigns (collectively the "Purchaser Indemnified Parties"),
harmless from, against and in respect of any and all losses, costs, expenses
(including without limitation, reasonable attorneys' fees and disbursements of
counsel), liabilities, damages, fines, penalties, charges, assessments,
judgments, settlements, claims, causes of action and other obligations of any
nature whatsoever (collectively "Losses") that any of the Purchaser Indemnified
Parties may at any time, directly or indirectly, suffer, sustain, incur or
become subject to, arising out of, based upon or resulting from or on account of
each and all of the following:
a. The breach or falsity of any representation or warranty
made by Seller, Licensee or Shareholder in this Agreement, including
the documents, instruments and agreements to be executed and/or
delivered by Seller, Licensee or Shareholder pursuant hereto or
thereto, except to the extent the Purchaser had actual knowledge
(excluding, however, any matters relating to representations or
warranties relating to Real Estate) of such breach or falsity based on
the Due Diligence Documents delivered by Seller, Licensee or
Shareholder and failed to advise Seller, Licensee and Shareholder of
such breach or falsity prior to the date of this Agreement.
b. The breach or nonperformance of any covenant or agreement
made by Seller, Licensee or Shareholder in this Agreement, including
the documents, instruments and agreements to be executed and/or
delivered by any of them pursuant hereto or thereto.
c. Any claims by or liabilities to any of the Seller's or the
Partnership's present or former employees on account of all sums due to
such employees or otherwise arising from acts or omissions allegedly
occurring on or before the Date of Closing, including, but not limited
to, salaries, pension or profit sharing benefits, wages, vacation and
sick pay and other employee benefits accrued as of the open of business
on the Date of Closing as well as all severance pay payable by any of
Seller or the Partnership to any of their respective present and former
employees.
d. All claims, demands, liabilities, debts and/or
Encumbrances, except Permitted Encumbrances, which may be asserted by
any creditors of Seller, Licensee or Shareholder, except to the extent
that Purchaser has assumed such liabilities under the provisions of
Section 3.2 of this Agreement and all claims, demands, liabilities,
debts and/or encumbrances which may be asserted by any creditors of the
Partnership, and except to the extent reflected on the Partnership
Closing Schedules.
e. All claims, demands, liabilities, debts and/or
Encumbrances, except Permitted Encumbrances, that may be asserted
against Purchaser, the Partnership, any of the RSA 2 Assets or any of
the Assets at any time or from time to time resulting from or arising
out of the ownership, use, maintenance or operation of the Assets, the
RSA 2
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Assets, or Business with respect to any period of time prior
to the Closing (excluding only any liability assumed by Purchaser under
the provisions of Section 3.2 of this Agreement or reflected on the
Partnership Closing Schedule).
f. All other liabilities of or claims against Seller, Licensee
or Shareholder of any kind, to the extent not specifically assumed by
the Purchaser under the provisions of Section 3.2 of this Agreement or
identified on a Schedule hereto resulting from or arising out of the
ownership, use, maintenance or operation of the Assets, the RSA 2
Assets, or Business with respect to any period of time prior to the
Closing.
g. Breach by Seller of the warranty and representations set
forth in Section 5.16(k). The foregoing indemnification includes,
without limitation, indemnification against all costs, pursuant to the
order, direction or request of a Governmental Authority or otherwise,
of removal, remediation of any kind, and disposal of Hazardous
Substances, all costs associated with claims for damages to persons,
property, or natural resources, and the Purchaser's reasonable
attorneys' and consultants' fees, court costs and expenses incurred in
connection with any thereof. Notwithstanding anything in this Section
11.1(g) to the contrary, this indemnification shall not apply to any
Losses incurred by the Purchaser as a direct result of affirmative
actions of the Purchaser as owner or operator of the Real Estate after
the Purchaser has acquired title to or a leasehold interest in the Real
Estate on the Date of Closing if such affirmative actions of the
Purchaser cause the introduction and initial release of a Hazardous
Substance in, about, under or near the Real Estate.
h. Any reduction in the Purchase Price or Alternate Purchase
Price, as the case may be, provided for under Section 2.4 hereof.
i. The indemnification provided for in this Section 11.1 shall
remain in full force and effect until the date two years after the
Date of Closing.
11.2 INDEMNIFICATION BY PURCHASER. Purchaser (including its successors
and assigns) covenants and agrees to pay and perform and indemnify and hold
Seller, Licensee and Shareholder, their officers, directors, employees,
affiliates, shareholders and agents, and each of their respective heirs,
personal representatives, successors and assigns, harmless from, against and in
respect of any and all Losses that any of them may at any time, directly or
indirectly, suffer, sustain, incur or become subject to, arising out of, based
upon or resulting from or on account of or relating to each and all of the
following:
a. The breach or falsity (or in the case of any covenant,
nonperformance) of any representation, warranty, covenant or agreement
made by Purchaser in this Agreement, including the documents,
instruments and agreements to be executed and/or delivered by Purchaser
pursuant hereto and thereto.
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b. The use or ownership of the Assets or the operation of the
Business by Purchaser after the Closing, including any claims by or
liabilities to any of the Purchaser's employees arising from acts
allegedly occurring after the Date of Closing, except to the extent
such claims or liabilities arise from or relate to acts or omissions of
Seller, Licensee, Shareholder or Partnership allegedly occurring on or
before the Date of Closing.
c. The failure of Purchaser to pay or perform the debts,
liabilities and obligations it agreed to assume pursuant to Section 3.2
hereof.
d. The existence, use, handling, storage, transportation,
manufacture, release, discharge, spillage, leakage, pumping, pouring,
emitting, dumping or disposal of any Hazardous Substance in, about,
under or near any parcel of Real Estate, to the extent caused by the
Purchaser a direct result of affirmative actions of the Purchaser as
owner or operator of the Real Estate after the Purchaser has acquired
title to or a leasehold interest in the Real Estate on the Date of
Closing. The foregoing indemnification includes, without limitation,
indemnification against all costs, pursuant to the order, direction or
request of a Governmental Authority or otherwise, of removal,
remediation of any kind, and disposal of Hazardous Substances, all
costs associated with claims for damages to persons, property, or
natural resources, and the Seller's reasonable attorneys' and
consultants' fees, court costs and expenses incurred in connection with
any thereof.
11.3 PROCEDURE FOR INDEMNIFICATION. In the event a party intends to
seek indemnification pursuant to the provisions of Sections 11.1 or 11.2 hereof
(the "Indemnified Party"), the Indemnified Party shall promptly give notice
hereunder to the other party (the "Indemnifying Party") after obtaining written
notice of any claim or the service of a summons or other initial legal process
in any action instituted against the Indemnified Party as to which recovery may
be sought against the Indemnifying Party because of the indemnification provided
for in Section 11.1 or 11.2 hereof, and, if such indemnity shall arise from the
claim of a third party, the Indemnified Party shall permit the Indemnifying
Party to assume the defense of any such claim and any litigation resulting from
such claim; provided, however, that the Indemnified Party shall not be required
to permit such an assumption of the defense of any claim or litigation which, if
not first paid, discharged or otherwise complied with, would result in an
interruption or disruption of the business of the Indemnified Party or any
material part thereof. Notwithstanding the foregoing, the right to
indemnification hereunder shall not be affected by any failure of the
Indemnified Party to give such notice (or by delay by the Indemnified Party in
giving such notice) unless, and then only to the extent that, the rights and
remedies of the Indemnifying Party shall have been prejudiced as a result of the
failure to give, or delay in giving, such notice. Failure by the Indemnifying
Party to notify the Indemnified Party of its election to defend any such claim
or action by a third party within ten (10) days after notice thereof shall have
been given to the
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Indemnifying Party shall be deemed a waiver by the Indemnifying Party of its
right to defend such claim or action.
If the Indemnifying Party assumes the defense of such claim or
litigation resulting therefrom, the obligations of the Indemnifying Party
hereunder as to such claim or litigation shall include taking all steps
necessary in the defense or settlement of such claim or litigation and holding
the Indemnified Party harmless from and against any and all damages caused by or
arising out of any settlement approved by the Indemnifying Party or any judgment
entered in connection with such claim or litigation. The Indemnifying Party
shall not, in the defense of such claim or any litigation resulting therefrom,
consent to entry of any judgment (other than a judgment of dismissal on the
merits without costs) except with the written consent of the Indemnified Party
or enter into any settlement (except with the written consent of the Indemnified
Party) which does not include as an unconditional term thereof the giving by the
claimant or the plaintiff to the Indemnified Party a release from all liability
in respect to such claim or litigation.
If the Indemnifying Party does not assume the defense of any such claim
by a third party or litigation resulting therefrom after receipt of notice from
the Indemnified Party, the Indemnified Party may defend against such claim or
litigation in such manner as it deems appropriate, and unless the Indemnifying
Party shall deposit with the Indemnified Party a sum equivalent to the total
amount demanded in such claim or litigation plus the Indemnified Party's
estimate of the cost (including attorneys' fees) of defending the same, the
Indemnified Party may settle such claim or litigation on such terms as it may
deem appropriate and the Indemnifying Party shall promptly reimburse the
Indemnified Party for the amount of such settlement and for all costs (including
attorneys' fees), expenses and damages incurred by the Indemnified Party in
connection with the defense against or settlement of such claim or litigation,
or if any such claim or litigation is not so settled, the Indemnifying Party
shall promptly reimburse the Indemnified Party for the amount of any judgment
rendered with respect to any claim by a third party in such litigation and for
all costs (including attorneys' fees), expenses and damage incurred by the
Indemnified Party in connection with the defense against such claim or
litigation, whether or not resulting from, arising out of, or incurred with
respect to, the act of a third party.
11.4 LIMITATIONS. Notwithstanding any provision of this ARTICLE 11 to
the contrary, Seller, Licensee, Shareholder and their respective successors and
assigns shall not be required to indemnify the Purchaser Indemnified Parties
pursuant to the provisions of Section 11.1(a) hereof unless and until the
aggregate of all such claims exceeds the sum of $100,000 (the "Threshold
Amount"). Once such cumulative Losses equal or exceed the Threshold Amount,
Seller, Licensee and Shareholder and their respective successors and assigns
shall be required to provide indemnification pursuant to Section 11.1(a) for all
such Losses. Notwithstanding the foregoing provisions of this Section 11.4 to
the contrary, losses arising out of the breach or falsity of the
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representations or warranties contained in Section 5.8 of this Agreement shall
not be subject to the foregoing provisions of this Section 11.4. Notwithstanding
any provision in this Agreement to the contrary, (i) indemnification pursuant to
this Section 11 shall be the exclusive monetary remedy for all Losses that any
of the Purchaser Indemnified parties may at any time, directly or indirectly,
suffer, sustain, incur or become subject to, arising out of, based upon or
resulting from or on account of each and all of the items set forth in Section
11.1(a)-(i), inclusive, and (ii) in no event will the indemnification
obligations of Seller, Licensee and Shareholder and their respective successors
and assigns under ARTICLE 11 hereof exceed in the aggregate the sum of Five
Million Four Hundred Fourteen Thousand Nine Hundred and no/100 Dollars
($5,414,900.00).
11.5 ARBITRATION.
a. All claims, disputes or other matters in question between
the parties to this Agreement, including for matters arising under
Section 2.4 hereof, arising out of or relating to this Agreement shall
be submitted for, subject to and decided by arbitration in accordance
with the Commercial Arbitration Rules of the American Arbitration
Association currently in effect as of the date of this Agreement ("AAA
Rules"), except to the extent those rules are inconsistent with this
Section 11.5. Any arbitration must be held in Chicago, Illinois by a
single arbitrator mutually selected by the parties hereto or, if the
parties hereto cannot agree on the appointment of such arbitrator
within ten (10) days following the date notice of the dispute is given
by Purchaser or one of the Seller, Licensee or Shareholder to the
adverse party, an arbitrator selected according to the AAA Rules.
The arbitrator's award shall be final, conclusive and binding
upon all parties to this Agreement, and judgment may be entered upon it
in accordance with the Federal Arbitration Act any court of general
jurisdiction in Chicago, Illinois, or in any United States District
Court having jurisdiction in Chicago, Illinois. The arbitrator shall be
required to provide in writing to the parties the basis for the award
or order of such arbitrator, and a court reporter shall record all
hearings (unless otherwise agreed to by the parties), with such record
constituting the official transcript of such proceedings. Each of
Seller, Licensee, Shareholder and the Purchaser specifically desires
this Arbitration clause to be governed by the United States Federal
Arbitration Act, and not by the Arbitration Code of any state.
b. Each of Seller, Licensee, Shareholder and the Purchaser
agrees and consents that any legal action, suit or proceeding seeking
to enforce this Section 11.5 or to confirm or contest any arbitration
award shall be instituted and adjudicated solely and exclusively in any
court of general jurisdiction in Chicago, Illinois, or in the United
States District Court having jurisdiction in Chicago, Illinois, and
each of Seller, Licensee,
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Shareholder and the Purchaser agrees that venue will be proper
in such courts and waives any objection which they may have now or
hereafter to the venue of any such suit, action or proceeding in such
courts, and irrevocably consents and agrees to the jurisdiction of said
courts in any such suit, action or proceeding. Each of Seller,
Licensee, Shareholder and the Purchaser further agrees to accept and
acknowledge service of any and all process which may be served in any
such suit, action or proceeding in said courts, and also agrees that
service of process or notice upon them shall be deemed in every respect
effective service of process or notice upon them, in any suit, action,
proceeding or arbitration demand, if given or made: (i) according to
applicable law; (ii) according to the AAA Rules; (iii) by a person over
the age of eighteen who personally serves such notice or service of
process on any of Seller, Licensee, Shareholder or Purchaser, as the
case may be; or (iv) by certified mail, return receipt requested,
mailed to any of Seller, Licensee, Shareholder or Purchaser, as the
case may be, at their respective addresses set forth in this Agreement.
c. In the event of arbitration filed or instituted between the
parties pursuant to this Section 11.5, the prevailing party will be
entitled to receive from the adverse party all costs, damages and
expenses, including reasonable attorney's fees, incurred by the
prevailing party in connection with that action or proceeding whether
or not the controversy is reduced to judgment or award. The prevailing
party will be that party who is determined by the arbitrator to have
prevailed on the major disputed issues.
ARTICLE 12: CLOSING
12.1 DATE OF CLOSING. Subject to the satisfaction or waiver of the
conditions precedent contained in ARTICLES 8, 9 and 10 hereof, the closing of
the transactions contemplated by this Agreement (the "Closing") shall be held at
9:00 a.m., on the last day of the month which is at least ten (10) days after
the receipt of the last required consent, at the offices Moss & Barnett in
Minneapolis, Minnesota, or at such other day, time and place as may be mutually
agreed upon in writing by Purchaser and Seller and shall be as of the opening of
business on such day. Such date is referred to in this Agreement as the "Date of
Closing."
12.2 DOCUMENTS TO BE DELIVERED BY SELLER, LICENSEE AND SHAREHOLDER. At
the Closing, Seller, Licensee and Shareholder shall execute, where necessary or
appropriate, and deliver to Purchaser each and all of the following:
a. A certificate in the form of Exhibit E hereto signed by
duly authorized officers of each of Seller, Licensee and Shareholder,
and dated as of the Date of Closing, to the effect that the
representations and warranties made by Seller, Licensee and
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Shareholder in this Agreement are true and correct in all material
respects at and as of the Closing with the same force and effect as
though such representations and warranties had been made on or given at
and as of the Closing and that Seller, Licensee and Shareholder have
each performed and complied with all of its/their covenants, agreements
and obligations under this Agreement which are to be performed and
complied with by them at or prior to the Closing;
b. A copy certified by the Secretary of each of Seller,
Licensee and Shareholder of the duly adopted resolutions of each of
Seller's, Licensee's and Shareholder's Boards of Directors and
Shareholder approving this Agreement and authorizing the execution and
delivery of this Agreement, including the documents, instruments and
agreements to be executed and/or delivered by any of Seller, Licensee
and Shareholder pursuant to this Agreement, and the consummation of the
transactions contemplated hereby and thereby;
c. A Bill of Sale to all of the Assets in the form of Exhibit
F hereto duly executed by Seller and Licensee;
d. Duly executed assignments by Seller and Licensee to
Purchaser with respect to the Licenses, Proprietary Rights, Software
and (except as otherwise contemplated by Section 2.1 hereof)
Partnership Interest in a form reasonably satisfactory to counsel for
Purchaser and in compliance with all Applicable Laws;
e. Releases, satisfactions, or terminations of all mortgages,
financing statements or other evidences of Encumbrances, other than
Permitted Encumbrances, filed with the Maine Secretary of State, any
county recorder and/or any other similar office in the State of Maine
evidencing an Encumbrance on any of the Assets;
f. A duly executed Quit Claim Deed with Covenant with respect
to each parcel of Seller Owned Real Estate and assignments of all
leases for Seller Leased Real Estate and, if necessary for the
Partnership Leased Real Estate, together with any necessary consents
therefore, in recordable form in substantially the form of Exhibit O
hereto for each parcel of Seller Leased Real Estate, together with any
necessary consents;
g. Policies of title insurance for each parcel of Owned/Leased
Real Estate or appropriate commitments for title insurance, in the form
required by Section 9.10 hereof;
h. Any document or certificate that the title insurance
company may reasonably require to issue the title insurance policies on
the Owned/Leased Real Estate in the form required by Section 9.10
hereof;
i. Evidence of compliance with applicable zoning laws for the
improvements located on each parcel of Owned/Leased Real Estate, which
may consist for each parcel of (i) a zoning letter from the applicable
zoning authority in the form of Exhibit P; or (ii) at
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Seller's expense, a zoning endorsement to the title policy for
the parcel of Owned/Leased Real Estate which includes coverage for
regulation by the Land Use Regulatory Commission; or (iii) at Seller's
expense, an opinion of counsel reasonably acceptable to Purchaser from
Rudman & Winchell or other counsel reasonably acceptable to Purchaser
to the effect that the parcel of Owned/Leased Real Estate complies with
applicable zoning laws. "Compliance with applicable zoning laws" as
used herein refers to compliance with applicable statutes of the State
of Maine, regulations (if applicable) of the Land Use Regulatory
Commission and applicable municipal ordinances.
j. An affidavit signed by Seller in the form of Exhibit G
hereto complying with Section 1445 of the Code;
k. Unless the failure to do so would not create a Material
Adverse Effect, Seller shall furnish Purchaser with estoppel letters
dated within a reasonable number of calendar days of the Date of
Closing with respect to all of the Operating Contracts listed on
Schedule 1.1(g) hereto, all of the RSA 2 Contracts listed on Schedule
5.15, hereto, and all Leased Real Estate, which shall be signed by each
party thereto other than Seller, Licensee, Shareholder and/or the
Partnership and which shall state that there are no defaults in and
that there have been no modifications of any such Operating Contract,
RSA 2 Contract or such leases for the Leased Real Estate, and that each
is each still in full force and effect;
l. All consents, releases, assignments and permissions of any
kind or nature, whether from a Governmental Authority or otherwise,
which reasonably may be required to effectively sell, assign and
transfer the Assets to Purchaser, all in a form reasonably satisfactory
to counsel for Purchaser;
m. The Agreement Not To Compete within the State of Maine duly
executed by Seller, Licensee, Shareholder and Maurice P. O'Connor, and
each entity controlled by Shareholder, in the forms attached hereto as
Exhibit H and Exhibit H-1;
n. Certificates of title and assignments thereof for all
Vehicles;
o. The duly executed Assumption Agreement;
p. Any disclosure statement required for the transfer of any
parcel of Real Estate which complies with the requirements of
applicable Governmental Authorities;
q. An estoppel letter from Cellco dated within fifteen (15)
calendar days of Closing which states that Unity has complied with all
requirements of Article 6.0 of the Partnership Agreement for the
Partnership and that Unity is in compliance with the Partnership
Agreement;
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r. Such other documents as are reasonably necessary or
appropriate to effect the consummation of the transactions contemplated
hereby and which are customary under local law;
s. A duly executed written opinion letter by Nelson, Mullins,
Riley & Scarborough, L.L.P., counsel for Seller, Licensee and
Shareholder, dated as of the Date of Closing, addressed to Purchaser,
reasonably satisfactory in form and substance to counsel for Purchaser,
addressing the matters set forth on Exhibit I;
t. A duly executed written opinion letter of FCC counsel of
Seller, Licensee and Shareholder, dated as of the Date of Closing,
addressed to Purchaser, reasonably satisfactory in form and substance
to counsel for Purchaser, addressing the matters set forth on Exhibit J
hereto;
u. The Post Closing Escrow Agreement duly executed by Seller,
Licensee and Shareholder;
v. A duly executed written opinion letter of Seller's state
regulatory counsel in Maine, addressed to the Purchaser, reasonably
satisfactory in form and substance to counsel for the Purchaser,
addressing the matters set forth on Exhibit K attached hereto;
w. If Shareholder is to provide Billing Service to Purchaser,
a billing services agreement in a mutually agreeable form, pursuant to
Section 13.4 below, to Purchaser and Shareholder duly executed by
Shareholder; and
x. Copies of such documents in form and substance reasonably
acceptable to counsel for Purchaser admitting the Purchaser as the
managing general partner of the Partnership.
12.3 DOCUMENTS TO BE DELIVERED BY PURCHASER. At the closing, Purchaser
shall execute, where necessary or appropriate, and deliver to Seller, Licensee
and/or Shareholder, as appropriate, each and all of the following:
a. A wire transfer of immediately available funds to Seller's,
Licensee's and Shareholder's designated account(s) and to the Post
Closing Escrow Account in the total amount provided for in Section 2.3
hereof;
b. A certificate in the form of Exhibit L hereto signed by a
duly authorized officer of Purchaser, and dated as of the Date of
Closing, to the effect that the representations and warranties made by
Purchaser in this Agreement are true and correct in all material
respects at and as of the Closing with the same force and effect as
though such representations and warranties had been made on or given at
and as of the Closing and the Purchaser has performed and complied with
all of its covenants, agreements and obligations under this Agreement
which are to be performed and complied with by Purchaser at or prior to
on the Closing;
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c. A copy certified by the Secretary of Purchaser of the duly
adopted resolutions of the Board of Directors of Purchaser approving
this Agreement and authorizing the execution and delivery of this
Agreement, including the documents, instruments and agreements to be
executed and/or delivered by the Purchaser pursuant hereto, and the
consummation of the transactions contemplated hereby and thereby;
d. The Assumption Agreement hereto duly executed by Purchaser;
e. A duly executed written opinion letter by Moss & Barnett, a
Professional Association, counsel for Purchaser, dated as of the Date
of Closing, addressed to Seller, Licensee and Shareholder, reasonably
satisfactory in form and substance to counsel for Seller, Licensee and
Shareholder addressing the matters set forth in Exhibit M hereto;
f. The Post Closing Escrow Agreement duly executed by
Purchaser;
g. A duly executed written opinion of FCC counsel of
Purchaser, dated as of Closing, addressed to Seller, Licensee and
Shareholder, reasonably satisfactory in form and substance to counsel
for Seller, Licensee and Shareholder addressing the matters set forth
in Exhibit N hereto.
ARTICLE 13: PERFORMANCE FOLLOWING THE DATE OF CLOSING
The following covenants and agreements are to be performed after the
Closing by the parties and shall continue in effect for the periods respectively
indicated or, where no indication is made, until performed:
13.1 COLLECTION OF RECEIVABLES. After the Closing, Purchaser shall be
empowered to collect all Receivables and other items transferred to Purchaser
hereunder and to endorse with the name of Seller any checks or other instrument
received on account of any such Receivables or other items. Seller, Licensee and
Shareholder agree to promptly transfer to Purchaser any cash, checks or other
property that they may receive in respect of the Receivables. At the written
request of Purchaser, Seller, Licensee and Shareholder will cooperate, and will
use commercially reasonable efforts to have the officers, directors, and other
employees of Seller and Shareholder cooperate, with Purchaser on and after the
Date of Closing in endeavoring to effect the collection of all Receivables and
with respect to other actions, proceedings, arrangements or disputes involving
Seller, Licensee or Shareholder or Purchaser based upon contracts, arrangements
or acts of Seller, Licensee or Shareholder which were in effect or occurred on
or prior to the Date of Closing. To the extent Seller, Licensee or Shareholder
makes a payment to Purchaser in satisfaction of a claim pursuant to ARTICLE 11
or 2.3(a)(iv) for breach of the representation and warranty in Section 5.17
above, and in the event Purchaser receives payment on or before a date
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two years after the Date of Closing of any of the Receivables which constituted
the basis for such claim, Purchaser shall pay an amount equal to such payments
to Seller.
13.2 FURTHER ACTS AND ASSURANCES. Purchaser, Unity, Licensee and
Shareholder each agrees that its officers will, at any time and from time to
time, on and after the Date of Closing, upon the reasonable request of the other
party, do all such further acts and things and execute, acknowledge and deliver,
or cause to be executed, acknowledged and delivered to Purchaser any and all
papers, documents, instruments, agreements, deeds, assignments, transfers,
assurances and conveyances as may be necessary or desirable to vest, perfect and
confirm of record in Purchaser, its successors and assigns, the title to any of
the Assets or otherwise to carry out and give effect to the provisions and
intent of this Agreement. In addition, from and after the Date of Closing,
Purchaser, Unity, Licensee and Shareholder will each afford to the other party
and its attorneys, accountants and other representatives access, during normal
business hours, to such personnel, books and records relating to the Assets and
the Business as may reasonably be required in connection with the preparation of
financial information or the filing of tax returns and will cooperate in all
reasonable respects with the other party in connection with claims and
litigation asserted by or against third parties, relating to the transactions
contemplated hereby. In the event Seller, Licensee or Shareholder is unable to
provide documentation, instruments or agreements specified in ss.12.2 hereof
prior to the Date of Closing and the parties close the transaction contemplated
by this Agreement, Seller, Licensee or Shareholder, as appropriate, shall
provide such documentation, instruments or agreements to Purchaser as promptly
as is practicable, but in any event, within two years of the Date of Closing.
13.3 CHANGE OF NAME. Seller will provide Purchaser with such consents
and shall perform such other acts (including changing Seller's names and assumed
names) as may be necessary to give the Purchaser the exclusive right to use the
name "Unicel" in the jurisdictions in which Seller or the Partnership heretofore
has done business. From and after the Date of Closing the Seller, Licensee and
Shareholder agree that they will not use such name for any purpose whatsoever.
13.4 BILLING SERVICES PROVIDED BY SHAREHOLDER. It is the parties
intention to convert the billing operations currently provided by Shareholder to
Seller related to the Business to the billing services platform to be chosen by
the Purchaser. The Shareholder, Seller and Purchaser agree to provide each other
with all reasonable cooperation to effect such conversion as of the Date of
Closing. In the event that a full conversion of such billing services cannot be
completed as of the Date of Closing, Shareholder agrees to continue to provide
the level of billing services currently being provided to Seller at cost as
incurred by Seller in providing such services for a period of up to ninety
(90) days from the Date of Closing.
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13.5 PRESERVATION OF AND ACCESS TO RECORDS. All books and records of
Seller, Licensee and Shareholder conveyed to Purchaser hereunder shall be
preserved by Purchaser for a period of six (6) years after the Date of Closing;
provided, however, Purchaser may destroy any part or parts of such records upon
obtaining written consent of Shareholder for such destruction, which consent
shall not be unreasonably withheld. Such records shall be made available to
Seller, Licensee and Shareholder and their representatives at all reasonable
times during normal business hours of Purchaser during said six-year period with
the right at their expense to make abstracts from and copies thereof. Purchaser
may return such records to Seller, Licensee and Shareholder at any time and
Purchaser's obligation to preserve or make available such records shall
thereupon terminate.
ARTICLE 14: TERMINATION.
14.1 TERMINATION. This Agreement may be terminated and the transactions
contemplated herein may be abandoned after the date of this Agreement, but not
later than the Closing:
a. By mutual written consent of all parties hereto;
b. By Purchaser or jointly by Seller, Licensee and Shareholder
if (i) any of the conditions provided for in ARTICLE 8 of this
Agreement have not been met and have not been waived in writing by the
party seeking to terminate on or before the Date of Closing; or (ii)
the FCC has denied or has not approved the application described in
Section 8.1 herein by July 31, 1996;
c. By Purchaser if any of the conditions provided for in
ARTICLE 9 of this Agreement have not been met and have not been waived
in writing by Purchaser on or before the Date of Closing;
d. Jointly by Seller, Licensee and Shareholder if any of the
conditions provided for in ARTICLE 10 of this Agreement have not been
met and have not been waived in writing by Seller, Licensee and
Shareholder on or before the Date of Closing;
e. By Purchaser pursuant to Sections 4.1(b) and/or 7.16
hereof; and
f. By either Seller or Purchaser if the Closing has not
occurred for any reason, on or before September 30, 1996.
In the event of termination or abandonment by any party as provided in this
Section 14.1, written notice shall forthwith be given to the other party and
each party shall pay its own expenses incident to preparation for consummation
of this Agreement and the transactions contemplated hereunder and neither party
shall have any obligation or liability to the other hereunder except such
liability as may arise as a result of a breach hereof.
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14.2 CURE BY SELLER, LICENSEE OR SHAREHOLDER. Notwithstanding the
foregoing, if Purchaser claims the right to terminate or abandon this Agreement
pursuant to clause (b), (c) or (e) of Section 14.1, then Purchaser must provide
Seller with written notice of its intention to terminate or abandon the
Agreement, which notice shall identify the condition or event giving rise to
Purchaser's right to terminate or abandon the Agreement and shall include the
dollar amount attributed to the Balance Sheet and prospective Income Statement
impacts such condition or event. Seller will have ten (10) business days from
receipt of such notice to deliver to Purchaser a notice that Seller, Licensee
and Shareholder have elected to do one of the following: (i) delay the Closing
for up to 30 days during which Seller, Licensee and Shareholder attempt to cure
such condition or event; or (ii) proceed to closing and, pursuant to an escrow
agreement satisfactory to the parties, escrow the dollar amount identified in
Purchaser's election notice pending the resolution of such condition or event.
In the event that Seller shall fail to deliver to Purchaser an election notice,
or if the parties cannot agree upon a mutually satisfactory escrow agreement,
this Agreement shall terminate in accordance with the provisions of this Section
14.2.
The limitations set forth in Section 11.4 shall not apply to any
matters addressed in an escrow agreement entered into pursuant to the preceding
paragraph. Seller, Licensee and Shareholder agree that by proceeding to Closing,
Purchaser shall not be deemed to have waived any rights or remedies available to
it under this Agreement, with respect to any matter known to it prior to the
Closing.
The provisions of this Section 14.2 shall not apply to termination
pursuant to Sections 9.6, 14.1(b)(ii) or 14.1(f).
14.3 RETURN OF DOCUMENTS AND NONDISCLOSURE. If this Agreement is
terminated for any reason pursuant to Section 14.2 hereto, each party shall
return all documents and materials which shall have been furnished by or on
behalf of the other party, and each party hereby covenants that it will not
disclose to any person or entity any confidential or proprietary information
about the other party or any information about the transactions contemplated
hereby, except insofar as may be necessary to assert its rights hereunder.
ARTICLE 15: MISCELLANEOUS
15.1 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS. Each of the
representations, warranties, covenants, agreements and indemnities of the
parties contained in this Agreement and in any Exhibit, Schedule, certificate,
instrument or document delivered by or on behalf of any of the parties hereto
pursuant to this Agreement and the transactions contemplated hereby shall
survive the Closing of the transactions contemplated hereby and any
investigation made by the parties or their agents either prior to or after the
date hereof for a period ending two
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years after the Date of Closing, after which no claim for an incorrect statement
or representation, or for the breach of any warranty, covenant, agreement or
indemnity under this Agreement may be brought, and no litigation with respect
thereto may be commenced, and no party shall have any liability or obligation
with respect thereto, unless the indemnified party gave written notice to the
indemnifying party specifying with particularity the incorrect statement or
representation or breach of warranty, covenant, agreement or indemnity claimed
on or before the expiration of such period.
15.2 BROKERS. Purchaser hereby represents and warrants to Seller,
Licensee and Shareholder that it has retained The Robinson-Humphrey Company,
Inc. (the "Broker") to assist it in purchasing the Assets and the Business and
that the Broker is entitled to a commission as a result of the consummation of
the transactions contemplated hereby. Purchaser agrees that it shall pay and
hold Seller, Licensee and Shareholder, their officers, directors, shareholders
and affiliates harmless from any and all fees, commissions and other sums which
may be due to the Broker or any other broker, investment advisor, finder or
similar consultant for the services provided for or on behalf of the Purchaser.
15.3 COOPERATION. The parties hereto shall cooperate with each other in
all respects, including using their commercially reasonable efforts to assist
each other in satisfying the conditions precedent to their respective
obligations under this Agreement, to the end that the transactions contemplated
hereby will be consummated. Without limiting the generality of the foregoing,
the Shareholder will vote all of its Stock in Unity and Licensee in favor of the
consummation of the transactions contemplated hereby.
15.4 PUBLIC ANNOUNCEMENTS. The timing and content of all public
announcements relating to the execution of this Agreement and the consummation
of the transactions contemplated hereby shall be approved by both Purchaser and
Shareholder prior to the release of such public announcements, and each party
agrees to cooperate with the other party as appropriate to comply with all
Applicable Laws. Subsequent to the Date of Closing, Purchaser may make such
announcements and/or advertisements as Purchaser, in its sole discretion, deems
necessary to all customers and/or potential customers and suppliers of the
Business.
15.5 SALES, USE AND DEED TAXES. Seller, Licensee and Shareholder
jointly and severally agree to pay in full any and all federal, state, local and
foreign sales taxes, use taxes, deed taxes, mortgage registrations, personal
property taxes or other similar taxes (including any interest or penalty
thereon) as and when the same may be due, which may be imposed upon or arise out
of the sale of the Assets by the Seller, Licensee or Shareholder to the
Purchaser or the consummation of the transactions contemplated hereby. Purchaser
and Seller each shall pay one-half of the real estate transfer taxes arising on
consummation of the transactions contemplated hereunder.
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15.6 INTENTIONALLY OMITTED.
15.7 NOTICES. All notices, demands and other communications provided
for hereunder shall be in writing and shall be given by personal delivery, via
facsimile transmission (receipt telephonically confirmed), by nationally
recognized overnight courier (prepaid), or by certified or registered first
class mail, postage prepaid, return receipt requested, sent to each party, at
its/his address as set forth below or at such other address or in such other
manner as may be designated by such party in written notice to each of the other
parties. All such notices, demands and communications shall be effective when
personally delivered, one (1) business day after delivery to the overnight
courier, upon telephone confirmation of facsimile transmission or upon receipt
after dispatch by mail to the party to whom the same is so given or made:
If to Seller, Licensee or: InterCel, Inc.
Shareholder 1233 O.G. Skinner Drive
West Point, Georgia 31833
Attn: Allen Smith and Jill Dorsey
With a copy to: Nelson, Mullins, Riley & Scarborough, L.L.P.
400 Colony Square, Suite 2200
1201 Peachtree Street Northeast
Atlanta, Georgia 30361
Attn: Glenn Sturm, Esq.
If to Purchaser: Rural Cellular Corporation
P.O. Box 1027
Alexandria, Minnesota 56308
Attn: Richard P. Ekstrand, President
With a copy to: Moss & Barnett, A Professional Association
4800 Norwest Center
90 South Seventh Street
Minneapolis, Minnesota 55402
Attn: Ann K. Newhall, Esq.
15.8 ENTIRE AGREEMENT. This Agreement, including the documents,
instruments, and agreements to be executed by the parties pursuant hereto,
contains the entire agreement of the parties hereto and supersedes all prior or
contemporaneous agreements and understandings, oral or written, between the
parties hereto with respect to the subject matter hereof, except for the
Nondisclosure Agreement.
15.9 REMEDIES CUMULATIVE. Remedies herein provided are cumulative and
not exclusive of any other remedies provided by law.
15.10 SPECIFIC PERFORMANCE. Seller, Licensee and Shareholder
acknowledge and agree that the Assets are unique and that Purchaser will have no
adequate remedy at law if Seller,
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<PAGE> 70
Licensee and Shareholder shall fail to perform any of its/their obligations
hereunder. In such event, Purchaser shall have the right, in addition to any
other rights it may have, to specific performance of this Agreement.
15.11 AMENDMENTS. No purported amendment, modification or waiver of any
provision of this Agreement or any of the documents, instruments or agreements
to be executed by the parties pursuant hereto shall be effective unless in a
writing specifically referring to this Agreement and signed by all of the
parties.
15.12 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns, but except as hereinafter provided in this Section, nothing
in this Agreement is to be construed as an authorization or right of any party
to assign its rights or delegate its duties under this Agreement without the
prior written consent of the other parties hereto. In its sole discretion,
Purchaser may assign its rights in and/or delegate its duties under this
Agreement to one or more wholly-owned subsidiaries (an "Affiliate" or
"Affiliates"); provided, that Purchaser shall remain responsible to diligently
pursue financing in accord with Section 9.6 hereof. No such assignment and/or
delegation shall relieve Purchaser of any of its duties or obligations
hereunder. In the event of such an assignment of rights and/or delegation of
duties, all references to the Purchaser in this Agreement shall also be deemed
to be references to the Affiliate to which this Agreement is assigned.
15.13 COSTS. Except as otherwise provided herein, each party hereto
shall pay its own costs and expenses incurred in connection with negotiating and
preparing this Agreement and consummating the transactions contemplated hereby,
including but not limited to fees and disbursements of their attorneys and
accountants. None of Seller's obligations for payment of such costs and expenses
shall be considered as current liabilities for the purpose of Section 2.4 above.
15.14 GOVERNING LAW. This Agreement, including the conveyancing and
transfer documents, instruments and agreements to be executed and/or delivered
by the parties pursuant hereto, shall be construed, governed by and enforced in
accordance with the laws of the State of Delaware, without giving effect to the
principals of conflicts of laws thereof, except for real estate conveyancing and
transfer issues, which shall be governed by the State of Maine.
15.15 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same Agreement.
15.16 HEADINGS. The headings of the articles, sections and subsections
of this Agreement are intended for the convenience of the parties only and shall
in no way be held to explain, modify, construe, limit, amplify or aid in the
interpretation of the provisions hereof. The
65
<PAGE> 71
terms "this Agreement," "hereof," "herein," "hereunder," "hereto" and similar
expressions refer to this Agreement as a whole and not to any particular
article, section, subsection or other portion hereof and include the Schedules
and Exhibits hereto and any document, instrument or agreement executed and/or
delivered by the parties pursuant hereto.
15.17 SCOPE OF AGREEMENT. Unless the context otherwise requires, all
references in this Agreement or in any Schedule or Exhibit hereto, to the
assets, properties, operations, business, financial statements, employees, books
and records, accounts receivable, accounts payable, contracts, agreements or
other attributes of the business of Seller, Licensee, Shareholder and/or the
Partnership shall mean such items or attributes as they are used in, apply to,
or relate to Seller's, Licensee's, Shareholder's and the Partnership's Business.
15.18 NUMBER AND GENDER. Unless the context otherwise requires, words
importing the singular number shall include the plural and vice versa and words
importing the use of any gender shall include all genders.
15.19 KNOWLEDGE. Knowledge, as used in this Agreement and the Schedules
and Exhibits attached hereto, means actual knowledge of a fact or constructive
knowledge if a reasonably prudent person in a like position would have known or
should have known, the fact; provided that no party shall have any greater duty
to investigate or acquire knowledge because of the existence of this Agreement
than would apply if this Agreement had never been executed and delivered, except
that when such term is used to qualify the matter set forth on the Schedules to
this Agreement, Seller, Licensee and Shareholder must make such investigation in
preparing such Schedules as is reasonable under the circumstances, giving due
consideration to the size and nature of the transaction contemplated herein.
Seller shall be deemed to have knowledge of matters known to its officers,
directors and those of its employees listed on Schedule 5.19 hereto or of
matters which reasonably prudent persons in their respective positions would
have known.
15.20 SEVERABILITY. In the event that any provision of this Agreement
is declared or held by any court of competent jurisdiction to be invalid or
unenforceable, such provision shall be severable from, and such invalidity or
unenforceability shall not be construed to have any effect on, the remaining
provisions of this Agreement, unless such invalid or unenforceable provision
goes to the essence of this Agreement, in which case the entire Agreement may be
declared invalid and not binding upon any of the parties.
15.21 PARTIES IN INTEREST. Nothing expressed or implied in this
Agreement is intended or shall be construed to confer any rights or remedies
under or by reason of this Agreement upon any person or entity other than
Purchaser, Seller, Licensee and Shareholder or their respective successors and
permitted assigns. Nothing in this Agreement is intended to relieve or discharge
the obligations or liabilities of any third person or entity to Purchaser or
Seller, Licensee and Shareholder.
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<PAGE> 72
15.22 WAIVER. The terms, conditions, warranties, representations and
indemnities contained in this Agreement, including the documents, instruments
and agreements executed and/or delivered by the parties pursuant hereto, may be
waived only by a written instrument executed by the party waiving compliance.
Any such waiver shall only be effective in the specific instance and for the
specific purpose for which it was given and shall not be deemed a waiver of any
other provision hereof or of the same breach or default upon any recurrence
thereof. No failure on the part of a party hereto to exercise and no delay in
exercising any right hereunder shall operate as a waiver thereof nor shall any
single or partial exercise of any right hereunder preclude any other or further
exercise thereof or the exercise of any other right.
15.23 OTHER ACQUISITIONS BY PURCHASER. Purchaser agrees that until the
Closing shall have occurred or this Agreement shall have been terminated,
Purchaser shall not acquire, or permit any of its subsidiaries (or, to the
extent within Purchaser's control, any other person or entity affiliated with
the Purchaser) to acquire any attributable interest in any FCC license if such
acquisition, together with the other interests of Purchaser, its subsidiaries
and other affiliates, would make the consummation of this Agreement contrary to
the Communications Act or the rules, regulations or policies of the FCC.
15.24 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. The word "including" shall mean including
without limitation. The parties intend that each representation, warranty and
covenant contained herein shall have independent significance. If any party has
breached any representation, warranty or covenant relating to the same subject
matter (regardless of the relative levels of specificity) which the party has
not breached shall not detract from or mitigate the fact that the party is in
breach of the first representation, warranty or covenant.
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<PAGE> 73
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by duly authorized representations as of the day, month and year first
above written.
PURCHASER:
RURAL CELLULAR CORPORATION
By /s/ Richard P. Ekstrand
------------------------------------------
Richard P. Ekstrand
Its President
UNITY:
UNITY CELLULAR SYSTEMS, INC.
By /s/ Maurice O'Connor
------------------------------------------
Maurice O'Connor
Its Vice President and General Manager
SHAREHOLDER:
INTERCEL, INC.
By /s/ Allen E. Smith
------------------------------------------
Allen E. Smith
Its Chief Executive Officer
LICENSEE:
INTERCEL LICENSES, INC.
By /s/ Allen E. Smith
------------------------------------------
Allen E. Smith
Its Chief Executive Officer
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LIST OF SCHEDULES AND EXHIBITS
<TABLE>
<S> <C>
Schedule 1.1(a) Description of Seller Real Estate
Schedule 1.1(b) List of Proprietary Rights
Schedule 1.1(c) List of Tangible Personal Property
Schedule 1.1(d) List of Vehicles
Schedule 1.1(e) List of Telephone Numbers, Etc.
Schedule 1.1(g) List of Material Operating Contracts
Schedule 1.1(h) List of Licenses, Certificates, Franchises, Permits, Consents and Approvals
Schedule 1.1(i) Categories of Pre-Paid Expenses
Schedule 1.1(l) Categories and Aggregate Value of Inventory
Schedule 1.1(n) List of Computer Software
Schedule 1.1(o) List of Easements and Permits
Schedule 1.2(c) List of Excluded Assets
Schedule 1.3 List of Shareholder Assets, Properties, Contracts and Rights
Schedule 1.4 List of Licensee Assets, Properties, Contracts and Rights
Schedule 5.3 List of Required Filings, Permits, Consents, Approvals and Notices
Schedule 5.4 List of Certain Encumbrances
Schedule 5.6 List of Pending and Threatened Litigation
Schedule 5.7 Description of Certain Labor Matters
Schedule 5.8 Description of Certain Tax Matters
Schedule 5.9 Description of Certain Employee Benefits
Schedule 5.11 List of Financial Statements and Certain Liabilities
Schedule 5.11(iii) List of Certain Financial Matters
Schedule 5.12 List of Certain Developments
Schedule 5.13 List of RSA 2 Proprietary Rights
Schedule 5.15 List of RSA 2 Contracts
Schedule 5.16(a) Description of Partnership Real Estate
Schedule 5.16(d) List of Permitted Encumbrances
Schedule 5.16(k) Description of Certain Real Estate Matters Affecting Seller Real Estate and
Partnership Real Estate
Schedule 5.19 List of Key Employees and Employment Agreements
Schedule 5.20 List of RSA 2 Licenses
Schedule 5.22 List of Other Material Contracts
Schedule 5.25 List of Subsidiaries
Schedule 5.27 Product Liability Claims
Schedule 5.28 List of Insurance
Schedule 5.30 CGSA Maps
</TABLE>
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<TABLE>
<S> <C>
Schedule 5.31 Network Diagram and Description
Schedule 5.32 System Information Updates
Schedule 5.33 List of Related Transactions
Schedule 5.34 List of Partnership Minutes
Schedule 6.5 Exceptions to Purchaser's Qualifications
Schedule 6.5(a) Due Diligence Letters
Schedule 15.19 Key Employees
Exhibit A Form of Assignment and Assumption Agreement
Exhibit B Form of Quit Claim Deed with Covenant
Exhibit C Form of Certain Lease Terms
Exhibit C-1 List of Leases
Exhibit C-2 Rockland Lease Amendment
Exhibit D Form of Post Closing Escrow Agreement
Exhibit E Form of Closing Certificates of Seller, Licensee and Shareholder
Exhibit F Form of Bill of Sale
Exhibit G Form of Seller's Section 1445 Affidavit
Exhibit H Form of Agreement Not To Compete of Seller, Licensee and Shareholder
Exhibit H-1 Form of Agreement Not to Compete of Maurice O'Connor
Exhibit I Form of Opinion of Sellers' Corporate Counsel
Exhibit J Form of Opinion of Sellers' FCC Counsel
Exhibit K Form of Opinion of Sellers' State Regulatory Counsel
Exhibit L Form of Purchaser's Closing Certificate
Exhibit M Form of Opinion of Purchaser's Counsel
Exhibit N Form of Opinion of Purchaser's FCC Counsel
</TABLE>
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DIRECTORY OF CERTAIN DEFINED TERMS
<TABLE>
<CAPTION>
TERM SECTION
<S> <C>
Affiliate.......................................................................15.12
Agreement.......................................................................Preamble
Agreement Not to Compete........................................................2.1
Alternate Purchase Price........................................................2.1
Applicable Laws.................................................................5.3
Article 6.0.....................................................................8.3
Assets..........................................................................1.5
Assumption Agreement............................................................3.2
Balance Sheet Date..............................................................5.11
Broker..........................................................................15.2
Business........................................................................Preamble
Cash Portion of the Purchase Price..............................................2.3
CGSA............................................................................5.30
Closing.........................................................................12.1
Closing Schedules...............................................................2.4(c)
COBRA Laws......................................................................7.19
Code............................................................................2.2
Communications Act..............................................................6.5
Competing Business..............................................................5.34
Customer Contracts..............................................................1.1(g)
Date of Closing ................................................................12.1
Deed............................................................................5.16(d)
DOJ.............................................................................8.4
Easements.......................................................................1.1(o)
Encumbrances....................................................................5.4
Environmental Audit Firm........................................................7.16
Environmental Laws..............................................................5.16(i)
Escrow Agent....................................................................2.3, 11.4(a)
</TABLE>
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<TABLE>
<S> <C>
Excluded Assets.................................................................1.2
Family..........................................................................5.34
FCC.............................................................................6.3
Final Order.....................................................................9.5
FTC.............................................................................8.4
Governmental Authority..........................................................5.3
Hazardous Substances............................................................5.16(i)
Hold Back Period................................................................2.3, 11.4(a)
HSR Act.........................................................................8.4
Indemnified Party...............................................................11.3
Indemnifying Party..............................................................11.3
Indemnity Fund..................................................................2.3
Intellectual Property...........................................................5.13
Inventory.......................................................................1.1(l)
Licensee........................................................................Preamble
Licenses........................................................................1.1(h)
Losses..........................................................................11.1
Majority Shareholder............................................................5.33
Material Adverse Effect.........................................................5.1
Net Partnership Scheduled Assets................................................2.4(c)
Net Pops........................................................................5.32
Net Unity Scheduled Assets......................................................2.4(c)
Network.........................................................................5.31
Nondisclosure Agreement.........................................................7.1
Operating Contracts.............................................................1.1(g)
Partnership Agreement...........................................................5.1; 5.34
Partnership Closing Schedule....................................................2.4(b)
Partnership Interest............................................................1.1(t)
Partnership Real Estate.........................................................5.16(a)
Permitted Encumbrances..........................................................5.16(d)
Proprietary Rights..............................................................1.1(b)
Purchase Price..................................................................2.1
</TABLE>
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<TABLE>
<S> <C>
Purchaser.......................................................................Preamble
Purchaser Indemnified Party.....................................................11.1
Real Estate.....................................................................1.1(a), 5.16(a)
Receivables.....................................................................1.1(k)
Related Person..................................................................5.34
RSA 2 Assets....................................................................5.3
RSA 2 Contracts.................................................................5.15
RSA 2 Inventory.................................................................5.5
RSA 2 Licenses..................................................................5.20
RSA 2 Proprietary Rights........................................................5.13
RSA 2 Receivables...............................................................5.17
Scheduled Assets................................................................2.4(a)(i)
Scheduled Liabilities...........................................................2.4(a)(ii)
Seller..........................................................................Preamble
Seller Owned Real Estate........................................................5.16(a)(iv)
Seller Real Estate..............................................................5.16(a)(i)
Shareholder.....................................................................Preamble
Software........................................................................1.1(n)
Taxes...........................................................................5.8
Threshold Amount................................................................11.4
Unity Closing Schedule..........................................................2.4(a)
Vehicles........................................................................1.1(d)
Warranty Deeds..................................................................5.16(e)
</TABLE>
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EXHIBIT A
ASSIGNMENT AND ASSUMPTION AGREEMENT
THIS ASSIGNMENT AND ASSUMPTION AGREEMENT is made and entered into as
of the ____ day of ____________, 199__, by and among Unity Cellular Systems,
Inc., a Maine corporation ("Unity"), InterCel, Inc., a Delaware corporation
("Shareholder"), InterCel Licenses, Inc., a Delaware corporation ("Licensee"),
and ________________________, a _________ corporation ("Purchaser").
WHEREAS, Purchaser, Unity, Licensee and Shareholder have entered into
an Asset Purchase Agreement dated December ___, 1996 (the "Purchase Agreement").
Unless otherwise defined herein, capitalized terms which are not proper nouns
shall have the meanings ascribed to them in the Purchase Agreement.
WHEREAS, Purchaser has taken over the operation of the Business as of
the open of business on the date hereof; and
WHEREAS, Purchaser, Unity, Licensee and Shareholder desire to enter
into this Agreement to set forth the terms and conditions on which Purchaser
will assume certain of the debts, liabilities and obligations of Unity,
Licensee and Shareholder related to the Business.
NOW, THEREFORE, in consideration of the purchase and sale of the
Assets, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. Assignment and Assumption of Contracts. Unity hereby sells,
assigns, transfers, conveys and delivers to Purchaser all of its right, title
and interest in and to the Operating Contracts. Purchaser does hereby assume
and agree to pay, perform and discharge in accordance with their terms all of
the obligations and commitments of Unity which accrue or first become
performable on or after the date hereof with respect to and concerning the
Operating Contracts; provided, however, that Purchaser does not assume any
liabilities for (i) products sold or services rendered by Unity in connection
with the Business under such Operating Contracts before the date hereof, or
(ii) any debts, liabilities or obligations arising as a result of a breach or
default by Unity under any of such Operating Contracts occurring before the
date hereof or as a result of the consummation of the transactions contemplated
by the Purchase Agreement. Notwithstanding any provision of this Agreement to
the contrary, this Agreement shall not constitute an assignment or an agreement
to assign any of the Operating Contracts, or any benefit arising thereunder or
resulting therefrom, if such an assignment or agreement to assign without a
consent required or necessary for such assignment would constitute a breach
thereof or in any way adversely affect the rights of Unity or Purchaser
thereunder. If such consent is not obtained, or if an attempted assignment
would be ineffective or would adversely affect the rights of Unity thereunder
so that Purchaser would not in fact receive all such rights, Unity, Licensee
and Shareholder shall use their
<PAGE> 80
commercially reasonable best efforts, and shall cooperate in any arrangement
which Purchaser may reasonably request in writing, to provide to Purchaser the
benefits under any such Operating Contract, including (a) entering into
subcontracts, subleases, sale and leasebacks, use and occupancy agreements or
other contractual arrangements which will provide such benefits to Purchaser;
(b) agreeing with the person whose consent is required to be obtained that
Unity will remain liable under any such Operating Contract to the same extent
as if such assignment had not occurred; and (c) enforcing, at the cost of
Unity, Shareholder and Licensee, and for the benefit of Purchaser, all rights
of Unity against any other party thereto arising out of the breach thereof by
such party. Any transfer or assignment to Purchaser of any of the Operating
Contracts which shall require the consent or approval of any other party shall
be made subject to such consent or approval being obtained; provided, however,
that nothing contained in this paragraph 1 shall affect the rights of
Purchaser, pursuant to the Purchase Agreement or otherwise, arising out of
Unity, Licensee or Shareholder's failure to have disclosed the need for such
consent or approval or for failing to have it obtained.
2. Assignment and Assumption of Licenses, Certificates,
Franchises and Permits. Unity, Licensee and Shareholder hereby sell, assign,
transfer and convey to Purchaser, all of their respective rights, title and
interest in and to all of their governmental licenses, certificates,
franchises, permits, registrations, concessions, consents and approvals
including, but not limited to, those described on Schedule 1.1(h) to the
Purchase Agreement (collectively, the "Licenses and Permits"). Purchaser does
hereby agree to be bound by and to assume and discharge in accordance with
their terms all of the obligations and commitments of Unity, Licensee or
Shareholder arising with respect to periods commencing after the date hereof,
with respect to and concerning the Licenses and Permits.
3. Assumption of Other Liabilities. Purchaser does hereby assume
and agree to pay, perform and discharge, the following debts, liabilities and
obligations of Seller:
a. All of Unity's trade accounts payable (being
maintained by Unity consistent with past practices) arising out of the
operation of the Business in the ordinary course, which are (i)
reflected on Unity's books and records and (ii) remain unpaid as of
the opening of business on the date hereof;
b. All amounts accrued as of the opening of business on
the date hereof for wages, salary and benefits, including vacation and
sick leave, payable to those employees of Unity who provide services
in connection with the operation of the Business and who are employed
by the Purchaser on the date hereof;
c. Unity's obligation to provide cellular telephone and
related services to its customers in accordance with the Customer
Contracts in effect on the date hereof;
d. All debts, liabilities and obligations of Unity,
Licensee and Shareholder identified on Schedule 3.2 to the Purchase
Agreement; and
2
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e. All liabilities and obligations of Unity for Seller
Leased Real Estate or in respect of Permitted Encumbrances listed on
Schedule 5.16(d) to the Purchase Agreement, including, without
limitation, Encumbrances or Permitted Encumbrances in respect of or
relating to Seller Real Estate, but only to the extent that said
liabilities and obligations accrue following the date hereof.
4. Liabilities Not Assumed. Except as specifically set forth in
herein, Purchaser shall not, by virtue of its purchase of the Assets or
otherwise, assume or become responsible for any debts, liabilities or
obligations of any of Unity, Licensee or Shareholder, whether fixed,
contingent, known, unknown or otherwise.
5. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same agreement.
6. Assignees. This Agreement shall inure to the benefit of and
be binding upon the parties hereto and their respective successors and assigns.
7. Scope. This Agreement is executed and delivered in connection
with the Purchase Agreement. Notwithstanding anything herein to the contrary,
nothing herein shall in any way vary the promises, agreements, representations,
warranties and covenants of any of the parties to and set forth in the Purchase
Agreement, all of which survive the closing and shall not be merged therein.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day, month and year first above written.
SELLERS:
UNITY CELLULAR SYSTEMS, INC.
By
-------------------------------------
Its
----------------------------------
INTERCEL LICENSES, INC.
By
-------------------------------------
Its
----------------------------------
[ASSIGNMENT AND ASSUMPTION OF PARTNERSHIP RIGHTS AND OBLIGATIONS, IF ANY, WILL
BE HANDLED IN A SEPARATE ASSIGNMENT AND ASSUMPTION DOCUMENT.]
3
<PAGE> 82
INTERCEL, INC.
By
-------------------------------------
Its
----------------------------------
PURCHASER:
----------------------------------------
By
-------------------------------------
Its
----------------------------------
4
<PAGE> 83
EXHIBIT B
FORM OF QUITCLAIM DEED WITH COVENANT
Unity Cellular Systems, Inc., a Maine corporation, with a place of
business in ______________, ___________ County, State of Maine, for
consideration paid, grants to __________________________, a Maine corporation,
with a place of business in Alexandria, Douglas County, Minnesota, WITH
QUITCLAIM COVENANT, the land in ___________ County, Maine, described as follows:
[Legal Description of Property]
For grantor's source of title, reference, is made to a ________________
deed from ______________ to Unity Cellular Systems, Inc. dated ______________
and recorded in the ________________ County Registry of Deeds in Book _____,
Page _____. Unity Cellular Systems, Inc. releases all rights in the premises
being conveyed.
IN WITNESS WHEREOF, Unity Cellular Systems Inc. has caused this deed
to be signed in its corporate name as an instrument under seal by its duly
authorized officer this _____ day of ____________, 19__.
UNITY CELLULAR SYSTEMS, INC.
By
- ------------------------------------ -------------------------------------
WITNESS Its
----------------------------------
hereunto duly authorized
Personally appeared the above-named __________________, the
______________ of Unity Cellular Systems, Inc., a Maine corporation, and
acknowledged the foregoing instrument to be his/her free act and deed in
his/her said capacity and the free act and deed of said corporation.
Before me,
------------------------------
Notary Public
Printed Name:
---------------------------
[SEAL]
<PAGE> 84
EXHIBIT C
AMENDMENT TO LEASE AGREEMENT
THIS AMENDMENT TO LEASE AGREEMENT, dated the ____ day of _________,
1996 (this "Amendment"), is made by and between ____________________, a
___________ corporation with its principal office located in Augusta, Maine
(hereinafter "Landlord") and Unity Cellular Systems, Inc., a Maine corporation
with its principal office located in Bangor, Penobscot County, Maine, and its
successors and assigns ("Tenant") (collectively, the "Parties").
W I T N E S S E T H
WHEREAS, Landlord owns property located in _______________________
(the "Premises"); and
WHEREAS, the parties hereto have previously entered into that certain
Lease Agreement (the "Agreement"), dated ___________ whereby the Tenant would
be permitted to use the Premises for communication services; and
WHEREAS, the parties have reached an agreement whereby the Agreement
shall be modified and amended.
NOW, THEREFORE, in consideration of the recitals above, and the mutual
promises set forth herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged by the parties, the
parties hereto, intending to be legally bound, agree as follows:
1. Terms. All terms used in this Amendment and not otherwise defined
herein, shall have the meanings ascribed to them in the Agreement, unless the
context clearly requires otherwise.
2. Extension of Term. Notwithstanding anything in this Agreement to
the contrary, if the term of this Agreement (including any options to extend
the term) ends prior to December 31, 2001, then Tenant shall have the option
and right, upon not less than thirty (30) days notice given to Landlord at
least thirty (30) days prior to the expiration of the term (or then-occurring
renewal term, if applicable) of the Agreement, to renew or extend the term of
the Agreement until December 31, 2001, at the rental and upon the same terms
and conditions as apply to Tenant's leasing of the Premises immediately prior
to the giving of such notice.
3. Cancellation. Section __________ of the Agreement is hereby
amended by deleting the Landlord's cancellation right as provided therein in
its entirety. The deleted language reads as follows:
[INSERT DELETED LANGUAGE]
4. The Agreement is hereby amended by inserting the following as
Section __:
__. Consent to Assignment.
(a) Notwithstanding anything in this Agreement to the contrary,
Landlord agrees that its consent shall not be required for any
assignment by Tenant of the Agreement to a person or entity approved
as a licensee by the Federal Communications Commission to conduct
cellular radio transmissions, or to the affiliate of any such approved
licensee. Landlord agrees timely to execute all documents and to take
any other necessary action reasonably requested by Tenant to
facilitate such assignment.
(b) Landlord agrees to cooperate with any financing by Tenant of
its interests in, to and under the Agreement and in any personalty
located at the Premises and further agrees that Landlord's consent
shall not be required for a collateral assignment of Tenant's
interests in the Agreement to a lender. Landlord agrees that it will
execute such instruments as may be requested by Tenant in order to
evidence Landlord's agreements stated in this section, including an
estoppel from Landlord to Tenant's lender; an agreement to give notice
to Tenant's lender and a right to cure in favor of such lender with
respect to defaults by Tenant under the Agreement; and agreement to
permit Tenant's lender (and any subsequent assignee of such lender) to
assume this Agreement and Tenant's rights and obligations hereunder as
of the date of such assumption; and a waiver or subordination of any
statutory or common law landlord lien rights.
5. Memorandum of Lease. If requested by Tenant, a short form
memorandum of this Agreement shall be executed by Landlord and Tenant and
recorded in the land title records of the county in which the Premises are
located.
<PAGE> 85
6. Consents. Wherever in the Agreement (as amended hereby) the
consent of any party to an action is required, such party shall not
unreasonably withhold or delay such consent.
7. Agreement to Remain in Full Force and Effect. Except as
herein provided, all terms and conditions of said Agreement dated ________,
shall remain in full force and effect and Landlord and Tenant hereby ratify and
confirm the terms and conditions of the Agreement, as modified herein.
8. Entire Agreement. This Amendment is the entire agreement of
the parties with respect to the subject matter hereof.
IN WITNESS WHEREOF, Landlord and Tenant have respectively caused their names
and seals to be hereunto affixed the day and year first written above.
LANDLORD:
----------------------------------------
BY:
- ------------------------------------ ------------------------------------
Witness
ITS:
-----------------------------------
- ------------------------------------
Print Name
TENANT:
UNITY CELLULAR SYSTEMS,
INC., a Maine corporation
BY:
- ------------------------------------ ------------------------------------
Witness
ITS:
-----------------------------------
- ------------------------------------
Print Name
Then personally appeared the above named ____________________ and
___________________ and severally acknowledged the foregoing instrument to be
their free act and deed.
SWORN to and subscribed before me
this ____ day of _________, 19__.
(L.S.)
- ----------------------------------
Notary Public for Maine
My Commission Expires:
-------------------
<PAGE> 86
EXHIBIT C-1
LEASED CELLULAR SITES - UNICEL
Pork Barrel Hill/
Millinocket site,
Penobscot County, Maine
Old Town site,
Old Town,
Penobscot County, Maine
Northport site,
Waldo County,
Maine
Newcastle site,
Lincoln County, Maine
Mt. Pisgah site, Winthrop,
Kennebec County,
Maine
Fish Hill Site,
Lincoln,
Penobscot County, Maine
Dixmont site,
Dixmont,
Penobscot County, Maine
Clinton site,
Clinton,
Kennebec County, Maine
Camden site,
Camden,
Knox County, Maine
Benner Hill site,
Rockland,
Knox County, Maine
Sears Island site,
Searsport,
Waldo County, Maine
Cook Hill site,
Vassalboro,
Kennebec County, Maine
<PAGE> 87
Gardiner site,
Gardiner,
Kennebec County, Maine
Union site,
Knox County, Maine
Liberty site,
Waldo County, Maine
LEASED CELLULAR SITES - PARTNERSHIP
Greenville site,
Piscataquis County, Maine
Wallagrass site,
Aroostook County,
Maine
Ludlow (Smyrna) site,
Aroostook County, Maine
Mountain # 9,
TDR2 WELS site,
Maine
Parkhurst (Johnson Hill,
Presque Isle) site,
Aroostook County, Maine
Athens site,
Athens,
Somerset County, Maine
Charleston site,
Penobscot County, Maine
Bigelow Mountain site,
Skowhegan,
Somerset County, Maine
<PAGE> 88
EXHIBIT C-2
AMENDMENT TO LEASE AGREEMENT
THIS AMENDMENT TO LEASE AGREEMENT, dated the ____ day of _________,
1996 (this "Amendment"), is made by and between Maritime Energy, which has an
office located in Rockland, Maine (hereinafter "Landlord") and Unity Cellular
Systems, Inc., a Maine corporation with its principal office located in Bangor,
Penobscot County, Maine, and its successors and assigns ("Tenant")
(collectively, the "Parties").
W I T N E S S E T H
WHEREAS, Landlord owns or leases property located at 532 Main Street,
Rockland, Maine, and which is more particularly described on Exhibit "A" hereto
which is by this reference made a part hereof, (the "Premises"); and
WHEREAS, the parties hereto have previously entered into that certain
Lease Agreement (the "Agreement"), dated March 8, 1994; and
WHEREAS, the parties have reached an agreement whereby the Agreement
shall be modified and amended.
NOW, THEREFORE, in consideration of the recitals above, and the mutual
promises set forth herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged by the parties, the
parties hereto, intending to be legally bound, agree as follows:
1. Terms. All terms used in this Amendment and not otherwise defined
herein, shall have the meanings ascribed to them in the Agreement, unless the
context clearly requires otherwise.
2. The Agreement is hereby amended by adding the following paragraphs:
Notwithstanding anything in this Agreement to the contrary, Maritime
Energy (hereinafter "Landlord") agrees that its consent shall not be
required for any assignment by Tenant of the Agreement to a person or
entity approved as a licensee by the Federal Communications Commission
to conduct cellular radio transmissions, or to the affiliate of any
such approved licensee. Landlord agrees timely to execute all
documents and to take any other necessary action reasonably requested
by Tenant to facilitate such assignment.
Landlord agrees to cooperate with any financing by Tenant of its
interests in, to and under the Agreement and in any personalty located
at the Premises and further agrees that Landlord's consent shall not
be required for a collateral assignment of Tenant's interests in the
Agreement to a lender. Landlord agrees that it will execute such
instruments as may be requested by Tenant in order to evidence
Landlord's agreements stated in this section, including an estoppel
from Landlord to Tenant's lender; an agreement to give notice to
Tenant's lender and a right to cure in favor of such lender with
respect to defaults by Tenant under the Agreement; and agreement to
permit Tenant's lender (and any subsequent assignee of such lender) to
assume this Agreement and Tenant's rights and obligations hereunder as
of the date of such assumption; and a waiver or subordination of any
statutory or common law landlord lien rights.
3. The Agreement is hereby further amended by deleting the following
language:
You agree to hold us harmless and to indemnify us for any claims or
liabilities which arise out of the premises, operation or use during
the term of this lease.
and by adding, in its place, the following language:
As to any liability for environmental conditions, laws or regulations
arising out of or connected with circumstances which occurred or
originated prior to the commencement of the Lease, Landlord agrees
that Tenant shall not be responsible for and it shall hold Tenant
harmless from and against the same. As to matters originating after
the commencement date of this Lease, each party shall indemnify and
hold the other party harmless from any and all claim of liability or
loss from personal injury or property damage resulting from or arising
out of the indemnifying party's negligent acts or omissions or willful
misconduct, or those of its servants or agents, in connection with the
premises, except to the extent due to the indemnified party's
negligent acts or omissions or those of its servants or agents.
4. Memorandum of Lease. If requested by Tenant, a short form
memorandum of this Agreement shall be executed by Landlord and Tenant and
recorded in the land title records of the county in which the Premises are
located.
<PAGE> 89
5. Consents. Wherever in the Agreement (as amended hereby) the
consent of any party to an action is required, such party shall not unreasonably
withhold or delay such consent.
6. Agreement to Remain in Full Force and Effect. Except as
herein provided, all terms and conditions of said Agreement dated March 8,
1994, shall remain in full force and effect and Landlord and Tenant hereby
ratify and confirm the terms and conditions of the Agreement, as modified
herein.
7. Entire Agreement. This Amendment is the entire agreement of
the parties with respect to the subject matter hereof.
IN WITNESS WHEREOF, Landlord and Tenant have respectively caused their names
and seals to be hereunto affixed the day and year first written above.
LANDLORD:
MARITIME ENERGY
BY:
- ------------------------------------ ------------------------------------
Witness
ITS:
-----------------------------------
- ------------------------------------
Print Name
TENANT:
UNITY CELLULAR SYSTEMS,
INC., a Maine corporation
BY:
- ------------------------------------ ------------------------------------
Witness ITS:
-----------------------------------
- ------------------------------------
Print Name
Then personally appeared the above named ____________________ and
___________________ and severally acknowledged the foregoing instrument to be
their free act and deed.
SWORN to and subscribed before me
this ____ day of _________, 19__.
(L.S.)
- ---------------------------------
Notary Public for Maine
My Commission Expires:
------------------
<PAGE> 90
EXHIBIT D
POST CLOSING ESCROW AGREEMENT
THIS POST CLOSING ESCROW AGREEMENT is made and entered into as of the
____ day of _________, 199__, by and among _________________________, a
_______________ corporation ("Purchaser"), Unity Cellular Systems, Inc., a Maine
corporation ("Unity"), InterCel Licenses, Inc., a Delaware corporation
("Licensee"), InterCel, Inc., a Delaware corporation ("Shareholder"), and
("Escrow Agent").
WHEREAS, Purchaser, Unity, Licensee and Shareholder have entered into
an Asset Purchase Agreement dated December __, 1996 (the "Purchase Agreement")
pursuant to which Unity, Licensee and Shareholder have sold and Purchaser has
purchased substantially all of Unity's assets used in connection with the
operation of a business providing cellular telephone and related services in
the Bangor, Maine MSA and Maine RSA 3 under the name "Unicel" and, subject to
Section 2.1 of the Purchase Agreement, of serving as the managing general
partner in Northern Maine Cellular Partnership, a Maine general partnership
that is engaged in the business of providing cellular telephone and related
services in Maine RSA 2;
WHEREAS, Section 2.3 of the Purchase Agreement provides for the escrow
of certain funds to protect the Purchaser with respect to the matters Unity,
Licensee and Shareholder have agreed to indemnify the Purchaser against
pursuant to ARTICLE 11 of the Purchase Agreement and with respect to certain
reductions in the Purchase Price or Alternate Purchase Price provided for in
Section 2.4 of the Purchase Agreement; and
WHEREAS, Purchaser, Unity, Licensee, Shareholder, and Escrow Agent
desire to enter into this Agreement to set forth the terms and conditions of
such escrow.
1. Defined Terms. As used herein, all defined terms not
otherwise defined herein have the meanings ascribed to them in the Purchase
Agreement.
2. Deposit of Funds. The Purchaser warrants that it has
deposited with the Escrow Agent, on the date hereof, the sum of ________________
and __/100 Dollars ($_______) (the "Principal") in
immediately available funds pursuant to Section 2.3 of the Purchase Agreement.
3. Purpose of Escrow. The Principal and any accrued interest
thereon (collectively the "Deposit") shall be held by the Escrow Agent to
protect the Purchaser with respect to (i) the matters as to which Unity,
Licensee and Shareholder are required to indemnify Purchaser against
<PAGE> 91
pursuant to the provisions of ARTICLE 11 of the Purchase Agreement
("Indemnification Claims"), and (ii) any reduction in the Purchase Price or
Alternate Purchase Price, as the case may be, pursuant to the provisions of
Section 2.4 of the Purchase Agreement ("Purchase Price Reduction Claims").
4. Investment of Funds. The Escrow Agent shall invest the
Principal in accordance with Unity's instructions in _________, _____________,
and __________ and in any other investments in accordance with Unity's and
Purchaser's joint written instructions.
5. Release of Funds. The Principal, less (x) the total amount of
all Indemnity Claims validly made by Purchaser pursuant to ARTICLE 11 of the
Purchase Agreement, less (y) the amount of any Purchase Price Reduction Claims
validly made pursuant to the provisions of Section 2.4 of the Purchase
Agreement, and (z) any interest on the total of the amounts specified in (x)
and (y) shall be paid to Unity together with any interest or income thereon on
the business day immediately following the expiration of the Hold Back Period.
If, prior to the expiration of the Hold Back Period, the Purchaser has given
notice of any Indemnification Claims and/or Purchase Price Reduction Claims,
the Escrow Agent shall retain Principal in an amount equal to the aggregate of
all such Indemnification Claims and Purchase Price Reduction Claims together
with any interest or income thereon (collectively the "Retained Portion"). The
Escrow Agent shall retain the Retained Portion together with any interest or
income thereon, in escrow, and the Hold Back Period shall be extended with
respect thereto, until the earlier of: [(i) twelve months from the date
hereof; or] (i) five (5) business days following the delivery to the Escrow
Agent of written instructions signed by Purchaser and Unity directing the
Escrow Agent as to whom all or any part of the Retained Portion and any
interest or income thereon is to be distributed, and/or (ii) ten (10) business
days after a copy of an arbitrator's final decision with respect to any
Indemnification Claims and or Purchase Price Reduction Claims has been
delivered to the Escrow Agent to the extent said arbitrator's final decision
contains instructions as to whom to disburse all or part of the Retained
Portion together with interest or income thereon, provided however, the Escrow
Agent shall have notified the parties hereto and provided them with copies of
said arbitrator's final decision at least four (4) business days before the
Escrow Agent proposes to release all or part of the Retained Portion pursuant
to said arbitrator's final decision.
6. Notices. All notices, instructions and other communications
provided for herein shall be in writing and shall be deemed validly given, made
or served, on the date of delivery in
2
<PAGE> 92
the case of personal delivery, or forty-eight (48) hours after deposit with the
U.S. Postal Service if sent by certified mail, return receipt requested,
addressed as follows:
if to Purchaser: Rural Cellular Corporation
P.O. Box 1027
Alexandria, Minnesota 56308
Attn: Richard P. Ekstrand, President
with a copy to: Moss & Barnett, A Professional Association
4800 Norwest Center
90 South Seventh Street
Minneapolis, Minnesota 55402
Attn: Ann K. Newhall, Esq.
if to Sellers: InterCel, Inc.
1233 O.G. Skinner Drive
West Point, Georgia 31833
Attn: Allen Smith and Jill Dorsey, Esq.
with a copy to: Nelson, Mullins, Riley & Scarborough, L.L.P.
400 Colony Square, Suite 2200 1201 Peachtree
Street Northeast Atlanta, Georgia 30361 Attn:
Glenn Sturm, Esq.
if to Escrow Agent: ______________________________________
______________________________________
______________________________________
or to such other addresses as the parties may designate.
7. Fees. All fees payable to the Escrow Agent for holding the
Deposit in escrow, investing the Principal, disbursing the Deposit and acting
as escrow agent hereunder shall be paid by Sellers.
3
<PAGE> 93
8. Duties of Escrow Agent. The Escrow Agent's duties and
responsibilities shall be limited to those expressly set forth in this
Agreement and the Escrow Agent shall not be subject to, nor obliged to
recognize, any other agreement between, or direction or instruction of, any or
all of the parties hereto even though reference thereto may be made herein;
provided, however, with the Escrow Agent's written consent, this Agreement may
be amended at any time or times by an instrument in writing signed by all of
the then parties in interest. The duties and obligations of the Escrow Agent
hereunder shall be determined solely by the express provisions of this
Agreement and no implied duties or obligations shall be read into this
Agreement against the Escrow Agent. The Escrow Agent shall be under no
obligation to refer to the Purchase Agreement or any other documents between or
among the parties related in any way to this Agreement.
9. Limitation on Liability. The Escrow Agent shall not be liable
to anyone by reason of any error of judgment, or for any act done or step taken
or omitted by it in good faith, or for any mistake of fact or law, or for
anything which it may do or refrain from doing in connection herewith, unless
caused by or arising out of its own gross negligence or bad faith.
10. Reliance. The Escrow Agent shall be entitled to rely and
shall be protected in acting in reliance upon any writing furnished to it by
any party hereto in accordance with the terms hereof, and shall be entitled to
treat as genuine, and as the document it purports to be, any letter, paper or
other document furnished to it by any party and believed by the Escrow Agent in
good faith to be genuine and to have been signed by the proper party. The
Escrow Agent may consult with counsel with respect to any question relating to
its duties or responsibilities hereunder and shall not be liable for any action
taken or omitted in good faith on advice of such counsel.
11. Conflicting Claims. In the event of any disagreement between
the parties hereto resulting in conflicting claims and demands being made in
connection with or against the Deposit, the Escrow Agent shall be entitled, at
its option, to refuse to comply with the claims or demands of any party until
such disagreement is finally resolved in the manner provided in paragraph 4
hereof, but shall continue to comply with the other terms and conditions of
this Agreement, and in so doing the Escrow Agent shall not be or become liable
to any party.
12. Attachment, Garnishment, Etc. If all or any part of the
Deposit is at any time attached, garnished or levied upon, or in case the
payment, assignment, transfer, conveyance or delivery of all or any part of the
Deposit shall be stayed or enjoined by any court order, or in
4
<PAGE> 94
case any order, judgment or decree shall be made or entered by any court
affecting all or any part of the Deposit, then in any of such events, the
Escrow Agent is authorized, in its sole discretion, to rely upon and comply
with any such order, writ, judgment or decree, which it believes in good faith
is binding upon it, and if it complies with any such order, writ, judgment or
decree, it shall not be liable to any of the parties hereto or to any other
person, firm or corporation by reason of such compliance, even though such
order, writ, judgment or decree may be subsequently reversed, modified,
annulled, set aside or vacated.
13. Governing Law. This Agreement shall be construed, governed,
enforced and administered in accordance with the laws of the State of
______________, without giving effect to the conflicts of law principles
thereof.
14. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day, month and year first above written.
PURCHASER:
RURAL CELLULAR CORPORATION
By
-------------------------------------
Richard P. Ekstrand
Its President
UNITY:
UNITY CELLULAR SYSTEMS, INC.
By
-------------------------------------
Its
---------------------------------
5
<PAGE> 95
SHAREHOLDER:
INTERCEL, INC.
By
-------------------------------------
Its
---------------------------------
LICENSEE:
INTERCEL LICENSES, INC.
By
-------------------------------------
Its
---------------------------------
ESCROW AGENT:
----------------------------------------
By
-------------------------------------
Its
---------------------------------
6
<PAGE> 96
EXHIBIT E
SELLER'S CLOSING CERTIFICATE
(UNITY CELLULAR SYSTEMS, INC.)
The undersigned, being a duly acting, appointed and authorized officer
of Unity Cellular Systems, Inc., a Maine corporation ("Unity"), hereby
certifies to Rural Cellular Corporation, a Minnesota corporation ("Purchaser"),
pursuant to Section 12.2(a) of the Asset Purchase Agreement made and entered
into as of the _____ day of December, 1996, by and among Purchaser, Unity,
InterCel Licenses, Inc., a Delaware corporation, and InterCel, Inc., a Delaware
corporation (the "Purchase Agreement"), as follows:
1. All of the representations and warranties made by Unity in the
Purchase Agreement and in the documents, instruments and/or
agreements executed and/or delivered by Unity prior to or on
the date hereof pursuant to the Purchase Agreement are true
and correct in all material respects on and as of the date
hereof with the same force and effect as though such
representations and warranties had been made on or given on
and as of the date hereof; and
2. Unity has performed and complied with all of its respective
covenants, agreements and obligations under the Purchase
Agreement which were to be performed and complied with by it
prior to or on the date hereof.
IN WITNESS WHEREOF, I have executed this Closing Certificate as of the
___ day of __________, 199___.
UNITY CELLULAR SYSTEMS, INC.
By
-------------------------------------
Its
---------------------------------
<PAGE> 97
LICENSEE'S CLOSING CERTIFICATE
(INTERCEL LICENSES, INC.)
The undersigned, being a duly acting, appointed and authorized officer
of InterCel Licenses, Inc., a Delaware corporation ("Licensee"), hereby
certifies to Rural Cellular Corporation, a Minnesota corporation ("Purchaser"),
pursuant to Section 12.2(a) of the Asset Purchase Agreement made and entered
into as of the _____ day of December, 1996, by and among Purchaser, Licensee,
Unity Cellular Systems, Inc., a Maine corporation, and InterCel, Inc. a
Delaware corporation (the "Purchase Agreement"), as follows:
1. All of the representations and warranties made by Licensee in
the Purchase Agreement and in the documents, instruments
and/or agreements executed and/or delivered by the Licensee
prior to or on the date hereof pursuant to the Purchase
Agreement are true and correct in all material respects on and
as of the date hereof with the same force and effect as though
such representations and warranties had been made on or given
on and as of the date hereof; and
2. Licensee has performed and complied with all of its respective
covenants, agreements and obligations under the Purchase
Agreement which were to be performed and complied with by it
prior to or on the date hereof.
IN WITNESS WHEREOF, I have executed this Closing Certificate as of the
___ day of __________, 199___.
INTERCEL LICENSES, INC.
By
-------------------------------------
Its
---------------------------------
<PAGE> 98
SHAREHOLDER'S CLOSING CERTIFICATE
(INTERCEL, INC.)
The undersigned, being a duly acting, appointed and authorized officer
of InterCel, Inc., a Delaware corporation ("Shareholder"), hereby certifies to
Rural Cellular Corporation, a Minnesota corporation ("Purchaser"), pursuant to
Section 12.2(a) of the Asset Purchase Agreement made and entered into as of the
_____ day of December, 1996, by and among Purchaser, Shareholder, InterCel
Licenses, Inc., a Delaware corporation, and Unity Cellular Systems, Inc., a
Maine corporation (the "Purchase Agreement"), as follows:
1. All of the representations and warranties made by Shareholder
in the Purchase Agreement and in the documents, instruments
and/or agreements executed and/or delivered by Shareholder
prior to or on the date hereof pursuant to the Purchase
Agreement are true and correct in all material respects on and
as of the date hereof with the same force and effect as though
such representations and warranties had been made on or given
on and as of the date hereof; and
2. Shareholder has performed and complied with all of its
respective covenants, agreements and obligations under the
Purchase Agreement which were to be performed and complied
with by it prior to or on the date hereof.
IN WITNESS WHEREOF, I have executed this Closing Certificate as of the
___ day of __________, 199___.
INTERCEL, INC.
By
-------------------------------------
Its
---------------------------------
<PAGE> 99
EXHIBIT F
BILL OF SALE
KNOW ALL MEN BY THESE PRESENTS:
That for value received, Unity Cellular Systems, Inc. a Maine
corporation ("Unity"), InterCel Licenses, Inc., a Delaware corporation
("Licensee"), and InterCel, Inc., a Delaware corporation ("Shareholder") do
hereby sell, assign, grant, bargain, convey, transfer, set over, deliver and
confirm unto ___________________, a _____________ corporation ("Purchaser"),
its successors and assigns, forever, all of their right, title and interest in
and to the Assets, as described and defined in that certain Asset Purchase
Agreement dated as of December ___, 1996, by and among Rural Cellular
Corporation, a Minnesota corporation, and Unity, Licensee and Shareholder (the
"Purchase Agreement") free and clear of all liens, encumbrances and charges of
every nature. This Bill of Sale transfers no interest in the Excluded Assets
specifically identified in Section 1.2 of the Purchase Agreement.
This Bill of Sale is executed and delivered in connection with the
Purchase Agreement. Notwithstanding anything herein to the contrary, nothing
herein shall in any way vary the promises, agreements, representations,
warranties and covenants of the parties to and set forth in the Purchase
Agreement, all of which shall survive the Closing and not be merged herein.
Unity, Licensee and Shareholder hereby binds themselves, their
successors and assigns, to warrant and defend the title to all the herein
described Assets unto Purchaser, its successor and assigns to the extent they
are obligated to do so under the terms of the Purchase Agreement.
Unity, Licensee and Shareholder hereby name and irrevocably constitute
and appoint Purchaser, its successors and assigns, their true and lawful
attorney, with full power of substitution, in the name of Purchaser, or in the
name of Unity, Licensee or Shareholder but on behalf and for the benefit of
Purchaser, its successors and assigns, to demand and receive from time to time
any and all Assets hereby sold, assigned, transferred, conveyed and delivered
to Purchaser and to give receipts, releases and acquaintances for and in
respect of the same or any part thereof; from time to time to institute and
prosecute in the name of Seller or otherwise, but for the benefit of Purchaser,
its successors and assigns, any and all proceedings at law, in equity or
otherwise which Purchaser, its successors or assigns, may deem proper in order
to collect, assert or enforce any claim, right, title or interest of any kind
in or to the assets hereby sold, assigned, transferred, conveyed and delivered,
or intended so to be, to defend or compromise any and all actions, suits or
proceedings, in respect of any of said Assets and to do all such acts and
things in relation thereto as Purchaser, its successors or assigns, shall deem
desirable. Unity, Licensee and
<PAGE> 100
Shareholder hereby declare that the foregoing powers are coupled with an
interest and are and shall be irrevocable by them.
This instrument shall be effective at the opening of business, Eastern
Standard Time, on the date hereof, and shall be binding upon Unity,
Shareholder, Licensee and their successors and assigns and shall inure to the
benefit of the Purchaser and its successors and assigns.
IN WITNESS WHEREOF, as of the _____ day of ____________, 199__, Unity,
Licensee and Shareholder have caused this Bill of Sale to be executed and
delivered by their duly authorized representatives.
UNITY:
Unity Cellular Systems, Inc.
By
-------------------------------------
Its
---------------------------------
SHAREHOLDER:
InterCel, Inc.
By
-------------------------------------
Its
---------------------------------
LICENSEE:
InterCel Licenses, Inc.
By
-------------------------------------
Its
---------------------------------
2
<PAGE> 101
EXHIBIT G
TRANSFEROR AFFIDAVIT
STATE OF ____________ )
) ss.
COUNTY OF ___________ )
Unity Cellular Systems, Inc., a Maine corporation ("Transferor"), the
undersigned affiant, is the seller of the property described in that certain
Asset Purchase Agreement dated December ___, 1996 (the "Purchase Agreement"),
by and among Transferor, InterCel, Inc., a Delaware corporation, and InterCel
Licenses, Inc., a ____________ corporation, as Sellers, and Rural Cellular
Corporation, a Minnesota corporation ("Transferee"), as Purchaser.
Section 1445 of the Internal Revenue Code of 1986, as amended from
time to time (the "Code"), provides that a transferee (buyer) of an interest in
United States real property must withhold tax if the transferor (seller) is a
foreign person. To inform Transferee that withholding of tax is not required
upon Transferor's disposition of an interest in United States real property
pursuant to the Purchase Agreement, Transferor, being first duly sworn on oath,
states as follows:
1. Transferor is not a foreign person for purposes of Section
1445 of the Code;
2. Transferor's United States taxpayer identification number is
_____________; and
3. Transferor's office address is ________________________________
______________________________________________________________.
Transferor understands that this affidavit may be disclosed to the
Internal Revenue Service by Transferee and that any false statement made
hereunder may be punishable by fine, imprisonment or both.
Under penalty of perjury, Transferor declares that it has examined
this affidavit and that the statements contained herein are true, correct and
complete.
Dated this ___ day of __________, 199__. Unity Cellular Systems, Inc.
By
-----------------------------------
Its
--------------------------------
Subscribed and sworn to before me
this ___ day of _______________, 199__.
- ---------------------------------------
Notary Public
<PAGE> 102
EXHIBIT H
AGREEMENT NOT TO COMPETE
THIS AGREEMENT NOT TO COMPETE is made and entered into this ____ day
of _____________, 1997, by and among _________________________________________,
a _________________ corporation ("Company"), Unity Cellular Systems, Inc., a
Maine corporation ("Unity"), InterCel, Inc., a Delaware corporation
("Shareholder"), InterCel Licenses, Inc., a Delaware corporation ("Licensee"),
and the undersigned subsidiaries of Shareholder whose names and addresses for
purposes of notice hereunder are shown on Schedule A hereto and incorporated
herein by reference (such subsidiaries of Shareholder, together with Unity,
Licensee and Shareholder, are referred to collectively herein as the
"Covenantors").
RECITALS:
A. Unity has heretofore been engaged in the business of
providing cellular telephone and related services in the Bangor, Maine
MSA and Maine RSA 3 under the name "Unicel" and was the managing
general partner in Northern Maine Cellular Partnership, a Maine
general partnership (the "Partnership"), which is engaged in the
business of providing cellular telephone and related services in Maine
RSA 2 under the name "Unicel" (which business of Unity and the
Partnership are collectively referred to herein as the "Business");
B. Pursuant to the terms of an Asset Purchase Agreement
dated December ___, 1996, by and among Unity, Shareholder, Licensee
and Rural Cellular Corporation (the "Purchase Agreement"), the Company
has purchased, and Unity and Licensee have sold, all of the assets,
properties, contract rights, operations and business of Unity of every
kind, nature and description whatsoever and certain assets, contract
rights and Licenses of Licensee as set forth in the Purchase
Agreement);
C. Shareholder is the sole shareholder of Unity and
Licensee;
D. The Company would not have entered into the Purchase
Agreement in the absence of Covenantors' agreement herein not to
compete with the Company.
<PAGE> 103
NOW, THEREFORE, in consideration of the foregoing premises and for
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties agree as follows:
1. Non-Competition Agreement. During the period of two (2) years
from and after the date hereof, Covenantors jointly and severally covenant and
agree that, without the Company's prior written consent, they will not,
directly or indirectly, individually or collectively, lend their credit, advice
or assistance, or engage in any activity or act in any manner, including but
not limited to, as an individual, owner, partner, joint venturer, shareholder,
officer, director, manager, employer, licensor, licensee, principal, agent,
investor or otherwise, for the purpose of establishing, operating or managing
any business or entity that is engaged in activities competitive with the
Business in the State of Maine. For the purposes of this Agreement,
competitive activities shall mean the provision of wireless (including, without
limitation, cellular) telecommunications services and both sales and resales of
wireless access, airtime and equipment.
2. Nonsolicitation Agreement. During the period of two (2) years
from and after the date hereof, Covenantors, jointly and severally, agree that
they will not, whether for their own account or for the account of any other
person or entity, directly or indirectly, or individually or collectively,
interfere with Company's relationship with or endeavor to divert or entice away
from the Company any person or entity which at any time during the term of the
Covenantors' prior relationship with the Business is or was an employee or
customer of the Business except as set forth in the Purchase Agreement.
3. Confidential Information. Covenantors understand and agree
that the assets and the Business acquired by the Company pursuant to the
Purchase Agreement are unique and specialized and that, in connection with
their respective ownership or affiliations with the Business, they received or
had access to Confidential Information (as hereinafter defined). Covenantors
jointly and severally agree that at all times from and after the date of this
Agreement, they shall keep secret all such Confidential Information and will
not, except as required by law, directly or indirectly, or individually or
collectively, "Use" (as hereinafter defined) or "Disclose" (as hereinafter
defined) the same to any person or entity without first obtaining the written
consent of the Company. At any time the Company may so request, Covenantors
shall turn over to the Company all books, notes, memoranda, manuals, notebooks,
tables, drawings, calculations, records and other documents made, compiled by
or delivered to them containing or concerning any Confidential Information,
including copies thereof except
2
<PAGE> 104
such copies as are reasonably necessary for historical purposes for Unity, in
their possession, it being agreed that the same and all information contained
therein are at all times the exclusive property of the Company.
As used in this Agreement, the term "Confidential Information" means
any information or compilation of information not generally known to the public
or the industry, which was previously proprietary to Unity, Licensee and/or
Shareholder, relating to procedures, techniques, methods, concepts, ideas,
affairs, products, processes and services related solely to the Business,
including, but not limited to, information relating to marketing,
merchandising, selling, research, development, purchasing, costs, customers,
plans, pricing, billing, needs of customers and services used by customers of
the Business. Confidential Information for purposes of this Agreement shall
also include all lists of customers, addresses, prospects, sales calls,
products, services, prices and the like as well as any specifications,
formulas, plans, drawings, accounts or sales records, sales brochures, books,
code books, records, manuals, trade secrets, knowledge, know-how, pricing
strategies, operating costs, sales margins, methods of operation in Maine and
the like related solely to the Business. All information disclosed to
Covenantors during the term of their prior relationship to the Business which
they have a reasonable basis to believe to be Confidential Information, which
was previously treated by Unity, Licensee and/or Shareholder as Confidential
Information, shall be presumed to be Confidential Information.
As used in this Agreement, the term "Disclose" means to reveal,
deliver, divulge, disclose, publish, copy, communicate, show or otherwise make
known or available to any other person or entity, or in any way to copy, any of
the Confidential Information.
As used in this Agreement, the term "Use" means to appropriate any of
the Confidential Information for the benefit of any person or entity other than
the Company.
4. Reasonableness of Covenants. Covenantors acknowledge and
agree that the geographic scope and period of duration of the restrictive
covenants contained in this Agreement are both fair and reasonable and that the
interests sought to be protected by the Company are legitimate business
interests entitled to be protected. Covenantors further acknowledge and agree
that the Company would not have agreed to enter into the Purchase Agreement
unless they entered into this Agreement.
5. Compensation. The Covenantors shall receive no separate
monetary consideration for the restrictive covenants contained in this
Agreement but the Covenantors
3
<PAGE> 105
acknowledge receipt of consideration in the form of the purchase of assets from
Unity, Licensee and the Shareholder pursuant to the Purchase Agreement.
6. Injunctive Relief. The parties agree that the remedy of
damages at law for the breach by Covenantors of any of the covenants contained
in this Agreement is an inadequate remedy. In recognition of the irreparable
harm that a violation by Covenantors of any of the covenants, agreements or
obligations arising under this Agreement would cause the Company, Covenantors
agree that, in addition to any other remedies or relief afforded by law, an
injunction against an actual or threatened violation or violations may be
issued against them and every other person and entity concerned thereby, it
being the understanding of the parties that both damages and an injunction
shall be proper modes of relief and are not to be considered alternative
remedies. In the event of any such actual or threatened violation, the
prevailing party in any legal proceeding shall be reimbursed by the other party
for all costs, expenses and reasonable attorneys' fees incurred in pursuing or
defending in such legal proceedings any of its rights with respect to such
actual or threatened violation.
7. Blue Pencil Doctrine. In the event that any of the
restrictive covenants contained in this Agreement shall be found by a court of
competent jurisdiction to be unreasonable by reason of its extending for too
great a period of time or over too great a geographic area or by reason of its
being too extensive in any other respect, then such restrictive covenant shall
be deemed modified to the minimum extent necessary to make it reasonable and
enforceable under the circumstances.
8. Notice. All notices, demands and other communications
provided for in this Agreement shall be in writing and shall be given by
personal delivery or by certified or registered first class mail, postage
prepaid, return receipt requested, sent to the Covenantors at the addresses
designated on Schedule A or to the Company at 3905 Dakota Street, Alexandria,
Minnesota 56308, attention Richard P. Ekstrand, President, or at such other
address as may be designated by a party in written notice delivered to the
other parties in accordance with this paragraph. All such notices, demands and
communications shall be effective when delivered.
9. Entire Agreement. This Agreement, together with the Purchase
Agreement, contains the entire agreement of the parties hereto and supersedes
all prior or contemporaneous agreements and understandings, oral or written,
between the parties hereto and thereto with respect to the subject matter
hereof and thereof.
4
<PAGE> 106
10. Amendment. No amendment or waiver of any provision of this
Agreement shall be effective unless the same shall be in writing and signed by
all of the parties and then such waiver shall only be effective in the specific
instance and for the specific purpose for which it was given.
11. Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective heirs,
personal representative(s), successors and permitted assigns, but nothing in
this Agreement is to be construed as an authorization or right of any party to
assign its/his rights or delegate its/his duties under this Agreement without
the prior written consent of the other party hereto.
12. Governing Law. This Agreement shall be construed, governed by
and enforced in accordance with the laws of the State of Maine, without giving
effect to the principles of conflicts of laws thereof.
13. Headings. The headings to the paragraphs of this Agreement
are intended for the convenience of the parties only and shall in no way be
held to explain, modify, amplify or aid in the interpretation of the provisions
hereof.
14. Severability. The provisions of this Agreement shall be
deemed severable and if any portion hereof shall be held invalid, illegal or
unenforceable for any reason, the remainder shall not thereby be invalidated
but shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day, month and year first above written.
COMPANY:
----------------------------------------
By:
-------------------------------------
Its
---------------------------------
5
<PAGE> 107
COVENANTORS:
UNITY CELLULAR SYSTEMS, INC.
By:
-------------------------------------
Its
---------------------------------
INTERCEL, INC.
By:
-------------------------------------
Its
---------------------------------
INTERCEL LICENSES, INC.
By:
-------------------------------------
Its
---------------------------------
[Add other Covenantors, as appropriate]
Schedule A - Names and Addresses of Covenantors
6
<PAGE> 108
EXHIBIT H-1
AGREEMENT NOT TO COMPETE
THIS AGREEMENT NOT TO COMPETE is made and entered into this ____ day
of _____________, 1997, by and among _______________________________, a
_____________ corporation ("Company"), and Maurice P. O'Connor, an individual
(the "O'Connor").
RECITALS:
A. Unity Cellular Systems, Inc. ("Unity") has heretofore
been engaged in the business of providing cellular telephone and
related services in the Bangor, Maine MSA and Maine RSA 3 under the
name "Unicel" and was the managing general partner in Northern Maine
Cellular Partnership, a Maine general partnership (the "Partnership"),
which is engaged in the business of providing cellular telephone and
related services in Maine RSA 2 under the name "Unicel" (which
business of Unity and the Partnership are collectively referred to
herein as the "Business");
B. The Company has purchased certain assets and licenses
comprising the Business from Unity and its affiliates, pursuant to an
Asset Purchase Agreement dated December ___, 1996 ("Purchase
Agreement");
C. O'Connor has been employed as the Vice President and
General Manager of Unity and has accepted similar employment with
____________________;
D. The Company would not have entered into the Purchase
Agreement in the absence of O'Connor's agreement herein not to compete
with the Company.
NOW, THEREFORE, in consideration of the foregoing premises and for
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties agree as follows:
1. Non-Competition Agreement. During the period of two (2) years
from and after the date hereof, O'Connor covenants and agrees that, without the
Company's prior written consent, he will not, directly or indirectly,
individually or collectively, lend his credit, advice or assistance, or engage
in any activity or act in any manner, including but not limited to, as an
individual, owner, partner, joint venturer, shareholder, officer, director,
manager, employer,
<PAGE> 109
licensor, licensee, principal, agent, investor or otherwise, for the purpose of
establishing, operating or managing any business or entity that is engaged in
activities competitive with the Business in the State of Maine. For the
purposes of this Agreement, competitive activities shall mean the provision of
wireless (including, without limitation, cellular) telecommunications services
and both sales and resales of wireless access, airtime and equipment.
2. Nonsolicitation Agreement. During the period of two (2) years
from and after the date hereof, O'Connor, agrees that he will not, whether for
his own account or for the account of any other person or entity, directly or
indirectly, or individually or collectively, interfere with Purchaser's
relationship with or endeavor to divert or entice away from the Purchaser any
person or entity which at any time during the term of the O'Connor's prior
relationship with Unity or the Company is or was an employee or customer of the
Business.
3. Confidential Information. O'Connor understands and agrees
that the assets and the Business acquired by the Company pursuant to the
Purchase Agreement are unique and specialized and that, in connection with his
employment with Unity, he received or had access to Confidential Information
(as hereinafter defined). O'Connor agrees that at all times from and after the
date of this Agreement, he shall keep secret all such Confidential Information
and will not, except as required by law or as an employee of the Company,
directly or indirectly, or individually or collectively, "Use" (as hereinafter
defined) or "Disclose" (as hereinafter defined) the same to any person or
entity without first obtaining the written consent of the Company. At any time
the Company may so request, O'Connor shall turn over to the Company all books,
notes, memoranda, manuals, notebooks, tables, drawings, calculations, records
and other documents made, compiled by or delivered to them containing or
concerning any Confidential Information, including copies thereof, in his
possession, it being agreed that the same and all information contained therein
are at all times the exclusive property of the Company.
As used in this Agreement, the term "Confidential Information" means
any information or compilation of information not generally known to the public
or the industry, which was previously proprietary to Unity, relating to
procedures, techniques, methods, concepts, ideas, affairs, products, processes
and services related to the Business, including, but not limited to,
information relating to marketing, merchandising, selling, research,
development, purchasing, costs, customers, plans, pricing, billing, needs of
customers and services used by customers of the Business. Confidential
Information for purposes of this Agreement shall also include all lists of
customers, addresses, prospects, sales calls, products, services, prices and
the like as well as any specifications, formulas, plans, drawings, accounts or
sales records, sales brochures, books,
2
<PAGE> 110
code books, records, manuals, trade secrets, knowledge, know-how, pricing
strategies, operating costs, sales margins, methods of operation in Maine and
the like. All information disclosed to O'Connor during the term of his prior
employment with Unity in the Business which he has a reasonable basis to
believe to be Confidential Information, which was previously treated by Unity,
or currently treated by the Company as Confidential Information, shall be
presumed to be Confidential Information.
As used in this Agreement, the term "Disclose" means to reveal,
deliver, divulge, disclose, publish, copy, communicate, show or otherwise make
known or available to any other person or entity, or in any way to copy, any of
the Confidential Information.
As used in this Agreement, the term "Use" means to appropriate any of
the Confidential Information for the benefit of any person or entity other than
the Company.
4. Reasonableness of Covenants. O'Connor acknowledges and agrees
that the geographic scope and period of duration of the restrictive covenants
contained in this Agreement are both fair and reasonable and that the interests
sought to be protected by the Company are legitimate business interests
entitled to be protected. O'Connor further acknowledges and agrees that the
Company would not have agreed to enter into the Purchase Agreement unless he
entered into this Agreement.
5. Compensation. The O'Connor shall receive no separate monetary
consideration for the restrictive covenants contained in this Agreement but the
O'Connor acknowledges receipt of consideration in the form of the vesting of
certain options for shares of common stock of InterCel, Inc. and the
Shareholder pursuant to Section 9.8 of the Purchase Agreement.
6. Injunctive Relief. The parties agree that the remedy of
damages at law for the breach by O'Connor of any of the covenants contained in
this Agreement is an inadequate remedy. In recognition of the irreparable harm
that a violation by O'Connor of any of the covenants, agreements or obligations
arising under this Agreement would cause the Company, O'Connor agree that, in
addition to any other remedies or relief afforded by law, an injunction against
an actual or threatened violation or violations may be issued against them and
every other person and entity concerned thereby, it being the understanding of
the parties that both damages and an injunction shall be proper modes of relief
and are not to be considered alternative remedies. In the event of any such
actual or threatened violation, the prevailing party in any legal proceeding
shall be reimbursed by the other party for all costs, expenses and
3
<PAGE> 111
reasonable attorneys' fees incurred in pursuing or defending in such legal
proceedings any of its rights with respect to such actual or threatened
violation.
7. Blue Pencil Doctrine. In the event that any of the
restrictive covenants contained in this Agreement shall be found by a court of
competent jurisdiction to be unreasonable by reason of its extending for too
great a period of time or over too great a geographic area or by reason of its
being too extensive in any other respect, then such restrictive covenant shall
be deemed modified to the minimum extent necessary to make it reasonable and
enforceable under the circumstances.
8. Notice. All notices, demands and other communications
provided for in this Agreement shall be in writing and shall be given by
personal delivery or by certified or registered first class mail, postage
prepaid, return receipt requested, sent to the O'Connor at ________________ or
to the Company at 3905 Dakota Street, Alexandria, Minnesota 56308, attention
Richard P. Ekstrand, President, or at such other address as may be designated
by a party in written notice delivered to the other parties in accordance with
this paragraph. All such notices, demands and communications shall be
effective when delivered.
9. Entire Agreement. This Agreement, together with the
Employment Agreement between O'Connor and ________________ dated
_______________, 1997, contains the entire agreement of the parties hereto and
supersedes all prior or contemporaneous agreements and understandings, oral or
written, between the parties hereto and thereto with respect to the subject
matter hereof and thereof.
10. Amendment. No amendment or waiver of any provision of this
Agreement shall be effective unless the same shall be in writing and signed by
all of the parties and then such waiver shall only be effective in the specific
instance and for the specific purpose for which it was given.
11. Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective heirs,
personal representative(s), successors and permitted assigns, but nothing in
this Agreement is to be construed as an authorization or right of any party to
assign its/his rights or delegate its/his duties under this Agreement without
the prior written consent of the other party hereto.
12. Governing Law. This Agreement shall be construed, governed by
and enforced in accordance with the laws of the State of Maine, without giving
effect to the principles of conflicts of laws thereof.
4
<PAGE> 112
13. Headings. The headings to the paragraphs of this Agreement
are intended for the convenience of the parties only and shall in no way be
held to explain, modify, amplify or aid in the interpretation of the provisions
hereof.
14. Severability. The provisions of this Agreement shall be
deemed severable and if any portion hereof shall be held invalid, illegal or
unenforceable for any reason, the remainder shall not thereby be invalidated
but shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day, month and year first above written.
COMPANY:
----------------------------------------
By:
-------------------------------------
Its
----------------------------------
O'CONNOR:
By:
-------------------------------------
Maurice P. O'Connor
5
<PAGE> 113
EXHIBIT I
______________, 1997
Rural Cellular Corporation
P. O. Box 1027
Alexandria, Minnesota 56308
Ladies and Gentlemen:
We have acted as counsel to Unity Cellular Corporation ("Company"),
InterCel Licenses, Inc. ("Licensee") and InterCel, Inc. ("Shareholder") in
connection with the preparation of the Asset Purchase Agreement dated as of
December __, 1996, among you and Company, Licensee and Shareholder (the
"Agreement") and have participated in the closing of the conveyance or
assignment of certain assets and the assumption of certain liabilities provided
for in the Agreement (the "Transaction"). This opinion letter is rendered
pursuant to Section 12.2(x) of the Agreement.
This opinion letter is limited by, and is in accordance with, the
January 1, 1992 edition of the Interpretive Standards applicable to Legal
Opinions to Third Parties in Corporate Transactions adopted by the Legal
Opinion Committee of the Corporate and Banking Law Section of the State Bar of
Georgia, which Interpretive Standards are incorporated in this opinion letter
by this reference. Capitalized terms used in this opinion letter [and the
attachments hereto] and not otherwise defined herein shall have the meanings
assigned to such terms in the Interpretive Standards or the Agreement. In the
event of a conflict in the definitions of such capitalized terms appearing in
both the Interpretive Standards and the Agreement, the definitions appearing in
the Agreement shall be applicable to this opinion letter.
In the capacity described above, we have considered such matters of
law and of fact, including the examination of originals or copies, certified or
otherwise identified to our satisfaction, of such records and documents of the
Company, certificates of officers and representatives of the Company,
certificates of public officials and such other documents as we have deemed
appropriate as a basis for the opinions hereinafter set forth.
As used in this opinion letter, the term "Closing Documents" means the
Agreement Not to Compete, the Post Closing Escrow Agreement, the Assumption
Agreement and the Billing Service Agreement, in each case as those terms are
defined in the Agreement.
1
<PAGE> 114
The opinions set forth herein are limited to the laws of the State of
Georgia and applicable federal laws of the United States. We note that the
Agreement contains a governing law provision which names the State of Delaware,
without giving effect to the principles of conflict of laws thereof, except for
real estate conveyancing and transfer issues for which the governing law
provision names the State of Maine. In accordance with Interpretive Standard
22, we express no opinion whether any court of any jurisdiction will give
effect to the governing law provision in the Agreement; Instead, we assume with
your permission that (a) that if Company, Licensee or Shareholder is brought
before a proper court of the State of Georgia to enforce rights under the
Agreement or the Closing Documents, such court will apply the substantive law
of the State of Georgia, notwithstanding the governing law provision of the
Agreement, and (b) with respect to rights under the Agreement and the Closing
Documents, the substantive law of the State of Delaware to the extent the
rights in question arise under Delaware law and the substantive law of the
State of Maine to the extent the rights in question arise out of real estate
conveyancing and transfer issues are identical to the law of the State of
Georgia with respect to corresponding matters or issues.
The term "Primary Lawyer Group" includes in addition to the persons
described in Interpretive Standard No. 7, the lawyers currently employed by
this firm who have performed substantive legal services related to the
Agreement or the Closing Documents and have specific knowledge of the
substance of this opinion letter.
We have deleted from Interpretive Standard 2(11) the reference to
"Hart-Scott-Rodino", so that coverage of Hart-Scott-Rodino is not excluded from
this opinion letter.
Based upon the foregoing, it is our opinion that:
(1) Company, Licensee and Shareholder are corporations existing
and in good standing under the laws of the States of Maine, Delaware and
Delaware, respectively.
(2) Company, Licensee and Shareholder each has the corporate power
to execute and deliver the Agreement and such of the Closing Documents as to
which it is a signatory, to perform its obligations thereunder, to own and use
its assets and to conduct its business as it is now being conducted.
(3) Company, Licensee and Shareholder each has duly authorized the
execution and delivery of the Agreement and such of the Closing Documents as to
which it is a signatory and all performance by it thereunder and has duly
executed and delivered the Agreement and such of the Closing Documents as to
which it is a signatory.
2
<PAGE> 115
(4) The Partnership is a general partnership existing and in good
standing under the laws of the State of Maine.
(5) The Partnership has all requisite partnership power to own,
operate and lease the RSA 2 Assets and to conduct its business as it is now
being conducted.
(6) The execution and delivery by Company, Licensee and
Shareholder of the Agreement and such of the Closing Documents as to which it
is a signatory do not, and if Company, Licensee and Shareholder were now to
perform its respective obligations under the Agreement and such of the Closing
Documents as to which it is a signatory such performance by it would not,
result in any:
(i) violation of its articles of incorporation or bylaws;
(ii) violation of any existing federal or state
constitution, statute, regulation, rule, order, or Applicable Law to
which it or the Assets are subject;
(iii) breach of or default under any material written
agreements;
(iv) creation or imposition of a contractual lien or
security interest in, on or against the Assets under any material
written agreements; or
(v) violation of any judicial or administrative decree,
writ, judgment or order to which, to our knowledge, Company or the
Assets are subject;
excluding from the foregoing clauses (ii), (iii), (iv) and (v) violations,
breaches defaults and Encumbrances which, and filings, notices permits,
covenants and approvals the absence of which, individually, or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.
With your permission we have assumed that the term "material written
agreements" used in clauses (iii) and (iv) above and in paragraph 7 below
includes only those agreements listed and indicated to be material contracts on
Schedules __, __ and __ to the Agreement.
(7) Except as provided on Schedule 5.3 to the Agreement, no
consent, approval, authorization or other action by, or filing with, any
governmental authority of the United States or the State of Georgia, and except
as provided on the schedule attached to this opinion letter or on Schedule 5.3,
no consent that has not been obtained of any party to any material written
agreement, is required for Company's execution and delivery of the Agreement
and consummation of the Transaction.
3
<PAGE> 116
(8) Except as provided on the schedule to this Opinion Letter, the
Agreement, together with the other documents and agreements executed and
delivered on the Date of Closing in connection with the Transaction, are
sufficient to and have conveyed the Assets and the Licenses to the Purchaser,
or are sufficient to cause the Seller and Licensee, as the case may be,
pursuant to Section 13.2 of the Agreement to perfect conveyance of the Assets
and the Licenses following the Date of Closing. [to be included on the
schedule to the opinion letter are, e.g., FCC Matters and contracts that are
not material contracts.]
(9) The Agreement is enforceable against each of Company, Licensee
and Shareholder. Each Closing Document to which the Company, Licensee or
Shareholder is a signatory is enforceable against such signatory.
Based upon the limitations and qualifications set forth above, we
confirm to you that to our knowledge:
(10) Except as set forth on the Schedules to the Agreement, no
litigation or other proceeding against Company, Licensee, Shareholder or
Partnership or any of their respective properties is pending or overtly
threatened by a written communication to Company, Licensee, Shareholder or
Partnership, as applicable.
[(11) Company has fully complied with all of its obligations under
the Partnership Agreement in connection with the consummation of the
transactions contemplated by the Asset Purchase Agreement. Company's partner
in the Partnership has [exercised] [waived, or allowed to lapse], any rights of
first refusal which it might have under Article 6 of the Partnership Agreement
to purchase all or any part of Company's Partnership Interest in connection
with the consummation of such transactions.
[(12) The Company and its Affiliates (as such term is defined in the
Partnership Agreement) have fully complied with all of its obligations under
Section 12.10 of the Partnership Agreement, and Company's partner in the
Partnership, and such partner's Affiliates, [exercised] [have waived, or
allowed to lapse], any rights which they may have had to purchase any of the
Assets.]
This opinion letter is provided to you for your exclusive use solely
in connection with the Transaction, and may not be relied upon by any other
person or for any other purpose without our prior written consent.
Very truly yours,
NELSON MULLINS RILEY & SCARBOROUGH, L.L.P.
By:
---------------------------------------
4
<PAGE> 117
EXHIBIT J
OPINION OF SELLERS' FCC COUNSEL
1) Licensee holds beneficially and of record all of the Licenses
described on Schedule 1.4 to the Asset Purchase Agreement, and such Licenses
are the only governmental licenses, certificates, franchises, registrations,
concessions, permits, consents and approvals necessary for Sellers to conduct
the Business as it is now being conducted.
2) The Partnership holds beneficially and of record all of the
RSA 2 Licenses described on Schedule 5.20 to the Asset Purchase Agreement, and
such licenses constitute all of the governmental licenses, certificates,
franchises, registrations, concessions, permits, consents and approvals which
are necessary for the Partnership to conduct its business as it is now being
conducted.
3) True and correct copies of the Licenses and the RSA 2 Licenses,
which are in the form of a set of documents issued by the FCC, are attached
hereto as Attachment 1.
4) The Licenses and the RSA 2 Licenses are valid, in good standing
and in full force and effect and, to the best of our knowledge, the Sellers have
performed their obligations under the Licenses in all material respects and the
Partnership has performed all of its obligations under the RSA 2 Licenses in all
material respects.
5) To the best of our knowledge, no event has occurred with
respect to the Licenses and/or the RSA 2 Licenses which permits, or after
notice or lapse of time or both would permit, revocation, termination or
suspension thereof, whether individually or in combination, or would result in
any other material impairment of the rights of any of the Sellers or the
Partnership with respect to any of the Licenses or RSA 2 Licenses.
6) To the best of our knowledge, there is not currently pending
or threatened any application, petition, objection or other pleading with the
FCC which questions the validity of or contests any of the Licenses and/or the
RSA 2 Licenses.
7) All consents and approvals required from the FCC for the
Sellers to assign the Licenses to the Purchaser and to authorize Purchaser to
hold the Licenses have been obtained by an action or decision as to which (i)
no request for a stay is pending, no stay is in effect, and any deadline for
filing any such request that may be designated by statute or regulation has
passed, (ii) no petition for rehearing or reconsideration or application for
review is pending and the time for the filing of such petition or application
has passed, (iii) the FCC does not have the action or decision under
reconsideration on its own motion and the time within which it may effect such
reconsideration has passed, and (iv) no judicial appeal is pending or in effect
and any deadline for filing any such appeal that may be designated by statute
or regulation has passed.
<PAGE> 118
8) All approvals and consents required from the FCC for the
Sellers to assign its entire Partnership Interest in the Partnership to the
Purchaser and to authorize the Purchaser to hold the Partnership Interest and
to manage and operate the Partnership have been obtained by an action or
decision as to which (i) no request for a stay is pending, no stay is in
effect, and any deadline for filing any such request that may be designated by
statute or regulation has passed, (ii) no petition for rehearing or
reconsideration or application for review is pending and the time for the
filing of such petition or application has passed, (iii) the FCC does not have
the action or decision under reconsideration on its own motion and the time
within which it may effect such reconsideration has passed, and (iv) no
judicial appeal is pending or in effect and any deadline for filing any such
appeal that may be designated by statute or regulation has passed.
9) The documents being executed by Licensee contemporaneously
herewith are sufficient in form and substance to vest in Purchaser Licensee's
entire right, title and interest in and to the Licenses.
2
<PAGE> 119
EXHIBIT K
CURTIS THAXTER STEVENS BRODER & MICOLEAU LLC [LETTERHEAD]
,1996
Mr. Richard Ekstrand
President/CEO
Rural Cellular Corporation
3905 Dakota Street
P.O. Box 1027
Alexandria, MN 56308
Re: MAINE STATE REGULATORY COUNSEL OPINION
Dear Mr. Ekstrand:
In connection with the Asset Purchase Agreement ("Agreement") made and
entered into as of the _ day of December, 1996, by and among Rural Cellular
Corporation, a Minnesota corporation ("Purchaser"), Unity Cellular Systems,
Inc., a Maine corporation ("Unity"), InterCel Licenses, Inc., a Delaware
corporation ("Licensee"), and InterCel, Inc., a Delaware corporation
("Shareholder," who with Licensee and Unity is hereinafter referred to as
"Sellers"), we have been asked to provide this opinion. Capitalized terms used
but not defined herein are defined in the Agreement.
Based upon such investigation and receipt of such certificates with
respect to factual matters as we deemed appropriate, it is our opinion that:
(1) with the exception of such local business and land use permits and
licenses that are generally applicable to all businesses and not specifically to
the Business, the Sellers are not required to have any state licenses,
certificates, authorizations, or permits to conduct the Business; and
(2) no approval or consent is required from the State of Maine,
including but not limited to the Maine Public Utilities Commission for Sellers
to sell and transfer the Business to
<PAGE> 120
Purchaser or for Unity to assign its entire Partnership Interest in the
Partnership to the Purchaser and to authorize the Purchaser to hold the
Partnership Interest and to manage and operate the Partnership, other than any
requirement for the Purchaser or any affiliated entity which will hold the
Partnership Interest for Purchaser to qualify to do business in the State of
Maine under the Maine Business Corporation Act, 13-A M.R.S.A.
This Opinion is solely for the benefit of Purchaser and may not be used
or relied upon by any other person without our prior written consent.
Very truly yours,
CURTIS THAXTER STEVENS BRODER
& MICOLEAU, LLC
By:
----------------------------
Its Member
<PAGE> 121
EXHIBIT L
PURCHASER'S CLOSING CERTIFICATE
The undersigned, being a duly acting, appointed and authorized officer
of Rural Cellular Corporation, a Minnesota corporation ("Purchaser"), hereby
certifies to Unity Cellular Systems, Inc., a Maine corporation ("Unity"),
InterCel Licenses, Inc., a Delaware corporation ("Licensee"), and InterCel,
Inc., a Delaware corporation ("Shareholder"), pursuant to Section 12.3(b) of the
Asset Purchase Agreement made and entered into as of the _____ day of December,
1996, by and among Unity, Licensee, Shareholder and Purchaser (the "Purchase
Agreement") as follows:
1. All of the representations and warranties made by Purchaser in the
Purchase Agreement and in the documents, instruments and/or agreements
executed and/or delivered by Purchaser prior to or on the date hereof
pursuant to the Purchase Agreement are true and correct in all
material respects on and as of the date hereof with the same force and
effect as though such representations and warranties had been made on
or given on and as of the date hereof; and
2. Purchaser has performed and complied with all of its covenants,
agreements and obligations under the Purchase Agreement which were to
be performed and complied with by it prior to or on the date hereof.
IN WITNESS WHEREOF, I have executed this Closing Certificate as of the _
day______of 199_.
RURAL CELLULAR CORPORATION
By
------------------------------
Its
----------------------------
<PAGE> 122
EXHIBIT M
________, 1997
Unity Cellular Systems, Inc.
InterCel Licenses, Inc.
InterCel, Inc.
1233 O.G. Skinner Drive
West Point, GA 31833
Ladies and Gentlemen:
We have acted as counsel for Rural Cellular Corporation, a Minnesota
corporation ("Purchaser"), in connection with the preparation, execution and
delivery of that certain Asset Purchase Agreement dated as of December__, 1996,
(the "Purchase Agreement"), by and among the Purchaser, Unity Cellular Systems,
Inc., a Maine corporation ("Unity"), InterCel Licenses, Inc., a Delaware
corporation ("Licensee"), and InterCel, Inc., a Delaware corporation (the
"Shareholder"). This opinion letter is being given to you pursuant to Section 6
of the Purchase Agreement. Capitalized terms used herein and not otherwise
defined in this opinion shall have the meaning given to such terms in the
Purchase Agreement.
In connection with this opinion letter, we have examined originals,
counterparts or copies certified or otherwise identified to our satisfaction of
only the following documents and have made no other investigation or inquiry
(items (d) through (h) below are sometimes collectively referred to herein as
the "Transaction Documents"):
a. The Articles of Incorporation of the Purchaser certified by the
Minnesota Secretary of State on________, 199__;
b. The By-Laws of the Purchaser certified to be true and correct by
the Secretary of the Purchaser as of________, 199_;
c. A certificate from the Minnesota Secretary of State indicating that
the Purchaser was in good standing in Minnesota as of_______, 199_;
d. The Purchase Agreement;
e. The Assumption Agreement of even date herewith by and among Unity,
Licensee, Shareholder and the Purchaser;
<PAGE> 123
Unity Cellular Systems, Inc.
InterCel Licenses, Inc.
InterCel, Inc.
Page 2
____________, 1997
f. That certain Post Closing Escrow Agreement of even date herewith by
and among Unity, Licensee, Shareholder, the Purchaser and_______________;
g. That certain Agreement Not to Compete of even date herewith by and
among Unity, Licensee, Shareholder and the Company;
h. That certain Billing Services Agreement of even date herewith by
and among the Purchaser and______________; and
i. A copy of the Minutes of Written Action of the Board of Directors
of the Purchaser, certified to be true and correct by the Secretary of the
Purchaser as of__________, 199___, in which action is taken with respect to
the Transaction Documents.
In addition, we have examined such other corporate resolutions, documents,
certificates and records and have made such investigations of law and fact as we
have deemed necessary or appropriate to enable us to render the opinions
expressed herein.
In reaching the opinions set forth below, we have assumed, and have not
independently verified, the genuineness of all signatures on all documents, the
legal capacity for all purposes relevant hereto of all natural persons, the
authenticity of all documents submitted to us as originals, the conformity to
the authentic originals of all documents submitted to us as copies, the
correctness, completeness and accuracy of all facts set forth in all
representations, warranties and certificates referred to or identified in this
opinion, and that there are no documents, agreements or understandings between
or among Unity, Licensee and/or the Shareholder, on the one hand, and the
Purchaser, on the other hand, other than the Transaction Documents, which would
have an effect on the opinions set forth below. In examining documents executed
by parties other than the Purchaser, we have assumed that such parties had the
requisite power and authority (corporate or otherwise) to execute, deliver and
perform all of their respective obligations thereunder and have also assumed the
due authorization by all requisite corporate action and execution and delivery
of such documents by such parties, and the validity and binding effect of those
documents on those parties. As to questions of fact material to our opinions, we
have relied upon the representations and warranties made in the Transaction
Documents and upon certificates of officers of the Purchaser and of public
officials ("Certificates"). We have not independently or through third parties
verified such representations and warranties or Certificates, or made any
independent investigation as to the existence of agreements, instruments or
other documents, orders, judgments or decrees by which the Purchaser or any of
its properties or assets may be bound.
In basing the opinions and other matters set forth herein on phrases such
as "best of our knowledge", "our knowledge," or "known to us", such phrases
signify that, in the course of our
<PAGE> 124
Unity Cellular Systems, Inc.
InterCel Licenses, Inc.
InterCel, Inc.
Page 3
___________, 1997
representation of the Purchaser in matters with respect to which we have been
engaged by the Purchaser to give substantive attention as counsel, no
information has come to our attention that would give us actual knowledge or
actual notice that any such opinion or other matters are not accurate or that
any of the foregoing Certificates and other matters on which we have relied are
not accurate and complete. Except as otherwise stated herein, we have undertaken
no independent investigation or verification of such matters. The phrases "best
of our knowledge", "our knowledge", "known to us" and similar language used
herein are intended to be limited to the knowledge of the lawyers currently
employed by our firm who have performed substantive legal services related to
the Transaction Documents and have specific knowledge of the substance of this
opinion.
Based solely upon the foregoing, and subject to the limitations, exceptions
and assumptions set forth below under the heading "Scope of Opinion," we are of
the opinion that:
1) Purchaser is a corporation duly organized, validly existing and in good
standing under the laws of the State of Minnesota, and has all requisite power
and authority, corporate and otherwise, to own, operate and lease its properties
and assets and to conduct its business as it is now being conducted.
2) The execution, delivery and performance of the Transaction Documents and
the consummation of the transactions contemplated thereby have been duly and
validly authorized by all necessary corporate action on the part of the
Purchaser. The Transaction Documents have been duly and validly authorized,
executed and delivered by Purchaser and the obligations of Purchaser thereunder
are valid and legally binding and enforceable in accordance with their
respective terms.
3) Purchaser has the unrestricted power and authority, corporate and
otherwise, to purchase the Assets being purchased under the Purchase Agreement
and to otherwise perform its obligations under the Transaction Documents. The
execution and delivery of the Transaction and the consummation of the
transactions contemplated thereby will not: (i) violate any provision of the
Articles of Incorporation or Bylaws (or comparable governing documents or
instruments) of Purchaser; (ii) violate any Applicable Laws issued, enacted,
entered or deemed applicable by any court or other Governmental Authority having
jurisdiction over Purchaser or any of its properties or assets; and (iii)
require any filing with, or permit, consent or approval of, or the giving of any
notice to, any Governmental Authority or any person or entity, excluding from
the foregoing clauses (ii), (iii), (iv) and (v) violations which, and filings,
notices, permits, consents and approvals the absence of which, individually or
in the aggregate, could reasonably be expected to have a material adverse effect
on the Purchaser or its assets, properties, revenues, business, operations,
financial conditions or prospects.
SCOPE OF OPINION
<PAGE> 125
Unity Cellular Systems, Inc.
InterCel Licenses, Inc.
InterCel, Inc.
Page 4
_____________, 1997
The foregoing opinions are subject to the following qualifications (in
addition to the qualifications, exceptions, limitations and assumptions
specified above):
A. Our opinions as they relate to the legality, validity, binding effect
and/or enforceability of the Transaction Documents are subject to the
limitations that might result from bankruptcy, insolvency, reorganization,
arrangement, moratorium, fraudulent or preferential transfer, fraudulent
conveyance, and other state and federal laws relating to or affecting the rights
or remedies of creditors generally, now or hereafter, in effect.
B. Our opinions as they relate to the legality, validity, binding effect
and/or enforceability of the Transaction Documents are subject to the
qualification that the availability of the remedies of specific performance or
injunctive relief, or any other equitable remedy, are subject to the discretion
of the court before which a proceeding therefor may be brought, equitable
defenses and the application of general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law),
including without limitation, concepts of materiality, reasonableness, good
faith, fair dealing and other similar doctrines affecting the enforcement of
agreements generally.
C. Except as expressly stated herein, no opinion is expressed or implied as
to the truth, accuracy or completeness of any of the representations, warranties
or other statements of the Purchaser or any other person contained in any of the
Transaction Documents or in any exhibit, schedule or attachment thereto.
D. We express or imply no opinion as to what actions the parties to the
Transaction Documents are required to or may take or fail to take on or after
the date hereof which, if taken or not taken, would affect or impair the
legality, validity, binding effect and/or enforceability of the Transaction
Documents or the rights and remedies of the parties thereunder.
E. Our opinions as they relate to the legality, validity, binding effect
and/or enforceability of the Transaction Documents are subject to the
limitations arising from state and federal court decisions involving statutes,
public policy and/or principles of equity holding that (i) purported waivers of
the benefits of statutory provisions or constitutional or common law rights and
broadly or vaguely stated provisions waiving rights or waivers of unknown future
rights or duties imposed by law are or may be void or unenforceable, (ii) under
certain circumstances, provisions declaring that the failure to exercise or
delay in exercising rights or remedies will not operate as a waiver of any such
right or remedy are invalid, (iii) provisions declaring that the documents may
only be amended or waived in writing may be unenforceable to the extent that an
oral agreement or an implied agreement by trade practice or course of conduct
has been created modifying one or more provisions of the Transaction Documents,
(iv) the enforcement of public policy is of a paramount public interest which
may prohibit enforcement of certain contractual provisions; and (v) the
indemnification and exculpation provisions of the Transaction Documents
<PAGE> 126
Unity Cellular Systems, Inc.
InterCel Licenses, Inc.
InterCel, Inc.
Page 5
___________, 1997
may be unenforceable to the extent that the enforcement of such provisions is
determined to be against public policy.
F. While certain members of this firm are qualified to practice in states
other than Minnesota, we have not examined the laws of any state other than
Minnesota or consulted with members of this firm who are admitted in other
jurisdictions with respect to the laws of such jurisdictions. Accordingly, our
opinions contained herein are limited exclusively to the laws of the State of
Minnesota (excluding principles of conflict of laws) and the federal laws of the
United States of America, and we express or imply no opinion with respect to the
laws of any other jurisdiction. Insofar as our opinions pertain to matters of
Delaware and/or Maine law, we have assumed that the substantive laws of such
states are identical in all respects to the substantive laws of the State of
Minnesota.
G. Minnesota Statutes, Section 290.371, subd. 4, provides that any
corporation required to file a Notice of Business Activities Report does not
have a cause of action upon which it may bring suit under Minnesota law unless
the corporation has filed a Notice of Business Activities Report and that the
use of the courts of the State of Minnesota for all contracts executed and all
causes of action that arose before the end of any period for which a corporation
failed to file a required report is precluded. Insofar as the foregoing opinion
may relate to the legality, validity, binding effect and/or enforceability of
any agreement under Minnesota law or in a Minnesota court, we have assumed that
any party seeking to enforce the agreement has at all times been, and will
continue at all times to be, exempt from the requirement of filing a Notice of
Business Activities Report or, if not exempt, has duly filed, and will continue
to duly file, all Notice of Business Activities Reports.
H. Certain rights, remedies, waivers and indemnities contained in the
Transaction Documents, in addition to those specifically enumerated above, may
be limited or rendered ineffective by applicable laws or judicial decisions
governing such provisions, but such laws and judicial decisions do not render
the Transaction Documents invalid as a whole, and there exist, in the
Transaction Documents or pursuant to applicable law, legally adequate remedies
for a realization of the principal benefits intended to be provided by the
Transaction Documents.
Please be advised that this opinion letter is as of the date hereof and
that events and developments subsequent hereto (including changes in present law
or the interpretations of such laws) could cause the foregoing opinions, if
given then, to be changed or withdrawn. We disclaim any responsibility to advise
you of any such events or developments which hereafter may be brought to our
attention.
This opinion is being furnished to the Sellers and may be relied upon by
the Sellers solely in connection with the Transaction Documents and for no other
purpose. This opinion is intended
<PAGE> 127
Unity Cellular Systems, Inc.
InterCel. Licenses, Inc.
InterCel, Inc.
Page 6
____________, 1997
for the Sellers' exclusive use and may not be used, circulated, quoted or
otherwise referred to for any other purpose, or relied upon by others.
MOSS & BARNETT
A Professional Association
By
--------------------------
Ann K. Newhall
AKN/jme
<PAGE> 128
EXHIBIT N
FORM OF OPINION OF FCC COUNSEL FOR PURCHASER
WITH REFERENCE TO SECTION 12.3 g. OF THE ASSET PURCHASE AGREEMENT
___________, 1997
Unity Cellular Systems, Inc.
InterCel Licenses, Inc.
InterCel, Inc.
1233 O.G. Skinner Drive
West Point, Georgia 31833
Gentlemen:
We have acted as Federal Communications Commission ("FCC") counsel for
Rural Cellular Corporation ("RCC" or "Purchaser") in connection with the Asset
Purchase Agreement dated as of December _______, 1996 between Unity Cellular
Systems, Inc., InterCel Licenses, Inc. and InterCel, Inc. This opinion is being
furnished to you pursuant to Section 12.3 g. of the Asset Purchase Agreement to
address the matters set forth in Exhibit N of the Asset Purchase Agreement.
Except as otherwise specified, capitalized terms used in this opinion which are
defined in the Asset Purchase Agreement are used herein with the same meaning.
This opinion is limited strictly to the Communications Act of 1934, as
amended, and the Federal Communications Commission's rules, regulations and
published policies promulgated pursuant thereto (collectively "Communications
Laws"), all as applicable to Purchaser. We express no opinion with respect to
any other law, statute, rule, regulation, ordinance, decision, judgment, decree,
legal requirement, or legal authority, whatsoever. This opinion should not be
construed to render an opinion on any matter of state law with respect to
Purchaser.
<PAGE> 129
________, 199___
Page 2
As to various questions of fact in connection with this opinion, we
have relied upon actual examination of available files of the Federal
Communications Commission ("FCC"), and pertinent statements and representations
of officers or responsible representatives of Purchaser, not including
representations and warranties of the Asset Purchase Agreement. Collectively,
our examination and inquiry shall be referred to as "Our Inquiry."
When used in this opinion, the term "our knowledge" refers to the
actual current knowledge of the attorneys currently employed by this firm who
have been actively involved in Purchaser's representation. Whenever our opinion
with respect to the existence or nonexistence of facts is qualified by the
phrase "to the best of our knowledge," or some similar phrase, it is intended
to indicate that no information has come to the attention of those attorneys in
the course of Our Inquiry and our representation of Purchaser that would give
them actual knowledge that our opinion with respect to the existence or
nonexistence of such facts is inaccurate. No inference as to our knowledge of
the existence or nonexistence of facts, other than facts of which we have
obtained actual knowledge as a result of our representation, should be drawn
from the fact of our representation of Purchaser as counsel.
Notwithstanding any other statement herein, this opinion should not be
interpreted to render an opinion on the validity of the issuance of any
securities, or on the lawful procedures for
<PAGE> 130
_________, 199____
Page 3
perfection of security interests. This opinion, unless otherwise noted, is
addressed only to the Asset Purchase Agreement.
This opinion is governed by, and shall be interpreted in accordance
with, the Legal Opinion Accord of the ABA Section of Business Law (1991). As a
consequence, it is subject to a number of qualifications, exceptions,
definitions, limitations on coverage and other limitations, all as more
particularly described in the Accord, and this opinion should be read in
conjunction therewith.
In connection with rendering this opinion, we have examined such
documents and records and have made such inquiries and investigations as we deem
to be necessary and appropriate. We are of the opinion that:
RCC is qualified in general, and in particular with respect to Maine
RSA 2, Maine RSA 3 and the Bangor, Maine MSA, to hold directly, or
control the licensee of, the cellular and microwave licenses which are
the subject of the Asset Purchase Agreement, except that qualifications
matters which may affect RCC based upon application of Section 22.942
of the FCC rules and which pertain to the ownership of stock in RCC by
subsidiaries of Telephone & Data Systems, Inc. are not included in this
opinion.
This opinion is being provided solely for the use and benefit of Unity
Cellular Systems, Inc., InterCel Licenses, Inc. and InterCel, Inc. in
connection with the Asset Purchase Agreement. This opinion is given for
the benefit of and is intended to be
<PAGE> 131
________, 199_
Page 4
relied upon by you in connection with the transaction referred to above. It may
not be quoted to, copied, delivered to, or relied upon by anyone other than you
in connection with the Asset Purchase Agreement and for no other purpose without
the express written consent of the undersigned firm. This opinion is effective
only as of the date hereof and we undertake no professional responsibility to
advise you as to any subsequent event either in the nature of a change of fact
or law, as to which we may become aware.
This opinion is based on statutory laws and judicial decisions that are
effective on the date hereof, and we do not opine with respect to any law,
regulation, rule or governmental policy which may be enacted, adopted, or become
effective after the date hereof. This opinion should not be assumed to state
general principles of law applicable to transactions of this kind.
Very truly yours,
By:
------------------------------
Officer
Lukas, McGowan, Nace & Gutierrez, Chtd.
