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Title: |
Asset Purchase Agreement |
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Date: |
2003 |
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Preview shows 21KB of 150KB total |
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$72 |
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ID: |
#1086438 |
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ASSET PURCHASE AGREEMENT
BY AND AMONG
D&E COMMUNICATIONS, INC.
CONESTOGA WIRELESS COMPANY
AND
KEYSTONE WIRELESS, LLC
Dated as of November 12, 2002
TABLE OF CONTENTS
Page
----
ARTICLE 1 PURCHASE AND SALE OF ASSETS AND ASSUMPTION OF LIABILITIES...............................................1
1.1 Sale and Purchase of Assets...........................................................................1
1.2 Excluded Assets.......................................................................................2
1.3 Assumed Liabilities...................................................................................3
1.4 Excluded Liabilities..................................................................................3
1.5 Deposit...............................................................................................4
1.6 Purchase Price Computation and Payment................................................................4
1.7 Closing Date.........................................................................................10
1.8 Closing Date Deliveries..............................................................................10
1.9 Further Assurances...................................................................................11
ARTICLE 2 REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLING GROUP.............................................12
2.1 Due Organization; Power and Authority................................................................12
2.2 Authority............................................................................................12
2.3 Financial Statements.................................................................................13
2.4 Operations Since the Balance Sheet Date..............................................................13
2.5 No Undisclosed Liabilities...........................................................................14
2.6 Taxes................................................................................................14
2.7 Availability of Assets and Legality of Use...........................................................15
2.8 Real Property........................................................................................15
2.9 Accounts Receivable..................................................................................15
2.10 Licenses.............................................................................................16
2.11 Title to Property....................................................................................16
2.12 Employee Relations...................................................................................16
2.13 Status of Contracts..................................................................................17
2.14 No Violations, Litigation or Regulatory Action.......................................................17
2.15 Environmental Matters................................................................................17
2.16 Insurance............................................................................................18
2.17 Subscribers..........................................................................................18
2.18 Customers............................................................................................19
2.19 Intellectual Property................................................................................19
2.20 Broker or Finder.....................................................................................19
2.21 Inventory............................................................................................19
2.22 Disclosure...........................................................................................19
ARTICLE 3 REPRESENTATIONS, WARRANTIES AND COVENANTS OF BUYER.....................................................20
3.1 Organization of Buyer................................................................................20
3.2 Authority of Buyer...................................................................................20
3.3 Absence of Litigation................................................................................20
3.4 No Broker or Finder..................................................................................20
3.5 Sufficient Funds and Financing.......................................................................21
ARTICLE 4 ACTIONS PRIOR TO THE CLOSING DATE......................................................................21
i
4.1 Access to Information................................................................................21
4.2 Preserve Accuracy of Representations and Warranties..................................................21
4.3 Interim Operations, Management and Oversight.........................................................22
4.4 Consents and Approvals...............................................................................22
4.5 FCC Compliance.......................................................................................23
4.6 No Public Announcements..............................................................................23
4.7 Formalization of Intercompany Agreements.............................................................23
4.8 No Solicitation......................................................................................24
4.9 Tax Clearance........................................................................................25
ARTICLE 5 OTHER AGREEMENTS.......................................................................................25
5.1 Non-Competition Agreement............................................................................25
5.2 Selling Group's Employees............................................................................26
5.3 BTS Agreement........................................................................................26
5.4 Nortel Agreement.....................................................................................28
5.5 Books and Records....................................................................................28
5.6 No Other Warranties; Survival........................................................................28
5.7 Bulk Sales...........................................................................................28
5.8 Use of "Conestoga" Name..............................................................................29
5.9 Reading Royals Agreement.............................................................................29
ARTICLE 6 CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER...........................................................29
6.1 No Misrepresentation or Breach of Covenants and Warranties...........................................29
6.2 No Restraint or Litigation...........................................................................30
6.3 Necessary Actions,...................................................................................30
6.4 Legal Opinion........................................................................................30
6.5 Other Documentation..................................................................................30
ARTICLE 7 CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLING GROUP...................................................30
7.1 No Misrepresentation or Breach of Covenants and Warranties...........................................30
7.2 No Restraint or Litigation...........................................................................31
7.3 Legal Opinion........................................................................................31
7.4 Required Consents....................................................................................31
7.5 Other Documentation..................................................................................31
ARTICLE 8 INDEMNIFICATION........................................................................................31
8.1 Indemnification by Selling Group.....................................................................31
8.2 Indemnification by Buyer.............................................................................32
8.3 Limitation of Damages................................................................................32
8.4 Notice of Claims.....................................................................................33
8.5 Set-Off..............................................................................................34
8.6 Exclusivity..........................................................................................34
ARTICLE 9 TERMINATION............................................................................................34
9.1 Termination..........................................................................................34
9.2 Remedies.............................................................................................35
9.3 Risk of Loss.........................................................................................35
ARTICLE 10 GENERAL PROVISIONS....................................................................................36
10.1 Confidential Nature of Information...................................................................36
10.2 Governing Law........................................................................................36
ii
10.3 Notices..............................................................................................36
10.4 Successors and Assigns...............................................................................37
10.5 Entire Agreement; Amendments.........................................................................38
10.6 Waivers..............................................................................................38
10.7 Expenses.............................................................................................38
10.8 Sales and Transfer Taxes.............................................................................38
10.9 Execution of Counterparts............................................................................38
10.10 Control Rights....................................................................................38
10.11 Headings; Knowledge of Selling Group..............................................................39
iii
SCHEDULES
I Markets
1.1(a) Fixed Assets
1.1(b) Contracts
1.1(c) Licenses
1.1(f) Books and Records
1.2(b) Contracts Not Assumed
2.2 Required Consents
2.4(b) Operations
2.6 Taxes
2.7 Condition of Fixed Assets
2.8(b) Leased Real Property
2.8(b)(1) Missing Lease Information Supplied by
Selling Group
2.9 Accounts Receivable
2.11 Title to Property
2.12 Employee Relations
2.13 Contracts
2.14 Litigation
2.15 Environmental Matters
2.16 Insurance
2.19 Intellectual Property
2 Missing Documentation
4.3 Interim Operations
EXHIBITS
1.5 Form of Deposit Escrow Agreement
1.6(d)(iii)(1) Form of Convertible Secured Note
1.6(d)(iii)(2) Form of Security Agreement
1.8(a)(i) Form of General Assignment and Bill of
Sale
1.8(b)(iii) Form of Assumption Agreement
4.4 Form of Consent and Estoppel Certificates
4.7(a) Form of Interconnection Agreement
4.7(c)(1) Form of Buffalo Valley Telephone Lease
Agreement
4.7(c)(2) Form of Conestoga Telephone and Telegraph
Lease Agreement
4.7(d) Form of Pikeville Lease Agreement
iv
6.4(1) Form of Selling Group Legal Opinion
(Corporate Matters)
6.4(2) Form of Selling Group Legal Opinion (FCC
Matters)
7.3 Form of Buyer Legal Opinion
v
ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT ("Agreement"), dated as of November 12,
2002, is by and among D&E COMMUNICATIONS, INC., a Pennsylvania corporation
("D&E") and CONESTOGA WIRELESS COMPANY, a Pennsylvania corporation ("CWC"), (D&E
and CWC are sometimes hereinafter collectively referred to as the "Selling
Group"), and KEYSTONE WIRELESS, LLC, a Delaware limited liability company
("Buyer").
CWC owns and operates all of the business, assets and rights related to
the business of providing mobile wireless services in the Basic Trading Areas
(BTA's) ("Markets") identified on Schedule I attached hereto and made a part
hereof (collectively, the "System"). Buyer desires to purchase, and CWC desires
to sell, substantially all of the assets of CWC used in or related to the
System, and in connection therewith, Buyer will assume certain liabilities of
Selling Group, all upon the terms and subject to the conditions set forth
herein.
The parties agree, for good and valuable consideration, as follows:
ARTICLE 1
PURCHASE AND SALE OF ASSETS AND ASSUMPTION OF LIABILITIES
1.1 Sale and Purchase of Assets.
On the terms and subject to the conditions set forth in this Agreement,
CWC shall, on the Closing Date (as defined below), sell, transfer and assign, to
Buyer, and Buyer shall purchase from CWC, the entire right, title and interest
in and to all of the assets and rights of CWC used in the System (other than the
Excluded Assets (as defined in Section 1.2 below)) (collectively, the "Assets"),
free and clear of all liens, security interests, pledges, encumbrances, claims
and equities of every kind other than the Permitted Exceptions (as defined
below), including, without limitation, the following:
(a) Fixed Assets and Personal Property. All fixed assets and
personal property of every type or description used by CWC in connection
with the System and owned by CWC, including without limitation, all
transmitters/receivers, towers and antennas, switching equipment, computer
hardware and all spare parts, accessories and supplies related thereto
("Fixed Assets"). All of such Fixed Assets are identified on Schedule
1.1(a) attached hereto and made a part hereof.
(b) Leases, Contracts, Options and Other Obligations. All leases,
contracts, options, manufacturers' warranties and other rights related to
the System set forth on Schedule 1.1(b) attached hereto and made a part
hereof ("Contracts").
(c) Licenses and Certificates. All authorizations, grants, permits
and other licenses, including, without limitation, all licenses and
certificates from the United States Federal Communications Commission (the
"FCC"), United States Federal Aviation Administration ("FAA") and
applicable state regulatory commissions (individually, a "State
Commission" and collectively, the "State Commissions"), issued in
connection
with the System on or before the Closing Date, and all applications and
construction permits related thereto ("Licenses"). All of such Licenses
are identified on Schedule 1.1(c) attached hereto and made a part hereof.
(d) Current Assets. All current assets of CWC on the Closing Date
including, without limitation, prepaid expenses and trade and other
accounts and notes receivable, if any, but only to the extent such current
assets are included in the Working Capital Adjustment (as described in
Section 1.6(a) below) ("Current Assets").
(e) Mobile Telephone Units. All mobile telephone units and related
components, spare parts and accessories, owned, used or leased and either
(i) related to the System and either maintained in inventory or shipped by
a supplier and en-route for delivery on the Closing Date to the extent
that with respect to such en-route property title has transferred to CWC
upon shipment or (ii) related to the System and in the custody of
customers of the System (on a rented or leased basis) or repair or service
personnel on the Closing Date ("Mobile Phones").
(f) Other Assets and Rights. All computer software including source
and object codes, accounting data, trade secrets, customer lists, supplier
lists, including rights under any acquisition agreement or agreements
whereby the Assets were acquired, rights under any pending lawsuits or
claims (other than claims related to tax matters, claims related to
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