EXHIBIT 10.7
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT ("Agreement") is made as of December 27, 2004 (the
"Effective Date"), by and between ESP Wireless Technology Group, Inc., whose
primary address is 0000 Xxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000 ("Buyer"), and
Champion Communication Services, Inc., whose primary address is 0000 Xxxxxxxxx
Xxxxx, Xxxxx 000, Xxx Xxxxxxxxx, Xxxxx 00000 ("Seller").
RECITALS
Seller holds the licenses ("Licenses") listed on Schedule A attached hereto that
have been granted by the Federal Communications Commission ("FCC") to operate
certain Private Mobile Radio Service ("PMRS") station(s) listed on Schedule A
("Stations"), and is the owner and operator of such Stations;
Seller desires to assign the License(s) to Buyer upon grant of all requisite FCC
consents and Buyer desires to be assigned the License(s), and Seller desires to
sell to Buyer, and Buyer desires to purchase from Seller, all Seller's right,
title and interest in and to the assets listed on Schedule A ("Purchased
Assets"); and
Seller and Buyer desire to enter into this Agreement to cause the purchase and
sale of the Purchased Assets free and clear of all liens and encumbrances, and
to cause the assignment of the License(s), pursuant to the terms set forth
herein.
Now, therefore, in consideration of the covenants and agreements contained
herein, and for other valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Parties (as defined below), intending to be
legally bound hereby, agree as follows:
ARTICLE I
DEFINITIONS
The following capitalized terms, as used in this Agreement, shall have the
meanings set forth in this Article:
"Act" means the Communications Act of 1934, as amended, 47 U.S.C. Sections 151
et seq. (2004).
"Agreement" means this Asset Purchase Agreement, together with its schedules,
exhibits, annexes, appendices, and other documents referred to hereunder, as the
same may be amended or modified in accordance with the terms hereof.
"Assignment Application" means the FCC Form 603, or other appropriate
applications or documentation, to be completed by the Parties requesting FCC
consent to the assignment of the License(s) from Seller to Buyer or its
designee.
"Bankruptcy" means with respect to any Party: (i) the making by the Party of a
general assignment for the benefit of creditors or an admission in writing of
the Party's inability to pay its debts when due; (ii) the commencement by or
against the Party of any liquidation, dissolution, bankruptcy, reorganization,
insolvency, or other proceeding for the relief of financially distressed
debtors, or the appointment for the Party, or for a substantial part of the
Party's assets, of a receiver, liquidator, custodian, or trustee, and if any of
the events referred to in this item (ii) occur involuntarily, the failure of the
same to be dismissed, stayed, or discharged within ninety (90) days; or (iii)
the entry of an order for relief against the Party under Chapter 11 of the
United States Bankruptcy Code.
"Closing" means the consummation of the transaction contemplated in this
Agreement in accordance with its provisions.
"Closing Date" means the date on which the Closing occurs.
"FCC Consent" means the action taken by the FCC granting its consent to the
assignment of the Licenses contemplated by this Agreement.
"Final Order" means that forty-five (45) days shall have elapsed from the
effective date of the FCC Consent without the filing of any adverse request,
petition or appeal by any third party or by the FCC on its own motion with
respect to the FCC Consent, or any resubmission of any Assignment Application,
or, if challenged, the FCC Consent shall have been reaffirmed or upheld and the
applicable period for seeking further administrative or judicial review shall
have expired without the filing of any action, petition, or request for further
review.
"Indemnified Buyer Group" means Buyer and its officers and directors.
"Indemnified Seller Group" means Seller and its officers and directors.
"Liens" means all liens, liabilities, claims, mortgages, obligations,
restrictions, or other encumbrances of any kind or nature, whether absolute,
legal, equitable, accrued, contingent or otherwise, including, without
limitation, any rights of first refusal.
"Management Agreement" shall have the meaning set forth in Section 2.08.
"Party" or "Parties" means the parties to this Agreement or their successors and
permitted assigns.
"Person" means an individual, corporation, association, partnership, joint
venture, trust, estate, or other entity or organization, other than either
Party.
"Purchase Price" means the aggregate price paid for the Purchased Assets set
forth in Section 2.05.
"Purchased Assets" means the Station(s) and the assets (including the Station
Contracts) listed on Schedule A.
"Rules" means the relevant rules and regulations of the FCC.
"Spectrum Lease Agreement" shall have the meaning set forth in Section 2.07.
"Station(s)" mean the facilities licensed under the call sign(s) listed on
Schedule A.
"Station Contracts" mean the site leases, management contracts, and other
contractual obligations listed on Schedule A.
ARTICLE II
PURCHASE AND SALE OF ASSETS; ASSIGNMENT OF LICENSES
2.01 Recitals. The foregoing Recitals are true and correct and form a
part of this Agreement.
2.02 Interim Closing. The Parties agree that no later than December 31,
2004, they shall have executed the Spectrum Lease Agreement and the Management
Agreement, and Seller shall have provided to Buyer all equipment and other
information required under the Spectrum Lease Agreement and the Management
Agreement (the "Interim Closing"). The date of such Interim Closing shall be
referred to herein as the "Interim Closing Date."
2.03 Purchase and Sale of Assets; Assignment of License(s). Subject to
the terms and conditions hereof and pursuant to a Xxxx of Sale, Assignment and
Assumption Agreement, a form of which is attached hereto as Schedule B, on the
Closing Date Seller shall assign, transfer, sell, convey and deliver to Buyer or
its designee all Seller's right, title and interest in and to the Purchased
Assets, free and clear of all Liens, and shall assign and deliver to Buyer or
its designee the License(s), for the Purchase Price, as set forth in Section
2.05(c) herein.
2.04 Assumption of Liabilities. Buyer is not assuming and shall not be
responsible for any liabilities or obligations of Seller, whether arising out of
or in connection with the Purchased Assets or Licenses, except for the
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obligations relating to the Purchased Assets and the Licenses for the period on
and after the Closing Date. Such assumed liabilities are specifically set forth
on Schedule A.
2.05 Purchase Price. Buyer shall pay one million four hundred fifty
thousand dollars ($1,450,000) to Seller for the Purchased Assets, in readily
available funds, as follows:
(a) Upon execution of this Agreement, the Spectrum Lease
Agreement and the Management Agreement by the Parties, Buyer shall deposit, into
a joint order escrow held by Cold Creek Consulting, Inc. (the "Escrow") pursuant
to the Escrow Agreement, a form of which is attached hereto as Schedule C, ten
percent (10%) of the Purchase Price (the "Down Payment").
(b) At the Interim Closing, Buyer shall deposit, into the
Escrow, ninety percent (90%) of the Purchase Price ("Additional Deposit") (the
Down Payment and the Additional Deposit are collectively referred to as the
"Escrowed Funds"). At the Interim Closing, all accrued interest on the Escrowed
Funds shall be paid to Buyer.
(c) At the Closing, except as otherwise set forth in this
Section 2.05 or in Section 6.04 below, Buyer shall pay to Seller the Purchase
Price by directing that the Escrowed Funds, together with interest accrued
thereon after the Interim Closing, shall be distributed to Seller. If, as of
June 30, 2005, any License has not yet been assigned by Seller to Buyer (each an
"Unassigned License"), the Parties mutually agree, in good faith, to enter into
a separate agreement for the valuation and assignment of the Unassigned
License(s) upon satisfaction of all applicable conditions and for the conveyance
of any related Purchased Assets upon satisfaction of all applicable conditions.
2.06 Allocation of Purchase Price. The Purchase Price shall be
allocated for tax and adjustment purposes among the Purchased Assets based on
the agreement of the Parties as specified on Schedule A of this Agreement. The
Parties hereby agree that the allocation of the Purchase Price shall be
controlling for tax purposes and shall be utilized in preparing Internal Revenue
Service ("IRS") Form 8594. In the event of any conflict in allocations among
such forms filed with the IRS or any other state taxing authority, the
allocation set forth on Schedule A shall be controlling.
2.07 Spectrum Lease Agreement. Upon execution of this Agreement, the
Parties also shall execute a Short-Term De Facto Transfer Spectrum Lease
Agreement ("Spectrum Lease Agreement"), a form of which is attached hereto as
Schedule D. In consideration of Seller permitting Buyer to operate the Stations
specified on Schedule A of the Spectrum Lease Agreement, Buyer shall be
obligated under the Spectrum Lease Agreement to pay Seller twenty thousand
dollars ($20,000) ("Lease Fee") for each full month from the Effective Date of
this Agreement until the Closing Date or until termination of this Agreement
under Article VIII herein ("Lease Fee Payment Period"). The Purchase Price to be
paid at the Closing shall be reduced by any Lease Fee payments made by Seller to
Buyer prior to the Closing Date. The Lease Fee shall be paid from the funds in
the Escrow pursuant to the terms of the Escrow Agreement.
2.08 Management Agreement. Upon execution of this Agreement, the
Parties also shall execute a Management Agreement, a form of which is attached
hereto as Schedule E. In consideration of Seller permitting Buyer to operate the
Stations specified on Schedule A of the Management Agreement, Buyer shall be
obligated under the Management Agreement to pay Seller ten dollars ($10.00) for
each full month from the Effective Date of this Agreement until the Closing Date
or until termination of this Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.01 Seller's Representations and Warranties. Except as otherwise set
forth in Schedule A, Seller hereby represents and warrants to Buyer that, as of
the Effective Date and as of the Closing Date: (i) Seller or its affiliate is
the lawful, beneficial and exclusive owner of the Purchased Assets, and Seller
will have the unrestricted right to sell or cause the sale of such Purchased
Assets and to assign the Station Contracts to Buyer free and clear of all Liens;
(ii) this Agreement has been duly authorized and approved by all required
corporate action of Seller; (iii) neither the execution nor the delivery of this
Agreement nor the consummation of the transaction contemplated hereby will
conflict with, or result in any violation or default under, any term of the
articles of incorporation, organizational documents, or by-laws of Seller, or
any agreement, mortgage, indenture, license, permit, lease or
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other instrument, judgment, decree, order, law or regulation by which Seller is
bound; (iv) the Purchased Assets are in good working order and repair, subject
to ordinary wear and tear, and are sufficient to operate the Stations as
currently operated by Seller and to the best of Seller's knowledge there are no
material changes in the Equipment transferred with the System as listed on the
summary of Licenses and Equipment attached to Schedule A; (v) Seller is the
lawful grantee of the Licenses and has the right, upon grant of FCC Consent
thereto, to assign the Licenses to Buyer; (vi) the Licenses are valid and in
good standing with the FCC, and Seller is in compliance in all material respects
with all statutes, rules, and regulations concerning construction, loading, and
spacing of the Licenses or the facilities associated therewith, and all other
federal statutes, Rules, regulations, and policies of the FCC applicable to
Seller, the Licenses, or the Stations (collectively, the "Laws"); (vii) the
Stations are not currently short-spaced by any third party, nor, after the
execution of this Agreement by both Parties, will they be short-spaced by any
third parties, or will they be subject to or operating under any agreement
encumbering any of the Licenses or any FCC waiver of otherwise applicable Laws;
(viii) there is no pending or, to the best of Seller's knowledge, threatened
action by the FCC or any other governmental agency or third party to suspend,
revoke, terminate or challenge any of the Licenses or otherwise investigate the
operation of the Stations; (ix) no person or entity holds or has been granted a
right of first refusal or other right or option to purchase the Purchased
Assets, the Stations or any part thereof; (x) the Stations are fully constructed
and operational as required by the Laws; (xi) all information provided by Seller
to Buyer concerning the Stations, the Licenses, the Purchased Assets and the
assumed liabilities listed on Schedule A including, but not limited to, all
historical financial information, are true and complete in all material respects
and there has been no material decrease in the revenue generated from the System
as reflected in the October 2004 financials and subsequent transmittals from
Seller to Buyer through the Interim Closing; (xii) Seller is not in default
under any of the Station Contracts; (xiii) all Station Contracts and customer
contracts are fully assignable by Seller to Buyer, subject to the Parties
obtaining any necessary third party consents to the assignment thereof and (xiv)
Seller has paid all applicable federal, state and local taxes due and/or payable
with respect to the operation of the System prior to the Interim Closing .
3.02 Buyer's Representations and Warranties. Buyer hereby represents
and warrants to Seller that, as of the Effective Date and as of the Closing
Date: (i) Buyer is duly incorporated and in good standing under the laws of the
state of its incorporation as well as all other states in which it transacts
business; (ii) this Agreement has been duly authorized and approved by all
required corporate action of Buyer; (iii) Buyer is financially and legally able
to meet its obligations hereunder; and (iv) neither the execution nor the
delivery of this Agreement nor the consummation of the transaction contemplated
hereby will conflict with, or result in any material violation or default under,
any term of the articles of incorporation or by-laws of Buyer, or any agreement,
mortgage, indenture, license, permit, lease or other instrument, judgment,
decree, order, law or regulation by which Buyer is bound.
ARTICLE IV
COVENANTS
4.01 Seller's Covenants. Seller hereby covenants and agrees that from
the Effective Date until the Closing:
(a) Conduct of Business. Seller shall: (i) maintain and
preserve, or cause to be maintained and preserved, the Purchased Assets, and
conduct, or cause to be conducted, the business of the Station(s), in a
reasonable and prudent manner, in the ordinary and usual course, and consistent
with industry practice; (ii) not enter into any lease or other material
agreement with respect to the Purchased Assets other than the leases and
agreements already entered into, without the prior written consent of Buyer;
(iii) not create, assume or incur any indebtedness with respect to the Purchased
Assets without the prior written consent of Buyer; (iv) not sell transfer,
dispose of, or create or suffer any Lien on any of the Purchased Assets without
the prior written consent of Buyer; (v) not take or cause to be taken any other
action which would have a material adverse effect on any of the Purchased
Assets, including, without limitation, the value or condition thereof; (vi)
satisfy, and obtain the release of, all Liens, if any, not assumed by Buyer; and
(vii) take all necessary actions to maintain the continued validity of the
License(s).
(b) No Shop. Neither Seller, nor any of its agents, shall take
any action, directly or indirectly, to solicit indications of interest in, or
offers for, the sale of the Purchased Assets or assignment of the License(s),
from any Person. Seller shall promptly inform Buyer of any offers or
solicitations to purchase any of the Purchased Assets or be assigned any of the
License(s), including the terms thereof, made by any third party.
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(c) Further Assurances. Seller shall execute and deliver such
other instruments of transfer and take such other action as Buyer may reasonably
request in order to put Buyer in possession of, and to vest in Buyer good,
valid, and unencumbered title to the Purchased Assets in accordance with this
Agreement and to consummate the transaction contemplated by this Agreement.
(d) Non-Compete. Except as otherwise set forth below with
respect to the Channel Capacity Agreement with Orange Crush Recycle, LP listed
on Schedule A ("Orange Crush Agreement"), for three (3) years from the Effective
Date ("Non-compete Period"), Seller shall not, either directly or indirectly, as
an equity owner, partner, investor, director, manager, officer, affiliate,
employee, agent, consultant or otherwise, (i) engage in the ownership, operation
and/or management of PMRS stations and related brokerage transactions within a
one hundred (100) mile radius around the Sears Tower in downtown Chicago,
Illinois, (ii) employ, solicit the employment of, or induce or seek to induce
the termination of the employment of any person employed by Buyer, or (iii)
interfere with or disrupt the creation or continuation of any business
relationship, contractual or otherwise, between Buyer and any third party with
which Buyer or Seller has had such a relationship during the six (6) months
preceding the Closing Date or during the Non-compete Period (the "Restricted
Activities"). The Non-compete Period for Restricted Activities with respect to
the Orange Crush Agreement shall commence on the Effective Date and shall
continue for one (1) year after expiration of the Orange Crush Agreement.
(ii) The Parties agree that the duration and
geographic scope of the non-competition provision set forth in this Section
4.01(d) are reasonable. If any court determines that the duration or the
geographic scope, or both, are unreasonable and that such provision is to that
extent unenforceable, the Parties agree that the provision shall remain in full
force and effect for the greatest time period and in the greatest area that
would not render it unenforceable.
(iii) The Parties agree that a breach by Seller of
any of the provisions of this Section 4.01(d) would cause irreparable damage to
Buyer. Therefore, Buyer shall be entitled, without the necessity of posting a
bond (which is hereby waived) to preliminary and permanent injunctions
restraining Seller from breaching or continuing any breach of any provision of
this Section 4.01(d), in addition to all other legal and equitable remedies to
which Buyer is entitled. The existence of any claim on the part of Seller
against Buyer, whether arising from this Agreement or otherwise, shall not
constitute a defense to the enforcement of injunctive relief or any other remedy
available to Buyer.
(iv) The remedies available to Buyer in this Section
4.01(d) with respect to any breach or claim of breach of this Section 4.01(d)
are cumulative. Buyer may, at its sole discretion, elect to pursue any or all of
such remedies. Such remedies may be enforced successively or concurrently.
4.02 Buyer's Covenants. Buyer shall execute and deliver such other
instruments of transfer and take such other action as may be reasonably
necessary to consummate the transaction contemplated by this Agreement.
4.03 Covenants of Both Parties. The Parties each covenant and agree
that:
(a) Assignment Application. Promptly following the Effective
Date, but in no event later than five (5) business days thereafter, the Parties
shall prepare and jointly file with the FCC their respective portions of the
Assignment Application.
(b) Disclosure to Parties. If either Party should become
aware, prior to the Closing, that any of its representations, warranties or
covenants is inaccurate or incapable of being performed, such Party shall
promptly give written notice of such inaccuracy or incapability to the other
Party; provided, however, that nothing contained in this Section 4.03(b) shall
relieve the Party bound by such representation, warranty or covenant from
complying with such representation, warranty, or covenant.
(c) Confidentiality. Except as otherwise required by law, by
court or by governmental order, neither Party shall disclose, or allow to be
disclosed, any confidential information of the other Party, except to each
Party's officers, directors, and attorneys, accountants, and employees involved
in this transaction, and only then on the condition that such individuals not
disclose the information disclosed to them.
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(d) Spectrum Lease Agreement; Management Agreement. The
Parties covenant to comply with the terms and conditions of the Spectrum Lease
Agreement, the Management Agreement, and with applicable Laws.
ARTICLE V
CLOSING CONDITIONS
5.01 Conditions to Buyer's Obligations. Buyer's obligations to perform
hereunder shall be subject to the satisfaction by Seller, or waiver in writing
by Buyer, of each of the following conditions precedent at or prior to the
Closing:
(a) Representations, Warranties and Obligations. All Seller's
representations and warranties contained in this Agreement shall be true and
correct in all material respects as of the Closing Date. Seller shall have
performed and complied with all its covenants and obligations under this
Agreement in all material respects.
(b) Third Party Consents. Seller shall have obtained and
delivered to Buyer or its designee all necessary consents and approvals of third
parties or governmental authorities to permit Buyer to acquire the Purchased
Assets without the addition of any condition which would, in the opinion of
Buyer, have an adverse effect on any of the Purchased Assets. Seller also shall
have made all registrations, qualifications, declarations, or filings with, or
notices to, any federal, state or local governmental authority or other third
party required on the part of Seller in connection with the execution of this
Agreement or the consummation of the transaction contemplated hereby.
(c) FCC Consent. The FCC shall have granted its consent to the
assignment of the Licenses to Buyer or its designee without the addition of any
condition that would have a material adverse effect on the Licenses, and that
such grant shall have become a Final Order.
(d) Liens and Indebtedness. All Liens and indebtedness with
respect to the Purchased Assets shall have been released to Buyer's
satisfaction.
5.02 Conditions to Seller's Obligations. Seller's obligations to
perform hereunder shall be subject to the satisfaction by Buyer, or waiver in
writing by Seller, of the following conditions precedent at or prior to the
Closing:
(a) Representations, Warranties and Obligations. All Buyer's
representations and warranties contained in this Agreement shall be true and
correct in all material respects as of the Closing Date. Buyer shall have
performed and complied with all its covenants and obligations under this
Agreement in all material respects.
(b) Third Party Consents. Buyer shall have obtained and
delivered to Seller all necessary consents and approvals of third parties or
governmental authorities to permit Buyer to acquire the Purchased Assets. Buyer
also shall have made all registrations, qualifications, declarations, or filings
with, or notices to, any federal, state or local governmental authority or other
third party required on the part of Buyer in connection with the execution of
this Agreement or the consummation of the transaction contemplated hereby.
(c) FCC Consent. The FCC shall have granted its consent to the
assignment of the Licenses to Buyer or its designee without the addition of any
condition that would have a material adverse effect on the Licenses, and that
such grant shall have become a Final Order.
ARTICLE VI
TRANSFER OF OPERATING RIGHTS; CLOSINGS
6.01 Transfer of Operating Rights. On the Effective Date, the Parties
shall execute the Spectrum Lease Agreement and the Management Agreement. The
Spectrum Lease Agreement and the Management Agreement shall be effective no
later than December 31, 2004.
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6.02 Closing. The Closing hereunder shall take place at the offices of
Seller, located at 0000 Xxxxxxxxx Xx. #000, Xxx Xxxxxxxxx, Xxxxx, at 10:00 AM
local time, on the tenth (10th) or the first business day after the tenth (10th)
day after the later of: (i) subject to Section 2.05(c) herein, the date on which
the grant of the FCC Consent becomes a Final Order (unless such condition
precedent to closing is waived by the Parties); or (ii) the satisfaction of all
other conditions specified in Article V hereof with respect to the Purchased
Assets; or (iii) on such other date and/or at such other place as may be
mutually agreed upon by the Parties in writing.
6.03 Seller's Deliveries. At the Closing, Seller shall deliver to Buyer
copies of the following documents: (i) all consents and approvals obtained; (ii)
all registrations, qualifications, declarations, filings and notices made
pursuant to Section 5.01 of this Agreement; and (iii) all applicable instruments
of sale and assignment and such other documents or instruments required to
effectuate the transaction contemplated hereby.
6.04 Buyer's Deliveries. At the Closing, Buyer shall deliver to Seller:
(i) all applicable instruments of sale and assignment and such other documents
or instruments required to effectuate the transaction contemplated hereby; and
(ii) the Purchase Price (less any reductions thereto made pursuant to Section
2.07 herein) and direction to distribute the appropriate amount of Escrowed
Funds, together with interest accrued thereon after the Interim Closing, as
provided in Section 2.05 herein.
6.05 Prorations and Post-Closing Adjustments. Except as otherwise set
forth in the Spectrum Lease Agreement, appropriate proration as of the close of
business on the Closing Date shall be made with respect to ongoing items of cost
and expense relating to the Purchased Assets. Such prorations shall be
determined by Buyer with Seller's cooperation and settled in cash no later than
ninety (90) days after the Closing Date.
ARTICLE VII
INDEMNIFICATION
7.01 Indemnification by Seller. Seller shall defend, indemnify and hold
the Indemnified Buyer Group harmless from and against all direct losses,
liabilities, damages, costs or expenses (including reasonable attorney's fees,
penalties and interest) payable to or for the benefit of, or asserted by, any
party resulting from, arising out of, or incurred as a result of any act or
omission of Seller with respect to the transaction contemplated hereby,
including, without limitation: (a) the breach of any representation, warranty or
covenant made by Seller herein or in accord herewith; (b) any claim arising out
of the business of operating the Stations prior to the Closing, whether made
before or after the Effective Date; or (c) any litigation, proceeding or
governmental investigation, whether commenced before or after the Effective
Date, arising out of the business of operating the Stations prior to the
Closing.
7.02 Indemnification by Buyer. Buyer shall defend, indemnify and hold
the Indemnified Seller Group harmless from and against all direct losses,
liabilities, damages, costs or expenses (including reasonable attorney's fees,
penalties and interest) payable to or for the benefit of, or asserted by, any
party resulting from, arising out of, or incurred as a result of any act or
omission of Buyer with respect to the transaction contemplated hereby,
including, without limitation: (a) the breach of any representation, warranty or
covenant made by Buyer herein or in accord herewith; (b) any claim arising out
of the business of operating the Stations after the Closing; or (c) any
litigation, proceeding or governmental investigation arising out of the business
of operating the Stations after the Closing.
7.03 Notice of Claims. A Party (the "Indemnified Party") shall give
prompt written notice to the other Party (the "Indemnifying Party") of any claim
against the Indemnified Party which might give rise to a claim by it against the
Indemnifying Party based upon the indemnity provisions contained herein, stating
the nature and basis of the claim and the actual or estimated amount thereof;
provided, however, that failure to give such notice shall not affect the
obligation of the Indemnifying Party to provide indemnification in accord with
the provisions of this Article VII unless, and only to the extent that, such
Indemnifying Party is actually prejudiced thereby.
7.04 Right to Defend. In the event that any action, suit or proceeding
is brought against any member of the Indemnified Seller Group or the Indemnified
Buyer Group with respect to which any Party may have liability under the
indemnification provisions contained herein: (a) the Indemnifying Party shall
have the right, at its sole cost and expense, to defend such action in the name
of or on behalf of the Indemnified Party; (b) in connection with any such
action, suit or proceeding, the Parties shall render to each other such
assistance as reasonably may be
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required in order to ensure the proper and adequate defense of any such action,
suit or proceeding; and (c) an Indemnified Party shall have the right to retain
its own counsel, with the fees and expenses to be paid by the Indemnifying
Party, if representation of such Indemnified Party by the counsel retained by
the Indemnifying Party would be inappropriate because of actual or potential
differing interests between such Indemnified Party and any other party
represented by such counsel.
7.05 Settlement. Neither Party shall make any settlement of any claim
which might give rise to liability of the other Party under the indemnification
provisions contained herein without the written consent of such other Party,
which consent such other Party covenants shall not be unreasonably withheld.
7.06 WARRANTIES; LIMITATIONS ON RECOVERY.
(a) ALL THE EQUIPMENT RELATED TO THE PURCHASED ASSETS ARE
BEING SOLD "AS IS" AND "WHERE IS." BUYER ACKNOWLEDGES AND AGREES THAT, EXCEPT AS
EXPRESSLY SET FORTH IN THIS AGREEMENT, SELLER HAS NOT MADE, AND SPECIFICALLY
NEGATES AND DISCLAIMS, ANY REPRESENTATIONS, WARRANTIES, COVENANTS OR AGREEMENTS
OF ANY KIND OR CHARACTER REGARDING ANY ASPECT OF THE EQUIPMENT RELATED TO THE
PURCHASED ASSETS. HAVING BEEN GIVEN THE OPPORTUNITY TO INSPECT THE EQUIPMENT
RELATED TO THE PURCHASED ASSETS, BUYER IS RELYING SOLELY ON ITS OWN
INVESTIGATION OF THE EQUIPMENT RELATED TO THE PURCHASED ASSETS AND NOT ON ANY
INFORMATION PROVIDED OR TO BE PROVIDED BY SELLER. BUYER ACKNOWLEDGES THAT BUYER
IS ACQUIRING THE EQUIPMENT RELATED TO THE PURCHASED ASSETS "AS IS" AND "WHERE
IS" AS OF THE CLOSING DATE, WITHOUT ANY EXPRESS OR IMPLIED WARRANTIES AS TO THE
FITNESS, MERCHANTABILITY, OR CONDITION OF THE EQUIPMENT RELATED TO THE PURCHASED
ASSETS OR AS TO ANY OTHER MATTER.
(b) NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE
CONTRARY, IN NO EVENT WILL EITHER PARTY BE LIABLE TO THE OTHER PARTY, BY
INDEMNIFICATION OR OTHERWISE, FOR ANY SPECIAL, INDIRECT, CONSEQUENTIAL OR
INCIDENTAL DAMAGES OF ANY KIND INCURRED BY SUCH OTHER PARTY.
ARTICLE VIII
TERMINATION
8.01 Termination Not Due to Breach. This Agreement may be terminated
(a) at any time by mutual written consent of Seller and Buyer, or (b) at any
time after December 31, 2004, by either Party if the Interim Closing has not
occurred, unless the period within which the Interim Closing is to occur is
extended by mutual written consent of the Parties. If the Agreement is
terminated under Section 8.01(a) prior to December 31, 2004, or under Section
8.01(b), Seller shall direct the Escrowed Funds, together with accrued interest
thereon, to be distributed to Buyer. If this Agreement is terminated at any time
after the Interim Closing and such termination is not the result of a breach of
this Agreement by one of the Parties, Buyer shall pay Seller the Lease Fee for
each full month of the Lease Fee Payment Period, and Seller shall distribute the
Escrowed Funds, together with interest accrued thereon, to Buyer, and all such
payments shall be made within thirty (30) days after termination. However, if
the Agreement is terminated due to a Party's breach, the provisions of Sections
8.02 and 8.03 shall apply.
8.02 Termination Due to Breach by Buyer. In the event that Buyer fails
to comply with any material term or obligation or breaches any representation or
warranty contained in this Agreement in any material respect and does not cure
such failure within thirty (30) days of receiving written notice from Seller
thereof ("Notice of Breach"), then Seller may, at its option, by written notice
to Buyer, terminate this Agreement as of the date of the Notice of Breach. If
the Agreement is terminated under this Section 8.02, Buyer shall pay Seller the
Lease Fee for each full month of the Lease Fee Payment Period, and Seller shall
distribute the Escrowed Funds, together with interest accrued thereon, to Buyer,
and all such payments shall be made within thirty (30) days after termination.
8.03 Termination Due to Breach by Seller. In the event that Seller
fails to comply with any material term or obligation or breaches any
representation or warranty contained in this Agreement in any material respect
8
and does not cure such failure within thirty (30) days of receiving a written
Notice of Breach from Buyer, then Buyer may, at its option, by written notice to
Seller, terminate this Agreement as of the date of the Notice of Breach. If the
Agreement is terminated under this Section 8.03, Buyer shall pay Seller the
Lease Fee for each full month of the Lease Fee Payment Period, and Seller shall
distribute the Escrowed Funds, together with interest accrued thereon, to Buyer,
and all such payments shall be made within thirty (30) days after termination.
8.04 Other Agreements. In the event this Agreement is terminated, the
Spectrum Lease Agreement and the Management Agreement shall terminate as of the
date that the termination of this Agreement is effective.
ARTICLE IX
GENERAL PROVISIONS
9.01 Expenses. Except as otherwise expressly provided herein, each
Party shall pay its own expenses (including, without limitation, the fees and
expenses of its agents, representatives, counsel, and accountants) incidental to
the negotiation, drafting, and performance of this Agreement, including, without
limitation, the preparation of the applicable sections of the Assignment
Application. Buyer shall pay all sales and transfer taxes, if any, applicable to
the sale of the System to Buyer, and the Parties shall split all applicable
filing fees for the Assignment Application and for the application required by
the FCC for approval of the Spectrum Lease Agreement.
9.02 Miscellaneous. This Agreement is the entire agreement between the
Parties with respect to the subject matter herein and supersedes all prior
agreements. This Agreement may not be assigned to any third party or amended,
and no provisions herein may be waived, without the prior written consent of
both Parties. This Agreement may be executed in counterpart originals, in which
case the effect shall be the same as if both Parties had executed the same
document. Neither Party shall be liable to the other Party for any failure to
perform hereunder due to a force majeure event. Both Parties shall comply with
all applicable Laws. If any provision of this Agreement is determined invalid or
illegal, such provision shall be fully severable, and the remainder of the
Agreement shall remain in full force and effect. Any notice or communication
must be in writing and given by depositing the same in the U.S. mail, addressed
to the Party to be notified at the address first listed above, postage prepaid
and registered or certified with return receipt requested or mailing the same
via overnight delivery, or by delivering the same in person. The Parties agree
that they shall not bind each other to any contract with third parties which
might create liability in either Party for damages arising out of the
transactions contemplated herein. This Agreement does not constitute and shall
not be construed as constituting an agency, a partnership or joint venture
between the Parties, and neither Party shall have the right to obligate or bind
the other Party in any manner whatsoever, and nothing herein contained shall
give or is intended to give any rights of any kind to any third persons. Nothing
herein authorizes, or is intended to authorize, either Party to execute any
document for or on behalf of the other Party. The representations, warranties,
covenants and agreements made by Seller and Buyer shall survive the Closing, and
shall be fully enforceable at law or in equity against such other Party and its
successors and assigns for a period of two (2) years after the Closing Date. The
rights and obligations under this Agreement shall survive any merger or sale of
a Party and shall be binding upon the successors and permitted assigns of each
Party. Time is of the essence in this Agreement.
9.03 Applicable Law; Remedies.
(a) This Agreement shall be governed by and construed in
accordance with the laws of the State of Illinois without reference to conflicts
of laws rules that might require application of laws of another jurisdiction.
Any suit, action, or proceeding with respect to this Agreement shall be brought
in the courts of Xxxx County in the State of Illinois, or in the U.S. District
Court for the Northern District of Illinois. The Parties hereby accept the
exclusive jurisdiction of those courts for the purpose of any suit, action, or
proceeding brought hereunder.
(b) All disputes under this Agreement, which cannot be
resolved amicably, shall be submitted to binding arbitration under the then
existing Commercial Arbitration Rules of the American Arbitration Association.
Arbitration proceedings shall be held in Chicago, Illinois, or in a location
mutually agreed upon by the Parties. The Parties may agree on an arbitrator;
otherwise, there will be a panel of three (3) arbitrators, one (1) named in
writing by each Party within twenty (20) days after either Party serves a notice
of arbitration on the other Party, and the third named in writing by the other
two (2) arbitrators so appointed by the Parties, within ten (10) days after the
two (2) arbitrators selected by the Parties are named. No person financially
interested in this
9
Agreement or in either Party may serve as an arbitrator. The costs of the
arbitration imposed by the arbitrators and the fees of the arbitrator or
arbitrators shall be assessed against the losing party to the arbitration. The
decision of the arbitrator or arbitrators will be final, conclusive, and binding
on both Parties, and judgment thereon may be entered and enforced in any court
of competent jurisdiction.
(c) Except as set forth in Section 9.03(b) herein with respect
to arbitration of any disputes, each Party acknowledges and recognizes that a
violation or threatened violation of the restrictions, agreements or covenants
contained herein shall cause irreparable damage to the other Party, and that the
other Party shall have no adequate remedy at law for such violation or
threatened violation. Notwithstanding anything to the contrary contained herein,
each Party agrees that the other Party shall be entitled, in addition to any
other rights or remedies it might have, to obtain specific performance or
injunctive relief in order to enforce this Agreement or prevent a breach or
further breach of any specific provision hereof, without the necessity of
proving actual damages. Such right to specific performance or injunction shall
be in addition to the other Party's right to bring an action for damages or to
exercise any other right or remedy available to the other Party as a result of
any breach hereunder. The other Party shall be entitled to costs and expenses,
including reasonable attorneys' fees, incurred in enforcing its rights under
this Agreement.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as
of the Effective Date.
CHAMPION COMMUNICATION SERVICES, INC. ESP WIRELESS TECHNOLOGY GROUP, INC.
By: By:
------------------------------------- --------------------------------
Title: Title:
---------------------------------- -----------------------------
Date: Date:
----------------------------------- ------------------------------
By:
-------------------------------------
Title:
----------------------------------
Date:
-----------------------------------
10
Schedule A
PURCHASED ASSETS, LICENSES, AND ALLOCATION OF PURCHASE PRICE FOR 2.06
ILLINOIS AND INDIANA
FREQUENCY CALL SIGN COMMON NAME EXP DATE
471.3625 WIM216 Aurora 10/10/05
471.4125 WPPW614 Sears 02/14/05
471.4125 WPPW614 Aurora 02/14/05
471.4125 WPPW614 Lake Zurich 02/14/05
471.4125 WPPW614 Mokena 02/14/05
471.4375 WPRF650 Aurora 08/30/05
471.4875 WPKM555 Lake Zurich 04/23/12
471.4875 WPKM555 Mokena 04/23/12
471.5000 WPTH688 Sears 10/04/11
471.5375 WIL751 Sears 03/09/14
471.6500 WPTH688 Sears 10/04/11
471.7375 WIM333 Sears 07/10/05
471.7625 WPQB918 Aurora 05/16/05
471.7625 WPQB918 Xxxxxxx 05/16/05
471.7875 WIM418 Mokena 06/11/11
471.8125 WPPH306 Sears 12/22/14
471.8375 KVK228 Aurora 02/28/14
471.8375 KVK228 Lake Zurich 02/28/14
471.8375 KVK228 Mokena 02/28/14
471.8625 WIM783 Sears 05/07/11
471.8875 WAC835 Aurora 10/04/14
471.9125 WIM279 Sears 05/30/05
471.9125 WPYF834 LaPorte, IN 08/04/13
471.9375 WPQG661 Sears 07/10/05
471.9375 WPQG661 Aurora 07/10/05
472.0125 WPPW446 Sears 02/09/05
472.0125 WPPW446 Aurora 02/09/05
472.0125 WPPW446 Lake Zurich 02/09/05
472.0125 WPPW446 Mokena 02/09/05
472.0375 WIM335 Aurora 04/18/05
472.0375 WIM335 Sears 04/18/05
472.0375 WIM335 Lake Zurich 04/18/05
472.0375 WIM335 Mokena 04/18/05
472.0625 WIM330 Aurora 04/18/05
472.0875 WPKK836 Mokena 03/26/12
472.1125 WIM783 Sears 05/07/11
472.1625 WPKK839 Mokena 03/26/12
472.1625 WPYF834 LaPorte, IN 08/04/13
472.1875 WPQG662 Sears 07/10/05
472.1875 WPQG662 Aurora 07/10/05
472.2375 WIM351 Sears 04/24/05
472.3875 WIM310 Mokena 04/14/05
472.3875 WIM310 Lake Zurich 04/14/05
472.4125 WIM334 Sears 04/06/05
472.4375 WIM309 Aurora 04/14/05
Schedule A
472.5375 WPMJ589 Sears 08/13/13
472.5375 WPMJ589 Lake Zurich 08/13/13
472.5375 WPMJ589 Aurora 08/13/13
472.5625 WPQY721 Sears 12/05/05
472.5625 WPQY721 Lake Zurich 12/05/05
472.5625 WPQY721 Aurora 12/05/05
472.5625 WPQY721 Mokena 12/05/05
472.5625 WPQY721 Xxxxxxx 12/05/05
472.6375 WIM331 Sears 04/18/05
472.6625 WPMS683 Aurora 12/02/13
472.6875 WIM356 Aurora 04/24/05
472.7625 WIM337 Sears 04/18/05
472.7625 WIM337 Mokena 04/18/05
472.7875 WIM308 Lake Zurich 04/05/05
472.7875 WIM308 Mokena 04/05/05
472.8375 KUR418 Sears 06/01/13
472.8500 WPTH688 Sears 10/04/11
472.9875 WIM226 Aurora 03/01/11
472.9875 WIM226 Lake Zurich 03/01/11
472.9875 WIM226 Mokena 03/01/11
472.9875 WIM226 Xxxxxxx 03/01/11
476.9625 WPSK972 Sears 06/06/11
900
========================
935.1375 WPLP777 Sears 11/12/12
935.2000 WNWQ630 Sears 09/03/12
935.2375 WPML271 Xxxxxxx 09/01/13
937.1500 WNWQ629 Sears 06/21/11
450-460
========================
461.6750 WPBK943 Batavia 01/11/13
463.4750 WPBK943 Batavia 01/11/13
461.2250 WPBK943 Batavia 01/11/13
461.8750 WPBK943 Aurora 01/11/13
461.1500 WPCH518 Chicago 09/11/12
461.1750 WPCH518 Chicago 09/11/12
461.5500 WPCH518 Chicago 09/11/12
461.9750 WPGP543 Chicago 02/17/05
464.8000 WPGP543 Chicago 02/17/05
463.3500 WPBS277 Chicago 02/18/13
463.8500 WPGP543 Chicago 02/17/05
461.0750 WPCH518 Chicago 09/11/12
461.2250 WPCH518 Chicago 09/11/12
461.3750 WPCH518 Chicago 09/11/12
461.4500 WPGP543 Chicago 02/17/05
461.6250 WPCH518 Chicago 09/11/12
461.9000 WPGP543 Chicago 02/17/05
463.3000 WPBS277 Chicago 02/18/13
463.5000 WPBS277 Chicago 02/18/13
464.3000 WPBS277 Chicago 02/18/13
12
463.8250 WPIK959 Xxxxxx Township 09/22/05
461.6750 WPCH518 Chicago 09/11/12
461.7250 WPCH518 Chicago 09/11/12
462.0000 WPCH518 Chicago 09/11/12
FLORIDA
FREQUENCY CALL SIGN COMMON NAME EXP DATE
454.0250 WPOJ468 Jacksonville 04/01/09
454.1000 WPOJ498 St. Augustine 04/01/09
454.1250 WPOJ468 Jacksonville 04/01/09
454.2500 WPOJ468 Jacksonville 04/01/09
454.3000 WPOJ468 Jacksonville 04/01/09
454.5250 KNKJ682 Jacksonville 04/01/09
454.5250 KNKJ682 Fernandina Beach 04/01/09
454.5250 KNKJ682 Jacksonville 04/01/09
454.5250 KNKJ682 Jacksonville Beach 04/01/09
454.6000 KNKM267 Jacksonville Beach 04/01/09
454.6000 KNKM267 Jacksonville Beach 04/01/09
454.6000 KNKM267 Jacksonville 04/01/09
472.4625 WPTK957 Delray Beach 10/23/11
472.7625 WPPX945 Delray Beach 03/08/05
ASSUMED LIABILITIES
Channel Capacity Agreement
--------------------------
Orange Crush Recycle, X.X. Xxxxx 03/31/09
Rent per box Lessor Special Notes Expiration
--------------------------------------------------------------------------------------------------------------------
Illinois/Indiana
Sears Tower 309.13 Chicago Towers, Inc. Combining provided; rent 12/31/2005
currently based upon 33
constructed
25.00 Chicago Towers, Inc. Maintenance 12/31/2005
Lake Zurich 225.00 A-Beep, LLC Combining provided; rent 9/30/2004
currently based upon 3
constructed and operational
Aurora 280.00 CSI(not Champion) Combining provided; rent under negotiation to be 3 year
currently based upon 5 term; lease not executed
constructed and operational
Mokena 325.00 Pinnacle Towers, Inc. Combining provided; rent under negotiation to be 3 year
currently based upon 4 term; lease not executed
constructed and operational
Laporte, In 200.00 Duneland Site Investments, LLC No combining-1 box 7/31/2006
Monticello 110.00 WILL AM FM-University of Illinois 1 box month to month
13
Rossville, IN 150.00 WLFI Television 1 box month to month
Xxxxxxx 100.00 Xxxxxx Farms 1 box month to month
Minooka under neg A-Beep, LLC 1 box no current lease
Shurgard 257.00 storage month to month
Florida
St Augustine 210.00 Pinnacle Towers, Inc. 1 box month to month
Jacksonville 243.10 Tower Tech Co. of Jacksonville 4 boxes month to month
Other
Utilities/telephone associated with the operation of each site
SCHEDULE B
XXXX OF SALE, ASSIGNMENT AND ASSUMPTION AGREEMENT
THIS XXXX OF SALE, ASSIGNMENT AND ASSUMPTION AGREEMENT (this "Agreement") is
made as of March 14,, 2005, by and between ESP Wireless Technology Group, Inc.,
whose primary address is 0000 Xxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000 ("Buyer")
and Champion Communication Services, Inc., whose primary address is 0000
Xxxxxxxxx Xxxxx, Xxxxx 000, Xxx Xxxxxxxxx, Xxxxx 00000 ("Seller").
WHEREAS, Buyer and Seller are parties to that certain Asset Purchase Agreement,
dated as of December 27, 2004, by and between Buyer and Seller (the "Asset
Purchase Agreement"), which provides for the transfer and sale by Seller to
Buyer on the date hereof of the Purchased Assets, the assumption by Buyer of the
Systems Contracts, and the assumption by Buyer of the Licenses; and
WHEREAS, Buyer and Seller now desire to carry out the intent and purpose of the
Asset Purchase Agreement by executing and delivering this instrument evidencing
(i) the vesting in Buyer of the Purchased Assets, (ii) the assumption by Buyer
of the Systems Contracts, and (iii) the assumption by Buyer of the Licenses;
NOW, THEREFORE, for and in consideration of the sum of $10.00 and other good and
valuable consideration (specified in the Asset Purchase Agreement), the receipt
and sufficiency of which are hereby acknowledged, Buyer and Seller hereby agree
as follows:
1. RECITALS. The foregoing Recitals are true and correct and form a part of
this Agreement.
2. DEFINITIONS. The capitalized terms used, but not otherwise defined herein,
shall have the meanings given to them in the Asset Purchase Agreement.
3. ASSIGNMENT AND ASSUMPTION. On and subject to the terms, conditions,
provisions, restrictions and limitations set forth in the Asset Purchase
Agreement:
(a) Seller hereby grants, sells, assigns, transfers, and conveys to Buyer
and its successors and assigns all of Seller's right, title and interest in and
to all of the Purchased Assets, including the Systems Contracts, and to the
Licenses; and
(b) Buyer hereby accepts all the rights, obligations and interest of Seller
in, to and under all of the Purchased Assets, and Buyer hereby assumes and
agrees to perform and discharge the Systems Contracts and to assume the
Licenses.
4. REPRESENTATIONS AND WARRANTIES. Seller hereby incorporates all of the
representations and warranties made by it in the Asset Purchase Agreement, and
Buyer hereby incorporates all of the representations and warranties made by it
in the Asset Purchase Agreement, subject, in the case of both Seller and Buyer,
to the terms, conditions, provisions, restrictions and limitations set forth in
the Asset Purchase Agreement.
5. THIRD-PARTY CONSENTS. The Purchased Assets include certain licenses (other
than the Licenses), permits and/or contracts and/or intellectual property which
may require the consent of third parties to any assignment. Anything to the
contrary in this Agreement notwithstanding, this Agreement shall not constitute
an agreement to assign or transfer any license, permit, contract, intellectual
property or other agreement or arrangement or any claim, right or benefit
arising thereunder or resulting therefrom if an assignment or transfer or an
attempt to make such an assignment or transfer without the consent of a third
party would constitute a breach or violation thereof or affect adversely the
rights of Buyer thereunder; and any transfer or assignment to Buyer by Seller of
any interest under any such permit, contract, intellectual property or other
agreement or arrangement that requires the consent of a third party shall be
made subject to such consent or approval being obtained. In the event any such
consent or approval is not obtained on or prior to the date of this Agreement,
Seller shall use commercially reasonable efforts to obtain any such approval or
consent after the date hereof until such time as such consent or approval has
been obtained, and Seller will cooperate with Buyer in any lawful arrangement to
provide that Buyer shall receive the interest of Seller in the benefits under
any such license, permit, contract, intellectual property or other agreement or
arrangement, including performance by Seller as agent, provided that Buyer shall
undertake to pay or satisfy the corresponding
liabilities for the enjoyment of such benefit to the extent Buyer would have
been responsible therefor hereunder if such consent or approval had been
obtained.
6. NON-CONTRAVENTION. Nothing contained herein shall be deemed to alter or
amend the terms and provisions of the Asset Purchase Agreement, and in the event
of any conflict between the terms and provisions of this Agreement and the Asset
Purchase Agreement, the terms and provisions of the Asset Purchase Agreement
shall be deemed to govern and be controlling.
7. GOVERNING LAW. This Agreement shall be governed by and constructed in
accordance with the internal laws of the State of Illinois, without regard to
the conflict of law rules of such state.
8. COUNTERPARTS. This Agreement may be executed in counterparts, each of
which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of this ______ day of ________, 2005.
SELLER:
CHAMPION COMMUNICATION SERVICES, INC.
By:
---------------------------------------
Its:
--------------------------------------
By:
---------------------------------------
Its:
--------------------------------------
BUYER:
ESP WIRELESS TECHNOLOGY GROUP, INC.
By:
---------------------------------------
Its:
--------------------------------------
SCHEDULE C
ESCROW AGREEMENT
This Escrow Agreement, is made as of December 27th, 2004, by and among
ESP Wireless Technology Group, Inc., whose primary address is 0000 Xxxxx Xxxxxx,
Xxxxxxxxxx, Xxxxxxxx 00000 ("Buyer"), Champion Communication Services, Inc.,
whose primary address is 0000 Xxxxxxxxx Xxxxx, Xxxxx 000, Xxx Xxxxxxxxx, Xxxxx
00000 ("Seller"), and Cold Creek Consulting, Inc., whose address is 00000 Xxxx
Xxxxxxxx Xx., Xxxxxx, Xxxxx 00000 ("Escrow Agent").
RECITALS
WHEREAS, Buyer and Seller have executed an Asset Purchase Agreement of
even date herewith pursuant to which Buyer shall pay Seller the sum of one
million four hundred fifty thousand dollars ($1,450,000) ("Purchase Price") in
consideration for the purchase of certain assets and the assumption of certain
Federal Communications Commission ("FCC") licenses.
WHEREAS, Buyer and Seller, in the Asset Purchase Agreement, have agreed
to escrow the Purchase Price pending closing thereon. Simultaneously with the
execution of this Escrow Agreement, Buyer has placed in escrow with Escrow Agent
the amount of one hundred forty five thousand dollars ($145,000) ("Escrow
Items"), the receipt of which is hereby acknowledged by Escrow Agent.
NOW, THEREFORE, it is hereby agreed by and between each of the
undersigned as follows:
1. The foregoing Recitals are true and correct and form a part of this
Escrow Agreement.
2. The capitalized terms used, but not otherwise defined herein, shall
have the meanings given to them in the Asset Purchase Agreement.
3. Pursuant to the Asset Purchase Agreement, upon the satisfaction of
certain conditions, Buyer shall place into escrow with Escrow Agent an
additional one million three hundred five thousand dollars ($1,305,000), which
upon deposit, shall be included in the Escrow Items.
4. Except as otherwise set forth in Section 5 below: (i) the Escrow
Items (including all interest that has accrued thereon) shall be held in escrow
by Escrow Agent until this Escrow Agreement is terminated, and thereupon the
same shall be delivered by Escrow Agent only to Buyer and Seller jointly, or to
one of them upon the written instructions of the other, or to a third party upon
the written instructions of both Buyer and Seller; (ii) authority of Escrow
Agent to act for Buyer and Seller or either of them in this respect must be
evidenced by a written instrument filed with Escrow Agent; (iii) delivery of the
Escrow Items by Escrow Agent as herein provided shall be made at the office of
Escrow Agent in Dallas, Texas, which shall be the place of performance of this
Escrow Agreement; and (iv) Escrow Agent shall act solely as a stakeholder with
respect to its duties under this Escrow Agreement.
5. Notwithstanding the terms set forth in Section 4 above, pursuant to
Section 2.07 of the Asset Purchase Agreement, Buyer has agreed to pay Seller a
monthly Lease Fee of twenty thousand dollars ($20,000) from the Escrow Items on
the first day of each month during the Lease Fee Payment Period (the "Due
Date"). Buyer and Seller hereby authorize Escrow Agent to pay Seller the Lease
Fee on each Due Date unless Escrow Agent receives written notice from either
Buyer or Seller, no later than three (3) business days prior to the Due Date,
that such payment must not be made.
6. This Escrow Agreement shall be considered as personal, and shall not
be assignable by any of the undersigned in whole or in part. Any attempted
assignment shall be void and of no force and effect. Escrow Agent assumes no
liability except as expressed in this Escrow Agreement.
ESCROW AGREEMENT Page 1
7. Should any controversy arise among any of the parties to this Escrow
Agreement or with respect to the right to receive the Escrow Items, Escrow Agent
shall have the right to institute a xxxx of interpleader in any court of
competent jurisdiction to determine the rights of the parties and, if it elects
in its discretion to do so, to tender the Escrow Items into the custody of such
court. Upon deposit of the Escrow Items with a court of competent jurisdiction
as provided above, Escrow Agent shall thereupon be discharged from all further
duties under this Escrow Agreement. Should a xxxx of interpleader be instituted,
or should Escrow Agent become involved in litigation in any manner whatsoever on
account of this Escrow Agreement or the escrow deposit made hereunder, Buyer and
Seller jointly and severally hereby bind and obligate themselves, and their
successors, assigns, heirs and legal representatives, to reimburse Escrow Agent
for any expenses, losses, costs or damages of any nature incurred in connection
with or resulting from such xxxx of interpleader or other litigation, including
reasonable attorneys' fees incurred.
8. Escrow Agent is hereby given a lien on all Escrow Items for all
indebtedness that may become owing to Escrow Agent hereunder, which lien may be
enforced by Escrow Agent by appropriate foreclosure proceedings. In making
delivery of the Escrow Items (including any accrued interest thereon), Escrow
Agent may withhold any amounts owing to it hereunder.
9. Escrow Agent is not charging a fee for its services to be rendered
under this Escrow Agreement, but is providing such services solely as a courtesy
to the parties.
10. Escrow Agent shall be under no duty or obligation to give any
notice, or to take or omit to take any other action with respect to the Escrow
Items, except to make disbursements in accordance with the terms of this Escrow
Agreement. Escrow Agent shall place any funds received under this Escrow
Agreement in an account as directed by both Buyer and Seller, and shall retain
such funds in such account until disbursed as provided herein. Escrow Agent
shall not be obligated to invest such funds or to receive interest thereon,
unless directed to do so by written instructions from Buyer and Seller. In the
event such investment instructions are received by Escrow Agent, its sole duty
shall be to invest such funds exactly in accordance with such instructions. In
connection with carrying out such investment instructions, Escrow Agent shall
not be required to exercise any discretion as to the type of investment, rate of
interest to be received or risk to be incurred. As and when any amount is needed
for a payment under this Escrow Agreement, the Escrow Agent shall cause a
sufficient amount of any investments made pursuant hereto to be converted into
cash, as directed in writing by Buyer and Seller. The Escrow Agent shall not be
liable for any loss of principal or income due to the choice of investments into
which any of the Escrow Items are invested or the conversion of such investments
into cash as provided for herein. Notwithstanding the foregoing the parties
hereby direct the Escrow Agent to invest such funds in a commercial money market
account established with Bank One, NA located in Chicago Illinois and such
account shall be titled in the name of Escrow Agent who shall control said
account subject to the terms of this Escrow Agreement.
11. Escrow Agent shall not be required to determine the validity or
sufficiency, whether in form or substance, of any instrument, document,
certificate, statement or notice contemplated by this Escrow Agreement. Escrow
Agent shall not be responsible for the identity or authority of any persons
executing or delivering written statements or instructions to the Escrow Agent.
Escrow Agent shall not be charged with knowledge of the contents or conditions
of any agreements between the parties to which Escrow Agent is not a party.
12. Escrow Agent shall have no duties except those expressly set forth
herein, and it shall not be bound by any waiver, modification, amendment,
termination or rescission of this Escrow Agreement, unless received by it in
writing, and, if its duties herein are affected, unless it shall have given its
prior written consent thereto. This Escrow Agreement may be amended, modified or
supplemented only by an instrument in writing executed by the party against
which enforcement of the amendment, modification or supplement is sought.
13. Escrow Agent shall not be under any obligation to take any legal
action in connection with this Escrow Agreement, or to appear in, prosecute or
defend any action or legal proceeding.
ESCROW AGREEMENT Page 2
14. Buyer and Seller jointly agree to reimburse Escrow Agent for any
reasonable third party costs and expenses incurred in carrying out its duties
under this Escrow Agreement. Buyer and Seller are advised to seek independent
legal counsel with respect to entering into this Escrow Agreement. Buyer and
Seller are further advised that Escrow Agent has a conflict of interest with
respect to this Escrow Agreement because of its representation of Seller in this
transaction and because of its need to protect its own interest, and they waive
such conflict.
15. Buyer and Seller jointly and severally agree to indemnify Escrow
Agent against, and to hold Escrow Agent harmless from, any and all losses,
costs, damages, expenses and claims suffered or incurred by Escrow Agent as a
result of, in connection with, or arising from or out of the actions or
omissions to act of Escrow Agent under this Escrow Agreement, except such
actions or omissions as may constitute Escrow Agent's willful misconduct or
gross negligence, and except for its failure properly to account for the Escrow
Items.
16. At any time Escrow Agent may resign upon 15 days prior written
notice to Buyer and Seller. Upon joint instructions from Buyer and Seller,
Escrow Agent shall deliver the Escrow Items to the designated substitute Escrow
Agent selected by Buyer and Seller and shall thereupon be discharged from any
further duties under this Escrow Agreement. If Buyer and Seller fail to
designate a substitute Escrow Agent within such 15 day period, Escrow Agent may,
in its sole discretion, institute a xxxx of interpleader as contemplated by this
Escrow Agreement.
17. All notices, demands, requests and other communications that may be
or are required to be given, made or sent by any party to any other party
pursuant to this Escrow Agreement shall be in writing and shall be deemed to
have been duly given or delivered by any party (a) when received by such party
if delivered by hand, (b) within one day after being sent by a recognized
overnight delivery service or (c) within three business days after being mailed
by first-class, registered or certified mail, postage prepaid, and in each case
addressed as follows:
If to Seller:
Champion Communication Services, Inc.
0000 Xxxxxxxxx Xxxxx, Xxxxx 000
Xxx Xxxxxxxxx, Xxxxx 00000
If to Buyer:
ESP Wireless Technology Group, Inc.
0000 Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
If to Escrow Agent:
Xxxxxxx Xxxx
Cold Creek Consulting, Inc.
00000 Xxxx Xxxxxxxx Xx.
Xxxxxx, Xxxxx 00000
Each party may designate by notice in writing a new address to which any notice,
demand, request or communication made thereafter be so given, made or sent.
Escrow Agent shall be responsible for acting only upon notices actually received
by it.
18. This Escrow Agreement shall be construed under the laws of the
State of Illinois, without resort to the conflict of law principles thereof. All
of Escrow Agent's rights hereunder are cumulative of any other rights it may
have by law or otherwise.
ESCROW AGREEMENT Page 3
19. This Escrow Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an
original, and such counterparts together shall constitute only one original.
20. This Escrow Agreement contains the complete agreement among the
parties with respect to the Escrow Items and the escrow provided for hereby, and
supersedes all prior agreements and understandings, whether oral or written,
among the parties with respect to the Escrow Items and such escrow. This Escrow
Agreement and the rights, interests and obligations hereunder shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
heirs, personal representatives, successors and assigns.
ESP WIRELESS TECHNOLOGY GROUP, INC.:
Dated: By:
--------------------------------- ----------------------------------
Its:
---------------------------
CHAMPION COMMUNICATION SERVICES, INC.:
Dated: By:
--------------------------------- ----------------------------------
Its:
---------------------------
By:
----------------------------------
Its:
--------------------------
COLD CREEK CONSULTING, INC.:
Dated: By:
--------------------------------- ----------------------------------
Its:
---------------------------
ESCROW AGREEMENT Page 4
SCHEDULE D
SHORT-TERM DE FACTO TRANSFER
SPECTRUM LEASE AGREEMENT
This Short-Term De Facto Transfer Spectrum Lease Agreement ("Spectrum
Lease Agreement") is made and entered into as of this 27th day of December,
2004, by and between Champion Communication Services, Inc., whose primary
address is 0000 Xxxxxxxxx Xxxxx, Xxxxx 000, Xxx Xxxxxxxxx, Xxxxx 00000
("Licensee"), and ESP Wireless Technology Group, Inc., whose primary address is
0000 Xxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000 ("Lessee"). Lessee and Licensee
may be referred to herein individually as a "Party" and collectively as
"Parties."
RECITALS
WHEREAS, Licensee is the licensee under the Federal Communications
Commission ("FCC") licenses ("Licenses") for the frequencies ("Frequencies")
listed on Schedule A; and
WHEREAS, pursuant to an Asset Purchase Agreement executed as of even
date herewith by the Parties, Licensee has agreed to assign the Licenses to
Lessee and Lessee has agreed to assume the Licenses from Licensee upon receipt
of all requisite FCC approvals ("FCC Consent"); and
WHEREAS, Lessee wishes to lease the Frequencies from Licensee ("Lease")
pending FCC Consent in accordance with the terms and conditions herein and
subject to prior FCC approval; and
WHEREAS, Licensee wishes to lease the Frequencies to Lessee pending FCC
Consent in accordance with the terms and conditions herein and subject to prior
FCC approval.
NOW, THEREFORE, in consideration of the premises and covenants
hereinafter set forth, and for good and valuable consideration the sufficiency
of which is hereby acknowledged, the Parties agree as follows:
1. Recitals. The foregoing Recitals are true and correct and form a
part of this Spectrum Lease Agreement.
2. Definitions. The capitalized terms used, but not otherwise defined
herein, shall have the meanings given to them in the Asset Purchase Agreement.
3. Effective Date; Term. This Spectrum Lease Agreement will take effect
on the date hereof ("Effective Date") and will expire on the earlier of (i) the
Closing on the Asset Purchase Agreement; (ii) one hundred eighty (180) days from
the Effective Date ("Initial Term"); provided, however, that this Spectrum Lease
Agreement will be renewed automatically at the end of the Initial Term for an
additional one hundred eighty (180) day term ("Renewal Term") if not already
terminated pursuant to Section 15 below, and provided that the Renewal Term does
not extend beyond the term of any of the Licenses (hereinafter, the Initial Term
and any Renewal Term, collectively, "Term"); or (iii) termination of this
Spectrum Lease Agreement in accordance with Section 15 below.
4. Lease Transfer Application; License Assignment Application.
(a) Lease Transfer Application: The Parties will cooperate in
filing the application required by the FCC seeking consent to the de facto
transfer of authority to use the Frequencies ("Lease Transfer Application")
within five (5) business days of the Effective Date. Lessee and Licensee shall
split the cost of all filing fees required for the Lease Transfer Application.
(b) License Assignment Application: The Parties will cooperate
in filing the Assignment Application within five (5) business days of the
Effective Date.
5. Frequency Management. Upon FCC consent to the de facto transfer of
authority from Licensee to Lessee to use the Frequencies ("FCC Lease Consent"),
Lessee will have exclusive rights to use, deploy and operate the Frequencies
during the Term. At its own expense, Lessee will be totally responsible for all
operational, engineering, maintenance, repair and other services needed to
deploy and maintain the Frequencies. Licensee, on the Effective Date, shall make
available to Lessee all equipment and information needed to deploy the
Frequencies.
Notwithstanding anything to the contrary herein, the Purchased Assets shall not
be conveyed by Licensee to Lessee until the Closing.
6. Assumption of Liabilities. Neither Party is assuming or will be
responsible for any of the other Party's liabilities or obligations, including
customer obligations, except as required by the FCC and this Spectrum Lease
Agreement. Each Party will bear its own legal, accounting and brokerage expenses
in connection with this Spectrum Lease Agreement.
7. Compensation. As compensation for Lease rights, Lessee will pay
Licensee the monthly Lease Fee of twenty thousand dollars ($20,000), due and
payable on the first business day of each month ("Due Date") with the first
Lease Fee payment due on the first business day of the first full month
following the Effective Date.
8. Revenues and Expenses. During the Term, Lessee will pay all expenses
and costs of the deployment and operation of the Frequencies, including, but not
limited to, any and all federal, state and local taxes related to the equipment
it uses to operate the Frequencies, any sales or other taxes associated with
providing service on the Frequencies, site rental, maintenance, utilities, and
all other recurring and nonrecurring costs and expenses. From the Effective Date
until this Spectrum Lease Agreement is terminated, Licensee shall not be
responsible for any expenses or costs incurred to operate the Frequencies.
Lessee will be entitled to all revenue derived from the operation of the
Frequencies during the Term.
9. Regulatory Compliance. The Parties agree and covenant to comply with
all applicable laws governing the Frequencies and the Licenses, including the
Act and the Rules (the "Applicable Laws"), and specifically represent and agree
to the following:
(a) Licensee and Lessee are familiar with the Applicable Laws
regarding a wireless service licensee's responsibility relating to spectrum
leasing, and agree to comply with all such Applicable Laws;
(b) Neither Lessee nor Licensee will represent itself as the
legal representative of the other before the FCC or any party, but will
cooperate with each other with respect to FCC matters concerning the Licenses or
the Frequencies;
(c) The Parties recognize that the Lease does not constitute
an assignment, sale or transfer of the Licenses;
(d) Lessee has primary responsibility for complying and will
comply at all times with the Applicable Laws (including the Rules set forth in
47 CFR Sections 1.9001 et seq.), and the Lease set forth in this Spectrum Lease
Agreement may be revoked, cancelled, or terminated by Licensee or the FCC if
Lessee fails to comply with any Applicable Law;
(e) Lessee will interact with the FCC on matters regarding the
Frequencies, and cause the preparation and submission to the FCC or any other
relevant authority of all reports, filings or other documents requested from
Lessee by the FCC or are otherwise required of a spectrum lessee;
(f) Lessee will maintain on file all information relating to
the Frequencies that must be maintained by Lessee under the Rules;
(g) Lessee will be subject to the same license use and
frequency operation restrictions and Applicable Laws under the Licenses as
Licensee would be, including, but not limited to restrictions and Applicable
Laws pertaining to operation, interference, and safety;
(h) If any of the Licenses is revoked or cancelled,
terminated, or otherwise ceases to be in effect, Lessee will have no continuing
authority or right to use and will vacate the leased spectrum for such
License(s) unless otherwise authorized by the FCC.
10. Covenants. During the Term: (i) Licensee will not permit any liens,
encumbrances, or short space agreements to attach to the Licenses or the
Frequencies; (ii) Lessee shall not take or omit to take any action that would
result in revocation, cancellation, or termination of any of the Licenses or in
the imposition by the FCC of any condition on a License that would have a
material adverse affect thereon; and (iii) neither Party will take any action
contrary to those permitted, or fail to take any action which would jeopardize
the rights of the other Party under this Spectrum Lease Agreement.
11. Representations and Warranties of Licensee. Licensee hereby
represents and warrants as follows: (i) this Spectrum Lease Agreement
constitutes the valid and binding obligation of Licensee entered into freely and
in accordance with Licensee's business judgment and is enforceable in accordance
with its terms; (ii) this Spectrum Lease Agreement has been duly authorized and
approved by all required corporate action of Licensee; (iii) neither the
execution nor the delivery of this Spectrum Lease Agreement, nor the completion
of the transaction contemplated hereby, will conflict with or result in any
violation of or constitute a default under any material agreement, mortgage,
indenture, license, permit, lease or other instrument, judgment, decree, order,
law or regulation by which Licensee is bound; (iv) Licensee is the lawful,
beneficial and exclusive licensee of the Licenses; (v) neither the Licenses nor
the Frequencies are subject to any agreement or understanding whatsoever with
any third party; (vi) the Licenses are valid and in good standing with the FCC:
and (vii) there is no pending or, to the best of Licensee's knowledge,
threatened action by the FCC or any other governmental agency or third party to
suspend, revoke, terminate or challenge any of the Licenses. Each of Licensee's
representations and warranties will survive the termination of the Spectrum
Lease Agreement for a period of two (2) years.
12. Representations and Warranties of Lessee. Lessee hereby represents
and warrants to Licensee as follows: (i) this Spectrum Lease Agreement
constitutes the valid and binding obligation of Lessee entered into freely and
in accordance with Lessee's business judgment and enforceable in accordance with
its terms; (ii) this Spectrum Lease Agreement has been duly authorized and
approved by all required action of Lessee; (iii) neither the execution nor the
delivery of this Spectrum Lease Agreement, nor the completion of the transaction
contemplated hereby, will conflict with or result in any material violation of
or constitute a material default under any term of the articles of incorporation
or by-laws of Lessee or any agreement, mortgage, indenture, license, permit,
lease or other instrument, judgment, decree, order, law or regulation by which
Lessee is bound; and (iv) Lessee has the requisite financial resources to
accomplish the obligations set forth in this Spectrum Lease Agreement. Each of
Lessee's representations and warranties will survive the termination of the
Spectrum Lease Agreement for a period of two (2) years.
13. Confidentiality and Non-Disclosure.
(a) Confidentiality of the Terms of this Spectrum Lease Agreement. The
terms of this Spectrum Lease Agreement that are not otherwise required to be
disclosed to the FCC in support of the Lease Transfer Application or Assignment
Application will be kept strictly confidential by the Parties and their agents,
which confidentiality will survive the termination or expiration of this
Spectrum Lease Agreement for a period of two (2) years. The Parties may make
disclosures as required by law and to employees, shareholders, agents, attorneys
and accountants (collectively, "Agents"), provided, however, that the Parties
will cause all Agents to honor the provisions of this Section 13. The Parties
will submit a confidentiality request with the FCC in the event the FCC requests
a copy this Spectrum Lease Agreement or any information regarding the terms
thereof from either of the Parties.
(b) Non-Disclosure of Confidential Information. It is contemplated
that, during the Term, the Parties may supply and/or disclose to each other
information identified as Confidential by the disclosing Party ("Information").
The Information will, during the Term and for a period of two (2) years
subsequent to the termination or expiration of the Spectrum Lease Agreement, be
kept confidential by the Parties, and not be used by the receiving Party in any
way detrimental to the disclosing Party. The receiving Party will be responsible
for any improper use of the Information by it or any of its employees,
representatives or agents. Each person to whom such Information is properly
disclosed must be advised of its confidential nature and must agree to abide by
the terms of this Section 13(b).
(i) Exclusions. The Information will not include any
information which becomes published or is in the public domain by other
than an unauthorized disclosure by the Parties, their employees,
representatives or agents.
(ii) Remedy for Breach. As a violation by the receiving Party
of the provisions of this Section 13(b) could cause irreparable injury
to disclosing Party and there may be no adequate remedy at law for such
violation, the disclosing Party will have the right, in addition to any
other remedies available to it at law or in equity, to enjoin the
receiving Party in a court of equity from further violating the
provisions.
14. Indemnification.
(a) Indemnification by Licensee. Licensee shall defend,
indemnify and hold Lessee, its officers and its directors (collectively, the
"Indemnified Lessee Group") harmless from and against all direct losses,
liabilities, damages, costs or expenses (including reasonable attorney's fees,
penalties and interest) payable to or for the benefit of, or asserted by, any
party resulting from, arising out of, or incurred as a result of any act or
omission of Licensee with respect to the transaction contemplated hereby,
including, without limitation: (a) the breach of any representation, warranty or
covenant made by Licensee herein or in accord herewith; (b) any claim brought
against Lessee by customers, employees or agents of Licensee, or any other
person or entity arising from dealings between Licensee and such entities or
persons (that are not related to Licensee's obligations under this Spectrum
Lease Agreement) or otherwise relating to Licensee or Licensee's business; or
(c) any litigation, proceeding or governmental investigation commenced before
the Effective Date arising out of the business of operating the Frequencies.
(b) Indemnification by Lessee. Lessee shall defend, indemnify
and hold Licensee, its officers and its directors (collectively, the
"Indemnified Licensee Group") harmless from and against all direct losses,
liabilities, damages, costs or expenses (including reasonable attorney's fees,
penalties and interest) payable to or for the benefit of, or asserted by, any
party resulting from, arising out of, or incurred as a result of any act or
omission of Lessee with respect to the transaction contemplated hereby,
including, without limitation: (a) the breach of any representation, warranty or
covenant made by Lessee herein or in accord herewith; (b) any claim brought
against Licensee by customers, employees, or agents of Lessee, or any other
person or entity, arising from dealings between Lessee and such entities or
persons (that are not related to Licensee's obligations under this Spectrum
Lease Agreement) or otherwise relating to the use or operation of the
Frequencies by Lessee; or (c) any litigation, proceeding or governmental
investigation commenced on or after the Effective Date arising out of the
business of operating the Frequencies.
(c) Notice of Claims. A Party (the "Indemnified Party") shall
give prompt written notice to the other Party (the "Indemnifying Party") of any
claim against the Indemnified Party which might give rise to a claim by it
against the Indemnifying Party based upon the indemnity provisions contained
herein, stating the nature and basis of the claim and the actual or estimated
amount thereof; provided, however, that failure to give such notice shall not
affect the obligation of the Indemnifying Party to provide indemnification in
accord with the provisions of this Section 14 unless, and only to the extent
that, such Indemnifying Party is actually prejudiced thereby.
(d) Right to Defend. In the event that any action, suit or
proceeding is brought against any member of the Indemnified Lessee Group or the
Indemnified Licensee Group with respect to which any Party may have liability
under the indemnification provisions contained herein: (a) the Indemnifying
Party shall have the right, at its sole cost and expense, to defend such action
in the name of or on behalf of the Indemnified Party; (b) in connection with any
such action, suit or proceeding, the Parties shall render to each other such
assistance as reasonably may be required in order to ensure the proper and
adequate defense of any such action, suit or proceeding; and (c) an Indemnified
Party shall have the right to retain its own counsel, with the fees and expenses
to be paid by the Indemnifying Party, if representation of such Indemnified
Party by the counsel retained by the Indemnifying Party would be inappropriate
because of actual or potential differing interests between such Indemnified
Party and any other party represented by such counsel.
(e) Settlement. Neither Party shall make any settlement of any
claim which might give rise to liability of the other Party under the
indemnification provisions contained herein without the written consent of such
other Party, which consent such other Party covenants shall not be unreasonably
withheld.
15. Termination.
(a) This Spectrum Lease Agreement automatically will terminate
upon the earlier of: (i) release of a Final Order denying the Lease Transfer
Application; (ii) termination of the Asset Purchase Agreement; (iii) the
Closing; (iv) expiration of the Term; (v) release of a Final Order invalidating
the Lease or otherwise requiring either Party or both Parties to terminate this
Spectrum Lease Agreement; or (vi) the loss, expiration without renewal,
revocation, termination or cancellation of all the Licenses.
(b) This Spectrum Lease Agreement may be terminated by either
Party upon material breach of the other Party after a thirty (30) day period for
cure by the breaching Party following written notice of the breach.
(c) The Parties will notify the FCC of the termination of this
Spectrum Lease Agreement with respect to any of the Frequencies within ten (10)
calendar days following the termination.
(d) If the Closing has not occurred forty-five (45) days prior
to the scheduled termination of this Spectrum Lease Agreement pursuant to
Section 15(a)(iii), then the Parties will cooperate to request continued lease
or comparable operating authority from the FCC, consistent with the terms and
conditions of this Spectrum Lease Agreement.
16. Effect of Termination. Upon the termination of this
Spectrum Lease Agreement, each Party will pay all its own fees and expenses
related to this Spectrum Lease Agreement and the transaction contemplated
herein, and the Parties will have no further liability hereunder except by
reason of any breach of this Spectrum Lease Agreement or of any representation,
warranty or covenant contained herein occurring prior to the date of
termination. Immediately upon termination of this Spectrum Lease Agreement,
except termination under Section 15 (a)(ii) above, Lessee promptly will
terminate all use of the Frequencies. Any termination of this Spectrum Lease
Agreement, however effected, will not release either Party from any liability or
other consequences arising from any breach or violation by that Party of the
terms of this Spectrum Lease Agreement prior to the effective time of the
termination.
17. Miscellaneous. This Spectrum Lease Agreement is the entire
agreement between the Parties with respect to the subject matter herein and
supersedes all prior agreements. This Spectrum Lease Agreement may not be
assigned to any third party or amended, and no provisions herein may be waived,
without the prior written consent of both Parties. This Spectrum Lease Agreement
may be executed in counterpart originals, in which case the effect shall be the
same as if both Parties had executed the same document. Neither Party shall be
liable to the other Party for any failure to perform hereunder due to a force
majeure event. If any provision of this Spectrum Lease Agreement is determined
invalid or illegal, such provision shall be fully severable, and the remainder
of the Spectrum Lease Agreement shall remain in full force and effect. Any
notice or communication must be in writing and given by depositing the same in
the U.S. mail, addressed to the Party to be notified at the address first listed
above, postage prepaid and registered or certified with return receipt requested
or mailing the same via overnight delivery, or by delivering the same in person.
The Parties agree that they shall not bind each other to any contract with third
parties which might create liability in either Party for damages arising out of
the transaction contemplated herein. This Spectrum Lease Agreement does not
constitute and shall not be construed as constituting an agency, a partnership
or joint venture between the Parties, and neither Party shall have the right to
obligate or bind the other Party in any manner whatsoever, and nothing herein
contained shall give or is intended to give any rights of any kind to any third
persons. Nothing herein authorizes, or is intended to authorize, either Party to
execute any document for or on behalf of the other Party. The representations,
warranties, covenants and agreements made by each Party shall survive
termination or expiration of this Spectrum Lease Agreement, and shall be fully
enforceable at law or in equity against such other Party and its successors and
assigns for a period of two (2) years after such termination or expiration. The
rights and obligations under this Spectrum Lease Agreement shall survive any
merger or sale of a
Party and shall be binding upon the successors and permitted assigns of each
Party. Time is of the essence in this Spectrum Lease Agreement.
18. Applicable Law; Remedies.
(a) This Spectrum Lease Agreement shall be governed by and
construed in accordance with the laws of the State of Illinois without reference
to conflicts of laws rules that might require application of laws of another
jurisdiction. Any suit, action, or proceeding with respect to this Spectrum
Lease Agreement shall be brought in the courts of Xxxx County in the State of
Illinois, or in the U.S. District Court for the Northern District of Illinois.
The Parties hereby accept the exclusive jurisdiction of those courts for the
purpose of any suit, action, or proceeding brought hereunder.
(b) All disputes under this Spectrum Lease Agreement, which
cannot be resolved amicably, shall be submitted to binding arbitration under the
then existing Commercial Arbitration Rules of the American Arbitration
Association. Arbitration proceedings shall be held in Chicago, Illinois, or in a
location mutually agreed upon by the Parties. The Parties may agree on an
arbitrator; otherwise, there will be a panel of three (3) arbitrators, one (1)
named in writing by each Party within twenty (20) days after either Party serves
a notice of arbitration on the other Party, and the third named in writing by
the other two (2) arbitrators so appointed by the Parties, within ten (10) days
after the two (2) arbitrators selected by the Parties are named. No person
financially interested in this Spectrum Lease Agreement or in either Party may
serve as an arbitrator. The costs of the arbitration imposed by the arbitrators
and the fees of the arbitrator or arbitrators shall be assessed against the
losing party to the arbitration. The decision of the arbitrator or arbitrators
will be final, conclusive, and binding on both Parties, and judgment thereon may
be entered and enforced in any court of competent jurisdiction.
(c) Except as set forth in Section 18(b) herein with respect
to arbitration of any disputes, each Party acknowledges and recognizes that a
violation or threatened violation of the restrictions, agreements or covenants
contained herein shall cause irreparable damage to the other Party, and that the
other Party shall have no adequate remedy at law for such violation or
threatened violation. Notwithstanding anything to the contrary contained herein,
each Party agrees that the other Party shall be entitled, in addition to any
other rights or remedies it might have, to obtain specific performance or
injunctive relief in order to enforce this Spectrum Lease Agreement or prevent a
breach or further breach of any specific provision hereof, without the necessity
of proving actual damages. Such right to specific performance or injunction
shall be in addition to the other Party's right to bring an action for damages
or to exercise any other right or remedy available to the other Party as a
result of any breach hereunder. The other Party shall be entitled to costs and
expenses, including reasonable attorneys' fees, incurred in enforcing its rights
under this Spectrum Lease Agreement.
IN WITNESS WHEREOF, the Parties hereto have executed this Spectrum
Lease Agreement as of the date first above written.
CHAMPION COMMUNICATION SERVICES, INC. ESP WIRELESS TECHNOLOGY GROUP, INC.
By: By:
--------------------------------- --------------------------------
Name: Name:
Title: Title:
Date: Date:
By:
--------------------------------
Name:
Title:
Date:
SCHEDULE A
LICENSES AND FREQUENCIES
Frequency Call Sign Location Exp. Date
--------- --------- -------- ---------
471.4125 WPPW614 Sears 02/14/05
471.4125 WPPW614 Aurora 02/14/05
471.4125 WPPW614 Lake Zurich 02/14/05
471.4125 WPPW614 Mokena 02/14/05
471.4875 WPKM555 Lake Zurich 04/23/12
471.4875 WPKM555 Mokena 04/23/12
471.5000 WPTH688 Sears 10/04/11
471.5375 WIL751 Sears 03/09/04
471.6500 WPTH688 Sears 10/04/11
471.7375 WIM333 Sears 07/10/05
471.7625 WPQB918 Aurora 05/16/05
471.7625 WPQB918 Xxxxxxx 05/16/05
471.8375 KVK228 Aurora 02/28/14
471.8375 KVK228 Lake Zurich 02/28/14
471.8375 KVK228 Mokena 02/28/14
471.8625 WIM783 Sears 05/07/11
472.1125 WIM783 Sears 05/07/11
472.1625 WPKK839 Mokena 03/26/12
472.3875 WIM310 Mokena 04/14/05
472.3875 WIM310 Lake Zurich 04/14/05
472.4125 WIM334 Sears 04/06/05
472.5375 WPMJ589 Sears 08/13/13
472.5375 WPMJ589 Lake Zurich 08/13/13
472.5375 WPMJ589 Aurora 08/13/13
472.5625 WPQY721 Sears 12/05/05
472.5625 WPQY721 Lake Zurich 12/05/05
472.5625 WPQY721 Aurora 12/05/05
472.5625 WPQY721 Mokena 12/05/05
472.5625 WPQY721 Xxxxxxx 12/05/05
472.6375 WIM331 Sears 04/18/05
472.8375 KUR418 Sears 06/01/13
472.8500 WPTH688 Sears 10/04/11
476.9625 WPSK972 Sears 06/06/11
472.4625 WPTK957 Delray Beach 10/23/11
472.7625 WPPX945 Delray Beach 3/8/05
454.0250 WPOJ468 Jacksonville 4/1/09
454.1250 WPOJ468 Jacksonville 4/1/09
454.2500 WPOJ468 Jacksonville 4/1/09
454.3000 WPOJ468 Jacksonville 4/1/09
454.1000 WPOJ498 St. Augustine 4/1/09
454.5250 KNKJ682 Jacksonville 4/1/09
454.5250 KNKJ682 Fernandina Beach 4/1/09
454.5250 KNKJ682 Jacksonville 4/1/09
454.5250 KNKJ682 Jacksonville Beach 4/1/09
454.6000 KNKM267 Jacksonville Beach 4/1/09
454.6000 KNKM267 Jacksonville Beach 4/1/09
454.6000 KNKM267 Jacksonville 4/1/09
SCHEDULE E
MANAGEMENT AGREEMENT
This Management Agreement is made and entered into as of this 27th day
of December, 2004, by and between Champion Communication Services, Inc., whose
primary address is 0000 Xxxxxxxxx Xxxxx, Xxxxx 000, Xxx Xxxxxxxxx, Xxxxx 00000
("Licensee"), and ESP Wireless Technology Group, Inc., whose primary address is
0000 Xxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000 ("Manager"). Manager and Licensee
may be referred to herein individually as a "Party" and collectively as
"Parties."
RECITALS
WHEREAS, Licensee is the licensee under the Federal Communications
Commission ("FCC") licenses ("Licenses") listed on Schedule A; and
WHEREAS, pursuant to an Asset Purchase Agreement executed as of even
date herewith by the Parties, Licensee has agreed to assign the Licenses to
Manager and Manager has agreed to assume the Licenses from Licensee upon receipt
of all requisite FCC approvals ("FCC Consent"); and
Whereas, Licensee desires that Manager manage the Stations, consistent
with all applicable FCC laws, rules and regulations ("Applicable Laws"), on
behalf of and for the benefit of Licensee; and
Whereas, Manager desires to manage the Stations, consistent with all
Applicable Laws, on behalf of and for the benefit of Licensee.
NOW, THEREFORE, in consideration of the premises and covenants
hereinafter set forth, and for good and valuable consideration the sufficiency
of which is hereby acknowledged, the Parties agree as follows:
1. Recitals. The foregoing Recitals are true and correct and form a
part of this Management Agreement.
2. Definitions. The capitalized terms used, but not otherwise defined
herein, shall have the meanings given to them in the Asset Purchase Agreement.
3. Effective Date; Term. This Management Agreement will take effect on
the date hereof ("Effective Date") and will expire on the earlier of (i) the
Closing on the Asset Purchase Agreement; (ii) one hundred eighty (180) days from
the Effective Date ("Initial Term"); provided, however, that this Management
Agreement will be renewed automatically at the end of the Initial Term for an
additional one hundred eighty (180) day term ("Renewal Term") if not already
terminated pursuant to Section 14 below, and provided that the Renewal Term does
not extend beyond the term of any of the Licenses (hereinafter, the Initial Term
and any Renewal Term, collectively, "Term"); or (iii) termination of this
Management Agreement in accordance with Section 14 below.
4. Obligations.
(a) Manager's Obligations: Consistent with the Applicable
Laws, Manager will provide complete system management services on behalf of
Licensee for the Stations. In carrying out these obligations, Manager shall not
engage in any operational, budget, personnel or technical activities with
respect to the Stations without involving Licensee in all related
decision-making activities and without first obtaining Licensee's written
consent. Manager will have exclusive rights to operate the Stations during the
Term. At its own expense, Manager will be totally responsible for all
operational, engineering, maintenance, repair and other services needed to
operate and maintain the Stations. Licensee, on the Effective Date, shall make
available to Manager all equipment and information needed to operate the
Stations. Notwithstanding anything to the contrary herein, the Purchased Assets
shall not be conveyed by Licensee to Manager until the Closing.
(b) Owner's Obligations: Consistent with the Applicable Laws,
Licensee, as licensee of the Stations, shall exercise complete control thereof
and shall be completely responsible for their operation.
5. Assumption of Liabilities. Neither Party is assuming or will be
responsible for any of the other Party's liabilities or obligations, including
customer obligations, except as required by the FCC and this Management
Agreement. Each Party will bear its own legal, accounting and brokerage expenses
in connection with this Management Agreement.
6. Compensation. As compensation for the rights granted hereunder,
Manager will pay Licensee the monthly fee of ten dollars ($10.00), due and
payable on the first business day of each month ("Due Date"), with the first fee
payment due on the first business day of the first full month following the
Effective Date.
7. Revenues and Expenses. During the Term, Manager will pay all
expenses and costs of the operation of Stations, including, but not limited to,
any and all federal, state and local taxes related to the equipment it uses to
operate the Stations, any sales or other taxes associated with providing service
on the Stations, site rental, maintenance, utilities, and all other recurring
and nonrecurring costs and expenses. From the Effective Date until this
Management Agreement is terminated, Licensee shall not be responsible for any
expenses or costs incurred to operate the Stations. Manager will be entitled to
all revenue derived from the operation of the Stations during the Term.
8. Regulatory Compliance. The Parties agree and covenant to comply with
all Applicable Laws, and specifically represent and agree to the following:
(a) Licensee and Manager are familiar with the Applicable Laws
regarding a wireless service licensee's responsibility relating to the Stations,
and agree to comply with all such Applicable Laws.
(b) Neither Manager nor Licensee will represent itself as the
legal representative of the other before the FCC or any party, but will
cooperate with each other with respect to FCC matters concerning the Licenses or
the Stations.
(c) The Parties recognize that this Management Agreement does
not constitute an assignment, sale or transfer of the Licenses.
(d) Licensee has primary responsibility for complying and will
comply at all times with the Applicable Laws. Manager will comply at all times
with the Applicable Laws. This Management Agreement may be revoked, cancelled,
or terminated by either party or the FCC if the other party fails to comply with
any Applicable Law.
(e) Licensee will interact with the FCC on matters regarding
the Stations, and cause the preparation and submission to the FCC or any other
relevant authority of all reports, filings or other documents requested by the
FCC or are otherwise required of a licensee of the Stations.
(f) Licensee will maintain on file all information relating to
the Stations that must be maintained by Licensee under the Applicable Laws.
(g) Manager will be subject to the same license use and
frequency operation restrictions and Applicable Laws under the Licenses as
Licensee would be, including, but not limited to restrictions and Applicable
Laws pertaining to operation, interference, and safety.
2
(h) If any of the Licenses is revoked or cancelled,
terminated, or otherwise ceases to be in effect, Manager will have no continuing
authority or right to operate the affected Stations.
9. Covenants. During the Term: (i) Licensee will not permit any liens,
encumbrances, or short space agreements to attach to the Licenses or the
Stations; (ii) Neither Party shall take or omit to take any action that would
result in revocation, cancellation, or termination of any of the Licenses or in
the imposition by the FCC of any condition on a License that would have a
material adverse affect thereon; (iii) Manager shall cooperate with Licensee in
its fulfillment of all obligations including, but not limited to, its
obligations under Section 8 herein; and (iv) neither Party will take any action
contrary to those permitted, or fail to take any action which would jeopardize
the rights of the other Party under this Management Agreement.
10. Representations and Warranties of Licensee. Licensee hereby
represents and warrants as follows: (i) this Management Agreement constitutes
the valid and binding obligation of Licensee entered into freely and in
accordance with Licensee's business judgment and is enforceable in accordance
with its terms; (ii) this Management Agreement has been duly authorized and
approved by all required corporate action of Licensee; (iii) neither the
execution nor the delivery of this Management Agreement, nor the completion of
the transaction contemplated hereby, will conflict with or result in any
violation of or constitute a default under any material agreement, mortgage,
indenture, license, permit, lease or other instrument, judgment, decree, order,
law or regulation by which Licensee is bound; (iv) Licensee is the lawful,
beneficial and exclusive licensee of the Licenses; (v) neither the Licenses nor
the Stations are subject to any agreement or understanding whatsoever with any
third party; (vi) the Licenses are valid and in good standing with the FCC: and
(vii) there is no pending or, to the best of Licensee's knowledge, threatened
action by the FCC or any other governmental agency or third party to suspend,
revoke, terminate or challenge any of the Licenses. Each of Licensee's
representations and warranties will survive the termination of this Management
Agreement for a period of two (2) years.
11. Representations and Warranties of Manager. Manager hereby
represents and warrants to Licensee as follows: (i) this Management Agreement
constitutes the valid and binding obligation of Manager entered into freely and
in accordance with Manager's business judgment and enforceable in accordance
with its terms; (ii) this Management Agreement has been duly authorized and
approved by all required action of Manager; (iii) neither the execution nor the
delivery of this Management Agreement, nor the completion of the transaction
contemplated hereby, will conflict with or result in any material violation of
or constitute a material default under any term of the articles of incorporation
or by-laws of Manager or any agreement, mortgage, indenture, license, permit,
lease or other instrument, judgment, decree, order, law or regulation by which
Manager is bound; and (iv) Manager has the requisite financial resources to
accomplish the obligations set forth in this Management Agreement. Each of
Manager's representations and warranties will survive the termination of the
Management Agreement for a period of two (2) years.
12. Confidentiality and Non-Disclosure.
(a) Confidentiality of the Terms of this Management Agreement.
The terms of this Management Agreement that are not otherwise required to be
disclosed to the FCC will be kept strictly confidential by the Parties and their
agents, which confidentiality will survive the termination or expiration of this
Management Agreement for a period of two (2) years. The Parties may make
disclosures as required by law and to employees, shareholders, agents, attorneys
and accountants (collectively, "Agents"), provided, however, that the Parties
will cause all Agents to honor the provisions of this Section 12. The Parties
will submit a confidentiality request with the FCC in the event the FCC requests
a copy this Management Agreement or any information regarding the terms thereof
from either of the Parties.
(b) Non-Disclosure of Confidential Information. It is
contemplated that, during the Term, the Parties may supply and/or disclose to
each other information identified as Confidential by the disclosing Party
("Information"). The Information will, during the Term and for a period of two
(2) years subsequent to the
3
termination or expiration of this Management Agreement, be kept confidential by
the Parties, and not be used by the receiving Party in any way detrimental to
the disclosing Party. The receiving Party will be responsible for any improper
use of the Information by it or any of its employees, representatives or agents.
Each person to whom such Information is properly disclosed must be advised of
its confidential nature and must agree to abide by the terms of this Section
12(b).
(i) Exclusions. The Information will not include any
information which becomes published or is in the public domain
by other than an unauthorized disclosure by the Parties, their
employees, representatives or agents.
(ii) Remedy for Breach. As a violation by the
receiving Party of the provisions of this Section 12(b) could
cause irreparable injury to disclosing Party and there may be
no adequate remedy at law for such violation, the disclosing
Party will have the right, in addition to any other remedies
available to it at law or in equity, to enjoin the receiving
Party in a court of equity from further violating the
provisions.
13. Indemnification.
(a) Indemnification by Licensee. Licensee shall defend,
indemnify and hold Manager, its officers and its directors (collectively, the
"Indemnified Manager Group") harmless from and against all direct losses,
liabilities, damages, costs or expenses (including reasonable attorney's fees,
penalties and interest) payable to or for the benefit of, or asserted by, any
party resulting from, arising out of, or incurred as a result of any act or
omission of Licensee with respect to the transaction contemplated hereby,
including, without limitation: (a) the breach of any representation, warranty or
covenant made by Licensee herein or in accord herewith; (b) any claim brought
against Manager by customers, employees or agents of Licensee, or any other
person or entity arising from dealings between Licensee and such entities or
persons (that are not related to Licensee's obligations under this Management
Agreement) or otherwise relating to Licensee or Licensee's business; or (c) any
litigation, proceeding or governmental investigation commenced before the
Effective Date arising out of the business of operating the Stations.
(b) Indemnification by Manager. Manager shall defend,
indemnify and hold Licensee, its officers and its directors (collectively, the
"Indemnified Licensee Group") harmless from and against all direct losses,
liabilities, damages, costs or expenses (including reasonable attorney's fees,
penalties and interest) payable to or for the benefit of, or asserted by, any
party resulting from, arising out of, or incurred as a result of any act or
omission of Manager with respect to the transaction contemplated hereby,
including, without limitation: (a) the breach of any representation, warranty or
covenant made by Manager herein or in accord herewith; (b) any claim brought
against Licensee by customers, employees, or agents of Manager, or any other
person or entity, arising from dealings between Manager and such entities or
persons (that are not related to Licensee's obligations under this Management
Agreement) or otherwise relating to the use or operation of the Stations by
Manager; or (c) any litigation, proceeding or governmental investigation
commenced on or after the Effective Date arising out of the business of
operating the Stations.
(c) Notice of Claims. A Party (the "Indemnified Party") shall
give prompt written notice to the other Party (the "Indemnifying Party") of any
claim against the Indemnified Party which might give rise to a claim by it
against the Indemnifying Party based upon the indemnity provisions contained
herein, stating the nature and basis of the claim and the actual or estimated
amount thereof; provided, however, that failure to give such notice shall not
affect the obligation of the Indemnifying Party to provide indemnification in
accord with the provisions of this Section 13 unless, and only to the extent
that, such Indemnifying Party is actually prejudiced thereby.
(d) Right to Defend. In the event that any action, suit or
proceeding is brought against any member of the Indemnified Manager Group or the
Indemnified Licensee Group with respect to which any Party may
4
have liability under the indemnification provisions contained herein: (a) the
Indemnifying Party shall have the right, at its sole cost and expense, to defend
such action in the name of or on behalf of the Indemnified Party; (b) in
connection with any such action, suit or proceeding, the Parties shall render to
each other such assistance as reasonably may be required in order to ensure the
proper and adequate defense of any such action, suit or proceeding; and (c) an
Indemnified Party shall have the right to retain its own counsel, with the fees
and expenses to be paid by the Indemnifying Party, if representation of such
Indemnified Party by the counsel retained by the Indemnifying Party would be
inappropriate because of actual or potential differing interests between such
Indemnified Party and any other party represented by such counsel.
(e) Settlement. Neither Party shall make any settlement of any
claim which might give rise to liability of the other Party under the
indemnification provisions contained herein without the written consent of such
other Party, which consent such other Party covenants shall not be unreasonably
withheld.
14. Termination.
(a) This Management Agreement automatically will terminate
upon the earlier of: (i) termination of the Asset Purchase Agreement; (ii) the
Closing; (iii) expiration of the Term; or (iv) the loss, expiration without
renewal, revocation, termination or cancellation of all the Licenses.
(b) This Management Agreement may be terminated by either
Party upon material breach of the other Party after a thirty (30) day period for
cure by the breaching Party following written notice of the breach.
15. Effect of Termination. Upon the termination of this Management
Agreement, each Party will pay all its own fees and expenses related to this
Management Agreement and the transaction contemplated herein, and the Parties
will have no further liability hereunder except by reason of any breach of this
Management Agreement or of any representation, warranty or covenant contained
herein occurring prior to the date of termination. Immediately upon termination
of this Management Agreement, except termination under Section 14(a)(ii) above,
Manager promptly will terminate all operation of the Stations. Any termination
of this Management Agreement, however effected, will not release either Party
from any liability or other consequences arising from any breach or violation by
that Party of the terms of this Management Agreement prior to the effective time
of the termination.
16. Miscellaneous. This Management Agreement is the entire agreement
between the Parties with respect to the subject matter herein and supersedes all
prior agreements. This Management Agreement may not be assigned to any third
party or amended, and no provisions herein may be waived, without the prior
written consent of both Parties. This Management Agreement may be executed in
counterpart originals, in which case the effect shall be the same as if both
Parties had executed the same document. Neither Party shall be liable to the
other Party for any failure to perform hereunder due to a force majeure event.
If any provision of this Management Agreement is determined invalid or illegal,
such provision shall be fully severable, and the remainder of the Management
Agreement shall remain in full force and effect. Any notice or communication
must be in writing and given by depositing the same in the U.S. mail, addressed
to the Party to be notified at the address first listed above, postage prepaid
and registered or certified with return receipt requested or mailing the same
via overnight delivery, or by delivering the same in person. The Parties agree
that they shall not bind each other to any contract with third parties which
might create liability in either Party for damages arising out of the
transaction contemplated herein. This Management Agreement does not constitute
and shall not be construed as constituting an agency, a partnership or joint
venture between the Parties, and neither Party shall have the right to obligate
or bind the other Party in any manner whatsoever, and nothing herein contained
shall give or is intended to give any rights of any kind to any third persons.
Nothing herein authorizes, or is intended to authorize, either Party to execute
any document for or on behalf of the other Party. The representations,
warranties, covenants and agreements made by each Party shall survive
termination or expiration of this Management Agreement, and shall be fully
enforceable at law or in equity against such other Party and its successors and
assigns for a period of two (2) years after such termination or expiration. The
rights and obligations under this Management Agreement shall survive any merger
or sale of a Party
5
and shall be binding upon the successors and permitted assigns of each Party.
Time is of the essence in this Management Agreement.
17. Applicable Law; Remedies.
(a) This Management Agreement shall be governed by and
construed in accordance with the laws of the State of Illinois without reference
to conflicts of laws rules that might require application of laws of another
jurisdiction. Any suit, action, or proceeding with respect to this Management
Agreement shall be brought in the courts of Xxxx County in the State of
Illinois, or in the U.S. District Court for the Northern District of Illinois.
The Parties hereby accept the exclusive jurisdiction of those courts for the
purpose of any suit, action, or proceeding brought hereunder.
(b) All disputes under this Management Agreement, which cannot
be resolved amicably, shall be submitted to binding arbitration under the then
existing Commercial Arbitration Rules of the American Arbitration Association.
Arbitration proceedings shall be held in Chicago, Illinois, or in a location
mutually agreed upon by the Parties. The Parties may agree on an arbitrator;
otherwise, there will be a panel of three (3) arbitrators, one (1) named in
writing by each Party within twenty (20) days after either Party serves a notice
of arbitration on the other Party, and the third named in writing by the other
two (2) arbitrators so appointed by the Parties, within ten (10) days after the
two (2) arbitrators selected by the Parties are named. No person financially
interested in this Management Agreement or in either Party may serve as an
arbitrator. The costs of the arbitration imposed by the arbitrators and the fees
of the arbitrator or arbitrators shall be assessed against the losing party to
the arbitration. The decision of the arbitrator or arbitrators will be final,
conclusive, and binding on both Parties, and judgment thereon may be entered and
enforced in any court of competent jurisdiction.
(c) Except as set forth in Section 17(b) herein with respect
to arbitration of any disputes, each Party acknowledges and recognizes that a
violation or threatened violation of the restrictions, agreements or covenants
contained herein shall cause irreparable damage to the other Party, and that the
other Party shall have no adequate remedy at law for such violation or
threatened violation. Notwithstanding anything to the contrary contained herein,
each Party agrees that the other Party shall be entitled, in addition to any
other rights or remedies it might have, to obtain specific performance or
injunctive relief in order to enforce this Management Agreement or prevent a
breach or further breach of any specific provision hereof, without the necessity
of proving actual damages. Such right to specific performance or injunction
shall be in addition to the other Party's right to bring an action for damages
or to exercise any other right or remedy available to the other Party as a
result of any breach hereunder. The other Party shall be entitled to costs and
expenses, including reasonable attorneys' fees, incurred in enforcing its rights
under this Management Agreement.
6
IN WITNESS WHEREOF, the Parties hereto have executed this Management
Agreement as of the date first above written.
CHAMPION COMMUNICATION SERVICES, INC. ESP WIRELESS TECHNOLOGY GROUP, INC.
By: By:
--------------------------------- ----------------------------------
Name: Name:
Title: Title:
Date: Date:
By:
---------------------------------
Name:
Title:
Date:
7
SCHEDULE A
LICENSES
Frequency Call Sign Location Exp. Date
--------- --------- -------- ---------
935.1375 WPLP777 Sears 11/12/12
935.2000 WNWQ630 Sears 09/03/12
935.2375 WPML271 Xxxxxxx 09/01/13
937.1500 WNWQ629 Sears 06/21/11
461.6750 WPBK943 Batavia 01/11/13
463.4750 WPBK943 Batavia 01/11/13
461.2250 WPBK943 Batavia 01/11/13
461.8750 WPBK943 Aurora 01/11/13
461.1500 WPCH518 Chicago 09/11/12
461.1750 WPCH518 Chicago 09/11/12
461.5500 WPCH518 Chicago 09/11/12
461.9750 WPGP543 Chicago 02/17/05
464.8000 WPGP543 Chicago 02/17/05
463.3500 WPBS277 Chicago 02/18/13
463.8500 WPGP543 Chicago 02/17/05
461.0750 WPCH518 Chicago 09/11/12
461.2250 WPCH518 Chicago 09/11/12
461.3750 WPCH518 Chicago 09/11/12
461.4500 WPGP543 Chicago 02/17/05
461.6250 WPCH518 Chicago 09/11/12
461.9000 WPGP543 Chicago 02/17/05
463.3000 WPBS277 Chicago 02/18/13
463.5000 WPBS277 Chicago 02/18/13
464.3000 WPBS277 Chicago 02/18/13
463.8250 WPIK959 Xxxxxx Township 09/22/05
461.6750 WPCH518 Chicago 09/11/12
461.7250 WPCH518 Chicago 09/11/12
462.0000 WPCH518 Chicago 09/11/12
471.3625 WIM216 Aurora 10/10/05
471.4375 WPRF650 Aurora 08/30/05
471.7875 WIM418 Mokena 06/11/11
471.8125 WPPH306 Sears 12/22/04
471.8875 WAC835 Aurora 10/04/04
471.9125 WIM279 Sears 05/30/05
471.9125 WPYF834 LaPorte, IN 08/04/13
471.9375 WPQG661 Sears 07/10/05
471.9375 WPQG661 Aurora 07/10/05
472.0125 WPPW446 Sears 02/09/05
472.0125 WPPW446 Aurora 02/09/05
472.0125 WPPW446 Lake Zurich 02/09/05
472.0125 WPPW446 Mokena 02/09/05
472.0375 WIM335 Aurora 04/18/05
472.0375 WIM335 Sears 04/18/05
Schedule A
472.0375 WIM335 Lake Zurich 04/18/05
472.0375 WIM335 Mokena 04/18/05
472.0625 WIM330 Aurora 04/18/05
472.0875 WPKK836 Mokena 03/26/12
472.1625 WPYF834 LaPorte, IN 08/04/13
472.1875 WPQG662 Sears 07/10/05
472.1875 WPQG662 Aurora 07/10/05
472.2375 WIM351 Sears 04/24/05
472.4375 WIM309 Aurora 04/14/05
472.6625 WPMS683 Aurora 12/02/13
472.6875 WIM356 Aurora 04/24/05
472.7625 WIM337 Sears 04/18/05
472.7625 WIM337 Mokena 04/18/05
472.7875 WIM308 Lake Zurich 04/05/05
472.7875 WIM308 Mokena 04/05/05
472.9875 WIM226 Aurora 03/01/11
472.9875 WIM226 Lake Zurich 03/01/11
472.9875 WIM226 Mokena 03/01/11
472.9875 WIM226 Xxxxxxx 03/01/11
Schedule A