ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement made as of this 28th day of June, 1996 (the
"Agreement"), by and among Advanced Radio Technologies Corporation, a Delaware
corporation ("ART" or "Purchaser"), DCT Communications, Inc., a California
corporation ("DCT" or "Seller"), Xxxxxx X. Xxxxxxxxxxxx (solely for the purposes
of Section 17 hereof), an individual ("Xxxxxxxxxxxx"), and the Estate of Xxxxxxx
X. Xxxxxxxx ("Neustadt"), through its representative, Xxxxxxxxx Xxxxxxxx (solely
for the purposes of Section 17 hereof).
W I T N E S S E T H:
WHEREAS, various of the parties hereto have executed various agreements,
including without limitation, a Services Agreement between DCT and ART, dated
February 11, 1994 (the "First Services Agreement"); a Second Services
Agreement (the "Second Services Agreement") between the same two parties,
effective September 1, 1994, which replaced the First Services Agreement; a
Put/Call Agreement between the same two parties, effective September 1, 1994
(the "Put/Call Agreement"); and a Consulting and Loan Agreement between DCT
and ART and concurred in by Xxxxxxxxxxxx, dated March 1, 1995 (the
"Consulting Agreement," together with the First Services Agreement and the
Put/Call Agreement, but not the Second Services Agreement, are hereinafter
referred to as the "Superseded Agreements");
WHEREAS, the parties desire to cancel and supersede all of the Superseded
Agreements between any and all of the parties simultaneously with the execution
of this Agreement; and
WHEREAS, ART wishes to purchase, and DCT wishes to assign the
Authorizations, as defined below, in exchange for the consideration described in
Section 1.4 hereof (the "Transaction").
NOW, THEREFORE, in consideration of the premises and the respective
covenants, representations and warranties herein contained, the parties hereto
agree as follows:
1. ASSIGNMENT OF AUTHORIZATIONS.
1.1 ASSIGNMENT OF AUTHORIZATIONS. Subject to and upon the terms and
conditions of this Agreement, DCT agrees to sell and assign to ART and ART
agrees to acquire from DCT, free and clear of any pledge, lien, options,
warrants, security interest, mortgage claim, charge, liability (other than
liabilities generally imposed on 38GHz licenses by FCC rules), right of first
refusal or other encumbrance (other than for taxes not yet due and payable) of
any kind whatsoever (the "Liens"), at the Closing(s), as defined below, all of
DCT's right, title and interest in, to and under the following assets:
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the sixteen (16) 38 GHz radio authorizations granted by the FCC listed
on Schedule 1.1 hereto (individually, an "Authorization"; collectively, the
"Authorizations").
1.2 NO ASSUMPTION OF ANY LIABILITIES. Except as required by the terms of
the First Services Agreement, as amended by the Amendment to DCT Services
Agreement entered into between DCT and ART of even date herewith (as amended,
the "Services Agreement"), ART will not assume, satisfy or perform any of the
debts, liabilities, obligations or commitments of DCT other than liabilities
with respect to the Authorizations and Future Authorizations imposed generally
on 38GHz licensees by FCC rules. DCT will retain all such debts, liabilities,
obligations and commitments.
1.3 DEPOSIT. ART shall pay to DCT, upon the execution of this Agreement
by each party, One Hundred Thousand and No/100 Dollars ($100,000) as a
deposit under this Agreement (the "Deposit"). The Deposit shall be held by
DCT for the exclusive benefit of ART nad DCT pursuant to the terms of this
Agreement, and no other person or entity shall have any right, title or
interest therein. If at least one Authorization is assigned to ART, the
Deposit shall become the exclusive property of DCT. The amount of the
Deposit shall be credited against the Closing Payment (as hereinafter
defined). If the Closing does not occur because of DCT's breach of its
obligations herein, DCT shall promptly return the Deposit to ART. If Closing
does not occur for any other reason, the Deposit shall be retained by DCT;
provided, however, if Closing does not occur because the FCC does not approve
the transfer of at least one Authorization on or before the 14th month after
the Effective Date of this Agreement, DCT shall promptly return the Deposit
to ART.
1.4 DETERMINATION OF THE CONSIDERATION. The Purchase Price that ART shall
pay for the Authorizations is Three Million Six Hundred Thousand Dollars
($3,600,000), subject to adjustment as provided in Section 1.5 hereof (with such
adjustments, if any, the "Purchase Price").
1.5 ADJUSTMENTS DUE TO ASSIGNMENT OF LESS THAN ALL OF THE AUTHORIZATIONS.
In the event that the FCC fails to consent to the assignment by DCT to ART of
all of the Authorizations but consents to the assignment of one or more of the
Authorizations, the Purchase Price shall be calculated by multiplying Three
Million Six Hundred Thousand and No/100 Dollars ($3,600,000) by a fraction, the
numerator of which is the number of POPs, as hereinafter defined, contained in
the Authorizations that have been consented to by the FCC for assignment, and
the denominator of which is the total number of POPs contained in the service
area of all of the Authorizations identified in Schedule 1.1. "POPs" shall mean
the population in the service area of an Authorization, as set forth in Schedule
1.5.
1.6 CONSTRUCTION OF FACILITIES; FCC APPROVAL.
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1.6.1 CONSTRUCTION OF FACILITIES. ART shall construct and shall place
traffic upon the facilities with respect to each Authorization in a manner
sufficient to at least satisfy the minimum construction and traffic loading
requirements then in effect under FCC rules for each Authorization by the
earlier of the construction certification date for such licenses and September
30, 1996, and shall continue to satisfy such FCC construction and operation
requirements as then exist to maintain and/or assign the Authorizations to a
third party.
1.6.2 FCC CONSENT. ART, at its expense, shall use its best efforts
to submit to the FCC as quickly as possible, and in any event prior to
November 29, 1996, one or more applications (individually, an "Application";
collectively, the "Applications") requesting the FCC's written consent to the
assignment of the Authorizations to ART or designers of ART. DCT shall
cooperate with respect to the preparation, filing, prosecution and appealing
of any denial of such Applications; provided, however, DCT shall not incur
any out-of-pocket costs in connection therewith. ART shall bear the cost of
preparing, filing, prosecuting and appealing the denial of any Applications,
including fees charged by the FCC in connection with the Applications. ART
shall prosecute each Application vigorously, and shall appeal the denial of
any Application; provided, ART shall not be required to appeal any denial if
(i) such denial is based on DCT's qualifications as the holder of the
Authorization, or as a transferee or any action or inaction of DCT (excluding
any inaction for which ART is responsible hereunder or in the Service
Agreement, as defined herein), or (ii) ART reasonably determines that the
cost of appeal is likely to be unreasonably expensive.
1.7 RIGHTS OF FIRST OFFER. In addition to its purchase of the
Authorizations hereunder, ART shall have a right of first offers as described
in this Section 1.7, with respect to such authorizations (if any) as may be
granted pursuant to the 38GHz pending applications filed in the name of DCT
which are listed in Schedule 1.7 (the "Future Authorizations"). The terms of
such first right of offer are as follows:
1.7.1 FIRST OFFER NOTICE. In the event DCT desires to assign any of
the Future Authorizations, it shall give written notice (the "First Offer
Notice") to ART of its desire to assign such Future Authorization(s). The First
Offer Notice shall (a) advise ART that DCT desires to assign the Future
Authorizations, (b) state the proposed sale price (the "First Offer Sale
Price"), (c) set forth the other material terms of the proposed offer ("Other
First Offer Sale Terms"), which shall include and xxxxxxx money deposit equal to
at least 10% of the cash portion of the First Offer Sale Price (the "First Offer
Deposit") and may include a lease arrangement with respect to the Future
Authorizations for the period from completion of construction through the date
of sale of the Future Authorizations, and (d) give ART the option to purchase
the Future Authorization(s) at the First Offer Sale Price and upon the Other
First Offer Sale Terms.
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1.7.1 RESPONSE BY ART. Within 30 days after the giving of the
First Offer Notice, ART shall give notice to DCT to the effect that: (a) ART
has elected to purchase all (but not less than all) of the Future
Authorizations proposed to be sold in the First Offer Notice, in which event
such notice shall be sent with the First Offer Deposit, or (b) ART does not
wish to purchase the Future Authorizations proposed to be sold in the First
Offer Notice, in which event DCT shall have the right to offer to sell and
sell such Future Authorizations to any third party on terms and conditions no
more favorable to such third party than the Other First Offer Sale Terms and
providing for a sale price equal to the First Offer Sale Price. If ART does
not give notice to DCT in answer to the First Offer Notice within such 30-day
period, ART shall be deemed to have given the answer set forth in Section
1.7.2(b), above, on the last day of such 30-day period. If ART gives or is
deemed to have given the answer set forth in clause (b), above, and DCT does
not sell such Future Authorizations within 180m days after the date ART gives
or is deemed to have given such answer, DCT shall not transfer such Future
Authorization without first making a new offer to ART in accordance with
this Section 1.7.
1.7.3 CLOSING ON SALE OF FUTURE AUTHORIZATIONS. In the event
that ART accepts the offer set forth in the First Offer Notice within the
time and in the manner set forth herein, the closing of the sale of the
Future Authorizations proposed to be sold in the First Offer Notice shall be
held at Xxxx and Xxxx, 0000 Xxxxxxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxxxx, X.X.
00000, and at the time and on the date specified by ART by written notice to
DCT, which date shall be on a business day on or before the 30th day after
the later of acceptance of the offer or FCC consent to the proposed
assignment of such Future Authorizations. ART shall be responsible for
obtaining FCC consent to the proposed assignment of Future Authorizations to
the same extent as described herein with respect to the Authorizations. DCT
shall transfer to ART the Future Authorizations free and clear of all Liens,
except any of the foregoing arising under the terms of this Agreement. At the
Closing, (a) DCT shall execute an Instrument of Assignment assigning all of
DCT's right, title and interest in and to such Future Authorizations, (b) ART
shall tender its payment of the cash portion of the First Offer Sale Price
(less the amount of the First Offer Deposit already paid) to DCT by wire
transfer of immediately available federal funds to an account specified by
DCT, and (c) DCT and ART shall perform the Other First Offer Sale Terms to be
performed by them.
1.7.4 DEFAULT. In the event that ART defaults in any obligation
it has to purchase the Future Authorizations proposed to be sold in the First
Offer Notice pursuant to this Section 1.7, then DCT shall be paid the First
Offer Deposit as liquidated damages, and shall thereafter be entitled to sell
any and all Future Authorizations to any third party without the requirement
of any first right of offer to ART.
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1.7.5 CONTROL OF FUTURE AUTHORIZATIONS. DCT shall have the
absolute right to control the processing of the applications for Future
Authorizations, to compromise or amend an application for a Future Authorization
and to enter into settlement agreements with respect thereto. No dismissal or
compromise of any one or more of the applications for Future Authorizations
shall constitute a default under this Agreement, notwithstanding any covenant or
representation to the contrary.
2. CLOSING.
2.1 DCT and ART agree that a Closing on the sale of each Authorization
(individually, a "Closing"; collectively, in the event there is more than one
date on which assignments of Authorizations are made by DCT to ART, the
"Closings") shall take place on such date and at such time within 30 days of
satisfaction of the conditions relating to each Authorization contained in
Sections 9 and 10, as mutually agreed by the parties (individually, the "Closing
Date"; collectively, the "Closing Dates"), at the offices of Xxxx and Xxxx, 0000
Xxxxxxxxxxxx Xxxxxx, X.X., Xxxxx 0000, Xxxxxxxxxx, XX 00000, or at such other
place and time as the parties agree.
2.2 DELIVERIES AT CLOSING. At Closing, DCT shall deliver or cause to be
delivered to ART:
2.2.1 an Instrument of Assignment in the form attached hereto as
EXHIBIT A, assigning each Authorization to be assigned at such Closing from
DCT to ART;
2.2.2 certified copies of resolutions of the shareholders and the
board of directors of DCT authorizing DCT to enter into and perform its
obligations under this Agreement;
2.2.3 a copy of the charter documents of DCT certified by the
appropriate public official and a copy of the by-laws of DCT certified by
its Secretary; and
2.2.4 a Good Standing Certificate of DCT dated as of or near the
Closing issued by the Secretary of State of the State of California.
2.3 DELIVERIES BY ART AT CLOSING. At each Closing, ART shall deliver to
DCT the portion of the Purchase Price, in cash or by certified check or wire
transfer, applicable to the Authorizations to be assigned by DCT to ART at such
Closing.
2.4 CERTIFICATIONS; OPINIONS. At each Closing, ART and DCT shall deliver
the certificates, opinions of counsel and other documents described in Sections
9 and 10 hereof, unless waived.
2.5 CONSENTS. At each Closing, the Final Order required pursuant to
Section 9.3 for the Authorization to be assigned at such Closing shall have been
issued.
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2.6 ALLOCATION OF PURCHASE PRICE. The Purchase Price (without adjustment)
paid to DCT shall be allocated to the Authorizations in the manner set forth in
Schedule 2.6 (the "Statement of Allocation"). Each of DCT and ART shall (a)
complete and execute a Form 8594 Asset Acquisition Statement Under Section 1060
of the Code consistent with the Statement of Allocation, (b) deliver a copy of
such form to the other, and (c) file a copy of such form with such party's tax
returns for the period which includes the Closing. DCT shall file all federal,
state and local tax returns and reports for any taxable period that includes the
Closing Date in a manner consistent with the Statement of Allocation.
3. REPRESENTATIONS AND WARRANTIES OF DCT. DCT represents and warrants to ART
as of this date and as of each Closing as follows:
3.1 ENTITY STATUS. DCT is a corporation duly organized, validly
existing and in good standing in the State of California. DCT has full power
and authority to carry on its business as and where now conducted, and to own
or lease and to operate its properties and assets where such properties and
assets are now owned, leased or operated by it and where such business is now
conducted by it. DCT is qualified to do business and is in good standing in
each of the jurisdictions in which the nature of its business or the property
owned or leased by it make such qualification necessary. Prior to the
Effective Date, DCT has delivered to ART complete and correct copies of any
organizational, by-laws or charter documents applicable to it, each as
amended and in effect on the date hereof.
3.2 AUTHORITY FOR AGREEMENT; CONFLICTS.
3.2.1 Subject to FCC consent, DCT has all necessary power and
authority, corporate or otherwise, to enter into, execute and deliver this
Agreement, the Services Agreement and the Instruments of Assignment (this
Agreement, the Services Agreement and Instrument of Assignment are
collectively referred to herein as the "Seller Documents") and to perform
fully its obligations hereunder and the transactions contemplated hereby
and thereby. The execution, delivery and performance of the Seller
Documents by DCT has been duly authorized by all necessary corporate
action.
3.2.2 Each of this Agreement and the Services Agreement has been,
and the Instruments of Assignment, at each Closing, will have been, duly
and validly executed and delivered by DCT and each of this Agreement and
the Services Agreement constitutes, and the Instruments of Assignment will
constitute, the legal, valid and binding obligation of DCT and each of this
Agreement and the Services Agreement is, and the Instruments of Assignment
will be, enforceable by and against DCT in accordance with their terms,
except as enforceability thereof may be limited by applicable bankruptcy,
reorganization, insolvency or other laws affecting creditors' rights
generally or by general principles of equity, regardless of
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whether such enforceability is considered in equity or at law.
3.2.3 The execution and delivery of this Agreement and, subject to
FCC consent, other Seller Documents by DCT and the consummation of the
transactions contemplated hereby and thereby will not conflict with or
result in any violations of or defaults under: (i) any statute, regulation,
order, judgment or decree of any federal, state or local governmental
body or regulatory authority applicable to DCT, or any of the
Authorizations; (ii) any other statute, regulation, order, judgment or
decree applicable to DCT or any of the Authorizations under or in any
other applicable jurisdiction; or (iii) any mortgage, indenture, lease,
agreement, instrument or other obligation to which DCT is a party or by
which any of the Authorizations are bound. Such execution, delivery and
consummation will not result in the creation of any Lien upon any of
the Authorizations.
3.3 CONSENTS AND APPROVALS OF GOVERNMENTAL AUTHORITIES. Except for the
consent of the FCC to the assignment of the Authorizations and Future
Authorizations, no consent, approval or authorization of, or declaration,
filing or registration with, any governmental or regulatory authority is
required to be made or obtained by DCT in connection with its execution and
delivery of and performance of its obligations under this Agreement.
3.4 FCC REGULATORY MATTERS.
3.4.1 SHARING AGREEMENTS. No agreement exists for the shared use
of facilities, trunk lines, airspace, radio frequencies or other assets
used in connection with the Authorizations or the Future Authorizations,
except for such agreements as ART may have requested or entered into.
3.4.2 FCC AUTHORIZATIONS. Schedule 1.1 sets forth a true and
complete list of each Authorization that shall, subject to FCC consent,
be assigned to ART hereunder, the name of the licensee or permit holder,
the call sign, the Authorization expiration date, and the status of any
applications for assignment or waiver of FCC rules filed with the FCC and
a true and complete list of each application for a Future Authorization
pending before the FCC on the date of this Agreement. DCT has provided to
ART true and correct copies of the Authorizations received by it from
the FCC. Except for the Superseded Agreements, none of such
Authorizations or Future Authorizations are subject to any purchase,
sale, option, right of first refusal agreements or Liens (except with
respect to the Future Authorizations, such agreements entered into
after the Effective Date of this Agreement with other applicants which
may compromise the grant or facilitate the grant of a Future
Authorization), and DCT is the licensee of
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such Authorizations and the applicant for the Future Authorizations.
Within five days of the execution of this Agreement, ART shall provide
DCT copies of the complete files in its possession and/or the possession
of W. Xxxxxxxx Xxxxxxx, Xx., Esq. (including, without limitation,
information comparable to that described in the first sentence of this
Section 3.4.2), relating to the seven Authorizations referenced in
Schedule 3.4.2.
3.4.3 FEES. All FCC license or other fees and charges that have
become due and payable with respect to the Authorizations pursuant to any
applications, filings, recordings and registrations with, and all
validations or exemptions, approvals, orders or authorizations, consents,
authorizations, certificates and permits from, the FCC, have been paid.
3.4.4 AUTHORIZATION COMPLIANCE. The Authorizations are valid and in
full force and effect without materially adverse conditions except for
such conditions as are or may be imposed generally on 38 GHz
authorizations.
3.4.5 DCT'S QUALIFICATIONS. DCT is not in violation of the alien
ownership statute set forth at 47 C.F.R. Subsections 310(A) and (B)
(1996). Neither DCT nor any of its officers, directors of shareholders
(i) is subject to the denial of Federal benefits that includes FCC
benefits pursuant to Section 5301 of the Anti-Drug Abuse Act of 1988, 21
U.S.C. Subsection 862 (1996), or (ii) has been convicted of a felony
involving antitrust law violations or fraud upon a government agency. DCT
is qualified under FCC rules in effect on this date to hold
authorizations issued for common carrier 38 GHz stations.
3.4.6 CERTAIN AUTHORIZATIONS. DCT holds each of the sixteen
Authorizations listed on Schedule 1.1, each of which is in full force
and effect on this date. The Authorizations listed on Schedule 1.1 for
Mobile, Alabama, Charleston, South Carolina and Dayton, Ohio were
issued pursuant to applications which, to the best of DCT's knowledge,
contain no material misrepresentations as to matters of engineering in
such applications, (ii) that DCT makes no representation as to whether
the frequency coordination referred to in or upon which the applications
were filed was completed in a manner that meets the requirements of FCC
Rule 21.100, and (iii) makes no warranty as to claims and plans expressed
in the public interest exhibits of such applications.
3.5 CONTRACTS. Except for this Agreement and the Services Agreement, DCT
is not a party to any contract, commitment or similar agreement or
arrangement, whether written or oral, by which any of the Authorizations is
bound, which relate to or affect the Authorizations in any way or which
affect DCT's ability to consummate the transactions contemplated in this
Agreement.
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3.6 LITIGATION. Except for FCC proceedings of general applicability or as
stated in Schedule 3.6, there are no actions, claims, proceedings, suits and
investigations pending, or, to the best knowledge of DCT, threatened against any
of DCT or any of the Authorizations, before any court, arbitrator or
administrative or governmental body: (i) relating to the Authorizations or which
seek to revoke, rescind, cancel, modify or refuse to renew any Authorization, or
(ii) in connection with the transactions contemplated hereby, nor is there any
basis for any such action. There is no judgment, order or decree affecting the
Authorizations or the transactions contemplated hereby.
3.7 DISCLOSURE. Neither this Agreement nor any exhibit or schedule hereto
nor any statement, list or certificate delivered to ART at or prior to the
Closing pursuant to this Agreement contains any untrue statement of a material
fact.
3.8 BROKERAGE. There are no claims for brokerage commissions or finder's
fees or similar compensation in connection with the transactions contemplated by
this Agreement based on any arrangement or agreement made by or on behalf of
DCT.
4. REPRESENTATIONS AND WARRANTIES BY ART. ART represents and warrants as of
the date hereof and as of the date of each Closing as follows:
4.1 ENTITY STATUS. ART is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware. ART has full
corporate power and authority (a) to carry on its business as now conducted and
to own or lease and operate its properties as and in the places where such
business is now conducted and as such properties are now owned, leased or
operated, and (b) to carry on business and, subject to FCC consent, to own or
lease and operate the Authorizations being purchased as and in the places where
such authorizations are located.
4.2 AUTHORITY FOR AGREEMENT; CONFLICTS. ART has all necessary power and
authority, corporate or otherwise, to execute and deliver this Agreement and to
carry out its obligations hereunder. At each Closing Date, the execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby shall have been duly authorized by the Board of Directors of ART. This
Agreement constitutes the valid and legally binging obligation of ART and is
enforceable against it in accordance with its terms, except as enforceability
thereof may be limited by applicable bankruptcy, reorganization, insolvency or
other laws affecting creditors, rights generally or by general principles of
equity, regardless of whether such enforceability is considered in equity or at
law. The execution and delivery of this Agreement and, subject to FCC consent,
the consummation of the transactions contemplated hereby, will not conflict with
or result in any violation of or default under any provision of the charter
documents or by-laws of ART or any material mortgage, indenture, lease,
agreement
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or other instrument, permit, concession, grant, franchise, license, judgment,
order, decree, statute, law, ordinance, rule or regulation applicable to it or
any of its respective properties.
4.3 LITIGATION. There are no judicial or administrative actions, suits,
proceedings or investigations pending, or to the knowledge of ART threatened,
that question the validity of this Agreement or of any action taken or to be
taken pursuant to or in connection with the provisions of this Agreement, nor
does ART know of any basis for any such action, suit, proceeding or
investigation.
4.4 CONSENTS AND APPROVALS OF GOVERNMENT AUTHORITIES. Except for the
consent of the FCC to the assignment of the Authorizations and except as set
forth on Schedule 4.4 hereto, no consent, approval or authorization of, or
declaration, filing or registration with any court or governmental or regulatory
authority is required to be made or obtained by ART in connection with its
execution, delivery, and performance of this Agreement.
4.5 BROKERAGE. There are no claims for brokerage commissions or finder's
fees or similar compensation in connection with the transactions contemplated by
this Agreement based on any arrangement or agreement made by or on behalf of
ART.
4.6 ASSIGNMENT AUTHORIZATION. ART is and will remain qualified under FCC
and other applicable rules, regulations and laws as in affect on the date hereof
to be the assignee of each Authorization.
5. EXPENSES. Except as otherwise provided herein, each party to this
Agreement shall assume and bear all of its own respective expenses, costs and
fees incurred or assumed by each in the preparation and execution of this
Agreement and compliance herewith, whether or not the transaction herein
provided for shall be consummated.
6. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations,
warranties and agreements of DCT and ART contained herein (including all
schedules and exhibits hereto) or in any document, statement, certificate or
other instrument referred to herein or delivered at each Closing in connection
with the transactions contemplated hereby shall survive the execution and
delivery of this Agreement, any investigation by ART of DCT or the
Authorizations, each Closing and the consummation of the transactions
contemplated by this Agreement for a period of six months after each Closing;
provided, however, in the event W. Xxxxxxxx Xxxxxxx, Xx., Esq. or is aware of
the inaccuracy of any representation or warranty set forth in this Agreement on
or prior to the date of any Closing, ART shall be required to notify DCT of the
inaccuracy of such representation or warranty, and in the event ART fails to so
notify DCT, ART shall not be entitled to make any claim hereunder for a breach
of such representation or warranty by DCT.
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7. INDEMNITIES.
7.1 INDEMNIFICATION BY DCT. DCT shall indemnify ART and its successors
and assigns for any and all damages, claims, losses, liabilities, and
expenses, including without limitation, reasonable legal and accounting
expenses (collectively, "Losses"), which may arise out of: (i) any material
breach of DCT's covenants and agreements hereunder; (ii) any inaccuracy or
misrepresentation in any material respect of any representation or warranty
of DCT hereunder; (iii) any liabilities of DCT (other than for taxes not yet
due and payable); or (iv) any claim or action asserted by any third party
arising out of or in connection with any event, act or omission relating to
Authorizations occurring prior to the Closing, other than matters arising or
resulting from a default by ART under the Services Agreement; provided,
however, that DCT shall not have any liability under Section 7.1(i) and (ii)
unless the aggregate of all losses relating thereto for which DCT would, but
for this proviso, be liable, exceeds on a cumulative basis an amount equal to
$50,000, in which event DCT shall be liable for all such losses on a
cumulative basis.
7.2 INDEMNIFICATION BY ART. ART shall indemnify and hold harmless DCT
from and against any and all Losses which may arise out of: (i) any material
breach of ART's covenants and agreements hereunder; (ii) any inaccuracy or
misrepresentation in any material respect of any representation or warranty
of ART hereunder, or (iii) any claim or action asserted by any third party
arising out of or in connection with any event, act or omission relating to
any of the Authorizations occurring on or after a Closing relating to the
assignment of such Authorization; provided, however, that ART shall not have
any liability under Section 7.2(i) and (ii) unless the aggregate of all
losses relating thereto for which ART would, but for this proviso, be liable,
exceeds on a cumulative basis an amount equal to $50,000, in which event ART
shall be liable for all such losses on a cumulative basis.
8. PREPARATION FOR CLOSING. DCT and ART agree to use their reasonable
efforts to maintain the accuracy of their respective representations and
warranties contained in this Agreement until the Closing(s).
9. FURTHER ASSURANCES. At any time and from time to time at or after the
Closing, at the request of ART and without further consideration, DCT shall
execute and deliver such other instruments of assignment and confirmation and
take such action as ART may reasonably request to assign to ART, and to
confirm the assignment by DCT to ART of all of DCT's right, title and
interest in the Authorizations.
10. PUBLIC ANNOUNCEMENTS. Except as required by law (including, without
limitation, any disclosure made in any documents filed with the Securities
and Exchange Commission or as required by any FCC rules or regulations),
neither DCT nor ART will, at any time, without the prior written consent of
the other party hereto, make
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any announcement, issue any press release or make any statement to any third
party (other than tax professional advisors, lenders and/or partners) with
respect to this Agreement.
11. CONFIDENTIALITY; ACCESS TO INFORMATION.
11.1 DCT and ART hereby reaffirm the terms and conditions of that
certain Non-Disclosure Agreement, dated January 29, 1996 (the
"Confidentiality Agreement"). Each party understands that it may not have an
adequate remedy at law for a breach or threatened breach by the other party
of the terms of the Confidentiality Agreement. Each party agrees that if
there is any such breach or threatened breach, the other party may, initiate
any legal or equitable remedies available to it, including obtaining an
injunction or restraining order to enjoin such other party from the breach or
threatened breach of the Confidentiality Agreement.
11.2 During the period from the date of this Agreement and continuing
until the earlier of last Closing or until termination of this Agreement
pursuant to the terms hereof, DCT shall provide officers of ART reasonable
access to information which has been generated by DCT and/or its counsel and
consultants during the past twelve months and which relate to the
Authorizations. DCT's provision of access pursuant to this Section 11.2 shall
in no way affect or otherwise obviate or diminish any representation or
warranty of DCT.
12. CONDUCT OF BUSINESS BY DCT. DCT covenants that it shall not:
12.1 sell, assign, convey or otherwise dispose of any of the
Authorizations or, except in accordance with the provisions of this
Agreement, any of the Future Authorizations or any right thereto
or interest therein;
12.2 encumber, or agree to encumber, in any way, or enter into
any consensual restriction with respect to, any of the Authorizations
or, except in accordance with the provisions of this Agreement, the
Future Authorizations or any right thereto or interest therein;
12.3 enter into any contract, agreements or understanding with
respect to any of the Authorizations or, except in accordance with the
provisions of this Agreement, the Future Authorizations; and
12.4 enter into any agreements or commitments for any of 12.1
through 12.3;
provided, however, notwithstanding any of the above covenants set forth in
this Section 12, DCT may amend and/or dismiss any application relating to
a Future Authorization.
13. CONDITIONS PRECEDENT TO ART'S OBLIGATIONS. All obligations of ART
under this Agreement are subject to the fulfillment to the
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reasonable satisfaction of ART prior to or at each Closing of each of the
following conditions, any of which may be waived by ART, in its sole
discretion:
13.1 REPRESENTATIONS AND WARRANTIES. The representations and warranties
made by DCT in this Agreement (including all exhibits and schedules hereto),
shall be true and correct in all material respects when made and, except for
those which expressly relate to an earlier date, shall be repeated and shall
be true and correct in all material respects at and as of each Closing Date,
except as specifically provided for herein, and ART shall have received a
certificate dated the date of the Closing signed by the chief executive
officer of DCT to the foregoing effect.
13.2 FCC CONSENTS. All consents from the FCC to consummate the
assignment of the Authorization(s) to be assigned by DCT to ART at each
Closing shall have been granted by a Final Order (as defined below), without
any conditions or restrictions that materially affect the value of the
Authorizations or operations pursuant to the Authorizations or any conditions
or restrictions materially different than the normal authorizations issued by
the FCC to other 38 GHz license holder. In the event that any FCC order
consenting to the assignment of an Authorization to ART imposes such
conditions, this condition shall not be satisfied until such conditions are
removed or eliminated, and DCT shall fully cooperate (provided, DCT shall not
be required to incur any out-of-pocket expenses in connection therewith) in
obtaining the removal or elimination of such restrictions. "Final Order"
means an action by the FCC granting its consent to the assignment of a
Authorization, with respect to which no request for stay, petition for
rehearing, reconsideration or appeal is pending, and as to which the time for
filing any petition for rehearing, reconsideration or appeal has expired and
with respect to which the time for agency reconsideration or review taken on
its own motion has expired, or in the event of the filing of such request,
petition or appeal, an action which shall have been reaffirmed or upheld and
with respect to which the time for seeking further administrative or judicial
review shall have expired. DCT shall not take or reasonably fail to take any
action which it believes would cause its disqualification as an assignor of
the Authorizations (except for any action for which ART is responsible
hereunder or in the Services Agreement).
13.3 PERFORMANCE BY DCT; CERTIFICATE. DCT shall have performed and
complied with all agreements and conditions required by this Agreement to be
performed or complied with by them prior to or at such Closing, and an
executive officer of DCT shall deliver to ART a certificate, dated such
Closing Date, to such effect.
13.4 ABSENCE OF ERRORS AND OMISSIONS. ART shall not have discovered any
material misstatement in any of the representations or warranties, or any
material failure to perform or satisfy any covenants or conditions required
by this Agreement to be performed or satisfied by DCT on or prior to the
Closing Date.
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13.5 OPINIONS OF COUNSEL FOR DCT. ART shall have received favorable
opinions as to the matters set forth in (i) the first sentence of Section
3.1 hereof, (ii) Section 3.2 hereof, and (iii) Section 3.3 hereof (in each
case, subject to reasonable and customary qualifications), issued to ART and
dated as of each Closing Date of corporate counsel to DCT and of Xxxxxxx,
Carton & Xxxxxxx, the FCC counsel to DCT, that Schedule 1.1 sets forth a true
and complete list of each of the Authorizations held by DCT and that the
representations in Sections 3.4.3 and 3.4.5 are true and correct to the best
of its information and belief based upon a review of its files, the readily
available files of the FCC and the files in the possession of DCT.
13.6 ABSENCE OF LITIGATION. No law, action or proceeding shall have been
enacted or instituted prior to or at such Closing Date before any court or
governmental body or authority pertaining to the transactions contemplated
hereby, the result of which could prevent or make illegal the consummation of
such transactions.
13.7 UCC SEARCHES. ART shall have obtained Uniform Commercial Code
(including fixture filings) and state and federal tax and judgment lien
searches against DCT, all dated within 30 days of such Closing Date.
13.8 RELEASE OF LIENS. All of the Authorizations to be assigned on such
Closing Date shall be free and clear of all Liens and ART shall have received
evidence of the release of all Liens and the termination of all financing
statements, if any, as may be reasonably requested by ART.
13.9 FINANCING. ART shall have either (a) consummated a private or
public sale of equity with aggregate net proceeds to ART of at least $30
million (the "Equity Sale"), or (b) obtain debt or equity proceeds in an
amount at least equal to the Purchase Price.
14. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF DCT. The obligations of DCT to
consummate the transactions contemplated hereby shall be subject to the
fulfillment by ART, prior to or at each Closing, of each of the following
conditions, unless waived by DCT:
14.1 REPRESENTATIONS AND WARRANTIES. The representations and warranties
made by ART in this Agreement shall be true and correct in all material
respects when made and, except for those which expressly relate to an earlier
date, shall be repeated and shall be true and correct in all material
respects at and as of each Closing Date, except as specifically provided for
herein, and DCT shall have received a certificate dated the date of each
Closing signed by an officer of ART to the foregoing effect.
14.2 FCC CONSENTS. All consents from the FCC to consummate the
assignment of each Authorization to be assigned by DCT to ART
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at the Closing shall have been obtained at or prior to the Closing.
14.3 PERFORMANCE OF ART; CERTIFICATE. ART shall have performed and
complied with all agreements and conditions required by this Agreement to be
performed or complied with by it prior to or at the Closing, and the
executive officer of ART shall deliver a certificate or certificates, dated
the Closing Date, to DCT to such effect.
14.4 ABSENCE OF LITIGATION. No action or proceeding shall have been
enacted or instituted prior to or at the Closing Date before any court or
governmental body or authority pertaining to the transactions contemplated
hereby, the result of which could prevent or make illegal the consummation
of such transactions.
14.5 PURCHASE PRICE. The whole or portion (as the case may be) of the
Purchase Price for the Authorizations assigned to ART at such Closing shall
have been delivered to DCT.
14.6 DCT SERVICES AGREEMENT. ART shall not be in default in any material
respect with respect to any of its obligations under the Services Agreement
as of each Closing Date, which default shall obviate DCT's ability to assign
one or more of the Authorizations to be assigned at such Closing.
15. TERMINATION. This agreement may be terminated by the parties as set
forth in this Section 15:
15.1 at any time, by the mutual written consent of DCT and ART;
15.2 by ART at any time after 14 months after the Effective Date,
if the conditions set forth in Section 9 shall not have been complied
with or performed and such noncompliance or nonperformance shall not
have been cured or eliminated by DCT by such time;
15.3 by DCT, at any time after 14 months after the Effective Date
(the "Seller Date"), if the conditions set forth in Section 10 hereof
shall not have been complied with or performed and such noncompliance
or nonperformance shall not have been cured or eliminated by ART by such
time; provided that if prior to the Seller Date, the FCC has issued an
order consenting to the assignment of the Authorizations to ART, ART may
extend the Seller Date until a date not later than 15 months after the
Effective Date by providing written notice to DCT;
15.4 by DCT, on the one hand, or by ART, on the other, if there shall
have been a breach of any material representation, warranty, covenant or
agreement on the part of the other hereunder, which breach cannot be
cured prior to the
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Closing; or by DCT at any time that there shall occur a termination of
the Services Agreement (unless DCT shall improperly have terminated the
Services Agreement);
provided, however, that the terminating party may not terminate its
obligations under this Agreement if such terminating party has breached this
Agreement in any material respect.
Notwithstanding any termination of this Agreement pursuant to this
Section 15, the provisions of Sections 7, 11, and 16.1 hereof shall remain in
full force and effect.
16. POST-CLOSING COVENANTS.
16.1 DISCLOSURE OF INFORMATION. From and after the Closing, DCT shall
not use or disclose to any person any proprietary information of ART for any
reason or purpose whatsoever, nor shall it make use of any such information
for its own purposes or for the benefit of any person except ART or any
affiliate thereof. The restrictions on use and disclosure of information
contained in this Section 16.1 do not extend to any item of information that
(A) is publicly known at the time of its disclosure, (B) is lawfully received
from a third party not bound in a confidential relationship to ART, (C) is
published or otherwise made known to the public by ART, or (D) is required to
be disclosed pursuant to a court order, provided that, upon receiving notice
such disclosure is required, DCT shall promptly give ART notice thereof, and
DCT shall cooperate with ART's efforts, if any, to contest the applicability
of such order so long as DCT shall incur no cost in connection therewith.
16.2 INJUNCTIVE RELIEF. The parties recognize and acknowledge that a
breach of Section 16.1 by DCT may cause irreparable and material loss and
damage to ART as to which ART may not have an adequate remedy at law or in
damages. Accordingly, DCT acknowledges and agrees that, in addition to any
other remedies to which ART may be entitled, the issuance of an injunction or
other equity remedy is an appropriate remedy for any such breach. It is the
desire and intent DCT and ART that the provisions of Section 16.1 shall be
enforced to the fullest extent permissible under the laws and public policies
applied in each jurisdiction in which enforcement is sought. Accordingly, if
any particular provision of any of Section 16.1 shall be adjudicated to be
invalid or unenforceable, such provision shall be deemed amended to delete
therefrom the portion adjudicated to be invalid or unenforceable, such
deletion to apply only with respect to the operation of such provision in the
particular jurisdiction in which such adjudication is made.
17. ENTIRE AGREEMENT; ASSIGNABILITY. This Agreement, together with the
schedules and exhibits hereto, and the Services Agreement, constitutes the
entire agreement between the parties hereto pertaining to the subject matter
hereof and supersedes all prior
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and contemporaneous agreements, understandings, negotiations and discussions,
whether oral or written, of the parties, including without limitation, the
Superseded Agreements, and there are no warranties, representations or other
agreements between the parties in connection with the subject matter hereof
except as specifically set forth herein. This Agreement and the Services
Agreement supersede all previous agreements between ART and/or Xxxxxxxxxxxx, on
the one hand, and DCT and/or Neustadt on the other hand. All of the Superseded
Agreements are hereby terminated and shall be of no further force or effect.
This Agreement may not be assigned by DCT or ART without the prior written
consent of the other party and any such attempted assignment shall be null and
void; provided, however, DCT and/or ART shall be permitted to assign its rights,
duties and obligations under this Agreement to a wholly-owned subsidiary of DCT
or ART (as the case may be) provided DCT or ART (as the case may be) shall
remain fully liable with respect to all of its respective obligations hereunder.
18. AMENDMENT. This Agreement may be amended by the parties hereto at any
time, but only by an instrument in writing duly executed and delivered on behalf
of each of the parties hereto.
19. HEADINGS. Section headings are not to be considered part of this Agreement
and are included solely for convenience and are not intended to be full or
accurate descriptions of the contents thereof. References to Sections are to
portions of this Agreement unless the context requires otherwise.
20. EXHIBITS, ETC. Exhibits, schedules and other documents referred to in this
Agreement are an integral part of this Agreement.
21. SUCCESSORS AND ASSIGNS. All of the terms and provisions of this Agreement
shall be binding upon and shall inure to the benefit of the parties hereto and
their respective assignees, successors and assigns.
22. NOTICES, ETC. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given on the
date of (a) delivery, if delivered or mailed, first-class postage prepaid,
return receipt requested, (b) personal delivery or (c) delivery, if delivered by
overnight courier.
22.0.1 if to DCT, to:
DCT Communications, Inc.
000 Xxxxxx Xxxx
Xxxxxxxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxx Xxxxx
and Xx. Xxx Xxxxxxxxxx
with a copy to:
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Xxxx and Xxxx
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxx 0000
Xxxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx, Esq.
and
Xxxxxxx, Carton & Xxxxxxx
0000 X Xxxxxx, X.X.
Xxxxx 000, Xxxx Xxxxx
Xxxxxxxxxx, X.X. 00000-0000
Attention: Xxxxxx X. Xxxxxxxxx, Xx., Esq.
22.0.2 if to ART to:
Advanced Radio Technologies Corporation
000 000xx Xxxxxx, X.X., Xxxxx 0000
Xxxxxxxx, Xxxxxxxxxx 00000
Attention: W. Xxxxxxxx Xxxxxxx, Xx., Esq.
and Xxxxxx X. Xxxxx
with a copy to:
Ropes & Xxxx
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx, 00000-0000
Attention: Xxxx X. Xxxxx, Esq.
Any party may, from time to time, specify as to address for purposes of this
Agreement any other address upon the giving of ten days' notice thereof to the
other parties.
23. GOVERNING LAW. This Agreement and the rights and obligations of the
parties hereto arising out of this Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware without regard to the
internal conflict of law provisions thereof.
24. SEVERABILITY. The provisions of this Agreement are severable, and if any
one or more provisions are deemed illegal or unenforceable, the remaining
provisions shall remain in full force and effect.
25. COUNTERPARTS. This Agreement may be executed simultaneously in any number
of counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
26. SERVICES AGREEMENT. The effectiveness of this agreement is contingent upon
execution of the Services Agreement by DCT and ART.
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27. WITHDRAWAL OF APPLICATION. ART shall use its best efforts to cause Telecom
One, Inc. to withdraw its pending 38GHz radio authorization application relating
to New Haven, Connecticut (FCC File Number 9506019) as soon as possible, and in
any event, prior to August 31, 1996.
28. EFFECTIVE DATE. The effective date of this Agreement shall be the date
first written above.
29. FINANCING. ART agrees to use commercially reasonable efforts to
complete the Equity Sale or obtain debt or equity proceeds in an amount at
least equal to the Purchase Price. Notwithstanding anything to the contrary
set forth herein, in the event ART is unsuccessful in achieving either of the
aforesaid on or before August 31, 1996, DCT shall be entitled to retain the
Deposit, neither DCT nor ART shall have any further obligation or liability
to the other hereunder and the Superseded Agreements shall remain null and
void.
[The remainder of this page has been intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the day and year first above written.
SELLER:
DCT COMMUNICATIONS, INC.
By: /s/ Xxxxxx X. Xxxxx
---------------------------------
Name: Xxxxxx X. Xxxxx
Title: President
Date: June 28, 1996
-------------------------------
PURCHASER:
ADVANCED RADIO TECHNOLOGIES
CORPORATION
By: /s/ W. Xxxxxxxx Xxxxxxx, Xx.
---------------------------------
Name: W. Xxxxxxxx Xxxxxxx, Xx.
Title: Exec. V. P.
Date: June 28, 1996
-------------------------------
Achknowledged only as
to Section 17:
/s/ Xxxxxx X. Xxxxxxxxxxxx
----------------------------------
Xxxxxx X. Xxxxxxxxxxxx
Estate of Xxxxxxx X. Xxxxxxxx
By: /s/ Xxxxxxxxx Xxxxxxxx
-------------------------------
Xxxxxxxxx Xxxxxxxx
Personal Representative
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