EXHIBIT 2.1
Execution Copy
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ASSET PURCHASE AGREEMENT
by and among
NUCENTRIX BROADBAND NETWORKS, INC.
and those additional Subsidiaries of
NUCENTRIX BROADBAND NETWORKS, INC.
listed on the signature pages hereto,
and
SBC OPERATIONS, INC.
Dated as of September 5, 2003
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TABLE OF CONTENTS
Page
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ARTICLE I. DEFINITIONS.............................................................................1
1.01 Definitions..................................................................................1
1.02 Other Terms..................................................................................8
ARTICLE II. PURCHASE AND SALE OF ASSETS.............................................................9
2.01 Purchase and Sale............................................................................9
2.02 Acquired Assets..............................................................................9
2.03 Excluded Assets.............................................................................10
2.04 Assumed Liabilities.........................................................................12
2.05 Specifically Excluded Liabilities...........................................................13
2.06 Assumed Contracts; Default Cures; Outstanding Liens.........................................13
2.07 Right to Exclude Certain Assets.............................................................14
2.08 Risk of Loss................................................................................15
ARTICLE III. PURCHASE PRICE.........................................................................15
3.01 Purchase Price..............................................................................15
3.02 Payments and Computations...................................................................15
3.03 Purchase Price Allocation...................................................................15
ARTICLE IV. THE CLOSING............................................................................16
4.01 Closing Date................................................................................16
4.02 Deliveries by Sellers.......................................................................16
4.03 Deliveries by Purchaser.....................................................................16
ARTICLE V. REPRESENTATIONS AND WARRANTIES OF SELLERS..............................................17
5.01 Organization; Standing and Power............................................................17
5.02 Authority; Execution and Delivery; Enforceability...........................................17
5.03 No Conflicts................................................................................17
5.04 Governmental Filings; Consents..............................................................18
5.05 Title to and Condition of Acquired Assets...................................................18
5.06 Real Property...............................................................................18
5.07 Tower Leases and Tower Subleases............................................................19
5.08 Contracts...................................................................................20
5.09 Permits.....................................................................................20
5.10 Company FCC Licenses........................................................................21
5.11 Acquired Spectrum Leases....................................................................23
5.12 Third Party Licenses Subject to License Acquisition Agreements..............................24
5.13 Taxes.......................................................................................24
5.14 Proceedings.................................................................................25
5.15 Compliance with Laws........................................................................25
5.16 Environmental Matters.......................................................................25
5.17 Absence of Certain Changes..................................................................25
5.18 Network Equipment...........................................................................25
5.19 Spare Parts and Equipment...................................................................25
5.20 Brokers or Finders..........................................................................26
5.21 Interference Coordination Agreements........................................................26
5.22 Intellectual Property.......................................................................26
5.23 Cable Systems...............................................................................27
5.24 Acquired WCS Agreements.....................................................................27
5.25 Collective Bargaining Agreements............................................................27
5.26 Accuracy of Copies and Statements...........................................................27
5.27 ERISA.......................................................................................27
5.28 Nucentrix Reports; Financial Statements.....................................................28
5.29 Insurance...................................................................................28
5.30 WorldCom BTA Agreements.....................................................................28
5.31 Non-US Operations...........................................................................29
ARTICLE VI. REPRESENTATIONS AND WARRANTIES OF PURCHASER............................................29
6.01 Organization; Standing and Power............................................................29
6.02 Authority; Execution and Delivery; Enforceability...........................................29
6.03 No Conflicts................................................................................29
6.04 Governmental Filings; Consents..............................................................29
6.05 Litigation..................................................................................30
6.06 Financing...................................................................................30
6.07 Brokers or Finders..........................................................................30
6.08 No Filings Outside United States............................................................30
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ARTICLE VII. COVENANTS..............................................................................30
7.01 Operation of Acquired Assets Prior to Closing...............................................30
7.02 Access to Information; Access to Personnel; Site Inspections................................32
7.03 Spectrum Testing............................................................................33
7.04 FCC Filings.................................................................................33
7.05 Third Party Consents........................................................................34
7.06 Commercially Reasonable Efforts.............................................................35
7.07 Notification of Certain Matters.............................................................35
7.08 Maintenance of FCC Licenses.................................................................36
7.09 Bankruptcy Covenants........................................................................38
7.10 Alternative Transaction.....................................................................38
7.11 Employee Matters............................................................................39
7.12 Further Assurances..........................................................................39
7.13 Tax Matters.................................................................................39
7.14 Confidentiality.............................................................................40
7.15 Press Releases..............................................................................40
7.16 Expenses....................................................................................41
7.17 Rejected Contracts..........................................................................41
7.18 Renewal of Certain Short Term Leases........................................................41
7.19 Apportionment of Prepaid Expenses and Accounts Payable......................................41
7.20 Third Party Licenses........................................................................42
7.21 Third Party Dedicated Equipment.............................................................43
7.22 FCC Waivers; Notice; Cure Amounts...........................................................43
7.23 Mutual Releases.............................................................................44
7.24 Common Equipment............................................................................44
7.25 FCC Amount..................................................................................44
7.26 WorldCom BTAs...............................................................................45
7.27 Transition Servicing........................................................................45
ARTICLE VIII. CLOSING CONDITIONS.....................................................................45
8.01 Conditions to Obligations of Purchaser and Sellers..........................................45
8.02 Additional Conditions to Obligations of Purchaser...........................................46
8.03 Additional Conditions to Obligations of Sellers.............................................48
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ARTICLE IX. TERMINATION............................................................................48
9.01 Termination.................................................................................48
9.02 Effect of Termination.......................................................................50
9.03 Expense Reimbursement; Break-up Fee.........................................................50
ARTICLE X. INDEMNIFICATION........................................................................51
10.01 Indemnification by Sellers..................................................................51
10.02 Indemnification by Purchaser................................................................52
10.03 Calculation of Losses; Limitation of Liability..............................................52
10.04 Termination of Indemnification..............................................................52
10.05 Procedures..................................................................................53
ARTICLE XI. GENERAL PROVISIONS.....................................................................54
11.01 Amendment and Waiver........................................................................54
11.02 Survival of Representations and Warranties; No Other Representations and Warranties.........54
11.03 Entire Agreement............................................................................54
11.04 Notices.....................................................................................54
11.05 No Third-Party Beneficiaries; Liability; Non-Recourse.......................................56
11.06 Interpretation; Exhibits and Schedules; Certain Definitions.................................56
11.07 Assignment..................................................................................56
11.08 Severability................................................................................57
11.09 Submission to Jurisdiction; Consent to Service of Process...................................57
11.10 Waiver of Jury Trial........................................................................57
11.11 Specific Performance........................................................................58
11.12 Construction................................................................................58
11.13 Governing Law...............................................................................58
11.14 Counterparts................................................................................58
11.15 No Expenditure of Funds.....................................................................58
11.16 Funding.....................................................................................59
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DEFINED TERMS
TERM SECTION
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Accounts Receivable 1.01
Acquired Assets 2.02
Acquired Spectrum Lease 1.01
Acquired WCS Agreements 5.24
Acquisition 2.01
Administrative Bar Date 1.01
Affected Lease 11.15(a)
Affected Lessor 1.01
Affiliate 1.01
Alternative Transaction 7.10
Annual FCC Reports 1.01
Appeal 1.01
Approval Motion 7.09(a)
Approval Order 1.01
Assigned Contracts 2.02(viii)
Assigned Permits 2.02(iii)
Assumed Liabilities 2.04
Bankruptcy Cases Recitals
Bankruptcy Code Recitals
Bankruptcy Court 1.01
Bid Deadline 1.01
Bidding Procedures Order 1.01
Bid Procedures Motion 7.09(b)
Books and Records 2.02(xi)
Break-up Fee 9.03(b)
BTA 5.21
Business Day 1.01
Claims 1.01
Closing 4.01
Closing Date 4.01
Code 1.01
Common Equipment 1.01
Communications Act 5.04
Company FCC Licenses 2.02(iv)
Company Pending Applications 1.01
Consent 5.04
Constructed Facilities 5.10(e)
Contracts 1.01
Court Amount 11.15(b)
Data Room 1.01
Default Cures 2.06
Determination Date 2.07(a)
DIP Loan Agreement 9.01(l)
Enforceability Exceptions 5.02
Environmental Law 1.01
ERISA 5.27
ERISA Affiliate 5.27
Exchange Act 5.04
Excluded Assets 2.03
Excluded Causes of Action 1.01
Excluded Liabilities 2.04
Excluded Real Property 1.01
Exclusion Date 2.07(c)
Expense Reimbursement 9.03(a)
FAA 5.07(d)
FCC 5.04
FCC Amount 7.25
FCC Assignment Applications 7.04(b)
FCC License 1.01
FCC Rules 1.01
Final Order 1.01
Final Suspension Date 11.15(a)
GAAP 5.28
Governmental Authority 1.01
Hazardous Substance 1.01
HSR Act 5.04
Indemnified Party 10.05(a)
Intellectual Property 1.01
Intellectual Property Contracts 1.01
Interference Coordination Agreements 5.21
ITFS 1.01
Judgment 5.03
Knowledge of Purchaser 1.01
Knowledge of Sellers 1.01
Law 1.01
Leased Pending Applications 5.11(d)
Legal Restraints 8.01(a)
Liabilities 1.01
License Acquisition Agreements 5.12(a)
Licensed Intellectual Property 1.01
Liens 5.05(a)
Loss 1.01
Market 5.10(a)
MMDS 1.01
Non-Disclosure Agreement 1.01
Nucentrix Preamble
ii
Partitioned BTAs 7.04(b)
Payment Order 11.15(b)
Permits 1.01
Permitted Liens 1.01
Person 1.01
Plan Confirmation Hearing Date 1.01
Predecessor-in-Interest 1.01
Proceeding 1.01
Prorated Expense Items 7.19(a)
Protected Service Area 1.01
PSA 1.01
Purchase Price 3.01
Purchaser Preamble
Purchaser Indemnified Party 10.01(a)
Purchaser Release 7.23(a)
Reports 5.28
Representative 1.01
Sale Motion 1.01
SEC 5.28
Seller Indemnified Party 10.02(a)
Sellers Preamble
Sellers' Budget 9.01(f)
Sellers Material Adverse Effect 1.01
Sellers Release 7.23(b)
Site Holder 7.21
Spare Parts and Equipment 1.01
Station Assets 1.01
Subsidiary 1.01
Superior Transaction 1.01
Suspended Payment 11.15(a)
Tax 1.01
Taxing Authority 1.01
Termination Date 9.01(f)
Termination Ruling 11.15(b)
Third Party Claim 10.05(a)
Third Party Dedicated Equipment 1.01
Third Party Licenses 1.01
Third Party Pending Applications 5.12(c)
Tower Leases 1.01
Tower Sites 1.01
Tower Subleases 2.02(vii)
Trade Secrets 1.01
Transfer Tax 1.01
Transmission Towers 1.01
WCS 1.01
iii
Wireless Cable Agreements 1.01
WorldCom BTAs 1.01
WorldCom BTA Agreements 1.01
WorldCom BTA Application 7.04(e)
iv
ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT dated as of September 5, 2003, by and among
Nucentrix Broadband Networks, Inc., a Delaware corporation ("Nucentrix"), those
additional Subsidiaries of Nucentrix listed on the signature pages hereto,
(collectively, with Nucentrix, the "Sellers"), and SBC Operations, Inc., a
Delaware corporation ("Purchaser").
RECITALS
WHEREAS, Sellers hold assets, including licenses and leases for ITFS,
MMDS and WCS spectrum, that are currently used or are useful for the provision
of certain telecommunications services in the United States;
WHEREAS, immediately following the execution hereof the Sellers and
certain of their Subsidiaries will commence cases (the "Bankruptcy Cases") under
chapter 11 of title 11 of the United States Code, 11 U.S.C. Sections 101 et seq.
(the "Bankruptcy Code"), by filing voluntary petitions with the United States
Bankruptcy Court for the Northern District of Texas, and each Seller will be a
debtor in possession in the Bankruptcy Cases; and
WHEREAS, the sale, assumption and assignment of the Acquired Assets and
assumption of the Assumed Liabilities will be conditioned, among other things,
upon the requisite approval of the Bankruptcy Court and the FCC on the terms
specified herein.
NOW, THEREFORE, in consideration of the mutual covenants,
representations and warranties herein contained, the parties hereto, intending
to be legally bound, hereby agree as follows:
ARTICLE I.
DEFINITIONS
1.01 Definitions. In this Agreement, the following capitalized terms
have the meanings set forth below (such meanings being applicable to both the
singular and plural forms of the terms defined):
"Accounts Receivable" shall mean all amounts owed to any Seller or any
of its Subsidiaries in respect of services provided by any such person.
"Acquired Spectrum Lease" means the interest held by any Seller or any
Subsidiary of any Seller to use spectrum granted to the holder of an FCC License
for ITFS, MMDS or WCS, including (a) any Leased Pending Application granted by
the FCC during the period from the date hereof until the Closing Date and (b)
any such interest held by a Predecessor-in-Interest of any Seller, except for
those FCC Licenses set forth on Schedule 2.03, those FCC Licenses in which
Sellers or their Subsidiaries have rights under Contracts set forth on Schedule
2.03 and any Contract excluded pursuant to Section 2.07.
"Administrative Bar Date" means the date set by the Bankruptcy Court as
the last day upon which administrative expense claims may be filed in the
Bankruptcy Cases.
"Affected Lessor" means any third party holder of an FCC License for
ITFS that leases spectrum under such FCC License for ITFS to any Seller or any
Subsidiary of a Seller.
"Affiliate" of any Person means another Person that directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, such first Person; provided that with respect to
Sections 3.03 (Purchase Price Allocation), 5.10(a) (Company FCC Licenses), 7.16
(Expenses), 7.17 (Rejected Contracts) and 7.20 (Third Party Licenses) of this
Agreement, a stockholder of Nucentrix (and any person who may be deemed an
Affiliate of any Seller solely by reason of its relationship with a stockholder
of Nucentrix) shall not be deemed to be an Affiliate of Sellers.
"Annual FCC Reports" means those reports, filings, notices and
regulatory fees required to be filed annually with the FCC by licensees,
permittees, conditional licensees and operators, including reports required by
Sections 21.11(a), 21.911, 21.307(d) and 21.920 of the FCC Rules, as such
reports, filings, notices, regulatory fees and similar filing and payment
requirements may be added or amended.
"Approval Order" means an order or orders of the Bankruptcy Court in
form and substance reasonably acceptable to Purchaser approving this Agreement
and all of the terms and conditions hereof, and approving and authorizing
Sellers and their Subsidiaries to consummate the Acquisition and the other
transactions contemplated hereby. Without limiting the generality of the
foregoing, no such order shall be deemed an Approval Order unless it finds and
provides that (i) the Acquired Assets sold, assigned, transferred, conveyed or
delivered to Purchaser pursuant to this Agreement will be transferred to
Purchaser free and clear of all Liens and Claims, with all Liens to be paid in
full at Closing, except to the extent Purchaser agrees otherwise or, subject to
the preceding sentence, as otherwise provided in the Approval Order; (ii)
Purchaser has acted in "good faith" within the meaning of Section 363(m) of the
Bankruptcy Code and is entitled to the protections of that section of the
Bankruptcy Code; (iii) this Agreement was negotiated, proposed and entered into
by the parties hereto without collusion, in good faith and from arm's length
bargaining positions; (iv) Purchaser is not acquiring or assuming any of
Sellers' or any other Person's Liabilities, except as expressly provided in this
Agreement; (v) subject to Section 2.07, all Tower Leases, Acquired Spectrum
Leases and Assigned Contracts and all Assumed Liabilities related thereto shall
be assumed by Sellers and assigned to Purchaser effective as of the Closing
pursuant to Section 365 of the Bankruptcy Code, and that all obligations and
liabilities relating to all Default Cures in respect thereof shall be directly
or indirectly borne fully by Sellers as contemplated by Section 2.06 and paid by
Sellers pursuant to such order; (vi) the Bankruptcy Court shall retain
jurisdiction to resolve any controversy or claim arising out of or relating to
this Agreement, or the breach hereof; and (vii) this Agreement and the
transactions contemplated hereby may be specifically enforced against and
binding upon, and not subject to rejection or avoidance by, Sellers, any
Subsidiaries of Sellers, any chapter 7 or chapter 11 trustee of any Seller or
any of its Subsidiaries or otherwise on behalf of Sellers.
"Bankruptcy Court" means the United States Bankruptcy Court for the
Northern District of Texas or any other court having jurisdiction over the
Bankruptcy Cases from time to time.
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"Bid Deadline" means the date, whether specified in the Bidding
Procedures Order or another date (not later than the date the Approval Order is
granted) established thereafter by an order of the Bankruptcy Court, on which
all competing bids to purchase all or any portion of the Acquired Assets are
required to be delivered to Sellers in order to participate in the Auction as
contemplated by the Bidding Procedures Order.
"Bidding Procedures Order" means an order of the Bankruptcy Court
substantially in the form set forth in Exhibit A.
"Business Day" means any day that is not a Saturday, a Sunday or other
day on which commercial banks are required or authorized by law to be closed in
the City of
New York.
"Claims" shall have the meaning set forth in Section 101(5) of the
Bankruptcy Code.
"Code" means the Internal Revenue Code of 1986, as amended.
"Common Equipment" shall mean any equipment (other than Third Party
Dedicated Equipment) which is owned by a Seller or any Subsidiary of a Seller
(and used in connection with the transmission of signals to or from a Tower
Site) and an Affected Lessor that is not an Affiliate of any Seller.
"Company Pending Applications" means all applications pending with the
FCC for new FCC Licenses for MMDS or WCS, assignments or transfers of FCC
Licenses for MMDS or WCS, modifications of FCC Licenses for MMDS or WCS,
extensions of time to construct Protected Service Area ("PSA") stations and
renewals of FCC Licenses for MMDS or WCS filed by any Seller or any Subsidiary
of a Seller; provided, however, that applications to which any Seller or any
Subsidiary of a Seller is a party with regard to Third Party Licenses shall not
be deemed Company Pending Applications, but shall instead be deemed Third Party
Pending Applications.
"Contracts" means contracts, bids, proposals, leases, subleases,
licenses, agreements, commitments and other arrangements, including customer,
supplier and subscriber contracts, in each case whether oral or written, but
excluding Permits.
"Data Room" means the rooms, including the due diligence materials
contained therein, (as such rooms existed on June 11, 12 and 13, 2003 during
such times as Representatives of Purchaser and its Affiliates occupied such
rooms) set up at Nucentrix's office located at 0000 Xxxxxxxxxxxxx Xxxxxxx, Xxxxx
0000, Xxxxxxxxxx, Xxxxx 00000.
"DIP Loan Agreement" means one or more written Contracts entered into
after the date hereof by one or more Sellers, one or more of their Subsidiaries,
and Purchaser providing for the advancement of funds by Purchaser to Sellers or
their Subsidiaries, as such Contract or Contracts are amended from time to time.
"Environmental Law" means any federal, state, local or foreign statute,
law, regulation, order, decree, permit, authorization, opinion, common law or
agency requirement relating to: (i) the protection, investigation or restoration
of the environment, health, safety, or
3
natural resources; (ii) the handling, use, presence, disposal, release or
threatened release of any Hazardous Substance; or (iii) noise, odor, indoor air,
employee exposure, electromagnetic emissions, wetlands, pollution, contamination
or any injury or threat of injury to Persons or property relating to any
Hazardous Substance.
"Excluded Causes of Action" shall mean those causes of action set forth
on Schedule 1.01(e).
"FCC License" means any license, permit, certificate, approval,
franchise, consent, waiver, registration or other authorization issued by the
FCC.
"FCC Rules" means Title 47 of the Code of Federal Regulations, as
amended, FCC policies and published FCC decisions.
"Final Order" means an action, order, judgment or decree (i) which has
not been reversed, stayed, enjoined, set aside, annulled or suspended; (ii) in
relation to which no request for stay, motion or petition for reconsideration or
rehearing, application or request for review, or notice of appeal or other
administrative or judicial petition for review or reconsideration (collectively,
an "Appeal") is pending or has been granted; and (iii) as to which the
prescribed time for filing an Appeal, and for the entry of orders staying,
reconsidering, or reviewing on the applicable Governmental Authority's own
motion has expired.
"Governmental Authority" means any (i) federal, state, local,
municipal, foreign or other government; (ii) governmental or quasi-governmental
authority of any nature (including any governmental agency, branch, department,
official, or entity and any court or other tribunal); or (iii) body exercising
or entitled to exercise any administrative, executive, judicial, legislative,
police, regulatory, or taxing authority or power of any nature, including any
arbitration tribunal.
"Hazardous Substance" means any substance that is: (i) listed,
classified or regulated pursuant to any Environmental Law; (ii) any petroleum
product or by-product, asbestos-containing material, lead-containing paint or
plumbing, polychlorinated biphenyls, black mold, radioactive material or radon;
and (iii) any other substance which may be the subject of regulatory action by
any Governmental Authority in connection with any Environmental Law.
"Intellectual Property" means all (i) trademarks, service marks, brand
names, certification marks, collective marks, d/b/a's, Internet domain names,
logos, symbols, trade dress, assumed names, fictitious names, trade names, and
other indicia of origin, all applications and registrations for the foregoing,
and all goodwill associated therewith and symbolized thereby, including all
renewals of same; (ii) inventions and discoveries, whether patentable or not,
and all patents, registrations, invention disclosures and applications therefor,
including divisions, continuations, continuations-in-part and renewal
applications, and including renewals, extensions and reissues; (iii)
confidential information, trade secrets and know-how, including processes,
schematics, business methods, formulae, drawings, prototypes, models, designs,
customer lists and supplier lists (collectively, "Trade Secrets"); (iv)
published and unpublished works of authorship, whether copyrightable or not
(including without limitation databases and other compilations of information),
copyrights therein and thereto, and registrations and
4
applications therefor, and all renewals, extensions, restorations and reversions
thereof; and (v) all other intellectual property or proprietary rights.
"Intellectual Property Contracts" means all Contracts concerning
Intellectual Property to which the Sellers or their Subsidiaries are a party,
including without limitation agreements granting the Sellers and their
Subsidiaries rights to use the Licensed Intellectual Property, non-assertion
agreements, settlement agreements, agreements granting rights to use
Intellectual Property, trademark coexistence agreements and trademark consent
agreements.
"ITFS" means Instructional Television Fixed Service, a class of
microwave frequencies licensed by the FCC pursuant to Part 74 of the FCC Rules.
"Knowledge of Purchaser" means the actual knowledge of Xxxxxxx Xxxxxx,
Xxxxx X. Xxxx or Xxxxx Xxxxxxxx after due inquiry.
"Knowledge of Sellers" means the actual knowledge of the individuals
set forth on Schedule 1.01(c) after due inquiry.
"Law" means any federal, state, local or foreign statute, law,
ordinance, regulation, rule, code, order, principle of common law, or judgment
enacted, promulgated, issued, enforced or entered by any Governmental Authority,
or other requirement or rule of law.
"Liabilities" means, as to any Person, all debts, adverse claims,
liabilities, commitments, responsibilities, loss contingencies and obligations
of any kind or nature whatsoever, direct, indirect, absolute or contingent, of
such Person, whether accrued or unaccrued, joint or several, vested or unvested,
disputed or undisputed, liquidated or unliquidated, secured or unsecured, due or
to become due, whether known or unknown, whether executory, determined,
determinable or otherwise and whether or not actually reflected, or required to
be reflected, in such Person's balance sheets or other books and records.
"Licensed Intellectual Property" means Intellectual Property that any
of the Sellers or their Subsidiaries are licensed or otherwise permitted by
other Persons to use.
"Loss" means any and all claims, losses, Liabilities, costs, penalties,
fines and amounts paid or payable or expenses incurred (including reasonable
fees for attorneys, accountants, consultants and experts), damages, obligations
to third parties, expenditures, judgments, awards or settlements that are
imposed upon or otherwise incurred by the relevant Person.
"MMDS" means, collectively, Multipoint Distribution Service and
Multichannel Multipoint Distribution Service, in each case a domestic
transmission service licensed by the FCC pursuant to Part 21 of the FCC Rules.
"Non-Disclosure Agreement" means that certain
Non-Disclosure Agreement, dated May 20, 2003, between SBC
Communications Inc. and Nucentrix.
"Permits" means all licenses, permits, certificates, approvals,
registrations and other governmental or regulatory authorizations, except for
FCC Licenses.
5
"Permitted Liens" means all (i) mechanics', carriers', workmen's,
repairmen's Liens that do not impair the use of the property or assets by the
Sellers and their Subsidiaries, (ii) Liens for Taxes that are not due and
payable that do not impair the use of the property or assets by the Sellers and
their Subsidiaries, (iii) zoning, building, subdivision, environmental and other
similar restrictions that do not impair the use of the property or assets by the
Sellers and their Subsidiaries, (iv) recorded easements, unrecorded easements,
covenants that run with the land or real property, rights-of-way and other
similar restrictions that do not impair the use of the property or assets by the
Sellers and their Subsidiaries, (v) Liens created under the DIP Loan Agreement,
if any, and (vi) those Liens set forth on Schedule 1.01(h) that do not impair
the use of the property or assets by the Sellers and their Subsidiaries.
"Person" means any individual, firm, corporation, partnership, limited
liability company, trust, joint venture, Governmental Authority or other entity
or organization.
"Plan Confirmation Hearing Date" means the date upon which the first
hearing is held by the Bankruptcy Court to consider the approval of a chapter 11
plan of reorganization of any of Sellers.
"Predecessor-in-Interest" of any Seller or any Subsidiary of any Seller
means such Person whose interest in FCC Licenses or spectrum leases were
succeeded by such Seller or Subsidiary.
"Proceeding" means any action, arbitration, audit, hearing, complaint,
inquiry, investigation, litigation, or suit (whether civil, criminal,
administrative, investigative, or informal) commenced, brought, conducted, or
heard by or before, or otherwise involving, any Governmental Authority or
arbitrator.
"Protected Service Area" means the geographic area in which the
licensee of an FCC License for ITFS or MMDS is protected from interference under
FCC Rules.
"Representative" means, with respect to any Person, such Person's
officers, directors, employees, agents and representatives (including any
investment banker, financial advisor, accountant, legal counsel, agent,
representative or expert retained by or acting on behalf of such Person or its
Subsidiaries).
"Sale Motion" means the motion or motions to be filed by Sellers, in
form and substance reasonably acceptable to Purchaser, seeking entry of the
Approval Order.
"Sellers Material Adverse Effect" means any change, circumstance or
event with respect to the Acquired Assets, any assets that would constitute
Acquired Assets, if the Closing were to occur at the time of measurement, or
Assumed Liabilities that, individually or in the aggregate with all other
adverse changes, circumstances or events, has, results in, has had, or has
resulted in (a) a material adverse effect on, or on the value of, the assets
that as of the Closing would constitute Acquired Assets, taken as a whole, or a
material increase in the amount of the Assumed Liabilities or (b) a material
adverse effect on the ability of any Seller timely to consummate the Acquisition
and the other transactions contemplated hereby and satisfy its obligations
hereunder in accordance with the terms hereof; provided that no change,
circumstance or event resulting from (a) the act of filing the Bankruptcy Cases,
(b) general
6
economic conditions in the United States or (c) a change in FCC Rules affecting
the Company FCC Licenses to the extent that such change does not have a
disproportionate effect on the Company FCC Licenses shall be considered in
determining that a Sellers Material Adverse Effect has occurred.
"Spare Parts and Equipment" means the inventory of spare parts and
equipment of the Sellers and their Subsidiaries that are used or useful or would
be used or useful in connection with the operation or maintenance of other
Acquired Assets, including transmitters, waveguides, antennas and related
equipment, but excluding customer equipment.
"Station Assets" means (i) the Tower Leases, (ii) the transmission and
reception equipment, studio-to-transmitter linking equipment, tower equipment,
test equipment, antennas, headend equipment, machinery, and other physical
assets (including embedded software and Intellectual Property rights
incorporated therein), buildings, improvements and fixtures, and all
appurtenances thereto, whether or not located at a site covered by a Tower
Lease, used or held for use by a Seller or a Subsidiary of Seller in connection
with the operation of any ITFS, MMDS or WCS station used by Seller or a
Subsidiary of Seller, provided it is used by a Seller or a Subsidiary of Seller
in connection with the operation of such station, (iii) the Spare Parts and
Equipment, (iv) all of Sellers' right, title and interest in the Common
Equipment, and (v) any tangible personal property set forth on Schedule 5.18
including any Third Party Dedicated Equipment set forth on Schedule 5.18;
provided, however, that the Station Assets shall not include any (x) Third Party
Dedicated Equipment that is not set forth on Schedule 5.18 or (y) any customer
premises equipment.
"Subsidiary" of any Person means another Person, an amount of the
voting securities, other voting ownership or voting partnership interests of
which is sufficient to elect at least a majority of its board of directors or
other governing body (or, if there are no such voting interests, more than 50%
of the equity interests of which) is owned directly or indirectly by such first
Person or by another Subsidiary of such Person.
"Superior Transaction" means one or more bona fide written proposals
made by one or more Persons not affiliated with Nucentrix or its Subsidiaries
for an Alternative Transaction that represents a better offer for the Acquired
Assets (or a material portion thereof) than the offer made by Purchaser for the
Acquired Assets pursuant to the terms of this Agreement that the Sellers may
enter into in accordance with the Bidding Procedures Order.
"Tax" means any tax, governmental fee or other like assessment or
charge of any kind whatsoever (including any tax imposed under Subtitle A of the
Code and any net income, alternative or add-on minimum tax, gross income, gross
receipts, sales, use, ad valorem, value added, transfer, franchise, profits,
license, withholding tax on amounts paid, payroll, employment, unemployment,
social security, excise, severance, stamp, capital stock, occupation, property,
environmental, telecommunications or windfall profit tax, premium, custom, duty
or other tax), together with any interest, penalty, addition to tax or
additional amount due thereon, imposed by any Governmental Authority (domestic
or foreign) responsible for the imposition of any such tax (a "Taxing
Authority").
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"Third Party Dedicated Equipment" means equipment owned by any Seller
or any of its Subsidiaries that is used solely and exclusively for the operation
of FCC Licenses held by a third party that is not a party to an Acquired
Spectrum Lease and not an Affiliate of Nucentrix. Such equipment includes, for
each such third party's respective FCC License: channel-specific transmitters,
channel-specific encoders, studio-to-transmitter link equipment, receive-only
antennas located at the third party's premises, downconverters and modulators;
provided, however, that such Third Party Dedicated Equipment shall not include
any equipment used or held for use by Sellers or their Subsidiaries in
connection with the operation of the Company FCC Licenses and Acquired Spectrum
Leases or in performing Sellers' or their Subsidiaries' obligations under any
Acquired Spectrum Lease, Tower Lease or Tower Sublease.
"Third Party Licenses" means the FCC Licenses held by third parties set
forth on Schedule 1.01(d).
"Tower Leases" means the Contracts relating to the use by Sellers or
their Subsidiaries of Transmission Towers or other transmission equipment (and
the embedded software and Intellectual Property rights incorporated therein) on
the Tower Sites that are set forth on Schedule 5.07(a).
"Tower Sites" means any real property used or occupied by Sellers or
their Subsidiaries on which Transmission Towers used by Sellers or their
Subsidiaries are located.
"Transfer Tax" means any federal, state, county, local, foreign and
other sales, use, transfer, conveyance, documentary transfer, recording or other
similar Tax, fee or charge imposed upon the sale, transfer or assignment of
property or any interest therein or the recording thereof, and any penalty,
addition to Tax or interest with respect thereto (but excluding any gains and
income Taxes).
"Transmission Towers" means any towers or other "antenna structures" as
defined by the FCC in Part 17 of the FCC Rules.
"WCS" means Miscellaneous Wireless Communications Services, a domestic
transmission service licensed by the FCC pursuant to Part 27 of the FCC Rules.
"Wireless Cable Agreements" shall mean those Contracts, in effect from
time to time, set forth on Schedule 1.01(g).
"WorldCom BTAs" means the FCC Licenses in the MMDS for the BTAs with
the following license numbers: (a) MDB257 (Little Rock, AR), (ii) MDB329
(Oklahoma City, OK), (iii) MDB101 (Dallas-Fort Worth, TX) and (iv) MDB401 (San
Antonio, TX).
"WorldCom BTA Agreements" means the BTA Lease and Option Agreement
dated October 31, 1997, by and between Heartland Wireless Commercial Channels,
Inc., as lessor, and CS Wireless Systems, Inc., as lessee, as amended by
Amendment dated December 2, 1998.
1.02 Other Terms. Other capitalized terms may be defined elsewhere in
this Agreement and, unless otherwise indicated, shall have such meaning
throughout this Agreement.
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All references to "$" and "dollars" shall be deemed to refer to United States
currency unless otherwise specifically provided herein. All references to "true
and complete" copies of specified documents, means true and complete copies of
such documents, together with all material amendments, modifications and
supplements thereto, and all waivers, consents and estoppels granted or
delivered thereunder.
ARTICLE II.
PURCHASE AND SALE OF ASSETS
2.01 Purchase and Sale. On the terms and subject to the conditions of
this Agreement, at the Closing, Sellers shall, and shall cause their
Subsidiaries to, sell, assign, transfer, convey and deliver to Purchaser, and
Purchaser shall purchase and assume from Sellers or their Subsidiaries (as the
case may be), all of the Assumed Liabilities and all of their respective right,
title and interest as of the Closing in and to the Acquired Assets, pursuant to
Sections 363(f) and 365 of the Bankruptcy Code, free and clear of all Liens and
Claims (other than the Permitted Liens described in clauses (ii), (iii), (iv)
and (v) of the definition thereof and Permitted Liens described in Part A of
Schedule 1.01(h)). The purchase and sale of the Acquired Assets and the
assumption of the Assumed Liabilities is referred to in this Agreement as the
"Acquisition".
2.02 Acquired Assets. The term "Acquired Assets" means all of the
following properties and assets of Sellers:
all Tower Leases;
(i) all other Station Assets;
(ii) all Permits of Sellers or their Subsidiaries used or held for use
in connection with the ownership or operation of the Acquired Assets, (the
"Assigned Permits");
(iii) the FCC Licenses held by any Seller or a Subsidiary of any Seller
as of the date hereof, and any FCC License granted to Sellers or any of
their Subsidiaries after the date hereof and on or before Closing that
authorizes such Person to operate an MMDS or WCS station or gives to such
Person the exclusive right to apply for an FCC license for specified
spectrum in a specified geographic area (the "Company FCC Licenses");
(iv) all Company Pending Applications;
(v) all Acquired Spectrum Leases;
(vi) those Contracts under which any Seller or any Subsidiary of a
Seller is a lessor, sublessor or licensor of, or makes available for use to
any Person, any Tower Site or portion thereof that is the subject of a
Tower Lease (the "Tower Subleases");
(vii) the Acquired WCS Agreements, Interference Coordination
Agreements, and all Contracts pursuant to which third parties provide
services necessary for any Seller
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or any Subsidiary of a Seller to perform any studio-to-transmitter
transport or linking obligations under any Acquired Spectrum Lease
(collectively, together with the Tower Subleases and any other Contracts
included in clause (xiii) below, the "Assigned Contracts");
(viii) subject to Section 7.19, all credits, prepaid expenses, deferred
charges, advance payments, security deposits and prepaid items that relate
to any of the other Acquired Assets as of the Closing;
(ix) all rights, claims, causes of action, rights to payment or to
enforce payment and credits to the extent relating to the other Acquired
Assets or anything that would have been part of the other Acquired Assets,
but for any destruction of such assets, including any such items arising
under insurance policies (or, if not assignable or transferable, all of the
Sellers and their Subsidiaries rights under such insurance policies with
respect to such assets) and all guarantees, warranties, indemnities and
similar rights in favor of any of the Sellers or any of their Subsidiaries
in respect of the Acquired Assets, but not to the extent relating to any
Excluded Asset or Excluded Liability, as provided in Section 2.03(ii);
(x) copies of the Acquired Spectrum Leases, Tower Leases, Assigned
Contracts and other records, files and documents of Sellers and their
Subsidiaries relating to any other Acquired Assets or to any Assumed
Liability, including service records, delivery records, warranty documents,
manuals, and all material lessor and lessee correspondence (in all cases,
in any form or medium) (the "Books and Records");
(xi) all Intellectual Property held by Sellers and their Subsidiaries
which have been used in the operation or ownership of the Acquired Assets;
and
(xii) subject to Section 2.07(a), all other assets and property of
Sellers or any of their Subsidiaries, including any other Contracts which
are used or held for use in connection with the other Acquired Assets.
2.03 Excluded Assets. As used herein, the term "Excluded Assets" means
all the properties, assets, goodwill and rights of any of the Sellers or their
Subsidiaries of whatever kind and nature, real or personal, tangible or
intangible, that are owned, leased or licensed by any of the Sellers or their
Subsidiaries at the Closing that are not included in the Acquired Assets and, to
the extent that they would otherwise constitute a portion of the Acquired
Assets, the following:
(i) all cash and cash equivalents of any of the Sellers and their
Subsidiaries except for any security deposits related to Acquired Assets;
(ii) all rights, claims, causes of action, rights of set-off, rights to
payment or to enforce payment and credits of any of the Sellers or their
Subsidiaries to the extent relating to any other Excluded Asset or any
Excluded Liability, including any such items arising under insurance
policies and all guarantees, warranties, indemnities and similar rights in
favor of any of Sellers or their Subsidiaries in respect of any other
Excluded Asset or any Excluded Liability;
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(iii) all rights in connection with and all assets relating to any
pension or other employee benefit plan of any of Seller or their
Subsidiaries;
(iv) all rights, claims, demands and causes of action of any Seller
under this Agreement;
(v) all financial, tax and other books and records of Sellers and their
Subsidiaries to the extent they do not relate to the Acquired Assets;
(vi) subject to Section 7.13, any refunds or credits of Taxes (i) not
otherwise related to the Acquired Assets or (ii) if related to the Acquired
Assets, for any taxable period (or portion thereof) ending prior to the
Closing Date that are owed to Sellers or their Subsidiaries;
(vii) all capital stock of each Seller and its Subsidiaries;
(viii) all computer software (and the Intellectual Property
incorporated therein) owned by any of the Sellers and their Subsidiaries
and all rights of any of the Sellers and their Subsidiaries in or to
Intellectual Property or computer software that any third party has granted
to any Seller or any Subsidiary of Seller pursuant to a license,
sublicense, agreement or permission, including "off-the-shelf" software
that is generally available to a public consumer for a price less than
$1,000 per license or for a price less than $1,000 on a per-user basis,
except embedded software and Intellectual Property included in the Acquired
Assets;
(ix) other than embedded software and Intellectual Property included in
the Acquired Assets and other than as set forth in 2.02(xii), all patents
(including all reissues, divisions, continuations and extensions thereof),
patent applications, trademarks, trademark registrations, trademark
applications, service marks, trade names, business names, brand names,
logos, corporate names, copyright registrations, designs, design
registrations and all rights to any of the foregoing and all copyrights,
trade secrets and confidential information (including know how, inventions,
formulae, processes, procedures, research records, test information, market
surveys and marketing know how), owned or licensed by any of the Sellers or
their Subsidiaries;
(x) all customer premises equipment held by Sellers or any of their
Subsidiaries in connection with the Acquired Assets;
(xi) all Third Party Dedicated Equipment that is not used or held for
use by Sellers or their Subsidiaries in connection with the operations of
(i) the Company FCC Licenses, (ii) the Acquired Spectrum Leases or (iii)
the Station Assets;
(xii) any rights, claims and causes of action under the Bankruptcy Code
and any avoidance claims under the Bankruptcy Code in which Sellers and
their Subsidiaries have rights;
(xiii) all Permits that are not Assigned Permits;
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(xiv) the name "Nucentrix", "Nucentrix Broadband", "Heartland Cable
Television", "Nucentrix Internet Services", "Nucentrix Spectrum Resources",
"Nucentrix Telecom Services", "Heartland", "Heartland Cable" or any
variation thereof, and any trademark, trade names, logo or symbols
containing such names;
(xv) all office equipment (including company issued personal computers,
cell phones, pagers and similar items) owned by Sellers or any of their
Subsidiaries;
(xvi) all Accounts Receivable;
(xvii) all rights, claims, demands and causes of action of any Seller
under the DIP Loan Agreement, if any;
(xviii) all rights, claims, demands and causes of action of any Seller
under the Wireless Cable Agreements;
(xix) the Excluded Causes of Action;
(xx) all Contracts between Sellers and/or any of their Subsidiaries and
any of their customers of cable or Internet service;
(xxi) all items set forth on Schedule 2.03;
(xxii) all rights, claims, demands and causes of actions, and all
Liabilities of any Seller or any Subsidiary of any Seller, under the
WorldCom BTA Agreements and those FCC Licenses subject to the WorldCom BTA
Agreements that are included on Schedule 2.03 (other than the Partitioned
BTAs);
(xxiii) the Partitioned BTAs, to the extent they become Excluded Assets
pursuant to Section 7.26; and
(xxiv) all other assets, rights and properties that Purchaser indicates
to Nucentrix in writing it is not purchasing, assuming or otherwise
acquiring, pursuant to Section 2.07 or otherwise.
2.04 Assumed Liabilities. Purchaser shall only assume, effective as of
the Closing, and from and after the Closing, Liabilities of Sellers and their
Subsidiaries under the Acquired Spectrum Leases, Tower Leases and Assigned
Contracts to be performed under the terms thereof after the Closing Date,
excluding any performance on the part of the Sellers or their Subsidiaries that
relates to the period prior to the Closing (the "Assumed Liabilities");
provided, however, that any Contract that was not made available to Purchaser in
the Data Room on June 11, 2003 or otherwise expressly provided to Purchaser
prior to the date hereof will not be an Assumed Liability unless Purchaser
agrees in writing to assume such Contract. Except for the Assumed Liabilities
referred to in the preceding sentence, Purchaser shall not assume, or be
obligated or liable for, any Liabilities of Sellers, or any of their Affiliates
or their respective predecessors, assignors, or transferors, including any
Liabilities relating to any fact, circumstance, occurrence, condition, act,
event or omission occurring, or the underlying cause of which occurred, prior to
the Closing (the "Excluded Liabilities"), whether in connection with the
12
Acquisition, the transactions contemplated hereby, or otherwise. From and after
the Closing, Purchaser agrees to pay, perform and discharge when due the Assumed
Liabilities.
2.05 Specifically Excluded Liabilities. In furtherance of Section 2.04,
the following shall constitute Excluded Liabilities.
(i) except as specifically set forth in Section 2.04, any Liability
relating to or arising out of any business of Sellers or their Subsidiaries
(including relating to the Acquired Assets), and based upon, arising out of
or resulting from any fact, circumstance, occurrence, condition, act, event
or omission existing on or occurring on or prior to the Closing;
(ii) any Liability that relates to, or that arises out of, any Excluded
Asset (including assets that become Excluded Assets pursuant to Section
2.07), or that arises out of the distribution to, or ownership by, any of
the Sellers or their Subsidiaries of the Excluded Assets or associated with
the realization of the benefits of any Excluded Asset;
(iii) except as expressly provided in Section 7.13, any Liability for
Taxes, whether or not accrued, assessed or currently due and payable, (A)
of any of Sellers or their Affiliates, or (B) of any other party for which
a Seller or their Affiliates may be liable, or to which any Acquired Asset
may be subject, whether under a tax sharing or other agreement, or (C)
relating to the operation or ownership of any of the Acquired Assets, for
any Tax period (or portion thereof) ending on or prior to the Closing Date;
(iv) any Liability relating to any present or former employee, director
consultant or independent contractor of any Seller or any Affiliate of any
Seller, including under any compensation, retirement or other employee
benefit plan or arrangement or otherwise relating to employment and whether
incurred before or after the Closing Date and whether resulting from a
contractual obligation or arising under ERISA or the Code;
(v) any Liability of any Seller to any other Seller or to any Affiliate
of such Person (including any Affiliates of Nucentrix that are not
Sellers);
(vi) any Liability resulting from any default, breach, forfeiture,
fine, nonperformance, misfeasance, malfeasance, violation of Law, or
nonfeasance by or on behalf of any Seller or its Affiliates; and
(vii) any Liability resulting from any Proceeding, pending or
threatened, arising from or relating to Sellers or their Affiliates.
2.06 Assumed Contracts; Default Cures; Outstanding Liens. Subject to
Sections 2.04 and 2.07 and the Bidding Procedures Order, at the Closing and
pursuant to Section 365 of the Bankruptcy Code, Sellers shall, and shall cause
their Subsidiaries to, assume and assign to Purchaser the Tower Leases, Acquired
Spectrum Leases and the Assigned Contracts. In furtherance of such assumption
and assignment, at or prior to the Closing, Sellers shall cure all defaults, if
any, under the Tower Leases, Acquired Spectrum Leases and the Assigned Contracts
(collectively, "Default Cures").
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2.07 Right to Exclude Certain Assets.
(a) Subject to Section 2.07(b), during the period from the date hereof
until the Exclusion Date, Purchaser, in its sole discretion and at its option,
by written notice to Nucentrix, may from time to time remove any one or more
items that would constitute Acquired Assets from the Acquired Assets, and such
removed Acquired Asset shall cease to be an Acquired Asset under this Agreement
for any purpose and shall thereafter be an Excluded Asset (the date the notice
with respect to any such asset is deemed given pursuant to Section 11.04 being
the "Determination Date"). All Liabilities relating to or arising under any
asset removed pursuant to the preceding sentence that would otherwise constitute
an Assumed Liability shall become an Excluded Liability upon such removal.
If Purchaser exercises its right to exclude any Tower Leases,
Station Assets or Tower Subleases pursuant to Section 2.07(a), then (i) a Tower
Lease and the Station Assets located on the property covered thereby shall not
be separated from each other by reason of such exclusion, and (ii) a Tower
Lease, the Station Assets and any Tower Subleases of space located on the Tower
Site covered thereby shall not be separated from each other by reason of such
exclusion.
(b) For purposes of this Agreement, "Exclusion Date" means a date that
is the earlier of five (5) Business Days prior to (x) the Plan Confirmation
Hearing Date (or, as to any such lease or Contract for which the Bankruptcy
Court extends the deadline for assumption or rejection beyond the deadline set
forth in 11 U.S.C. Section 365(d)(2), the date to which extended) or (y) the
Closing Date; provided that with respect to assets or property obtained after
the Exclusion Date, Purchaser shall have five (5) Business Days after receipt of
written notice from any Seller or its Subsidiary notifying Purchaser that such
assets or property was obtained. Prior to the Closing, Sellers shall provide
Purchaser with not less than thirty (30) days prior written notice of the Plan
Confirmation Hearing Date.
(c) If Purchaser excludes any Tower Lease, Acquired Spectrum Lease or
Tower Sublease pursuant to Section 2.07(a) after the Bid Deadline, the Purchase
Price will be increased by an amount equal to lease payments made by Sellers and
their Subsidiaries or accrued with respect to any such Contract in respect of
the period commencing on the Bid Deadline and ending on the Determination Date;
provided that Purchaser shall not be responsible for (i) any amount other than
the monthly rent or applicable portion thereof paid or accrued under such
Contract and (ii) payments or accruals with respect to any Contract for which
either (A) a motion to reject is not filed with the Bankruptcy Court within 30
days of the relevant Determination Date and which is not rejected prior to the
Closing or (B) is assigned, assumed, transferred or otherwise dispose of after
the relevant Determination Date.
(d) After Purchaser has notified Sellers of the removal of any item
from the Acquired Assets in accordance with Section 2.07(a), Sellers may,
subject to Section 7.01, transfer, assign or otherwise dispose of such item and,
if such item is a Contract, subject to Section 7.01, terminate, suspend payments
under or reject any such Contract. The Purchaser shall not be entitled to any
reduction of or credit to the Purchase Price with respect to any item removed
from the Acquired Assets pursuant to this Section 2.07.
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2.08 Risk of Loss. Prior to the Closing, any loss of or damage to any
of the physical Acquired Assets from fire, casualty, condemnation or any other
occurrence not covered by insurance payable to Purchaser shall be the sole
responsibility of Sellers. Sellers shall, and shall cause their Subsidiaries to,
use their best efforts to obtain any insurance proceeds relating to any Acquired
Assets or assets or property or rights that would otherwise constitute Acquired
Assets.
ARTICLE III.
PURCHASE PRICE
3.01 Purchase Price. In consideration of the sale, assignment,
transfer, conveyance and delivery to Purchaser of the right, title and interest
of Sellers and their Subsidiaries as of the Closing in and to the Acquired
Assets, Purchaser shall (i) pay Sellers at Closing an amount equal to Fifteen
Million Dollars ($15,000,000.00) (the "Purchase Price"), subject to Sections
2.07, 7.26 and 11.15, and (ii) assume, effective as of the Closing, the Assumed
Liabilities.
3.02 Payments and Computations. Each party shall make each payment due
to the other parties hereunder as soon as practicable on the day when due in
U.S. dollars by wire transfer in immediately available funds. All payments by
Purchaser hereunder shall be made to a single account to be specified by
Nucentrix at least five (5) Business Days prior to the Closing Date, and payment
to such account shall constitute payment to any or all of Sellers as may be
required hereunder.
3.03 Purchase Price Allocation. As soon as practicable following the
Closing, Purchaser shall deliver to Sellers an allocation of the Purchase Price
and Assumed Liabilities among the Acquired Assets according to the relative fair
market values of such assets on the Closing Date and consistent with Section
1060 of the Code; provided, however, that prior to delivering a final allocation
of the Purchase Price and Assumed Liabilities in accordance herewith, Purchaser
shall deliver to Sellers a draft allocation and provide Sellers a reasonable
opportunity to comment on such proposed allocation. Such final allocation of
fair market value shall be binding on the Purchaser and the Sellers for all U.S.
federal, state, and local income tax purposes, but shall not, to the extent it
does not affect any rights of Purchaser hereunder, be binding upon Sellers or
their estates for any purposes relating to confirmation of any plan of
reorganization or otherwise related to the Bankruptcy Cases. Following the
Closing Date, Sellers and Purchaser in connection with their respective U.S.
Federal, state and local income tax returns (including amended tax returns and
claims for refunds) and other filings, shall not take (and shall cause their
Affiliates not to take) any position inconsistent with the allocation determined
pursuant to this Section 3.03, unless otherwise required by applicable Tax law.
Purchaser and Sellers shall cooperate in the filing of any forms (including Form
8594) with respect to such allocation, including any amendments to such forms
required with respect to any adjustment to the Purchase Price pursuant to this
Agreement.
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ARTICLE IV.
THE CLOSING
4.01 Closing Date. The closing of the Acquisition (the "Closing") shall
take place at the offices of Xxxxxx & Xxxxxx L.L.P., 3800 Xxxxxxx Xxxx Center,
0000 Xxxx Xxxxxx, Xxxxxx, Xxxxx at 10:00 a.m., local time, two (2) Business Days
following the satisfaction or waiver of the conditions set forth in Article VIII
(other than those conditions that by their nature cannot be satisfied until the
time of Closing, but subject to the satisfaction of those conditions) unless
another date is otherwise agreed to in writing by Purchaser and Nucentrix. The
date on which the Closing occurs is referred to herein as the "Closing Date".
4.02 Deliveries by Sellers. At the Closing, Sellers shall, and, where
applicable, shall cause their Subsidiaries to, deliver to Purchaser:
(a) duly executed deeds, bills of sale, assignments and other documents
and instruments of transfer, in form and substance reasonably acceptable to
Purchaser as may be necessary to sell, assign, transfer, convey and deliver good
and valid title to the Acquired Assets to Purchaser, free and clear of all Liens
and Claims pursuant to Sections 363(f) and 365 of the Bankruptcy Code;
(b) if applicable, any payment required to be made pursuant to the
terms of Section 7.19, by wire transfer of immediately available funds to a bank
account designated in writing by Purchaser (such designation to be made at least
five (5) Business Days prior to the Closing Date);
(c) a copy of the Approval Order certified by the Bankruptcy Court;
(d) the officer's certificate required to be delivered pursuant to
Section 8.02(e);
(e) a certificate of non-foreign status pursuant to Treasury
Regulations Section 1.1445-5(b)(3) in form and substance reasonably acceptable
to Purchaser; and
(f) the Purchaser Release.
4.03 Deliveries by Purchaser. At the Closing, Purchaser shall deliver
to Sellers:
(a) payment in cash, by wire transfer of immediately available funds,
in an amount equal to:
(i) the Purchase Price (as such payment at Closing is
increased pursuant to Section 2.07, if applicable) plus or minus such
amounts calculated in accordance with Section 7.19; plus
(ii) if applicable, any payment required to be made pursuant
to the terms of Section 7.19.
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(b) duly executed assumption agreements and other instruments of
assumption, in form and substance reasonably acceptable to Sellers and their
counsel, providing for the assumption of the Assumed Liabilities by Purchaser;
(c) the officer's certificate required to be delivered pursuant to
Section 8.03(c); and
(d) the Sellers Release.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES OF SELLERS
Sellers hereby, jointly and severally, represent and warrant to
Purchaser as follows:
5.01 Organization; Standing and Power. Each Seller and its Subsidiaries
is duly organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation and each Seller and its Subsidiaries has the
requisite corporate power and authority to own, lease or otherwise hold its
properties and assets and to conduct its business. Each Seller and its
Subsidiaries is duly qualified to do business as a foreign corporation in each
jurisdiction where the nature of assets held by it or the nature of the business
conducted by it make such qualification necessary, except where the failure to
be so qualified, individually or in the aggregate, could not reasonably be
expected to have a Sellers Material Adverse Effect.
5.02 Authority; Execution and Delivery; Enforceability. Each Seller has
the requisite corporate power and authority to (i) execute this Agreement and
(ii) subject to entry of the Approval Order and the entry of the Bidding
Procedures Order, consummate the Acquisition and the other transactions
contemplated hereby. The execution and delivery by each Seller of this Agreement
and the consummation by each Seller of the Acquisition and the other
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of each Seller. Each Seller has duly executed and
delivered this Agreement. This Agreement constitutes its legal, valid and
binding obligation, enforceable against it in accordance with its terms
(assuming in each case due authorization, execution and delivery thereof by
Purchaser and the entry of the Approval Order) subject to the entry of the
Approval Order and, as to the enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency, moratorium or other laws affecting creditors' rights
generally from time to time in effect and to general principles of equity
(collectively, the "Enforceability Exceptions").
5.03 No Conflicts. The execution and delivery by Sellers of this
Agreement do not, and the consummation of the Acquisition and the other
transactions contemplated hereby and compliance by Sellers with the terms hereof
will not, conflict with, or result in any violation of or default (with or
without notice or lapse of time, or both) under, or give rise to a right of
termination, cancellation or acceleration of any obligation or to loss of a
benefit under, or result in the creation of any Lien upon any of the Acquired
Assets of Sellers under, any provision of (i) the certificate of incorporation,
articles of incorporation or by-laws of any Seller or any of its Subsidiaries,
(ii) subject to entry of the Approval Order, any Contract to which any Seller or
any
17
of its Subsidiaries is a party or any Contract by which any of their assets are
bound or (iii) subject to (x) entry of the Approval Order and (y) the
governmental filings and other matters referred to in Section 5.04, any
judgment, order or decree ("Judgment") or Law applicable to any Acquired Asset,
any Seller or any Subsidiary of Seller.
5.04 Governmental Filings; Consents. No consent, approval, license,
permit, order or authorization ("Consent") of, or registration, declaration or
filing with, any Governmental Authority or third party is required to be
obtained or made by or with respect to any Seller in connection with the
execution, delivery and performance by Sellers of this Agreement or the
consummation of the Acquisition or the other transactions contemplated hereby,
other than (i) compliance with and filings, if any, under the Securities
Exchange Act of 1934 (the "Exchange Act"), (ii) filings with and approvals of
the Federal Communications Commission (the "FCC") as required under the
Communications Act of 1934 (the "Communications Act") and the FCC Rules, (iii)
entry of the Bidding Procedures Order and the Approval Order and (iv) any
notifications or filings under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act
of 1976, as amended ("HSR Act").
5.05 Title to and Condition of Acquired Assets.
(a) Sellers and their Subsidiaries have good and valid title to all of
the tangible personal property constituting Acquired Assets, and, except for
Permitted Liens, such property is free and clear of any mortgage, pledge,
hypothecation, security interest, encumbrance, right of offset, claim (including
as defined in 11 U.S.C. Section 101(5)), easement, lease, sublease, covenant,
right of way, option, restriction on use, lien or charge of any kind, or any
rights or claims of ownership of others, however evidenced or created (including
any agreement to grant any of the foregoing, any conditional sale or other title
retention agreement, any lease in the nature thereof, and the filing of or
agreement to file any financing statement under the lien notice records or other
similar legislation of any jurisdiction) (collectively, "Liens"). No Affiliate
of Sellers, other than the Sellers, owns or holds any rights, titles or
interests in (including any Lien on) any of the tangible or intangible Acquired
Assets.
(b) Except as set forth on Schedule 5.05(b), all of the buildings,
improvements, fixtures, machinery, equipment and other tangible assets included
in the Acquired Assets are in good operating condition and repair and are
useable in the ordinary course of business except for those failures to be in
good operating condition and repair and useable in the ordinary course of
business that, individually or in the aggregate, could not reasonably be
expected to have a Sellers Material Adverse Effect.
(c) Since the date hereof, no material asset, right or property that
would be included in the Acquired Assets at the Closing has suffered any
material damage.
5.06 Real Property. Schedule 5.06 sets forth a true and complete list
of all real property interests owned by the Sellers and their Subsidiaries that
is necessary for, or is primarily used or held for use in connection with, the
Acquired Assets. Except for property that may be considered fixtures on real
property described on Schedule 5.06, none of the Sellers or any of their
Subsidiaries owns any real property which relates to any of the Acquired Assets.
Except for the Tower Leases and associated real property interests identified in
Schedule 5.07(a) and for
18
property that may be considered fixtures on real property described on Schedule
5.06, there are no real property interests necessary for the operation of the
Acquired Assets in compliance with all applicable FCC Licenses, Acquired
Spectrum Leases and Assigned Permits.
5.07 Tower Leases and Tower Subleases.
(a) Schedule 5.07(a) sets forth a true and complete list of the
following information in relation to each of the Tower Leases: (i) the market in
which the lease is used, (ii) the expiration date of the lease, (iii) the name
of the lessor, (iv) the antenna structure registration number, (v) the address
or location of the leased premises or Tower Site, and (vi) the monthly,
quarterly or annual rent, as applicable, payable under such Tower Lease. True
and complete copies of the Tower Leases were made available to Purchaser in the
Data Room on June 11, 2003 or have been otherwise expressly provided to
Purchaser. The Tower Leases set forth on Schedule 5.07(e) are all of the Tower
Leases that are necessary to use the equipment associated with each Tower Site
that is included as an Acquired Asset, and to access such equipment in
connection with such use.
(b) Assuming all Default Cures are made, (i) subject to entry of the
Approval Order, each of the Tower Leases is valid, binding on Sellers and, to
the Knowledge of Sellers, each other party thereto and in full force and effect,
enforceable by Sellers in accordance with its terms subject to the
Enforceability Exceptions; (ii) except as set forth on Schedule 5.07(c), none of
Sellers or their Subsidiaries has assigned, pledged, transferred, or otherwise
disposed of or granted any Lien (other than Permitted Liens) on its rights,
titles and interests under any of the Tower Leases to any other Person, nor, to
the Knowledge of Sellers, has any other party to the Tower Leases so assigned,
pledged, transferred, granted any Lien (other than Permitted Liens) on, or
otherwise disposed of any of its rights, title and interests thereunder; (iii)
neither Sellers nor, to the Knowledge of Sellers, any other party to any of the
Tower Leases has failed to comply with or is in material breach or material
default thereunder; and (iv) except as set forth on Schedule 5.07(b)(iv), to the
Knowledge of Sellers, no condition exists or event has occurred and is
continuing as of the date hereof and the Closing which, with or without the
lapse of time or the giving of notice, or both, would constitute a material
default by any party under any Tower Lease.
(c) Schedule 5.07(c) sets forth a true and complete list of the
following information in relation to each of the Tower Subleases: (i) the
expiration date of such Tower Sublease, (ii) the name of the lessee or other
counterparty to such Tower Sublease, (iii) the address or location of the leased
premises or Tower Site, and (iv) the monthly, quarterly or annual rent, as
applicable, payable under such Tower Sublease. True and complete copies of the
Tower Subleases have been made available to Purchaser in the Data Room on June
11, 2003.
(d) Except as set forth on Schedule 5.07(d), to the Knowledge of
Sellers, all of the Transmission Towers located on the Tower Sites are
obstruction-marked and lighted to the extent required by, and in accordance
with, the rules and regulations of the Federal Aviation Administration (the
"FAA") and the FCC Rules. To the Knowledge of Sellers, appropriate notification
to the FAA and registration with the FCC has been made for each Transmission
Tower located on the Tower Sites and owned, leased or used by Sellers where
required by the rules and regulations of the FAA or the FCC Rules, as
applicable.
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5.08 Contracts.
(a) Except as set forth on Schedule 5.08(a), Sellers and their
Subsidiaries are not party to or bound by any Contract that would as of the
Closing be an Acquired Asset that is or includes or provides for:
(i) a covenant not to compete in any geographical area or in
any line of business;
(ii) a lease, sublease or similar Contract with any Person
under which any Seller or its Subsidiaries is a lessor, sublessor or
licensor of, or makes available for use to any Person, any FCC License, any
Transmission Tower, or any other Station Assets;
(iii) a maintenance agreement or similar Contract providing
for maintenance, repair, servicing or similar obligations of third parties
with respect to the Station Assets or any portion thereof that has an
aggregate future liability to Sellers or their Subsidiaries in excess of
$25,000.00 or is not terminable by Sellers or their Subsidiaries by notice
of not more than 90 days for a cost of less than $25,000.00; or
(iv) a Contract for the sale of any Acquired Asset or any
right, title or interest therein or the grant of any preferential rights
(including options and rights of first refusal) to purchase any Acquired
Asset or requiring the consent of any third party to the transfer thereof.
(b) Schedule 5.08(b) sets forth a true and complete list of all the
Assigned Contracts as of the date hereof. True and complete copies of all
Contracts were made available to Purchaser in the Data Room on June 11, 2003 or
have been otherwise expressly provided to Purchaser prior to the date hereof.
(c) Except as set forth on Schedule 5.08(c), assuming all Default Cures
are properly discharged, (i) subject to entry of the Approval Order, all
Assigned Contracts are valid, binding on Sellers and, to the Knowledge of
Sellers, each other party thereto and in full force and effect and are
enforceable by Sellers or their Subsidiaries, as applicable, in accordance with
their terms subject to the Enforceability Exceptions; (ii) neither Sellers nor,
to the Knowledge of Sellers, any other party to any of the Assigned Contracts
has failed to comply or is in material breach or material default in any respect
thereunder; and (iii) to the Knowledge of Sellers, no condition exists or event
has occurred which, with or without the lapse of time or the giving of notice,
or both, would constitute a material default by any party under any Assigned
Contract.
(d) Except as set forth on Schedule 5.08(d), prior to the date the
Bankruptcy Cases were filed, no notice has been issued or action occurred which
if not cured could result in the termination of any Tower Lease that is an
Acquired Asset, Assigned Contract or Acquired Spectrum Lease.
5.09 Permits. (i) Sellers and their Subsidiaries have all Permits
required to own and operate the Acquired Assets in compliance, in all material
respects, with all Laws and
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Acquired Spectrum Leases, (ii) none of Sellers or their Subsidiaries is in
violation of any Acquired Permit, except for violations that, individually or in
the aggregate, could not reasonably be expected to have a Sellers Material
Adverse Effect, and (iii) no Proceedings are pending or, to the Knowledge of
Sellers, threatened with respect to any Acquired Permit.
5.10 Company FCC Licenses.
(a) Schedule 5.10(a) sets forth a true and complete list as of the date
hereof of all FCC Licenses held by Sellers and any of their Affiliates. For each
such FCC License, Schedule 5.10(a) sets forth the (i) name of the licensee, (ii)
FCC call sign, (iii) authorized channel(s), and (iv) market where the facilities
are authorized (the "Market"). The Company FCC Licenses and the Third Party
Licenses are all the FCC Licenses necessary or used to provide the services
currently provided by the Sellers and their Subsidiaries. Except for Company
Pending Applications filed prior to the date hereof and those modifications that
have been granted by the FCC prior to the date hereof, the Sellers and their
Affiliates have not modified or sought to have modified any Company FCC License.
Except as set forth on Schedule 5.10(a), all Company FCC Licenses are owned by
Sellers free and clear of all Liens and Claims (other than Permitted Liens).
(b) Except as set forth on Schedule 5.10(b), (i) the grant, renewal or
assignment of the Company FCC Licenses to the existing licensee thereof was
approved by the FCC by Final Order and the Company FCC Licenses are validly
issued and in full force and effect; (ii) there is no Proceeding pending before
the FCC or, to the Knowledge of Sellers, threatened, with respect to any Company
FCC License; and (iii) Sellers and their Subsidiaries have made on a timely
basis all payments to any applicable Governmental Authority for the Company FCC
Licenses.
(c) Schedule 5.10(c) sets forth a true and complete list of all Company
Pending Applications. Schedule 5.10(c) includes a true and complete list for
each Company Pending Application of (i) the name of the applicant, (ii) the FCC
file number, (iii) the proposed channel(s), and (iv) the general purposes of
such applications.
(d) Except as set forth on Schedule 5.10(d), no Company Pending
Application (i) is subject to any objection or petition to deny, which objection
or petition to deny has been filed with the FCC; and (ii) to the Knowledge of
Sellers, proposes facilities that the FCC has advised a Seller are predicted to
cause impermissible interference as determined by Parts 21, 27 and 74 of the FCC
Rules.
(e) Except as set forth on Schedule 5.10(e), the facilities subject to
a Company FCC License for which a certification or notification of completion of
construction has been filed with the FCC ("Constructed Facilities") are
operating and at all times since January 1, 2003, have been operating in
material compliance with the FCC License therefor, the Communications Act and
FCC Rules, and Sellers are not transmitting from or otherwise operating any such
facility that is not the subject of an FCC License. Except as set forth on
Schedule 5.10(e), none of the facilities subject to a Company FCC License (x) is
authorized pursuant to an authorization which is subject to challenge before the
United States Court of Appeals, or (y) other than as set forth on Schedule
5.07(c), is subject to any lease, sub-lease or
21
any agreement to make it available to a third party; no Company FCC License is
subject to (x) a revocation proceeding or (y) a pending request for waiver of
Section 21.303 of the FCC Rules; and no Constructed Facilities are operating
pursuant to special temporary or developmental authority.
(f) Except as set forth on Schedule 5.10(f), since January 1, 2000, all
Annual FCC Reports required to be filed by each Seller with the FCC with respect
to the Company FCC Licenses have been timely filed. All Annual FCC Reports filed
by any of the Sellers or their Subsidiaries are complete and accurate in all
material respects.
(g) True and complete copies of the FCC Licenses set forth on Schedule
5.10(a), the Company Pending Applications and all documents filed in any
Proceeding pending at the FCC relating to any Acquired Asset, were made
available to Purchaser in the Data Room on June 11, 2003 or have been otherwise
expressly provided to Purchaser prior to the date hereof.
(h) Schedule 5.10(h) sets forth a true and complete list of all
operational fixed services, cable antenna relay services and receive-only earth
stations that are licensed to Sellers and their Subsidiaries and are currently
used, or have been used since January 1, 2003, to transmit programming on any
Company FCC Licenses (excluding MMDS booster and hub stations).
(i) Except as set forth on Schedule 5.10(i)(A) and Schedule 5.10(e),
there is no Company FCC License and, except as set forth on Schedule 5.10(i)(B),
there is no FCC License associated with the Acquired Spectrum Leases identified
on Schedule 5.10(i)(B):
(i) that is subject to 47 C.F.R. Section 21.43(b), and for
which a certification or notification of completion of construction has
been filed with the FCC, which has been submitted for cancellation by or
through the actions of Seller or its Affiliates;
(ii) that is subject to 47 C.F.R. Section 21.44(a)(3), (A)
which has been subject to the voluntary removal or alteration of any
facilities so as to render any station not operational for a period of 30
days or more, or (B) is not operating due to the voluntary removal or
alteration of any facilities as of the date hereof or the Closing Date;
(iii) that is subject to 47 C.F.R. Section 21.303(c), for
which written notice has been provided, or required to have been provided
to the FCC, because of a voluntary discontinuation, reduction or impairment
of public communication service to a community or part of a community,
and/or has been sent to the FCC's Wireless Telecommunications Bureau for
cancellation because of a permanent discontinuance of service;
(iv) that is subject to 47 C.F.R. Section 21.303(d), (A) which
has been subject to the removal of equipment or facilities, thereby
rendering any station not operational, and (B) for which any radio
frequency that has not been used to render service (as authorized after
construction is completed and a certificate of completion of construction
is filed) for a consecutive period of more than 180 days; and
22
(v) which is otherwise currently subject to a condition or
situation that could reasonably be expected to place the applicable FCC
License at material risk of revocation, cancellation or forfeiture within
180 days after the Closing Date.
5.11 Acquired Spectrum Leases.
(a) For each Acquired Spectrum Lease, Schedule 5.11(a) sets forth: (i)
the name of the third-party lessor; (ii) the name of the Seller, its Subsidiary
or its Predecessor-in-Interest that is the lessee; (iii) the FCC call sign or
file number covering the Acquired Spectrum Lease; (iv) the channels and market
in which the Acquired Spectrum Lease is used or useful; (v) the expiration date
of the FCC License for the spectrum under the Acquired Spectrum Lease, and (vi)
the expiration date of the Acquired Spectrum Lease. True and complete copies of
the Acquired Spectrum Leases were made available to Purchaser in the Data Room
on June 11, 2003 or have been otherwise expressly provided to Purchaser prior to
the date hereof. Except as set forth on Schedule 5.11(a), all Acquired Spectrum
Leases are free and clear of all Liens and Claims (other than Permitted Liens).
(b) Subject to payment of Default Cures, each Acquired Spectrum Lease
is valid, binding on Sellers and, to the Knowledge of Sellers, each other party
thereto and in full force and effect, meets all requirements of Law, and is
enforceable in accordance with its terms subject to the Enforceability
Exceptions. A Seller, its Subsidiary or its Predecessor-in-Interest is the
lessee under each Acquired Spectrum Lease and, subject to the rights reserved to
the lessor, has the sole right to use the spectrum under each Acquired Spectrum
Lease as required to conduct its business for the purposes contemplated in the
Acquired Spectrum Lease. To the Knowledge of Sellers, other than the terms of
each Acquired Spectrum Lease and the FCC Rules limiting the duration of such
Acquired Spectrum Leases, there are no facts or circumstances that might
(whether with or without notice, lapse of time or the occurrence of any other
event) preclude the renewal or extension of such Acquired Spectrum Leases. To
the Knowledge of Sellers: (i) neither Sellers nor any other party to any of the
Acquired Spectrum Leases has (x) failed to comply or is in material breach or
material default thereunder or (y) claimed that the counterparty has failed to
comply or is in material breach or material default thereunder, and (ii) the
consummation of the Acquisition and the transactions contemplated by this
Agreement, subject to the entry of the Approval Order, will not cause any
violation, breach or default of any Acquired Spectrum Lease or require the
consent of the lessor thereunder. Except as set forth on Schedule 5.11(b), no
party to any Acquired Spectrum Lease has claimed, and to the Knowledge of
Sellers, no party has threatened, that such party has a right to terminate the
Acquired Spectrum Lease prior to or at the Closing or to seek damages against
any of Sellers for the violation, breach or default by any of Sellers of such
Acquired Spectrum Lease.
(c) Except as set forth on Schedule 5.11(c), to the Knowledge of
Sellers and except for Leased Pending Applications and Third Party Pending
Applications filed prior to the date hereof: (i) the grant, renewal or
assignment of the FCC Licenses issued to the licensee of the spectrum covered by
any Acquired Spectrum Lease was approved by the FCC by Final Order; (ii) the
Acquired Spectrum Leases are validly issued and in full force and effect; and
(iii) there is no Proceeding pending before the FCC or threatened with respect
to the Acquired Spectrum Leases or any underlying FCC License.
23
(d) To the Knowledge of Sellers, Schedule 5.11(d) sets forth a true and
complete list of all pending applications as of the date hereof for new FCC
License for MMDS, ITFS or WCS, assignments or transfers of FCC Licenses for
MMDS, ITFS or WCS, modifications of FCC Licenses for MMDS, ITFS or WCS,
extensions of time to construct PSA stations and renewals of FCC Licenses for
MMDS, ITFS or WCS filed by a lessor with respect to any FCC License subject to
any Acquired Spectrum Lease (collectively, the "Leased Pending Applications").
(e) Except as set forth on Schedule 5.11(e), to the Knowledge of
Sellers, no Leased Pending Application: (i) is subject to any informal objection
or petition to deny; or (ii) proposes facilities that the FCC has advised the
applicant are predicted to cause impermissible interference as determined by
Parts 21, 27 and 74 of the FCC Rules.
5.12 Third Party Licenses Subject to License Acquisition Agreements.
(a) Schedule 5.12(a) sets forth a true and complete list of Contracts
in effect with respect to Sellers' or their Subsidiaries' acquisition of the
Third Party Licenses (collectively, the "License Acquisition Agreements").
Schedule 5.12(a) sets forth for each License Acquisition Agreement: (i) the name
of the counterparties thereto; (ii) the name of the Seller entity that is the
proposed acquirer of the Third Party Licenses; (iii) the FCC call sign or file
number for each Third Party License; and (iv) the channels and Market in which
the Third Party License is used or useful. True and complete copies of the
License Acquisition Agreements were made available to Purchaser in the Data Room
on June 11, 2003 or have been otherwise expressly provided to Purchaser prior to
the date hereof. Except as set forth on Schedule 5.12(a), to the Knowledge of
Sellers all Third Party Licenses that are subject to License Acquisition
Agreements are free and clear of all Liens and Claims (other than Permitted
Liens).
(b) Except as set forth on Schedule 5.12(b), to the Knowledge of
Sellers, there is no Proceeding pending before the FCC or threatened with
respect to any Third Party License that is subject to a License Acquisition
Agreement.
(c) To the Knowledge of Sellers, Schedule 5.12(c) contains a true and
complete list of all pending applications for new FCC Licenses for MMDS, ITFS or
WCS, assignments or transfers of FCC Licenses for MMDS, ITFS or WCS,
modifications of FCC Licenses for MMDS, ITFS or WCS, extensions of time to
construct PSA channels and renewals of FCC Licenses for MMDS, ITFS or WCS filed
by the licensee of the Third Party Licenses that are subject to License
Acquisition Agreements in connection with such Third Party Licenses
(collectively, the "Third Party Pending Applications").
(d) To the Knowledge of Sellers, no Third Party Pending Application
that is subject to a License Acquisition Agreement: (i) is subject to any
informal objection or petition to deny; or (ii) proposes facilities that the FCC
has advised the applicant are predicted to cause impermissible interference as
determined by Parts 21, 27 and 74 of the FCC Rules.
5.13 Taxes. (i) Except as are extinguished by the Approval Order, no
Tax Liens have been filed or otherwise exist affecting any Acquired Assets and
no claims are being asserted in with respect to any Taxes of the Sellers; (ii)
no Tax is required to be withheld
24
pursuant to Section 1445 of the Code as a result of the transfers contemplated
by this Agreement; (iii) none of the Acquired Assets secures any indebtedness,
the interest on which is tax-exempt under Section 103(a) of the Code; and (iv)
none of the Acquired Assets is "tax-exempt use property" within the meaning of
Section 168(h) of the Code.
5.14 Proceedings. Schedule 5.14 sets forth a true and complete list of
each pending or, to the Knowledge of Sellers, threatened Proceeding (excluding
Proceedings involving the FCC that may relate to FCC Licenses for ITFS, MMDS, or
WCS in general and are not reasonably likely to have a disproportionate effect
on the Company FCC Licenses) against or relating to or involving any Acquired
Asset or Assumed Liability. No Seller or its Subsidiary is a party or subject to
or in default under any Judgment applicable or relating to or involving any of
the Acquired Assets or Assumed Liabilities.
5.15 Compliance with Laws. The use and operation of the Acquired Assets
by Sellers and their Subsidiaries materially complies with all Laws. Sellers and
their Subsidiaries have not received any communication from a Governmental
Authority that alleges that Sellers' or their Subsidiaries' use or operation of
the Acquired Assets is not in compliance with any Law, nor has any Seller
received any oral communication to such effect.
5.16 Environmental Matters. The use and operation of the Acquired
Assets is in material compliance with all applicable Environmental Laws. There
are no pending or, to the Knowledge of Sellers, threatened Proceedings by or
before any Governmental Authority alleging that the use or operation of the
Acquired Assets is not in compliance with applicable Environmental Laws. Sellers
possess and are in compliance, in all material respects, with all Permits
necessary under Environmental Laws for the operation of the Acquired Assets. No
property owned or, to the Knowledge of Sellers, leased by Sellers or their
Subsidiaries and included in the Acquired Assets is contaminated with any
Hazardous Substance and the Sellers made available to Purchaser in the Data Room
on June 11, 2003 copies of all environmental reports, studies, assessments,
sampling data and other environmental information in its possession relating to
the Acquired Assets.
5.17 Absence of Certain Changes. Since December 31, 2002, the Acquired
Assets have been operated and maintained in the ordinary course and there has
not occurred nor has any fact, circumstance, occurrence, condition, act, event
or omission which has resulted in, or could, individually or in the aggregate,
reasonably be expected to result in a Sellers Material Adverse Effect.
5.18 Network Equipment. Schedule 5.18 sets forth a true and complete
list of all physical assets used or held for use by Sellers or their
Subsidiaries in connection with the operation of (i) the Company FCC Licenses,
(ii) the Acquired Spectrum Leases and (iii) the Station Assets, which are
material in connection with the Company FCC Licenses or Acquired Spectrum
Leases.
5.19 Spare Parts and Equipment. Schedule 5.19 sets forth a true and
complete list of all locations of the Spare Parts and Equipment of Sellers and
their Subsidiaries relating to the operation of (i) the Company FCC Licenses,
(ii) the Acquired Spectrum Leases and (iii) the Station Assets.
25
5.20 Brokers or Finders. Except for the fees and expenses of Xxxxxxxx
Xxxxx Xxxxxx & Xxxxx Capital, Inc., which will be paid by Sellers, Sellers and
their Subsidiaries have no liability to any agent, broker, investment banker or
other firm or Person for any broker's or finder's fee or any other commission or
similar fee in connection with the Acquisition or the other transactions
contemplated hereby for which Purchaser could become liable or obligated.
5.21 Interference Coordination Agreements. Schedule 5.21 sets forth a
true and complete list of all Contracts (the "Interference Coordination
Agreements") regarding the Company FCC Licenses between (A) any of Sellers or
their Subsidiaries and any other MMDS or ITFS licensee, applicant, lessor or
operator or (B) to the Knowledge of Sellers or any of their Subsidiaries,
between the lessor of any Acquired Spectrum Lease and any other MMDS or ITFS
licensee, applicant, lessor or operator with respect to (i) interference to or
from adjacent markets or spectrum within any market affecting Acquired Spectrum
Leases, (ii) the coordination of adjacent market or in-market spectrum use, or
(iii) other matters concerned with the operation of channels in adjacent markets
or in the same market or agreements for the partitioning of any Basic Trading
Area ("BTA") authorizations that is the subject of an Acquired Spectrum Lease.
All Interference Coordination Agreements were made available to Purchaser in the
Data Room on June 11, 2003.
5.22 Intellectual Property.
(a) The Sellers and their Subsidiaries have sufficient rights to use
all Intellectual Property used or necessary in the operation of the Acquired
Assets, all of which (except to the extent constituting Excluded Assets) shall
survive and be transferred to Purchaser unchanged by the consummation of the
transactions contemplated by this Agreement. There is no Proceeding, opposition
or cancellation pending, or, to the Knowledge of Sellers, asserted or threatened
concerning the ownership, validity, registerability, enforceability,
infringement, use or licensed right to use any Intellectual Property as concerns
the Acquired Assets. To the Knowledge of the Sellers, no valid basis for any
such Proceeding, opposition or cancellation exists. To the Knowledge of the
Sellers, no person is violating any other Intellectual Property right owned by
any of them exclusively and included in the Acquired Assets. Upon the
Acquisition, Purchaser will have all the Intellectual Property rights necessary
to operate the Acquired Assets.
(b) The Sellers and their Subsidiaries have taken all reasonable
measures to protect the secrecy, confidentiality and value of all Trade Secrets
that are owned, used or held by any of them in connection with the Acquired
Assets, and, to the Knowledge of the Sellers, such Trade Secrets have not been
used, disclosed to or discovered by any person except pursuant to valid and
appropriate non-disclosure and/or license agreements and those agreements have
not been breached. To the Knowledge of the Sellers, none of their employees has
any patents issued or applications pending for any device, process, design or
invention of any kind now used or needed in order to operate the Acquired
Assets, which patents or applications have not been assigned to one of the
Sellers or their Subsidiaries. All current and prior employees have executed
valid intellectual property and confidentiality agreements.
(c) To the Knowledge of Sellers, each Intellectual Property Contract is
legal, valid, binding on Sellers and, to the Knowledge of Sellers, each other
party thereto and
26
enforceable against the other party, and is in full force and effect and will
continue to be so following the Acquisition subject to the Enforceability
Exceptions. No Seller has received written notice of any claim, and to the
Knowledge of Sellers, no claim has otherwise been threatened or asserted that
any of the Sellers or their Subsidiaries or, to the Knowledge of the Sellers,
another person, has breached any Intellectual Property Contract. There exists no
event, condition or occurrence that, with the giving of notice or lapse of time,
or both, would constitute a breach or default by any Seller or any of their
Subsidiaries or, to the Knowledge of the Sellers, another person under any
Intellectual Property Contract. No party to any Intellectual Property Contract
has given notice of its intention to cancel, terminate, change the scope of
rights under, or fail to renew any Intellectual Property Contract. No party to
any Intellectual Property Contract has repudiated in writing any provision
thereof. Except as may result from the filing of the Bankruptcy Cases,
consummation of the transactions contemplated hereby will not place any of the
Sellers or their Subsidiaries in breach or default of any Intellectual Property
Contract, or trigger any modification, termination or acceleration thereunder,
or effect any license under or encumbrance on Intellectual Property owned or
held by the Purchaser immediately prior to the Closing Date. To the Knowledge of
the Sellers, the Licensed Intellectual Property is valid, subsisting and
enforceable and is not subject to any outstanding order, judgment, decree or
agreement adversely affecting the use thereof or its rights thereto by the
Sellers and their Subsidiaries.
5.23 Cable Systems. None of the Acquired Assets is used in a "cable
system" as that term is defined in 47 U.S.C. Section 522(7), or has a
relationship with a "cable system" that is prohibited by the FCC Rules.
5.24 Acquired WCS Agreements. Schedule 5.24(a) sets forth a true and
complete list of, and true and complete copies were made available to Purchaser
in the Data Room on June 11, 2003 of, all WCS partition or disaggregation
agreements entered into by Sellers or their Subsidiaries ("Acquired WCS
Agreements"). Each Acquired WCS Agreement is valid, binding and in full force
and effect, meets all requirements of Law, and is enforceable in accordance with
its terms subject to the Enforceability Exceptions.
5.25 Collective Bargaining Agreements. No Seller or any of its
Subsidiaries is a party to or bound by any labor agreement or collective
bargaining agreement respecting its employees, and there is not any pending, or,
to the Knowledge of the Sellers, threatened, strike, walkout or other work
stoppage or any union organizing effort by or respecting its employees.
5.26 Accuracy of Copies and Statements. The copies of documents
delivered, provided or made available by any of the Sellers or their
Subsidiaries to Purchaser pursuant to the terms of this Agreement are complete
and accurate in all material respects.
5.27 ERISA. Neither the Sellers, any of their Subsidiaries nor any
entity which is considered one employer with the Sellers under Section 4001 of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or
Section 414 of the Code (an "ERISA Affiliate") (x) maintains or contributes to
or has within the past six years maintained or contributed to an "employee
pension plan" within the meaning of Section 3(2) of ERISA that is subject to
Subtitles C or D of Title IV of ERISA or (y) maintains or has an obligation to
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contribute to or has within the past six years maintained or had an obligation
to contribute to a "multiemployer plan" within the meaning of Section 3(37) of
ERISA.
5.28 Nucentrix Reports; Financial Statements. Nucentrix has made
available to the Purchaser each registration statement, report, proxy statement
or information statement prepared by it since December 31, 2002, including (i)
Nucentrix's Annual Report on Form 10-K for the year ended December 31, 2002, and
(ii) Nucentrix's Quarterly Reports on Form 10-Q for the period ended March 31,
2003 each in the form (including exhibits, annexes and any amendments thereto)
filed with the Securities and Exchange Commission (the "SEC") (collectively,
including any such reports filed subsequent to the date hereof and as amended,
the "Reports"). As of their respective dates, (or, if amended, as of the date of
such amendment) the Reports did not, and any Reports filed with the SEC
subsequent to the date hereof will not, contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements made therein, in light of the circumstances in
which they were made, not misleading. Each of the consolidated balance sheets
included in or incorporated by reference into the Reports (including the related
notes and schedules) fairly presents, or will fairly present, in all material
respects, the consolidated financial position of Nucentrix and its subsidiaries
as of its date and each of the consolidated statements of income and of changes
in financial position included in or incorporated by reference into the Reports
(including any related notes and schedules) fairly presents, or will fairly
present, in all material respects, the results of operations, retained earnings
and changes in financial position, as the case may be, of Nucentrix and its
subsidiaries for the periods set forth therein (subject, in the case of
unaudited statements, to notes and normal year-end audit adjustments that will
not be material in amount or effect), in each case in accordance with U.S.
generally accepted accounting principles ("GAAP") consistently applied during
the periods involved, except as may be noted therein.
5.29 Insurance.
(a) Schedule 5.29 sets forth a list of all insurance policies or
binders, which list shall contain the coverage, deductible and term of each
policy or binder, which are currently in effect insuring the Acquired Assets or
Assumed Liabilities and true and complete copies thereof were made available to
Purchaser in the Data Room on June 11, 2003 or have been otherwise expressly
provided to Purchaser prior to the date hereof.
(b) With respect to policies listed in Schedule 5.29, insofar as they
relate to the Acquired Assets or Assumed Liabilities, (i) the Sellers or their
Subsidiaries have paid all premiums due and have not received any notice of
cancellation, and (ii) (A) except as set forth in Schedule 5.29, there are no
pending or asserted claims against such insurance by any Seller or its
Subsidiaries and (B) no Seller or any of its Subsidiaries has received any
notice of any pending or threatened termination of any of such policies or any
premium increases for the current policy period with respect to any of such
policies.
5.30 WorldCom BTA Agreements. Schedule 5.30 sets forth a true and
complete list of all of the FCC Licenses subject to the WorldCom BTA Agreements.
True and complete copies of the WorldCom BTA Agreements and the FCC Licenses
subject to such agreements were made available to Purchaser in the Data Room on
June 11, 2003 or were
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otherwise expressly provided to Purchaser prior to the date hereof. No Person,
other than Sellers, has any rights in the Partitioned BTAs pursuant to the
WorldCom BTA Agreements.
5.31 Non-US Operations. None of the Sellers or any of their
Subsidiaries has any assets located outside the United States or derives revenue
from any sources or assets located outside the United States.
ARTICLE VI.
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to each Seller as follows:
6.01 Organization; Standing and Power. Purchaser is duly organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation and has the requisite corporate power and authority to own, lease
or otherwise hold its properties and assets and to carry on its business as
presently conducted.
6.02 Authority; Execution and Delivery; Enforceability. Purchaser has
the requisite corporate power and authority to execute this Agreement and to
consummate the Acquisition and the other transactions contemplated hereby. The
execution and delivery by Purchaser of this Agreement and the consummation by
Purchaser of the Acquisition and the other transactions contemplated hereby have
been duly authorized by all necessary corporate action on the part of Purchaser.
Purchaser has duly executed and delivered this Agreement. This Agreement
constitutes its legal, valid and binding obligation, enforceable against it in
accordance with its terms (assuming in each case due authorization, execution
and delivery thereof by the other parties thereto, and the entry of the Approval
Order) subject to the Enforceability Exceptions.
6.03 No Conflicts. The execution and delivery by Purchaser of this
Agreement does not, and the consummation of the Acquisition and the other
transactions contemplated hereby and compliance by Purchaser with the terms
hereof will not, conflict with, or result in any violation of or default (with
or without notice or lapse of time, or both) under, or give rise to a right of
termination, cancellation or acceleration of any obligation or the loss of a
material benefit under, or result in the creation of any Lien upon any of the
properties or assets of Purchaser or any of its Subsidiaries under, any
provision of (i) the certificate of incorporation or by-laws of Purchaser or any
of its Subsidiaries, (ii) any material Contract to which Purchaser or any of its
Subsidiaries is a party or by which any of their respective properties or assets
is bound or (iii) any Judgment or Law applicable to Purchaser or any of its
Subsidiaries or their respective properties or assets, other than, in the case
of clauses (ii) and (iii) above, any such items that, individually or in the
aggregate, could not reasonably be expected to prevent the consummation of the
transactions contemplated hereby.
6.04 Governmental Filings; Consents. No Consent of, or registration,
declaration or filing with, any Governmental Authority or third party is
required to be obtained or made by or with respect to Purchaser or any of its
Subsidiaries in connection with the execution, delivery and performance by
Purchaser of this Agreement or the consummation of the Acquisition or the other
transactions contemplated hereby, other than (i) compliance with and
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filings, if any, under Section 13(a) of the Exchange Act, (ii) filings with and
approvals of the FCC as required under the Communications Act and the FCC Rules,
(iii) those that may be required solely by reason of the participation of
Sellers (as opposed to any other third party) in the Acquisition and other
transactions contemplated hereby, (iv) entry of the Approval Order and (v) the
HSR Act.
6.05 Litigation. There are no (i) outstanding Judgments against
Purchaser or any of its Subsidiaries, (ii) Proceedings pending or, to the
Knowledge of Purchaser, threatened against Purchaser or any of its Subsidiaries,
or (iii) investigations by any Governmental Authority that are pending or, to
the Knowledge of Purchaser, threatened against Purchaser or any of its
Subsidiaries that, individually or in the aggregate, could reasonably be
expected to prevent the consummation of the transactions contemplated hereby.
6.06 Financing. Purchaser will have prior to the Closing cash in
immediately available funds sufficient to enable it to pay the Purchase Price at
the Closing.
6.07 Brokers or Finders. Purchaser has no liability to any agent,
broker, investment banker or other firm or Person for any broker's or finder's
fee or any other commission or similar fee in connection with the Acquisition or
the other transactions contemplated hereby for which Sellers could become liable
or obligated.
6.08 No Filings Outside United States. Subject to the accuracy of the
representation and warranty contained in Section 5.31, there are no filings
required under the antitrust or competition statutes of jurisdictions located
outside of the United States in connection with the transactions contemplated by
this Agreement as a result of the operations of Purchaser in jurisdictions
outside of the United States.
ARTICLE VII.
COVENANTS
7.01 Operation of Acquired Assets Prior to Closing. Except with the
prior written consent of Purchaser, from the date hereof until the Closing,
subject to the limitations imposed on Sellers as a result of having filed
petitions for relief under the Bankruptcy Code, Sellers and their Subsidiaries
shall operate and maintain the Acquired Assets in the ordinary course consistent
with past practice, and will use reasonable efforts to preserve intact
satisfactory relationships with (i) the lessors under the Tower Leases and
Acquired Spectrum Leases and (ii) the counterparties to the Assigned Contracts.
In addition, during the period from the date hereof until the Closing, Sellers
shall not and shall not permit their Subsidiaries to do any of the following
without the prior written consent of Purchaser:
(a) (i) fail to maintain all of the physical Acquired Assets in good
operating condition (ordinary wear and tear excepted), and in a state of repair
and condition that complies with applicable Law or (ii) sell or otherwise
dispose of any portion of the Spare Parts and Equipment otherwise constituting
Acquired Assets; provided, however, that Sellers and their Subsidiaries shall be
permitted to use or deploy all or any portion of such Spare Parts and Equipment
in the ordinary course of business to repair and replace Acquired Assets;
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(b) disconnect, remove or dispose of any of the equipment of Sellers or
their Subsidiaries included in or associated with the Acquired Assets or
equipment that would be included in or associated with Acquired Assets, if the
time of the disconnect, removal or disposal was the Closing;
(c) fail to pay the rent or other costs and expenses payable in
relation to the Acquired Spectrum Leases and Tower Leases that are Acquired
Assets on a timely basis consistent with past practice;
(d) create or permit to exist any Lien (other than Permitted Liens) on
any of the Acquired Assets;
(e) terminate, adversely amend or modify, renew, extend, exercise any
option or rights of first refusal, agree to a novation of or (directly or
indirectly) waive or relinquish any rights under any Assigned Contract or rights
that under any Contract would be an Assigned Contract if the time of the
termination, amendment, modification, renewal, extension, exercise, novation,
waiver or relinquishment was the Closing;
(f) terminate, adversely amend or modify, renew, extend, exercise any
option or rights of first refusal, agree to a novation of, or (explicitly or
implicitly) waive or relinquish any rights under, any Acquired Spectrum Lease or
Tower Lease that is an Acquired Asset, or allow, suffer or permit any default of
any Seller or any Subsidiary of a Seller under any Acquired Spectrum Lease or
Tower Lease that is an Acquired Asset;
(g) enter into any leasing or licensing agreements, take-or-pay
arrangements or similar affiliations, alignments or agreements with respect to
the use of any Acquired Spectrum Leases or Tower Leases that are Acquired
Assets, or sell, convey, assign, lease, or grant rights with respect to,
sublease, license or otherwise transfer or dispose of (i) any Acquired Spectrum
Lease, (ii) any Tower Lease that is an Acquired Asset, (iii) any other Station
Asset, except disposals of obsolete equipment on a Tower Site in the ordinary
course of business consistent with past practice, and provided that Sellers may
deploy inventory in the ordinary course of business, consistent with past
practice, in connection with the operation of the Company FCC Licenses, Third
Party Licenses and Acquired Spectrum Leases or any other aspects of the Business
that Purchaser is not purchasing under this Agreement, or (iv) any other asset
or property of any of Sellers or their Subsidiaries constituting the Acquired
Assets;
(h) directly or indirectly waive or relinquish any right or claim with
respect to any Acquired Assets;
(i) if any loss, damage, impairment, confiscation, or condemnation of
or to any of the physical Acquired Assets occurs, fail to use their reasonable
efforts to promptly repair, replace or restore such physical Acquired Assets to
their prior condition as soon as reasonably practicable thereafter;
(j) fail to maintain insurance policies on each of the Station Assets
consistent with current practices;
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(k) sell or convey, or attempt to sell or convey, or otherwise dispose
of any assets that would be Acquired Assets at the Closing;
(l) fail to operate in accordance with the terms of any
debtor-in-possession financing agreement;
(m) knowingly take any action or knowingly omit to take any action,
which action or omission, if taken prior to, on or after the date hereof, would
result in a Sellers Material Adverse Effect;
(n) amend or modify the WorldCom BTA Agreements;
(o) fail to pay the Persons listed on Schedule 5.08(d) within sixty
(60) days after the date on which the Bankruptcy Cases commence all amounts
necessary to cure any and all defaults or breaches under all applicable
Contracts with such Persons which but for such default or breach would be
Assigned Contracts which arose prior to the date on which the Bankruptcy Cases
commenced; or
(p) agree to do any of the foregoing.
7.02 Access to Information; Access to Personnel; Site Inspections.
(a) During the period from the date hereof until the Closing Date,
Sellers shall, subject to applicable Law, and shall cause their Subsidiaries to,
provide Purchaser and its authorized Representatives reasonable access, upon
reasonable notice and during normal business hours, to personnel responsible
for, and records relating to the Acquired Assets or any assets that would
constitute Acquired Assets if the Closing were to occur at the time of
measurement, and during such period will furnish promptly to Purchaser any
information in the possession of any Seller or any Subsidiary of any Seller
concerning the Acquired Assets or any assets that would constitute Acquired
Assets if the Closing were to occur at the time of measurement, as Purchaser may
reasonably request; provided, however, that in no event shall Sellers be
obligated to provide (i) access or information in violation of Law, (ii) any
information the disclosure of which would cause the loss of any legal privilege
available to any Seller relating to such information or would cause any Seller
to breach a confidentiality obligation to which it is bound; provided that the
applicable Seller has used its reasonable efforts to protect the privilege or to
obtain a waiver of the applicable contractual obligation, or (iii) copies of
bids, letters of intent, expressions of interest or other proposals received
from other Persons prior to the Bid Deadline in connection with the transactions
contemplated by this Agreement or information and analyses relating to such
communications, except to the extent required in the Bidding Procedures Order.
(b) During the period from the date hereof until the Closing Date,
Purchaser and its Representatives will have the right to enter the properties or
sites owned or, subject to access rights to which Sellers or the Subsidiaries of
Sellers are entitled by Law or Contract, leased by the Sellers and their
Subsidiaries and relating to the Acquired Assets or any assets that would
constitute Acquired Assets if the Closing were to occur at the time of
measurement, and inspect the equipment thereon of Sellers and their
Subsidiaries, making surveys, mechanical and structural engineering studies,
environmental assessments, and any other investigations and
32
inspections as Purchaser may reasonably request; provided that, the foregoing
shall not permit the Purchaser to conduct any invasive testing of soil at any
property owned or leased by Sellers or the Subsidiaries and Purchaser shall
provide Sellers at least 24 hours prior written notice of any intent of any
entry, inspection or actions to be taken under this Section 7.02(b) and shall
permit a Representative of Sellers to accompany Purchaser and its
Representatives on any site, entry or inspection and shall, to the extent not
subject to any confidentiality provisions or Contracts, provide to Nucentrix
copies of all surveys and environmental assessments in Purchaser's possession
performed on behalf of Purchaser by third parties with respect to such
properties or sites.
(c) For a period of one year from and after the Closing Date, upon the
written request of Sellers, Purchaser will reasonably promptly provide Sellers
with such tax information relating to the Acquired Assets as of the Closing, as
Sellers may reasonably request.
7.03 Spectrum Testing. From and after the date hereof, if Purchaser
wishes to conduct any operational tests with respect to electromagnetic spectrum
to be included in the Acquired Assets, Sellers will, and will cause their
Subsidiaries to, cooperate with Purchaser in the conduct of such tests and
provide Purchaser with access to the assets and properties of Sellers and their
Subsidiaries reasonably necessary to conduct such testing; provided that neither
Sellers nor any of their Subsidiaries shall be required to make any
out-of-pocket expenditures in connection with the testing contemplated by this
Section 7.03.
7.04 FCC Filings.
(a) Sellers will file or cause to be filed with the FCC as soon as
practicable after the commencement of the Bankruptcy Cases, but in no event more
than ten (10) Business Days following the commencement of the Bankruptcy Cases,
pro forma applications with respect to the assignment of all FCC Licenses to the
applicable Seller, in each case as a debtor-in-possession. Sellers shall use
their best efforts to prosecute such pro forma applications to obtain FCC
approval. No Seller shall take any action, or fail to take any action, if such
action or failure to act would (or would be expected to) have the effect of
delaying the receipt of or failing to obtain such FCC consent, including, but
not limited to, providing such information or data as the FCC may request.
(b) Within ten (10) Business Days after the date hereof, Sellers will
file or will cause to be filed with the FCC an application to partition the
portion of the WorldCom BTAs that is not leased pursuant to the WorldCom BTA
Agreements in accordance with Exhibit B of the WorldCom BTA Agreements (the
"Partitioned BTAs"). Sellers shall use their best efforts to prosecute such
application to obtain FCC approval. No Seller shall take any action, or fail to
take any action, if such action or failure to act would (or would be expected
to) have the effect of delaying the receipt of or failing to obtain the FCC
consent for such partitions, including, but not limited to, providing such
information or data as the FCC may request. If the WorldCom BTAs are not
partitioned in accordance with this Section 7.04(b) by the date of entry of the
Approval Order then, Purchaser and Sellers will cause the application to
partition the WorldCom BTAs to be incorporated into the FCC Assignment
Application at the time of filing of the FCC Assignment Applications.
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(c) Not later than five (5) Business Days following the date of entry
of the Approval Order, Purchaser and Sellers shall file or cause to be filed
with the FCC all appropriate applications with respect to the assignment to
Purchaser of the Company FCC Licenses, the amendment of the Company Pending
Applications to specify Purchaser as the applicant as of the Closing and the
partitioning of the WorldCom BTAs into the Partitioned BTAs to the extent not
partitioned in accordance with Section 7.04(b) by the date of entry of the
Approval Order. During the period from the date of entry of the Approval Order
to the Closing Date, promptly after any other FCC authorization or application
becomes a Company FCC License or Company Pending Application, as applicable,
Purchaser and Sellers shall file or cause to be filed with the FCC such
assignment applications and filings with respect to such FCC authorizations and
applications. Such FCC authorizations and applications are hereinafter referred
to as the "FCC Assignment Applications." The FCC Assignment Applications and any
supplemental information furnished in connection therewith shall be in
substantial compliance with the FCC Rules.
(d) Purchaser and Sellers shall furnish to each other such necessary
information and reasonable assistance as the other may reasonably request in
connection with the preparation, filing and prosecution of the FCC Assignment
Applications and the WorldCom BTA Application, if any. Purchaser and Sellers
shall bear their own expenses in connection with the preparation, filing and
prosecution of the FCC Assignment Applications and the WorldCom BTA Application,
if any. Purchaser and Sellers shall each use their commercially reasonable
efforts to prosecute the FCC Assignment Applications and the WorldCom BTA
Application, if any, and shall furnish to the FCC any documents, materials, or
other information reasonably requested by the FCC; provided that in connection
with obtaining such approvals, Purchaser shall not be required to agree to any
conditions or limitations (i) with respect to any business or property of
Purchaser or its Affiliates (excluding the Acquired Assets) on terms not
acceptable to Purchaser in its sole and absolute discretion or (ii) on the
Acquired Assets on terms not reasonably acceptable to Purchaser or that would
have, in the aggregate, a material impact on the benefits expected to be
obtained by Purchaser and its Affiliates from the Acquisition.
(e) If the condition set forth in Section 8.02(g) hereof has not been
satisfied on or before April 1, 2004, Sellers will, upon written notice from
Purchaser, either (i) amend and bifurcate the FCC Assignment Application in
order that all portions of the FCC Assignment Applications relating to the
WorldCom BTAs be considered for approval by the FCC pursuant to a separate
application process or (ii) if the bifurcation described in clause (i) is not
permitted by the FCC, amend the FCC Assignment Application to delete the
portions of the FCC Assignment Applications relating to the WorldCom BTAs from
the FCC Assignment Applications and will, not later than five (5) Business Days
following the amendment of the FCC Assignment Applications, file or cause to be
filed with the FCC a separate application with respect to the partitioning of
the WorldCom BTAs in accordance with Exhibit B of the WorldCom BTA Agreements
and the transfer and assignment to Purchaser of the Partitioned BTAs (the
bifurcated application or separate application, as the case may be, the
"WorldCom BTA Application"). The WorldCom BTA Application, if any, and any
supplemental information furnished in connection therewith shall be in
substantial compliance with the FCC Rules.
7.05 Third Party Consents. During the period from the date hereof until
90 days after the Closing Date, Purchaser, on the one hand, and Sellers, on the
other hand, will
34
cooperate and use their respective commercially reasonable efforts to obtain any
consents, approvals and waivers required from third parties to assign, convey,
transfer and deliver the Acquired Assets to Purchaser (to the extent such
consents, approvals and waivers are required notwithstanding the entry of the
Approval Order); provided, however, that Purchaser will not be required to
expend any sum, make a financial commitment or grant or agree to any concession
in order to obtain any such required consent, approval or waiver. If any
required consent, approval or waiver is not obtained prior to or within 90 days
after the Closing Date, the parties shall (at their own expense), if requested
by Purchaser, implement an arrangement, reasonable and lawful as to both
Purchaser and Sellers, designed to afford to Purchaser the economic benefits of
the affected Acquired Assets, if any.
7.06 Commercially Reasonable Efforts.
(a) Subject to Sections 7.04(c) and 7.06(b), each of the parties hereto
shall use their respective commercially reasonable efforts to take, or cause to
be taken, all actions, and to do, or cause to be done, and to assist and
cooperate with the other parties hereto in doing, all things necessary, proper
or advisable under Laws to ensure that (i) the conditions set forth in this
Agreement are satisfied, (ii) to consummate and make effective, as promptly as
practicable, the Acquisition and the other transactions contemplated hereby and
(iii) each of the FCC Assignment Applications is approved by the FCC by Final
Order.
(b) Without limiting the generality of the foregoing, the parties
hereto shall furnish to each other such necessary information and reasonable
assistance, as each may reasonably request in connection with the preparation,
filing and prosecution of applications and motion papers, including the Sale
Motion and FCC Assignment Applications, needed to obtain by Final Order,
Bankruptcy Court approval of the Approval Order and FCC approval of the FCC
Assignment Applications, and shall execute any additional documents and
instruments reasonably requested by the other parties that are necessary to
consummate the transactions contemplated hereby, whether before or after the
Closing.
7.07 Notification of Certain Matters. Sellers shall give prompt notice
to Purchaser, and Purchaser shall give prompt notice to Sellers, of (i) any
notice or other communication from any Person alleging that the consent of such
Person is or may be required in connection with the Acquisition or the
transactions contemplated hereby, (ii) any written objection, litigation or
administrative proceeding that challenges the Acquisition or the transactions
contemplated hereby or the entry of the Approval Order and (iii) any fact,
circumstance, occurrence, condition, act, event or omission with respect to the
assets that as of the Closing would be Acquired Assets that has had or, would,
in the aggregate, be reasonably likely to result in a Sellers Material Adverse
Effect, except that Sellers shall not be required to provide the terms and
conditions of, or copies of, competing bids, letters of intent, expressions of
interest or other proposals to purchase all or any portion of the Acquired
Assets or any other assets of Sellers that are received by Sellers prior to the
Bid Deadline, all of which shall be delivered to Purchaser as contemplated by
the Bidding Procedures Order.
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7.08 Maintenance of FCC Licenses.
(a) Except with respect to the FCC Licenses set forth on Schedule 5.30
(other than the WorldCom BTAs), Sellers will, and will cause their Subsidiaries
to:
(i) maintain in full force and effect all Company FCC
Licenses, and timely comply with FCC Rules, including (x) the filing of
Annual FCC Reports and (y) making all installment payments in respect of
FCC Licenses within two calendar quarters of the due dates for such
installment payments;
(ii) except for those Company Pending Applications that
request additional time to complete construction of facilities authorized
under BTA authorizations, prosecute and defend diligently and in good faith
each Company Pending Application;
(iii) (A) except with respect to Acquired Spectrum Leases that
are removed from the Acquired Assets pursuant to Section 2.07 or that
otherwise constitute Excluded Assets, enforce all of its rights under each
Acquired Spectrum Lease on a timely basis; (B) not enter into any agreement
on or with respect to spectrum capacity under any Company FCC License
without the prior consultation with and the prior approval of Purchaser;
and (C) not enter into any agreements to accept harmful interference as
prescribed by the FCC Rules in connection with any Company FCC License
without the prior consultation with and the prior approval of Purchaser;
(iv) for any Company FCC License that is subject to 47 C.F.R.
Section 21.44(a)(3), not remove or alter of any facilities so as to render
any station not operational for a period of 30 days or more, or not
operational as of the Closing, and, for any Acquired Lease Spectrum that is
subject to 47 C.F.R. Section 21.44(a)(3), not permit the removal or
alteration of any facilities so as to render any station not operational
for a period of 30 days or more, or not operational as of the Closing; and
(v) except as set forth in Section 7.04, not seek the
modification of any Company FCC License, except for such modifications as
are authorized by this Agreement, are required by FCC Rules or which become
authorized pursuant to Company Pending Applications. In any such event, the
Sellers will consult with Purchaser prior to seeking such modification.
(b) Except with respect to Acquired Spectrum Leases that are removed
from the Acquired Assets pursuant to Section 2.07 or that otherwise constitute
Excluded Assets, Sellers and their Subsidiaries shall use reasonable efforts to
ensure that third party lessors under Acquired Spectrum Leases:
(i) maintain in full force and effect all Acquired Spectrum
Leases, and timely and materially comply with FCC Rules, including the
filing of Annual FCC Reports;
(ii) prosecute and defend diligently and in good faith each
Leased Pending Application;
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(iii) (A) not enter into any agreement regarding or with
respect to its proposed or authorized ITFS or MMDS spectrum capacity for
the system to which the Acquired Spectrum Lease relates; (B) not enter into
any agreement regarding or with respect to spectrum capacity under any
Acquired Spectrum Lease without the prior approval of Sellers; and (C) not
enter into any agreements to accept harmful interference as prescribed by
the FCC Rules in connection with any Acquired Spectrum Lease without the
prior consultation with and the prior approval of Purchaser; and
(iv) (A) not seek to modify any Acquired Spectrum Lease,
except for such modifications as are authorized by this Agreement, are
required by FCC Rules or which become authorized pursuant to Leased Pending
Applications; and (B) prevent the new application, or amendment to any
Leased Pending Application, except (x) as specifically required by the
terms of the Acquired Spectrum Leases, (y) as required by the terms of an
applicable Acquired Spectrum Lease or as requested by the FCC, or (z) as
may be reasonably required to operate the facilities proposed in such
Leased Pending Application.
The Sellers will consult with Purchaser prior to taking any material
action under this Section 7.08(b).
(c) Sellers and their Subsidiaries will ensure and will use reasonable
efforts to ensure that their counterparties, as the case may be, to the Third
Party Licenses:
(i) maintain in full force and effect all Third Party
Licenses, and timely and materially comply with FCC Rules, including the
filing of Annual FCC Reports;
(ii) prosecute and defend diligently and in good faith each
Third Party Pending Application;
(iii) (A) not enter into any agreement regarding or with
respect to its proposed or authorized ITFS or MMDS spectrum capacity for
the system to which the Third Party License relates; (B) not enter into any
agreement regarding or with respect to spectrum capacity under any Third
Party License without the prior approval of Purchaser; and (C) not enter
into any agreements to accept harmful interference as prescribed by the FCC
Rules in connection with any Third Party License without the prior
consultation with and the prior approval of Purchaser; and
(iv) (A) not seek to modify any Third Party License, except
for such modifications as are authorized by this Agreement, are required by
FCC Rules or which become authorized pursuant to Third Party Pending
Applications; and (B) prevent the new application, or amendment to any
Third Party Pending Application, except (w) as specifically required by the
terms of the agreement by which Sellers have agreed to acquire the Third
Party Licenses, (x) as required by the terms of an applicable Third Party
License, (y) as requested by the FCC, or (z) as may be reasonably required
to operate the facilities proposed in such Third Party Pending Application.
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The Sellers will consult with Purchaser prior to taking any material
action under this Section 7.08(c).
7.09 Bankruptcy Covenants.
(a) Within three Business Days following the commencement of the
Bankruptcy Cases, Sellers will, and will cause their applicable Subsidiaries to,
at their sole cost and expense, file a motion to obtain an order, pursuant to 11
U.S.C. Sections 105, 363, and 365, to approve the Acquisition, in form and
substance reasonably acceptable to Purchaser and Nucentrix, but including the
express terms of the Approval Order as defined and on the terms contained herein
(the "Approval Motion"). Sellers will, and will cause their applicable
Subsidiaries to, use their best efforts to obtain the Approval Order on or
before November 17, 2003.
(b) Immediately following the commencement of the Bankruptcy Cases,
Sellers will, and will cause their applicable Subsidiaries to, at their sole
cost and expense, file a motion, pursuant to 11 U.S.C. Sections 105, 363, and
365, substantially in the form attached hereto as Exhibit C, including all
exhibits thereto, to approve the Bidding Procedures Order (the "Bid Procedures
Motion"). Sellers will, and will cause their applicable Subsidiaries to, use
their best efforts to obtain the approval of the Bidding Procedures Order on or
before September 26, 2003.
(c) Sellers will provide Purchaser and its Representatives the
opportunity, and sufficient time, to review and comment on all documents,
motions, orders, filings or pleadings that Sellers file with the Bankruptcy
Court which relate to the consummation or approval of the Acquisition and this
Agreement, the Approval Motion, the Bid Procedures Motion, related orders, or
any provision herein or therein, and will incorporate all reasonable comments of
Purchaser and its Representatives. Sellers will also promptly provide Purchaser
with facsimile or electronic copies of all pleadings received by or served by or
upon the Sellers in connection with its Bankruptcy Case, which, to the Knowledge
of Sellers, have not otherwise been served on Purchaser.
(d) From and after the commencement of the Bankruptcy Case, Sellers
will, and will cause their applicable Subsidiaries to, continue to operate their
business as a debtor in possession pursuant to Sections 1107 and 1108 of the
Bankruptcy Code.
(e) During the period from the date hereof until the Closing, Sellers
shall not and shall not permit their Subsidiaries to take any actions outside
the ordinary and usual course of business without the approval of the Bankruptcy
Court after written notice to Purchaser.
7.10 Alternative Transaction. Purchaser acknowledges and agrees that
until the earlier of the entry by the Bankruptcy Court of the Approval Order or
the termination of this Agreement in accordance with its terms, Sellers and
their respective Affiliates and Representatives shall be permitted to take such
actions as permitted under the Bidding Procedures Order with respect to an
Alternative Transaction and may take any other affirmative action (including
entering into any agreement or letter-of-intent with respect thereto) to cause,
promote or assist the purchase of all or any portion of the Acquired Assets (or
any other assets of any Seller) by a third party (an "Alternative Transaction")
not otherwise prohibited hereby;
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provided, however, that (i) Sellers and their respective Affiliates may only
enter into, and seek Bankruptcy Court approval of, any definitive agreement with
respect thereto if such Alternative Transaction is a Superior Transaction and
(ii) Sellers may only seek Bankruptcy Court approval of any such Alternative
Transaction after the Bankruptcy Court rules on the Bidding Procedures Order.
Without limiting the generality of the foregoing, Sellers and their respective
Affiliates and Representatives shall be permitted to supply information relating
to any Seller or the Acquired Assets (or any other assets of any Seller) to
prospective purchasers in accordance with the Bidding Procedures Order (but
subject to the condition that a confidentiality agreement as provided for in the
Bidding Procedures Order shall be required prior to disclosing or providing any
material, non-public information of any Seller).
7.11 Employee Matters. Sellers acknowledge and agree that Purchaser
will not be required to offer employment to or employ any present or former
employee (including any employee on any type of leave of absence) of any Seller
and that Purchaser has no liability or obligation relating to any such employees
of Sellers or their Subsidiaries. Following the entry of the Approval Order,
Purchaser may meet with and discuss with employees of the Sellers, potential
employment with Purchaser and its Affiliates commencing on or after the Closing.
7.12 Further Assurances.
(a) From time to time, as and when requested by any party, each party
will execute and deliver, or cause to be executed and delivered, all such
documents and instruments and shall take, or cause to be taken, all such further
or other actions, as such other party may reasonably deem necessary or desirable
to consummate the Acquisition and the other transactions contemplated hereby,
including, in the case of Sellers, providing the Books and Records and executing
and delivering to Purchaser such assignments, deeds, bills of sale, consents and
other instruments, in each case as Purchaser or its counsel may reasonably
request as necessary or desirable for such purpose.
(b) Sellers and Purchaser each further agree that, subject to the terms
hereof, prior to the Closing they will use their commercially reasonable efforts
to take, or cause to be taken, all actions and to do, or cause to be done, all
things necessary, proper or advisable under the Bankruptcy Code and other
applicable Laws and Regulations to consummate and make effective the
transactions contemplated by this Agreement, including, but not limited to,
using their commercially reasonable efforts to obtain all necessary waivers,
consents and approvals and to effect all necessary filings, including, but not
limited to, obtaining the entry by the Bankruptcy Court of the Approval Order.
7.13 Tax Matters.
(a) Sellers shall furnish or cause to be furnished to the Purchaser,
upon request, as promptly as practicable, such information and assistance
relating to the Acquired Assets as is reasonably necessary for filing of all Tax
returns, including any claim for exemption or exclusion from the application or
imposition of any Taxes or making of any election related to Taxes, the payment
of Taxes, the preparation for any audit by any Taxing Authority and the
prosecution or defense of any Proceeding relating to any Tax return.
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(b) All Transfer Taxes arising out of the transfer of the Acquired
Assets and any Transfer Taxes required to effect any recording or filing with
respect thereto shall be borne by Sellers. The Transfer Taxes shall be
calculated assuming that no exemption from Transfer Taxes is available, unless
otherwise indicated in the Approval Order or, at Closing, Purchaser shall
provide an appropriate resale exemption certificate or other evidence acceptable
to Sellers of exemption from such Transfer Taxes. Sellers and Purchaser shall
cooperate to timely determine the amount of any Transfer Taxes and timely
prepare and file any returns or other filings relating to such Transfer Taxes,
in form and substance satisfactory to each party, including any claim for
exemption or exclusion from the application or imposition of any Transfer Taxes.
Sellers shall pay such Transfer Taxes and shall file all necessary documentation
and returns with respect to such Transfer Taxes when due, and shall promptly,
following the filing thereof, furnish a copy of such return or other filing and
a copy of a receipt showing payment of any such Transfer Tax to Purchaser.
(c) Except as provided in Section 7.13(b), all real property Taxes,
personal property Taxes and similar ad valorem obligations levied with respect
to the Acquired Assets for a Tax period that includes (but does not end on) the
Closing Date, whether imposed or assessed before or after the Closing Date,
shall be apportioned between Sellers, on the one hand, and Purchaser, on the
other, as of the Closing Date, based on the number of days in any such period
falling prior to and including the Closing Date, on the one hand, and after the
Closing Date, on the other hand. Sellers shall be responsible for the portion of
such apportioned Taxes attributable to the period up to and including the
Closing Date and Purchaser shall be responsible for the portion of such
apportioned Taxes attributable to the period after the Closing Date.
Accordingly, if any Taxes required to be apportioned hereunder are paid by
Purchaser, on the one hand, or Sellers, on the other hand, then Sellers or
Purchaser, as the case may be, shall promptly reimburse the paying party for the
non-paying party's share of such apportioned Taxes. Similarly, if Purchaser, on
the one hand, or Sellers, on the other hand, receive a refund of any Taxes that
are required to be apportioned hereunder, then the recipient of such refund
shall promptly pay to the other party such other party's share of such refund as
determined in accordance with the foregoing apportionment provisions (assuming
that Purchaser and Sellers contributed to the applicable Tax payment in
accordance with the first two sentences of this Section 7.13(c)).
7.14 Confidentiality. Sellers will and will cause their Subsidiaries to
enforce all of their rights under each confidentiality agreement entered into
with a potential bidder as contemplated by the Bidding Procedures Order.
7.15 Press Releases. Except for filings with the Bankruptcy Court with
respect to the Bankruptcy Cases, a press release, mutually agreed upon by
Sellers and Purchaser, to be issued by Nucentrix immediately following the
execution of this Agreement and an associated Current Report on Form 8-K (which
Form 8-K and press release to be filed and issued, respectively, immediately
following the execution of this Agreement shall report and announce the
execution of this Agreement and the filing of the Bankruptcy Cases, with the
Form 8-K including as an exhibit a copy of this Agreement), and as expressly
provided in the DIP Loan Agreement, if any, no public filing, release or
announcement concerning this Agreement or the transactions contemplated hereby
shall be issued by any party or its Affiliates without the prior written consent
of Purchaser, in the case of Sellers, or, Nucentrix, in the case of Purchaser
40
(which consent shall not be unreasonably withheld or delayed), unless such
disclosure is required by an order of the Bankruptcy Court or any other
Judgment, by Law or by obligations pursuant to an agreement with any national
securities exchange; provided, however, that the party intending to make such
release shall use commercially reasonable efforts consistent with such order,
Judgment, Law or obligation to give the other parties prior notice and to
consult with the other parties with respect to the text thereof. To the extent
the provisions of this Section 7.15 and the provisions of the Non-Disclosure
Agreement conflict, the terms of this Section 7.15 shall control.
7.16 Expenses. Except as set forth in Sections 7.04 (FCC Filings), 7.05
(Third Party Consents), 7.13 (Tax Matters) and 9.03 (Expense Reimbursement;
Break-up Fee), all costs and expenses (including all fees and expenses of
counsel, accountants, investment bankers, experts and consultants to a party or
its Affiliates) incurred by a party or on its behalf in connection with the
preparation, negotiation, execution and delivery, and performance of this
Agreement, and the transactions contemplated hereby and thereby (including costs
incurred in connection with obtaining entry of the Approval Order and the
Bidding Procedures Order) shall be paid by the party incurring such expense.
7.17 Rejected Contracts. Sellers shall not reject or cause to be
rejected any Contract in any bankruptcy proceeding following the date hereof
unless such Contract is listed as an Excluded Asset on Schedule 7.17 or that,
after the date hereof, has been removed from the Acquired Assets in accordance
with Section 2.07.
7.18 Renewal of Certain Short Term Leases. Sellers shall, and shall
cause their Subsidiaries to, use their best efforts to obtain the renewal of
each Contract which could form a part of the Acquired Assets and which may
terminate pursuant to its terms prior to the Termination Date on terms
reasonably acceptable to Purchaser, unless Purchaser shall request in writing
that any such Contract should not be renewed.
7.19 Apportionment of Prepaid Expenses and Accounts Payable.
(a) Subject to Section 7.19(c), on the Closing Date, those items of
expenses and accounts payable specifically referred to in Section 7.19(b) in
relation to the Acquired Assets that are Assumed Liabilities and are paid or
payable before and after the Closing Date on an annual, quarterly, monthly or
other regular periodic basis ("Prorated Expense Items") shall be prorated as of
the Closing Date and apportioned, such that (i) Purchaser will receive the
economic benefit or burden, as applicable, of all such items after the Closing
Date, and (ii) Sellers shall receive the economic benefit or burden, as
applicable, of all such items for the period prior to, and including, the
Closing Date. After the Closing Date, (x) if Purchaser should receive any bills
or accounts or any reimbursement for prepaid expenses in relation to Prorated
Expense Items that are attributable in whole to the period prior to, and
including, the Closing Date, then Purchaser shall promptly forward the same to
Sellers (for payment, in the case of any such bills or accounts), (y) if Sellers
should receive any bills or accounts or any reimbursement for prepaid expenses
in relation to the Prorated Expense Items that are attributable in whole to the
period after the Closing Date, then Sellers shall promptly forward the same to
Purchaser (for payment, in the case of any such bills or accounts) and (z) if
Purchaser or Sellers should receive any bills or accounts or any reimbursements
for prepaid expenses in relation to the Prorated
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Expense Items that are attributable in part to the period prior to, and
including, the Closing Date, and in part to the period after the Closing Date,
the amount thereof shall be apportioned between Sellers, on the one hand, and
Purchaser, on the other hand, as of the Closing Date, based on the number of
days in such period falling prior to and including the Closing Date, on the one
hand, and after the Closing Date, on the other hand. In the case of bills or
accounts referred to in clause (z), the party receiving the same shall be
required to pay only such portion of such xxxx or account for which it is
responsible in accordance with this Section 7.19(a). All rent receivable under
the Tower Subleases shall be apportioned such that Sellers shall receive the
rent attributable to the period prior to, and including, the Closing Date and
Purchaser shall receive the rent attributable to the period commencing after the
Closing Date.
(b) The following expense items shall be prorated in the manner
contemplated by Section 7.19(a): (i) regular periodic rent or lease payments
(including prepaid rent and rent payable in arrears) payable under the Acquired
Spectrum Leases and Tower Leases, (ii) annual FCC regulatory fees in relation to
the Company FCC Licenses, (iii) Taxes as provided in Section 7.13(c), and (iv)
utilities expenses pertaining to the Tower Leases.
(c) Not less than ten (10) Business Days prior to the Closing Date, the
parties will jointly prepare a preliminary closing statement containing their
good faith calculation of the prorations provided for in Section 7.19(a). If
final bills or accounts in relation to any Prorated Expense Items or rent
receivable referred to in Section 7.19(a) are not available or have not been
issued prior to that date for any Prorated Expense Item, or rent receivable that
is required to be prorated as contemplated in Section 7.19(a), then Nucentrix
and Purchaser shall estimate the amount of each such item in good faith, and
such estimate shall be reflected in the preliminary closing statement. If the
parties are unable to agree upon the amounts for the preliminary closing
statement, Purchaser shall provide its good faith estimate which shall be
binding upon the parties for purposes of the amounts to be paid at Closing. The
amount payable by Purchaser at the Closing will be increased or decreased to
reflect the net amount owing between the parties as shown on such preliminary
closing statement, using such estimates where necessary. Final adjustment
between the parties as to any estimated item used in the preparation of the
preliminary closing statement shall be made as soon as reasonably practicable
after the Closing after such item becomes final. Payments in connection with
such final adjustment or otherwise necessary to reconcile amounts between the
parties in accordance with Section 7.19(a) will be due within thirty (30) days
of written notice from the party entitled to payment.
7.20 Third Party Licenses.
(a) If any of the Third Party Licenses set forth on Schedule 5.12(a)
are acquired by any Seller or any of its Affiliates after the Closing Date, then
(i) such Seller and Purchaser shall (or Sellers shall cause such Affiliate to)
as soon as practicable file an application for assignment of such Third Party
License to Purchaser and (ii) subject to the receipt of any necessary Consent of
any Governmental Authority required to be obtained by Sellers and/or Purchaser
in connection therewith, including the approval of the FCC by Final Order, (x)
Sellers shall (or shall cause their Affiliates to) sell, assign, transfer,
convey and deliver to Purchaser such Third Party Licenses and (y) in
consideration therefor, Purchaser shall pay to Sellers the applicable amounts
for such Third Party Licenses set forth on Schedule 5.12(a).
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(b) Except with respect to Third Party Licenses set forth on Schedule
5.12(a), prior to the Closing, Sellers will not enter into any Contract to
acquire any Third Party License that is the subject of an Acquired Spectrum
Lease without the written consent of Purchaser if such acquisition may be
consummated after the Closing Date.
7.21 Third Party Dedicated Equipment. Solely with respect to those
items of Third Party Dedicated Equipment which are not set forth on Schedule
5.18, Sellers hereby undertake and agree as follows:
Sellers will not, and will cause their Subsidiaries not to, sell,
transfer or otherwise dispose of such equipment to any third party without
obtaining a prior written agreement and acknowledgment from such third party
addressed to Nucentrix and Purchaser to the effect that: (a) all rights, titles
and interests of such third party are subject and subordinate to the rights of
Purchaser, and any landlord, lessor or other Person owning or in possession of a
site on which such equipment is located (a "Site Holder"), not to be disturbed
in the use or possession of such site and any real or personal property thereon
(including in the case of Purchaser, any Acquired Assets located thereon), (b)
any disconnection or removal of such equipment by such third party will only be
effected in a manner that does not damage or adversely affect the operation or
functionality of such Acquired Assets or the real or personal property located
on such site, (c) such third party will obtain the prior consent of Purchaser
(not to be unreasonably withheld or delayed) and any other applicable Site
Holder prior to accessing such site in connection with any disconnection or
removal of equipment activities, (d) prior to the Closing, such third party may
only disconnect or remove such equipment under the supervision of Sellers'
designated technical specialists, (e) after the Closing, such third party may
only disconnect or remove such equipment under the supervision of Purchaser's
designated technical specialists, (f) such third party shall be solely
responsible for any damages or out-of-pocket costs incurred by Sellers,
Purchaser or any other Site Holder resulting from any such disconnection or
removal, and (g) Purchaser has not assumed any obligations or liabilities to
such third party including any obligation to maintain, repair, insure, or
operate any such equipment.
7.22 FCC Waivers; Notice; Cure Amounts.
(a) If Purchaser is requested in writing by Nucentrix on the one hand,
or Sellers are requested in writing by Purchaser on the other hand, the
requested party shall use its or their commercially reasonable efforts, as
applicable, to assist in preparing and filing with the FCC a request for a
waiver for the Company FCC Licenses included in the Acquired Assets or for any
FCC License associated with an Acquired Spectrum Lease of any FCC Rules that
might result in a revocation or forfeiture for failure to provide service,
including but not limited to, 47 C.F.R. Sections 21.43(b), 21.44(a)(3),
21.303(c) and 21.303(d); provided that the foregoing shall not affect the
obligations of Sellers pursuant to Section 7.01.
(b) If, at any time after the date the Approval Order is granted, an
event outside of the control of Sellers occurs (relating solely to action or
inaction after the date the Approval Order is granted) which, if left uncured,
would result in a breach of Sections 5.10(i)(iv) or (v), Sellers shall provide
Purchaser with prompt written notice of such occurrence, which notice shall set
forth in reasonable detail: (i) an explanation of the event and the impact such
event has had upon the assets and property of Sellers and their Subsidiaries
(including a list of all
43
FCC Licenses and/or Acquired Spectrum Leases which could reasonably be expected
to be at risk for forfeiture, cancellation or revocation in the absence of
affirmative remedial efforts); (ii) a description of the actions Sellers would
propose to take in order to remedy the effects of the event upon the assets and
property of Sellers and their Subsidiaries and cure any breaches or pending
breaches of Section 5.10(i)(iv) or (v), including a detailed good faith estimate
of costs associated with each such action; and (iii) a description of the
insurance proceeds or other sources of funding available to Sellers to cover the
identified costs, including without limitation, any amounts available under the
DIP Loan Agreement, if any. In the event that Sellers can establish to
Purchaser's reasonable satisfaction that: (i) the course of action proposed in
the aforementioned notice is a reasonable and necessary response to the damage
caused to the Acquired Assets and (ii) that Sellers do not have access to
sufficient funds, including pursuant to the DIP Loan Agreement, if any, for such
purposes, in order to complete that portion of the proposed course of action
which falls outside of Sellers' ordinary course of business, Sellers may
thereafter, if the DIP Loan Agreement is in effect, request that the budget
and/or the funding commitment established pursuant to such DIP Loan Agreement be
increased to include the identified funding shortfall; provided, however, that
any such request will not create any obligation of Purchaser hereunder and any
changes to such DIP Loan Agreement, if any, shall be at Purchaser's sole
discretion.
7.23 Mutual Releases.
(a) Sellers agree to release Purchaser, subject to payment by Purchaser
of all outstanding amounts owing in connection with the transactions
contemplated by this Agreement and the DIP Loan Agreement, if any, from all
rights, claims, demands and causes of action of Sellers, however arising, under
and in connection with the DIP Loan Agreement, if any, and shall deliver an
instrument to that effect, in a form satisfactory to Purchaser, to Purchaser at
the Closing (the "Purchaser Release").
(b) Purchaser agrees to release Sellers, subject to payment by Sellers
of all outstanding amounts owing in connection with the transactions
contemplated by this Agreement and the DIP Loan Agreement, if any, from all
rights, claims, demands and causes of action of Purchaser, however arising,
under and in connection with the DIP Loan Agreement, if any, and shall deliver
an instrument to that effect, in a form satisfactory to Nucentrix, to Sellers at
the Closing (the "Sellers Release").
7.24 Common Equipment. Purchaser will provide all applicable Affected
Lessors with continued access to the Common Equipment to which they have rights;
provided, however, that (A) Purchaser is in no way assuming any of the
obligations under the Contracts related to such Common Equipment (or under any
other Contract which is not included in the Acquired Assets), (B) although
Purchaser will grant such access, Purchaser will not have any obligation to
maintain such Common Equipment or any responsibility for the functionality of
that Common Equipment, (C) the duration of such access shall be limited to the
term of the Contracts related to such Common Equipment (without renewal) and (D)
the terms of such access shall be determined by Purchaser in its sole
discretion.
7.25 FCC Amount. Two (2) Business Days prior to the Closing, Nucentrix
will deliver a certificate of an executive officer of Nucentrix to Purchaser
specifying all amounts to
44
be owed to the FCC by Sellers and their Subsidiaries immediately prior to the
Closing (the "FCC Amount"). Concurrently with or immediately following the
Closing, Sellers shall pay the FCC Amount to the FCC.
7.26 WorldCom BTAs. If the WorldCom BTA Application has been filed with
the FCC either as a new application or as a result of bifurcating the FCC
Assignment Application, and all of the conditions to Closing have been satisfied
or waived (or would, if the Closing were as of the date of measurement, be
satisfied or waived) except for the conditions set forth in Sections 8.02(i) and
8.03(e) hereof, then, upon the giving of written notice by Purchaser to
Nucentrix, the Partitioned BTAs will be deemed Excluded Assets, the Purchase
Price will be reduced by $1,300,000.00, the conditions set forth in Sections
8.02(i) and 8.03(e) hereof will be deemed satisfied and Sellers and Purchaser
will cooperate to, and Sellers will, either (A) remove Purchaser as an applicant
or party to the WorldCom BTA Application, including removing Purchaser's name
from such application, or (B) withdraw the WorldCom BTA Application in its
entirety.
7.27 Transition Servicing. If any software included in the Excluded
Assets is necessary or useful in the operation of the Acquired Assets, Nucentrix
and Purchaser will cooperate and use their commercially reasonable efforts to
have in effect arrangements that provide Purchaser with the use and access to
such software at no cost to Purchaser for a reasonable period following the
Closing.
ARTICLE VIII.
CLOSING CONDITIONS
8.01 Conditions to Obligations of Purchaser and Sellers. The respective
obligations of Purchaser, on the one hand, and Sellers, on the other hand, to
effect the Closing shall be subject to the satisfaction (or written waiver by
Purchaser or Sellers, as applicable) at or prior to the Closing of each of the
following conditions:
(a) No Injunctions or Restraints. No temporary restraining order,
preliminary or permanent injunction or other order issued by any court of
competent jurisdiction or other legal restraint or prohibition (collectively,
"Legal Restraints"), shall be in effect or pending which delays, restrains,
enjoins or otherwise prohibits or seeks to restrain, enjoin or otherwise
prohibit the consummation of the Acquisition and the transactions contemplated
hereby and no such order or injunction shall be threatened.
(b) The Approval Order. The Bankruptcy Court shall have entered the
Approval Order.
(c) Consents and Approvals. The waiting period under the HSR Act shall
have lapsed or been earlier terminated. Any consents, waivers, authorizations
and approvals of third parties (including any Governmental Authority other than
approval by the FCC of the FCC Assignment Application) necessary in connection
with the Acquisition and the other transactions contemplated by this Agreement,
unless, with respect to third parties which are not Governmental Authorities,
waived in writing by Purchaser, shall have been obtained by Sellers and
delivered to Purchaser, except such terminations, consents, waivers,
authorizations and
45
approvals the failure of which to obtain could not, in the aggregate, have a
Sellers Material Adverse Effect and except for such consents and approvals which
are not required due to the entry by the Bankruptcy Court of the Approval Order.
8.02 Additional Conditions to Obligations of Purchaser. The obligation
of Purchaser to effect the Closing shall also be subject to the satisfaction (or
written waiver by Purchaser) at or prior to the Closing of each of the following
conditions:
(a) Accuracy of Representations and Warranties. The representations and
warranties of Sellers set forth in this Agreement shall be true and correct
(except that for purposes of determining whether such representations are true
and correct all qualifications as to materiality contained in the
representations and warranties shall be disregarded), except for those failures
to be true and correct that, in the aggregate, have not had and would not be
reasonably likely to have a Sellers Material Adverse Effect, in each case (A) as
of the date hereof and (B) on and as of the Closing, in the latter case with the
same force and effect as though such representations and warranties had been
made on and as of the Closing, except that representations and warranties that
are made as of a specific date need be true and correct only as of such date.
(b) Section 5.10(i). The representations and warranties contained in
Section 5.10(i) shall be true and correct on and as of the Closing with the same
force and effect as though such representations and warranties had been made on
and as of the Closing, except that:
(i) for the purposes of Section 5.10(i), actions taken by
Persons other than Sellers, their agents or employees shall not be
considered "voluntary" or to have been taken "voluntarily," and Sellers
shall not be held responsible for actions taken by Persons other than
Sellers, their agents and employees, provided Sellers have used their
respective best efforts to prevent any such action by persons or parties
other than Sellers, their agents or employees;
(ii) for purposes of this Section 8.02(b), the representations
and warranties contained in Section 5.10(i) shall not apply to any FCC
License for which Seller holds the surrounding BTA authorization, and for
which, after Closing, Purchaser would be legally entitled to receive a
license from the FCC based upon ownership of such BTA authorization;
(iii) for any condition which would otherwise constitute a
breach of any representation or warranty contained in Section 5.10(i), such
condition shall not constitute a breach of such representation or warranty
for purposes of this Section 8.02(b) if the FCC has granted a waiver to
Sellers of the relevant FCC Rules covering such condition and Sellers have
provided Purchaser a copy of such waiver promptly following the grant
thereof, or if Nucentrix has, with written notice to Purchaser, timely
filed a waiver request with the FCC that complies with the FCC's
requirements for such a waiver in all material respects, and such waiver
request remains pending on and as of the Closing; provided that in all such
applicable circumstances such waiver or pending waiver shall provide
Purchaser with at least 180 days cure period following the Closing
46
and is not subject to any conditions which Purchaser finds, in its sole
discretion, to be unreasonable; and
(iv) from and after a DIP Loan Agreement is in effect, Sellers
shall not be deemed to be in breach of this Section 8.02(b) as a result of
any event described in Section 7.22(b) hereof, but only to the extent: (A)
that Sellers have complied with the provisions of Section 7.22(b) with
respect to such event; and (B) Purchaser shall have opted not to provide
funds for the funding shortfall identified in the notice provided for
thereunder in accordance with Section 7.22(b); provided, further, however,
that this exception shall only apply (i) to the extent the breaches or
pending breaches are identified in such notice and shall not apply with
respect to any breaches of which Sellers first provide notice under Section
7.22(b) after the latest breach in respect of which the amounts available
under the DIP Loan Agreement, if any, have been increased pursuant to
Section 7.22(b) by an amount, in the aggregate, equal to at least
$250,000.00, and (ii) during any period during which there shall be in
effect a Sellers Material Adverse Effect.
(c) Performance of Obligations. Sellers shall have performed and
complied in all material respects with all agreements, covenants and obligations
required by this Agreement to be performed or complied with by Sellers at or
prior to the Closing.
(d) No Sellers Material Adverse Effect. From the date hereof until the
Closing, there shall not have occurred a Sellers Material Adverse Effect that is
continuing.
(e) Officer's Certificate. Purchaser shall have received a certificate,
dated the Closing Date, signed by an appropriate senior officer of Nucentrix to
the effect that the conditions specified in Sections 8.02(a), 8.02(b), 8.02(c)
and 8.02(d) have been satisfied, and that Sellers have performed and complied
with their obligations in Section 2.06.
(f) Approval Order. The Approval Order shall have become a Final Order.
(g) FCC Approvals. The approval by the FCC of the FCC Assignment
Applications shall each have been obtained by a Final Order; provided that this
condition will not be deemed to be satisfied if any such approval by the FCC
contains any conditions or limitations (i) with respect to any business or
property of Purchaser or its Affiliates (excluding the Acquired Assets) on terms
not acceptable to Purchaser in its sole and absolute discretion or (ii) on the
Acquired Assets on terms not reasonably acceptable to Purchaser or that would
have, in the aggregate, a material impact on the benefits expected to be
obtained from the Acquisition.
(h) Compliance with Acquired Spectrum Leases. Sellers are in compliance
in all material respects with all of the terms of the Acquired Spectrum Leases
that would constitute a part of the Acquired Assets on such date if such date
were the Closing Date.
(i) WorldCom BTA Application. If the WorldCom BTA Application has been
filed with the FCC either as a new application or as a result of bifurcating the
FCC Assignment Application, the approval by the FCC of the WorldCom BTA
Application shall have been obtained by a Final Order; provided that this
condition will not be deemed to be satisfied if any such approval by the FCC
contains any conditions or limitations (i) with respect to any business or
property of Purchaser or its Affiliates (excluding the Acquired Assets) on terms
not
47
acceptable to Purchaser in its sole and absolute discretion or (ii) on the
Partitioned BTAs on terms not reasonably acceptable to Purchaser or that would
have, in the aggregate, a material impact on the benefits expected to be
obtained from the Partitioned BTAs.
8.03 Additional Conditions to Obligations of Sellers. The obligation of
Sellers to sell, assign, convey and deliver the Acquired Assets and to enter
into the other transactions contemplated hereby shall be subject to the
satisfaction (or waiver by Sellers) at or prior to the Closing of each of the
following conditions:
(a) Accuracy of Representations and Warranties. The representations and
warranties of Purchaser set forth in this Agreement shall, in the aggregate, be
true and correct in all material respects (except that for purposes of
determining whether such representations are true and correct all material
qualifications contained in the representations and warranties shall be
disregarded), in each case (i) as of the date hereof and (ii) on and as of the
Closing Date, in the latter case with the same force and effect as though such
representations and warranties had been made on and as of the Closing, except
that representations and warranties that are made as of a specific date need be
true and correct only as of such date.
(b) Performance of Obligations. Purchaser shall have performed and
complied in all material respects with all agreements, covenants and obligations
required by this Agreement to be performed or complied with by Purchaser at or
prior to the Closing.
(c) Officer's Certificate. Sellers shall have received a certificate,
dated the Closing Date, signed by an appropriate senior officer of Purchaser to
the effect that the conditions specified in Sections 8.03(a) and 8.03(b) have
been satisfied.
(d) FCC Approval. The approval by the FCC of the FCC Assignment
Applications shall have been obtained.
(e) WorldCom BTA Application. If the WorldCom BTA Application has been
filed with the FCC either as a new application or as a result of bifurcating the
FCC Assignment Application, the approval by the FCC of the WorldCom BTA
Application shall have been obtained by a Final Order.
ARTICLE IX.
TERMINATION
9.01 Termination. This Agreement may be terminated and the transactions
contemplated hereby abandoned at any time prior to the Closing:
(a) by mutual written consent of Purchaser and Nucentrix;
(b) by Purchaser, if the Approval Order shall not have been entered and
become a Final Order on or before November 26, 2003;
(c) by Purchaser or Sellers, if any Legal Restraint permanently
restraining, enjoining or otherwise prohibiting the consummation of the
Acquisition shall have become a
48
Final Order; provided, however, that the party seeking to terminate this
Agreement pursuant to this Section 9.01(c), shall have used commercially
reasonable efforts to prevent the entry of and to remove such order;
(d) by Purchaser, if there shall be a breach by Sellers of any
representation, warranty, covenant or agreement contained in this Agreement
which would result in a failure of a condition set forth in Section 8.02 and
which breach cannot be cured or has not been cured by the earlier of (i) twenty
(20) Business Days after the giving of written notice by Purchaser to Sellers of
such breach and (ii) the Termination Date as then in effect; provided, however,
that the twenty (20) Business Days limitation contained in clause (i) of this
Section 9.01(d) shall be extended with respect to a breach resulting in a
failure of a closing condition set forth in Section 8.02(b) for an additional
twenty (20) Business Days to the extent that Sellers (i) have commenced work to
cure the breach during the initial 20 Business Day period and (ii) diligently
pursue completion of the cure during the second 20 Business Day period;
(e) by Sellers, if there shall be a breach by Purchaser of any
representation, warranty, covenant or agreement contained in this Agreement
which would result in a failure of a condition set forth in Section 8.03 and
which breach cannot be cured or has not been cured by the earlier of (i) twenty
(20) Business Days after the giving of written notice by Sellers to Purchaser of
such breach and (ii) the Termination Date as then in effect;
(f) by Purchaser or Sellers, if the Closing shall not have occurred by
August 31, 2004, such date being referred to hereinafter as the "Termination
Date"; provided, however, that if the Closing shall not have occurred by August
30, 2004 solely due to the failure of the condition set forth in Section
8.02(g), then either Purchaser or Sellers may extend the Termination Date until
October 29, 2004 provided further, however, that if Purchaser extends the
Termination Date, then Purchaser shall be obligated to provide additional
financing to Sellers under the terms of the DIP Loan Agreement, if any, for
Seller's reasonable operating needs consistent with the operating budget of
Sellers through August 31, 2004 attached hereto as Exhibit B (the "Sellers'
Budget") for the period from the date of such extension through the earlier of
(A) the Closing Date and (B) October 29, 2004, in an amount not to exceed an
aggregate of $1.40 million;
(g) by Purchaser or Sellers, if, at any time prior to the entry of the
Approval Order, (i) the Bankruptcy Court or another court of competent
jurisdiction shall enter an order approving or authorizing an Alternative
Transaction or (ii) any Seller shall have entered into a Contract contemplating
an Alternative Transaction and such Contract shall have been approved by an
order of the Bankruptcy Court; provided, however, that in the case of a
termination by Sellers, the terms set forth in Section 9.03 shall be complied
with in accordance with the terms thereof and the Bidding Procedures Order;
(h) by Purchaser, if Sellers shall not have filed a case under Chapter
11 of the Bankruptcy Code by September 5, 2003;
(i) by Purchaser, if (A) the FCC shall have denied any FCC Assignment
Application or (B) the FCC shall have designated any FCC Assignment Application
for hearing;
49
(j) by Purchaser, if entry of the Bidding Procedures Order has not
occurred by October 3, 2003;
(k) by Purchaser, if a Sellers Material Adverse Effect shall have
occurred and is continuing at the time of termination; provided, however, that,
in the event any change, circumstance or event with respect to the Acquired
Assets that shall constitute a Sellers Material Adverse Effect can be cured,
prior to exercising its rights under this Section 9.01(k) Purchaser shall have
provided written notice to Sellers of such change, circumstance or event giving
rise to such Sellers Material Adverse Effect and such Sellers Material Adverse
Effect shall not have been cured within 20 Business Days after the date such
written notice is given pursuant to Section 11.04;
(l) by Purchaser, if, prior to the Final Suspension Date, the Sellers
fail to comply in full with the provisions of any order of the Bankruptcy Court
(including a Payment Order and/or a Termination Ruling), or the Sellers fail to
comply with any material provision of the Bankruptcy Code, including,
notwithstanding the terms of Section 11.15 hereof, suspension or delay of
payments, and any such failure results in the loss or termination of any Tower
Lease, Acquired Spectrum Lease or any other Acquired Asset; or
(m) by Sellers, if Purchaser does not give to Sellers on or prior to
the Bid Deadline, a Contract on reasonable terms and conditions providing for
debtor-in-possession financing in an amount at least equal to Seven Million Two
Hundred Fifty Thousand Dollars ($7,250,000) (which amount includes a 10% upward
variance from Sellers' Budget and is subject to decrease as specified in Section
11.15(b) hereof) and in accordance with the allocation set forth on Sellers'
Budget, for the period from the entry of the Approval Order through August 31,
2004.
9.02 Effect of Termination. A party desiring to terminate this
Agreement pursuant to Section 9.01 shall give written notice thereof to each
other party (except that with respect to the Sellers, notice is only required to
be given to Nucentrix) specifying the provision hereof pursuant to which the
Agreement is terminated and this Agreement shall be terminated at the time such
notice is given. Upon termination, this Agreement shall forthwith become null
and void and of no further force and effect, without liability on the part of
Purchaser or Sellers or any of their respective Affiliates or Representatives
under this Agreement, except for the provisions of Sections 5.20 (Brokers or
Finders), 6.07, (Brokers or Finders), 7.15 (Press Releases), 7.16 (Expenses),
9.03 (Expense Reimbursement; Break-up Fee), Article XI and this Section 9.02
(which shall remain in full force and effect) and except for liability for any
prior breach of this Agreement. If this Agreement is terminated prior to
Closing, Purchaser shall have the right but not the obligation to participate
without prejudice in any process relating to any subsequent sale or disposition
of the Acquired Assets or any portion thereof, including but not limited to, the
right to submit an offer to acquire all or any portion of the Acquired Assets.
9.03 Expense Reimbursement; Break-up Fee.
(a) If this Agreement is terminated by Purchaser or Sellers pursuant to
Section 9.01(g), then Sellers shall pay to Purchaser an amount, not to exceed
$450,000.00, subject to increase pursuant to Section 11.15 (the "Expense
Reimbursement"), to reimburse
50
Purchaser's out-of-pocket costs and expenses incurred in connection with
Purchaser's consideration of a transaction involving one or more Sellers,
including the transactions contemplated by this Agreement, through the period up
to and including the date upon which this Agreement is terminated, as provided
in and subject to the conditions of the Bidding Procedures Order. The Expense
Reimbursement shall be payable to Purchaser in cash, by wire transfer of
immediately available funds to an account designated in writing by Purchaser,
and shall be paid as provided in and subject to the conditions set forth in the
Bidding Procedures Order.
(b) If this Agreement is terminated by Purchaser or Sellers pursuant to
Section 9.01(g) and Sellers consummate (A) an Alternative Transaction entered
into or consummated in connection with the terms of the Bidding Procedures Order
at any time or (B) a merger, reorganization, share exchange, consolidation or
similar transaction involving, or any purchase of all or substantially all of
the assets or any equity securities of, Nucentrix or any of its Subsidiaries
with a third party (other than Purchaser or an affiliate or assignee of
Purchaser) or a sale of all or substantially all of the Acquired Assets to a
third party (other than Purchaser or an affiliate or assignee of Purchaser), in
any case, other than pursuant to the Bidding Procedures Order within one year
after termination of this Agreement, Sellers shall pay to Purchaser an amount
equal to the lesser of (i) $450,000.00 and (ii) an amount equal to $600,000.00,
subject to increase pursuant to Section 11.15, minus the Expense Reimbursement
previously paid, in accordance with and subject to the terms of the Bidding
Procedures Order (the "Break-up Fee"). The Break-up Fee shall be payable to
Purchaser in cash, by wire transfer of immediately available funds to an account
designated in writing by Purchaser, and shall be paid on the Business Day
immediately following consummation of the transaction or transactions giving
rise to the payment of the Break-up Fee.
ARTICLE X.
INDEMNIFICATION
10.01 Indemnification by Sellers.
(a) From and after the Closing, Sellers, jointly and severally, shall
indemnify Purchaser and its Affiliates and each of their respective
Representatives (a "Purchaser Indemnified Party"), against, and hold them
harmless from, any Losses suffered or incurred (payable promptly upon written
request), to the extent arising from or in connection with or otherwise with
respect to (i) any breach of any representation or warranty of any Seller
contained in this Agreement, (ii) any breach of any covenant or agreement of any
Seller contained in this Agreement, and (iii) any Excluded Liabilities (or any
third party claim for payment or satisfaction of any Excluded Liabilities).
(b) Except as otherwise specifically provided in Section 7.19 of this
Agreement, Purchaser acknowledges that its sole and exclusive remedy for
monetary damages after the Closing with respect to any and all breaches of this
Agreement shall be pursuant to the indemnification provisions set forth in this
Article X.
(c) For purposes of Section 10.01(a)(i), (i) a breach of a
representation or warranty shall be deemed to exist either if such
representation or warranty is actually inaccurate or breached or would have been
inaccurate or breached if such representation or warranty had
51
not contained any limitation or qualification as to materiality, Sellers
Material Adverse Effect, Knowledge or similar language, and (ii) the amount of
Losses in respect of any breach of a representation or warranty (including any
deemed breach resulting from the application of clause (i)) shall be determined
without regard to any limitation or qualification as to materiality, Sellers
Material Adverse Effect, Knowledge or similar language set forth in such
representation or warranty.
10.02 Indemnification by Purchaser.
(a) From and after the Closing, Purchaser shall indemnify Sellers,
their respective Affiliates and each of their respective Representatives (a
"Seller Indemnified Party"), against, and hold them harmless from, any Losses
suffered or incurred (payable promptly upon written request), to the extent
arising from or in connection with or otherwise with respect to any Assumed
Liabilities (or any third party claim for payment or satisfaction of any Assumed
Liabilities).
(b) Except as otherwise specifically provided in this Agreement,
Sellers acknowledge that their sole and exclusive remedy for monetary damages
after the Closing with respect to any and all breaches of this Agreement shall
be pursuant to the indemnification provisions set forth in this Article X.
10.03 Calculation of Losses; Limitation of Liability.
(a) The amount of any Loss for which indemnification is provided under
this Article X shall be (i) net of any amounts actually recovered by the
indemnified party under such party's insurance policies with respect to such
Loss, (ii) net of any amounts actually recovered from any third person (by
contribution, indemnification or otherwise) with respect to such Loss, and (iii)
adjusted to take account of any net Tax effect realized by the indemnified party
arising from the payment of the amount of the Loss. Any indemnification payment
made pursuant to this Article X shall be treated as an adjustment to the
Purchase Price for U.S. Federal income tax purposes.
(b) (i) The aggregate indemnification obligations of the Sellers
pursuant to Section 10.01(a)(i) shall not exceed the Purchase Price and (ii)
Sellers shall not be liable to any Purchaser Indemnified Party for any breach of
any representation or warranty of any Seller contained in this Agreement
pursuant to Section 10.01(a)(i) unless and only to the extent that the aggregate
Losses suffered by the Purchaser Indemnified Parties from all breaches,
collectively, exceed seventy-five thousand dollars ($75,000); provided, however,
that any Loss suffered by the Purchaser Indemnified Parties for any individual
breach of any representation or warranty pursuant to 10.01(a)(i) for an amount
less than $5,000 or for any series of related breaches for an amount less than
$12,500 shall not be deemed to be Losses for purposes of Section 10.01(a)(i) and
this Section 10.03. The indemnification obligations of Sellers pursuant to
10.01(a)(i) shall not include any special, consequential or punitive damages.
10.04 Termination of Indemnification. The obligations to indemnify and
hold harmless any person pursuant to Section 10.01(a)(i), shall terminate when
the applicable representation or warranty terminates pursuant to Section 11.02;
provided, however, that such
52
obligations to indemnify and hold harmless shall not terminate with respect to
any item as to which the person to be indemnified shall have, before the
expiration of the applicable period, previously made a bona fide claim by
delivering notice of such claim (stating in reasonable detail the basis of such
claim) pursuant to Section 10.05 to the party that is required to provide the
indemnification.
10.05 Procedures.
(a) Third Party Claims. Each Person (an "Indemnified Party") making a
claim arising from or involving a claim made by any third person against the
Indemnified Party for which indemnification may be available to such Indemnified
Party hereunder (a "Third Party Claim"), must notify the indemnifying party in
writing (and in reasonable detail) of the Third Party Claim within ten (10)
Business Days after receipt by such Indemnified Party of notice of the Third
Party Claim. Thereafter, the Indemnified Party shall deliver to the indemnifying
party, within five (5) Business Days after the Indemnified Party's receipt
thereof, copies of all notices and documents (including court papers) received
by the Indemnified Party relating to the Third Party Claim. No delay on the part
of the Indemnified Party in notifying the indemnifying party shall relieve the
indemnifying party from any liability or obligation under this Agreement unless
(and solely to the extent) the indemnifying party is materially prejudiced
thereby.
(b) Assumption. If a Third Party Claim is made against a Seller
Indemnified Party, the Purchaser shall be entitled to participate in the defense
thereof and, if it so chooses, to assume the defense thereof with counsel
selected by the Purchaser; provided, however, that such counsel is not
reasonably objected to by the Seller Indemnified Party. Should the Purchaser so
elect to assume the defense of a Third Party Claim, the Purchaser shall not be
liable to the Seller Indemnified Party for any legal expenses subsequently
incurred by the Seller Indemnified Party in connection with the defense thereof.
If the Purchaser assumes such defense, the Seller Indemnified Party shall have
the right to participate in the defense thereof and to employ counsel (not
reasonably objected to by the Purchaser), at its own expense, separate from the
counsel employed by the Purchaser, it being understood that the Purchaser shall
control such defense. The Purchaser shall be liable for the reasonable fees and
expenses of counsel employed by the Purchaser for any period during which the
Purchaser has not assumed the defense thereof (other than during any period in
which the applicable Seller Indemnified Party shall have failed to give notice
of the Third Party Claim as provided above). If the Purchaser chooses to defend
or prosecute a Third Party Claim, all the applicable Seller Indemnified Parties
shall cooperate in the defense or prosecution thereof. Such cooperation shall
include the retention and (upon the indemnifying party's request) the provision
to the Purchaser of records and information that are reasonably relevant to such
Third Party Claim, and making employees available on a mutually convenient basis
to provide additional information and explanation of any material provided
hereunder. Whether or not the Purchaser assumes the defense of a Third Party
Claim, the Seller Indemnified Party shall not admit any liability with respect
to, or settle, compromise or discharge, or offer to settle, compromise or
discharge, such Third Party Claim without the Purchaser's prior written consent
(which may be withheld). If the Purchaser assumes the defense of a Third Party
Claim, the Seller Indemnified Party shall agree to any settlement, compromise or
discharge of a Third Party Claim that the Purchaser may recommend and that by
its terms (i) obligates the Purchaser to pay the full amount of the liability in
connection with such Third Party Claim, (ii) releases the Seller Indemnified
Party completely in connection with such Third
53
Party Claim, and (iii) would not otherwise adversely affect the Seller
Indemnified Party in any material respect. In the event a Third Party Claim is
asserted against a Purchaser Indemnified Party other than in the Bankruptcy
Court, Sellers shall be entitled to file a motion to transfer such Third Party
Claim to the Bankruptcy Court.
ARTICLE XI.
GENERAL PROVISIONS
11.01 Amendment and Waiver. This Agreement may not be amended except by
an instrument in writing signed on behalf of each of the parties hereto. By an
instrument in writing Purchaser, on the one hand, or Nucentrix on behalf of the
Sellers, on the other hand, may waive compliance by the other party with any
term or provision of this Agreement that such other party was or is obligated to
comply with or perform.
11.02 Survival of Representations and Warranties; No Other
Representations and Warranties.
(a) The representations and warranties contained herein shall survive
until the Administrative Bar Date. Subject to any limitations on survival
contained herein, no investigation made before or after the date of this
Agreement by or on behalf of Purchaser will limit or affect in any way the
representations, warranties, covenants and agreements of Sellers under or
pursuant to this Agreement.
(b) Except for the representations and warranties set forth in Article
V, no Seller or any other Person is making any representations or warranties,
written or oral, statutory, express or implied, in relation to the Acquired
Assets or the Assumed Liabilities.
(c) Except for the representations and warranties set forth in Article
VI, neither Purchaser nor any other Person is making any representations or
warranties, written or oral, statutory, express or implied, with respect to
Purchaser.
11.03 Entire Agreement. This Agreement, along with the Schedules and
Exhibits hereto, contains the entire agreement and understanding between the
parties hereto with respect to the subject matter hereof and supersedes all
prior agreements and understandings relating to such subject matter.
11.04 Notices. Any notice, request, instruction or other document to be
given hereunder by any party to the others shall be in writing and delivered
personally or sent by registered or certified mail, postage prepaid, by
facsimile or by overnight courier which guarantees delivery on the next Business
Day after deposit with such overnight courier:
54
(i) if to Purchaser,
SBC Communications Inc.
000 Xxxx Xxxxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxx 00000
Attention: Director of Corporate Development
Fax: (000) 000-0000
with a copy (which shall not constitute notice) to:
SBC Communications Inc.
000 Xxxx Xxxxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxx 00000
Attention: Xxxxx Xxxxx, Vice President and
Assistant General Counsel
Fax: (000) 000-0000
Xxxxxxxx & Xxxxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxxxxxxx
Fax: (000) 000-0000
and
Xxx & Xxxxx Incorporated
000 X. Xxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxxx
Fax: (000) 000-0000
(ii) if to Sellers or any Seller,
Nucentrix Broadband Networks, Inc.
0000 Xxxxxxxxxxxxx Xxxxxxx, Xxxxx 0000
Xxxxxxxxxx, Xxxxx 00000
Attention: J. Xxxxxx Xxxxxxxxx
Fax: (000) 000-0000
and with a copy (which shall not constitute notice) to:
Xxxxxx & Xxxxxx L.L.P.
0000 Xxxxxxxx Xxxx Xxxxxx
0000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000-0000
Attention: Xxxxxx X. Xxxxx
Fax: (000) 000-0000
55
Any notice, request, instruction or other document given as provided above shall
be deemed given to the receiving party upon actual receipt, if delivered
personally; three Business Days after deposit in the mail, if sent by Registered
or Certified Mail; upon confirmation of successful transmission if sent by
facsimile (provided that if given by facsimile such notice, request, instruction
or other document shall be followed up within one Business Day by delivery
pursuant to one of the other methods described herein); or on the next Business
Day after deposit with an overnight courier, if sent by an overnight courier as
described above.
11.05 No Third-Party Beneficiaries; Liability; Non-Recourse. This
Agreement is for the sole benefit of the parties hereto and their successors and
permitted assigns and nothing herein expressed or implied shall give or be
construed to give to any Person, other than the parties hereto and such
successors and assigns, any legal or equitable rights hereunder.
11.06 Interpretation; Exhibits and Schedules; Certain Definitions.
(a) The headings contained in this Agreement, in any Exhibit or
Schedule hereto and in the table of contents to this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement. Nothing contained in the Schedules shall be deemed adequate to
disclose an exception to a representation or warranty made herein unless the
Schedule identifies the exception with particularity and detail, and each
Schedule creates such an exception only to the extent the applicable
representations and warranty referred to by such Schedule by number. All
Exhibits and Schedules annexed hereto or referred to herein are hereby
incorporated in and made a part of this Agreement as if set forth in full
herein. Any capitalized terms used in any Schedule or Exhibit but not otherwise
defined therein, shall have the meaning as defined in this Agreement. When a
reference is made in this Agreement to a Section, Exhibit or Schedule, such
reference shall be to a Section of, or an Exhibit or Schedule to, this Agreement
unless otherwise indicated.
(b) Whenever the words "include", "includes" or "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation". The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement. The definitions contained in
this Agreement are applicable to the singular as well as the plural forms of
such terms and to the masculine as well as to the feminine and neuter genders of
such terms.
(c) Any agreement, instrument, statute or regulation defined or
referred to herein or in any agreement or instrument that is referred to herein
means such agreement, instrument, statute or regulation as from time to time
amended, modified or supplemented, including (in the case of agreements or
instruments) by waiver or consent and (in the case of statutes or regulations)
by succession of comparable successor statutes or regulations and references to
all attachments thereto and instruments incorporated therein. References to a
Person are also to its permitted successors and assigns.
11.07 Assignment. This Agreement and the rights and obligations
hereunder shall not be assignable or transferable by Purchaser or Sellers
without the prior written consent of the other parties hereto. Notwithstanding
the foregoing, Purchaser may assign its rights and
56
obligations hereunder (including its rights to purchase any of the Acquired
Assets) to (i) one or more Affiliates of Purchaser or (ii) after the Closing, to
any assignee or transferee of a significant portion of the Acquired Assets;
provided, however, that Purchaser shall guarantee all obligations of the
assignee and such assignment will not relieve Purchaser from any of its
obligations hereunder. Any attempted assignment in violation of this Section
11.07(a) shall be void ab initio.
11.08 Severability. If any provision of this Agreement (or any portion
thereof) or the application of any such provision (or any portion thereof) to
any Person or circumstance shall be held invalid, illegal or unenforceable in
any respect by a court of competent jurisdiction, such invalidity, illegality or
unenforceability shall not affect any other provision hereof (or the remaining
portion thereof) or the application of such provision to any other Persons or
circumstances.
11.09 Submission to Jurisdiction; Consent to Service of Process.
(a) The Parties agree that the Bankruptcy Court shall retain exclusive
jurisdiction to enforce the terms of this Agreement and to decide any claims or
disputes which may arise or result from, or be connected with, this Agreement,
any breach or default hereunder, or the transactions contemplated hereby and any
and all Proceedings related to the foregoing shall be filed and maintained only
in the Bankruptcy Court, and the parties hereby consent to and submit to the
jurisdiction and venue of the Bankruptcy Court and shall receive notices at such
locations as indicated in Section 11.04 hereof; provided, however, that if the
Bankruptcy Cases have closed and have not been reopened pursuant to Section 350
of the Bankruptcy Code, the parties agree to unconditionally and irrevocably
submit to the non-exclusive jurisdiction of the United States District Court for
the Western District of Texas sitting in Bexar County or the United States
District Court for the Northern District of Texas sitting in Dallas County and
any appellate court from any thereof, for the resolution of any such claim or
dispute; provided, further, if the Sellers do not file a case under the
Bankruptcy Code, the parties agree to unconditionally and irrevocably submit to
the exclusive jurisdiction of the courts of the State of Delaware and the
Federal courts of the United States of America located in the State of Delaware.
(b) The parties hereby unconditionally and irrevocably waive, to the
fullest extent permitted by Law, any objection which they may now or hereafter
have to the laying of venue of any dispute arising out of or relating to this
Agreement or any of the transactions contemplated hereby brought in any court
specified in Section 11.09(a) above, or any defense of inconvenient forum for
the maintenance of such dispute. Each of the parties hereto agrees that a
judgment in any such dispute may be enforced in other jurisdictions by suit on
the judgment or in any other manner provided by law.
(c) Each of the parties hereto hereby consents to process being served
by any party to this Agreement in any suit, action or proceeding by the mailing
of a copy thereof in accordance with the provisions of Section 11.04.
11.10 Waiver of Jury Trial. THE PARTIES HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY
57
APPLICABLE LAW, ANY RIGHT THAT THEY MAY HAVE TO TRIAL BY JURY OF ANY CLAIM OR
CAUSE OF ACTION, OR IN ANY LEGAL PROCEEDING, DIRECTLY OR INDIRECTLY BASED UPON
OR ARISING OUT OF THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT (WHETHER BASED ON CONTRACT, TORT, OR ANY OTHER THEORY). EACH PARTY
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS SET FORTH IN THIS SECTION
11.10.
11.11 Specific Performance. Each partY ACKNOWLEDGES THAT THE OTHER
PARTIES WOULD BE IRREPARABLY DAMAGED IF ANY OF THE PROVISIONS OF THIS AGREEMENT
ARE NOT PERFORMED IN ACCORDANCE WITH THEIR SPECIFIC TERMS AND THAT ANY BREACH OF
THIS AGREEMENT COULD NOT BE ADEQUATELY COMPENSATED IN ALL CASES BY MONETARY
DAMAGES ALONE AND THAT, IN ADDITION TO ANY OTHER RIGHT OR REMEDY TO WHICH A
PARTY MAY BE ENTITLED, AT LAW OR IN EQUITY, IT SHALL BE ENTITLED TO ENFORCE ANY
PROVISION OF THIS AGREEMENT BY A DECREE OF SPECIFIC PERFORMANCE AND TO
TEMPORARY, PRELIMINARY AND PERMANENT INJUNCTIVE RELIEF TO PREVENT BREACHES OR
THREATENED BREACHES OF ANY OF THE PROVISIONS OF THIS AGREEMENT, WITHOUT POSTING
ANY BOND OR OTHER UNDERTAKING.
11.12 Construction. Purchaser and Sellers hereby acknowledge that (i)
Purchaser and Sellers jointly and equally participated in the drafting of this
Agreement and all other agreements contemplated hereby, (ii) both Purchaser and
Sellers have been adequately represented and advised by legal counsel with
respect to this Agreement and the transactions contemplated hereby, and (iii) no
presumption shall be made that any provision of this Agreement shall be
construed against any party by reason of any role in the drafting of this
Agreement or any other agreement contemplated hereby.
11.13 Governing Law. This Agreement shall be governed by and construed
in accordance with the Bankruptcy Code and internal laws of the State of
New
York.
11.14 Counterparts. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one or more such counterparts have been signed by
each of the parties and delivered to the other party.
11.15 No Expenditure of Funds.
(a) Prior to the earliest of (i) the entry of the Approval Order, (ii)
the entry of an order by the Bankruptcy Court or another court of competent
jurisdiction approving or authorizing an Alternative Transaction and (iii) the
entry by any Seller into a Contract contemplating an Alternative Transaction
(the earliest of (i), (ii) and (iii), being the "Final Suspension Date"),
Sellers may, after consulting with their professional service advisors and in a
manner consistent with their good faith business judgment and subject to
subparagraph (d) below, delay or suspend the expenditure of any funds on lease
or rental payments that become
58
due and payable in the period between the date of the filing of the Bankruptcy
Cases and the Final Suspension Date on one or more Tower Leases and Acquired
Spectrum Leases (each, a "Suspended Payment"). For purposes of this Section
11.15, any such Tower Lease or Acquired Spectrum Lease with respect to which any
Seller suspends any such payments shall be referred to as an "Affected Lease".
(b) If prior to the Final Suspension Date, (i) the Bankruptcy Court or
another court of competent jurisdiction rules, enters an order requiring or
otherwise finds or holds that one or more Sellers are required to make a payment
with respect to any Suspended Payment prior to the Final Suspension Date (a
"Payment Order") or (ii) the Bankruptcy Court or another court of competent
jurisdiction rules, enters an order or otherwise finds or holds that the failure
by one or more Sellers to make one or more Suspended Payments will result in a
breach or termination of any Affected Lease prior to the Final Suspension Date
(a "Termination Ruling"), then Purchaser may, in its sole discretion, make on
behalf of Sellers the payment required by the Payment Order or make on behalf of
Sellers the payment in the Termination Ruling necessary to cause such lease to
not be in breach, cure any such breach or avoid a termination (any such payment,
a "Court Amount") directly to the Person to whom the Court Amount is owed and
Sellers agree not to oppose or object any such action by or on behalf of
Purchaser. If Purchaser pays any Court Amount, then: (A) the amount of the
financing commitment that Purchaser would be required to provide in accordance
with Section 9.01(m) hereof such that Sellers will not be able to terminate this
Agreement pursuant to such section will be reduced by the amount of all Court
Amounts paid by or on behalf of Purchaser and such reduction in the commitment
shall be deemed consistent with Sellers' operating budget for purposes of this
Agreement; (B) the aggregate amount of the Expense Reimbursement and the
Break-up Fee that may be paid pursuant to Section 9.03 shall each be increased
by the amount of all Court Amounts paid; (C) the Purchase Price shall be reduced
by the amount of any Court Amounts paid by or on behalf of Purchaser; and (D)
Sellers shall reimburse Purchaser for the amount of any Court Amounts paid by or
on behalf of Purchaser promptly following any termination of this Agreement
other than a termination pursuant to Section 9.01(g) hereof.
(c) If any Seller exercises its rights to suspend any payment under
Section 11.15(a), such Seller will promptly from time to time notify Purchaser
in writing of such suspension of payment and identify the Affected Lease,
amounts owed pursuant to the Affected Lease and the aggregate amount of
suspended payments under such Affected Leases.
(d) Any delay or suspension of making payment as described in this
Section 11.15 will not constitute a breach by Seller of Section 5.07(b)(iv),
Section 5.11(b)(i), Section 5.17, the first sentence of Section 7.01, Section
7.01(c), Section 7.01(f), or Section 7.09(e) of this Agreement unless such
failures result in a Sellers Material Adverse Effect or such failures together
with all breaches of this Agreement and any other facts, events or circumstances
result in a Sellers Material Adverse Effect. Sellers shall make all missed or
suspended payments that have not been paid by or on behalf of Purchaser promptly
following the Final Suspension Date.
11.16 Funding. The parties acknowledge and agree that no provision of
this Agreement requires Purchaser to loan or otherwise advance any funds to
Sellers or any of their Subsidiaries unless Purchaser expressly agrees in
writing to loan or otherwise advance any such funds.
59
IN WITNESS WHEREOF, Sellers and Purchaser have duly executed this
Agreement as of the date first written above.
NUCENTRIX BROADBAND NETWORKS, INC.
By:/s/ XXXXXXX X. XXXXXXX
-----------------------------------
Name: Xxxxxxx X. XxXxxxx
Title: President and Chief
Executive Officer
HEARTLAND CABLE TELEVISION, INC.
By:/s/ XXXXXXX X. XXXXXXX
-----------------------------------
Name: Xxxxxxx X. XxXxxxx
Title: President and Chief
Executive Officer
NUCENTRIX INTERNET SERVICES, INC.
By:/s/ XXXXXXX X. XXXXXXX
-----------------------------------
Name: Xxxxxxx X. XxXxxxx
Title: President and Chief
Executive Officer
NUCENTRIX SPECTRUM RESOURCES, INC.
By:/s/ XXXXXXX X. XXXXXXX
-----------------------------------
Name: Xxxxxxx X. XxXxxxx
Title: President and Chief
Executive Officer
SBC OPERATIONS, INC.
By:/s/ XXXXX X. XXXXX
-----------------------------------
Name: Xxxxx X. Xxxxx
Title: Senior Executive Vice President
- Corporate Development
[Following is a list of schedules to the
Asset Purchase Agreement. Pursuant to
Item 601(b)(2) of Regulation S-K, these schedules to the
Asset Purchase
Agreement have been omitted from this Exhibit 2.1. Certain schedules to the
Asset Purchase Agreement are confidential and proprietary. Nucentrix Broadband
Networks, Inc. ("Nucentrix") will furnish supplementally a copy of any schedule
to the Securities and Exchange Commission ("SEC") upon request. If the SEC
requests a copy of any omitted schedule to the
Asset Purchase Agreement that
Nucentrix considers confidential and proprietary, Nucentrix will submit a
confidential treatment request concurrently with furnishing the requested
schedule to the SEC.]
SCHEDULES
---------
Schedule 1.01(c) Knowledge of Sellers
Schedule 1.01(d) Third Party Licenses
Schedule 1.01 (e) Excluded Causes of Action
Schedule 1.01(g) Wireless Cable Agreements
Schedule 1.01(h) Permitted Liens
Schedule 2.03 Excluded Assets
Schedule 5.05(b) Damaged Acquired Assets
Schedule 5.06 Title to Real Property
Schedule 5.07(a) Tower Leases
Schedule 5.07(b)(iv) Tower Leases - Exceptions
Schedule 5.07(c) Tower Subleases
Schedule 5.07(d) Transmission Towers FCC/FAA Compliance - Exceptions
Schedule 5.07(e) Necessary Tower Leases Associated with Tower Sites
Schedule 5.08(a) Contracts - Exceptions
Schedule 5.08(b) Assigned Contracts
Schedule 5.08(c) Assigned Contracts - Exceptions
Schedule 5.08(d) Assigned Contracts - Notices
Schedule 5.10(a) Company FCC Licenses
Schedule 5.10(b) Company FCC Licenses - Exceptions
Schedule 5.10(c) Company Pending Applications
Schedule 5.10(d) Company Pending Applications - Exceptions
Schedule 5.10(e) Constructed Facilities - Exceptions
Schedule 5.10(f) Annual FCC Reports - Exceptions
Schedule 5.10(h) Secondary Licenses
Schedule 5.10(i)(A) Company FCC Licenses - Further Exceptions
Schedule 5.10(i)(B) Certain Acquired Spectrum Leases
Schedule 5.11(a) Acquired Spectrum Leases
Schedule 5.11(b) Acquired Spectrum Leases - Exceptions
Schedule 5.11(c) Acquired Spectrum Leases FCC Licenses - Exceptions
Schedule 5.11(d) Leased Pending Applications
Schedule 5.11(e) Leased Pending Applications - Exceptions
Schedule 5.12(a) Third Party Licenses
Schedule 5.12(b) Third Party License - Exceptions
Schedule 5.12(c) Third Party Pending Applications
Schedule 5.14 Proceedings
Schedule 5.18 Network Equipment
Schedule 5.19 Spare Parts and Equipment
Schedule 5.21 Interference Coordination Agreements
Schedule 5.24(a) Acquired WCS Agreements
Schedule 5.29 Insurance
Schedule 5.30 WorldCom BTA Agreements
Schedule 7.17 Rejected Contracts
EXHIBITS
--------
Exhibit A Bidding Procedures Order
Exhibit B Sellers Budget
Exhibit C Bid Procedures Motion
ii
