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EXHIBIT 2.1
EXECUTION COPY
FIRST AMENDED AND RESTATED
ASSET PURCHASE AGREEMENT
by and among
TELIGENT, INC.
TELIGENT LICENSE CO. I, L.L.C.,
TELIGENT LICENSE CO. II, L.L.C.,
TELIGENT SERVICES, INC.,
TELIGENT OF VIRGINIA, INC.,
QUADRANGLE INVESTMENTS, INC.,
BACKLINK, L.L.C.,
JTEL, L.L.C.,
KATLINK, L.L.C.,
TELIGENT TELECOMMUNICATIONS, L.L.C.,
TELIGENT COMMUNICATIONS, L.L.C.
and
TELIGENT ACQUISITION CORP.
September 4, 2001
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TABLE OF CONTENTS
ARTICLE I DEFINITIONS ..................................................................1
Section 1.1 Definitions..................................................................1
Section 1.2 Construction.................................................................8
ARTICLE II PURCHASE AND SALE....................................................................9
Section 2.1 The Sale.....................................................................9
Section 2.2 Excluded Assets.............................................................11
Section 2.3 Assumed Obligations.........................................................12
Section 2.4 Excluded Liabilities........................................................12
Section 2.5 Assumption of Certain Leases and Other Contracts............................12
ARTICLE III PURCHASE PRICE.....................................................................13
Section 3.1 Purchase Price..............................................................13
Section 3.2 Allocation of Purchase Price................................................13
ARTICLE IV THE CLOSING.........................................................................14
Section 4.1 Time and Place of Closing...................................................14
Section 4.2 Payment of Purchase Price...................................................14
Section 4.3 Deliveries by the Sellers...................................................14
Section 4.4 Deliveries by the Buyer.....................................................15
ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE SELLERS........................................16
Section 5.1 Organization; Qualification.................................................16
Section 5.2 Authority Relative to this Agreement........................................16
Section 5.3 Consents and Approvals; No Violation........................................16
Section 5.4 FCC Licenses and FCC Analogous Licenses.....................................17
Section 5.5 Equipment Compliance with FCC Rules.........................................18
Section 5.6 Financial Statements and Reports............................................18
Section 5.7 Title to Assets.............................................................18
Section 5.8 Leased Real Property........................................................18
Section 5.9 Environmental Matters.......................................................18
Section 5.10 ERISA; Benefit Plans........................................................19
Section 5.11 Certain Contracts and Arrangements..........................................20
Section 5.12 Legal Proceedings and Judgments.............................................20
Section 5.13 Permits.....................................................................20
Section 5.14 Compliance with Laws........................................................20
Section 5.15 Taxes.......................................................................20
Section 5.16 Intellectual Property.......................................................21
Section 5.17 Labor and Employment Matters................................................21
Section 5.18 Disclaimer of other Representations and Warranties..........................21
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF THE BUYER.........................................21
Section 6.1 Organization................................................................21
Section 6.2 Authority Relative to this Agreement........................................22
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Section 6.3 Consents and Approvals; No Violation........................................22
Section 6.4 Subsidiaries and Investments................................................22
Section 6.5 Capitalization..............................................................23
Section 6.6 Interim Operations of the Buyer.............................................23
Section 6.7 Qualifications to Hold Permits..............................................23
Section 6.8 Legal Proceedings and Judgments.............................................23
ARTICLE VII COVENANTS OF THE PARTIES...........................................................23
Section 7.1 Conduct of Business.........................................................23
Section 7.2 Buyer Equity Offering.......................................................24
Section 7.3 Rights Related to the Stock Consideration...................................24
Section 7.4 Access to Information.......................................................25
Section 7.5 Expenses.................................................................. 26
Section 7.6 Further Assurances..........................................................26
Section 7.7 Public Statements...........................................................27
Section 7.8 Governmental Entity Consents and Approvals..................................27
Section 7.9 Fees and Commissions........................................................29
Section 7.10 Tax Matters.................................................................29
Section 7.11 Supplements to Schedules....................................................29
Section 7.12 Employees.................................................................. 30
Section 7.13 Litigation Support..........................................................30
Section 7.14 Notification................................................................31
Section 7.15 Submission for Bankruptcy Court Approval....................................31
Section 7.16 Investor Qualification......................................................35
Section 7.17 Management Agreements.......................................................35
Section 7.18 Transition Services.........................................................35
ARTICLE VIII CONDITIONS TO CLOSING.............................................................36
Section 8.1 Conditions to Each Party's Obligations to Effect the Closing................36
Section 8.2 Conditions to Obligations of the Buyer......................................37
Section 8.3 Conditions to Obligations of the Sellers....................................38
ARTICLE IX TERMINATION AND ABANDONMENT.........................................................39
Section 9.1 Termination.................................................................39
Section 9.2 Procedure and Effect of Termination.........................................40
ARTICLE X MISCELLANEOUS PROVISIONS.............................................................41
Section 10.1 Amendment and Modification..................................................41
Section 10.2 Waiver of Compliance; Consents..............................................41
Section 10.3 Survival....................................................................41
Section 10.4 No Impediment to Liquidation................................................42
Section 10.5 Notices.....................................................................42
Section 10.6 Assignment..................................................................43
Section 10.7 Governing Law...............................................................43
Section 10.8 Counterparts................................................................43
Section 10.9 Schedules and Exhibits......................................................43
Section 10.10 Entire Agreement............................................................44
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Section 10.11 Bulk Sales or Transfer Laws.................................................44
Section 10.12 Submission to Jurisdiction..................................................44
Section 10.13 No Strict Construction......................................................44
Section 10.14 Remedies....................................................................44
LIST OF EXHIBITS AND SCHEDULES
EXHIBITS
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Exhibit A - List of Assumed Agreements
Exhibit B - Form of Xxxx of Sale
Exhibit C - Form of Instrument of Assignment and Assumption
Exhibit D - Certificate of Incorporation and Bylaws of the Buyer
Exhibit E - Form of Governing Documents of the Designated Buyer
Subsidiaries
Exhibit F - Form of Bid Procedures Order
Exhibit G - Form of Sale Order
Exhibit H - Terms of Debtor-in-Possession Working Capital Facility
Exhibit I - Key Executives' Employment Agreement Terms
SCHEDULES REFERENCED IN:
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Schedule 1.1(a)(1) - Section 1.1(a)
Schedule 2.1(j) - Section 2 .1(j)
Schedule 2.2 - Section 2 .2(f)
Schedule 5.8 - Section 5.8 and Section 5.11
Schedule 5.9 - Section 2.1(f) and Section 5.9
Schedule 5.10 - Section 5.10(a), Section 5.10(c) and Section 5.10(d)
Schedule 5.11 - Section 5 .11
Schedule 5.12 - Section 5 .12
Schedule 5.13 - Section 1.1(a) and Section 5.13
Schedule 5.16 - Section 5 .16
Schedule 5.17 - Section 5 .17
Schedule 6.5 - Section 6 .5
Schedule 7.1(a) - Section 7.1(a)
Schedule 7.1(c) - Section 7.1(c)
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FIRST AMENDED AND RESTATED ASSET PURCHASE AGREEMENT
This First Amended and Restated Asset Purchase Agreement (this
"Agreement") is made as of September 4, 2001 by and among Teligent, Inc., a
Delaware corporation ("Teligent"); Teligent License Co. I, L.L.C., a Delaware
limited liability company; Teligent License Co. II, L.L.C., a Delaware limited
liability company; Teligent Services, Inc., a Delaware corporation; Teligent of
Virginia, Inc., a Virginia Public Service Company; Quadrangle Investments, Inc.,
a Delaware corporation; BackLink, L.L.C., a Delaware limited liability company;
JTel, L.L.C., a Delaware limited liability company; KatLink, L.L.C., a Delaware
limited liability company; Teligent Telecommunications, L.L.C., a Delaware
limited liability company; Teligent Communications, L.L.C., a Delaware limited
liability company (collectively, the "Sellers"); and Teligent Acquisition Corp.,
a Delaware corporation (the "Buyer").
WHEREAS, each of the Sellers and the Buyer are parties to the Asset
Purchase Agreement, dated as of August 23, 2001 (the "Original Agreement"), and
they desire to amend and restate the Original Agreement in its entirety as set
forth herein;
WHEREAS, the Buyer desires to purchase from the Sellers, and the Sellers
desire to sell to the Buyer, the Purchased Assets (as hereinafter defined) upon
the terms and conditions hereinafter set forth in this Agreement; and
WHEREAS, the Buyer desires to purchase from the Sellers the Purchased
Assets for the purpose of providing broadband capacity and related services;
NOW, THEREFORE, in consideration of the mutual covenants,
representations, warranties and agreements hereinafter set forth, and intending
to be legally bound hereby, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions.
(a) As used in this Agreement, the following terms have the
meanings specified in this Section 1.1(a).
"Actual DIP Financing Amount" means all obligations outstanding under
the Debtor-in-Possession Working Capital Facility.
"Affiliate" has the meaning set forth in Rule 12b-2 of the General Rules
and Regulations under the Exchange Act.
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"Assumed Agreements" means any contract, agreement, real or personal
property lease, commitment, understanding or instrument which relates to the
Business or the Purchased Assets and which is listed on Exhibit A attached
hereto, which Exhibit may be amended from time to time by the Buyer up to the
commencement of the Sale Hearing and excluding any contract, agreement, real or
personal property lease, commitment, understanding or instrument that the Buyer
elects to exclude pursuant to Section 2.5(a).
"Bankruptcy Code" means Title 11 of the United States Code, 11 U.S.C.
Sections 101, et. seq.
"Bankruptcy Court" means the United States Bankruptcy Court for the
Southern District of New York or such other court having jurisdiction over the
Chapter 11 Case originally administered in the Southern District of New York
under Case No. 01-12974.
"Xxxx of Sale" means the Xxxx of Sale to be executed and delivered by
the Sellers at the Closing, substantially in the form of Exhibit B attached
hereto.
"Business" means the activities carried on by the Sellers for the
purpose of providing local and long distance telephony, high-speed data and
Internet access services over local digital networks; provided that "Business"
shall not include any of the activities carried on by any of the Excluded
Subsidiaries.
"Business Day" means any day other than Saturday, Sunday and any day
which is a legal holiday under the laws of the State of New York or a day on
which banking institutions in such state are authorized by law or other
governmental action to close.
"Buyer Common" means the Buyer's common stock, par value $0.01 per
share.
"Buyer Equity Offering" means a privately placed equity offering of the
Buyer's securities to qualified institutional buyers under Rule 144A or any
other equity offering exempt from the registration requirements of the
Securities Act in an amount sufficient to fund the Cash Consideration hereunder
and to provide sufficient working capital, as determined in the Buyer's sole
discretion, for the continued operation of the Operating Business after the
Closing.
"Buyer Representatives" means the Buyer's accountants, employees,
counsel, environmental consultants, financial advisors and other authorized
representatives.
"Cash Collateral Order" means that certain final cash collateral order
entered by the Bankruptcy Court, dated June 13, 2001, as may be amended from
time to time.
"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended.
"Chapter 11 Case" means the Sellers' case commenced under Chapter 11 of
the Bankruptcy Code.
"COBRA" means the Consolidated Omnibus Budget Reconciliation Act of
1985, as amended and set forth in Section 4980B of the Code and Part 6 of
Subtitle B of Title I of ERISA.
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"Code" means the Internal Revenue Code of 1986, as amended.
"Committed Financing" means the receipt of binding subscription
agreements by the Buyer from investors in the Buyer Common under the Buyer
Equity Offering for an aggregate amount of no less than $250,000,000.
"Confidential Information" shall have the meaning specified in the
Confidentiality Agreement.
"Confidentiality Agreement" means the Confidentiality Agreement, dated
as of June 20, 2001, between Teligent and Friedman, Billings, Xxxxxx & Co.
"Disability" means any physical or mental incapacitation which results
or will result in a Key Executive's inability to perform his duties and
responsibilities for the Sellers for a total of 120 days during the twelve-month
period commencing on the date of the Original Agreement, as determined by an
Independent Medical Doctor. For the purposes of this definition, an "Independent
Medical Doctor" shall be a medical doctor chosen in the following manner: the
Buyer and Teligent shall each choose a medical doctor and such medical doctors,
together, shall choose a third medical doctor who shall be the Independent
Medical Doctor.
"Encumbrances" means any mortgages, pledges, liens, claims, charges,
security interests, conditional and installment sale agreements, activity and
use limitations, conservation easements, deed restrictions, encumbrances and
charges of any kind.
"Environmental Laws" means all federal, state and local laws, statutes,
regulations, rules, ordinances, codes, decrees, judgments, or judicial or
administrative orders relating to pollution or protection of the environment
applicable to the Business.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA Affiliate" means any entity which is treated as a single employer
with any of the Sellers for purposes of Section 414 of the Code.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Excluded Subsidiaries" means Executive Conference Inc., a New Jersey
corporation, Xxxxxx Shell Corp. (formerly Infinet Telecommunications, Inc.), an
Ohio corporation, Telecommunications Concepts, Inc., a Virginia corporation,
American Long Lines, Inc., a Pennsylvania corporation, Easton Telecom Services,
Inc., an Ohio corporation, Teligent Professional Services, Inc., a Delaware
corporation, Auctel, Inc., a Delaware corporation, OMC Communications, Inc., a
Maryland corporation, Association Communications, Inc., a Washington
corporation, FirstMark Communications, Inc., an Ohio corporation, Teligent
International Ltd., a Bermuda company, and Teligent Canada Ltd., a Canadian
corporation.
"FCC" means the Federal Communications Commission.
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"FCC Analogous Consents" means any consents from state or local
regulatory authorities with respect to the assignment of the FCC Analogous
Licenses in connection with the consummation of the transactions contemplated by
this Agreement.
"FCC Analogous Licenses" means any licenses, authorizations or permits
issued by state or local regulatory authorities which are used or useful in
connection with the Business and listed on Schedule 5.13.
"FCC Consents" means the actions by the FCC granting its consent to the
assignment of the FCC Licenses in connection with the consummation of the
transactions contemplated hereby.
"FCC Licenses" means all, permits, construction permits and other
authorizations issued by the FCC which are used or useful in connection with the
Business and listed on Schedule 5.13.
"FCC Rules" means the rules and regulations of the FCC, 47 Code of
Federal Regulations, Part 1 et seq.
"Final Order" means, (i) for purposes of the FCC Consents, an
administrative order issued by the FCC for which (A) the deadline for lodging
any administrative appeal, reconsideration, stay or review has expired pursuant
to the FCC Rules and (B) such order has not otherwise been reversed, stayed,
enjoined, set aside, annulled or suspended; and (ii) for purposes of the
consents required from all other Governmental Entities (including, without
limitation, the FCC Analogous Consents), an action by any such Governmental
Entity that has not been reversed, stayed, enjoined, set aside, annulled or
suspended, or where the time period for any further action by such Governmental
Entity has expired without further action by such Governmental Entity.
Notwithstanding the foregoing, in the case of any consent required of a
Governmental Entity, including the FCC Consents, such consent by such
Governmental Entity shall be deemed a Final Order even if there is a timely
request for stay, appeal, reconsideration, review or rehearing challenging the
action by such Governmental Entity, unless (x) such challenge has a substantial
probability of success on its merits and (y) such challenge, if successful,
would have a Material Adverse Effect.
"Governmental Entity" means any federal, state or local governmental or
regulatory authority, department, agency, commission, body or other governmental
entity.
"Hazardous Substances" means (i) any petrochemical or petroleum
products, oil, coal tar, or coal ash, radioactive materials, radon gas, asbestos
in any form that is or could become friable, urea formaldehyde foam insulation
or other equipment that contains dielectric fluid which may contain
polychlorinated biphenyls, and (ii) any chemicals, materials or substances
defined as or included in the definition of "hazardous substances," "solid
wastes," "hazardous wastes," "hazardous materials," "restricted hazardous
materials," "extremely hazardous substances," "toxic substances," "contaminants"
or "pollutants" under any applicable Environmental Law.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended, and the relevant rules and regulations thereunder.
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"Income Tax" means any federal, state, local or foreign Tax (i) based
upon, measured by or calculated with respect to net income, profits or receipts
(including, without limitation, capital gains Taxes and minimum Taxes), or (ii)
based upon, measured by or calculated with respect to multiple bases (including,
without limitation, corporate franchise taxes) if one or more of the bases on
which such Tax may be based, measured by or calculated with respect to, is
described in clause (i), in each case together with any interest, penalties, or
additions to such Tax.
"Instrument of Assignment and Assumption" means the Instrument of
Assignment and Assumption to be executed and delivered by the Buyer and the
Sellers at the Closing, substantially in the form of Exhibit C attached hereto.
"Intellectual Property" means all of the following in any jurisdiction
throughout the world: (i) patents, patent applications and patent disclosures,
(ii) trademarks, service marks, trade dress, trade names, corporate names, logos
and Internet domain names, together with all goodwill associated with each of
the foregoing, (iii) copyrights and copyrightable works, (iv) registrations and
applications for any of the foregoing, (v) trade secrets, confidential
information and inventions and (vi) rights under any license agreements for any
of the foregoing.
"Key Executives" means Xxxxxx Xxxxxxxx and Xxx Xxxxxxxxxx.
"Knowledge" means, with respect to each Seller, as to a particular
matter, the actual knowledge of the Key Executives, in each case without
independent investigation.
"Material Adverse Effect" means any change or changes in, or effect on,
the Business or the Purchased Assets that is individually, or are in the
aggregate, reasonably likely to be materially adverse to the financial condition
of the Operating Business or the Purchased Assets, each taken as a whole, taking
into account the Sellers' current status as filers under Chapter 11 of the
Bankruptcy Code, other than (i) any change or effect in any way resulting from
or arising in connection with this Agreement or any of the transactions
contemplated hereby (including any announcement with respect to this Agreement
or any of the transactions contemplated hereby), (ii) changes in (A) economic,
regulatory or political conditions generally or (B) general business or economic
conditions relating to any industries in which any of the Sellers participates,
which is not specific to such Seller, (iii) any change in or effect on the
Purchased Assets or the Operating Business which is cured (including by the
payment of money) by the applicable Seller or any of its Affiliates before the
Termination Date or (iv) any change or effect resulting from (A) the
discontinuance of service referenced in Section 7.1(c) herein or (B) the
Seller's plan to decommission the facilities reflected in the letter dated
August 21, 2001, from Teligent to the Buyer.
"Operating Business" means the activities carried on by the Sellers for
the purpose of providing local and long distance telephony, high-speed data and
Internet access services over the local digital networks in the following
Standard Metropolitan Statistical Areas: Boston, MA, Chicago, IL, Cleveland, OH,
Dallas, TX, Hartford, CT, Houston, TX, Los Angeles, CA, New York, NY,
Philadelphia, PA, Phoenix, AZ and Washington, D.C; provided that "Operating
Business " shall not include any of the activities carried on by the Excluded
Subsidiaries.
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"Permitted Encumbrances" means (i) statutory liens for current Taxes or
assessments not yet due or delinquent or the validity or amount of which is
being contested in good faith by appropriate proceedings, (ii) mechanics',
carriers', workers', repairers' and other similar liens arising or incurred in
the ordinary course of business relating to obligations as to which there is no
default on the part of any of the Sellers or the validity or amount of which is
being contested in good faith by appropriate proceedings, or pledges, deposits
or other liens securing the performance of bids, trade contracts, leases or
statutory obligations (including workers' compensation, unemployment insurance
or other social security legislation), (iii) zoning, entitlement, conservation
restriction and other land use and environmental regulations by governmental
authorities which do not materially interfere with the present use of the
Purchased Assets, (iv) all exceptions, restrictions, easements, charges,
rights-of-way and other Encumbrances set forth in any state, local or municipal
franchise under which the Business is conducted which do not materially
interfere with the present use of the Purchased Assets, and (v) such other
liens, imperfections in or failure of title, charges, easements, rights-of-way,
encroachments, exceptions, restrictions and encumbrances which do not materially
interfere with the present use of the Purchased Assets and neither secure
indebtedness or the payment of the deferred purchase price of property, nor
individually or in the aggregate create a Material Adverse Effect.
"Person" means any individual, partnership, limited liability company,
joint venture, corporation, trust, unincorporated organization or any
Governmental Entity.
"Release" means release, spill, leak, discharge, dispose of, pump, pour,
emit, empty, inject, xxxxx, dump or allow to escape into or through the
environment.
"Required Consents" means, collectively, (i) the Sale Order, (ii) the
filings by the Sellers and the Buyer required by the HSR Act and the expiration
or earlier termination of all waiting periods under the HSR Act, (iii) the FCC
Consents, (iv) the FCC Analogous Consents, (v) the Other Regulatory Approvals
which may be required, as determined in accordance with Section 7.8(d), and (vi)
the Third Party Consents.
"Sale Hearing" means the hearing of the Bankruptcy Court during which
the Bankruptcy Court considers the Sale Order.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Seller Licensees" means Teligent License Co. I, L.L.C., Teligent
License Co. II, L.L.C., BackLink, L.L.C., JTel, L.L.C., KatLink, L.L.C.,
Teligent Services, Inc. and any other entity holding licenses necessary to
conduct the Business.
"Sellers' Representatives" means the Sellers' accountants, employees,
counsel, environmental consultants, financial advisors and other authorized
representatives.
"Subsidiary," when used in reference to any other Person, means any
Person of which the outstanding securities having ordinary voting power to elect
a majority of the board of directors
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or other Persons performing similar functions of such Person are owned directly
or indirectly by such other Person.
"Tax" and "Taxes" means (i) all taxes, charges, fees, levies, penalties
or other assessments of any kind whatsoever imposed by any federal, state, local
or foreign taxing authority, including, but not limited to, income, excise,
property, sales, transfer, franchise, payroll, withholding, social security or
other taxes, whether computed on a separate or consolidated, unitary or combined
basis or in any other manner, including any interest, penalties or additions
attributable thereto or (ii) liability for the payment of any amounts of the
type described in clause (i) above as a result of being party to any agreement
or any express or implied obligation to indemnify or otherwise succeed to the
liability of any other Person.
"Tax Return" means any return, report, information return or other
document (including any related or supporting information) required to be
supplied to any Governmental Entity with respect to Taxes.
"Third Party Consents" means all of the consents set forth on Schedule
1.1(a)(1) attached hereto.
"Transferring Employee Records" means all personnel files related to the
Transferred Employees to the extent such files pertain to (i) skill and
development training and resumes, (ii) seniority histories, (iii) salary and
benefit information, (iv) Occupational, Safety and Health Administration medical
reports, (v) active medical restriction forms, and (vi) job performance reviews
and applications.
"TSI" means Teligent Services, Inc., a Delaware corporation.
"WARN Act" means the Worker Adjustment Retraining and Notification Act
of 1988, as amended.
(b) Each of the following terms has the meaning specified in
the Section set forth opposite such term:
Term Section
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Agreement Recitals
Assumed Obligations 2.3
Benefit Plans 5.10(a)
Bid Procedures 7.15(a)
Books and Records 7.18(b)
Buyer Recitals
Buyer Material Adverse Effect 4.4(h)
Cash Consideration 3.1
Closing 4.1
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Closing Date 4.1
Debtor-in-Possession Working
Capital Facility 7.15(d)
Designated Buyer Subsidiaries 2.1
Environmental Permits 5.9(a)
Excluded Assets 2.2
Excluded Liabilities 2.4
DIP Order 7.15(c)
Financial Statements 5.6
FMV Proceeds 7.15(a)(i)(x)
Interim Financing 7.15(d)
Leased Real Property 5.8
Other Regulatory Approvals 7.8(d)
Permits 5.13
Pre-Petition Secured Lenders 8.2(d)
Proposal 7.15(a)(ix)
Purchased Assets 2.1
Purchase Price 3.1
Registered Intellectual Property 5.16
Sale Order 7.15(b)
Sellers Recitals
Stock Consideration 3.1
Teligent Recitals
Termination Date 9.1(l)
Transfer Taxes 7.10(b)
Transferred Employee 7.12(a)
Transferable Permits 2.1(f)
Transition Period 7.18(a)
Transition Services Agreement 7.18(a)
WARN Obligations 7.12(b)
Section 1.2 Construction.
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The headings and captions of the various Articles and Sections of this
Agreement have been inserted solely for purposes of convenience, are not part of
this Agreement, and shall not be deemed in any manner to modify, explain, expand
or restrict any of the provisions of this Agreement. Unless stated to the
contrary, all references to Articles, Sections, paragraphs or clauses herein
shall be to the specified Article, Section, paragraph, or clause of this
Agreement, and all references to Exhibits and Schedules shall be to the
specified Exhibits and Schedules attached hereto. All Exhibits and Schedules
attached hereto are made a part hereof. All terms defined herein shall have the
same meaning in the Exhibits and Schedules, except as otherwise provided
therein. All references in this Agreement to "this Agreement" shall be deemed to
include the Exhibits and Schedules attached hereto. The terms "hereby,"
"hereto," "hereunder" and any similar terms as used in this Agreement, refer to
this Agreement in its entirety and not only to the particular portion of this
Agreement where the term is used. The term "including" when used herein without
the qualifier, "without limitation," shall mean "including, without limitation."
Wherever in this Agreement the singular number is used, the same shall include
the plural, and the masculine gender shall include the feminine and neuter
genders, and vice versa, as the context shall require. The word, "or," shall not
be construed to be exclusive. Provisions shall apply, when appropriate, to
successive events and transactions.
ARTICLE II
PURCHASE AND SALE
Section 2.1 The Sale. Upon the terms and subject to the satisfaction
of the conditions contained in this Agreement, at the Closing, the Sellers shall
sell, assign, convey, transfer and deliver to the Buyer, or in the case of the
assignment of the FCC Licenses and the FCC Analogous Licenses, TAC License
Corp., a Delaware corporation, or TAC Virginia, L.L.C., a Delaware limited
liability company (collectively, the "Designated Buyer Subsidiaries"), and the
Buyer shall, by payment of the Purchase Price, purchase and acquire from the
Sellers, free and clear of all Encumbrances (except for Permitted Encumbrances),
all of the rights, title and interest that the Sellers possess as of the Closing
and have the right to transfer in, to and under the real, personal, tangible and
intangible property or assets described below (collectively, the" Purchased
Assets"):
(a) all inventories of supplies, materials and critical spares
used in connection with the Business;
(b) all equipment used in connection with the Business,
including (i) DSLAMs, modems, routers, ANXs, Xxxxxx equipment, Xxxxxx OEM
equipment, and all other 18 GHz, 23 GHz and 24 GHz-enabled equipment;
(ii) all equipment necessary to render fully operational 2,000 additional
Teligent Access Sites beyond those operating in the Operating Business at
the Closing; and (iii) all additional equipment necessary to render fully
operational 100 additional Teligent Node sites beyond those operating in
the Operating Business at the Closing;
(c) all machinery, vehicles, furniture and other tangible
personal property used in connection with the Business;
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(d) all of the Sellers' accounts receivable as of the Closing
Date;
(e) the Assumed Agreements, in each case, to the extent the
same are assignable under Section 365 of the Bankruptcy Code or to the
extent consented to by the third party or third parties to such
agreements, and any and all customer deposits, customer advances and
credits, security deposits and letters of credit related to any such
Assumed Agreements;
(f) the Permits (including, without limitation, the FCC
Licenses and the FCC Analogous Licenses) and the Environmental Permits
listed on Schedule 5.9, in each case, to the extent the same are
assignable (the "Transferable Permits");
(g) to the extent assignable under Section 365 of the
Bankruptcy Code or to the extent consented to by the third party or third
parties to such agreements, all confidentiality, noncompete or
nondisclosure agreements executed by vendors, suppliers or employees of
the Sellers or other third parties, in each case, relating to the
Business;
(h) all of the shares of the capital stock of ICG
Communications, Inc., a Delaware corporation, owned by any of the
Sellers;
(i) originals or copies of all Transferring Employee Records,
books, operating records, operating, safety and maintenance manuals,
engineering design plans, blueprints and as-built plans, specifications,
procedures and similar items of the Sellers relating specifically to the
Purchased Assets, including books of account, all customer lists, billing
records and other customer correspondence relating to the Business, all
regulatory filings and other books and records relating to the rates and
services provided by the Sellers in connection with the operation of the
Business;
(j) except as set forth on Schedule 2.1(j) and subject to
Section 2.2(d), all of the rights, claims or causes of action of any of
the Sellers against a third party related to the Purchased Assets, the
operation of the Operating Business or the Assumed Obligations or Assumed
Agreements arising out of transactions occurring prior to the Closing
Date, except where such rights, claims or causes of action relate to
Excluded Liabilities; to the extent such rights, claims or causes of
action relate to both Assumed Obligations and Excluded Liabilities, the
Buyer and each Seller shall share such rights, claims or causes of action
in the same proportion as their respective liabilities bear to the total
liability relating to those rights, claims or causes of action;
(k) all Intellectual Property used by the Sellers in connection
with the Business, together with all related income, royalties, damages
and payments due or payable at the Closing or thereafter (including,
without limitation, damages and payments for past or future infringements
or misappropriations thereof), the right to xxx and recover for past
infringements or misappropriations thereof, any and all corresponding
rights that, now or hereafter, may be secured throughout the world and
all copies and tangible embodiments of any such Intellectual Property;
and
(l) to the extent assignable under Section 365 of the
Bankruptcy Code or to the extent consented to by the insurance providers,
the rights of the Sellers under those
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insurance policies which cover risks covering the Operating Business or
the Purchased Assets.
Section 2.2 Excluded Assets. Notwithstanding any provision herein to
the contrary, the Purchased Assets shall not include the following property or
assets and any other property or assets not described in Section 2.1, of the
Sellers (the "Excluded Assets"):
(a) cash (including all cash residing in any collateral cash
account securing any obligation or contingent obligation of the Sellers),
cash equivalents and bank deposits, subject to the Buyer's rights under
Section 2.1(e);
(b) certificates of deposit, shares of stock (subject to
Section 2.1(h)), securities, bonds, debentures, evidences of indebtedness
(excluding the Sellers' accounts receivable as of the Closing Date),
including, without limitation, interests in any Person owned by any
Seller, including, but not limited to, the equity interests owned in the
Sellers and the Excluded Subsidiaries;
(c) rights to any Tax refunds of any of the Sellers, whether
such refund is received as a payment or as a credit against future Taxes;
(d) the Sellers' causes of action, choses of action and rights
of recovery pursuant to Sections 544 through 550 and Section 553 of the
Bankruptcy Code and any other avoidance actions under any other
applicable provisions of the Bankruptcy Code;
(e) subject to Sections 7.4(c) and 7.18(b), the corporate
charter, qualifications to conduct business as a foreign corporation,
arrangements with registered agents relating to foreign qualifications,
taxpayer and other identification numbers, seals, minute books, stock
transfer books, blank stock certificates, and other documents relating to
the organization, maintenance, and existence of the Sellers as a
corporation or a limited liability company, as the case may be, any
books, records or the like of the Sellers;
(f) all of the assets set forth on Schedule 2.2;
(g) all of the agreements to which any of the Sellers is a
party which are not Assumed Agreements and any and all customer deposits,
customer advances and credits and security deposits related to any such
agreements which are not Assumed Agreements;
(h) the rights of each Seller under this Agreement and any
other agreements between any of the Sellers and the Buyer or any of its
Affiliates;
(i) all of the real, personal, tangible or intangible property
(including Intellectual Property) or assets owned by the Excluded
Subsidiaries except to the extent that such property or assets relate to
the Operating Business;
(j) any and all prepaid workers compensation premiums (other
than the portion relating to the Transferred Employees);
(k) all intercompany receivables owed to the Sellers; and
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(l) claims against current or former directors, officers or
other employees of, or agents, accountants or other advisors of or to,
any of the Sellers.
Section 2.3 Assumed Obligations. On the Closing Date, the Buyer shall
execute and deliver to Teligent the Instrument of Assignment and Assumption
pursuant to which the Buyer shall assume and agree to discharge solely the
following liabilities and obligations (the "Assumed Obligations"), in
accordance with the respective terms and subject to the respective conditions
thereof:
(a) all liabilities and obligations of any of the Sellers under
the Assumed Agreements (subject to the limitation on cure amounts set
forth in Section 2.5(b)) and the Transferable Permits in accordance with
the terms thereof;
(b) all liabilities and obligations relating to any customer
deposits and customer advances and credits, in each case, to the extent
that the cash relating to such deposits, advances and credits are
included in the Purchased Assets, the security deposits are included in
the Purchased Assets and the Sellers' rights under the letters of credit
securing customer deposits, advances or credits are assigned to the Buyer
as part of the Purchased Assets;
(c) all liabilities and obligations assumed by, or allocated
to, the Buyer pursuant to Section 7.10; and
(d) all liabilities and obligations related to the Purchased
Assets arising from any actions or omissions occurring after the Closing
Date or the Operating Business arising from any actions or omissions
occurring after the Closing Date.
Section 2.4 Excluded Liabilities. The Buyer shall not assume or be
obligated to pay, perform or otherwise discharge any liabilities or obligations
of any of the Sellers other than the Assumed Obligations (collectively, the
"Excluded Liabilities").
Section 2.5 Assumption of Certain Leases and Other Contracts. The
Sale Order shall provide for the assumption by the applicable Sellers and
assignment to the Buyer, effective upon the Closing, of the Assumed Agreements
on the following terms and conditions:
(a) At the Closing, the applicable Sellers shall assume and
such Sellers shall assign to the Buyer the Assumed Agreements. The
Assumed Agreements shall also be identified by the date of the Assumed
Agreement (if available), the other party or parties to the Assumed
Agreement and the address of such party or parties (if available) set
forth on Exhibit A, as the case may be, all included on an exhibit
attached to a motion for authority to assume and assign such Assumed
Agreements. To the extent any such information is set forth on Exhibit A
and is later determined by the Sellers not to be available, the Sellers
shall promptly notify the Buyer of any such lack of availability. Such
exhibit shall set forth the approximate amounts necessary to cure
defaults, if any, under each of such Assumed Agreements as determined by
the Sellers based on the Sellers' books and records, subject to amendment
of the cure amounts by the Sellers from time to time. Until thirty (30)
days after the date on which the Sale Order is entered by the Bankruptcy
Court, the Buyer, in its discretion, by delivery of written notice to the
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Sellers, may exclude any contract, agreement, real or personal property
lease, commitment, understanding or instrument listed on Exhibit A and
the Buyer shall not acquire any rights or assume any liabilities with
respect thereto; provided that the Buyer shall use its commercially
reasonable best efforts to finalize its exclusions from Exhibit A as
soon as possible.
(b) If there exists on the Closing Date any default related
to an Assumed Agreement which relates to the Operating Business or the
Purchased Assets, the Buyer shall be responsible for any and all amounts
to be cured pursuant to Section 365(a) of the Bankruptcy Code in an
amount not exceeding $500,000 in the aggregate as a condition to the
assumption and assignment of such Assumed Agreement. At the Closing, the
Buyer shall provide funds to the Sellers (by wire transfer of
immediately-available U.S. funds) in an amount sufficient to pay all
such cure amounts up to $500,000 in the aggregate for such Assumed
Agreements. Immediately upon receipt by the Sellers of such funds and
the Purchase Price at the Closing, the Sellers shall pay all cure
amounts for such Assumed Agreements.
(c) If there exists on the Closing Date any default related
to an Assumed Agreement which relates to the Business but neither the
Operating Business nor the Purchased Assets, the Buyer shall be
responsible for any and all amounts to be cured pursuant to Section
365(a) of the Bankruptcy Code as a condition to the assumption and
assignment of such Assumed Agreement. At the Closing, the Buyer shall
provide funds to the Sellers (by wire transfer of immediately-available
U.S. funds) in an amount sufficient to pay in full all such cure amounts
for such Assumed Agreements. Immediately upon receipt by the Sellers of
such funds and the Purchase Price at the Closing, the Sellers shall pay
all cure amounts for such Assumed Agreements.
(d) The Buyer shall be responsible for any and all costs and
expenses necessary in connection with providing adequate assurance of
future performance with respect to the Assumed Agreements.
ARTICLE III
PURCHASE PRICE
Section 3.1 Purchase Price. The aggregate consideration for the
Purchased Assets shall be $117,500,000 (the "Purchase Price"), consisting of:
(i) a number of shares of Buyer Common equal to the quotient of: (x) $5,000,000,
divided by (y) the price per share of Buyer Common paid by the investors in the
Buyer under the Buyer Equity Offering (the "Stock Consideration") and (ii)
$112,500,000 in cash (the "Cash Consideration").
Section 3.2 Allocation of Purchase Price. Prior to the Closing, the
Buyer and the Sellers shall use their reasonable best efforts to agree as to the
allocation of the Purchase Price pursuant to Section 1060 of the Code and the
rules and regulations thereunder. The Buyer and the Sellers agree to use such
allocation in filing all required forms under Section 1060 of the Code and all
other Tax Returns, and the Buyer and the Sellers further agree that they shall
not take any position inconsistent with such allocation on any examination of
any such Tax Return,
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in any refund claim or in any Tax litigation. Upon the request of the other, the
Buyer and the Sellers agree to provide the other information reasonably
necessary to complete Form 8594. Not later than thirty (30) days prior to the
filing of their respective Forms 8594 relating to this transaction, each party
shall deliver to the other party a copy of its Form 8594. In the event of a
dispute with respect to any part of the allocation of the Purchase Price, the
Buyer and the Sellers shall attempt to reconcile their differences and any
resolution by them as to any disputed allocation shall be final, binding and
conclusive on the parties. If the Buyer and the Sellers are unable to reach a
resolution on such differences within thirty (30) days after the date any such
dispute arises, the Buyer and the Sellers shall submit the disputed allocations
for determination and resolution to the Bankruptcy Court, which shall be
instructed to determine and report to the parties, upon such disputed
allocations, and such report shall be final, binding and conclusive on the
parties hereto with respect to the disputed allocations.
ARTICLE IV
THE CLOSING
Section 4.1 Time and Place of Closing. Upon the terms and subject to
the satisfaction of the conditions contained in Article VIII of this Agreement,
the closing of the sale of the Purchased Assets and the assumption of the
Assumed Obligations and Assumed Agreements contemplated by this Agreement (the
"Closing") shall take place at the offices of Xxxxxx, Xxxx & Xxxxxxxx LLP, 000
Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, at 10:00 A.M. (local time) no later than the
fifth (5th) Business Day following the date on which the conditions set forth in
Article VIII have been satisfied (other than the conditions with respect to
actions the respective parties hereto will take at the Closing itself) or, to
the extent permitted, waived in writing, or at such other place or time as the
Buyer and Teligent (on behalf of the Sellers) may mutually agree. The date and
time at which the Closing actually occurs is hereinafter referred to as the
"Closing Date."
Section 4.2 Payment of Purchase Price. Upon the terms and subject to
the satisfaction of the conditions contained in this Agreement, in consideration
of the aforesaid sale, assignment, conveyance, transfer and delivery of the
Purchased Assets, at the Closing the Buyer shall: (i) subject to Section 4.4(a),
pay, or cause to be paid, to Teligent (on behalf of the Sellers) an amount in
U.S. dollars equal to the Cash Consideration, by wire transfer of immediately-
available funds to such account or accounts specified by Teligent (such account
or accounts shall be specified by Teligent in a written notice to be delivered
to the Buyer no later than one (1) Business Day prior to the Closing Date) and
(ii) deliver to Teligent (on behalf of the Sellers) stock certificates
representing the Stock Consideration registered in the name or names of Persons
specified by Teligent in a written notice to be delivered to the Buyer no later
than one (1) Business Day prior to the Closing Date.
Section 4.3 Deliveries by the Sellers. At or prior to the Closing,
the Sellers shall deliver the following to the Buyer:
(a) the Xxxx of Sale, duly executed by the Sellers for the
personal property included in the Purchased Assets;
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(b) all consents, waivers or approvals obtained by the
Sellers with respect to the Purchased Assets, the transfer of the
Transferable Permits and the consummation of the transactions required
in connection with the sale of the Purchased Assets contemplated by this
Agreement, to the extent specifically required hereunder;
(c) the certificates contemplated by Section 8.2(b) and a
certificate from an authorized officer of Teligent to the effect that
all cure amounts payable in accordance with Sections 2.5(b) and (c) will
have been caused to be paid as of the Closing Date;
(d) the Instrument of Assignment and Assumption and all such
other instruments of assignment or conveyance as shall, in the
reasonable opinion of the Buyer and its counsel, be necessary to
transfer to the Buyer all of the Sellers' rights, title and interest in,
to and under all of the Purchased Assets, in accordance with this
Agreement;
(e) certificates of title for certificated motor vehicles or
other separately titled Purchased Assets, or other evidences of the
right to use the Purchased Assets, duly executed by the applicable
Seller and in form reasonably satisfactory to Buyer;
(f) stock certificates representing all of the shares of the
capital stock of ICG Communications, Inc., a Delaware corporation, owned
by the Sellers, endorsed in blank or accompanied by duly executed stock
powers; and
(g) all such other agreements, documents, instruments and
writings as are required to be delivered by the Sellers at or prior to
the Closing Date pursuant to this Agreement, except where failure to
provide such documents would not materially affect the Sellers' ability
to consummate the transactions contemplated hereby.
Section 4.4 Deliveries by the Buyer. At or prior to the Closing, the
Buyer shall deliver the following to Teligent (on behalf of the Sellers):
(a) an amount of cash equal to the Cash Consideration less
the Actual DIP Financing Amount by wire transfer of
immediately-available U.S. funds to such account or accounts specified
by Teligent;
(b) the stock certificates representing the Stock
Consideration;
(c) certified copies of the Certificate of Incorporation and
the Bylaws of the Buyer and each of the Designated Buyer Subsidiaries,
each as in effect as of the Closing;
(d) certified copies of the resolutions duly adopted by the
Buyer's board of directors authorizing the execution, delivery and
performance of this Agreement and each of the other transactions
contemplated hereby, including the issuance and delivery of the Stock
Consideration hereunder;
(e) the Instrument of Assignment and Assumption with respect
to the Assumed Obligations and Assumed Agreements, duly executed by the
Buyer;
(f) the certificate contemplated by Section 8.3(b);
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(g) all such other instruments of assumption as shall, in
the reasonable opinion of Teligent and its counsel, be necessary for the
Buyer to assume the Assumed Obligations in accordance with this
Agreement; and
(h) such other agreements, documents, instruments and
writings as are required to be delivered by the Buyer at or prior to the
Closing Date pursuant to this Agreement, except where the failure to
deliver such agreements, documents, instruments and writings would not
materially affect the Buyer's ability to consummate the transactions
contemplated hereby (a "Buyer Material Adverse Effect").
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
As an inducement to the Buyer to enter into this Agreement and to
consummate the transactions contemplated hereby, each Seller with respect to
itself, severally represents and warrants to the Buyer as follows:
Section 5.1 Organization; Qualification. Such Seller is either a
corporation or limited liability company duly incorporated or formed, validly
existing and in good standing under the laws of its state of incorporation or
formation and has all requisite corporate or limited liability company power and
authority to own, lease, and operate the Purchased Assets and to carry on the
Business (as it relates to such Seller) as is now being conducted. As related to
the operation of the Business, such Seller is duly qualified or licensed to do
business as a foreign corporation or limited liability company and is in good
standing in each jurisdiction in which the property owned, leased or operated by
it or the nature of the business conducted by it makes such qualification
necessary, except in each case in those jurisdictions where the failure to be so
duly qualified or licensed and in good standing would not have a Material
Adverse Effect.
Section 5.2 Authority Relative to this Agreement. Such Seller has
all corporate or limited liability company power and, upon entry of the Sale
Order, authority necessary to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby have
been duly and validly authorized by the board of directors or other similar
governing body of such Seller and no other corporate or limited liability
company proceedings on the part of such Seller are necessary to authorize this
Agreement or to consummate the transactions contemplated hereby. Upon entry of
the Sale Order, this Agreement has been duly and validly executed and delivered
by such Seller, and assuming that this Agreement constitutes a valid and binding
agreement of the Buyer, and subject to the receipt of the Required Consents
constitutes a valid and binding agreement of such Seller, enforceable against
such Seller in accordance with its terms, except that such enforceability may be
limited by applicable bankruptcy, insolvency, moratorium or other similar laws
affecting or relating to enforcement of creditors' rights generally or general
principles of equity.
Section 5.3 Consents and Approvals; No Violation. Subject to the
receipt of the Required Consents, neither the execution and delivery of this
Agreement by such Seller nor the sale by such Seller of the Purchased Assets
pursuant to this Agreement will (a) conflict with or
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result in any breach of any provision of the Certificate or Articles of
Incorporation, Bylaws, Certificate of Formation, or Limited Liability Agreement
(or other similar governing documents) of such Seller; (b) require any consent,
approval, authorization or permit of, or filing with or notification to, any
Governmental Entity which has not otherwise been obtained or made, except (i)
where the failure to obtain such consent, approval, authorization or permit, or
to make such filing or notification, would not, individually or in the
aggregate, have a Material Adverse Effect or prevent or materially delay the
consummation of the transactions contemplated by this Agreement or (ii) for
those requirements which become applicable to such Seller as a result of the
specific regulatory status of the Buyer (or any of its Affiliates) or as a
result of any other facts that specifically relate to the business or activities
in which the Buyer (or any of its Affiliates) is or proposes to be engaged; (c)
result in a default (or give rise to any right of termination, cancellation or
acceleration) under any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, license, agreement or other instrument or obligation
to which such Seller is a party or by which such Seller or any of the Purchased
Assets may be bound, except for such defaults (or rights of termination,
cancellation or acceleration) as to which requisite waivers or consents have
been obtained or which would not, individually or in the aggregate, have a
Material Adverse Effect or prevent or materially delay the consummation of the
transactions contemplated by this Agreement; or (d) violate any order, writ,
injunction, decree, statute, rule or regulation applicable to such Seller, or
any of its assets, which violation, individually or in the aggregate, would have
a Material Adverse Effect.
Section 5.4 FCC Licenses and FCC Analogous Licenses. Such Seller is
conducting its business in accordance with the FCC Licenses and the FCC
Analogous Licenses and is not in violation of, or in default under, (i) the
Communications Act of 1934, as amended, including the Telecommunications Act of
1996, or any of the conditions, rules or regulations applicable to such FCC
Licenses or (ii) any applicable state statute governing telecommunications or
the applicable rules, regulations and orders of any state regulatory commission
with jurisdiction over the FCC Analogous Licenses or the Business, except where
such violation or default would not, individually or in the aggregate, have a
Material Adverse Effect on the ongoing effectiveness of such FCC Licenses or FCC
Analogous Licenses. The FCC Licenses and the FCC Analogous Licenses (A) are not
subject to pending renewal or modification applications other than in the
ordinary course, (B) are in full force and effect, and (C) to the Knowledge of
such Seller, have been validly issued. "Validly issued" as used in this Section
5.4 means that the FCC Licenses and the FCC Analogous Licenses have been issued
through the means of regular agency procedures applied in conformity with
applicable laws and there is no legal basis to conclude that such Seller cannot
hold the FCC Licenses or the FCC Analogous Licenses as a matter of law. "Full
force and effect" as used in this Section 5.4 means (x) the orders issuing or
renewing the FCC Licenses and the FCC Analogous Licenses have become effective
under applicable laws, (y) the FCC Licenses and the FCC Analogous Licenses have
not expired or been suspended, revoked, canceled or modified in any adverse way
and such Seller has taken steps necessary to maintain and preserve the
effectiveness of the FCC Licenses and the FCC Analogous Licenses, and (z) the
FCC Licenses and the FCC Analogous Licenses contain no conditions that would
have a Material Adverse Effect except for conditions imposed generally by the
FCC or state regulatory commissions on the holders of such licenses. There are
(1) no complaints, claims or actions outstanding before any Governmental Entity
that could result in the revocation or cancellation of the FCC Licenses and the
FCC Analogous Licenses and (2) no fees or other
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payments due and owing in connection with the FCC Licenses and the FCC Analogous
Licenses on the date of the Original Agreement.
Section 5.5 Equipment Compliance with FCC Rules. The radio frequency
equipment transferred by the Sellers to the Buyer pursuant to Section 2.1 comply
with, or have been grandfathered under, FCC Rules applicable to radio frequency
equipment to be used in the radio services authorized by the FCC Licenses.
Section 5.6 Financial Statements and Reports. Such Seller has made
available to the Buyer the audited consolidated financial statements of Teligent
and its Subsidiaries for the fiscal year ended December 31, 2000 included in
Teligent's Form 10-K filed with the SEC (collectively, including any amendments
to the financial statements, the "Financial Statements"). The Financial
Statements (including the notes thereto) have been prepared in accordance with
generally accepted accounting principles, applied on a consistent basis
throughout the period covered thereby and present fairly the financial condition
of Teligent and its Subsidiaries for such period in accordance with generally
accepted accounting principles. Such Seller has made available to the Buyer all
of its monthly operating reports filed with the Bankruptcy Court.
Section 5.7 Title to Assets. Except for Permitted Encumbrances, such
Seller has title and will transfer to the Buyer as of the Closing, indefeasible
title to, or a valid leasehold interest in, all of the Purchased Assets used in
and material to the operation of the Business, free and clear of all
Encumbrances.
Section 5.8 Leased Real Property. Schedule 5.8 lists, as of the date
of the Original Agreement, all real property leases under which such Seller is a
lessee or a lessor and which relate to the Operating Business or the Purchased
Assets and are material to the financial condition of the Business or the
Purchased Assets, each taken as a whole (collectively, the "Leased Real
Property").
Section 5.9 Environmental Matters. Except as disclosed on Schedule
5.9:
(a) to the Knowledge of such Seller, such Seller holds, and
is, and has been, in compliance with, all material permits, licenses and
governmental authorizations required for such Seller to conduct the
Business under applicable Environmental Laws ("Environmental Permits"),
and such Seller is otherwise in compliance with applicable Environmental
Laws with respect to the Business and the Purchased Assets, except for
such failures to hold or comply with required Environmental Permits, or
such failures to be in compliance with applicable Environmental Laws,
which, individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect;
(b) to the Knowledge of such Seller, such Seller has not
received any written notice that it is a potentially responsible party
under CERCLA or any similar state law with respect to the Business or
the Purchased Assets, except for such liability under such laws as would
not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect;
(c) such Seller has not entered into or agreed to any
consent decree or order, or other binding agreement with a Governmental
Entity and is not subject to any
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outstanding judgment, decree, or judicial or administrative order
relating to compliance with or liability under any Environmental Law or
to investigation or cleanup of Hazardous Substances under any
Environmental Law relating to the Business or the Purchased Assets where
any of the foregoing would, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect; and
(d) to the Knowledge of such Seller, there are no claims,
actions or proceedings under or relating to Environmental Laws pending
or, to such Seller's Knowledge, threatened against or relating to such
Seller, the Purchased Assets, or the Business which would, individually
or in the aggregate, reasonably be expected to have a Material Adverse
Effect.
The representations and warranties made in this Section 5.9 are the
Sellers' exclusive representations and warranties relating to any environmental
matters, including, without limitation, any arising under any Environmental
Laws.
Section 5.10 ERISA; Benefit Plans.
(a) Schedule 5.10 lists each employee benefit plan (as such
term is defined in Section 3(3) of ERISA) and each other material
employee benefit plan, program or arrangement maintained, contributed
to, or required to be contributed to, by such Seller as of the date of
the Original Agreement on account of current or former employees of the
Business (each, a "Benefit Plan").
(b) Each Benefit Plan that is intended to be qualified under
Section 401(a) of the Code has received a determination from the
Internal Revenue Service that such Benefit Plan is so qualified, and, to
the Knowledge of such Seller, nothing has occurred since the date of
such determination that would materially adversely affect the qualified
status of such Benefit Plan.
(c) Except as set forth on Schedule 5.10, to the Knowledge
of such Seller, each Benefit Plan has been maintained, funded, and
administered in material compliance with its terms, the terms of any
applicable collective bargaining agreements, and all applicable laws
including, but not limited to, ERISA and the Code. Such Seller has no
obligation to contribute to or any other liability under or with respect
to any multiemployer plan (as such term is defined in Section 3(37) of
ERISA) with respect to any employee of the Business. Neither such Seller
nor any ERISA Affiliate has any liability or potential liability under
Title IV of ERISA or to the Pension Benefit Guaranty Corporation that
could become a liability of the Buyer.
(d) Except as set forth on Schedule 5.10, to the Knowledge
of such Seller, such Seller has no obligation to provide medical or life
insurance benefits to any current or future, retired or former employee
of the Business other than pursuant to Part 6 of Subtitle B of Title I
of ERISA.
(e) Neither such Seller nor any ERISA Affiliate maintains a
plan which would be reasonably likely to result in the payment to any
employee or former employee of such
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Seller by the Buyer of any money or other property or rights or
accelerate or provide any other rights or benefits to any employee or
former employee of the Company which would become an obligation of the
Buyer as a result of the transactions contemplated by this Agreement,
whether or not such payment would constitute a parachute payment within
the meaning of Section 280G of the Code.
Section 5.11 Certain Contracts and Arrangements. Except for
contracts, agreements, personal property leases, service agreements, customer
agreements, commitments, understandings or instruments which (a) are listed on
Schedule 5.8 or Schedule 5.11 or (b) have been entered into in the ordinary
course of business and do not involve obligations in excess of $25,000
individually, such Seller is not, as of the date of the Original Agreement, a
party to any written contract, agreement, personal property lease, commitment,
understanding or instrument which is material to the Operating Business or the
Purchased Assets.
Section 5.12 Legal Proceedings and Judgments. Except as set forth on
Schedule 5.12, to the Knowledge of such Seller, (a) there are no claims,
actions, proceedings or investigations pending or threatened against or relating
to such Seller before any court or other Governmental Entity acting in an
adjudicative capacity, which individually or in the aggregate, would have a
Material Adverse Effect; and (b) there are no claims, actions, proceedings or
investigations pending against or relating to such Seller before any court or
other Governmental Entity acting in an adjudicative capacity, which have been
commenced after the filing of the Chapter 11 Case. Except as set forth on
Schedule 5.12, to the Knowledge of such Seller, such Seller is not subject to
any outstanding judgment, rule, order, writ, injunction or decree of any court
or other Governmental Entity which, individually or in the aggregate, would have
a Material Adverse Effect.
Section 5.13 Permits. Such Seller has all permits, licenses
(including, without limitation, the FCC Licenses and the FCC Analogous
Licenses), franchises and other governmental authorizations, consents and
approvals, other than with respect to Environmental Laws which are addressed in
Section 5.9 (collectively, "Permits"), necessary for the operation of the
Business as presently conducted, except where the failure to have such Permits
would not, individually or in the aggregate, have a Material Adverse Effect.
Schedule 5.13 sets forth a list of all material Permits and Environmental
Permits held by such Seller as of the date of the Original Agreement and
necessary for the operation of the Business as presently conducted.
Section 5.14 Compliance with Laws. To the Knowledge of such Seller,
such Seller is in material compliance with all Permits, laws, statutes, orders,
rules, regulations, ordinances, or judgments of any Governmental Entity
applicable to it, except for violations which, individually or in the aggregate,
do not have a Material Adverse Effect.
Section 5.15 Taxes . All material Tax Returns relating to the
Business or the Purchased Assets required to be filed by or on behalf of such
Seller have been filed in a timely manner, and all material Taxes shown to be
due on such Tax Returns have been paid in full. All material Taxes which such
Seller is obligated to withhold from amounts owing to any employee, creditor or
third party have been properly withheld and paid to the appropriate taxing
authority.
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Section 5.16 Intellectual Property. Schedule 5.16 attached hereto
sets forth all of the following that are owned by the Sellers related to the
Business: (a) patents and patent applications; (b) registered trademarks and
service marks and applications therefor and Internet domain names; and (c)
registered copyrights and applications therefor (the "Registered Intellectual
Property"). Except as set forth on Schedule 5.16, such Seller owns all of the
Registered Intellectual Property, and such Seller possesses all material
licenses from third parties necessary for the operation of the Business as
presently conducted, free and clear of all Encumbrances (other than the
Permitted Encumbrances).
Section 5.17 Labor and Employment Matters. Except as disclosed on
Schedule 5.17: (a) such Seller is not party to or bound by any collective
bargaining agreement or relationship with any labor organization; (b) no labor
organization or group of employees has filed any representation petition or made
any written or oral demand for recognition; (c) to the Knowledge of such Seller,
no union organizing efforts are underway or threatened; (d) no labor strike,
work stoppage, slowdown, or other material labor dispute is underway or, to the
Knowledge of such Seller, threatened; and, (e) there is no labor or
employment-related claim, charge, complaint or investigation pending or, to the
Knowledge of such Seller, threatened in any forum that, if adversely decided, is
likely to have a Material Adverse Effect.
Section 5.18 Disclaimer of other Representations and Warranties.
Except as expressly set forth in this Article V, the Sellers make no
representation or warranty, express or implied, at law or in equity, in respect
of any of their assets (including, without limitation, the Purchased Assets),
liabilities or operations, including, without limitation, with respect to
merchantability or fitness for any particular purpose, and any such other
representations or warranties are hereby expressly disclaimed. The Buyer hereby
acknowledges and agrees that, except to the extent specifically set forth in
this Article V, the Buyer is purchasing the Assets on an "as-is, where-is"
basis. Without limiting the generality of the foregoing, the Sellers make no
representation or warranty regarding any assets other than the Purchased Assets,
and none shall be implied at law or in equity.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF THE BUYER
As an inducement to the Sellers to enter this Agreement and to
consummate the transactions contemplated hereby, the Buyer represents and
warrants to the Sellers as follows:
Section 6.1 Organization. The Buyer is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Delaware and has all requisite corporate power and authority to own, lease
and operate its properties and to carry on its business as is now being
conducted. Within three (3) Business Days after the date of the Original
Agreement, each of the Designated Buyer Subsidiaries will be a corporation duly
incorporated, or a limited liability company duly organized, validly existing
and in good standing under the laws of its state of incorporation or formation
and will have all requisite corporate or limited liability company power and
authority to own, lease and operate its properties and to carry on its business
as is now proposed to be conducted. Attached hereto as Exhibit D are true and
correct copies of the Buyer's Certificate of Incorporation and Bylaws as of the
date of the
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Original Agreement. Attached hereto as Exhibit E are the forms of Certificate or
Articles of Incorporation and Bylaws of the Designated Buyer Subsidiaries which
will become effective no later than three (3) Business Days after the date of
the Original Agreement.
Section 6.2 Authority Relative to this Agreement. The Buyer has full
corporate power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby have
been duly and validly authorized by the board of directors of the Buyer and no
other corporate proceedings on the part of the Buyer are necessary to authorize
this Agreement or to consummate the transactions contemplated hereby. This
Agreement has been duly and validly executed and delivered by the Buyer, and
assuming that this Agreement constitutes a valid and binding agreement of the
Sellers, constitutes a valid and binding agreement of the Buyer, enforceable
against the Buyer in accordance with its terms, except that such enforceability
may be limited by applicable bankruptcy, insolvency, moratorium or other similar
laws affecting or relating to enforcement of creditors' rights generally or
general principles of equity.
Section 6.3 Consents and Approvals; No Violation. Subject to the
receipt of the Required Consents (other than the Third Party Consents) neither
the execution and delivery of this Agreement by the Buyer nor the purchase by
the Buyer of the Purchased Assets and the assumption by the Buyer of the Assumed
Obligations and Assumed Agreements pursuant to this Agreement will (a) conflict
with or result in any breach of any provision of the Certificate of
Incorporation or Bylaws (or other similar governing documents) of the Buyer; (b)
require any consent, approval, authorization or permit of, or filing with or
notification to, any Governmental Entity which has not been otherwise obtained
or made; or (c) result in a default (or give rise to any right of termination,
cancellation or acceleration) under any of the terms, conditions or provisions
of any material note, bond, mortgage, indenture, agreement, lease or other
instrument or obligation to which the Buyer is a party or by which any of its
assets may be bound, except for such defaults (or rights of termination,
cancellation or acceleration) as to which requisite waivers or consents have
been obtained, and except for such breaches or defaults that would not have a
Buyer Material Adverse Effect.
Section 6.4 Subsidiaries and Investments. Other than the Designated
Buyer Subsidiaries, which are wholly-owned Subsidiaries of the Buyer, the Buyer
does not own, directly or indirectly, any capital stock, partnership interest,
limited liability interests, joint venture interest or other security interests
in any other Person. As of three (3) Business Days after the date of the
Original Agreement and the Closing, (a) all of the issued and outstanding shares
of the capital stock or limited liability company interests of the Designated
Buyer Subsidiaries will have been duly authorized, validly issued, fully paid,
and nonassessable, and held of record and beneficially by the Buyer and will not
be subject to, nor issued in violation of, any preemptive rights or rights of
first refusal, and will be owned of record and beneficially by the Buyer free
and clear of all Encumbrances; (b) there will be no outstanding or authorized
options, warrants, rights, contracts, calls, puts, rights to subscribe,
conversion rights or other agreements or commitments to which any Designated
Buyer Subsidiary is a party or which are binding upon any such entity providing
for the issuance, disposition or acquisition of any of its capital stock; (c)
there will be no voting trusts, proxies or any other agreements or
understandings with respect to the voting of the capital stock or limited
liability company
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interests of any of the Designated Buyer Subsidiaries; and (d) no Designated
Buyer Subsidiary is subject to any obligation (contingent or otherwise) to
repurchase or otherwise acquire or retire any shares of its capital stock or
limited liability company interests.
Section 6.5 Capitalization. As of the Closing, the authorized,
issued and outstanding capital stock of the Buyer shall be as set forth on
Schedule 6.5. As of the Closing, all of the issued and outstanding shares of the
Buyer's capital stock shall have been duly authorized, validly issued, fully
paid, and nonassessable and will not be subject to, or be issued in violation
of, any preemptive rights or rights of first refusal and are free and clear of
all Encumbrances. As of the Closing, there will be no outstanding or authorized
options, warrants, rights, contracts, calls, puts, rights to subscribe,
conversion rights or other agreements or commitments to which the Buyer is a
party or which are binding upon the Buyer providing for the issuance,
disposition or acquisition of any of its capital stock (other than this
Agreement and the other transactions contemplated hereby) except as set forth on
Schedule 6.5. Except as set forth on Schedule 6.5, as of the Closing, there will
be no outstanding or authorized stock appreciation, phantom stock or similar
rights with respect to the Buyer or any of its Subsidiaries. Except as set forth
on Schedule 6.5, there will be no voting trusts, proxies or any other agreements
or understandings with respect to the voting of the capital stock of the Buyer
or any of its Subsidiaries as of the Closing. As of the Closing, except as set
forth on Schedule 6.5, neither the Buyer nor any of its Subsidiaries will be
subject to any obligation (contingent or otherwise) to repurchase or otherwise
acquire or retire any shares of its capital stock.
Section 6.6 Interim Operations of the Buyer. Each of the Buyer and
the Designated Buyer Subsidiaries was formed solely for the purpose of engaging
in the transactions contemplated hereby, has engaged in no other business
activities, has incurred no liabilities (except as contemplated by or in
connection with this Agreement), and has conducted its operations only in
furtherance of the transactions contemplated by this Agreement.
Section 6.7 Qualifications to Hold Permits. The Buyer is aware of no
bases why it or any of the Designated Buyer Subsidiaries would not be qualified
to hold the FCC Licenses, the FCC Analogous Licenses or any of the other
Permits.
Section 6.8 Legal Proceedings and Judgments. There are no claims,
actions, proceedings or investigations pending or, to the knowledge of the
Buyer, threatened against or relating to the Buyer before any court or other
Governmental Entity acting in an adjudicative capacity, which individually or in
the aggregate would have a Buyer Material Adverse Effect.
ARTICLE VII
COVENANTS OF THE PARTIES
Section 7.1 Conduct of Business.
(a) Except as described on Schedule 7.1(a) and except as
required by the Bankruptcy Court, during the period commencing on the
date of the Original Agreement and ending on the Closing Date, the
Sellers shall (i) operate the Operating Business in the usual, regular
and ordinary course, (ii) other than as permitted in writing by the
Buyer, preserve in all material respects the Operating Business, and
(iii) endeavor to preserve, in
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all material respects, the goodwill and relationships with customers,
suppliers and others having business dealings with the Operating
Business, in each case, taking into account each of the Seller's current
status as a filer under Chapter 11 of the Bankruptcy Code, the Cash
Collateral Order, the discontinuance of service referenced in Section
7.1(c) herein and the Sellers' plan to decommission the facilities
reflected in the letter dated August 21, 2001, from Teligent to the
Buyer.
(b) Prior to the Closing Date, without the prior written
consent of the Buyer, which shall not be unreasonably withheld, no
Seller shall (i) terminate, extend or otherwise amend any of the FCC
Licenses or FCC Analogous Licenses or (ii) other than Permitted
Encumbrances, create, incur, assume or suffer to exist any Encumbrance
upon the Purchased Assets (taking into account the Cash Collateral
Order), in each case, other than in the ordinary course of business.
Prior to the Closing Date, without the prior written consent of the
Buyer, no Seller shall sell, lease (as lessor), transfer or otherwise
dispose of, any of the Purchased Assets.
(c) Prior to the Closing Date, the Sellers shall (i)
continue all activities necessary to preserve and maintain in full force
and effect the FCC Licenses and the FCC Analogous Licenses and (ii)
undertake to discontinue the provision of local and data services in the
markets listed in Schedule 7.1(c). The Sellers shall submit applications
seeking approval of, or make other necessary filings at, state
regulatory commissions in relevant states for such discontinuance. In
discontinuing service, the Sellers shall provide reasonable customer
notice and otherwise comply with all federal and state regulatory
requirements.
(d) Prior to the Closing Date, the Buyer shall take no
action or actions which would constitute the exercise of control over
the FCC Licenses or FCC Analogous Licenses.
Section 7.2 Buyer Equity Offering. The Buyer shall use its best
efforts to either (a) consummate the Buyer Equity Offering or (b) show evidence
reasonably satisfactory to the Sellers of the Committed Financing by no later
than two (2) days prior to the date of the auction conducted pursuant to the Bid
Procedures or provide other assurance reasonably acceptable to the Sellers that
the Buyer will be able to fund the Cash Consideration at the Closing.
Section 7.3 Rights Related to the Stock Consideration. The Buyer
shall provide to the Sellers and any subsequent holders of the Stock
Consideration all rights to registration thereof under the securities laws,
rights to financial reports and all other rights which are provided
contractually by the Buyer to the investors under the Buyer Equity Offering in
connection with their acquisition of Buyer Common as if the Stock Consideration
had been issued to the Sellers pursuant to the Buyer Equity Offering; provided,
that the Sellers and any subsequent holders of the Stock Consideration shall
agree to be subject to all limitations and obligations of the investors under
the Buyer Equity Offering relating to such registration rights.
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Section 7.4 Access to Information.
(a) Between the date of the Original Agreement and the
Closing Date, each Seller shall, during ordinary business hours, upon
reasonable notice (i) give the Buyer and the Buyer Representatives
reasonable access to all books, records, plants, offices and other
facilities and properties constituting the Purchased Assets to which the
Buyer is not denied access by law, (ii) permit the Buyer to make such
reasonable inspections thereof as the Buyer may reasonably request,
(iii) furnish the Buyer with such financial and operating data and other
information with respect to the Business as the Buyer may from time to
time reasonably request, (iv) furnish the Buyer a copy of each material
report, schedule or other document filed or received by such Seller with
respect to the Business with the SEC; provided, however, that (A) any
such access shall be conducted in such a manner so as not to interfere
unreasonably with the operation of the Business, (B) such Seller shall
not be required to take any action which would constitute a waiver of
the attorney-client privilege and (C) such Seller need not supply the
Buyer with any information which such Seller is under a legal obligation
not to supply. Notwithstanding anything in this Section 7.4(a) to the
contrary, the Buyer shall not have access to any of the Seller's
customer lists, Transferring Employee Records and personnel and medical
records, which in such Seller's good faith judgment is sensitive or the
disclosure of which could subject such Seller to any risk of liability.
(b) The Buyer and the Sellers acknowledge that they are
subject to the Confidentiality Agreement. All information furnished to
or obtained by the Buyer or any of the Buyer Representatives or the
Sellers or any of the Sellers' Representatives pursuant to this
Agreement shall be subject to the provisions of the Confidentiality
Agreement and shall be treated as Confidential Information for all
purposes of the Confidentiality Agreement.
(c) For a period of three (3) years (subject to Section
7.10(a)) after the Closing Date, each party and its representatives
shall have reasonable access to all of the books and records relating to
the Business or the Purchased Assets, including, without limitation, all
information pertaining to the Assumed Agreements, all Transferring
Employee Records or other personnel and medical records required by law,
legal process or subpoena, in the possession of the other party to the
extent that such access may reasonably be required by such party in
connection with the Assumed Obligations or the Excluded Liabilities, or
other matters relating to or affected by the operation of the Business
and the Purchased Assets. Such access shall be afforded by the party in
possession of such books and records upon receipt of reasonable advance
notice and during normal business hours; provided, however, that (i) any
such access shall be conducted in such a manner as not to interfere
unreasonably with the operation of the business of any party or its
Affiliates, (ii) no party shall be required to take any action which
would constitute a waiver of the attorney-client privilege, and (iii) no
party need supply the other party with any information which such party
is under a legal obligation not to supply. The party exercising this
right of access shall be solely responsible for any costs or expenses
incurred by it pursuant to this Section 7.4(c). If the party in
possession
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of such books and records shall desire to dispose of any such books and
records upon or prior to the expiration of such period, such party
shall, prior to such disposition, give the other party a reasonable
opportunity at such other party's expense, to segregate and remove such
books and records as such other party may select.
Section 7.5 Expenses. Except to the extent specifically provided
herein, whether or not the transactions contemplated hereby are consummated, all
costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be borne by the party incurring such
costs and expenses.
Section 7.6 Further Assurances.
(a) Subject to the terms and conditions of this Agreement,
each of the parties hereto shall use reasonable best efforts to take, or
cause to be taken, all action, and to do, or cause to be done, all
things reasonably necessary, proper or advisable under applicable laws
and regulations to consummate and make effective the sale of the
Purchased Assets in accordance with this Agreement, including without
limitation using reasonable best efforts to ensure satisfaction of the
conditions precedent to each party's obligations hereunder and obtaining
all FCC Consents or FCC Analogous Consents that have not become Final
Orders prior to the Closing Date. Neither any of the Sellers, on the one
hand, nor the Buyer, on the other hand, shall, without the prior written
consent of the other party (it being understood that the written consent
of Teligent shall have the same effect as the consent of all of the
Sellers), take any action which would reasonably be expected to prevent
or materially impede, interfere with or delay the transactions
contemplated by this Agreement. From time to time on or after the
Closing Date, each Seller shall, at its own expense, execute and deliver
such documents to the Buyer as the Buyer may reasonably request in order
to more effectively vest in the Buyer such Seller's title to the
Purchased Assets subject to Permitted Encumbrances. From time to time
after the date of the Original Agreement, the Buyer shall, at its own
expense, execute and deliver such documents to each Seller as such
Seller may reasonably request in order to more effectively consummate
the sale of the Purchased Assets and the assumption and assignment of
the Assumed Obligations and the Assumed Agreements in accordance with
this Agreement.
(b) In the event that any Purchased Asset shall not have
been conveyed to the Buyer at the Closing, the applicable Seller shall,
subject to Section 7.6(c), use reasonable best efforts to convey such
asset to the Buyer as promptly as is practicable after the Closing.
(c) To the extent that any of the Sellers' rights under any
Assumed Agreement may not be assigned without the consent of another
Person which consent has not been obtained, this Agreement shall not
constitute an agreement to assign the same if an attempted assignment
would constitute a breach thereof or be unlawful and such Seller shall
use reasonable best efforts (without being required to make any payment
to any third party or to incur any economic burden and taking into
account such Seller's status as a filer under Chapter 11 of the
Bankruptcy Code, the Cash Collateral Order, the discontinuance of
services referenced in Section 7.1(c) herein and the Sellers' plan to
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decommission the facilities reflected in the letter dated August 21,
2001, from Teligent to the Buyer) to obtain any such required consent(s)
as promptly as reasonably possible unless failure to obtain such consent
would not, individually or in the aggregate, have a Material Adverse
Effect, and the Buyer agrees to cooperate with such Seller in its
efforts to obtain any such consent (including the submission of such
financial or other information concerning the Buyer and the execution of
any assumption agreements or similar documents reasonably requested by a
third party) without being required to make any payment to any third
party or to incur any economic burden.
Section 7.7 Public Statements. Teligent and the Buyer shall consult
with each other prior to issuing any public announcement, statement or other
disclosure with respect to this Agreement or the transactions contemplated
hereby, except that the parties may make disclosures with respect to this
Agreement and the transactions contemplated hereby to the extent and under the
circumstances in which the parties are expressly permitted by the
Confidentiality Agreement to make disclosures of Confidential Information.
Section 7.8 Governmental Entity Consents and Approvals.
(a) FCC Consents. Subject to Section 7.8(e), within five
(5) Business Days after the date of the Original Agreement, the Buyer
shall prepare and file, or cause to be prepared and filed, the necessary
application or applications with the FCC seeking the FCC Consents and
thereafter, shall timely make all other filings and notifications and
timely seek all such consents, licenses, approvals, permits, waivers,
orders or authorizations as may be required to obtain the FCC Consents.
The Sellers shall cooperate with the Buyer to the fullest extent
reasonably possible to provide all necessary information for the
preparation of such applications, including those portions of such
applications which are required to be completed by the Sellers. The
Buyer shall bear the fees payable to the FCC in connection with the
preparation and filing of the applications for the FCC Consents;
provided, that no filing fees incurred in connection with the
application or applications seeking the FCC Consents shall be paid by
the Buyer unless and until the Bid Procedures are approved by the
Bankruptcy Court.
(b) HSR Act. Subject to Section 7.8(e), within ten (10)
Business Days after the entry of the Sale Order by the Bankruptcy Court
or at such other time as the Sellers and the Buyer mutually agree is
appropriate, the Sellers and the Buyer shall each prepare and file, or
cause to be prepared and filed, with the Federal Trade Commission and/or
the United States Department of Justice, as the case may be, all
requisite applications and amendments thereto together with related
information, data and exhibits necessary to satisfy any applicable
requirements of the HSR Act. Each party shall promptly respond to any
requests for additional information in connection with such filings and
shall take all other reasonable actions to cause the waiting periods
under the HSR Act to terminate or expire at the earliest possible date
after the date of filing. The Buyer shall be responsible for payment of
the application filing fee under the HSR Act, but not the Sellers' costs
and expenses (including attorneys' fees and other legal fees and
expenses) associated with the preparation of the Sellers' portion of
such filing.
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(c) FCC Analogous Consents. Subject to Section 7.8(e),
within ten (10) Business Days after the date of the Original Agreement,
the Sellers and/or the Buyer, as applicable, shall each file or cause to
be filed with any state or local regulatory authorities analogous to the
FCC applications for the approval of the assignment of the FCC Analogous
Licenses. The Sellers and the Buyer shall prosecute such applications
with all reasonable diligence and otherwise use their reasonable best
efforts to obtain grants of approval as expeditiously as practicable.
The Buyer shall bear the fees payable to the state and local regulatory
entities in connection with the preparation and filing of the
applications for the FCC Analogous Consents.
(d) Other Governmental Entity Approvals. The Sellers and
the Buyer shall each use their reasonable best efforts to cooperate with
each other in determining any filings, notifications and requests for
approval (other than the FCC Consents, the FCC Analogous Consents and
the filings by the Sellers and the Buyer required by the HSR Act and the
expiration or earlier termination of all waiting periods under the HSR
Act) required to be made and received prior to the Closing under
applicable law or regulation (collectively, the " Other Regulatory
Approvals"). In connection with any Other Regulatory Approvals, neither
the Buyer nor any of the Sellers will, and each of them will use its
reasonable best efforts not to, cause or permit any of its officers,
directors, partners or other Affiliates to, take any action which could
reasonably be expected to materially and adversely affect the submission
of any required filings or notifications or the grant of any such
approvals.
(e) Cooperation. The Sellers and the Buyer (i) shall
promptly inform each other of any communication from any Governmental
Entity concerning this Agreement, the transactions contemplated hereby,
and any filing, notification or request for approval and (ii) shall
permit the other party to review in advance any proposed written
communication or information submitted to any such Governmental Entity
in response thereto. In addition, each of the Sellers and the Buyer
shall not agree to participate in any meeting with any Governmental
Entity in respect of any filings, investigation or other inquiry with
respect to this Agreement, the transactions contemplated hereby or any
such filing, notification or request for approval unless it consults
with the other party in advance and, to the extent permitted by any such
Governmental Entity, gives the other party the opportunity to attend and
participate thereat, in each case to the maximum extent practicable.
Subject to any restrictions under applicable laws, rules or regulations,
each of the Sellers and the Buyer shall furnish the other party with
copies of all correspondence, filings and communications (and memoranda
setting forth the substance thereof) between it and its Affiliates and
their respective representatives on the one hand, and the Governmental
Entity or members of its staff on the other hand, with respect to this
Agreement, the transactions contemplated hereby (excluding documents and
communications which are subject to preexisting confidentiality
agreements and to the attorney-client privilege or work product
doctrine) or any such filing, notification or request for approval. The
Sellers and the Buyer shall also furnish the other party with such
necessary information and assistance as such other party and its
Affiliates may reasonably request in connection with their preparation
of necessary filings, registration, or submissions of information to the
Governmental Entity in connection with this Agreement, the transactions
contemplated hereby and any such filing, notification or
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request for approval. The Sellers and the Buyer shall prosecute all
required requests for approval with all necessary diligence and
otherwise use their respective reasonable best efforts to obtain the
grant thereof by a Final Order as soon as possible.
Section 7.9 Fees and Commissions. Subject to the Buyer's rights to
reimbursement of expenses under Section 7.15 with respect to the expenses which
may be incurred in connection with the defense or indemnity as set forth below,
the Sellers, on the one hand, and the Buyer, on the other hand, shall pay to the
other or otherwise discharge, and shall defend, indemnify and hold the other
harmless from and against, any and all claims or liabilities for all brokerage
fees, commissions and finder's fees incurred by reason of any action taken by
such party.
Section 7.10 Tax Matters.
(a) Cooperation on Tax Matters. The Buyer and the Sellers
agree to furnish or cause to be furnished to each other, upon request,
as promptly as practicable, such information and assistance relating to
the Business and the Purchased Assets (including, without limitation,
access to books and records) as is reasonably necessary for the
preparation and filing of all Tax returns in connection with matters
relating to or affected by the operations of the Sellers prior to the
Closing, including the making of any election relating to Taxes, the
preparation for any audit by any taxing authority, and the prosecution
or defense of any claim, suit or proceeding relating to any Tax.
Notwithstanding anything to the contrary herein, the Buyer and the
Sellers shall retain all books and records with respect to Taxes
pertaining to the Purchased Assets for a period of at least six (6)
years following the Closing Date. At the end of such period, each party
shall provide the other with at least thirty (30) days prior written
notice before destroying any such books and records, during which period
the party receiving such notice can elect to take possession, at its own
expense, of such books and records. The Sellers and the Buyer shall
cooperate with each other in the conduct of any audit or other
proceeding relating to Taxes involving the Purchased Assets or the
Business.
(b) Transfer Taxes. All excise, sales, use, transfer, value
added, registration, stamp, recording, documentary, conveyancing,
franchise, property, transfer, gains and similar Taxes, levies, charges
and recording, filing and other fees (collectively, "Transfer Taxes")
incurred in connection with the transactions contemplated by this
Agreement shall be paid by the Buyer. The Buyer shall, at its own
expense, file all necessary Tax returns and other documentation with
respect to all such Transfer Taxes and, if required by applicable law,
the appropriate Seller shall join in the execution of any Tax returns
and other documentation at the Buyer's request. Notwithstanding the
foregoing, the Sellers shall seek in the Sale Order a decretal paragraph
which provides that, in accordance with Section 1146(c) of the
Bankruptcy Code, the transactions contemplated hereby are steps in the
formulation, or anticipation of the formulation, of a Chapter 11 plan
for the Sellers and, as such, the making or delivery of any instrument
of transfer to effectuate the transactions contemplated hereby shall not
be taxed under any law imposing a stamp tax or similar tax.
Section 7.11 Supplements to Schedules. Prior to the Closing Date,
the Sellers may supplement or amend the Schedules furnished by them
pursuant to this Agreement with
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respect to any matter relating to the Purchased Assets or the Business.
In the event such supplements and amendments are reasonably anticipated
by the parties to give rise to adverse economic consequences to the
Operating Business or the Purchased Assets, the Buyer may either
terminate this Agreement without liability or close the transaction (in
which event any breach of any representation or warranty made by the
Sellers which would otherwise exist absent such supplements and
amendments shall be deemed cured for all purposes of this Agreement);
provided, however, that the Buyer may not terminate this Agreement if
such adverse economic consequences would not, individually or in the
aggregate, have a Material Adverse Effect.
Section 7.12 Employees.
(a) No later than thirty (30) days after the entry of the
Sale Order, in which case the Sellers shall have adequate time to comply
with the WARN Act, the Buyer shall provide the Sellers with the identity
of the Sellers' employees to whom the Buyer intends to make offers of
employment and the general terms of such offers; provided that the Buyer
shall notify the Sellers no later than one (1) Business Day after any
change to the identity of the Sellers' employees to whom the Buyer will
make offers of employment or any change to the general terms of such
offers. The Sellers shall timely provide and shall be solely responsible
for any required WARN notice with respect to any remaining employees of
the Sellers to whom the Buyer intends not to make offers and to any
other employees to whom such notice may be required in the Sellers'
judgment. Each person who accepts the Buyer's offer of employment
pursuant to this Section 7.12 (a) shall be referred to herein as a
"Transferred Employee"; provided, however, that it is understood that
the Buyer shall not be obligated to retain any such employees (other
than the Key Executives) in the employment of the Buyer for any
specified period of time from and after the Closing Date.
(b) The Sellers shall be responsible for all obligations and
liabilities under the WARN Act to the extent applicable and under
applicable state and local laws (the "WARN Obligations") arising solely
as a result of their actions prior to and including the Closing Date.
The Buyer shall be responsible for all WARN Obligations arising solely
as a result of its actions taken after the Closing Date.
Section 7.13 Litigation Support. In the event and for so long as any
party is actively contesting or defending against any action, suit, proceeding,
hearing, investigation, charge, complaint, claim, or demand in connection with
(a) any transaction contemplated under this Agreement or (b) any fact,
situation, circumstance, status, condition, activity, practice, plan,
occurrence, event, incident, action, failure to act, or transaction on or prior
to the Closing Date involving the Sellers, the other party will cooperate with
the contesting or defending party and its counsel in the contest or defense,
make available its personnel, and provide such testimony and access to its books
and records as shall be reasonably necessary in connection with the contest or
defense, all at the sole cost and expense of the contesting or defending party.
In the event that the Sale Order is the subject of an appeal, the Buyer and the
Sellers agree to use reasonable best efforts to seek an expedited review and
decision of such appeal and to seek the dissolution of any stay which might be
entered in connection with such an appeal; provided, that each party shall
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bear the cost of complying with this provision, subject to the Buyer's rights
under Section 7.15(a) to reimbursement of expenses.
Section 7.14 Notification. The Sellers shall notify the Buyer and
keep it advised of the occurrence, to the Knowledge of the Sellers, of (a) any
litigation or administrative proceeding pending or threatened against any Seller
which could, if adversely determined, have a Material Adverse Effect and (b) any
material damage or destruction of any of the Purchased Assets. The Buyer shall
notify the Sellers and keep them advised of the occurrences of any Buyer
Material Adverse Effect.
Section 7.15 Submission for Bankruptcy Court Approval.
(a) Within five (5) Business Days after the date of the
Original Agreement, the Sellers (or Teligent on their behalf) shall file
with the Bankruptcy Court a motion, supporting papers, notices, and a
proposed procedures order, substantially in the form of the order
attached hereto as Exhibit F, seeking, among other things, the
Bankruptcy Court's approval of the following proposed bidding procedures
(the "Bid Procedures"):
(i) without duplication, prior to such time as the
Buyer shows evidence reasonably satisfactory to the Sellers that
the Buyer has obtained the Committed Financing, if (A) the Buyer
has not materially breached any of the provisions of this
Agreement, (B) the Sellers terminate this Agreement in
accordance with Article 9 hereof and (C) either (I) an order is
entered by the Bankruptcy Court approving the sale of all or
substantially all of the Purchased Assets to a third party who
is not a Pre-Petition Secured Lender pursuant to Section 363 of
the Bankruptcy Code (a "Section 363 Sale") within sixty (60)
days after the date of such termination by the Sellers and such
Section 363 Sale is later consummated or (II) a plan of
reorganization involving the sale of all or substantially all of
the Purchased Assets or all or substantially all of the capital
stock of Teligent to a third party who is not a Pre-Petition
Secured Lender is confirmed by the Bankruptcy Court ("Plan of
Reorganization") within four (4) months after the date of such
termination by the Sellers, and such Plan of Reorganization is
later substantially consummated, then the Sellers shall pay to
the Buyer up to $2,000,000 in the aggregate for the Buyer's
actually incurred reasonable out-of-pocket, reasonably
documented expenses, including any fees required by Governmental
Entities incurred in connection with the transactions
contemplated hereby, in addition to the following:
(x) in the event that the fair market value (as
determined by the Bankruptcy Court to the extent necessary) of
the proceeds (the "FMV Proceeds") received by the Sellers in
such Section 363 Sale or Plan of Reorganization, as applicable,
is equal to at least $124,500,000, a breakup fee in the amount
of $3,000,000; or
(y) in the event that the FMV Proceeds received by
the Sellers in such Section 363 Sale or Plan of Reorganization,
as applicable, are less than $124,500,000, a payment of
$1,500,000, characterized as a breakup fee, to the
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Buyer for all business plans prepared by Friedman, Billings,
Xxxxxx & Co. for the Buyer, which business plans shall be
delivered to the Sellers upon receipt of such payment; or
(ii) without duplication, prior to such time as the
Buyer shows evidence reasonably satisfactory to the Sellers that
the Buyer has obtained the Committed Financing, if (A) the Buyer
has not materially breached any of the provisions of this
Agreement, (B) the Sellers terminate this Agreement in
accordance with Article 9 hereof and (C) the conditions set
forth in Section 7.15(a)(i)(C) above have not been satisfied,
then the Sellers shall pay to the Buyer up to $2,000,000 in the
aggregate for the Buyer's actually incurred reasonable
out-of-pocket, reasonably documented expenses, including any
fees required by Governmental Entities incurred in connection
with the transactions contemplated hereby; or
(iii) without duplication, prior to such time as the
Buyer shows evidence reasonably satisfactory to the Sellers that
the Buyer has obtained the Committed Financing, if (A) the Buyer
has not materially breached any of the provisions of this
Agreement and (B) the Buyer terminates this Agreement in
accordance with Article 9 hereof, then the Sellers shall pay to
the Buyer up to $2,000,000 in the aggregate for the Buyer's
actually incurred reasonable out-of-pocket, reasonably
documented expenses, including any fees required by Governmental
Entities incurred in connection with the transactions
contemplated hereby; or
(iv) without duplication, on or following such time
as the Buyer shows evidence reasonably satisfactory to the
Sellers that the Buyer has obtained the Committed Financing, if
(A) the Buyer has not materially breached any of the provisions
of this Agreement, (B) the Sellers terminate this Agreement in
accordance with Article 9 hereof and (C) either (I) an order is
entered by the Bankruptcy Court approving a sale of all or
substantially all of the Purchased Assets pursuant to a Section
363 Sale to a third party who is not a Pre-Petition Secured
Lender within sixty (60) days after the date of such termination
by the Seller, the FMV Proceeds from which actually equal or
exceed $126,500,000, and such Section 363 Sale is later
consummated or (II) a Plan of Reorganization involving the sale
of all or substantially all of the Purchased Assets or all or
substantially all of the capital stock of Teligent to a third
party who is not a Pre-Petition Secured Lender is confirmed by
the Bankruptcy Court within four (4) months after the date of
such termination by the Seller, the FMV Proceeds from which
actually equal or exceed $126,500,000, and such Plan of
Reorganization is later substantially consummated, then the
Sellers shall pay to the Buyer up to $2,000,000 in the aggregate
for the Buyer's actually incurred reasonable out-of-pocket,
reasonably documented expenses, including any fees required by
Governmental Entities incurred in connection with the
transactions contemplated hereby, in addition to a breakup fee
in the amount of $5,000,000; or
(v) without duplication, on or following such time
as the Buyer shows evidence reasonably satisfactory to the
Sellers that the Buyer has obtained the Committed Financing, if
(A) the Buyer has not materially breached any of the
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provisions of this Agreement, (B) the Sellers terminate this
Agreement in accordance with Article 9 hereof and (C) the
conditions set forth in Section 7.15(a)(iv)(C) above have not
been satisfied, then the Sellers shall pay to the Buyer up to
$2,000,000 in the aggregate for the Buyer's actually incurred
reasonable out-of-pocket, reasonably documented expenses,
including any fees required by Governmental Entities incurred in
connection with the transactions contemplated hereby; or
(vi) without duplication, on or following such time
as the Buyer shows evidence reasonably satisfactory to the
Sellers that the Buyer has obtained the Committed Financing, if
(A) the Buyer has not materially breached any of the provisions
of this Agreement and (B) the Buyer terminates this Agreement in
accordance with Article 9 hereof, then the Sellers shall pay to
the Buyer up to $2,000,000 in the aggregate for the Buyer's
actually incurred reasonable out-of-pocket, reasonably
documented expenses, including any fees required by Governmental
Entities incurred in connection with the transactions
contemplated hereby; and
(vii) to the extent that the Sellers conduct an
auction and the Buyer shows evidence reasonably satisfactory to
the Sellers that the Buyer has obtained the Committed Financing,
any competing bid from a third party who is not a Pre-Petition
Secured Lender in such auction must be for all or substantially
all of the Purchased Assets and the initial amount of any such
third party bid must exceed the Purchase Price by at least
$9,000,000; and
(viii) any break up fee payable to the Buyer under the
foregoing clauses (i)-(vii), inclusive, approved by the
Bankruptcy Court shall be paid by the Sellers to the Buyer
within two (2) Business Days after the last event which shall
have caused such break-up fee to become payable under this
Section 7.15; and
(ix) any expense reimbursement payable to the Buyer
under the foregoing clauses (i)-(vii), inclusive, approved by
the Bankruptcy Court shall be paid by the Sellers to the Buyer
upon the earlier to occur of (A) 90 days after the event giving
rise to such reimbursement and (B) if the Buyer is entitled to a
break-up fee in accordance with this Section 7.15, such time as
such break-up fee is payable; and
(x) the Sellers shall promptly notify the Buyer of
any written expression of interest or bids (each, a "Proposal")
received by any Seller from any Person relating to any bids or
offers (binding or non-binding) for the purchase or acquisition
of all or substantially all of the Operating Business or the
Purchased Assets or the purchase or acquisition of all or
substantially all of the capital stock of Teligent or any of the
other Sellers; and the Sellers shall, within two (2) Business
Days after receipt of any such Proposal provide a copy of such
Proposal to the Buyer in the manner set forth in Section 10.5.
Notwithstanding anything herein to the contrary, for purposes of this
Section 7.15(a), "Pre-Petition Secured Lenders" shall not include any
third party who acquires from and
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after the date of the Original Agreement, for purposes of consummating a
purchase or acquisition of all or substantially all of the Purchased
Assets, any of the claims of the Sellers' lenders under that certain
Credit Agreement, dated as of July 2, 1998.
(b) The parties hereto shall use their respective reasonable
best efforts to obtain the entry of an order approving the Bid
Procedures on an expedited basis within fourteen (14) days after the
motion with respect thereto is filed with the Bankruptcy Court. As soon
as is practicable after the date of the Original Agreement, the Sellers
(or Teligent on their behalf) shall file with the Bankruptcy Court a
motion, supporting papers, notices, and a form of sale order,
substantially in the form of the order attached hereto as Exhibit G,
seeking the Bankruptcy Court's approval of this Agreement, the Sellers'
performance under this Agreement, the assumption and assignment of the
Assumed Agreements and Assumed Obligations, and the Sellers' retention
of the Excluded Assets (the "Sale Order"). The Sale Order shall be in
form and substance reasonably satisfactory to the Buyer and shall
provide, without limitation, that:
(i) as of the Closing, the transactions contemplated
by this Agreement will effect a legal, valid, enforceable and
effective sale and transfer of each of the Purchased Assets to
the Buyer and shall vest the Buyer with good title to the
Purchased Assets free and clear of all Encumbrances (other than
Permitted Encumbrances);
(ii) the transactions contemplated by this Agreement
constitute reasonably equivalent value and fair consideration
for the Purchased Assets being purchased; and
(iii) the Buyer is a good faith purchaser of the
Purchased Assets, as that term is used in Section 363(m) of the
Bankruptcy Code.
(c) As soon as practicable after the approval by the
Bankruptcy Court of the Bid Procedures, the Sellers (or Teligent on
their behalf) shall file with the Bankruptcy Court a motion, supporting
papers, notices, and a form of financing order mutually agreeable to the
Sellers and the Buyer seeking the Bankruptcy Court's approval for the
Sellers to borrow up to $25,000,000 from the Buyer pursuant to Section
364 of the Bankruptcy Code (the "DIP Order"). The DIP Order shall
provide that in connection with the proposed financing, the Buyer is
acting in "good faith" and is entitled to the protections of Section
364(e) of the Bankruptcy Code. In addition, the DIP Order shall provide
that such financing shall be secured on a super-priority basis by liens
that, pursuant to Section 364(c) or Section 364(d) of the Bankruptcy
Code, shall be senior in priority to all Encumbrances, including those
of the Pre-Petition Secured Lenders on the Purchased Assets.
(d) Commencing on the later to occur of: (i) the entry of
the DIP Order by the Bankruptcy Court and (ii) the entry of the Sale
Order by the Bankruptcy Court, until the Closing, at the election of the
Sellers, the Buyer shall lend to the Sellers an amount up to $25,000,000
to be used in the operations of the Sellers related solely and
exclusively to the Operating Business (the "Interim Financing"). The
Interim Financing shall be made on the terms and subject to the
conditions of a credit facility in the form attached hereto
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as Exhibit H (the "Debtor-in-Possession Working Capital Facility").
Notwithstanding anything herein to the contrary, none of the following
actions shall constitute a breach or default of the Sellers under this
Agreement: (A) the withdrawal by the Sellers of the request for approval
of the Interim Financing prior to the entry of the DIP Order by the
Bankruptcy Court, (B) the Sellers' election to not borrow under the
Interim Financing or (C) the repayment and/or termination of the Interim
Financing in accordance with the terms of the Debtor-in-Possession
Working Capital Facility.
Section 7.16 Investor Qualification. The Sellers shall not transfer
any portion of the Stock Consideration to any Person who is not a "qualified
institutional buyer" as that term is defined under Rule 144A of the Securities
Act.
Section 7.17 Management Agreements.
(a) In the event any FCC Analogous Consent for any state
listed in Section 8.2(h) has not become a Final Order by the Closing
Date, but a majority of the FCC Analogous Consents listed in Section
8.2(h), including those for California, Texas and New York, have become
Final Orders, then the Buyer and TSI shall enter into a management
agreement for each of the other states set forth in Section 8.2(h) for
which a Final Order has not yet been obtained. Pursuant to such
management agreement, the Buyer shall act as manager of the operations
in such state or jurisdiction on behalf of TSI and at the direction of
TSI and consistent with all applicable laws and regulations until such
FCC Analogous Consent has become a Final Order; provided that, if the
Buyer and Teligent (on behalf of the Sellers) each reasonably believes
that entering into such management agreement pending such FCC Analogous
Consent becoming a Final Order in such state would materially adversely
affect the timing or outcome of obtaining a Final Order granting such
FCC Analogous Consent, then the Buyer and TSI shall not enter into such
management agreement.
(b) In the event any FCC Analogous Consent for any state
other than the states listed in Section 8.2(h) has not become a Final
Order by the Closing Date, then, at the Buyer's option, the Buyer and
TSI shall enter into a management agreement whereby the Buyer shall act
as manager of the operations in such state on behalf of TSI and at the
direction of TSI and consistent with all applicable laws and regulations
until such FCC Analogous Consent has become a Final Order.
Section 7.18 Transition Services.
(a) At or prior to the Closing, the Buyer and Teligent, on
behalf of itself and the other Sellers, agree to negotiate and enter
into a mutually acceptable transition services agreement (the
"Transition Services Agreement") whereby the Buyer shall provide, or
shall cause its Subsidiaries to provide, to the Sellers various
services, including without limitation, financial services (e.g.,
controller functions, payroll functions, financial reporting functions,
systems management functions, accounts payable functions),
infrastructure support services (e.g., information technology and
application support), operations support services (e.g., storage space,
office space, etc.), and human
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resources services (e.g., staffing), pursuant to mutually acceptable and
reasonable terms and conditions.
(b) For a period of three (3) years after the Closing Date
(the "Transition Period"), the Sellers, the Buyer and their
representatives shall have reasonable access to, and each shall have the
right to photocopy at their own expense, all of the books and records,
including any computerized databases and files and programs and
associated software, (the "Books and Records") relating to the
pre-Closing operations of the Sellers and/or the Purchased Assets as
they existed as of the Closing Date, including but not limited to (i)
the investigation, evaluation and prosecution of any and all causes of
action retained by any Seller, (ii) the evaluation and defense of any
and all claims brought against the estate of any Seller and (iii) all
Transferred Employees' records or other personnel and medical records
required by law, legal process or subpoena, in the possession of the
other party to the extent that such access may reasonably be required by
such party in connection with the Assumed Obligations and Excluded
Liabilities, or other matters relating to or affected by the operation
of the Business or use of the Purchased Assets. During the Transition
Period, the Buyer agrees to provide Teligent and any of its
representatives, during ordinary business hours, upon reasonable request
and notice and at Teligent's expense, with reasonable access to
employees of the Buyer for purposes of winding down the estates of the
Sellers. Access pursuant to this Section 7.18(b) shall be afforded by
the party in possession of such Books and Records, upon receipt of
reasonable advance notice, during normal business hours and at the
expense of the requesting party; provided, however, that (A) any such
investigation shall be conducted in such a manner as not to interfere
unreasonably with the operation of the business of any party, (B) no
party shall be required to take any action which would constitute a
waiver of the attorney-client privilege or which would require the
disclosure of confidential information and (C) no party need to supply
the other party with any information which such party is under a legal
obligation not to supply. The party exercising this right of access
shall be solely responsible for any costs or expenses incurred by it
pursuant to this Section 7.18(b). If the party in possession of such
Books and Records shall desire to dispose of any such Books and Records
upon or prior to the expiration of such period, such party shall, prior
to such disposition, give the other party a reasonable opportunity at
such other party's expense, to segregate and remove such Books and
Records as such other party may select.
ARTICLE VIII
CONDITIONS TO CLOSING
Section 8.1 Conditions to Each Party's Obligations to Effect the
Closing. The respective obligations of each party to effect the sale and
purchase of the Purchased Assets shall be subject to the fulfillment at or prior
to the Closing Date of the following conditions:
(a) the waiting period under the HSR Act applicable to the
consummation of the sale of the Purchased Assets contemplated hereby
shall have expired or been terminated;
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(b) no preliminary or permanent injunction or other order or
decree by any federal or state court which prevents the consummation of
the sale of a material part of the Purchased Assets contemplated hereby
shall have been issued and remain in effect (each party agreeing to use
its reasonable best efforts to have any such injunction, order or decree
lifted) and no statute, rule or regulation shall have been enacted by
any Governmental Entity which prohibits the consummation of the sale of
the Purchased Assets;
(c) other than as set forth in Section 8.2 or 8.3 for the
FCC Consents and the FCC Analogous Consents, all consents of
Governmental Entities required for the consummation of the transactions
contemplated by this Agreement shall have become Final Orders of the
respective Governmental Entities; provided that it shall not be a
condition to the Closing that a Final Order by any such Governmental
Entity not include any adverse terms or conditions unless such terms
and/or conditions would, in the aggregate, create a Material Adverse
Effect; and
(d) on or before October 31, 2001, the Bankruptcy Court
shall have entered the Sale Order and all conditions contemplated by the
Sale Order to consummate the transactions contemplated hereby shall have
been satisfied.
Section 8.2 Conditions to Obligations of the Buyer. The obligation
of the Buyer to effect the purchase of the Purchased Assets contemplated by this
Agreement shall be subject to the fulfillment at or prior to the Closing Date of
the following additional conditions:
(a) the Sellers shall have performed and complied in all
material respects with the covenants contained in this Agreement which
are required to be performed and complied with by such Sellers on or
prior to the Closing Date and the representations and warranties of such
Sellers which are set forth in this Agreement shall be true and correct
in all material respects as of the date of the Original Agreement and as
of the Closing Date (except to the extent that any such representation
or warranty speaks as of a particular date) as though made at and as of
the Closing Date;
(b) the Buyer shall have received a certificate from an
authorized officer of each of the Sellers, dated as of the Closing Date,
to the effect that, to the best of such officer's knowledge, the
conditions set forth in Section 8.2(a) have been satisfied;
(c) the Purchased Assets shall have been released from all
Encumbrances and there shall be no Encumbrances on the Purchased Assets
(other than the Permitted Encumbrances);
(d) the Sellers' lenders under that certain Credit
Agreement, dated as of July 2, 1998 (the "Pre-Petition Secured
Lenders"), shall have agreed in writing that any and all of their
post-petition liens on the Purchased Assets shall attach only to the
proceeds of the transactions contemplated hereby and not to the
Purchased Assets;
(e) each of the Key Executives shall have agreed to become
employed by the Buyer as of the Closing Date on terms not materially
different from the terms set forth on
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Exhibit I for such Key Executive, and each Key Executive shall not have
died or suffered a Disability;
(f) the Buyer shall have received the other items to be
delivered pursuant to Section 4.3;
(g) all FCC Consents shall have become Final Orders; and
(h) (i) the FCC Analogous Consents for the following states
or jurisdictions shall have become Final Orders: Arizona, California,
Connecticut, District of Columbia, Illinois, Maryland, Massachusetts,
Ohio, Pennsylvania, Texas, New York, New Jersey and Virginia or (ii) the
Buyer and TSI shall have entered into a management agreement pursuant to
Section 7.17(a) in the event that any FCC Analogous Consent for the
foregoing states in clause (i) has not become a Final Order.
Any condition specified in this Section 8.2 may be waived by the Buyer; provided
that no such waiver shall be effective against the Buyer unless it is set forth
in a writing executed by the Buyer.
Section 8.3 Conditions to Obligations of the Sellers. The obligation
of each Seller to effect the sale of the Purchased Assets contemplated by this
Agreement shall be subject to the fulfillment at or prior to the Closing Date of
the following additional conditions:
(a) the Buyer shall have performed and complied with in all
material respects the covenants contained in this Agreement which are
required to be performed and complied with by the Buyer on or prior to
the Closing Date and the representations and warranties of the Buyer
which are set forth in this Agreement shall be true and correct in all
material respects as of the date of the Original Agreement and as of the
Closing Date (except to the extent that any such representation or
warranty speaks as of a particular date) as though made at and as of the
Closing Date;
(b) Teligent shall have received (on behalf of the Sellers)
a certificate from an authorized officer of the Buyer, dated as of the
Closing Date, to the effect that, to the best of such officer's
knowledge, the conditions set forth in Section 8.3(a) have been
satisfied;
(c) each Seller shall have received the other items to be
delivered to it pursuant to Section 4.4;
(d) all FCC Consents shall have been obtained or if any FCC
Consent has not been obtained by the Closing Date, the Buyer has either
waived the requirements for such FCC Consent or the Buyer and the Seller
Licensees have entered, at the Buyer's option, into a management
agreement whereby the Buyer will act as manager of the operations of the
Seller Licensees on behalf of the Seller Licensees and at the direction
of the Seller Licensees and consistent with all applicable laws and
regulations until such FCC Consent has been obtained; and
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(e) the Certificate or Articles of Incorporation and Bylaws
of the Designated Buyer Subsidiaries shall be substantially in the form
of Exhibit E attached hereto.
Any condition specified in this Section 8.3 may be waived by the Sellers;
provided that no such waiver shall be effective against any Seller unless it is
set forth in writing executed by such Seller.
ARTICLE IX
TERMINATION AND ABANDONMENT
Section 9.1 Termination. This Agreement may be terminated at any
time prior to the Closing Date by:
(a) mutual written consent of Teligent (on behalf of the
Sellers) and the Buyer;
(b) the Buyer, if there has been a material violation or
breach by the Sellers of any covenant, representation or warranty made
by them contained in this Agreement which has prevented the satisfaction
of any condition to the obligations of the Buyer to effect the Closing
and such violation or breach has not been cured by the Sellers within
ten (10) Business Days of receipt of written notice thereof or waived by
the Buyer;
(c) the Sellers, if there has been a material violation or
breach by the Buyer of any covenant, representation or warranty made by
it contained in this Agreement which has prevented the satisfaction of
any condition to the obligations of the Sellers to effect the Closing
and such violation or breach has not been cured by the Buyer within ten
(10) Business Days of receipt of written notice thereof or waived by the
Sellers;
(d) the Sellers, if on or prior to two (2) days prior to the
date of the auction conducted pursuant to the Bid Procedures, the Buyer
cannot show evidence reasonably satisfactory to the Sellers of the
Committed Financing;
(e) the Buyer or the Sellers, if any event occurs which
renders satisfaction of one or more conditions set forth in Section 8.1
impossible; provided that the Buyer or the Sellers, as the case may be,
shall not be entitled to terminate this Agreement pursuant to this
Section 9.1(e) if the impossibility results primarily from such party
itself breaching any representation, warranty or covenant contained in
this Agreement;
(f) the Buyer, if the Bid Procedures are not approved by the
Bankruptcy Court within fifteen (15) Business Days after the date of the
Original Agreement or if the Bid Procedures are stayed, reversed or
modified in a manner which materially detracts from the protections of
the Buyer thereunder; provided that the Buyer shall not be entitled to
terminate this Agreement pursuant to this Section 9.1(f) if the failure
to obtain such approval within such time period results primarily from
the Buyer breaching any representation, warranty or covenant contained
in this Agreement;
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(g) the Buyer or the Sellers, if the Sale Order has not been
entered by the Bankruptcy Court on or prior to October 31, 2001;
provided that the Buyer or the Sellers, as the case may be, shall not be
entitled to terminate this Agreement pursuant to this Section 9.1(g) if
the failure to obtain such approval within such time period results
primarily from such party itself breaching any representation, warranty
or covenant contained in this Agreement;
(h) the Sellers, if the DIP Order has not been entered by
the Bankruptcy Court on or prior to October 31, 2001; provided that the
Sellers shall not be entitled to terminate this Agreement pursuant to
this Section 9.1(h) if the failure to obtain such approval within such
time period results from the Sellers' withdrawal of the request for the
DIP Order or results primarily from such party itself breaching any
representation, warranty or covenant contained in this Agreement;
(i) the Buyer, in accordance with Section 7.11;
(j) the Buyer, if, prior to or upon the approval of the Bid
Procedures by the Bankruptcy Court, the Buyer has not received written
consent or consent on the record at the hearing on the Bid Procedures
from the Pre-Petition Secured Lenders to a carve-out from their liens
and their administrative claims for any break-up fee or expense
reimbursement which may be due to the Buyer pursuant to Section 7.15;
(k) the Buyer, if the bankruptcy auction to be conducted
pursuant to the Bid Procedures is scheduled for a date earlier than 28
days after the approval of the Bid Procedures; or
(l) the Buyer or the Sellers, if the Closing shall not have
occurred on or prior to February 15, 2002 (the "Termination Date");
provided that the Buyer or the Sellers, as the case may be, shall not be
entitled to terminate this Agreement pursuant to this Section 9.1(l) if
the failure of the Closing to occur on or prior to such date results
primarily from such party itself breaching any representation, warranty
or covenant contained in this Agreement.
Section 9.2 Procedure and Effect of Termination. In the event of
termination of this Agreement and abandonment of the transactions contemplated
hereby by either or both of the parties pursuant to Section 9.1, written notice
thereof shall forthwith be given by the terminating party to the other party (it
being understood that notice to Teligent shall have the same effect as notice to
all of the Sellers) and this Agreement shall terminate and the transactions
contemplated hereby shall be abandoned, without further action by any of the
parties hereto. If this Agreement is terminated as provided herein:
(a) said termination shall be the sole remedy of the parties
hereto with respect to breaches of any covenant, representation or
warranty contained in this Agreement and none of the parties hereto nor
any of their respective trustees, directors, officers or Affiliates, as
the case may be, shall have any liability or further obligation to the
other party or any of their respective trustees, directors, officers or
Affiliates, as the case may be, pursuant to this Agreement, except in
each case as stated in this Section 9.2, Section
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10.14 and in Sections 7.4(b), 7.5, 7.8(a), 7.9 and 7.15, and upon a
willful breach by a party, in which case the non-breaching party shall
have all rights and remedies existing at law or in equity; provided,
however, the Sellers shall not be responsible for liability for any
misrepresentation or breach of any warranty or covenant by the Sellers
contained in this Agreement prior to the time of such termination;
(b) all filings, applications and other submissions made
pursuant to this Agreement, to the extent practicable, shall be
withdrawn from the agency or other Person to which they were made; and
(c) all Confidential Information from any and all of the
Sellers shall be returned to Teligent, and all Confidential Information
from the Buyer shall be returned to the Buyer.
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.1 Amendment and Modification. This Agreement may be
amended, modified or supplemented only by written agreement of Teligent (on
behalf of the Sellers) and the Buyer.
Section 10.2 Waiver of Compliance; Consents. Except as otherwise
provided in this Agreement, any failure of any of the parties to comply with any
obligation, covenant or condition herein may be waived by the party entitled to
the benefits thereof only by a written instrument signed by the party granting
such waiver, but such waiver or failure to insist upon strict compliance with
such obligation, covenant, or condition shall not operate as a waiver of, or
estoppel with respect to any subsequent or other failure.
Section 10.3 Survival. Subject to the succeeding sentence, each and
every representation, warranty and covenant contained in this Agreement shall
expire with, and be terminated and extinguished by the consummation of the sale
of the Purchased Assets and the transfer of the Assumed Obligations pursuant to
this Agreement, and such representations, warranties and covenants shall not
survive the Closing Date, and neither any of the Sellers, the Buyer nor any
officer, director, trustee or Affiliate of any of them shall have any liability
whatsoever with respect to any such representation, warranty or covenant.
Notwithstanding the foregoing, (a) the obligations of the Buyer with respect to
the Assumed Obligations and of the Sellers with respect to the Excluded
Liabilities and the covenants contained in Sections 2 .5(b), (c) and (d), 7.3,
7.4(b) and (c), 7.5, 7.9, 7.16 and 7.18 and this Article X shall survive the
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby, (b) the covenants contained in Sections 7.6
and 7.7 shall survive until the first anniversary of the Closing Date, and (c)
the representations and warranties contained in Sections 6.5 and 6.6 and the
covenants contained in Sections 7.12 and 7.13 shall survive the execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby until thirty (30) days after the expiration of the applicable statutes of
limitation (including all periods of extension, whether automatic or
permissive).
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Section 10.4 No Impediment to Liquidation. Subject to Sections 2.2(e),
7.4(c) and 7.10, nothing herein shall be deemed or construed as to limit,
restrict or impose any impediment to the Sellers' right to liquidate, dissolve
and wind-up its affairs and to cease all business activities and operations at
such time as it may determine following the Closing. Subject to Sections 2.2(e),
7.4(c) and 7.10, the Sellers shall not be obligated to retain assets or
employees or to continue operations following the Closing (or to retain
outsource assistance) in order to satisfy its obligations hereunder.
Section 10.5 Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given (i) when personally
sent/delivered, by facsimile transmission (with hard copy to follow) or sent by
reputable express courier (charges prepaid) or (ii) five (5) days following
mailing by registered or certified mail postage prepaid and return receipt
requested. Unless another address is specified in writing, notices, demands and
communications to any Seller and the Buyer shall be sent to the addresses
indicated below:
(a) If to any of the Sellers, to:
c/o Teligent, Inc.
0000 Xxxxxxxx Xxxx
Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: General Counsel
with a copy to:
Xxxxxxxx & Xxxxx
000 X. Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxx X. X. Xxxxxxxxxx, Esquire
Xxxxxx X. Xxxxxxx, P.C.
(b) if to the Buyer, to:
Teligent Acquisition Corp.
Xxxxx 000
0000 Xxxxxxxxxx Xxxxxx, Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx
with copies to:
Xxxxxx, Xxxx & Xxxxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
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Attention: Xxxxx X. Xxxxxxxxx, P.C.
and
Xxxxxx, Xxxx & Xxxxxxxx LLP
0000 Xxxxxxxxxxx Xxx., XX
Xxxxxxxxxx, X.X. 00000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxx, Esq.
and
Friedman, Billings, Xxxxxx & Co.
Suite 700
0000 Xxxxxxxxxx Xxxxxx, Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxx Xxxxxxx, Esq.
Section 10.6 Assignment. This Agreement and all of the provisions hereof
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns and with respect to any of the
Sellers, any entity that may succeed to substantially all the assets of such
Seller, but neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any party hereto, including by
operation of law, without the prior written consent of the other party, nor is
this Agreement intended to confer upon any other Person except the parties
hereto any rights or remedies hereunder. Any assignment of this Agreement or any
of the rights, interests or obligations hereunder in contravention of this
Section 10.6 shall be null and void and shall not bind or be recognized by any
of the Sellers or the Buyer. Notwithstanding the foregoing, no provision of this
Agreement shall create any third party beneficiary rights in any employee or
former employee of any of the Sellers (including any beneficiary or dependent
thereof) in respect of continued employment or resumed employment, and no
provision of this Agreement shall create any rights in any such Persons in
respect of any benefits that may be provided, directly or indirectly, under any
employee benefit plan or arrangement except as expressly provided for
thereunder.
Section 10.7 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York (regardless of
the laws that might otherwise govern under applicable New York principles of
conflicts of law) as to all matters, including but not limited to matters of
validity, construction, effect, performance and remedies.
Section 10.8 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
Section 10.9 Schedules and Exhibits. All Exhibits and Schedules referred
to herein are intended to be and hereby are specifically made a part of this
Agreement.
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Section 10.10 Entire Agreement. This Agreement, the
Confidentiality Agreement and the Exhibits, Schedules, documents, certificates
and instruments referred to herein or therein, embody the entire agreement and
understanding of the parties hereto in respect of the transactions contemplated
by this Agreement. There are no restrictions, promises, representations,
warranties, covenants or undertakings, other than those expressly set forth or
referred to herein or therein. It is expressly acknowledged and agreed that
there are no restrictions, promises, representations, warranties, covenants or
undertakings contained in any material made available to the Buyer pursuant to
the terms of the Confidentiality Agreement. This Agreement supersedes all oral
or written prior agreements and understandings between the parties with respect
to such transactions other than the Confidentiality Agreement.
Section 10.11 Bulk Sales or Transfer Laws. The Buyer hereby waives
compliance by the Sellers with the provisions of the bulk sales or transfer laws
of all applicable jurisdictions.
Section 10.12 Submission to Jurisdiction. The parties hereto
irrevocably submit to the exclusive jurisdiction of the Bankruptcy Court (or any
court exercising appellate jurisdiction over the Bankruptcy Court) over any
dispute arising out of or relating to this Agreement or any other agreement or
instrument contemplated hereby or entered into in connection herewith or any of
the transactions contemplated hereby or thereby and any such dispute shall be
deemed to have arisen in the State of New York. Each party hereby irrevocably
agrees that all claims in respect of such dispute or proceedings may be heard
and determined in such dispute or proceedings may be heard and determined in
such courts. The parties hereby irrevocably waive, to the fullest extent
permitted by applicable law, any objection which they may now or hereafter have
to the laying of venue of any such dispute brought in such court or any defense
of inconvenient forum in connection therewith.
Section 10.13 No Strict Construction. The parties have
participated jointly in the negotiation and drafting of this Agreement. In the
event an ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as if drafted jointly by the parties, and no
presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any of the provisions of this Agreement.
Section 10.14 Remedies. Subject to Section 10.3, the Sellers and
the Buyer hereby acknowledge and agree that money damages may not be an adequate
remedy for any breach or threatened breach of any of the provisions of this
Agreement and that, in such event, the Sellers or their successors or assigns,
or the Buyer or its successors or assigns, as the case may be, may, in addition
to any other rights and remedies existing in their favor, apply to the
Bankruptcy Court or any other court of competent jurisdiction for specific
performance, injunctive and/or other relief in order to enforce or prevent any
violations of this Agreement.
* * * * *
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IN WITNESS WHEREOF, the Sellers and the Buyer have caused this agreement
to be signed by their respective duly authorized officers as of the date first
above written.
TELIGENT ACQUISITION CORP.
By: /s/ XXXXXX X. XXXXXXX
-----------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: President and Secretary
TELIGENT, INC.
By: /s/ XXXXX X. XXXXXX
-----------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President and
Assistant Secretary
TELIGENT LICENSE CO. I, L.L.C.
By: /s/ XXXXX X. XXXXXX
-----------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President and
Assistant Secretary
50
TELIGENT LICENSE CO. II, L.L.C.
By: /s/ XXXXX X. XXXXXX
-----------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President and
Assistant Secretary
TELIGENT SERVICES, INC.
By: /s/ XXXXX X. XXXXXX
-----------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President and
Assistant Secretary
TELIGENT OF VIRGINIA, INC.
By: /s/ XXXXX X. XXXXXX
-----------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President and
Assistant Secretary
QUADRANGLE INVESTMENTS, INC.
By: /s/ XXXXX X. XXXXXX
-----------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President and
Assistant Secretary
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BACKLINK, L.L.C.
By: /s/ XXXXX X. XXXXXX
-----------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President and
Assistant Secretary
JTEL, L.L.C.
By: /s/ XXXXX X. XXXXXX
-----------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President and
Assistant Secretary
KATLINK, L.L.C.
By: /s/ XXXXX X. XXXXXX
-----------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President and
Assistant Secretary
52
TELIGENT TELECOMMUNICATIONS, L.L.C.
By: /s/ XXXXX X. XXXXXX
-----------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President and
Assistant Secretary
TELIGENT COMMUNICATIONS, L.L.C.
By: /s/ XXXXX X. XXXXXX
-----------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President and
Assistant Secretary
