ASSET PURCHASE AGREEMENT
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THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made as of this 25th
day of October, 2001 (the "Effective Date"), by and among (i) ARDENT
COMMUNICATIONS, INC., a Delaware corporation, and ARDENT, INC., a Virginia
corporation, both debtors and debtors-in-possession (collectively, "Seller"),
each with a principal place of business at 0000 Xxxxx Xxxx Xxxxx Xxxxx,
Xxxxxxxxx, Xxxxxxxx 00000, and (ii) NETWORK ACCESS SOLUTIONS CORPORATION, a
Delaware corporation or its Permitted Designee (as defined in Section 12(d))
("Buyer"), with offices at 00000 Xxxxxx Xxxxxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx
00000. Seller and Buyer are sometimes referred to as the "Parties."
RECITALS
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WHEREAS, Seller is engaged in the business of supplying broadband Internet
access solutions and web services (collectively, the "Business"); and
WHEREAS, on October 10, 2001, Seller filed voluntary chapter 11 petitions
commencing cases in the United States Bankruptcy Court for the District of
Columbia (the "Bankruptcy Court"), Case Nos. 01-02085 and 01-02086
(collectively, the "Chapter 11 Case"); and
WHEREAS, Buyer desires to purchase certain of the assets of Seller related
to or used by Seller in connection with the Business and to assume selected
executory contracts of Seller (the "Acquired Assets") (as more particularly
defined in Section 1) related to the Business on an expedited basis, and
Seller desires to sell, assign and transfer to Buyer the Acquired Assets on an
expedited basis, as more particularly described herein and in accordance with
Sections 105, 363 and 365 of the United States Bankruptcy Code (the
"Bankruptcy Code"); and
WHEREAS, the Parties agree that time is of the essence in connection with
the sale of the Acquired Assets, and Buyer has stated that a rapid
consummation of the sale of the Acquired Assets is essential; and
WHEREAS, the Acquired Assets will be sold pursuant to an order of the
Bankruptcy Court approving such sale under Sections 105, 363 and 365 of the
Bankruptcy Code (the "Sale Order" defined in Section 6(c)(ii)(B) herein).
NOW, THEREFORE, for and in consideration of the foregoing and their
mutual covenants and agreements set forth below, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the Parties, intending to be legally bound, hereby agree as follows:
1. SALE OF ASSETS
(a) Acquired Assets. At the Closing (as defined in Section 3(a)),
pursuant to Sections 105, 363, and 365 of the Bankruptcy Code and on the terms
and subject to the conditions precedent of this Agreement, Seller will sell,
assign and transfer to Buyer, and Buyer will purchase, all of Seller's right,
title and interest in and to the Acquired Assets. The Acquired Assets include
the following:
(i) DSL Customers. Seller's entire DSL customer base, including
but not limited to resellers (the "DSL Customers"), consisting of
approximately 16,800 lines as listed on a 3.5" floppy disk delivered by Seller
to Buyer on the date of this Agreement and initialed by the parties hereto,
examples of which are set forth on Schedule 1(a)(i).
(ii) DSL Customer Contracts. Any and all contracts and
agreements related to the DSL Customers (including but not limited to reseller
agreements), samples of which are included on Schedule 1(a)(ii) (the "Customer
Contracts"). Pursuant to Section 365 of the Bankruptcy Code and the
Assignment and Assumption Agreement (as defined in Section 3(b)(iii), as
applicable, Seller will assign to Buyer, and Buyer will accept from Seller,
all of Seller's right, title and interest in, to and under the Customer
Contracts.
(iii) Covad Contract. That certain ISP Customer Agreement for
TeleSpeed(sm) Services Prepared for CAIS, Version 3.3, dated as of October 29,
1998, together with List Pricing Schedule A, Volume Purchase Plan Schedule B,
Client TeleSpeed Circuit Matrix Schedule D, that certain Services Addendum,
dated as of August 1, 1999, that certain Services Agreement, dated as of
August 2, 1999, including the Volume Commitment Schedule, Price Schedule
TeleSpeed Services, Service Level Agreement TeleSpeed Services, Price
Schedule TeleSurfer(sm) Services, and Market Development Funds TeleSpeed
Services and all related contracts and agreements related to the DSL Customers
or the DSL Customer Contracts (including but not limited to the Memorandum of
Understanding dated September 25, 2001) (collectively, the "Covad Contract")
between Seller or its predecessors and Covad Communications Company
("Covad"). The Parties acknowledge that Four Million Seven Hundred Thousand
and 00/00 United States Dollars (US $4,700,000.00) (the "Covad Cure Amount")
is currently owed by the Seller pursuant to the Covad Contract for pre-
petition services. The Covad Cure Amount and other obligations under the
Covad Contract shall be satisfied by the Parties pursuant to Section 6(i).
Seller will assign all of Seller's right, title, interest and obligations and
liabilities in (as expressly described in this Agreement), to and under the
Covad Contract to Buyer, and Buyer will accept and assume the same from
Seller.
(iv) Related Material. Subject to the last sentence of this
Section (iv), DSL Customer User IP and email addresses and related
information, Customer Premises Equipment ("CPE") owned by Covad or Seller, CPE
passwords and configurations, DSL Customer contact information, billing and
pricing information, static IP addresses and relevant Covad backhaul network
information, all of Seller's written and electronic information relating to
the DSL Customers (including, without limitation, customer lists, customer
files and other written accounts of Seller) incidental to or used in
performing the Customer Contracts, and other reasonably requested information,
in each case, to the extent transferable, relating to sales and marketing
data, principal contacts, pricing information and accounting records and
information and contract performance information (the "Related Material").
Buyer and Seller agree to complete within ten (10) days of the Effective Date
a final Transition Plan for the transition of certain matters regarding the
DSL Customers, including without limitation, DSL Customer User IP and email
addresses, as set forth in the initial Transition Plan attached hereto as
Schedule 1(a)(iv). Seller covenants that it will use its commercially
reasonable efforts, as requested by Buyer, to obtain approval from the
American Registry for Internet Numbers ("ARIN") and/or the Internet
Corporation for Assigned Names and Numbers ("ICANN") of the transition of the
DSL Customer User IP and email addresses to Buyer, including taking any steps
recommended or required by ARIN and/or ICANN with regard to Seller's
management of assigned IP addresses managed by Seller. Seller makes no
covenant, representation or warranty regarding its ability to transfer such
User IP and email addresses without the approval of ARIN and/or ICANN.
(b) Excluded Assets. The Seller is not selling, transferring or
conveying to Buyer any asset that is not described in Section 1(a).
(c) Non-Assumption of Liabilities. Except for performance of
obligations arising under the Customer Contracts from and after the Closing
Date, and except with respect to the Covad Contract as discussed in Sections
1(a),2(b)(iii), and 6(i) herein, the Buyer will not assume or have any
responsibility with respect to any liability of Seller for Seller's customers.
2. PURCHASE PRICE
(a) Security Deposit. Within three (3) days of the Effective Date,
Buyer shall deliver or cause to be delivered by wire transfer or by a
certified or cashier's check, the amount of Three Hundred Thousand and 00/00
United States Dollars (US $300,000.00) (the "Security Deposit") into the care
of Xxxxxxx Berlin Shereff Xxxxxxxx, LLP as escrow agent (the "Escrow Agent")
pursuant to the terms and conditions of this Section 2(a) and of an escrow
agreement substantially in the form attached hereto as Exhibit A (the "Escrow
Agreement") to be executed by Buyer, Seller and the Escrow Agent. At the
Closing, the Security Deposit, together with any interest thereon, shall be
credited against the Purchase Price (as defined below.) If this Agreement is
terminated prior to Closing, the Security Deposit shall be distributed in
accordance with Section 11(b).
(b) Purchase Price. The aggregate purchase price for the Acquired
Assets shall be: TWO Million AND 00/00 UNITED STATES DOLLARS (US
$2,000,000.00) (the "Purchase Price"). The Purchase Price is in addition to
and separate from the payment by Buyer to Covad of the Covad Cure Amount
(although the Parties recognize that Buyer's payment of the Covad Cure Amount
may constitute a substantial benefit to Seller and its estate vis-a-vis a
reduction of Seller's liability to Covad), and the Purchase Price is payable
in accordance with the following:
(i) At the Closing (as defined below), Buyer shall deliver to
Seller by wire transfer in immediately available funds to an account
designated in writing by Seller to Buyer prior to the Closing, the amount of
TWO MILLION AND 00/00 UNITED STATES DOLLARS (US $2,000,000.00), less the
Security Deposit and any accrued interest thereon, plus any amount to which
the Seller is entitled pursuant to Section 2(b)(iii);
(ii) One (1) day prior to the Closing, Buyer and Seller shall
deliver to the Escrow Agent a Mutual Consent Notice (as defined in the Escrow
Agreement), instructing the Escrow Agent to wire on the Closing Date the
amount of the Security Deposit, plus any interest accrued thereon, to the
account of Seller as designated in the Mutual Consent Notice.
(iii) If the amount paid by Buyer to Covad in connection with the
assignment and assumption of the Covad Agreement to Buyer hereunder (the
"Actual Covad Cure Payment") is less than the Covad Cure Amount, Buyer shall
also pay to Seller an amount equal to fifty percent (50%) of the difference
between the Covad Cure Amount and the Actual Covad Cure Payment.
(c) The Parties agree that the Purchase Price shall be allocated as
set forth on Schedule 2(c) attached hereto and that the Parties will file all
Federal and state income tax returns and all other forms and returns,
including Internal Revenue Service Form 8594, in accordance with the
allocation set forth on Schedule 2(c).
3. CLOSING
(a) The closing of the transactions contemplated by this Agreement
(the "Closing") will take place at the offices of Xxxxxxx Berlin Shereff
Xxxxxxxx, LLP, 0000 X Xxxxxx, XX, Xxxxx 000, Xxxxxxxxxx, X.X. 00000-0000 or at
such other place, or pursuant to such other means, as may be mutually agreed
by the Parties. The Closing shall take place (i) within one business day
after the conditions set forth in Sections 8 and 9 have been satisfied or
waived or (ii) at such other time as fixed by agreement among the Parties (the
"Closing Date"). Time is of the essence in connection with this Agreement,
and Buyer shall have the right to terminate this Agreement in accordance with
Section 11(a)(ii)(B) if the Closing has not occurred on or before November 19,
2001, and under no circumstance shall Buyer be obligated to close later than
November 19, 2001.
(b) At the Closing, Seller shall deliver to Buyer (i) possession of
all tangible assets comprising the Acquired Assets, (ii) a Xxxx of Sale
substantially in the form attached hereto as Exhibit B duly executed by
Seller, and (iii) an Assignment and Assumption Agreement in respect of the
Customer Contracts and the Covad Contracts substantially in the form attached
hereto as Exhibit C duly executed by Seller. In addition, for the period from
the Closing through and including ninety (90) days from Closing, Seller shall
execute and deliver, without further consideration, such further instruments
of transfer and take such other commercially reasonable action as Buyer may
require to transfer to Buyer, or perfect the transfer to Buyer of, any of the
Acquired Assets.
(c) At the Closing, Buyer shall deliver to Seller (i) the Purchase Price
in accordance with Section 2(b), and (ii) the Xxxx of Sale and the Assignment
and Assumption Agreement, duly executed by Buyer.
4. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents, warrants and covenants to Buyer as follows:
(a) Authorization. Ardent Communications, Inc. and Ardent Inc. are
corporations duly organized, validly existing and in good standing under the
laws of the State of Delaware and the Commonwealth of Virginia, respectively.
The execution and delivery by Seller of this Agreement to Buyer and the sale
contemplated hereby has been duly and validly authorized by any and all
necessary action on the part of Seller and its stockholders, and Seller shall
deliver to Buyer, at or prior to the execution hereof, copies, certified by
Seller's Secretary, of the minutes of the meeting of its Board of Directors
and stockholders at which such authority was granted. Subject to Bankruptcy
Court approval, this Agreement and the documents executed pursuant to this
Agreement (collectively the "Definitive Documents") to which it is a party
have been duly and validly executed by Seller and, assuming due authorization,
execution and delivery by the Seller of the Definitive Documents to which it
is a party, such Definitive Documents will constitute legal, valid and binding
obligations of Seller, enforceable against Seller in accordance with their
terms, upon the entry of the Sale Order (as defined in Section 6(c)(ii)(B));
provided, however, if Seller breaches this Agreement subsequent to approval of
this Agreement by the Bankruptcy Court and the entry of the Sale Order,
Buyer's damages are an administrative priority claim under Sections 503(b) and
507(a) of the Bankruptcy Code.
(b) No Conflict. Except for (i) orders, approvals or authorizations
of the Bankruptcy Court and (ii) for consents, orders, approvals,
authorizations, or registrations, which, if not obtained, would not,
individually or in the aggregate, have a material adverse effect on the
Business, Seller has full power, right and authority to sell and transfer the
Acquired Assets to Buyer and the execution, delivery and performance of this
Agreement by Seller and compliance by Seller with the terms hereof will not
(x) conflict with any provision of the organizational documents of Seller; (y)
result in a default (or give rise to any termination, cancellation or
acceleration) under any of the terms, conditions or provisions of any
agreement to which Seller is a party or by which it is bound, except for such
defaults (or rights of termination, cancellation or acceleration) as to
requisite waivers or consents have been obtained; or (z) violate any statute,
law, rule, regulation, order, writ, injunction or decree of any governmental
authority or create a lien, encumbrance, security interest or claim upon any
of the assets of Seller.
(c) Title. Seller has, and at the Closing Buyer will obtain, good and
marketable title to the Acquired Assets, free and clear of all liens, claims,
interests, encumbrances and security interests of any kind or nature
whatsoever. Seller has not licensed or otherwise granted any person or entity
any right or interest in any of the Acquired Assets. No person or entity
currently maintains any claim, and, no person or entity has a valid basis for
claiming that the operation of the Business or the use of the Acquired Assets
infringes, violates or has violated any licensing agreement, patent, non-
competition, confidentiality or trademark right or copyright or other rights
of any other person or entity.
(d) Litigation. Except as set forth on Schedule 4(d), there is no
claim, judgment, litigation or proceeding in existence or pending at present,
or to the knowledge of Seller threatened, against or relating to the Acquired
Assets or the Business which would affect or encumber the Acquired Assets; no
replevins, attachments, executions or tax assessments or liens are in force
against Seller or the Acquired Assets; and Seller does not know, or have
reasonable grounds to know, of any basis for any such action, or of any
governmental investigation relative to Seller, the Acquired Assets or the
Business.
(e) Customer Contracts. Seller's right, title and interest in and to
each of the Customer Contracts, is fully assignable and, on the Closing Date,
each such assumed Customer Contract will be in full force and effect and
Seller will not be in default thereunder.
(f) DSL Customers. The DSL Customers consist of approximately 16,800
lines.
(g) Broker. No broker has been engaged by Seller in connection with
the transaction contemplated by this Agreement and no brokerage fees will be
payable by Seller to any party as the result of the consummation of such
transaction.
(h) Compliance With Law. To Seller's knowledge, Seller has filed with
the appropriate governmental authorities all material applications,
notifications and other documents and has been issued and is in compliance
with all material requirements for all laws, regulations, permits,
certificates, licenses, approvals and other authorizations required to operate
the Business, except where the failure to do so would not have a material
adverse effect on the Business. Seller is in material compliance with each
(and has not received any claim or notice that the Business is not in
compliance with or that it is in violation of any) law to which the Business
is subject (including all record keeping and reporting requirements thereof);
and, to the Seller's knowledge, no prior actions of the Seller in violation of
any law or regulation will result in liability to the Buyer as a result of the
transactions contemplated by this Agreement.
(i) Governmental Notices. Seller has not received from any
governmental authority or third party any material request for information,
notice of claim, demand letter, or other notification in connection with the
conduct of the Business or the use of the Acquired Assets.
(j) Business Information. In connection with this transaction, the
Seller has made or will make available to the Buyer all books, records,
correspondence, customer lists, and technical and financial information
requested by the Buyer and relating to the Acquired Assets, including the
Covad Contract, as of the date of this Agreement (the "Business Information").
The Business Information is accurate in all material respects.
(k) Customer Disputes. Except as identified on Schedule 4(j), Seller
is not aware of any dispute with any DSL Customer.
5. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents, warrants and covenants to Seller as follows:
(a) Buyer is a Delaware corporation duly organized, validly existing
and in good standing under the laws of the state of Delaware and has the power
and authority and all necessary governmental approvals to own, lease and
operate its properties and to carry on its business as it is now being
conducted. Buyer is duly qualified to do business, and is in good standing,
in each jurisdiction where the character of its properties owned or held under
lease or the nature of its activities make such qualification appropriate,
except where the failure to be so qualified would not individually or in the
aggregate have a material adverse effect on Buyer's ability to complete the
transactions contemplated by this Agreement. The execution and delivery of
this Agreement to Seller and the transactions contemplated hereby have been
duly authorized by Buyer's Board of Directors, and Buyer shall deliver to
Seller, at or prior to the execution hereof, copies, certified by Buyer's
Secretary, of the minutes of the meeting of its Board of Directors at which
such authority was granted.
(b) Buyer has taken all action required by the laws of the State of
Delaware or any other applicable law to authorize the transactions
contemplated herein.
(c) There are no pending or, to the knowledge of Buyer, threatened
actions or proceedings before any court or administrative agency or other
authority which might or will materially or adversely affect Buyer's ability
or right to perform all Buyer's obligations hereunder.
(d) This Agreement constitutes the legal, valid, and binding agreement
of Buyer, enforceable in accordance with its terms. The consummation of the
transactions contemplated hereby will not conflict with or result in a breach
of any provision of, or constitute a default under, any contract, agreement,
instrument, regulation, law, or order of any court, administrative agency or
federal, state, or local authority to which Buyer is a party, by which it is
bound, or to which it may be subject for which Buyer has not obtained a waiver
or the consent of the affected party. The execution, delivery, and
performance of this Agreement by Buyer will not (i) conflict with or result in
a breach or violation of any term or provision of Buyer's Certificate of
Incorporation or Bylaws, nor shall its execution, delivery, or performance
conflict with or result in a breach of any of the terms, conditions, or any
provision of, or constitute a default (or give rise to any right of
termination, cancellation, acceleration, vesting, payment exercise, suspension
or revocation) under, any indenture, mortgage, contract, agreement, or other
instrument to which Buyer is a party, or by which it or its properties are or
may be bound or affected, (ii) violate any order, writ, injunction, decree,
statute, rule or regulation applicable to the Buyer or the Buyer's properties
or assets, except for violations, breaches, defaults, terminations,
cancellations, accelerations, creations, impositions, suspensions or
revocations that would not individually or in the aggregate have a material
adverse effect on the Buyer's ability to complete the transactions
contemplated by this Agreement, or (iii) constitute an event that would permit
any party to terminate any agreement or accelerate the maturity of any
indebtedness or other obligation of Buyer.
(e) No broker has been engaged by Buyer in connection with the
transaction contemplated by this Agreement and no brokerage fees will be
payable by the Buyer to any party as the result of the consummation of such
transaction.
(f) Buyer has sufficient cash and/or available credit facilities and/or
commitments to pay the Purchase Price and the Covad Cure Amount and to make
all other necessary payments of fees and expenses in connection with the
transactions contemplated by this Agreement and the Definitive Documents.
6. COVENANTS
(a) Access and Investigation. Between the date hereof and the
Closing, Seller grants to Buyer and to its duly authorized representatives
including, but not limited to, its employees, accountants and counsel
reasonable access to (i) all information concerning the Acquired Assets and or
the Business as Buyer may reasonably request and (ii) reasonable access,
during normal business hours, to the Acquired Assets and to present and former
key management employees of the Business who have significant information
regarding the Acquired Assets and Business, and releases all such employees
from any obligations of confidentiality or non-disclosure with regard to
disclosures made by such employees to the Buyer for the purpose of evaluating
the transactions contemplated by this Agreement.
(b) Notice of Sale. Seller will mail notice of the sale, which notice
will comply and be served in accordance with the Bankruptcy Code, the Federal
Rules of Bankruptcy Procedure, any applicable local bankruptcy rules, and any
applicable order of the Bankruptcy Court, to parties who assert any interest,
lien, encumbrance or claim in or against the Acquired Assets (including but
not limited to Nortel Networks, Inc.), in addition to the DSL Customers,
Covad, any nondebtor party to a contract that is being assigned hereunder, and
any committee of unsecured creditors appointed in the Chapter 11 Case.
(c) Bankruptcy Court Approvals.
(i) Seller confirms that its negotiation of this Agreement with
Buyer is critical to its obtaining the highest and best price for its assets,
and that without Buyer's commitment of substantial time and expense to the
process, Seller would have to employ a less orderly process for the sale of
its assets and therefore risk attracting lower prices. Seller acknowledges
that Buyer would not have invested the time and incurred the expense of
negotiating and documenting the transaction if it were not entitled to a break
up fee as described below. Notwithstanding anything in this Agreement to the
contrary, if Buyer is not the successful bidder for the Acquired Assets
because a bid or bids higher and better than the Purchase Price is approved by
the Bankruptcy Court, Buyer shall be entitled to a break-up fee of Xxxxx
Xxxxxxxx xxx 00/00 Xxxxxx Xxxxxx Dollars (US $40,000.00) (the "Break-up
Fee"), provided this Agreement has not been terminated by Seller under Section
11(a)(v) at that time. The Break-Up fee shall be payable to Buyer at the
closing of the sale of the Acquired Assets to such alternate bidder.
(ii) As promptly as possible after the date hereof, Seller will
file and serve motions (and, at a minimum, notice will be made to Covad and
all DSL Customers and any other parties to Customer Contracts or any contracts
being assigned hereunder) pursuant to Bankruptcy Code Sections 105, 363, and
365, as applicable, in a form reasonably approved by counsel for Buyer:
(A) seeking entry of an order (on an expedited basis)
substantially in the form attached hereto as Exhibit D (the "Procedures
Order"), approving among other things the payment of the Break-Up Fee as an
administrative priority claim under Bankruptcy Code Sections 503(b) and
507(a), approving procedures for the sale of the Acquired Assets (including an
overbid amount of US $100,000.00 over the Purchase Price, an incremental bid
amount of US $50,000.00 and matching bid provisions), and setting dates for
the auction sale of the Acquired Assets no later than November 16, 2001 (the
"Auction Hearing Date"), and the hearing on the sale of the Acquired Assets no
later than November 16, 2001 (the "Sale Hearing Date"); and
(B) seeking entry of an order substantially in the form
attached hereto as Exhibit E (the "Sale Order"), which, among other things,
(i) authorizes Seller to sell, transfer and assign the Acquired Assets to
Buyer, on an expedited basis, pursuant to this Agreement and Bankruptcy Code
Sections 105, 363 and 365, as applicable, free and clear of liens, claims,
interests, encumbrances and security interests of any nature or kind, (ii)
determines that Buyer is a good faith purchaser under Section 363(m) of the
Bankruptcy Code and that the Buyer has acted in good faith, is a bona fide
purchaser for value, the Purchase Price is fair and reasonable, and the sale
of the Acquired Assets is free and clear of all liens, claims, interests, and
encumbrances; (iii) provides that the Customer Contracts and the Covad
Contract are assigned to Buyer pursuant to 11 U.S.C. Section 365, that Buyer
assumes no liability for claims or cure amounts under the Customer Contracts
prior to the date of Closing, that all Customer Contracts and the Covad
Contract are enforceable against the nondebtor parties and that Buyer assumes
the Covad Cure Amount pursuant to Section 6(i); (iv) Seller assumes any
obligation to cure the Customer Contracts; (v) provides that Section 1146(c)
applies to the sale; (vi) is in all respects in a form reasonably acceptable
to Counsel for Buyer; (vii) provides that the ten (10) day periods provided for
in Federal Rules of Bankruptcy Procedure 6004(g) and 6006(d) are waived;
and (viii) provides that the Parties shall hold the funds collected on account
of any accounts receivable that are owed to the other party in trust and that
commingling of such accounts receivable with the Parties' general funds
or accounts shall not destroy the trust protection or nature of such funds
or impact the duties each Party owes to the other with regard to accounts
receivable.
(d) Books and Records. After the Closing, Buyer shall allow Seller
and any of its then current directors, officers, employees, counsel,
representatives, accountants and auditors (collectively, the "Seller's
Representatives") reasonable access to all business records and files of the
Seller or the Business that are transferred solely to Buyer in connection
herewith, which are reasonably required by such Seller's Representatives in
order to complete the Chapter 11 Case or for tax or other valid business
purposes, during regular business hours and upon reasonable notice to Buyer.
The Seller's Representatives shall have the right to make copies of any such
records and files; provided, however, that any such access or copying shall be
had or done in such a manner so as not to unreasonably interfere with the
normal conduct of Buyer's business or operations.
(e) Additional Matters. Subject to the terms and conditions herein,
except as provided by the Bankruptcy Code, the Bankruptcy Rules or any other
orders entered or approvals or authorizations granted by the Bankruptcy Court
in the Chapter 11 Case, each of the parties hereto agrees to use all
commercially reasonable efforts to take, or cause to be taken, all action and
to do, or cause to be done, all things necessary, proper or advisable,
including under applicable laws and regulations, to consummate and make
effective the transactions contemplated by this Agreement, including using all
commercially reasonable efforts to obtain all necessary waivers, consents and
approvals required under this Agreement.
(f) Preservation of Acquired Assets. Seller will take all prudent
actions, at Seller's cost, to safeguard, preserve and maintain the integrity
of the Acquired Assets pending Closing.
(g) Seller's Good Faith Cooperation. Seller shall reasonably
cooperate in good faith to assist Buyer in preserving and protecting the
Acquired Assets and the Business during the ninety (90) day transition period
following the Closing, consistent with the obligations of both parties set
forth herein.
(h) Collection of Accounts Receivable after the Closing. Seller shall
be responsible for all costs attributable to the provision of services to the
DSL Customers prior to the Closing Date, and Buyer shall be responsible for
all costs attributable to the provision of services to the DSL Customers from
and after the Closing Date. Seller shall be entitled to all DSL Customer
revenue for services provided to DSL Customers prior to the Closing Date, and
Buyer shall be entitled to all DSL Customer revenue for services provided to
DSL Customers from and after the Closing Date. From and after the Closing
Date, Buyer and Seller shall use their best efforts to assist each other in
connection with the collection and proper allocation of accounts receivable
from the DSL Customers. The Parties shall hold the funds collected on account
of any accounts receivable that are owed to the other party in trust. Buyer
and Seller each agree to remit to the other any payments which it receives and
to which the other is entitled within three (3) business days. Further, each
party shall have the right to inspect the books and records of the other party
with regard to the collection of accounts receivable related to the DSL
Customers.
(i) Covad Contract. Buyer shall pay to Covad the Covad Cure Amount as
such amount is due and owing under the Covad Contract. Seller shall be
obligated to pay any amount necessary to cure the Covad Contract in excess of
the Covad Cure Amount. Seller shall pay all obligations under the Covad
Contract arising from the date of the filing of Seller's bankruptcy petitions
through the Closing, and Buyer shall not be obligated to pay any such
liabilities or obligations.
(j) December Billing. Seller shall not send bills to the DSL
Customers for the month of December 2001.
7. CONFIDENTIALITY
(a) The Seller possesses and will possess following the Closing
confidential and proprietary business information relating to the Acquired
Assets and the Business (the "Proprietary Information"). The Seller agrees
that it will maintain the confidentiality of all Proprietary Information and
will not use, or disclose to any other party, for any purpose whatsoever, any
Proprietary Information relating to the Acquired Assets or the Business.
Further Seller acknowledges the critical importance of maintaining the
Proprietary Information as confidential and agrees that because any award of
monetary damages would be inadequate for any breach of this covenant and would
cause prior irreparable harm to Buyer, that in any event of the breach or
threatened breach of this covenant Buyer will be entitled to equitable relief,
including injunctive relief and specific performance. Such remedy shall not
be the exclusive remedy for any breach of this covenant but will be in
addition to all other remedies available at law or equity.
(b) The Buyer agrees that prior to the Closing and, in the event that
the Buyer is not the successful bidder, after the termination of this
Agreement, it will not disclose confidential information with respect to the
Seller, the Acquired Assets or the Business, for any purpose or reason
whatsoever (except to authorized representatives of the Buyer and to counsel
and other advisers, provided that such advisors (other than counsel) agree to
the confidentiality provisions of this Section 7(b)), unless (i) such
information becomes known to the public generally through no fault of the
Buyer, (ii) disclosure is required by law or the order of any governmental or
regulatory authority under color of law, or (iii) the Buyer reasonably
believes that such disclosure is required in connection with the defense of a
lawsuit or for certification or state licensure purposes; provided, that prior
to disclosing any information pursuant to clauses (ii) or (iii) above, the
Buyer shall, if possible, give prior written notice thereof to the Seller, its
successors or assigns, and provide the Seller, its successors or assigns with
the opportunity to contest such disclosure. Further Buyer acknowledges the
critical importance of maintaining the Proprietary Information as confidential
and agrees that because any award of monetary damages would be inadequate for
any breach of this covenant and would cause prior irreparable harm to Seller,
that in any event of the breach or threatened breach of this covenant Seller
will be entitled to equitable relief, including injunctive relief and specific
performance. Such remedy shall not be the exclusive remedy for any breach of
this covenant but will be in addition to all other remedies available at law
or equity.
8. CONDITIONS TO BUYER'S OBLIGATION
The obligation of Buyer to consummate the transactions to be performed
by it in connection with the Closing is subject to satisfaction of all of the
following conditions (all or any of which may be waived, in whole or in part,
by the Buyer):
(a) The Procedures Order has been entered by the Bankruptcy Court and
is no longer subject to stay, modification, or appeal and has become a final
order.
(b) The Sale Order, in all respects in a form reasonably acceptable to
counsel for Buyer, has been entered by the Bankruptcy Court and either (i) is
no longer subject to stay, modification, or appeal and has become a final
order; or (ii) provides that the ten (10) day periods provided for in Federal
Rules of Bankruptcy Procedure 6004(g) and 6006(d) are waived.
(c) Seller's representations and warranties contained in the Agreement
are true and correct in all material respects as of the Closing Date as though
such representations and warranties were made at such time.
(d) Seller has, in all material respects, performed or complied with,
as the case may be, all obligations, covenants and conditions required by this
Agreement to be performed or complied with by it on or before the Closing
Date.
(e) Seller has executed and delivered the Xxxx of Sale and the
Assignment.
(f) A duly authorized officer of the Seller has executed and delivered to
Buyer a certificate dated as of the Closing Date certifying as to (c) and (d)
above.
(g) There is no injunction or order of any court or government authority
of competent jurisdiction prohibiting the transactions contemplated by this
Agreement.
(h) Upon consummation of the transactions contemplated by this Agreement,
Buyer will have obtained good title in and to the Acquired Assets.
9. CONDITIONS TO SELLER'S OBLIGATIONS
The obligation of Seller to consummate the transactions to be performed
by it in connection with the Closing is subject to satisfaction of the
following conditions (all or any of which may be waived, in whole or in part,
by Seller):
(a) The Sale Order has been entered by the Bankruptcy Court;
(b) Buyer's representations and warranties contained in the Agreement
are true and correct in all material respects as of the Closing Date as though
such representations and warranties were made at such time;
(c) Buyer has, in all material respects, performed or complied with,
as the case may be, all obligations, covenants and conditions required by this
Agreement to have been performed or complied with in all material respects on
or before the Closing Date;
(d) The Chief Financial Officer or another duly authorized officer of
Buyer has executed and delivered to Seller a certificate dated as of the
Closing Date certifying as to (b) and (c) above; and
(e) There is no injunction or order of any court or government
authority of competent jurisdiction prohibiting the sale.
10. Survival of Representations and Warranties.
The representations and warranties of the parties hereto included or
provided for herein, shall not survive the Closing and there shall be no
liability in respect thereof, whether such liability has accrued prior to the
Closing or after the Closing, on the part of either Party.
11. TERMINATION
(a) At anytime before the consummation and completion of the
Closing, this Agreement may be terminated (i) by mutual written agreement of
the Parties; (ii) by Buyer if (A) the Procedures Order has not been entered by
October 29, 2001, the Auction Hearing Date has not occurred on or before
November 16, 2001, and the Sale Order has not been entered on or before
November 16, 2001; (B) Closing has not occurred on or before November 19,
2001; and (C) any other condition set forth in Section 8 has become incapable
of fulfillment or has not been satisfied on or before November 19, 2001; (iii)
by Seller or Buyer if a bid or bids for the Acquired Assets by a purchaser
other than Buyer higher and better than the Purchase Price is approved by the
Bankruptcy Court; (iv) by Buyer in the event of any material breach by Seller
of any of Seller's agreements, representations or warranties contained herein
and the failure of Seller to cure such breach within seven calendar days after
receipt of written notice from a Buyer requesting such breach to be cured; or
(v) by Seller in the event of any material breach by Buyer of any of its
agreements, representations or warranties contained herein and the failure of
Buyer to cure such breach within seven days after receipt of notice from
Seller requesting such breach to be cured.
(b) Effect of Termination. If the Agreement is terminated pursuant to
clause (i) of paragraph (a), all obligations of the Parties shall terminate
without liability of any party to the other, and the Security Deposit (and any
interest thereon) shall be returned to Buyer. If the Agreement is terminated
pursuant to clauses (ii) or (iv) of paragraph (a), such termination is without
prejudice to any other rights Buyer may have with respect to any breach of any
representation, warranty or covenant by Seller, and Buyer shall be entitled to
the immediate return of the Security Deposit (and any interest thereon). If
the Agreement is terminated pursuant to clause (v) of paragraph (a), provided
Seller is not in material breach of any of its agreements, representations or
warranties contained herein, Seller shall be entitled to retain the Security
Deposit as liquidated damages and as the Seller's sole and exclusive remedy
for a breach by Buyer hereunder. If the Agreement is terminated pursuant to
clause (iii) of paragraph (a), Buyer shall be entitled to the Break-Up Fee and
return of the Security Deposit (with interest) and Buyer shall have no further
liability whatsoever. Notwithstanding anything to the contrary in this
Section 11(b), the provisions of Section 7(a) and 7(b) shall remain in full
force.
THE TERMS AND CONDITIONS OF THIS AGREEMENT ARE SUBJECT TO THE APPROVAL OF
THE BANKRUPTCY COURT.
12. MISCELLANEOUS PROVISIONS
(a) Press Releases and Public Announcements. No party shall issue
any press release or make any public announcement relating to the subject
matter of this Agreement without the prior written approval of the other
party; provided, however, that any party may make any public disclosure it
believes in good faith is required by applicable law as determined by a
written opinion of counsel or any listing or trading agreement concerning its
publicly-traded securities (in which case the disclosing party will use
commercially reasonable efforts to advise the other party prior to making the
disclosure). In addition, the Parties shall jointly prepare a letter to be
sent to the DSL Customers subsequent to the Effective Date to explain Buyer's
purchase of the Acquired Assets and the transition of such contracts.
(b) No Third-Party Beneficiaries. This Agreement shall not confer
any rights or remedies upon any person other than the Parties and their
respective successors and permitted assigns.
(c) Entire Agreement. This Agreement and all other documents
referred to herein constitute the entire agreement between the Parties and
supersedes any prior understandings, agreements, or representations by or
between the Parties, written or oral, to the extent they have related in any
way to the subject matter hereof.
(d) Succession and Assignment. This Agreement shall be binding upon
and inure to the benefit of the Parties named herein and their respective
successors and permitted assigns, including, in the case of the Seller, a
Chapter 11 trustee in the event such a trustee is appointed, or a Chapter 7
trustee in the event the Chapter 11 Case is converted. No party may assign
either this Agreement or any of its rights, interests, or obligations
hereunder without the prior written approval of the other party; provided,
however, that Buyer may with at least five (5) days' prior written notice to
Seller (i) assign any or all of its rights and interests hereunder to one or
more of its wholly owned subsidiaries (a "Permitted Designee") and (ii)
designate one or more of its wholly owned subsidiaries to perform its
obligations hereunder (in any or all of which cases the party hereto
nonetheless shall remain responsible for the performance of all of its
obligations hereunder); and provided, however, that the Seller may assign to
any entity the rights to enforce the obligations set forth in Section 7(b).
(e) Counterparts; Facsimile Signatures. This Agreement may be
executed in one or more counterparts, each of which shall be deemed an
original but all of which together will constitute one and the same
instrument. Any signature page delivered by facsimile or telecopy shall be
binding to the same extent as an original signature page, with regard to any
agreement subject to the terms hereof or any amendment thereto. Any party who
delivers such a signature page agrees to later deliver an original counterpart
to any party who requests it.
(f) Headings. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
(g) Notices. All notices, demands, requests, consents, approvals or
other communications required or permitted to be given with respect to this
Agreement shall be in writing and shall be delivered (charges prepaid,
receipt confirmed or return receipt requested (if available)) by hand, by
internationally and nationally recognized air courier service or by facsimile,
addressed as set forth below or to such other address as such party shall have
specified most recently by written notice. Notice shall be deemed given and
effective (i) if delivered by hand or by internationally or nationally
recognized air courier service, when delivered at the address specified in
this Section 12(g) (or in accordance with the latest unrevoked written
direction from such party) or (ii) if given by facsimile when such facsimile
is transmitted to the facsimile number specified in this Section 12(g) (or in
accordance with the latest unrevoked written direction from such party),
provided, that, appropriate confirmation is received and that any such
facsimile is promptly followed by delivery of written notice delivered by hand
or by internationally or nationally recognized air courier service.
If to the Seller: Copy to:
Ardent Communications, Inc. Xxxxxxx Berlin Shereff Xxxxxxxx, LLP
0000 Xxxxx Xxxx Xxxxx Xxxxx 0000 X Xxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000 Washington, DC 2000702-4859
Attention: Xxxx Xxxxx, CFO Attention: Xxxxxx X. Xxx, Esq.
Tel: (000) 000-0000 Tel: (000) 000-0000
Fax: (000) 000-0000 Fax: (000) 000-0000
If to the Buyer: Copy to:
Network Access Solutions Corp. Xxxx Xxxxxxx LLP
13650 Dulles Technology Dr. 0000 X Xxxxxx, X.X.
Xxxxxxx, XX 00000 Xxxxxxxxxx, X.X. 00000-0000
Attention: Xxx Xxxx, CEO Attention: Xxxxxx X. Xxxxxxxx, Esq.
Tel: (000) 000-0000 Tel: (000) 000-0000
Fax: (000) 000-0000 Fax: (000) 000-0000
(h) Governing Law. This Agreement shall be governed by and construed
in accordance with the domestic laws of the District of Columbia without
giving effect to any choice or conflict of law provision or rule (whether of
the District of Columbia or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the District of
Columbia.
(i) Amendments and Waivers. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by the
Buyer and the Seller. No waiver by any party of any default,
misrepresentation, or breach of warranty or covenant hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation, or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior or subsequent such
occurrence.
(j) Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
(k) Expenses. Except with respect to the Seller's payment of the
Break Up Fee as provided for in Section 6(c)(i), each of the Buyer and the
Seller will bear its own costs and expenses (including legal fees and
expenses) incurred in connection with the Agreement and the transactions
contemplated hereby.
(l) 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. Any reference to any federal, state,
local, or foreign statute or law shall be deemed also to refer to all rules
and regulations promulgated thereunder, unless the context requires otherwise.
The word "including" shall mean including without limitation.
(m) Incorporation of Exhibits and Schedules. The exhibits and
schedules identified in this Agreement are incorporated herein by reference
and made a part hereof.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the Parties hereto have executed this Asset Purchase
Agreement as of the date first above written.
"SELLER":
ARDENT COMMUNICATIONS, INC.,
a Delaware corporation
By: /s/ Xxxx X. Xxxxx
--------------------------------
Name: Xxxx X. Xxxxx
Title: Chief Financial Officer
ARDENT, INC., a Virginia corporation
By: /s/ Xxxx X. Xxxxx
----------------------------
Name: Xxxx X. Xxxxx
Title: Chief Financial Officer
"BUYER":
NETWORK ACCESS SOLUTIONS CORPORATION,
a Delaware corporation
By: /s/ Xxx Xxxx
----------------------------
Name: Xxx Xxxx
Title: Chief Executive Officer
List of Schedules
-----------------
Schedule 1(a)(i) DSL Customers
Schedule 1(a)(ii) Customer Contracts
Schedule 1(a)(iv) Transition Plan
Schedule 2(c) Allocation of Purchase Price
Schedule 4(d) Litigation
Schedule 4(j) Customer Disputes
List of Exhibits
----------------
Exhibit A Escrow Agreement
Exhibit B Xxxx of Sale
Exhibit C Assignment
Exhibit D Procedures Order
Exhibit E Sale Order
Schedule 1(a)(i)
DSL Customers
A complete list of the DSL Customers is set forth on a 3.5" floppy disk
delivered by Seller to Buyer on the Effective Date. Examples the DSL
Customers listed on such floppy disk are as follows:
[to be provided by Ardent/SBSF]
Schedule 1(A)(ii)
Customer Contracts
To be provided by SBSF/Ardent
Schedule 1(A)(iv)
Transition Plan
To be provided by SBSF/Ardent
Schedule 2(c)
Allocation of Purchase Price
To be agreed upon by the parties on or prior to the Closing
Schedule 4(d)
Litigation
None.
Schedule 4(j)
Customer Disputes
As of the date of this Agreement, there are two hundred and two (202) open
customer trouble tickets.
Exhibit A
Escrow Agreement
To be provided by SBSF/Ardent
Exhibit B
Xxxx of Sale
To be provided by SBSF/Ardent
Exhibit C
Assignment
To be provided by SBSF/Ardent
Exhibit D
Procedures Order
To be provided by SBSF/Ardent
Exhibit E
Sale Order
To be provided by SBSF/Ardent
