ACQUISITION AGREEMENT By and Among NEXTWAVE TELECOM INC., CELLCO PARTNERSHIP D/B/A VERIZON WIRELESS and VZW CORP. Dated as of November 4, 2004
Exhibit
10.5
EXECUTION
COPY
SUBJECT
TO CONFIDENTIALITY AGREEMENT
By
and
Among
NEXTWAVE
TELECOM INC.,
CELLCO
PARTNERSHIP D/B/A
VERIZON
WIRELESS
and
VZW
CORP.
Dated
as
of November 4, 2004
TABLE
OF CONTENTS
Page
|
PURCHASE
AND SALE OF SHARES
|
1
|
|
|
Section
1.1
|
Purchase
and Sale
|
1
|
|
Section
1.2
|
The
Purchase Price
|
1
|
|
ARTICLE
II
|
THE
CLOSING
|
2
|
|
Section
2.1
|
The
Closing
|
2
|
|
Section
2.2
|
Deliveries
|
2
|
|
ARTICLE
III
|
REPRESENTATIONS
AND WARRANTIES OF THE COMPANY
|
2
|
|
Section
3.1
|
Organization;
License Subsidiaries
|
2
|
|
Section
3.2
|
Due
Authorization
|
3
|
|
Section
3.3
|
Capitalization
|
4
|
|
Section
3.4
|
Financial
Statements
|
4
|
|
Section
3.5
|
Litigation
|
4
|
|
Section
3.6
|
Consents
and Approvals
|
5
|
|
Section
3.7
|
No
Violations
|
5
|
|
Section
3.8
|
Licenses
|
5
|
|
Section
3.9
|
Compliance
with Laws
|
7
|
|
Section
3.10
|
Financial
Advisory, Legal and Other Fees
|
7
|
|
Section
3.11
|
ERISA
Compliance
|
7
|
|
Section
3.12
|
Taxes
|
7
|
|
Section
3.13
|
Offering
of Shares
|
9
|
|
Section
3.14
|
Limitation
of Representations and Warranties
|
9
|
|
ARTICLE
IV
|
REPRESENTATIONS
AND WARRANTIES OF THE PARENT AND THE ACQUIROR
|
9
|
|
Section
4.1
|
Investment
|
9
|
|
Section
4.2
|
Rule
144
|
10
|
|
Section
4.3
|
Organization
of the Parent and Acquiror
|
10
|
|
Section
4.4
|
Authority
of the Parent and the Acquiror
|
10
|
|
Section
4.5
|
Non-Contravention
|
10
|
|
Section
4.6
|
FCC
Status
|
10
|
|
Section
4.7
|
Brokers
and Finders
|
11
|
|
Section
4.8
|
Litigation
|
11
|
|
Section
4.9
|
Consents
and Approvals
|
11
|
|
Section
4.10
|
Sufficient
Available Funds
|
11
|
i
TABLE
OF CONTENTS
(continued)
Page
|
|
||
|
ARTICLE
V
|
COVENANTS
OF THE COMPANY
|
11
|
|
Section
5.1
|
Conduct
of Business Pending the Closing
|
11
|
|
Section
5.2
|
Access
to Information
|
14
|
|
Section
5.3
|
No
Solicitation of Alternative Proposals
|
14
|
|
Section
5.4
|
Use
of Proceeds
|
15
|
|
Section
5.5
|
Bankruptcy
Plan
|
15
|
|
Section
5.6
|
Releases
|
16
|
|
Section
5.7
|
Tax
Matters
|
16
|
|
Section
5.8
|
Global
Resolution Agreement
|
19
|
|
ARTICLE
VI
|
ADDITIONAL
COVENANTS
|
19
|
|
Section
6.1
|
Consents
|
19
|
|
Section
6.2
|
Confidentiality
|
20
|
|
Section
6.3
|
Notification
of Certain Matters
|
20
|
|
Section
6.4
|
Name
Following the Closing
|
21
|
|
Section
6.5
|
Books
and Records
|
21
|
|
Section
6.6
|
Opco
|
21
|
|
ARTICLE
VII
|
CONDITIONS
|
21
|
|
Section
7.1
|
Conditions
to Each Party’s Obligations
|
21
|
|
Section
7.2
|
Conditions
to the Acquirer’s Obligations
|
21
|
|
Section
7.3
|
Conditions
to the Obligations of the Company
|
24
|
|
|
||
|
ARTICLE
VIII
|
TERMINATION
|
25
|
|
Section
8.1
|
Termination
|
25
|
|
Section
8.2
|
Break-Up
Payment
|
26
|
|
|
||
|
ARTICLE
IX
|
NO
SURVIVAL OF REPRESENTATIONS AND WARRANTIES AND CERTAIN COVENANTS;
REMEDIES
|
27
|
|
ARTICLE
X
|
MISCELLANEOUS
|
27
|
|
Section
10.1
|
Governing
Law
|
27
|
|
Section
10.2
|
Jurisdiction;
Forum; Service of Process; Waiver of Jury Trial
|
27
|
|
Section
10.3
|
Successors
and Assigns
|
27
|
|
Section
10.4
|
Entire
Agreement, Amendment
|
28
|
|
Section
10.5
|
Notices
|
28
|
|
Section
10.6
|
Certain
Definitions
|
29
|
|
Section
10.7
|
Delays
or Omissions
|
32
|
|
Section
10.8
|
Counterparts
|
33
|
|
Section
10.9
|
Severability
|
33
|
|
Section
10.10
|
Titles
and Subtitles
|
33
|
|
Section
10.11
|
No
Public Announcement
|
33
|
|
Section
10.12
|
Further
Actions, Commercially Reasonable Efforts
|
33
|
|
Section
10.13
|
Usage
|
33
|
|
Section
10.14
|
Guarantee
of Parent
|
34
|
Exhibit
A
- FCC Licenses
Exhibit
B
- Escrow Agreement
Exhibit
C
- Plan Term Sheet
Exhibit
D
- Acquisition Approval Order
Exhibit
E
- FCC Matters Opinion
ii
THIS
ACQUISITION AGREEMENT (this “Agreement”) is made as of November 4, 2004 by and
among NextWave Telecom Inc., a Delaware corporation (the “Company”), Cellco
Partnership D/B/A Verizon Wireless, a Delaware general partnership (the
“Parent”) and VZW Corp., a Delaware corporation and wholly-owned subsidiary of
Parent (the “Acquiror”). References to this Agreement herein shall include each
of the Exhibits and Schedules attached hereto. Capitalized terms used, but
not
otherwise defined herein shall have the respective meanings ascribed to such
terms in Section 10.6.
WHEREAS,
the Company and the Debtor Subsidiaries have commenced the Bankruptcy Case
currently pending in the Bankruptcy Court jointly administered under Case No.
98-B21529(ASH);
WHEREAS,
the Company and the Debtor Subsidiaries intend to propose a Third Joint Plan
of
Reorganization (the “Bankruptcy Plan”) substantially in conformity with the Plan
Term Sheet annexed to this Agreement as Exhibit C (the “Plan Term Sheet”)
pursuant to which (i) holders of Claims will be paid in full, (ii) the United
States Federal Communications Commission (“FCC”) licenses set forth on Exhibit A
attached hereto (the “FCC Licenses”) will continue to be held by NextWave
Personal Communications Inc. (“NPCI”) and NextWave Power Partners Inc. (“NPPI”)
(NPCI and NPPI, together with NextWave Partners Inc. (“NPI”), the sole
shareholder of NPPI, are collectively referred to as the “License Subsidiaries”
and, individually, a “License Subsidiary”), (iii) all other assets of the
Company will be transferred to a newly formed wholly owned subsidiary of the
Company (“Opco”) and all direct and indirect Liabilities of the Company will be
assigned to and assumed by Opco, (iv) the equity interests of the Company (the
“Company Equity Interests”) will be cancelled and the holders thereof will
receive the treatment specified in the Plan Term Sheet, and (v) the Company
will
be reorganized (the “Reorganized Company”) and continue its business as a
wholly-owned subsidiary of the Acquiror;
WHEREAS,
the Acquiror desires to acquire the FCC Licenses by acquiring all of the capital
stock of the Reorganized Company (the “Shares”); and
WHEREAS,
to implement such acquisition, the Acquiror desires to purchase from the
Company, and, in connection with the consummation of the Bankruptcy Plan, the
Company desires to sell to the Acquiror, upon the terms and subject to the
conditions set forth herein, the Shares.
NOW,
THEREFORE, in consideration of the mutual covenants, agreements, representations
and warranties contained herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
ARTICLE
I
PURCHASE
AND SALE OF SHARES
Section
1.1 Purchase
and Sale.
Upon
the terms and subject to the conditions set forth herein and in accordance
with
the Bankruptcy Plan, at the Closing (as defined herein) the Company shall sell
to the Acquiror, and the Acquiror shall purchase from the Company, the
Shares.
Section
1.2 The
Purchase Price.
The
aggregate purchase price for the Shares shall be $3,000,000,000 (the “Purchase
Price”). At the Closing, the Acquiror shall (i) deliver or cause to be delivered
to the Company an amount of cash (the “Closing Cash”) equal to the Purchase
Price minus
an
amount equal to the sum of (A) the Section 3 Payment (as defined herein) and
(B)
$165,000,000 (as such amount may be adjusted pursuant to Section 7.2(j), (ii)
deliver or cause to be delivered to the FCC the Section 3 Payment and (iii)
deliver or cause to be delivered to the Escrow Agent an amount in cash equal
to
the amount determined pursuant to clause (i)(B) above (as increased by any
net
return earned thereon and as reduced by any payments therefrom made pursuant
to
the Escrow Agreement, the “Escrow Amount”) to be held by the Escrow Agent in
accordance with the terms and conditions of an escrow agreement substantially
in
the form attached as Exhibit B hereto (the “Escrow Agreement”). The cash
payments referred to in clauses (i), (ii) and (iii) of the preceding sentence
shall be made by wire transfer of immediately available funds to accounts
designated by the Company, the FCC and the Escrow Agent, respectively. The
Company shall designate its account, and shall use commercially reasonable
efforts to cause the FCC and the Escrow Agent to designate their respective
accounts, at least three (3) Business Days prior to the Closing
Date.
ARTICLE
II
THE
CLOSING
Section
2.1 The
Closing.
The
closing of the purchase and sale of the Shares hereunder and the consummation
of
the Bankruptcy Plan (collectively, the “Closing”) shall take place at the
offices of Well, Gotshal & Xxxxxx LLP, at a date (the “Closing Date”) and
time to be mutually agreed upon by the Company and the Acquiror, which shall
be
at least three (3) but no more than five (5) Business Days following the
satisfaction or waiver by the Parent, the Acquiror or the Company, as
appropriate, of all of the conditions set forth in Article VII (other than
those
conditions that by their nature are to be satisfied at the Closing, but subject
to the satisfaction or waiver of those conditions).
Section
2.2 Deliveries.
At the
Closing, the Company shall deliver to the Acquiror, (1) certificates
representing the Shares being purchased by the Acquiror and registered in the
name of the Acquiror or its permitted corporate nominee or designee (the
“Corporate Nominee”) in such amounts as the Acquiror shall specify to the
Company at least three (3) Business Days prior to the Closing Date, and (ii)
the
documents and certificates required to be delivered pursuant to Section 7.2
hereof. Delivery of such certificates to the Acquiror shall be made against
receipt by the Company, the FCC and the Escrow Agent, respectively, of the
Closing Cash, the Section 3 Payment and the Escrow Amount. At the Closing,
in
addition to the delivery by the Acquiror of the Closing Cash, the Section 3
Payment and the Escrow Amount as specified in the immediately preceding
sentence, the Acquiror and Parent shall deliver to the Company the documents
and
certificates required to be delivered pursuant to Section 7.3.
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES OF THE COMPANY
Except
as
specifically set forth in the disclosure schedule prepared and signed by the
Company and delivered to the Parent concurrently with the execution of this
Agreement (the “Disclosure Schedule”), the Company represents and warrants to
each of the Parent and the Acquiror that all of the statements contained in
this
Article III are true and complete as of the date of this Agreement (or, if
made
as of a specified date, as of such date). Each exception set forth in the
Disclosure Schedule is identified by reference to, or has been grouped under
a
heading referring to, a specific individual Section and, except as otherwise
specifically stated with respect to such exception, relates to such
Section.
2
Section
3.1 Organization;
License Subsidiaries.
(a) The
Company and each License Subsidiary are each corporations duly organized,
validly existing and in good standing under the Laws of the State of Delaware
and have the requisite corporate power and corporate authority to carry on
their
respective businesses as they are now being conducted. Each of the Company
and
each License Subsidiary is duly qualified and licensed as a foreign corporation
to do business and is in good standing (and has paid all relevant franchise
or
analogous taxes) in each jurisdiction where the character of its assets owned
or
held under lease or the nature of its business makes such qualification
necessary except where the failure to be so licensed or in good standing (or
to
pay such relevant franchise or analogous taxes) would not individually or in
the
aggregate (a) materially impair or otherwise materially and adversely affect
any
License Subsidiary’s interest in and right to control and operate its respective
FCC Licenses free and clear of Liens or (b) materially delay or materially
impair the Company’s ability to consummate the transactions contemplated by this
Agreement.
(b) (i)
The
Company owns, either directly or indirectly through one or more License
Subsidiaries, all of the capital stock and other equity interests of the License
Subsidiaries free and clear of all Liens, and (ii) there are no outstanding
subscription rights, options, warrants, convertible or exchangeable securities
or other rights of any character whatsoever relating to issued or unissued
capital stock or other equity interests of any License Subsidiary, or any
Commitments of any character whatsoever relating to issued or unissued capital
stock or other equity interests of any License Subsidiary or pursuant to which
any License Subsidiary is or may become bound to issue or grant additional
shares of its capital stock or other equity interests or related subscription
rights, options, warrants, convertible or exchangeable securities or other
rights, or, to grant preemptive rights.
(c) Since
the
date of their formation, none of the License Subsidiaries has conducted any
business activities, other than (i) directly or, in the case of NPI, indirectly,
holding the FCC Licenses and making regulatory filings in connection therewith,
or (ii) in connection with the transactions contemplated by this Agreement.
No
License Subsidiary is a party to, or a guarantor of, any Commitment, owns or
leases any assets, employs any Person, possesses any permits, licenses or
franchises or is subject to any Lien. As of the Closing, after giving effect
to
the Bankruptcy Plan, none of the License Subsidiaries will (i) have any asset
of
any type or kind whatsoever, other than (A) in the case of each of NPPI and
NPCI, the FCC Licenses, (B) in the case of NPI, the outstanding capital stock
of
NPPI, and (C) the right to indemnification pursuant to Section 5.7, (ii) conduct
any business other than (A) holding the FCC Licenses and making regulatory
filings in connection therewith or (B) in connection with the transactions
contemplated by this Agreement, or (iii) be subject to any
Liability.
(d) Since
the
date of its formation, the Company has operated as a holding company, has not
conducted any business activities except through its subsidiaries other than
in
connection with the transactions contemplated by this Agreement. The Company
is
not a party to, or guarantor of, any Commitment, and does not own or lease
any
assets, employ any Person, possess any permits, licenses or franchises and
is
subject to no Lien. As of the Closing, after giving effect to the Bankruptcy
Plan, the Company will (i) own no assets, other than the stock of NPCI and
NPI
and the right to indemnification pursuant to Section 5.7, (ii) conduct no
business other than (A) holding the stock of NPCI and NPI or (B) in connection
with the transactions contemplated by this Agreement and (iii) be subject to
no
Liabilities.
3
Section
3.2 Due
Authorization.
Subject
to the entry of the Acquisition Approval Order, the Company has all corporate
right, corporate power and corporate authority to enter into this Agreement
and
each of the Transaction Documents to which it is a party, and to consummate
the
transactions contemplated hereby and thereby, subject in the case of the
purchase and sale of the Shares, to the entry of the Confirmation Order. Upon
the entry of the Acquisition Approval Order, the execution and delivery by
the
Company of this Agreement and each of the Transaction Documents to which it
is a
party, and, upon the entry of the Acquisition Approval Order and the
Confirmation Order, the issuance, sale and delivery of the Shares by the Company
and the compliance by the Company with each of the provisions of this Agreement
and each of the Transaction Documents to which it is a party will (a) be within
the corporate power and authority of the Company, and (b) have been duly
authorized by all requisite corporate action of the Company. This Agreement
has
been, and each of the Transaction Documents to which the Company is a party
when
executed and delivered by the Company will be, duly and validly executed and
delivered by the Company, and this Agreement constitutes, and each of such
Transaction Documents when executed and delivered by the Company (and assuming
this Agreement constitutes and each such Transaction Document will constitute,
a
valid and binding obligation of the Parent and Acquiror, as applicable) will
constitute, a valid and binding agreement of the Company, enforceable against
the Company in accordance with its terms, from and after entry of the
Acquisition Approval Order, except as such enforcement is limited by bankruptcy,
reorganization, insolvency and other similar laws affecting the enforcement
of
creditors’ rights generally and limitations imposed by general principles of
equity.
Section
3.3 Capitalization.
(a) Section
3.3(a) of the Disclosure Schedule contains a complete and accurate description
of the equity capitalization of the Company as of the date hereof including
all
Company Equity Interests.
(b) Except
for Claims and Interests to be fully discharged pursuant to the Bankruptcy
Plan
and the rights created pursuant to this Agreement and the Transaction Documents,
there are no outstanding subscription rights, options, warrants, convertible
or
exchangeable securities, Commitments or other rights of any character whatsoever
to which the Company is a party relating to issued or unissued capital stock
of
the Company, or pursuant to which the Company is or may become bound to issue
or
grant additional shares of its capital stock or related subscription rights,
options, warrants, convertible or exchangeable securities or other rights,
or to
grant preemptive rights. Except for Claims and Interests to be fully discharged
pursuant to the Bankruptcy Plan (i) the Company has not agreed to, register
any
securities under the Securities Act or under any state securities Law and has
not granted or agreed to grant registration rights to any Person and (ii) there
are no claims relating to the registration of any capital stock of the Company
under the Securities Act or under any state securities Law. There are no voting
trusts, stockholders agreements, proxies or other Commitments or understandings
in effect to which the Company is a party with respect to the voting or transfer
of any of the outstanding shares of Company Equity Interests.
(c) As
of the
Closing, after giving effect to the Bankruptcy Plan and the transactions
contemplated by this Agreement (and assuming they are effected as contemplated
hereby and thereby), the authorized capital stock of the Reorganized Company
shall consist solely of the Shares.
4
Section
3.4 Financial
Statements.
The
audited consolidated and unaudited consolidating financial statements of the
Company for the years ended December 31, 2001 and 2002, and the unaudited
consolidated and consolidating financial statements for the year ended December
31, 2003 and the interim period ended June 30, 2004 (including any related
schedules and/or notes) included in Section 3.4 of the Disclosure Schedule,
comply in all material respects with applicable accounting requirements then
applicable to such financial statements, and have been prepared in accordance
with United States generally accepted accounting principles in effect as of
such
respective dates (“GAAP”) consistently followed throughout the periods involved
(except as may be indicated in the notes thereto) and fairly present in
accordance with GAAP the consolidated or consolidating, as the case may be,
financial condition, results of operations, cash flows and changes in
stockholders’ equity of the Company and its subsidiaries as of the respective
dates thereof and for the respective periods then ended (in each case subject,
as to interim statements, to the absence of footnotes and subject to changes
resulting from year-end adjustments).
Section
3.5 Litigation.
(a) There
is
no claim, action, suit, proceeding or, to the Knowledge of the Company,
investigation of any kind or nature whatsoever (“Litigation”) pending or, to the
Knowledge of the Company, threatened against the Company or any of the License
Subsidiaries or involving any of their respective properties or assets by or
before any court, arbitrator or other Governmental Entity which (x) as of the
date hereof, in any manner challenges or seeks to prevent, enjoin, materially
impair the Company’s ability to consummate or materially delay the transactions
contemplated by this Agreement or any of the Transaction Documents or (y) if
resolved adversely to the Company or a License Subsidiary would have a Material
Adverse Effect. There is no judgment, decree, injunction, rule, or order of
any
court, governmental department, commission, agency, instrumentality or
arbitrator outstanding against the Company or any of the License
Subsidiaries.
(b) Neither
the Company nor any of the License Subsidiaries is in default under or in breach
of any order, judgment or decree of any court, arbitrator or other Governmental
Entity, and neither the Company nor any of its subsidiaries is a party or
subject to any order, judgment or decree of any court, arbitrator or other
Governmental Entity, except where such default, breach, order, judgment or
decree would not (a) materially impair or otherwise materially and adversely
affect any License Subsidiary’s interest in and right to control and operate its
respective FCC Licenses free and clear of Liens or (b) materially delay or
materially impair the Company’s ability to consummate the transactions
contemplated by this Agreement.
Section
3.6 Consents
and Approvals.
No
consent, approval, authorization of, declaration, filing, or registration with,
any Governmental Entity, and no consent of any other third party under any
agreement or other instrument to which the Company or any of its subsidiaries
is
a party or pursuant to which the Company or any of the License Subsidiaries
or
any of their respective assets or properties is subject (the “Third Party
Consents”), is required to be made or obtained by the Company or any of its
subsidiaries in connection with the execution, delivery, and performance of
this
Agreement or any of the Transaction Documents, except for (i) the Regulatory
Approvals, (ii) approval of the Disclosure Statement by the Bankruptcy Court,
(iii) the Required Consents, (iv) the Confirmation Order, and (v) the
Acquisition Approval Order (the consents and approvals described in the
foregoing clauses (i) through (v) are hereinafter referred to collectively
as
the “Governmental Requirements”).
5
Section
3.7 No
Violations.
Neither
the execution or delivery or, subject to obtaining the Third Party Consents
and
the Governmental Requirements, performance by the Company of this Agreement
or
any of the Transaction Documents to which the Company is a party nor the
consummation of the Bankruptcy Plan will: (a) conflict with, or result in a
breach or a violation of, any provision of the certificate of incorporation
or
bylaws or other organizational documents of the Company or any of the License
Subsidiaries, or (b) constitute, with or without notice or the passage of time
or both, a breach, violation or default, create a Lien, other than Permitted
Encumbrances, or give rise to any right of termination, modification,
cancellation, prepayment, suspension, limitation, revocation or acceleration,
under (i) any Law or (ii) any provision of any agreement or other instrument
to
which the Company or any of the License Subsidiaries is a party or pursuant
to
which the Company or any of the License Subsidiaries or any of their respective
assets or properties is subject, except in the cases of clause (i) and (ii)
above, for such breaches, violations, defaults, Liens, terminations,
modifications, cancellations, prepayments, suspensions, limitations, revocations
or accelerations which, individually or in the aggregate, would not (A)
materially impair or otherwise materially and adversely affect any License
Subsidiary’s interest in and right to control and operate its respective FCC
Licenses free and clear of Liens or (B) materially delay or materially impair
the Company’s ability to consummate the transactions contemplated by this
Agreement.
Section
3.8 Licenses.
(a) Exhibit
A
sets forth, as of the date hereof, the following information regarding each
FCC
License: (i) the call sign of, and the radio frequencies covered by, such FCC
License, (ii) the market number and market name assigned to such FCC License
by
the FCC, (iii) the grant and expiration date of such FCC License and (iv) the
name of the licensee of the FCC License. All of the FCC Licenses are valid
and
in full force and effect and have been granted by the FCC. Neither the Company
nor any License Subsidiary has pending applications for any license,
authorization, permit or approval to construct and operate a PCS system. True
and correct copies of the FCC Licenses, in effect as of the date hereof, are
attached to Section 3.8(a) of the Disclosure Schedule. The applicable License
Subsidiary is the sole owner of each FCC License as set forth on Exhibit A
and
no other party has any ownership interest, option or similar right to acquire
an
ownership interest in any FCC License. As of the date hereof, no party, other
than the Company, the License Subsidiaries and the Excluded Entities (but only
to the extent of their network operations utilizing spectrum encompassed within
FCC Licenses owned by the License Subsidiaries), has any right to use any of
the
spectrum covered by each such FCC License and, after giving effect to the
Bankruptcy Plan, no party, other than the Company and the License Subsidiaries,
will have any right to use any of the spectrum covered by each such FCC
License.
(b) Other
than the FCC Licenses, neither the Company nor any License Subsidiary requires
any state, local or federal permits, licenses, franchises, variances,
exemptions, orders, operating rights or other state, local or federal
governmental authorizations, consents or approvals to conduct their business
as
presently conducted.
(c) The
Company and each License Subsidiary have performed as of the date of this
Agreement, and will have performed as of the Closing Date, all of their
respective obligations required to have been performed under the FCC Licenses
as
of such dates, except for obligations the non-performance of which will not,
and
would not reasonably be expected to, (i) materially impair or otherwise
adversely affect any License Subsidiary’s interest in and right to control and
operate its respective FCC Licenses free and clear of all Liens or (ii)
materially delay or materially impair the Company’s ability to consummate the
transactions contemplated by this Agreement. No event has occurred or condition
or state of facts exists which constitutes or, after notice or lapse of time
or
both, will, or would reasonably be expected to, constitute a breach or default
under the FCC Licenses which permits or, after notice or lapse of time or both,
will, or would reasonably be expected to, permit revocation, cancellation,
suspension or adverse modification of the FCC Licenses, or which might adversely
affect the rights of the Company or any License Subsidiary under the FCC
Licenses, except for such events, conditions, breaches or defaults the
occurrence of which will not, and would not reasonably be expected to, (x)
materially impair or otherwise materially and adversely affect the License
Subsidiary’s interest in and right to control and operate its respective FCC
Licenses free and clear of all Liens or (y) materially delay or materially
impair the Company’s ability to consummate the transactions contemplated by this
Agreement. Subject to obtaining the Governmental Requirements, the FCC Licenses
will, after giving effect to the transactions contemplated by this Agreement,
continue in full force and effect without the consent, approval, or act of,
or
the making of any filing with, any Governmental Entity.
6
(d) Except
for the Bankruptcy Case and for rule making or similar proceedings of general
applicability to Persons engaged in substantially the same business as that
conducted by the Company and the License Subsidiaries, (i) there are no judicial
or administrative claims, actions, suits, demands, proceedings or to the
Knowledge of the Company investigations pending or, to the Knowledge of the
Company, threatened against the Company or any Affiliate thereof relating to
the
FCC Licenses in, before or by any Governmental Entity, (ii) there is no
judgment, decree or injunction outstanding against the Company or any Affiliate
thereof relating to or involving the Licenses, (iii) there is no rule or order
outstanding against the Company or any Affiliate thereof relating to or
involving the FCC Licenses that will, or would reasonably be expected to, (x)
materially impair or otherwise materially and adversely affect any License
Subsidiary’s interest in and right to control and operate its respective FCC
Licenses free and clear of all Liens, or (y) create any Liens that will not
be
released pursuant to the Bankruptcy Plan and (iv) there are no unsatisfied
judgments against the Company or any Affiliate thereof with respect to the
FCC
Licenses.
(e) The
Company and each License Subsidiary is qualified under the FCC’s rules and the
Communications Act to hold and convey the FCC Licenses. To the Knowledge of
the
Company, there are no facts or circumstances relating to the FCC qualifications
of the Company or any of its Affiliates that would prevent or materially delay
the FCC’s grant of any FCC Form 603 (or other appropriate form) application
under FCC rules and the Communications Act.
(f) The
Company or a License Subsidiary has submitted to the FCC, on Form 601, a timely
notification of the satisfaction of the five-year construction benchmark
applicable to each of the FCC Licenses as mandated by 47 C.F.R. § 24.203
and the FCC has granted such notification. The factual assertions of the Company
or such License Subsidiary in such Form 601 are true and correct in all material
respects. The file number and grant date for each such applicable benchmark
notification is specified in Exhibit A.
7
(g) Neither
the Company nor any License Subsidiary has any pending E-911 Phase I or Phase
II
“deployment requests” pursuant to 47 C.F.R. § 20.18 of the FCC’s
rules.
(h) The
Company and/or the relevant License Subsidiary validly holds and has the sole
right to control and operate the FCC Licenses, free and clear of all Liens.
Under the FCC’s rules, and as memorialized in the Global Resolution Agreement,
there are no unjust enrichment obligations associated with the FCC
Licenses.
(i) The
Company and each of its Affiliates that is party to the Global Resolution
Agreement has fully complied with all of its obligations pursuant to the Global
Resolution Agreement that are required to be complied with prior to the date
of
this Agreement.
Section
3.9 Compliance
with Laws.
Except
for Laws relating to the FCC Licenses, which are covered by Section 3.8, the
Company and the License Subsidiaries are in compliance with all Laws in all
material respects, except where the failure to comply would not individually
or
in the aggregate (a) impair or otherwise adversely affect any License
Subsidiary’s interest in and right to control and operate its respective FCC
Licenses free and clear of Liens or (b) materially delay or impair the Company’s
ability to consummate the transactions contemplated by this Agreement, and
neither the Company nor any License Subsidiary has received any written notice
of any alleged violation of Laws.
Section
3.10 Financial
Advisory, Legal and Other Fees.
No
agent, broker, accounting firm, investment bank, other financial advisor,
commercial bank, other financial institution, law firm, public relations firm
or
any other Person is or will be entitled to any fee, commission, expense or
other
amount from the Company or any of the License Subsidiaries in connection with
any of the transactions contemplated by this Agreement or the Transaction
Documents based upon arrangements made by or on behalf of the Company or any
of
the License Subsidiaries, other than any such fee, commission, expense or other
amount that (a) will be, or has been, paid by the Estates or (b) will be assumed
by Opco prior to the Closing.
Section
3.11 ERISA
Compliance.
Neither
the Company nor any License Subsidiary maintains, contributes to or is required
to maintain or contribute to any Employee Plans.
Section
3.12 Taxes.
(a) The
Company and each License Subsidiary have timely filed (or there have been filed
on their behalf) all Tax Returns required to be filed by them under applicable
Law, and all such Tax Returns were and are true, complete and correct in all
respects. All Taxes due and payable by the Company have been timely
paid.
(b) There
are
no Tax Liens upon the assets of the Company except for Permitted
Encumbrances.
(c) The
Company has complied in all material respects with the provisions of the Code
relating to the withholding of Taxes, as well as similar provisions under any
other Laws, and have, within the time and in the manner prescribed by Law,
withheld, collected and paid over to the proper governmental authorities all
amounts required.
8
(d) No
audits
or other administrative proceedings or court proceedings are currently pending
or, to the Knowledge of the Company, asserted with regard to any Taxes or Tax
Returns of the Company.
(e) The
Company has not received a written ruling of a taxing authority relating to
Taxes or entered into a written and legally binding agreement relating to Taxes
with any taxing authority.
(f) The
Company has not requested any extension of time within which to file any Tax
Return, which Tax Return has not since been filed.
(g) The
Company has not agreed to and is not required to make any adjustment pursuant
to
Section 481(a) of the Code (or any predecessor provision) by reason of any
change in any accounting method of the Company, and there is no application
pending with any taxing authority requesting permission for any changes in
any
accounting method of the Company. To the Knowledge of the Company, the IRS
has
not proposed any such adjustment or change in accounting method.
(h) The
Company does not have any liability for Taxes of any Person other than the
License Subsidiaries (i) under Treasury Reg. Section 1.1502-6 (or any similar
provision of state, local or foreign Law), (ii) by contract, or (iii)
otherwise.
(i) The
Company does not have, nor has it ever had, any income which is includable
in
computing the taxable income of a United States person (as determined under
Section 7701 of the Code) under Section 951 of the Code. None of the
Subsidiaries are or have ever been a “passive foreign investment company” within
the meaning of Section 1297 of the Code. The Company is not and never has been
a
“personal holding company” within the meaning of Section 542 of the Code. There
are no gain recognition agreements, within the meaning of Treasury Reg.
1.367(a)-8 or any predecessor provision, between the Company, on one hand,
and a
stockholder of the Company, on the other. There is no pending or threatened
action, proceeding or investigation by any taxing authority for assessment
or
collection of Taxes with respect to the Company in any jurisdiction where the
Company has not filed a Tax Return.
(j) Each
License Subsidiary which is a partnership, joint venture or limited liability
company has been treated since its formation, and continues to be treated for
federal income tax purposes, as a partnership or as a disregarded entity, and
not as a corporation or as an association taxable as a corporation.
(k) For
purposes of this Section 3.12, all representations and warranties with respect
to the Company are deemed to include and to apply to each of the License
Subsidiaries and predecessors (and the subsidiaries of such
predecessors).
(l) No
deficiencies for any Taxes have been proposed, asserted or assessed against
the
Company which have not been paid and there is no outstanding waiver of the
statute of limitations with respect to any Taxes or Tax Returns of the
Company.
(m) The
Company does not have any intercompany items (as defined in Treas. Reg.
1.1502-13(b)(2)), any corresponding items (as defined in Treas. Reg.
1.1502-13(b)(3)) or any recomputed corresponding items (as defined in Treas.
Reg. 1.1502-13(b)(4)).
9
(n) As
used
in this Agreement, (i) the term “Taxes” means (x) any federal, state, county,
local or foreign taxes, charges, fees, levies or other assessments, including
all net income, gross income, sales and use, ad valorem, transfer, gains,
profits, excise, franchise, real and personal property, gross receipt, capital
stock, production, business and occupation, disability, employment, payroll,
license, estimated, stamp, custom duties, severance or withholding taxes or
charges imposed by any Governmental Entity, and includes any interest and
penalties (civil or criminal) on or additions to any such taxes, (y) any
liability for the payment of any amounts described in (x) as a result of being
a
member of an affiliated, consolidated, combined, unitary or other similar group
or as a result of transferor or successor liability, and (z) any liability
for
the payment of any amounts as a result of being a party to any tax-allocation
or
tax-sharing agreement or as a result of any express or implied obligation to
indemnify any other Person with respect to the payment of any amounts of the
type described in clauses (x) and (y) and (ii) the term “Tax Return” means a
report, return or other information required to be supplied to a governmental
entity with respect to Taxes including, where permitted or required, combined
or
consolidated returns.
(o) All
corporate records (including copies of returns, worksheets and any electronic
documentation) pertaining to the preparation of Taxes for all periods that
end
prior to the Closing Date or include the Closing Date have been maintained
in
all material respects.
(p) The
Company is a calendar year taxpayer for all relevant Tax purposes.
Section
3.13 Offering
of Shares.
Neither
the Company nor any Person acting on its behalf has taken any action (including,
without limitation, any offering of any securities of the Company under
circumstances which would require, under the Securities Act, the integration
of
such offering with the offering, issuance and sale of the Shares) which might
reasonably be expected to subject the offering, issuance or sale of the Shares
to the registration requirements of Section 5 of the Securities
Act.
Section
3.14 Limitation
of Representations and Warranties.
EXCEPT
FOR THE REPRESENTATIONS AND WARRANTIES SET FORTH IN THIS AGREEMENT, THE
TRANSACTION DOCUMENTS AND THE CERTIFICATES DELIVERED AT THE CLOSING PURSUANT
TO
SECTION 7.2, THE COMPANY IS NOT MAKING ANY OTHER REPRESENTATIONS OR WARRANTIES
CONCERNING THE FCC LICENSES, THE COMPANY, THE LICENSE SUBSIDIARIES OR ANY OF
THEIR RESPECTIVE AFFILIATES.
ARTICLE
IV
REPRESENTATIONS
AND WARRANTIES OF THE PARENT AND THE ACQUIROR
Except
as
specifically set forth in the disclosure schedule prepared and signed by the
Acquiror and delivered to the Company concurrently with the execution of this
Agreement (the “Acquiror Disclosure Schedule”), each of the Parent and the
Acquiror hereby jointly and severally represents and warrants to the Company
that all of the statements contained in this Article IV are true and complete
as
of the date of this Agreement (or, if made as of a specified date, as of such
date). Each exception set forth in the Acquiror Disclosure Schedule is
identified by reference to, or has been grouped under a heading referring to,
a
specific Section and, except as otherwise specifically stated with respect
to
such exception, relates to such Section.
10
Section
4.1 Investment.
(a) The
Acquiror is, and the Parent indirectly is, acquiring the Shares for investment
for its own account, and not with a view to any resale or distribution thereof
in violation of the Securities Act. Each of the Parent and the Acquiror
understand that the Shares have not been and will not be registered under the
Securities Act or any state securities Laws by reason of specific exemptions
therefrom which depend upon, among other things, the bona fide nature of the
investment intent and the accuracy of each of the Parent’s and the Acquiror’s
representations as expressed herein.
(b) The
Acquiror’s financial condition is such that it is in a position to hold the
Shares for an indefinite period, bear the economic risks of the investment
and
withstand the complete loss of the investment. The Acquiror has extensive
knowledge and experience in financial and business matters and has the
capability to evaluate the merits and risks of such Shares. Each of the Parent
and the Acquiror qualifies as (i) an “accredited investor” as such term is
defined in Section 2(15) of the Securities Act and Regulation D promulgated
thereunder or (ii) a “qualified institutional buyer” as defined in Rule 144A
under the Securities Act.
(c) The
Acquiror (i) has had a complete opportunity to conduct a due diligence
investigation concerning the Company’s business operations, financial affairs
and prospects; (ii) has received all the information it considers necessary
or
appropriate for deciding whether to enter into the transactions contemplated
by
this Agreement and the Transaction Documents; and (iii) has, in conjunction
with
its legal counsel and other advisors, evaluated the risk factors inherent in
an
investment in the Shares.
Section
4.2 Rule
144.
The
Acquiror acknowledges that the Shares must be held indefinitely unless
subsequently registered under the Securities Act and any applicable state
securities Laws or unless exemptions from such registrations are available
Each
of the Parent and the Acquiror is aware of and familiar with the provisions
of
Rule 144 promulgated under the Securities Act which permit limited resale of
securities purchased in a private placement subject to the satisfaction of
certain conditions.
Section
4.3 Organization
of the Parent and Acquiror.
Each of
the Parent and the Acquiror is duly organized and validly existing and (in
the
case of the Acquiror only) in good standing under the laws of the jurisdiction
of its organization.
Section
4.4 Authority
of the Parent and the Acquiror.
(a) Each
of
the Parent and the Acquiror has all right, power and authority to execute and
deliver this Agreement and the Transaction Documents to which it is a party,
to
consummate the transactions contemplated hereby and thereby and to comply with
the terms, conditions and provisions hereof and thereof applicable to the Parent
or the Acquiror, as the case may be.
(b) The
execution, delivery and performance by each of the Parent and the Acquiror
of
this Agreement and each of the Transaction Documents to which it is a party,
the
compliance by each of the Parent and the Acquiror with each of the provisions
of
this Agreement and each of the Transaction Documents and the consummation of
the
transactions contemplated hereby and thereby, are within the power and authority
of each of the Parent and the Acquiror, have been duly authorized and approved
by the requisite actions of each of the Parent and the Acquiror and do not
require any further authorization or consent of either the Parent or the
Acquiror or their respective beneficial owners. This Agreement is the legal,
valid and binding agreement of each of the Parent and the Acquiror, enforceable
against the Parent and the Acquiror in accordance with its terms, except as
such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar Laws from time to time affecting
the
enforcement of creditors’ rights generally.
11
Section
4.5 Non-Contravention.
The
execution, delivery and performance by each of the Parent and the Acquiror
of
this Agreement and the Transaction Documents to which it is a party and the
consummation of the transactions contemplated hereby and thereby, will not
(a)
conflict with or result in a breach of any of the terms and provisions of,
or
constitute a default (or an event which with notice or lapse of time, or both,
would constitute a default) under any agreement, instrument, franchise, license
or permit to which the Parent or the Acquiror is a party or by which any of
their respective properties or assets may be bound or (b) violate or conflict
with any judgment, decree, order, statute, rule or regulation of any court
or
any public, governmental or regulatory agency or body applicable to the Parent
or the Acquiror or any of their respective properties or assets, other than
such
breaches, defaults or violations that have not, and are not reasonably expected
to, materially delay or materially impair the ability of either the Parent
or
the Acquiror to consummate the transactions contemplated by this Agreement
and
the Transaction Documents to which it is a party. The execution, delivery and
performance by each of the Parent and the Acquiror of this Agreement and the
Transaction Documents to which it is a party and the consummation of the
transactions contemplated hereby and thereby, do not and will not violate or
conflict with any provision of the organizational documents of either the Parent
or the Acquiror.
Section
4.6 FCC
Status.
(a) Each
of
the Acquiror and Parent holds or controls all FCC licenses necessary to the
lawful operation of its business and has the requisite FCC qualifications to
hold or control such FCC licenses except as would not be reasonably likely
to
materially delay or materially impair the Parent’s or the Acquiror’s ability to
consummate the transactions contemplated by this Agreement.
(b) There
is
no pending or threatened application, petition, objection or other pleading
with
the FCC or other Governmental Entity challenging the FCC qualifications of
either the Parent or the Acquiror to hold any of its FCC licenses, except for
rulemaking or similar proceedings of general applicability to persons engaged
in
substantially the same business as that conducted by the Parent or the Acquiror
and except as would not be reasonably likely to materially delay or materially
impair the Parent’s or the Acquiror’s ability to consummate the transactions
contemplated by this Agreement.
(c) The
Parent is, and on the Closing Date the Acquiror will be, qualified under FCC
rules and the Communications Act to control the Reorganized
Company.
(d) To
the
Knowledge of each of the Parent and the Acquiror, there are no facts or
circumstances relating to the FCC qualifications of either the Parent or the
Acquiror that would prevent or materially delay the FCC’s grant of any FCC Form
603 (or other appropriate form) application contemplated by this Agreement
under
FCC rules and the Communications Act.
12
Section
4.7 Brokers
and Finders.
No
agent, broker, investment banker, other financial advisor or other Person
engaged by or on behalf of the Parent or the Acquiror is or will be entitled
to
any broker’s or finder’s fee or any other commission or similar fee in
connection with any of the transactions contemplated by this Agreement or the
Transaction Documents.
Section
4.8 Litigation.
There
is no Litigation pending or, to the Knowledge of the Parent and the Acquiror,
threatened against either the Parent or the Acquiror or involving any of their
respective properties or assets by or before any court, arbitrator or other
Governmental Entity which (i) as of the date hereof, in any manner challenges
or
seeks to prevent, enjoin, materially impair the Acquiror’s or Parent’s ability
to consummate, or materially delay the transactions contemplated by this
Agreement or any of the Transaction Documents or (ii) if resolved adversely
to
either the Parent or the Acquiror would reasonably be expected to have a
material adverse effect on the ability of the Parent or the Acquiror to fulfill
its obligations under this Agreement and the Transaction Documents. There is
no
judgment, decree, injunction, rule, or order of any court, governmental
department, commission, agency, instrumentality or arbitrator outstanding
against either the Parent or the Acquiror that could reasonably be expected
to
have a material adverse effect on the ability of either the Parent or the
Acquiror to fulfill its obligations under this Agreement and the Transaction
Documents. Neither the Parent nor the Acquiror is in default under or in breach
of any order, judgment or decree of any court, arbitrator or other Governmental
Entity which would have a material adverse effect on the ability of either
the
Parent or the Acquiror to fulfill its obligations under this Agreement and
the
Transaction Documents.
Section
4.9 Consents
and Approvals.
No
consent, approval, authorization of, declaration, filing, or registration with,
any Governmental Entity is required to be made or obtained by either the Parent
or the Acquiror in connection with the execution, delivery, and performance
of
this Agreement or any of the Transaction Documents, except for the Governmental
Requirements.
Section
4.10 Sufficient
Available Funds.
The
Acquiror (or its assignees) will have available on the Closing Date funds
sufficient to pay the Purchase Price for the Shares.
ARTICLE
V
COVENANTS
OF THE COMPANY
The
Company hereby covenants with the Parent and the Acquiror as
follows:
Section
5.1 Conduct
of Business Pending the Closing.
(a) Except
as
otherwise provided herein or as described in the Plan Term Sheet, from and
after
the date hereof, the Company shall, and shall cause each of the License
Subsidiaries and each of the Company’s other Affiliates to, conduct its
operations relating to the FCC Licenses in the ordinary course, consistent
with
past practice. Subject to the foregoing, and except as otherwise provided
herein, the Company shall, and shall cause each of the License Subsidiaries
and
each of the Company’s other Affiliates to, use its reasonable commercial efforts
to preserve the FCC Licenses intact. The Company shall cause each of the License
Subsidiaries to maintain its right and interest in the FCC Licenses that it
holds. The Company shall and shall cause each of the License Subsidiaries and
each of the Company’s other Affiliates to, maintain the validity of the FCC
Licenses. The Company shall not, and shall cause each of the License
Subsidiaries not to, engage in any action or omit to take any action which
would
be reasonably likely to result in a material adverse effect on the FCC Licenses.
The Company shall, and shall cause each of the License Subsidiaries and each
of
the Company’s other Affiliates to, use their respective commercially reasonable
efforts to comply in all material respects with all Laws. The Company shall
promptly provide the Acquiror and Parent with copies of all applications and
other correspondence of the Company, any of the License Subsidiaries or any
of
the Company’s other Affiliates to the FCC and any notices, orders or
correspondence received by the Company, any of the License Subsidiaries or
any
of the Company’s other Affiliates from the FCC with respect to the FCC
Licenses.
13
(b) Except
(v) for any actions taken by the Company or any of the License Subsidiaries
to
create Opco and to conduct the business of the Excluded Entities provided
that
such
actions have no effect on the FCC Licenses or the transactions contemplated
by
this Agreement or Taxes or Tax attributes and provided
further
that
Opco assumes any Liability incurred in connection with such actions, (w) as
set
forth in Section 5.1(b) of the Disclosure Schedule, (x) as otherwise expressly
contemplated by this Agreement, the Plan Term Sheet or any of the Transaction
Documents, (y) as consented to by the Acquiror in writing (such consent not
to
be unreasonably withheld or delayed) or (z) as required by the Bankruptcy Code
or other applicable Laws, during the period from the date of this Agreement
through and including the Closing Date, the Company shall not, and shall not
permit any of the License Subsidiaries to:
(i) (a)
declare, set aside or pay any dividends (payable in cash, stock, property or
otherwise) on, make any other distributions in respect of, or enter into any
agreement with respect to the voting of, any of its capital stock (other than
intercompany transfers of cash in the ordinary course of business), (b) split,
combine or reclassify any of its capital stock or issue or authorize the
issuance of any other securities in respect of, in lieu of or in substitution
for shares of its capital stock, or (c) purchase, redeem or otherwise acquire
any capital stock in the Company or any of the License Subsidiaries or any
other
securities thereof or any rights, warrants or options to acquire any such shares
or other securities;
(ii) issue,
deliver, sell, pledge or otherwise encumber or subject to any Lien any of its
shares of capital stock or other equity interest or any other voting securities
or any securities convertible into, exercisable for or exchangeable with, or
any
rights, warrants or options to acquire, any such shares, voting securities
or
convertible securities (other than the issuance of shares of Series B Common
Stock upon the exercise or conversion, as the case may be, of Options, Warrants
or the outstanding debt of the Company or any of the Debtor Subsidiaries
convertible into shares of Series B Common Stock, in each case outstanding
on
the date hereof and in accordance with their terms on the date hereof all of
which will be cancelled at the Closing);
(iii) amend
its
charter, bylaws or other comparable organizational documents or amend or waive
any provisions of the Transaction Documents;
14
(iv) acquire
any “business”, as defined in Rule 3-05(a)(2) of Regulation S-X (whether by
merger, consolidation, purchase of assets or otherwise) or acquire any material
equity interest in any Person not an Affiliate (whether through a purchase
of
stock, establishment of a joint venture or otherwise);
(v) (a)
sell,
exchange or license or otherwise dispose of any of the FCC Licenses (including
any spectrum associated with a particular frequency block), (b) enter into
any
new joint ventures or similar projects, (c) enter into any new development
projects, or (d) enter into any (i) new leases or other agreements or
understandings or (ii) amendments to any existing leases, agreements or
understandings;
(vi) change
its methods of accounting, except as required by changes in GAAP; or change
any
of its methods of reporting income and deductions for federal income tax
purposes from those employed in the preparation of the federal income tax
returns for the taxable years ended December 31, 2003, except for future
amendments of those Tax Returns to correct immaterial mistakes or as required
by
changes in Law or regulation or as may be required in connection with the
Bankruptcy Case;
(vii) effect
any settlement or compromise of any pending or threatened proceeding in respect
of which the Company or any of the License Subsidiaries is or could have been
a
party, unless such individual settlement (a) includes an unconditional written
release of the Company and the License Subsidiaries, in form and substance
reasonably satisfactory to the Acquiror, from all liability on claims that
are
the subject matter of such proceeding, and (b) does not include any statement
as
to any admission of fault, culpability or failure to act by or on behalf of
the
Company and the License Subsidiaries;
(viii) (a)
incur
any additional indebtedness, or (b) make any loans, advances or capital
contributions to, or investments in, any Person (other than intercompany
transfers of cash in the ordinary course of business);
(ix) (a)
terminate the employment of any executive officer of the Company other than
for
cause, (b) enter into any new employment agreement with any existing director
or
executive officer, (c) grant to any current or former director or executive
officer of the Company or the License Subsidiaries any increase in compensation,
bonus or other benefits (other than increases in base salary in the ordinary
course of business consistent with past practice or arising due to a promotion
or other change in status and consistent with generally applicable compensation
practices), (d) grant to any such current or former director, executive officer
or other employee any increase in severance or termination pay, or (e) amend,
adopt or terminate any employment, deferred compensation, severance, termination
or indemnification agreement with any such current or former director, executive
officer or employee;
(x) enter
into any new agreement which has a non-competition, geographical restriction
or
similar covenant or amend any existing agreement to add in a manner adverse
to
the Parent or Acquiror a non-competition, geographical restriction or similar
covenant;
15
(xi) incur
any
Liabilities, other than in the ordinary course, consistent with past practice
(it being understood that to the extent incurred, Opco will assume such
Liabilities prior to the Closing); or
(xii) agree
to
take, any of the foregoing actions.
(c) From
and
after the date hereof, the Company will use its commercially reasonable efforts
and will cause each of the License Subsidiaries to use their commercially
reasonable efforts not to enter into any new Commitments that relate to the
business of any of the Excluded Entities, subject to Section 5.1(b)(x) above.
From and after the date on which the Confirmation Order becomes a Final Order,
neither the Company nor any License Subsidiary will own or lease any assets,
employ any Person, possess any permits, licenses or franchises, incur any
Liability or conduct any business other than (i) directly, or, in the case
of
the Company and NPI, indirectly, holding the FCC Licenses and making regulatory
filings in connection therewith, (ii) in connection with the transactions
contemplated by this Agreement, (iii) in the case of NPI, holding the
outstanding capital stock of NPPI, or (iv) in the case of the Company, holding
the stock of NPCI and NPI.
Section
5.2 Access
to Information.
The
Company shall, and shall cause each of the License Subsidiaries and the Excluded
Entities (in the case of the Excluded Entities, solely with respect to
information related to Taxes and network operations on spectrum encompassed
within the FCC Licenses) to, afford to the Parent and the Acquiror and to their
respective officers, employees, accountants, counsel, financial advisors and
other representatives, reasonable access during normal business hours from
the
date hereof until the Closing to all the properties, books, contracts,
commitments, personnel, reports and records of or relating to the Company,
any
of the License Subsidiaries or any of the Excluded Entities (in the case of
the
Excluded Entities, solely with respect to information related to Taxes and
network operations on spectrum encompassed within the FCC Licenses) and during
such period the Company shall, and shall cause each of the License Subsidiaries
and the Excluded Entities (in the case of the Excluded Entities, solely with
respect to information related to Taxes and network operations on spectrum
encompassed within the FCC Licenses) to, furnish promptly to the Parent and
the
Acquiror, and to any other person that the Parent and the Acquiror may
reasonably request (a) a copy of each report, schedule, disclosure statement
and
other document that relates in whole or in part to this Agreement, the FCC
Licenses or the Acquiror or the Parent filed by it during such period in the
Bankruptcy Case, (b) such operating reports, financial reporting packages and
other operational and/or financial information sent to management or the Board
of Directors or to the banks with whom the Company and the License Subsidiaries
maintain credit facilities or lines of credit or to the Creditors’ Committee and
(c) all other information concerning its business, properties and personnel
as
the Acquiror may reasonably request; provided,
however,
that
nothing in this Section 5.2 or otherwise shall require the Company to furnish
to
the Acquiror or Parent (i) any materials prepared by the Company’s financial
advisors or legal advisors with respect to an Alternative Proposal (as defined
herein), (ii) access or information in violation of applicable Law or (iii)
access or information relating to (A) any of the Excluded Entities to the extent
that such information is not related to Taxes and does not relate to the FCC
Licenses (including for these purposes network operations on spectrum
encompassed within the FCC Licenses), this Agreement or the Transaction
Documents or (B) to the extent that such information is not related to Taxes,
the assets and liabilities of the Company or any of the License Subsidiaries
to
be assigned to or assumed by any of the Excluded Entities pursuant to the
Bankruptcy Plan.
16
Section
5.3 No
Solicitation of Alternative Proposals.
(a) Except
as
expressly permitted in writing by the Acquiror, from and after the date of
this
Agreement, the Company shall not authorize or permit any of the License
Subsidiaries or any of the Company’s or the License Subsidiaries’ respective
directors, officers, employees, representatives, agents and advisors (including
any investment banker, other financial advisor, attorney, accountant or other
representative retained by any of them) (all such parties, “Representatives”),
directly or indirectly, including by cooperating with the Creditors’ Committee,
to (i) solicit, initiate, or take any other action designed to solicit any
proposal that constitutes, or would be reasonably expected to lead to, a
proposal or offer for a transaction pursuant to a plan of reorganization,
merger, consolidation, business combination, dissolution, recapitalization,
transfer, exchange or issuance of shares, debt refinancing, sale of assets
or
similar transaction involving the Company, any of the License Subsidiaries
or
any of the FCC Licenses (collectively, an “Alternative Proposal”), (ii)
participate in any substantive discussions or negotiations regarding any
Alternative Proposal, except that discussions or negotiations may be held with,
and non-public information provided to, the Creditors Committee concerning
an
Alternative Proposal, or (iii) enter into any letter of intent, agreement in
principle, acquisition agreement or other similar agreement related to any
Alternative Proposal. Upon execution of this Agreement, each of the Company
and
the License Subsidiaries shall immediately cease any existing activities,
discussions or negotiations with any parties heretofore conducted with respect
to any Alternative Proposal. Notwithstanding anything to the contrary that
may
be set forth in the foregoing, none of the Company or any of the License
Subsidiaries or any of their respective Representatives will be precluded from
providing information to, or discussing and negotiating with, any Person that
has made, after the date hereof, an unsolicited bona fide Alternative Proposal
in writing. In addition, none of the Company or any of the License Subsidiaries
or any of their respective Representatives will be precluded from executing
an
agreement providing for an Alternative Proposal or recommending any such
Alternative Proposal to the creditors and stockholders of the Company, if in
the
good faith determination of the Board of Directors (in consultation with its
financial advisors) such Alternative Proposal, together with the value of any
other net assets available for stakeholders, provides a higher value to the
stakeholders of the Company than the sum of (a) Purchase Price and (b) the
value
of Opco and that the Board of Directors determines in good faith (after
consultation with outside legal counsel) that it is advisable to authorize
such
actions in order to comply with its fiduciary duties or under the Bankruptcy
Code. No Person considering making an Alternative Proposal shall be provided
non-public information by the Company unless such Person has executed a
confidentiality agreement with terms that are materially no less favorable
to
the Company than those contained in the Non-Disclosure Agreement between the
Parent and the Company dated May 19, 1999 (the “Confidentiality
Agreement”).
(b) The
Company shall notify the Acquiror immediately (in no event later than 24 hours)
after (i) receipt by the Company or a License Subsidiary of any written
Alternative Proposal by any Person, or (ii) the delivery by the Company or
the
License Subsidiaries of any non-public information in connection with an
Alternative Proposal or the granting of access by the Company or the License
Subsidiaries to the properties, books or records of the Company or the License
Subsidiaries by any Person that has made an Alternative Proposal. Such notice
shall be in writing and shall indicate, to the extent not prohibited by the
terms of any confidentiality agreement, the identity of the offeror and shall
also indicate all the material terms and conditions of such proposal, inquiry
or
contract.
17
(c) Notwithstanding
any other provision of this Agreement, the Company agrees that it will not
nor
will any License Subsidiary (i) enter into a definitive agreement relating
to an
Alternative Proposal unless such definitive agreement shall provide for an
obligation by the Company to pay the Break-Up Payment at the time provided
in
Section 8.2(b) or (ii) consummate any Alternative Proposal unless concurrent
with such consummation of the Break-Up Payment is paid to the Parent in
accordance with Section 8.2(b).
Section
5.4 Use
of
Proceeds.
The
Closing Cash received by the Company shall be used by the Company in accordance
with the Plan Term Sheet.
Section
5.5 Bankruptcy
Plan.
(a) The
Company shall, and shall cause each of the Debtor Subsidiaries to, use
commercially reasonable efforts to restructure the capitalization of the Company
and the License Subsidiaries pursuant to the Bankruptcy Plan in accordance
with
the Plan Term Sheet. In furtherance of and without limiting the generality
of
the foregoing, the Company shall, and shall cause each of the Debtor
Subsidiaries to, (i) seek to obtain the Acquisition Approval Order as promptly
as practicable but no later than twenty (20) Business Days following execution
of this Agreement, (ii) file with the Bankruptcy Court the Bankruptcy Plan
and a
related Disclosure Statement as promptly as practicable but no later than
fifteen (15) Business Days following the entry of the Acquisition Approval
Order, and (iii) seek Bankruptcy Court approval of the Disclosure Statement,
the
Required Consents and the Confirmation Order as expeditiously as possible in
light of all circumstances. The Acquiror shall have a reasonable opportunity
to
review and comment on the Bankruptcy Plan, the Disclosure Statement and the
Confirmation Order prior to their being filed with the Bankruptcy Court and
each
of the Bankruptcy Plan, the Disclosure Statement and the Confirmation Order
shall be in form and substance reasonably satisfactory to the Acquiror (it
being
understood that any provision of the Bankruptcy Plan or the Disclosure Statement
that is set forth in the Plan Term Sheet or could not reasonably be expected
to
adversely affect or delay the transactions contemplated by this Agreement,
including (A) the ability of the Company or any of the License Subsidiaries
to
obtain a discharge of Claims and Liabilities as contemplated by Section 7.2(g)
or (B) any License Subsidiary’s interest in and right to control and operate its
respective FCC Licenses free and clear of Liens, shall be deemed reasonably
satisfactory to the Acquiror).
(b) As
soon
as reasonably practicable after the date hereof, the Company shall and shall
cause each Debtor Subsidiary to, file a motion for approval of the Acquisition
Approval Order. From and after the date hereof until the earlier of the
termination of this Agreement and the Closing, the Company shall submit to
Parent and the Acquiror for their reasonable review and comment all
non-ministerial motions, orders, applications and supporting papers and notices
prepared by the Company (including forms of orders and notices to interested
parties) relating in whole or in part to (i) this Agreement, Parent or the
Acquiror, (ii) the ability of the Company or any of the License Subsidiaries
to
obtain a discharge of Claims and Liabilities under the Bankruptcy Plan as
contemplated by Section 7.2(g), viii) any License Subsidiary’s interest in and
right to control and operate its respective FCC Licenses free and clear of
Liens, or (iv) Taxes, in each case sufficiently prior to their being filed
with
the Bankruptcy Court or Governmental Entity to enable the Parent and the
Acquiror and their advisors to adequately review and comment
thereon.
(c) From
and
after the date hereof through the Closing Date, Parent and the Acquiror shall
not take any action in the Bankruptcy Case, including the filing of a plan
of
reorganization or offer to purchase any assets of the Company or any of its
Affiliates, without the prior written consent of the Company (although nothing
herein shall prevent Parent and the Acquiror from asserting their rights or
fulfilling their obligations under this Agreement).
18
Section
5.6 Releases.
The
Company shall use commercially reasonable efforts to ensure that the
Confirmation Order shall provide, among other things, that the directors,
officers, advisors, attorneys, investment bankers and agents of the Company,
the
Acquiror and their respective Affiliates, members, managers, shareholders,
partners, representatives, employees, attorneys and agents are released from
any
and all Litigation related to the Company and the License Subsidiaries, their
business, their governance, their securities disclosure practices, the purchase
or sale of any of the Company’s equity or debt securities and all actions taken
in connection with the Bankruptcy Plan and that directors and officers of the
Company release the Company from their indemnity rights.
Section
5.7 Tax
Matters.
(a) Tax
Covenants.
The
Company hereby covenants and agrees that (i) the consolidated net operating
loss
(as defined in Treas. Reg. 1.1502-21(e), a “CNOL”) of the consolidated group of
which the Company is the parent (the “Company Group”) for its taxable year
commencing on January 1, 2005 and ending on the Closing Date (excluding any
portion thereof that will not be available to the Company or the License
Subsidiaries after the Closing pursuant to Treas. Reg. 1.1502-21 or otherwise)
(the “2005 CNOL” ), will be not less than $1,362,000,000 (the “Base CNOL” ),
(ii) the 2005 CNOL will not be subject to reduction subsequent to the Closing
Date pursuant to Treas. Reg. 1.1502-28T, a final IRS determination or otherwise,
except as a direct result of actions taken by the Company or any License
Subsidiary subsequent to the Closing (other than the carrying back of any such
consolidated net operating loss to reduce taxable income of the Company Group
for prior taxable periods), and (iii) the Tax liability of the Company and
its
subsidiaries for all taxable periods ending prior to or that include the Closing
Date, calculated as of the Closing Date as if the Closing Date were the last
day
of any relevant taxable period that includes but does not end on the Closing
Date, will be $0 taking into account any income and gain generated by the
transactions contemplated in this Agreement (including any income taken into
account pursuant to Treas. Reg. 1.1502-19 or Temp. Reg. 1.1502-19T (or any
corresponding provisions of state, local or foreign Law) as a result of any
excess loss account (as defined in Treas. Reg. 1.1502-19(a)(2)).
(b) Tax
Indemnity.
The
Parent, the Acquiror, the Company, the License Subsidiaries and any of their
Affiliates (the “Indemnified Parties”) shall be indemnified for any and all
Taxes, costs (including reasonable attorneys’ or accountants’ fees), interest,
penalties or other losses arising out of, based upon or relating or attributable
to (without duplication): (i) any breach of or inaccuracy in any representation
or warranty contained in Section 3.12 (without regard to any materiality or
knowledge qualifier contained therein), (ii) any Tax liability of the Company
and its subsidiaries as calculated in accordance with Section 5.7(a)(iii),
and
(iii) the value, determined pursuant to Section 5.7(c), of the excess, if any,
of the Base CNOL over the 2005 CNOL (taking into account any reductions thereto
that occur subsequent to the Closing Date that are inconsistent with the
covenant contained in Section 5.7(a)(ii)) (the “CNOL Shortfall” and, the value
of the CNOL Shortfall together with taxes and losses described in clauses
5.7(b)(i) and 5.7(b)(ii), “Indemnifiable Losses”).
19
(c) Computation
of Value of the CNOL Shortfall.
The
value of a CNOL Shortfall shall be equal to the sum of (i) to the extent any
portion of the Base CNOL represented by the CNOL Shortfall has already been
utilized in a Tax Return of the Company or any affiliated group of which Company
or any of the License Subsidiaries is a member (assuming the portion of the
Base
CNOL represented by the CNOL Shortfall is utilized after utilizing the remainder
of the Base CNOL but before using any other CNOLs or other attributes available
to the Parent, the Acquiror, any member of the Company Group or any of their
Affiliates), an amount equal to the product of (x) such utilized portion of
the
Base CNOL represented by such CNOL Shortfall and (y) 0.38 and (ii) to the extent
any portion of the Base CNOL represented by the CNOL Shortfall has not yet
been
utilized in a Tax Return of the Company or any affiliated group of which Company
or any of the License Subsidiaries is a member (assuming the portion of the
Base
CNOL represented by the CNOL Shortfall is utilized after utilizing the remainder
of the Base CNOL but before using any other CNOLs or other attributes available
to the Parent, the Acquiror, any member of the Company Group or any of their
Affiliates), the value of such yet to be utilized Base CNOL represented by
such
CNOL Shortfall determined based on the following assumptions: (I) an effective
Tax rate of 38.0%, (II) a discount rate of 8.75% and (III) full utilization
in
equal installments as of December 31 of each year from the year in which such
CNOL Shortfall arises through December 31, 2008. The value of any such CNOL
Shortfall, as calculated pursuant to the prior sentence, shall also include
any
other costs (including reasonable attorneys’ or accountants’ fees), interest,
expenses or other losses of the Parent, the Acquiror, the Company, the License
Subsidiaries and any of their Affiliates arising out of, based upon or relating
or attributable thereto. The value of a CNOL Shortfall, as calculated pursuant
to the prior two sentences, shall be reduced by the value of any additional
deductions to which the Parent and the Acquiror reasonably expect the Company
Group to become entitled that results from expenditures incurred by the Company
Group on or prior to the Closing Date that are not included in the 2005 CNOL
(after giving effect to any disallowance). The value of any such additional
deductions shall be determined based on (X) an effective Tax rate of 38.0%,
(Y)
a discount rate of 8.75% and (Z) full deductibility of such additional
deductions in equal installments over 15 years (or such shorter period over
which such deductions are allowable).
(d) Preparation
and Filing of Tax Returns For Tax Periods Ending On or Prior to the
Closing.
Not
later than sixty (60) days prior to the date for filing thereof, Opco shall
cause the Company and each License Subsidiary to prepare and provide to the
Parent and the Acquiror for their review and comment all Tax Returns required
to
be filed by the Company or any License Subsidiary for any taxable period ending
on or prior to the Closing Date. The Parent and the Acquiror shall have thirty
(30) days from the receipt of any such Tax Return to contest such Tax Return
by
providing the Company, in writing, a reasonably detailed explanation as to
those
matters set forth in such Tax Return with which the Parent or the Acquiror
disagrees (the “Objection”). To the extent the Parent or the Acquiror does not
provide a timely Objection, the Parent and the Acquiror shall be deemed to
have
agreed to such Tax Return, and Opco shall cause the Company or the relevant
License Subsidiary to promptly file such Tax Return, and Opco shall pay all
Taxes as shown on such Tax Return. To the extent the Parent or the Acquiror
does
provide a timely Objection, the Parent, the Acquiror and the Company shall
use
good faith efforts to resolve any disputes set forth in the Objection within
fifteen (15) days from the receipt of the Objection. To the extent the Parent,
the Acquiror and the Company are not able to resolve all disputes within such
time period, Opco shall cause the Company or the relevant License Subsidiary
to
prepare and promptly file such Tax Return in the manner requested by Opco,
and
Opco shall pay all Taxes as shown on such Tax Return; provided,
however,
that,
in the case of any disputed item, Opco shall cause the Company or the relevant
License Subsidiary to prepare such Tax Return in accordance with the Parent’s or
Acquiror’s desired treatment and Opco shall pay all Taxes as shown on such Tax
Return provided that the Company or the relevant License Subsidiary receives
a
“more likely than not” tax opinion from Skadden, Arps, Slate, Meagher, &
Xxxx LLP reasonably satisfactory to Opco confirming the Parent’s or Acquiror’s
desired treatment of such disputed item. The Parent’s and the Acquirer’s actions
pursuant to this Section 5.7(d) do not waive or modify their right to payment
and indemnification as set forth in this Section 5.7.
20
(e) Accelerated
Proceedings.
The
Company, the Parent, the Acquiror and Opeo, on behalf of themselves and their
Affiliates, shall use best efforts to determine with finality the extent of
the
Indemnified Parties’ Indemnifiable Losses pursuant to Section 5.7(b)(iii). The
Company, the Parent and the Acquiror agree that such efforts shall include,
without limitation, (A) either of (i) seeking to obtain one or more closing
agreements pursuant to Code section 7121 (each, a “Closing Agreement”), whether
pursuant to one or more pre-filing agreements with the IRS in accordance with
Revenue Procedure 2001-22 or otherwise, with respect to the Company Group’s
taxable periods (for United States federal income Tax purposes) commencing
on
January 1, 2004 and January 1, 2005 or (ii) seeking (x) expedited review by
the
IRS, under Section 505(b) of the Bankruptcy Code, of the federal income Tax
Return of the Company Group filed for the taxable period (for United States
federal income Tax purposes) commencing on January 1, 2004 and (y) to obtain
a
Closing Agreement with respect to the Company Group’s taxable period (for United
States federal income Tax purposes) commencing on January 1, 2005, which Closing
Agreement together with an election under Section 172(b)(3) of the Code or
otherwise produces finality with respect to the Company Group’s taxable period
(for United States federal income Tax purposes) commencing on January 1, 2004
and (B) seeking to obtain one or more Closing Agreements, pursuant to a
pre-filing agreement or otherwise, for taxable periods (for United States
federal income Tax purposes) ending after the Closing Date. For all periods
prior to the Closing, Opco shall cause the Company and each License Subsidiary
to, (I) keep the Parent and the Acquiror informed as to the status of any such
proceeding and any discussions, negotiations or arrangements related thereto
and
(II) afford the Parent and the Acquiror the opportunity to participate fully
in
any and all meetings, telephone calls or other conferences with respect thereto.
For all periods subsequent to the Closing, the Company shall, or shall cause
each License Subsidiary to, (A) use reasonable commercial efforts to pursue
any
such proceedings in a manner to minimize the amount of the Indemnified Parties’
Indemnifiable Losses; provided,
however,
that
none of the Company, any License Subsidiary, the Parent, the Acquiror or any
of
their Affiliates shall be required to pursue any such proceeding if the Company,
any License Subsidiary, the Parent, the Acquiror or any of their Affiliates
could be materially and adversely prejudiced thereby and (B) keep Opco informed
as to the status of any such proceedings and any discussions, negotiations
or
arrangements related thereto. The Company or Opco, as the case may be, shall
not, and shall cause each License Subsidiary not to, file or submit any document
to any taxing authority in connection with any such proceeding without first
providing the Parent and the Acquiror or Opco, as the case may be, with (X)
copies of any such document and (Y) an opportunity to review and comment on
any
such document prior to such filing or submission.
(f) Tax
Audits.
For all
periods after the Closing Date, so long as any Escrow Amount remains, the
Company shall promptly notify Opco in writing upon receipt of any written notice
of any pending or threatened audit, assessment or administrative proceeding
(a
“Tax Claim”) received by the Company or any License Subsidiary from any Tax
authority with respect to an Indemnifiable Loss; provided,
however,
that a
failure to give such notice will not affect the Indemnified Parties’ right to
indemnification unless and solely to the extent Opco is materially and adversely
prejudiced as a consequence of such failure. The Company or the relevant License
Subsidiary shall control the conduct of any such Tax Claim and shall have the
rights to settle, compromise and/or concede such Tax Claim; provided,
however,
that
the Company or the relevant License Subsidiary shall not settle, compromise
and/or concede such asserted liability if such settlement, compromise or
concession could increase any Indemnifiable Loss without the consent of Opco,
not to be unreasonably withheld, conditioned or delayed; provided,
further,
however,
that
the Company shall not be required to seek a judicial determination with respect
to any Tax Claim.
21
(g) Payments.
Any
amounts owed to any Indemnified Party under this Section 5.7 shall be paid
by
the Escrow Agent out of the Escrow Amount in cash by wire transfer of
immediately available funds to an account designated by the relevant Indemnified
Party within three (3) days of the Escrow Agent’s receipt of a joint written
notice from the Acquiror and Opco; provided,
however,
that
the Indemnified Parties shall not be entitled to any indemnity for Indemnifiable
Losses to the extent such Indemnifiable Losses exceed the Escrow
Amount.
(h) Survival.
Notwithstanding any other provision of this Agreement to the contrary, the
obligations of the parties set forth in this Section 5.7 and in Section 7.2(j)
and the representation and warranties set forth in Section 3.12 shall survive
until the expiration of the applicable statute of limitations of any such matter
(including extensions thereof).
(i) Release
of Escrow Amount.
After
the payment of an Indemnifiable Losses (and, to the extent provided in the
Escrow Agreement, Losses (as defined in Section 7.2(g)(iii))), the Escrow Amount
shall be released to Opco upon the expiration of all relevant survival periods
set forth in Section 5.7(h). Notwithstanding anything to the contrary contained
in the immediately preceding sentence, at any time, an amount equal to the
excess of (x) the Escrow Amount over (y) the aggregate amount, in the reasonable
judgment of the Parent and the Acquiror, of potential remaining Indemnifiable
Losses at such time (i.e., adjusted for all items and periods for which the
Company, in the reasonable judgment of the Parent and the Acquiror or pursuant
to a legally binding agreement with the IRS, has received finality), shall
be
released to Opco. Any portion of the Escrow Amount to be released in accordance
with this Section 5.7(i) shall be paid by the Escrow Agent out of the Escrow
Amount in cash by wire transfer of immediately available funds to an account
designated by Opco within three (3) days of the Escrow Agent’s receipt of a
joint written notice from the Acquiror and Opco.
(j) Cooperation.
Each of
Opco, the Acquiror, the Company and the License Subsidiaries shall provide
the
other parties with such information and records and shall make such of its
officers, employees and agents available as may be reasonably requested by
any
of the parties in connection with the preparation of any Tax Return or any
audit
or other proceeding that relates to the Company or any of the License
Subsidiaries. The Parent, the Acquiror and the Company shall promptly inform
Opco of each Tax Return in which any portion of the 2005 CNOL is claimed and
the
amount so claimed.
Section
5.8 Global
Resolution Agreement.
The
Company and each of its Affiliates that is a party to the Global Resolution
Agreement shall fully comply, with its obligations pursuant to the Global
Resolution Agreement that relate to this Agreement (including the timely
provision of the Notice of Sale (as defined in the Global Resolution Agreement)
within 15 days from the date of this Agreement, pursuant to Section 10 of the
Global Resolution Agreement).
22
ARTICLE
VI
ADDITIONAL
COVENANTS
Section
6.1 Consents.
(a) FCC
Approvals.
The
Company and the Acquiror shall, as promptly as practicable, but in no event
later than ten (10) business days following the execution of this Agreement,
file with the FCC one or more FCC Form 603 (or other appropriate form)
applications (“FCC Applications”) seeking consent for the transfer of control of
the FCC Licenses to the Acquiror. The FCC Applications shall include a request
that the FCC as part of its approval of the FCC Applications explicitly state
that under the FCC’s rules, and as memorialized in the Global Resolution
Agreement, there are no unjust enrichment obligations associated with the FCC
Licenses. The Company and the Acquiror shall cooperate and use their respective
commercially reasonable efforts to prosecute such applications to a favorable
conclusion, including the preparation and filing of any request for waiver
that
the FCC indicates is necessary to grant the applications, and shall each bear
its own costs for such filings. The Company and the Acquiror shall respond
with
reasonable diligence and dispatch to any request for additional information
made
in response to such filings. No party hereto shall independently participate
in
any formal meeting with the FCC in respect of any such applications without
giving the other parties hereto prior notice of the meeting, and, to the extent
permitted by the FCC, the opportunity to attend and/or participate.
(b) HSR
Filing.
Except
as otherwise agreed in writing by the parties, as soon as reasonably practicable
following the execution of this Agreement but in no event later than twenty
(20)
Business Days after the date hereof, the parties will make, or cause to be
made,
such filings as are required to be made by them under the HSR Act in connection
with the transactions contemplated hereby provided the Parent may delay the
submission of such filings for up to ten (10) Business Days. Each party will
cooperate in the preparation of, and will file complete and accurate
notification and report forms with respect to the transactions contemplated
hereby, pursuant to the HSR Act and the rules and regulations promulgated
thereunder, and will file on a timely basis such additional information and
documentary materials as may be requested by any Governmental Entity pursuant
to
the HSR Act. Each party will request early termination of the waiting period
under the HSR Act. Each party shall promptly inform the other of any inquiries
or communications from any such Governmental Entity with regard to such filings,
information or materials. Each party shall respond with reasonable diligence
and
dispatch to any request for additional information made in response to such
filings. Each party shall pay its respective costs of compliance with the HSR
Act, except that the Acquiror shall be responsible for the Federal Trade
Commission filing fee for any required filing under the HSR Act. No party hereto
shall independently participate in any formal meeting with any Governmental
Entity in respect of any such filings, information or materials without giving
the other parties hereto prior notice of the meeting and, to the extent
permitted by such Governmental Entity, the opportunity to attend and/or
participate.
(c) Each
party hereto shall use commercially reasonable efforts to take, or cause to
be
taken, all such reasonable further actions and to do, or cause to be done,
all
things reasonably necessary, proper or advisable to obtain the consents and
approvals it is required to obtain under any Law in order to consummate and
make
effective as promptly as practicable the transactions contemplated by this
Agreement and the Transaction Documents including obtaining the Governmental
Requirements; provided,
however,
that
neither the Parent, the Acquiror nor any of their Affiliates shall be required
to divest any assets or pay any consideration (other than customary filing
fees
and related legal expenses) to obtain such consents and approvals. The Parent
will have the primary role in conducting any discussions or negotiations with
respect to obtaining the HSR Approval. The Company will cooperate with the
Parent and the Acquiror in their efforts to obtain and satisfy the terms and
conditions of any such consents and approvals, including, without limitation,
taking such actions that the Parent deems necessary or appropriate to implement
any agreement or order entered into with, or issued by, any Governmental Entity,
but only to the extent that such actions would be consistent with the use of
the
Company’s commercially reasonable efforts hereunder.
23
(d) The
Acquiror and Parent will furnish such information as the Company may reasonably
request in connection with the Bankruptcy Case and will otherwise reasonably
support the Company’s preparation and presentation of any motion, filing,
disclosure statement or other pleading in the Bankruptcy Case consistent with
the terms of this Agreement.
Section
6.2 Confidentiality.
The
Confidentiality Agreement shall continue in full force and effect,
notwithstanding the execution of this Agreement or the subsequent termination
of
this Agreement.
Section
6.3 Notification
of Certain Matters.
From
the date hereof through the Closing, the Company shall give prompt notice to
the
Acquiror and Parent of the occurrence, or failure to occur, of any event the
occurrence or failure of which caused any of the Company’s representations or
warranties contained in this Agreement to be untrue or inaccurate in any
material respect; provided,
however,
that no
such notification shall be deemed for any purpose under this Agreement to permit
the Company to alter or amend the representations and warranties contained
herein. From the date hereof through the Closing, the Acquiror or Parent shall
give prompt notice to the Company of the occurrence, or failure to occur, of
any
event the occurrence or failure of which caused any of the Acquiror’s or
Parent’s representations or warranties contained in this Agreement to be untrue
or inaccurate in any material respect; provided,
however,
that no
such notification shall be deemed for any purpose under this Agreement to permit
the Acquiror or Parent to alter or amend the representations and warranties
contained herein.
Section
6.4 Name
Following the Closing.
Following the Closing Date, none of the Acquiror, the Company, the License
Subsidiaries and their respective Affiliates shall have any right, title or
interest in the name “NextWave” (or any variation thereof) or any trademarks,
trade names, logo or symbols related thereto. As soon as reasonably practicable
following the Closing (and in any event, within sixty (60) days thereafter),
the
Acquiror shall cause the Company and each of the License Subsidiaries to amend
the organizational documents of each such entity to the extent necessary to
remove the “NextWave” name (and any variation thereof) from its
name.
Section
6.5 Books
and Records.
From
and after the Closing, Opco, the Company and the License Subsidiaries shall
each
preserve and keep, in accordance with their document retention policies, their
respective financial and Tax books and records that exist as of the Closing
Date, and shall make such books and records and personnel available to each
other as may reasonably be required by any of them in connection with any
matter, including any insurance claim, audit or legal proceeding or
investigation; provided,
however,
that in
no event shall Opco, the Company or the License Subsidiaries be obligated to
provide any information the disclosure of which would jeopardize any privilege
available to Opco, the Company, the License Subsidiaries or their respective
Affiliates relating to such information or which would cause Opco, the Company,
the License Subsidiaries or their respective Affiliates to breach a
confidentiality obligation by which any of them is bound. If Opco, the Company
or any of the License Subsidiaries (the “Disposing Parties”) decides to dispose
of any such financial or Tax books and records, including ledgers, balance
sheets, income statements, operating reports, journals, check registers,
accounts payable, company capital accounts, receipts, bank statements, tax
returns and associated support, before doing so, at least ninety (90) days
prior
notice to such effect shall be given by the applicable Disposing Party of such
books and records to the other parties and such other parties shall have the
opportunity (but not the obligation), at their sole cost and expense, to remove
and retain all or any part of such books and records as they may in their
respective sole discretion select.
24
Section
6.6 Opco.
On or
before the date the Confirmation Order becomes a Final Order, the Company shall
cause Opco to become a party to this Agreement, and the Acquiror and Parent
shall consent to amend this Agreement to include Opco as a party
hereto.
ARTICLE
VII
CONDITIONS
Section
7.1 Conditions
to Each Party’s Obligations.
The
respective obligation of each party to consummate the transactions contemplated
hereby shall be subject to the satisfaction at or prior to the Closing of each
of the following conditions:
(a) Governmental
Approvals.
The HSR
Approval relating to the transactions contemplated by this Agreement and the
Transaction Documents shall have occurred.
(b) No
Injunctions or Restraints.
No
temporary restraining order, preliminary or permanent injunction or other order
issued by any court of competent jurisdiction preventing consummation of any
of
the transactions contemplated hereby shall be in effect.
Section
7.2 Conditions
to the Acquiror’s Obligations.
The
obligation of the Acquiror to consummate the transactions contemplated hereby
shall be subject to the satisfaction at or prior to the Closing of each of
the
following conditions:
(a) Representations
and Warranties.
The
representations and warranties of the Company contained in this Agreement (i)
that are qualified as to materiality or by reference to Material Adverse Effect
shall be true and correct and (ii) that are not so qualified shall be true
and
correct in all material respects, in each case as of the Closing Date, except
to
the extent such representations and warranties expressly relate to a particular
date (in which case, on and as of such particular date). The Company shall
have
delivered to the Acquiror and Parent at the Closing a certificate signed on
behalf of the Company by the Company’s Chief Executive Officer, dated the
Closing Date, in form and substance reasonably satisfactory to the Acquiror
and
Parent, to the foregoing effect.
(b) Performance
of Obligations.
The
Company shall have performed in all material respects all obligations required
to be performed by it under this Agreement at or prior to the Closing (for
this
purpose any materiality qualifiers contained in any covenant shall be
disregarded) and the Company shall have delivered to the Acquiror and Parent
at
the Closing a certificate signed on behalf of the Company by the Company’s Chief
Executive Officer, dated the Closing Date, in form and substance reasonably
satisfactory to the Acquiror, to the foregoing effect.
25
(c) The
FCC Approval.
Notwithstanding any other provision in this Agreement, and without limiting
the
foregoing, (i) the FCC shall have issued the FCC Approval (a) without any
modification to the amount of the Purchase Price, (b) without any requirement
that the Acquiror pay any amount to the FCC or any other party (other than
the
Section 3 Payment) and (c) without any other material adverse conditions imposed
on the Reorganized Company, Acquiror or any of its Affiliates, other than such
conditions that are generally applicable to holders of FCC licenses, and (ii)
FCC Approval, issued on the basis described in clause (i) above, shall have
become a Final Order. The parties specifically agree that if the FCC Approval
does not state that under the FCC’s rules, and as memorialized in the Global
Resolution Agreement, there are no unjust enrichment obligations associated
with
the FCC Licenses, then the FCC Approval shall be deemed to contain a material
adverse condition imposed on the Acquiror.
(d) Other
FCC Matters.
The
Company shall have delivered (i) to the Acquiror and the Parent a certificate
signed on behalf of the Company by an officer of the Company and each of the
License Subsidiaries setting forth that portion of the Purchase Price to be
delivered to the FCC (the “Section 3 Payment”) in accordance with the Global
Resolution Agreement by and among the Company, the License Subsidiaries and
NWI,
on the one hand, and the FCC on the other hand, dated as of April 20, 2004
(the
“Global Resolution Agreement”), and (ii) evidence reasonably satisfactory to the
Acquiror of the FCC’s agreement as to the amount of the Section 3
Payment.
(e) Transaction
Documents.
All of
the Transaction Documents shall be in full force and effect and there shall
exist no material breach of, or default under, any of the Transaction Documents
by the Company.
(f) Bankruptcy
Case.
(i) The
Bankruptcy Plan, in form and substance reasonably satisfactory to the Acquiror
(it being understood that the standard for Acquiror’s reasonable satisfaction is
subject to Section 5.5(a)) shall have been approved by the Bankruptcy Court
pursuant to the Confirmation Order, (ii) the Acquisition Approval Order shall
be
in form and substance reasonably satisfactory to the Acquiror and shall be
a
Final Order, and (iii) the Confirmation Order and each other substantive order
of the Bankruptcy Court in respect of the Bankruptcy Plan which affects the
economic or other interests of the Acquiror or the Parent shall be a Final
Order.
(g) The
Confirmation Order.
The
Confirmation Order shall be in form and substance reasonably satisfactory to
the
Acquiror and shall provide that:
(i) On
the
Closing Date, unless otherwise provided in the Plan Term Sheet, the Confirmation
Order will discharge the Company and the License Subsidiaries, from any and
all
Claims and Liabilities whether or not (a) a Proof of Claim based on such Claim
was filed or deemed filed under Bankruptcy Code section 501, or such Claim
was
listed on the schedules of the Company or any of the Debtor Subsidiaries filed
in the Bankruptcy Case; (b) such Claim is or was allowed under Bankruptcy Code
section 502; or (c) the holder of such Claim has voted on or accepted the
Bankruptcy Plan. The rights that are provided in the Bankruptcy Plan shall
be in
complete (x) discharge of all Claims against, Liens on, and Interests against
the Company and the License Subsidiaries and (y) discharge and release of all
Claims and Liabilities, including all causes of action, whether known or
unknown, against the Company and the License Subsidiaries. After the Closing
Date, all such Claims and Liabilities may only be asserted as provided for
in
the Bankruptcy Plan or against Opco.
26
(ii) Unless
otherwise provided in the Plan Term Sheet, all Persons that have held or
asserted, which hold or assert, or which may in the future hold or assert any
Claim, Liability, demand or cause of action against the Company and the License
Subsidiaries (or any of them) or relating to the operation of the businesses
of
the Company or the License Subsidiaries before the Closing Date whenever and
wherever arising or asserted (including all such Claims sounding in tort,
contract, warranty or any other theory of law, equity or admiralty, whether
legal or equitable, matured or unmatured, contingent or non-contingent, senior
or subordinated), or Interest, shall be permanently stayed, estopped, restrained
and enjoined from taking any action for the purpose of directly or indirectly
collecting, recovering, or receiving payments, satisfaction, or recovery with
respect to any such Claim, Liability, demand, cause of action or Interest,
including:
(A) commencing
or continuing in any manner any action or other proceeding of any kind with
respect to any such Claim, Liability, demand or cause of action, or Interest
against any of the Company and the License Subsidiaries, or against the property
of any of the Company and the License Subsidiaries with respect to any such
claim, demand or cause of action, or Interest;
(B) enforcing,
attaching, collecting, or recovering, by any manner or means, any judgment,
award, decree or order against any of the Company and the License Subsidiaries
or against the property of any of the Company and the License Subsidiaries
with
respect to any such Claim, Liability, demand or cause of action or
Interest;
(C) creating,
perfecting or enforcing any Lien of any kind against any of the Company and
the
License Subsidiaries or any of the property of any Company and the License
Subsidiaries with respect to any such Claim, Liability, demand or cause of
action or Interest;
(D) asserting
or accomplishing any setoff, right of subrogation, indemnity contribution or
recoupment of any kind against any obligation due any of the Company and the
License Subsidiaries or against the property of any of the Company and the
License Subsidiaries with respect to any such Claim, Liability, demand, cause
of
action or Interest; and
(E) taking
any act, in any manner, in any place whatsoever, against any of the Company
and
the License Subsidiaries or their property, that does not conform to, or comply
with, the provisions of the Bankruptcy Plan relating to such Claim, Liability,
demand, cause of action or Interest.
(iii) From
and
after the Closing Date, Opco shall defend, indemnify and hold harmless the
Company and the License Subsidiaries and each of their respective
representatives and heirs, successors and assigns (collectively, the “Purchaser
Indemnified Parties”) from and against any loss, Claim, Liability, expense or
damage (including reasonable attorneys’ fees and expenses) (collectively,
“Losses”) arising under or out of, in connection with, or in any way relating
to, the Company, the Debtor Subsidiaries, the operations of the Company and
the
Debtor Subsidiaries prior to the Closing Date, the issuance of the Shares to
the
Acquiror, and any violation of the injunction provided for in Section
7.2(g)(ii).
27
(h) Bankruptcy
Order regarding the Shares.
The
Bankruptcy Court shall have entered an order to the effect that all of the
Shares to be outstanding or subject to issuance upon completion of the
Bankruptcy Plan shall at the time of their issuance be duly authorized and
validly issued and outstanding, fully paid and nonassessable, free and clear
of
any Liens, issued in compliance with all federal and state securities Laws,
not
issued in violation of, or subject to any, preemptive rights or other rights
to
subscribe for or purchase securities.
(i) Material
Adverse Effect.
There
shall be no Material Adverse Effect and the Company shall deliver to the
Acquiror at the Closing a certificate of the Company signed by its Chief
Executive Officer, dated as of the Closing Date, to the foregoing
effect.
(j) Tax
Matters.
The
covenants and agreements set forth in Section 5.7(a) of this Agreement shall
have been complied with in all respects; provided,
however,
that
the covenant in Section 5.7(a)(iii) shall be deemed to have been complied with
(solely for purposes of determining whether the condition set forth in this
Section 7.2(j) shall have been satisfied) so long as (i) in the case of any
Tax
liability referred to in Section 5.7(a)(iii) that is shown as due on a filed
Tax
Return, such Tax liability has been paid and (ii) in the case of any Tax
liability referred to in Section 5.7(a)(iii) for which no Tax Return is required
or for which the relevant Tax Return has not yet been required to be filed,
(x)
the amount of the Tax liability is less than $200,000 or has been paid, or
(y)
the amount of the Tax liability is $200,000 or greater and the initial Escrow
Amount shall be increased above $165,000,000 by an amount equal to the
reasonably estimated amount of such unpaid Tax liability (including, for
purposes of clarification, the portion of such amount not in excess of $200,000)
jointly agreed upon by the Parent, the Acquiror, the Company and Opco on or
prior to the Closing Date (an “Increased Amount”); provided,
further,
however,
that
immediately prior to the payment of any Tax liability referred to in clause
(y)
above, there shall be paid out of the Escrow Amount to the Company (so as to
enable the Company to pay, or cause to be paid, such amount to the relevant
taxing authority) the amount of such Tax liability (to the extent of the
Increased Amount relevant to such Tax liability) notwithstanding anything in
Section 5.7(d) to the contrary and the excess, if any, of the relevant Increased
Amount over the actual amount of such Tax liability paid out of the escrow
shall
be released to Opco; provided,
further,
that
the covenants in Section 5.7(a)(i) and (ii) shall be deemed to have been
complied with so long as there is no CNOL Shortfall.
(k) Legal
Opinion.
The
Acquiror and Parent shall have received a legal opinion of the Company’s outside
counsel dated as of the Closing Date related to the matters set forth on Exhibit
E hereto.
(l) Escrowed
FCC Licenses.
The FCC
Licenses, if any, that are held in escrow by Mellon Bank as of the date of
this
Agreement shall have been returned to the Company or the License
Subsidiaries.
28
Section
7.3 Conditions
to the Obligations of the Company.
The
respective obligation of the Company to consummate the transactions contemplated
hereby shall be subject to the satisfaction at or prior to the Closing of each
of the following conditions:
(a) Representations
and Warranties.
The
representations and warranties of the Acquiror and Parent contained in this
Agreement (i) that are qualified as to materiality shall be true and correct
and
(ii) that are not so qualified shall be true and correct in all material
respects, in each case as of the Closing Date, except to the extent such
representations and warranties expressly relate to a particular date (in which
case, on and as of such particular date). The Acquiror and Parent shall have
delivered to the Company at the Closing a certificate signed on behalf of the
Acquiror and Parent by the Acquiror’s Chief Executive Officer and Parent’s Chief
Executive Officer, respectively, dated the Closing Date, in form and substance
reasonably satisfactory to the Company, to the foregoing effect.
(b) Performance
of Obligations.
The
Acquiror and the Parent shall have performed in all material respects all
obligations required to be performed by each of them under this Agreement at
or
prior to the Closing (for this purpose any materiality qualifiers contained
in
any covenant shall be disregarded) and shall have delivered to the Company
at
the Closing a certificate signed on behalf of the Acquiror and the Parent by
the
Acquiror’s Chief Executive Officer and the Parent’s Chief Executive Officer,
respectively, dated the Closing Date, in form and substance reasonably
satisfactory to the Company, to the foregoing effect.
(c) Transaction
Documents.
All of
the Transaction Documents shall be in full force and effect and there shall
exist no material breach of, or default under, any of the Transaction Documents
by the Parent or the Acquiror.
(d) Bankruptcy
Case.
The
Bankruptcy Plan shall have been approved by the Bankruptcy Court pursuant to
the
Confirmation Order, and the Acquisition Approval Order and the Confirmation
Order shall be Final Orders.
ARTICLE
VIII
TERMINATION
Section
8.1 Termination.
This
Agreement may be terminated and the transactions contemplated hereby may be
abandoned at any time prior to the Closing Date notwithstanding the fact that
any requisite authorization and approval of the transactions contemplated hereby
shall have been received and no party hereto shall have any liability to any
other party hereto (provided that any such termination shall not relieve any
party from liability for a breach of any provision hereof prior to such
termination, except as provided in Section 8.2(c), nor shall it terminate the
Company’s obligations under Section 5.3(c) and the parties’ obligations under
Section 8.2 and Article X):
(a) by
the
mutual written consent of the Parent and the Company;
(b) by
the
Parent or the Company if: (i) the Closing has not occurred by September 30,
2005
(the “End Date”); (ii) there shall be any law that makes consummation of the
purchase of the Shares hereunder illegal or otherwise prohibited or if any
court
of competent jurisdiction or Governmental Entity shall have issued an order,
decree, ruling or taken any other action restraining, enjoining or otherwise
prohibiting the purchase of the Shares hereunder and such order, decree, ruling
or other action shall have become final and non-appealable or (iii) the
Bankruptcy Plan fails to receive the Required Consents and the Bankruptcy Court
shall not have entered the Confirmation Order within 60 days of the deadline
for
receipt of the Required Consents;
29
(c) by
the
Parent, (i) if the Board of Directors of the Company withdraws or changes its
recommendation of this Agreement in a manner materially adverse to the Acquiror,
(ii) if the Board of Directors of the Company recommends an Alternative
Proposal, or (iii) if the Company enters into a written agreement providing
for
any Alternative Proposal;
(d) (i)
by
the Parent, if the Company or any License Subsidiary shall have breached or
failed to perform any of its representations, warranties, covenants or
agreements set forth in this Agreement, which breach or failure to perform
(A)
would give rise to the failure of a condition set forth in Section 7.2(a) or
7.2(b) and (B) is incapable of being cured or has not been cured within 30
days
after the giving of written notice to the Company of such breach or failure
to
perform; provided,
however,
that if
such breach or failure to perform is capable of being cured and the Company
is
using its reasonable efforts to cure, then the Parent’s right to terminate under
this Section 8.1(d)(i) shall not be available; or (ii) by the Company, if the
Acquiror or Parent shall have breached or failed to perform any of its
representations, warranties, covenants or agreements set forth in this
Agreement, which breach or failure to perform (A) would give rise to the failure
of a condition set forth in Section 7.3(a) or 7.3(b) and (B) is incapable of
being cured or has not been cured within 30 days after the giving of written
notice to the Acquiror or Parent of such breach or failure to perform;
provided,
however,
that if
such breach or failure to perform is capable of being cured and the Acquiror
or
the Parent is using its reasonable efforts to cure, then the Company’s right to
terminate under this Section 8.1(d)(ii) shall not be available;
(e) by
the
Parent, if the Bankruptcy Court has not entered the Acquisition Approval Order
within twenty (20) Business Days following the execution of this Agreement;
or
(f) by
the
Company, if (i) the Board of Directors has taken the actions specified in the
penultimate sentence of Section 5.3(a), or (ii) the Bankruptcy Court has ordered
the Company to terminate this Agreement in order to accept any Alternative
Proposal; provided,
that,
the Company shall have the right to terminate this Agreement pursuant to clause
(i) above only if it has complied with all of the provisions of Section
5.3.
Section
8.2 Break-Up
Payment.
(a) The
Parent shall be entitled to receive from the Company as a priority
administrative claim a payment (the “Break-Up Payment”) in an aggregate amount
equal to 3% of the Purchase Price if at the time of termination of this
Agreement neither the Parent nor the Acquiror is in breach of any of its
obligations hereunder and the following occurs:
(i) the
Parent terminates this Agreement pursuant to Section 8.1(b)(iii), (c) or
(d)(i);
(ii) the
Company terminates this Agreement pursuant to Section 8.1(b)(iii) or (f);
or
30
(iii) a
bona
fide Alternative Proposal shall have been made to the Company prior to the
End
Date and this Agreement is terminated pursuant to Section 8.1(b)(i) while the
Company is in material breach of this Agreement and within twelve months
following such termination the Bankruptcy Court approves an agreement
contemplating such Alternative Proposal, or if Bankruptcy Court Approval is
no
longer required the Company has entered into an agreement contemplating such
Alternative Proposal.
(b) The
Break-Up Payment payable pursuant to Section 8.2(a) shall be paid by the Company
concurrently with the consummation of the transactions provided for in the
applicable Alternative Proposal by wire transfer of immediately available funds
to an account designated by the Parent. The Break-Up Payment required to be
made
pursuant to this Section 8.2 shall constitute an allowed administrative expense
under Section 503(b)(1) of the Bankruptcy Code, but shall be payable solely
as
set forth in this Section 8.2.
(c) The
Company acknowledges and agrees that (i) the payment of the Break-Up Payment
is
an integral part of the transactions contemplated by this Agreement, (ii) in
the
absence of the Company’s obligations to make this payment, neither the Parent
nor the Acquiror would have entered into this Agreement and (iii) time is of
the
essence with respect to the payment of the Break-Up Payment. Under circumstance
where the Acquiror is not awarded the remedy of specific performance and
receives the Break-Up Payment, the Break-Up Payment shall be in the nature
of
liquidated damages and, upon payment thereof, the Company and its Affiliates
shall be deemed to be fully released and discharged from any liability or
obligation, including for the reimbursement of expenses, arising out of,
resulting from or related to the Company’s failure to consummate the
transactions contemplated by this Agreement.
(d) Notwithstanding
any other provision of this Section 8.2, the Parent shall not be entitled to
any
Break-Up Payment or any other claim against or recovery from the Company upon
any termination of this Agreement if either the Acquiror or Parent caused such
termination by breaching any of its representations, warranties or covenants
and
either the Parent or the Acquiror fails to cure its breach within the applicable
time period provided in Section 8.1(d).
ARTICLE
IX
NO
SURVIVAL OF REPRESENTATIONS AND WARRANTIES AND CERTAIN
COVENANTS;
REMEDIES
Except
as
provided in Section 5.7(h) and pursuant to the Confirmation Order, none of
the
representations and warranties of the Company, the Parent and the Acquiror
contained in Articles III and IV, including the Disclosure Schedule and the
Acquiror Disclosure Schedule, or any certificate or instrument delivered in
connection herewith at or prior to the Closing, and none of the covenants
contained in Articles V and VI (other than Sections 5.4, 6.2, 6.4 and 6.5)
shall
survive the Closing. The Escrow Agreement shall provide that the Parent and
the
Acquiror shall have access to the funds deposited pursuant to the Escrow
Agreement to satisfy any Losses, subject to reasonable notice to Opco and the
opportunity for Opco to assume the defense thereof.
31
ARTICLE
X
MISCELLANEOUS
Section
10.1 Governing
Law.
THIS
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL
AND SUBSTANTIVE LAWS OF THE STATE OF DELAWARE WITHOUT GIVING EFFECT TO CONFLICTS
OF LAW PRINCIPLES THEREOF.
Section
10.2 Jurisdiction;
Forum; Service of Process; Waiver of Jury Trial.
Except
as provided in the Escrow Agreement, with respect to any suit, action or
proceeding (“Proceeding”) arising out of or relating to this agreement each of
the Company, the Parent and the Acquiror hereby irrevocably:
(a) submit
to
the exclusive jurisdiction of the Bankruptcy Court for any Proceeding arising
out of or relating to this Agreement or the Transaction Documents and the
transactions contemplated hereby and thereby (and agrees not to commence any
Proceeding relating hereto or thereto except in such court) and waives any
objection to venue being laid in the Bankruptcy Court whether based on the
grounds of forum
non conveniens
or
otherwise;
(b) consents
to service of process in any Proceeding by recognized international express
carrier or delivery service, to the Company, the Parent or the Acquiror at
their
respective addresses referred to in Section 10.5; provided,
however,
that
nothing herein shall affect the right of any party hereto to serve process
in
any other manner permitted by law; and
(c) WAIVES,
TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY
IN ANY ACTION, PROCEEDING OR LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT
OF,
UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTION
DOCUMENTS.
Section
10.3 Successors
and Assigns.
Except
as otherwise provided herein, the provisions hereof shall inure to the benefit
of, and be binding upon, the successors by operation of law, permitted assigns
and the Corporate Nominee of the parties hereto. No assignment of this Agreement
may be made by any party at any time, whether or not by operation of Law,
without the other parties’ prior written consent; provided,
that,
the Parent and the Acquiror shall be permitted to assign their respective rights
and obligations under this Agreement to any of their existing or newly created
corporate Affiliates without the consent of any other party hereto so long
as
such assignment would not be reasonably likely to materially delay or materially
impair the ability of any of the parties hereto to consummate the transactions
contemplated by this Agreement. Only the parties to this Agreement or their
permitted assigns shall have rights under this Agreement.
Section
10.4 Entire
Agreement; Amendment.
This
Agreement and the Transaction Documents and the Confidentiality Agreement
constitute the full and entire understanding and agreement between the parties
with regard to the subject matter hereof and supersedes all prior agreements
relating to the subject matter hereof. Except as expressly provided herein,
neither this Agreement nor any term hereof may be amended, waived, discharged
or
terminated other than by a written instrument signed by the parties hereto.
No
waiver of any of the provisions of this Agreement shall be deemed to or shall
constitute a waiver of any other provision hereof (whether or not similar).
No
delay on the part of any party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof.
32
Section
10.5 Notices.
All
notices, requests, consents and other communications hereunder to any party
shall be deemed to be sufficient if contained in a written instrument delivered
in person or sent by facsimile, nationally recognized overnight courier or
first
class registered or certified mail, return receipt requested, postage prepaid,
addressed to such party at the address set forth below or such other address
as
may hereafter be designated in writing by such party to the other
parties:
(i) if
to the
Company to:
NEXTWAVE
TELECOM INC.
000
Xxxx
Xxxxxx, 0xx
Xxxxx
Xxxxxxxxx,
XX 00000
Fax:
(000) 000-0000
Attn:
Xxxxx Xxxxxx, Esq.
with
a
copy to:
Weil,
Gotshal & Xxxxxx LLP
000
Xxxxx
Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Fax:
(000) 000-0000
Attn:
Xxxxxx Xxxxxxxxxx, Esq.
Xxxxxx
X.
Xxxxxxx, Esq.
and
Xxxxxxx-Rape
P.C.
0000
Xxxxxxxxx Xxxxx
Xxxxxx,
XX 00000
Fax:
(000) 000-0000
Attn:
Xxxxxxx Xxxxxxx-Rape, Esq.
which
shall not constitute notice;
(ii) if
to the
Parent and the Acquiror, to:
Verizon
Wireless
000
Xxxxxxxxxx Xxxxxx Xxxx
Xxxxxxxxxx,
XX 00000
Fax:
(000) 000-0000
Attn:
Xxxxxxxx X. Xxxxxxx
33
with
a
copy to:
Verizon
Wireless
000
Xxxxxxxxxx Xxxxxx Xxxx
Xxxxxxxxxx,
XX 00000
Fax:
(000) 000-0000
Attn:
Xxxxxxxx X. Xxxxxx, Esq.
Attn:
Xxxxxx Xxxx, Esq.
Skadden,
Arps, Slate, Xxxxxxx & Xxxx LLP
0
Xxxxx
Xxxxxx
Xxx
Xxxx,
XX 00000-0000
Fax:
(000) 000-0000
Attn:
Xxxxx Xxxxx Xxxxxx, Esq.
J.
Xxxxxxx Xxxxxx, Esq.
which
shall not constitute notice.
All
such
notices, requests, consents and other communications shall be deemed to have
been given or made if and when delivered personally or by overnight courier
to
the parties at the above addresses or sent by electronic transmission, with
confirmation received, to the facsimile numbers specified above (or at such
other address or facsimile number for a party as shall be specified by like
notice). Any notice delivered by any party hereto to any other party hereto
shall also be delivered to each other party hereto simultaneously with delivery
to the first party receiving such notice.
Section
10.6 Certain
Definitions.
As used
herein, the following terms shall have the meanings set forth
below:
“Acquisition
Approval Order” shall mean an order of the Bankruptcy Court approving the
Break-Up Payment as an administrative expense and the execution and delivery
by
the Company of this Agreement, substantially in the form of Exhibit
D.
“Affiliate”
and “associate” shall have the meanings ascribed to them in Rule 12b-2
promulgated under the Exchange Act. “Affiliates” of the Acquiror or Parent shall
be deemed to include entities that control the Parent, together with entities
wholly-owned, or solely controlled by any or all of such Persons.
“Bankruptcy
Case” shall mean all legal proceedings of the Company and Debtor Subsidiaries
instituted in the Bankruptcy Court.
“Bankruptcy
Code” shall mean Title 11 of the United States Code, 11 U.S.C. § 101, et
seq., as now in effect or hereafter amended.
“Bankruptcy
Court” shall mean the United States Bankruptcy Court for the Southern District
of New York in which the Bankruptcy Case is pending.
“Board
of
Directors” shall mean the Board of Directors of the Company.
34
“Bridge
Notes” shall mean the Convertible Senior Subordinated Notes due 2002 issued by
the Company as amended by orders of the Bankruptcy Court in effect on the date
hereof.
“Business
Day” shall have the meaning provided in the Bankruptcy Code.
“Claim”
shall mean any claim or liability against the Company, that is proposed to
receive consideration and/or be discharged under the Bankruptcy
Plan.
“Code”
shall mean the Internal Revenue Code of 1986, as amended.
“Commitments”
shall mean any binding contract, agreement, instrument or commitment of any
nature whatsoever, whether written or oral, including all amendments thereof
and
supplements thereto.
“Communications
Act” shall mean the Communications Act of 1934, as amended, and the rules and
regulations (including those issued by the FCC) promulgated
thereunder.
“Confirmation
Order” shall mean the order entered by the Bankruptcy Court in the Bankruptcy
Case confirming the Bankruptcy Plan pursuant to Section 1129 of the Bankruptcy
Code.
“Creditors
Committee” shall mean the Statutory Committee of creditors of the Company and
the Debtor Subsidiaries.
“Debtor
Subsidiaries” shall mean the License Subsidiaries, plus NWI and any other
subsidiary of the Company that hereafter files a petition for relief under
Chapter 11 of the Bankruptcy Code.
“Disclosure
Statement” shall mean the disclosure statement filed in connection with the
Bankruptcy Plan in the Bankruptcy Case.
“Employee
Plan” shall mean each deferred compensation and each bonus or other incentive
compensation, stock purchase, stock option and other equity compensation plan,
program, agreement or arrangement; each severance, retention or termination
pay,
medical, surgical, hospitalization, life insurance and other “welfare” plan,
fund or program (within the meaning of Section 3(1) of ERISA); each
profit-sharing, stock bonus or other “pension” plan, fund or program (within the
meaning of Section 3(2) of ERISA); each employment, termination, retention
or
severance agreement; and each other employee benefit plan, fund, program,
agreement or arrangement, in each case, that is sponsored, maintained or
contributed to or required to be contributed to by the Company or any ERISA
Affiliate, or to which the Company or any ERISA Affiliate is party, whether
written or oral, for the benefit of any current employees, officers, independent
contractors, or directors of the Company or any of the License
Subsidiaries.
“ERISA”
shall mean the Employee Retirement Income Security Act of 1974, as
amended.
“Escrow
Agent” shall mean a commercial bank of national standing mutually acceptable to
the Acquiror and the Company.
35
“Estates”
shall mean the respective estates, as defined in Section 541 of the Bankruptcy
Code, of the Company and the Debtor Subsidiaries.
“Excluded
Entities” means, collectively, NWI, Tele* Code Inc., a Delaware corporation, and
Opco.
“FCC”
shall mean the Federal Communications Commission and any successor Governmental
Entity.
“FCC”
Approval shall mean the consent of the FCC to the transfer of control over
the
FCC Licenses to Acquiror.
“Final
Order” shall mean an action taken or order issued by the applicable Governmental
Entity as to which: (i) no request for stay of the action or order is pending,
no such stay is in effect, and, if any deadline for filing any such request
is
designated by statute or regulation, it is passed, including any extensions
thereof; (ii) no petition for rehearing or reconsideration of the action or
order, or protest of any kind, is pending before the Governmental Entity and
the
time for filing any such petition or protest is passed; (iii) the Governmental
Entity does not have the action or order under reconsideration or review on
its
own motion and the time for such reconsideration or review has passed; and
(iv)
the action or order is not then under judicial review, there is no notice of
appeal or other application for judicial review pending, and the deadline for
filing such notice of appeal or other application for judicial review has
passed, including any extensions thereof.
“Governmental
Entity” shall mean any supernational, national, foreign, federal, state or local
judicial, legislative, executive, administrative or regulatory body or
authority.
“HSR
Act”
shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended.
“HSR
Approval” means the expiration or termination of the applicable waiting period
(any extension thereof) under the HSR Act.
“Interest”
shall mean the legal, equitable, contractual and other rights of the holders
of
Company Equity Interests, including the rights of any Person to purchase or
demand the issuance of any class or series of Company Equity Interests or any
other equity security of the Company of any of the Debtor Subsidiaries,
including (a) conversion, exchange, voting, participation and dividend rights;
(b) liquidation preferences; (c) stock options, warrants, and put rights; and
(d) share-appreciation rights.
“Knowledge”
of a party hereto shall mean the actual knowledge of any director or executive
officer after due inquiry.
“Laws”
shall mean all foreign, federal, state, and local laws, statutes, ordinances,
rules, regulations, orders, judgments, decrees and bodies of law.
“Liability”
shall mean all “Claims” as defined in the Bankruptcy Code and any other
liability, debt or obligation of any of the Company or the License Subsidiaries,
of any kind or nature (including any administrative expenses and other
obligations incurred before the Closing Date) and shall include all claims
sounding in tort, contract, warranty or any other theory of law, equity or
admiralty, whether known or unknown, legal or equitable, matured or unmatured,
contingent or non-contingent, senior or subordinated, liquidated or
unliquidated.
36
“Lien”
shall mean with respect to any asset or right; any mortgage, deed of trust,
lien
(statutory or other), pledge, hypothecation, assignment, claim, charge, security
interest, conditional sale agreement, title, exception, or encumbrance, option,
right of first offer or refusal, easement, servitude, voting or transfer
restriction, or any other right of another to or adverse claim of any kind
in
respect of such asset or right.
“Material
Adverse Effect” shall mean, any change, effect, event, occurrence or development
that is, or is reasonably likely to, (a) be materially adverse to the business,
results of operations or financial condition of the Company and the License
Subsidiaries, taken as a whole, or (b) have any material adverse effect on
any
of the FCC Licenses or on the ability of the Company and the License
Subsidiaries to consummate the transactions contemplated by this Agreement,
other than any change, effect, event or occurrence relating to or arising out
of
(i) the economy or securities markets in general, (ii) this Agreement or the
transactions contemplated hereby or the announcement thereof, (iii) the
Company’s financial condition as of date of this Agreement, (iv) the Company’s
industry generally, (v) the communications industry generally or (vi) any
outbreak of major hostilities or terrorist activities, any declaration by the
United States of a national emergency or war or other national or international
calamity or crisis.
“NWI”
shall mean Nextwave Wireless Inc., a Delaware corporation.
“Options”
shall mean options to purchase shares of Series B Common Stock.
“Permitted
Encumbrances” shall mean any Lien (i) permitted under the Bridge Notes; (ii)
permitted under the Global Resolution Agreement; (iii) approved by the
Bankruptcy Court, including, without limitation, Liens granted pursuant to
a
cash collateral and/or Debtor-in Possession financing order and Liens granted
as
adequate protection; (iv) Liens for taxes not yet due and payable; (v) Liens
securing rental payments under capital lease arrangements; and (vi) other Liens
either (I) arising in the ordinary course of business that are not incurred
in
connection with the borrowing of money or (II) that would not materially
interfere with the conduct of the Company’s business.
“Person”
shall mean any individual, firm, corporation, limited liability company,
partnership, company, trust or other entity, and shall include any successor
(by
merger or otherwise) of such entity.
“Regulatory
Approvals” shall mean all approvals, consents (including consents to assignments
of permits and rights of way), waivers, certificates, and other authorizations
reasonably required to be obtained from the FCC, any state public utility or
service commissions or any other federal, state, foreign or municipal
communications regulatory agency having jurisdiction over the Company or the
Acquiror’s business including the HSR Approval in order to consummate the
transactions contemplated by this Agreement and the Transaction
Documents.
“Required
Consents” shall mean the acceptance of the Bankruptcy Plan by at least one class
of Claims or Interests that is impaired under the Bankruptcy Plan, if a class
of
claims is impaired under the Bankruptcy Plan, determined without including
any
acceptance of the Bankruptcy Plan by any insider, as required by 11 U.S.C.
§1129(a)(10).
00
“XXX”
xxxxx xxxx xxx Xxxxxx Xxxxxx Securities and Exchange Commission and any
successor Governmental Entity.
“Securities
Act” shall mean the Securities Act of 1933, as amended, or any successor federal
statute, and the rules and regulations of the SEC thereunder, all as the same
shall be in effect at the time. Reference to a particular section of the
Securities Act shall include reference to the comparable section, if any, of
such successor federal statute.
“Series
B
Common Stock” shall mean Series B Common Stock, par value $0.0001 per share, of
the Company.
“Transaction
Documents” shall mean the Escrow Agreement, the Reorganized Company Certificate
of Incorporation, the Reorganized Company Bylaws, and all other contracts,
agreements, schedules, certificates, orders and other documents being delivered
pursuant to or in connection with this Agreement.
“Warrants”
shall mean warrants to purchase shares of Series B Common Stock.
Section
10.7 Delays
or Omissions.
Except
as expressly provided herein, no delay or omission to exercise any right, power
or remedy accruing to the Company, the Acquiror or Parent upon any breach or
default of any party under this Agreement, shall impair any such right, power
or
remedy of the Company, the Acquiror or Parent nor shall it be construed to
be a
waiver of any such breach or default, or an acquiescence therein, or of or
in
any similar breach or default thereafter occurring; nor shall any waiver of
any
single breach or default be deemed a waiver of any other breach or default
theretofore or thereafter occurring. Any waiver, permit, consent or approval
of
any kind or character on the part of the Company, the Acquiror or Parent of
any
breach or default under this Agreement, or any waiver on the part of any such
party of any provisions or conditions of this Agreement, must be in writing
and
shall be effective only to the extent specifically set forth in such writing.
All remedies, either under this Agreement or by Law or otherwise afforded to
the
Company, the Acquiror or Parent shall be cumulative and not
alternative.
Section
10.8 Counterparts.
This
Agreement may be executed in any number of counterparts, each of which may
be
executed by only one of the parties hereto, each of which shall be enforceable
against the party actually executing such counterpart, and all of which together
shall constitute one instrument.
Section
10.9 Severability.
In the
event that any provision of this Agreement becomes or is declared by a court
of
competent jurisdiction to be illegal, unenforceable or void, this Agreement
shall continue in full force and effect without said provisions; provided,
that,
no such severability shall be effective if it materially changes the economic
benefit of this Agreement to any party.
Section
10.10 Titles
and Subtitles.
The
titles and subtitles used in this Agreement are used for convenience only and
are not to be considered in construing or interpreting this
Agreement.
Section
10.11 No
Public Announcement.
None of
the Company, the License Subsidiaries, the Parent or the Acquiror shall make
any
press release or other public announcement concerning the transactions
contemplated by this Agreement and the Transaction Documents, except as and
to
the extent that any such party shall be obligated to make any such disclosure
by
this Agreement, the Global Resolution Agreement or by Law, in which case the
other party will be advised and the parties shall use their respective
commercially reasonable efforts to cause a mutually agreeable release or
announcement; provided,
however,
that
the foregoing shall not preclude the Company from making communications or
disclosures that are necessary in connection with the administration of the
Bankruptcy Case and then only after consultation with the other regarding the
basis of such obligation and the content of such press release, public
announcement or filing or as the parties shall mutually agree. The parties
agree
that the initial press release to be issued with respect to the transactions
contemplated by this Agreement and the Transaction Documents shall be in the
form heretofore agreed to by the parties.
38
Section
10.12 Further
Actions, Commercially Reasonable Efforts.
Without
waiving any right to terminate this Agreement under Section 8.1, upon the terms
and subject to the conditions hereof, each of the parties agrees to use its
commercially reasonable efforts to take, or cause to be taken, all actions,
and
to do, or cause to be done, and to assist and cooperate with the other parties
in doing, all things necessary, proper or advisable to consummate and make
effective, in the most expeditious manner practicable, the transactions
contemplated by this Agreement and the Transaction Documents, including (i)
the
obtaining of all necessary actions or notations, waivers, consents and approvals
from governmental or regulatory entities and the making of all necessary
registrations and filings and the taking of all steps as may be necessary to
obtain an approval or waiver from, or to avoid an action or proceeding by,
any
Governmental Entity, (ii) the obtaining of all necessary consents, approvals
or
waivers from third parties, (iii) the defending of any lawsuits or other legal
proceedings, whether judicial or administrative, challenging this Agreement
or
any of the Transaction Documents or the consummation of the transactions
contemplated thereby, including seeking to have any stay or temporary
restraining order entered by any court or other Governmental Entity vacated
or
reversed, and (iv) the execution and delivery of any additional instruments
necessary to consummate the transactions contemplated by, and to fully carry
out
the purposes of, this Agreement and the Transaction Documents; provided,
however,
that
neither the Parent, the Acquiror nor any of their respective Affiliates shall
be
required to divest any assets or pay any consideration (other than customary
filing fees and related legal expenses) to obtain such consents and approvals.
To the extent that regulatory or other considerations make it necessary or
desirable for the parties to restructure the form of the transactions
contemplated by this Agreement and such restructuring can be accomplished
without (A) diminution in the aggregate consideration to be received or any
other meaningful adverse economic or other consequence to the other party or
any
holder of Claims or Company Equity Interests or (B) causing, or being reasonably
likely to cause, a material delay or material impairment of any of the parties’
ability to consummate the transactions contemplated by this Agreement, each
party will cooperate with the other to effect such restructured
transaction.
Section
10.13 Usage.
The
defined terms herein shall apply equally to both the singular and plural forms
of the terms defined. Whenever the context may require, any pronoun shall
include the corresponding masculine, feminine and neuter forms. All references
herein to “Articles”, “Sections” and “Exhibits” shall be deemed to be references
to Articles and Sections of and Exhibits to, this Agreement unless the context
shall otherwise require. The words “include,” “includes” and “including” shall
be deemed to be followed by the phrase “without limitation.” Whenever any
payment hereunder is to be paid in “cash,” payment shall be made in the legal
tender of the United States and the method for payment shall be by wire transfer
of immediately available funds. The words “hereof,” “herein” and “hereunder” and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement.
Unless otherwise expressly provided herein, any agreement, instrument or statute
defined or referred to herein or in any agreement or instrument that is referred
to herein means such agreement, instrument or statute as from time to time
amended, modified or supplemented, including (in the case of agreements or
instruments) by waiver or consent and (in the case of statutes) by succession
of
comparable successor statutes. Unless otherwise expressly provided, wherever
the
consent of any Person is required or permitted herein, such consent may be
withheld in such Person’s sole discretion. Time is of the essence in this
Agreement and any certificate or document delivered pursuant hereto or in
connection herewith.
39
Section
10.14 Guarantee
of Parent.
Parent
guarantees the full and timely payment and performance of the covenants,
agreements, obligations, representations and warranties under this Agreement
and
the Transaction Documents of the Acquiror and any Affiliate of Parent or the
Acquiror, including any such Affiliate that is an assignee of the Acquiror
pursuant to Section 10.3.
[SIGNATURE
PAGE FOLLOWS]
40
IN
WITNESS WHEREOF, each of the undersigned has caused this Agreement to be
executed as of the date first above written.
COMPANY:
NEXTWAVE
TELECOM INC.
By:
/s/
Xxxxx
X. Xxxxxx
Name:
Xxxxx X. Xxxxxx
Title:
Executive Vice President, General
Counsel
PARENT:
CELLCO
PARTNERSHIP D/B/A/
VERIZON
WIRELESS
By:
Name:
Title:
ACQUIROR:
VZW
CORP.
By:
Name:
Title:
41
IN
WITNESS WHEREOF, each of the undersigned has caused this Agreement to be
executed as of the date first above written.
COMPANY:
NEXTWAVE
TELECOM INC.
By:
Name:
Title:
PARENT:
CELLCO
PARTNERSHIP D/B/A/
VERIZON
WIRELESS
By:
/s/
Xxxxxx X. Xxxxxx
Name:
Xxxxxx X. Xxxxxx
Title:
President & CEO
ACQUIROR:
VZW
CORP.
By:
/s/
Xxxxxx X. Xxxxxx
Name:
Xxxxxx X. Xxxxxx
Title:
President & CEO
42
EXHIBIT
A
FCC
LICENSES
|
Call
Sign
|
BTA
Name
|
BTA
#
|
Block
|
MHz
|
Frequencies
|
License
Grant Date
|
License
Expiration Date
|
ULS
File # for
5
YR Construction Notification
|
Date
5 YR Construction Notification Granted
|
Licensee
|
|
XXXX000
|
Xxxxxxxx
Xxxx, XX
|
25
|
F
|
00
|
0000-0000;
1970-1975
|
6/27/1997
|
6/27/2007
|
0000955023
|
4/21/2003
|
NPPI
|
|
KNLF652
|
Baltimore,
MD
|
29
|
C
|
00
|
0000-0000;
1975-1985
|
1/3/1997
|
1/3/2007
|
0000753736
|
4/21/2003
|
NPCI
|
|
XXXX000
|
Xxxxxx,
XX
|
51
|
C
|
00
|
0000-0000;
1975-1985
|
1/3/1997
|
1/3/2007
|
0000753594
|
4/21/2003
|
NPCI
|
|
XXXX000
|
Xxxxxxxx,
XX
|
91
|
F
|
00
|
0000-0000;
1970-1975
|
4/28/1997
|
4/28/2007
|
0000963163
|
4/21/2003
|
NPPI
|
|
KNLH216
|
Corpus
Christi, TX
|
99
|
F
|
00
|
0000-0000;
1970-1975
|
4/28/1997
|
4/28/2007
|
0000912797
|
4/21/2003
|
NPPI
|
|
XXXX000
|
Xxxxxxx
Xxxxx, XX
|
107
|
F
|
00
|
0000-0000;
1970-1975
|
4/28/1997
|
4/28/2007
|
0000968515
|
4/21/2003
|
NPPI
|
|
KNLF802
|
Xxxxxx,
XX
|
000
|
C
|
10
|
1895-1900;
1975-1980
|
1/3/1997
|
1/3/2007
|
0000000000
|
4/21/2003
|
NPCI
|
|
KNLH202
|
Detroit,
MI
|
112
|
D
|
00
|
0000-0000;
1945-1950
|
4/28/1997
|
4/28/2007
|
0000774222
|
4/21/2003
|
NPPI
|
|
XXXX000
|
Xxxxx,
XX
|
000
|
X
|
00
|
0000-0000;
1970-1975
|
6/27/1997
|
6/27/2007
|
0000936586
|
4/21/2003
|
NPPI
|
|
XXXX000
|
Xx
Xxxxxx-Xxxxxxxx, XX
|
124
|
D
|
00
|
0000-0000;
1945-1950
|
4/28/1997
|
4/28/2007
|
0000000000
|
4/21/2003
|
NPPI
|
|
KNLH211
|
Greenville
- Spartanburg, SC
|
177
|
F
|
00
|
0000-0000;
1970-1975
|
4/28/1997
|
4/28/2007
|
0000955028
|
4/21/2003
|
NPPI
|
|
KNLH225
|
Janesville-Beloit,
WI
|
216
|
F
|
00
|
0000-0000;
1970-1975
|
4/28/1997
|
4/28/2007
|
0000912261
|
4/21/2003
|
NPPI
|
|
KNLF645
|
Los
Angeles, CA
|
262
|
C
|
00
|
0000-0000;
1980-1985
|
1/3/1997
|
1/3/2007
|
0000753783
|
4/21/2003
|
NPCI
|
|
KNLH214
|
Madison,
WI
|
000
|
X
|
00
|
0000-0000;
1965-1970
|
4/28/1997
|
4/28/2007
|
0000791568
|
4/21/2003
|
NPPI
|
|
XXXX000
|
Xxx
Xxxx, XX
|
321
|
C
|
00
|
0000-0000;
1980-1990
|
1/3/1997
|
1/3/2007
|
0000773257
|
4/21/2003
|
NPCI
|
|
XXXX000
|
Xxxxx,
XX
|
326
|
F
|
00
|
0000-0000;
1970-1975
|
4/28/1997
|
4/28/2007
|
0000955025
|
4/21/2003
|
NPPI
|
|
KNLH201
|
Philadelphia,
PA-Wilmington, DE-Trenton, NJ
|
346
|
F
|
00
|
0000-0000;
1970-1975
|
6/27/1997
|
6/27/2007
|
0000902501
|
4/21/2003
|
NPPI
|
|
KNLH228
|
Xxxxxxxxxx,
XX
|
000
|
D
|
00
|
0000-0000;
1945-1950
|
6/27/1997
|
6/27/2007
|
0000852881
|
4/21/2003
|
NPPI
|
|
KNLF812
|
Xxxxxxxx,
XX
|
000
|
C
|
00
|
0000-0000;
1980-1985
|
1/3/1997
|
1/3/2007
|
0000753708
|
4/21/2003
|
NPCI
|
|
KNLH223
|
Provo-Orem,
UT
|
365
|
F
|
00
|
0000-0000;
1970-1975
|
4/28/1997
|
4/28/2007
|
0000000000
|
4/21/2003
|
NPPI
|
|
KNLH212
|
Springfield-Holyoke,
MA
|
000
|
X
|
00
|
0000-0000;
1965-1970
|
6/27/1997
|
6/27/2007
|
0000772113
|
4/21/2003
|
NPPI
|
|
KNLH210
|
Tulsa,
OK
|
448
|
F
|
00
|
0000-0000;
1970-1975
|
4/28/1997
|
4/28/2007
|
0000000000
|
4/21/2003
|
NPPI
|
|
XXXX000
|
Xxxxxxxxxx,
XX
|
461
|
C
|
00
|
0000-0000;
1975-1985
|
1/3/1997
|
1/3/2007
|
0000753709
|
4/21/2003
|
NPCI
|
A-1
EXHIBIT
B
ESCROW
AGREEMENT
B-1
ESCROW
AGREEMENT
BY
AND
AMONG
CELLCO
PARTNERSHIP
D/B/A
VERIZON WIRELESS,
VZW
CORP.,
[NEXTWAVE
OPCO],
NEXTWAVE
TELECOM INC.
AND
[ ],
AS
ESCROW AGENT
DATED
AS
OF ________ [ ], 2005
B-2
ESCROW
AGREEMENT, dated as of ________ [ ], 2005 (this “Agreement”),
by
and among Cellco Partnership D/B/A Verizon Wireless, a Delaware general
partnership (“Parent”),
VZW
Corp., a Delaware corporation and wholly owned subsidiary of Parent
(“Acquiror”),
[NextWave Opco], a Delaware [corporation] [limited liability company]
(“NextWave
Opco”),
Nextwave Telecom Inc., a Delaware corporation (the “Company”),
and
(_________, a _________ banking corporation], as escrow agent (the “Escrow
Agent”).
Except as otherwise defined herein, capitalized terms used herein and not
defined shall have the meanings ascribed to such terms in the Acquisition
Agreement (as defined below).
WHEREAS,
Acquiror, the Company and Parent have entered into an Acquisition Agreement,
dated as of November [ ], 2004 (the “Acquisition Agreement”),
pursuant to which Acquiror will acquire the FCC Licenses by acquiring all of
the
capital stock of the Reorganized Company; and
WHEREAS,
pursuant to Section 1.2 of the Acquisition Agreement, on the date hereof,
Acquiror will deposit the Escrow Amount (as defined below) in the Escrow Account
(as defined below) with the Escrow Agent to be held, administered and disposed
of by the Escrow Agent in accordance with this Agreement and the Acquisition
Agreement.
NOW,
THEREFORE, in consideration of the representations, warranties, covenants and
agreements contained in this Agreement, and intending to be legally bound
hereby, the parties agree as follows:
1. Appointment;
Deposit, Security Interest.
(a) Acquiror
and the Company hereby appoint the Escrow Agent as escrow agent hereunder,
and
the Escrow Agent hereby accepts such appointment, subject to the terms and
conditions contained in this Agreement.
(b) On
the
date hereof, Acquiror shall deposit the amount determined pursuant to Section
1.2(i)(B) of the Acquisition Agreement (as increased by any net return thereon
and as reduced by any payments therefrom made pursuant to this Agreement, the
“Escrow
Amount”)
in the
Escrow Account with the Escrow Agent.
(c) The
Escrow Agent shall accept and maintain the Escrow Amount in a separate escrow
account (the “Escrow
Account”).
All
funds in the Escrow Account shall be held and disposed of by the Escrow Agent
in
accordance with the terms of this Agreement and the Acquisition
Agreement.
(d) Parent
and Acquiror shall have first-priority perfected security interests in the
Escrow Account and the Bankruptcy Plan and the Confirmation Order shall so
provide.
2. Investment
of Funds.
The
Escrow Amount will be invested in such investments as Acquiror and NextWave
Opco
may specifically direct in writing to the Escrow Agent. In the absence of such
specific investment instruction, the Escrow Amount shall be invested in the
Escrow Agent’s [Insured Money Account]. All earnings from such investment shall
be credited to, and any losses debited from the Escrow Account.
B-3
3. Administration
of Escrow Account.
The
Escrow Agent shall administer the Escrow Account as follows:
(a) In
the
event Parent, Acquiror, the Company, the License Subsidiaries or any of their
Affiliates (the “Indemnified Parties”) shall be entitled to indemnification for
any Taxes, costs (including reasonable attorneys’ or accountants’ fees),
interest, penalties or other losses arising out of, based upon or relating
or
attributable to any Indemnifiable Losses, Acquiror and NextWave Opco shall
send
joint written notice to the Escrow Agent identifying the amount of funds from
the Escrow Account to be paid to the relevant Indemnified Party and the Escrow
Agent shall pay such amount in cash by wire transfer of immediately available
funds to an account designated by the relevant Indemnified Parry within three
(3) days of receipt by the Escrow Agent of such written notice; provided,
however,
that
the Indemnified Parties shall not be entitled to any indemnity for Indemnifiable
Losses to the extent such Indemnifiable Losses exceed the Escrow Amount (as
reduced for any prior payments pursuant to this Section 3); provided,
further,
that
any Increased Amount shall be available solely to pay the Tax liability relating
to such Increased Amount, as set forth on Exhibit C hereto.
(b) If
any
Increased Amount is agreed upon by Parent, Acquiror, the Company and NextWave
Opco pursuant to Section 7.2( j) of the Acquisition Agreement, such Increased
Amount shall be set forth on Exhibit C hereto, showing the allocation of such
Increased Amount among specific Tax liabilities. In the event of the payment
of
any Tax liability referred to in Section 7.2(j) clause (y) of the Acquisition
Agreement, there shall be paid out of the Escrow Amount to the Company (so
as to
enable the Company to pay, or cause to be paid, such amount to the relevant
taxing authority) the amount of such Tax liability (to the extent of the
Increased Amount relevant to such Tax liability as set forth on Exhibit C
hereto) notwithstanding anything in Section 5.7(d) of the Acquisition Agreement
to the contrary and the excess, if any, of the relevant Increased Amount over
the actual amount of such Tax liability paid out of the escrow shall be released
to NextWave Opco. The payments made pursuant to this Section 3(b) shall be
made
by the Escrow Agent within three (3) days of receipt by the Escrow Agent of
a
joint written notice from Acquiror and NextWave Opco, identifying the amount
of
funds from the Escrow Account to be paid pursuant hereto, in cash by wire
transfer of immediately available funds to an account(s) designated by the
Acquiror and NextWave Opco in such joint written notice.
(c) In
the
event that the Company and/or the License Subsidiaries or any of their
respective representatives and heirs, successors and assigns, suffer any Losses
pursuant to Section 7.2(g)(iii) of the Acquisition Agreement, Parent and/or
Acquiror, as applicable, shall have access to the Escrow Amount (but not any
Increased Amount) held in the Escrow Account to satisfy such Losses;
provided,
however,
that
the provisions of Section 4(a) hereof have been fulfilled by Parent or Acquiror,
as applicable, and NextWave Opco has been given the opportunity to assume the
defense of such Losses. Any payments made to Parent or Acquiror pursuant to
this
Section 3(c) shall be made in accordance with Section 4 hereof.
(d) After
the
payment of any Losses or Indemnifiable Losses, the Escrow Amount shall be
released to NextWave Opco upon the expiration of all relevant survival periods
set forth in Section 5.7(h) of the Acquisition Agreement; provided, that the
release of any Increased Amount shall be governed by paragraph (b) above.
Notwithstanding anything to the contrary contained in the immediately preceding
sentence, at any time, NextWave Opco may request that Parent and Acquiror
instruct the Escrow Agent to release to NextWave Opco an amount equal to the
excess of (x) the Escrow Amount (excluding any Increased Amount) over (y) the
aggregate amount, in the reasonable judgment of Parent and Acquiror, of
potential remaining Indemnifiable Losses at such time (i.e., adjusted for all
items and periods for which the Company, in the reasonable judgment of Parent
and Acquiror or pursuant to a legally binding agreement with the IRS, has
received finality). Each such release of any portion of the Escrow Amount to
NextWave Opco shall be deemed to include an amount of interest thereon (net
of
the previously made tax disbursements under Section 20(b) hereof that are
attributable thereto) at the rate actually earned on the Escrow Amount in
accordance with Section 2 hereof. Any portion of the Escrow Amount to be
released in accordance with this Section 3(d) shall be paid by the Escrow Agent
out of the Escrow Amount in cash by wire transfer of immediately available
funds
to an account designated by NextWave Opco within three (3) days of the Escrow
Agent’s receipt of a joint written notice from Acquiror and NextWave Opco
specifying the portion of the Escrow Amount to be released to NextWave
Opco.
B-4
(e) In
the
event that any dispute shall arise between the parties with respect to the
obligation of Acquiror and/or NextWave Opco to instruct the Escrow Agent to
disburse the funds out of the Escrow Account, the Escrow Agent shall refrain
from taking any action contemplated by this Agreement until such dispute is
resolved in accordance with Section 15 hereof.
(f) The
Escrow Agent shall not disburse any funds from the Escrow Account except as
provided in this Section 3 and Section 20(b).
(g) In
the
event fund transfer instructions are given (other than in writing at the time
of
the execution of the Agreement), whether in writing, by telecopier or otherwise
the Escrow Agent is authorized to seek confirmation of such instructions by
telephone call-back to the person or persons designated on the call-back
schedule attached hereto as Exhibit
A,
and the
Escrow Agent may rely upon the confirmations of anyone purporting to be the
person or persons so designated. The persons and telephone numbers for
call-backs may be changed only in writing actually received and acknowledged
by
the Escrow Agent. If the Escrow Agent is unable to contact any of the authorized
representatives identified in the Call-Back Schedule, the Escrow Agent is hereby
authorized to seek confirmation of such instructions by telephone call-back
to
any one or more of Acquiror’s or NextWave Opco’s executive officers
(“Executive
Officers”),
which
shall include the titles of President, Vice President, Treasurer or Secretary,
as the Escrow Agent may select. Such “Executive Officer” shall deliver to the
Escrow Agent a fully executed incumbency certificate, and the Escrow Agent
may
rely upon the confirmation of anyone purporting to be any such officer. The
Escrow Agent and the beneficiary’s bank in any funds transfer may rely solely
upon any account numbers or similar identifying numbers provided by Acquiror
or
NextWave Opco to identify (i) the beneficiary, (ii) the beneficiary’s bank or
(iii) an intermediary bank. The Escrow Agent may apply any of the escrowed
funds
for any payment order it executes using any such identifying number, even when
its use may result in a person other than the beneficiary being paid, or the
transfer of funds to a bank other than the beneficiary’s bank or an intermediary
bank designated. The parties to this Agreement acknowledge that such security
procedure is commercially reasonable.
4. Claims.
(a) If
a
claim for indemnification of Losses is asserted by Parent or Acquiror pursuant
to Section 7.2(g)(iii) of the Acquisition Agreement, Parent or Acquiror, as
applicable, or an attorney in fact on either of their behalf (the “Claimant”)
shall
give written notice of their claim (the “Claim
Notice”)
to the
Escrow Agent and to NextWave Opco. Each Claim Notice shall set forth (i) the
dollar amount of all Losses, (ii) the corresponding amount of the Escrow Amount
involved in the claimed Losses, and (iii) the basis for the claim.
B-5
(b) Within
15
days from the date of delivery of a Claim Notice, NextWave Opco or an
attorney-in-fact on its behalf shall provide the Claimant, with a copy to the
Escrow Agent, a written response (the “Response
Notice”)
in
which NextWave Opco shall either: (x) agree that an amount of the Escrow Amount
in the Escrow Account equal to the entire Losses claimed by the Claimant may
be
released from the Escrow Account (to the extent available, and if the Escrow
Amount is less than the Losses, the entire Escrow Amount), and all of NextWave
Opco’s right, title and interest in and to such released Escrow Amount
transferred to the relevant Claimant, (y) agree that an amount of the Escrow
Amount in the Escrow Account that is less than the entire Losses claimed by
the
Claimant may be released from the Escrow Account (to the extent available)
and
all of NextWave Opco’s right, title and interest in and to such released portion
of the Escrow Amount transferred to the relevant Claimant, or (z) contest that
any amount of the Escrow Amount in the Escrow Account be released from the
Escrow Account and so transferred to the Claimant; provided,
however,
that
NextWave Opco may not contest, in whole or in part, a determination of Losses
which has been finally settled pursuant to the provisions of Section 4(e) hereof
(a “Settled
Adjustment”).
In
the case of a (i) Settled Adjustment and (ii) in cases where no Response Notice
is delivered by NextWave Opco within such 15-day period, NextWave Opco shall
be
deemed to have agreed that an amount of the Escrow Amount equal to the Settled
Adjustment, in the case of the foregoing clause (i), or the entire adjustment
claimed by the Claimant, in the case of the foregoing clause (ii), shall be
released from the Escrow Account and all of NextWave Opco’s right, title and
interest in and to such Escrow Amount may be transferred to the
Claimant.
(c) If
NextWave Opco agreed in the Response Notice (or is deemed to have agreed) that
an amount of the Escrow Amount equal to the entire Losses claimed by the
Claimant may be released from the Escrow Account and all of NextWave Opco’s
right, title and interest in and to such Escrow Amount may be transferred to
the
Claimant, the Escrow Agent shall promptly, following the earlier of the required
date for the delivery of the Response Notice or its actual date of delivery,
deliver to the Claimant the appropriate amount of the Escrow Amount (to the
extent available) by wire transfer of immediate available funds to an account
designated by the Claimant.
(d) If
NextWave Opco agrees in the Response Notice that an amount of the Escrow Amount
in the Escrow Account that is less than the entire Losses claimed by the
Claimant may be released from the Escrow Account and all of NextWave Opco’s
right, title and interest in and to such Escrow Amount may be transferred to
the
Claimant, the Escrow Agent shall promptly, following the earlier of the required
date for delivery of the Response Notice or its actual date of delivery, deliver
to the Claimant the appropriate amount of the Escrow Amount. The remainder
of
the Losses claimed by the Claimant shall be resolved in accordance with Section
4(e) hereof.
(e) If
NextWave Opco by Response Notice contests all or a portion of Losses claimed
by
the Claimant and NextWave Opco and the Claimant do not come to an agreement
within 30-days from receipt of such Response Notice with respect to the
indemnification amount of such Losses, the matter shall be resolved in
accordance with the terms of Section 15 hereof.
B-6
5. Fees
and Expenses.
The
fees of the Escrow Agent are set forth in Exhibit
B
attached
hereto. Acquiror and NextWave Opco shall each pay 50% of all the fees and
expenses due to the Escrow Agent in connection with this Agreement. The Escrow
Agent shall send all invoices for fees payable under this Agreement to both
Acquiror and NextWave Opco in accordance with the notice provisions of Section
10 of this Agreement.
6. Limitation
of Escrow Agent’s Liability.
(a) The
Escrow Agent undertakes to perform such duties as are specifically set forth
in
this Agreement only and shall have no duty under any other agreement or document
notwithstanding it being referred to herein or attached hereto as an exhibit.
The Escrow Agent shall not be liable except for the performance of such duties
as are specifically set forth in this Agreement, and no implied covenants or
obligations shall be read into this Agreement against the Escrow Agent. The
Escrow Agent shall incur no liability with respect to any action taken by it
or
for any inaction on its part in reliance upon any notice, direction,
instruction, consent, statement or other document believed by it to be genuine
and duly authorized and executed by the proper parry or parties, nor for any
other good faith action or inaction except for its own willful misconduct or
gross negligence. In all questions arising under this Agreement, the Escrow
Agent may rely on the advice of counsel, and for anything done, omitted or
suffered in good faith by the Escrow Agent based upon such advice the Escrow
Agent shall not be liable to anyone. The Escrow Agent shall not be required
to
take any action hereunder involving any expense unless the payment of such
expense is made or provided for in a manner reasonably satisfactory to it.
The
Escrow Agent shall not be liable for incidental, consequential or punitive
damages. The parties hereto acknowledge that the foregoing indemnities shall
survive the resignation or the removal of the Escrow Agent or the termination
of
this Agreement.
(b) Acquiror
and NextWave Opco shall each indemnify the Escrow Agent for, and hold it
harmless against, 50% of any loss, liability or expense incurred without gross
negligence or willful misconduct on the part of Escrow Agent, arising out of
or
in connection with its carrying out of its duties hereunder. This right of
indemnification shall survive the termination of this Agreement and the
resignation or removal of the Escrow Agent. Acquiror and NextWave Opco shall
each pay 50% of such indemnification costs and expenses.
(c) In
the
event that (i) any dispute shall arise between the parties with respect to
the
disposition or disbursement of any of the assets held hereunder or (ii) the
Escrow Agent shall be uncertain as to how to proceed in a situation not
explicitly addressed by the terms of this Agreement (whether because of
conflicting demands by the other parties hereto or otherwise) the Escrow Agent
shall be permitted to: (A) refrain from taking any action contemplated by this
Agreement and/or (B) interplead all of the assets held hereunder into a Federal
court sitting in the State of New York or a New York State Court, and thereafter
be fully relieved from any and all liability or obligation with respect to
such
interpleaded assets. The parties hereto (other than the Escrow Agent) further
agree to pursue any redress or recourse in connection with such a dispute
without making the Escrow Agent a party to it.
7. Termination.
This
Agreement with respect to the Escrow Account shall terminate upon the
disbursement by the Escrow Agent of all funds in the Escrow Account in
accordance with Section 3 hereof.
B-7
8. Successor
Escrow Agent.
(a) In
the
event the Escrow Agent becomes unavailable or unwilling to continue as Escrow
Agent under this Agreement, the Escrow Agent may resign and be discharged from
its duties and obligations hereunder by giving its written resignation to the
other parties to this Agreement. Similarly, the Escrow Agent may be removed
and
replaced following the giving of 30 days prior joint written notice to the
Escrow Agent by Acquiror and NextWave Opco. The resignation or removal of the
Escrow Agent hereunder shall take effect not more than 30 days after the written
resignation of the Escrow Agent is given to the other parties to this Agreement
or the joint written notice of removal is given to Escrow Agent, as the case
may
be; provided
that
such resignation or removal shall in no event take effect before the successor
to the Escrow Agent shall have been appointed pursuant to this Section
8.
(b) Acquiror
may appoint a successor Escrow Agent only with the consent of the Company (which
consent shall not be unreasonably withheld or delayed). The Escrow Agent shall
act in accordance with joint written instructions from Acquiror and the Company
as to the transfer of the Escrow Account to a successor Escrow Agent. If a
successor Escrow Agent is not appointed, then the Escrow Agent may apply to
a
Federal court sitting in the State of New York or a New York State Court to
do
so. In the event of a merger, consolidation or sale of substantially all of
the
corporate trust business of the Escrow Agent (including the administration
of
the Escrow Account), the successor organization, without further act, shall
become the Escrow Agent under this Agreement.
9. Amendment.
This
Agreement may be amended with respect to any provision contained herein at
any
time by written action of the parties hereto.
10. Notices.
All
notices, requests, claims, demands, statements, consents, approvals and other
communications under this Agreement shall be in writing and shall be deemed
given if delivered personally, telecopied (which is confirmed) or sent by
overnight courier (providing proof of delivery) to the parties at the following
addresses (or at such other address for a party as shall be specified by like
notice):
(i) if
to
NextWave Opco to:
[NEXTWAVE
OPCO]
000
Xxxx
Xxxxxx, 0xx
Xxxxx
Xxxxxxxxx,
XX 00000
Fax:
(000) 000-0000
Attn:
Xxxxx Xxxxxx, Esq.
with
a
copy to:
Xxxx
Xxxxxxx & Xxxxxx LLP
000
Xxxxx
Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Fax:
(000) 000-0000
Attn:
Xxxxxx Xxxxxxxxxx, Esq.
Xxxxxx
X.
Xxxxxxx, Esq.
B-8
and
Xxxxxxx-Rape
P.C.
0000
Xxxxxxxxx Xxxxx
Xxxxxx,
XX 00000
Fax:
(000) 000-0000
Attn:
Xxxxxxx Xxxxxxx-Rape, Esq.
which
shall not constitute notice;
(ii) if
to
Parent or Acquiror, to:
Verizon
Wireless
000
Xxxxxxxxxx Xxxxxx Xxxx
Xxxxxxxxxx,
XX 00000
Fax:
(000) 000-0000
Attn:
Xxxxxxxx X. Xxxxxxx
with
a
copy to:
Verizon
Wireless
000
Xxxxxxxxxx Xxxxxx Xxxx
Xxxxxxxxxx,
XX 00000
Fax:
(000) 000-0000
Attn:
Xxxxxxxx X. Xxxxxx, Esq.
Attn:
Xxxxxx Xxxx, Esq.
Skadden,
Arps, Slate, Xxxxxxx & Xxxx LLP
0
Xxxxx
Xxxxxx
Xxx
Xxxx,
XX 00000-0000
Fax:
(000) 000-0000
Attn:
Xxxxx Xxxxx Xxxxxx, Esq.
J.
Xxxxxxx Xxxxxx, Esq.
which
shall not constitute notice.
(iii) if
to the
Company, to
NextWave
Telecom INC.
[ ]
[ ]
Telecopy
No.: ( )
Attention:
with
a
copy to:
Verizon
Wireless
000
Xxxxxxxxxx Xxxxxx Xxxx
Xxxxxxxxxx,
XX 00000
Fax:
(000) 000-0000
Attn:
Xxxxxxxx X. Xxxxxx, Esq.
Attn:
Xxxxxx Xxxx, Esq.
B-9
Skadden,
Arps, Slate, Xxxxxxx & Xxxx LLP
0
Xxxxx
Xxxxxx
Xxx
Xxxx,
XX 00000-0000
Fax:
(000) 000-0000
Attn:
Xxxxx Xxxxx Xxxxxx, Esq.
J.
Xxxxxxx Xxxxxx, Esq.
which
shall not constitute notice.
(iv) if
to the
Escrow Agent, to
[ ]
[ ]
[ ]
Telecopy
No.: ( )
Attention:
11. Counterparts.
This
Agreement may be executed in one or more counterparts, all of which shall be
considered one and the same agreement and shall become effective when one or
more counterparts have been signed by each of the parties and delivered to
the
other parties. A facsimile copy of a signature page shall be deemed to be an
original signature page.
12. Entire
Agreement; No Third-Party Beneficiaries.
This
Agreement (including the documents and instruments referred to herein) (a)
constitutes the entire agreement, and supersede all prior agreements and
understandings, both written and oral, between the parties with respect to
the
subject matter of this Agreement and (b) except to the extent specifically
provided in this Agreement, are not intended to confer upon any Person other
than the parties any rights or remedies.
13. 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 principles of conflict of Laws thereof.
14. Assignment.
The
provisions hereof shall inure to the benefit of, and be binding upon, the
successors by operation of law, permitted assigns and the permitted corporate
nominee or designee of the parties hereto. No assignment of this Agreement
may
be made by any party at any time, whether or not by operation of Law, without
the other parties’ prior written consent; provided,
that,
Parent and Acquiror shall be permitted to assign their respective rights and
obligations under this Agreement to any of their existing or newly created
corporate Affiliates without the consent of any other party hereto so long
as
such assignment would not be reasonably likely to materially delay or materially
impair the ability of any of the parties hereto to fulfill their obligations
under this Agreement.
15. Dispute
Resolution.
All
disputes relating to the breach, termination or validity of this Agreement
or
the parties’ performance hereunder (“Dispute”)
shall
be resolved as provided by this Section 15.
(a) Each
party shall send the other parties written notice identifying the Dispute and
invoking the procedures of this Section 15. Within 15 days of the giving of
such
notice, the parties involved in the Dispute (the “Dispute Parties”) shall meet
at a mutually agreed location in New York, New York, for the purpose of
determining whether they can resolve the Dispute themselves by written
agreement, and, if not, whether they can agree upon a third-party arbitrator
to
whom to submit the matter in dispute for final and binding arbitration in
accordance with the procedures set forth in Sections 15(c) and (d)
hereof.
B-10
(b) If
the
Dispute Parties fail to resolve the Dispute by written agreement or fail to
agree on the arbitrator within said 15-day period, either of the Dispute Parties
may make written application to the American Arbitration Association
(“AAA”)
to
resolve the dispute by arbitration before a panel of three arbitrators
(collectively, the “Arbitrator”
and
each member of such panel a “Panel
Member”)
to be
selected as follows: (i) one Panel Member shall be appointed by the petitioner
at the time of application, (ii) one Panel Member shall be appointed by the
respondent within 20 days of receipt by respondent of a copy of the application
for arbitration and (iii) the Dispute Parties shall by mutual agreement select
a
third, independent, Panel Member, except that in the event that the Dispute
Parties are unable to reach agreement as to the third Panel Member within 20
days of the written application to AAA, then the third Panel Member (or any
other Panel Member not timely appointed) shall be selected by AAA in accordance
with the listing, striking and ranking procedures in the Commercial Arbitration
Rules of the AAA, then in effect. The Dispute Parties shall hold a preliminary
conference with AAA within ten calendar days after the end of such 20 day period
to discuss the Dispute and the qualifications and experience which the Dispute
Parties respectively believe such third Panel Member should have and AAA shall
then appoint such third Panel Member within 20 days after the end of such 20
day
period.
(c) Within
60
days of the selection of the Arbitrator, the Dispute Parties shall meet in
New
York, New York with such Arbitrator at a place and time designated by such
Arbitrator after consultation with such parties and present their respective
positions on the Dispute. The arbitration proceeding shall be held in accordance
with the rules for commercial arbitration of the AAA in effect on the date
of
the initial application for arbitration (as such rules are modified by the
terms
of this Agreement or may be further modified by mutual agreement of the
parties). Each of the Dispute Parties shall have no longer than five days to
present its position, the entire proceedings before the Arbitrator shall be
no
more than ten days, and the decision of the Arbitrator shall be made in writing
no more than 30 days following the end of the proceeding. Such an award shall
be
a final and binding determination of the Dispute and shall be fully enforceable
as an arbitration decision in any court having jurisdiction over the Dispute
Parties. The prevailing party (as determined by the Arbitrator) shall in
addition be awarded by the Arbitrator such party’s reasonable attorneys’ fees
and expenses in connection with such proceeding. The non-prevailing party (as
determined by the Arbitrator) shall pay the Arbitrator’s fees and
expenses.
(d) By
agreeing to arbitration, the parties do not intend to deprive any court of
its
jurisdiction to issue a pre-arbitral injunction, pre-arbitral attachment or
other order in aid of arbitration proceedings and the enforcement of any award.
Without prejudice to such provisional remedies as may be available under the
jurisdiction of a court, the Arbitrator shall have full authority to grant
provisional remedies or to order the parties to request that a court modify
or
vacate any temporary or preliminary relief issued by a such court, and to award
damages for the failure of any party to respect the Arbitrator’s orders to that
effect. Each of the parties (a) consents to submit itself to the personal
jurisdiction of any Federal court located in the State of New York or any New
York State Court for the purpose of any preliminary relief in aid of
arbitration, or for enforcement of any award of the Arbitrator, (b) agrees
that
it will not attempt to deny or defeat such personal jurisdiction by motion
or
other request for leave from any such court, and (c) agrees that it will not
bring any Action relating to this Agreement or any of the transactions
contemplated by this Agreement in any court other than a Federal court sitting
in the State of New York or a New York State Court for the purpose of any
preliminary relief in aid of arbitration, or for enforcement of any award of
the
Arbitrator.
B-11
16. Waiver
of Jury Trial.
The
parties hereby waive a trial by Jury of any and all issues arising in any action
or proceeding between them or their successors or assigns, under or in
connection with this Agreement or any of its provisions or any negotiations
in
connection herewith.
17. Headings.
The
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this
Agreement.
18. Severability.
If any
term or other provision of this Agreement is invalid, illegal or incapable
of
being enforced by any rule of Law or public policy, all other conditions and
provisions of this Agreement shall nevertheless remain in full force and effect.
Upon such determination that any term or other provision is invalid, illegal
or
incapable of being enforced, the parties shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties as closely
as
possible to the fullest extent permitted by applicable Law in an acceptable
manner to the end that the transactions contemplated hereby are fulfilled to
the
extent possible.
19. Successor.
Any
corporation into which the Escrow Agent in its individual capacity may be merged
or converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Escrow Agent in its
individual capacity shall be a party, or any corporation to which substantially
all the corporate trust business of the Escrow Agent in its individual capacity
may be transferred, shall be the Escrow Agent under this Escrow Agreement
without further act.
20. Taxes.
(a) Upon
execution of this Agreement, each of Parent, Acquiror, the Company and NextWave
Opco shall provide the Escrow Agent with a fully executed Internal Revenue
Service Form W-9 (or a substitute thereof reasonably acceptable to the Escrow
Agent), which shall include its Tax Identification Number as assigned by the
Internal Revenue Service.
(b) Parent,
Acquiror, the Company and NextWave Opco agree that NextWave Opco shall be deemed
to be the owner of the Escrow Amount for all relevant Tax purposes, and none
of
Parent, Acquiror, the Company or NextWave Opco shall take any position
inconsistent therewith on any Tax Return or otherwise except as required by
Law.
On each of (i) the last Business Day (as defined below) of each calendar quarter
and (ii) any day on which any other funds are to be disbursed from the Escrow
Account, the Escrow Agent shall disburse to NextWave Opco an amount equal to
the
product of (x) all net interest or other net income earned on the Escrow Amount
(as reasonably determined by the Escrow Agent) since the last disbursement
date
pursuant to this Section 20(b) and (y) the then applicable effective combined
rate for NextWave Opco (depending upon its then tax status); provided,
however,
that in
the event that the aggregate amount to be disbursed from the Escrow Account
on
any given day (including pursuant to this Section 20(b)) exceeds the Escrow
Amount on such day, notwithstanding anything to the contrary contained in this
Agreement or in the Acquisition Agreement, the disbursement required pursuant
to
this Section 20(b) shall be paid in full prior to making any other
disbursements.
“Business
Day” shall mean any day on which the Escrow Agent is open for business at its
offices in New York, New York.
21. Force
Majeure.
In the
event that the Escrow Agent is unable to perform its obligations under the
terms
of this Agreement because of acts of God, strikes, equipment or transmission
failure or damage reasonably beyond its control, or other cause reasonably
beyond its control, the Escrow Agent shall not be liable for damages to the
other parties for any damages resulting from such failure to perform otherwise
from such causes. Performance under this Agreement shall resume when the Escrow
Agent is able to perform substantially.
[SIGNATURE
PAGE FOLLOWS]
B-12
IN
WITNESS WHEREOF, each of the parties have caused this Agreement to be duly
executed as of the day and year first written above.
CELLCO
PARTNERSHIP
D/B/A
VERIZON WIRELESS
By_________________________________
Name:
Title:
VZW
CORP.
By_________________________________
Name:
Title:
NEXTWAVE
TELECOM INC.
By_________________________________
Name:
Title:
NEXTWAVE
OPCO
By_________________________________
Name:
Title:
[ESCROW
AGENT]
By_________________________________
Name:
B-13
EXHIBIT
A
Call-Back
Schedule
Telephone
Number(s) for Call-backs and
Person(s)
Designated to Confirm Funds Transfer Instructions
If
to
NextWave Opco:
TIN#:
Address:
000 Xxxx Xxxxxx Xxx, Xxxxx 000
Xxxxxxxxx,
XX 00000
Wire
Instructions:
|
Name
|
Telephone
Number
|
|
|
1.
Xxxxx Xxxxxx
|
(000)
000-0000
|
|
|
2.
Xxxxxx Xxxx
|
(000)
000-0000
|
|
|
3.
Xxxxx Xxxxxxx
|
(000)
000-0000
|
|
If
to
Acquiror:
TIN#:
Address:
Attention:
Wire
Instructions:
|
Name
|
Telephone
Number
|
|
|
1.
|
||
|
2.
|
||
|
3.
|
||
If
to
Parent:
TIN#:
Address:
A-1
Attention:
Wire
Instructions:
|
Name
|
Telephone
Number
|
|
|
1.
|
||
|
2.
|
||
|
3.
|
||
Telephone
call-backs shall be made to each party if joint instructions are required
pursuant to the Agreement.
A-2
EXHIBIT
B
Fees
For Escrow Agent Services
B-1
EXHIBIT
C
Increased
Amount
C-1
EXHIBIT
C
PLAN
TERM SHEET
C-1
TERM
SHEET FOR THIRD JOINT PLAN OF REORGANIZATION
OF
NEXTWAVE TELECOM INC ET
AL.
Below
is
a summary of the principal terms of the Third Joint Plan of Reorganization
(the
“Plan”) to be proposed by NextWave Telecom Inc. (“NTI”), NextWave Personal
Communications Inc. (“NPCI”), NextWave Wireless Inc. (“NWI”), NextWave Power
Partners Inc. (“NPPI”), and NextWave Partners Inc. (“NPI”, collectively with
NTI, NPCI, NWI, and NPPI, the “Debtors”) with the United States Bankruptcy Court
for the Southern District of New York (the “Bankruptcy Court”). The Debtors’
Chapter I1 cases are being jointly administered under Case Xx. 00 X 00000 (ASH).
The provisions set forth herein are subject to such reasonable modifications
as
the parties may agree to. The Plan may contain other or additional provisions
consistent with the Bankruptcy Code and applicable law as the Debtors may
determine, provided
that
provisions that could reasonably be expected to adversely affect or delay the
transactions contemplated by the Acquisition Agreement, including, but not
limited to, (A) the ability of the Company or any of the License Subsidiaries
to
obtain a discharge of Claims and Liabilities as contemplated by Section 7.2(g)
of the Acquisition Agreement or (B) any License Subsidiary’s interest in and
right to control and operate its respective FCC Licenses free and clear of
Liens, shall be subject to the reasonable consent of the Acquiror.
|
PLAN
PROPONENTS:
|
NTI,
NPCI, NPI, NPPI and NWI.
|
|
|
TREATMENT
OF
ALLOWED
CLAIMS
AGAINST
AND EQUITY
INTERESTS
IN THE
DEBTORS:
|
Administrative
Claims.
Cash in full after confirmation but prior to the closing under the
Acquisition Agreement (the “Creditor Distribution Date”) or in the
ordinary course of business, plus interest to the extent required
under
non-bankruptcy law.
Priority
Tax Claims.
Cash in full on the Creditor Distribution Date, plus
interest.
Priority
Non-Tax Claims.
Cash in full on the Creditor Distribution Date, plus
interest.
Secured
Claims.
Cash in full on the Creditor Distribution Date or such other treatment
as
shall render such Claim unimpaired.
FCC
Claim.
Cash concurrent with the closing under the Acquisition Agreement
in the
amount of the Section 3 Payment, pursuant to the terms of the Global
Resolution Agreement.
Bridge
Noteholders Claims.
Cash in full on the Creditor Distribution Date or the right to convert
into Series B Common Stock and receipt of treatment accorded to holders
of
such Common Stock.
General
Unsecured Claims (includes all unsecured Claims not in any other
class).
Cash in full on the Creditor Distribution Date, plus
interest.
Securities
Litigation Claims.
No recovery.
Intercompany
Claims.
No recovery. Deemed to accept the Plan.
Equity
Interests in NPCI, NPPI and NPI.
Unimpaired.
Equity
Interests in NWI.
NWI will directly or indirectly be spun-out as an
LLC.
|
C-2
|
Series
A Common Stock.
All Series A Common Stock will convert to shares of Series B Common
Stock
on a 1:1 basis. Such holders shall then receive the treatment of
Series B
Common Stock. Such holders shall be entitled to vote as a separate
class
to approve the Plan.
Series
B Common Stock.
Each holder of Existing NTI Series B Common Stock will receive (a)
their
pro rata share of an amount equal to the sum of (1) $3.0 billion
and (2)
the residual cash remaining after payments and distributions made
prior
and pursuant to the Plan to nonshareholders (such as operational
expenses
in the interim, administrative expenses and the payment in full of
all
creditors), less (i) the Section 3 Payment, (ii) $165 million (subject
to
adjustment pursuant to Section 7.2(j) of the Acquisition Agreement)
to be
placed into a tax escrow (the “Escrow Amount”), all rights to which shall
be considered assigned to NextWave Opco by NTI’s existing shareholders,
(iii) appropriate reserves for contingent liabilities and expenses
related
to the conclusion of the bankruptcy proceedings, and (iv) funding
for the
obligations assumed by and future operations of NextWave Opco; and
(b)
their pro rata distribution of interests in NWI.
Existing
Options/Warrants.
Holders may convert into Series B Common Stock.
Expired
Options/Warrants.
No Recovery.
|
||
|
CONVERSION
RIGHTS:
|
Holders
of claims with a valid contractual right to convert into Series B
Common
Stock will be able to convert pursuant to the procedures to be established
by the Plan and the Disclosure Statement.
|
|
|
DIP
LOAN PAYMENT,
RIGHT
AND CLARITY
CLAIM:
|
DIP
loan payment rights under the DIP loan facility agreements of the
Debtors
will be paid in full in Cash on the Creditor Distribution
Date.
On
the Creditor Distribution Date, the holder of the Clarity Claim shall
receive $1 million in Cash.
|
|
|
BONUS
POOLS FOR
CURRENT
ACTIVE
EMPLOYEES
AND
CONSULTANTS:
|
Shares
of Series B Common Stock will be reserved for grant at confirmation
to
active employees and consultants.
|
C-3
|
TRANSFERS
OF
PROPERTY
|
On
or before the closing under the Acquisition Agreement, the following
will
occur in this order:
(i)
OPCO (if other than NWI) shall be formed;
(ii)
All assets and liabilities of the License Subsidiaries and NTI (except
for
the PCS Licenses and other agreed upon assets) shall be transferred
to,
and assumed by, OPCO;
(iii)
NWI will be spun-out in the form of an LLC along with Tele*Code/Opco
to
the holders of Series B Common Stock;
(iv)
All assets and liabilities of TELE*Code, a non-debtor, including
the
Equity Interests in TELE*Code, shall be transferred to, and assumed
by,
OPCO;
(v)
The Acquiror shall pay the Aggregate Acquisition Consideration to
NTI, net
of (A) the Section 3 Payment, which shall be paid directly to the
FCC, and
(B) $165,000,000 (such amount may be adjusted pursuant to Section
7.2(j)
of the Acquisition Agreement), which shall be transferred to the
Tax
Escrow Agent;
(vi)
NTI shall issue the New NTI Common Stock to the Acquiror and shall
become
a wholly-owed subsidiary thereof.
|
|
|
CONDITIONS
TO
EFFECTIVE
DATE:
|
(i)
The Confirmation Order shall be a Final Order;
(ii)
Execution of and satisfaction or waiver of conditions to the Plan
Documents; and
(iii)
Satisfaction or waiver of conditions to the Acquisition Agreement.
Any of
the foregoing conditions may be waived by NTI, the Acquiror or the
Parent
to the extent provided for in the Acquisition
Agreement.
|
|
|
RETENTION
OF
JURISDICTION:
|
The
Plan shall provide for the Bankruptcy Court to retain jurisdiction
over
the Debtors and the Plan after the Confirmation Date in a manner
usual and
customary for Chapter 11 plans.
|
|
|
DISCHARGE,
EXCULPATIONS,
RELEASES
AND
INJUNCTIONS:
|
The
Plan shall provide for a discharge of the Debtors as set forth in
Section
7.2(g) of the Acquisition Agreement. The Plan shall also provide
for
exculpations for the Debtors, their officers and directors, the Committee
and its members, Verizon and their respective professionals, etc.
in a
manner usual and customary for Chapter 11 plans. The Plan shall also
contain releases (i) to and from the Debtors and the FCC, in accordance
with the Global Resolution Agreement, (ii) for the Debtors’ officers and
directors; and (iii) for Verizon and its officers and directors.
The Plan
will provide an injunction preventing holders of Claims and Liabilities
from asserting such Claims and Liabilities against the Acquiror,
the
Parent or the Reorganized
Debtors/OPCO.
|
C-4
EXHIBIT
D
ACQUISITION
APPROVAL ORDER
D-1
| UNITED STATES BANKRUPTCY COURT | ||
| SOUTHERN DISTRICT OF NEW YORK | ||
| ---------------------------------------------------------------------- | x | |
| In re | Chapter 11 | |
| : | ||
| Case Xx. 00 X 00000 (ASH) | ||
| : | ||
| NEXTWAVE PERSONAL COMMUNICATIONS INC., et al., |
(Jointly
Administered)
|
|
|
Debtors.
|
: | |
| ---------------------------------------------------------------------- | x |
ORDER
GRANTING MOTION PURSUANT TO SECTIONS 105 AND 363
OF
THE BANKRUPTCY CODE AND FEDERAL RULE OF BANKRUPTCY
PROCEDURE
2002 APPROVING ACQUISITION
AGREEMENT
AND TERMINATION PAYMENT
Upon
the
Motion Pursuant to Sections 105 and 363 of the Bankruptcy Code and Federal
Rule
of Bankruptcy Procedure 2002 Approving Acquisition Agreement (the “Motion”)
filed
by NextWave Personal Communications Inc., et
al.,
the
above-captioned debtors and debtors in possession (collectively, “NextWave”
or
the
“Debtors”);
and
upon the hearing on the Motion held on November __ 2004 (the “Hearing”)
and
the representations of counsel and evidence submitted thereat; and good and
sufficient notice of the Motion and the Hearing having been given, and no other
or further notice being required; and upon the complete record of these Chapter
11 cases and after due deliberation and good cause appearing therefor, the
Court
hereby
FINDS,
DETERMINES AND CONCLUDES THAT:
1. This
Court has jurisdiction to hear and determine the Motion under 28 U.S.C.
§§ 157 and 1334, and this matter is a core proceeding under 28 U.S.C.
§ 157(b)(2)(A). Venue of these cases and the Motion in this District is
proper under 28 U.S.C. §§ 1408 and 1409.
2. The
statutory predicates for relief requested in the Motion are Sections 105 and
363
of title 11 of the United States Code (the “Bankruptcy
Code”),
and
Rule 2002 of the Federal Rules of Bankruptcy Procedure (the “Bankruptcy
Rules”).
3. As
evidenced by the affidavits of service filed with this Court, and based on
the
representations of counsel at the Hearing: (i) due, proper, timely, adequate
and
sufficient notice of the Motion, the Hearing, the Acquisition Agreement and
the
transactions contemplated thereby, has been provided in accordance with Sections
102(1), 105, 363 and 503(b) of the Bankruptcy Code, Bankruptcy Rule 2002, and
all other provisions of the Bankruptcy Rule and/or the Local Rules of the United
States Bankruptcy Court for the Southern District of New York (the “Local
Rules”)
governing the transactions that are the subject of the Motion; (ii) such notice
was good, sufficient and appropriate under the circumstances; and (iii) no
other
or further notice of the Motion, the Hearing or the Acquisition Agreement or
the
transactions contemplated thereby is or shall be required.
4. A
reasonable opportunity to object and to be heard with respect to the Motion
and
the relief requested therein has been afforded to all parties in interest,
including the following: (i) the Office of the United States Trustee; (ii)
the
Committee; (iii) all entities (as used throughout this Order, such term shall
have the meaning set forth in Section 101(15) of the Bankruptcy Code) known
by
the Debtors to have asserted a lien on any of the Debtors’ other assets; (iv)
all of the Debtors’ creditors, equity and other interest holders of record; (v)
the taxing authorities for those jurisdictions in which the Debtors have
conducted business; (vi) all non-debtor parties to any executory contracts
or
unexpired leases of the Debtors; (vii) all other parties that had filed a notice
of appearance and demand for service of papers in the Bankruptcy Cases under
Bankruptcy Rule 2002 as of the date of the Motion; and (viii) parties in
interest by publication of notice as set forth in the certificates of service
filed in connection with the Motion.
| 1 |
Capitalized
terms used but not defined herein have the meanings ascribed to
such terms
in the Acquisition Agreement attached hereto as Exhibit
1
or as defined in the Motion.
|
D-2
5. Each
of
the Debtors has full corporate power and authority to execute the Acquisition
Agreement and all other documents contemplated thereby. Subject to the
conditions in the Acquisition Agreement, each of the Debtors has all of the
corporate power and authority necessary to consummate the transactions
contemplated by the Acquisition Agreement and no consents or approvals, other
than approval of this Court through this Order, FCC Approval, HSR Approval
and
those approvals expressly provided for in the Acquisition Agreement, are
required by the Debtors to consummate the transactions contemplated
therein.
6. Approval
at this time of the Acquisition Agreement and the consummation of the
transactions contemplated thereby (subject to confirmation of a chapter 11
plan)
is in the best interests of Debtors, their creditors, and their
estates.
7. The
terms
and the conditions of the Acquisition Agreement are fair and
reasonable.
8. The
Debtors have articulated good and sufficient reasons for authorizing entry
into
the Acquisition Agreement and approving the Break-Up Payment under the terms
and
conditions of the Acquisition Agreement. The Break-Up Payment is (i) an actual
and necessary cost and expense of preserving the Debtors’ estates, within the
meaning of Bankruptcy Code section 503(b), (ii) of substantial benefit to the
Debtors, their estates, their creditors, and other parties-in-interest, (iii)
reasonable and appropriate considering, among other things, the size and nature
of the proposed acquisition and the efforts that have been and will be expended
by Cellco Partnership d/b/a Verizon Wireless (“Verizon Wireless”) and VZW Corp.
in seeking to consummate the transactions contemplated by the Acquisition
Agreement, and (iv) necessary to ensure that Verizon Wireless and VZW Corp.
will
continue to pursue the transactions contemplated by the Acquisition
Agreement.
9. The
Break-Up Payment is an integral part of the transactions contemplated by the
Acquisition Agreement, and, in the absence of the Debtors’ obligations to make,
and agreement to request administrative claim status for, such payment as
specified in the Acquisition Agreement, Verizon Wireless and VZW Corp. would
not
have entered into the Acquisition Agreement. Accordingly, Verizon Wireless
and
VZW Corp. are unwilling to hold open their offer to pursue the proposed
acquisition involving the Debtors and consummate the other transactions
contemplated by the Acquisition Agreement unless they are assured of the
Debtors’ ability, right, and obligation to pay the Break-Up
Payment.
10. The
Acquisition Agreement has been pursued by the Debtors in contemplation of their
expected reorganization, and will facilitate the Debtors’ attempts to reorganize
under Chapter 11 of the Bankruptcy Code.
D-3
NOW,
THEREFORE, IT IS HEREBY ORDERED, ADJUDGED AND DECREED THAT:
1. The
Motion is GRANTED.
2. Any
objections to the entry of this order or the relief granted herein and requested
in the Motion that have not been withdrawn, waived or settled, and all
reservations of rights included therein, hereby are denied and overruled on
the
merits with prejudice.
3. The
Debtors are authorized to enter into the Acquisition Agreement and perform
their
obligations thereunder.
4. The
Debtors are authorized to pay the Break-Up Payment in accordance with the terms
of the Acquisition Agreement.
5. The
Break-Up Payment (a) constitutes an administrative expense of the Debtors’
estates under Bankruptcy Code section 503(b) and 507(a)(1), with priority in
any
subsequent or superseding bankruptcy case (including any chapter 7 case), shall
(b) be paid by the Debtors in the time and manner provided in the Acquisition
Agreement without any further order of this Court, and (c) not be discharged,
modified or otherwise affected by any plan of reorganization of any of the
Debtors, any conversion of the case to Chapter 7, or any dismissal of the
case.
6. Upon
the
closing under the Acquisition Agreement, the License Sale Cash Payment shall
be
paid to the FCC in accordance with the terms of the Global Resolution Agreement
approved by this Court by order dated May 25, 2004 (the “GRA”), and any
applicable Sharing Payment shall be paid to the FCC in accordance with the
terms
of the GRA, with such payments to be free and clear of any liens, claims,
encumbrances, rights or interests of the Debtors and other parties in
interest.
7. The
failure specifically to include any particular provisions of the Acquisition
Agreement in this order shall not diminish or impair the effectiveness of such
provisions. Likewise, all of the provisions of this order are nonseverable
and
mutually dependent.
8. The
terms
and provisions of this order shall be binding in all respects upon the Debtors,
their estates, their respective affiliates, successors, and assigns, and any
trustee, responsible person, estate administrator, representative, or similar
person subsequently appointed for or in connection with any of Debtors’ estates
or affairs in these chapter 11 cases or in any subsequent case(s) under the
Bankruptcy Code involving any of the Debtors.
9. Nothing
contained in the reorganization plan confirmed for the Debtors in these cases
or
in any other order in these cases (including any order entered after any
conversion of these cases to cases under Chapter 7 of the Bankruptcy Code)
shall
alter, conflict with or derogate from the provisions of the Acquisition
Agreement, and the terms of this order, and, in the event of any inconsistency
between such plan and this order, the terms of this order shall
govern.
10. Nothing
herein shall prescribe or constrain the FCC’s exercise of its regulatory
authority.
11. This
order shall be effective immediately, and not stayed pursuant to Bankruptcy
Rule
5004(g) or any other applicable Bankruptcy Rule.
Dated:
White Plains, New York
______________,
0000
XXXXXXXXX
XXXXX X. XXXXXX, Xx.
XXXXXX
XXXXXX BANKRUPTCY JUDGE
D-4
EXHIBIT
E
FCC
MATTERS OPINION
E-1
__________,
2005
Celico
Partnership d/b/a Verizon Wireless
_____________,
Vice President
&
Xxxxxxxx Xxxxxx, Esq., Associate General Counsel
000
Xxxxxxxxxx Xxxxxx Xxxx
Xxxxxxxxxx,
XX 00000
Re: Acquisition
Agreement (the “Agreement”) dated as of ____________, 2004, by
and
between Nextwave Telecom Inc. (“the Company”), Cellco Partnership
d/b/a
Verizon
Wireless (the “Parent”), and VZW Corp. (the “Acquiror”).
Ladies
and Gentlemen:
We
have
acted as special federal communications regulatory counsel to the Company in
connection with the negotiation, preparation and execution of the Agreement.
This opinion is rendered to you pursuant to Section __ of the Agreement.
Capitalized terms defined in the Agreement and used herein without definition
shall have the meanings given such terms in the Agreement.
As
special federal communications regulatory counsel to the Company, we address
only matters within the jurisdiction of the Federal Communications Commission
(“FCC”) under the Communications Act of 1434, as amended, and the rules,
regulations, and published and publicly available orders and policies of the
FCC
(collectively, the “Communications Laws”) with respect to the FCC Licenses
issued by the FCC to the Company’s License Subsidiaries as listed on Annex A
hereto (the “FCC Licenses”). We express no opinion as to any other federal,
state, or local laws, statutes, rules, or regulations including, but not limited
to, bankruptcy laws, state or local public utility and other laws, regulations,
rules or policies that may be applicable to the operations of the Company or
to
its PCS system. The opinions expressed herein do not address the effect, if
any,
of pending legislation or of proceedings before the FCC or any court to which
the Company is not a party.
In
connection with our rendering of this opinion, we have examined the
Communications Laws, the Agreement, and the public records of the FCC that
were
made available to us as of [no earlier than 48 hours prior to close], 2005,
as
we have deemed appropriate. We have assumed the accuracy, completeness and
authenticity of the public records of the FCC that we examined on [no earlier
than 48 hours prior to close], 2004. We also have relied upon responses received
from the FCC to our inquiries dated [no more than 10 business days prior to
close], 2005 to Due Diligence Requests, Investigations and Hearing Division,
Enforcement Bureau, FCC with respect to the existence of formal complaints,
notices of apparent liability, hearings, investigations, petitions (other than
with respect to specific applications), and other proceedings against the
Company, and, as to factual matters, upon a certificate of an officer of
Company. We have not made any independent review or investigation of factual
or
other matters for purposes of rendering this opinion. We have not conducted
a
field inspection or other technical or engineering evaluation of the PCS system
or any other plant and facilities that have been constructed or may be operating
pursuant to the FCC Licenses.
In
rendering the opinions herein expressed, we have assumed, without further
investigation: (i) the genuineness of all signatures on documents examined
by us, (ii) the legal capacity of natural persons purporting to execute
documents examined by us, (iii) the authenticity of all documents examined
by us
and represented to us as being originals, (iv) the conformity to original
documents of all documents examined by us and represented to us as being
certified, conformed or photostatic copies or facsimiles, (v) the authority
of the Company to enter into and to perform its obligations under the Agreement,
and (vi) that such Agreement constitutes a legal, valid and binding
obligation of the Company.
E-2
All
statements as to factual matters underlying the opinions set forth herein are
based upon our knowledge as of the date hereof. All references herein to “our
knowledge” mean the actual present knowledge of the attorneys in this firm who
are actively engaged in substantive representation of the Company without any
investigation or inquiry except as expressly described herein. No inference
as
to our knowledge of the existence or absence of any fact should be drawn from
the fact of our representation of the Company.
Our
opinions are limited strictly to the matters stated herein and no opinions
may
be inferred or are implied beyond the matters expressly stated herein. We have
assumed no obligation to advise you with respect to any matters apart from
the
opinions specifically expressed herein.
Based
upon our examination of the foregoing disclosures, documents, records and
matters of law and subject to the qualifications, assumptions, limitations
and
exceptions set forth herein, we are of the opinion that:
1. The
execution and delivery by the Company, and its performance in accordance with
the terms of the Agreement does not violate any of the terms or provisions
of,
or constitute a default under, the Communications Laws or of the FCC Licenses,
and, other than filing the requisite consummation notice with the FCC, no
consent, approval, authorization, order or waiver of, or filing with, the FCC
is
required under the Communications Laws to be obtained or made by the Company,
other than those that have been obtained and made under the Communications
Laws,
for the execution and delivery by the Company, and its performance in accordance
with its terms of its obligations under the Agreement.
2. The
Company’s License Subsidiaries hold the FCC Licenses it identified as holding in
Annex A. The FCC Licenses are not subject to any conditions outside the ordinary
course.
3. The
FCC
has granted its consents to the transfer of control of the License Subsidiaries
to the Parent (the “FCC Consent”), (a) without any modification to the amount of
the Purchase Price, (b) without any requirement that the Acquiror pay any
amount to the FCC or any other party (other than the Section 3 Payment) and
(c)
without any other material adverse conditions that are generally applicable
to
holders of FCC licenses. The FCC Consent has been duly issued and is in effect.
The time has expired during which a party in interest may timely seek
administrative or judicial reconsideration or review of the FCC Consent, and
within which the FCC may review or set aside the FCC Consent on its own motion.
The FCC Consent includes and constitutes all necessary consents, approvals
and
authorizations required under the Communications Laws for the transfer of
control of the License Subsidiaries to Parent pursuant to the
Agreement.
4. To
our
knowledge, there is no complaint, notice of violation, notice of apparent
liability or other administrative proceeding pending or threatened by or before
the FCC against the Company, the License Subsidiaries, or the FCC
Consent.
This
opinion is being furnished to you subject to the qualifications, assumptions,
limitations and exceptions expressed herein and may be relied upon by you only
with respect to the specific matters that are the subject hereof. This opinion
is rendered only to you and is solely for your benefit in connection with the
transactions expressly addressed herein, and may not be copied, delivered to,
or
relied upon by anyone other than you, or by you with respect to any other
transactions or for any other purpose, without the express written consent
of
this firm.
This
opinion is rendered as of the date hereof and we undertake no responsibility
to
advise you of any changes which might occur after the date hereof.
Very
truly yours,
E-3
|
Call
Sign
|
BTA
Name
|
BTA
#
|
Block
|
MHz
|
Frequencies
|
License
Grant Date
|
License
Expiration Date
|
ULS
File # for
5
YR
Construction
Notification
|
Date
5 YR Construction Notification Granted
|
Licensee
|
|
XXXX000
|
Xxxxxxxx
Xxxx, XX
|
25
|
F
|
00
|
0000-0000;
1970-1975
|
6/27/1997
|
6/27/2007
|
0000955023
|
4/21/2003
|
NPPI
|
|
KNLF652
|
Baltimore,
MD
|
29
|
C
|
00
|
0000-0000;
1975-1985
|
1/3/1997
|
1/3/2007
|
0000753736
|
4/21/2003
|
NPCI
|
|
XXXX000
|
Xxxxxx,
XX
|
51
|
C
|
00
|
0000-0000;
1975-1985
|
1/3/1997
|
1/3/2007
|
0000753594
|
4/21/2003
|
NPCI
|
|
XXXX000
|
Xxxxxxxx,
XX
|
91
|
F
|
00
|
0000-0000;
1970-1975
|
4/28/1997
|
4/28/2007
|
0000963163
|
4/21/2003
|
NPPI
|
|
KNLH216
|
Corpus
Christi, TX
|
99
|
F
|
00
|
0000-0000;
1970-1975
|
4/28/1997
|
4/28/2007
|
0000912797
|
4/21/2003
|
NPPI
|
|
XXXX000
|
Xxxxxxx
Xxxxx, XX
|
107
|
F
|
00
|
0000-0000;
1970-1975
|
4/28/1997
|
4/28/2007
|
0000968515
|
4/21/2003
|
NPPI
|
|
KNLF802
|
Xxxxxx,
XX
|
000
|
C
|
10
|
1895-1900;
1975-1980
|
1/3/1997
|
1/3/2007
|
0000000000
|
4/21/2003
|
NPCI
|
|
KNLH202
|
Detroit,
MI
|
112
|
D
|
00
|
0000-0000;
1945-1950
|
4/28/1997
|
4/28/2007
|
0000774222
|
4/21/2003
|
NPPI
|
|
XXXX000
|
Xxxxx,
XX
|
000
|
X
|
00
|
0000-0000;
1970-1975
|
6/27/1997
|
6/27/2007
|
0000936586
|
4/21/2003
|
NPPI
|
|
XXXX000
|
Xx
Xxxxxx-Xxxxxxxx, XX
|
124
|
D
|
00
|
0000-0000;
1945-1950
|
4/28/1997
|
4/28/2007
|
0000000000
|
4/21/2003
|
NPPI
|
|
KNLH211
|
Greenville
- Spartanburg, SC
|
177
|
F
|
00
|
0000-0000;
1970-1975
|
4/28/1997
|
4/28/2007
|
0000955028
|
4/21/2003
|
NPPI
|
|
KNLH225
|
Janesville-Beloit,
WI
|
216
|
F
|
00
|
0000-0000;
1970-1975
|
4/28/1997
|
4/28/2007
|
0000912261
|
4/21/2003
|
NPPI
|
|
KNLF645
|
Los
Angeles, CA
|
262
|
C
|
00
|
0000-0000;
1980-1985
|
1/3/1997
|
1/3/2007
|
0000753783
|
4/21/2003
|
NPCI
|
|
KNLH214
|
Madison,
WI
|
000
|
X
|
00
|
0000-0000;
1965-1970
|
4/28/1997
|
4/28/2007
|
0000791568
|
4/21/2003
|
NPPI
|
|
XXXX000
|
Xxx
Xxxx, XX
|
321
|
C
|
00
|
0000-0000;
1980-1990
|
1/3/1997
|
1/3/2007
|
0000773257
|
4/21/2003
|
NPCI
|
|
XXXX000
|
Xxxxx,
XX
|
326
|
F
|
00
|
0000-0000;
1970-1975
|
4/28/1997
|
4/28/2007
|
0000955025
|
4/21/2003
|
NPPI
|
|
KNLH201
|
Philadelphia,
PA-Wilmington, DE-Trenton, NJ
|
346
|
F
|
00
|
0000-0000;
1970-1975
|
6/27/1997
|
6/27/2007
|
0000902501
|
4/21/2003
|
NPPI
|
|
KNLH228
|
Xxxxxxxxxx,
XX
|
000
|
D
|
00
|
0000-0000;
1945-1950
|
6/27/1997
|
6/27/2007
|
0000852881
|
4/21/2003
|
NPPI
|
|
KNLF812
|
Xxxxxxxx,
XX
|
000
|
C
|
00
|
0000-0000;
1980-1985
|
1/3/1997
|
1/3/2007
|
0000753708
|
4/21/2003
|
NPCI
|
|
KNLH223
|
Provo-Orem,
UT
|
365
|
F
|
00
|
0000-0000;
1970-1975
|
4/28/1997
|
4/28/2007
|
0000000000
|
4/21/2003
|
NPPI
|
|
KNLH212
|
Springfield-Holyoke,
MA
|
000
|
X
|
00
|
0000-0000;
1965-1970
|
6/27/1997
|
6/27/2007
|
0000772113
|
4/21/2003
|
NPPI
|
|
KNLH210
|
Tulsa,
OK
|
448
|
F
|
00
|
0000-0000;
1970-1975
|
4/28/1997
|
4/28/2007
|
0000000000
|
4/21/2003
|
NPPI
|
|
XXXX000
|
Xxxxxxxxxx,
XX
|
461
|
C
|
00
|
0000-0000;
1975-1985
|
1/3/1997
|
1/3/2007
|
0000753709
|
4/21/2003
|
NPCI
|
