EXHIBIT 2.1
EXECUTION VERSION
================================================================================
ASSET PURCHASE AGREEMENT
by and among
NUCENTRIX BROADBAND NETWORKS, INC.
and those additional Subsidiaries of
NUCENTRIX BROADBAND NETWORKS, INC.
listed on the signature pages hereto,
NEXTEL SPECTRUM ACQUISITION CORP.
and
UNRESTRICTED SUBSIDIARY FUNDING COMPANY
Dated as of November 10, 2003
================================================================================
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS................................................................................2
1.01 Definitions....................................................................................2
1.02 Other Terms....................................................................................9
ARTICLE II PURCHASE AND SALE OF ASSETS................................................................9
2.01 Purchase and Sale..............................................................................9
2.02 Acquired Assets................................................................................9
2.03 Excluded Assets...............................................................................10
2.04 Assumed Liabilities...........................................................................13
2.05 Excluded Liabilities..........................................................................13
2.06 Assumed Contracts; Default Cures..............................................................14
2.07 Right to Exclude Certain Assets...............................................................14
2.08 Risk of Loss..................................................................................15
ARTICLE III PURCHASE PRICE............................................................................15
3.01 Purchase Price................................................................................15
3.02 Purchase Price Deposit........................................................................15
3.03 Payments and Computations.....................................................................16
3.04 Purchase Price Allocation.....................................................................16
ARTICLE IV THE CLOSING...............................................................................16
4.01 Closing Date..................................................................................16
4.02 Deliveries by Sellers.........................................................................17
4.03 Deliveries by Purchaser.......................................................................17
4.04 Joint Delivery................................................................................18
ARTICLE V REPRESENTATIONS AND WARRANTIES OF SELLERS.................................................18
5.01 Organization; Standing and Power..............................................................18
5.02 Authority; Execution and Delivery; Enforceability.............................................18
5.03 No Conflicts..................................................................................19
5.04 Governmental Filings; Consents................................................................19
5.05 Title to and Condition of Acquired Assets.....................................................19
5.06 Real Property.................................................................................20
5.07 Tower Leases..................................................................................20
-i-
TABLE OF CONTENTS
(continued)
PAGE
5.08 Contracts.....................................................................................21
5.09 Permits.......................................................................................22
5.10 Company FCC Licenses..........................................................................22
5.11 Acquired Spectrum Leases......................................................................24
5.12 Intentionally Deleted.........................................................................25
5.13 Taxes.........................................................................................25
5.14 Proceedings...................................................................................25
5.15 Compliance with Laws..........................................................................25
5.16 Environmental Matters.........................................................................25
5.17 Absence of Certain Changes....................................................................26
5.18 Network Equipment.............................................................................26
5.19 Spare Parts and Equipment.....................................................................26
5.20 Brokers or Finders............................................................................26
5.21 Interference Coordination Agreements..........................................................26
5.22 Intellectual Property.........................................................................26
5.23 Cable Systems.................................................................................27
5.24 Acquired WCS Agreements.......................................................................28
5.25 Collective Bargaining Agreements..............................................................28
5.26 Accuracy of Copies and Statements.............................................................28
5.27 ERISA.........................................................................................28
5.28 Nucentrix Reports; Financial Statements.......................................................28
5.29 Insurance.....................................................................................29
5.30 WorldCom BTA Agreements.......................................................................29
5.31 Non-U.S. Operations...........................................................................29
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF PURCHASER...............................................29
6.01 Organization; Standing and Power..............................................................29
6.02 Authority; Execution and Delivery; Enforceability.............................................29
6.03 No Conflicts..................................................................................30
6.04 Governmental Filings; Consents................................................................30
6.05 Litigation....................................................................................30
-ii-
TABLE OF CONTENTS
(continued)
PAGE
6.06 Financing.....................................................................................30
6.07 Brokers or Finders............................................................................30
6.08 No Filings Outside United States..............................................................30
ARTICLE VII COVENANTS.................................................................................31
7.01 Operation of Acquired Assets Prior to Closing.................................................31
7.02 Access to Information; Access to Personnel; Site Inspections..................................32
7.03 Spectrum Testing..............................................................................33
7.04 FCC Filings...................................................................................33
7.05 Third Party Consents..........................................................................35
7.06 Commercially Reasonable Efforts...............................................................35
7.07 Notification of Certain Matters...............................................................35
7.08 Maintenance of FCC Licenses...................................................................36
7.09 Bankruptcy Covenants..........................................................................38
7.10 Intentionally Deleted.........................................................................38
7.11 Employee Matters..............................................................................38
7.12 Further Assurances............................................................................38
7.13 Tax Matters...................................................................................39
7.14 Confidentiality...............................................................................40
7.15 Press Releases................................................................................42
7.16 Expenses......................................................................................42
7.17 Rejected Contracts............................................................................42
7.18 Renewal of Certain Short Term Leases..........................................................42
7.19 Apportionment of Prepaid Expenses and Accounts Payable........................................42
7.20 Intentionally Deleted.........................................................................44
7.21 Third Party Dedicated Equipment...............................................................44
7.22 FCC Waivers...................................................................................44
7.23 Mutual Releases...............................................................................44
7.24 Common Equipment..............................................................................45
7.25 FCC Amount....................................................................................45
7.26 WorldCom BTAs.................................................................................46
-iii-
TABLE OF CONTENTS
(continued)
PAGE
7.27 Transition Servicing..........................................................................46
7.28 Non-competition...............................................................................46
7.29 Jonesboro BTA Agreement.......................................................................46
7.30 HSR Filing....................................................................................46
7.31 Performance...................................................................................47
7.32 Assignment of FCC Licenses after the Closing..................................................47
ARTICLE VIII CLOSING CONDITIONS........................................................................47
8.01 Conditions to Obligations of Purchaser and Sellers............................................47
8.02 Additional Conditions to Obligations of Purchaser.............................................48
8.03 Additional Conditions to Obligations of Sellers...............................................50
ARTICLE IX TERMINATION...............................................................................50
9.01 Termination...................................................................................51
9.02 Effect of Termination.........................................................................52
9.03 Intentionally Deleted.........................................................................52
ARTICLE X INDEMNIFICATION...........................................................................52
10.01 Indemnification by Sellers....................................................................52
10.02 Indemnification by Purchaser..................................................................52
10.03 Calculation of Losses; Limitation of Liability................................................53
10.04 Termination of Indemnification................................................................53
10.05 Procedures....................................................................................53
ARTICLE XI GENERAL PROVISIONS........................................................................55
11.01 Amendment and Waiver..........................................................................55
11.02 Survival of Representations and Warranties; No Other Representations and Warranties...........55
11.03 Entire Agreement..............................................................................55
11.04 Notices.......................................................................................55
11.05 No Third-Party Beneficiaries; Liability; Non-Recourse.........................................57
11.06 Interpretation; Exhibits and Schedules; Certain Definitions...................................57
11.07 Assignment....................................................................................57
11.08 Severability..................................................................................58
-iv-
TABLE OF CONTENTS
(continued)
PAGE
11.09 Submission to Jurisdiction; Consent to Service of Process.....................................58
11.10 Waiver of Jury Trial..........................................................................58
11.11 Specific Performance..........................................................................59
11.12 Construction..................................................................................59
11.13 Governing Law.................................................................................59
11.14 Counterparts..................................................................................59
11.15 Intentionally Deleted.........................................................................59
11.16 Funding.......................................................................................59
-v-
TABLE OF DEFINITIONS
Term Section
Accounts Receivable.........................................................................................1.01
Acquired Assets.............................................................................................2.02
Acquired Spectrum Leases................................................................................2.02(vi)
Acquired Tower Leases....................................................................................2.02(i)
Acquired WCS Agreements.....................................................................................5.24
Acquisition.................................................................................................2.01
Administrative Bar Date.....................................................................................1.01
Affected Lessor.............................................................................................1.01
Affiliate...................................................................................................1.01
Ancillary Agreements....................................................................................2.03(iv)
Annual FCC Reports..........................................................................................1.01
Appeal......................................................................................................1.01
Approval Motion..........................................................................................7.09(a)
Approval Order..............................................................................................1.01
Assigned Contracts.....................................................................................2.02(vii)
Assigned Permits.......................................................................................2.02(iii)
Assumed Liabilities.........................................................................................2.04
Auction.................................................................................................Recitals
Bankruptcy Cases........................................................................................Recitals
Bankruptcy Code.........................................................................................Recitals
Bankruptcy Court............................................................................................1.01
Bidding Procedures Order................................................................................Recitals
Books and Records........................................................................................2.02(x)
BTA.........................................................................................................5.21
Business................................................................................................Recitals
Business Day................................................................................................1.01
Claims......................................................................................................1.01
Clearwave...................................................................................................1.01
Closing.....................................................................................................4.01
Closing Date................................................................................................4.01
Closing Period Tax Obligations...........................................................................7.13(c)
Code........................................................................................................1.01
Common Equipment............................................................................................1.01
Communications Act..........................................................................................1.01
Company FCC Licenses....................................................................................2.02(iv)
Company Pending Applications................................................................................1.01
Confidential Information.................................................................................7.14(c)
Consent.....................................................................................................5.04
Constructed Facilities...................................................................................5.10(e)
Contracts...................................................................................................1.01
Default Cures...............................................................................................2.06
Determination Date.......................................................................................2.07(a)
DIP Loan Agreement..........................................................................................1.01
DOJ.........................................................................................................7.30
Enforceability Exceptions...................................................................................5.02
i
TABLE OF DEFINITIONS
(continued)
Term Section
Environmental Law...........................................................................................1.01
ERISA.......................................................................................................5.27
ERISA Affiliate.............................................................................................5.27
Escrow Agent................................................................................................3.02
Escrow Agreement............................................................................................1.01
Escrowed Funds..............................................................................................3.02
Exchange Act................................................................................................5.04
Excluded Assets.............................................................................................2.03
Excluded Causes of Action...................................................................................1.01
Excluded Liabilities........................................................................................2.04
Exclusion Date...........................................................................................2.07(c)
FAA......................................................................................................5.07(c)
FCC.........................................................................................................5.04
FCC Amount..................................................................................................7.25
FCC Assignment Applications..............................................................................7.04(b)
FCC License.................................................................................................1.01
FCC Rules...................................................................................................1.01
Final Order.................................................................................................1.01
FTC.........................................................................................................7.30
GAAP........................................................................................................5.28
Governmental Authority......................................................................................1.01
Hazardous Substance.........................................................................................1.01
HSR Act.....................................................................................................5.04
HSR Rules...................................................................................................7.30
Indemnified Party.......................................................................................10.05(a)
Intellectual Property.......................................................................................1.01
Intellectual Property Contracts.............................................................................1.01
Interference Coordination Agreements........................................................................5.21
ITFS........................................................................................................1.01
Jonesboro BTA...............................................................................................1.01
Jonesboro BTA Agreement.....................................................................................1.01
Jonesboro Proceeds.......................................................................................7.29(a)
Judgment....................................................................................................5.03
Knowledge of Purchaser......................................................................................1.01
Knowledge of Sellers........................................................................................1.01
Law.........................................................................................................1.01
Leased Pending Applications..............................................................................5.11(d)
Legal Restraints.........................................................................................8.01(a)
Liabilities.................................................................................................1.01
Licensed Intellectual Property..............................................................................1.01
Liens....................................................................................................5.05(a)
Loss........................................................................................................1.01
Market...................................................................................................5.10(a)
ii
TABLE OF DEFINITIONS
(continued)
Term Section
MMDS........................................................................................................1.01
MMDS Business Information................................................................................7.14(b)
Non-Disclosure Agreement....................................................................................1.01
Nucentrix...........................................................................................Introduction
Nucentrix Trust Agreement...................................................................................1.01
Partitioned BTAs............................................................................................1.01
Permits.....................................................................................................1.01
Permitted Liens.............................................................................................1.01
Person......................................................................................................1.01
Plan Confirmation Hearing Date..............................................................................1.01
Predecessor-in-Interest.....................................................................................1.01
Principal BTA License...........................................................................Schedule 8.02(g)
Principal FCC License...........................................................................Schedule 8.02(g)
Proceeding..................................................................................................1.01
Prorated Expense Items...................................................................................7.19(a)
Purchaser...........................................................................................Introduction
Purchase Price..............................................................................................3.01
Purchaser Indemnified Party.............................................................................10.01(a)
Purchaser Release........................................................................................7.23(a)
PSA.........................................................................................................1.01
Remaining Licenses..........................................................................................7.32
Reports.....................................................................................................5.28
Representative..............................................................................................1.01
Sale Motion.............................................................................................Recitals
SEC.........................................................................................................5.28
Sellers.............................................................................................Introduction
Seller Indemnified Party................................................................................10.02(a)
Sellers' Budget..........................................................................................9.01(f)
Sellers Material Adverse Effect.............................................................................1.01
Sellers Release..........................................................................................7.23(b)
Site Holder.................................................................................................7.21
Spare Parts and Equipment...................................................................................1.01
Station Assets..............................................................................................1.01
Subsidiary..................................................................................................1.01
Tax.........................................................................................................1.01
Tax Escrow Account.......................................................................................7.13(d)
Tax Escrow Amount........................................................................................7.13(d)
Taxing Authority............................................................................................1.01
Terminated ITFS Lease.......................................................................................7.24
Termination Date.........................................................................................9.01(f)
Third Party Claim.......................................................................................10.05(a)
Third Party Dedicated Equipment.............................................................................1.01
Third Party Licenses........................................................................................1.01
iii
TABLE OF DEFINITIONS
(continued)
Term Section
Tower Lease.................................................................................................1.01
Tower Sites.................................................................................................1.01
Trade Secrets...............................................................................................1.01
Transfer Tax................................................................................................1.01
Transmission Towers.........................................................................................1.01
USFCo...............................................................................................Introduction
WCS.........................................................................................................1.01
Wireless Cable Agreements...................................................................................1.01
WorldCom FCC Licenses.......................................................................................5.30
WorldCom BTAs...............................................................................................1.01
WorldCom BTA Agreements.....................................................................................1.01
WorldCom BTA Application.................................................................................7.04(d)
iv
ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT, dated as of November ___, 2003, by and among
Nucentrix Broadband Networks, Inc., a Delaware corporation ("Nucentrix"), those
additional Subsidiaries of Nucentrix listed on the signature pages hereto
(collectively, with Nucentrix, the "Sellers"), Nextel Spectrum Acquisition
Corp., a Delaware corporation ("Purchaser"), and Unrestricted Subsidiary Funding
Company, a Delaware corporation ("USFCo").
RECITALS
WHEREAS, Sellers hold assets, including licenses and leases for ITFS,
MMDS and WCS spectrum, that are currently used or are useful for the provision
of certain telecommunications services in the United States (the "Business";
defined terms used herein without definition have the meanings indicated in
Section 1.01);
WHEREAS, Sellers and certain of their Subsidiaries have commenced
cases, which are jointly administered under case no. 03-39123-HDH-11 (the
"Bankruptcy Cases"), under chapter 11 of title 11 of the United States Code, 11
U.S.C. Sections 101 et seq. (the "Bankruptcy Code"), by filing voluntary
petitions with the United States Bankruptcy Court for the Northern District of
Texas, and each Seller is a debtor in possession in the Bankruptcy Cases;
WHEREAS, the sale, assumption and assignment of the Acquired Assets and
assumption of the Assumed Liabilities will be conditioned, among other things,
upon the requisite approval of the Bankruptcy Court and the FCC on the terms
specified herein;
WHEREAS, on September 5, Sellers filed with the Bankruptcy Court a
motion (the "Sale Motion") seeking entry of an order, among other things, (i)
establishing procedures for Sellers' proposed auction of the assets and
liabilities of the Business and (ii) approving the terms and conditions of the
Asset Purchase Agreement, dated as of September 5, 2003, by and among SBC
Operations, Inc. and Sellers, subject to higher and better offers;
WHEREAS, on September 16, 2003, the Bankruptcy Court entered an order
approving procedures for Sellers' proposed auction of the assets and liabilities
of the Business (the "Bidding Procedures Order"). In accordance with the Bidding
Procedures Order, competing offers for the assets of the Business were
considered and an auction was held on November 4, 2003, by Sellers and their
representatives (the "Auction"); and
WHEREAS, following the conclusion of the Auction, Sellers determined
that Purchaser submitted the highest and best offer for the assets and
liabilities of the Business. Sellers therefore wish to sell to Purchaser and
Purchaser wishes to purchase from Sellers the Acquired Assets and assume the
Assumed Liabilities pursuant to Sections 363 and 365 of the Bankruptcy Code and
the applicable Federal Rules of Bankruptcy Procedure, upon the terms and subject
to the conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants,
representations and warranties herein contained, the parties hereto, intending
to be legally bound, hereby agree as follows:
1
ARTICLE I
DEFINITIONS
1.01 Definitions. In this Agreement, the following capitalized terms
have the meanings set forth below (such meanings being applicable to both the
singular and plural forms of the terms defined):
"Accounts Receivable" shall mean all amounts owed to any Seller or any
of its Subsidiaries in respect of services provided by any such Person.
"Administrative Bar Date" means the date set by the Bankruptcy Court as
the last day upon which administrative expense claims may be filed in the
Bankruptcy Cases.
"Affected Lessor" means any third party holder of an FCC License for
ITFS that leases spectrum under such FCC License for ITFS to any Seller or any
Subsidiary of a Seller.
"Affiliate" of any Person means another Person that directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, such first Person; provided that with respect to
Sections 3.04 (Purchase Price Allocation), 5.10(a) (Company FCC Licenses) and
7.16 (Expenses) of this Agreement, a stockholder of Nucentrix (and any Person
who may be deemed an Affiliate of any Seller solely by reason of its
relationship with a stockholder of Nucentrix) shall not be deemed to be an
Affiliate of Sellers.
"Annual FCC Reports" means those reports, filings, notices and
regulatory fees required to be filed annually with the FCC by licensees,
permittees, conditional licensees and operators, including reports required by
Sections 21.11(a), 21.911, 21.307(d) and 21.920 of the FCC Rules, as such
reports, filings, notices, regulatory fees and similar filing and payment
requirements may be added or amended.
"Approval Order" means an order or orders of the Bankruptcy Court in
form and substance reasonably acceptable to Purchaser approving this Agreement
and all of the terms and conditions hereof, and approving and authorizing
Sellers and their Subsidiaries to consummate the Acquisition and the other
transactions contemplated hereby. Without limiting the generality of the
foregoing, no such order shall be deemed an Approval Order unless it finds and
provides that: (i) the Acquired Assets sold, assigned, transferred, conveyed or
delivered to Purchaser pursuant to this Agreement will be transferred to
Purchaser free and clear of all Liens and Claims, with all Liens to be paid in
full at Closing or otherwise attach to the proceeds of such sale, except to the
extent Purchaser agrees otherwise or, subject to the preceding sentence, as
otherwise provided in this Agreement or the Approval Order; (ii) Purchaser has
acted in "good faith" within the meaning of Section 363(m) of the Bankruptcy
Code and is entitled to the protections of that section of the Bankruptcy Code;
(iii) this Agreement was negotiated, proposed and entered into by the parties
hereto without collusion, in good faith and from arm's length bargaining
positions; (iv) Purchaser is not acquiring or assuming any of Sellers' or any
other Person's Liabilities, except as expressly provided in this Agreement; (v)
subject to Section 2.07, all Acquired Tower Leases, Acquired Spectrum Leases and
Assigned Contracts and all Assumed Liabilities related thereto shall be assumed
by Sellers and assigned to Purchaser effective as of the Closing pursuant to
Section 365 of the Bankruptcy Code, and that all Liabilities relating to all
2
Default Cures in respect thereof shall be directly or indirectly borne fully by
Sellers as contemplated by Section 2.06 and paid by Sellers pursuant to such
order; (vi) the Bankruptcy Court shall retain jurisdiction to resolve any
controversy or claim arising out of or relating to this Agreement, or the breach
hereof; and (vii) this Agreement and the transactions contemplated hereby may be
specifically enforced against and binding upon, and not subject to rejection or
avoidance by, Sellers, any Subsidiaries of Sellers, any chapter 7 or chapter 11
trustee of any Seller or any of its Subsidiaries or otherwise on behalf of
Sellers.
"Bankruptcy Court" means the United States Bankruptcy Court for the
Northern District of Texas or any other court having jurisdiction over the
Bankruptcy Cases from time to time.
"Business Day" means any day that is not a Saturday, a Sunday or other
day on which commercial banks are required or authorized by law to be closed in
the City of
New York.
"Claims" shall have the meaning set forth in Section 101(5) of the
Bankruptcy Code.
"Code" means the Internal Revenue Code of 1986, as amended.
"Common Equipment" shall mean any equipment (other than Third Party
Dedicated Equipment) which is owned by a Seller or any Subsidiary of a Seller
(and used in connection with the transmission of signals to or from a Tower
Site) and an Affected Lessor that is not an Affiliate of any Seller.
"Communications Act" means the Communications Act of 1934, as amended,
47 U.S.C. Sections 151 et seq.
"Company Pending Applications" means all applications pending with the
FCC for new FCC Licenses for MMDS or WCS, assignments or transfers of FCC
Licenses for MMDS or WCS, modifications of FCC Licenses for MMDS or WCS,
extensions of time to construct PSA stations and renewals of FCC Licenses for
MMDS or WCS filed by any Seller or any Subsidiary of a Seller.
"Contracts" means contracts, bids, proposals, leases, subleases,
licenses, agreements, commitments and other arrangements, including customer,
supplier and subscriber contracts, in each case, whether oral or written, but
excluding Permits.
"DIP Loan Agreement" means the Debtor in Possession Credit Agreement,
dated November 10, 2003, by and among Sellers and Purchaser providing for the
advancement of funds by Purchaser to Sellers or their Subsidiaries, attached
hereto as Exhibit A.
"Environmental Law" means any federal, state, local or foreign statute,
law, regulation, order, decree, permit, authorization, opinion, common law or
agency requirement relating to: (i) the protection, investigation or restoration
of the environment, health, safety, or natural resources; (ii) the handling,
use, presence, disposal, release or threatened release of any Hazardous
Substance; or (iii) noise, odor, indoor air, employee exposure, electromagnetic
emissions, wetlands, pollution, contamination or any injury or threat of injury
to Persons or property relating to any Hazardous Substance.
3
"Escrow Agreement" means the Escrow Agreement, dated October 24, 2003,
by and among Purchaser, Nucentrix and the Escrow Agent, attached hereto as
Exhibit B.
"Excluded Causes of Action" shall mean those causes of action set forth
on Schedule 1.01(a).
"FCC License" means any license, permit, certificate, approval,
franchise, consent, waiver, registration or other authorization issued by the
FCC.
"FCC Rules" means Title 47 of the Code of Federal Regulations, as
amended from time to time, and any policies or published decisions issued
pursuant to such regulations or the Communications Act.
"Final Order" means an action, order, judgment or decree: (i) which has
not been reversed, stayed, enjoined, set aside, annulled or suspended; (ii) in
relation to which no request for stay, motion or petition for reconsideration or
rehearing, application or request for review, or notice of appeal or other
administrative or judicial petition for review or reconsideration (collectively,
an "Appeal") is pending or has been granted; and (iii) as to which the
prescribed time for filing an Appeal, and for the entry of orders staying,
reconsidering, or reviewing the applicable Governmental Authority's own motion
has expired.
"Governmental Authority" means any: (i) federal, state, local,
municipal, foreign or other government; (ii) governmental or quasi-governmental
authority of any nature (including any governmental agency, branch, department,
official, or entity and any court or other tribunal); or (iii) body exercising
or entitled to exercise any administrative, executive, judicial, legislative,
police, regulatory, or taxing authority or power of any nature, including any
arbitration tribunal.
"Hazardous Substance" means any substance that is: (i) listed,
classified or regulated pursuant to any Environmental Law; (ii) any petroleum
product or by-product, asbestos-containing material, lead-containing paint or
plumbing, polychlorinated biphenyls, black mold, radioactive material or radon;
and (iii) any other substance which may be the subject of regulatory action by
any Governmental Authority in connection with any Environmental Law.
"Intellectual Property" means all: (i) trademarks, service marks, brand
names, certification marks, collective marks, d/b/a's, Internet domain names,
logos, symbols, trade dress, assumed names, fictitious names, trade names, and
other indicia of origin, all applications and registrations for the foregoing,
and all goodwill associated therewith and symbolized thereby, including all
renewals of same; (ii) inventions and discoveries, whether patentable or not,
and all patents, registrations, invention disclosures and applications therefor,
including divisions, continuations, continuations-in-part and renewal
applications, and including renewals, extensions and reissues; (iii)
confidential information, trade secrets and know-how, including processes,
schematics, business methods, formulae, drawings, prototypes, models, designs,
customer lists and supplier lists (collectively, "Trade Secrets"); (iv)
published and unpublished works of authorship, whether copyrightable or not
(including databases and other compilations of information), copyrights therein
and thereto, and registrations and applications therefor, and all renewals,
extensions, restorations and reversions thereof; and (v) all other intellectual
property or proprietary rights.
4
"Intellectual Property Contracts" means all Contracts concerning
Intellectual Property to which the Sellers or their Subsidiaries are a party,
including agreements granting the Sellers and their Subsidiaries rights to use
the Licensed Intellectual Property, non-assertion agreements, settlement
agreements, agreements granting rights to use Intellectual Property, trademark
coexistence agreements and trademark consent agreements.
"ITFS" means Instructional Television Fixed Service, a class of
microwave frequencies licensed by the FCC pursuant to Part 74 of the FCC Rules.
"Jonesboro BTA" means the FCC Licenses in the MMDS for the BTA with
license number MDB219 (Jonesboro, Arkansas).
"Jonesboro BTA Agreement" means the BTA Lease and Option Agreement,
dated April 14, 2003, between Nucentrix Spectrum Resources, Inc., as lessor, and
Clearwave Broadband Internet Solutions, Inc. ("Clearwave"), an Arkansas
corporation, as lessee.
"Knowledge of Purchaser" means the actual knowledge of Xxxxx X. Xxxxxx.
"Knowledge of Sellers" means the actual knowledge of the individuals
set forth on Schedule 1.01(b) after due inquiry (provided that due inquiry shall
not require inquiries to or review of databases of the FCC or lessors of
Acquired Spectrum Leases or holders of Third Party Licenses, or similar third
parties (excluding Representative of Sellers)).
"Law" means any federal, state, local or foreign statute, law,
ordinance, regulation, rule, code, order, principle of common law, or judgment
enacted, promulgated, issued, enforced or entered by any Governmental Authority,
or other requirement or rule of law.
"Liabilities" means, as to any Person, all debts, adverse claims,
liabilities, commitments, responsibilities, loss contingencies and obligations
of any kind or nature whatsoever, direct, indirect, absolute or contingent, of
such Person, whether accrued or unaccrued, joint or several, vested or unvested,
disputed or undisputed, liquidated or unliquidated, secured or unsecured, due or
to become due, whether known or unknown, whether executory, determined,
determinable or otherwise and whether or not actually reflected, or required to
be reflected, in such Person's balance sheets or other books and records.
"Licensed Intellectual Property" means Intellectual Property that any
of the Sellers or their Subsidiaries are licensed or otherwise permitted by
other Persons to use.
"Loss" means any and all claims, losses, Liabilities, costs, penalties,
fines and amounts paid or payable or expenses incurred (including reasonable
fees for attorneys, accountants, consultants and experts), damages, diminution
in value, obligations to third parties, expenditures, judgments, awards or
settlements that are imposed upon or otherwise incurred by the relevant Person.
"MMDS" means, collectively, Multipoint Distribution Service and
Multichannel Multipoint Distribution Service, in each case a domestic
transmission service licensed by the FCC pursuant to Part 21 of the FCC Rules.
5
"Non-Disclosure Agreement" means that certain Non-Disclosure Agreement,
dated September 25, 2003, between Nextel Communications, Inc. and Nucentrix.
"Nucentrix Trust Agreement" means that certain Trust Agreement dated as
of January 19, 2001, by and between Nucentrix and Xxxxx X. Xxxxxxxxx.
"Partitioned BTAs" means that portion of the WorldCom BTAs that is not
leased pursuant to the WorldCom BTA Agreement.
"Permits" means all licenses, permits, certificates, approvals,
registrations and other governmental or regulatory authorizations, except for
FCC Licenses.
"Permitted Liens" means all: (i) mechanics', carriers', workmen's,
repairmen's Liens that do not impair the use of the property or assets by the
Sellers and their Subsidiaries; (ii) Liens for Taxes that are not due and
payable and that do not impair the use of the property or assets by the Sellers
and their Subsidiaries; (iii) zoning, building, subdivision, environmental and
other similar restrictions that do not impair the use of the property or assets
by the Sellers and their Subsidiaries, as presently used or as necessary to
maintain the Acquired Assets; (iv) recorded easements, unrecorded easements,
covenants that run with the land or real property, rights-of-way and other
similar restrictions that do not impair the use of the property or assets by the
Sellers and their Subsidiaries; (v) Liens created under the DIP Loan Agreement,
if any; and (vi) those Liens set forth on Schedule 1.01(c) that do not impair
the use of the property or assets by the Sellers and their Subsidiaries.
"Person" means any individual, firm, corporation, partnership, limited
liability company, trust, joint venture, Governmental Authority or other entity
or organization.
"Plan Confirmation Hearing Date" means the date upon which the first
hearing is held by the Bankruptcy Court to consider the approval of a chapter 11
plan of reorganization of any of Sellers.
"Predecessor-in-Interest" of any Seller or any Subsidiary of any Seller
means such Person whose interest in FCC Licenses or spectrum leases were
succeeded by such Seller or Subsidiary.
"Proceeding" means any action, arbitration, audit, hearing, complaint,
inquiry, investigation, litigation, or suit (whether civil, criminal,
administrative, investigative, or informal) commenced, brought, conducted, or
heard by or before, or otherwise involving, any Governmental Authority or
arbitrator (other than proceedings involving the FCC that may relate to FCC
Licenses for ITFS, MMDS or WCS in general that could not be reasonably expected
to have a material effect, as determined in Purchaser's sole discretion, on the
Company FCC Licenses or Acquired Spectrum Leases).
"PSA" means the geographic area in which the licensee of an FCC License
for ITFS or MMDS is protected from interference under FCC Rules.
"Representative" means, with respect to any Person, such Person's
officers, directors, employees, agents and representatives (including any
investment banker, financial advisor,
6
accountant, legal counsel, agent, representative or expert retained by or acting
on behalf of such Person or its Subsidiaries).
"Sellers Material Adverse Effect" means any change, circumstance or
event with respect to the Acquired Assets, any assets that would constitute
Acquired Assets, if the Closing were to occur at the time of measurement, or the
Assumed Liabilities that, individually or in the aggregate with all other
adverse changes, circumstances or events, has, results in, has had, or has
resulted in (i) a material adverse effect on, or on the value of, the Acquired
Assets, taken as a whole, or a material increase in the amount of the Assumed
Liabilities, or (ii) a material adverse effect on the ability of any Seller
timely to consummate the Acquisition and the other transactions contemplated
hereby and satisfy its obligations hereunder in accordance with the terms
hereof; provided that no change, circumstance or event resulting from (i) the
act of filing the Bankruptcy Cases, (ii) general economic conditions in the
United States, (iii) a change in FCC Rules affecting the Company FCC Licenses to
the extent that such change does not have a disproportionate effect on the
Company FCC Licenses, or (iv) pre-petition amendments to Acquired Spectrum
Leases that have resulted in deferral of payments to future periods shall be
considered in determining that a Sellers Material Adverse Effect has occurred.
"Spare Parts and Equipment" means the inventory of spare parts and
equipment of the Sellers and their Subsidiaries that are used or useful or would
be used or useful in connection with the operation or maintenance of other
Acquired Assets, including transmitters, waveguides, antennas and related
equipment, but excluding customer equipment.
"Station Assets" means (i) the Tower Leases, (ii) the transmission and
reception equipment, studio-to-transmitter linking equipment, tower equipment,
test equipment, antennas, headend equipment, machinery, and other physical
assets (including embedded software and Intellectual Property rights
incorporated therein), buildings, improvements and fixtures, and all
appurtenances thereto, whether or not located at a site covered by an Acquired
Tower Lease, provided it is used or held for use by a Seller or a Subsidiary of
Seller in connection with the operation of any Company FCC License or Acquired
Spectrum Lease to be conveyed to Purchaser hereunder, (iii) the Spare Parts and
Equipment, (iv) all of Sellers' right, title and interest in the Common
Equipment, and (v) any tangible personal property set forth on Schedule 5.18,
including any Third Party Dedicated Equipment set forth on Schedule 5.18;
provided, however, that the Station Assets shall not include any (i) Third Party
Dedicated Equipment that is not set forth on Schedule 5.18 or (ii) any customer
premises equipment.
"Subsidiary" of any Person means another Person, an amount of the
voting securities, other voting ownership or voting partnership interests of
which is sufficient to elect at least a majority of its board of directors or
other governing body (or, if there are no such voting interests, more than 50%
of the equity interests of which) is owned directly or indirectly by such first
Person or by another Subsidiary of such Person.
"Tax" means any tax, governmental fee or other like assessment or
charge of any kind whatsoever (including any tax imposed under Subtitle A of the
Code and any net income, alternative or add-on minimum tax, gross income, gross
receipts, sales, use, ad valorem, value added, transfer, franchise, profits,
license, withholding tax on amounts paid, payroll, employment, unemployment,
social security, excise, severance, stamp, capital stock, occupation,
7
property, environmental, telecommunications or windfall profit tax, premium,
custom, duty or other tax), together with any interest, penalty, addition to tax
or additional amount due thereon, imposed by any Taxing Authority.
"Taxing Authority" means any Governmental Authority (domestic or
foreign) responsible for the imposition of any tax.
"Third Party Dedicated Equipment" means equipment owned by any Seller
or any of its Subsidiaries that is used solely and exclusively for the
transmission or reception of transmission capacity, authorized by FCC License
issued to a third party not Affiliated with Nucentrix, pursuant to a lease or
sublease that is not an Acquired Spectrum Lease between (i) a Seller or any of
its Affiliates and (ii) a third party not Affiliated with Nucentrix, (A)
including, to the extent they exist, channel-specific transmitters,
channel-specific encoders, studio-to-transmitter link equipment, receive-only
antennas located at the third party's premises, downconverters and modulators;
and (B) excluding, notwithstanding the foregoing, (I) all Spare Parts and
Equipment and inventory, (II) any equipment used or held for use by any Seller
or any of its Subsidiaries in connection with the operation of any Company FCC
License, (III) any equipment used or held for use by any Seller or any of its
Subsidiaries in connection with the performance of any Acquired Spectrum Lease,
and (IV) any equipment used or held for use by any Seller or any of its
Subsidiaries in connection with the performance of its obligations under any
Acquired Spectrum Lease or any Acquired Tower Lease.
"Third Party Licenses" means the FCC Licenses held by the lessors under
the Acquired Spectrum Leases.
"Tower Lease" means the Contracts relating to the use by Sellers or
their Subsidiaries of Transmission Towers or other transmission equipment (and
the embedded software and Intellectual Property rights incorporated therein) on
the Tower Sites that are set forth on Schedule 5.07(a).
"Tower Sites" means any real property on which Transmission Towers used
by Sellers or their Subsidiaries are located.
"Transfer Tax" means any federal, state, county, local, foreign and
other sales, use, transfer, conveyance, documentary transfer, recording or other
similar Tax, fee or charge imposed upon the sale, transfer or assignment of
property or any interest therein or the recording thereof, and any penalty,
addition to Tax or interest with respect thereto (but excluding any gains and
income Taxes).
"Transmission Towers" means any towers or other "antenna structures" as
defined by the FCC in Part 17 of the FCC Rules.
"WCS" means Miscellaneous Wireless Communications Services, a domestic
transmission service licensed by the FCC pursuant to Part 27 of the FCC Rules.
"Wireless Cable Agreements" shall mean those Contracts, in effect from
time to time, set forth on Schedule 1.01(d).
8
"WorldCom BTAs" means the FCC Licenses in the MMDS for the BTAs with
the following license numbers: (i) MDB257 (Little Rock, AR), (ii) MDB329
(Oklahoma City, OK), (iii) MDB101 (Dallas-Fort Worth, TX) and (iv) MDB401 (San
Antonio, TX).
"WorldCom BTA Agreements" means the BTA Lease and Option Agreement,
dated October 31, 1997, by and between Heartland Wireless Commercial Channels,
Inc., as lessor, and CS Wireless Systems, Inc., as lessee, as amended by
Amendment dated December 2, 1998.
1.02 Other Terms. Other capitalized terms may be defined elsewhere in
this Agreement and, unless otherwise indicated, shall have such meaning
throughout this Agreement. All references to "$" and "dollars" shall be deemed
to refer to United States currency unless otherwise specifically provided
herein. All references to "true and complete" copies of specified documents,
means true and complete copies of such documents, together with all material
amendments, modifications and supplements thereto, and all waivers, consents and
estoppels granted or delivered thereunder.
ARTICLE II
PURCHASE AND SALE OF ASSETS
2.01 Purchase and Sale. On the terms and subject to the conditions of
this Agreement, at the Closing, Sellers shall, and shall cause their
Subsidiaries to, sell, assign, transfer, convey and deliver to Purchaser, and
Purchaser shall purchase and assume from Sellers or their Subsidiaries (as the
case may be), all of the Assumed Liabilities and all of their respective right,
title and interest as of the Closing in and to the Acquired Assets, pursuant to
Sections 363(f) and 365 of the Bankruptcy Code, free and clear of all Liens and
Claims (other than the Permitted Liens described in clauses (iii), (iv) and (v)
of the definition thereof). The purchase and sale of the Acquired Assets and the
assumption of the Assumed Liabilities is referred to in this Agreement as the
"Acquisition".
2.02 Acquired Assets. The term "Acquired Assets" means all of the
following properties and assets of Sellers:
(i) the Contracts set forth on Schedule 2.02(i) for any Tower
Lease (the "Acquired Tower Leases");
(ii) all other Station Assets;
(iii) all Permits of Sellers or their Subsidiaries used or
held for use in connection with the ownership or operation of the
Acquired Assets (the "Assigned Permits");
(iv) the FCC Licenses set forth on Schedule 2.02(iv), which
are held by any Seller or a Subsidiary of any Seller as of the date
hereof, and any FCC License granted to Sellers or any of their
Subsidiaries after the date hereof and on or before Closing that
authorizes such Person to operate an MMDS or WCS station or gives to
such Person the exclusive right to apply for an FCC license for
specified spectrum in a specified geographic area (the "Company FCC
Licenses");
9
(v) all Company Pending Applications that relate to the
Company FCC Licenses;
(vi) the Contracts set forth on Schedule 2.02(vi), which give
any Seller or any Subsidiary of any Seller an interest to use spectrum
granted to the holder of an FCC License for ITFS, MMDS or WCS,
including (a) any Leased Pending Application granted by the FCC during
the period from the date hereof until the Closing Date and (b) any such
interest held by a Predecessor-in-Interest of any Seller (the "Acquired
Spectrum Leases");
(vii) the Acquired WCS Agreements, Interference Coordination
Agreements, the Jonesboro BTA Agreement, the Nucentrix Trust Agreement
and all Contracts pursuant to which third parties provide services
necessary for any Seller or any Subsidiary of a Seller to perform any
studio-to-transmitter transport or linking obligations under any
Acquired Spectrum Lease (collectively, the "Assigned Contracts");
(viii) subject to Section 7.19, all credits, prepaid expenses,
deferred charges, advance payments, security deposits and prepaid items
that relate to any of the other Acquired Assets as of the Closing;
(ix) all rights, claims, causes of action, rights to payment
or to enforce payment and credits to the extent relating to the other
Acquired Assets or anything that would have been part of the other
Acquired Assets, but for any destruction of such assets, including any
such items arising under insurance policies (or, if not assignable or
transferable, all of the Sellers and their Subsidiaries rights under
such insurance policies with respect to such assets) and all
guarantees, warranties, indemnities and similar rights in favor of any
of the Sellers or any of their Subsidiaries in respect of the Acquired
Assets, but not to the extent relating to any Excluded Asset or
Excluded Liability, as provided in Section 2.03(ii);
(x) copies of the Acquired Spectrum Leases, Tower Leases,
Assigned Contracts and other records, files and documents of Sellers
and their Subsidiaries relating to any other Acquired Assets or to any
Assumed Liability, including service records, delivery records,
warranty documents, manuals, and all material lessor and lessee
correspondence (in all cases, in any form or medium) (the "Books and
Records"); and
(xi) the software databases and, to the extent permitted under
the Bankruptcy Code, Intellectual Property held by Sellers and their
Subsidiaries that have been used in the operation or ownership of the
Acquired Assets.
2.03 Excluded Assets. As used herein, the term "Excluded Assets" means
all the properties, assets, goodwill and rights of any of the Sellers or their
Subsidiaries of whatever kind and nature, real or personal, tangible or
intangible, that are owned, leased or licensed by any of the Sellers or their
Subsidiaries at the Closing that are not included in the Acquired Assets and, to
the extent that they would otherwise constitute a portion of the Acquired
Assets, the following:
10
(i) all cash and cash equivalents of any of the Sellers and
their Subsidiaries except for any security deposits related to Acquired
Assets;
(ii) all rights, claims, causes of action, rights of set-off,
rights to payment or to enforce payment and credits of any of the
Sellers or their Subsidiaries to the extent relating to any other
Excluded Asset or any Excluded Liability, including any such items
arising under insurance policies and all guarantees, warranties,
indemnities and similar rights in favor of any of Sellers or their
Subsidiaries in respect of any other Excluded Asset or any Excluded
Liability;
(iii) all rights in connection with and all assets relating to
any pension or other employee benefit plan of any of Seller or their
Subsidiaries;
(iv) all rights, claims, demands and causes of action of any
Seller under this Agreement, the Escrow Agreement, the DIP Loan
Agreement and the other agreements and instruments executed and
delivered in connection with this Agreement (such agreements and
instruments, other than this Agreement, collectively, the "Ancillary
Agreements");
(v) all financial, tax and other books and records of Sellers
and their Subsidiaries to the extent they do not relate to the Acquired
Assets;
(vi) subject to Section 7.13, any refunds or credits of Taxes
(i) not otherwise related to the Acquired Assets or (ii) if related to
the Acquired Assets, for any taxable period (or portion thereof) ending
prior to the Closing Date that are owed to Sellers or their
Subsidiaries;
(vii) all capital stock of each Seller and its Subsidiaries;
(viii) other than embedded software and Intellectual Property
included in the Acquired Assets and other than as set forth in Section
2.02(xi), all computer software (and the Intellectual Property
incorporated therein) owned by any of the Sellers and their
Subsidiaries and all rights of any of the Sellers and their
Subsidiaries in or to Intellectual Property or computer software that
any third party has granted to any Seller or any Subsidiary of Seller
pursuant to a license, sublicense, agreement or permission, including
"off-the-shelf" software that is generally available to a public
consumer for a price less than $1,000 per license or for a price less
than $1,000 on a per-user basis;
(ix) other than embedded software and Intellectual Property
included in the Acquired Assets and other than as set forth in Section
2.02(xi), all patents (including all reissues, divisions, continuations
and extensions thereof), patent applications, trademarks, trademark
registrations, trademark applications, service marks, trade names,
business names, brand names, logos, corporate names, copyright
registrations, designs, design registrations and all rights to any of
the foregoing and all copyrights, trade secrets and confidential
information (including know how, inventions, formulae, processes,
procedures, research records, test information, market surveys and
marketing know how), owned or licensed by any of the Sellers or their
Subsidiaries;
11
(x) all customer premises equipment held by Sellers or any of
their Subsidiaries in connection with the Acquired Assets;
(xi) all Third Party Dedicated Equipment that is not used or
held for use by Sellers or their Subsidiaries in connection with the
operations of (a) the Company FCC Licenses, (b) the Acquired Spectrum
Leases, or (c) the Station Assets;
(xii) any rights, claims and causes of action under the
Bankruptcy Code and any avoidance claims under the Bankruptcy Code in
which Sellers and their Subsidiaries have rights;
(xiii) all Permits that are not Assigned Permits;
(xiv) the name "Nucentrix", "Nucentrix Broadband", "Heartland
Cable Television", "Nucentrix Internet Services", "Nucentrix Spectrum
Resources", "Nucentrix Telecom Services", "Heartland", "Heartland
Cable" or any variation thereof, and any trademark, trade names, logo
or symbols containing such names;
(xv) all office equipment (including company issued personal
computers, cell phones, pagers and similar items) owned by Sellers or
any of their Subsidiaries;
(xvi) all Accounts Receivable;
(xvii) all rights, claims, demands and causes of action of any
Seller under the DIP Loan Agreement, if any;
(xviii) the Excluded Causes of Action;
(xix) all Contracts between Sellers and/or any of their
Subsidiaries and any of their customers of cable or Internet service;
(xx) the WorldCom BTA Agreements and all rights, claims,
demands and causes of actions, and all Liabilities of any Seller or any
Subsidiary of any Seller, under the WorldCom BTA Agreements and those
FCC Licenses subject to the WorldCom BTA Agreements (other than the
Partitioned BTAs);
(xxi) the Partitioned BTAs, to the extent they become Excluded
Assets pursuant to Section 7.26;
(xxii) all rights, claims, demands and causes of actions, and
all Liabilities of any Seller or any Subsidiary of any Seller, under
the Jonesboro BTA Agreement and the Jonesboro BTAs, to the extent they
become Excluded Assets pursuant to Section 7.29;
(xxiii) all other assets, rights and properties that Purchaser
indicates to Nucentrix in writing it is not purchasing, assuming or
otherwise acquiring, pursuant to Section 2.07 or otherwise;
12
(xxiv) those Contracts under which any Seller or any
Subsidiary of a Seller is a lessor, sublessor or licensor of, or makes
available for use to any Person, any Tower Site or portion thereof that
is the subject of an Acquired Tower Lease; and
(xxv) all rights, claims, demands and causes of action of any
Seller under the Wireless Cable Agreements.
2.04 Assumed Liabilities. Purchaser shall only assume, effective as of
the Closing, and from and after the Closing, Liabilities of Sellers and their
Subsidiaries under the Acquired Spectrum Leases, Acquired Tower Leases and
Assigned Contracts to be performed under the terms thereof after the Closing
Date, excluding any performance on the part of the Sellers or their Subsidiaries
that relates to the period prior to the Closing (the "Assumed Liabilities");
provided, however, that any Contract that was required to be listed on Schedule
5.08(a) but was not so listed or any Contract that was not expressly provided to
Purchaser prior to the date hereof will not be an Assumed Liability unless
Purchaser agrees in writing to assume such Contract. From and after the Closing,
Purchaser agrees to pay, perform and discharge when due the Assumed Liabilities.
2.05 Excluded Liabilities. Except for the Assumed Liabilities referred
to in Section 2.04, Purchaser shall not assume, or be obligated or liable for,
any Liabilities of Sellers, or any of their Affiliates or their respective
predecessors, assignors, or transferors, including any Liabilities relating to
any fact, circumstance, occurrence, condition, act, event or omission occurring,
or the underlying cause of which occurred, prior to the Closing (the "Excluded
Liabilities"), whether in connection with the Acquisition, the transactions
contemplated hereby, or otherwise. Excluded Liabilities include the following
Liabilities:
(i) except as specifically set forth in Section 2.04, any
Liability relating to or arising out of any business of Sellers or
their Subsidiaries (including relating to the Acquired Assets), and
based upon, arising out of or resulting from any fact, circumstance,
occurrence, condition, act, event or omission existing on or occurring
on or prior to the Closing;
(ii) any Liability that relates to, or that arises out of, any
Excluded Asset (including assets that become Excluded Assets pursuant
to Section 2.07), or that arises out of the distribution to, or
ownership by, any of the Sellers or their Subsidiaries of the Excluded
Assets or associated with the realization of the benefits of any
Excluded Asset;
(iii) except as expressly provided in Section 7.13, any
Liability for Taxes, whether or not accrued, assessed or currently due
and payable, (A) of any of Sellers or their Affiliates, or (B) of any
other party for which a Seller or their Affiliates may be liable, or to
which any Acquired Asset may be subject, whether under a tax sharing or
other agreement, or (C) relating to the operation or ownership of any
of the Acquired Assets, for any Tax period (or portion thereof) ending
on or prior to the Closing Date;
13
(iv) any Liability relating to any present or former employee,
director consultant or independent contractor of any Seller or any
Affiliate of any Seller, including under any compensation, retirement
or other employee benefit plan or arrangement or otherwise relating to
employment and whether incurred before or after the Closing Date and
whether resulting from a contractual obligation or arising under ERISA
or the Code;
(v) any Liability of any Seller to any other Seller or to any
Affiliate of such Person (including any Affiliates of Nucentrix that
are not Sellers);
(vi) any Liability resulting from any default, breach,
forfeiture, fine, nonperformance, misfeasance, malfeasance, violation
of Law, or nonfeasance by or on behalf of any Seller or its Affiliates;
and
(vii) any Liability resulting from any Proceeding, pending or
threatened, arising from or relating to Sellers or their Affiliates,
including the Proceedings set forth on Schedule 5.14.
2.06 Assumed Contracts; Default Cures. Subject to Sections 2.04, 2.05
and 2.07 and the Approval Order, at the Closing and pursuant to Section 363 and
365 of the Bankruptcy Code, Sellers shall, and shall cause their Subsidiaries
to, assume and assign to Purchaser the Acquired Tower Leases, Acquired Spectrum
Leases and the Assigned Contracts. In furtherance of such assumption and
assignment, at and subject to the Closing, Sellers shall cure all defaults, if
any, under the Tower Leases, Acquired Spectrum Leases and the Assigned Contracts
(collectively, "Default Cures").
2.07 Right to Exclude Certain Assets.
(a) Subject to Section 2.07(b) and Schedule 2.07, until the
Exclusion Date, Purchaser, in its sole discretion and at its option, by written
notice to Nucentrix, may from time to time remove any one or more items that
would constitute Acquired Assets from the Acquired Assets, and such removed
Acquired Asset shall cease to be an Acquired Asset under this Agreement for any
purpose and shall thereafter be an Excluded Asset (the date the notice with
respect to any such asset is deemed given pursuant to Section 11.04 being the
"Determination Date"). All Liabilities relating to or arising under any asset
removed pursuant to the preceding sentence that would otherwise constitute an
Assumed Liability shall become an Excluded Liability upon such removal.
(b) If Purchaser exercises its right to exclude any Acquired Tower
Lease or Station Asset (other than Spare Parts and Equipment) pursuant to
Section 2.07(a), then Purchaser may only do so by also excluding the Acquired
Tower Lease and the Station Assets, as applicable, located on the Tower Site for
such excluded Acquired Tower Lease or Station Asset.
(c) For purposes of this Agreement, "Exclusion Date" means a date
that is the earlier of (i) five (5) Business Days prior to the Plan Confirmation
Hearing Date, or (ii) sixty (60) calendar days after the Approval Order becomes
a Final Order; provided that with respect to assets or property obtained after
the Exclusion Date, Purchaser shall have five (5) Business Days after receipt of
written notice from any Seller or its Subsidiary notifying Purchaser that such
14
assets or properties were obtained to give notice pursuant to Section 2.07(a) to
remove any such assets or properties that would otherwise constitute Acquired
Assets. Prior to the Closing, Sellers shall provide Purchaser with not less than
thirty (30) days' prior written notice of the Plan Confirmation Hearing Date.
(d) Intentionally deleted.
(e) After Purchaser has notified Sellers of the removal of any item
from the Acquired Assets in accordance with Section 2.07(a), Sellers may,
subject to Section 7.01, transfer, assign or otherwise dispose of such item and,
if such item is a Contract, subject to Section 7.01, terminate, suspend payments
under or reject any such Contract; provided, however, that if Sellers shall
offer to sell, assign or transfer such an excluded Acquired Asset, Sellers shall
send written notice to Purchaser of the proposed sale. Such notice shall enclose
a copy of the final forms of all proposed transaction documents relating to the
sale. At Purchaser's election, within twenty (20) calendar days from its receipt
of Sellers' notice, Purchaser may notify Sellers in writing that Purchaser will
purchase such asset on terms and conditions substantially similar to the terms
and conditions under which the Sellers' proposed buyer would have purchased that
excluded Acquired Asset. If Purchaser fails to send written notice to Sellers
within the aforementioned 20-day period, then Purchaser's right to purchase that
asset shall expire.
(f) The Purchaser shall not be entitled to any reduction of or
credit to the Purchase Price with respect to any item removed from the Acquired
Assets pursuant to this Section 2.07.
2.08 Risk of Loss. Prior to the Closing, any loss of or damage to any
of the physical Acquired Assets from fire, casualty, condemnation or any other
occurrence not covered by insurance payable to Purchaser shall be the sole
responsibility of Sellers. Sellers shall, and shall cause their Subsidiaries to,
use their best efforts to obtain any insurance proceeds relating to any Acquired
Assets or assets or property or rights that would otherwise constitute Acquired
Assets.
ARTICLE III
PURCHASE PRICE
3.01 Purchase Price. In consideration of the sale, assignment,
transfer, conveyance and delivery to Purchaser of the right, title and interest
of Sellers and their Subsidiaries as of the Closing in and to the Acquired
Assets, Purchaser shall pay Sellers at Closing an amount equal to Fifty-One
Million Dollars ($51,000,000) (the "Purchase Price"), subject to the terms and
conditions set forth herein, including Sections 2.07, 3.02, 7.19, 7.25 and 7.29
and Schedule 3.01.
3.02 Purchase Price Deposit. Pursuant to the Bidding Procedures Order
and the Escrow Agreement, Purchaser has deposited with Bank One, National
Association, in its capacity as escrow agent (the "Escrow Agent"), the sum of
Four Hundred Fifty Thousand Dollars ($450,000) in cash or other form of
immediately available U.S. funds (the "Escrowed Funds"), to be released by the
Escrow Agent and delivered to either Purchaser or Sellers, in accordance with
the provisions of the Escrow Agreement and this Section 3.02. Subject to the
provisions of the Escrow Agreement, the Escrowed Funds (together with any
investment income earned thereon) shall be distributed as follows:
15
(a) if the Closing shall occur, the Escrowed Funds shall be applied
towards the Purchase Price payable by Purchaser to Sellers pursuant to Section
4.03(a), and any investment income earned thereon shall be delivered to
Purchaser at the Closing;
(b) if this Agreement is terminated by Sellers pursuant to Section
9.01(e), subject to Section 4.7(b) of the DIP Loan Agreement, the Escrowed Funds
(together with any investment income earned thereon) shall be delivered to
Sellers; or
(c) if this Agreement is terminated for any reason other than as
stated in Sections 3.02(b), the Escrowed Funds (together with any investment
income earned thereon) shall be delivered to Purchaser.
3.03 Payments and Computations. Each party shall make each payment due
to the other parties hereunder as soon as practicable on the day when due in
U.S. dollars by wire transfer in immediately available funds. All payments by
Purchaser hereunder shall be made to a single account to be specified by
Nucentrix at least five (5) Business Days prior to the Closing Date, and payment
to such account shall constitute payment to any or all of Sellers as may be
required hereunder.
3.04 Purchase Price Allocation. As soon as practicable following the
Closing, Purchaser shall deliver to Sellers an allocation of the Purchase Price
and Assumed Liabilities among the Acquired Assets according to the relative fair
market values of such assets on the Closing Date and consistent with Section
1060 of the Code; provided, however, that prior to delivering a final allocation
of the Purchase Price and Assumed Liabilities in accordance herewith, Purchaser
shall deliver to Sellers a draft allocation and provide Sellers a reasonable
opportunity to comment on such proposed allocation. Such final allocation of
fair market value shall be binding on the Purchaser and the Sellers for all U.S.
federal, state, and local income Tax purposes, but shall not, to the extent it
does not affect any rights of Purchaser hereunder, be binding upon Sellers or
their estates for any purposes relating to confirmation of any plan of
reorganization or otherwise related to the Bankruptcy Cases. Following the
Closing Date, Sellers and Purchaser in connection with their respective U.S.
Federal, state and local income Tax returns (including amended Tax returns and
claims for refunds) and other filings, shall not take (and shall cause their
Affiliates not to take) any position inconsistent with the allocation determined
pursuant to this Section 3.04, unless otherwise required by applicable Tax law.
Purchaser and Sellers shall cooperate in the filing of any forms (including Form
8594) with respect to such allocation, including any amendments to such forms
required with respect to any adjustment to the Purchase Price pursuant to this
Agreement.
ARTICLE IV
THE CLOSING
4.01 Closing Date. The closing of the Acquisition (the "Closing") shall
take place at the offices of Xxxxxx & Xxxxxx L.L.P., 3800 Xxxxxxxx Xxxx Center,
0000 Xxxx Xxxxxx, Xxxxxx, Xxxxx at 10:00 a.m., local time, ten (10) Business
Days following the satisfaction or waiver of the conditions set forth in Article
VIII (other than those conditions that by their nature cannot be satisfied until
the time of Closing, but subject to the satisfaction of those conditions) unless
16
another date is otherwise agreed to in writing by Purchaser and Nucentrix. The
date on which the Closing occurs is referred to herein as the "Closing Date".
4.02 Deliveries by Sellers. At the Closing, Sellers shall, and, where
applicable, shall cause their Subsidiaries to, deliver to Purchaser:
(a) duly executed deeds, bills of sale, assignments and other
documents and instruments of transfer, in form and substance reasonably
acceptable to Purchaser as may be necessary to sell, assign, transfer, convey
and deliver good and valid title to the Acquired Assets to Purchaser, free and
clear of all Liens and Claims (other than the Permitted Liens described in
clauses (iii), (iv) and (v) of the definition thereof) pursuant to Sections
363(f) and 365 of the Bankruptcy Code;
(b) if applicable, any payment required to be made pursuant to the
terms of Section 7.19, by wire transfer of immediately available funds to a bank
account designated in writing by Purchaser (such designation to be made at least
five (5) Business Days prior to the Closing Date);
(c) a copy of the Approval Order certified by the Bankruptcy Court;
(d) the officer's certificate required to be delivered pursuant to
Section 8.02(e);
(e) a certificate of non-foreign status pursuant to Treasury
Regulations Section 1.1445-5(b)(3) in form and substance reasonably acceptable
to Purchaser; and
(f) the Purchaser Release.
4.03 Deliveries by Purchaser. Subject to the terms and conditions of
this Agreement, at the Closing Purchaser shall deliver to Sellers (or the Escrow
Agent as provided in Section 4.03(b)):
(a) payment in cash, by wire transfer of immediately available
funds, in an amount equal to:
(i) subject to Section 3.01 and Section 3.02(a), the Purchase
Price; minus
(ii) the FCC Amounts in accordance with Section 7.25; minus
(iii) an amount equal to the sum of (A) the outstanding
principal amounts, together with the accrued but unpaid interest, under
each post-petition loan made by Purchaser to the applicable Sellers
pursuant to the DIP Loan Agreement and (B) the balance of any other
Obligations (as defined in the DIP Loan Agreement) outstanding under
the DIP Loan Agreement, all in accordance with Section 4.2 of the DIP
Loan Agreement.
17
(b) pursuant to Section 7.13(d), payment in cash, by wire transfer
of immediately available funds, to the Tax Escrow Account, of an amount equal to
the Tax Escrow Amount;
(c) duly executed assumption agreements and other instruments of
assumption, in form and substance reasonably acceptable to Sellers and their
counsel, providing for the assumption of the Assumed Liabilities by Purchaser;
(d) the officer's certificate required to be delivered pursuant to
Section 8.03(c); and
(e) the Sellers Release.
4.04 Joint Delivery. In accordance with Section 3.02(a), at or
immediately prior to the Closing, Purchaser and Sellers shall deliver to the
Escrow Agent a joint written instruction signed by Purchaser and Sellers
informing the Escrow Agent that the Closing will occur and directing the Escrow
Agent to deliver the Escrowed Funds to Sellers and all investment income earned
on the Escrowed Funds to Purchaser at the Closing.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF SELLERS
Sellers hereby, jointly and severally, represent and warrant to
Purchaser as follows:
5.01 Organization; Standing and Power. Each Seller and its Subsidiaries
is duly organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation and each Seller and its Subsidiaries has the
requisite corporate power and authority to own, lease or otherwise hold its
properties and assets and to conduct its business. Each Seller and its
Subsidiaries is duly qualified to do business as a foreign corporation in each
jurisdiction where the nature of assets held by it or the nature of the business
conducted by it make such qualification necessary, except where the failure to
be so qualified, individually or in the aggregate, could not reasonably be
expected to have a Sellers Material Adverse Effect.
5.02 Authority; Execution and Delivery; Enforceability. Each Seller has
the requisite corporate power and authority to (a) execute this Agreement and
each Ancillary Agreement to which it is, or will be, a party, and (b) subject to
entry of the Approval Order, consummate the Acquisition and the other
transactions contemplated hereby and thereby. The execution and delivery by each
Seller of this Agreement and each Ancillary Agreement to which it is, or will
be, a party and the consummation by each Seller of the Acquisition and the other
transactions contemplated hereby and thereby have been duly authorized by all
necessary corporate action on the part of each Seller. Each Seller has duly
executed and delivered this Agreement, and prior to the Closing, each Seller
shall have duly executed and delivered each Ancillary Agreement to which it is,
or will be, a party. This Agreement, constitutes, and each Ancillary Agreement
to which each Seller is, or will be, when so executed and delivered will
constitute such Seller's legal, valid and binding obligation, enforceable
against it in accordance with their respective terms (assuming, in each case,
due authorization, execution and delivery thereof by the other parties thereto
that are not a Seller or an Affiliate of a Seller) subject to the entry of the
Approval Order and, as to the enforcement of remedies, to applicable bankruptcy,
reorganization,
18
insolvency, moratorium or other laws affecting creditors' rights generally from
time to time in effect and to general principles of equity (collectively, the
"Enforceability Exceptions").
5.03 No Conflicts. The execution, delivery and performance of this
Agreement and the Ancillary Agreements by each Seller do not, and the
consummation of the transactions contemplated hereby and thereby, and compliance
by Sellers with the terms hereof and thereof do not and will not conflict with
or result in any violation or breach of or default (with or without notice or
lapse of time, or both) under, or give rise to a right of termination,
cancellation or acceleration of any obligation or to loss of a benefit under, or
result in the creation of any Lien (or any obligation to create a Lien) upon any
of the properties or assets of any Seller under, any provision of (a) the
certificate or articles of incorporation, by-laws, or other organizational
documents of any Seller or any of its Subsidiaries, (b) subject to entry of the
Approval Order, any Contract to which any Seller or any of its Subsidiaries is a
party or any Contract by which any of their properties or assets may be bound or
(c) subject to (i) entry of the Approval Order and (ii) the governmental filings
and other matters referred to in Section 5.04, any judgment, order or decree
("Judgment") or Law applicable any Seller or any Subsidiary of Seller or their
respective properties or assets.
5.04 Governmental Filings; Consents. No consent, approval, license,
permit, order or authorization of, or registration, declaration or filing with,
any Governmental Authority or other Person ("Consent") is required to be
obtained or made by or with respect to any Seller in connection with the
execution, delivery and performance by such Seller of this Agreement or any of
the Ancillary Agreements to which it is or will be a party or the consummation
of the transactions contemplated hereby or thereby, other than (a) compliance
with and filings, if any, under the Securities Exchange Act of 1934 (the
"Exchange Act"), (b) filings with and approvals of the Federal Communications
Commission (the "FCC") as required under the Communications Act and the FCC
Rules, (c) entry of the Approval Order, and (d) any notifications or filings
under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the
"HSR Act").
5.05 Title to and Condition of Acquired Assets.
(a) Sellers and their Subsidiaries have good and valid title to all
of the tangible personal property constituting Acquired Assets, and, except for
Permitted Liens, such property is free and clear of any mortgage, pledge,
hypothecation, security interest, encumbrance, right of offset, claim (including
as defined in 11 U.S.C. Section 101(5)), easement, lease, sublease, covenant,
right of way, option, restriction on use, lien or charge of any kind, or any
rights or claims of ownership of others, however evidenced or created (including
any agreement to grant any of the foregoing, any conditional sale or other title
retention agreement, any lease in the nature thereof, and the filing of or
agreement to file any financing statement under the lien notice records or other
similar legislation of any jurisdiction) (collectively, "Liens"). No Affiliate
of Sellers, other than the Sellers, owns or holds any rights, titles or
interests in (including any Lien on) any of the tangible or intangible Acquired
Assets.
(b) Except as set forth on Schedule 5.05(b), all of the buildings,
improvements, fixtures, machinery, equipment and other tangible assets included
in the Acquired Assets are in good operating condition and repair and are
useable in the ordinary course of business except for those failures to be in
good operating condition and repair and useable in the
19
ordinary course of business that, individually or in the aggregate, could not
reasonably be expected to have a Sellers Material Adverse Effect.
(c) Since the date hereof, no material asset, right or property that
would be included in the Acquired Assets at the Closing has suffered any
material damage.
5.06 Real Property. Schedule 5.06 sets forth a true and complete list
of all real property interests owned by the Sellers and their Subsidiaries that
are necessary for, or are primarily used or held for use in connection with, the
Acquired Assets. Except for property that may be considered fixtures on real
property described on Schedule 5.06, none of the Sellers or any of their
respective Subsidiaries owns any real property that relates to any of the
Acquired Assets. Except for the Tower Leases and associated real property
interests identified in Schedule 5.07(a) and for property that may be considered
fixtures on real property described on Schedule 5.06, there are no real property
interests necessary for the operation of the Acquired Assets in compliance with
all applicable FCC Licenses, Acquired Spectrum Leases and Assigned Permits.
5.07 Tower Leases.
(a) Schedule 5.07(a) sets forth a true and complete list of the
following information in relation to each of the Tower Leases: (i) the market in
which the lease is used, (ii) the expiration date of the lease; (iii) the name
of the lessor; (iv) the antenna structure registration number; (v) the address
or location of the leased premises or Tower Site; and (vi) the monthly,
quarterly or annual rent, as applicable, payable under such Tower Lease. Sellers
have made available or expressly provided to Purchaser true and complete copies
of the Tower Leases prior to the date hereof. The Acquired Tower Leases set
forth on Schedule 2.02(i) are all of the Tower Leases that are necessary to use
the equipment associated with each Tower Site that is used in connection with an
Acquired Asset, and to access such equipment in connection with such use.
(b) Assuming all Default Cures are made: (i) subject to entry of the
Approval Order, each of the Acquired Tower Leases is valid, binding on Sellers
and, to the Knowledge of Sellers, each other party thereto, in full force and
effect, and enforceable by Sellers in accordance with its terms subject to the
Enforceability Exceptions; (ii) except as set forth on Schedule 5.07(b)(ii),
none of Sellers or their respective Subsidiaries has assigned, pledged,
transferred, or otherwise disposed of or granted any Lien (other than Permitted
Liens) on its rights, title or interests under any of the Acquired Tower Leases
to any other Person, nor, to the Knowledge of Sellers, has any other party to
the Acquired Tower Leases so assigned, pledged, transferred, granted any Lien
(other than Permitted Liens) on, or otherwise disposed of any of its rights,
title or interests thereunder; (iii) neither Sellers nor, to the Knowledge of
Sellers, any other party to any of the Acquired Tower Leases has failed to
comply with or is in material breach or material default thereunder; and (iv)
except as set forth on Schedule 5.07(b)(iv), to the Knowledge of Sellers, no
condition exists or event has occurred and is continuing which, with or without
the lapse of time or the giving of notice, or both, would constitute a material
default by any party under any Acquired Tower Lease.
(c) Except as set forth on Schedule 5.07(c), to the Knowledge of
Sellers, all of the Transmission Towers located on the Tower Sites for the
Acquired Tower Leases are
20
obstruction-marked and lighted to the extent required by, and in accordance
with, the rules and regulations of the Federal Aviation Administration (the
"FAA") and the FCC Rules. To the Knowledge of Sellers, appropriate notification
to the FAA and registration with the FCC have been made for each Transmission
Tower that is leased by any Seller pursuant to an Acquired Tower Lease where
required by the rules and regulations of the FAA or the FCC Rules, as
applicable.
5.08 Contracts.
(a) Except as set forth on Schedule 5.08(a), Sellers and their
respective Subsidiaries are not party to or bound by any Contract that would as
of the Closing be an Acquired Asset that is or includes or provides for:
(i) a covenant not to compete in any geographical area or in
any line of business;
(ii) a lease, sublease or similar Contract with any Person
under which any Seller or its Subsidiaries is a lessor, sublessor or
licensor of, or makes available for use to any Person, any FCC License,
any Transmission Tower, or any other Station Assets;
(iii) a maintenance agreement or similar Contract providing
for maintenance, repair, servicing or similar obligations of third
parties with respect to the Station Assets or any portion thereof that
has an aggregate future liability to Sellers or their Subsidiaries in
excess of $25,000 or is not terminable by Sellers or their Subsidiaries
by notice of not more than 90 days for a cost of less than $25,000; or
(iv) a Contract for the sale of any Acquired Asset or any
right, title or interest therein or the grant of any preferential
rights (including options and rights of first refusal) to purchase any
Acquired Asset or requiring Consent to the transfer thereof.
(b) Schedule 5.08(b) sets forth a true and complete list of all the
Assigned Contracts as of the date hereof. Sellers have made available or
expressly provided to Purchaser true and complete copies of all Assigned
Contracts prior to the date hereof.
(c) Except as set forth on Schedule 5.08(c), assuming all Default
Cures are properly discharged: (i) subject to entry of the Approval Order, all
Assigned Contracts are valid, binding on Sellers and, to the Knowledge of
Sellers, each other party thereto and in full force and effect and are
enforceable by Sellers or their respective Subsidiaries, as applicable, in
accordance with their terms subject to the Enforceability Exceptions; (ii)
neither Sellers nor, to the Knowledge of Sellers, any other party to any of the
Assigned Contracts has failed to comply or is in material breach or material
default in any respect thereunder; and (iii) to the Knowledge of Sellers, no
condition exists or event has occurred which, with or without the lapse of time
or the giving of notice, or both, would constitute a material default by any
party under any Assigned Contract.
(d) Except as set forth on Schedule 5.08(d), prior to the date the
Bankruptcy Cases were filed, no notice of violation, breach or default has been
issued or action occurred
21
which if not cured could result in the termination of any Acquired Tower Lease,
Assigned Contract or Acquired Spectrum Lease.
5.09 Permits. (a) Sellers and their Subsidiaries have all Permits
required to own and operate the Acquired Assets in compliance, in all material
respects, with all Laws and Acquired Spectrum Leases, (b) none of Sellers or
their respective Subsidiaries is in violation of any Acquired Permit, except for
violations that, individually or in the aggregate, could not reasonably be
expected to have a Sellers Material Adverse Effect, and (c) no Proceedings are
pending or, to the Knowledge of Sellers, threatened with respect to any Acquired
Permit.
5.10 Company FCC Licenses.
(a) Schedule 5.10(a) sets forth a true and complete list as of the
date hereof of all FCC Licenses held by Sellers and any of their Affiliates. For
each such FCC License, Schedule 5.10(a) sets forth the (i) name of the licensee,
(ii) FCC call sign, (iii) authorized channel(s), and (iv) market where the
facilities are authorized (the "Market"). The Company FCC Licenses and the Third
Party Licenses are all the FCC Licenses necessary or used to provide the
services currently provided by Sellers and their Subsidiaries. Except for
Company Pending Applications filed prior to the date hereof and those
modifications that have been granted by the FCC prior to the date hereof, the
Sellers and their Affiliates have not modified or sought to have modified any
Company FCC License. Except as set forth on Schedule 5.10(a), all Company FCC
Licenses are owned by Sellers free and clear of all Liens and Claims (other than
Permitted Liens).
(b) Except as set forth on Schedule 5.10(b): (i) the grant, renewal
or assignment of the Company FCC Licenses to the existing licensee thereof was
approved by the FCC by Final Order and the Company FCC Licenses are validly
issued and in full force and effect; (ii) there is no Proceeding pending before
the FCC or, to the Knowledge of Sellers, threatened, with respect to any Company
FCC License; and (iii) Sellers and their respective Subsidiaries have made on a
timely basis all payments to any applicable Governmental Authority for the
Company FCC Licenses.
(c) Schedule 5.10(c) sets forth a true and complete list of all
Company Pending Applications and includes a true and complete list for each
Company Pending Application of (i) the name of the applicant, (ii) the FCC file
number, (iii) the proposed channel(s), and (iv) the general purposes of such
applications.
(d) Except as set forth on Schedule 5.10(d), no Company Pending
Application: (i) is subject to any objection or petition to deny, which
objection or petition to deny has been filed with the FCC; and (ii) to the
Knowledge of Sellers, proposes facilities that the FCC has advised a Seller are
predicted to cause impermissible interference as determined by Parts 21, 27 and
74 of the FCC Rules.
(e) Except as set forth on Schedule 5.10(e), (i) the facilities
subject to a Company FCC License for which a certification or notification of
completion of construction has been filed with the FCC ("Constructed
Facilities") are operating, and at all times since January 1, 2002 and, to the
Knowledge of Sellers, at all times between January 1, 1996 and December 31,
22
2001, have been operating, in material compliance with the FCC License therefor,
the Communications Act and FCC Rules, (ii) Sellers are not transmitting from or
otherwise operating any Constructed Facility that is not the subject of an FCC
License, (iii) none of the Constructed Facilities subject to a Company FCC
License (A) is authorized pursuant to an authorization which is subject to
challenge before the United States Court of Appeals, or (B) other than as set
forth on Schedule 5.07(c), is subject to any lease, sub-lease or any agreement
to make it available to a third party; (iv) no Company FCC License is subject to
(A) a revocation proceeding or (B) a pending request for waiver of Section
21.303 of the FCC Rules; and (v) no Constructed Facilities are operating
pursuant to special temporary or developmental authority.
(f) Except as set forth on Schedule 5.10(f), since January 1, 2000,
all Annual FCC Reports required to be filed by each Seller with the FCC with
respect to the Company FCC Licenses have been timely filed. All Annual FCC
Reports filed by any of the Sellers or their respective Subsidiaries are
complete and correct in all material respects.
(g) Prior to the date hereof, Sellers have made available or
expressly provided to Purchaser, true and complete copies of the FCC Licenses
set forth on Schedule 5.10(a), the Company Pending Applications and all
documents filed in any Proceeding pending at the FCC relating to any Acquired
Asset.
(h) Schedule 5.10(h) sets forth a true and complete list of all
operational fixed services, cable antenna relay services and receive-only earth
stations that are licensed to Sellers and their Subsidiaries and are currently
used, or have been used since January 1, 2003, to transmit programming on any
Company FCC Licenses (excluding MMDS booster and hub stations).
(i) Except as set forth on Schedule 5.10(i)(i) and Schedule 5.10(e),
there is no Company FCC License and, except as set forth on Schedule
5.10(i)(ii), there is no FCC License associated with any of the Acquired
Spectrum Leases identified on Schedule 5.10(i)(ii):
(i) that is subject to 47 C.F.R. Section 21.43(b), and for
which a certification or notification of completion of construction has
been filed with the FCC, which has been submitted for cancellation by
or through the actions of a Seller or its Affiliates;
(ii) that is subject to 47 C.F.R. Section 21.44(a)(3), (A)
which has been subject to the voluntary removal or alteration of any
facilities so as to render any station not operational for a period of
30 days or more, or (B) is not operating due to the voluntary removal
or alteration of any facilities as of the date hereof or the Closing
Date;
(iii) that is subject to 47 C.F.R. Section 2l.303(c), for
which written notice has been provided, or required to have been
provided to the FCC, because of a voluntary discontinuation, reduction
or impairment of public communication service to a community or part of
a community, and/or has been sent to the FCC's Wireless
Telecommunications Bureau for cancellation because of a permanent
discontinuance of service;
(iv) that is subject to 47 C.F.R. Section 21.303(d), (A) which
has been subject to the removal of equipment or facilities, thereby
rendering any station not operational,
23
and (B) for which any radio frequency that has not been used to render
service (as authorized after construction is completed and a
certificate of completion of construction is filed) for a consecutive
period of more than 180 days; or
(v) which is otherwise currently subject to a condition or
situation that could reasonably be expected to place the applicable FCC
License at material risk of revocation, cancellation or forfeiture
within 180 days after the Closing Date.
5.11 Acquired Spectrum Leases.
(a) For each Acquired Spectrum Lease, Schedule 2.02(vi) sets forth:
(i) the name of the third-party lessor; (ii) the name of the Seller, its
Subsidiary or its Predecessor-in-Interest that is the lessee; (iii) the FCC call
sign or file number covering the Acquired Spectrum Lease; (iv) the channels and
market in which the Acquired Spectrum Lease is used or useful; (v) the
expiration date of the FCC License for the spectrum under the Acquired Spectrum
Lease; and (vi) the expiration date of the Acquired Spectrum Lease. Sellers have
made available or expressly provided to Purchaser true and complete copies of
the Acquired Spectrum Leases prior to the date hereof. Except as set forth on
Schedule 5.11(a), all Acquired Spectrum Leases are free and clear of all Liens
and Claims (other than Permitted Liens).
(b) Subject to payment of Default Cures, each Acquired Spectrum
Lease is valid, binding on Sellers and, to the Knowledge of Sellers, each other
party thereto, and in full force and effect, meets all requirements of Law, and
is enforceable in accordance with its terms subject to the Enforceability
Exceptions. A Seller, its Subsidiary or its Predecessor-in-Interest is the
lessee under each Acquired Spectrum Lease and, subject to the rights reserved to
the lessor, has the sole right to use the spectrum under each Acquired Spectrum
Lease as required to conduct its business for the purposes contemplated in the
Acquired Spectrum Lease. To the Knowledge of Sellers, other than the terms of
each Acquired Spectrum Lease and the FCC Rules limiting the duration of such
Acquired Spectrum Leases, there are no facts or circumstances that might
(whether with or without notice, lapse of time or the occurrence of any other
event) preclude the renewal or extension of such Acquired Spectrum Leases. To
the Knowledge of Sellers: (i) neither Sellers nor any other party to any of the
Acquired Spectrum Leases has (A), subject to payment of the Default Cures,
failed to comply or is in material breach or material default thereunder or (B)
claimed that the counterparty has failed to comply or is in material breach or
material default thereunder; and (ii) the consummation of the Acquisition and
the transactions contemplated by this Agreement, subject to the entry of the
Approval Order, will not cause any violation, breach or default of any Acquired
Spectrum Lease or require the Consent of the lessor thereunder. Except as set
forth on Schedule 5.11(b), no party to any Acquired Spectrum Lease has claimed,
and to the Knowledge of Sellers, no party has threatened, that such party has a
right to terminate the Acquired Spectrum Lease prior to or at the Closing or to
seek damages against any of Sellers for the violation, breach or default by any
of Sellers of such Acquired Spectrum Lease.
(c) Except as set forth on Schedule 5.11(c), to the Knowledge of
Sellers and except for Leased Pending Applications and Third Party Pending
Applications filed prior to the date hereof: (i) the grant, renewal or
assignment of the FCC Licenses issued to the licensee of the spectrum covered by
any Acquired Spectrum Lease was approved by the FCC by Final
24
Order; (ii) the Acquired Spectrum Leases are validly issued and in full force
and effect; and (iii) there is no Proceeding pending before the FCC or
threatened with respect to the Acquired Spectrum Leases or any underlying FCC
License.
(d) To the Knowledge of Sellers, Schedule 5.11(d) sets forth a true
and complete list of all pending applications as of the date hereof for new FCC
License for MMDS, ITFS or WCS, assignments or transfers of FCC Licenses for
MMDS, ITFS or WCS, modifications of FCC Licenses for MMDS, ITFS or WCS,
extensions of time to construct PSA stations and renewals of FCC Licenses for
MMDS, ITFS or WCS filed by a lessor with respect to any FCC License subject to
any Acquired Spectrum Lease (collectively, the "Leased Pending Applications").
(e) Except as set forth on Schedule 5.11(e), to the Knowledge of
Sellers, no Leased Pending Application: (i) is subject to any informal objection
or petition to deny: or (ii) proposes facilities that the FCC has advised the
applicant are predicted to cause impermissible interference as determined by
Parts 21, 27 and 74 of the FCC Rules.
5.12 Intentionally Deleted.
5.13 Taxes. (a) Except as are extinguished by the Approval Order, no
Tax Liens have been filed or otherwise exist affecting any Acquired Assets and
no claims are being asserted with respect to any Taxes of the Sellers; (b) no
Tax is required to be withheld pursuant to Section 1445 of the Code as a result
of the transfers contemplated by this Agreement; (c) none of the Acquired Assets
secures any indebtedness, the interest on which is tax-exempt under Section
103(a) of the Code; and (d) none of the Acquired Assets is "tax-exempt use
property" within the meaning of Section 168(h) of the Code.
5.14 Proceedings. Schedule 5.14 sets forth a true and complete list of
each pending and, to the Knowledge of Sellers, threatened Proceeding (excluding
Proceedings involving the FCC that may relate to FCC Licenses for ITFS, MMDS, or
WCS in general and are not reasonably likely to have a disproportionate effect
on the Company FCC Licenses) against or relating to or involving any Acquired
Asset or Assumed Liability. No Seller or any Subsidiary of a Seller is a party
or subject to or in default under any Judgment applicable or relating to or
involving any of the Acquired Assets or Assumed Liabilities.
5.15 Compliance with Laws. The use and operation of the Acquired Assets
by Sellers and their Subsidiaries materially complies with all Laws. Sellers and
their Subsidiaries have not received any communication from a Governmental
Authority that alleges that Sellers' or any of their respective Subsidiaries'
use or operation of the Acquired Assets is not in compliance with any Law, nor
has any Seller received any oral communication to such effect.
5.16 Environmental Matters. The use and operation of the Acquired
Assets is in material compliance with all applicable Environmental Laws. There
are no pending or, to the Knowledge of Sellers, threatened Proceedings by or
before any Governmental Authority alleging that the use or operation of the
Acquired Assets is not in compliance with applicable Environmental Laws. Sellers
possess and are in compliance, in all material respects, with all Permits
necessary under Environmental Laws for the operation of the Acquired Assets. No
25
property owned or, to the Knowledge of Sellers, leased by Sellers or their
Subsidiaries and included in the Acquired Assets is contaminated with any
Hazardous Substance and, prior to the date hereof, the Sellers have expressly
provided Purchaser with true and complete copies of all environmental reports,
studies, assessments, sampling data and other environmental information in its
possession relating to the Acquired Assets.
5.17 Absence of Certain Changes. Since December 31, 2002, the Acquired
Assets have been operated and maintained in the ordinary course and there has
not occurred nor has any fact, circumstance, occurrence, condition, act, event
or omission which has resulted in, or could, individually or in the aggregate,
reasonably be expected to result in a Sellers Material Adverse Effect.
5.18 Network Equipment. Schedule 5.18 sets forth a true and complete
list of all physical assets used or held for use by Sellers or their respective
Subsidiaries in connection with the operation of (a) the Company FCC Licenses,
(b) the Acquired Spectrum Leases and (c) the Station Assets, which are material
in connection with the Company FCC Licenses or the Acquired Spectrum Leases.
5.19 Spare Parts and Equipment. Schedule 5.19 sets forth a true and
complete list of all locations of the Spare Parts and Equipment of Sellers and
their Subsidiaries relating to the operation of (a) the Company FCC Licenses,
(b) the Acquired Spectrum Leases and (c) the Station Assets.
5.20 Brokers or Finders. Except for the fees and expenses of Xxxxxxxx
Xxxxx Xxxxxx & Xxxxx Capital, Inc., which will be paid by Sellers, Sellers and
their Subsidiaries have no liability to any agent, broker, investment banker or
other firm or Person for any broker's or finder's fee or any other commission or
similar fee in connection with the Acquisition or the other transactions
contemplated hereby for which Purchaser could become liable or obligated.
5.21 Interference Coordination Agreements. Schedule 5.21 sets forth a
true and complete list of all Contracts (the "Interference Coordination
Agreements") regarding the Company FCC Licenses between (a) any of Sellers or
their Subsidiaries and any other MMDS or ITFS licensee, applicant, lessor or
operator or (b) to the Knowledge of Sellers or any of their Subsidiaries,
between the lessor of any Acquired Spectrum Lease and any other MMDS or ITFS
licensee, applicant, lessor or operator with respect to (i) interference to or
from adjacent markets or spectrum within any market affecting Acquired Spectrum
Leases, (ii) the coordination of adjacent market or in-market spectrum use, or
(iii) other matters concerned with the operation of channels in adjacent markets
or in the same market or agreements for the partitioning of any Basic Trading
Area ("BTA") authorizations that is the subject of an Acquired Spectrum Lease.
True and complete copies of all Interference Coordination Agreements have been
expressly provided to Purchaser prior to the date hereof.
5.22 Intellectual Property.
(a) The Sellers and their Subsidiaries have sufficient rights to use
all Intellectual Property used or necessary in the operation of the Acquired
Assets, all of which (except to the extent constituting Excluded Assets) shall
survive and be transferred to Purchaser
26
unchanged by the consummation of the transactions contemplated by this
Agreement. There is no Proceeding, opposition or cancellation pending, or, to
the Knowledge of Sellers, asserted or threatened concerning the ownership,
validity, registerability, enforceability, infringement, use or licensed right
to use any Intellectual Property as concerns the Acquired Assets. To the
Knowledge of the Sellers, no valid basis for any such Proceeding, opposition or
cancellation exists. To the Knowledge of the Sellers, no person is violating any
other Intellectual Property right owned by any of them exclusively and included
in the Acquired Assets. Upon the Acquisition, Purchaser will have all the
Intellectual Property rights necessary to operate the Acquired Assets.
(b) The Sellers and their Subsidiaries have taken all reasonable
measures to protect the secrecy, confidentiality and value of all Trade Secrets
that are owned, used or held by any of them in connection with the Acquired
Assets, and, to the Knowledge of the Sellers, such Trade Secrets have not been
used, disclosed to or discovered by any Person except pursuant to valid and
appropriate non-disclosure and/or license agreements and those agreements have
not been breached. To the Knowledge of the Sellers, none of their employees has
any patents issued or applications pending for any device, process, design or
invention of any kind now used or needed in order to operate the Acquired
Assets, which patents or applications have not been assigned to one of the
Sellers or their Subsidiaries. All current and prior employees have executed
valid intellectual property and confidentiality agreements.
(c) To the Knowledge of Sellers, each Intellectual Property Contract
is legal, valid, binding on Sellers and, to the Knowledge of Sellers, each other
party thereto, enforceable against the other party, and is in full force and
effect and will continue to be so following the Acquisition subject to the
Enforceability Exceptions. No Seller has received written notice of any claim,
and to the Knowledge of Sellers, no claim has otherwise been threatened or
asserted that any of the Sellers or their Subsidiaries or, to the Knowledge of
the Sellers, another Person, has breached any Intellectual Property Contract.
There exists no event, condition or occurrence that, with the giving of notice
or lapse of time, or both, would constitute a breach or default by any Seller or
any of their Subsidiaries or, to the Knowledge of the Sellers, another Person
under any Intellectual Property Contract. No party to any Intellectual Property
Contract has given notice of its intention to cancel, terminate, change the
scope of rights under, or fail to renew any Intellectual Property Contract. No
party to any Intellectual Property Contract has repudiated in writing any
provision thereof. Except as may result from the filing of the Bankruptcy Cases,
consummation of the transactions contemplated hereby will not place any of the
Sellers or their Subsidiaries in breach or default of any Intellectual Property
Contract, or trigger any modification, termination or acceleration thereunder,
or effect any license under or encumbrance on Intellectual Property owned or
held by the Purchaser immediately prior to the Closing Date. To the Knowledge of
the Sellers, the Licensed Intellectual Property is valid, subsisting and
enforceable and is not subject to any outstanding Judgment or agreement
adversely affecting the use thereof or its rights thereto by the Sellers and
their Subsidiaries.
5.23 Cable Systems. None of the Acquired Assets is used in a "cable
system" as that term is defined in 47 U.S.C. Section 522(7), or has a
relationship with a "cable system" that is prohibited by the FCC Rules.
27
5.24 Acquired WCS Agreements. Schedule 5.24 sets forth a true and
complete list of, and true and complete copies were made available or expressly
provided to Purchaser by Sellers prior to the date hereof, of all WCS partition
or disaggregation agreements entered into by Sellers or their Subsidiaries
("Acquired WCS Agreements"). Each Acquired WCS Agreement is valid, binding and
in full force and effect, meets all requirements of Law, and is enforceable in
accordance with its terms subject to the Enforceability Exceptions.
5.25 Collective Bargaining Agreements. No Seller or any of its
Subsidiaries is a party to or bound by any labor agreement or collective
bargaining agreement respecting its employees, and there is not any pending, or,
to the Knowledge of the Sellers, threatened, strike, walkout or other work
stoppage or any union organizing effort by or respecting its employees.
5.26 Accuracy of Copies and Statements. The copies of documents
delivered, provided or made available by any of the Sellers or their
Subsidiaries to Purchaser pursuant to the terms of this Agreement are complete
and accurate in all material respects.
5.27 ERISA. Neither the Sellers, any of their respective Subsidiaries
nor any Person which is considered one employer with the Sellers under Section
4001 of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), or Section 414 of the Code (an "ERISA Affiliate") (a) maintains or
contributes to or has within the past six years maintained or contributed to an
"employee pension plan" within the meaning of Section 3(2) of ERISA that is
subject to Subtitles C or D of Title IV of ERISA or (b) maintains or has an
obligation to contribute to or has within the past six years maintained or had
an obligation to contribute to a "multiemployer plan" within the meaning of
Section 3(37) of ERISA.
5.28 Nucentrix Reports; Financial Statements. Nucentrix has made
available to the Purchaser each registration statement, report, proxy statement
or information statement prepared by it since December 31, 2002, including (i)
Nucentrix's Annual Report on Form 10-K for the year ended December 31, 2002, and
(ii) Nucentrix's Quarterly Reports on Form 10-Q for the period ended March 31,
2003, each in the form (including exhibits, annexes and any amendments thereto)
filed with the Securities and Exchange Commission (the "SEC") (collectively,
including any such reports filed subsequent to the date hereof and as amended,
the "Reports"). As of their respective dates (or, if amended, as of the date of
such amendment), the Reports did not, and any Reports filed with the SEC
subsequent to the date hereof will not, contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements made therein, in light of the circumstances in
which they were made, not misleading. Each of the consolidated balance sheets
included in or incorporated by reference into the Reports (including the related
notes and schedules) fairly presents, or will fairly present, in all material
respects, the consolidated financial position of Nucentrix and its subsidiaries
as of its date, and each of the consolidated statements of income and of changes
in financial position included in or incorporated by reference into the Reports
(including any related notes and schedules) fairly presents, or will fairly
present, in all material respects, the results of operations, retained earnings
and changes in financial position, as the case may be, of Nucentrix and its
subsidiaries for the periods set forth therein (subject, in the case of
unaudited statements, to notes and normal year-end audit adjustments that will
not be material in amount or effect), in each case in accordance with U.S.
generally accepted accounting principles ("GAAP") consistently applied during
the periods involved, except as may be noted therein.
28
5.29 Insurance.
(a) Schedule 5.29 sets forth a list of all insurance policies or
binders, including the coverage, deductible and term of each policy or binder,
which are currently in effect insuring the Acquired Assets or the Assumed
Liabilities, and Sellers have made available or expressly provided to Purchaser
true and complete copies thereof prior to the date hereof.
(b) With respect to policies listed in Schedule 5.29, insofar as
they relate to the Acquired Assets or the Assumed Liabilities, (i) Sellers or
their Subsidiaries have paid all premiums due and have not received any notice
of cancellation, and (ii) (A) except as set forth in Schedule 5.29, there are no
pending or asserted claims against such insurance by any Seller or any of its
Subsidiaries and (B) no Seller or any of its Subsidiaries has received any
notice of any pending or threatened termination of any of such policies or any
premium increases for the current policy period with respect to any of such
policies.
5.30 WorldCom BTA Agreements. Schedule 5.30 sets forth a true and
complete list of all of the FCC Licenses subject to the WorldCom BTA Agreements
(the "WorldCom FCC Licenses"). Sellers have made available or expressly provided
to Purchaser true and complete copies of the WorldCom BTA Agreements and
WorldCom FCC Licenses prior to the date hereof. No Person, other than Sellers,
has any rights in the Partitioned BTAs pursuant to the WorldCom BTA Agreements.
5.31 Non-U.S. Operations. None of the Sellers or any of their
Subsidiaries has any assets located outside the United States or derives revenue
from any sources or assets located outside the United States.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to each Seller as follows:
6.01 Organization; Standing and Power. Purchaser is duly organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation and has the requisite corporate power and authority to own, lease
or otherwise hold its properties and assets and to carry on its business as
presently conducted.
6.02 Authority; Execution and Delivery; Enforceability. Purchaser has
the requisite corporate power and authority to execute this Agreement and each
Ancillary Agreement to which it is, or will be, a party, and to consummate the
Acquisition and the other transactions contemplated hereby and thereby. The
execution and delivery by Purchaser of this Agreement and each Ancillary
Agreement to which it is, or will be, a party and the consummation by Purchaser
of the Acquisition and the other transactions contemplated hereby and thereby
have been duly authorized by all necessary corporate action on the part of
Purchaser. Purchaser has duly executed and delivered this Agreement, and prior
to Closing, Purchaser shall have executed and delivered each Ancillary Agreement
to which Purchaser is, or will be, a party. This Agreement constitutes, and each
Ancillary Agreement to which Purchaser is, or will be, a party, when so executed
or delivered, will constitute, its legal, valid and binding obligation,
enforceable against it in accordance with its respective terms (assuming, in
each case, due authorization,
29
execution and delivery thereof by the other parties thereto, and the entry of
the Approval Order, and, as to the enforcement of remedies, subject to the
Enforceability Exceptions).
6.03 No Conflicts. The execution, delivery and performance of this
Agreement and the Ancillary Agreements by Purchaser does not, and the
consummation of the transactions contemplated hereby and thereby, and compliance
by Purchaser with the terms hereof and thereof do not and will not conflict with
or result in any violation or breach of or default (with or without notice or
lapse of time, or both) under, or give rise to a right of termination,
cancellation or acceleration of any obligation or to loss of a benefit under, or
result in the creation of any Lien (or any obligation to create a Lien) upon any
of the properties or assets of Purchaser under, any provision of (a) the
certificate or articles of incorporation, by-laws, or other organizational
documents of Purchaser or any of its Subsidiaries, (b) subject to entry of the
Approval Order, any Contract to which Purchaser or any of its Subsidiaries is a
party or any Contract by which any of their properties or assets may be bound or
(c) subject to (i) entry of the Approval Order and (ii) the governmental filings
and other matters referred to in Section 5.04, any Judgment or Law applicable
any Purchaser or any Subsidiary of Purchaser or their respective properties or
assets.
6.04 Governmental Filings; Consents. No Consent is required to be
obtained or made by or with respect to Purchaser in connection with the
execution, delivery and performance by Purchaser of this Agreement or any of the
Ancillary Agreements to which it is, or will be, a party or the consummation the
transactions contemplated hereby or thereby, other than (a) compliance with and
filings, if any, under Section 13(a) of the Exchange Act, (b) filings with and
approvals of the FCC as required under the Communications Act and the FCC Rules,
(c) those that may be required solely by reason of the participation of Sellers
(as opposed to any other third party) in the Acquisition and other transactions
contemplated hereby, (d) entry of the Approval Order, and (e) the HSR Act.
6.05 Litigation. There are no (a) outstanding Judgments against
Purchaser or any of its Subsidiaries, (b) Proceedings pending or, to the
Knowledge of Purchaser, threatened against Purchaser or any of its Subsidiaries,
or (c) investigations by any Governmental Authority that are pending or, to the
Knowledge of Purchaser, threatened against Purchaser or any of its Subsidiaries,
that, individually or in the aggregate, could reasonably be expected to prevent
the consummation of the transactions contemplated hereby.
6.06 Financing. Purchaser will have prior to the Closing cash in
immediately available funds sufficient to enable it to pay the Purchase Price at
the Closing.
6.07 Brokers or Finders. Purchaser has no liability to any agent,
broker, investment banker or other firm or Person for any broker's or finder's
fee or any other commission or similar fee in connection with the Acquisition or
the other transactions contemplated hereby for which any Seller could become
liable or obligated.
6.08 No Filings Outside United States. Subject to the accuracy of the
representation and warranty contained in Section 5.31, there are no filings
required under the antitrust or competition statutes of jurisdictions located
outside of the United States in connection with the transactions contemplated by
this Agreement as a result of the operations of Purchaser in jurisdictions
outside of the United States.
30
ARTICLE VII
COVENANTS
7.01 Operation of Acquired Assets Prior to Closing. Except with the
prior written consent of Purchaser, from the date hereof until the Closing,
subject to the limitations imposed on Sellers as a result of having filed
petitions for relief under the Bankruptcy Code, Sellers and their Subsidiaries
shall operate and maintain the Acquired Assets in the ordinary course consistent
with past practice, and will use reasonable efforts to preserve intact
satisfactory relationships with (i) the lessors under the Acquired Tower Leases
and Acquired Spectrum Leases and (ii) the counterparties to the Assigned
Contracts. In addition, during the period from the date hereof until the
Closing, Sellers shall not and shall not permit their Subsidiaries to do any of
the following without the prior written consent of Purchaser:
(a) (i) fail to maintain all of the physical Acquired Assets in good
operating condition (ordinary wear and tear excepted), and in a state of repair
and condition that complies with applicable Law or (ii) sell or otherwise
dispose of any portion of the Spare Parts and Equipment otherwise constituting
Acquired Assets; provided, however, that Sellers and their Subsidiaries shall be
permitted to use or deploy all or any portion of such Spare Parts and Equipment
in the ordinary course of business to repair and replace Acquired Assets;
(b) disconnect, remove or dispose of any of the equipment of Sellers
or their Subsidiaries included in or associated with the Acquired Assets or
equipment that would be included in or associated with Acquired Assets, if the
time of the disconnect, removal or disposal was the Closing;
(c) fail to pay the rent or other costs and expenses payable in
relation to the Acquired Spectrum Leases and Acquired Tower Leases on a timely
basis consistent with past practice;
(d) create or permit to exist any Lien (other than Permitted Liens)
on any of the Acquired Assets;
(e) terminate, adversely amend or modify, renew, extend, exercise
any option or rights of first refusal, agree to a novation of or (directly or
indirectly) waive or relinquish any rights under any Assigned Contract or rights
that under any Contract would be an Assigned Contract if the time of the
termination, amendment, modification, renewal, extension, exercise, novation,
waiver or relinquishment was the Closing;
(f) terminate, adversely amend or modify, renew, extend, exercise
any option or rights of first refusal, agree to a novation of, or (explicitly or
implicitly) waive or relinquish any rights under, any Acquired Spectrum Lease or
Acquired Tower Lease, or allow, suffer or permit any default of any Seller or
any Subsidiary of a Seller under any Acquired Spectrum Lease or Acquired Tower
Lease;
(g) enter into any leasing or licensing agreements, take-or-pay
arrangements or similar affiliations, alignments or agreements with respect to
the use of any Acquired Spectrum Leases or Acquired Tower Leases, or sell,
convey, assign, lease, or grant rights with respect to, sublease, license or
otherwise transfer or dispose of (i) any Acquired Spectrum Lease,
31
(ii) any Acquired Tower Lease, (iii) any other Station Asset, except disposals
of obsolete equipment on a Tower Site in the ordinary course of business
consistent with past practice, and provided that Sellers may deploy inventory in
the ordinary course of business, consistent with past practice, in connection
with the operation of the Company FCC Licenses, Third Party Licenses and
Acquired Spectrum Leases or any other aspects of the Business that Purchaser is
not purchasing under this Agreement, or (iv) any other asset or property of any
of Sellers or their Subsidiaries constituting the Acquired Assets;
(h) directly or indirectly waive or relinquish any right or claim
with respect to any Acquired Assets;
(i) if any loss, damage, impairment, confiscation, or condemnation
of or to any of the physical Acquired Assets occurs, fail to use their
reasonable efforts to promptly repair, replace or restore such physical Acquired
Assets to their prior condition as soon as reasonably practicable thereafter;
(j) fail to maintain insurance policies on each of the Station
Assets consistent with current practices;
(k) sell or convey, or attempt to sell or convey, or otherwise
dispose of any assets that would be Acquired Assets at the Closing;
(l) fail to operate in accordance with the terms of the DIP Loan
Agreement;
(m) knowingly take any action or knowingly omit to take any action,
which action or omission, if taken prior to, on or after the date hereof, would
result in a Sellers Material Adverse Effect;
(n) amend or modify the WorldCom BTA Agreements;
(o) fail to pay the Persons listed on Schedule 5.08(d) all amounts
necessary to cure any and all defaults or breaches under all applicable
Contracts with such Persons which but for such default or breach would be
Assigned Contracts which arose prior to the date on which the Bankruptcy Cases
commenced; or
(p) agree to do any of the foregoing.
7.02 Access to Information; Access to Personnel; Site Inspections.
(a) During the period from the date hereof until the Closing Date,
Sellers shall, subject to applicable Law, and shall cause their respective
Subsidiaries to, provide Purchaser and its authorized Representatives reasonable
access, upon reasonable notice and during normal business hours, to personnel
responsible for, and records relating to the Acquired Assets or any assets that
would constitute Acquired Assets if the Closing were to occur at the time of
measurement, and during such period will furnish promptly to Purchaser any
information in the possession of any Seller or any Subsidiary of any Seller
concerning the Acquired Assets or any assets that would constitute Acquired
Assets if the Closing were to occur at the time of measurement, as Purchaser may
reasonably request; provided, however, that in no event shall
32
Sellers be obligated to provide (i) access or information in violation of Law,
(ii) any information the disclosure of which would cause the loss of any legal
privilege available to any Seller relating to such information or would cause
any Seller to breach a confidentiality obligation to which it is bound, provided
that the applicable Seller has used its reasonable efforts to protect the
privilege or to obtain a waiver of the applicable contractual obligation, or
(iii) copies of bids, letters of intent, expressions of interest or other
proposals received from other Persons in connection with the transactions
contemplated by this Agreement or information and analyses relating to such
communications, except to the extent required in the Bidding Procedures Order.
(b) During the period from the date hereof until the Closing Date,
Purchaser and its Representatives will have the right to enter the properties or
sites owned or, subject to access rights to which Sellers or the Subsidiaries of
Sellers are entitled by Law or Contract, leased by the Sellers and their
Subsidiaries and relating to the Acquired Assets or any assets that would
constitute Acquired Assets if the Closing were to occur at the time of
measurement, and to inspect the equipment thereon of Sellers and their
Subsidiaries, make surveys, mechanical and structural engineering studies,
environmental assessments, and conduct any other investigations and inspections
as Purchaser may reasonably request; provided that, the foregoing shall not
permit the Purchaser to conduct any invasive testing of soil at any property
owned or leased by Sellers or the Subsidiaries and Purchaser shall provide
Sellers at least 24 hours prior written notice of any intent of any entry,
inspection or actions to be taken under this Section 7.02(b) and shall permit a
Representative of Sellers to accompany Purchaser and its Representatives on any
site, entry or inspection and shall, to the extent not subject to any
confidentiality provisions or Contracts, provide to Nucentrix copies of all
surveys and environmental assessments in Purchaser's possession performed on
behalf of Purchaser by third parties with respect to such properties or sites.
(c) For a period of one year from and after the Closing Date, upon
the written request of Sellers, Purchaser will reasonably promptly provide
Sellers with such Tax information relating to the Acquired Assets as of the
Closing, as Sellers may reasonably request.
(d) Notwithstanding anything to the contrary contained in this
Agreement, the Non-Disclosure Agreement or any other Ancillary Agreement, from
and after the date that the Approval Order becomes a Final Order, Purchaser may
contact the counterparty to any Contract that is an Acquired Asset for any
purpose, including negotiating amendments to such Contracts subject to the
Closing of the Acquisition.
7.03 Spectrum Testing. From and after the date hereof, if Purchaser wishes to
conduct any operational tests with respect to electromagnetic spectrum to be
included in the Acquired Assets, Sellers will, and will cause their respective
Subsidiaries to, cooperate with Purchaser in the conduct of such tests and
provide Purchaser with access to the assets and properties of Sellers and their
Subsidiaries reasonably necessary to conduct such testing; provided that neither
Sellers nor any of their Subsidiaries shall be required to make any
out-of-pocket expenditures in connection with the testing contemplated by this
Section 7.03.
7.04 FCC Filings.
(a) Sellers shall use their best efforts to prosecute applications
filed by Seller
33
to partition the Partitioned BTAs to obtain FCC approval. No Seller shall take
any action, or fail to take any action, if such action or failure to act would
(or would be expected to) have the effect of delaying the receipt of or failing
to obtain the FCC consent for such partitions, including, but not limited to,
providing such information or data as the FCC may request. If the WorldCom BTAs
are not partitioned in accordance with this Section 7.04(a) by the date of entry
of the Approval Order then, Purchaser and Sellers will cause the application to
partition the WorldCom BTAs to be incorporated into the FCC Assignment
Application at the time of filing of the FCC Assignment Applications.
(b) Not later than five (5) Business Days following the date that
the Approval Order becomes a Final Order, Purchaser and Sellers shall file or
cause to be filed with the FCC all appropriate applications with respect to the
assignment to Purchaser of the Company FCC Licenses, the amendment of the
Company Pending Applications to specify Purchaser as the applicant as of the
Closing and the partitioning of the WorldCom BTAs into the Partitioned BTAs to
the extent not partitioned in accordance with Section 7.04(a). During the period
from the date of entry of the Approval Order to the Closing Date, promptly after
any other FCC authorization or application becomes a Company FCC License or
Company Pending Application, as applicable, Purchaser and Sellers shall file or
cause to be filed with the FCC such assignment applications and filings with
respect to such FCC authorizations and applications. Such FCC authorizations and
applications, and the WorldCom BTA Application, if applicable, are hereinafter
referred to as the "FCC Assignment Applications." The FCC Assignment
Applications and any supplemental information furnished in connection therewith
shall be in substantial compliance with the FCC Rules or be responsive to a
request of the FCC.
(c) Purchaser and Sellers shall furnish to each other such necessary
information and reasonable assistance as the other may reasonably request in
connection with the preparation, filing and prosecution of the FCC Assignment
Applications. Purchaser and Sellers shall bear their own expenses in connection
with the preparation, filing and prosecution of the FCC Assignment Applications.
Purchaser and Sellers shall each use their commercially reasonable efforts to
prosecute the FCC Assignment Applications and shall furnish to the FCC any
documents, materials, or other information reasonably requested by the FCC;
provided that in connection with obtaining such approvals, Purchaser shall not
be required to agree to any conditions or limitations (i) with respect to any
business or property of Purchaser or its Affiliates (excluding the Acquired
Assets) on terms not acceptable to Purchaser in its sole and absolute discretion
or (ii) on the Acquired Assets on terms not reasonably acceptable to Purchaser
or that would have, in the aggregate, a material impact on the benefits expected
to be obtained by Purchaser and its Affiliates from the Acquisition.
(d) If the condition set forth in Section 8.02(g) hereof has not
been satisfied on or before April 1, 2004, Sellers will, upon written notice
from Purchaser, either (i) amend and bifurcate the FCC Assignment Application in
order that all portions of the FCC Assignment Applications relating to the
WorldCom BTAs be considered for approval by the FCC pursuant to a separate
application process or (ii) if the bifurcation described in clause (i) is not
permitted by the FCC, amend the FCC Assignment Application to delete the
portions of the FCC Assignment Applications relating to the WorldCom BTAs from
the FCC Assignment Applications and will, not later than five (5) Business Days
following the amendment of the FCC Assignment Applications, file or cause to be
filed with the FCC a separate application with respect to the
34
partitioning of the WorldCom BTAs in accordance with Exhibit B of the WorldCom
BTA Agreements and the transfer and assignment to Purchaser of the Partitioned
BTAs (the bifurcated application or separate application, as the case may be,
the "WorldCom BTA Application"). The WorldCom BTA Application, if any, and any
supplemental information furnished in connection therewith shall be in
substantial compliance with the FCC Rules.
7.05 Third Party Consents. During the period from the date hereof until
90 days after the Closing Date, Purchaser, on the one hand, and Sellers, on the
other hand, will cooperate and use their respective commercially reasonable
efforts to obtain any Consents required to assign, convey, transfer and deliver
the Acquired Assets to Purchaser (to the extent such Consents are required
notwithstanding the entry of the Approval Order); provided, however, that
Purchaser will not be required to expend any sum, make a financial commitment or
grant or agree to any concession in order to obtain any such required Consent.
If any required Consent is not obtained prior to or within 90 days after the
Closing Date, the parties shall (at their own expense), if requested by
Purchaser, implement an arrangement, reasonable and lawful as to both Purchaser
and Sellers, designed to afford to Purchaser the economic benefits of the
affected Acquired Assets, if any.
7.06 Commercially Reasonable Efforts.
(a) Subject to Sections 7.04(b) and 7.06(b), each of the parties
hereto shall use their respective commercially reasonable efforts to take, or
cause to be taken, all actions, and to do, or cause to be done, and to assist
and cooperate with the other parties hereto in doing, all things necessary,
proper or advisable under Laws to ensure that (i) the conditions set forth in
this Agreement are satisfied, (ii) to consummate and make effective, as promptly
as practicable, the Acquisition and the other transactions contemplated hereby
and (iii) each of the FCC Assignment Applications is approved by the FCC by
Final Order.
(b) Without limiting the generality of the foregoing, the parties
hereto shall furnish to each other such necessary information and reasonable
assistance, as each may reasonably request in connection with the preparation,
filing and prosecution of applications and motion papers, including the FCC
Assignment Applications, needed to obtain by Final Order, Bankruptcy Court
approval of the Approval Order and FCC approval of the FCC Assignment
Applications, and shall execute any additional documents and instruments
reasonably requested by the other parties that are necessary to consummate the
transactions contemplated hereby, whether before or after the Closing.
7.07 Notification of Certain Matters. Sellers shall give prompt notice
to Purchaser, and Purchaser shall give prompt notice to Sellers, of (i) any
notice or other communication from any Person alleging that the consent of such
Person is or may be required in connection with the Acquisition or the
transactions contemplated hereby, (ii) any written objection, litigation or
administrative proceeding that challenges the Acquisition or the transactions
contemplated hereby or the entry of the Approval Order and (iii) any fact,
circumstance, occurrence, condition, act, event or omission with respect to the
assets that as of the Closing would be Acquired Assets that has had or, would,
in the aggregate, be reasonably likely to result in a Sellers Material Adverse
Effect.
35
7.08 Maintenance of FCC Licenses.
(a) Except with respect to the FCC Licenses set forth on Schedule
5.30 (other than the WorldCom BTAs), Sellers will, and will cause their
Subsidiaries to:
(i) maintain in full force and effect all Company FCC
Licenses, and timely comply with FCC Rules, including (A) the filing of
Annual FCC Reports and (B) making all installment payments in respect
of FCC Licenses within two calendar quarters of the due dates for such
installment payments;
(ii) except for those Company Pending Applications that
request additional time to complete construction of facilities
authorized under BTA authorizations, prosecute and defend diligently
and in good faith each Company Pending Application;
(iii) (A) except with respect to Acquired Spectrum Leases that
are removed from the Acquired Assets pursuant to Section 2.07 or that
otherwise constitute Excluded Assets, enforce all of its rights under
each Acquired Spectrum Lease on a timely basis; (B) not enter into any
agreement on or with respect to spectrum capacity under any Company FCC
License without the prior consultation with and the prior approval of
Purchaser; and (C) not enter into any agreements to accept harmful
interference as prescribed by the FCC Rules in connection with any
Company FCC License without the prior consultation with and the prior
approval of Purchaser;
(iv) for any Company FCC License that is subject to 47 C.F.R.
Section 21.44(a)(3), not remove or alter of any facilities so as to
render any station not operational for a period of 30 days or more, or
not operational as of the Closing, and, for any Acquired Lease Spectrum
that is subject to 47 C.F.R. Section 2l.44(a)(3), not permit the
removal or alteration of any facilities so as to render any station not
operational for a period of 30 days or more, or not operational as of
the Closing; and
(v) except as set forth in Section 7.04, not seek the
modification of any Company FCC License, except for such modifications
as are authorized by this Agreement, are required by FCC Rules or which
become authorized pursuant to Company Pending Applications. In any such
event, the Sellers will consult with Purchaser prior to seeking such
modification.
(b) Except with respect to Acquired Spectrum Leases that are removed
from the Acquired Assets pursuant to Section 2.07 or that otherwise constitute
Excluded Assets, Sellers and their Subsidiaries shall use reasonable efforts to
ensure that third party lessors under Acquired Spectrum Leases:
(i) maintain in full force and effect all Acquired Spectrum
Leases, and timely and materially comply with FCC Rules, including the
filing of Annual FCC Reports;
(ii) prosecute and defend diligently and in good faith each
Leased Pending Application;
36
(iii) (A) not enter into any agreement regarding or with
respect to its proposed or authorized ITFS or MMDS spectrum capacity
for the system to which the Acquired Spectrum Lease relates; (B) not
enter into any agreement regarding or with respect to spectrum capacity
under any Acquired Spectrum Lease without the prior approval of
Sellers; and (C) not enter into any agreements to accept harmful
interference as prescribed by the FCC Rules in connection with any
Acquired Spectrum Lease without the prior consultation with and the
prior approval of Purchaser; and
(iv) (A) not seek to modify any Acquired Spectrum Lease,
except for such modifications as are authorized by this Agreement, are
required by FCC Rules or which become authorized pursuant to Leased
Pending Applications; and (B) prevent the new application, or amendment
to any Leased Pending Application, except (I) as specifically required
by the terms of the Acquired Spectrum Leases, (II) as required by the
terms of an applicable Acquired Spectrum Lease or as requested by the
FCC, or (III) as may be reasonably required to operate the facilities
proposed in such Leased Pending Application.
The Sellers will consult with Purchaser prior to taking any material
action under this Section 7.08(b).
(c) Sellers and their Subsidiaries will ensure and will use
reasonable efforts to ensure that their counterparties, as the case may be, to
the Third Party Licenses:
(i) maintain in full force and effect all Third Party
Licenses, and timely and materially comply with FCC Rules, including
the filing of Annual FCC Reports;
(ii) prosecute and defend diligently and in good faith each
Third Party Pending Application;
(iii) (A) not enter into any agreement regarding or with
respect to its proposed or authorized ITFS or MMDS spectrum capacity
for the system to which the Third Party License relates; (B) not enter
into any agreement regarding or with respect to spectrum capacity under
any Third Party License without the prior approval of Purchaser; and
(C) not enter into any agreements to accept harmful interference as
prescribed by the FCC Rules in connection with any Third Party License
without the prior consultation with and the prior approval of
Purchaser; and
(iv) (A) not seek to modify any Third Party License, except
for such modifications as are authorized by this Agreement, are
required by FCC Rules or which become authorized pursuant to Third
Party Pending Applications; and (B) prevent the new application, or
amendment to any Third Party Pending Application, except (I) as
specifically required by the terms of the agreement by which Sellers
have agreed to acquire the Third Party Licenses, (II) as required by
the terms of an applicable Third Party License, (III) as requested by
the FCC, or (IV) as may be reasonably required to operate the
facilities proposed in such Third Party Pending Application.
37
The Sellers will consult with Purchaser prior to taking any material
action under this Section 7.08(c).
7.09 Bankruptcy Covenants.
(a) Within three Business Days following the completion of the
Auction, Sellers will and will cause their applicable Subsidiaries to, at their
sole cost and expense, file a motion to obtain an order, pursuant to 11 U.S.C.
Sections 105, 363, and 365, to approve the Acquisition, in form and substance
reasonably acceptable to Purchaser and Nucentrix, but including the express
terms of the Approval Order as defined and on the terms contained herein (the
"Approval Motion"). Sellers will, and will cause their applicable Subsidiaries
to, use their best efforts to obtain the Approval Order on or before November
17, 2003.
(b) Sellers will provide Purchaser and its Representatives the
opportunity, and sufficient time, to review and comment on all documents,
motions, orders, filings or pleadings that Sellers file with the Bankruptcy
Court which relate to the consummation or approval of the Acquisition and this
Agreement, the Approval Motion, related orders, or any provision herein or
therein, and will incorporate all reasonable comments of Purchaser and its
Representatives. Sellers will also promptly provide Purchaser with facsimile or
electronic copies of all pleadings received by or served by or upon the Sellers
in connection with its Bankruptcy Case, which, to the Knowledge of Sellers, have
not otherwise been served on Purchaser.
(c) From and after the commencement of the Bankruptcy Cases, Sellers
will, and will cause their applicable Subsidiaries to, continue to operate their
business as a debtor in possession pursuant to Sections 1107 and 1108 of the
Bankruptcy Code.
(d) During the period from the date hereof until the Closing,
Sellers shall not and shall not permit their Subsidiaries to take any actions
outside the ordinary and usual course of business without the approval of the
Bankruptcy Court after written notice to Purchaser.
7.10 Intentionally Deleted.
7.11 Employee Matters. Sellers acknowledge and agree that Purchaser
will not be required to offer employment to or employ any present or former
employee (including any employee on any type of leave of absence) of any Seller
and that Purchaser has no liability or obligation relating to any such employees
of Sellers or their Subsidiaries. Following the entry of the Approval Order and
notwithstanding the Non-Disclosure Agreement, Purchaser may meet with and
discuss with employees of the Sellers, potential employment with Purchaser and
its Affiliates commencing on the earlier of the (a) Closing Date and (b) the
date that such employee is terminated.
7.12 Further Assurances.
(a) Subject to Sections 7.04(b) and 7.06, from time to time, as and
when requested by any party, each party will execute and deliver, or cause to be
executed and delivered, all such documents and instruments and shall take, or
cause to be taken, all such further or other actions, as such other party may
reasonably deem necessary or desirable to consummate the Acquisition and the
other transactions contemplated hereby, including, in the
38
case of Sellers, providing the Books and Records and executing and delivering to
Purchaser such assignments, deeds, bills of sale, consents and other
instruments, in each case as Purchaser or its counsel may reasonably request as
necessary or desirable for such purpose.
(b) Subject to Sections 7.04(b) and 7.06, Sellers and Purchaser each
further agree that, subject to the terms hereof, prior to the Closing they will
use their commercially reasonable efforts to take, or cause to be taken, all
actions and to do, or cause to be done, all things necessary, proper or
advisable under the Bankruptcy Code and other applicable Laws and Regulations to
consummate and make effective the transactions contemplated by this Agreement,
including using their commercially reasonable efforts to obtain all necessary
waivers, consents and approvals and to effect all necessary filings, including
obtaining the entry by the Bankruptcy Court of the Approval Order.
7.13 Tax Matters.
(a) Sellers shall furnish or cause to be furnished to the Purchaser,
upon request, as promptly as practicable, such information and assistance
relating to the Acquired Assets as is reasonably necessary for filing of all Tax
returns, including any claim for exemption or exclusion from the application or
imposition of any Taxes or making of any election related to Taxes, the payment
of Taxes, the preparation for any audit by any Taxing Authority and the
prosecution or defense of any Proceeding relating to any Tax return.
(b) All Transfer Taxes arising out of the transfer of the Acquired
Assets and any Transfer Taxes required to effect any recording or filing with
respect thereto shall be borne by Sellers. The Transfer Taxes shall be
calculated assuming that no exemption from Transfer Taxes is available, unless
otherwise indicated in the Approval Order or, at Closing, Purchaser shall
provide an appropriate resale exemption certificate or other evidence acceptable
to Sellers of exemption from such Transfer Taxes. Sellers and Purchaser shall
cooperate to timely determine the amount of any Transfer Taxes and timely
prepare and file any returns or other filings relating to such Transfer Taxes,
in form and substance satisfactory to each party, including any claim for
exemption or exclusion from the application or imposition of any Transfer Taxes.
Sellers shall pay such Transfer Taxes and shall file all necessary documentation
and returns with respect to such Transfer Taxes when due, and shall promptly,
following the filing thereof, furnish a copy of such return or other filing and
a copy of a receipt showing payment of any such Transfer Tax to Purchaser.
(c) Except as provided in Section 7.13(b), all real property Taxes,
personal property Taxes and similar ad valorem obligations levied with respect
to the Acquired Assets for a Tax period that includes (but does not end on) the
Closing Date, whether imposed or assessed before or after the Closing Date (the
"Closing Period Tax Obligations"), shall be apportioned between Sellers, on the
one hand, and Purchaser, on the other, as of the Closing Date, based on the
number of days in any such period falling prior to and including the Closing
Date, on the one hand, and after the Closing Date, on the other hand. Subject to
Section 7.13(d) and Section 7.19, Sellers shall be responsible for the portion
of such apportioned Taxes attributable to the period up to and including the
Closing Date and Purchaser shall be responsible for the portion of such
apportioned Taxes attributable to the period after the Closing Date.
Accordingly, subject to Section 7.13(d) and Section 7.19, if any Taxes required
to be apportioned hereunder are paid by
39
the party who is not responsible for such Taxes as determined under this Section
7.13(c), the non-paying party shall promptly reimburse the paying party for the
non-paying party's share of such apportioned Taxes. Similarly, if Purchaser, on
the one hand, or Sellers, on the other hand, receive a refund of any Taxes that
are required to be apportioned hereunder, then the recipient of such refund
shall promptly pay to the other party such other party's share of such refund as
determined in accordance with the foregoing apportionment provisions (assuming
that Purchaser and Sellers contributed to the applicable Tax payment in
accordance with the first two sentences of this Section 7.13(c)).
(d) At the Closing, Purchaser shall pay to a separate escrow account
to be established by the Escrow Agent (the "Tax Escrow Account") an amount (the
"Tax Escrow Amount") equal to the Closing Period Tax Obligations as estimated by
the appropriate Taxing Authorities; provided that, the portion of the Tax Escrow
Amount that is attributable to pre-Closing periods shall be deducted from the
amount payable by Purchaser at the Closing pursuant to Section 7.19. The amount
of the Closing Period Tax Obligations shall be paid by the Escrow Agent to the
appropriate Taxing Authorities when such Taxes become due. If the Tax Escrow
Amount is insufficient to fully pay the Closing Period Tax Obligations owed, (i)
Sellers shall pay an amount to the appropriate Taxing Authorities when due equal
to the product of (A) the amount of such deficiency multiplied by (B) the
quotient of (1) the amount of the Purchase Price reduction pursuant to Section
7.19 attributable to Closing Period Tax Obligations, divided by (2) the Tax
Escrow Amount, and (ii) Purchaser shall pay the remainder of the deficiency to
the appropriate Taxing Authorities when due. If the Tax Escrow Amount exceeds
the Closing Period Tax Obligations owed, then the Escrow Agent shall pay (i) to
Sellers an amount of such excess equal to the product of (A) the amount of such
excess multiplied by (B) the quotient of (1) the amount of the Purchase Price
reduction pursuant to Section 7.19 attributable to Closing Period Tax
Obligations, divided by (2) the Tax Escrow Amount, and (ii) to Purchaser an
amount equal to the remainder of such excess. Sellers and Purchaser agree to
deliver joint written instructions to the Escrow Agent to carry out the terms of
this Section 7.13(d).
7.14 Confidentiality.
(a) Sellers will and will cause their Subsidiaries to enforce all of
their rights under each confidentiality agreement entered into with a potential
bidder as contemplated by the Bidding Procedures Order.
(b) For a period of two (2) years after the Closing Date, Sellers
shall, and shall cause their Affiliates and Representatives to, preserve and
protect the confidentiality of the terms and conditions of the Acquired Spectrum
Leases, Real Property Leases, Assigned Contracts, Books and Records and similar
confidential information related to the Acquired Assets (collectively, the "MMDS
Business Information"), and not to disclose the MMDS Business Information to any
third party except as required by applicable Law or, if Sellers deem necessary
or advisable, in connection with any Proceeding involving Sellers; provided,
however, that Sellers shall use good faith efforts to provide Purchaser with
written notice of such circumstance prior to disclosure of any such information
so that Purchaser may seek a protective order or other appropriate remedy. For
the avoidance of doubt, the foregoing obligations shall not apply to (i)
information which is or becomes generally known to the industry or in the public
domain other than as a result of Sellers' or their Affiliates' or
Representatives' disclosure of such information
40
in violation of the provisions of this Agreement or (ii) information that is
furnished or becomes available to Sellers from a third party on a
non-confidential basis after the date hereof who is not, to the Knowledge of
Sellers, prohibited from disclosing such information by a legal, contractual or
fiduciary obligation. Notwithstanding the foregoing, Sellers shall not be
required to maintain their legal existence for any time after the Closing, and
if Sellers shall cease to exist prior to the second anniversary of the Closing
Date, Sellers shall, and shall cause their Affiliates and Representatives to,
deliver to Purchaser all copies of the MMDS Business Information in their
possession or shall cause such copies to be destroyed and shall certify the same
to Purchaser.
(c) The parties agree that (i) any information furnished to or
obtained by Purchaser or any of its Representatives during the period from the
date of this Agreement to the Closing Date as a result of Sellers providing
access as contemplated by Section 7.02 and (ii) the terms and conditions of this
Agreement, the Ancillary Agreements and the transactions contemplated hereby and
thereby (the "Confidential Information"), shall in each case be treated by
Purchaser as confidential on the same terms and conditions as those set forth in
Non-Disclosure Agreement; provided, however, that neither this Agreement nor the
Non-Disclosure Agreement shall apply to restrict disclosure or use of any
Confidential Information (i) to the extent reasonably necessary in connection
with any application to the FCC contemplated hereby or otherwise reasonably
necessary in connection with the transfer of Acquired Assets contemplated hereby
or Purchaser's performance of this Agreement prior to the Closing, (ii) if
Purchaser deems necessary or advisable, in connection with any Proceeding
involving Purchaser; provided, however, that Purchaser shall use good faith
efforts to provide Sellers with written notice of such circumstance prior to
disclosure of any such information so that Sellers may seek a protective order
or other appropriate remedy, or (iii) after the Closing.
(d) Notwithstanding the foregoing, the parties hereto acknowledge
that in connection with seeking entry of the Approval Order and implementation
thereof, this Agreement (together with any Exhibits and certain Schedules
attached hereto) will be filed with the Bankruptcy Court and made publicly
available, and prior to the entry of such Approval Order, disclosures relating
to the transactions contemplated by this Agreement and the Ancillary Agreements
will be made to the official committee of unsecured creditors of Sellers
appointed in connection with the Bankruptcy Cases and to its Representatives,
and the parties agree that such filing and disclosures will not violate any
confidentiality obligations owing to any party, whether pursuant to the
Non-Disclosure Agreement, this Agreement or otherwise.
(e) Notwithstanding anything to the contrary in this Agreement or in
any other agreement to which the parties hereto are parties or by which they are
bound, the obligations of confidentiality contained herein and therein, as they
relate to the Acquisition, shall not apply to the tax structure or tax treatment
of the Acquisition, and each party hereto (and any employee, representative, or
agent of any party hereto) may disclose to any and all Persons, without
limitation of any kind, the tax structure and tax treatment of the Acquisition.
The preceding sentence is intended to cause the Acquisition not to be treated as
having been offered under conditions of confidentiality for purposes of Section
1.6011-4(b)(3) (or any successor provision) of the Treasury Regulations
promulgated under the Code and shall be limited to and construed in a manner
consistent with such purpose. In addition, each party hereto acknowledges that
it has no proprietary or exclusive rights to the tax structure of the
Acquisition or any tax matter or tax idea related to the Acquisition.
41
(f) The Non-Disclosure Agreement shall be terminated and become null
and void without further liability to any of the parties thereto (other than
with respect to claims arising prior to the date that the Approval Order becomes
a Final Order) on the date that the Approval Order becomes a Final Order.
7.15 Press Releases. Except for filings with the Bankruptcy Court with
respect to the Bankruptcy Cases, a press release, mutually agreed upon by
Sellers and Purchaser, to be issued by Nucentrix immediately following the
execution of this Agreement and an associated Current Report on Form 8-K (which
Form 8-K and press release to be filed and issued, respectively, immediately
following the execution of this Agreement shall report and announce the
execution of this Agreement, with the Form 8-K including as an exhibit a copy of
this Agreement), and as expressly provided in the DIP Loan Agreement, if any, no
public filing, release or announcement concerning this Agreement or the
transactions contemplated hereby shall be issued by any party or its Affiliates
without the prior written consent of Purchaser, in the case of Sellers, or,
Nucentrix, in the case of Purchaser (which consent shall not be unreasonably
withheld or delayed), unless such disclosure is required by an order of the
Bankruptcy Court or any other Judgment, by Law or by obligations pursuant to an
agreement with any national securities exchange; provided, however, that the
party intending to make such release shall use commercially reasonable efforts
consistent with such order, Judgment, Law or obligation to give the other
parties prior notice and to consult with the other parties with respect to the
text thereof. To the extent the provisions of this Section 7.15 and the
provisions of the Non-Disclosure Agreement conflict, the terms of this Section
7.15 shall control.
7.16 Expenses. Except as set forth in Sections 7.04 (FCC Filings), 7.05
(Third Party Consents), and 7.13 (Tax Matters), all costs and expenses
(including all fees and expenses of counsel, accountants, investment bankers,
experts and consultants to a party or its Affiliates) incurred by a party or on
its behalf in connection with the preparation, negotiation, execution and
delivery, and performance of this Agreement, and the transactions contemplated
hereby and thereby (including costs incurred in connection with obtaining entry
of the Approval Order and the Bidding Procedures Order) shall be paid by the
party incurring such expense. The reasonable fees and expenses of the Escrow
Agent shall be borne by Purchaser as provided in the Escrow Agreement.
7.17 Rejected Contracts. Sellers shall not reject or cause to be
rejected any Contract in any bankruptcy proceeding following the date hereof if
such Contract is an Acquired Asset unless such Contract has been removed from
the Acquired Assets in accordance with Section 2.07.
7.18 Renewal of Certain Short Term Leases. Sellers shall, and shall
cause their Subsidiaries to, use their best efforts to obtain the renewal of
each Contract which could form a part of the Acquired Assets and which may
terminate pursuant to its terms prior to the Termination Date on terms
reasonably acceptable to Purchaser, unless Purchaser shall request in writing
that any such Contract should not be renewed.
7.19 Apportionment of Prepaid Expenses and Accounts Payable.
42
(a) Subject to Section 7.19(c), on the Closing Date, those items of
expenses and accounts payable specifically referred to in Section 7.19(b) in
relation to the Acquired Assets that are Assumed Liabilities and are paid or
payable before and after the Closing Date on an annual, quarterly, monthly or
other regular periodic basis ("Prorated Expense Items") shall be prorated as of
the Closing Date and apportioned, such that (i) Purchaser will receive the
economic benefit or burden, as applicable, of all such items after the Closing
Date, and (ii) Sellers shall receive the economic benefit or burden, as
applicable, of all such items for the period prior to, and including, the
Closing Date. After the Closing Date, (x) if Purchaser should receive any bills
or accounts or any reimbursement for prepaid expenses in relation to Prorated
Expense Items that are attributable in whole to the period prior to, and
including, the Closing Date, then Purchaser shall promptly forward the same to
Sellers (for payment, in the case of any such bills or accounts), (y) if Sellers
should receive any bills or accounts or any reimbursement for prepaid expenses
in relation to the Prorated Expense Items that are attributable in whole to the
period after the Closing Date, then Sellers shall promptly forward the same to
Purchaser (for payment, in the case of any such bills or accounts) and (z) if
Purchaser or Sellers should receive any bills or accounts or any reimbursements
for prepaid expenses in relation to the Prorated Expense Items that are
attributable in part to the period prior to, and including, the Closing Date,
and in part to the period after the Closing Date, the amount thereof shall be
apportioned between Sellers, on the one hand, and Purchaser, on the other hand,
as of the Closing Date, based on the number of days in such period falling prior
to and including the Closing Date, on the one hand, and after the Closing Date,
on the other hand. In the case of bills or accounts referred to in clause (z),
the party receiving the same shall be required to pay only such portion of such
xxxx or account for which it is responsible in accordance with this Section
7.19(a).
(b) The following expense items shall be prorated in the manner
contemplated by Section 7.19(a): (i) regular periodic rent or lease payments
(including prepaid rent and rent payable in arrears) payable under the Acquired
Spectrum Leases and Acquired Tower Leases; (ii) annual FCC regulatory fees in
relation to the Company FCC Licenses; (iii) Taxes as provided in Section
7.l3(c); and (iv) utilities expenses pertaining to the Acquired Tower Leases.
(c) Not less than ten (10) Business Days prior to the Closing Date,
the parties will jointly prepare a preliminary closing statement containing
their good faith calculation of the prorations provided for in Section 7.19(a).
If final bills or accounts in relation to any Prorated Expense Items or rent
receivable referred to in Section 7.19(a) are not available or have not been
issued prior to that date for any Prorated Expense Item, or rent receivable that
is required to be prorated as contemplated in Section 7.19(a), then Nucentrix
and Purchaser shall estimate the amount of each such item in good faith, and
such estimate shall be reflected in the preliminary closing statement. If the
parties are unable to agree upon the amounts for the preliminary closing
statement, Purchaser shall provide its good faith estimate which shall be
binding upon the parties for purposes of the amounts to be paid at Closing. The
amount payable by Purchaser at the Closing will be increased or decreased to
reflect the net amount owing between the parties as shown on such preliminary
closing statement, using such estimates where necessary. Final adjustment
between the parties as to any estimated item used in the preparation of the
preliminary closing statement shall be made as soon as reasonably practicable
after the Closing after such item becomes final. Payments in connection with
such final adjustment or otherwise necessary to reconcile amounts between the
parties in accordance with Section 7.19(a) will be due within thirty (30) days
of written notice from the party entitled to payment.
43
7.20 Intentionally Deleted.
7.21 Third Party Dedicated Equipment. Solely with respect to those
items of Third Party Dedicated Equipment which are not set forth on Schedule
5.18, Sellers hereby undertake and agree as follows: (a) Sellers will not, and
will cause their Subsidiaries not to, sell, transfer or otherwise dispose of
such equipment to any third party without obtaining a prior written agreement
and acknowledgment from such third party addressed to Nucentrix and Purchaser to
the effect that: all rights, titles and interests of such third party are
subject and subordinate to the rights of Purchaser, and any landlord, lessor or
other Person owning or in possession of a site on which such equipment is
located (a "Site Holder"), not to be disturbed in the use or possession of such
site and any real or personal property thereon (including in the case of
Purchaser, any Acquired Assets located thereon), (b) any disconnection or
removal of such equipment by such third party will only be effected in a manner
that does not damage or adversely affect the operation or functionality of such
Acquired Assets or the real or personal property located on such site, (c) such
third party will obtain the prior consent of Purchaser (not to be unreasonably
withheld or delayed) and any other applicable Site Holder prior to accessing
such site in connection with any disconnection or removal of equipment
activities, (d) prior to the Closing, such third party may only disconnect or
remove such equipment under the supervision of Sellers' designated technical
specialists, (e) after the Closing, such third party may only disconnect or
remove such equipment under the supervision of Purchaser's designated technical
specialists, (f) such third party shall be solely responsible for any damages or
out-of-pocket costs incurred by Sellers, Purchaser or any other Site Holder
resulting from any such disconnection or removal, and (g) Purchaser has not
assumed any obligations or liabilities to such third party including any
obligation to maintain, repair, insure, or operate any such equipment.
7.22 FCC Waivers. If Purchaser is requested in writing by Nucentrix, on
the one hand, or Sellers are requested in writing by Purchaser, on the other
hand, the requested party shall use its or their commercially reasonable
efforts, as applicable, to assist in preparing and filing with the FCC a request
for a waiver for the Company FCC Licenses included in the Acquired Assets or for
any FCC License associated with an Acquired Spectrum Lease of any FCC Rules that
might result in a revocation or forfeiture for failure to provide service,
including 47 C.F.R. Sections 21.43(b), 2l.44(a)(3), 2l.303(c) and 21.303(d);
provided that the foregoing shall not affect the obligations of Sellers pursuant
to Section 7.01.
7.23 Mutual Releases.
(a) Sellers agree to release Purchaser, subject to payment by
Purchaser of all outstanding amounts owing in connection with the transactions
contemplated by this Agreement and/or the DIP Loan Agreement, if any, from all
rights, claims, demands and causes of action of Sellers, however arising, under
and in connection with the DIP Loan Agreement, if any, and shall deliver an
instrument to that effect, in a form satisfactory to Purchaser, to Purchaser at
the Closing (the "Purchaser Release").
(b) Purchaser agrees to release Sellers, subject to payment by
Sellers of all outstanding amounts owing in connection with the transactions
contemplated by this Agreement and/or the DIP Loan Agreement, if any, from all
rights, claims, demands and causes of action of Purchaser, however arising,
under and in connection with the DIP Loan Agreement, if any, and
44
shall deliver an instrument to that effect, in a form satisfactory to Nucentrix,
to Sellers at the Closing (the "Sellers Release").
7.24 Common Equipment. If any Seller has granted an Affected Lessor the
right to purchase or otherwise acquire Common Equipment used by the Affected
Lessor for transmission of its ITFS channels pursuant to the terms of a
transmission capacity lease or sublease, other than an Acquired Spectrum Lease,
between such Seller and such Affected Lessor (a "Terminated ITFS Lease"),
Purchaser will, subject to clause (j) hereof, provide such Affected Lessor with
continued access to that Common Equipment; provided, however, that (a) Purchaser
is in no way assuming any of the obligations under the Contracts related to such
Common Equipment (or under any other Contract which is not included in the
Acquired Assets); (b) although Purchaser will grant such access rights,
Purchaser will not have any obligation to maintain such Common Equipment or any
responsibility for the functionality of that Common Equipment; (c) the duration
of such access shall begin on the date the Terminated ITFS Lease is rejected
pursuant to 11 U.S.C. Section 365(d)(2) and shall continue for the number of
months it would be provided under the terms of the Terminated ITFS Lease if the
Terminated ITFS Lease were an Acquired Spectrum Lease expiring on such rejection
date; (d) the terms of such access shall be determined by Purchaser in its sole
discretion; (e) notwithstanding any of the foregoing, Purchaser shall have the
right to change or terminate such Affected Lessor's access to the Common
Equipment in the event a change is required by the FCC or in the event that
Purchaser, for any cause, no longer possesses the right to mount and house the
Common Equipment at the applicable Tower Site; (f) such Affected Lessor may not
assign, lease or otherwise provide any right to access the Common Equipment to
any Person; (g) such Affected Lessor's right to access such Common Equipment
will immediately terminate in the event of any attempted assignment, lease or
other provision of such Affected Lessor's right to access such Common Equipment
to any Person; (h) such Affected Lessor's right to access Common Equipment will
immediately terminate in the event such Affected Lessor or any of its Affiliates
enters into any agreement or understanding for or related to any third party's
use of the transmission capacity as may be authorized by the applicable FCC
License or may be further authorized by the FCC based upon the Affected Lessor's
applicable FCC License; (i) such affected Lessor shall inform Purchaser promptly
of the occurrence of any event that causes a Common Equipment access right
termination under this Section 7.24; and (j) such Affected Lessor shall enter
into an agreement providing for the forgoing in this Section 7.24 and otherwise
in form and substance reasonably acceptable to Purchaser prior to accessing the
Common Equipment pursuant to this Section 7.24.
7.25 FCC Amount. Two (2) Business Days prior to the Closing, Nucentrix
will deliver a certificate of an executive officer of Nucentrix to Purchaser
specifying all amounts to be owed to the FCC by Sellers and their Subsidiaries
immediately prior to the Closing (other than amounts payable with respect to
Company FCC Licenses that are not transferred to Purchaser at the Closing) (the
"FCC Amount"). Concurrently with or immediately following the Closing, Purchaser
shall pay the FCC Amount to the FCC. The Purchase Price shall be reduced in an
amount equal to the FCC Amounts.
7.26 WorldCom BTAs. The failure or inability of the Partitioned BTAs to
be transferred to Purchaser at the Closing as a result of a breach by Purchaser
of its obligations under the WorldCom BTA Agreements or the Agreement to Assign
Certain Basic Trading Area Licenses dated October 17, 2003 by and among
Nucentrix, Nucentrix Spectrum Resources, Inc.
45
and Purchaser, shall not (i) constitute the breach of any representation,
warranty or covenant of Sellers or Purchaser hereunder; (ii) give rise to the
failure of any condition set forth in Article VIII, including Section 8.02(a),
(b), (d) and (g); (iii) entitle any party hereto to terminate this Agreement, or
(iv) result in any adjustment to the Purchase Price pursuant to Schedule 3.01.
7.27 Transition Servicing. If any software included in the Excluded
Assets is necessary or useful in the operation of the Acquired Assets, Nucentrix
and Purchaser will cooperate and use their commercially reasonable efforts to
have in effect arrangements that provide Purchaser with the use and access to
such software at no cost to Purchaser for a reasonable period following the
Closing.
7.28 Non-competition. During the period from and including the Closing
Date until the second anniversary of the Closing Date, Sellers shall not (a)
acquire licenses for MMDS or ITFS spectrum or enter into leases for MMDS or ITFS
spectrum, or (b) operate any business using MMDS or ITFS spectrum in the United
States of America.
7.29 Jonesboro BTA Agreement.
(a) If Clearwave exercises its option under the Jonesboro BTA
Agreement to purchase the Jonesboro BTA prior to Closing, then: (i) the Purchase
Price shall be reduced by an amount equal to 50% of the net proceeds received by
Sellers as consideration for such purchase (the "Jonesboro Proceeds"); (ii)
Sellers shall use the full amount of the proceeds therefrom to prepay the DIP
Loan Agreement in accordance with Section 4.7(b) thereof; (iii) Purchaser and
Seller will cause the FCC Assignment Application to be amended to remove the
Jonesboro BTA from the FCC Assignment Application; and (iv) the Jonesboro BTA
Agreement and the Jonesboro BTA shall become an Excluded Asset.
(b) If (i) prior to the Closing Clearwave does not exercise its
option under the Jonesboro BTA Agreement to purchase the Jonesboro BTA, (ii) the
Jonesboro BTA Agreement is assigned to Purchaser as an Acquired Asset, (iii)
after the Closing Clearwave exercises its option to purchase the Jonesboro BTA,
and (iv) the ITFS Leases (as defined in the Jonesboro BTA Agreement) are still
in force and effect, Sellers shall take all necessary actions to assign the ITFS
Leases to Clearwave in accordance with the Jonesboro BTA Agreement without any
further consideration.
7.30 HSR Filing.
(a) If in Purchaser's determination notice is or may be required
under the HSR Act or any regulation issued pursuant to the HSR Act (together
with the HSR Act and any applicable state antitrust laws, rules and regulations,
the "HSR Rules"), as promptly as practicable following the date that the
Approval Order becomes a Final Order, Purchaser and Sellers shall file with the
United States Federal Trade Commission (the "FTC") and the United States
Department of Justice (the "DOJ") the notification and report form required
pursuant to the HSR Rules for the Acquisition and the other transactions
contemplated hereby and any supplemental information requested in connection
therewith pursuant to the HSR Rules. Purchaser and Sellers shall: (i) promptly
furnish to each other such necessary information and assistance as the other may
reasonably request in connection with the preparation of any filing or
46
submission that is necessary under the HSR Rules; (ii) promptly apprise each
other of the status of any communication with, and any inquiries or requests for
additional information from, the FTC or DOJ; (iii) promptly comply with any such
inquiry or request; and (iv) promptly provide any supplemental information
requested in connection with the filings made hereunder pursuant to the HSR
Rules. Any notification, report, supplemental information or other submission or
information provided to any Governmental Authority in accordance with this
Section 7.30 shall be in material compliance with the HSR Rules.
(b) Sellers and Purchaser shall each bear and pay their own costs
and expenses incurred in connection with their obligations under this Section
7.30.
(c) Sellers and Purchaser shall use their best and commercially
reasonable efforts to obtain any clearance required under the HSR Rules to
consummate the Acquisition and the other transactions contemplated by this
Agreement.
7.31 Performance. USFCo shall take all necessary steps to ensure that
Purchaser takes any and all actions required to be taken by Purchaser pursuant
to this Agreement.
7.32 Assignment of FCC Licenses after the Closing. If any of the
Company FCC Licenses are not assigned to Purchaser at the Closing because the
approval of the FCC with respect to the FCC Assignment Applications related
thereto shall not have been obtained by Final Order (the "Remaining Licenses"),
then Sellers and Purchaser shall, after the Closing, continue to seek to obtain
the approval of the FCC with respect to the assignment of such Remaining
Licenses until October 29, 2004. If the approval of the FCC to the assignment of
any of the Remaining Licenses is obtained by Final Order after the Closing, then
(a) Sellers shall promptly sell, assign, transfer, convey and deliver that
Remaining License to Purchaser; and (b), if that Remaining License is a
Principal FCC License, Purchaser shall pay to Sellers the amount required
pursuant to Schedule 3.01. If any Remaining License has not been transferred to
Purchaser on or before October 29, 2004, and if Sellers offer to sell, assign or
transfer such a Remaining License to any third party or otherwise dispose of
Seller's rights in such a Remaining License, Purchaser shall have the option to
purchase that Remaining License for an amount equal to (a) the amount set forth
on Schedule 8.02(g)(i) or Schedule 8.02(g)(ii), as applicable, with respect to a
Principal FCC License or (b) no additional consideration with respect to any
Company FCC Licenses that are not Principal FCC Licenses. After October 29,
2004, Sellers will, at Purchaser's request, submit to the FCC for cancellation
any Company FCC License that has not been transferred to Purchaser.
ARTICLE VIII
CLOSING CONDITIONS
8.01 Conditions to Obligations of Purchaser and Sellers. The respective
obligations of Purchaser, on the one hand, and Sellers, on the other hand, to
effect the Closing shall be subject to the satisfaction (or written waiver by
Purchaser or Sellers, as applicable) at or prior to the Closing of each of the
following conditions:
(a) No Injunctions or Restraints. No temporary restraining order,
preliminary or permanent injunction or other order issued by any court of
competent jurisdiction or other
47
legal restraint or prohibition (collectively, "Legal Restraints"), shall be in
effect or pending which delays, restrains, enjoins or otherwise prohibits or
seeks to restrain, enjoin or otherwise prohibit the consummation of the
Acquisition and the transactions contemplated hereby and no such Legal
Restraints shall be threatened.
(b) The Approval Order. The Bankruptcy Court shall have entered the
Approval Order.
(c) Consents and Approvals. The waiting period under the HSR Act, if
applicable, shall have lapsed or been earlier terminated. Any Consents (other
than approval by the FCC of the FCC Assignment Applications) necessary in
connection with the Acquisition and the other transactions contemplated by this
Agreement, unless, with respect to Persons which are not Governmental
Authorities, waived in writing by Purchaser, shall have been obtained by Sellers
and delivered to Purchaser, except such Consents the failure of which to obtain
could not, in the aggregate, have a Sellers Material Adverse Effect and except
for Consents that are not required due to the entry by the Bankruptcy Court of
the Approval Order.
8.02 Additional Conditions to Obligations of Purchaser. The obligation
of Purchaser to effect the Closing shall also be subject to the satisfaction (or
written waiver by Purchaser) at or prior to the Closing of each of the following
conditions:
(a) Accuracy of Representations and Warranties. The representations
and warranties of Sellers set forth in this Agreement shall be true and correct
in all respects (except that for purposes of determining whether such
representations and warranties are true and correct, all qualifications in such
representations or warranties as to materiality or Sellers Material Adverse
Effect shall be disregarded) in each case (i) as of the date hereof and (ii) on
and as of the Closing, in the latter case with the same force and effect as
though such representations and warranties had been made on and as of the
Closing, except: (i) for those failures to be true and correct that,
individually or in the aggregate, have not had or would not be reasonably likely
to have a Sellers Material Adverse Effect; (ii) that representations and
warranties that are made as of a specific date need be true and correct only as
of such date; and (iii) that if, and for so long as, the conditions set forth in
Section 8.02(g) are satisfied, then failure of any representation or warranty
contained in Section 5.10 shall be disregarded for purposes of this Section
8.02(a) to the extent that such representation or warranty relates to the
approval by the FCC of the transfer of the Company FCC Licenses to Purchaser.
(b) Section 5.10(i). Without limiting Section 8.02(a), the
representations and warranties contained in Section 5.10(i) shall be true and
correct on and as of the Closing with the same force and effect as though such
representations and warranties had been made on and as of the Closing, except
that:
(i) for the purposes of Section 5.10(i), actions taken by
Persons other than Sellers, their agents or employees shall not be
considered "voluntary" or to have been taken "voluntarily," and Sellers
shall not be held responsible for actions taken by Persons other than
Sellers, their agents and employees, provided Sellers have used their
respective best efforts to prevent any such action by persons or
parties other than Sellers, their agents or employees;
48
(ii) for purposes of this Section 8.02(b), the representations
and warranties contained in Section 5.10(i) shall not apply to any FCC
License for which Seller holds the surrounding BTA authorization, and
for which, after Closing, Purchaser would be legally entitled to
receive a license from the FCC based upon ownership of such BTA
authorization;
(iii) for any condition which would otherwise constitute a
breach of any representation or warranty contained in Section 5.10(i),
such condition shall not constitute a breach of such representation or
warranty for purposes of this Section 8.02(b) if the FCC has granted a
waiver to Sellers of the relevant FCC Rules covering such condition and
Sellers have provided Purchaser a copy of such waiver promptly
following the grant thereof, or if Nucentrix has, with written notice
to Purchaser, timely filed a waiver request with the FCC that complies
with the FCC's requirements for such a waiver in all material respects,
and such waiver request remains pending on and as of the Closing;
provided that in all such applicable circumstances such waiver or
pending waiver shall provide Purchaser with at least 180 days cure
period following the Closing and is not subject to any conditions which
Purchaser finds, in its sole discretion, to be unreasonable; and
(iv) if, and for so long as, the conditions set forth in
Section 8.02(g) are satisfied, then failure of any representation or
warranty contained in Section 5.10(i) shall be disregarded for purposes
of this Section 8.02(b) to the extent that such representation or
warranty relates to the approval by the FCC of the transfer of the
Company FCC Licenses to Purchaser.
(c) Performance of Obligations. Sellers shall have performed and
complied in all material respects with all agreements, covenants and obligations
required by this Agreement to be performed or complied with by Sellers at or
prior to the Closing.
(d) No Sellers Material Adverse Effect. From the date hereof until
the Closing, there shall not have occurred a Sellers Material Adverse Effect
that is continuing, except that if, and for so long as, the conditions set forth
in Section 8.02(g) are satisfied, then failure of any representation or warranty
contained in Section 5.10 to be true and correct shall be disregarded for
purposes of this Section 8.02(d) to the extent that Section 5.10 relates to the
approval by the FCC of the transfer of the Company FCC Licenses to Purchaser.
(e) Officer's Certificate. Purchaser shall have received a
certificate, dated the Closing Date, signed by an appropriate senior officer of
Nucentrix to the effect that the conditions specified in Sections 8.02(a),
8.02(b), 8.02(c) and 8.02(d) have been satisfied, and that Sellers have
performed and complied with their obligations in Section 2.06.
(f) Approval Order. The Approval Order shall have become a Final
Order.
(g) FCC Approvals. The approval by the FCC of the FCC Assignment
Applications shall have been obtained on the terms set forth in Schedule
8.02(g).
49
(h) Compliance with Acquired Spectrum Leases. Sellers shall be in
compliance in all material respects with all of the terms of the Acquired
Spectrum Leases that would constitute a part of the Acquired Assets on such date
if such date were the Closing Date.
8.03 Additional Conditions to Obligations of Sellers. The obligation of
Sellers to sell, assign, convey and deliver the Acquired Assets and to enter
into the other transactions contemplated hereby shall be subject to the
satisfaction (or waiver by Sellers) at or prior to the Closing of each of the
following conditions:
(a) Accuracy of Representations and Warranties. The representations
and warranties of Purchaser set forth in this Agreement shall be true and
correct in all material respects (except that any representation or warranty
qualified by materiality shall be true and correct in all respects) in each case
(i) as of the date hereof and (ii) on and as of the Closing, in the latter case
with the same force and effect as though such representations and warranties had
been made on and as of the Closing, except that representations and warranties
that are made as of a specific date need be true and correct only as of such
date.
(b) Performance of Obligations. Purchaser shall have performed and
complied in all material respects with all agreements, covenants and obligations
required by this Agreement to be performed or complied with by Purchaser at or
prior to the Closing.
(c) Officer's Certificate. Sellers shall have received a
certificate, dated the Closing Date, signed by an appropriate senior officer of
Purchaser to the effect that the conditions specified in Sections 8.03(a) and
8.03(b) have been satisfied.
(d) FCC Approval. The approval by the FCC of the FCC Assignment
Applications shall have been obtained with respect to each FCC License to be
transferred at the Closing.
ARTICLE IX
TERMINATION
9.01 Termination. This Agreement may be terminated and the transactions
contemplated hereby abandoned at any time prior to the Closing:
(a) by mutual written consent of Purchaser and Nucentrix;
(b) by Purchaser, if the Approval Order shall not have been entered
and become a Final Order on or before November 26, 2003;
(c) by Purchaser or Sellers, if any Legal Restraint permanently
restraining, enjoining or otherwise prohibiting the consummation of the
Acquisition shall have become a Final Order; provided, however, that the party
seeking to terminate this Agreement pursuant to this Section 9.01(c), shall have
used commercially reasonable efforts to prevent the entry of and to remove such
order;
(d) by Purchaser, if there shall be a breach by Sellers of any
representation, warranty, covenant or agreement contained in this Agreement
which would result in a failure of a
50
condition set forth in Section 8.02 and which breach cannot be cured or has not
been cured by the earlier of (i) twenty (20) Business Days after the giving of
written notice by Purchaser to Sellers of such breach and (ii) the Termination
Date as then in effect; provided, however, that the twenty (20) Business Days
limitation contained in clause (i) of this Section 9.01(d) shall be extended
with respect to a breach resulting in a failure of a closing condition set forth
in Section 8.02(b) for one additional twenty (20) Business Day period to the
extent that Sellers (i) have commenced work to cure the breach during the
initial 20 Business Day period and (ii) diligently pursue completion of the cure
during the second 20 Business Day period;
(e) by Sellers, if there shall be a breach by Purchaser of any
representation, warranty, covenant or agreement contained in this Agreement
which would result in a failure of a condition set forth in Section 8.03 and
which breach cannot be cured or has not been cured by the earlier of (i) twenty
(20) Business Days after the giving of written notice by Sellers to Purchaser of
such breach and (ii) the Termination Date as then in effect;
(f) by Purchaser or Sellers, if the Closing shall not have occurred
by August 31, 2004, such date being referred to hereinafter as the "Termination
Date"; provided, however, that if the Closing shall not have occurred by August
30, 2004 solely due to the failure of the condition set forth in Section
8.02(g), then either Purchaser or Sellers may extend the Termination Date until
October 29, 2004; provided, further, that if Purchaser extends the Termination
Date, then Purchaser shall be obligated to provide additional financing to
Sellers under the terms of the DIP Loan Agreement;
(g) by Purchaser, if (i) the FCC shall have denied any FCC
Assignment Application, or (ii) the FCC shall have designated any FCC Assignment
Application for hearing;
(h) by Purchaser, if a Sellers Material Adverse Effect shall have
occurred and is continuing at the time of termination; provided, however, that
in the event any change, circumstance or event with respect to the Acquired
Assets that shall constitute a Sellers Material Adverse Effect can be cured,
prior to exercising its rights under this Section 9.01(h), Purchaser shall have
provided written notice to Sellers of such change, circumstance or event giving
rise to such Sellers Material Adverse Effect and such Sellers Material Adverse
Effect shall not have been cured within 20 Business Days after the date such
written notice is given pursuant to Section 11.04; or
(i) by Purchaser, if the Sellers fail to comply in full with the
provisions of any order of the Bankruptcy Court or of the Bankruptcy Code and
such failure results in the loss or termination of any Acquired Spectrum Lease,
Acquired Tower Lease, Company FCC License or Station Asset.
9.02 Effect of Termination. A party desiring to terminate this
Agreement pursuant to Section 9.01 shall give written notice thereof to each
other party (except that with respect to the Sellers, notice is only required to
be given to Nucentrix) specifying the provision hereof pursuant to which the
Agreement is terminated and this Agreement shall be terminated at the time such
notice is given. Upon termination, this Agreement shall forthwith become null
and void and of no further force and effect, without liability on the part of
Purchaser or Sellers or any of their respective Affiliates or Representatives
under this Agreement, except for the provisions of
51
Sections 3.02, 5.20, 6.07, 7.14, 7.15 and 7.16, Article XI, this Section 9.02
and the Escrow Agreement and the DIP Loan Agreement (all of the foregoing of
which shall remain in full force and effect) and except for liability for any
prior breach of this Agreement. If this Agreement is terminated prior to
Closing, Purchaser shall have the right but not the obligation to participate
without prejudice in any process relating to any subsequent sale or disposition
of the Acquired Assets or any portion thereof, including the right to submit an
offer to acquire all or any portion of the Acquired Assets.
9.03 Intentionally Deleted.
ARTICLE X
INDEMNIFICATION
10.01 Indemnification by Sellers.
(a) From and after the Closing, Sellers, jointly and severally,
shall defend, indemnify Purchaser and its Affiliates and each of their
respective Representatives (each, a "Purchaser Indemnified Party"), against, and
hold them harmless from, any Losses suffered or incurred (payable promptly upon
written request), to the extent arising from or in connection with or otherwise
with respect to (i) any breach of any representation or warranty of any Seller
contained in this Agreement or any Ancillary Agreement, (ii) any breach of any
covenant or agreement of any Seller contained in this Agreement or any Ancillary
Agreement, and (iii) any Excluded Liabilities (or any third party claim for
payment or satisfaction of any Excluded Liabilities).
(b) Except as otherwise specifically provided in Section 7.19 of
this Agreement, Purchaser acknowledges that its sole and exclusive remedy for
monetary damages after the Closing with respect to any and all breaches of this
Agreement shall be pursuant to the indemnification provisions set forth in this
Article X.
(c) For purposes of Section 10.01(a)(i), (i) a breach of a
representation or warranty shall be deemed to exist either if such
representation or warranty is actually inaccurate or breached or would have been
inaccurate or breached if such representation or warranty had not contained any
limitation or qualification as to materiality, Sellers Material Adverse Effect,
Knowledge or similar language, and (ii) the amount of Losses in respect of any
breach of a representation or warranty (including any deemed breach resulting
from the application of clause (i)) shall be determined without regard to any
limitation or qualification as to materiality, Sellers Material Adverse Effect,
Knowledge or similar language set forth in such representation or warranty.
10.02 Indemnification by Purchaser.
(a) From and after the Closing, Purchaser shall indemnify Sellers,
their respective Affiliates and each of their respective Representatives (each,
a "Seller Indemnified Party"), against, and hold them harmless from, any Losses
suffered or incurred (payable promptly upon written request), to the extent
arising from or in connection with or otherwise with respect to any Assumed
Liabilities (or, subject to the Approval Order, any third party claim for
payment or satisfaction of any Assumed Liabilities).
52
(b) Except as otherwise specifically provided in this Agreement,
Sellers acknowledge that their sole and exclusive remedy for monetary damages
after the Closing with respect to any and all breaches of this Agreement shall
be pursuant to the indemnification provisions set forth in this Article X.
10.03 Calculation of Losses; Limitation of Liability.
(a) The amount of any Loss for which indemnification is provided
under this Article X shall be (i) net of any amounts actually recovered by the
indemnified party under such party's insurance policies with respect to such
Loss, (ii) net of any amounts actually recovered from any third person (by
contribution, indemnification or otherwise) with respect to such Loss, and (iii)
adjusted to take account of any net Tax effect realized by the indemnified party
arising from the payment of the amount of the Loss. Any indemnification payment
made pursuant to this Article X shall be treated as an adjustment to the
Purchase Price for U.S. Federal income tax purposes.
(b) (i) The aggregate indemnification obligations of the Sellers
pursuant to Section 10.01(a)(i) shall not exceed the Purchase Price and (ii)
Sellers shall not be liable to any Purchaser Indemnified Party for any breach of
any representation or warranty of any Seller contained in this Agreement
pursuant to Section 10.01(a)(i) unless and only to the extent that the aggregate
Losses suffered by the Purchaser Indemnified Parties from all breaches,
collectively, exceed seventy-five thousand dollars ($75,000); provided, however,
that any Loss suffered by the Purchaser Indemnified Parties for any individual
breach of any representation or warranty pursuant to 10.01(a)(i) for an amount
less than $5,000 or for any series of related breaches for an amount less than
$12,500 shall not be deemed to be Losses for purposes of Section 10.0l(a)(i) and
this Section 10.03. The indemnification obligations of Sellers pursuant to
10.01(a)(i) shall not include any special, consequential or punitive damages.
10.04 Termination of Indemnification. The obligations to defend,
indemnify and hold harmless any Indemnified Party (as defined below) pursuant to
Section 10.0l shall terminate when the applicable representation or warranty
terminates pursuant to Section 11.02; provided, however, that such obligations
to defend, indemnify and hold harmless shall not terminate with respect to any
item as to which the Indemnified Party shall have, before the expiration of the
applicable period, previously made a bona fide claim by delivering notice of
such claim (stating in reasonable detail the basis of such claim) pursuant to
Section 10.05 to the party that is required to provide the indemnification.
10.05 Procedures.
(a) Third Party Claims. Each Person (an "Indemnified Party") making
a claim arising from or involving a claim made by any third Person against the
Indemnified Party for which indemnification may be available to such Indemnified
Party hereunder (a "Third Party Claim"), must notify the indemnifying party in
writing (and in reasonable detail) of the Third Party Claim within ten (10)
Business Days after receipt by such Indemnified Party of notice of the Third
Party Claim. Thereafter, the Indemnified Party shall deliver to the indemnifying
party, within five (5) Business Days after the Indemnified Party's receipt
thereof, copies of all notices and documents (including court papers) received
by the Indemnified Party relating to the Third
53
Party Claim. No delay on the part of the Indemnified Party in notifying the
indemnifying party shall relieve the indemnifying party from any liability or
obligation under this Agreement unless (and solely to the extent) the
indemnifying party is materially prejudiced thereby.
(b) Assumption. If a Third Party Claim is made against an
Indemnified Party, the indemnifying party shall be entitled to participate in
the defense thereof and, if it so chooses, to assume the defense thereof at its
sole cost with counsel selected by the indemnifying party; provided, however,
that such counsel is not reasonably objected to by the Indemnified Party;
provided, further, that the Indemnified Party shall be entitled to assume and
control the defense of a Third Party Claim if the Indemnified Party has one or
more defenses or counterclaims with respect to that Third Party Claim that are
inconsistent with one or more of defenses or counterclaims that may be available
to the indemnifying party with respect to that Third Party Claim. Should the
indemnifying party elect to assume the defense of a Third Party Claim, the
indemnifying party shall not be liable to the Indemnified Party for any legal
expenses subsequently incurred by the Indemnified Party in connection with the
defense thereof. If the indemnifying party assumes such defense, the Indemnified
Party shall have the right to participate in the defense thereof and to employ
counsel (not reasonably objected to by the indemnifying party), at its own
expense, separate from the counsel employed by the indemnifying party, it being
understood that the indemnifying party shall control such defense. The
indemnifying party shall be liable for the reasonable fees and expenses of
counsel employed by the Indemnified Party for any period during which the
indemnifying party has not assumed the defense thereof. If the indemnifying
party chooses to defend or prosecute a Third Party Claim, the Indemnified Party
shall reasonably cooperate in the defense or prosecution thereof. Such
cooperation shall include the retention and (upon the indemnifying party's
request) the provision to the indemnifying party of records and information that
are reasonably relevant to such Third Party Claim, and making employees
available on a mutually convenient basis to provide additional information and
explanation of any material provided hereunder, provided that the indemnifying
party shall reimburse the Indemnified Party for the compensation (including
salary and benefits) and reasonable out-of-pocket expenses incurred by any
employee of an Indemnified Party who may provide assistance to the indemnifying
party pursuant to this Section 10.05(b) and for any additional costs incurred by
the Indemnified Party to enable such employee to provide litigation support in
lieu of their duties for the Indemnified Party. Whether or not indemnifying
party assumes the defense of a Third Party Claim, the Indemnified Party shall
not admit any liability with respect to, or settle, compromise or discharge, or
offer to settle, compromise or discharge, such Third Party Claim without the
indemnifying party's prior written consent (which may be withheld). Except with
the prior written consent of the Indemnified Party, no indemnifying party that
assumes the defense of a Third Party Claim shall consent to the entry of any
judgment or enter into any settlement, compromise or discharge of a Third Party
Claim that by its terms (i) includes injunctive or other non-monetary relief
that adversely affects the Indemnified Party in any material respect, (ii) does
not release the Indemnified Party completely in connection with such Third Party
Claim, or (iii) would otherwise adversely affect the Indemnified Party in any
material respect. In the event a Third Party Claim is asserted against an
Indemnified Party other than in the Bankruptcy Court, the indemnifying party
shall be entitled to file a motion to transfer such Third Party Claim to the
Bankruptcy Court.
54
ARTICLE XI
GENERAL PROVISIONS
11.01 Amendment and Waiver. This Agreement may not be amended or
supplemented except by an instrument in writing signed on behalf of each of the
parties hereto. By an instrument in writing, Purchaser, on the one hand, or
Nucentrix, on behalf of itself and the other Sellers, on the other hand, may
waive compliance by the other party with any term or provision of this Agreement
that such other party was or is obligated to comply with or perform.
11.02 Survival of Representations and Warranties; No Other
Representations and Warranties.
(a) The representations and warranties contained herein shall
survive until the later to occur of the Closing Date or the Administrative Bar
Date. Subject to any limitations on survival contained herein, no investigation
made before or after the date of this Agreement by or on behalf of Purchaser
will limit or affect in any way the representations, warranties, covenants and
agreements of Sellers under or pursuant to this Agreement.
(b) Except for the representations and warranties set forth in
Article V, no Seller or any other Person is making any representations or
warranties, written or oral, statutory, express or implied, in relation to the
Acquired Assets or the Assumed Liabilities.
(c) Except for the representations and warranties set forth in
Article VI, neither Purchaser nor any other Person is making any representations
or warranties, written or oral, statutory, express or implied, with respect to
Purchaser.
11.03 Entire Agreement. This Agreement, along with the Schedules and
Exhibits hereto, contains the entire agreement and understanding between the
parties hereto with respect to the subject matter hereof and supersedes all
prior agreements and understandings relating to such subject matter.
11.04 Notices. Any notice, request, instruction or other document to be
given hereunder by any party to the others shall be in writing and delivered
personally or sent by registered or certified mail, postage prepaid, by
facsimile or by overnight courier which guarantees delivery on the next Business
Day after deposit with such overnight courier:
55
(i) if to Purchaser,
Nextel Spectrum Acquisition Corp.
0000 Xxxxxx Xxxxxx Xxxxx
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx Seneca,
Senior Manager of Strategic Finance
Fax: (000) 000-0000
with a copy (which shall not constitute notice) to:
Nextel Communications, Inc.
0000 Xxxxxx Xxxxxx Xxxxx
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx Xxxxxxx, Esq.
General Counsel
Fax: (000) 000-0000
and with a copy (which shall not constitute notice) to:
Xxxxx Day
00 Xxxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
Fax: (000) 000-0000
(ii) if to Sellers or any Seller,
Nucentrix Broadband Networks, Inc.
0000 Xxxxxxxxxxxxx Xxxxxxx, Xxxxx 0000
Xxxxxxxxxx, Xxxxx 00000
Attention: J. Xxxxxx Xxxxxxxxx
Fax: (000) 000-0000
and with a copy (which shall not constitute notice) to:
Xxxxxx & Xxxxxx L.L.P.
0000 Xxxxxxxx Xxxx Xxxxxx
0000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000-0000
Attention: Xxxxxx X. Xxxxx
Fax: (000) 000-0000
Any notice, request, instruction or other document given as provided above shall
be deemed given to the receiving party: (a) upon actual receipt, if delivered
personally; (b) three Business Days after deposit in the mail, if sent by
Registered or Certified Mail; (c) upon confirmation of
56
successful transmission if sent by facsimile; or (d) on the next Business Day
after deposit with an overnight courier, if sent by an overnight courier as
described above.
11.05 No Third-Party Beneficiaries; Liability; Non-Recourse. Except as
provided in Article X with respect to indemnification of the Indemnified Parties
hereunder, this Agreement is for the sole benefit of the parties hereto and
their successors and permitted assigns and nothing herein expressed or implied
shall give or be construed to give to any Person, other than the parties hereto
and such successors and assigns, any legal or equitable rights hereunder.
11.06 Interpretation; Exhibits and Schedules; Certain Definitions.
(a) The headings contained in this Agreement, in any Exhibit or
Schedule hereto and in the table of contents to this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement. Nothing contained in the Schedules shall be deemed adequate to
disclose an exception to a representation or warranty made herein unless the
Schedule identifies the exception with particularity and detail, and each
Schedule creates such an exception only to the extent the applicable
representations and warranty referred to by such Schedule by number. All
Exhibits and Schedules annexed hereto or referred to herein are hereby
incorporated in and made a part of this Agreement as if set forth in full
herein. Any capitalized terms used in any Schedule or Exhibit but not otherwise
defined therein, shall have the meaning as defined in this Agreement. When a
reference is made in this Agreement to an Article, Section, Exhibit or Schedule,
such reference shall be to an Article or a Section of, or an Exhibit or Schedule
to, this Agreement unless otherwise indicated.
(b) Whenever the words "include", "includes" or "including" are used
in this Agreement, they shall be deemed to be followed by the words "without
limitation". The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement. The definitions contained in
this Agreement are applicable to the singular as well as the plural forms of
such terms and to the masculine as well as to the feminine and neutral genders
of such terms.
(c) Any agreement, instrument, statute or regulation defined or
referred to herein or in any agreement or instrument that is referred to herein
means such agreement, instrument, statute or regulation as from time to time
amended, modified or supplemented, including (in the case of agreements or
instruments) by waiver or consent and (in the case of statutes or regulations)
by succession of comparable successor statutes or regulations and references to
all attachments thereto and instruments incorporated therein. References to a
Person are also to its permitted successors and assigns.
11.07 Assignment. This Agreement and the rights and obligations
hereunder shall not be assignable or transferable by Purchaser or Sellers
without the prior written consent of the other parties hereto. Notwithstanding
the foregoing, Purchaser may assign its rights and obligations hereunder
(including its rights to purchase any of the Acquired Assets) to (i) one or more
Affiliates of Purchaser or (ii) after the Closing, to any assignee or transferee
of all or a portion of the Acquired Assets; provided, however, such assignment
will not relieve Purchaser from any of its obligations hereunder. Any attempted
assignment in violation of this Section 11.07 shall be void and unenforceable.
57
11.08 Severability. If any provision of this Agreement (or any portion
thereof) or the application of any such provision (or any portion thereof) to
any Person or circumstance shall be held invalid, illegal or unenforceable in
any respect by a court of competent jurisdiction, such invalidity, illegality or
unenforceability shall not affect any other provision hereof (or the remaining
portion thereof) or the application of such provision to any other Persons or
circumstances.
11.09 Submission to Jurisdiction; Consent to Service of Process.
(a) The Parties agree that the Bankruptcy Court shall retain
exclusive jurisdiction to enforce the terms of this Agreement and to decide any
claims or disputes which may arise or result from, or be connected with, this
Agreement, any breach or default hereunder, or the transactions contemplated
hereby and any and all Proceedings related to the foregoing shall be filed and
maintained only in the Bankruptcy Court, and the parties hereby consent to and
submit to the jurisdiction and venue of the Bankruptcy Court and shall receive
notices at such locations as indicated in Section 11.04 hereof; provided,
however, that if the Bankruptcy Cases have closed and have not been reopened
pursuant to Section 350 of the Bankruptcy Code, the parties agree to
unconditionally and irrevocably submit to the non-exclusive jurisdiction of the
United States District Court for the Northern District of Texas sitting in
Dallas County and any appellate court from any thereof, for the resolution of
any such claim or dispute.
(b) The parties hereby unconditionally and irrevocably waive, to the
fullest extent permitted by Law, any objection which they may now or hereafter
have to the laying of venue of any dispute arising out of or relating to this
Agreement or any of the transactions contemplated hereby brought in any court
specified in Section 11.09(a) above, or any defense of inconvenient forum for
the maintenance of such dispute. Each of the parties hereto agrees that a
judgment in any such dispute may be enforced in other jurisdictions by suit on
the judgment or in any other manner provided by Law.
(c) Each of the parties hereto hereby consents to process being
served by any party to this Agreement in any suit, action or proceeding by the
mailing of a copy thereof in accordance with the provisions of Section 11.04.
11.10 Waiver of Jury Trial. THE PARTIES HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
RIGHT THAT THEY MAY HAVE TO TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION, OR IN
ANY LEGAL PROCEEDING, DIRECTLY OR INDIRECTLY BASED UPON OR ARISING OUT OF THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT (WHETHER BASED ON
CONTRACT, TORT, OR ANY OTHER THEORY). EACH PARTY ACKNOWLEDGES THAT IT AND THE
OTHER PARTIES HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS SET FORTH IN THIS SECTION 11.10.
58
11.11 Specific Performance. EACH PARTY ACKNOWLEDGES THAT THE OTHER
PARTIES WOULD BE IRREPARABLY DAMAGED IF ANY OF THE PROVISIONS OF THIS AGREEMENT
ARE NOT PERFORMED IN ACCORDANCE WITH THEIR SPECIFIC TERMS AND THAT ANY BREACH OF
THIS AGREEMENT COULD NOT BE ADEQUATELY COMPENSATED IN ALL CASES BY MONETARY
DAMAGES ALONE AND THAT, IN ADDITION TO ANY OTHER RIGHT OR REMEDY TO WHICH A
PARTY MAY BE ENTITLED AT LAW OR IN EQUITY, IT SHALL BE ENTITLED TO ENFORCE ANY
PROVISION OF THIS AGREEMENT BY A DECREE OF SPECIFIC PERFORMANCE AND TO
TEMPORARY, PRELIMINARY AND PERMANENT INJUNCTIVE RELIEF TO PREVENT BREACHES OR
THREATENED BREACHES OF ANY OF THE PROVISIONS OF THIS AGREEMENT, WITHOUT POSTING
ANY BOND OR OTHER UNDERTAKING.
11.12 Construction. Purchaser and Sellers hereby acknowledge that (a)
Purchaser and Sellers jointly and equally participated in the drafting of this
Agreement and all other agreements contemplated hereby, (b) both Purchaser and
Sellers have been adequately represented and advised by legal counsel with
respect to this Agreement and the transactions contemplated hereby, and (c) no
presumption shall be made that any provision of this Agreement shall be
construed against any party by reason of any role in the drafting of this
Agreement or any other agreement contemplated hereby.
11.13 Governing Law. This Agreement shall be governed by and construed
in accordance with the Bankruptcy Code and internal laws of the State of
New
York.
11.14 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which shall
together constitute one and the same agreement, and shall become effective when
one or more such counterparts have been signed by each of the parties and
delivered to the other party.
11.15 Intentionally Deleted.
11.16 Funding. The parties acknowledge and agree that no provision of
this Agreement requires Purchaser to loan or otherwise advance any funds to
Sellers or any of their Subsidiaries unless Purchaser expressly agrees in
writing to loan or otherwise advance any such funds.
[Signature Page Immediately Follows]
59
IN WITNESS WHEREOF, Sellers and Purchaser have duly executed this
Agreement as of the date first written above.
NUCENTRIX BROADBAND NETWORKS, INC.
By: /s/ Xxxxxxx X. XxXxxxx
-----------------------------------
Name: Xxxxxxx X. XxXxxxx
Title: President and Chief Executive
Officer
HEARTLAND CABLE TELEVISION, INC.
By: /s/ Xxxxxxx X. XxXxxxx
-----------------------------------
Name: Xxxxxxx X. XxXxxxx
Title: President and Chief Executive
Officer
NUCENTRIX INTERNET SERVICES, INC.
By: /s/ Xxxxxxx X. XxXxxxx
-----------------------------------
Name: Xxxxxxx X. XxXxxxx
Title: President and Chief Executive
Officer
NUCENTRIX SPECTRUM RESOURCES, INC.
By: /s/ Xxxxxxx X. XxXxxxx
-----------------------------------
Name: Xxxxxxx X. XxXxxxx
Title: President and Chief Executive
Officer
NEXTEL SPECTRUM ACQUISITION CORP.
By: /s/ Xxxx Xxxxxxxxx
-----------------------------------
Name: Xxxx Xxxxxxxxx
Title: Vice President
[SIGNATURE PAGE TO
ASSET PURCHASE AGREEMENT]
UNRESTRICTED SUBSIDIARY FUNDING COMPANY
By: /s/ Xxxx Xxxxxxxxx
-----------------------------------
Name: Xxxx Xxxxxxxxx
Title: Vice President
[SIGNATURE PAGE TO
ASSET PURCHASE AGREEMENT]
EXHIBITS:
Exhibit A DIP Loan Agreement
Exhibit B Escrow Agreement
SCHEDULES:
Schedule 1.01(a) Excluded Causes of Action
Schedule 1.01(b) Knowledge of Sellers
Schedule 1.01(c) Permitted Liens
Schedule 1.01(d) Wireless Cable Agreements
Schedule 2.02(i) Acquired Tower Leases
Schedule 2.02(iv) Company FCC Licenses
Schedule 2.02(vi) Acquired Spectrum Leases
Schedule 2.07 Subsequently Excluded Assets
Schedule 3.01 Purchase Price
Schedule 5.05(b) Condition of Acquired Assets - Exceptions
Schedule 5.06 Title to Real Property
Schedule 5.07(a) Tower Leases
Schedule 5.07(b)(ii) Tower Leases - Exceptions
Schedule 5.07(b)(iv) Tower Leases - Defaults
Schedule 5.07(c) Transmission Towers FCC/FAA Compliance - Exceptions
Schedule 5.08(a) Contracts - Exceptions
Schedule 5.08(b) Assigned Contracts
Schedule 5.08(c) Assigned Contracts - Exceptions
Schedule 5.08(d) Assigned Contracts - Notices
Schedule 5.10(a) FCC Licenses
Schedule 5.10(b) Company FCC Licenses - Exceptions
Schedule 5.10(c) Company Pending Applications
Schedule 5.10(d) Company Pending Applications - Exceptions
Schedule 5.10(e) Constructed Facilities - Exceptions
Schedule 5.10(f) Company FCC Licenses - FCC Reports Exceptions
Schedule 5.10(h) Secondary Licenses
Schedule 5.10(i)(i) Company FCC Licenses - Further Exceptions
Schedule 5.10(i)(ii) Certain Acquired Spectrum Leases
Schedule 5.11(a) Acquired Spectrum Leases - Exceptions
Schedule 5.11(b) Acquired Spectrum Leases - Exceptions
Schedule 5.11(c) Acquired Spectrum Leases FCC Licenses - Exceptions
Schedule 5.11(d) Leased Pending Applications
Schedule 5.11(e) Leased Pending Applications - Exceptions
Schedule 5.14 Proceedings
Schedule 5.18 Network Equipment
Schedule 5.19 Spare Parts and Equipment
Schedule 5.21 Interference Coordination Agreements
Schedule 5.24 Acquired WCS Agreements
Schedule 5.29 Insurance
Schedule 5.30 WorldCom FCC Licenses
Schedule 8.02(g) FCC Approvals
Schedule 8.02(g)(i) Principal BTA Licenses
Schedule 8.02(g)(ii) Principal FCC Licenses
