Exhibit 2.5
CLOSING AGREEMENT
THIS CLOSING AGREEMENT dated the 6th day of August, 2000, by
and between Advanced Wireless Systems, Inc. ("Purchaser") and
Digital Wireless Systems, Inc. ("Seller").
RECITALS
1. WHEREAS, Seller is a debtor in a Chapter 11 case pending
in the United States Bankruptcy Court for the Middle District of
Tennessee, and as a Chapter 11 debtor has confirmed a plan of
reorganization (the "Plan of Reorganization") approved by court
order entered May 28, 2000; and
2. The Plan of Reorganization approved the sale of assets
from Seller to Purchaser pursuant to the terms and conditions of an
asset purchase agreement (the "Purchase Agreement") dated February
15, 2000; and
3. Purchaser and Seller are prepared to proceed with the
closing of this sale (the "Closing") under certain terms and
conditions.
D. Purchaser and Seller have agreed that the attached
Schedule A represents a calculation of three adjustments to the
purchase price of the Assets being sold: (1) adjustment due to the
price adjustment provision of the Purchase Agreement, (2)
adjustment due to failure to deliver Licenses, as specified in
Section 2 below, and (3) adjustment due to failure to deliver
audited financial statements, as specified in Section 7 below.
NOW, THEREFORE, premises considered and for good and valuable
consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows:
1. Seller is unable to transfer title to its multipoint
distribution service (the "Licenses") until the parties can obtain
FCC approval of the assignment of Seller's licenses to Purchaser.
Pending this approval, Seller agrees to lease the transmission
capacity on the channels to be assigned to Purchaser pursuant to a
spectrum lease agreement to be executed at Closing. The parties
hereto agree to file assignment applications with the FCC within
ten days of Closing.
2. Seller and Purchaser agree that the purchase price of the
Assets to be transferred at Closing is reduced by 1,100,000 shares,
in consideration of the inability of Seller to transfer the
Licenses. The reduction in the purchase price will be withheld
from the shares to be issued to the Seller's interest holders in
accordance with the attached Schedule A. The adjustment in the
purchase price shall be deducted from the Class 5 Claimants'
shares, pro rata according to their percentage ownership of the
Seller immediately prior to Closing.
3. Seller and Purchaser agree to enter into the spectrum
lease agreement attached as Exhibit 1. The spectrum lease
agreement provides that the monthly rental for the Licenses shall
be 100,000 shares of Purchaser's Common Stock per month for the
first twelve months of the lease. The Seller and Purchaser agree
that, if substantially all of the Licenses have not been
transferred to Purchaser by August 1, 2001, they will renegotiate
the monthly rental price of the spectrum lease agreement.
4. With respect to the licenses relating to Station WHT 707
previously held by Wireless Advantage, Inc. and which are now in
Seller's name by order of the Bankruptcy Court entered March 28,
2000, Seller agrees to use its reasonable efforts to obtain
cooperation from Wireless Advantage, Inc. in order to effectuate
the assignment of such licenses by the FCC.
5. Seller shall use reasonable efforts to obtain a court
order from the Bankruptcy Court acknowledging the assignment of all
leases and executory contracts under Seller's name to Purchaser as
contemplated under the Purchase Agreement.
6. Seller shall have thirty days from Closing to perform the
due diligence and make the required disclosures under the Purchase
Agreement regarding such sections of the Purchase Agreement as 5.6,
5.13, 5.15, 5.20, 5.25, 5.26 and 5.27 as they relate to licenses,
spectrum leases and compliance with FCC rules.
7. Seller is unable to deliver audited financial statements
of the Seller at Closing, as required by Section 5.5 of the
Purchase Agreement and does not have the funds to obtain such
audited statements. Seller and Purchaser will cooperate, at
Purchaser's expense, in obtaining audited financial statements' for
Seller's operations that comply with requirements contained in Form
8-K for reporting on significant acquisitions. Purchaser will
reserve and hold back from the purchase price, 803,397 shares of
Purchaser's Common Stock, to be deducted from the DWSI directors'
shares according to the amounts expressed in Schedule A. If the
parties are unsuccessful in obtaining the required audited
financial statements for Seller, using reasonable commercial
efforts, within 70 days after Closing. The purchase price will be
reduced by the said 307,410 shares and such shares will not be
issued. If the audited statements are obtained within 70 days, the
307,410 reserved shares will be issued to the Seller's interest
holders as provided in the attached Schedule A. The 307,410
reserved shares shall be placed into escrow for the benefit of the
scheduled holders, subject to the terms of this paragraph.
IN WITNESS WHEREOF, the parties have executed this Closing
Agreement as of the date first written above.
DIGITAL WIRELESS, INC. ADVANCE WIRELESS SYSTEMS, INC.
By: ________________________ By: ___________________
Xxxxx X. Xxxxxxxxx Xxxxxx X. Xxxxxx
Chief Executive Officer President
Schedule A To
Closing Agreement
Price Adjustments:
30-Day Average Closing Price of
AWSS Common Stock (Thru 7/7/00) = $0.9950
Theoretical Price Adjustment as of 7/7/00 = 844,221 Units of Equity
Actual Price Adjustment made as of 7/7/0 = $0.8584
30-Day Average Closing Price of AWSS
Common Stock (As of Friday 8/4/00) = $0.8584
Total Price Adjustment = 2,251,631 Units of Equity
Additional Price Adjustment Between 7/7/00 to
8/4/00 (i.e., 2,251,631 minus 869,632 = 1,381,999 Units of Equity
Addn.
Price
Adjust-
AWSS ment
Price Units of From Adjusted
AWSS Adjust- Equity 7/7/00 AWSS
Units ment Issued Thru License Audit Units
Claims of Equity 7/7/00 on 8/6/00 8/4/00 Escrow Escrow of Equity
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Class 4 $447,127 894,258 94,365 988,623 157,327 0 0 1,145,950
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Class 5 Shares DWSI %
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Baton Rouge LLC 982,142 26.25% 1,865,233 203,410 2,068,643 321,566 288,113 0 2,102,096
Xxxxxxx Breaks 2,217 0.06% 4,210 460 4,670 726 650 3,914 832
Xxxxxxx Xxxxxx 1,773 0.05% 3,367 367 3,734 581 520 3,131 664
Xxxxxxx Xxx 1,995 0.05% 3,789 413 4,202 653 585 3,523 747
Xxxxx Xxxxxx 665 0.02% 1,263 138 1,401 217 195 1,174 249
Future Vision
Wireless
Cable, Inc. 999,738 26.72% 1,898,650 207,176 2,105,826 327,206 293,275 0 2,139,757
Xxxxxx Xxxxxxx 77,217 2.06% 146,646 15,997 162,643 25,278 22,652 136,334 28,935
Reading
Partnership 931,596 24.90% 1,769,238 193,068 1,962,306 304,891 273,286 0 1,993,911
Xxxxx Xxxxxxxxx 77,217 2.06% 146,646 15,997 162,643 25,278 22,652 136,334 28,935
Shreveport
Partnership 666,983 17.83% 1,266 699 138,242 1,404,941 218,276 195,661 0 1,427,556
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3,741,543 100.00% 7,105,742 775,267 7,881,009 1,224,672 1,097,589 284,410 7,723,682
Adjustments 869,632 1,381,999 1,097,589 284,410 8,869,632
Total Class 4 and Class 5
Units of Equity 8,000,000 8,869,632 8,869,632
