ASSET PURCHASE AGREEMENT
by and between
WESTERN INTEGRATED NETWORKS, LLC, and Affiliates
as "Seller,"
and
SUREWEST COMMUNICATIONS
as "Buyer"
Dated as of June 19, 2002
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (this "Agreement"), dated as of this 19th day
of June, 2002, is by and between SureWest Communications ("Buyer"), on the one
hand, and Western Integrated Networks, LLC ("WIN Parent") and all of its
Affiliates (collectively with WIN Parent, the "Seller"), on the other.
RECITALS
Seller is a single source facilities based provider of broadband services
to residential and small business customers in certain targeted markets, with
both fiber and coaxial cable deployed to the small business and home (the
"Business"), with its major offices and operational facilities located in
Sacramento, California and Denver, Colorado.
Nine of the entities constituting Seller, including WIN Parent, filed for
protection under Chapter 11 of the Bankruptcy Code on March 11, 2002, in the
United States District Court for the District of Colorado (the "Bankruptcy
Court"). Additional entities constituting Seller, at the request of Buyer, will
file for protection under Chapter 11 in the Bankruptcy Court. All of the filing
entities are or will be jointly administered under Case No. 02-13043 (EEB)
(collectively, the "Bankruptcy Case"). Certain WIN Affiliates are currently
operating as debtors-in-possession. This Agreement establishes obligations on
the part of WIN Parent and certain WIN Affiliates, whether or not they are WIN
Debtors (as defined herein).
Buyer desires to purchase from Seller, and Seller desires to sell to Buyer,
all of the Assets (as defined herein) (and assume certain identified
liabilities) of Seller relating to the Business, subject to the terms and
conditions of this Agreement, including its provisions regarding the assignment
of liabilities. It is the intent of the parties that Buyer obtain at Closing (as
defined herein), free from any lien, mortgage, encumbrance or other restriction,
all of the Assets of Seller identified herein, including those Assets identified
by Buyer as necessary to operate the business of Seller currently conducted in
Sacramento County, California.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and promises contained herein and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the parties hereto agree
as follows:
ARTICLE 1
DEFINITIONS
1.1 Defined Terms. As used herein, the terms below shall have the following
meanings:
"Accounts Receivable" shall mean all rights to receive money arising out of
the sale, lease, or other disposition of goods or other property or rendition of
services by Seller prior to the Closing Date.
"Affiliate" shall have the same meaning as in ss. 101(2)(A) and (B) of the
Bankruptcy Code.
"Agreement" has the meaning set forth above in the preamble to this
Agreement.
"Alternative Transaction" is a transaction approved by the Bankruptcy Court
between Seller, on the one hand, and a party other than Buyer, on the other
hand, pursuant to which such other party: (A) is permitted to acquire in one or
a series of related transactions all or substantially all of the Assets, or (B)
is permitted to make a comparable investment in Seller or become a sponsor or an
economic co-proponent of a plan of reorganization of Seller.
"Assets" shall mean all right, title and interest of Seller in and to the
Business, and the properties, assets and rights of any and every kind, whether
tangible or intangible, real, personal, or mixed, owned, held or used by Seller
or in which Seller has any interest whatsoever (but, in each case, only to the
extent of such interest), including, without limitation, all of Seller's right,
title and interest in and to the following:
a. all Real Estate;
b. all Equipment;
c. all Accounts Receivable;
d. all Inventory, including all prepaid Inventory;
e. all Intellectual Property;
f. all rights (including, without limitation, all purchase options)
existing under the Assumed Executory Contracts and Permits, to the extent that
such rights can be assigned pursuant to the Bankruptcy Code and/or applicable
non-bankruptcy law;
g. all office supplies, production supplies, spare parts, other
miscellaneous supplies, and other tangible property of any kind wherever
located, including, without limitation, all property of any kind located in any
building, warehouse, office or other space leased, owned, occupied or used in
connection with the Real Estate;
h. all prepayments and prepaid expenses, including, without limitation,
utility or leasehold deposits;
i. all lists, records and other information pertaining to accounts,
personnel and referral sources, all lists and records pertaining to suppliers
and customers, and all Books and Records of every kind and, to the extent
assignable or, if contained in an Executory Contract, to the extent assigned as
an Assumed Executory Contract, all warranties of manufacturers, sellers,
suppliers, lessors or dealers associated with any of the Assets;
j. all Permits, licenses, certifications and approvals from all permitting,
licensing, accrediting and certifying agencies, to the extent assignable, and
the rights to all data and records held by such permitting, licensing and
certifying agencies, subject to the provisions of Article 9, to the extent the
same can be assigned pursuant to state law, rule or regulation and/or the
Bankruptcy Code; and
k. all domain names, Internet addresses and/or URLs, world wide web sites,
and any and all contractual rights, including without limitation, linkage
rights, owned or controlled by Seller, including any and all content therein and
any and all intellectual property rights embodied therein, including without
limitation, patents, patent applications, copyrights, copyright applications,
trade secrets, trademarks and/or service marks and associated applications
therefore, trade dress, including any and all goodwill associated therewith, in
connection with any such domain name, Internet address and/or URL, world wide
web site, or contractual right.
However, the Assets shall not include any of the Excluded Assets (as
defined below).
"Assumed Executory Contracts" shall mean the Executory Contracts and leases
set forth in Exhibit B attached hereto. A Contingent Executory Contract set
forth on Exhibit C shall not become an Assumed Executory Contract until such
time as Buyer and the other party to such Contingent Executory Contract agree to
an amendment or other modification on terms and conditions acceptable to Buyer,
and Buyer confirms in writing to Seller that such Contingent Executory Contract
shall become an Assumed Executory Contract, and Exhibit B shall be amended by
inclusion of such new Assumed Executory Contract
"Assumed Liabilities" shall mean solely ordinary course warranty
obligations within the historical parameters of Seller's operations for its
current products and Liabilities under any Assumed Executory Contracts. Assumed
Liabilities specifically exclude any Liability of any WIN Affiliate not a WIN
Debtor.
"Bankruptcy Case" has the meaning set forth in the Recitals and, as the
context requires, shall be deemed to refer to any one or more of the cases.
"Bankruptcy Code" shall mean the United States Bankruptcy Code, 11
▇.▇.▇.▇▇. 101 et seq.
"Bankruptcy Court" has the meaning set forth in the Recitals.
"Books and Records" shall mean all books and records of Seller of any and
every kind, including, without limitation, CD, compact disk lists, ledgers,
files, reports, plans, drawings and operating records of every kind, held or
maintained by Seller pertaining to the Assets, customers, suppliers,
distributors of Seller, disk or tape files, printouts, runs or other
computer-prepared information and the Seller's interest in all computer programs
required to access, and the equipment containing, all such computer-based
information, product, business and marketing plans and sales, maintenance and
production records.
"Broadband Telecommunications and Cable System" or "System" shall mean the
network used by Seller to deliver telecommunications services and/or used in the
provision of video programming and/or cable services.
"Business" has the meaning set forth in the Recitals.
"Business Day" shall mean any day excluding Saturday, Sunday and any day
which is a legal holiday under the laws of the State of California or is a day
on which banking institutions located in such state are authorized or required
by law or other governmental action to close.
"Buyer" has the meaning set forth in the preamble to this Agreement.
"Closing" shall have the meaning set forth in Section 3.1.
"Closing Date" shall have the meaning set forth in Section 3.1.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Confidentiality Agreement" shall mean the Confidentiality Agreement dated
as of March 15, 2002, by and between Seller and Buyer.
"Contingent Executory Contracts" shall mean those contracts that are not
Assumed Executory Contracts, but that are contracts between Seller and third
parties with whom Buyer will continue a business relationship after Closing, on
new or modified terms and conditions, if new or modified terms and conditions
acceptable to Buyer can be negotiated prior to Closing. A Contingent Executory
Contract can be made an Assumed Executory Contract by written designation of
Buyer to Seller not less than three (3) days before Closing.
"CPUC" shall mean the California Public Utilities Commission.
"Deposit" shall have the meaning set forth in Section 2.3(a).
"Designated Authorities" shall have the meaning set forth in Section 5.10.
"Disclosure Schedule" shall have the meaning set forth in Article 5.
"Environmental Laws" shall mean all federal, state and local statutes,
regulations and ordinances concerning public health and safety, worker health
and safety, and pollution or protection of the environment, including without
limitation all those relating to odor control and the presence, use, production,
generation, handling, transportation, treatment, storage, disposal,
distribution, labeling, testing, processing, discharge, release, threatened
release, control or cleanup of any hazardous materials, substances or wastes, as
such requirements are enacted and in effect on or prior to the Closing Date.
"Equipment" shall mean, other than Inventory, all machinery, equipment
(including, without limitation, all durable medical equipment and medical
equipment components), supplies, spare parts, appliances, vehicles, fixtures,
furnishings, storage racks, tools, dies, computer hardware, furniture and other
tangible personal property in which Seller has any interest, including, without
limitation, all such items which are located on or in, or which are made a part
of, any building, warehouse, office or other space leased, owned, occupied or
used in connection with, and whether or not affixed to the Real Estate.
"Escrow Agent" shall mean the Person selected, within ten (10) Business
Days of the date of this Agreement, by the Seller and the Buyer to serve as the
escrow agent pursuant to the Escrow Agreement.
"Escrow Agreement" shall mean the Escrow Agreement in the form of Exhibit
D, which is to be executed after the execution of this Agreement, subject to
such revisions thereto required by the Escrow Agent and accepted by the Seller
and Buyer.
"Excluded Assets" shall mean (i) all causes of action and rights of
recovery for avoidance actions of Seller under Sections 547-553 of the
Bankruptcy Code; (ii) tax refunds and tax attributes; (iii) all cash and cash
equivalents (including non-marketable securities and short term investments, but
excluding advance payments described in Section 3.4 of this Agreement); (iv) the
documents and equity interests relating solely to the organization, maintenance
and existence of Seller or any WIN Affiliate as a corporation or limited
liability company, as the case may be; (v) any Executory Contracts that are not
Assumed Executory Contracts, including any Contingent Executory Contracts that
do not become Assumed Executory Contracts; (vi) any rights of Seller under this
Agreement; (vii) professional fee retainers held by ▇▇▇▇▇▇ & Company, P.C., Q
Consulting LLC, Dow, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ and other professionals approved by the
Bankruptcy Court, including the counsel and accountants for the unsecured
creditors committee; (viii) receivables owed by Sacramento Municipal Utility
District as of the Closing Date; (ix) deposit money arising from completed work
as of the Closing Date held by Pacific ▇▇▇▇; and (x) all Assets of entities not
in bankruptcy, except Assets required to operate the Business in Sacramento
County, California. Excluded Assets of the type described in clause (ii) and
(iii) of the preceding sentence shall refer only to such Assets that exist prior
to and up to, or are attributable to the periods prior to, the Closing Date.
"Executory Contracts" shall mean all oral or written contracts, agreements,
leases, subleases, licenses, permits, distribution arrangements, sales and
purchase agreements, and purchase and sale orders to which a WIN Debtor is a
party, or any other contract identified by Buyer pursuant to this Agreement. No
agreement shall be an Assumed Executory Contract without being (i) specifically
identified in Exhibit B to this Agreement as of the execution of this Agreement,
(ii) included in Exhibit B by the inclusion of Contingent Executory Contracts
that become Assumed Executory Contracts as provided herein or (iii) included in
Exhibit B after the execution of this Agreement if mutually agreed to by the
parties hereto, or in the case of Executory Contracts relating to the Sacramento
market, upon written designation by Buyer to Seller of such Executory Contract
as an Assumed Executory Contract not less than three (3) days before Closing.
"Facility" shall mean all offices and operational facilities of Seller,
and, as the context requires, shall be deemed to refer to any one or more of the
facilities.
"FCC" shall mean the Federal Communications Commission.
"Final Order" shall mean an Order of the Bankruptcy Court that has not been
reversed, stayed, modified or amended and as to which the time to appeal or
petition for certiorari has expired and as to which no appeal or petition for
certiorari is pending.
"Intellectual Property" shall mean:
a. all inventions (whether patentable or unpatentable and whether or not
reduced to practice), all improvements thereto, and all patents, patent
applications and patent disclosures, together with all reissuances,
continuations, continuations-in-part, revisions, extensions and reexaminations
thereof;
b. all trademarks, service marks, trade dress, logos, trade names and
corporate names, together with all translations, adaptations, derivations and
combinations thereof and including all goodwill associated therewith, and all
applications, registrations and renewals in connection therewith;
c. all copyrightable works, all copyrights and all applications,
registrations and renewals in connection therewith;
d. all mask works and all applications, registrations and renewals in
connection therewith;
e. all trade secrets and confidential business information (including
ideas, research and development, know-how, formulas, compositions, manufacturing
and production processes and techniques, technical data, designs, drawings,
specifications, customer and supplier lists, pricing and cost information, and
business and marketing plans and proposals);
f. all computer software (including data and related documentation), to the
extent assignable;
g. all other proprietary rights; and
h. all copies and tangible embodiments thereof (in whatever form or
medium).
"Inventory" shall mean (a) all stock in trade, merchandise, goods, supplies
and other products owned by Seller for resale or lease in the ordinary course of
business to its customers or otherwise under the control of Seller or carried on
the books of Seller for the exclusive use by Seller, wherever located and (b)
all of the raw materials, work in process, semi-finished and finished products,
wrapping, supply and packaging items, promotional materials and similar items of
Seller, wherever located.
"Knowledge" shall mean, as to a particular matter, the actual knowledge of
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇ or ▇▇▇▇▇▇▇ ▇▇▇▇, for Seller, or ▇▇▇▇▇ ▇▇▇▇▇,
President and Chief Executive Officer, for Buyer.
"Liability" shall mean any liability (whether known or unknown, whether
asserted or unasserted, whether absolute or contingent, whether accrued or
unaccrued, whether liquidated or unliquidated, and whether due or to become
due), including any liability for Taxes, in each instance attributable only to
acts or circumstances of or for periods commencing on and after the Closing
Date.
"Ordinary Course of Business" shall mean the ordinary course of business
consistent with past custom and practice (including with respect to quantity,
frequency and pricing).
"Permits" shall mean all licenses, permits, franchises, approvals,
authorizations, consents or orders of, or filings with, or notifications to, any
governmental authority, whether foreign, federal, state or local, necessary for
the past, present or reasonably anticipated future conduct or operation of the
Business or the System, as each is currently conducted, including but not
limited to FCC and CPUC licenses or authorizations, franchise agreements and
permits, construction and excavation permits, certificates of convenience and
necessity, pole attachment or conduit agreements, cable copyright compliance,
and compliance with government rules and regulations applicable to the operation
of a telecommunications business, multichannel video programming business, or
cable system.
"Person" shall mean any individual, corporation, partnership, limited
liability company, trust, association, joint venture or other entity or any kind
whatsoever.
"Personnel" shall mean all directors, officers and employees.
"Purchase Price" shall have the meaning set forth in the Section 2.3.
"Real Estate" shall mean all fee interests in real property, leasehold
estate interests of real property, and all improvements and fixtures (except
leased improvements and fixtures) located thereon (including, without
limitation, the Facility) and all easements, licenses, rights of way, and all
appurtenances to such property including without limitation the Real Estate set
forth in Exhibit E.
"Representative" shall mean any attorney, accountant, agent, consultant or
other representative (but shall not include Personnel) for Seller or Buyer.
"Sale Approval Order" shall have the meaning set forth in Section 4.2.
"Sale Procedures Order" shall have the meaning set forth in Section 4.1.
"Security Interest" shall mean any mortgage, pledge, lien, encumbrance,
charge or other security interest, any mechanic's, materialmen's and similar
liens, but not (a) liens for Taxes not yet due and payable, and (b) purchase
money liens and liens securing rental payments under capital lease arrangements.
"Seller" shall have the meaning set forth in the preamble to this Agreement
and, as the context requires, shall be deemed to refer to any one or more of WIN
Parent or WIN Affiliates.
"Tax(es)" shall mean any federal, state, local or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental (including taxes under Code Section
59A), customs duties, capital stock, profits, withholding, social security (or
similar), unemployment, disability, real property, personal property, sales,
use, transfer, registration, value added, alternative or add-on minimum,
estimated or other tax of any kind whatsoever, including any interest, penalty
or addition thereto, whether disputed or not.
"Title Documents" shall have the meaning set forth in Section 8.1.
"Title Insurance Commitment" shall mean the commitment for title insurance
in the amount of One Hundred Percent (100%) of the fair market value of the Real
Estate (other than leased Real Estate), to be issued by a title insurance
company chosen by Seller and reasonably acceptable to Buyer.
"URL" shall mean an electronic address for an information source on the
Internet, such as an ftp site, gopher server, or web page and known as a
Universal (or Uniform) Resource Locator.
"WIN Affiliates" means all Affiliates of WIN, whether or not subject to the
jurisdiction of the Bankruptcy Court, which are described on Exhibit F.
"WIN Debtors" shall mean WIN Parent and those other WIN Affiliates who are
debtors in possession in the Bankruptcy Case, and Western Integrated Networks of
Colorado Purchasing Company, LLC, and any other WIN Affiliate selected by Buyer,
all as indicated on Exhibit F, which Exhibit shall be amended to include any
additional entities constituting Seller, at the request of Buyer, which will
file for protection under Chapter 11 in the Bankruptcy Court, as required to
achieve the ends of this Agreement prior to Closing.
"WIN Parent" has the meaning set forth in the recitals.
1.2 Construction. The headings and captions of the various Articles and
Sections of this Agreement have been inserted solely for purposes of
convenience, are not part of this Agreement, and shall not be deemed in any
manner to modify, explain, expand or restrict any of the provisions of this
Agreement. Unless stated to the contrary, all references to Articles, Sections,
paragraphs or clauses herein shall be to the specified Article, Section,
paragraph or clause of this Agreement, and all references to Exhibits and
Schedules shall be to the specified Exhibits and Schedules attached hereto. All
Exhibits and Schedules attached are made a part hereof. All terms defined herein
shall have the same meaning in the Exhibits and Schedules, except as otherwise
provided therein. All references in this Agreement to "this Agreement" shall be
deemed to include the Exhibits and Schedules attached hereto. The terms
"hereby", "hereto", "hereunder" and any similar terms as used in this Agreement,
refer to this Agreement in its entirety and not only to the particular portion
of this Agreement where the term is used. Whenever in this Agreement provision
is made for the payment of attorneys' fees, such provision shall be deemed to
mean reasonable attorneys' fees and paralegals' fees. The term "including" when
used herein shall mean "including, without limitation." Wherever in this
Agreement the singular number is used, the same shall include the plural, and
the masculine gender shall include the feminine and neuter genders, and vice
versa, as the context shall require.
ARTICLE 2
PURCHASE AND SALE AGREEMENT
2.1 Transfer of Assets. Upon the terms and subject to the conditions and
provisions contained herein and in the Sale Procedures Order or the Sale
Approval Order, at the Closing, Seller shall sell, convey, transfer, assign and
deliver to Buyer (or to one or more Affiliates of Buyer designated by Buyer),
and Buyer, or such designated Affiliates, shall acquire and accept from Seller,
the Assets free and clear of any and all Security Interests and any other liens,
claims and encumbrances as authorized pursuant to 11 U.S.C. ▇▇.▇▇. 363(f) and
105(a). Buyer reserves the right to reject, on or before the Closing Date, any
obligation to take title to any individual Asset with no change to the Purchase
Price.
2.2 Assumed Liabilities. From and after the Closing, Buyer shall assume and
undertake to pay, perform and discharge when due or required to be performed the
Assumed Liabilities. Buyer shall not assume or be bound by any duties,
responsibilities, obligations or liabilities of Seller or to which Seller or any
of the Assets of the Business may be bound or affected, of whatever kind of
nature, whether known, unknown, contingent or otherwise, other than the Assumed
Liabilities.
2.3 Purchase Price. Upon the terms and subject to the conditions set forth
herein, Buyer shall pay to Seller for the sale, transfer, assignment, conveyance
and delivery of the Assets, Twelve Million Dollars ($12,000,000) in cash payable
by wire transfer or other immediately available funds (the "Purchase Price"),
payable as follows:
a. Seven Hundred Thousand Dollars ($700,000) of the Purchase Price (the
"Deposit") shall be delivered by Buyer to Seller on the date that the motion for
the Sale Procedures Order is filed. The Deposit shall be held and invested in a
segregated interest-bearing account, and applied in accordance with the terms of
this Agreement. So long as there is a Closing which results in payment of the
Purchase Price to Seller as required by this Agreement, all interest accrued on
the Deposit shall be for the account of Buyer. If the transaction contemplated
by this Agreement is not consummated because of an Alternative Transaction, then
the Deposit and any interest shall be returned to Buyer. If the transaction
contemplated by this Agreement is not consummated due to Seller's default
hereunder, then the Deposit and any interest shall be paid to Buyer as Buyer's
sole and exclusive remedy which consideration the parties to this Agreement
agree is reasonable and fair compensation for the foreseeable losses that might
result from such breach considering all of the circumstances existing on the
date of this Agreement, including the relationship of the value of the Deposit
to the range of harm to Buyer that can be reasonably anticipated, and in
recognition that proof of actual damages would be difficult, costly or
inconvenient. If the transaction contemplated by this Agreement is not
consummated due to Buyer's default hereunder, then the Deposit and any interest
shall be paid to Seller and (i) if such default occurs prior to the entry of the
Sale Approval Order, such Deposit shall be Seller's sole and exclusive remedy
which consideration the parties to this Agreement agree is reasonable and fair
compensation for the foreseeable losses that might result from such breach
considering all of the circumstances existing on the date of this Agreement,
including the value of the Deposit to the range of harm to Seller that can be
reasonably anticipated, and in recognition that proof of actual damages would be
difficult, costly or inconvenient or (ii) if such default occurs on or after the
entry of the Sale Approval Order, the retention of such Deposit shall not be
Seller's exclusive remedy. If the transaction contemplated by this Agreement is
not consummated due to any reason other than Seller's or Buyer's default
hereunder, then the Deposit and any interest shall be paid to Buyer as Buyer's
sole and exclusive remedy which consideration the parties to this Agreement
agree is reasonable and fair compensation for the foreseeable losses that might
result from such breach considering all of the circumstances existing on the
date of this Agreement, including the relationship of the value of the Deposit
to the range of harm to Buyer that can be reasonably anticipated, and in
recognition that proof of actual damages would be difficult, costly or
inconvenient.
b. The balance of the Purchase Price shall be deposited by Buyer with the
Escrow Agent on or before the Closing Date and shall be paid or held on the
Closing Date by the Escrow Agent as follows:
(1) The Escrow Agent shall segregate and thereafter continue to hold
the sum of One Million Two Hundred Thousand Dollars ($1,200,000),
which shall be designated as a "Holdback Account" and shall be
held, invested, administered and distributed or paid as provided
in Section 2.4. The retention of the Holdback Account in escrow
after the Closing Date shall not prevent the closing of the
transactions contemplated by this Agreement.
(2) The balance of the Purchase Price shall be paid on the Closing
Date by the Escrow Agent to Seller.
The Purchase Price shall be allocated for federal income tax purposes among the
Assets in a manner agreeable to Buyer and Seller; provided that such allocation
shall be made in a manner consistent with ss. 1060 of the Code.
2.4 Holdback Account. Subject to the provisions of Section 2.4(d), the
Holdback Account shall be held by the Escrow Agent for a period of One Hundred
and Eighty (180) days following the Closing Date (the "Holdback Period") as
security for Seller's agreement to indemnify Buyer under Article 13 of this
Agreement.
a. On the first and fifteenth days of each month during the Holdback Period
and the last day of the Holdback Period, Buyer may request payment from the
Escrow Agent of all or any part of the Holdback Account to compensate Buyer for
any amount in respect of which it is entitled to payment pursuant to Section
13.1 by giving written notice to the Escrow Agent and Seller specifying the
amount and reason for the payment. If, within five (5) Business Days after Buyer
gives such notice, Seller does not give notice to Buyer and the Escrow Agent of
Seller's objections to the payment requested by Buyer, the Escrow Agent shall
pay to Buyer forthwith the full amount requested by Buyer. Any portion of the
payment requested by Buyer with respect to which the notice from Seller states
objections shall remain in escrow (beyond the Holdback Period if required
pursuant to Section 2.4(d) pending resolution of the dispute between Buyer and
Seller with respect thereto. Seller shall not state an objection to any payment
requested by Buyer, except on the basis of its good faith belief (i) that Seller
has no obligation, either directly or in accordance with its agreement to
reimburse Buyer under this Agreement, in connection with the matter for which
Buyer requests payment from the Escrow Agent or (ii) that the amount requested
by Buyer is unreasonable. Buyer shall not request payment of any part of the
Holdback Account except on the basis of its good faith belief that (i) Seller is
obligated to reimburse Buyer pursuant to this Agreement with respect to the
matter for which Buyer requests payment from the Escrow Agent and (ii) the
amount requested is reasonable.
b. During the Holdback Period, the Escrow Agent shall hold and invest the
Holdback Account in a segregated interest-bearing account.
c. All interest earned on the Holdback Account shall accrue exclusively to
Seller.
d. Any sum (including interest thereon, if any) held by the Escrow Agent
pursuant to the terms of this Agreement and not set aside to satisfy any claim
of Buyer shall be paid to Seller at the end of the Holdback Period; provided,
however, if at the end of the Holdback Period, there is any unresolved matter in
respect of which Buyer has requested payment under Section 2.4 or any unresolved
dispute between Buyer and Seller arising from the giving of notice under Section
2.4, the amount claimed due from Seller in such matter or the amount requested
by Buyer in accordance with Section 2.4 above with respect to any such dispute,
shall be retained in the Holdback Account pending resolution of such matter or
dispute. At such time following the end of the Holdback Period as there are no
such matters or disputes with respect to which Seller may have an obligation to
Buyer under this Section 2.4, the balance of the Holdback Account shall be paid
to Seller in the manner described above.
e. Buyer's ability to request and receive payment from the Seller of all or
any part of the Holdback Account shall be deemed Buyer's exclusive remedy for
the matters for which the Holdback Account is created hereunder.
2.5 Executory Contracts. If there exists on the Closing Date any default in
an Assumed Executory Contract by a WIN Debtor, Buyer shall be responsible for
any amounts to be cured pursuant to Section 365(a) of the Bankruptcy Code.
2.6 Sales and Related Taxes. Seller shall pay any and all sales, use,
excise, transfer and conveyance taxes payable or assessable in connection with
or as a result of the transfer of the Assets under the terms of this Agreement
and the transactions contemplated hereby. Buyer shall not be responsible for any
business, occupation, withholding, possessory interest or similar tax or
assessment or any other tax or fee (excluding franchise or copyright fees) of
any kind relating to any period on or prior to the Closing Date with respect to
Seller, the Assets or the construction, operation or maintenance of the System,
nor for any supplemental assessment or increase in any such tax, assessment or
fee relating to such period, all of which shall be the responsibility of Seller
except as provided in ss. 2.5 hereof.
ARTICLE 3
CLOSING
3.1 Closing. Upon the terms and conditions set forth herein and in the Sale
Procedures Order or the Sale Approval Order, the closing of the transactions
contemplated herein (the "Closing") shall be held at 10:00 a.m. Mountain
Daylight Time at the offices of ▇▇▇▇▇▇ & Company, P.C., ▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ a date within three (3) Business Day after the Sale
Approval Order is entered, but in all events not later than July 12, 2002. The
date on which the Closing occurs is referred to as the "Closing Date."
3.2 Deliverables at Closing. At the Closing, and in connection with
effecting and consummating the Closing, including, without limitation, the sale
and purchase of the Assets and the delivery of the Purchase Price, Seller and
Buyer shall, on the Closing Date, deliver the following:
a. Seller shall deliver to Buyer:
i. the various certificates, instruments and documents referred
to below in Section 9.1.
ii. general warranty deeds held by any WIN Debtor (if Seller took
title to such Real Estate by general warranty deed, otherwise by
special warranty deed) to all Real Estate (other than leased Real
Estate), assignments (including Intellectual Property transfer
documents), bills of sale and such other instruments of sale,
transfer, conveyance and assignment as Buyer and its counsel may
reasonably request, all in form and substance satisfactory to Buyer,
all of which shall be conveyed "as-is, where-is," without any
warranty, express or implied, except for the warranty of title set
forth in Section 5.4;
iii. the originals of all Books and Records, tangible Assets,
Permits, policies, Assumed Executory Contracts, leases or other
instruments, in each case owned by or in the possession of Seller
(excluding any such items that are Excluded Assets), otherwise copies
thereof;
iv. the Title Insurance Commitment, brought up to the Closing Date;
v. the Disclosure Schedule, updated from the date of this
Agreement to the Closing Date;
vi. a certificate executed by an officer of WIN Parent, dated as
of the Closing Date, certifying that, to the best of Seller's
Knowledge, each of the representations and warranties made pursuant to
this Agreement by Seller is true, correct and complete in all respects
at and as of the Closing Date as though made at and as of that date;
and
vii. such other documentation as is reasonably required by Buyer
to confirm the performance by Seller, or the compliance with
conditions to Closing set out in this Agreement.
b. Buyer shall deliver or cause to be delivered to Seller:
i. the amount of cash equal to the Purchase Price, less the
Deposit, and advance payments as described in Section 3.4 of this
Agreement;
ii. the various certificates, instruments and documents referred
to below in Section 9.2; and
iii. such other documentation as is reasonably required by Seller
to confirm the performance by Buyer, or the compliance with conditions
to Closing set out in this Agreement.
c. After the Closing Date, Seller shall deliver to Buyer such other
instruments as shall be reasonably requested by Buyer to vest in Buyer
title in and to the Assets in accordance with the provisions hereof.
3.3 Transaction Expenses. Except as expressly provided herein, each party
shall bear its own costs and expenses, including attorney, accountant and other
consultant fees, in connection with the execution and negotiation of this
Agreement and the consummation of the transactions contemplated hereby. No
costs, expenses or fees of any kind shall be a lien on any of the Assets
transferred at Closing.
3.4 Advance Payments. All advance payments from, or monies of, third
parties on deposit with Seller relating to the Business including without
limitation advance payments and deposits by Subscribers for converters,
encoders, decoders, telecommunications services, data services or video services
(or any related sales) shall be retained by Seller and credited to the account
of Buyer. All monies relating to the Business that are on deposit with third
parties as of the Closing Date for the account of Seller or as security for
Seller's performance of its obligations with respect to the Business (other than
deposits the full benefit of which will not be available to Buyer after the
Closing Date), including without limitation deposits on real property and
deposits for utilities, shall become the property of Buyer without any further
adjustment to the Purchase Price. Notwithstanding the foregoing, Seller shall
retain and Buyer shall not receive a credit for Excluded Assets or restricted
cash held as security by third parties for letters of credit, bonds or similar
obligations.
3.5 Other Closing Matters. Each of the parties shall use their reasonable
efforts to take such other actions required hereby to be performed by it prior
to or on the Closing Date.
ARTICLE 4
OVERBID PROCEDURES AND BANKRUPTCY COURT APPROVAL
4.1 Overbid Procedures. This Agreement is made subject to overbid at the
hearing on the Bankruptcy Court's approval of this Agreement. WIN Debtors shall
give notice of its application for approval of the sale of the Assets to Buyer
subject to overbid, and shall immediately following the execution of this
Agreement, if not sooner, seek the Bankruptcy Court's approval of the overbid
procedures and the break-up fee as set forth below (as well as such other sale
procedures as may be required) (the "Sale Procedures Order"). The overbid
provisions shall be as follows:
a. The initial minimum overbid shall be an amount equal to $350,000,
with additional overbids in minimum increments thereafter of $100,000;
b. Prospective overbidders will be notified that they will be required
to pre-qualify with Seller Forty-Eight (48) hours prior to the sale hearing
in order to demonstrate their financial capacity to close the transactions
contemplated hereby. As part of the pre-qualification process, each
overbidder shall deliver to WIN Parent Forty-Eight (48) hours prior to the
sale hearing a deposit of ten percent (10%) of the amount of such
overbidder's bid in a cashier's check or other immediately available funds
made payable to WIN Parent. Such deposit shall be nonrefundable if the bid
of such overbidder is accepted by the Bankruptcy Court and such overbidder
fails to consummate the transactions contemplated hereby due to such
overbidder's default. The balance of the Purchase Price shall be paid as
set forth above in Article 3.
c. Any and all overbids shall be on the same terms and conditions in
all material respects to those set forth in this Agreement. In the event a
prospective overbidder pre-qualifies with WIN Parent, WIN Parent shall
immediately notify and inform Buyer of the pre-qualification and the
identity or identities of the prospective overbidder(s).
4.2 Sale Approval Motion, Notice, and Order. WIN Debtors shall serve and
file a motion, reviewed by and acceptable to Buyer, seeking the approval of the
Bankruptcy Court for the sale of the Assets as contemplated by this Agreement
free and clear of any liens, claims and encumbrances authorized pursuant to 11
U.S.C. ▇▇.▇▇. 363(b), 363(f) and 105(a) and such sale of Assets will be free and
clear of any Security Interests; however, with respect to the Real Estate
described in the Title Insurance Commitment, subject only to those exceptions
set forth therein (the "Sale Approval Order"). Such approval shall be obtained
after Seller has provided notice to all of Seller's respective creditors and
equity security holders (excluding contingent warranty claimants) and Buyer in
accordance with Bankruptcy Rules 2002(a), (c), 6004, 9006 and 9008 and any
applicable local bankruptcy rules, providing for such limited notice as the
Bankruptcy Court may order. Such notice of hearing shall be in a form and
substance satisfactory to the Bankruptcy Court and to Buyer and shall be
published at least once in a publication satisfactory to Buyer. Such Sale
Approval Order shall provide that the transactions undertaken under this Asset
Purchase Agreement have been undertaken at arm's length, without any collusion
by the parties and in good faith within the meaning of Section 363(m) of the
Bankruptcy Code and shall grant Buyer all of the protections afforded by Section
363(m).
4.3 Executory Contracts. Concurrently with the filing of the motion to
approve this Agreement and the sale of the Assets, Seller shall seek Bankruptcy
Court approval to assume the Assumed Executory Contracts, and to assign the
Assumed Executory Contracts to Buyer at the Closing. If Section 365 of the
Bankruptcy Code precludes assumption and assignment of any of the Assumed
Executory Contracts, such precluded Assumed Executory Contracts shall not be
included in the Assets (or the Assumed Liabilities).
4.4 Break-Up Fee. In the motion filed in anticipation of the Sale
Procedures Order, Seller shall request approval of a break-up fee, which shall
be in the amount of Two Hundred Fifty Thousand Dollars ($250,000) and payable to
Buyer upon the occurrence of the following: If Seller enters into an Alternative
Transaction, then Seller will pay to Buyer the break-up fee. This break-up fee
and the return of the Deposit will serve as the exclusive remedy to Buyer under
this Agreement in the event the Buyer is not the successful bidder. The break-up
fee will be payable when the Alternative Transaction closes, provided that if an
Alternative Transaction is approved by the Bankruptcy Court but ultimately does
not close, Buyer shall be entitled to the break-up fee on the effective date of
Seller's liquidation, approval of a plan of reorganization, or sale of assets to
a third party that results in a cash payout that is at least equal to the amount
of the break-up fee. No break-up fee will be owed if Buyer terminates the
transaction for any reason other than as a result of an Alternative Transaction,
or Buyer willfully fails to comply with the conditions to Closing for the
purposes of delaying or precluding the Closing.
4.5 Expedited Approval Procedures. Seller and Buyer will take such action
as is reasonably available to them to seek approval of the Bankruptcy Court to
expedite a Sale Approval Order, and to avoid any suspension of operations or
provision of services to any customer in good standing. Seller and Buyer will
take such action as is reasonably available to them to meet the following
timetable:
Calendar days after
Execution of this
Agreement Action
---------- -------
+3 Filing of motion seeking approval of Sale Procedures Order
and Sale Approval Order
+20 Approval of Sale Procedures Order
+23 Deadline for submission of qualified bids
+25 Approval of Sale Approval Order and sale
(or auction, if qualified bids submitted)
+26 Effective date (Closing Date).
"Qualified bids" are bids providing for (i) distributions to creditors of
no less value than the Purchase Price after taking into account the payment
of the break-up fee to Buyer, plus the required bidding increment and (ii)
a reasonable level of liquidity available to Seller on the Closing Date. If
there are no other qualified bids submitted, the remaining timetable can be
accelerated.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF SELLER
As an inducement to Buyer to enter into this Agreement, Seller hereby
makes, to the best of Seller's Knowledge (except with respect to the
representations contained in Sections 5.4 and 5.6 which are made without any
such Knowledge limitation), as of the date hereof, the following representations
and warranties to Buyer regarding only those assets being transferred from
Seller to Buyer (subject only to the entry of the Sale Approval Order by the
Bankruptcy Court), except as set forth in the disclosure schedule accompanying
this Agreement, which is attached hereto as Exhibit G and referred to as the
"Disclosure Schedule". The Disclosure Schedule will be arranged in paragraphs
corresponding to the lettered and numbered paragraphs contained herein:
5.1 Organization and Authorization of Seller. Each of the WIN Parent and
every WIN Affiliate is duly organized, validly existing and in good standing
under the laws of its state of formation and each state in which it is
authorized to do business, and each such state is indicated on Section 5.1 of
the Disclosure Schedule.
5.2 Authorization of Transaction. Upon entry of the Sale Approval Order,
Seller has all necessary power and authority to enter into this Agreement and
has taken all action necessary (corporate or otherwise), to execute and deliver
this Agreement, to consummate the transactions contemplated hereby and to
perform its obligations hereunder, and no other proceedings on the part of
Seller are necessary to authorize the execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated hereby.
This Agreement has been duly executed and delivered by Seller and, upon entry of
the Sale Approval Order, is a valid and binding obligation of Seller,
enforceable against it in accordance with its terms (except to the extent that
enforcement may be affected by applicable bankruptcy, reorganization, insolvency
and similar laws affecting creditors' rights and remedies and by general
principles of equity (regardless of whether enforcement is sought at law or in
equity). Upon entry of the Sale Approval Order, each agreement or instrument
which has been or shall be entered into or executed and delivered by Seller in
connection with the transactions contemplated hereby has been (or will be) duly
authorized, executed and delivered by Seller, and is (or will be when
authorized, executed and delivered) a valid and binding obligation of Seller,
enforceable against it in accordance with its terms (except to the extent that
enforcement may be affect by laws relating to bankruptcy, reorganization,
insolvency and similar laws affecting creditors' rights and remedies and by
general principles of equity (regardless of whether enforcement is sought at law
or in equity)).
5.3 No Violation. Upon entry of the Sale Approval Order, the execution and
delivery of this Agreement and the other agreements specified herein and the
consummation of the transactions contemplated hereby and thereby do not and will
not conflict with or violate any statute or law, or any judgment, decree, order,
regulation or rule of any court or governmental authority, binding upon or
applicable to Seller or by which the property or assets of Seller, including the
Assets or the Business, are bound or affected. Seller has complied with all
provisions of and is not in breach or default (including any event or failure
that with the passage of time or giving of notice or both would become a breach
or default) under each Assumed Executory Contract or any Permit other than those
provisions which are unenforceable pursuant to ss. 365 of the Bankruptcy Code or
upon entry of an order of the Bankruptcy Court approving the assignment or
transfer of such Assumed Executory Contract or Permit.
5.4 Title to Assets. Upon entry of the Sale Approval Order and by the
Closing Date, Seller will have good and marketable title to all of the Assets to
be transferred to Buyer, free and clear of any Security Interest and any other
liens, claims and encumbrances as authorized pursuant to 11 U.S.C. ▇▇.▇▇. 363(f)
and 105(a) (other than encumbrances of record for Real Estate as described in
the Title Insurance Commitment), and will be free and clear of any Security
Interest. Neither Seller nor any WIN Affiliate has or will transfer any Asset
from a WIN Debtor to a WIN Affiliate that is not a WIN Debtor.
5.5 Governmental Consents and Approvals. Except for the Sale Approval
Order, the authorization of a license from the Sacramento County Metropolitan
Cable Commission and consent to transfer of Assets and customers, and any
necessary authorization by the CPUC, no consent, waiver, agreement, approval,
Permit or authorization of, or declaration, filing, notice or registration to or
with, any United States federal or state, local or foreign governmental or
regulatory authority is required to be made or obtained by Seller in connection
with the execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby or thereby, other than
notice to or filing with the Federal Communications Commission, and the approval
of such public utility commissions with jurisdiction over the operations of
Seller, and such franchising authorities and commissions with whom Seller has
franchise or similar agreements.
5.6 Books and Records. Seller has made and kept Books and Records and
accounts which, in reasonable detail, accurately and fairly reflect the
activities of Seller in all material respects, Seller has used its best efforts
to reconcile all of its property records with Inventory and Assets in place, and
Seller's inventory records identify the physical locations of Inventory and
Assets in place and material to the operation of Seller's Business as it is
currently conducted. Buyer has been provided with a current copy of such
Inventory records and list of Assets in place as of the date hereof.
5.7 Intellectual Property. Section 5.7 of the Disclosure Schedule lists all
of Seller's federal, state and foreign registrations of trademarks, service
marks and of other marks and trade names, and all pending applications for any
such registrations and all of Seller's patents and all applications therefore.
Seller owns or possesses adequate and enforceable (except as enforceability may
be limited by applicable bankruptcy, insolvency, reorganization and similar laws
affecting creditors' rights and remedies and by general equitable principles
(regardless of whether enforcement is sought in equity or law)) licenses or
other rights to use, all Intellectual Property that is material to the Business
or the System as currently conducted by Seller. Seller has not received any
written notice of invalidity, infringement or misappropriation of any rights of
others with respect to such Intellectual Property. Seller has taken all steps it
deems commercially reasonable to protect the Intellectual Property from
infringement by any other firm, corporation, association or person and to
maintain the value of the Intellectual Property. Seller has made all payments of
right-to-use and other one-time fees required to be paid to use any software or
other licenses and authorizations, and, other than maintenance fees and other
recurring charges that may be outstanding since March 11, 2002, or the amounts
payable in order to cure Assumed Executory Contracts identified in Exhibit B, no
other charges or fees are payable to any provider of Intellectual Property.
Except for issues of non-compliance relating to non-payment of fees and expenses
occurring prior to March 11, 2002, Seller is in compliance will all license and
other Intellectual Property agreements applicable to the Business or the System.
No other Person (a) has the right to use any trademarks, service marks or trade
names listed thereon, (b) has notified Seller that it is claiming any ownership
of or right to use such Intellectual Property, or (c) is infringing upon or
misappropriating any such Intellectual Property in any way. Seller's use of the
Intellectual Property is not infringing upon or otherwise violating the rights
of any third party in or to such Intellectual Property.
5.8 Real Estate. Section 5.8 of the Disclosure Schedule contains a
description of all of Seller's Real Estate, together with a description of the
use to which such real property is put in connection with the operation of the
Business.
a. The zoning of each parcel of Real Estate described in Section 5.8
of the Disclosure Schedule on which is situated an antenna or tower site,
microwave transmission and/or receive site, headend facility or satellite
earth receiving station permits the presently existing improvements and the
continuation of the business use now conducted on such parcel.
b. The Real Estate owned by, leased to or utilized by Seller has
direct and unobstructed access for purposes of ingress and egress to public
roads or streets or to private roads over which Seller has a valid
right-of-way. All such Real Estate is served by utilities and services
necessary for the continuation of the business use now conducted on such
Real Estate.
c. Except where the failure to so possess would not have a material
adverse effect on the Business, Seller possesses all easements or
rights-of-way, whether public or private, necessary for the construction,
operation, maintenance, repair or replacement of any cables, lines, towers,
equipment and other facilities which are used by Seller or the Business.
5.9 Environmental Matters. All operations currently performed by Seller are
in material compliance with all applicable Environmental Laws (including
obtaining and compliance with all permits and approvals required thereunder).
Other than the environmental issues related to Seller's lease for space at
▇▇▇▇▇▇▇▇▇ Park in Sacramento, California, Seller has not received and Seller is
not aware of any other person receiving, any notice of any administrative,
judicial or private party investigation, proceeding or action with respect to
violations, alleged or proven, of applicable Environmental Laws by Seller or
otherwise involving the Business which investigation, proceeding or action
could, if adversely resolved, materially and adversely affect the Business or
the Assets.
5.10 Franchises and Authorities. Section 5.10 of the Disclosure Schedule
lists all franchises, licenses and authorities used by Seller in connection with
the construction, operation or maintenance of the Business in Sacramento County,
California (the "Designated Authorities"). Seller is the valid holder and duly
authorized grantee of each of the Designated Authorities. Each of the Designated
Authorities is for the period specified in Section 5.10 of the Disclosure
Schedule. All of the Designated Authorities were duly authorized and entered
into or accepted by Seller, and validly issued and obtained by or transferred to
and accepted by Seller, in accordance with and as required by the terms thereof
and by applicable law. No other Designated Authority is required by law in
connection with the construction, operation and maintenance of the Business in
Sacramento County, California. Seller has all material governmental licenses,
permits, consents and other governmental rights, privileges and interests, other
than franchises, including without limitation governmental authorities and
authorizations from the FCC for business radio licenses, satellite earth
receiving facilities and CARS microwave facilities, that are necessary or
appropriate to carry on the Business in Sacramento County, California as
conducted on the date hereof, each of which is set forth in Section 5.10 of the
Disclosure Schedule, is in full force and effect and has not been revoked,
cancelled or encumbered (except to the extent that the failure to pay franchise
fees or other fees related to local government regulation operates as an
encumbrance).
5.11 Installation.
a. The Broadband Telecommunications and Cable System comprising the
Business has been constructed, installed and maintained in a good and
workmanlike manner in all material respects consistent with accepted
industry standards and is free from defects, reasonable wear and tear
excepted, and satisfies in all material respects the requirements of the
Designated Franchises, applicable technical standards and federal, state
and local laws, rules, regulations and orders including without limitation
the rules and regulations of the Federal Communications Commission and
state public utilities commissions.
b. All Equipment, wherever placed or located, is placed and maintained
pursuant to valid governmental authorities, contracts, or franchises. Each
authorization is in full force and effect authorizing such placement and
the continued maintenance thereof in the manner presently placed and
maintained by Seller. To Seller's Knowledge, none of the Equipment requires
or may require, because of incorrect, improper or unlawful construction,
installation or location, or due to the requirements of any authorizations
pursuant to which it has been installed or otherwise due to directives of
or claims by the person or entity giving such authorization or any other
person, any rearrangement, relocation, rehabilitation, reinstallation or
removal in any material respect or any material expenditure for any
additional or different equipment or facilities, or facilities or labor in
connection therewith.
c. Except for certain restoration issues occurring in the Ordinary
Course of Business, written notice of which has been provided to Buyer, no
material restoration, repair or other work is required with respect to (i)
the Assets or the Business except as required in the usual and ordinary
course of business, or (ii) any structure, street, sidewalk, easement,
right-of-way or other property, including without limitation adjacent or
abutting property, due to the construction, operation or maintenance of the
Business or is required by any federal, state or local laws, rules,
regulations, ordinances codes or orders or by any franchises, governmental
authorities or contracts.
5.12 Carriage of Signals and Rates. Seller has the legal right and
authority, including without limitation all necessary authority from the FCC and
the requisite compulsory copyright license under Section 111 of the Copyright
Act, to carry and use in the conduct of the Business all of the stations,
frequencies or programming (whether broadcast, television, satellite, radio or
otherwise) carried by the Business, all as shown in Section 5.12 of the
Disclosure Schedule. No oral or written notices have been received from the FCC,
the United States Copyright Office, any local or other television station or
system or from any other person or entity, station or governmental authority
claiming to have a right of objection challenging or questioning the right of
Seller or the Business to carry or furnish, or not to carry or furnish, any of
the signals or any other station or service to any customer of the Business.
Section 5.12 of the Disclosure Schedule sets forth the rates charged by Seller
in connection with the Business for every service, level of service, package of
services, installations, or other services, equipment or items for which Seller
has an established charge as of the date of this Agreement. Seller has not
received any written requests, notices or demands from the FCC or any other
governmental authority, or any other person, challenging or questioning the
legal rights of Seller to operate the Business or carry any broadcast television
signal or requesting signal carriage pursuant to the FCC's "must-carry" rules.
All of the local broadcast television signals carried by the Business are
carried either pursuant to the must-carry requirements or pursuant to executed
retransmission consent agreements.
5.13 Physical Plant and Subscribers.
a. The Broadband Telecommunications and Cable System constructed in
Sacramento County, California has approximately Three Hundred Six (306)
fully completed and operational strand and conduit miles of cable system
and lines, of which approximately One Hundred Eighty-Two (182) miles are
aerial and approximately One Hundred Twenty-Four (124) miles are installed
underground. For purposes of this Agreement, a "strand" or "conduit" mile
is considered to be one mile measured along any continuous single line of
aerial or underground cable installation, irrespective of the total number
of cables on or in such installation.
b. There are approximately Forty-Two Thousand (42,000) homes passed by
cables comprising the Broadband Telecommunications and Cable System in
Sacramento County. For purposes of this Agreement, homes means free
standing single family residential dwelling units and individual dwelling
units within apartment buildings, condominiums and townhouses within the
franchise areas (excluding commercial structures), and homes passed means
homes existing as of the date of this Agreement within the franchise areas
and permitting service by the Business without any expense to Buyer for
extension or modification of the System other than installation of a
standard drop or tap and computer provisioning expenses.
c. The Broadband Telecommunications and Cable System has the capacity
of Eight Hundred Sixty (860)-MHz downstream channels over 100% of the
System. The System provides reception on all channels offered in compliance
with the requirements of the franchises, in full compliance with the rules
and regulations of the FCC, and meets all the material technical standards
of ss. 76.605 of the rules and regulations of the FCC which are legally
required to be met by the System. The Broadband Telecommunications and
Cable System is authorized to utilize all frequencies currently used in the
frequency bands generally allocated for use for the specific services
offered, and in the manner currently used. No part of the Broadband
Telecommunications and Cable System has failed to comply with applicable
signal leakage rules and regulations, and Seller has completed the
independent testing required to be filed with the FCC in June, 2002. Seller
has met the conditions and requirements that are applicable to emergency
alert systems or has otherwise sought a deferral or waiver of such
conditions and requirements.
d. Seller has provided Buyer with the approximate number of customers
receiving services in the Sacramento County, California portion of the
Business as of May 24, 2002, including the identification of the number of
customers purchasing each level of service offered by Seller in Sacramento
County, California.
5.14 FCC, Copyright Office and CPUC.
a. Seller has timely and accurately made all requisite filings and
payments with the Register of Copyrights and is otherwise in compliance
with all applicable rules and regulations of the Copyright Office. Seller
has made available to Buyer true and complete copies of all reports and
filings made or filed pursuant to copyright rules and regulations with
respect to the Business.
b. Seller has made available to Buyer true and complete copies of the
final versions of all forms filed with the FCC that have been prepared with
respect to the Business and the System, and filed with any governmental
authority, and any other written materials or documentation relating to
rate matters. Seller has timely and properly made all filings,
applications, reports and other submissions required under federal law and
rules and regulations promulgated thereunder, in each case relevant to the
conduct and operation of the Business and the System, and the operation of
the Business and the System is in compliance with all applicable provisions
of federal law including with respect to Section 76.605 of the rules and
regulations promulgated by the FCC, and any emergency alert requirements
adopted by the FCC or other governmental agency.
c. Seller has made all necessary filings with the CPUC necessary to
conduct the Business and operate the System, and to locate any of the
Assets in California, and has otherwise operated the Business and the
System in full compliance with California law and the rules and regulations
administered by the CPUC.
5.15 Personnel Information. Seller has provided to Buyer a true and
complete list of all of Seller's Personnel, which list includes a listing of
each individual's (i) name, (ii) title or position and (iii) an indication of
whether each such Person is employed on a full- or part-time basis as of the
date hereof. It is expressly understood that Buyer shall not be obligated by
this Agreement to employ any employees of Seller, or to honor any promise or pay
any wages or other compensation promised or earned at any time prior to Closing.
Seller has provided to Buyer true and correct copies of each written employment
contract, or similar agreement with any employee, officer, director, member or
shareholder of Seller, each of which is identified in Section 5.15 of the
Disclosure Schedule. Seller is not a party to or subject to any labor, union or
collective bargaining agreement or arrangement and Seller has not recognized,
nor is it required to recognize nor has it received any demand for recognition
by any collective bargaining representative with respect to employees of Seller.
There have been no labor or employment disputes nor is Seller aware of any union
organization activity involving Seller or the Business.
5.16 Litigation. Except as set forth in Section 5.16 of the Disclosure
Schedule or the proceeding in the Bankruptcy Case, there is no litigation or
governmental proceeding affecting the Seller and the Assets, nor, to the
Knowledge of Seller, including the knowledge of its counsel is there any
threatened or pending litigation or governmental proceeding.
5.17 Employee Benefits. Neither Seller nor any Employee Benefit Plan or
Multiemployer Plan (as those terms are defined in ERISA) maintained by Seller or
its Affiliates or to which Seller or its Affiliates has or has had the
obligation to contribute in respect of any employees that render services in
connection with the System, is in violation of the provisions of ERISA or the
Internal Revenue Code; no reportable event, within the meaning of ERISA, has
occurred and is continuing with respect to any such Employee Benefit Plan or
Multiemployer Plan; no prohibited transaction, within the meaning of Title I of
ERISA, has occurred with respect to any such Employee Benefit Plan or
Multiemployer Plan; Seller has not failed to make any contribution or payment
required by Seller in respect of any such Employee Benefit Plan or Multiemployer
Plan so as to cause Buyer to have responsibility or liability for such amount;
and, except for Cablexpress, Inc., Seller has complied with all COBRA
requirements relating to continuation of health care coverage for Seller's
employees (and dependents) rendering services in connection with the System.
Section 5.17 of the Disclosure Schedule identifies each Employee Benefit Plan of
Seller or its Affiliates.
5.18 Permits. Section 5.18 of the Disclosure Schedule identifies all
material Permits (other than Permits relating to owned or leased Real Estate),
with all federal, state, county, local or other governmental authorities.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF BUYER
As an inducement to Seller to enter into this Agreement, Buyer hereby makes
the following representations and warranties as of the date hereof to Seller:
6.1 Organization of Buyer. Buyer is a duly organized corporation, validly
existing and in good standing under the laws of the State of California.
6.2 Authorization. Buyer has all necessary corporate power and authority to
enter into this Agreement and has taken all corporate action necessary, to
execute and deliver this Agreement, to consummate the transactions contemplated
hereby and to perform its obligations hereunder, and no other corporate
proceedings on the part of Buyer are necessary to authorize the execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby. This Agreement has been duly executed and
delivered by Buyer and is a valid and binding obligation of Buyer, enforceable
against it in accordance with its terms (except to the extent that enforcement
may be affected by applicable bankruptcy, reorganization, insolvency and similar
laws affecting creditors' rights and remedies and by general principles of
equity (regardless of whether enforcement is sought at law or in equity)). Each
agreement or instrument which has been or shall be entered into or executed and
delivered by Buyer in connection with the transactions contemplated hereby has
been (or will be) duly authorized, executed and delivered by Buyer, and is (or
will be when authorized, executed and delivered) a valid and binding obligation
of Buyer, enforceable against it in accordance with its terms (except to the
extent that enforcement may be affect by laws relating to bankruptcy,
reorganization, insolvency and similar laws affecting creditors' rights and
remedies and by general principles of equity (regardless of whether enforcement
is sought at law or in equity)).
6.3 Governmental Consents and Approvals. Other than the Sale Approval
Order, and the approval of the CPUC, no consent, waiver, agreement, approval,
Permit or authorization of, or declaration, filing, notice or registration to or
with, any English federal or local governmental or regulatory authority is
required to be made or obtained by Buyer in connection with the execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby or thereby.
6.4 No Violation. The execution and delivery of this Agreement and the
other agreements specified herein and the consummation of the transactions
contemplated hereby and thereby do not and will not (i) violate any provision of
the Articles of Incorporation or Bylaws of Buyer or (ii) conflict with or
violate any statute or law, or any judgment, decree, order, regulation or rule
of any court or governmental authority, binding upon or applicable to Buyer or
by which the property or assets of Buyer, including the Assets, are bound or
affected.
6.5 Financial Capacity. Buyer has access to sufficient financial resources
to consummate the transactions contemplated hereby.
ARTICLE 7
PRE-CLOSING COVENANTS OF BUYER AND SELLER
Seller and Buyer covenant and agree with each other that from the date
hereof through the Closing:
7.1 General. Each of the parties shall, upon the terms and subject to the
conditions contained herein, pursue diligently and in good faith and use all
reasonable efforts to take, or cause to be taken, all actions and to do, or
cause to be done, all things necessary or advisable under applicable laws and
regulations to put, consummate and make effective the transactions contemplated
hereby.
7.2 Maintenance and Operation of Business Prior to Closing. Seller shall
operate its Business in the Ordinary Course of Business, including remediation
or other ordinance compliance work, subject to the requirements of the
Bankruptcy Code and the Bankruptcy Court. Seller shall not suspend, terminate or
further limit sales, marketing or other operations in Sacramento County without
five (5) Business Days' prior notice to and authorization of Buyer.
Notwithstanding the foregoing, Seller reserves the right to adjust staffing
levels and other cash expenditures consistent with the needs of the Business, so
long as the Business is not compromised as of Closing. Seller and Buyer shall
consult prior to changes to staffing and cash expenditures to reach reasonable
adjustments to overhead.
7.3 Investigation by Buyer. Seller shall allow Buyer and its
Representatives and the financial institutions (and their counsel and
representatives), if any, providing or proposed to provide financing in
connection with this Agreement and the transactions contemplated hereby, during
regular business hours upon reasonable notice, to make such inspection of the
Assets, Business and operations of Seller and to inspect and make copies of
contracts, Books and Records and all other documents and information requested
by Buyer and related to the operations and Business of Seller, including,
without limitation, historical financial information concerning the business of
Seller, and to meet with Seller's designated personnel and/or their
representatives. Seller shall make available to Buyer promptly upon reasonable
request (i) all additional documents and information with respect to the affairs
of Seller relating to the Business and (ii) access to the Personnel and to
Seller's Representatives as Buyer, or its Representatives, may from time to time
reasonably request and shall instruct such Personnel and Representatives to
cooperate with Buyer and its Representatives, and to make available such
documents and information as Buyer and its Representatives may request. Buyer
shall not be restricted from access to any current or former employee.
7.4 Consents and Reasonable Efforts. Seller shall take all reasonable
actions required (i) to obtain at the earliest practicable date all consents,
Permits, waivers, approvals, authorizations and agreements of, and promptly to
give all notices to, effect all registrations pursuant to, and make all other
filings with or submissions to, any third parties, including, without
limitation, applications for transfer of the Assets and any other filings or
submissions with governmental and regulatory authorities, necessary or advisable
to authorize approve or permit the consummation of the transactions contemplated
hereby (to the extent transferable or assignable), and (ii) to cooperate with
Buyer in Buyer's defense of all legal proceedings, whether judicial or
administrative and whether brought derivatively or on behalf of third parties
(including government agencies or officials), challenging this Agreement or the
consummation of the transactions contemplated hereby or thereby. Buyer shall
furnish to Seller such necessary information and reasonable assistance as Seller
may request in connection with the preparation of all necessary filings with any
third parties, including, without limitation, governmental and regulatory
authorities. Seller shall confer with Buyer to determine the appropriate
handling of construction issues and treatment of previous construction under
Seller's various state and local construction authorizations. Seller shall have
identified and resolved any issue related to Executory Contracts with providers
of video programming for the Broadband Telecommunications and Cable System under
which Seller would be responsible to pay or compensate such providers for
advance discounts and upfront payments. If Buyer determines that action is
necessary to address past commitments or obligations, Seller will act consistent
with Buyer's determination (other than a determination that Seller should be
responsible for monetary commitments or obligations), and work with Buyer to
resolve any outstanding issues, including actions that may be required
post-Closing. If a penalty, fine or forfeiture is assessed with respect to any
pre-Closing construction or network deployment, such penalty, fine or forfeiture
shall be the responsibility of Seller.
7.5 Notification of Certain Matters. Each party will give prompt written
notice to the other party of any material adverse development causing a breach
of any of its own representations and warranties in Articles 5 and 6 above. Any
such disclosure prior to Closing will not be considered a breach of this
Agreement if the Closing takes place.
7.6 Delivery of Bankruptcy Pleadings. Seller shall ensure that Buyer
receives copies of all pleadings and other documents filed by Seller with the
Bankruptcy Court within six (6) hours of the time that such document is filed
with the Bankruptcy Court. Documents filed after 3 P.M. shall be delivered not
later than noon on the following day.
ARTICLE 8
TITLE TO REAL ESTATE
8.1 Title Insurance Commitment and Policy. Seller shall furnish to Buyer,
at Seller's expense, the Title Insurance Commitment on or before ten (10) days
subsequent to the execution hereof. Copies or abstracts of the instruments
listed in the schedule of exceptions in the Title Insurance Commitment shall
also be furnished to Buyer at Seller's expense on such date. This requirement
shall pertain only to instruments shown of record in the office of the clerk and
recorder of the designated county or counties (the Title Insurance Commitment,
together with the copies or abstracts of such exceptions, are hereinafter
referred to as the "Title Documents"). Seller shall have the title insurance
policy delivered to Buyer as soon as practicable after Closing, and shall pay
the premium therefore at Closing.
8.2 Inspection of Title Documents. Buyer shall have the right to inspect
the Title Documents. Written notice by Buyer of unmerchantibility of title or
any other material unsatisfactory title condition shown by the Title Documents
shall be signed by or on behalf of Buyer and given to Seller on or before five
(5) Business Days after Buyer's receipt of the Title Documents. If Seller does
not receive Buyer's notice by the date specified above, Buyer shall be deemed to
have accepted the condition of title as disclosed by the Title Documents as
satisfactory.
8.3 Matters not Shown by Public Record. Seller shall deliver to Buyer on or
before the date specified in Section 8.1, copies of surveys, if any, in Seller's
possession. Buyer shall have the right to inspect the Real Estate subject to the
Title Insurance Commitment to determine if any third party has any right in such
Real Estate not shown by the public records. Written notice by Buyer of any
material unsatisfactory condition(s) revealed in any survey or by Buyer's
inspection shall be signed by or on behalf of Buyer and given to Seller on or
before twenty (20) days subsequent to the execution hereof. If Seller does not
receive Buyer's notice by the date specified above, Buyer shall be deemed to
have accepted the condition of title as satisfactory.
8.4 Right to Cure. If Seller receives a notice of unmerchantibility of
title or any other unsatisfactory title condition(s) from Buyer as provided in
this Article, Seller shall use reasonable efforts to correct such unsatisfactory
title condition(s) on or before the Closing Date, which shall be a condition to
Buyer's obligation to close (unless waived by Buyer).
ARTICLE 9
CONDITIONS TO OBLIGATIONS TO CLOSE
9.1 Conditions to Obligation of Buyer. The obligation of Buyer to
consummate the transactions to be performed by it in connection with the Closing
is subject to satisfaction of the following conditions:
a. Seller shall have delivered a copy of the resolutions of its
members or board of directors (as the case may be), authorizing the
execution and delivery of this Agreement and the consummation of the
transactions set forth herein. Such resolutions shall be certified by an
authorized officer or manager of Seller and as being true and correct and
in full force and effect as of the Closing Date;
b. The representations and warranties set forth in Article 5 above
shall be true and correct at and as of the Closing Date in all material
respects and the Sale Procedures Order shall be in full force and effect;
c. Seller shall have performed and complied with all of its covenants
hereunder in all material respects through and as of the Closing;
d. No actions by any governmental authority shall have been initiated
for the purpose of enjoining or preventing the transactions contemplated
hereby;
e All actions to be taken by Seller in connection with consummation of
the transactions contemplated hereby and all certificates, opinions,
instruments and other documents required to effect the transactions
contemplated hereby will be reasonably satisfactory in form and substance
to Buyer;
f. Seller's Sacramento business shall be in continuous ongoing
operation through Closing without degradation of service quality or
reliability, and without a decline of more than 5% in the number of
customers from April 1, 2002;
g. Buyer shall have received a ▇▇▇▇ of sale or assignments with
respect to all Assets that are within and outside the jurisdiction of the
Bankruptcy Court and that it determines are necessary to utilize the Assets
effectively immediately after Closing as part of a going business in
Sacramento County;
h. Not later than July 10, 2002, the Sale Approval Order, in form and
substance reasonably acceptable to Buyer, shall have been entered, after
due and sufficient notice, by the Bankruptcy Court, approving this
Agreement, as executed and delivered, and approving and directing the
transfer to Buyer of the Assets to be transferred or assumed hereunder,
free and clear of all Security Interests including without limitation all
liens, claims, encumbrances, and other interests and restrictions,
including mechanics' liens pursuant to Sections 363(b) and 363(f) of the
Bankruptcy Code and finding Buyer to be a good faith purchaser within the
meaning of Section 363(m) of the Bankruptcy Code, and either (i) the Sale
Approval Order shall be a Final Order or (ii) the stay of the Sale Approval
Order under Rule 6004(g) of the Federal Rules of Bankruptcy Procedure shall
have been ordered to be not applicable; and
i. Seller shall have delivered to Buyer a certificate to the effect
that each of the conditions specified above (9.1a through 9.1h) are
satisfied in all respects.
9.2 Conditions to Obligation of Seller. The obligation of Seller to
consummate the transactions to be performed by it in connection with the Closing
is subject to satisfaction of the following conditions:
a. The Bankruptcy Court shall have issued the Sale Approval Order
authorizing and confirming each of the provisions of this Agreement and the
transactions contemplated herein by July 9, 2002, and either (i) the Sale
Approval Order shall be a Final Order or (ii) the stay of the Sale Approval
Order under Rule 6004(g) of the Federal Rules of Bankruptcy Procedure shall
have been ordered to be not applicable;
b. Buyer shall have delivered a copy of the resolutions of its board
of directors authorizing the execution and delivery of this Agreement and
the consummation of the transactions set forth herein. Such resolutions
shall be certified by an authorized officer of Buyer and as being true and
correct and in full force and effect as of the Closing Date;
c. The representations and warranties set forth in Article 6 above
shall be true and correct in all material respects at and as of the Closing
Date;
d. Buyer shall have performed and complied with all of its covenants
hereunder in all material respects through the Closing;
e. No action, suit or proceeding shall be pending or threatened before
any court or quasi-judicial or administrative agency of any federal, state,
local or foreign jurisdiction or before any arbitrator wherein an
unfavorable injunction, judgment, order, decree, ruling or charge would (i)
prevent consummation of any of the transactions contemplated by this
Agreement, (ii) cause any of the transactions contemplated by this
Agreement to be rescinded following consummation, or (iii) affect adversely
the right of Buyer to own the Assets and to operate the Business; and
f. Buyer shall have delivered to Seller a certificate to the effect
that each of the conditions specified above in (9.2a through 9.2e) is
satisfied in all respects.
g. All actions to be taken by Seller in connection with consummation
of the transactions contemplated hereby and all certificates, opinions,
instruments and other documents required to effect the transactions
contemplated hereby will be reasonably satisfactory in form and substance
to Seller. Seller may waive any condition specified in this Section 9.2 if
it executes a writing so stating at or prior to the Closing.
ARTICLE 10
RISK OF LOSS
10.1 Risk of Loss. Seller acknowledges and agrees that Buyer does not have
any Liability or obligation to Seller in respect of any loss, theft or damage to
property experienced by Seller at any time, whether occurring prior to, on or
after the date hereof. If Closing occurs, Buyer shall be entitled to the
proceeds of any insurance or other proceeds payable with respect to the losses
on the Assets for loss or damage occurring prior to the Closing Date, whether
received prior to, at or after Closing. This Article shall survive the Closing.
ARTICLE 11
POST-CLOSING COVENANTS
11.1 General. In case at any time after the Closing any further action is
necessary or desirable to carry out the purposes of this Agreement, each of the
parties will take such further action (including the execution and delivery of
such further instruments and documents) as any other party reasonably may
request, all at the sole cost and expense of the requesting party. If as of the
Closing, there are conditions that remain to be performed or representations and
warranties that are untrue and require cure as determined in the absolute
discretion of Buyer, then such issues shall be addressed through the
Indemnification procedure set forth in Section 13.1 and the Holdback procedure
set out in Sections 2.3 and 2.4.
11.2 Litigation Support. In the event and for so long as any party actively
is contesting or defending against any action, suit, proceeding, hearing,
investigation, charge, complaint, claim or demand in connection with (i) any
transaction contemplated under this Agreement or (ii) any fact, situation,
circumstance, status, condition, activity, practice, plan, occurrence, event,
incident, action, failure to act or transaction on or prior to the Closing Date
involving Seller, the other party will cooperate with the contesting or
defending party and such party's counsel in the contest or defense, make
available its personnel, and provide such testimony and access to its books and
records as shall be necessary in connection with the contest or defense. Costs
of counsel to the other party shall be at the sole cost and expense of the
contesting or defending party.
11.3 Transition. Seller will not take any action, or permit any of its
Personnel to take any action, that is designed or intended to have the effect of
discouraging any lessor, licensor, customer, supplier or other business
associate of Seller from maintaining the same business relationships with Buyer
after the Closing as it maintained with Seller prior to the Closing. Seller will
take such reasonable affirmative action as is requested by Buyer to assist Buyer
to develop or continue business relationships between Buyer and third parties,
including customers and parties to Executory Contracts with whom Buyer seeks to
continue a business relationship after Closing. Seller will cause its Personnel
to refer all customer inquiries relating to the Business to Buyer from and after
the Closing.
11.4 Title Insurance Policy. As set forth in Section 8.1, Seller will have
the title insurance policy for the Real Estate issued on a basis consistent with
the commitment, and delivered to Buyer as soon as practicable after Closing.
11.5 Access to Books and Records. Following the Closing, Buyer will permit
Seller, during normal business hours, to have reasonable access to the
personnel, Books and Records and other data related to the Business with respect
to periods prior to Closing, and the right to make copies and extracts
therefrom, to the extent that such access may be reasonably required in
connection with (a) the preparation of Tax returns and financial statements, (b)
compliance with the requirements of any governmental or regulatory authority,
(c) the determination of rights and obligations under this Agreement and (d) the
performance of Seller's duties, obligations and rights under the Bankruptcy Code
and the Bankruptcy Case. Further, Buyer agrees for a period of six (6) years
after the Closing Date, not to destroy or otherwise dispose of the Books and
Records and other data related to the Business unless Buyer first offers in
writing to surrender the Books and Records and other data to Seller.
ARTICLE 12
TERMINATION
12.1 Termination of Agreement. This Agreement may be terminated prior to
the Closing:
a. By mutual written consent executed by both Buyer and Seller
(subject to the approval of the Bankruptcy Court) at any time;
b. By either party and if such party is not in breach of this
Agreement, if the Closing does not occur by August 1, 2002;
c. By Buyer, if any event occurs which renders satisfaction of one or
more of the conditions to Buyer's obligations set forth in Article 9.1
impossible; and
d. By Seller, if any event occurs which renders satisfaction of one or
more of the conditions to Seller's obligations set forth in Article 9.2
impossible.
12.2 In the Event of Termination; Remedies. If any party terminates this
Agreement pursuant to Section 12.1 above, all rights and obligations of the
parties hereunder shall terminate without any Liability of any party to any
other Party (except for as otherwise provided herein); provided, however, that
such termination shall not affect Seller's obligations pursuant to Section
2.3(a) and Section 14.10 (Termination of Covenants, etc.) and Buyer's
obligations pursuant to Section 2.3(a) hereof.
ARTICLE 13
INDEMNITY
13.1 Seller's Indemnity. Seller covenants and agrees to defend, indemnify
and hold harmless Buyer and its Affiliates and their respective Personnel (the
"Indemnitees"), up to the amount of the Holdback Amount (provided that no claim
may be brought under this Section 13.1 unless and until the aggregate amount of
all claims is at least $50,000 whereupon all claims including the first $50,000
of such claims may be pursued), from and against any and all actual liabilities
and obligations asserted or other claims, actions judgments, assessments, taxes
(including without limitation federal, state and local income taxes and property
taxes), charges, fines, penalties, debts, damages, costs or expenses of any kind
(including without limitation reasonable legal fees and costs) suffered,
incurred or accrued by any of the Indemnitees directly arising from the
following:
a. the breach of any representation or warranty made by Seller in
Sections 5.7 (Intellectual Property), 5.9 (Environmental Matters), 5.12
(Carriage of Signals and Rates), 5.14 (FCC, Copyright Office and CPUC),
5.17 (Employee Benefits) and 5.18 (Permits) under this Agreement, any
Exhibit or any document, instrument or certificate delivered by Seller
pursuant to such sections in this Agreement, including the material falsity
or inaccuracy thereof; or
b. the breach or default by Seller in the observance or
performance of any of Seller's other obligations under this Agreement.
ARTICLE 14
MISCELLANEOUS
14.1 Assignment; Successors. Neither this Agreement nor any of the rights
or obligations hereunder may be assigned by any party without the prior written
consent of all other parties to this Agreement. Seller consents to the
assignment by Buyer of its rights pursuant to this Agreement, to any Affiliate
of Buyer; provided, however, that no such assignment by Buyer shall relieve
Buyer of any of its obligations hereunder and any such assignee shall only have
such rights (as limited hereunder) and obligations as Buyer now has hereunder.
Any assignment or attempted assignment in violation of this Section shall be
void. Subject to the foregoing, this Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective representatives,
heirs, legatees, successors and permitted assigns, including without limitation
any Chapter 11 or Chapter 7 trustee appointed in the Bankruptcy Case, and no
other person shall have any right, benefit or obligation hereunder.
14.2 Notices. Any notice required to be given under this Agreement shall be
given in writing and may be served either by personal delivery, email,
facsimile, Federal Express or a similar recognized national over-night delivery
or courier service, postage and shipping prepaid, addressed to the respective
parties as indicated below, or such different address as a party may have fixed
by notice hereunder:
If to Seller, addressed to:
Western Integrated Networks, LLC
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇
with a copy to
Attorneys for Seller:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇ & Company, P.C.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇ ▇▇▇-▇▇▇▇
Fax: ▇▇▇ ▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇
If to Buyer, addressed to:
SureWest Communications
Attn: ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇ ▇▇▇-▇▇▇▇
Fax: ▇▇▇ ▇▇▇-▇▇▇▇
Email: ▇.▇▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇
with a copy to
Attorneys for Buyer:
▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇, White & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇ ▇▇▇-▇▇▇▇
Fax: ▇▇▇ ▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇▇▇▇@▇▇▇▇▇▇.▇▇▇
and a copy to
Risa ▇▇▇▇ ▇▇▇▇-▇▇▇▇▇, Esq.
Holland & ▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇ ▇▇▇-▇▇▇▇
Fax: ▇▇▇ ▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
or to such other place and with such other copies as either party may designate
as to itself by written notice to the others.
Notices delivered personally shall be effective upon delivery. Notices
transmitted by e-mail, facsimile or overnight delivery shall be effective when
received provided they are received during normal business hours of the
recipient on a Business Day, and if not, the next Business Day.
14.3 Choice of Law. This Agreement shall be construed and interpreted, and
the rights of the parties determined in accordance with, the laws of the State
of Colorado. Each party irrevocably consents to the service of any and all
process in any action or proceeding arising out of or relating to this Agreement
by the mailing of copies of such process to each party at its address specified
in Section 14.2. The parties hereto irrevocably submit to the exclusive
jurisdiction of the Bankruptcy Court (or any court exercising appellate
jurisdiction over the Bankruptcy Court) over any dispute arising out of or
relating to this Agreement or any other agreement or instrument contemplated
hereby or entered into in connection herewith or any of the transactions
contemplated hereby or thereby and any such dispute shall be deemed to have
arisen in the State of Colorado. Each party hereby irrevocably agrees that all
claims in respect of such dispute or proceedings may be heard and determined in
such courts. The parties hereby irrevocably waive, to the fullest extent
permitted by applicable law, any objection which they may now or hereafter have
to the laying of venue of any such dispute brought in such court or any defense
of inconvenient forum in connection therewith.
14.4 Entire Agreement; Amendments and Waivers. This Agreement, together
with all exhibits and schedules attached or to be attached hereto constitutes
the entire agreement among the parties pertaining to the subject matter hereof
and supersedes all prior agreements, understandings, negotiations and
discussions, whether oral or written, of the parties (except the Confidentiality
Agreement); provided that the forms of agreements that may be attached hereto as
Schedules or Exhibits shall be superseded by the copies of such agreements by
the parties thereto to be conclusive evidence of such parties' approval of any
change or modification or waiver of this Agreement shall be binding unless
executed in writing by or on behalf of the party to be bound thereby. No waiver
of any of the provisions of this Agreement shall be deemed or shall constitute a
waiver of any other provision hereof (whether or not similar), nor shall such
waiver constitute a continuing waiver unless otherwise expressly provided.
14.5 Third Party Beneficiaries. No Person other than the parties hereto,
shall have any rights or claims under or by virtue of this Agreement.
14.6 No Waiver. The failure of either party hereto to seek redress for any
breach, or to insist upon the strict performance, of any covenant or condition
of the Agreement by the other shall not be, or be deemed to be, a waiver of the
breach or failure to perform, nor prevent a subsequent act or omission in
violation of, or not strictly complying with, the terms hereof from constituting
a default hereunder.
14.7 Multiple Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. This Agreement may be
executed by facsimile provided that original signatures are delivered within
five (5) Business Days thereof.
14.8 Invalidity. In the event that any one or more of the provisions, or
any portion thereof contained in this Agreement or in any other instrument
referred to herein, shall, for any reason, be held to be invalid, illegal or
unenforceable in any respect, then to the maximum extent permitted by law, such
invalidity, illegality or unenforceability shall not affect any other provision,
or any portion thereof, of this Agreement or any other such instrument.
14.9 Publicity. No party shall issue any press release or make any public
statement regarding the transactions contemplated hereby, without the prior
approval of the other party, and the parties hereto shall issue a mutually
acceptable press release as soon as practicable after the entry of the Sale
Approval Order; provided that nothing herein shall be deemed to prohibit any
party from making any disclosure which its counsel deems necessary in order to
fulfill such party's disclosure or notice obligations imposed by law or by the
Sale Procedures Order.
14.10 Cumulative Remedies. All rights and remedies of either party hereto
are cumulative of each other and of every other right or remedy such party may
otherwise have at law or in equity, and the exercise of one or more rights or
remedies shall not prejudice or impair the concurrent or subsequent exercise of
other rights or remedies; provided, however, that any Person pursuing any rights
and remedies with respect to access to Books and Records shall first agree to
reasonable confidentiality restriction with Buyer.
14.11 Termination of Covenants, Representations, and Warranties. The
covenants, representations, and warranties made by Seller and/or Buyer herein
shall terminate as of the Closing, except for the covenants, representations and
warranties and other terms set out in Article 1, Section 1.1 (Defined Terms),
and Articles 4.4 (Break-Up Fee), 10 (Risk of Loss), 11 (Post-Closing Covenants),
12 (Termination), 13 (Indemnity) and 14 (Miscellaneous). Other than as provided
in Article 13, Buyer shall have no right to seek indemnification subsequent to
the Closing based on a breach of a representation and/or warranty made by Seller
herein or in any other document, certificate or instrument entered into by the
Seller in connection herewith.
14.12 No Impediment to Liquidation. Nothing herein shall be deemed or
construed so as to limit, restrict or impose any impediment to Seller's right to
liquidate, dissolve and wind-up its affairs and to cease all business activities
and operations not included in the transaction at any time as it may determine
that is at least 120 days following the Closing.
14.13 Representation by Counsel; Mutual Negotiation. Each party has been
represented by counsel of its choice in negotiating this Agreement. This
Agreement shall therefore be deemed to have been negotiated and prepared at the
joint request, direction and construction of the parties, at arm's length, with
the advice and participation of counsel, and will be interpreted in accordance
with its terms without favor to any party.
IN WITNESS WHEREOF, Buyer and Seller have caused this Asset Purchase
Agreement to be executed by their respective duly authorized officers, and have
caused their respective corporate seals to be hereunto affixed, all as of the
day and year first above written.
SELLER:
WESTERN INTEGRATED NETWORKS, LLC
By: __________________________
Name: _____________________
Its: _________________________
(for itself and for all WIN Affiliates)
BUYER: SUREWEST COMMUNICATIONS
By: _________________________
Name: _________________________
Its: __________________________
EXHIBITS
Exhibit A - Not Filed herewith
Exhibit B - Not Filed herewith
Exhibit C - Not Filed herewith
Exhibit D - Not Filed herewith
Exhibit E - Not Filed herewith
Exhibit F - Not Filed herewith
Exhibit G - Not Filed herewith