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ASSET SALE AGREEMENT
by and between
U.S. WIRELESS CORPORATION, ET AL
and
TRAFFICMASTER USA, INC.
dated as of November 12, 2001
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TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS AND INTERPRETATION
Section 1.01 Definitions.............................................................. 2
Section 1.02 Interpretation........................................................... 8
ARTICLE II
PURCHASE AND SALE OF ASSETS
Section 2.01 Sale and Transfer of Assets.............................................. 8
Section 2.02 Retained Assets.......................................................... 9
Section 2.03 Assumption of Liabilities................................................ 9
Section 2.04 The Purchase Price....................................................... 9
Section 2.05 ▇▇▇▇▇▇▇ Money Deposit.................................................... 10
ARTICLE III
THE CLOSING
Section 3.01 The Closing.............................................................. 10
Section 3.02 Deliveries by Seller..................................................... 10
Section 3.03 Deliveries by Buyer...................................................... 11
ARTICLE IV
REPRESENTATIONS AND
WARRANTIES OF SELLER
Section 4.01 Title to Assets; Encumbrances............................................ 11
Section 4.02 Intellectual Property.................................................... 12
Section 4.03 Organization............................................................. 13
Section 4.04 Board Approval; Authority Relative to this Agreement..................... 13
Section 4.05 Governmental Consents and Approvals...................................... 13
Section 4.06 No Violations............................................................ 13
Section 4.07 Litigation............................................................... 14
Section 4.08 No Default............................................................... 14
Section 4.09 No Violation of Law...................................................... 14
Section 4.10 Environmental Matters.................................................... 14
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Section 4.11 Title to and Use of Property............................................. 14
Section 4.12 Absence of Conflicts..................................................... 14
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF BUYER
Section 5.01 Organization............................................................. 15
Section 5.02 Authorization............................................................ 15
Section 5.03 Binding Agreement........................................................ 15
Section 5.04 Consents and Approvals; No Violations.................................... 16
Section 5.05 Brokers or Finders....................................................... 16
ARTICLE VI
COVENANTS
Section 6.01 Interim Operations of the Business....................................... 16
Section 6.02 Access................................................................... 17
Section 6.03 Efforts and Actions to Cause Closing to Occur............................ 17
Section 6.04 Assigned Contracts; Certain Adjustments.................................. 17
Section 6.05 Approval of Break-Up Fee and Overbid Procedures.......................... 18
Section 6.06 Bankruptcy Court Filings................................................. 18
Section 6.07 Employee Matters......................................................... 18
Section 6.08 Subsequent Actions....................................................... 18
Section 6.09 Completion of Non-assignable Assigned Contracts.......................... 18
Section 6.10 Renewal-Period of Real Property Leases................................... 19
Section 6.11 Tax Matters.............................................................. 19
Section 6.12 General Cooperation...................................................... 19
Section 6.13 Further Assurances....................................................... 20
ARTICLE VII
CONDITIONS
Section 7.01 Conditions to Each Party's Obligation to Effect the Closing.............. 20
Section 7.02 Conditions to Obligations of Buyer to Effect the Closing................. 20
Section 7.03 Conditions to Obligations of Seller to Effect the Closing................ 23
ARTICLE VIII
"AS IS" TRANSACTION
Section 8.01 "As Is" Transaction..................................................... 23
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ARTICLE IX
EXTENSION; WAIVER
Section 9.01 Extension; Waiver........................................................ 24
ARTICLE X
MISCELLANEOUS
Section 10.01 Fees and Expenses........................................................ 24
Section 10.02 Amendment and Modification............................................... 24
Section 10.03 Notices.................................................................. 24
Section 10.04 Counterparts............................................................. 26
Section 10.05 Entire Agreement; No Third Party Beneficiaries........................... 26
Section 10.06 Governing Law............................................................ 26
Section 10.07 Exclusive Jurisdiction................................................... 26
Section 10.08 Election of Remedies..................................................... 26
Section 10.09 Assignment............................................................... 26
Section 10.10 Headings................................................................. 27
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ASSET SALE AGREEMENT
Asset Sale Agreement, dated as of November 12, 2001, by and between
U.S. Wireless Corporation ("U.S. Wireless"), Wireless Location Services, Inc.
("WLS") and Wireless Location Technologies, Inc. ("WLT"), Delaware corporations,
as debtors and debtors-in-possession (collectively referred to as the "Seller"),
and Trafficmaster USA, Inc., a Delaware corporation with corporate offices at
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, a wholly owned subsidiary of
Trafficmaster Plc, a company registered in England with corporate offices at
▇▇▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ UK, and listed on the London
Stock Exchange ("Buyer").
WHEREAS, Seller has developed a network-based proprietary technology
to locate mobile telephone subscribers by recognizing the pattern of radio waves
radiating from a subscriber's handset (the "RadioCamera Technology"). In
January 2001, U.S. Wireless formed a wholly owned subsidiary, WLS, and assigned
to it certain agreements. In January 2001, U.S. Wireless formed a wholly owned
subsidiary, WLT, which holds intellectual property supporting the RadioCamera
Technology. The Seller's activities to date have consisted primarily of
research, development and testing of the RadioCamera Technology (collectively
referred to as the "Business"); and
WHEREAS, Seller filed voluntary petitions on August 29, 2001 (the
"Petition Date") for relief under chapter 11 of title 11 of the United States
Code, 11 U.S.C. (S)(S) 101-1330 (the "Bankruptcy Code"), pending in the United
States Bankruptcy Court for the District of Delaware (the "Court") as Case Nos.
01-10262 through 01-10264 (SLR) (the "Bankruptcy Cases"); and
WHEREAS, Buyer desires to purchase and acquire from Seller certain
assets and rights, and Seller desires to sell, convey, assign and transfer all
of such assets and rights to Buyer, in the manner and subject to the terms and
conditions set forth herein and as authorized under Sections 363 of the
Bankruptcy Code; and
WHEREAS, Seller desires to assign to Buyer and Buyer may desire to
assume from Seller, certain liabilities associated with the assignment of
Designated Contracts (defined herein), if any, in the manner and subject to the
terms and conditions set forth herein and as authorized under Section 363 of the
Bankruptcy Code;
NOW, THEREFORE, in consideration of the foregoing promises and the
representations, warranties, covenants and agreements contained herein, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, and intending to be legally bound hereby, the parties
hereto hereby agree as follows:
ARTICLE I
DEFINITIONS AND INTERPRETATION
Section 1.01 Definitions. For all purposes of this Agreement,
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except as otherwise expressly provided or unless the context clearly requires
otherwise:
"Additional Designated Contracts" has the meaning set forth in Section
6.05(c).
"Agreement" or "this Agreement" shall mean this Asset Sale Agreement,
together with the Schedules hereto.
"Ancillary Agreements" shall mean the ▇▇▇▇ of Sale and any Lease
Assignment Documents that have been specifically designated by Buyer.
"Applicable Law" shall mean any law, regulation, rule, order, judgment
or decree to which the Business, the Assets or Seller is subject.
"Assets" shall mean the assets of Seller set forth in Section 2.01.
"Assigned Contracts" shall mean those Designated Contracts which are
assigned to Buyer at Closing.
"Assigned Designated Contracts" shall mean the Assigned Contracts and
the Post-Closing Assigned Contracts.
"Assumed Liabilities" has the meaning set forth in Section 2.03.
"Bankruptcy Case" has the meaning set forth in the recitals hereof.
"Bankruptcy Code" has the meaning set forth in the recitals hereof.
"Bankruptcy Court" has the meaning set forth in the recitals hereof.
"Break-Up Fee" has the meaning set forth in Section 6.05.
"Business" has the meaning set forth in the recitals hereof.
"Business Day" shall mean any day other than a Saturday, Sunday or a
day on which banks in Delaware are authorized or obligated by Applicable Law or
executive order to close or are otherwise generally closed.
"Buyer" has the meaning set forth in the recitals hereof.
"Closing" shall mean the closing referred to in Section 3.01.
"Closing Date" shall mean the date on which the Closing occurs.
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"Claims" shall mean, with respect to the period prior to the Closing
Date, any right to payment from Seller, whether or not such right is reduced to
judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured,
disputed, undisputed, legal, equitable, secured or unsecured, known or unknown;
or any right to an equitable remedy for breach of performance if such breach
gives rise to a right of payment from Seller, whether or not such right to an
equitable remedy is reduced to judgment, fixed, contingent, matured, unmatured,
disputed, undisputed, secured or unsecured.
"Committee" shall mean the official committee of unsecured creditors
appointed in the Bankruptcy Case.
"Contracts" shall mean any and all contracts relating to the Assets.
"Contract Information" has the meaning set forth in Section 6.04(a).
"Cure Amount(s)" shall mean the aggregate dollar amount required to be
paid to the non-seller parties to the Assigned Designated Contracts, by
agreement or order of the Bankruptcy Court, as a condition to the assumption by
Seller of such contracts pursuant to Section 365 of the Bankruptcy Code and the
reinstatement of such contracts in full force and effect.
"Deposit" has the meaning in Section 2.05.
"Designated Contract(s)" has the meaning set forth in Section 6.04(b).
"Encumbrance" shall mean any mortgage, pledge, lien (statutory or
otherwise), security interest, easement, right of way, covenant, claim,
restriction, right, option, conditional sale or other title retention agreement,
charge or encumbrance of any kind or nature, including actions in rem and lis
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pendens in respect of any Assets.
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"Environmental Laws" means any and all laws, statutes, rules,
regulations, orders, ordinances, codes, legal directives, notices, legal
requirements and rules of common law of any Governmental Authority relating to
pollution, or protection of the environment in effect at the time of Closing in
any and all jurisdictions in which any Seller is conducting or at any time has
conducted business or where the Acquired Assets are or were located, and any
judicial or administrative interpretation thereof including, but not limited to,
any judicial or administrative order, consent decree, judgment or settlement
relating to the environment, Hazardous Materials, or exposure to Hazardous
Materials.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
"Final Order" shall mean an order or judgment of the Bankruptcy Court
as to which the time to appeal, petition for certiorari, or move for reargument
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or rehearing has expired and as to which no appeal, petition for certiorari, or
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other proceedings for reargument or rehearing shall then be pending or in the
event that an appeal, writ of certiorari, reargument, or rehearing thereof has
been sought, such order of the Bankruptcy Court shall have been determined by
the highest court to which such order was appealed, or certiorari, reargument or
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rehearing shall have been denied and the time to take any further appeal,
petition for certiorari, or move for reargument or rehearing shall have expired.
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"Governmental Entity" shall mean a court, arbitral tribunal,
administrative agency or commission or other governmental or other regulatory
authority or agency.
"Hardware" shall mean any computer hardware or peripheral device that
is used, has been used, or is intended to be used in, or relates to, the conduct
of any business by Seller.
"Hazardous Materials" means: (i) any "waste," "hazardous waste,"
"industrial waste," "solid waste," "hazardous material," "hazardous substance,"
"toxic substance," "hazardous material," "pollutant," or "contaminant" as those
or similar terms are defined, identified, or regulated under any Environmental
Laws; (ii) any asbestos, polychlorinated biphenyls, or radon; (iii) any
petroleum, petroleum hydrocarbons, petroleum products, crude oil and any
components, fractions, or derivatives thereof; and (iv) any substance that,
whether by its nature or its use, is subject to regulation under any
Environmental Law or results in any Governmental Authority requiring any
environmental investigation, remediation, or monitoring thereof.
"Indebtedness" shall mean, at any time and with respect to any Person,
(a) all indebtedness of such Person for borrowed money, (b) all indebtedness of
such Person for the deferred purchase price of property or services (other than
property, including Inventory, and services purchased, and trade payables, other
expense accruals and deferred compensation items arising in the ordinary course
of business, consistent with past practice), (c) all obligations of such Person
evidenced by notes, bonds, debentures or other similar instruments (other than
performance, surety and appeal bonds arising in the ordinary course of business
in respect of which such Person's liability remains contingent), (d) all
indebtedness of such Person created or arising under any conditional sale or
other title retention agreement with respect to property acquired by such Person
(even though the rights and remedies of the seller or lender under such
agreement in the event of default are limited to repossession or sale of such
property), (e) all obligations of such Person under leases which have been or
should be, in accordance with GAAP, recorded as capital leases, to the extent
required to be so recorded, (f) all reimbursement, payment or similar
obligations of such Person, contingent or otherwise, under acceptance, letter of
credit or similar facilities, (g) all Indebtedness of others referred to in
clauses (a) through (f) above guaranteed directly or indirectly by such Person,
or in effect guaranteed directly or indirectly by such Person through an
agreement (i) to pay or purchase such Indebtedness or to advance or supply funds
for the payment or purchase of such Indebtedness, (ii) to purchase, sell or
lease (as lessee or lessor) property, or to purchase or sell services, primarily
for the purpose of enabling the debtor to make payment of such Indebtedness,
(iii) to supply funds to or in any other manner invest in the debtor (including
any agreement to pay for property or services irrespective of whether such
property is received or such services are rendered) or (iv) otherwise to assure
a creditor against loss in respect of such Indebtedness, and (h) all
Indebtedness referred to in clauses (a) through (g) above secured by (or for
which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Encumbrance upon or in property (including,
accounts and contract rights) owned by such Person, even though such Person has
not assumed or become liable for the payment of such Indebtedness.
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"Intangible Property" shall mean all Software, securities, partnership
or other ownership interests, rights to receive money or property by assignment,
future interests, claims and rights against third parties, Accounts Receivable,
notes receivable, Intellectual Property, prepaid expenses, acquisition costs and
other intangible property of any nature owned, leased, licensed, used or held,
directly or indirectly, by, on behalf of or for the account of, a Person.
"Intellectual Property" shall mean all Trademarks, United States and
foreign patents and patent applications and improvements thereon, assumed names,
logos, inventions, technical information, know-how, processes, service marks,
trade names, Trade Secrets and copyrights (including registrations, licenses and
applications pertaining thereto and further including derivatives and renewals
thereof), and all other intellectual property rights, software (in object and
source code formats) and other confidential and proprietary information,
processes and formulas used in, or necessary for the operation of Seller's
business throughout the world, including without limitation the design,
development, manufacture, use, import and sale of the products, technology and
services of Seller (including products, technology or services currently under
development by Seller), other than generally available software products of
Third Parties that are not assignable. The "Intellectual Property" shall
include all information and materials reasonably required to diagnose problems
in, maintain, support, enhance and otherwise modify the Intellectual Property,
including source code, system documentation, statements of principles of
operation and schematics, as well as any pertinent commentary or explanation
that may be reasonably necessary to render such information or materials
understandable and useable by an experienced computer programmer.
"Knowledge of Seller" concerning a particular subject, area or aspect
of the Business or affairs shall mean the actual knowledge of any of the senior
officers and directors of Seller or such officer's or director's reason to know
in the course of conducting his or her duties.
"Leased Real Property" shall mean the leasehold interests held by
Seller under the Real Property Leases.
"Liabilities" shall mean the debts, liabilities, claims, security
interests, Encumbrances, demands, expenses, commitments and obligations (whether
accrued or not, known or unknown, disclosed or undisclosed, fixed or contingent,
asserted or unasserted, liquidated or unliquidated, arising prior to, at or
after the Closing) of Seller.
"Permits" means permits, certificates, licenses, filings, approvals
and other authorizations of any Governmental Entity.
"Person" shall mean a natural person, partnership, corporation,
limited liability company, business trust, joint stock company, trust,
unincorporated association, joint venture, Governmental Entity or other entity
or organization.
"Plans" shall mean each deferred compensation and each bonus or other
incentive compensation, stock purchase, stock option and other equity
compensation plan, program, agreement or arrangement; each severance or
termination pay, medical, surgical, hospitalization, life insurance and other
"welfare" plan, fund or program (within the meaning of Section 3(1) of ERISA);
each profit-sharing, stock bonus or other "pension" plan, fund or program
(within the
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meaning of Section 3(2) of ERISA); each employment, termination or severance
agreement; and each other employee benefit plan, fund, program, agreement or
arrangement, in each case, that is sponsored, maintained or contributed to or
required to be contributed to by Seller or an ERISA Affiliate, that together
with Seller would be deemed a "single employer" within the meaning of Section
4001(b) of ERISA, or to which Seller or an ERISA Affiliate is party, whether
written or oral, for the benefit of any employee or former employee of Seller.
"Post-Closing Assigned Contracts" shall mean those Designated
Contracts assigned to Buyer after Closing.
"Purchase Price" has the meaning set forth in Section 2.04.
"Real Property" shall mean the Leased Real Property.
"Real Property Leases" shall mean the real property leases to which
Seller is a party and which Buyer may wish to assume as described in Schedule
4.01(b).
"Release" shall mean any release, spill, emission, discharge, leaking,
pumping, injection, deposit, disposal, dispersal, leaching or migration into the
environment (including, ambient air, surface water, groundwater and surface or
subsurface strata).
"Retained Assets" has the meaning set forth in Section 2.02.
"Retained Properties" shall mean the real property, and buildings and
fixtures thereon, owned, leased or operated by Seller, the control of which will
not be transferred, directly or indirectly, to Buyer at Closing pursuant to this
Agreement, including those assets listed in Schedule 2.02(a).
"Sale Hearing" means the hearing to consider approval of the Sale
Motion.
"Sale Motion" means and refers to the motion or motions to be filed by
Seller seeking (a) approval of the terms and provisions of this Agreement and
the Ancillary Agreements, and (b) authorization for (i) the sale of certain
assets pursuant to section 363 of the Bankruptcy Code and (ii) the assumption
and assignment of certain Contracts pursuant to section 365 of the Bankruptcy
Code, both as contemplated in this Agreement.
"Sale Order" shall mean an order (or orders) of the Bankruptcy Court,
in form satisfactory to Buyer, approving the consummation of the Transactions,
under Sections 363 and 365 of the Bankruptcy Code. The Sale Order shall
provide, inter alia, for the assumption of the Initial Designated Contracts by
Seller and the assignment of such contracts to Buyer.
"Seller" has the meaning set forth in the recitals hereof.
"Software" shall mean any and all (a) computer programs, including any
and all software implementation of algorithms, models and methodologies, whether
in source code or object code, (b) databases and compilations, including any and
all data and collections of data, and (c) all documentation, including user
manuals and training materials, relating to any of the foregoing.
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"Subsidiary" shall mean, with respect to any Person, any corporation
or other organization, whether incorporated or unincorporated, of which (a) at
least a majority of the securities or other interests having by their terms
ordinary voting power to elect a majority of the Board of Directors or others
performing similar functions with respect to such corporation or other
organization is directly or indirectly owned or controlled by such Person or by
any one or more of its Subsidiaries, or by such Person and one or more of its
Subsidiaries or (b) such Person or any other Subsidiary of such Person is a
general partner (excluding any such partnership where such Person or any
Subsidiary of such party does not have a majority of the voting interest in such
partnership).
"Tangible Property" shall mean all cash, furnishings, machinery,
equipment, Hardware, computer systems, supplies, inventories, vehicles, books
and records and other tangible property and facilities of any kind or nature
whatsoever.
"Tax" or "Taxes" shall mean all taxes, duties, levies, penalties or
other assessments imposed by any federal, state, local or foreign governmental
authority, including income, gross receipts, excise, personal and real property
(including leaseholds and interests in leaseholds), sales, gain, use, license,
custom duty, unemployment, capital stock, transfer, franchise, payroll,
withholding, social security, minimum estimated, profit, gift, severance, value
added, disability, premium, recapture, credit, occupation, service, leasing,
employment, stamp and other taxes, and shall include interest, penalties or
additions attributable thereto or attributable to any failure to comply with any
requirement regarding Tax Returns.
"Tax Return" shall mean any return (including estimated returns),
report, information return, statement, declaration or other document (including
any related or supporting information) filed or required to be filed with any
United States federal, state, local or foreign Governmental Entity in connection
with any determination, assessment or collection of any Tax or other
administration of any laws, regulations or administrative requirements
(collectively "returns") and any amended returns.
"Third Party" shall mean any Person other than Seller, Buyer, or any
of their respective Affiliates.
"Trademarks" shall mean all United States and foreign trademarks,
tradenames, service marks and registrations and applications for registration
therefor.
"Trade Secrets" shall mean technology, trade secrets and other
confidential information, know-how, proprietary processes, formulae, algorithms,
models and methodologies.
"Transactions" shall mean all the transactions provided for or
contemplated by this Agreement and/or the Ancillary Agreements.
"Transfer Taxes" has the meaning set forth in Section 6.11(a).
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Section 1.02 Interpretation.
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(a) When a reference is made in this Agreement to a section, article,
paragraph, exhibit or schedule, such reference shall be to a section, article,
paragraph, exhibit or schedule of this Agreement unless clearly indicated to the
contrary.
(b) Whenever the words "include", "includes" or "including" are used
in this Agreement they shall be deemed to be followed by the words "without
limitation."
(c) The words "hereof", "herein" and "herewith" and words of similar
import shall, unless otherwise stated, be construed to refer to this Agreement
as a whole and not to any particular provision of this Agreement.
(d) The meaning assigned to each term defined herein shall be equally
applicable to both the singular and the plural forms of such term, and words
denoting any gender shall include all genders. Where a word or phrase is defined
herein, each of its other grammatical forms shall have a corresponding meaning.
(e) A reference to any party to this Agreement or any other agreement
or document shall include such party's predecessors, successors and permitted
assigns.
(f) A reference to any legislation or to any provision of any
legislation shall include any amendment to, and any modification or re-enactment
thereof, any legislative provision substituted therefor and all regulations and
statutory instruments issued thereunder or pursuant thereto.
(g) References to $ are to United States Dollars.
ARTICLE II
PURCHASE AND SALE OF ASSETS
Section 2.01 Sale and Transfer of Assets. On the terms and subject
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to the conditions set forth in this Agreement, at the Closing, Seller shall
sell, convey, assign, transfer and deliver to Buyer, and Buyer shall purchase,
acquire and accept from Seller, good and marketable title, free and clear of all
Liens, Claims or Encumbrances, to the Assets set forth below ("Assets"):
(a) All Intellectual Property of the Seller including without
limitation all patents (including applications), trade secrets, customer lists,
licensing rights and entitlements, and proprietary computer software and
systems; including all published and non-published documentation.
(b) All know-how, processes, technical data, techniques, confidential
business information, lists of former customers, inventions (whether or not
patented or patentable), trade secrets, data bases and rights in data, and other
proprietary information, technology and
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Intellectual Property rights, including reasonable access to current system
configurations and system environments.
(c) The data platform, data center and network operations center
equipment, excluding only (i) the Hewlett-Packard Credit Corporation ("HP")
computer equipment that is encumbered by any valid and perfected liens and/or
security interests in favor of HP (collectively, the "HP Computer Equipment")
and (ii) the real property associated with the center;
(d) The Radio Camera demonstration system in metropolitan Washington,
D.C., including the assignment of any access agreements or tower leases for the
operation of such system as set forth in Schedule 4.01(b);
(e) The Radio Camera demonstration system in the San Francisco Bay
area, including the assignment of any access agreements or tower leases for the
operation of the such system as set forth in Schedule 4.01(b);
(f) Any Radio Camera inventory plus related spare parts;
(g) Option to take Seller's stake in Wireless Technology, Inc.
("WTI") subject to due diligence at Buyer's sole discretion.
Section 2.02 Retained Assets. Notwithstanding Section 2.01, all of
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Seller's right, title and interest in and to the following properties, assets
and rights shall be excluded from the Assets (collectively, the "Retained
Assets"):
(a) all assets, properties and contracts listed in Schedule 2.02(a);
(b) all Tax refunds and recoveries and similar benefits of Seller;
(c) any claims, counterclaims, offsets, defenses or causes of action
arising prior to the Closing Date;
(d) any claims, actions or causes of action for monetary damages for
any breach of fiduciary duty, fraud or other tortious conduct occurring prior to
the Closing Date;
(e) any rights, demands, claims, actions, and causes of action
constituting avoidance actions of Seller's estate under chapter 5 of the
Bankruptcy Code;
(f) all Contracts not assigned to Buyer as provided in Section 6.04.
Section 2.03 Assumption of Liabilities. Buyer shall assume no
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liabilities of Seller under this Agreement or otherwise.
Section 2.04 The Purchase Price. Subject to the terms and conditions
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of this Agreement, the aggregate purchase price for the sale and transfer of the
Assets to, and the assumption of the Assumed Liabilities by, Buyer (the
"Purchase Price"), is Two Million Dollars ($2,000,000.00). Any "Cure Amounts"
required to be paid under section 365 of the Bankruptcy
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Code to facilitate the transfer and/or assignment of any or all of the Assets or
as may be required to utilize all or part of the Assets shall be paid by the
Seller from the Purchase Price and shall not be in addition to the Purchase
Price.
Section 2.05 ▇▇▇▇▇▇▇ Money Deposit. Immediately upon execution of
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this Agreement, Buyer shall deposit Two Hundred Fifty Thousand Dollars
($250,000) (the "Deposit") to be held in escrow pursuant to an escrow agreement.
ARTICLE III
THE CLOSING
Section 3.01 The Closing. Upon the terms and subject to the
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conditions of this Agreement, the consummation of the transactions contemplated
by this Agreement (the "Closing") shall take place at the offices of ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ LLP, 3000 Two ▇▇▇▇▇ Square, Eighteen and ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇ at 10:00 a.m. on December 10, 2001, or such other date and/or place as is
agreed to in writing by each of the parties hereto.
Section 3.02 Deliveries by Seller. At the Closing, Seller shall
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deliver or cause to be delivered to Buyer (unless previously delivered), the
following:
(a) a duly executed ▇▇▇▇ of Sale in form and substance acceptable to
Buyer;
(b) duly executed counterparts of one or more instruments of
assignment and assumption, substantially in form and substance customary in
similar transactions, with respect to all Leased Real Property designated by
Buyer (the "Lease Assignment Documents");
(c) all documents of title and instruments of conveyance reasonably
necessary to transfer record and/or beneficial ownership to Buyer of all
automobiles, trucks, trailers which constitute Assets pursuant to this
Agreement;
(d) assignments of the Trademarks and the other Intellectual Property
rights in form and substance reasonably acceptable to Buyer and such
confirmatory assignments as may be necessary to record in the United States
Patent and Trademark Office, the assignment to Buyer of the United States
registered Trademarks and shall have executed such other confirmatory
assignments prepared by Buyer which are in substance reasonably acceptable to
Seller and its counsel as Buyer or its counsel deem to be necessary or advisable
to record in state trademark offices;
(e) all such other documents of title, deeds, endorsements,
assignments and other instruments of sale, conveyance or transfer as are
reasonably necessary to vest in Buyer good and marketable title to the Assets.
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Section 3.03 Deliveries by Buyer. At the Closing, Buyer shall
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deliver to Seller (unless previously delivered), the following:
(a) a cashier's check (or, at Seller's option, wire transfer)
payable to Seller in the amount of the Purchase Price less the Deposit;
(b) a duly executed instrument of assumption in form and substance
customary in similar transactions;
(c) a duly executed counterpart of each Lease Assignment Document
applicable to Buyer; and
(d) such other documents as are required to be delivered by Buyer to
Seller pursuant to this Agreement.
ARTICLE IV
REPRESENTATIONS AND
WARRANTIES OF SELLER
The Sellers jointly and severally represent and warrant to the Buyer as
follows:
Section 4.01 Title to Assets; Encumbrances.
-----------------------------
(a) Personal Property. Seller is the owner of the Assets other
-----------------
than the Leased Real Property and leased personal property, and, by the
execution and delivery at the Closing of the instruments of transfer provided
for herein and such other documents required, Buyer will be vested with good,
valid and marketable title to each of the Assets other than the Leased Real
Property and leased personal property (subject to their respective leases), free
and clear of all Liens, Claims and Encumbrances.
(b) Leased Real Property. Schedule 4.01(b) contains a list of all
--------------------
real property leased by Seller associated with the operation of the Assets
listed in Sections 2.01(d) and 2.01(e). The only Leased Real Property that Buyer
may wish to assume are those tower sites and/or access agreements relating to
the operation of the Assets in Sections 2.01(d) and 2.01(e). Subject to the
approval of the Bankruptcy Court, each of the leases listed in Schedule 4.01(b)
is a valid and subsisting leasehold interest of Seller and is in full force and
effect. Following the assumption and upon the assignment of such leases by
Seller to Buyer in accordance with the provisions of Section 365 of the
Bankruptcy Code and the requisite order of the Bankruptcy Court, there will be
no defaults thereunder and no circumstances or events which, would constitute
defaults under such leases except, in either instance, for defaults which,
individually or in the aggregate, do not or would not reasonably be expected to
have a material impact on the use of such property or are unenforceable due to
operation of Section 365(b)(2) of the Bankruptcy Code or shall be cured by
Seller pursuant to Section 365 (b)(1) of the Bankruptcy Code, by Seller paying
any Cure Amounts due and owing from the Purchase Price.
-11-
(c) Leased Personal Property. Schedule 4.01(c) contains a list of
------------------------
all personal property leased by Seller and desired by Buyer used in connection
with the operation of the Business and included in the Assets. Subject to the
approval of the Bankruptcy Court pursuant to the Sale Order and the assumption
and assignment of the leases pursuant thereto, each of the leases relating to
leased personal property is a valid and subsisting leasehold interest of Seller
free of Liens, Claims and Encumbrances, except as set forth in Schedule 4.01(c),
and, except as limited by the Bankruptcy Code, is a binding obligation of
Seller, enforceable against Seller in accordance with its terms, and is in full
force and effect. Following the assumption and upon the assignment of such
leases by Seller to Buyer in accordance with the provisions of Section 365 of
the Bankruptcy Code and the requisite order of the Bankruptcy Court, there will
be no defaults thereunder and no circumstances or events which, with notice or
the passage of time or both, would constitute defaults under such leases except,
in either instance, for defaults which, individually or in the aggregate, do not
or would not reasonably be expected to have a material impact on the use of such
property or are unenforceable due to operation of Section 365(b)(2) of the
Bankruptcy Code or shall be cured by Seller pursuant to Section 365(b)(1) of the
Bankruptcy Code, by Seller paying any Cure Amounts due and owing from the
Purchase Price.
Section 4.02 Intellectual Property.
---------------------
(a) Schedule 4.02(a) sets forth, for the Intellectual Property owned
by Seller, a complete and accurate list of all U.S. and foreign (i) patents and
patent applications; (ii) Trademark registrations (including Internet domain
registrations), Trademark applications, and material unregistered Trademarks
(including, the issue and expiration dates of all of the Trademark registrations
and applications of Seller relating to the Business) and (iii) copyright
registrations, copyright applications and material unregistered copyrights. Such
list includes, for each of the foregoing, the applicable record owner,
jurisdiction and registration and/or application number, and date issued (or
filed).
(b) Schedule 4.02(b) lists all Software which is owned, licensed,
leased or otherwise used by Seller in the conduct of the Business, and
identifies which Software is owned, licensed, leased or otherwise used, as the
case may be.
(c) Schedule 4.02(c) sets forth a complete and accurate list of all
agreements granting or obtaining any right to use or practice any rights under
any Intellectual Property, to which Seller is a party or otherwise bound,
including license agreements, settlement agreements and covenants not to ▇▇▇
(collectively, the "License Agreements"). The License Agreements are valid and
binding obligations of all parties thereto, enforceable in accordance with their
terms, and there exists no event or condition which will result in a violation
or breach of, or constitute a default by any party under any such License
Agreement pursuant to section 365 of the Bankruptcy Code.
(d) Except as set forth on Schedule 4.02(d), the Intellectual
Property owned by Seller is valid and subsisting, in full force and effect, and
has not been canceled, expired or abandoned. There is no pending threatened
opposition, interference or cancellation proceeding before any court or
registration authority in any jurisdiction against the Intellectual Property
owned by Seller, or against any Intellectual Property licensed to Seller.
-12-
(e) Seller will transfer to Buyer on the Closing Date good and
marketable title to all of the Intellectual Property owned by Seller, free and
clear of all Liens, Claims and Encumbrances. Except as set forth in Schedule
4.02(e), (i) Seller has the sole and exclusive right to use the registered
Trademarks in the United States in connection with the goods listed and (ii)
Seller is the owner of all right, title and interest in and to the registered
Trademarks.
(f) The conduct of the Business as currently conducted or planned to
be conducted does not infringe upon (either directly or indirectly such as
through contributory infringement or inducement to infringe) any intellectual
property rights owned or controlled by any Third Party.
(g) Except as set forth on Schedule 4.02(g), to the Knowledge of
Seller, no Third Party is misappropriating, infringing, diluting or violating
any Intellectual Property owned by Seller.
Section 4.03 Organization. Each Seller is a legal entity validly
------------
existing under the laws of the jurisdiction of its incorporation or organization
and has the requisite organizational power and authority to own, use, and
operate its properties and to carry on its business as it is now being conducted
or presently proposed to be conducted.
Section 4.04 Board Approval; Authority Relative to this Agreement.
----------------------------------------------------
Each Seller has the corporate and other organizational power and authority to
enter into this Agreement and to carry out its obligations hereunder. The
execution, delivery, and performance of this Agreement by each of the Sellers
and the consummation by each of the Sellers of the transactions under this
Agreement have been duly authorized by all requisite actions. Subject to the
entry and effectiveness of the Sale Order, this Agreement has been duly and
validly executed and delivered by or on behalf of each of the Seller and
(assuming this Agreement constitutes a valid and binding obligation of the
Buyer) constitutes a valid and binding agreement of the Seller, enforceable
against the Seller in accordance with its terms subject to applicable bankruptcy
law.
Section 4.05 Governmental Consents and Approvals. Except as set forth
-----------------------------------
in Schedule 4.05 hereof, no consent, approval, authorization of, declaration,
filing, or registration with, any domestic or foreign government or regulatory
authority, is required to be made or obtained by any of the Sellers in
connection with the execution, delivery, and performance of this Agreement and
the consummation of the transactions contemplated hereunder, except for
consents, approvals, authorizations of, declarations, or filings with, the
Bankruptcy Court.
Section 4.06 No Violations. Neither the execution, delivery, or
-------------
performance of this Agreement by the Seller, nor the consummation by any Seller
of the transactions contemplated hereunder, nor compliance by any Seller with
any of the provisions hereof, will (a) result in any breach of any provisions of
the articles of incorporation or bylaws or similar organizational documents of
any Seller, (b) result in a violation, or breach of, or constitute (with or
without due notice or lapse of time) a default (or give rise to any right of
termination, cancellation, vesting, payment, exercise, acceleration, suspension,
or revocation) under any of the terms, conditions, or provisions of any note,
bond, mortgage, deed of trust, security interest,
-13-
indenture, license, contract, agreement, plan, or other instrument or obligation
to which any Seller is a party or by which such Seller's properties or assets
may be bound or affected, (c) violate any order, writ, injunction, decree,
statute, rule, or regulation applicable to any Seller or to any properties or
assets of a Seller, or (d) result in the creation or imposition of any
Encumbrance.
Section 4.07 Litigation. Except for the pendency of the Chapter 11
----------
Case and except as set forth in Schedule 4.07 hereof, there is no suit, action,
proceeding, or investigation (whether at law or equity, before or by any
federal, state, or foreign commission, court, tribunal, board, agency, or
instrumentality, or before any arbitrator) pending or, threatened against or
affecting any Seller, nor is there any judgment, decree, injunction, rule, or
order of any court, governmental department, commission, agency,
instrumentality, or arbitrator outstanding against any Seller.
Section 4.08 No Default. Except as set forth in Schedule 4.08 hereof,
----------
no Seller is in violation, breach of, or default under (and no event has
occurred that with notice or the lapse of time would constitute a violation,
breach of, or a default under) any term, condition, or provision of (a) its
articles of incorporation or bylaws or other organizational documents, (b) any
note, bond, mortgage, deed of trust, security interest, indenture, license,
agreement, plan, contract, lease, commitment, or other instrument, or obligation
to which such Seller is a party or by which such Seller's properties or assets
may be bound or affected, or (c) any order, writ, governmental authorization,
injunction, decree, statute, rule, or regulation applicable to such Seller or to
such Seller's properties or assets.
Section 4.09 No Violation of Law. Except as disclosed in Schedule 4.09
-------------------
hereof no Seller is in violation of, or has been given notice or been charged
with any violation of, applicable law.
Section 4.10 Environmental Matters. Except as set forth in Schedule
---------------------
4.10 hereof (a) with respect to the Business, each Seller is, and for the past
two (2) years has been, in material compliance with all applicable Environmental
Laws; (b) with respect to the Business, no Seller is subject to any pending or
threatened claim, action, suit, investigation, inquiry, or proceeding under any
Environmental Law; and (c) there has been no release of Hazardous Materials by
any Seller arising in connection with the Business except in compliance with
applicable Environmental Laws and there is no investigatory, remedial, or
monitoring obligations of any Seller under applicable Environmental Laws arising
from the Business.
Section 4.11 Title to and Use of Property. At the Closing, the Buyer
----------------------------
will acquire all right, title and interest in, to and under all of the Assets,
in each case free and clear of any and all Liens, Claims and (including any and
all claims that may arise by reason of the execution, delivery or performance by
the Sellers of this Agreement).
Section 4.12 Absence of Conflicts. The execution, delivery and
---------------------
performance by Seller of this Agreement, the consummation by Seller of the
transactions contemplated hereby nor the compliance by Seller with any of the
provisions hereof, do not and will not:
-14-
(a) contravene, conflict with, or result in any violation or breach
of any provision of the articles of incorporation or by-laws of
Seller;
(b) assuming compliance with the matters referred to in Section 4.04,
contravene, conflict with, or result in any violation or breach of any
provision of applicable law, statute, ordinance, rule, regulation,
judgment, injunction, order, or decree; or
(c) except as listed on Schedule 4.05, require any approval of any
-------------
Governmental Entity or any consent or other action by any Person or
Governmental Entity under, constitute a default (or an event that,
with or without notice or lapse of time or both, would constitute a
default) under, or cause or permit the termination, cancellation,
acceleration, triggering or other change of any right or obligation or
the loss of any benefit to which Seller is entitled under (i) any
provision of any agreement or other instrument binding upon Seller, or
(ii) any permit held by, or affecting or in any way relating to the
Assets or business of, Seller.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF BUYER
Buyer represents and warrants to Seller that:
Section 5.01 Organization. Buyer is a corporation, duly
------------
organized, validly existing and in good standing under the laws of its state of
incorporation.
Section 5.02 Authorization. Buyer has full power and authority
-------------
to execute and deliver this Agreement and the Ancillary Agreements and to
consummate the Transactions. The execution, delivery and performance by Buyer of
this Agreement and the Ancillary Agreements and the consummation by Buyer of the
Transactions has been duly authorized by its Board of Directors, and no other
corporate action on its part is necessary to authorize the execution and
delivery by it of this Agreement or the Ancillary Agreements or the consummation
by it of the Transactions. No vote of, or consent by, the holders of any class
or series of equity is necessary to authorize the execution and delivery by
Buyer of this Agreement or the Ancillary Agreements or the consummation by it of
the Transactions.
Section 5.03 Binding Agreement. This Agreement has been duly
-----------------
executed and delivered by Buyer and assuming due and valid authorization,
execution and delivery hereof or thereof, as the case may be, by Seller on or
before Friday, November 16, 2001, this Agreement is a valid and binding
obligation of Buyer, enforceable against Buyer in accordance with its terms
except (i) as limited by applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance and other similar laws of general application
affecting enforcement of creditors' rights generally and (ii) the availability
of the remedy of specific performance or injunctive or other forms of equitable
relief may be subject to equitable defenses and would be subject to the
discretion of the court before which any proceeding therefor may be brought. All
schedules and ancillary agreements to this Agreement shall be agreed upon and
finalized after
-15-
Seller's execution of this Agreement. This Agreement shall become null and void
if such schedules are not finalized and agreed upon by both parties by November
27, 2001.
Section 5.04 Consents and Approvals; No Violations. Except for the
-------------------------------------
filings, permits, authorizations, consents and approvals as may be required
under, and other applicable requirements of, the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust
Improvements Act of 1976, none of the execution, delivery or performance of this
Agreement or the Ancillary Agreements by Buyer, the consummation by Buyer of the
Transactions or compliance by Buyer with any of the provisions hereof or thereof
will (i) conflict with or result in any breach of any provision of the
Certificate of Incorporation or By-Laws of Buyer, (ii) require any filing with,
or permit, authorization, consent or approval of, any Governmental Entity, (iii)
require any consent, approval or notice under, or result in a violation or
breach of, or constitute (with or without due notice or lapse of time or both) a
default (or give rise to any right of termination, cancellation or acceleration)
under, any of the terms, conditions or provisions of any contract, agreement,
arrangement or understanding to which Buyer is a party, as applicable, or by
which Buyer or any of its properties or assets may be bound, or (iv) violate any
order, writ, injunction, decree, statute, rule or regulation applicable to
Buyer, or any of its Subsidiaries or any of their respective properties or
assets, excluding from the foregoing clauses (ii), (iii) and (iv) such
violations, breaches or defaults which would not, individually or in the
aggregate, have a material adverse effect on the ability of Buyer to consummate
the Transactions.
Section 5.05 Brokers or Finders. Buyer has not entered into any
------------------
agreement or arrangement entitling any agent, broker, investment banker,
financial advisor or other firm or Person to any broker's or finder's fee or any
other commission or similar fee in connection with any of the Transactions.
ARTICLE VI
COVENANTS
Section 6.01 Interim Operations of the Business. Subject to any
----------------------------------
obligations as a debtor or debtor-in-possession under the Bankruptcy Code, or
order of the Bankruptcy Court, Seller shall, in the context of the pending cases
before the Bankruptcy Court, use commercially reasonable efforts to ensure that
after the date hereof and prior to the Closing Date, except as expressly
provided in this Agreement:
(a) Seller shall take all action reasonably required to (i) preserve
and protect the Intellectual Property and (ii) maintain, preserve and protect
all of the Assets in the condition in which they exist on the date hereof,
except for ordinary wear and tear;
(b) Seller shall not modify, amend or terminate any of their leases
or material contracts unless any such modification or amendment shall be to the
benefit of Seller or waive, release or assign any material rights or claims to
the extent included in the Assets, except in the ordinary course of business and
consistent with Seller's past practice;
(c) Seller shall not enter into any material commitment or
transaction (including, any capital expenditure) other than in the ordinary
course of Business;
-16-
(d) Seller shall not lease, license, mortgage, pledge or encumber any
Assets.
Section 6.02 Access.
------
(a) Between the date of this Agreement and the Closing, Seller shall
(i) afford Buyer and its authorized representatives reasonable access to all
offices and other facilities, all employees and personnel of Seller; (ii) permit
Buyer and its authorized representatives to make such inspections as they may
reasonably require; and (iii) furnish Buyer and its authorized representatives
with such operating data and other information concerning the Business as they
may from time to time reasonably request.
(b) Each party agrees not to destroy any files or records which are
subject to this Section 6.02 without giving reasonable notice to the other
parties, and within 15 days of receipt of such notice, such other party may
cause to be delivered to it the records intended to be destroyed, at such other
party's expense.
Section 6.03 Efforts and Actions to Cause Closing to Occur.
---------------------------------------------
(a) Prior to the Closing, upon the terms and subject to the
conditions of this Agreement, Buyer and Seller shall use their respective
commercially reasonable efforts to take, or cause to be taken, all actions, and
to do, or cause to be done and cooperate with each other in order to do, all
things necessary, proper or advisable (subject to any Applicable Laws) to
consummate the Closing and the other Transactions as promptly as practicable. In
addition, no party hereto shall take any action after the date hereof that could
reasonably be expected to materially delay the obtaining of, or result in not
obtaining, any permission, approval or consent from any Governmental Entity or
other Person required to be obtained prior to Closing.
Section 6.04 Assigned Contracts; Certain Adjustments.
---------------------------------------
(a) On or before November 14, 2001, at Buyer's request, Seller shall
provide Buyer with all information regarding the Contracts (the "Contract
Information") to enable Buyer to determine which of the Contracts are necessary
or desirable for the proper operation by Buyer of the Business after the Closing
Date. Such information shall include, without limitation, the amounts which
Seller's books and records reflect are due and owing with respect to each
Contract, including the Cure Amounts.
(b) On or before November 27, 2001, subject to having received the
Contract Information from Seller, Buyer shall furnish to Seller a list, prepared
by Buyer in good faith, of those Contracts it requires to be assumed by Seller,
and assigned to Buyer, in accordance with Section 365 of the Bankruptcy Code
(the "Designated Contracts"). Upon receipt by Seller of the list of Designated
Contracts, Seller shall request the Bankruptcy Court to establish procedures for
the entry of an order authorizing the assumption by Seller of the Designated
Contracts and the assignment thereof to Buyer. Any "Cure Amounts" due pursuant
to Section 365 of the Bankruptcy Code shall be paid by Seller from the Purchase
Price.
(c) To the extent requested by Buyer, Seller shall use its best
efforts to obtain the consent of each non-seller party to the Designated
Contracts, to the assumption of such Contracts upon such terms as Buyer shall
reasonably request.
-17-
Section 6.05 Approval of Break-Up Fee and Overbid Procedures. Attached
-----------------------------------------------
hereto as Exhibit 6.05 is a true and correct copy of the Bankruptcy Court's
November 8, 2001 Order (the "Sale Procedures Order") approving bid procedures
and the terms of a break-up fee to be paid to Buyer under the conditions stated
therein. The parties acknowledge that the terms of the Sale Procedures Order are
consistent with and fulfill all requirements of Buyer under this Agreement
regarding the judicial procedures for effectuating the sale of the Assets to
Buyer.
Section 6.06 Bankruptcy Court Filings.
------------------------
(a) As promptly as practicable after the date of this Agreement,
Seller shall file, in a form reasonably satisfactory to Buyer, a Sale Motion,
and Seller shall use its best efforts to obtain entry of the Sale Order as
promptly as practicable.
(b) Seller shall provide Buyer with copies of any and all motions,
applications, pleadings, schedules, statements, reports and other papers
(including exhibits and supporting documentation) filed by or on behalf of
Seller or any Subsidiary of Seller in the chapter 11 cases and related to the
Assets or this Agreement.
Section 6.07 Employee Matters.
----------------
(a) As of the Closing, Buyer may, in its discretion, offer to employ
any hourly or salaried employee of Seller under such terms and conditions as
Buyer may determine and Seller shall refrain from any acts calculated to
dissuade or having the effect of dissuading any of such employees from accepting
employment with Buyer or calculated to induce or having the effect of inducing
any such employees thereafter to terminate employment with Buyer. Buyer shall
assume no liabilities or obligations whatsoever with respect to any employees,
officers or directors of Seller.
Section 6.08 Subsequent Actions.
------------------
(a) If at any time after the Closing, Buyer will consider or be
advised that any deeds, bills of sale, instruments of conveyance, assignments,
assurances or any other actions or things are necessary or desirable to vest,
perfect or confirm ownership (of record or otherwise) in Buyer, its right, title
or interest in, to or under any or all of the Assets or otherwise to carry out
this Agreement, Seller shall execute and deliver all deeds, bills of sale,
instruments of conveyance, assignments and assurances and take and do all such
other actions and things as may be reasonably requested by Buyer in order to
vest, perfect or confirm any and all right, title and interest in, to and under
such rights, properties or assets in Buyer or otherwise to carry out this
Agreement.
(b) In case at any time after the Closing Date any further action is
necessary, proper or advisable to carry out the purposes of this Agreement, as
soon as reasonably practicable, each party hereto shall take, or cause its
proper officers or directors to take, all such necessary, proper or advisable
actions.
Section 6.09 Completion of Non-assignable Assigned Contracts. To the
-----------------------------------------------
extent that the rights of Seller under any Assigned Contract, or under any other
Asset to be assigned under the Bankruptcy Code to Buyer hereunder, may not be
assigned without the consent of a
-18-
Third Party which has not been obtained prior to the Closing, this Agreement
shall not constitute an agreement to assign the same if an attempted assignment
would be unlawful. If any such consent has not been obtained or if any attempted
assignment would be ineffective or would impair Buyer's rights under the
instrument in question so that Buyer would not acquire the benefit of all such
rights, then Seller, to the maximum extent permitted by Applicable Law and the
instrument, shall act as Buyer's agent in order to obtain for Buyer the benefits
thereunder and shall cooperate, to the maximum extent permitted by Applicable
Law and the instrument, with Buyer in any other reasonable arrangement designed
to provide such benefits to Buyer (including, by entering into an equivalent
arrangement).
Section 6.10 Renewal-Period of Real Property Leases. With respect to
--------------------------------------
each Real Property Lease, Seller shall use its best efforts to obtain from the
landlord an extension of the time-period (until at least December 31, 2001)
under which Seller must notify the landlord of its intention to renew or
terminate, as the case may be, such Real Property Lease.
Section 6.11 Tax Matters.
-----------
(a) If prior to Closing Seller shall have obtained an order of the
Bankruptcy Court exempting the Transactions from all sales, use, transfer,
stamp, duty, value added, and other similar taxes and fees, including, all bulk
sales taxes, in each case including interest, penalties or additions
attributable thereto (collectively, "Transfer Taxes"), to the extent any such
Transfer Taxes arise out of the transfer of the Assets and any Transfer Taxes
required to effect any recording or filing with respect thereto such Transfer
Taxes shall be borne by Seller.
(b) If prior to the Closing, Seller shall not have obtained an order
of the Bankruptcy Court exempting the Transactions from all Transfer Taxes, any
Transfer Taxes required to effect any recording or filing with respect thereto
shall be borne by Seller. The Transfer Taxes shall be calculated assuming that
no exemption from Transfer Taxes is available, unless at Closing, Buyer shall
provide an appropriate resale exemption certificate or other evidence,
reasonably acceptable to Seller, of exemption from such Transfer Taxes.
(c) Proration of Taxes. Except as provided in Sections 6.11(a) and
------------------
6.11(b), all real property Taxes, personal property Taxes or similar ad valorem
-- -------
obligations levied with respect to the Assets for any taxable period that
includes the day before the Closing Date and ends after the Closing Date,
whether imposed or assessed before or after the Closing Date, shall be prorated
between Seller and Buyer as of 12:00:01 a.m. on the Closing Date. If any Taxes
subject to proration are paid by Buyer, on the one hand, or Seller, on the other
hand, the proportionate amount of such Taxes paid (or in the event a refund of
any portion of such Taxes previously paid is received, such refund net of any
Taxes payable with respect to the receipt of any interest included in such
refund) shall be paid promptly by (or to) the other after the payment of such
Taxes (or promptly following the receipt of any such refund).
Section 6.12 General Cooperation. From the date hereof through the
-------------------
Closing, Seller will use its good faith efforts to operate the Business in such
a manner as to achieve a smooth transition consistent with the mutual business
interests of Seller and Buyer. In this regard, Seller and Buyer agree that they
will enter into good faith discussions concerning the
-19-
Business, including, but not limited to, personnel policies and procedures, and
other operational matters relating to the Business.
Section 6.13 Further Assurances. Each party shall cooperate with the
------------------
other parties, and execute and deliver, or use its commercially reasonable
efforts to cause to be executed and delivered, all such other instruments,
including instruments of conveyance, assignment and transfer, and to make all
filings with and to obtain all consents, approvals or authorizations of any
Governmental Entity or other regulatory authority or any other Person under any
Permit, agreement, indenture or other instrument, and take all such other
actions as such party may reasonably be requested to take by another party
hereto from time to time, consistent with the terms of this Agreement, in order
to effectuate the provisions and purposes of this Agreement and the
transactions contemplated hereby.
ARTICLE VII
CONDITIONS
Section 7.01 Condition to Each Party's Obligation to Effect the
--------------------------------------------------
Closing. The respective obligation of each party to effect the Closing shall be
-------
subject to the satisfaction at or prior to the Closing Date of the following
conditions:
(a) Statutes; Court Orders. No statute, rule or regulation shall have
----------------------
been enacted by any Governmental Entity which prohibits the consummation of the
Closing; and there shall be no order or injunction of a court of competent
jurisdiction or Governmental Entity in effect precluding consummation of the
Closing.
Section 7.02 Conditions to Obligations of Buyer to Effect the Closing.
--------------------------------------------------------
The obligations of Buyer to consummate the Closing shall be subject to the
satisfaction on or prior to the Closing Date of each of the following
conditions:
(a) Sale Order.
----------
(i) The Bankruptcy Court shall have entered the Sale Order, which
shall become a Final Order, in form and substance acceptable to Buyer,
approving and authorizing the Transactions and finding, after an adequate
record, among other things, that: (A) the Assets acquired by Buyer,
including the assignment of Designated Contracts, were purchased in good
faith within the meaning of section 363(m) of the Bankruptcy Code and that
Buyer is entitled to the protections of such section; (B) (i) the sale of
the Assets and the assignment of the Designated Contracts shall be free and
clear of all Liens, Claims and Encumbrances; and (ii) Buyer shall not be
considered to be or treated as a successor to Seller or its Affiliates or
insiders for the purpose of asserting or assessing liability or Claim
against Buyer with respect to any action, or failure to take action, by
Seller or its Affiliates or insiders; (C) Buyer's rights under this
Agreement and the Ancillary Agreements shall not be subject to the
automatic stay, shall constitute expenses and obligations under Section
503(b) of the Bankruptcy Code payable under Section 507(a)(i) of the
Bankruptcy Code (unless otherwise expressly provided herein) and that Buyer
may exercise such rights without further order of the Bankruptcy Court;
-20-
(D) Seller is in compliance with all terms and provisions of the Designated
Contracts; and (E) the Designated Contracts are assigned to the Buyer.
Nothing in this Section 7.02(i), or any other Section of this Agreement,
shall preclude Seller or Buyer from consummating the Transactions if Buyer,
in its sole discretion, waives the requirement that the Sale Order or any
other orders become Final Orders.
(b) Certificate Regarding Representations and Warranties. All
----------------------------------------------------
information required to be furnished or delivered by Seller pursuant to this
Agreement shall have been furnished or delivered as of the date hereof and the
Closing Date as required hereunder; the representations and warranties made by
Seller in this Agreement shall be true and correct in all material respects on
and as of the Closing Date with the same force and effect as though such
representations and warranties had been made on the Closing Date; and Buyer
shall have received a certificate dated as of the Closing Date, executed by an
authorized officer of Seller to such effect.
(c) Compliance by Seller. Seller shall have duly performed in all
--------------------
material respects all of the covenants, agreements, and conditions contained in
this Agreement that are required to be performed by Seller prior to the Closing
Date, and Buyer shall have received a certificate, dated as of the Closing Date,
executed by an authorized officer of Seller, to such effect.
(d) Certified Resolutions. Buyer shall have received from Seller,
---------------------
a certificate dated as of the Closing Date and executed by the Secretary of
Seller containing a true and correct copy of resolutions duly adopted by
Seller's Board of Directors approving and authorizing this Agreement and the
transactions contemplated hereby. The Secretary of Seller shall also certify
that such resolutions have not been rescinded, revoked, modified, or otherwise
affected and remain in full force and effect.
(e) No Injunction; Etc. With respect to the Closing Date, no
------------------
action, proceeding, investigation, regulation, or legislation shall be pending
or overtly threatened which seeks to enjoin, restrain, or prohibit Seller or
Buyer, or to obtain substantial damages from Seller or Buyer, in respect of the
consummation of the transactions contemplated hereby, which, in the reasonable
judgment of Buyer, would make it inadvisable to consummate such transactions.
(f) Governmental Consents. Prior to the Closing Date:
---------------------
(1) all approvals of Governmental Entities and all filings
and registrations with, and notifications to, all Governmental Entities required
for consummation of the transactions contemplated hereby on the Closing Date
shall have been obtained or made and shall be in full force and effect and all
waiting periods required by law shall have expired; and
(2) no approval of a Governmental Entity (including but
not limited to the Approval Order) which is necessary to consummate the
transactions contemplated hereby shall be conditioned or restricted in a manner
which in the reasonable judgment of Buyer would so materially adversely impact
the economic or business benefits of the transactions contemplated by this
Agreement that, had such condition or requirement been known, Buyer would not,
in its reasonable judgment, have entered into this Agreement.
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(g) Consents and Approvals. Prior to the Closing Date:
-----------------------
(1) Seller shall have obtained any and all consents required for
consummation of the transactions contemplated in this Agreement on the Closing
Date or for preventing any default under any approval or permit of a
Governmental Entity; and
(2) no consent so obtained which is necessary to consummate the
transactions contemplated hereby shall be conditioned or restricted in a manner
which in the reasonable judgment of Buyer would so materially adversely impact
the economic or business benefits of the transactions contemplated by this
Agreement that, had such condition or requirement been known, Buyer would not,
in its reasonable judgment, have entered into this Agreement.
(h) Other Agreements. On or before the Closing Date, Seller and
----------------
Buyer shall have executed the other agreements contemplated hereby in
substantially the form attached hereto.
(i) Opinion of Counsel. On or prior to the Closing Date, anticipated
------------------
to be December 10, 2001, counsel for Seller shall have delivered an opinion to
Buyer, substantially in the form of Exhibit "A" hereto.
-----------
(j) Proceedings. The form and substance of all opinions,
-----------
certificates, assignments, orders, including the Approval Order, and other
documents and instruments hereunder shall be satisfactory in all reasonable
respects to Buyer and its counsel.
(k) Finalization of Schedules. All schedules and ancillary
-------------------------
agreements to this Agreement shall be agreed upon and finalized after Seller's
execution of this Agreement. This Agreement shall become null and void if such
schedules are not finalized and agreed upon by both parties by November 27,
2001.
(l) Consent of Lessors. Seller shall have received, in form and
------------------
substance satisfactory to Buyer, the consent of each of the lessors of the
software and hardware leases set forth on Schedule 4.01(c) hereto to assign such
leases to Seller.
(m) HP Computer Equipment. Prior to the Closing of the sale, Seller
---------------------
shall abandon to HP all HP Computer Equipment upon which HP has a valid and
perfected lien and security interest and shall agree to lift the automatic stay
as to HP to allow HP to foreclose its interests and sell the HP Computer
Equipment. However, prior to Seller abandoning the HP Computer Equipment, Buyer
shall have a reasonable amount of time to inspect such HP Computer Equipment in
order to recover anything covered in this agreement.
(n) Issuance of Order. Seller shall obtain an order by the
-----------------
Bankruptcy Court authorizing the assumption and assignment of the Designated
Contracts.
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Section 7.03 Conditions to Obligations of Seller to Effect the
-------------------------------------------------
Closing. The obligations of Seller to consummate the Closing shall be subject to
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the satisfaction on or prior to the Closing Date of each of the following
conditions:
(a) Representations and Warranties. All of the representations and
------------------------------
warranties of Buyer set forth in this Agreement that are qualified as to
materiality shall be true and complete and any such representations and
warranties that are not so qualified shall be true and complete in all material
respects, in each case as of the date of this Agreement and as of the Closing
Date, other than representations and warranties that speak as of a specific date
or time (which need only be so true and correct as of such date or time).
(b) Sale Order. The Bankruptcy Court shall have entered the Sale
----------
Order.
ARTICLE VIII
"AS IS" TRANSACTION
Section 8.01 "As Is" Transaction. BUYER HEREBY ACKNOWLEDGES AND AGREES
------------------
THAT, EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN ARTICLE IV ABOVE, SELLER MAKES
NO REPRESENTATIONS OR WARRANTIES WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO
ANY MATTER RELATING TO THE ASSETS INCLUDING, WITHOUT LIMITATION, INCOME TO BE
DERIVED OR EXPENSES TO BE INCURRED IN CONNECTION WITH THE ASSETS, THE PHYSICAL
CONDITION OF ANY PERSONAL PROPERTY COMPRISING A PART OF THE ASSETS OR WHICH IS
THE SUBJECT OF ANY OTHER LEASE OR CONTRACT TO BE ASSUMED BY BUYER AT THE
CLOSING, THE ENVIRONMENTAL CONDITION OR OTHER MATTER RELATING TO THE PHYSICAL
CONDITION OF ANY REAL PROPERTY OR IMPROVEMENTS WHICH ARE THE SUBJECT OF ANY REAL
PROPERTY LEASE TO BE ASSUMED BY BUYER AT THE CLOSING, THE ZONING OF ANY SUCH
REAL PROPERTY OR IMPROVEMENTS, THE VALUE OF THE ASSETS (OR ANY PORTION THEREOF),
THE TRANSFERABILITY OF PROPERTY, THE TERMS, AMOUNT, VALIDITY OR ENFORCEABILITY
OF ANY ASSUMED LIABILITIES, THE MERCHANTABILITY OR FITNESS OF THE PERSONAL
PROPERTY OR ANY OTHER PORTION OF THE ASSETS FOR ANY PARTICULAR PURPOSE, OR ANY
OTHER MATTER OR THING RELATING TO THE ASSETS OR ANY PORTION THEREOF. WITHOUT IN
ANY WAY LIMITING THE FOREGOING, SELLER HEREBY DISCLAIMS ANY WARRANTY, EXPRESS OR
IMPLIED, OF MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE AS TO ANY
PORTION OF THE ASSETS. BUYER FURTHER ACKNOWLEDGES THAT IN PROCEEDING WITH ITS
ACQUISITION OF THE ASSETS, EXCEPT FOR ANY REPRESENTATIONS AND WARRANTIES
EXPRESSLY SET FORTH IN ARTICLE V, BUYER IS DOING SO BASED SOLELY UPON SUCH
INDEPENDENT INSPECTIONS AND INVESTIGATIONS AS BUYER DEEMED NECESSARY OR
APPROPRIATE. ACCORDINGLY, BUYER WILL ACCEPT THE ASSETS AT THE CLOSING "AS IS,"
"WHERE IS," AND "WITH ALL FAULTS."
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ARTICLE IX
EXTENSION; WAIVER
Section 9.01 Extension; Waiver. At any time prior to the Closing, each
-----------------
of the parties hereto may (i) extend the time for the performance of any of the
obligations or acts of any other party hereto, (ii) waive any inaccuracies in
the representations and warranties of any other party contained herein or in any
document delivered pursuant hereto, (iii) waive compliance with any of the
agreements of the other party contained herein, or (iv) waive any condition to
its obligations hereunder. Any agreement on the part of a party hereto to any
such extension or waiver shall be valid only if set forth in a written
instrument signed on behalf of such party.
ARTICLE X
MISCELLANEOUS
Section 10.01 Fees and Expenses. (a) All costs and expenses incurred
-----------------
in connection with this Agreement and the consummation of the Transactions shall
be paid by the party incurring such expenses, except as specifically provided to
the contrary in this Agreement.
(b) To the extent provided in the Sale Order, in accordance with
Section 1146(c) of the Bankruptcy Code, the instruments transferring the Assets
to Buyer shall contain the following endorsement:
"Because this [instrument] has been authorized pursuant to Order of
the United States Bankruptcy Court for the District of Delaware
relating to a chapter 11 plan of the Grantor, it is exempt from
transfer taxes, stamp taxes or similar taxes pursuant to 11 U.S.C.
(S)1146(c)."
Section 10.02 Amendment and Modification. This Agreement may be
--------------------------
amended, modified and supplemented in any and all respects, but only by a
written instrument signed by all of the parties hereto expressly stating that
such instrument is intended to amend, modify or supplement this Agreement.
Section 10.03 Notices. All notices and other communications hereunder
-------
shall be in writing and shall be deemed given when mailed, delivered personally,
telecopied (which is confirmed) or sent by an overnight courier service, such as
Federal Express, to the parties at the following addresses (or at such other
address for a party as shall be specified by such party by like notice):
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if to Buyer, to:
Trafficmaster U.S.A., Inc.
▇/▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telephone: ▇▇ ▇▇▇▇ ▇▇▇▇▇▇
Facsimile: 44 1234 759318
With a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
and
if to Seller, to:
U.S. Wireless Corporation, et al
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP
3000 Two ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address as a party may from time to time designate in writing
in accordance with this Section. Each notice or other communication given to
any party hereto in accordance with the provisions of this Agreement shall be
deemed to have been received (a) on the Business Day
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it is sent, if sent by personal delivery, or (b) on the first Business Day after
sending, if sent by overnight delivery, properly addressed and prepaid or (c)
upon receipt, if sent by mail (regular, certified or registered); provided,
--------
however, that notice of change of address shall be effective only upon receipt.
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The parties agree that delivery of process or other papers in connection with
any such action or proceeding in the manner provided in this Section 10.04, or
in such other manner as may be permitted by law, shall be valid and sufficient
service thereof.
Section 10.04 Counterparts. This Agreement may be executed in one or
------------
more counterparts, all of which shall be considered one and the same agreement
and shall become effective when two or more counterparts have been signed by
each of the parties and delivered to the other parties Copies of executed
counterparts transmitted by telecopy or other electronic transmission service
shall be considered original executed counterparts, provided receipt of copies
of such counterparts is confirmed.
Section 10.05 Entire Agreement; No Third Party Beneficiaries. This
----------------------------------------------
Agreement, and the schedules hereto, the Sale Procedures Order and the Sale
Order (a) constitute the entire agreement and supersede all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof and thereof and supersede and cancel all prior agreements,
negotiations, correspondence, undertakings, understandings and communications of
the parties, oral and written, with respect to the subject matter hereof.
Section 10.06 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
-------------
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE WITHOUT GIVING
EFFECT TO THE PRINCIPLES OF CONFLICTS OF LAW THEREOF.
Section 10.07 Exclusive Jurisdiction. The parties hereby agree that,
----------------------
without limitation of any party's right to appeal any order of the Bankruptcy
Court, (a) the Bankruptcy Court shall retain exclusive jurisdiction to enforce
the terms of this Agreement and to decide any claims or disputes which may arise
or result from, or be connected with this Agreement, any breach or default
hereunder, or the transactions contemplated herein, and (b) any and all claims,
actions, causes of action, suits and proceedings relating to the foregoing shall
be filed and maintained only in the Bankruptcy Court, and the parties hereby
consent and submit to the jurisdiction of the Bankruptcy Court.
Section 10.08 Election of Remedies. Neither the exercise of nor the
--------------------
failure to exercise a right of set-off or to give notice of a claim under this
Agreement will constitute an election of remedies or limit Buyer in any manner
in the enforcement of any other remedies that may be available to any of them,
whether at law or in equity.
Section 10.09 Assignment. Neither this Agreement not any of the
----------
rights, interests or obligations hereunder shall be assigned by any of the
parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other parties, except that (a) Buyer may assign, in its
sole discretion, any or all of its rights, obligations and interests hereunder
to Buyer and (b) Buyer may assign any or all of its rights hereunder to purchase
the Assets to one or more Third Party purchasers. Subject to the first sentence
of this Section 10.09,
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this Agreement shall be binding upon, inure to the benefit of and be enforceable
by the parties and their respective successors and permitted assigns.
Section 10.10 Headings. The article, section, paragraph and other
--------
headings contained in this Agreement are inserted for convenience of reference
only and shall not affect in any way the meaning or interpretation of this
Agreement.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, Buyer and Seller have executed this Agreement or
caused this Agreement to be executed by their respective officers thereunto duly
authorized as of the date first written above.
U.S. WIRELESS CORPORATION, WIRELESS LOCATION
SERVICES, INC., and WIRELESS LOCATION
TECHNOLOGIES, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇, President and COO
Trafficmaster USA, Inc.
By: /s/ ▇▇▇▇ ▇▇▇▇▇
-------------------------------
▇▇▇▇ ▇▇▇▇▇, CEO