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(B) Approving Asset Purchase Agreement

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In Re: a7 Chapter 11 a7

AM COMMUNICATIONS, INC., et al ., a7 Case No. 03-12689 a7 (Jointly Administered)

Debtors a7 a7



This matter coming on to be heard on the Motion of Debtors with Respect to Proposed Sale of Certain of the Debtors' Assets to AM Broadband, LLC, Amtec, L.L.C., and Nestronix, Inc., Free and Clear of Liens, Claims and Encumbrances for: (I) an Order (A) Establishing Bidding Procedures Including, Without Limitation, Break-Up Fee Provisions in Connection With the Sales, (B) Approving Asset purchase agreements; (C) Approving Form and Manner of Notice of Sale; (II) Final Order Approving the Sales to AM Broadband, LLC, Amtec, L.L.C., and Nestronix, Inc., or the Successful Bidder(s); and (III) Related Relief (the "Motion") 1 filed by the above-captioned Debtors and Debtors-in-possession (the "Debtors"); the Court having reviewed the Motion considered the objections thereto, the evidence presented and having heard the statements of counsel in support of the relief requested therein at a hearing thereon (the "Preliminary Hearing"); the Court finding that (a) the Court has jurisdiction over this matter pursuant to 28 U.S.C. a7a7 157 and 1334, and (b) this is a core proceeding pursuant to 28 U.S.C.a7 157(b)(2); the Court finding that notice of the Motion given by the Debtors was sufficient under the circumstances; and the Court being fully advised in the premises and having

determined that the legal and factual bases set forth in the Motion and at the Preliminary Hearing on the Motion establish just cause for the relief herein granted;


1.The Debtors have articulated good and sufficient reasons for approving the Bidding Procedures and the Bid Protections described in the Motion and as amended and/or modified herein. The objections of the Official Unsecured Creditors' Committee and the United States Trustee (the "Objections") are overruled except as the procedures are modified herein. The Bidding Procedures and the Bid Protections are reasonable and appropriate and represent the best method for maximizing the return on the Purchased Assets described in the Motion.

2.Notice of the Bidding Procedures approved hereby and the method of notice for the Sale proposed in the Motion is good and sufficient notice of the Bidding Procedures and the proposed Sale, plus the Debtors shall provide notice of the Sale by publication in the Wall Street Journal and no other or further notice is required.

3.The Bidding Procedures and Bid Protections were negotiated by the Debtors in good faith with AM Broadband, LLC ("AMB"), Amtec, L.L.C. ("Amtec"), and Nestronix, Inc. ("Nest") (collectively "Purchasers") and their approval is a condition precedent to the asset purchase agreements between the Debtors and Purchaser(s) (the "APAs").

4.The Bidding Procedures and Bid Protections have promoted competitive bidding by the Purchasers to assume the role of stalking horse and thus have already encouraged Purchasers to enter into the APAs. Absent authorization of the Bidding Procedures and the Bid Protections, Purchasers will not go forward with the APAs and therefore the estate would 1 Unless otherwise defined in this Order, capitalized terms used herein shall have the meanings ascribed to them in the Motion.


otherwise lose the opportunity to obtain the highest and best available offer for the Purchased Assets by way of the Auction described in the Motion.

5.In particular, the payments to Purchasers of the Break-Up Fees as set forth herein and based upon the record at the Preliminary Hearing (i) are an actual and necessary cost and expense of preserving the Debtors' estate within the meaning of 11 U.S.C. a7 503(b), (ii) are of substantial benefit to the Debtors' estate, and (iii) are reasonable and appropriate, including in light of the size and nature of the proposed Sale of the Purchased Assets and the efforts that have been and will be expended by Purchasers, notwithstanding that the proposed sale is subject to higher or better offers for the Purchased Assets.

6.The APAs, as attached to the Motion, appear reasonable and appropriate in light of the proposed Sale and reflect, based upon the showing at the Preliminary Hearing, good faith, arm's-length negotiations. Any findings, however, under Section 363 of the Bankruptcy Code shall be reserved until the Final Hearing.


1. The Motion shall be, and hereby is, GRANTED as set forth herein and the Objections are overruled.

2. The APAs, as described in the Motion, and subject to modification to clarify that no timeliness defaults shall exist under the APAs to the extent the schedule herein is followed, are hereby APPROVED, and the Debtors are authorized to consummate the transactions described therein, subject to (i) the Bidding Procedures and Bid Protections and (ii) entry of a final order authorizing the sale and transfer of the Purchased Assets.


3. The Bidding Procedures, as set forth on Exhibit 1 hereto and incorporated herein by reference, are hereby approved and shall govern all proceedings relating the Sale, the Auction and bids for the Purchased Assets.

4. The Bid Protections are hereby approved as follows:

a. If the Debtors close a transaction(s) providing for the sale of all or any substantial portion of the Purchased Assets to a Successful Bidder other than the Purchaser(s) (an "Alternative Transaction"), then the Debtors shall pay to such Purchaser(s) upon the closing of such Alternative Transaction, a termination payment consisting of a break-up fee (the "Break-Up Fee") and Debtors shall reimburse Purchaser(s) for actual reasonable out-of-pocket expenses incurred in connection with the APAs (the "Reimbursement") and the transactions contemplated therein up to a maximum set forth in the following table:





AM Broadband

Substantially all assets of:

AM Broadband Services, SRS Communications, and AM Nex-Link Communications. Actual out of pocket expenses not to exceed $50,000.

Amtec Substantially all assets of AMC Services. Actual out of pocket expenses not to exceed $50,000.

Nestronix Substantially all of the assets of the Broadband Products business (primarily AM Communications). Actual out of pocket expenses not to exceed $50,000.

Any Alternative Transaction with respect to AM Broadband shall require the repayment of AM Broadband's $250,000 participation in the LaSalle DIP Facility. Any Alternative


Transaction with respect to Nestronix shall require the repayment of up to $500,000
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