Letter LETTER by Next Angel LLC ITC-STA-20130130-00038 STi Telecom Internat

STi Telecom Internat

LETTER submitted by Next Angel LLC

Letter

2013-01-31

This document pretains to ITC-STA-20130130-00038 for Special Temporal Authority on a International Telecommunications filing.

IBFS_ITCSTA2013013000038_984324

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UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
---------------------------------------------------------x
In re Chapter 11

VIVARO CORPORATION, et al., Case No. 12-13810 (MG)

Debtors. (Jointly Administered)
---------------------------------------------------------x

ORDER PURSUANT TO SECTIONS 105(a) AND 363 OF THE BANKRUPTCY
CODE (I) APPROVING (A) SALE OF SUBSTANTIALLY ALL OF THE ASSETS
OF THE DEBTORS OUTSIDE THE ORDINARY COURSE OF BUSINESS, FREE AND
CLEAR OF ALL LIENS, CLAIMS, INTERESTS, AND ENCUMBRANCES,
AND (B) FORM AND CONTENT OF ASSET PURCHASE AGREEMENT

Upon the motion, dated November 16, 2012 (the “Motion”) [ECF No. 115] of debtors

and debtors in possession Vivaro Corporation; STI Prepaid, LLC; Kare Distribution, Inc.; STi

Telecom, Inc.; TNW Corporation; STi CC I, LLC; and STi CC II, LLC (collectively, the

“Debtors”), for, among other things, entry of an order (the “Sale Order”) pursuant to sections

105(a), 363, and 365 of title 11 of the United States Code (the “Bankruptcy Code”); Rules 2002,

6004, and 6006 of the Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”); Local

Bankruptcy Rules 2002-1, 6004-1, and 9006-1(b); and the Amended Guidelines for the Conduct

of Asset Sales established and adopted by the United States Bankruptcy Court for the Southern

District of New York pursuant to General Order M-383 (the “Sale Guidelines”), granting the

following relief: (i) approving the Debtors’ Sale1 of the Purchased Assets (as that term is defined

in the APA) to [Next Angel, LLC]2 (the “Purchaser”) pursuant to the Asset Purchase and Sale

1
To the extent not otherwise defined or indicated herein, all capitalized terms shall have the meanings ascribed to
them in the Motion and the APA.
2
The members of Next Angel, LLC, and the percentage of their respective membership interests, are as follows:
Next Communications, Inc. (“Nextcomm”) (42.5%); Angel Telecom (USA) Inc. (“Angel”) (42.5%); Marcatel
Telecommunications, LLC (15%). Nextcomm and Angel Telecom AG, Angel’s parent corporation, provide post-
petition trade credit to the Debtors pursuant to the DIP Credit Agreement.

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Agreement between the Debtors and the Purchaser (the “APA”, a true and correct copy of which

is annexed hereto as Exhibit “A”), free and clear of all liens, claims, interests, encumbrances and

other liabilities of any kind or nature whatsoever, whether secured or unsecured, choate or

inchoate, filed or unfiled, scheduled or unscheduled, noticed or unnoticed, recorded or

unrecorded, contingent or non-contingent, liquidated or unliquidated, matured or unmatured,

disputed or undisputed, senior or subordinated or known or unknown, whether arising prior to or

subsequent to the Petition Date, whether imposed by agreement, understanding, law, equity or

otherwise, including without limitation, any right of setoff, recoupment, netting or deduction,

except for the Assumed Liabilities (the “Interests”), with such Interests to transfer, affix and

attach to the proceeds of the Sale, all as more fully set forth herein; and (ii) approving the form

and content of the APA; and the Court having entered an Order, dated December 19, 2012 (the

“Amended Bidding Procedures Order”), authorizing (i) bidding procedures in connection with

the Sale, (ii) the Breakup Fee, if any, and (iii) the Sale Notice; and the Purchaser having been

chosen by the Debtors as the Successful Bidder at the Auction; and hearings on this Sale Order

having been held on January 17, January 24, January 29 and January 31, 2013 (the “Sale

Hearing”), at which time all interested parties were offered an opportunity to be heard with

respect to the Sale; and the Court having reviewed and considered (i) the Motion, (ii) the

objections thereto, if any, (iii) the declarations and supplemental declarations of Philip Gund and

Robert Smith filed in support of the Motion (iv) the arguments of counsel made, and the

evidence proffered or adduced, at the Sale Hearing; and it appearing that the relief requested in

the Motion is in the best interests of the Debtors, their estates and creditors, and other parties-in-

interest in the Debtors’ bankruptcy cases; and upon the record of the Sale Hearing and this case;

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and after due deliberation thereon; and good cause appearing therefor, the Court hereby FINDS,

DETERMINES, AND CONCLUDES THAT:

A. The findings and conclusions set forth herein constitute the Court’s findings of

fact and conclusions of law pursuant to Bankruptcy Rule 7052, made applicable to this

proceeding pursuant to Bankruptcy Rule 9014.

B. To the extent any of the following findings of fact constitute conclusions of law,

they are adopted as such. To the extent any of the following conclusions of law constitute

findings of fact, they are adopted as such.

C. Capitalized terms used but not otherwise defined herein shall have the meanings

ascribed to them in the Motion.

D. The Court has jurisdiction over the Motion and the transactions contemplated by

the APA pursuant to 28 U.S.C. §§ 157 and 1334, and this matter is a core proceeding pursuant to

28 U.S.C. § 157(b)(2)(A)(N). Venue of this case and the Motion in this District is proper under

28 U.S.C. §§ 1408 and 1409.

E. The statutory predicates for the relief sought in the Motion are sections 105, 363,

and 365 of the Bankruptcy Code, and Bankruptcy Rules 2002, 6004, and 6006.

F. As evidenced by the affidavits of service previously filed with the Court,

(i) proper, timely, adequate and sufficient notice of the Motion, the Sale Hearing and the Sale,

has been provided in accordance with sections 102(1), 363 and 365 of the Bankruptcy Code, and

Bankruptcy Rules 2002, 6004, 6006, 9006, 9007, 9008 and 9014, the local rules of the Court,

and the Amended Bidding Procedures Order; (ii) such notice was proper, timely, good and

sufficient, and appropriate under the particular circumstances; (iii) the Sale Motion and all other

relevant documents were duly and properly served on all required persons and entities in

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accordance with the Amended Bidding Procedures Order; and (iv) no other or further notice of

the Motion, the Sale Hearing or the Sale, is necessary or shall be required.

G. The Debtors (i) have full corporate power and authority to execute the APA and

all other documents contemplated thereby, and the sale of the Purchased Assets by the Debtors

has been duly and validly authorized by all necessary corporate action of the Debtors, (ii) have

all of the requisite power and authority necessary to consummate the transactions contemplated

by the APA and the Motion, (iii) have taken all corporate action necessary to authorize and

approve the APA and the consummation by the Debtors of the transactions contemplated

thereby, and (iv) no consents or approvals, other than those expressly provided for in the APA,

are required for the Debtors to consummate such transactions.

H. Entry into the APA and consummation of the transactions contemplated thereby

constitute the exercise by the Debtors of sound business judgment and such acts are in the best

interests of the Debtors, their estate, and creditors. The Court finds that the Debtors have

articulated good and sufficient business reasons justifying the Sale of the Purchased Assets

pursuant to sections 105 and 363 of the Bankruptcy Code. Such business reasons include, but

are not limited to, the facts that (a) the APA constitutes the highest and/or best offer for the

Purchased Assets and (b) the APA and the closing thereon will present the best opportunity to

realize the value of the Debtors’ assets and avoid decline and devaluation of the Debtors’

business. A valid business purpose exists for approval of the transactions contemplated by the

Sale Motion pursuant to section 363(b) of the Bankruptcy Code. The sale of the Purchased

Assets to Purchaser under the APA will constitute a transfer for reasonably equivalent value and

fair consideration under the Bankruptcy Code and all applicable law. The consideration

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provided by the Purchaser for the Purchased Assets under the APA is fair and reasonable and

may not be avoided under section 363(n) of the Bankruptcy Code.

I. The APA and the transactions contemplated by the APA were negotiated and

have been and are undertaken by the Debtors and the Purchaser at arm’s length, without

collusion or fraud, and in good faith within the meaning of section 363(m) of the Bankruptcy

Code. The process employed by the Debtor and its advisors in connection with the Auction was

fair, adequate and reasonable in order to obtain the highest and best price possible for the

Purchased Assets and the Debtor afforded all interested potential purchasers a full, fair and

reasonable opportunity to make a higher and better offer to purchase the Purchased Assets. The

Auction conducted in accordance with the Amended Bidding Procedures Order on January 15

and 16, 2013, at which the Purchaser was declared the highest and best bidder, was conducted in

good faith within the meaning of section 363(m) of the Bankruptcy Code. As a result of the

foregoing, the Debtors and the Purchaser are entitled to the protections of section 363(m) of the

Bankruptcy Code.

J. The APA was negotiated, proposed and entered into by the Debtors and the

Purchaser without collusion, in good faith, and from arm’s-length bargaining positions. Neither

the Debtors nor the Purchaser have engaged in any conduct that would cause or permit the APA

and Sale to be avoided under section 363(n) of the Bankruptcy Code.

K. The consideration provided by the Purchaser for the Purchased Assets is the

highest and/or otherwise best offer received by the Debtors and is fair and reasonable. A sale of

the Purchased Assets other than one free and clear of Interests would impact materially and

adversely on the Debtors’ bankruptcy estates, will yield substantially less value for the Debtors’

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estate, with less certainty than the available alternatives and thus the alternative would be of

substantially less benefit to the Debtors’ estates.

L. A reasonable opportunity to object or be heard with respect to the Motion and the

relief requested therein has been afforded to all interested persons and entities, including: (i) the

Office of the United States Trustee for the Southern District of New York; (ii) the Official

Committee of Unsecured Creditors (the “Committee”); (iii) those additional parties that have

requested notice pursuant to Bankruptcy Rule 2002 (subject to any previous orders of this Court

modifying such Rule); (iv) any party known to the Debtors to possess and/or exercise any control

over any of the Purchased Assets; (v) any party known to the Debtors to assert any rights in the

Purchased Assets; (vi) the Internal Revenue Service; (vii) all federal, state, and local regulatory

authorities that have a known interest in the relief requested in the Motion; (viii) non-debtor

parties to the Assumed Contracts; (ix) any party known to the Debtors to be a potential bidder for

the Purchased Assets; and (x) all applicable federal, state and local tax authorities with

jurisdiction over the Debtors and/or the Purchased Assets.

M. The Purchaser is not an “insider” of the Debtors, as that term is defined in

section 101 of the Bankruptcy Code, provided however, that Marcatel Telecommunications,

LLC, a non-debtor affiliate of the Debtors, is a member of the Purchaser.

N. The transfer of the Purchased Assets to the Purchaser will be a legal, valid, and

effective transfer of the Purchased Assets, and, except for liabilities expressly assumed under the

APA as “Assumed Liabilities,” will vest the Purchaser with all right, title, and interest of the

Debtors to the Purchased Assets free and clear of all Interests in the Purchased Assets, including,

but not limited to, those (A) that purport to give to any party a right or option to effect any

forfeiture, modification, right of first refusal, or termination of the Debtors’ or the Purchaser’s

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interest in the Purchased Assets, or any similar rights, (B) relating to taxes arising under or out

of, in connection with, or in any way relating to the operation of the Purchased Assets prior to

the Closing (including all fees and taxes owed to the FCC and/or any state of federal taxing

authority), and (C) (i) all mortgages, deeds of trust, security interests, conditional sale or other

title retention agreements, pledges, liens, judgments, demands, encumbrances, rights of first

refusal or charges of any kind or nature, if any, including, but not limited to, any restriction on

the use, voting, transfer, receipt of income or other exercise of any attributes of ownership and

(ii) all debts arising in any way in connection with any agreements, acts, or failures to act, of the

Debtors or any of the Debtors’ predecessors or affiliates, claims (as that term is defined in

section 101(5) of the Bankruptcy Code), obligations, liabilities, demands, guaranties, options,

rights, contractual or other commitments, restrictions, interests and matters of any kind and

nature, whether known or unknown, contingent or otherwise, whether arising prior to or

subsequent to the commencement of these cases pursuant to chapter 11 of the Bankruptcy Code,

and whether imposed by agreement, understanding, law, equity or otherwise, including but not

limited to claims otherwise arising under doctrines of successor liability.

O. The APA is being entered into in good faith and not to hinder, delay or defraud

any creditors of the Debtors. The Debtors shall not in any way be liable or responsible for any

liabilities, commitments or obligations in any way related to the Purchased Assets or the

Assumed Contracts arising from and after the Closing Date. The Purchaser is not a continuation

of the Debtors or their estates. There is no continuity of enterprise between the Debtors and the

Purchaser. The Purchaser is not a successor to the Debtors or their estates and the transactions

contemplated in the APA do not amount to, or otherwise constitute a consolidation, merger or de

facto merger of the Purchaser and the Debtors or their estates.

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P. The Purchaser would not have entered into the APA and would not consummate

the transactions contemplated thereby, thus adversely affecting the Debtors, their estates, and

their creditors, if the sale of the Purchased Assets to the Purchaser was not free and clear of all

Interests of any kind or nature whatsoever, or if the Purchaser would, or in the future could, be

liable for any of the Interests.

Q. The Debtors may sell the Purchased Assets free and clear of all Interests of any

kind or nature whatsoever because one or more of the standards set forth in section 363(f)(1)-(5)

of the Bankruptcy Code has been satisfied. Those holders of Interests who did not object, or

who withdrew their objections, to the Sale or the Motion are deemed to have consented pursuant

to section 363(f)(2) of the Bankruptcy Code. Those holders of Interests who did object fall

within one or more of the other subsections of section 363(f) of the Bankruptcy Code and are

adequately protected by having their Interests, if any, attach to the cash proceeds of the Sale

ultimately attributable to the property against or in which they claim an Interest. For the

avoidance of doubt, the Order Pursuant to 11 U.S.C. §§ 105 and 363 Approving Removal and

Sale of Certain Telecom Switches and Network Equipment by Third Party Seller (Docket No.

257), entered on January 18, 2013, does not constitute a default under the APA, DIP Credit

Agreement or DIP Orders.

R. Nextcomm and Angel Telecom AG (jointly, the "Lenders") provide post-petition

trade credit to the Debtors pursuant to a DIP Credit Agreement which, inter alia, provided a lien

in substantially all of the assets of the Debtors, as well as a superpriority administrative

claim. The liens of the Lenders pursuant to the DIP Credit Agreement are valid and perfected

liens in substantially all of the assets of the Debtors as provided under the DIP Credit Agreement

and orders of the Bankruptcy Court. All of the obligations under the DIP Credit Agreement

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constitute, for the purposes of section 363 (k) of the Bankruptcy Code, an allowed secured claim

pursuant to section 506 (a) of the Bankruptcy Code (the "Allowed Secured Claim"). The Lenders

have represented that they will assign the Allowed Secured Claim to Purchaser. In accordance

with section 363(k) of the Bankruptcy Code, and as set forth in the APA, upon such assignment,

the Purchaser has credit bid the Allowed Secured Claim as part of the consideration thereunder,

which credit bid the Debtors accept pursuant to Section 363(k) as a set off to the purchase price

(the "Credit Bid"). The Credit Bid was a valid and proper offer pursuant to sections 363(b) and

363(k) of the Bankruptcy Code. Upon closing of the Sale, the effect of the Credit Bid will be that

neither the Lenders nor the Purchaser will have any further Allowed Secured Claim against the

Debtors or their assets, except that the Carve-Out under the DIP Orders shall remain a

superpriority claim against the Debtors for the benefit of the Debtors’ and the Committee’s

professionals.

For all of the foregoing and after due deliberation, the Court ORDERS,

ADJUDGES, AND DECREES THAT:

General Provisions

1. The Motion is granted in its entirety as provided herein.

2. All objections and responses concerning the Motion are resolved in accordance

with the terms of this Order and as set forth in the record of the Sale Hearing, and to the extent

any such objection or response was not otherwise withdrawn, waived, or settled, it is hereby

overruled and denied.

Approval of the APA

3. The APA, and all of the terms and conditions thereof, is approved.

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4. Pursuant to section 363(b) of the Bankruptcy Code, the Debtors are empowered

and authorized to perform their obligations under and comply with the terms of the APA, and

consummate the Sale, pursuant to and in accordance with the terms and conditions of the APA.

5. The Debtors are authorized to execute and deliver, and empowered to perform

under, consummate and implement, the APA, together with all additional instruments and

documents that may be reasonably necessary or desirable to implement the APA, and to take all

further actions as may be reasonably requested by the Purchaser for the purpose of assigning,

transferring, granting, conveying and conferring to the Purchaser or reducing to possession, the

Purchased Assets, or as may be necessary or appropriate to the performance of the obligations as

contemplated by the APA.

6. This Sale Order and the APA shall be binding in all respects upon all creditors

(whether known or unknown) of the Debtors, all parties in interest, all successors and assigns of

the Purchaser, the Debtors and their affiliates and subsidiaries, the Purchased Assets, and any

subsequent trustee appointed in the Debtors’ chapter 11 cases or upon a conversion to a case

under chapter 7 of the Bankruptcy Code, and shall not be subject to rejection. Nothing contained

in any chapter 11 plan confirmed in this bankruptcy case or the confirmation order confirming

any such chapter 11 plan shall conflict with or derogate from the provisions of the APA or this

Sale Order. In the event of any inconsistency between the terms of the APA and this Sale Order,

this Sale Order shall control.

7. Unless otherwise provided in the APA or the Transition Services Agreement (a

true and correct copy of which is annexed hereto as Exhibit “B”), the APA and any related

agreements, documents, or other instruments may be modified, amended or supplemented by the

parties thereto in accordance with the terms thereof without further order of the Court; provided

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that (a) the Committee and (b) the U.S. Trustee shall receive no less than three (3) business days’

written notice of any modification, amendment or supplement, and (b) any such modification,

amendment, or supplement is not material or does not have an adverse effect on the Debtors or

the Debtors’ estates.

Assumption and Assignment Procedures

8. The assumption and assignment of executory contracts and unexpired leases of

non-residential real property is a material term of the APA. As soon as practicable after entry of

this Order, but no later than seven (7) days before the Assumption Hearing (defined below), the

Debtors shall file with the Court and serve on all counterparties to any executory contract or

unexpired lease that may be assumed by the Debtors and assigned to the Purchaser (the

“Contract Notice Parties”), an Assumption Notice, that identifies, to the extent applicable: (i) the

contract or lease that may be an Assumed Contract, (ii) the name of the counterparty to such

contract or lease, and (iii) the cure amount for such contract or lease if it becomes an Assumed

Contract; provided, however, that the presence of a contract or lease on the Assumption Notice

does not constitute an admission that such contract is an executory contract or unexpired lease.

9. All contract or lease counterparties who have timely filed objections to the

assumption and assignment of any contract or lease, proposed cure amount or adequate assurance

of future performance proposed with respect thereto (individually, an “Objecting Party” and

collective, the “Objecting Parties”)3 may have their objections heard at the Assumption Hearing,

unless the objection is resolved prior to the Assumption Hearing. Any party that has failed to

3
The Objecting Parties are as follows: STX Communications LLC (Docket No. 212); 75 Broad, LLC (Docket No.
214); Banc of America Leasing & Capital LLC (Docket No. 219); Oracle Americas, Inc. (Docket No. 226); Entel,
S.A. (Docket No. 228); 15-01 Pollitt Drive LLC (Docket No. 230); Diga Entertainment, LLC (Docket No. 231);
AT&T Corp. (Docket No. 236); Wind Telecom, S.A. (Docket No. 237); Sprint Communications Company L.P.
(Docket No. 238); Marcatel Com, S.A. De C.V./Unifica, Gusma Properties, LP and Gusma Investments, LP (Docket
No. 245)

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timely file an objection to the assumption and assignment of any contract or lease or related cure

amount or adequate assurance of future performance is forever barred from objecting thereto,

including asserting any additional cure or other default amounts against the Debtors and their

bankruptcy estates, and the Purchaser with respect such executory contract(s) and unexpired

lease(s) and shall be deemed to consent to the Sale and the assumption and assignment of such

executory contract(s) or unexpired lease(s) in connection therewith.

10. Subject to the Court’s availability, the Assumption Hearing will be held on

February 15, 2013, or such later date as the parties may be heard. If the Debtors and the

counterparty(ies) are unable to consensually resolve any objection prior to the Assumption

Hearing, the dispute will be heard at the Assumption Hearing (or such other date as fixed by the

Court).

11. Nothing in this Sale Order or the APA authorizes the assumption, assignment or

rejection, in whole or in part, of any executory contracts, including but not limited to, the

contracts listed on the Notice of (I) Potential Assumption and Assignment of Executory

Contracts and Unexpired Leases; and (II) Cure Amount with Respect to Executory Contracts and

Unexpired Leases to be Potentially Assumed and Assigned, dated December 20, 2012. Other

than the rights and obligations between the parties to the APA, nothing herein or in the APA

shall affect the rights of any Objecting Parties, all of which rights are hereby preserved,

including, without limitation, the right of an Objecting Party to seek, oppose or support (a) any

assumption, assignment or rejection of an Objecting Party Agreement on any legal or factual

basis, (b) adequate assurance of future performance, (c) the estimation or assertion of any

proposed cure amounts, (d) the assumption by the Purchaser of all obligations and liabilities

under any Objecting Party Agreement by virtue of the assumption and assignment of the

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Objecting Party Agreement under Section 365 and other applicable law, including, to the extent

applicable, contingent, unmatured, or unliquidated claims, and whether such arise or arose pre-

or post-closing, and (e) adequate assurance for payment of such obligations and liabilities. For

purposes of this Sale Order, “Objecting Party Agreement” means any written contract,

agreement, license or other document that creates binding contractual obligations between an

Objecting Party and one or more of the Debtors. Nothing in this Sale Order or the APA shall

prejudice, estop, bar, impair or otherwise limit in any respect any party's rights under Section

365 of the Bankruptcy Code with respect to the Objecting Party Agreements, including, without

limitation, the rights set forth above in subparts (a) through (e).

Transfer of Assets

12. Notwithstanding anything to the contrary herein, pursuant to sections 105(a) and

363(f) of the Bankruptcy Code, the Purchased Assets shall be transferred to the Purchaser, and

upon Closing (as that term is defined in the APA) shall be, free and clear of all Interests, with all

such Interests of any kind or nature whatsoever to attach to the net proceeds of the Sale in the

order of their priority, with the same validity, force and effect which they now have as against

the Purchased Assets, subject to any claims and defenses the Debtors may possess with respect

thereto.

13. Except as expressly permitted or otherwise specifically provided by the APA or

this Sale Order, all persons and entities, including, but not limited to, all debt security holders,

equity security holders, governmental, tax, and regulatory authorities, lenders, employees, trade

and other creditors, holding Interests against or in the Debtors or the Purchased Assets, arising

under or out of, in connection with, or in any way relating to, the Debtors, the Purchased Assets,

the operation of the Purchased Assets prior to the Closing, or the transfer of the Purchased Assets

to the Purchaser, are forever barred, estopped, and permanently enjoined from asserting against

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the Purchaser, its successors or assigns, its property, or the Purchased Assets, such persons’ or

entities’ Interests or Claims.

14. The transfer of the Purchased Assets to the Purchaser pursuant to the APA

constitutes a legal, valid, and effective transfer of the Purchased Assets, and shall vest the

Purchaser with all right, title, and interest of the Debtors in and to the Purchased Assets free and

clear of all Interests of any kind or nature whatsoever.

15. If any Person (as that term is defined in the APA) or entity that has filed financing

statements, mortgages, mechanic’s liens, lis pendens, or other documents or agreements

evidencing Interests in the Debtors or the Purchased Assets shall not have delivered to the

Debtors prior to the Closing, in proper form for filing and executed by the appropriate parties,

termination statements, instruments of satisfaction, releases of all Interests which the Person or

entity has with respect to the Debtors or the Purchased Assets or otherwise, then (a) the Debtors

are authorized and directed to execute and file such statements, instruments, releases and other

documents on behalf of the Person or entity with respect to the Purchased Assets and (b) the

Purchaser is authorized to file, register, or otherwise record a certified copy of this Sale Order,

which, once filed, registered or otherwise recorded, shall constitute conclusive evidence of the

release of all Interests in the Purchased Assets of any kind or nature whatsoever.

Notwithstanding anything herein, the rights of the Debtors to execute such documents shall not

extend to releasing or cancelling Diga’s security interest, if any. This Order shall be binding

upon and govern the acts of all persons or entities, including without limitation, all filing agents,

recording agencies, secretaries of state and all other persons and entities who may be required by

operation of law to accept, file, register or otherwise record or release any documents or

instruments.

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16. All persons or entities, presently or on or after the Closing Date with access to or

in possession or control of some or all of the Purchased Assets are directed to provide access to

and surrender possession of the Purchased Assets to the Purchaser on the Closing Date or at such

other time thereafter as the Purchaser may request.

17. To the extent that the Debtors are selling any “personally identifiable

information” (as that term is defined in 11 U.S.C. § 101(41A)) to the Purchaser, then the Debtors

have satisfied section 363(b)(1)(A) of the Bankruptcy Code because the Purchaser has agreed to

comply with, and be bound by, the Debtors’ privacy policy.

Additional Provisions

18. The consideration provided by the Purchaser for the Purchased Assets under the

APA constitutes reasonably equivalent value and fair consideration under the Bankruptcy Code

and laws of the United States, and any state (including New York), territory, possession, or the

District of Columbia.

19. At Closing, Marcatel and Unifica are hereby deemed to have collectively waived

the amount of $800,000 in post-petition administrative expense claims against the Debtors, and

such claims shall be deemed released against the Debtors and their estates.

20. On the Closing of the Sale, the Debtors’ creditors are authorized and directed to

execute such documents and take all other actions as may be necessary to release their Interests

in the Purchased Assets, if any, as such Interests may have been recorded or may otherwise exist.

21. Pursuant to the terms of the APA and the Bidding Procedures Orders, if the Sale

has not been consummated by February 4, 2013 as the result of Purchaser’s failure to satisfy any

of its conditions precedent to Closing, the Debtors shall have the right, but not the obligation, to

terminate the APA and be authorized, but not required, to deem the next highest or otherwise

best Qualified Bid for the Purchased Assets (the “Back-Up Bid,” and the party submitting the

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Back-Up Bid, the “Back-Up Bidder”) as the Successful Bid, as disclosed at the Sale Hearing, and

the Debtors, in consultation with the Consulting Parties shall be authorized, but not required, to

enter into agreements with the Back-Up Bidder and consummate the Sale with the Back-Up

Bidder without further order of the Court. The Back-Up Bid shall remain open until the first

business day following the consummation of a Sale of the relevant assets to the Successful

Bidder.

22. Pursuant to the terms of the APA, if the Closing has not been consummated by

February 8, 2013 as the result of Sellers’ failure to satisfy any of their conditions precedent to

Closing, the Purchaser shall have the right, but not the obligation, to terminate the APA.

23. This Sale Order (a) shall be effective as a determination that, on the Closing, all

Interests existing as to the Debtors or the Purchased Assets prior to the Closing have been

unconditionally released, discharged and terminated, and that the conveyances described herein

have been effected, and (b) shall be binding upon and shall govern the acts of all entities

including without limitation, all filing agents, filing officers, title agents, title companies,

recorders of mortgages, recorders of deeds, registrars of deeds, administrative agencies,

governmental departments, secretaries of state, federal, state, and local officials, and all other

persons and entities who may be required by operation of law, the duties of their office, or

contract, to accept, file, register or otherwise record or release any documents or instruments, or

who may be required to report or insure any title or state of title in or to any of the Purchased

Assets.

24. Each and every federal, state, and local governmental agency or department is

directed to accept any and all documents and instruments necessary and appropriate to

consummate the transactions contemplated by the APA.

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25. All entities who are presently, or on the Closing may be, in possession of any or

all of the Purchased Assets are directed to surrender possession of the Purchased Assets to the

Purchaser on the Closing.

26. Except for the Assumed Liabilities or as expressly permitted or otherwise

specifically provided for in the APA or this Sale Order, the Purchaser shall have no liability or

responsibility for any liability or other obligation of the Debtors arising under or related to the

Purchased Assets other than for the Assumed Liabilities. Without limiting the generality of the

foregoing, and except as otherwise specifically provided herein and in the APA, to the extent

allowed by law, the Purchaser shall not be liable for any claims against the Debtors or any of

their predecessors and/or affiliates, and the Purchaser shall have no successor or vicarious

liabilities of any kind or character including, but not limited to, any such liability that may be

imposed by statute (e.g., under so-called “bulk sale” laws) or any theory of antitrust,

environmental, successor or transferee liability, labor law, de facto merger, or substantial

continuity, whether known or unknown as of the Closing, now existing or hereafter arising,

whether fixed or contingent, with respect to the Debtors or any obligations of the Debtors arising

prior to the Closing, including, but not limited to, liabilities on account of any taxes arising,

accruing, or payable under, out of, in connection with, or in any way relating to the operation of

the Purchased Assets prior to the Closing.

27. Under no circumstances shall the Purchaser be deemed a successor of or to the

Debtors for any Interest against or in the Debtors or the Purchased Assets of any kind or nature

whatsoever. The sale, transfer, assignment and delivery of the Purchased Assets shall not be

subject to any Interests, and Interests shall remain with, and continue to be obligations of, the

Debtors. All Persons holding Interests against or in the Debtors or the Purchased Assets shall be,

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and are, forever barred, estopped, and permanently enjoined from asserting, prosecuting, or

otherwise pursuing such Interests against the Purchaser, its property, its successors and assigns,

or the Purchased Assets, as an alleged successor or otherwise, with respect to any Interest of any

kind or nature whatsoever such Person or entity had, has, or may have against or in the Debtors,

their estates, officers, directors, shareholders, or the Purchased Assets. Following the Closing,

no holder of an Interest in the Debtors shall interfere with the Purchaser’s title to or use and

enjoyment of the Purchased Assets based on or related to such Interest, or any actions that the

Debtors may take in their chapter 11 cases.

28. Notwithstanding anything to the contrary in this Sale Order, the APA or any sale

documents, the allocation of the proceeds of the Sale shall be determined and fixed by further

Order of the Bankruptcy Court.

29. Notwithstanding anything to the contrary in this Sale Order, the APA, the

Transition Services Agreement or otherwise, (a) none of the agreements (“Oracle Agreements”)

between one or more of the Debtors, on the one hand, and Oracle America, Inc., including any of

its predecessors-in-interest (“Oracle”), on the other hand, and (b) none of the Oracle software,

shall be transferred to the Purchaser, absent a further Order of this Court or pursuant to the

procedures set forth herein. Further, to the extent that (a) any computer equipment or any IT

assets are transferred to the Purchaser that embodies or contains Oracle software and (b) such

transfer of equipment occurs prior to the assumption and assignment of any Oracle Agreements,

then such Oracle software shall be scrubbed prior to the transfer of such equipment. To the

extent that Oracle subsequently consents to the assumption and assignment of any Oracle

Agreements, then with respect to such Oracle Agreements, the Debtors shall have no further

access to any Oracle software, absent separate agreement between Oracle and Debtors. To the

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extent that the terms of this paragraph conflict with other provisions of this Order, the APA or

the Transition Services Agreement, the terms of this paragraph shall control.

30. Notwithstanding anything to the contrary contained in the APA, this Sale Order

and/or any document or instrument entered into in respect of this Sale, including, without

limitation, any amendments, modifications and/or supplements thereto:

a. The Purchaser, in respect of the Purchased Assets, shall be responsible for

and shall timely pay, from and after the Closing Date, all federal Universal Service Fund

contribution obligations (the “USF Obligations”) resulting from or relating to

telecommunications services provided post-Closing Date, including, without limitation, all USF

Obligations resulting from any true-up of the telecommunications reporting worksheets (a

“Worksheet” or, quarterly, an FCC Form “499-Q” or, annually, an FCC Form “499-A”) required

to be submitted thereafter by the Purchaser or by the Debtors in respect of telecommunications

services provided post-Closing Date.

b. Similarly, the Debtors shall be responsible for and shall pay all USF

Obligations resulting from or relating to telecommunications services provided by the Debtors

pre-Closing Date, including, without limitation, all USF Obligations resulting from the true-up of

any 499-Q or 499-A Worksheet required to be submitted by the Debtors or by the Purchaser in

respect of telecommunications services provided pre-Closing Date.

c. The Debtors and the Purchaser shall each timely comply with all reporting

obligations required by USAC, the Federal Communications Commission (the “FCC”) and

applicable regulations and FCC orders relating to the telecommunications services provided

post-Petition Date.

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d. Within ten (10) business days after the Closing Date, the Debtors shall

submit to USAC all information and documentation required by USAC to deactivate the

Debtors’ USF Filer ID numbers so as to establish “deactivation dates” as of the Closing Date.

e. Nothing in the APA, this Sale Order or in connection with the Sale shall

prohibit, limit, impair or otherwise restrict USAC’s right to (i) conduct audits of the books and

records of the Debtors and/or the Purchaser, including in respect of reported contributor

revenues, for the pre-Petition Date, post-Petition Date and post-Closing Date periods, (ii) assess

and invoice any USF Obligations resulting from any such audits, and (iii) pursue USAC’s rights

related to any such audits, including, without limitation, amending any previously filed claims

against the Debtors.

31. All liens, including any lien of Diga Entertainment LLC (“Diga”) (to the extent

any such liens may exist), on property sold pursuant to this Order and the APA will attach to the

proceeds of the Sale with the same force, effect and validity as the liens on such property.

Nothing in this Order, the APA or the sale of the Debtors’ assets free and clear of all liens, as

provided herein, shall be deemed to abrogate, limit or otherwise deny the security interest of

Diga (to the extent any such interest may exist), or any rights Diga may have as a secured

creditor, in the event of the assignment and assumption of the “Manufacturing & Distribution

Agreement”, the “Consent to Assignment and Assumption”, the “Settlement Agreement”, the

“Second Modification Agreement” and the “Consulting Agreement” between Diga and the

Debtors.

32. The Carve-Out under the DIP Order and DIP Credit Agreement shall remain as a

superpriority administrative claim against the Debtors and their estates for the benefit of the

Debtors’ and the Committee’s professionals.

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33. Subject to the terms of the APA and the Transition Services Agreement, the

Purchaser shall provide the Sellers with an original or copy of all documents and electronic files,

pins, CDR and other electronic data maintained by the Sellers.

34. This Court retains jurisdiction to enforce and implement the terms and provisions

of the APA and other sale documents, all amendments thereto, any waivers and consents

thereunder, and of each of the agreements, instruments and documents executed in connection

therewith in all respects, including, but not limited to, retaining jurisdiction to (a) compel

delivery of the Purchased Assets to the Purchaser, (b) compel delivery of the purchase price or

performance of other obligations under the APA owed to the Debtors, (c) resolve any disputes

arising under or related to the APA, except as otherwise provided therein, (d) interpret,

implement, and enforce the provisions of this Sale Order, and (e) protect the Purchaser against

(i) any of the Excluded Liabilities or (ii) any Interests in the Debtors or the Purchased Assets, of

any kind or nature whatsoever, attaching to the proceeds of the Sale; provided, however, that in

the event the Court abstains from exercising or declines to exercise such jurisdiction or is

without jurisdiction with respect to the APA, other sale documents or this Sale Order, such

abstention, refusal, or lack of jurisdiction shall have no effect upon, and shall not control,

prohibit, or limit the exercise of jurisdiction of any other court having competent jurisdiction

with respect to any such matter.

35. Next Angel, LLC, Angel Telecom AG, Angel Telecom (USA) Inc., Next

Communications, Inc., Marcatel Com, S.A. de C.V., Marcatel Telecommunications, LLC and

Organizacion Radio Beep S.A. De C.V./Unifica are subject to and hereby consent to the Court’s

jurisdiction.

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36. The transactions contemplated by the APA are undertaken by the Purchaser in

good faith, as that term is used in section 363(m) of the Bankruptcy Code, and accordingly, the

reversal or modification on appeal of the authorization provided herein to consummate the Sale

shall not affect the validity of the Sale of the Purchased Assets to the Purchaser, unless such

authorization is duly stayed pending such appeal. The Purchaser is a purchaser in good faith of

the Purchased Assets, and is entitled to all of the protections afforded by section 363(m) of the

Bankruptcy Code.

37. The terms and provisions of the APA and this Sale Order shall be binding in all

respects upon, and shall inure to the benefit of, the Debtors, their estates, and their creditors, the

Purchaser, and its respective affiliates, successors and assigns, and any affected third parties

including, but not limited to, all persons asserting an Interest in the Purchased Assets to be sold

to the Purchaser pursuant to the APA, notwithstanding any subsequent appointment of any

trustee(s), party, entity or other fiduciary under any section of the Bankruptcy Code or, as to

which trustee(s), party, entity or other fiduciary such terms and provisions likewise shall be

binding.

38. The provisions of this Sale Order and the terms and conditions of the APA shall

be binding upon, fully enforceable against and inure to the benefit of any trustee, responsible

officer or other fiduciary appointed in the Debtors’ chapter 11 cases or any successor case under

any section of the Bankruptcy Code or any applicable law. Such binding effect is an integral part

of this Sale Order.

39. The failure specifically to include any particular provisions of the APA in this

Sale Order shall not diminish or impair the effectiveness of such provision, it being the intent of

the Court that the APA be authorized and approved in its entirety.

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40. Nothing contained in this Sale Order shall be construed to apply to any Person,

Governmental Body (as that term is defined in the APA) or other entity that is beyond the

jurisdiction of this Court, except as may otherwise be appropriate under applicable law.

41. The stay of orders authorizing the use, sale or lease of property as provided for in

Fed. R. Bank. P. 6004(h) shall not apply to this Sale Order, and this Sale Order is immediately

effective and enforceable upon entry and its provisions shall be self-executing, and the automatic

stay of Orders authorizing the sale, use or lease of property from the Debtors’ estates, as set forth

in Fed. R. Bank. P. 6004 shall not apply to this Order.

42. The provisions of this Sale Order are nonseverable and mutually dependent.

43. The sale approved by this Sale Order is not subject to avoidance pursuant to

Section 363(n) of the Bankruptcy Code.

44. The Court shall retain jurisdiction over the implementation, interpretation and

enforcement of this Sale Order.

Dated: January 31, 2013
New York, New York

_____/s/Martin Glenn_______
MARTIN GLENN
United States Bankruptcy Judge

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Document Created: 2013-01-31 18:27:47
Document Modified: 2013-01-31 18:27:47

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