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EXHIBIT 10.27.1
SETTLEMENT AND ASSUMPTION AGREEMENT AND RELEASE
THIS SETTLEMENT AND ASSUMPTION AGREEMENT AND RELEASE (this
"Agreement") is
made as of the 31st day of August, 2004 by and between
HORIZON PCS, INC. ("Horizon"), BRIGHT PERSONAL COMMUNICATIONS
SERVICES,
INC. ("Bright") and HORIZON PERSONAL COMMUNICATIONS, INC.
("Percom" and
collectively with Horizon and Bright, the "Debtors"),
and
SBA BROADBAND, INC. ("Broadband"), SBA NETWORK SERVICES, INC.
("Network"),
SBA PROPERTIES, INC. ("Properties"), SBA SITES, INC. ("Sites")
and SBA
TOWERS, INC. ("Towers" and, collectively with Broadband,
Network,
Properties and Sites, the "SBA Entities").
RECITALS
A. On August 15, 2003 (the "Petition Date") the Debtors each
filed a
voluntary petition for relief under Chapter 11 of title 11 of
the United States
Code, 11 U.S.C. Sections 101-1330, as amended (the "Bankruptcy
Code") in the
United States Bankruptcy Court for the Southern District of
Ohio, Eastern
Division (the "Bankruptcy Court"). The Chapter 11 cases of the
Debtors
(individually a "Case," and collectively, the "Cases") have been
consolidated
for procedural purposes only.
B. The Debtors and the SBA Entities are parties to numerous
contracts and
leases related to the provision of wireless personal
communications services.
The Debtors and certain of the SBA Entities are parties to
approximately 375
leases of wireless telecommunications tower sites pursuant to a
Master Site
Agreement (the "Percom MSA") dated August 17, 1999 between
Percom and Towers and
a Master Site Agreement dated as of October 1999 between Bright
and Towers (the
"Bright MSA" and, together with the Percom MSA, the "MSAs"). The
MSAs set forth
the general terms and conditions pursuant to which the SBA
Entities agree to
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lease space to the Debtors; individual site locations are
governed by separate
Site License Acknowledgements ("SLAs") entered into by one of
the Debtors and
one of the SBA Entities. Each SLA authorizes one of the Debtors
to maintain and
operate wireless communications equipment at a particular
telecommunications
tower site, with each such SLA specifying the applicable site
location, monthly
lease payments for that particular site and annual escalations
of such lease
payments, lease term, and equipment to be installed by or for
the account of the
particular Debtor.
C. On August 17, 1999 Percom and Towers entered into the
following
additional agreements:
1. Master Design Build Agreement (the "Percom BTS
Agreement")
whereby the SBA Entities would construct to the Debtors'
specifications additional telecommunication towers at sites
jointly determined by the Debtors and the SBA Entities, and
the Debtors would lease space at such tower sites from the
SBA
Entities, pursuant to the Percom MSA and an SLA to be
entered
into following construction of such tower.
2. Site Development Agreement (the "SDA") pursuant to which
the
SBA Entities agreed to pay certain development fees to the
Debtors for certain telecommunications tower sites which the
SBA Entities construct on behalf of the Debtors.
D. In October 1999 Bright and Towers entered into a Master
Design Build
Agreement (the "Bright BTS Agreement" and, together with the
Percom BTS
Agreement, the "BTS Agreements") substantially similar to the
Percom BTS
Agreement.
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E. From time to time the MSAs, the BTS Agreements and the SDA
have been
amended by the parties.
F. In 2001, the Debtors and the SBA Entities entered into, inter
alia, one
or more documents entitled as amendments to 100 of the
then-existing SLAs
pursuant to which the SBA Entities acquired and installed
emergency power
generators (the "Generators") at the telecommunication tower
sites which were
the subject of such SLAs in order to supply backup power to such
sites in the
event of a power failure. Documents entitled as amendments to
such SLAs (the
"Generator Amendments") specified the particular tower site
subject to such
amendments and increased the monthly rent under the applicable
SLA in the
initial amount of $200.00 (the "Additional Rent"). There is a
dispute between
the parties as to whether the Generator Amendments are separate
agreements or
true amendments to the applicable SLAs, which issue is being
resolved as part of
this Agreement. On January 2, 2004 the Debtors filed their
Motion of the Debtors
and Debtors-in-Possession for an Order Approving the Rejection
of Unexpired
Power Generators Leases with SBA Towers, Inc. and SBA
Properties, Inc. (the
"Generator Lease Rejection Motion"). Towers and Properties filed
an Objection to
the Generator Lease Rejection Motion on the basis that the
Generator Amendments
are integral and non-severable parts of the MSAs and the
applicable SLAs, which
the Debtors contested. The Bankruptcy Court has held an
evidentiary hearing and
the parties have filed extensive legal memoranda. No decision on
the Generator
Lease Rejection Motion has been made by the Bankruptcy
Court.
G. At various dates in 2001 and 2003 Broadband and one or more
of the
Debtors entered into agreements (the "SBA Microwave Service
Agreements") whereby
Broadband agreed to provide digital microwave network services
to the Debtors in
Indiana and
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Pennsylvania. On August 6, 2004 the Debtors filed with the
Bankruptcy Court the
Motion of the Debtors and Debtors-in-Possession for an Order
Approving the
Rejection of Certain Unexpired Microwave Service Agreements with
SBA Broadband
Services, Inc. (the "Microwave Services Rejection Motion"),
which the Bankruptcy
Court approved by Stipulated Order entered on August 26, 2004
(the "Microwave
Services Rejection Order") [Docket No. 999].
H. The SBA Entities have timely filed numerous proofs of claim
(the
"Proofs of Claim") in the Cases for, among other things, rent
for space at
telecommunications tower sites under the MSAs and the SLAs,
construction and
development services under the BTS Agreements, obligations of
the Debtors under
the BTS Agreements, and services fees under the SBA Microwave
Service
Agreements, all accruing or arising prior to the Petition Date.
In addition, the
SBA Entities have asserted claims under all such agreements that
accrued or
arose after the Petition Date. The Debtors have asserted claims
against one or
more of the SBA Entities under, among other things, the SDA, and
the Debtors
have disputed certain of the Proofs of Claim.
I. By Order dated August 13, 2004 the Bankruptcy Court approved
the
Disclosure Statement for the Joint Plan of Reorganization of the
Debtors (the
"Joint Plan"). The Debtors are in the process of soliciting
votes to approve the
Joint Plan and the Bankruptcy Court has scheduled a hearing to
consider
confirmation of the Joint Plan on September 21, 2004.
J. The Debtors desire to continue to lease space at
telecommunications
tower sites of the SBA Entities. In order to induce the Debtors
to assume the
MSAs and the SLAs, as modified herein, the SBA Entities have
agreed to certain
modifications of the SLAs, the Debtors have agreed to pay
certain amounts to
cure defaults under such SLAs and agreements and to pay certain
post-petition
obligations under the BTS Agreements, the SBA Entities have
agreed to
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support the Joint Plan, and the parties have agreed to resolve
the disputes
concerning the Generator Amendments, the SBA Microwave Service
Agreements and
the Proofs of Claim, all as set forth herein.
NOW, THEREFORE, intending to be legally bound hereby and in
consideration
of the premises and the agreements set forth herein and for
other good and
valuable consideration, the sufficiency of which is hereby
acknowledged, the
Debtors and the SBA Entities agree as follows:
AGREEMENT
1. This Agreement is subject to approval of the Bankruptcy
Court, which
shall be sought either through the filing of a stipulation, or
the filing of a
motion, so that Court approval of the Agreement shall be
obtained at or before
the hearing scheduled for September 21, 2004. This Agreement
shall become
effective on the date (10/1/04) that the order of the
Bankruptcy
Court approving this Agreement becomes a final, non-appealable
order.
2. The Debtors hereby assume, as of the Effective Date, their
respective
MSAs and SLAs, including all Generator Amendments, as modified
herein.
a. In connection with such assumption, the Debtors will on
the
Effective Date pay the following amounts by wire transfer to
the SBA Entities in order to cure all defaults in existence
under the MSAs and the SLAs on the Effective Date:
i. The sum of $593,676.45, subject to subsequent refund
(not to exceed $50,000.00) in the event of further
reconciliation of amounts due and modification of rental
commencement dates, for rental payments, including
Additional Rent, accruing prior
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to the Petition Date, in full and final satisfaction of
Proofs of Claim Nos. 267, 288-91, 294-97; and
ii. The amount of any unpaid rental payments, excluding
Additional Rent, for the month of September, 2004; and
iii. The sum of $178,802 in respect of Additional Rent
accruing from and after the Petition Date,
iv. The sum of $48,317.00 in respect of installation
services at the Country Club site, in full and final
satisfaction of Proof of Claim No. 262; and
v. The sum of $29,440.2
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