Exhibit 99.2
AGREEMENT AND PLAN OF REORGANIZATION
Dated as of September 17, 1999
among
VoiceStream Wireless Corporation
VoiceStream Wireless Holding Corporation
VoiceStream Subsidiary III Corporation
Aerial Communications, Inc.
and
Telephone and Data Systems, Inc.
Table of Contents
Article I - The Reorganization
Section 1.0 The Reorganization
Section 1.1 The Merger
Section 1.2 Closing
Section 1.3 Effective Time
Section 1.4 Effects of the Merger
Section 1.5 Restated Certificate of Incorporation and By-laws;
Officers and Directors
Article II - Effect of the Merger on the Stock of the Constituent Corporations;
Surrender of Certificates
Section 2.1 Effect on Stock
Section 2.2 Surrender of Certificates
Article III - Representations and Warranties of the Company
Section 3.1 Organization
Section 3.2 Subsidiaries
Section 3.3 Capital Structure
Section 3.4 Authority
Section 3.5 Consents and Approvals; No Violations
Section 3.6 SEC Documents and Other Reports
Section 3.7 Absence of Material Adverse Change
Section 3.8 Information Supplied
Section 3.9 Permits; Compliance with Laws
Section 3.10 Tax Matters
Section 3.11 Liabilities
Section 3.12 Benefit Plans; Employees and Employment Practices
Section 3.13 Litigation
Section 3.14 Environmental Matters
Section 3.15 Section 203 of DGCL
Section 3.16 Intellectual Property
Section 3.17 Opinion of Financial Advisor
Section 3.18 Brokers
Section 3.19 Tax Status
Section 3.20 Contracts
Section 3.21 Vote Required
Section 3.22 Transactions with Affiliates
Article IV - Representations and Warranties of Parent and Sub
Section 4.1 Organization
Section 4.2 Ownership of Merger Subs
Section 4.3 Capital Structure
Section 4.4 Authority
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Section 4.5 Consents and Approvals; No Violations
Section 4.6 SEC Documents and Other Reports
Section 4.7 Absence of Material Adverse Change
Section 4.8 Information Supplied
Section 4.9 Permits; Compliance with Laws.
Section 4.10 Tax Matters
Section 4.11 Liabilities
Section 4.12 Litigation
Section 4.13 State Takeover Statutes
Section 4.14 Brokers
Section 4.15 Tax Status
Section 4.16 Interim Operations of Sub
Section 4.17 Vote Required
Section 4.18 Transactions with Affiliates
Section 4.19 Opinion of Xxxxxxx, Xxxxx & Co
Article V - Covenants Relating to Conduct of Business
Section 5.1 Conduct of Business by the Company Pending the
Reorganization
Section 5.2 Conduct of Business by Parent Pending the
Reorganization
Section 5.3 No Solicitation
Section 5.4 Third Party Standstill Agreements
Section 5.5 Disclosure of Certain Matters; Delivery of Certain
Filings
Section 5.6 Tax Status
Article VI - Additional Agreements
Section 6.1 Employee Benefits
Section 6.2 Options; Restricted Stock Awards
Section 6.3 Company Stockholders Meeting
Section 6.4 Preparation of the Registration Statement and Joint
Proxy Statement
Section 6.5 Comfort Letters
Section 6.6 Access to Information
Section 6.7 Compliance with the Securities Act
Section 6.8 Stock Exchange Listings
Section 6.9 Fees and Expenses
Section 6.10 Public Announcements
Section 6.11 Real Estate Transfer Tax
Section 6.12 State Takeover Laws
Section 6.13 Indemnification; Directors and Officers Insurance
Section 6.14 Best Efforts
Section 6.15 Certain Litigation
Section 6.16 Transition Services Agreement
Section 6.17 Registration Rights Agreement
Section 6.18 Investor Claim
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Section 6.19 Intercompany Service Agreements
Section 6.20 Revolving Credit Agreement
Section 6.21 Series A and B Notes
Section 6.22 Nokia Credit Agreement
Section 6.23 Intercompany Accounts
Section 6.24 Tax Allocation Agreement and Tax Settlement Agreement
Section 6.25 Parent Stockholder Voting Agreement
Section 6.26 Agreements Regarding Taxes
Article VII - Conditions Precedent
Section 7.1 Conditions to Each Party's Obligation to Effect the
Reorganization
Section 7.2 Conditions to Obligation of the Company to Effect the
Reorganization
Section 7.3 Conditions to Obligations of Parent and Merger Sub C
to Effect the Reorganization
Article VIII - Termination and Amendment
Section 8.1 Termination
Section 8.2 Effect of Termination
Section 8.3 Amendment
Section 8.4 Extension; Waiver
Article IX - General Provisions
Section 9.1 Non-Survival of Representations and Warranties and
Agreements
Section 9.2 Notices
Section 9.3 Interpretation; Definitions
Section 9.4 Counterparts
Section 9.5 Entire Agreement; No Third-Party Beneficiaries
SECTION 9.6 GOVERNING LAW
Section 9.7 Assignment
Section 9.8 Severability
Section 9.9 Enforcement of this Agreement
Section 9.10 Obligations of Subsidiaries
Section 9.11 Reliance on Representations
ANNEX A - RESTATED CERTIFICATE OF INCORPORATION
ANNEX B - COMPANY'S RESTATED BYLAWS
ANNEX C - TRANSITION SERVICES AGREEMENT
ANNEX D - STOCKHOLDER AGREEMENT
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ANNEX E - INDEMNITY AGREEMENT
ANNEX F - DEBT/EQUITY REPLACEMENT AGREEMENT
ANNEX G - PARENT STOCKHOLDER AGREEMENT
ANNEX H - INVESTOR AGREEMENT
ANNEX I - FORM OF PARENT FCC COUNSEL OPINION
ANNEX J - FORM OF XXXXXXX XXXXX & XXXXX LLP OPINION
ANNEX K - FORM OF COMPANY FCC COUNSEL OPINION
ANNEX L - FORM OF SIDLEY & AUSTIN OPINION
ANNEX M - TAX CERTIFICATES
ANNEX N - TAX CERTIFICATES
ANNEX O - STOCKHOLDER TAX CERTIFICATE
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AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION, dated as of September 17, 1999
(this "Agreement") among VoiceStream Wireless Corporation, a Washington
corporation ("VoiceStream"), VoiceStream Wireless Holding Corporation, a
Delaware corporation ("Holding"), (VoiceStream and Holding are collectively
referred to herein as "Parent" as explained below) VoiceStream Subsidiary III
Corporation, a Delaware corporation ("Merger Sub C"), which shall be a wholly
owned direct subsidiary of Holding as of the Effective Time, Aerial
Communications, Inc., a Delaware corporation (the "Company") (Merger Sub C and
the Company being hereinafter collectively referred to as the "Constituent
Corporations"), and Telephone and Data Systems, Inc., a Delaware corporation
("Series A Stockholder"). Except as otherwise set forth herein, capitalized (and
certain other) terms used herein shall have the meanings set forth in Section
9.3.
W I T N E S S E T H:
WHEREAS, VoiceStream, Holding and Omnipoint Corporation, a Delaware
corporation ("Omnipoint"), have entered into an Agreement and Plan of
Reorganization dated as of June 23, 1999 (the "Omnipoint Agreement") providing
for, among other things, the merger of a subsidiary of Holding ("Merger Sub A")
into VoiceStream (the "VoiceStream Merger"), and the merger of another
subsidiary of Holding ("Merger Sub B") into Omnipoint (the "Omnipoint
Merger")(the VoiceStream Merger, the Omnipoint Merger and the other transactions
contemplated by the Omnipoint Agreement are herein referred to as the "Omnipoint
Reorganization");
WHEREAS, the reorganization provided herein (the "Reorganization")
shall include the merger (the "Merger") of Merger Sub C with and into the
Company and, if applicable, the other transactions described below;
WHEREAS, if the Omnipoint Reorganization is consummated prior to the
consummation of the transactions contemplated by this Agreement, and the other
conditions to the Reorganization specified in Article VII are satisfied or
waived, in the Reorganization, Holding shall be Parent and shall acquire all of
the common stock of the Company through the Merger, in which case the Merger
will occur as part of and concurrently with or promptly after the Omnipoint
Reorganization;
WHEREAS, if the transactions contemplated by the Omnipoint Agreement
are terminated or not consummated by the Omnipoint End Date (as defined herein),
and the other conditions to the Reorganization specified in Article VII are
satisfied or waived by the Omnipoint End Date, in the Reorganization, Holding
shall be Parent and shall concurrently acquire (i) all of the common stock of
the Company through the Merger and (ii) all of the common stock of VoiceStream
through the VoiceStream Merger;
WHEREAS, the respective Boards of Directors of VoiceStream, Holding,
Merger Sub C and the Company have approved and declared advisable the
Reorganization,
upon the terms and subject to the conditions herein set forth whereby each
issued and outstanding Series A Common Share, $1.00 par value, of the Company
("Company Series A Common Shares") and each issued and outstanding Common Share,
$1.00 par value of the Company ("Company Common Shares" and together with the
Company Series A Common Shares, "Company Common Stock"), other than shares of
Company Common Stock owned directly or indirectly by Parent or the Company, will
be converted into shares of Common Stock, $0.001 par value, of Parent ("Parent
Common Stock") or, to the extent provided herein, cash;
WHEREAS, the respective Boards of Directors of VoiceStream, Holding and
the Company have determined that the Reorganization is in furtherance of and
consistent with their respective long-term business strategies and is fair to
and in the best interests of their respective stockholders;
WHEREAS, for federal income tax purposes, it is intended that the
Reorganization shall qualify as a reorganization within the meaning of Section
368(a) of the United States Internal Revenue Code of 1986, as amended (the
"Code"), and/or as an exchange described in Section 351(a) of the Code;
WHEREAS, VoiceStream, Holding, Merger Sub C and the Company desire to
make certain representations, warranties, covenants and agreements in connection
with the Reorganization and also to prescribe various conditions to the
Reorganization.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein contained, and intending to be legally bound
hereby, VoiceStream, Holding, Merger Sub C and the Company hereby agree as
follows:
Article I - The Reorganization
Section 1.0 The Reorganization. (a) Holding has caused Merger Sub A,
Merger Sub B and Merger Sub C to be organized for the purposes of effectuating
the Omnipoint Merger, the VoiceStream Merger, and the Merger. Merger Sub A,
Merger Sub B and Merger Sub C are collectively referred to as "Merger Subs".
(b) If the Omnipoint Reorganization is consummated by the Omnipoint End
Date, the Merger shall occur as specified herein as part of and concurrently
with or promptly after the Omnipoint Reorganization.
(c) If the transactions contemplated by the Omnipoint Agreement are
terminated or not consummated by the Omnipoint End Date and the other conditions
to the Reorganization specified in Article VII are satisfied or waived by the
Omnipoint End Date, Holding shall concurrently acquire (i) all of the common
stock of the Company through the Merger as specified herein, and (ii) all of the
common stock of VoiceStream through the VoiceStream Merger as specified in this
Section 1.0(c). In such event, pursuant to Articles of Merger and a Plan of
Merger, in a form to be mutually agreed
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upon by VoiceStream and the Company (sometimes hereinafter referred to
collectively as the "Merger Document" or "Merger Documents"), upon the terms and
subject to the conditions set forth in this Agreement and in the Merger
Documents:
(i) In the VoiceStream Merger, Merger Sub A shall be merged
with and into VoiceStream in accordance with the applicable provisions
of Washington law. VoiceStream shall be the surviving corporation in
the VoiceStream Merger and shall continue its corporate existence under
Washington law. As a result of the VoiceStream Merger, VoiceStream
shall become a wholly owned Subsidiary of Holding. The effects and
consequences of the VoiceStream Merger shall be as set forth in the
VoiceStream Merger Documents.
(ii) The parties shall (i) file Merger Documents as are
required by and executed in accordance with Washington law and (ii)
make all other filings or recordings required under applicable
Washington law.
(iii) In the case of this Section 1.0(c), the Effective Time
shall be the later of (i) the date and time of the filing of the Merger
Documents with respect to the VoiceStream Merger (or such other date
and time as may be specified in such documents as may be permitted by
Washington law) and (ii) the date and time of the filing of the
Certificate of Merger (as defined below) with respect to the Merger (or
such other date and time as may be specified in such certificate as may
be permitted by Delaware law).
(iv) At the Effective Time, by virtue of the VoiceStream
Merger and without any action on the part of any of the parties, each
share of the common stock of Merger Sub A outstanding immediately prior
to the Effective Time shall be converted into and shall become one
share of common stock of the surviving corporation of the VoiceStream
Merger.
(v) At the Effective Time, the one share of the capital stock
of Holding issued to VoiceStream and outstanding immediately prior to
the Effective Time shall be cancelled and cease to exist.
(vi) At the Effective Time, each share of VoiceStream Common
Stock that is issued and outstanding immediately prior to the Effective
Time shall be converted into one share of Holding Common Stock. Upon
such conversion, all such shares of VoiceStream Common Stock shall be
cancelled and cease to exist, and each certificate theretofore
representing any such shares shall, without any action on the part of
the holder thereof, be deemed to represent an equivalent number of
shares of Holding Common Stock.
(vii) Notwithstanding the foregoing, VoiceStream Common Stock
outstanding immediately prior to the Effective Time and held by a
holder who has
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not voted in favor of the Reorganization and has demanded appraisal for
such shares in accordance with Washington law ("Dissenting Shares")
shall not be converted into a right to receive shares of Holding Common
Stock unless such holder fails to perfect, withdraws or otherwise loses
its right to appraisal. If, after the Effective Time, such holder fails
to perfect, withdraws or loses its right to appraisal, such shares
shall be treated as if they had been converted as of the Effective Time
into a right to receive Holding Common Stock.
(d) All representations, warranties and covenants of Parent are hereby
made on a joint and several basis by VoiceStream and Holding.
Section 1.1 The Merger. Upon the terms and subject to the conditions
hereof, and in accordance with the DGCL, in the Reorganization, Merger Sub C
shall be merged with and into the Company at the Effective Time. Following the
Effective Time, the separate corporate existence of Merger Sub C shall cease and
the Company shall continue as the surviving corporation (the "Surviving
Corporation") and shall succeed to and assume all the rights and obligations of
Merger Sub C and the Company in accordance with the DGCL.
Section 1.2 Closing. Unless waived by Parent, the Company and Parent
shall use their reasonable commercial efforts to cause the closing of the
transactions contemplated by this Agreement (the "Closing") to take place
concurrently with the closing of the Omnipoint Reorganization or as soon as
practicable thereafter, subject to the satisfaction or waiver of the conditions
set forth in Article VII. If the Omnipoint Reorganization does not take place,
the Closing will take place at 10:00 a.m. on the fifth Business Day after
satisfaction or waiver of the conditions set forth in Article VII, at the
offices of Sidley & Austin, Xxx Xxxxx Xxxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx 00000,
or, at the request of Parent, at the offices of Sidley & Austin, 000 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, unless another date, time or place is agreed
to in writing by the parties hereto. The date on which the Closing takes place
is herein referred to as the "Closing Date."
Section 1.3 Effective Time. The Merger shall become effective when a
Certificate of Merger (the "Certificate of Merger"), executed in accordance with
the relevant provisions of the DGCL, is duly filed with the Secretary of State
of the State of Delaware, or at such other time as Merger Sub C and the Company
shall agree should be specified in the Certificate of Merger. Except as provided
in Section 1.0(c)(iii), the term "Effective Time" shall mean the later of the
date and time at which the Certificate of Merger is duly filed with the
Secretary of State of the State of Delaware or such later time established by
the Certificate of Merger. The filing of the Certificate of Merger shall be made
as soon as practicable after the satisfaction or waiver of the conditions set
forth herein.
Section 1.4 Effects of the Merger. The Merger shall have the effects
set forth in the DGCL.
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Section 1.5 Restated Certificate of Incorporation and By-laws; Officers
and Directors. (a) The Restated Certificate of Incorporation of the Company, as
in effect immediately prior to the Effective Time, shall be amended as of the
Effective Time as set forth on Annex A hereto. As so amended, such Restated
Certificate of Incorporation shall be the Restated Certificate of Incorporation
of the Surviving Corporation until thereafter changed or amended as provided
therein or by applicable law.
(b) The Restated By-laws of the Company, as in effect immediately prior
to the Effective Time, shall be amended as of the Effective Time as set forth on
Annex B. As so amended, such Restated By-laws shall be the By-laws of the
Surviving Corporation until thereafter changed or amended as provided by the
Restated Certificate of Incorporation of the Surviving Corporation or by
applicable law.
(c) Subject to Section 2.2 of the Investment Agreement, the directors
of Merger Sub C immediately prior to the Effective Time shall be the directors
of the Surviving Corporation, until the next annual meeting of stockholders (or
the earlier of their resignation or removal) and until their respective
successors are duly elected and qualified, as the case may be.
(d) Subject to the Management Side Letter, the officers of Merger Sub C
immediately prior to the Effective Time shall be the officers of the Surviving
Corporation until the earlier of their resignation or removal and until their
respective successors are duly elected and qualified, as the case may be.
Article II - Effect of the Merger on the Stock of the Constituent Corporations;
Surrender of Certificates
Section 2.1 Effect on Stock. As of the Effective Time, by virtue of the
Merger and without any action on the part of any of Sub, the Company or the
holders of any securities of the Constituent Corporations:
(a) Capital Stock of Sub. Each issued and outstanding share of capital
stock of Merger Sub C shall be converted into and become one validly issued,
fully paid and nonassessable share of Common Stock, no par value, of the
Surviving Corporation.
(b) Treasury Stock and Parent Owned Stock. Each share of Company Common
Stock that is owned by the Company or by any Subsidiary of the Company and each
share of Company Common Stock that is owned by Parent, Merger Sub C or any other
Subsidiary of Parent shall automatically be cancelled and retired and shall
cease to exist, and no consideration shall be delivered in exchange therefor.
(c) Conversion of Company Common Stock. Except as set forth in Item
2.1(c) of the Company Letter, as of the date hereof, no shares of Company Common
Stock or Stock Equivalents were issued, reserved for issuance or outstanding.
Each share of
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Company Common Stock issued and outstanding (other than shares of Company Common
Stock to be cancelled in accordance with Section 2.1(b)) shall be converted into
.455 (the "Conversion Number") validly issued, fully paid and nonassessable
shares of Parent Common Stock (the "Per Share Stock Consideration"); provided,
that each share of Company Common Stock with respect to which an election to
receive only cash has been effectively made by a Public Holder and not revoked
or lost pursuant to Section 2.1(d) (a "Cash Election"), shall be converted into
the right to receive $18.00 in cash, without interest (the "Per Share Cash
Consideration"). Notwithstanding the foregoing, in the event that (i) the
Omnipoint Agreement is terminated or the transactions contemplated by the
Omnipoint Agreement are not consummated by the Omnipoint End Date and (ii) the
Closing Date Market Price is less than $39.56, the Conversion Number shall be
the amount determined by dividing $18.00 by the Closing Date Market Price, but
shall not be greater than .50 or less than .455. In the event Investor exercises
its right under Section 10.6 of the Investment Agreement ("Tag-Along Right"),
the Operating Company Shares owned by Investor (as described in the Company
Letter) shall be converted immediately prior to the Effective Time into such
number of shares of Company Common Stock equal to the product of (i) such number
of Operating Company Shares and (ii) the Exchange Rate, and the shares of
Company Common Stock obtained by Investor through such conversion shall be
converted into shares of Parent Common Stock pursuant to the Merger. In the
event Investor does not exercise its Tag-Along Right, subject to the
authorization, execution and delivery of the Indemnity Agreement, Parent hereby
agrees to accept and be bound by all of the rights of Investor and its
Affiliates under the Investment Agreement and the Joint Venture Agreement. As of
the Effective Time, all such shares of Company Common Stock shall be converted
in accordance with this paragraph, and when so converted, shall no longer be
outstanding and shall automatically be retired and shall cease to exist, and
each holder of a certificate representing any such shares of Company Common
Stock shall cease to have any rights with respect thereto, except the right to
receive (i) certificates representing the shares of Parent Common Stock into
which such shares of Company Common Stock have been converted, (ii) any
dividends and other distributions in accordance with Section 2.2(d) and (iii)
any cash, without interest, to be paid in lieu of any fractional share of Parent
Common Stock in accordance with Section 2.2(e).
(d) Cash Election by Public Holders. Each person who, at the Effective
Time, is a record holder of shares of Company Common Stock other than the Series
A Stockholder, Investor (with respect to Operating Company Shares owned by
Investor which are converted into Company Common Stock immediately prior to the
Merger pursuant to the Tag-Along Right) and holders of shares of Company Common
Stock to be cancelled as set forth in Section 2.1(b) (such eligible holders
hereinafter being referred to as the "Public Holders"), shall have the right to
submit an election form (the "Cash Election Form") specifying the number of
shares of Company Common Stock that such person desires to have converted into
the right to receive the Per Share Cash Consideration pursuant to the Cash
Election. Any eligible record holder who fails properly to submit a Cash
Election Form on or prior to the Election Deadline in
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accordance with the procedures set forth in this Section 2.1(d) shall be
entitled to receive the Per Share Stock Consideration for each share of Company
Common Stock registered in the name of such holder. Any Cash Election shall be
validly made only if the Exchange Agent shall have received a Cash Election Form
by 5:00 p.m., New York City time on the twentieth Business Day (the "Election
Deadline") after the date on which the Letter of Transmittal and Cash Election
Form are sent to the Public Holders pursuant to Section 2.2(b). For a Cash
Election made by a Public Holder to be valid, a Cash Election Form properly
completed and executed (with the signature or signatures thereon guaranteed to
the extent required by the Cash Election Form) must be delivered by such holder
accompanied by such holder's Certificates, or by an appropriate guarantee of
delivery of such Certificates from a member of any registered national
securities exchange or of the National Association of Securities Dealers, Inc.
or a commercial bank or trust company in the United States as set forth in such
Cash Election Form. Any holder of Company Common Stock who has made an election
by submitting an Election Form to the Exchange Agent may at any time prior to
the Election Deadline change such holder's election by submitting a revised Cash
Election Form and/or a Letter of Transmittal, properly completed and signed,
that is received by the Exchange Agent prior to the Election Deadline. Any
holder of Company Common Stock may at any time prior to the Election Deadline
revoke such holder's election by written notice to the Exchange Agent received
by the close of business on the day prior to the Election Deadline, in which
event such holder shall be entitled to receive only the Per Share Stock
Consideration with respect to each share of Company Common Stock registered in
the name of such holder immediately prior to the Effective Time. Parent shall
have the right to make reasonable rules (which will be described in the Cash
Election Form), not inconsistent with the terms of this Agreement, governing the
validity of Cash Election Forms and the procedures for making Cash Elections.
(e) Adjustment of Conversion Number. Except in connection with the
Omnipoint Agreement, in the event of any reclassification, stock split or stock
dividend with respect to Parent Common Stock, any change or conversion of Parent
Common Stock into other securities or any other dividend or distribution with
respect to Parent Common Stock (other than normal quarterly cash dividends as
the same may be modified from time to time in the ordinary course), or if a
record date with respect to any of the foregoing should occur, prior to the
Effective Time, appropriate and proportionate adjustments, if any, shall be made
to the Conversion Number and the Per Share Cash Election Consideration, and
thereafter all references in this Agreement to the Conversion Number and the Per
Share Cash Election Consideration shall be deemed to be to the Conversion Number
and the Per Share Cash Election Consideration, respectively, as so adjusted.
Notwithstanding the foregoing, in the event of any amendment of the
Omnipoint Agreement that would result in a reclassification, stock split, or
stock dividend with respect to Parent Common Stock, any change or conversion of
Parent Common Shares into other securities or any other dividend or distribution
with respect to Parent Common Stock, appropriate and proportionate adjustments,
if any, shall be made to the
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Conversion Number and the Per Share Cash Election Consideration, and thereafter
all references in this Agreement shall be deemed to be the Conversion Number and
the Per Share Cash Election Consideration, respectively, as so adjusted.
In the event that the aggregate number of shares of Company Common
Stock and Stock Equivalents, not including shares issued or to be issued
pursuant to the Debt/Equity Replacement Agreement and to TDS and Investor or
shares which are or may be issued pursuant to Performance Options ("Adjusted
Fully Diluted Shares") exceeds 85,839,161 shares as of the Effective Time, the
Conversion Number shall be determined by dividing 39,056,818 by such number of
Adjusted Fully Diluted Shares as of the Effective Time. The number of shares of
Company Common Stock and Stock Equivalents for the purpose of such recalculation
shall be determined in a manner consistent with the methodologies used in
preparing Item 2.1(c) of the Company Letter including without limitation the
shares of Company Common Stock actually outstanding and shares of Company Common
Stock issuable (i) in exchange for the Operating Company Shares whether or not
Investor exercises its Tag-Along Rights as set forth in Section 10.6 of the
Investment Agreement, (ii) pursuant to Company Stock Options determined using
the treasury stock method, (iii) pursuant to the Restricted Stock Plan
regardless of whether payment for the Restricted Stock units is made in cash or
Company Common Stock, (iv) pursuant to the Tax-Deferred Savings Plan, (v)
pursuant to the Compensation Plan for Non-Employee Directors, and (vi) any other
Company Common Stock and Stock Equivalents outstanding as of the Effective Time;
provided, for the purpose of such recalculation the shares of Company Common
Stock issued or issuable pursuant to Performance Options and the shares issued
or issuable pursuant to the Debt/Equity Replacement Agreement and to TDS and
Investor shall be disregarded for purpose of the recalculation. The Conversion
Number shall be subject to further adjustment as provided in the third sentence
of Section 2.1(c) in the event that the Omnipoint Agreement is terminated or the
transactions contemplated by the Omnipoint Agreement are not consummated by the
Omnipoint End Date, provided that the Conversion Number determined pursuant to
this Section 2.1(e) shall be used in lieu of .455.
Section 2.2 Surrender of Certificates. (a) Exchange Agent. ChaseMellon
Shareholder Services LLC shall act as exchange agent in the Merger (the
"Exchange Agent"). As and when needed, but no later than twenty-five Business
Days after the Effective Time, Parent shall deposit with the Exchange Agent, in
trust for the holders of certificates (the "Company Certificates") which
immediately prior to the Effective Time represented shares of Company Common
Stock converted in the Merger, (i) certificates (the "Parent Certificates")
representing the shares of Parent Common Stock issuable pursuant to Section
2.1(c) with respect to shares of Company Common Stock which have been converted
into the right to receive Parent Common Stock (such shares of Parent Common
Stock, together with cash in lieu of fractional shares and any dividends or
distributions with respect thereto in accordance with Section 2.2(d) being
hereinafter referred to as the "Stock Consideration Fund"), and (ii) cash with
respect to shares of Company Common Stock with respect to which a Cash Election
has been properly
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made and not withdrawn or lost (the "Cash Consideration Fund") (the Stock
Consideration Fund and the Cash Consideration Fund are hereinafter referred to
as the "Exchange Fund").
(b) Exchange Procedure. As soon as reasonably practicable after the
Effective Time, but no later than five Business Days after the Effective Time,
the Surviving Corporation shall cause the Exchange Agent to mail to each holder
of record of a Company Certificate, (i) a letter of transmittal (which shall
specify that delivery shall be effected, and risk of loss and title to a Company
Certificate shall pass, only upon delivery of such Company Certificate to the
Exchange Agent and shall be in a form and have such other provisions as Parent
may reasonably specify), (ii) with respect to the Public Holders, the Cash
Election Form and (iii) instructions for use in effecting the surrender of
Company Certificates in exchange for the property described in the next
sentence. Upon surrender for cancellation to the Exchange Agent of all Company
Certificate(s) held by any holder of record of a Company Certificate, together
with such letter of transmittal duly executed, such holder shall be entitled to
receive in exchange therefor (x) the Per Share Cash Consideration if a Cash
Election is properly and timely made or (y) a Parent Certificate (which shall
not include any restrictive legends) representing the number of whole shares of
Parent Common Stock into which the shares of Company Common Stock represented by
the surrendered Company Certificate(s) shall have been converted at the
Effective Time pursuant to Section 2.1(c), cash in lieu of any fractional share
of Parent Common Stock in accordance with Section 2.2(e) and certain dividends
and other distributions in accordance with Section 2.2(d); and the Company
Certificate(s) so surrendered shall forthwith be cancelled. In the event of a
transfer of ownership of shares of Company Common Stock that is not registered
in the transfer records of the Company, cash or a Parent Certificate
representing shares of Parent Common Stock may be paid to or issued in a name
other than that in which the Company Certificate surrendered in exchange
therefor is registered, if such Company Certificate shall be properly endorsed
or otherwise be in proper form for transfer and the person requesting such
payment shall pay any transfer or other Taxes required by reason of the payment
to a person other than the registered holder of such Company Certificate or
establish to the satisfaction of the Surviving Corporation that such Tax has
been paid or is not applicable. Until surrendered as contemplated by this
Section 2.2, each Company Certificate shall be deemed at any time after the
Effective Time to represent only the right to receive (i) the Per Share Cash
Consideration, subject to the delivery of a proper and timely Cash Election
Form, or (ii)(A) certificates representing the shares of Parent Common Stock
into which the shares of Company Common Stock represented by such Company
Certificate have been converted, (B) any dividends and other distributions in
accordance with Section 2.2(d) and (C) any cash, without interest, to be paid in
lieu of any fractional share of Parent Common Stock in accordance with Section
2.2(e). Parent or the Exchange Agent shall be entitled to deduct and withhold
from the consideration otherwise payable pursuant to this Agreement to any
holder of shares of Company Common Stock such amounts as Parent or the Exchange
Agent is required to deduct and withhold with respect to the making of such
payment under the Code or under any provision of state,
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local or foreign Tax law. To the extent that amounts are so withheld by Parent
or the Exchange Agent, such withheld amounts shall be treated for all purposes
of this Agreement as having been paid to the holder of the shares of Company
Common Stock in respect of which such deduction and withholding was made by
Parent or the Exchange Agent.
(c) No Further Ownership Rights in Shares. All shares of Parent Common
Stock issued and cash paid upon the surrender of Company Certificates in
accordance with the terms of this Article II (including any cash paid pursuant
to Section 2.2(d) or Section 2.2(e)) shall be deemed to have been issued (and
paid) in full satisfaction of all rights pertaining to the shares of Company
Common Stock theretofore represented by such Company Certificates. At the
Effective Time, the stock transfer books of the Company shall be closed, and
there shall be no further registration of transfers on the stock transfer books
of the Surviving Corporation of the shares of Company Common Stock that were
outstanding immediately prior to the Effective Time. If, after the Effective
Time, Company Certificates are presented to the Surviving Corporation or the
Exchange Agent for any reason, they shall be cancelled and exchanged as provided
in this Article II.
(d) Dividends. No dividends or other distributions that are declared on
or after the Effective Time on Parent Common Stock, or are payable to the
holders of record thereof on or after the Effective Time, shall be paid to any
person entitled by reason of the Merger to receive Parent Certificates, and no
cash payment in lieu of any fractional share of Parent Common Stock shall be
paid to any such person pursuant to Section 2.2(e), until such person shall have
surrendered its Company Certificate(s) as provided in Section 2.2(b). Subject to
applicable law, there shall be paid to each person receiving a Parent
Certificate: (i) at the time of such surrender or as promptly as practicable
thereafter, the amount of any dividends or other distributions theretofore paid
with respect to the shares of Parent Common Stock represented by such Parent
Certificate and having a record date on or after the Effective Time and a
payment date prior to such surrender; and (ii) at the appropriate payment date
or as promptly as practicable thereafter, the amount of any dividends or other
distributions payable with respect to such shares of Parent Common Stock and
having a record date on or after the Effective Time but prior to such surrender
and a payment date on or subsequent to such surrender. In no event shall the
person entitled to receive such dividends or other distributions be entitled to
receive interest on such dividends or other distributions.
(e) No Fractional Shares. No certificates or scrip representing
fractional shares of Parent Common Stock shall be issued upon the surrender for
exchange of Company Certificates pursuant to this Article II; no dividend or
other distribution by Parent and no stock split shall relate to any such
fractional share; and no such fractional share shall entitle the record or
beneficial owner thereof to vote or to any other rights of a stockholder of
Parent. In lieu of any such fractional share, each holder of shares of Company
Common Stock who would otherwise have been entitled thereto upon the surrender
of Company Certificate(s) for exchange pursuant to this Article II (other than
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with respect to shares of Company Common Stock for which an effective Cash
Election has been made) will be paid an amount in cash (without interest),
rounded to the nearest whole cent, determined by multiplying (i) the per share
closing price on the Nasdaq National Market System ("Nasdaq") of Parent Common
Stock (as reported on the Nasdaq) on the date on which the Effective Time shall
occur (or, if Parent Common Stock shall not trade on the Nasdaq on such date,
the first day of trading in Parent Common Stock on the Nasdaq thereafter) by
(ii) the fractional share to which such holder would otherwise be entitled.
(f) Termination of Exchange Fund. Any portion of the Exchange Fund
which remains undistributed to holders of Company Common Stock for twelve months
after the Effective Time shall be delivered to Parent, upon demand, and any
holders of Company Common Stock who have not theretofore complied with this
Article II and the instructions set forth in the letter of transmittal mailed to
such holders after the Effective Time shall thereafter look only to the
Surviving Corporation (subject to abandoned property, escheat or other similar
laws) for payment of cash pursuant to the Cash Election or shares of Parent
Common Stock, any cash in lieu of fractional shares of Parent Common Stock and
any dividends or distributions with respect to such shares of Parent Common
Stock to which they are entitled.
(g) No Liability. None of Parent, Sub, the Company or the Exchange
Agent shall be liable to any person in respect of any cash delivered to a public
official pursuant to any applicable abandoned property, escheat or similar law.
Article III - Representations and Warranties of the Company
The Company represents and warrants to Parent and Merger Sub C as
follows:
Section 3.1 Organization. The Company and each of its Subsidiaries
(collectively, the "Company Subsidiaries") is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation and has requisite corporate power and authority to carry on its
business as now being conducted, except where the failure to be so organized,
existing and in good standing or to have such power and authority has not had
and would not reasonably be expected to have a Material Adverse Effect on the
Company or prevent or materially delay the consummation of the Reorganization.
The Company and each of the Company Subsidiaries is duly qualified or licensed
to do business and in good standing in each jurisdiction in which the nature of
its business or the ownership or leasing of its properties makes such
qualification or licensing necessary, except in such jurisdictions where the
failure to be so duly qualified or licensed and in good standing would not
reasonably be expected to have a Material Adverse Effect on the Company or
prevent or materially delay the consummation of the Reorganization. The Company
has delivered to Parent complete and correct copies of its Restated Certificate
of Incorporation and By-laws and has made available to Parent the Certificate of
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Incorporation and By-laws (or similar organizational documents) of each of the
Company Subsidiaries.
Section 3.2 Subsidiaries. Item 3.2 of the Company Letter lists each
Company Subsidiary and any Investment Entities. All of the outstanding shares of
capital stock of each Company Subsidiary that is a corporation have been validly
issued and are fully paid and nonassessable. Except as set forth in Item 3.2 of
the Company Letter, all of the outstanding shares of capital stock of each
Subsidiary of the Company are owned by the Company, by Subsidiaries of the
Company or by the Company and Subsidiaries of the Company, free and clear of all
Liens. Except as set forth in Item 3.2 of the Company Letter, (i) the Company
and its Subsidiaries have no on-going obligations, agreements, commitments,
rights, understandings or arrangements with respect to any Investment Entities,
including funding obligations; and (ii) all Investment Interests are owned by
the Company or its Subsidiaries free and clear of all Liens. Except as set forth
in Item 3.2 of the Company Letter and except for the capital stock owned by the
Company in its Subsidiaries, neither the Company nor any of its Subsidiaries
owns, directly or indirectly, any capital stock or other ownership interest in
any corporation, partnership, joint venture, limited liability company or other
entity.
Section 3.3 Capital Structure. The authorized capital stock of the
Company consists of 60,000,000 Company Series A Common Shares, 100,000,000
Company Common Shares, 60,000,000 Series B Common Shares, $1.00 par value (the
"Company Series B Common Shares") and 10,000,000 shares of Preferred Stock,
$1.00 par value (the "Company Preferred Stock"). At the close of business on
September 16, 1999, (i) no shares of Company Preferred Stock and no Series B
Common Shares were outstanding, (ii) 40,000,000 Company Series A Common Shares
and 31,930,588 Company Common Shares were issued and outstanding, (iii) no
shares of Company Common Stock were held by the Company in treasury, (iv)
40,000,000 Company Common Shares were reserved for issuance upon conversion of
the Company Series A Common Shares, (v) 2,960,480 Company Common Shares were
reserved for issuance pursuant to outstanding stock options (the "Company Stock
Options") to purchase Company Common Shares under the Company's 1996 Long- Term
Incentive Plan (the "Company Long-Term Incentive Plan"), (vi) 456,000 Company
Common Shares were reserved for issuance pursuant to the Company's Retention
Restricted Stock Unit Plan (the "Restricted Stock Plan"), (vii) 114,514 Company
Common Shares were reserved for issuance pursuant to the Tax Deferred Savings
Plan, (viii) 6,056 Company Common Shares were reserved for issuance pursuant to
the Company's Compensation Plan for Non-Employee Directors and (ix) as described
in Item 3.2 of the Company Letter, Company Common Shares were reserved for
issuance to the Investor in Aerial Operating Company, Inc. ("Operating
Company"). Except as set forth above and in Item 3.2 and 3.3 of the Company
Letter, and except for Company Common Shares which are reserved for issuance in
exchange for shares of Company Series A Common Shares in accordance with the
Company's Restated Certificate of Incorporation, as of the date hereof, no
shares of Company Common Stock or shares of capital stock of any Subsidiary of
the Company were issued, reserved for issuance or
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outstanding and there are no stock appreciation rights, phantom stock rights or
other contractual rights the value of which is determined in whole or in part by
the value of any capital stock ("Stock Equivalents") of the Company or any
Subsidiary of the Company. Each outstanding share of Company Common Stock is,
and each share of Company Common Stock which may be issued pursuant to the
Company Benefit Plans and the other agreements and instruments listed above will
be, when issued, duly authorized, validly issued, fully paid and nonassessable
and not subject to preemptive rights. There are no outstanding bonds,
debentures, notes or other indebtedness of the Company or any Subsidiary of the
Company having the right to vote (or convertible into, or exchangeable for,
securities having the right to vote) on any matter on which the Company's
stockholders may vote. Except as set forth above or in Item 3.3 of the Company
Letter, as of the date of this Agreement, there are no securities, options,
warrants, calls, rights, commitments, agreements, arrangements or undertakings
of any kind obligating the Company or any of the Company Subsidiaries to issue,
deliver or sell or create, or cause to be issued, delivered or sold or created,
additional shares of capital stock or other voting securities or Stock
Equivalents of the Company or of any of the Company Subsidiaries or obligating
the Company or any of the Company Subsidiaries to issue, grant, extend or enter
into any such security, option, warrant, call, right, commitment, agreement,
arrangement or undertaking.
Except as set forth in Item 3.3 of the Company Letter, as of the date
of this Agreement, there are no outstanding contractual obligations of the
Company or any of the Company Subsidiaries to repurchase, redeem or otherwise
acquire any shares of capital stock of the Company or any of the Company
Subsidiaries.
Section 3.4 Authority. The Board of Directors of the Company, at a
meeting duly called and held, duly adopted resolutions approving this Agreement,
the Reorganization and the Stockholder Agreement, determining that the
Reorganization, including the Merger, is fair to, and in the best interests of,
the Company's stockholders and recommending that the Company's stockholders
adopt this Agreement. The Company has requisite corporate power and authority to
execute and deliver this Agreement and, subject to approval by the Company's
stockholders of the Reorganization, to consummate the transactions contemplated
hereby. The execution, delivery and performance of this Agreement by the Company
and the consummation by the Company of the Reorganization and of the other
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of the Company, subject to approval by the
Company's stockholders of this Agreement and the Reorganization. This Agreement
has been duly executed and delivered by the Company and (assuming the valid
authorization, execution and delivery of this Agreement by Parent and Sub)
constitutes the valid and binding obligation of the Company enforceable against
the Company in accordance with its terms, except that such enforceability (i)
may be limited by bankruptcy, insolvency, moratorium or other similar laws
affecting or relating to the enforcement of creditors' rights generally and (ii)
is subject to general principles of equity.
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Section 3.5 Consents and Approvals; No Violations. Except as set forth
in Item 3.5 of the Company Letter, except for filings, permits, authorizations,
consents and approvals as may be required under the Securities Act, the Exchange
Act, the Communications Act, the HSR Act, the DGCL, and under the rules,
regulations and published decisions of the FAA, the FCC and state public utility
or service commissions or similar agencies, and except as may be required in
connection with the Transfer Taxes described in Section 6.11, neither the
execution, delivery or performance of this Agreement by the Company nor the
consummation by the Company of the transactions contemplated hereby will (i)
conflict with or result in any breach of any provision of the Restated
Certificate of Incorporation or By-laws of the Company or of the similar
organizational documents of any of the Company Subsidiaries, (ii) require any
filing with, or permit, authorization, consent or approval of, any Governmental
Entity (except where the failure to obtain such permits, authorizations,
consents or approvals or to make such filings would not reasonably be expected
to have a Material Adverse Effect on the Company or prevent or materially delay
the consummation of the Reorganization), (iii) 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, amendment, cancellation or
acceleration) under, any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, lease, license, contract, agreement or other
instrument or obligation to which the Company or any of its Subsidiaries is a
party or by which any of them or any of their properties or assets may be bound,
(iv) violate any order, writ, judgment, injunction, decree, statute, rule or
regulation applicable to the Company, any of the Company Subsidiaries or any of
their properties or assets, or (v) result in the creation or imposition of any
Lien on any asset of the Company or its Subsidiaries except in the case of
clauses (iii), (iv) or (v) for violations, breaches or defaults that would not
reasonably be expected to have a Material Adverse Effect on the Company or
prevent or materially delay the consummation of the Reorganization.
Section 3.6 SEC Documents and Other Reports. The Company has filed with
the SEC all documents required to be filed by it since April 25, 1996 under the
Securities Act or the Exchange Act (the "Company SEC Documents"). As of their
respective filing dates, the Company SEC Documents complied in all material
respects with the requirements of the Securities Act or the Exchange Act, as the
case may be, each as in effect on the date so filed, and at the time filed with
the SEC none of the Company SEC Documents contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. The financial statements of the Company
included in the Company SEC Documents comply as of their respective dates in all
material respects with the then applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto, have been
prepared in accordance with generally accepted accounting principles (except in
the case of the unaudited statements, as permitted by Form 10-Q under the
Exchange Act) applied on a consistent basis during the periods involved (except
as may be indicated therein or in the notes thereto) and fairly present
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the consolidated financial position of the Company and its consolidated
Subsidiaries as at the dates thereof and the consolidated results of their
operations and their consolidated cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal year-end audit
adjustments and to any other adjustments described therein). The Company and its
Subsidiaries have not made any material misstatements of fact, or omitted to
disclose any fact, to any Government Entity or in any report, document or
certificate filed therewith, which misstatements or omissions, individually or
in the aggregate, could reasonably be expected to subject any material licenses
or authorizations to revocation or failure to renew, except to the extent that
such revocation or failure to renew would not have a Material Adverse Effect on
the Company or the transactions contemplated by this Agreement.
Section 3.7 Absence of Material Adverse Change. Except as disclosed in
Item 3.7 of the Company Letter or in the documents filed by the Company with the
SEC and publicly available prior to the date of this Agreement (the "Company
Filed SEC Documents"), since December 31, 1998 the Company and its Subsidiaries
have conducted their respective businesses in all material respects only in the
ordinary course, consistent with past practices, and there has not been (i) any
Material Adverse Change with respect to the Company, (ii) any declaration,
setting aside or payment of any dividend or other distribution with respect to
its capital stock or any redemption, purchase or other acquisition of any of its
capital stock, (iii) any split, combination or reclassification of any of its
capital stock or any issuance or the authorization of any issuance of any other
securities in respect of, in lieu of or in substitution for shares of its
capital stock, or (iv) any change in accounting methods, principles or practices
by the Company affecting its assets, liabilities or business, except insofar as
may have been required by a change in generally accepted accounting principles.
Section 3.8 Information Supplied. None of the information supplied or
to be supplied by the Company specifically for inclusion or incorporation by
reference in (i) the Registration Statement or (ii) the proxy statement
(together with any amendments or supplements thereto, the "Joint Proxy
Statement") relating to the Stockholders Meetings, will, in the case of the
Registration Statement, at the time it becomes effective, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein not
misleading, or in the case of the Joint Proxy Statement, at the time of the
mailing of the Joint Proxy Statement, the time of the Stockholders Meetings and
at the Effective Time, contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under which they
are made, not misleading or necessary to correct any statement in any earlier
communication with respect to the solicitation of proxies for the Stockholders
Meetings which has become false or misleading. The Registration Statement will
comply (with respect to the Company) as to form in all material respects with
the requirements of the Securities Act, and the Joint Proxy Statement will
comply (with respect to the Company) as to form in all material respects with
the requirements of the Exchange Act.
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Section 3.9 Permits; Compliance with Laws. (a) Each of the Company and
its Subsidiaries is in possession of all franchises, grants, authorizations,
licenses, permits, easements, variances, exceptions, consents, certificates,
approvals and orders of any Governmental Entity necessary for the Company or any
of its Subsidiaries to own, lease and operate its properties or to carry on its
business as it is now being conducted (the "Company Permits"), except where the
failure to have any of the Company Permits would not, individually or in the
aggregate, have a Material Adverse Effect on the Company, and, as of the date of
this Agreement, no suspension or cancellation of any of the Company Permits is
pending or, to the knowledge of the Company, threatened, except where the
suspension or cancellation of any of the Company Permits would not reasonably be
expected to, individually or in the aggregate, have a Material Adverse Effect on
the Company. The businesses of the Company and its Subsidiaries are not being
conducted in violation of any law, ordinance or regulation of any Governmental
Entity, except for possible violations that would not reasonably be expected to
have a Material Adverse Effect on the Company or prevent, or result in a
material delay in, the consummation of the Reorganization.
(b)(i) The Company and each of its Subsidiaries holds, and is
qualified and eligible to hold, all material licenses, permits and
other authorizations issued or to be issued by the FCC to such entity
for the operation of their respective businesses, all of which are set
forth in Item 3.9(b)(i) of the Company Letter (the "Company FCC
Licenses").
(ii) The Company FCC Licenses are valid and in full force and
effect and neither the Company nor any of its Subsidiaries is or has
been delinquent in payment on or in default under any installment
obligation owed to the United States Treasury in connection with the
Company FCC Licenses. As used herein, the term "full force and effect"
means that (i) the orders issuing the Company FCC Licenses have become
effective, (ii) no stay of effectiveness of such orders has been issued
by the FCC, and (iii) the Company FCC Licenses have not been
invalidated by any subsequent published FCC action.
(iii) All material reports and applications required by the
Communications Act or required to be filed with the FCC by the Company
or any of its Subsidiaries have been filed and are accurate and
complete in all material respects.
(iv) The Company and its Subsidiaries are, and have been, in
compliance in all material respects with, and the wireless
communications systems operated pursuant to the Company FCC Licenses
are and have been operated in compliance in all material respects with,
the Communications Act.
(v) There is not pending as of the date hereof any
application, petition, objection, pleading or proceeding with the FCC
or any public service commission or similar body having jurisdiction or
authority over the communications
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operations of the Company or any of its Subsidiaries which questions
the validity of or contests any Company FCC License or which presents a
substantial risk that, if accepted or granted, or concluded adversely,
could result in (as applicable) the revocation, cancellation,
suspension, dismissal, denial or any materially adverse modification of
any Company FCC License or imposition of any substantial fine or
forfeiture against the Company or any of its Subsidiaries except as set
forth in Item 3.9(b)(v) of the Company Letter.
(vi) No facts are known to the Company or its Subsidiaries
which if known by a Governmental Entity of competent jurisdiction would
present a substantial risk that any Company FCC License could be
revoked, cancelled, suspended or materially adversely modified or that
any substantial fine or forfeiture could be imposed against the Company
or any of its Subsidiaries.
Section 3.10 Tax Matters. Except as set forth in Item 3.10 of the
Company Letter or as would not have a Material Adverse Effect on the Company,
(i) the Company and each of its Subsidiaries have timely filed (after taking
into account any extensions to file) all Tax Returns required to be filed by
them either on a separate or combined or consolidated basis; (ii) all such Tax
Returns are complete and accurate and disclose all taxes required to be paid for
the periods covered thereby; (iii) the Company and its Subsidiaries have paid or
caused to be paid all taxes shown as due on such Tax Returns and all Taxes for
which no Tax Return was required to be filed, and the financial statements
contained in the most recent Company SEC Documents reflect an adequate reserve
for all Taxes payable by the Company and its Subsidiaries for all taxable
periods and portions thereof accrued through the date of such financial
statements; (iv) none of the Company or any Subsidiary has waived in writing any
statute of limitations in respect of Taxes; (v) the Tax Returns referred to in
clause (i) relating to income Taxes have been examined by the appropriate taxing
authority or the period for assessment of the Taxes in respect of which such Tax
Returns were required to be filed has expired; (vi) there is no action, suit,
investigation, audit, claim or assessment pending or proposed in writing with
respect to taxes of the Company or any of its Subsidiaries; (vii) there are no
liens for Taxes upon the assets of the Company or any Subsidiary except for
liens relating to current Taxes not yet due; (viii) all Taxes which the Company
or any Subsidiary is required by law to withhold or to collect for payment have
been duly withheld and collected, and have been paid or accrued on the books of
the Company or such Subsidiary; (ix) none of the Company or any Subsidiary has
been a member of any group of corporations filing Tax Returns on a consolidated,
combined, unitary or similar basis other than each such group of which it is
currently a member; (x) no deduction of any amount that would otherwise be
deductible by the Company or any of its Subsidiaries with respect to taxable
periods ending on or before the Effective Time could be disallowed under Section
162(m) of the Code; (xi) neither the Company nor any of its Subsidiaries has
constituted either a "distributing corporation" or a "controlled corporation" in
a distribution of stock qualifying for tax-free treatment under Section 355 of
the Code (a) in the two years prior to the date of this Agreement or (b) in a
distribution which could otherwise constitute part of a "plan" or
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"series of related transactions" (within the meaning of Section 355(e) of the
Code) in conjunction with the Reorganization; (xii) neither the Company nor any
of its Subsidiaries is a "United States real property holding corporation"
within the meaning of Section 897(c)(2) of the Code; and (xiii) as a result of
the Reorganization, neither the Company nor Parent will be obligated to make a
payment to an individual that would be a "parachute payment" to a "disqualified
individual" as those terms are defined in Section 280G of the Code without
regard to whether such payment is reasonable compensation for personal services
performed or to be performed in the future.
Section 3.11 Liabilities. Except as set forth in the Company Filed SEC
Documents or Item 3.11 of the Company Letter, neither the Company nor any of its
Subsidiaries has any liabilities or obligations of any nature (whether accrued,
absolute, contingent or otherwise) required by generally accepted accounting
principles to be set forth on a consolidated balance sheet of the Company and
its Subsidiaries or in the notes thereto, other than liabilities and obligations
incurred in the ordinary course of business since December 31, 1998 and
liabilities which would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect on the Company.
Section 3.12 Benefit Plans; Employees and Employment Practices. (a)
Except as disclosed in the Company Filed SEC Documents or Item 3.12(a) of the
Company Letter, neither the Company nor any of its Subsidiaries has adopted or
amended in any material respect any Company ERISA Benefit Plan since the date of
the most recent audited financial statements included in the Company Filed SEC
Documents. Except as set forth in Item 3.12(a) of the Company Letter, the
Company does not have any commitment to create, adopt or contribute to any
additional plan covering any active, former or retired employees of the Company.
Except as disclosed in Item 3.12(a) of the Company Letter or in the Company
Filed SEC Documents, as of the date of this Agreement, there exist no material
employment, consulting, severance, bonus, incentive or termination agreements
between the Company or any of its Subsidiaries and any current or former
employee, officer or director of the Company or any of its Subsidiaries.
(b) Item 3.12(b) of the Company Letter contains a list of all ERISA
Benefit Plans sponsored by the Company or its ERISA Affiliates. None of the
Company, any of its Subsidiaries, any officer of the Company or any of its
Subsidiaries or any of the ERISA Benefit Plans has on or before the date of this
Agreement engaged in a "prohibited transaction" (as defined in Section 406 of
ERISA or Section 4975 of the Code) with respect to any ERISA Benefit Plan that
could reasonably be expected to subject the Company, any of its Subsidiaries or
any officer of the Company or any of its Subsidiaries to any material Tax on
prohibited transactions imposed by Section 4975 of the Code or to any material
liability under Section 502(i) or (l) of ERISA where the Tax or liability that
would be reasonably expected to occur would have a Material Adverse Effect on
the Company. Except as disclosed in Item 3.12(b) of the Company Letter, none of
the Company, its Subsidiaries or any ERISA Affiliate has at any time during the
five-year period preceding the date hereof contributed to any "multiemployer
plan" (as
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defined in Section 3(37) of ERISA).
(c) Except as disclosed in Item 3.12(c) of the Company Letter, and
except for such matters as could not be reasonably expected to have a Material
Adverse Effect on the Company, to the extent applicable, (i) each Company ERISA
Benefit Plan complies with the requirements of ERISA and the Code, (ii) each
Company ERISA Benefit Plan intended to be qualified under Section 401 (a) of the
Code has been determined by the Internal Revenue Service to be so qualified and
nothing has occurred since the date of that determination that could reasonably
be expected to adversely affect the qualified status of such plan and its
related trust is tax-exempt and has been so since its creation, and (iii) each
Company ERISA Benefit Plan has been maintained and administered in compliance
with its terms and with the requirements prescribed by any and all statutes,
orders, rules and regulations, including but not limited to ERISA and the Code,
which are applicable to such Company ERISA Benefit Plans.
(d) Except as disclosed in Item 3.12(d) of the Company Letter, all
material contributions, reserves or premium payments to the Company ERISA
Benefit Plan, accrued to the date hereof have been made or provided for.
(e) Except as disclosed in Item 3.12(e) of the Company Letter, and
except for any liability as could not be reasonably expected to have a Material
Adverse Effect on the Company, the Company has not incurred any liability under
Subtitle C or D of Title IV of ERISA with respect to any "single- employer plan"
within the meaning of Section 4001(a)(15) of ERISA, currently or formerly
maintained by Company, or any entity which is considered one employer with
Company under Section 4001 of ERISA.
(f) Except as disclosed in Item 3.12(f) of the Company Letter, the
Company has no obligation for retiree health and life benefits under any Company
ERISA Benefit Plan, except as required to avoid excise taxes under Section
4980(B) of the Code and the terms of the Company ERISA Benefit Plans permit the
Company to amend or terminate such Company ERISA Benefit Plans without incurring
liability thereunder.
(g) Except as disclosed in Item 3.12 (g) of the Company Letter, the
Company has not engaged in, nor is it a successor or parent corporation to an
entity that has engaged in a transaction described in Section 4069 of ERISA.
(h) Except as disclosed in Item 3.12(h) of the Company Letter or the
Company Filed SEC Documents, neither the Company nor any of its ERISA Affiliates
has any current or projected liability in respect of post employment or post
retirement welfare benefits for retired or former employees of the Company.
(i) Except as disclosed in Item 3.12(i) of the Company Letter, no tax
under Section 4980B of the Code has been incurred in respect of any Company
ERISA Benefit Plan that is a group health plan, as defined in Section 5000(b)(1)
of the Code.
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(j) Except as disclosed in Item 3.12(j) of the Company Letter, as of
the date of this Agreement there is no pending dispute, arbitration, claim, suit
or grievance involving a Company Benefit Plan (other than routine claims for
benefits payable under any such Company Benefit Plan) that would reasonably be
expected to have a Material Adverse Effect on the Company.
(k) Item 3.12(k) of the Company Letter contains a list setting forth
the name and current annual salary and other compensation payable to each
Significant Employee, and the profit sharing, bonus or other form of additional
compensation paid or payable by the Company or its Subsidiaries to or for the
benefit of each such person for the current fiscal year. Except as set forth in
Item 3.12(k) of the Company Letter, there are no oral or written contracts,
agreements or arrangements obligating the Company or any of its Subsidiaries to
increase the compensation or benefits presently being paid or hereafter payable
to any Significant Employees or any oral employment or consulting or similar
arrangements regarding any Significant Employee which are not terminable without
liability on thirty days' or less prior notice and lists all written employment
and consulting agreements with respect to any Significant Employee. The Company
has provided true and correct copies of all employment agreements listed on Item
3.12(k). Except for severance obligations to Significant Employees set forth in
Item 3.12(k) of the Company Letter, there is not due or owing and there will not
be due and owing at the Effective Time to any Significant Employees, any sick
pay, severance pay (whether arising out of the termination of a Significant
Employee prior to, on, or subsequent to the Effective Time), compensable time or
pay, including salary, commission and bonuses, personal time or pay or vacation
time or vacation pay attributable to service rendered on or prior to the
Effective Time. Except as disclosed in Item 3.12(k) of the Company Letter and
other than claims made in the ordinary course of business consistent with past
practice in an aggregate amount not to exceed $500,000 neither the Company nor
any of its Subsidiaries have any liability arising out of claims made or suits
brought (including workers' compensation claims and claims or suits for
contribution to, or indemnification of, third parties, occupational health and
safety, environmental, consumer protection or equal employment matters) for
injury, sickness, disease, discrimination, death or termination of employment of
any Significant Employee, or other employment matter to the extent attributable
to an event occurring or a state of facts existing on or prior to the Effective
Time.
(l) The Company and each of its Subsidiaries (i) is in compliance with
all applicable Federal and state laws, rules and regulations respecting
employment, employment practices, terms and conditions of employment and wages
and hours, in each case, with respect to Company Employees, except where the
failure to be in compliance would not, singly or in the aggregate, have a
Material Adverse Effect on the Company or any of its Subsidiaries or their
financial condition or business; (ii) has withheld all amounts required by law
or by agreement to be withheld from the wages, salaries and other payments to
Company Employees; (iii) is not liable for any arrears of wages or any taxes or
any penalty for failure to comply with any of the foregoing, except as would
reasonably be expected to not have a Material Adverse Effect on the
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Company; and (iv) (other than routine payments to be made in the normal course
of business and consistent with past practice) is not liable for any payment to
any trust or other fund or to any governmental or administrative authority, with
respect to unemployment compensation benefits, Social Security or other benefits
for Company Employees.
(m) Except as disclosed in Item 3.12(m) of the Company Letter, as of
the date of this Agreement there are no material controversies, strikes, work
stoppages or disputes pending between the Company or any of its Subsidiaries and
any current or former employees, and no organizational effort by any labor union
or other collective bargaining unit currently is under way with respect to any
employee, which in any such case would reasonably be expected to have a Material
Adverse Effect on the Company. None of the Company or any of its Subsidiaries is
a party to a collective bargaining agreement. Except as set forth in Item
3.12(m) of the Company Letter, there is no, and there is not threatened, any
labor dispute, grievance or litigation relating to labor, safety or
discrimination matters involving any Company Employee including charges of
unfair labor practices or discrimination complaints, which, if adversely
determined, would reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect on the Company. There has been no
engagement in any unfair labor practices by the Company or its Subsidiaries
within the meaning of the National Labor Relations Act which would reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect on
the Company.
Section 3.13 Litigation. Except with respect to the matters addressed
in Annex E hereto or as disclosed in Item 3.13 of the Company Letter or in the
Company Filed SEC Documents, as of the date of this Agreement, there is no suit,
action, proceeding or investigation pending or, to the Company's knowledge,
threatened, against the Company or any of its Subsidiaries that, individually or
in the aggregate, would reasonably be expected to have a Material Adverse Effect
on the Company or prevent or materially delay the consummation of the
Reorganization. Except as disclosed in Item 3.13 of the Company Letter or in the
Company Filed SEC Documents, neither the Company nor any of its Subsidiaries is
subject to any outstanding judgment, order, writ, injunction or decree that
would, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect on the Company or prevent or materially delay the
consummation of the Reorganization.
Section 3.14 Environmental Matters. Except as set forth in the Company
Filed SEC Documents or in Item 3.14 of the Company Letter, neither the Company
nor any of its Subsidiaries has (i) not been in compliance with any
Environmental Laws or Environmental Permits, except for such non-compliance as,
taken individually or in the aggregate, would not reasonably be expected to
result in a Material Adverse Effect on the Company or its Subsidiaries; (ii)
stored, released or disposed of any Hazardous Substances on, under or at any of
the Company's or any of its Subsidiaries' properties or any other properties,
other than in a manner that would not, in all such cases taken individually or
in the aggregate, reasonably be expected to result in a Material Adverse
-21-
Effect on the Company, (iii) any knowledge of the presence of any Hazardous
Substances that have been released into the environment on, under or at any of
the Company's or any of its Subsidiaries' properties other than that which would
not reasonably be expected to result in a Material Adverse Effect on the
Company, or (iv) received any written notice (A) of any violation of any
applicable Environmental Law that has not been resolved or settled with the
relevant Governmental Entity and with respect to which there are no continuing
material obligations, (B) of the institution or pendency of any suit, action,
claim, proceeding or investigation by any Governmental Entity or any third party
in connection with any such violation, (C) by any Governmental Entity requiring
remediation of Hazardous Substances at or arising from any of the Company's or
any of its Subsidiaries' properties or any other properties, (D) alleging
noncompliance by the Company or any of its Subsidiaries with the terms of any
permit required under any Environmental Law in any manner reasonably likely to
require material expenditures or to result in material liability that has not
been resolved or settled and with respect to which there are no continuing
material obligations or (E) demanding payment for response to or remediation of
Hazardous Substances at or arising from any of the Company's or any of its
Subsidiaries' properties or any other properties, except in each case for the
notices set forth in Item 3.14 of the Company Letter and except in each case for
notices that would not, individually or in the aggregate, reasonably be expected
to result in a Material Adverse Effect on the Company.
Section 3.15 Section 203 of DGCL. Under the Company's Restated
Certificate of Incorporation, Section 203 of the DGCL is inapplicable to the
Reorganization, this Agreement and the Stockholder Agreement and, accordingly,
neither such Section nor, to the knowledge of the Company, any other
antitakeover or similar statute or regulation applies to any such transactions.
To the knowledge of the Company, no other "control share acquisition," "fair
price," "moratorium" or other antitakeover laws or regulations enacted under
U.S. federal or state laws applicable to the Company apply to this Agreement or
any of the transactions related thereto.
Section 3.16 Intellectual Property. Item 3.16 of the Company Letter
sets forth a complete list of all Intellectual Property Rights. Except as set
forth in the Company Filed SEC Documents or in Item 3.16 of the Company Letter,
the Intellectual Property Rights consist solely of items and rights which are:
(i) owned by the Company or its Subsidiaries, (ii) in the public domain, or
(iii) rightfully used by Company or its Subsidiaries pursuant to a license, and,
with respect to Intellectual Property Rights owned by the Company or its
Subsidiaries, the Company or its Subsidiaries own the entire right, title and
interest in and to such Intellectual Property Rights free and clear of any
Liens. The Company and its Subsidiaries have all rights in the Intellectual
Property Rights necessary to carry out the current and anticipated future (up to
the Closing) activities of the Company and its Subsidiaries. The Intellectual
Property Rights do not infringe on any proprietary right of any Person. No
claims (x) challenging the validity, effectiveness, or ownership by the Company
or its Subsidiaries of any of the Intellectual Property Rights, or (y) to the
effect that the Intellectual Property Rights infringe or will
-22-
infringe on any intellectual property or other proprietary right of any person
have been asserted or, to the Company's knowledge, are threatened by any person
nor to the Company's knowledge are there any valid grounds for any bona fide
claim of any such kind. To the best of the Company's knowledge, there is no
material unauthorized use, infringement or misappropriation of any of the
Intellectual Property Rights by any third party, employee or former employee of
the Company or its Subsidiaries.
Section 3.17 Opinion of Financial Advisor. The Company has received the
opinion of Xxxxxxxxx Xxxxxx & Xxxxxxxx Securities Corporation ("Company
Financial Advisor"), dated the date hereof, to the effect that, as of the date
hereof, the consideration to be received in the Reorganization by the Company's
stockholders is fair to the Company's stockholders from a financial point of
view, a copy of which opinion has been delivered to Parent.
Section 3.18 Brokers. Except for the Company Financial Advisor and
Xxxxxxxxxxx Xxxxxxx & Company, Inc., the financial advisor to the Special
Committee of the Board of Directors of the Company, the fees and expenses of
each of which will be paid by the Company (and are reflected in agreements with
the Company, true and correct copies of which have been furnished to Parent), no
broker, investment banker, financial advisor or other person, is entitled to any
broker's, finder's, financial advisor's or other similar fee or commission in
connection with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of the Company.
Section 3.19 Tax Status. To the knowledge of the Company after due
investigation, neither the Company nor any of its Affiliates has taken any
action or failed to take any action which action or failure would jeopardize the
qualification of either the Merger or the VoiceStream Merger as a reorganization
within the meaning of Section 368(a) of the Code and/or as part of a transaction
described in Section 351(a) of the Code. To the knowledge of the Company after
due investigation, there are no facts or circumstances relating to the Company
or its Affiliates, including any covenants or undertakings of the Company
pursuant to this Agreement, that would prevent Sidley & Austin from delivering
the opinion referred to in Section 7.2(b) as of the date hereof.
Section 3.20 Contracts. Except as set forth in the Company Filed SEC
Documents or in Item 3.20 of the Company Letter, neither the Company nor any of
its Subsidiaries is a party to or bound by (i) any "material contract" (as such
term is defined in Item 601(b)(10) of Regulation S-K of the SEC) or any
agreement, contract or commitment the loss or termination of which would have a
Material Adverse Effect on the Company; (ii) any non-competition agreement or
any other agreement or obligation which materially limits or will materially
limit the Company or any of its Subsidiaries from engaging in the business of
providing wireless communications services or from developing wireless
communications technology anywhere in the world; or (iii) any management
agreement, technical services agreement or other agreement whereby the Company
or any of its Subsidiaries is provided or is required to provide management or
technical services to any other Person. With such exceptions as,
-23-
individually or in the aggregate, have not had, and would not be reasonably
expected to have, a Material Adverse Effect on the Company or its Subsidiaries,
(x) each of the contracts, agreements and commitments of the Company or its
Subsidiaries is valid and in full force and effect and (y) neither the Company
nor any of its Subsidiaries has violated any provision of, or committed or
failed to perform any act which, with or without notice, lapse of time, or both,
would constitute a default under the provisions of any such contract, agreement
or commitment. To the knowledge of the Company, no counterparty to any such
contract, agreement or commitment has violated any provision of, or committed or
failed to perform any act which, with or without notice, lapse of time, or both
would constitute a default or other breach under the provisions of, such
contract, agreement or commitment, except for defaults or breaches which,
individually or in the aggregate, have not had, or would not reasonably be
expected to have, a Material Adverse Effect on the Company or its Subsidiaries.
Neither the Company nor any of its Subsidiaries is a party to, or otherwise a
guarantor of or liable with respect to, any interest rate, currency or other
swap or derivative transaction, other than any such transactions which are not
material to the business of the Company or its Subsidiaries. The Company has
provided or made available to Parent a copy of each agreement described in item
(i), (ii) and (iii) above.
Section 3.21 Vote Required. The only vote of the holders of any class
or series of capital stock of the Company necessary to approve this Agreement
and the transactions contemplated hereby is the affirmative vote of the holders
of a majority of the outstanding shares of Company Common Stock.
Section 3.22 Transactions with Affiliates. Except as described in Item
3.22 of the Company Letter or the Company Filed SEC Documents, no Affiliate of
the Company nor any stockholder, officer, director, partner, member, consultant
or employee of any thereof, is at the date hereof a party to any transaction
with the Company or any of its Subsidiaries, including any contract or
arrangement providing for the furnishing of services to or by, providing for
rental of real or personal property (including intellectual property) to or
from, or otherwise requiring payments to or from the Company or any of its
Subsidiaries, or any Affiliate thereof.
Article IV - Representations and Warranties of Parent and Sub
Parent and Merger Sub C represent and warrant to the Company as
follows:
Section 4.1 Organization. Parent, Sub, Merger Sub A, Merger Sub B and
each of Parent's Subsidiaries (collectively, the "Parent Subsidiaries") is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its organization and has requisite corporate or other
organizational power and authority to carry on its business as now being
conducted, except where the failure to be so organized, existing and in good
standing or to have such power and authority has not had and would not
reasonably be expected to have a Material Adverse Effect on Parent
-24-
or prevent or materially delay the consummation of the Reorganization. Each of
Parent and Merger Sub C is duly qualified or licensed to do business and in good
standing in each jurisdiction in which the nature of its business or the
ownership or leasing of its properties makes such qualification or licensing
necessary, except in such jurisdictions where the failure to be so duly
qualified or licensed and in good standing would not reasonably be expected to
have a Material Adverse Effect on Parent or prevent or materially delay the
consummation of the Reorganization.
Section 4.2 Ownership of Merger Subs. All of the outstanding shares of
capital stock of each Merger Sub have been validly issued and are fully paid and
nonassessable. All of the outstanding shares of capital stock of each Merger Sub
are owned by Holding.
Section 4.3 Capital Structure. The authorized capital stock of Holding
consists of 400,000,000 shares of common stock, par value $0.001 per share
("Holding Common Stock"), of which one share has been issued to VoiceStream at a
price of $2.00 as of the date hereof, and 5,000,000 shares of preferred stock,
par value $0.001 per share, none of which are outstanding as of the date hereof.
The authorized capital stock of VoiceStream consists of 300,000,000 shares of
VoiceStream common stock ("VoiceStream Common Stock") and 50,000,000 shares of
VoiceStream preferred stock ("VoiceStream Preferred Stock"). As of the close of
business on September 15, 1999, (i) there were outstanding 95,765,505 shares of
VoiceStream Common Stock (inclusive of all shares of restricted stock granted
under any compensatory plans or arrangements); (ii) 7,600,000 shares of
VoiceStream common Stock had been authorized pursuant to the VoiceStream stock
option plan (the "VoiceStream Option Plan"), of which 4,590,542 shares are
issued and outstanding; (iii) 1,000,000 shares of VoiceStream Common Stock had
been authorized pursuant to the VoiceStream employee stock purchase plan (the
"VoiceStream ESPP"), of which 158,092 shares have been issued; (iv) 200,000
shares of VoiceStream Common Stock had been authorized under the VoiceStream
executive restricted stock plan (the "VoiceStream ERSP"), of which no shares
have been issued; (v) no phantom shares or stock units had been issued under any
stock option, compensation or deferred compensation plan or arrangement with
respect to VoiceStream Common Stock; and (vi) there were outstanding no
VoiceStream warrants for VoiceStream Common Stock and no shares of VoiceStream
Preferred Stock. Each outstanding share of VoiceStream Common Stock is, and each
share of VoiceStream Common Stock which may be issued pursuant to the
VoiceStream ESPP or VoiceStream ERSP will be, when issued in accordance with the
respective terms thereof, duly authorized, validly issued, fully paid and
nonassessable and not subject to preemptive rights. There are no outstanding
bonds, debentures, notes or other indebtedness of Parent or any Subsidiary of
Parent having the right to vote (or convertible into, or exchangeable for,
securities having the right to vote) on any matter on which Parent's
stockholders may vote. Except for this Agreement, as set forth above or in Item
4.3 of the Parent Letter, as of the date of this Agreement, there are no
securities, options, warrants, calls, rights, commitments, agreements,
arrangements or undertakings of any kind obligating Parent or any of the
-25-
Parent Subsidiaries to issue, deliver or sell or create, or cause to be issued,
delivered or sold or created, additional shares of capital stock or other voting
securities or Stock Equivalents of Parent or of any of the Parent Subsidiaries
or obligating Parent or any of the Parent Subsidiaries to issue, grant, extend
or enter into any such security, option, warrant, call, right, commitment,
agreement, arrangement or undertaking.
As of the date of this Agreement, there are no outstanding contractual
obligations of Parent or any of the Parent Subsidiaries to repurchase, redeem or
otherwise acquire any shares of capital stock of Parent or any of the Parent
Subsidiaries.
Section 4.4 Authority. The Board of Directors of Parent, at a meeting
duly called and held, duly adopted resolutions approving this Agreement, the
Reorganization and the Stockholder Agreement, determining that the
Reorganization, including the Merger, and the issuance (the "Parent Share
Issuance") of shares of Parent Common Stock in accordance with the
Reorganization, is fair to, and in the best interests of, Parent's stockholders.
The Board of Directors of Merger Sub C has declared the Reorganization advisable
and approved this Agreement. Parent and Merger Sub C have the requisite
corporate power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. The execution, delivery and
performance of this Agreement by Parent and Merger Sub C and the consummation by
Parent and Merger Sub C of the Reorganization and of the other transactions
contemplated hereby have been duly authorized by all necessary corporate action
on the part of Parent and Merger Sub C subject, in the case of Parent, to the
approval of the Reorganization and the Parent Share Issuance by Parent's
stockholders. This Agreement has been duly executed and delivered by Parent and
Merger Sub C and (assuming the valid authorization, execution and delivery of
this Agreement by the Company) constitutes the valid and binding obligation of
each of Parent and Merger Sub C enforceable against each of them in accordance
with its terms, except that such enforceability (i) may be limited by
bankruptcy, insolvency, moratorium or other similar laws affecting or relating
to the enforcement of creditors' rights generally and (ii) is subject to general
principles of equity. The Parent Share Issuance, the filing of a registration
statement on Form S-4 with the SEC by Parent under the Securities Act of 1933,
as amended, for the purpose of registering the shares of Parent Common Stock to
be issued in connection with the Reorganization (together with any amendments or
supplements thereto, whether prior to or after the effective date thereof, the
"Registration Statement") have been duly authorized by Parent's Board of
Directors.
Section 4.5 Consents and Approvals; No Violations. Except as set forth
in Item 4.5 of the Parent Letter, except for filings, permits, authorizations,
consents and approvals as may be required under, and other applicable
requirements of, the Securities Act, the Exchange Act, the Communications Act,
the HSR Act, the DGCL, and under the rules, regulations and published decisions
of the FAA, the FCC and state public utility or service commissions or similar
agencies, and except as may be required in connection with the Transfer Taxes
described in Section 6.11, neither the execution,
-26-
delivery or performance of this Agreement by Parent and Merger Sub C nor the
consummation by Parent and Merger Sub C of the transactions contemplated hereby
will (i) conflict with or result in any breach of any provision of the
respective certificate of incorporation or By-laws of Parent and Sub, (ii)
require any filing with, or permit, authorization, consent or approval of, any
Governmental Entity (except where the failure to obtain such permits,
authorizations, consents or approvals or to make such filings would not
reasonably be expected to have a Material Adverse Effect on Parent or prevent or
materially delay the consummation of the Reorganization), (iii) 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, amendment,
cancellation or acceleration) under, any of the terms, conditions or provisions
of any note, bond, mortgage, indenture, license, lease, contract, agreement or
other instrument or obligation to which Parent or any of its Subsidiaries is a
party or by which any of them or any of their properties or assets may be bound,
(iv) violate any order, writ, judgment, injunction, decree, statute, rule or
regulation applicable to Parent, any of its Subsidiaries or any of their
properties or assets, or (v) result in the creation or imposition of any Lien on
any asset of the Company or its Subsidiaries except in the case of clauses
(iii), (iv) or (v) for violations, breaches or defaults that would not
reasonably be expected to have a Material Adverse Effect on Parent or prevent or
materially delay the consummation of the Reorganization.
Section 4.6 SEC Documents and Other Reports. Parent has filed with the
SEC all documents required to be filed by it since December 31, 1998 under the
Securities Act or the Exchange Act (the "Parent SEC Documents"). As of their
respective filing dates, the Parent SEC Documents complied in all material
respects with the requirements of the Securities Act or the Exchange Act, as the
case may be, each as in effect on the date so filed, and at the time filed with
the SEC none of the Parent SEC Documents contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. The financial statements of Parent
included in the Parent SEC Documents comply as of their respective dates in all
material respects with the then applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto, have been
prepared in accordance with generally accepted accounting principles (except in
the case of the unaudited statements, as permitted by Form 10-Q under the
Exchange Act) applied on a consistent basis during the periods involved (except
as may be indicated therein or in the notes thereto) and fairly present the
consolidated financial position of Parent and its consolidated Subsidiaries as
at the dates thereof and the consolidated results of their operations and their
consolidated cash flows for the periods then ended (subject, in the case of
unaudited statements, to normal year-end audit adjustments and to any other
adjustments described therein). Parent and its Subsidiaries have not made any
material misstatements of fact, or omitted to disclose any fact, to any
Government Entity or in any report, document or certificate filed therewith,
which misstatements or omissions, individually or in the aggregate, could
reasonably be expected to subject any material licenses or authorizations to
revocation
-27-
or failure to renew, except to the extent that such revocation or failure to
renew would not have a Material Adverse Effect on Parent or the transactions
contemplated by this Agreement.
Section 4.7 Absence of Material Adverse Change. Except as disclosed in
Item 4.7 of the Parent Letter or in the documents filed by Parent with the SEC
and publicly available prior to the date of this Agreement (the "Parent Filed
SEC Documents"), since December 31, 1998 Parent and its Subsidiaries have
conducted their respective businesses in all material respects only in the
ordinary course, consistent with past practices, and there has not been (i) any
Material Adverse Change with respect to Parent, (ii) any declaration, setting
aside or payment of any dividend or other distribution with respect to its
capital stock (other than regular quarterly cash dividends) or any redemption,
purchase or other acquisition of any of its capital stock, (iii) any split,
combination or reclassification of any of its capital stock or any issuance or
the authorization of any issuance of any other securities in respect of, in lieu
of or in substitution for shares of its capital stock, or (iv) any change in
accounting methods, principles or practices by Parent affecting its assets,
liabilities or business, except insofar as may have been required by a change in
generally accepted accounting principles.
Section 4.8 Information Supplied. None of the information supplied or
to be supplied by Parent specifically for inclusion or incorporation by
reference in (i) the Registration Statement or (ii) the Joint Proxy Statement,
will, in the case of the Registration Statement, at the time it becomes
effective, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein not misleading, or in the case of the Joint Proxy Statement,
at the time of the mailing of the Joint Proxy Statement, the time of the
Stockholders Meetings and at the Effective Time, contain any untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading or necessary to correct
any statement in any earlier communication with respect to the solicitation of
proxies for the Stockholders Meetings which has become false or misleading. The
Registration Statement will comply (with respect to Parent) as to form in all
material respects with the requirements of the Securities Act and the Joint
Proxy Statement will comply (with respect to Parent) as to form in all material
respects with the requirements of the Exchange Act.
Section 4.9 Permits; Compliance with Laws. (a) Each of Parent and its
Subsidiaries is in possession of all franchises, grants, authorizations,
licenses, permits, charters, easements, variances, exceptions, consents,
certificates, approvals and orders of any Governmental Entity necessary for
Parent or any of its Subsidiaries to own, lease and operate its properties or to
carry on its business as it is now being conducted (the "Parent Permits"),
except where the failure to have any of the Parent Permits would not,
individually or in the aggregate, have a Material Adverse Effect on Parent, and,
as of the date of this Agreement, no suspension or cancellation of any of
-28-
the Parent Permits is pending or, to the knowledge of Parent, threatened, except
where the suspension or cancellation of any of the Parent Permits would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect on Parent. The businesses of Parent and its Subsidiaries are not
being conducted in violation of any law, ordinance or regulation of any
Governmental Entity, except for possible violations that would not reasonably be
expected to have a Material Adverse Effect on Parent or prevent or materially
delay the consummation of the Reorganization.
(b)(i) Parent and each of its Subsidiaries holds, and is
qualified and eligible to hold, all material licenses, permits and
other authorizations issued or to be issued by the FCC to such entity
for the operation of their respective businesses, all of which are set
forth in Item 4.9(b)(i) of Parent Letter (the "Parent FCC Licenses").
(ii) Parent FCC Licenses are valid and in full force and
effect and neither Parent nor any of its Subsidiaries is or has been
delinquent in payment on or in default under any installment obligation
owed to the United States Treasury in connection with Parent FCC
Licenses. As used herein, the term "full force and effect" means that
(i) the orders issuing the Parent FCC Licenses have become effective,
(ii) no stay of effectiveness of such orders has been issued by the
FCC, and (iii) the Parent FCC Licenses have not been invalidated by any
subsequent published FCC action.
(iii) All material reports and applications required by the
Communications Act or required to be filed with the FCC by Parent or
any of its Subsidiaries have been filed and are accurate and complete
in all material respects.
(iv) Parent and its Subsidiaries are, and have been, in
compliance in all material respects with, and the wireless
communications systems operated pursuant to Parent FCC Licenses are and
have been operated in compliance in all material respects with, the
Communications Act.
(v) There is not pending as of the date hereof any
application, petition, objection, pleading or proceeding with the FCC
or any public service commission or similar body having jurisdiction or
authority over the communications operations of Parent or any of its
Subsidiaries which questions the validity of or contests any Parent FCC
License or which presents a substantial risk that, if accepted or
granted, or concluded adversely, could result in (as applicable) the
revocation, cancellation, suspension, dismissal, denial or any
materially adverse modification of any Parent FCC License or imposition
of any substantial fine or forfeiture against Parent or any of its
Subsidiaries except as set forth in Item 4.9(b)(v) of Parent Letter.
(vi) No facts are known to Parent or its Subsidiaries which if
known by a Governmental Entity of competent jurisdiction would present
a substantial risk
-29-
that any Parent FCC License could be revoked, cancelled, suspended or
materially adversely modified or that any substantial fine or
forfeiture could be imposed against Parent or any of its Subsidiaries.
Section 4.10 Tax Matters. Except as set forth in Item 4.10 of the
Parent Letter or as would not have a Material Adverse Effect on Parent, (i)
Parent and each of its Subsidiaries have timely filed (after taking into account
any extensions to file) all Tax Returns required to be filed by them either on a
separate or combined or consolidated basis; (ii) all such Tax Returns are
complete and accurate and disclose all Taxes required to be paid for the periods
covered thereby; (iii) Parent and its Subsidiaries have paid or caused to be
paid all Taxes shown as due on such Tax Returns and all Taxes for which no Tax
Return was required to be filed, and the financial statements contained in the
most recent Parent SEC Documents reflect an adequate reserve for all Taxes
payable by Parent and its Subsidiaries for all taxable periods and portions
thereof accrued through the date of such financial statements; (iv) none of
Parent or any Subsidiary has waived in writing any statute of limitations in
respect of Taxes; (v) the Tax Returns referred to in clause (i) relating to
income taxes have been examined by the appropriate taxing authority or the
period for assessment of the Taxes in respect of which such Tax Returns were
required to be filed has expired; (vi) there is no action, suit, investigation,
audit, claim or assessment pending or proposed in writing with respect to Taxes
of Parent or any of its Subsidiaries; (vii) there are no liens for Taxes upon
the assets of Parent or any Subsidiary except for liens relating to current
Taxes not yet due; (viii) all Taxes which Parent or any Subsidiary is required
by law to withhold or to collect for payment have been duly withheld and
collected, and have been paid or accrued on the books of Parent or such
Subsidiary; (ix) none of Parent or any Subsidiary has been a member of any group
of corporations filing Tax Returns on a consolidated, combined, unitary or
similar basis other than each such group of which it is currently a member; (x)
no deduction of any amount that would otherwise be deductible by Parent or any
of its Subsidiaries with respect to taxable periods ending on or before the
Effective Time could be disallowed under Section 162(m) of the Code; (xi)
neither Parent nor any of its Subsidiaries is a "United States real property
holding corporation" within the meaning of Section 897(c)(2) of the Code; and
(xii) as a result of the Reorganization, Parent will not be obligated to make a
payment to an individual that would be a "parachute payment" to a "disqualified
individual" as those terms are defined in Section 280G of the Code without
regard to whether such payment is reasonable compensation for personal services
performed or to be performed in the future.
Section 4.11 Liabilities. Except as set forth in the Parent Filed SEC
Documents, to the knowledge of Parent, neither Parent nor any of its
Subsidiaries has any liabilities or obligations of any nature (whether accrued,
absolute, contingent or otherwise) required by generally accepted accounting
principles to be set forth on a consolidated balance sheet of Parent and its
Subsidiaries or in the notes thereto, other than liabilities and obligations
incurred in the ordinary course of business since December 31, 1998 and
liabilities which would not, individually or in the aggregate, reasonably be
expected
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to have a Material Adverse Effect on Parent.
Section 4.12 Litigation. Except as disclosed in Item 4.12 of the Parent
Letter or in the Parent Filed SEC Documents, as of the date of this Agreement,
there is no suit, action, proceeding or investigation pending or, to Parent's
knowledge, threatened, against Parent or any of its Subsidiaries that,
individually or in the aggregate, would reasonably be expected to have a
Material Adverse Effect on Parent or prevent or materially delay the
consummation of the Reorganization. Except as disclosed in Item 4.12 of the
Parent Letter or in the Parent Filed SEC Documents, neither Parent nor any of
its Subsidiaries is subject to any outstanding judgment, order, writ, injunction
or decree that would, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect on Parent or prevent or materially delay the
consummation of the Reorganization.
Section 4.13 State Takeover Statutes. To the knowledge of Parent, no
state antitakeover statute or similar statute or regulation applicable to Parent
is applicable to this Agreement or the transactions contemplated hereby. To the
knowledge of Parent, no other "control share acquisition," "fair price,"
"moratorium" or other antitakeover laws or regulations enacted under U.S.
federal or state laws applicable to Parent apply to this Agreement or any of the
transactions related thereto.
Section 4.14 Brokers. No broker, investment banker, financial advisor
or other person, other than Xxxxxxx, Xxxxx & Co., the fees and expenses of which
will be paid by Parent (and are reflected in an agreement between Xxxxxxx, Sachs
& Co. and Parent, is entitled to any broker's, finder's, financial advisor's or
other similar fee or commission in connection with the transactions contemplated
by this Agreement based upon arrangements made by or on behalf of Parent.
Section 4.15 Tax Status. To the knowledge of Parent after due
investigation, neither Parent nor any of its Affiliates has taken any action or
failed to take any action which action or failure would jeopardize the
qualification of either the Merger or the VoiceStream Merger as a reorganization
within the meaning of Section 368(a) of the Code and/or as part of a transaction
described in Section 351(a) of the Code. To the knowledge of Parent after due
investigation, there are no facts or circumstances relating to Parent or its
Affiliates, including any covenants or undertakings of the Company pursuant to
this Agreement, that would prevent Xxxxx, Day, Xxxxxx & Xxxxx from delivering
the opinion referred to in Section 7.3(b) as of the date hereof.
Section 4.16 Interim Operations of Sub. Merger Sub C was formed solely
for the purpose of engaging in the transactions contemplated hereby, has engaged
in no other business activities and has conducted its operations only as
contemplated hereby.
Section 4.17 Vote Required. The only vote of the holders of any class
or series of capital stock of Parent necessary to approve this Agreement and the
transactions
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contemplated hereby is (i) with respect to the transactions contemplated by
Sections 1.0(b) or 1.0(c), the affirmative vote of the holders of two-thirds of
the outstanding shares of Parent Common Stock and (ii) with respect to the
Parent Share Issuance, the affirmative vote of the holders of a majority of the
outstanding shares of Parent Common Stock.
Section 4.18 Transactions with Affiliates. Except as described in Item
4.18 of Parent Letter or the Parent SEC Documents, no Affiliate of Parent nor
any stockholder, officer, director, partner, member, consultant or employee of
any thereof, is at the date hereof a party to any transaction with Parent or any
of its Subsidiaries, including any contract or arrangement providing for the
furnishing of services to or by, providing for rental of real or personal
property (including intellectual property) to or from, or otherwise requiring
payments to or from Parent or any of its Subsidiaries, or any Affiliate thereof.
Section 4.19 Opinion of Xxxxxxx, Sachs & Co. Parent has received the
oral opinion of Xxxxxxx, Xxxxx & Co. on the date hereof to the effect that, as
of the date hereof, the consideration to be paid by Parent in the Reorganization
is fair to the Parent's stockholders from a financial point of view.
Article V - Covenants Relating to Conduct of Business
Section 5.1 Conduct of Business by the Company Pending the
Reorganization. During the period from the date of this Agreement until the
Effective Time, the Company shall, and shall cause each of its Subsidiaries to,
in all material respects, except as contemplated by this Agreement, carry on its
business in the ordinary course as currently conducted. Without limiting the
generality of the foregoing, and except as otherwise contemplated by this
Agreement (including the Annexes hereto) or as disclosed in the Company Letter,
during such period, the Company shall not, and shall not permit any of its
Subsidiaries to, without the prior written consent of Parent:
(a) (i) declare, set aside or pay any dividends on, or make any other
distributions in respect of, or redeem or repurchase, any of its capital stock
or other equity interest, except for dividends by a Subsidiary of the Company to
its parent or (ii) split, combine or reclassify any of its capital stock or
other equity interest or issue or authorize the issuance of any other securities
in respect of, in lieu of or in substitution for shares of its capital stock;
(b) issue, deliver, sell, pledge or otherwise encumber any shares of
its capital stock or other equity interest, any other voting securities or any
securities convertible into, or any rights, warrants or options to acquire, any
such shares, voting securities or convertible securities, other than the
issuance of shares of Company Common Stock under the Company Long-Term Incentive
Plan, Company Restricted Stock Plan or Tax Deferred Savings Plan in the ordinary
course or pursuant to the Investment Agreement;
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(c) amend its Restated Certificate of Incorporation or By-laws or other
similar organizational documents;
(d) acquire, or agree to acquire, in a single transaction or in a
series of related transactions, any business or assets, other than (i)
transactions that are in the ordinary course of business, and which involve
individually or in the aggregate a purchase price not in excess of $5,000,000
and (ii) capital expenditures described in paragraph (e) below;
(e) make or agree to make any new capital expenditure other than
expenditures contemplated by the Company's capital budget for fiscal 1999 and
expenditures not in excess of the dollar amount included in the Company's
business plan for fiscal 2000;
(f) sell, lease, license, encumber or otherwise dispose of, or agree to
sell, lease, license, encumber or otherwise dispose of, any of its assets, other
than transactions that are in the ordinary course of business and which involve
assets having a current value not in excess of $5,000,000 individually or in the
aggregate;
(g) increase the salary or wages payable or to become payable to its
directors, officers or employees, except for increases required under employment
agreements existing on the date hereof, and except for increases for officers
and employees in the ordinary course of business consistent with past practices;
or enter into any employment or severance agreement with, or establish, adopt,
enter into or amend, or make any grants or awards under, any bonus, profit
sharing, thrift, stock option, restricted stock, pension, retirement, deferred
compensation, employment, termination or severance plan, agreement, policy or
arrangement for the benefit of, any director, officer or employee, except, in
each case, in the ordinary course of business consistent with past practices
(including those with respect to the timing and amount of, and persons entitled
to, grants and awards), or as may be required by the terms of any such plan,
agreement, policy or arrangement or to comply with applicable law;
(h) except as may be required as a result of a change in law or in
generally accepted accounting principles, make any change in its method of
accounting or its fiscal year;
(i) enter into, modify in any material respect, amend in any material
respect or terminate any material contract or agreement to which the Company or
any of its Subsidiaries is a party, or waive, release or assign any material
rights or claims, in each case, in any manner adverse to the Company or any of
its Subsidiaries;
(j) amend any term of any of its outstanding securities in any material
respect;
(k) adopt a plan or agreement of complete or partial liquidation,
dissolution, merger, consolidation, restructuring, recapitalization or other
material reorganization;
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(l) incur, assume or guarantee any material Indebtedness other than
pursuant to agreements in effect on the date hereof and listed in the Company
Letter;
(m) create, incur, assume or suffer to exist any Lien upon any of its
property, assets or revenues, whether now owned or hereafter acquired, other
than Liens incurred in the ordinary course of business or to secure Indebtedness
or other obligations permitted by this Agreement;
(n) create, incur, assume or suffer to exist any obligation whereby the
Company or its Subsidiaries guarantees any Indebtedness, leases, dividends or
other obligations of any third party;
(o) make any loan, advance or capital contributions to or investment in
any Person, other than loans, advances or capital contributions to or
investments in its wholly owned Subsidiaries;
(p) enter into any agreement or arrangement that materially limits or
otherwise materially restricts the Company, any of its Subsidiaries or any of
their respective Affiliates or any successor thereto or that could, after the
Effective Time, limit or restrict Parent, any of its Subsidiaries, the Surviving
Corporation or any of their Affiliates, from engaging in the business of
providing wireless communications services or developing wireless communications
technology anywhere in the world or otherwise from engaging in any other
business;
(q) settle, or propose to settle, any material litigation,
investigation, arbitration, proceeding or other claim;
(r) make any material tax election or enter into any settlement or
compromise of any material tax liability;
(s) take any action, other than as expressly permitted by this
Agreement, that would make any representation or warranty of the Company
hereunder inaccurate in any material respect at the Effective Time; or
(t) enter into any contract, agreement, commitment or arrangement to do
any of the foregoing.
Section 5.2 Conduct of Business by Parent Pending the Reorganization.
During the period from the date of this Agreement until the Effective Time,
except as contemplated by this Agreement or the Omnipoint Agreement, Parent
shall not, and shall not permit any of its Subsidiaries to, without the prior
written consent of the Company (which consent shall not be unreasonably withheld
or delayed):
(a) amend its articles or certificate of incorporation, bylaws or other
applicable governing instrument;
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(b) amend any terms of the shares of Parent Common Stock in any
material respect;
(c) split, combine, subdivide or reclassify any shares of Parent Common
Stock or declare, set aside or pay any dividend or other distribution (whether
in cash, stock or property or any combination thereof) in respect of Parent
Common Stock, except for (i) regular quarterly cash dividends, (ii) regular
dividends on any future series of preferred stock pursuant to the terms of such
securities, or (iii) dividends paid by any Parent Subsidiary to Parent or any
Parent Subsidiary that is, directly or indirectly, wholly owned by Parent;
(d) take any action that would or would reasonably be expected to
prevent, impair or materially delay the ability of Parent to consummate the
transactions contemplated by this Agreement;
(e) change (i) its methods of accounting or accounting practices in any
material respect except as required by concurrent changes in generally accepted
accounting principles or by law or (ii) its fiscal year;
(f) enter into or acquire any new line of business that (i) is material
to Parent and (ii) is not strategically related to the current business or
operations of Parent;
(g) agree or commit to do any of the foregoing;
provided, however, that nothing herein shall preclude or restrict Parent from
consummating the transactions contemplated by the Omnipoint Agreement.
Section 5.3 No Solicitation. (a) From the date hereof until the
termination hereof, the Company will not, and will cause its Affiliates, and the
officers, directors, employees, investment bankers, attorneys, accountants,
consultants or other agents or advisors of the Company and its Affiliates, not
to, directly or indirectly: (i) take any action to solicit, initiate, facilitate
or encourage the submission of any Acquisition Proposal; (ii) other than in the
ordinary course of business and not related to an Acquisition Proposal, engage
in any discussions or negotiations with, or disclose any non-public information
relating to the Company or any of its Subsidiaries or afford access to the
properties, books or records of the Company or any of its Subsidiaries to, any
Person who is known by the Company to be considering making, or has made, an
Acquisition Proposal; (iii) (A) approve any transaction under Section 203 of the
Delaware Law or (B) approve of any Person's becoming an "interested stockholder"
under Section 203 of Delaware Law or (iv) enter into any agreement with respect
to an Acquisition Proposal. Nothing contained in this Agreement shall prevent
the Board of Directors of the Company from complying with Rule 14e-2 and Rule
14d-9 under the 1934 Act with regard to an Acquisition Proposal; provided, that
the Board of Directors of the Company shall not recommend that the stockholders
of the Company tender their shares in connection with a tender offer except to
the extent the Board of Directors of
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the Company by a majority vote determines in its good faith judgment that such a
recommendation is required to comply with the fiduciary duties of the Board of
Directors of the Company to shareholders under applicable Delaware Law, after
receiving the advice of outside legal counsel.
(b) The Company will notify Parent promptly (but in no event later than
24 hours) after receipt by the Company (or any of its advisors) of any
Acquisition Proposal, or of any request (other than in the ordinary course of
business and not related to an Acquisition Proposal) for non-public information
relating to the Company or any of its Subsidiaries or for access to the
properties, books or records of the Company or any of its Subsidiaries by any
Person who is known to be considering making, or has made, an Acquisition
Proposal. The Company shall provide such notice orally and in writing and shall
identify [the Person making, and] the terms and conditions of, any such
Acquisition Proposal or request. The Company shall keep Parent fully informed,
on a prompt basis (but in any event no later than 24 hours), of the status and
details of any such Acquisition Proposal or request. The Company shall, and
shall cause its Subsidiaries and the directors, employees and other agents of
the Company and the Company Subsidiaries to, cease immediately and cause to be
terminated all activities, discussions or negotiations, if any, with any Persons
conducted prior to the date hereof with respect to any Acquisition Proposal.
Section 5.4 Third Party Standstill Agreements. Subject to the fiduciary
responsibilities of the Board of Directors of the Company, during the period
from the date of this Agreement through the Effective Time, the Company shall
enforce and shall not terminate, amend, modify or waive any standstill provision
of any confidentiality or standstill agreement between the Company and other
parties entered into prior to the date hereof in connection with the process
conducted by the Company to solicit acquisition proposals for the Company.
Section 5.5 Disclosure of Certain Matters; Delivery of Certain Filings.
The Company shall promptly advise Parent orally and in writing if there occurs,
to the knowledge of the Company, any change or event which results in the
executive officers of the Company having a good faith belief that such change or
event has resulted in or is reasonably likely to result in a Material Adverse
Effect on the Company or prevent or materially delay the consummation of the
Reorganization. Parent shall promptly advise the Company orally and in writing
if there occurs, to the knowledge of Parent, any change or event which results
in the executive officers of Parent having a good faith belief that such change
or event has resulted in or is reasonably likely to result in a Material Adverse
Effect on Parent. The Company shall provide to Parent, and Parent shall provide
to the Company, copies of all filings made by the Company or Parent, as the case
may be, with any Governmental Entity in connection with this Agreement and the
transactions contemplated hereby.
Section 5.6 Tax Status. During the period from the date of this
Agreement through the Effective Time, each of Parent, the Company and their
respective Affiliates
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shall use its reasonable best efforts (i) to cause each of the Merger and the
VoiceStream Merger to qualify as a reorganization within the meaning of Section
368(a) of the Code and/or as part of a transaction described in Section 351(a)
of the Code and (ii) to obtain the opinions of counsel referred to in Section
7.2(b) and Section 7.3(b), including the execution of the tax certificates
referenced therein.
Article VI - Additional Agreements
Section 6.1 Employee Benefits. (a) Parent shall take all necessary
action so that each person who is an employee of the Company or any of its
Subsidiaries as of the Effective Time (including each such person who is on
vacation, temporary layoff, approved leave of absence, sick leave or short- or
long-term disability) (a "Retained Employee") shall remain an employee of the
Company or the Surviving Corporation or a Subsidiary of the Company or of the
Surviving Corporation, as the case may be, immediately following the Effective
Time. If any person who (a) is receiving, as of the Effective Time, long-term
disability benefits and (b) was employed by Aerial or any of its Subsidiaries
immediately before becoming eligible to receive long-term disability benefits
ceases to be totally and permanently disabled and is able to return to
employment, Parent shall take all necessary action so that, to the extent
required by law, such person becomes an employee of the Company or the Surviving
Corporation or a Subsidiary of the Company or of the Surviving Corporation, as
the case may be. Prior to the Effective Time, TDS and the Company shall enter
into an Employee Benefit Plans Separation Agreement whereby certain TDS employee
benefit plans in which the Company participates shall be spun-off to allow the
Company to become the sole sponsor. The terms of the Employee Benefit Plans
Separation Agreement shall provide, inter alia, for the termination (without the
establishment of any similar plan) of the Company's participation in the
Telephone and Data Systems, Inc. Wireless Companies' Pension Plan and Telephone
and Data Systems, Inc. Supplemental Executive Retirement Plan. Parent shall not
be subject to any liability with respect to the Telephone and Data Systems, Inc.
Wireless Companies' Pension Plan. Parent shall take all necessary action so that
each employee benefit plan maintained by the Company or any of its Subsidiaries
immediately before the Effective Time shall be continued immediately following
the Effective Time. Parent shall take all necessary action so that, throughout
the period beginning at the Effective Time and ending on September 30, 2000, the
Company, the Surviving Corporation and their Subsidiaries will provide for each
Retained Employee and former employee of the Company and its Subsidiaries, a
level of employee benefits and aggregate compensation that is substantially
comparable in the aggregate with that provided by the Company immediately prior
to the Effective Time. Parent shall take all necessary action so that each
Retained Employee shall after the Effective Time continue to be credited with
the unused vacation and sick leave credited to such employee through the
Effective Time under the applicable vacation and sick leave policies of the
Company and its Subsidiaries, and Parent shall permit or cause the Company, the
Surviving Corporation and their Subsidiaries to permit such employees to use
such vacation and sick leave.
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Parent shall take all necessary action so that, for all purposes under each
employee benefit plan maintained by Parent or any of its Subsidiaries in which
employees or former employees of the Company and its Subsidiaries become
eligible to participate upon or after the Effective Time, each such person shall
be given credit for all service with the Company and its Subsidiaries (or all
service credited by the Company or its Subsidiaries) to the same extent as if
rendered to Parent or any of its Subsidiaries. As of the Effective Time, the
Company will have no Company Benefit Plans except for those Company Benefit
Plans listed in Items 3.12(a) and 3.12(b) of the Company Letter. Item 6.1(a) of
the Company Letter contains a true and complete list of each director, officer
and employee of the Company and its Subsidiaries holding options under any
Company Benefit Plan, and the dollar or share amounts thereof.
(b) Except as otherwise provided in this Section or in Section
6.2, nothing in this Agreement shall be interpreted as limiting the power of the
Surviving Corporation to amend or terminate any particular Company Benefit Plan
or any other particular employee benefit plan, program, agreement or policy or
as requiring the Surviving Corporation to offer to continue (other than as
required by its terms) any written employment contract or to continue the
employment of any specific person, provided, however, that no such termination
or amendment may take away benefits or any other payments already accrued as of
the time of such termination or amendment without the consent of such person,
except as allowed by law.
(c) As of the Effective Time and subject to the applicable
time limitations contained herein, Parent shall honor or cause to be honored by
the Company, the Surviving Corporation and their Subsidiaries all employment
agreements, bonus agreements, severance agreements and non-competition
agreements with the persons who are directors, officers and employees of the
Company and its Subsidiaries.
(d) Without limitation of Parent's or the Company's
obligations under any existing employment agreement, bonus agreement, severance
agreement or non-competition agreement, Parent shall maintain, or shall cause
the Company and the Surviving Corporation to maintain, the Company's bonus
programs through at least September 30 of the calendar year in which the
Reorganization is consummated, with bonuses to be paid to each Retained Employee
still employed at such time participating thereunder at the greater of (A) such
employee's target level and (B) the bonus such employee would have earned under
the applicable Company bonus program if the transactions contemplated by this
Agreement had not occurred, in all events on a basis consistent with past
practice, and in either case prorated on the basis of the portion of the
calendar year elapsed as of the time of termination of the relevant bonus
program.
(e) Parent shall, or shall cause the Company and the Surviving
Corporation to, (A) waive all limitations as to preexisting conditions,
exclusions and waiting periods with respect to participation and coverage
requirements applicable to the Retained Employees and former employees of the
Company and its Subsidiaries
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under any welfare or fringe benefit plan in which such employees and former
employees may be eligible to participate after the Effective Time, other than
limitations or waiting periods that are in effect with respect to such employees
and that have not been satisfied under the corresponding welfare or fringe
benefit plan maintained by the Company for the Retained Employees and former
employees prior to the Effective Time, and (B) provide each Retained Employee
and former employee with credit under any welfare plans in which such employee
or former employee becomes eligible to participate after the Effective Time for
any co-payments and deductibles paid by such Retained Employee or former
employee for the then current plan year under the corresponding welfare plans
maintained by the Company prior to the Effective Time.
Section 6.2 Options; Restricted Stock Awards. (a) Prior to the
Effective Time, the Board of Directors of the Company (or the Stock Option
Compensation Committee of the Board of Directors) shall adopt such resolutions
or shall take such other actions as may be required, with respect to Company
Stock Options and Company Restricted Stock Units, to specifically approve the
transactions contemplated by this Section 6.2. The Company shall use reasonable
efforts to obtain any necessary consents of the holders of such Company Stock
Options and Company Restricted Stock Units to effect this Section 6.2.
(b) At the Effective Time, each Company Stock Option which is
outstanding immediately prior to the Effective Time pursuant to any Company
Stock Plan shall become and represent an option to purchase the number of shares
of Parent Common Stock (a "Substitute Option") determined by multiplying the
number of Company Common Shares subject to such Company Stock Option immediately
prior to the Effective Time by the Conversion Number, at an exercise price per
share of Parent Common Stock (increased to the nearest whole cent) equal to the
exercise price per Company Common Share subject to such Company Stock Option
immediately prior to the Effective Time divided by the Conversion Number. All
other terms and conditions applicable to the Company Stock Options, including
vesting, shall remain unchanged with respect to the Substitute Options. No
fractional shares of Parent Common Stock will be issued upon the exercise of
Substitute Options. In lieu of such issuance, the shares of Parent Common Stock
issued pursuant to the terms of this Agreement shall be rounded to the closest
whole share of Parent Common Stock. After the Effective Time, except as
otherwise provided in this Section 6.2, each Substitute Option shall be
exercisable upon the same terms and conditions as were applicable to the related
Company Stock Option immediately prior to the Effective Time, after giving
effect to the resolutions and other actions described in this Section 6.2. Not
later than ten days following the Effective Time, Parent shall file a
registration statement on Form S-8 or otherwise included in an existing
registration statement with respect to the shares of Parent Common Stock to be
issued upon exercise of the Substitute Options and shall use its best efforts to
maintain the effectiveness of such registration statement for so long as the
Substitute Options shall remain outstanding.
(c) Pursuant to the Company Restricted Stock Plan, as of the date of
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approval by the stockholders of the Company of this Agreement, each Company
Restricted Stock Unit shall become fully vested and each holder of a Company
Restricted Stock Unit shall be entitled to receive from the Company a payment in
an amount equal to the Fair Market Value (as defined by the Restricted Stock
Unit Plan) of such Restricted Stock Unit determined on such vesting date. Such
payment shall be made in cash or Company Common Shares, as determined in the
sole discretion of the Chairman of the Company.
Section 6.3 Company Stockholders Meeting. (a) The Company shall call a
meeting of the holders of Company Common Stock (the "Company Stockholders
Meeting") to be held as promptly as practicable for the purpose of voting upon
the Reorganization. Except as provided below, the Board of Directors of each
party shall recommend approval and adoption of this Agreement and the
transactions contemplated hereby by its respective stockholders and Parent and
the Company shall each take all lawful action to solicit such approval,
including timely mailing of the Proxy Statement/Prospectus. The Board of
Directors of the Company shall be permitted to withdraw, or modify in a manner
adverse to Parent, its recommendation to its stockholders, but only if (i) the
Board of Directors of the Company determines in good faith by majority vote of
all directors entitled to vote on the approval of this Agreement, on the basis
of the advice of the Company's outside counsel that it is required under
Delaware law to take such action in order for the Board of Directors to comply
with its fiduciary duties under applicable Delaware Law, (ii) the Company shall
have delivered to Parent three Business Days' prior written notice advising
Parent that it intends to take such action and the Company's Board of Directors
has considered any proposed changes to this Agreement (if any) proposed by
Parent and (iii) the Company has fully and completely complied with Section 5.3
and this Section. Unless this Agreement is previously terminated in accordance
with Section 8.1, the Company shall submit this Agreement to its stockholders at
the meeting required to be called and held pursuant to this Section 6.3(a), even
if the Company's Board of Directors determines at any time after the date hereof
that it is no longer advisable or recommends that its stockholders reject it.
(b) Parent shall call a meeting of its stockholders (the "Parent
Stockholder Meeting" and, together with the Company Stockholder Meeting, the
"Stockholder Meetings"), to be held as promptly as practicable for the purpose
of voting upon the Reorganization and Parent Share Issuance. Unless waived by
the Company, Parent shall use its reasonable commercial efforts to cause the
Parent Stockholder Meeting to be coordinated with and held at the same time and
place as the vote of the Parent Stockholders, as defined below, with respect to
the Omnipoint Agreement. Parent shall, though its Board of Directors, recommend
to the holders of Parent Common Stock approval of the Reorganization and Parent
Share Issuance. Unless this Agreement is previously terminated in accordance
with Section 8.1, Parent shall submit the Reorganization and Parent Share
Issuance to its stockholders at the meeting required to be called and held
pursuant to this Section 6.3(a), even if Parent's Board of Directors determines
at any time after the date hereof that it is no longer advisable or
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recommends that its stockholders reject it.
(c) The Company and Parent shall coordinate and cooperate with respect
to the timing of the Stockholder Meetings and shall use their reasonable
commercial efforts to hold such meetings on the same day. Parent shall use its
reasonable best efforts to cause the record date for the Parent Stockholder
Meeting to be set as of a date prior to the consummation of the transactions
contemplated by the Omnipoint Agreement.
Section 6.4 Preparation of the Registration Statement and Joint Proxy
Statement. The Company and Parent shall promptly prepare and file with the SEC
the Joint Proxy Statement and Parent shall prepare and file with the SEC the
Registration Statement, in which the Joint Proxy Statement will be included as a
prospectus. Unless waived by the Company, the Company and Parent shall use their
reasonable commercial efforts to cause the Joint Proxy Statement to be combined
with the proxy statement of Parent and Omnipoint relating to the Omnipoint
Agreement. Each of the Company and Parent shall use its reasonable efforts to
have the Registration Statement declared effective under the Securities Act as
promptly as practicable after such filing. Parent shall also take any reasonable
action (other than qualifying to do business in any jurisdiction in which it is
now not so qualified) required to be taken under any applicable state securities
laws in connection with the issuance of Parent Common Stock in connection with
the Reorganization and upon any exercise of the Substitute Options. The Company
shall furnish all information concerning the Company and the holders of shares
of Company Common Stock as may be reasonably requested by Parent in connection
with any such action. Parent shall notify the Company promptly of the receipt of
any comments from the SEC or its staff and of any request by the SEC or its
staff for amendments or supplements to the Registration Statement or the Joint
Proxy Statement or for additional information and will supply the Company with
copies of all correspondence between Parent or any of its representatives, on
the one hand, and the SEC or its staff, on the other hand, with respect to the
Registration Statement, the Joint Proxy Statement or the Reorganization. If at
any time prior to the Company Stockholders Meeting there shall occur any event
that should be set forth in an amendment or supplement to the Registration
Statement or the Joint Proxy Statement, each of Parent and the Company shall
promptly prepare and mail to the stockholders of the Company and Parent such an
amendment or supplement. Parent and the Company shall cooperate in the
preparation of the Registration Statement, the Joint Proxy Statement or any
amendment or supplement thereto.
Section 6.5 Comfort Letters. (a) The Company shall use reasonable
efforts to cause to be delivered to Parent "comfort" letters of Xxxxxx Xxxxxxxx
LLP, the Company's independent public accountants, dated the date on which the
Registration Statement shall become effective and as of the Effective Time, and
addressed to Parent and the Company, in form and substance reasonably
satisfactory to Parent and as is reasonably customary in scope and substance for
letters delivered by independent public accountants in connection with
transactions such as those contemplated by this
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Agreement.
(b) Parent shall use reasonable efforts to cause to be delivered to the
Company "comfort" letters of Xxxxxx Xxxxxxxx LLP, Parent's independent public
accountants, dated the date on which the Registration Statement shall become
effective and as of the Effective Time, and addressed to the Company and Parent,
in form and substance reasonably satisfactory to the Company and as is
reasonably customary in scope and substance for letters delivered by independent
public accountants in connection with transactions such as those contemplated by
this Agreement.
Section 6.6 Access to Information. Upon reasonable notice and subject
to restrictions contained in confidentiality agreements to which the Company is
subject and subject to the terms of the Reciprocal Non-Disclosure and
Confidentiality Agreement dated December 28, 1998, between Series A Stockholder
on behalf of itself and its Affiliates, including the Company, and Parent, as
the same may be amended, supplemented or modified (the "Confidentiality
Agreement"), (a) the Company shall, and shall cause each of its Subsidiaries to,
afford to Parent and to the officers, employees, accountants, counsel and other
representatives of Parent all reasonable access, during normal business hours
during the period prior to the Effective Time, to all their respective lenders,
agents and other representatives, properties, assets, books, contracts,
commitments and records and, during such period, the Company shall (and shall
cause each of its subsidiaries to) furnish promptly to Parent all information
concerning its business, properties and personnel as Parent may reasonably
request, including a copy of each report, schedule, registration statement and
other document filed or received by it during such period pursuant to the
requirements of the federal or state securities laws or the federal Tax laws and
(b) Parent shall, and shall cause each of its Subsidiaries to, afford to the
Company and to the officers, employees, accountants, counsel and other
representatives of the Company all reasonable access, during normal business
hours during the period prior to the Effective Time, to all their respective
properties, books, contracts, commitments and records and, during such period,
Parent shall (and shall cause each of its Subsidiaries to) furnish promptly to
the Company all information concerning its business, properties and personnel as
the Company may reasonably request, including a copy of each report, schedule,
registration statement and other document filed or received by it during such
period pursuant to the requirements of the federal or state securities laws or
the federal Tax laws.
Section 6.7 Compliance with the Securities Act. (a) No later than
thirty days following the date of this Agreement, the Company shall cause to be
prepared and delivered to Parent a list identifying all persons who, at the time
of the Company Stockholders Meeting, may be deemed to be an "affiliate" of the
Company, as such term is used in paragraphs (c) and (d) of Rule 145 under the
Securities Act (the "Rule 145 Affiliates"). The Company shall use reasonable
efforts to cause each person who is identified as a Rule 145 Affiliate in such
list (except Series A Stockholder and Investor) to deliver to Parent on or prior
to the Effective Time a written agreement, in a
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form to be approved by the parties hereto, that such Rule 145 Affiliate shall
not sell, pledge, transfer or otherwise dispose of any shares of Parent Common
Stock issued to such Rule 145 Affiliate in connection with the Reorganization,
except pursuant to an effective registration statement or in compliance with
such Rule 145 or another exemption from the registration requirements of the
Securities Act.
(b) Prior to the Effective Time, the Board of Directors of Parent (or
the committee of the Board of Directors of Parent composed solely of two or more
"Non- Employee Directors," as that term is defined in Rule 16b-3(b)(3)(i) under
the Exchange Act, administering the stock plans of Parent) shall adopt such
resolutions or shall take such other actions as are required to specifically
approve the acquisitions of Parent Common Stock and Substitute Options at the
Effective Time, as contemplated by Sections 2.1(c) and 6.2, by directors,
officers or employees of the Company who may become directors or officers of
Parent, such approvals to be given for the purpose of exempting such
acquisitions under Rule 16b-3 under the Exchange Act, it being acknowledged that
such approvals shall not adversely affect Parent's ability subsequently to
determine that any such person has not in fact become a director or officer of
Parent.
Section 6.8 Stock Exchange Listings. Parent shall use reasonable
efforts to be included on Nasdaq, upon notification of issuance, the shares of
Parent Common Stock to be issued in connection with the Reorganization and upon
any exercise of the Substitute Options.
Section 6.9 Fees and Expenses. (a) Except as provided below in this
Section 6.9, all fees and expenses incurred in connection with the
Reorganization, this Agreement and the transactions contemplated hereby shall be
paid by the party incurring such fees or expenses, whether or not the
Reorganization is consummated.
(b) In the event that Parent terminates this Agreement pursuant to
Section 8.1(c)(i) or Section 8.1(e), the Company shall pay, or cause to be paid,
in same day funds to Parent within five (5) Business Days of such termination,
$40,000,000 (the "Termination Fee").
Section 6.10 Public Announcements. Parent and the Company will consult
with each other before issuing any press release or otherwise making any public
statements with respect to the transactions contemplated by this Agreement and
shall not issue any such press release or make any such public statement prior
to such consultation, except as may be required by applicable law, fiduciary
duties or by obligations pursuant to any listing agreement with any national
securities exchange.
Section 6.11 Real Estate Transfer Tax. Parent and the Company agree
that either the Surviving Corporation or the Company (without any liability to
any of the Company's stockholders) will pay any state or local Tax which is
attributable to the transfer of the beneficial ownership of the Company's or its
Subsidiaries' real property,
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if any (collectively, the "Transfer Taxes"), and any penalties or interest with
respect to the Transfer Taxes, payable in connection with the consummation of
the Reorganization. The Company agrees to cooperate with Parent in the filing of
any returns with respect to the Transfer Taxes, including supplying in a timely
manner a complete list of all real property interests held by the Company and
its Subsidiaries and any information with respect to such property that is
reasonably necessary to complete such returns. The portion of the consideration
allocable to the real property of the Company and its Subsidiaries shall be
determined by Parent in its reasonable discretion. To the extent permitted by
law, the Company's stockholders shall be deemed to have agreed to be bound by
the allocation established pursuant to this Section 6.11 in the preparation of
any return with respect to the Transfer Taxes.
Section 6.12 State Takeover Laws. If any "fair price" or "control share
acquisition" statute or other similar statute or regulation shall become
applicable to the transactions contemplated hereby, Parent and the Company and
their respective Boards of Directors shall use reasonable efforts to grant such
approvals and take such actions as are necessary so that the transactions
contemplated hereby may be consummated as promptly as practicable on the terms
contemplated hereby and otherwise act to minimize the effects of any such
statute or regulation on the transactions contemplated hereby.
Section 6.13 Indemnification; Directors and Officers Insurance. (a)
Parent shall, or shall cause the Surviving Company to, continue to provide all
rights to indemnification or exculpation, existing in favor of a director,
officer, employee or agent (an "Indemnified Person") of the Company or any of
its Subsidiaries (including, without limitation, rights relating to advancement
of expenses and indemnification rights to which such persons are entitled
because they are serving as a director, officer, agent or employee of another
entity at the request of the Company or any of its Subsidiaries), as provided in
the Restated Certificate of Incorporation of the Company, the By-laws of the
Company or any indemnification agreement, in each case, as in effect on the date
of this Agreement, and relating to actions or events through the Effective Time,
and such rights to indemnification shall survive the Reorganization and shall
continue in full force and effect, without any amendment thereto; provided,
however, that neither Parent nor the Surviving Corporation shall be required to
indemnify any Indemnified Person in connection with any proceeding (or portion
thereof) to the extent involving any claim initiated by such Indemnified Person
unless the initiation of such proceeding (or portion thereof) was authorized by
the Board of Directors of the Company or unless such proceeding is brought by an
Indemnified Person to enforce rights under this Section 6.13; provided further
that any determination required to be made with respect to whether an
Indemnified Person's conduct complies with the standards set forth under the
DGCL, the Restated Certificate of Incorporation of the Company, the By-laws of
the Company or any such agreement, as the case may be, shall be made by
independent legal counsel selected by Parent and reasonably acceptable to such
Indemnified Person; and provided further that nothing in this Section 6.13 shall
impair any rights of any Indemnified Person. Without limiting the generality of
the preceding sentence, in
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the event that any Indemnified Person becomes involved in any actual or
threatened action, suit, claim, proceeding or investigation after the Effective
Time relating to actions prior to the Effective Time, Parent shall, or shall
cause the Surviving Corporation to, promptly advance to such Indemnified Person
his or her legal and other expenses (including the cost of any investigation and
preparation incurred in connection therewith), subject to the providing by such
Indemnified Person of an undertaking to reimburse all amounts so advanced in the
event of a non-appealable determination of a court of competent jurisdiction
that such Indemnified Person is not entitled thereto.
(b) Subject to the prior written approval by Parent, which shall not be
unreasonably withheld, prior to the Effective Time, the Company shall have the
right to obtain and pay for in full a "tail" coverage directors' and officers'
liability insurance policy ("D&O Insurance") covering a period of not more than
six years after the Effective Time and providing coverage in amounts and on
terms consistent with the Company's existing D&O Insurance. In the event the
Company does not obtain such insurance, Parent shall cause the Surviving
Corporation to continue to provide D&O Insurance relating to actions or events
through the Effective Time (through Series A Stockholder or directly with an
insurance carrier), for a period of not more than six years after the Effective
Time; provided, that the Surviving Corporation may substitute therefor policies
of substantially similar coverage and amounts containing terms no less
advantageous to such former directors or officers; provided further that if the
existing D&O Insurance expires or is cancelled during such period, Parent or the
Surviving Corporation shall make reasonable commercial efforts to obtain
substantially similar D&O Insurance; and provided further that the Company shall
not be required to expend, in order to maintain or procure an annual D&O
Insurance policy, an amount in excess of 200% of the last annual premium paid
prior to the date hereof, but in such case shall purchase as much coverage as
possible for such amount.
(c) The provisions of this Section 6.13 are intended to be for the
benefit of, and shall be enforceable by, each Indemnified Person, his or her
heirs and his or her personal representatives and shall be binding upon the
successors and assigns of Parent, the Company and the Surviving Company.
Section 6.14 Best Efforts. (a) Subject to the provisions hereof, each
of the Company, Parent and Merger Sub C agrees to use best efforts to consummate
and make effective, in the most expeditious manner practicable, the
Reorganization and the other transactions contemplated by this Agreement;
provided, however, that neither Parent nor any of its Subsidiaries shall be
required, nor, without the consent of Parent, shall the Company or its
Subsidiaries be permitted, to divest or hold separate or otherwise take or
commit to take any action that limits its freedom of action with respect to the
Company, Parent or any of their Subsidiaries or any material portion of the
assets of the Company, Parent or any of their Subsidiaries or any of the
business, product lines, or assets of the Company, Parent or any of their
Subsidiaries. Without limiting the foregoing, (i) each of the Company, Parent
and Merger Sub C agrees to use best efforts to take, or cause to be taken, all
actions necessary to comply promptly with
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all legal requirements that may be imposed on itself with respect to the
Reorganization (which actions shall include furnishing all information required
under the HSR Act and all actions required in connection with approvals of or
filings with the FCC, state public utility or service commissions or similar
agencies and any other Governmental Entity) and shall promptly cooperate with
and furnish information to each other in connection with any such requirements
imposed upon any of them or any of their Subsidiaries in connection with the
Reorganization and (ii) each of the Company, Parent and Merger Sub C shall, and
shall cause its Subsidiaries to, use best efforts to obtain (and shall cooperate
with each other in obtaining) any consent, authorization, order or approval of,
or any exemption by, the FCC, state public utility or service commissions or
similar agencies and any other Governmental Entity or other public or private
third party required to be obtained or made by Parent, Sub, the Company or any
of their Subsidiaries in connection with the Reorganization or the taking of any
action contemplated thereby or by this Agreement. Notwithstanding anything to
the contrary contained in this Agreement, in connection with any filing or
submission required or action to be taken by Parent, the Company or any of its
respective Subsidiaries to consummate the Reorganization or the other
transactions contemplated in this Agreement, the Company shall not, without
Parent's prior written consent, commit to any divestiture of assets or
businesses of the Company and its Subsidiaries if such divested assets and/or
businesses are material to the assets or profitability of the Company and its
Subsidiaries taken as a whole.
(b) As promptly as practicable after the execution and delivery of this
Agreement, Parent and the Company shall prepare all appropriate applications for
FCC approval, and such other documents as may be required, with respect to the
transfer of control of the Company and Parent to Holding Company (collectively,
the "FCC Applications"). Not later than the tenth Business Day following
execution and delivery of this Agreement, the Company and Parent will exchange
with each other their respective completed portions of the FCC Applications. Not
later than the fifteenth Business Day following the execution and delivery of
this Agreement, the Company and Parent shall file, or cause to be filed, the FCC
Applications. If the Effective Time shall not have occurred for any reason
within any applicable initial consummation period, and neither the Company nor
Parent shall have terminated this Agreement pursuant to Section 8.1, Parent and
the Company shall jointly request one or more extensions of the consummation
period of such grant. No party hereto shall knowingly take, or fail to take, any
action if the intent or reasonably anticipated consequence of such action or
failure to act is, or would be, to cause the FCC not to grant approval of the
FCC Applications or delay either such approval or the consummation of the
transfer of control of the Company. Parent and the Company shall each pay
one-half (1/2) of any FCC fees, if applicable, in connection with the filing or
granting of approval of the FCC Applications. Each of Parent and the Company
shall bear its own expenses in connection with the preparation and prosecution
of the FCC Applications. Parent and the Company shall each use all commercially
reasonable efforts to prosecute the FCC Applications in good faith and with due
diligence before the FCC and in connection therewith shall take such action or
actions as may be necessary or reasonably required
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in connection with the FCC Applications, including furnishing to the FCC any
documents, materials or other information requested by the FCC in order to
obtain such FCC approval as expeditiously as practicable.
(c) Promptly after the date hereof, Parent and the Company (as may be
required pursuant to the HSR Act) will complete all documents required to be
filed with the Federal Trade Commission and the Department of Justice in order
to comply with the HSR Act and, not later than 20 Business Days after the date
hereof, together with the Persons who are required to join in such filings,
shall file the same with the appropriate Governmental Entities. Parent and the
Company shall each pay one-half (1/2) of any fees that may be payable in
connection with the filing pursuant to the HSR Act. Parent and the Company shall
promptly furnish all materials thereafter required by any of the Governmental
Entities having jurisdiction over such filings. and shall take all reasonable
actions and shall file and use all reasonable efforts to have declared effective
or approved all documents and notifications with any such Governmental Entities,
as may be required under the HSR Act or other federal antitrust laws for the
consummation of the Transactions and any other transactions contemplated hereby.
(d) Each of the Company and Parent shall promptly notify the other of:
(i) any notice or other communication from any Person alleging
that the consent of such Person is or may be required in connection
with the transactions contemplated by this Agreement;
(ii) any notice or other communication from any Governmental
Entity in connection with the transactions contemplated by this
Agreement;
(iii) the occurrence, or non-occurrence, of any event the
occurrence or non-occurrence of which would be reasonably be expected
to cause any representation or warranty made by it and contained herein
to be untrue or inaccurate in any material respect at any time during
the period commencing on the date hereof and ending at the Effective
Time;
(iv) any failure of such party to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it
hereunder; provided, however, that the delivery of any notice pursuant
to this Section 6.14(d) shall not limit or otherwise affect the
remedies available hereunder to the party receiving such notice;
(v) any actions, suits, claims, investigations or proceedings
commenced or, to its knowledge threatened against such party which, if
pending on the date of this Agreement, would have been required to have
been disclosed pursuant to Section 3.13, in the case of the Company, or
Section 4.12, in the case of Parent, or which relate to the
consummation of the Transactions; and
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(vi) any event, condition or state of facts which could have a
Material Adverse Effect on such party.
Section 6.15 Certain Litigation. The Company agrees that it shall not
settle any litigation commenced after the date hereof against the Company or any
of its directors by any stockholder of the Company relating to the
Reorganization, this Agreement or the Stockholder Agreement without the prior
written consent of Parent, which consent shall not be unreasonably withheld or
delayed.
Section 6.16 Transition Services Agreement. Parent, Company and Series
A Stockholder shall enter into the Transition Services Agreement in the form
attached hereto as Annex C on or prior to the Effective Time.
Section 6.17 Registration Rights Agreement. Parent and Series A
Stockholder shall enter into the Registration Rights Agreement in the form
attached hereto as Exhibit A to the Stockholder Agreement on or prior to the
Effective Time.
Section 6.18 Investor Claim. Matters relating to the investment and
claim by the Investor are set forth on Annex E hereto.
Section 6.19 Intercompany Service Agreements. Each of the following
agreements ("Intercompany Service Agreements") and, except as provided in the
Transition Services Agreement or in this Agreement, all other agreements between
the Company and its Subsidiaries, on the one hand, and Series A Stockholder and
its Subsidiaries (other than the Company and its Subsidiaries) on the other
hand, shall be terminated as of the Effective Time and, as provided in Section
6.23, all amounts due from one party to another thereunder shall be settled in
cash on or prior to the Effective Time:
(i) Cash Management Agreement;
(ii) Insurance Cost Sharing Agreement;
(iii) Intercompany Agreement;
(iv) Exchange Agreement;
(v) Employee Benefit Plan Agreement; and
(vi) Company Registration Rights Agreement.
Following such termination, except as otherwise provided in this
Agreement or the Transition Services Agreement, the Company and Series A
Stockholder shall release each other with respect to any Loss relating to or
arising from the foregoing agreements and all amounts due thereunder on and
after the Effective Time.
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Section 6.20 Revolving Credit Agreement. On the date of this Agreement,
the Company, Operating Company, Series A Stockholder and Parent shall enter into
the Debt/Equity Replacement Agreement attached hereto as Annex F.
Section 6.21 Series A and B Notes. Prior to the Effective Time, Parent
shall, with the assistance of the Company, acquire all of the Series A Notes and
Series B Notes. Any investment banking firm engaged in connection with such
acquisition shall be selected by the Series A Stockholder subject to the consent
of Parent (including such investment banking firm's fees and expenses), which
shall not be unreasonably withheld. Unless otherwise determined pursuant to the
preceding sentence, the parties hereto agree that Credit Suisse First Boston
Corporation ("CSFB") shall be engaged to assist Parent in acquiring the Series A
Notes and Series B Notes. Parent shall bear the fees and expenses of acquiring
the Series A Notes and Series B Notes (including the fees and reasonable
expenses of counsel and of CSFB or other investment banking firm selected
pursuant to this Section), and shall be responsible for and pay any make-whole
premium (the "Make-Whole Premium"), to the extent the amount of the Make-Whole
Premium is less than or equal to the difference (the "Parent Cost") between the
Redemption Present Value and accreted value of the Notes on the date such Notes
are acquired. The Redemption Present Value of the Notes shall be computed by
CSFB in accordance with standard market practice, and shall equal the present
value of the redemption price of such Notes corresponding to the earliest
Optional Redemption Date, as defined in the Series A Indenture and the Series B
Indenture (November 1, 2001 in the case of the Series A Notes and February 1,
2003 in the case of the Series B Notes), discounted from such date to the date
of acquisition, using a discount rate equal to a comparable Treasury rate with
respect to such Note plus 50 basis points. Series A Stockholder shall be
responsible for and shall pay the amount of any Make-Whole Premium in excess of
the Parent Cost. Following the acquisition of the Series A Notes and Series B
Notes, on or prior to the Effective Time, Series A Stockholder shall be released
and discharged in full from the Series A Guaranty and the Series B Guaranty and
such guarantees shall be terminated.
Section 6.22 Nokia Credit Agreement. At the Effective Time, Parent
shall cause all obligations, including accrued interest, under the Nokia Credit
Agreement to be repaid in full and the Nokia Credit Agreement and the Nokia
Guaranty shall be terminated, or Parent shall obtain an amendment to the Nokia
Credit Agreement (including the substitution of Parent as guarantor thereunder
and the release and discharge in full of the Series A Stockholder's obligations
under the Nokia Guaranty), to permit the Reorganization to occur without
resulting in a default under the Nokia Credit Agreement. Parent shall bear the
expense of refinancing all borrowings under the Nokia Credit Agreement.
Following such action, on or prior to the Effective Time, Series A Stockholder
shall be released and discharged in full from the Nokia Guaranty.
Section 6.23 Intercompany Accounts. All intercompany accounts payable,
receivables, loans, including accrued interest and any penalties, accrued but
unpaid guarantee fees and other intercompany accounts ("Intercompany Accounts")
between
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the Company and its Subsidiaries, on the one hand, and Series A Stockholder and
its Subsidiaries (other than the Company and its Subsidiaries), on the other
hand, including amounts due from one party to another under the Intercompany
Service Agreements, shall be settled and paid in cash on or prior to the
Effective Time. To the extent necessary Parent shall advance funds to the
Company on or prior to the Effective Time to permit the Company to settle all
Intercompany Accounts with Series A Stockholder. The parties acknowledge and
agree that the preparation of financial statements and accounts will necessarily
require the parties to estimate the amounts of certain Intercompany Accounts
and, accordingly, except as otherwise provided in the Transition Services
Agreement, the parties agree that they will cooperate after the Effective Time
to true-up such estimates considering actual experience or information learned
after the Effective Time. The parties hereto agree to true-up and settle such
estimates in cash within 30 days after notice from the other party specifying in
reasonable detail the final amount of any such Intercompany Account. Following
such settlement, the Company and Series A Stockholder shall release each other
with respect to any Loss relating to or arising from any such intercompany
accounts on and after the Effective Time.
Section 6.24 Tax Allocation Agreement and Tax Settlement Agreement. The
Tax Allocation Agreement shall terminate as of the Effective Time and none of
the parties thereto shall have any liability to any other party thereunder
following the Effective Time. The Tax Settlement Agreement shall remain in full
force and effect in accordance with its terms following the Effective Time, and
the Company shall withdraw its contention, made in a letter dated June 8, 1999
from the Company to the Series A Stockholder, that an error in the application
of the federal income tax law was made in the tax settlement model referred to
in Section 2 of the Tax Settlement Agreement.
Section 6.25 Parent Stockholder Voting Agreement. Xxxxxxx & Xxxxxxxx
Investors, L.P., H & F Orchard Partners, L.P., H & F International Partners,
L.P., Xxxx X. Xxxxxxx, Xxxxxxx X. Xxxxxxxxx, PNCellular, Inc., Xxxxxxx Family
Trust, Xxxxxxx Communications Corporation, GS Capital Partners, L.P., The
Xxxxxxx Sachs Group, Inc., Bridge Street Fund 1992, L.P., Stone Street Fund
1992, L.P., Providence Media Partners, L.P., Xxxxxxxxxx Telecommunications
Holdings (USA) Limited and Xxxxxxxxxx Telecommunications PCS (USA) Limited
("Parent Stockholders"), who hold 46% of the fully diluted voting power of the
Parent Company Stock on the date hereof, shall enter into the Parent Stockholder
Voting Agreement with the Company in the form attached hereto as Annex G
pursuant to which such stockholders of Parent shall agree to vote for the
Reorganization and Parent Share Issuance.
Section 6.26 Agreements Regarding Taxes.
(a) Series A Stockholder Liability for Taxes. The Series A Stockholder
shall be liable for and shall indemnify Parent and the Company and its
Subsidiaries for all Taxes (including any obligation to contribute to the
payment of a Tax determined on a consolidated, combined or unitary basis with
respect to a group of corporations that
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includes or included the Company or any of its Subsidiaries and Taxes resulting
from the Company and its Subsidiaries ceasing to be a member of the Series A
Stockholder's Group), (i) imposed on the Series A Stockholder's Group or any
member thereof (other than the Company and its Subsidiaries) for any taxable
year, (ii) imposed on the Company or any of its Subsidiaries or for which the
Company or any of its Subsidiaries may otherwise be liable for any taxable year
or period that ends on or before the date on which the Effective Time occurs
(the "Effective Date"), and with respect to any taxable year or period beginning
before and ending after the Effective Date, the portion of such taxable year
ending on and including the Effective Date, or (iii) imposed on Parent or the
Company or any of its Subsidiaries as a result of the receipt of any payment
made to it pursuant to the provisions of this Section 6.26. Except as set forth
in Section 6.26(d), the Series A Stockholder shall be entitled to any refund of
Taxes of the Company and its Subsidiaries received for such periods.
(b) Parent Liability for Taxes. Parent shall be liable for and
indemnify the Series A Stockholder for (i) the Taxes of the Company and any of
its Subsidiaries for any taxable year or period that begins after the Effective
Date and, with respect to any taxable year or period beginning before and ending
after the Effective Date, the portion of such taxable year beginning after the
Effective Date and (ii) Taxes imposed on the Series A Stockholder as a result of
any payment made to it pursuant to the provisions of this Section 6.26. Parent
shall be entitled to any refund of Taxes of the Company and any of its
Subsidiaries received for such periods.
(c) Taxes for Short Taxable Year. For purposes of paragraphs (a) and
(b), whenever it is necessary to determine the liability for Taxes of the
Company or any of its Subsidiaries for a portion of a taxable year or period
that begins before and ends after the Effective Date, the determination of the
Taxes of such entity for the portion of the year or period ending on, and the
portion of the year or period beginning after, the Effective Date shall be
determined by assuming that the entity had a taxable year or period which ended
at the close of the Effective Date, except that exemptions, allowances or
deductions that are calculated on an annual basis, such as the deduction for
depreciation, shall be apportioned on a time basis.
(d) Refunds from Carrybacks. If the Series A Stockholder becomes
entitled to a refund or credit of Taxes for any period for which it is liable
under Section 6.26(a) to indemnify Parent and such Taxes are attributable solely
to the carryback of losses, credits or similar items from a taxable year or
period that begins after the Effective Date and attributable to the Company or
any of its Subsidiaries, the Series A Stockholder shall promptly pay to Parent
the amount of such refund or credit together with any interest thereon. In the
event that any refund or credit of Taxes for which a payment has been made is
subsequently reduced or disallowed, Parent shall indemnify and hold harmless the
Series A Stockholder for any Tax liability, including interest and penalties,
assessed against the Series A Stockholder by reason of the reduction or
disallowance.
(e) Tax Returns. The Series A Stockholder shall file or cause to be
filed
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when due all Tax Returns with respect to Taxes that are required to be filed by
or with respect to the Company and any of its Subsidiaries for taxable years or
periods ending on or before the Effective Date and shall pay any Taxes due in
respect of such Tax Returns, and Parent shall file or cause to be filed when due
all Tax Returns with respect to Taxes that are required to be filed by or with
respect to the Company and any of its Subsidiaries for taxable years or periods
ending after the Effective Date and shall remit any Taxes due in respect of such
Tax Returns. The Series A Stockholder shall pay Parent the Taxes for which the
Series A Stockholder is liable pursuant to Section 6.26(a) but which are payable
with Tax Returns to be filed by Parent pursuant to the previous sentence within
10 days prior to the due date for the filing of such Tax Returns.
(f) Contest Provisions. Parent shall promptly notify the Series A
Stockholder in writing upon receipt by Parent, any of its Affiliates or the
Company or any of its Subsidiaries of notice of any pending or threatened
federal, state, local or foreign income or franchise tax audit or assessment
which may materially affect the Taxes of the Company or any of its Subsidiaries
for which the Series A Stockholder would be required to indemnify Parent
pursuant to Section 6.26(a), provided that failure to comply with this provision
shall not affect Parent's right to indemnification hereunder. The Series A
Stockholder shall have the sole right to represent the Company and its
Subsidiaries' interests in any tax audit or administrative or court proceeding
relating to taxable periods ending on or before the Effective Date, and to
employ counsel of its choice at its expense. Notwithstanding the foregoing, the
Series A Stockholder shall not be entitled to settle, either administratively or
after the commencement of litigation, any claim for Taxes which would adversely
affect the liability for Taxes of Parent or the Company or any of the Company's
Subsidiaries for any period after the Effective Date to any extent (including
the imposition of income tax deficiencies, the reduction of asset basis or cost
adjustments, the lengthening of any amortization or depreciation periods, the
denial of amortization or depreciation deductions, or the reduction of loss or
credit carryforwards) without the prior written consent of Parent. Such consent
shall not be unreasonably withheld, and shall not be necessary to the extent
that the Series A Stockholder has indemnified Parent against the effects of any
such settlement.
(g) Assistance and Cooperation. After the Closing Date, each of the
Series A Stockholder and Parent shall:
(i) assist (and cause their respective Affiliates to assist)
the other party in preparing any Tax Returns or reports which such
other party is responsible for preparing and filing in accordance with
this Section 6.26;
(ii) cooperate fully in preparing for any audits of, or
disputes with taxing authorities regarding, any Tax Returns of the
Company or any of its Subsidiaries;
(iii) make available to the other party and to any taxing
authority as
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reasonably requested all information, records, and documents relating
to Taxes of the Company and its Subsidiaries;
(iv) provide timely notice to the other in writing of any
pending or threatened tax audits or assessments of the Company or any
of its Subsidiaries for taxable periods for which the other party may
have a liability under this Section 6.26; and
(v) furnish the other party with copies of all correspondence
received from any taxing authority in connection with any tax audit or
information request with respect to any such taxable period.
(h) Payment. Any indemnity payment required to be made pursuant to this
Section 6.26 shall be paid within 15 days after the indemnified party makes
written demand upon the indemnifying party, but in no case earlier than five
Business Days prior to the date on which the relevant Taxes are required to be
paid to the relevant taxing authority (including estimated Tax payments).
(i) Adjustment to Purchase Price. Parent and the Series A Stockholder
agree to report any indemnification payment made by the Series A Stockholder
under this Section 6.26 as an adjustment to purchase price, contribution to
capital, or other non-taxable amount to the extent that there is substantial
authority for such reporting position under applicable law, it being understood
that if such reporting position is disallowed in any administrative or court
proceeding, the Series A Stockholder shall indemnify Parent under Section
6.26(a) for the effects of such disallowance.
(j) Survival of Obligations. The obligations of the parties set forth
in this Section 6.26 shall be unconditional and absolute and shall remain in
effect without limitation as to time.
Article VII - Conditions Precedent
Section 7.1 Conditions to Each Party's Obligation to Effect the
Reorganization. The respective obligations of each party hereto to effect the
Reorganization shall be subject to the fulfillment at or prior to the Effective
Time of the following conditions:
(a) Stockholder Approval. The Reorganization shall have been duly
approved by the requisite vote of the stockholders of the Company in accordance
with applicable law and the Restated Certificate of Incorporation and By-laws of
the Company and the Parent Share Issuance shall have been duly approved by the
requisite vote of the stockholders of Parent in accordance with applicable law
and the Certificate of Incorporation and Bylaws of Parent.
(b) No Injunction or Restraint. No statute, rule, regulation, executive
order, decree, temporary restraining order, preliminary or permanent injunction
or other order
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issued by any court of competent jurisdiction or other Governmental Entity
preventing the consummation of the Reorganization or which could reasonably be
expected to have a Material Adverse Effect on the Company shall be in effect;
provided, however, that each of the parties shall have used their commercially
reasonable efforts to prevent the entry of any such temporary restraining order,
injunction or other order, including, without limitation, taking such action as
is required to comply with Section 6.14, and to appeal as promptly as possible
any injunction or other order that may be entered.
(c) Stock Exchange Listings. The shares of Parent Common Stock issuable
in accordance with the Reorganization and pursuant to Section 6.2 shall have
been authorized for listing on the Nasdaq, subject to official notice of
issuance.
(d) HSR. Any waiting period (and any extension thereof) under the HSR
Act applicable to the Reorganization shall have expired or been terminated.
(e) Registration Statement. The Registration Statement shall have
become effective in accordance with the provisions of the Securities Act. No
stop order suspending the effectiveness of the Registration Statement shall have
been issued by the SEC and no proceedings for that purpose shall have been
initiated or, to the knowledge of Parent or the Company, threatened by the SEC.
All necessary state securities authorizations (including state takeover
approvals) shall have been received unless the failure to receive any such
authorization would not have a Material Adverse Effect on the Company or Parent
or the transactions contemplated by this Agreement.
(f) Governmental Approvals. All necessary consents or authorizations
from Governmental Entities which may be required in connection with the
transactions contemplated hereby, including but not limited to the FCC and state
public utility or service commissions or similar agencies, shall have been
received and, in the case of the FCC, shall have become Final Orders, unless the
failure to receive any such consent or authorization would not have a Material
Adverse Effect on the Company or Parent or the transactions contemplated by this
Agreement, and such consents or authorizations shall not contain any conditions
which would reasonably be expected to have a Material Adverse Effect on the
Company or Parent or the transactions contemplated by this Agreement.
(g) Investor Agreement. Parent and the Series A Stockholder shall have
executed and delivered the Investor Agreement attached hereto as Exhibit H.
(h) Omnipoint Agreement. The transactions contemplated by the Omnipoint
Agreement shall have been consummated or terminated, provided that this
condition shall be deemed to have been satisfied on the Omnipoint End Date if
the transactions contemplated by the Omnipoint Agreement shall have not been
consummated or terminated by such date.
(i) Public Announcement. In the event the Omnipoint Agreement shall
have
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been terminated or the condition specified in Section 7.1(h) shall have been
deemed to be satisfied pursuant to the proviso thereof, twenty business days
shall have elapsed following public announcement of such event.
Section 7.2 Conditions to Obligation of the Company to Effect the
Reorganization. The obligation of the Company to effect the Reorganization shall
be subject to the fulfillment at or prior to the Effective Time of the following
additional conditions:
(a) Performance of Obligations; Representations and Warranties. Each of
Parent and Merger Sub C shall have performed each of its agreements contained in
this Agreement required to be performed at or prior to the Effective Time, and
each of the representations and warranties of Parent and Merger Sub C contained
in this Agreement (disregarding all qualifications and exceptions contained
therein relating to materiality or a Material Adverse Effect or any similar
standard or qualification) shall be true and correct at and as of the Effective
Time as if made at and as of the Effective Time in each case except as
contemplated or permitted by this Agreement and except as would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on the Company or Parent or the transactions contemplated by this
Agreement; and the Company shall have received a certificate signed on behalf of
Parent by its Chief Executive Officer and its Chief Financial Officer to such
effect.
(b) Tax Opinion. The Company shall have received an opinion of Sidley &
Austin, in form and substance reasonably satisfactory to the Company, dated the
Effective Time, substantially to the effect that, on the basis of facts,
representations and assumptions set forth in such opinion which are consistent
with the state of facts existing as of the Effective Time, for federal income
tax purposes:
(i) The Merger will constitute either (A) a "reorganization"
within the meaning of Section 368(a) of the Code, to which the Company,
Merger Sub C and Parent will each be a party, within the meaning of
Section 368(b) of the Code or (B) part of a transaction described in
Section 351(a) of the Code;
(ii) No gain or loss will be recognized by Parent, Merger Sub
C or the Company as a result of the Merger;
(iii) A stockholder of the Company that does not elect to
receive any cash pursuant to the Merger will recognize no gain or loss
solely as a result of the conversion of shares of Company Common Stock
into shares of Parent Common Stock pursuant to the Merger, except with
respect to cash, if any, received in lieu of fractional shares of
Parent Common Stock;
(iv) A stockholder of the Company that elects to receive cash
pursuant to the Merger will recognize any gain (but not loss) realized
as a result of the Merger in an amount equal to the lesser of (A) the
difference between (x) the fair
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market value of Parent Common Stock received pursuant to the Merger
plus cash received pursuant to the Merger and (y) the basis of such
stockholder's Company Common Stock surrendered in the Merger or (B) the
amount of cash received pursuant to the election to receive cash;
(v) The aggregate tax basis of the shares of Parent Common
Stock received in exchange for shares of Company Common Stock pursuant
to the Merger (including fractional shares of Parent Common Stock for
which cash is received) will be the same as the aggregate tax basis of
such shares of Company Common Stock, (A) decreased by the amount of
cash received in exchange for shares of Company Common Stock pursuant
to an election to receive cash and (B) increased by the amount of gain
recognized (determined under clause (iv) above);
(vi) The holding period for shares of Parent Common Stock
received in exchange for shares of Company Common Stock pursuant to the
Merger will include the period that such shares of Company Common Stock
were held by the stockholder, provided such shares of Company Common
Stock were held as capital assets by such stockholder at the Effective
Time; and
(vii) A stockholder of the Company who receives cash in lieu
of a fractional share of Parent Common stock will recognize gain or
loss equal to the difference, if any, between such stockholder's basis
in such fractional share (as described in clause (v) above) and the
amount of cash received.
In rendering such opinion, Sidley & Austin may receive and rely upon
representations from others, including representations from the Company and
Holding contained in certificates substantially in the form of the Company Tax
Certificate and the Tax Matters Certificate attached hereto as Annex M and Annex
M-2, representations from Holding contained in a certificate substantially in
the form of the Parent Tax Certificate attached hereto as Annex N, and
representations in a certificate substantially in the form of the Tax Matters
Certificate attached hereto as Annex O from certain persons who own, as of the
Effective Time, five percent (5%) or more of the total number of shares of the
Company or of VoiceStream (or, in such counsel's discretion, of Omnipoint).
(c) Consents Under Agreements. Parent shall have obtained the consent
or approval of each person whose consent or approval shall be required in
connection with the transactions contemplated hereby under any indenture,
mortgage, evidence of indebtedness, lease or other agreement or instrument to
which Parent or one of its Subsidiaries is a party, except where the failure to
obtain the same would not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect on Parent or the Company or upon
the transactions contemplated by this Agreement.
(d) Intercompany Services Agreements. The Intercompany Services
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Agreements shall have been terminated.
(e) Debt/Equity Replacement Agreement. The transactions contemplated by
the Debt/Equity Replacement Agreement shall have been consummated.
(f) Series A and B Notes. The Series A Notes and Series B Notes shall
have been acquired by Parent and/or Parent shall have obtained consents from the
requisite number of holders of Series A Notes and Series B Notes to the
amendment of the Series A Indenture and Series B Indenture (including the
substitution of Parent as guarantor thereunder and the elimination of Section
3.8 in such indentures), and Parent shall have taken such other action as may be
necessary to permit the Reorganization to occur without resulting in a default
under the Series A Indenture or the Series B Indenture, to cause the Series A
Stockholder to be released and discharged in full from the Series A Guarantee
and the Series B Guarantee and to terminate such guarantees on or prior to the
Effective Time.
(g) Nokia Credit Agreement. Parent shall have caused all obligations
under the Nokia Credit Agreement to be repaid in full and the Nokia Credit
Agreement and Nokia Guaranty shall have been terminated; or Parent shall have
obtained an amendment to the Nokia Credit Agreement (including the substitution
of Parent as guarantor thereunder and the release and discharge in full of the
Nokia Guaranty), to permit the Reorganization to occur without resulting in a
default under the Nokia Credit; and, in either event, the Series A Stockholder
shall have been released and discharged in full from the Nokia Guaranty on or
prior to the Effective Time.
(h) Intercompany Accounts. All Intercompany Accounts shall have been
settled and paid in cash based on financial information available at the
Effective Time.
(i) Tax Allocation Agreement. The Tax Allocation Agreement shall have
been terminated.
(j) Parent Stockholder Agreement. The Parent Stockholders shall have
executed and delivered the Parent Stockholder Voting Agreement.
(k) Omnipoint Agreement. There shall have been no amendments to the
Omnipoint Agreement or the transactions contemplated thereby except for
amendments which would not, individually or in the aggregate, have a Material
Adverse Effect on Parent or on the transactions contemplated by this Agreement.
(l) Registration Rights Agreement. Parent shall have executed and
delivered the Registration Rights Agreement.
(m) FCC Opinion. The Company shall have received an opinion of FCC
counsel to Parent, dated the Effective Time, substantially in the form attached
hereto as Annex I.
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(n) Corporate Opinion. The Company shall have received an opinion of
corporate and state regulatory counsel to Parent, dated the Effective Time, in
substantially the form attached hereto as Annex J.
(o) Nasdaq. The shares of Parent Company Stock to be issued pursuant to
Section 2.1(c) shall have been listed on the Nasdaq National Market.
(p) Year 2000. There shall not have occurred and be continuing a
Material Adverse Effect with respect to Parent relating to the Year 2000 Issue,
provided, however, that for purposes of this condition, clauses (i) and (ii) of
the definition of Material Adverse Effect shall be disregarded.
Notwithstanding anything contained to the contrary in Section 7.2(a) or
anywhere else in this Agreement, Parent may enter into any Subsequent
Transaction, and no changes of any representation or warranty of Parent
contained in this Agreement as a result of any Subsequent Transaction shall
result in a failure of the conditions set forth in Section 7.2(a); provided, in
each case, that any such Subsequent Transaction would not, or would reasonably
not be expected to prevent, impair or materially delay the ability of the
Company or Parent to consummate the transactions contemplated by this Agreement.
Section 7.3 Conditions to Obligations of Parent and Merger Sub C to
Effect the Reorganization. The obligation of Parent and Merger Sub C to effect
the Reorganization shall be subject to the fulfillment at or prior to the
Effective Time of the following additional conditions:
(a) Performance of Obligations; Representations and Warranties. The
Company shall have performed each of its agreements contained in this Agreement
required to be performed at or prior to the Effective Time, and each of the
representations and warranties of the Company contained in this Agreement
(disregarding all qualifications and exceptions contained therein relating to
materiality or a Material Adverse Effect or any similar standard or
qualification) shall be true and correct at and as of the Effective Time as if
made at and as of the Effective Time, in each case except as contemplated or
permitted by this Agreement and except as would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on the
Company or Parent or the transactions contemplated by this Agreement; and Parent
shall have received a certificate signed on behalf of the Company by its Chief
Executive Officer and its Chief Financial Officer to such effect.
(b) Tax Opinion. Parent shall have received an opinion of Xxxxx, Day,
Xxxxxx & Xxxxx, in form and substance reasonably satisfactory to Parent, dated
the Effective Time, substantially to the effect that, on the basis of facts,
representations and assumptions set forth in such opinion which are consistent
with the state of facts existing as of the Effective Time,
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(i) for federal income tax purposes, no gain or loss will be recognized
by Holding, Merger Sub C or the Company solely as a result of the
Reorganization; and
(ii) in the case of the VoiceStream Merger, (x) such merger will be
treated for federal income tax purposes as a reorganization described in section
368(a) of the Code, and each of VoiceStream, Holding and, in the case of a
reorganization described in section 368(a)(2)(E) of the Code, Merger Sub A, will
be a party to the reorganization within the meaning of section 368(b) of the
Code, or (y) such merger will be treated as a transfer of property by the
VoiceStream stockholders, other than holders of dissenting shares, to Holding
described in section 351(a) of the Code.
In rendering such opinion, Xxxxx, Day, Xxxxxx & Xxxxx may receive and rely upon
representations from others, including representations from the Company and
VoiceStream contained in certificates substantially in the form of the Company
Tax Certificate, the VoiceStream Certificate and the Tax Matters Certificate
attached hereto as Annex M, Annex M-1 and Annex M-2, representations from
Holding contained in certificates substantially in the form of the Parent Tax
Certificate and the VoiceStream Wireless Holding Certificate attached hereto as
Annex N and Annex N-1, and representations substantially in the form of the Tax
Matters Certificate attached hereto as Annex O from certain persons who own, as
of the Effective Time, five percent (5%) or more of the total number of shares
of the Company or of VoiceStream (or, in such counsel's discretion, of
Omnipoint).
(c) FCC Opinion. Parent shall have received an opinion of FCC counsel
of the Company, dated the Effective Time substantially in the form attached
hereto as Annex K.
(d) Corporate Opinion. Parent shall have received an opinion of
corporate and state regulatory counsel to the Company in form and substance
reasonably acceptable to Parent substantially in the form attached hereto as
Annex L.
(e) Consents Under Agreements. The Company shall have obtained the
consent or approval of each person whose consent or approval shall be required
in connection with the transactions contemplated hereby under any indenture,
mortgage, evidence of indebtedness, lease or other agreement or instrument to
which the Company or one of its Subsidiaries is a party, except where the
failure to obtain the same would not reasonably be expected, individually or in
the aggregate, to have a Material Adverse Effect on the Company or Parent or
upon the transactions contemplated by this Agreement.
(f) Indemnity Agreement. The Indemnity Agreement shall have been
authorized, executed and delivered by the parties thereto.
(g) Year 2000. There shall not have occurred and be continuing a
Material Adverse Effect with respect to the Company relating to the Year 2000
Issue, provided,
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however, that for purposes of this condition, clauses (i) and (ii) of the
definition of Material Adverse Effect shall be disregarded.
(h) Dissenting Shares. No more than 7.5% of the shares of VoiceStream
Common Stock outstanding immediately prior to the Effective Time shall be
Dissenting Shares.
(i) Parent shall have received from the Company, the Series A
Stockholder and the Investor, a Certificate, dated the Effective Date, in
substantially the same form as Annex O (in the case of the Series A Stockholder
and the Investor) or Annex M-2 (in the case of the Company).
(j) Parent shall have received a written fairness opinion from Xxxxxxx,
Sachs & Co. confirming its oral fairness opinion referred to in Section 4.19,
within 5 Business Days of the execution of this Agreement.
Article VIII - Termination and Amendment
Section 8.1 Termination. This Agreement may be terminated at any time
prior to the Effective Time, whether before or after any approval by the
stockholders of Parent or the Company of the matters presented in connection
with the Reorganization:
(a) by mutual written consent of Parent, Merger Sub C and the Company;
(b) by either Parent or the Company:
(i) if the Reorganization has not been effected on or prior to
the close of business on September 17, 2000 (the "Termination Date");
provided, however, that if the Reorganization has not occurred by such
date due to the fact that the condition set forth in Section 7.1(f) has
not been satisfied but all other conditions hereto have been satisfied
or waived or are then capable of promptly being satisfied, the
Termination Date shall be December 17, 2000; provided, further, that
the right to terminate this Agreement pursuant to this Section
8.1(b)(i) shall not be available to any party whose failure to fulfill
any obligation of this Agreement has been the cause of, or resulted in,
the failure of the Reorganization to have occurred on or prior to such
date; or
(ii) if any Governmental Entity shall have issued an order,
decree or ruling or taken any other action permanently enjoining,
restraining or otherwise prohibiting the transactions contemplated by
this Agreement and such order, decree or ruling or other action shall
have become final and nonappealable; provided, however, that the right
to terminate this Agreement pursuant to this Section 8.1(b)(ii) shall
not be available to any party who has not used its best efforts to
cause such order to be lifted or otherwise taken such action as is
required to comply with Section 6.14;
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(c) by Parent if (i) the Company shall have failed to comply with any
of its covenants or agreements contained in this Agreement required to be
complied with prior to the date of such termination, except as would not
reasonably be expected to have a Material Adverse Effect on the Company or
Parent or the transactions contemplated by this Agreement, which failure to
comply cannot be or has not been cured within 30 days after receipt by the
Company of written notice of such failure to comply or (ii) the stockholders of
the Company shall not approve the Reorganization at the Company Stockholders
Meeting or any adjournment thereof;
(d) by the Company if (i) Parent or Merger Sub C shall have failed to
comply with any of its respective covenants or agreements contained in this
Agreement required to be complied with prior to the date of such termination,
except as would not reasonably be expected to have a Material Adverse Effect on
the Company or Parent or the transactions contemplated by this Agreement, which
failure to comply cannot be or has not been cured within 30 days after receipt
by Parent of written notice of such failure to comply or (ii) the stockholders
of Parent shall not approve the Parent Share Issuance at the Parent Stockholders
Meeting or any adjournment thereof; or
(e) by either Parent or the Company if there has been a breach by the
other (or Merger Sub C if the Company is the terminating party) of any
representation or warranty (disregarding all qualifications and exceptions
contained therein relating to materiality or a Material Adverse Effect or any
similar standard or qualification) except any breach that would not reasonably
be expected to have a Material Adverse Effect on the Company or Parent or the
transactions contemplated by this Agreement, in each case which breach cannot be
or has not been cured within 30 days after receipt by the breaching party of
written notice of the breach.
Section 8.2 Effect of Termination. In the event of a termination of
this Agreement by either the Company or Parent as provided in Section 8.1, this
Agreement shall forthwith become void and there shall be no liability or
obligation on the part of Parent, Merger Sub C or the Company or their
respective officers or directors, except with respect to Section 3.18, Section
4.14, Section 6.9, this Section 8.2 and Article IX); provided, however, that
nothing in this Article VIII shall relieve any party for liability for any
breach of this Agreement; provided, further, that the parties hereto agree that
any damages for a breach of this Agreement by the Company shall be reduced by
the amount of any payment to Parent pursuant to Section 6.9(b)(ii).
Section 8.3 Amendment. This Agreement may be amended by the parties
hereto, by or pursuant to action taken by their respective Boards of Directors,
at any time before or after approval by the stockholders of Parent and the
Company of the matters presented to them in connection with the Reorganization;
provided, however, that after any such approval, no amendment shall be made if
applicable law would require further approval by such stockholders, unless such
further approval shall be obtained. This Agreement may not be amended except by
an instrument in writing signed on behalf of each of the parties hereto.
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Section 8.4 Extension; Waiver. At any time prior to the Effective Time,
the parties hereto, by action taken or authorized by their respective Board of
Directors, may, to the extent legally allowed, (i) extend the time for the
performance of any of the obligations or other acts of the other parties hereto,
(ii) waive any inaccuracies in the representations and warranties contained
herein or in any document delivered pursuant hereto or (iii) waive compliance
with any of the agreements or conditions contained herein. 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. The failure of
any party to this Agreement to assert any of its rights under this Agreement or
otherwise shall not constitute a waiver of those rights.
Article IX - General Provisions
Section 9.1 Non-Survival of Representations and Warranties and
Agreements. None of the representations and warranties in this Agreement or in
any instrument delivered pursuant to this Agreement shall survive the Effective
Time or, except as set forth in Section 8.2 hereof, the termination of this
Agreement pursuant to the terms hereof. This Section 9.1 shall not limit any
covenant or agreement of the parties which by its terms contemplates performance
after the Effective Time of the Reorganization.
Section 9.2 Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given if delivered personally, sent by
overnight courier (providing proof of delivery) or telecopied (with a
confirmatory copy sent by overnight courier) to the parties at the following
addresses (or at such other address for a party as shall be specified by like
notice):
(a) if to Parent or Sub, to:
VoiceStream Wireless Corporation
0000 000xx Xxxxxx XX, Xxxxx 000
Xxxxxxxx, XX 00000
Attn: General Counsel
Telecopy No.: 000-000-0000
with a copy to:
Xxxxxxx Xxxxx & Xxxxx XXX
0000 Xxxxxxxx Center
000 Xxxxx Xxxxxx
Xxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxx, Esq.
Telecopy No: 000-000-0000
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(b) if to the Company, to:
Aerial Communications, Inc.
0000 Xxxx Xxxx Xxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: President
Telecopy No.: 000-000-0000
with a copy to:
Aerial Communications, Inc.
c/o Telephone and Data Systems, Inc.
00 Xxxxx XxXxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Chairman
Telecopy No.: 000-000-0000
with a copy to:
Sidley & Austin
Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxx, Esq.
Telecopy No.: 312-853-7036
Section 9.3 Interpretation; Definitions. When a reference is made in
this Agreement to an Article, Section, Schedule, Annex or Exhibit, such
reference shall be to an Article, Section, Schedule, Annex or Exhibit of this
Agreement unless otherwise indicated or unless the context otherwise requires.
The table of contents and headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement. Whenever the words "include," "includes" or "including" are used
in this Agreement, they shall be deemed to be followed by the words "without
limitation." References to a Person are also references to its assigns and
successors in interest (by means of merger, consolidation or sale of all or
substantially all the assets of such Person or otherwise, as the case may be).
References to a document are to such document as amended, waived and otherwise
modified from time to time and references to a statute or other governmental
rule are to such statute or rule as amended and otherwise modified from time to
time (and references to any provision thereof shall include references to any
successor provision). The definitions set forth herein are equally applicable
both to the singular and plural forms and the feminine, masculine and neuter
forms of the terms defined. The term "hereof" and similar terms refer to this
Agreement as a whole. As used in this Agreement, the phrase "made available"
shall mean that the information referred to has been made available if requested
by the party to whom such information is to be made available.
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As used in this Agreement, the following terms have the meanings
specified or referred to in this Section 9.3.
"Acquisition Proposal" means any offer or proposal for, or any
indication of interest in (i) a merger, consolidation, share exchange, business
combination, reorganization, recapitalization, liquidation, dissolution or other
similar transaction involving the Company or any of its Subsidiaries; (ii) the
acquisition, directly or indirectly, in a single transaction or series of
related transactions, of (A) an equity interest representing greater than 15% of
the voting power of the Company or any of its Subsidiaries or (B) assets,
securities or ownership interests representing an amount equal to or greater
than 15% of the consolidated assets or earning power of the Company and its
Subsidiaries, other than the transactions contemplated by this Agreement; or
(iii) the consummation of any other transaction or the entering into of any
other agreement or arrangement with respect to any other transactions, the
effect of which would have the same result as the occurrence of (i) or (ii).
"Action" shall mean any action, suit, arbitration, inquiry, proceeding
or investigation by or before any court, any governmental or other regulatory or
administrative agency or commission or any arbitration tribunal.
"Adjusted Fully Diluted Shares" shall have the meaning set forth in
Section 2.1(e).
"Affiliate" shall mean with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under common control with
such Person provided that, for purposes of this definition, "control"
(including, with correlative meanings, the terms "controlled by" and "under
common control with"), as used with respect to any Person, shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities or by contract or otherwise.
"Agreement" shall mean this Agreement and Plan of Reorganization dated
the date hereof among Parent, Merger Sub C and the Company and shall include the
Schedules, Annexes, Exhibits and disclosure letters attached or related thereto.
"Business Day" means a day other than a Saturday, Sunday or other day
on which commercial banks in New York City, Chicago, Illinois or Seattle,
Washington are authorized or required by law to close.
"Cash Consideration Fund" shall have the meaning set forth in Section
2.2(a).
"Cash Election" shall have the meaning set forth in Section 2.1(c).
"Cash Election Form" shall have the meaning set forth in Section 2.1(d)
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"Cash Management Agreement" shall mean the Cash Management Agreement,
dated April 15, 1996, between Series A Stockholder and the Company, as amended.
"Certificate of Merger" shall have the meaning set forth in Section 1.3
"Closing" shall have the meaning set forth in Section 1.2.
"Closing Date" shall have the meaning set forth in Section 1.2.
"Closing Date Market Price" means with respect to one share of Parent
Common Stock, the average of the Mean Price (calculated on a weighted average
based upon the volume of shares traded on each day) for such share during the
period of the 15 most recent trading days ending on the Business Day prior to
the Effective Time.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Communications Act" shall mean the Communications Act of 1934, as
amended, and the Telecommunications Act of 1996, as amended, together with the
rules, regulations and published decisions of the FCC promulgated thereunder.
"Company" shall have the meaning set forth in the introductory
paragraph of this Agreement.
"Company Benefit Plan" shall mean any bonus, pension, profit sharing,
deferred compensation, incentive compensation, stock ownership, stock purchase,
stock option, phantom stock, retirement, vacation, severance, disability, death
benefit, hospitalization, medical, life insurance, supplemental unemployment
benefits, employee stock purchase, stock appreciation, restricted stock or other
employee benefit plan, policy or arrangement providing benefits to any current
or former employee, officer or director of the Company or any of its
Subsidiaries.
"Company Certificates" shall have the meaning set forth in Section
2.2(a).
"Company Common Shares" shall have the meaning set forth in the first
recital of this Agreement.
"Company Common Stock" shall have the meaning set forth in the recital
provision of this Agreement.
"Company Employee" shall mean any employee of the Company or any of its
Subsidiaries.
"Company Filed SEC Documents" shall have the meaning set forth in
Section 3.7.
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"Company Financial Advisor" shall have the meaning set forth in Section
3.17.
"Company Letter" shall mean the letter from the Company to Parent dated
the date hereof, which letter relates to this Agreement and is designated
therein as the Company Letter.
"Company Permits" shall have the meaning set forth in Section 3.9.
"Company Preferred Stock" shall have the meaning set forth in Section
3.3.
"Company Registration Rights Agreement" shall mean the Registration
Rights Agreement, dated April 15, 1996, between Series A Stockholder and the
Company, as amended.
"Company Restricted Stock Units" shall mean restricted stock units
granted under the Company Restricted Stock Unit Plan.
"Company SEC Documents" shall have the meaning set forth in Section
3.6.
"Company Series A Common Shares" shall have the meaning set forth in
the first recital of this Agreement.
"Company Stockholders Meeting" shall have the meaning set forth in
Section 6.3.
"Company Stock Options" shall have the meaning set forth in Section
3.3.
"Company Subsidiaries" shall have the meaning set forth in Section 3.1.
"Confidentiality Agreement" shall have the meaning set forth in Section
6.6.
"Constituent Corporations" shall have the meaning set forth in the
introductory paragraph of this Agreement.
"Conversion Number" shall have the meaning set forth in Section 2.1(c).
"D&O Insurance" shall have the meaning set forth in Section 6.13(b).
"Debt/Equity Replacement Agreement" shall mean the Debt/Equity
Replacement Agreement in the form attached hereto as Annex F.
"DGCL" shall mean the General Corporation Law of the State of Delaware.
"Dissenting Shares" shall have the meaning set forth in Section
1.0(c)(vii).
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"Effective Date" shall have the meaning set forth in Section 6.26(a).
"Effective Time" shall have the meaning set forth in Section 1.3.
"Election Deadline" shall have the meaning set forth in Section 2.1(e).
"Employee Benefit Plans Agreement" shall mean the Employee Benefit
Plans Agreement, dated April 15, 1996, between Series A Stockholder and the
Company, as amended.
"Employee Benefit Plans Separation Agreement" shall mean the Employee
Benefit Plans Separation Agreement in the form attached hereto as Annex D.
"Environmental Laws" shall mean any applicable statute, law, ordinance,
regulation, rule, judgment, decree or order of any Governmental Entity relating
to or regulating or imposing liability or standards of conduct with respect to
pollution, protection of the environment or environmental regulation or control
or regarding Hazardous Substances or occupational health or safety.
"Environmental Permits" shall mean, with respect to any Person, all
permits, licenses, franchises, certificates, approvals and other similar
authorizations of any Governmental Entity relating to or required by
Environmental Laws and affecting, or relating in any way to, the business of
such Person or any of its Subsidiaries as currently conducted.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended, together with the rules and regulations promulgated thereunder.
"ERISA Affiliate" shall mean (i) any corporation which is a member of
the same controlled group of corporations (within the meaning of Section 414(b)
of the Code) as the Company; (ii) any partnership, trade or business (whether or
not incorporated) which on the day before the Closing Date was under common
control (within the meaning of Section 414(c) of the Code) with the Company; and
(iii) any entity which is a member of the same affiliated service group (within
the meaning of Section 414(m) of the Code as either the Company, any corporation
described in clause (i) or any partnership, trade or business described in
clause (ii).
"ERISA Benefit Plan" shall mean a Company Benefit Plan maintained as of
the date of this Agreement which is also an "employee pension benefit plan" (as
defined in Section 3(2) of ERISA) or which is also an "employee welfare benefit
plan" (as defined in Section 3(1) of ERISA).
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, together with the rules and regulations promulgated thereunder.
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"Exchange Agent" shall have the meaning set forth in Section 2.2(a).
"Exchange Agreement" shall mean the Exchange Agreement, dated April 15,
1996, between Series A Stockholder and the Company, as amended.
"Exchange Fund" shall have the meaning set forth in Section 2.2(a).
"Exchange Rate" shall mean the "Exchange Rate Applicable to Aerial
Common Shares" as defined in Section 7.2 of the Investment Agreement as adjusted
pursuant to Section 7.3 of the Investment Agreement, as specified in Item 3.2 of
the "Company Letter."
"FAA" shall mean the Federal Aviation Administration and any successor
agency or body.
"FCC" shall mean the Federal Communications Commission and any
successor agency or body.
"Final Order" shall mean action by the applicable regulatory authority
(the "Agency") which is in full force and effect, with respect to which no
petition or other request for Agency or court stay, reconsideration or review of
any kind is pending, and as to which all time periods have expired within which
the Agency or a court may be asked to stay, reconsider or review the action or
may stay, reconsider or review the action sua sponte.
"Governmental Entity" shall mean any federal, state or local government
or any court, tribunal, administrative agency or commission or other
governmental or other regulatory authority or agency, domestic, foreign or
supranational, including the FAA, FCC and any state public utility or service
commission or similar agency.
"Hazardous Substance" shall mean any material defined as toxic or
hazardous, including any petroleum and petroleum products, under any applicable
Environmental Law.
"Holding" shall have the meaning set forth in the recitals hereto.
"Holding Common Stock" shall have the meaning set forth in Section 4.3.
"HSR Act" shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act
of 1976, as amended.
"Indebtedness" of any Person at any date shall mean (a) all
indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services (other than current trade liabilities incurred in
the ordinary course of business and payable in accordance with customary
practices), (b) any other indebtedness of
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such Person which is evidenced by a note, bond, debenture or similar instrument,
(c) all obligations of such Person under financing leases, (d) all obligations
of such Person in respect of acceptances issued or created for the account of
such Person and with respect to unpaid reimbursement obligations related to
letters of credit issued for the account of such Person and (e) all liabilities
secured by any Lien on any property owned by such Person even though such Person
has not assumed or otherwise become liable for the payment thereof.
"Indemnified Person" shall have the meaning set forth in Section
6.13(a).
"Insurance Cost Sharing Agreement" shall mean the Insurance Cost
Sharing Agreement, dated April 15, 1996, between Series A Stockholder and the
Company, as amended.
"Intellectual Property Rights" shall mean any right to use, all
patents, patent rights, trademarks, trade names, trade dress, logos, service
marks, copyrights, know how and other proprietary intellectual property rights
and computer programs held or used by the Company or any of its Subsidiaries.
"Intercompany Accounts" shall have the meaning set forth in Section
6.23.
"Intercompany Agreement" shall mean the Intercompany Agreement, dated
April 15, 1996, by and between the Company and Series A Stockholder, as amended.
"Intercompany Service Agreements" shall have the meaning set forth in
Section 6.19.
"Investment Agreement" shall mean the Investment Agreement, dated as of
September 8, 1998, by and among the Company, Series A Stockholder, Operating
Company and Investor, as amended.
"Investment Entity" shall mean an entity in which the Company or any of
its Subsidiaries has an Investment Interest.
"Investment Interest" shall mean a direct or indirect ownership of (i)
capital stock, bonds, debentures, partnership, membership interests or other
ownership interests or other securities of any Person; (ii) any deposit with or
advance, loan or other extension of credit (including the purchase of property
from another Person subject to an understanding or agreement, contingent or
otherwise to resell such property to such other Person) to any other Person;
(iii) any revenue or profit interests pursuant to any agreement or license or
(iv) any agreement, commitment, right, understanding or arrangement with respect
to any of the items referred to in (i), (ii) or (iii) of this definition.
"Investor" shall mean Sonera, Ltd., a Finnish limited liability
company, which holds an investment in Operating Company.
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"Joint Proxy Statement" shall have the meaning set forth in Section
3.8.
"Joint Venture Agreement" shall mean the Joint Venture Agreement dated
as of September 8, 1998, by and among the Company, Operating Company and Sonera
Corporation U.S.
"knowledge" shall mean the actual knowledge of the executive officers
of the Company or its Subsidiaries or the executive officers of Parent, as the
case may be who have exercised reasonable due diligence with respect to the
representation and warranty to which such knowledge statement is made.
"Liabilities" shall mean any and all debts, liabilities and
obligations, absolute or contingent, matured or unmatured, liquidated or
unliquidated, accrued or unaccrued, whenever arising (unless otherwise specified
in this Agreement), including all costs and expenses relating thereto, and
including, without limitation, those debts, liabilities and obligations arising
under any law, rule, regulation, Action, threatened Action, order or consent
decree of any governmental entity or any award of any arbitrator of any kind,
and those arising under any contract, commitment or undertaking.
"Liens" shall mean any pledges, claims, liens, charges, encumbrances
and security interests of any kind or nature whatsoever.
"Long-Term Incentive Plan" shall mean the Company's 1996 Long-Term
Incentive Plan.
"Losses" shall mean losses, Liabilities, claims, damages, payments,
absolute or contingent, matured or unmatured, liquidated or unliquidated,
accrued or unaccrued, known or unknown (including, without limitation, the costs
and expenses of any and all Actions, threatened Actions, demands, assessments,
judgments, settlements and compromises relating thereto and attorneys' fees and
any and all expenses whatsoever reasonably incurred in investigating, preparing
or defending against any such Actions or threatened Actions.
"Management Side Letter" shall mean the letter dated September 8, 1998,
among Series A Stockholder, the Company and Investor.
"Material Adverse Change" or "Material Adverse Effect" shall mean, when
used in connection with the Company or Parent, as the case may be, any change or
effect (or any development that, insofar as can reasonably be foreseen, is
likely to result in any change or effect) or fact or condition that is
materially adverse to the business, properties, assets, financial condition or
results of operations of the Company and its Subsidiaries taken as a whole, or
Parent and its Subsidiaries taken as a whole, as the case may be, provided,
however, that (i) any adverse change, effect or development that is primarily
caused by conditions affecting the United States economy generally or the
economy of any nation or region in which the Company or Parent, as the case may
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be, or its Subsidiaries conducts business that is material to the business of
the Company or Parent, as the case may be, and its Subsidiaries, taken as a
whole, shall not be taken into account in determining whether there has been (or
whether there could reasonably be foreseen) a "Material Adverse Change" or
"Material Adverse Effect" with respect to the Company or Parent, as the case may
be, (ii) any adverse change, effect or development that is primarily caused by
conditions generally affecting the industries in which the Company or Parent, as
the case may be, conducts its business shall not be taken into account in
determining whether there has been (or whether there could reasonably be
foreseen) a "Material Adverse Change" or "Material Adverse Effect" with respect
to the Company or Parent, as the case may be, and (iii) any adverse change,
effect or development that is primarily caused by the announcement or pendency
of this Agreement, the Reorganization or the transactions contemplated hereby
shall not be taken into account in determining whether there has been (or
whether there could reasonably be foreseen) a "Material Adverse Change" or
"Material Adverse Effect" with respect to the Company or Parent, as the case may
be; and a "Material Adverse Effect" with respect to the transactions
contemplated by this Agreement shall mean any event, fact or condition which
would reasonably be expected to materially delay, interfere with, impair or
prevent the transactions contemplated by this agreement in a manner which would
have a material adverse effect on such transactions taken as a whole considering
the intentions and expectations of the parties hereto; provided, however, that
for the purpose of Section 7.1(b), clause (iii) above shall not be excluded.
"Mean Price" means, on any day in which shares are traded on Nasdaq,
the average of the high and low trading prices for which one share of Parent
Common Stock is traded on Nasdaq as reported by The Wall Street Journal.
"Merger" shall have the meaning set forth in the recitals to this
Agreement.
"Merger Documents" shall have the meaning set forth in Section 1.0.
"Merger Sub A" shall have the meaning set forth in the recitals to this
Agreement.
"Merger Sub B" shall have the meaning set forth in the recitals to this
Agreement.
"Merger Sub C" shall have the meaning set forth in the recitals to this
Agreement.
"Nasdaq" shall have the meaning set forth in Section 2.2(e).
"Nokia" shall mean Nokia Telecommunications, Inc., a Delaware
corporation.
"Nokia Credit Agreement" shall mean the Credit Agreement dated as of
June 30,
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1998 among the Company, Nokia and the financial institutions named therein, as
amended.
"Nokia Guaranty" shall mean the Guaranty, dated June 30, 1998, by
Series A Stockholder of the obligations of the Company to Nokia under the Nokia
Credit Agreement.
"Omnipoint Agreement" shall mean the transactions contemplated by the
Agreement and Plan or Reorganization dated as of June 23, 1999 by and among
Parent, VoiceStream Wireless Holding Corporation and Omnipoint Corporation.
"Omnipoint Merger" shall have the meaning set forth in the recitals to
this Agreement.
"Omnipoint Reorganization" shall have the meaning set forth in the
recitals hereto.
"Omnipoint End Date" shall mean the "End Date", as defined in the
Omnipoint Agreement, provided that such date shall be no later than June 30,
2000.
"Operating Company" shall mean Aerial Operating Company, Inc., a
Delaware corporation and Subsidiary of the Company.
"Operating Company Shares" shall mean shares of common stock, $.001 par
value, of Operating Company.
"Parent" shall have the meaning set forth in Section 1.0.
"Parent Certificates" shall have the meaning set forth in Section
2.2(a).
"Parent Common Stock" shall have the meaning set forth in the recitals
of this Agreement.
"Parent Filed SEC Documents" shall have the meaning set forth in
Section 4.7.
"Parent Letter" shall mean the letter from Parent to the Company dated
the date hereof, which letter relates to this Agreement and is designated
therein as the Parent Letter.
"Parent Permits" shall have the meaning set forth in Section 4.9.
"Parent SEC Documents" shall have the meaning set forth in Section 4.6.
"Parent Share Issuance" shall have the meaning set forth in Section
4.4.
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"Parent Stockholders" shall have the meaning set forth in Section 6.25.
"Parent Stockholder Meeting" shall have the meaning set forth in
Section 6.3(b).
"Parent Subsidiaries" shall have the meaning set forth in Section 4.1.
"Per Share Cash Consideration" shall have the meaning set forth in
Section 2.1(c).
"Per Share Cash Value" shall have the meaning set forth in Section
2.1(c).
"Per Share Stock Consideration" shall have the meaning set forth in
Section 2.1(d).
"Person" shall mean an individual, corporation, partnership, limited
liability company, joint venture, association, joint stock company,
unincorporated syndicate, unincorporated organization, trust, trustee, executor,
administrator or other legal representative, governmental authority or agency,
political subdivision, or any group of Persons acting in concert.
"Public Holders" shall have the meaning set forth in Section 2.1(d).
"Registration Rights Agreement" shall mean the Registration Rights
Agreement attached to the Stockholder Agreement to be entered into between
Series A Stockholder and Parent.
"Registration Statement" shall have the meaning set forth in Section
4.4.
"Reorganization" shall have the meaning set forth in the recitals to
this Agreement.
"Restricted Stock Plan" shall mean the Company's Retention Restricted
Stock Unit Plan.
"Retained Employee" shall have the meaning set forth in Section 6.1(a).
"Revolving Credit Agreement" shall mean the Revolving Credit Agreement,
dated August 31, 1998, between Series A Stockholder and Operating Company, as
amended.
"Revolving Credit Agreement Guaranty" shall mean the Guaranty dated
August 31, 1998 by the Company of the obligations of Operating Company to Series
A Stockholder under the Revolving Credit Agreement, as reaffirmed in connection
with any amendment to the Revolving Credit Agreement.
"Rule 145 Affiliates" shall have the meaning set forth in Section 6.7.
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"SEC" shall mean the Securities and Exchange Commission.
"Securities Act" shall mean the Securities Act of 1933, as amended,
together with the rules and regulations promulgated thereunder.
"Series A Guaranty" shall mean the Guaranty by the Series A Stockholder
of the obligations of the Company under the Series A Notes.
"Series A Indenture" shall mean the Indenture dated as of November 4,
1996, among the Company, Series A Stockholder and The First National Bank of
Chicago, as supplemented, relating to the Series A Notes.
"Series A Notes" shall mean the Series A Zero Coupon Notes due 2006, of
the Company.
"Series A Stockholder" shall mean Telephone and Data Systems, Inc., a
Delaware corporation, the parent of the Company.
"Series A Stockholder's Group" shall mean any "affiliated group" (as
defined in Section 1504 of the Code without regard to the limitations contained
in Section 1504(b) of the Code) that includes the Series A Stockholder or any
predecessor of or successor to the Series A Stockholder (or another such
predecessor or successor).
"Series B Guaranty" shall mean the Guaranty by the Series A Stockholder
of the obligations of the Company under the Series B Notes.
"Series B Indenture" shall mean the Indenture dated as of February 5,
1998 among the Company, Series A Stockholder and The First National Bank of
Chicago, as supplemented, relating to the Series B Notes.
"Series B Notes" shall mean the Series B Zero Coupon Notes due 2008, of
the Company.
"Significant Employee" shall mean any Employee of the Company or any of
its Subsidiaries who (i) is an officer of the Company or any of its
Subsidiaries, (ii) has a written employment contract with the Company or any of
its Subsidiaries which calls for annual compensation in excess of $90,000, or
(iii) is compensated by the Company and/or its Subsidiaries at an annual rate
greater than $90,000.
"Stock Consideration Fund" shall have the meaning set forth in Section
2.2(a).
"Stock Equivalents" shall have the meaning set forth in Section 3.3.
"Stockholder Agreement" shall mean the Stockholder Agreement to be
entered into between Series A Stockholder and Parent attached hereto as Annex D.
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"Subsequent Transaction" shall mean any transaction, including the
Omnipoint Transaction, whereby (i) Parent or any of its Subsidiaries would
acquire (by merger, consolidation, acquisition of stock or assets or otherwise)
any corporation, limited liability company, partnership, other business
organization or assets or division thereof, which is in the business of
providing wireless communication services, (ii) Parent or any of its
Subsidiaries would acquire an Investment Interest in any of the foregoing, (iii)
Parent or any of its Subsidiaries would issue any equity interest or incur any
Indebtedness whether in connection with any item described in (i) or (ii) or
otherwise, (iv) Parent or any of its Subsidiaries enters into or engages in a
strategic alliance or other commercial relationship or (v) Parent or any of its
Subsidiaries is acting in the ordinary course consistent with past practice;
provided, however, in connection with a Subsequent Transaction described in
items (i), (ii), (iii) or (iv) of this definition, Parent must receive an
opinion from a nationally recognized investment bank, acting as financial
advisor to Parent, to the effect that, from a financial point of view, such
Subsequent Transaction is fair to the holders of Parent Common Stock or, if
applicable, Parent.
"Subsidiary" or "subsidiary" shall mean a person, an amount of the
voting securities, other voting ownership or voting partnership interests of
which is sufficient to elect at least a majority of its Board of Directors or
other governing body (or, if there are no such voting interests, 50% or more of
the equity interests of which) is owned directly or indirectly by another
Person.
"Substitute Options" shall have the meaning set forth in Section 6.2(b)
"Supplemental Agreement" shall mean the Supplemental Agreement, dated
as of September 8, 1998, by and among the Company, Operating Company and
Investor.
"Surviving Corporation" shall have the meaning set forth in Section 1.1
"Tag-Along Right" shall have the meaning set forth in Section 2.1(c).
"Tax" and "Taxes" shall mean any federal, state, local or foreign net
income, gross income, gross receipts, windfall profit, severance, property,
production, sales, use, license, excise, franchise, employment, payroll,
withholding, alternative or add-on minimum or any other tax, custom, duty,
governmental fee or other like assessment or charge of any kind whatsoever,
together with any interest or penalty, addition to Tax or additional amount
imposed by any Governmental Entity.
"Tax Allocation Agreement" shall mean the Tax Allocation Agreement,
dated September 8, 1998, between Series A Stockholder and the Company, as
amended.
"Tax Deferred Savings Plan" shall mean the Telephone and Data Systems,
Inc. Tax Deferred Savings Plan.
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"Tax Return" shall mean any return, report or similar statement
required to be filed with respect to any Tax including, without limitation, any
information return, claim for refund, amended return or declaration of estimated
tax.
"Tax Settlement Agreement" shall mean the Tax Settlement Agreement
dated March 12, 1999 among Series A Stockholder, the Company and Operating
Company, as amended.
"Termination Fee" shall have the meaning set forth in Section 6.9(b).
"Transfer Taxes" shall have the meaning set forth in Section 6.11.
"Transition Services Agreement" shall mean the Transition Services
Agreement in the form attached hereto as Annex C.
"VoiceStream Common Stock" shall have the meaning set forth in Section
4.3.
"VoiceStream ESPP" shall have the meaning set forth in Section 4.3.
"VoiceStream ERSP" shall have the meaning set forth in Section 4.3.
"VoiceStream Merger" shall have the meaning set forth in the recitals
to this Agreement.
"VoiceStream Option Plan" shall have the meaning set forth in Section
4.3.
"VoiceStream Preferred Stock" shall have the meaning set forth in
Section 4.3.
"Year 2000 Issue" means a failure of a system to recognize and properly
process date-sensitive functions involving dates prior to, on and after December
31, 1999 (including, but not limited to calculation, comparison and sequencing,
and including, without limitation, leap year calculations).
Section 9.4 Counterparts. This Agreement may be executed in
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties, it being understood that all
parties need not sign the same counterpart.
Section 9.5 Entire Agreement; No Third-Party Beneficiaries. Except for
the Confidentiality Agreement, this Agreement constitutes the entire agreement
and supersedes all prior agreements and understandings, both written and oral,
among the parties with respect to the subject matter hereof. This Agreement,
except for the provisions of Sections 6.1, 6.13, and 6.19 through 6.24, is not
intended to confer upon any person other than the parties hereto any rights or
remedies hereunder.
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SECTION 9.6 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE, REGARDLESS OF
THE LAWS THAT MIGHT OTHERWISE GOVERN UNDER APPLICABLE PRINCIPLES OF CONFLICTS OF
LAWS.
Section 9.7 Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto without the prior written consent of the other parties. Subject to the
preceding sentence, this Agreement shall be binding upon, inure to the benefit
of, and be enforceable by, the parties and their respective successors and
assigns.
Section 9.8 Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law,
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic and legal
substance of the transactions contemplated hereby are not affected in any manner
materially adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in a mutually acceptable manner in
order that the transactions contemplated by this Agreement may be consummated as
originally contemplated to the fullest extent possible.
Section 9.9 Enforcement of this Agreement. The parties hereto agree
that irreparable damage would occur in the event that any of the provisions of
this Agreement were not performed in accordance with their specific terms or
were otherwise breached in any material respect. It is accordingly agreed that
the parties shall be entitled to an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the material terms and
provisions hereof in any court of the United States or any state having
jurisdiction, such remedy being in addition to any other remedy to which any
party is entitled at law or in equity.
Section 9.10 Obligations of Subsidiaries. Whenever this Agreement
requires any Subsidiary of Parent (including Sub) or of the Company to take any
action, such requirement shall be deemed to include an undertaking on the part
of Parent or the Company, as the case may be, to cause such Subsidiary to take
such action.
Section 9.11 Reliance on Representations. Notwithstanding any
investigation, knowledge or review made at any time by or on behalf of any party
hereto, the parties acknowledge and agree that all representations and
warranties contained in this Agreement, the Annexes, the Company Letter, the
Parent Letter or in any of the documents, certification or agreements delivered
in connection therewith, are being relied upon as a material inducement to enter
into this Agreement and the transactions contemplated hereby.
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In Witness Whereof, Parent, Merger Sub C and the Company have caused
this Agreement to be signed by their respective officers thereunto duly
authorized all as of the date first written above.
VOICESTREAM WIRELESS CORPORATION
By: /s/ Xxxxx X. Xxxxxxxxx
------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Executive Vice President -
Strategy, Finance and
Development
VOICESTREAM WIRELESS HOLDING
CORPORATION
By: /s/ Xxxxx X. Xxxxxxxxx
------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Executive Vice President -
Strategy, Finance and
Development
VOICESTREAM SUBSIDIARY III
CORPORATION
By: /s/ Xxxxx X. Xxxxxxxxx
------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Executive Vice President -
Strategy, Finance and
Development
AERIAL COMMUNICATIONS, INC.
By: /s/ XxXxx X. Xxxxxxx, Xx.
--------------------------------
Name: XxXxx X. Xxxxxxx, Xx.
Title: Chairman
In addition, this Agreement is signed by the undersigned solely for the purposes
of Sections 6.16, 6.17, 6.18, 6.19, 6.20, 6.21, 6.23, 6.24, and 6.26.
TELEPHONE AND DATA SYSTEMS, INC.
By: /s/ XxXxx X. Xxxxxxx
----------------------------
Name: XxXxx X. Xxxxxxx
Title: Chairman
SIGNATURE PAGE TO AGREEMENT AND PLAN OF REORGANIZATION
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