Exhibit 10.1
ASSET EXCHANGE AGREEMENT
among
AT&T Wireless PCS, LLC
TeleCorp PCS, Inc.
TeleCorp PCS, LLC
TeleCorp Holding Corp, Inc.
TeleCorp Communications, Inc.
TeleCorp Equipment Leasing, L.P.
TeleCorp Realty, LLC
Dated as of February 28, 2000
TABLE OF CONTENTS
Page
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ARTICLE I
SWAP TRANSACTIONS; RELATED AGREEMENTS
1.1 [Intentionally omitted.].......................................... 3
1.2 Swap Transactions................................................. 3
1.3 Like-Kind Exchange................................................ 3
1.4 Replacement Assets................................................ 4
1.5 Intermediary...................................................... 5
1.6 Transition Agreement.............................................. 5
1.7 Return of Assets.................................................. 5
ARTICLE II
CLOSING
2.1 Time and Place of Closing......................................... 6
2.2 Closing Actions and Deliveries.................................... 6
ARTICLE III
COVENANTS
3.1 Consummation of Transactions...................................... 9
3.2 Confidentiality................................................... 12
3.3 Conduct Prior to Closing.......................................... 13
3.4 Covenants of AT&T................................................. 13
3.5 Covenants of TeleCorp Affiliates.................................. 14
3.6 FCC Construction Requirements..................................... 16
3.7 Treatment of Employees............................................ 16
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF AT&T
4.1 Organization, Power and Authority................................. 19
4.2 Consents; No Conflicts............................................ 20
4.3 Litigation........................................................ 20
4.4 FCC Compliance.................................................... 20
i
4.5 Brokers................................................... 20
4.6 Licenses.................................................. 20
4.7 Compliance With Laws...................................... 21
4.8 Taxes..................................................... 21
4.9 Acquisition Agreements.................................... 22
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF TELECORP
5.1 Organization, Power and Authority......................... 22
5.2 Consents; No Conflicts.................................... 23
5.3 Litigation................................................ 23
5.4 FCC Compliance............................................ 23
5.5 Brokers................................................... 23
5.6 TeleCorp Assets; Liens.................................... 24
5.7 TeleCorp Assets........................................... 25
5.8 Environmental and Safety Laws............................. 25
5.9 TeleCorp Assigned Agreements.............................. 26
5.10 License................................................... 27
5.11 Compliance With Laws...................................... 27
5.12 Taxes..................................................... 28
5.13 Insurance................................................. 28
5.14 Undisclosed Liabilities................................... 28
5.15 Inventory................................................. 29
5.16 Labor Relations........................................... 29
5.17 Licenses and Permits...................................... 29
5.18 Employee Benefits......................................... 29
5.19 No Material Adverse Change................................ 30
5.20 Affiliate Agreements...................................... 30
ARTICLE VI
CLOSING CONDITIONS
6.1 Conditions to Obligations of All Parties.................. 30
6.2 Conditions to Obligations of TeleCorp..................... 30
6.3 Conditions to the Obligations of AT&T..................... 31
ARTICLE VII
SURVIVAL AND INDEMNIFICATION
7.1 Survival.................................................. 32
7.2 Indemnification by AT&T................................... 32
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7.3 Indemnification by TeleCorp............................... 33
7.4 Procedures................................................ 34
7.5 Tax costs and Tax benefits................................ 35
ARTICLE VIII
TERMINATION
8.1 Termination............................................... 35
8.2 Effect of Termination; Tax Responsibility................. 36
ARTICLE IX
DEFINITIONS
ARTICLE X
MISCELLANEOUS PROVISIONS
10.1 Amendment and Modification................................ 5
10.2 Waiver of Compliance; Consents............................ 5
10.3 Notices................................................... 5
10.4 Parties in Interest; Assignment........................... 6
10.5 Applicable Law............................................ 7
10.6 Counterparts.............................................. 7
10.7 Interpretation............................................ 7
10.8 Entire Agreement.......................................... 7
10.9 Publicity................................................. 7
10.10 Specific Performance...................................... 7
10.11 Remedies Cumulative....................................... 8
10.12 Severability.............................................. 8
10.13 Beneficiaries of Agreement................................ 8
10.14 Designated Transferee..................................... 8
10.15 Access to Records......................................... 8
10.16 Agency.................................................... 8
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SCHEDULES AND EXHIBITS
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Schedules
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Schedule 0.1 TeleCorp Assets
Schedule 0.2 Polycell Licenses
Schedule 0.3 ABC Licenses
Schedule 0.4 Wisconsin Licenses
Schedule 0.5 Iowa Licenses
Schedule 1.3 Asset Match - Like Kind Exchange
Schedule 2.2(e) Delivery and Exchange of Assets
by/Intermediary Letter of Instruction
Schedule 3.7(a) Excluded Employees
Schedule 4.0 AT&T Disclosure Schedule
Section 4.6 AT&T/Iowa Licenses
Schedule 5.0 TeleCorp Disclosure Schedule
Section 5.6(a) TeleCorp Liens
Section 5.9 TeleCorp Assigned Agreements
Schedule 5.10 Boston Licenses
Schedule 5.18 Employee Benefits
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Exhibits
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Exhibit A Polycell Acquisition Agreement
Exhibit B Polycell Assignments
Exhibit B-1 ABC to AT&T (contract rights)
Exhibit B-2 AT&T to Intermediary (contract rights)
Exhibit B-3 Intermediary to Telecorp (contract rights)
Exhibit B-4 Polycell to Telecorp (license)
Exhibit C ABC Acquisition Agreement
Exhibit C-1 AT&T to Intermediary (contract rights)
Exhibit C-2 Intermediary to Telecorp (contract rights)
Exhibit C-3 ABC to Telecorp (license)
Exhibit D Intermediary Agreement
Exhibit E Transition Agreement
Exhibit F AT&T Assignments (WI/IA Licenses)
Exhibit G TeleCorp ▇▇▇▇ of Sale and Assignment
Exhibit G-1 TeleCorp to Intermediary
Exhibit G-2 Intermediary to AT&T
Exhibit G-3 TeleCorp to AT&T (licenses)
Exhibit G-4 TeleCorp to AT&T ▇▇▇▇ of Sale
Exhibit G-5 TeleCorp to AT&T Assignment and Assumption
of Leases and Contracts
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ASSET EXCHANGE AGREEMENT
THIS ASSET EXCHANGE AGREEMENT (this "Agreement"), dated as of February
28, 2000, by and between AT&T Wireless PCS, LLC, a Delaware limited liability
company ("AT&T"), TeleCorp PCS, Inc., a Delaware corporation ("TeleCorp"),
TeleCorp PCS, LLC, a Delaware limited liability company ("TeleCorp LLC"),
TeleCorp Holding Corp, Inc., a Delaware corporation ("TeleCorp Holding"),
TeleCorp Communications, Inc., a Delaware corporation ("TeleCorp
Communications"), TeleCorp Equipment Leasing, L.P., a Delaware limited
partnership ("TeleCorp Equipment"), TeleCorp Realty, LLC, a Delaware limited
liability company ("TeleCorp Realty") (TeleCorp, TeleCorp LLC, TeleCorp Holding,
TeleCorp Communications, TeleCorp Equipment, and TeleCorp Realty hereinafter
collectively, the "TeleCorp Affiliates"). Certain terms used in this Agreement
are defined in Article IX hereof.
WHEREAS, TeleCorp LLC holds (a) the 20MHz PCS licenses in the Boston-
Providence MTA listed on Schedule 0.1 (the "Boston Licenses") and (b) the
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related operating assets and properties described on Schedule 0.1, constituting
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all of the assets and properties of TeleCorp primarily used or held for use for
its personal communications services business in such area (the "Boston
Business" and, collectively with the Boston Licenses, the "TeleCorp Assets");
WHEREAS, (a) pursuant to a License Acquisition Agreement in the form
of Exhibit A (the "Polycell Acquisition Agreement") between Polycell
Communications, Inc., a Delaware corporation ("Polycell"), and ABC Wireless,
L.L.C., a Delaware limited liability company ("ABC" or the "Polycell Buyer"),
the Polycell Buyer has obtained the right to purchase the licenses listed on
Schedule 0.2 (the "Polycell Licenses") and (b) the Polycell Buyer has agreed to
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assign to AT&T (i) the right to direct the transfer of the right to hold the
Polycell Licenses to TeleCorp, and (ii) all other rights and obligations under
the Polycell Acquisition Agreement by an Assignment and Assumption Agreement
substantially in the form of Exhibit B (the "Polycell Assignment");
WHEREAS, pursuant to a License Acquisition Agreement in the form of
Exhibit C (the "ABC Acquisition Agreement") between ABC and AT&T, AT&T has
obtained the right to direct the transfer of the right to hold the licenses of
ABC listed on Schedule 0.3 in the MTA (as defined below) of the Des Moines-Quad
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Cities (the "ABC Licenses" and, together with the Polycell Licenses, the "AT&T
Acquired Assets") to TeleCorp, as well as assign to TeleCorp all other rights
and obligations under the ABC Acquisition Agreement;
WHEREAS, AT&T (or its Affiliate) holds the 10MHz licenses listed on
Schedule 0.4 in the territory in Wisconsin set forth therein (the "Wisconsin
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Licenses");
WHEREAS, AT&T (or its Affiliate) holds the 10MHz licenses listed on
Schedule 0.5 in the Fort Dodge, Iowa, and Waterloo, Iowa, BTAs (the "Iowa
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Licenses" and, together with the Wisconsin Licenses, the "AT&T Owned Assets");
WHEREAS, the Polycell Acquisition Agreement and the ABC Acquisition
Agreement (collectively, the "Acquisition Agreements") require payments of cash
consideration equal to the purchase price stated in each such Agreement,
including the ▇▇▇▇▇▇▇ money deposit held in escrow under the Polycell Agreement
(such cash consideration in the aggregate, the "Cash Consideration") and,
pursuant to the Polycell Acquisition Agreement, Polycell has the option to
substitute for a portion of its share of the Cash Consideration certain payments
in stock of TeleCorp (the "Stock Consideration"), in connection with the
transfer, respectively, of the Polycell Licenses and the ABC Licenses and AT&T
is willing to fund the Cash Consideration in accordance with the terms hereof;
WHEREAS, the parties to this Agreement wish to effect, or cause to be
effected, an exchange (the "Swap Transactions") of (a) the Boston Licenses for
(b) (I) the AT&T Acquired Assets and (II) the AT&T Owned Assets (clauses (I) and
(II) collectively, the "AT&T Assets"), which Swap Transactions shall be effected
to the fullest extent possible in accordance with this Agreement as a like-kind
exchange of property for Federal income tax purposes pursuant to Section 1031 of
the Code;
WHEREAS, in addition to the Cash Consideration, AT&T shall pay to
TeleCorp an aggregate amount equal to (a) $80 million less (b) the Cash
Consideration (hereinafter, the "Asset Payment") for the Boston Business; and
WHEREAS, in order to effect the Swap Transactions and the other
transactions contemplated hereby, the parties hereto wish to enter into an
agreement substantially in the form of Exhibit D (the "Intermediary Agreement")
with an intermediary corporation and exchange agent (the "Intermediary") that
meets all applicable requirements to act as a Qualified Intermediary (as defined
below), pursuant to which such Intermediary would (a) hold the TeleCorp Assets,
the AT&T Assets, the Cash Consideration, the Asset Payment, and the Stock
Consideration, if any, pending consummation of the Swap Transactions, (b) (i)
consummate the transactions contemplated by each of the Acquisition Agreements
and (ii) direct and cause the delivery of the AT&T Acquired Assets to TeleCorp
Holding, the AT&T Owned Assets to TeleCorp LLC and the Asset Payment to the
TeleCorp Affiliates designated on Schedule 1.3 (TeleCorp or such designated
Affiliates, as applicable, a "Designated TeleCorp Affiliate" and collectively,
the "Designated TeleCorp Affiliates") and (c) deliver on the Closing Date the
TeleCorp Assets to AT&T, all on the terms and subject to the conditions herein
set forth.
NOW, THEREFORE, in consideration of the promises and the mutual
representations, warranties, covenants, conditions and agreements hereinafter
set forth, the parties agree as follows:
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ARTICLE I
SWAP TRANSACTIONS; RELATED AGREEMENTS
1.1 [Intentionally omitted.]
1.2 Swap Transactions. Upon the terms and subject to the conditions hereof
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(including without limitation Section 1.3 below) and in reliance upon the
representations, warranties, covenants and agreements herein contained, the
Designated TeleCorp Affiliates and AT&T (or, if applicable in the case of
Replacement Assets, an Affiliate of AT&T designated by AT&T) shall exchange the
AT&T Owned Assets and the AT&T Acquired Assets and, to the extent applicable,
the Replacement Assets (as defined below), for the TeleCorp Assets (other than
the TeleCorp Excluded Assets), free and clear of all Liens (except Permitted
Liens).
1.3 Like-Kind Exchange. (a) Subject to Sections 1.3(b), 1.4, 1.5 and 1.6
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below, the Boston Licenses shall be exchanged for the AT&T Assets;
(b) TeleCorp Holding, TeleCorp LLC and AT&T shall use all commercially
reasonable efforts to structure the Swap Transactions in such a manner that the
Swap Transactions will qualify as a tax-free exchange of like-kind assets to the
maximum extent permitted by Section 1031 of the Code, including, as applicable,
a deferred like-kind exchange under Section 1031 of the Code. In accordance
with this Section and Schedule 1.3 and, subject to Sections 1.4 and 1.5 hereof,
the parties shall undertake to the extent possible to match like-kind assets
with like-kind assets of equivalent value.
(c) TeleCorp Holding, TeleCorp LLC and AT&T agree that the values on
the Closing Date of the TeleCorp Assets and AT&T Assets described in Section
1.3(a) above will be reflected on Schedule 1.3 and the parties will not take any
position on any tax returns inconsistent therewith and will prepare and file all
returns and reports relating to the exchange contemplated by this Agreement,
including all Federal, state and local Tax returns, in a manner which is
consistent with such Schedule 1.3 (which may be amended from time to time by
agreement of the parties), except to the extent otherwise required pursuant to a
"determination" within the meaning of Code Section 1313(a).
(d) All property to be transferred to a Designated TeleCorp Affiliate
pursuant to this Agreement shall be received by such Designated TeleCorp
Affiliate on or before the earlier of (i) 180 days after TeleCorp and its
Affiliates are treated as transferring any of the TeleCorp Assets and (ii) the
due date for TeleCorp's income tax return for the taxable year in which the
first transfer of any TeleCorp Asset occurs, in either case, within the meaning
of Regulations section 1.1031(k)-1(b)(2). All property to be transferred to
AT&T or its Affiliates pursuant to this Agreement shall be received by such
entities on or before the earlier of (i) 180 days after AT&T is treated as
transferring any of the AT&T Assets and (ii) the due date for AT&T's income tax
return for the taxable year in which the first transfer of any AT&T Asset
occurs, in either case, within the meaning of Regulations section 1.1031(k)-
1(b)(2). None of the parties to this
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Agreement shall have any right to receive, pledge, borrow, or otherwise obtain
the benefits of money or other property held by the Intermediary within the
meaning of Regulations section 1.1031(k)-1(g)(6), except as otherwise expressly
permitted under such section prior to the earlier of 180 days after each party
is treated as transferring any of its assets pursuant to this Agreement, or the
due date for such company's income tax return for the taxable year in which the
transfer of such company's assets pursuant to this Agreement occurs, in each
case within the meaning of Regulations section 1.1031(k)-1(b)(2)(ii).
1.4 Replacement Assets. (a) In the event that AT&T is unable to deliver, or
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cause the delivery of, any of the Polycell Licenses and ABC Licenses within 35
days after any of TeleCorp and its Affiliates are treated as transferring any
TeleCorp Asset within the meaning of Regulation section 1.1031(k)-1(b)(2)(i)
(the "First Transfer Date"), then, within 45 days after the First Transfer Date,
AT&T shall deliver, or cause to be delivered, to the Intermediary, for delivery
to the Designated TeleCorp Affiliates, one of the following (chosen at AT&T's
option), which delivery will constitute full and complete satisfaction of AT&T's
obligations with respect to the Polycell Licenses or the ABC Licenses, as the
case may be: (A) cash in an amount equal to (1) $133 times the number of POPs
covered by the Polycell Licenses or the ABC Licenses, as the case may be, less
(2) the amount of the Cash Consideration that was required to be paid pursuant
to the Polycell Acquisition Agreement or the ABC Acquisition Agreement, as the
case may be, and the transactions contemplated thereby; (B) an amount of Class A
Common Stock of TeleCorp having a value equal to the cash payable under clause
(A) above, valued based on the average of the closing prices of such stock for
the ten trading days immediately preceding the date of Closing; or (C) executed
assignments in form and substance satisfactory to TeleCorp for PCS Licenses held
by AT&T and/or its Affiliates in markets of equivalent size and density to
markets covered by the ABC Licenses and Polycell Licenses and reasonably
acceptable to TeleCorp (the "Replacement Assets") for at least an equivalent
number of POPs, which shall be exchanged in accordance with Section 1.3(b)
above. In each case, TeleCorp may timely deliver to the Intermediary a signed
schedule identifying and designating such Replacement Assets as "replacement
assets" within the meaning of Regulations section 1.1031(k)-l(c)(2). If AT&T
chooses to comply with clause (C) above, TeleCorp will deliver to the
Intermediary, and shall cause the Intermediary to deliver to AT&T, an amount of
Class A Common Stock of TeleCorp, valued as set forth in clause (B) above, equal
to the amount of the Cash Consideration that was required to be paid pursuant to
the Polycell Acquisition Agreement or the ABC Acquisition Agreement, as the case
may be, and the transactions contemplated thereby, and, if the number of POPs
included in the Replacement Assets chosen exceeds the number of POPs covered by
the Polycell Licenses or the ABC Licenses, as the case may be, TeleCorp will
deliver to the Intermediary, and shall cause the Intermediary to deliver to
AT&T, an additional amount of TeleCorp Class A Common Stock, valued as set forth
in clause (B) above, equal to $133 times the number of such excess POPs.
(b) In the event TeleCorp LLC is unable to deliver the TeleCorp
Assets, or if this Agreement terminates prior to delivery of the TeleCorp
Assets, and prior to termination any TeleCorp Affiliate has acquired any of the
AT&T Acquired Assets
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pursuant to this Agreement, then promptly upon termination of this Agreement,
TeleCorp shall, as directed by AT&T, either (A) sell the Polycell Licenses or
the ABC Licenses, as the case may be, to an entity designated by AT&T, for a
purchase price and otherwise on the same terms and conditions as TeleCorp's
acquisition of the Polycell Licenses or the ABC Licenses or (B) issue to AT&T an
amount of Class A Common Stock of TeleCorp having a value equal to (1) $133
times the number of POPs covered by the Polycell Licenses or the ABC Licenses,
as the case may be, less (2) the amount of the Cash Consideration that was
required to be paid pursuant to the Polycell Acquisition Agreement or the ABC
Acquisition Agreement, as the case may be, and the transactions contemplated
thereby, such stock to be valued based on the average of the closing prices of
such stock for the ten trading days immediately preceding the date of Closing.
1.5 Intermediary. The parties shall (a) select an Intermediary that is a
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Qualified Intermediary, (b) enter into the Intermediary Agreement and (c)
deliver, or cause to be delivered, to the Intermediary the AT&T Assignments (as
defined below), the Cash Consideration, the Asset Payment, the TeleCorp
Assignments, the Stock Consideration (if any) and all other documents, money and
other property required to be delivered pursuant to Section 2.2 below pending
consummation of the transactions contemplated hereby, provided, however, that
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nothing in this Agreement (other than Section 1.4 or 10.14 hereof) or the
Intermediary Agreement will alter the fact that, at Closing (or thereafter, as
applicable, pursuant to the Intermediary Agreement), title to the AT&T Assets
shall pass directly to the Designated TeleCorp Affiliates and title to the
TeleCorp Assets shall pass directly to AT&T. On the Closing Date (or
thereafter, as applicable, pursuant to the Intermediary Agreement), the
Intermediary shall consummate each of the transactions contemplated by each of
the Acquisition Agreements, and shall deliver or direct the delivery of the
TeleCorp Assets and AT&T Assets to the respective recipients thereof set forth
in Schedule 1.3, which may be amended by TeleCorp and AT&T from time to time,
all in the manner set forth in the Intermediary Agreement.
1.6 Transition Agreement. On the Closing Date, TeleCorp and AT&T shall enter
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into the Transition Agreement attached hereto as Exhibit E, which Agreement
shall require TeleCorp to provide operational and administrative services for
AT&T with respect to the TeleCorp Assets for a period of time and subject to the
terms and conditions specified therein.
1.7 Declined Assets. Notwithstanding any other provision of this Agreement,
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AT&T shall have the right to determine in its sole discretion that it does not
intend to, or is unable to, utilize any of the assets comprising the Boston
Business in connection with its ownership and operation of the Boston Licenses,
which determination shall be made the earlier of (i) one hundred and twenty
(120) days after the date hereof and (ii) the Closing Date. AT&T hereby
covenants and agrees that title to such declined assets will not be deemed to
have been transferred to AT&T under the terms of this Agreement.
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ARTICLE II
CLOSING
2.1 Time and Place of Closing. Upon the terms and subject to the conditions
-------------------------
hereof, the closing of the Transactions (the "Closing") shall take place at the
offices of Cadwalader, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
at 10:00 a.m. local time on the date on which the last of the conditions
precedent set forth in Article VI hereof has been satisfied, or at such other
place and/or time and/or on such other date as the parties may agree or as may
be necessary to permit the fulfillment or waiver of any of the conditions set
forth in Article VI (the "Closing Date"). The Closing shall be deemed to have
occurred as of 12:01 a.m. on the Closing Date.
2.2 Closing Actions and Deliveries. Upon the terms hereof and, subject to the
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satisfaction or waiver by the appropriate party, if applicable, of the
conditions set forth in Article VI, to consummate the Transactions, on the
Closing Date (or, if applicable, the earlier closing of the acquisition of any
of the AT&T Acquired Assets), the parties shall take the following actions (or
in the event of the earlier closing of the AT&T Acquired Assets, such of the
following as may be applicable):
(a) AT&T Actions With Respect to Intermediary. AT&T shall (i) execute
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and deliver to the Intermediary (A) assignments of the rights to direct the
transfer to TeleCorp Holding of (I) all rights to the AT&T Acquired Assets and
(II) the other rights and obligations of the Polycell Buyer and AT&T under the
Polycell Acquisition Agreement and the ABC Acquisition Agreement, respectively
(assignments of clauses (I) and (II) above collectively, the "AT&T Acquisition
Assignments") and (B) license assignments substantially in the form of Exhibit F
(the "AT&T License Assignments") to TeleCorp LLC of all of AT&T's rights to the
AT&T Owned Assets (the AT&T Acquisition Assignments and the AT&T License
Assignments collectively, the "AT&T Assignments"), (ii) deliver or cause to be
delivered to the Intermediary the Cash Consideration and the Asset Payment and
(iii) pursuant to the Intermediary Agreement, direct the Intermediary to take
all actions necessary to (A) consummate all of the transactions contemplated by
the Acquisition Agreements, including without limitation payment of the Cash
Consideration and the Stock Consideration, if any, to the respective recipients
thereof, (B) cause the AT&T Acquired Assets to be transferred to TeleCorp
Holding, (C) assign and transfer to TeleCorp all other rights and obligations
under the Acquisition Agreements, (D) cause the AT&T Owned Assets to be
transferred to TeleCorp LLC and (E) pay the Asset Payment to the Designated
TeleCorp Affiliates.
(b) AT&T Deliveries to TeleCorp. AT&T shall execute and deliver (or
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cause to be executed and delivered) to TeleCorp:
(i) the opinion of Wachtell, Lipton, ▇▇▇▇▇ & ▇▇▇▇, counsel to AT&T,
dated the Closing Date, addressed to TeleCorp in form and substance
reasonably satisfactory to TeleCorp and its counsel;
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(ii) the opinion of ▇▇▇▇▇ ▇▇▇▇▇▇, Esq., FCC counsel to AT&T, dated
the Closing Date, addressed to TeleCorp in form and substance reasonably
satisfactory to TeleCorp and its counsel;
(iii) a certificate of an officer of AT&T, dated the Closing Date,
certifying as to the fulfillment of the conditions set forth in Sections
6.2(a) and 6.2(b) and that each of the conditions precedent to the
obligations of AT&T hereunder have been waived by AT&T or have been
satisfied (which shall not affect any rights to indemnification under
Article VII hereof);
(iv) a certificate of an officer of AT&T, dated the Closing Date,
certifying as to (A) the resolutions adopted by AT&T duly authorizing the
execution, delivery and performance of this Agreement by AT&T and the
execution and delivery by AT&T of all instruments and documents
contemplated hereby (and stating that the resolutions thereby certified
have not been amended, modified, revoked or rescinded) and (B) the
signatures of the Persons who have been authorized to execute and deliver
this Agreement on behalf of AT&T and any other agreement executed or to be
executed in connection herewith;
(v) a good standing certificate of AT&T from the Secretary of State
of Delaware, dated no earlier than 30 days prior to the Closing;
(vi) a certification from AT&T under Section 1445(b)(2) of the Code
and Regulations thereunder, in form reasonably acceptable to TeleCorp,
stating the taxpayer identification number of AT&T and that AT&T is not a
foreign Person; and
(vii) all such other documents and instruments as TeleCorp or its
counsel may reasonably request in order to consummate the Swap Transactions
or to enable the TeleCorp Affiliates to protect, exercise and enjoy all
rights and benefits with respect to the AT&T Assets.
(c) TeleCorp Affiliate Actions With Respect to Intermediary. The
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TeleCorp Affiliates shall (i) execute and deliver, or cause to be executed and
delivered, to the Intermediary a ▇▇▇▇ of sale and an assignment and assumption
agreement substantially in the form of Exhibit G of all of its and any other
Designated TeleCorp Affiliate's rights to the TeleCorp Assets (the "TeleCorp
Assignments"), (ii) deliver the Stock Consideration, if any, and (iii) direct
the Intermediary to cause all rights to the TeleCorp Assets to be transferred,
as applicable, to AT&T.
(d) TeleCorp Deliveries to AT&T. TeleCorp shall execute and deliver
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(or cause to be executed and delivered) to AT&T:
(i) the opinion of Mintz, Levin, Cohn, Ferris, Glovsky & Popeo,
P.C., counsel to TeleCorp, dated the Closing Date, addressed to AT&T in
form and substance reasonably satisfactory to AT&T and its counsel;
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(ii) the opinion of Wiley, Rein & Fielding, FCC Counsel to
TeleCorp, dated the Closing Date, addressed to AT&T in form and substance
reasonably satisfactory to AT&T and its counsel;
(iii) a certificate of an officer of TeleCorp, dated the Closing
Date, certifying as to the fulfillment of the conditions set forth in
Sections 6.3(a) and 6.3(b) and that each of the conditions precedent to the
obligations of TeleCorp hereunder have been waived by TeleCorp or have been
satisfied (which shall not affect any rights to indemnification under
Article VII hereof);
(iv) a certificate of an officer of TeleCorp, dated the Closing
Date, certifying as to (A) the resolutions adopted by TeleCorp duly
authorizing the execution, delivery and performance of this Agreement by
TeleCorp and the execution and delivery by TeleCorp of all instruments and
documents contemplated hereby (and stating that the resolutions thereby
certified have not been amended, modified, revoked or rescinded) and (B)
the signatures of the Persons who have been authorized to execute and
deliver this Agreement on behalf of TeleCorp and any other agreement
executed or to be executed in connection herewith;
(v) a good standing certificate of each of the TeleCorp Affiliates
from the Secretary of State of Delaware, dated no earlier than 30 days
prior to the Closing;
(vi) evidence reasonably satisfactory to AT&T that all releases and
satisfaction pieces required to release all Liens (other than Permitted
Liens) on the TeleCorp Assets have been obtained;
(vii) an estoppel certificate, reasonably satisfactory to AT&T, from
each of the landlords, licensors or lessors under each of the TeleCorp
Assigned Leases;
(viii) a certification from TeleCorp under Section 1445(b)(2) of the
Code and the Regulations thereunder, in form reasonably acceptable to AT&T,
stating the taxpayer identification number of TeleCorp (and such Affiliate
of TeleCorp as owns for Federal income tax purposes any of the TeleCorp
Assets) and that TeleCorp (or such Affiliate) is not a foreign Person;
(ix) the TeleCorp Books and Records; and
(x) all such other documents and instruments as AT&T or its
counsel may reasonably request in order to consummate the Transactions or
to enable AT&T to protect, exercise and enjoy all rights and benefits with
respect to the TeleCorp Assets.
(e) TeleCorp and AT&T Deliveries. The parties shall execute and
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deliver to Intermediary a joint letter of instruction (the "Letter of
Instruction") confirming that all the conditions precedent to consummation of
the transactions contemplated hereby have been satisfied or waived by TeleCorp
and AT&T and directing
-8-
Intermediary to effect the deliveries and exchange of like-kind assets in the
manner specified in Schedule 1.3.
------------
(f) Intermediary Actions and Deliveries. Intermediary shall, upon
-----------------------------------
receipt of the Letter of Instruction and the other items required to be
delivered to it by the parties hereto pursuant to the provisions of Article II
hereof and in accordance with the terms of the Intermediary Agreement, take the
following actions and effect the following deliveries:
(i) consummate the transactions contemplated by each of the
Acquisition Agreements in accordance with the provisions of each such
agreement. In connection therewith, Intermediary shall (A) deliver to each
of the counterparties to each such Acquisition Agreement that portion of
the Cash Consideration as is allocable to the purchase price required to be
paid under such Acquisition Agreement and such instruments, certificates,
opinions and other agreements as may be required pursuant to the terms of
each of the Acquisition Agreements to consummate the transactions
contemplated by each of such agreements, (B) deliver to Polycell the
required Stock Consideration, if any, and (C) direct that such
counterparties deliver any and all rights, and/or assign, as applicable,
all of the Polycell Licenses and the ABC Licenses and execute and deliver
such instruments, certificates, opinions and other agreements as may be
required pursuant to the terms of each of the Acquisition Agreements to
consummate the transactions contemplated by each of such Agreements, to
TeleCorp or another Designated TeleCorp Affiliate, as applicable;
(ii) deliver the TeleCorp Assignments to AT&T, as applicable; and
(iii) deliver the AT&T Assignments and the Asset Payment to the
Designated TeleCorp Affiliates, as applicable.
ARTICLE III
COVENANTS
3.1 Consummation of Transactions. Each party shall use (except as otherwise
----------------------------
provided in this Section 3.1) all commercially reasonable efforts to take or
cause to be taken, all actions, and to do, or cause to be done, all things
necessary, proper or advisable and consistent with applicable Law to carry out
all of their respective obligations under this Agreement and to consummate the
Transactions at the earliest practicable date, which efforts shall include the
following:
(a) The parties shall use all commercially reasonable efforts to cause
the Closing to occur and the Transactions to be consummated in accordance with
the terms hereof, and, without limiting the generality of the foregoing, to
obtain all necessary Consents including the approval of this Agreement and the
Swap Transactions by all Governmental Authorities and agencies, including the
FCC, and any Consents necessary or advisable in the reasonable judgment of
TeleCorp and AT&T in connection with
-9-
franchise laws applicable to the execution, delivery and performance of this
Agreement or the consummation of the Swap Transactions, and to make all filings
with and to give all notices to third parties which may be necessary or
reasonably required in order for the parties to consummate the Transactions.
(b) Each party shall furnish to the other party all information
concerning such party and its Affiliates reasonably required for inclusion in
any application or filing to be made by AT&T, TeleCorp or any other party in
connection with the Transactions or otherwise to comply with applicable FCC Law.
(c) Upon the request of another party, each party shall, without
further consideration, forthwith execute and deliver, or cause to be executed
and delivered, such further instruments of assignment, transfer, conveyance,
endorsement, direction or authorization and other documents, and shall take such
other action, as may reasonably be requested by such party in order to
effectuate the purposes of this Agreement.
(d) TeleCorp and AT&T each covenants and agrees from and after the
execution and delivery of this Agreement to and including the Closing Date as
follows:
(i) As soon as practicable, but in no event later than 30 days
after the date of this Agreement, each of the parties shall file with the
FCC a complete application requesting its approval and consent to the Swap
Transactions (the "FCC Applications"); provided, that the parties shall
--------
cooperate with each other in the preparation of the FCC Applications and
shall in good faith and with due diligence take all reasonable steps
necessary to expedite the processing of the FCC Applications and to secure
such Consents or approvals as expeditiously as practicable. If the Closing
shall not have occurred for any reason within the initial effective periods
of the granting of FCC approval of any of the FCC Applications, and neither
party shall have terminated this Agreement under Article VIII, the parties
shall jointly request and use their respective best efforts to obtain one
or more extensions of the effective periods of such grants. Neither party
will knowingly take, or fail to take, any action the intent or reasonably
anticipated consequence of which would be to cause the FCC not to grant
approval of the FCC Applications, or to cause the FCC to intervene in a
manner damaging to the ability to operate the parties' respective
businesses in the manner contemplated following the Closing. The parties
agree to oppose any requests for reconsideration or judicial review of the
granting of approval of the FCC Applications.
(ii) Upon receipt of approval of the FCC of the applications to
approve the assignments of Licenses contemplated as part of the Swap
Transactions, as reported by public notice issued by the FCC, each shall
use all commercially reasonable efforts to take, or forbear from taking,
all such actions, so as to maintain such approval in full force and effect
and not to engage in, or forbear from engaging in, any activity which would
result in the revocation or modification of such approval. In addition to
FCC approval, it is understood that the Closing may be subject to the prior
approval of one or more state regulatory
-10-
commissions. Each party shall use all commercially reasonable efforts to
file with any relevant state agency or agencies, as soon as practicable
following the date hereof and in no event later than ten (10) Business Days
from the date hereof, a joint application requesting the approval of the
assignments of Licenses contemplated as part of the Swap Transactions. Each
of the parties hereto shall diligently take or cooperate in the taking of
all steps that are necessary or appropriate to expedite the prosecution and
favorable consideration of such applications. The parties covenant and
agree to undertake all actions reasonably requested by any regulatory
authority and to file such material as shall be necessary or any required
to obtain any necessary waivers or other authority from the any state
agency or agencies in connection with the foregoing applications.
(iii) Within fifteen (15) Business Days of the date of execution
hereof, the parties shall file, or cause to be filed, with the Federal
Trade Commission ("FTC") and the Antitrust Division of the Department of
Justice ("DOJ") any and all reports or notifications which are required to
be filed under the HSR Act or other Law.
(iv) Each party shall promptly comply with all requests for further
documents and information made by the DOJ or the FTC, shall use all
commercially reasonable efforts to obtain early termination of all waiting
periods under the HSR Act, and shall furnish to the other all such
information in its possession as may be necessary for the completion of the
reports or notifications to be filed by the other.
(e) Each party shall use all commercially reasonable efforts to
structure the Transactions in such a manner that no franchise Laws shall be
applicable to the relationship between AT&T and TeleCorp (or its Affiliates);
provided, that no party shall be obligated to agree to any modification that
--------
adversely affects such party. Nothing in this Agreement shall be construed to
require the parties to consummate the Closing if any regulatory approval would
require that it (i) divest or hold separate any of its assets existing as of the
date hereof other than as contemplated by this Agreement or (ii) otherwise take
or commit to take any action that limits its freedom of action in any material
respect with respect to any of its businesses, product lines or assets other
than as contemplated by this Agreement.
(f) Each party shall refrain from taking any action (or failing to
take any action) if such action (or failure to take any action) could reasonably
be expected to result in the expiration, revocation, suspension or adverse
modification of any of the FCC Licenses with respect to any of the AT&T Assets
or the TeleCorp Assets, as the case may be.
(g) Each party shall refrain, and shall cause each of its Affiliates
to refrain, from agreeing, whether in writing or otherwise, to take any action
inconsistent with any of the foregoing.
-11-
(h) TeleCorp shall take all actions as may be necessary to satisfy the
condition set forth in Section 6.2(d), except to the extent that taking such
action would have a material adverse effect on TeleCorp and its Affiliates taken
as a whole. For the purposes of the immediately preceding sentence, a "material
adverse effect" shall include having to spend in excess of $2,000,000 in order
to obtain the consent referred to in Section 6.2(d).
3.2 Confidentiality.
---------------
(a) Each party shall, and shall cause each of its Affiliates, and its
and their respective shareholders, members, managers, directors, officers,
employees and agents (collectively, "Representatives") to, keep secret and
retain in strictest confidence any and all Confidential Information relating to
any other party that it receives in connection with the negotiation or
performance of this Agreement, and shall not disclose such Confidential
Information, and shall cause its Representatives not to disclose such
Confidential Information, to anyone except the receiving party's Affiliates and
Representatives and any other Person that agrees to keep in confidence all
Confidential Information in accordance with the terms of this Section 3.2.
Until the Closing, each party agrees to use Confidential Information received
from another party only to pursue such Transactions, but not for any other
purpose. All tangible embodiments of Confidential Information furnished pursuant
to this Agreement shall be returned promptly to the party to whom it belongs
upon request by such party.
(b) The obligations set forth in Section 3.2(a) shall be inoperative
with respect to Confidential Information that (i) is or becomes generally
available to the public other than as a result of disclosure by the receiving
party or its Representatives in violation of this Agreement, (ii) was available
to the receiving party on a nonconfidential basis prior to its disclosure to the
receiving party, or (iii) becomes available to the receiving party on a
nonconfidential basis from a source other than the providing party or its
agents, provided, that such source is not known by the receiving party to be
--------
bound by a confidentiality agreement with the providing party or the providing
party's agents.
(c) To the fullest extent permitted by Law, if a party or any of its
Affiliates or Representatives breaches, or threatens to commit a breach of, this
Section 3.2, the party whose Confidential Information shall be disclosed, or
threatened to be disclosed, shall have the right and remedy to have this Section
3.2 specifically enforced by any court having jurisdiction, it being
acknowledged and agreed that money damages will not provide an adequate remedy
to such party. Nothing in this Section 3.2 shall be construed to limit the
right of any party to collect money damages in the event of breach of this
Section 3.2.
(d) Anything else in this Agreement notwithstanding, each party shall
have the right to disclose any information, including Confidential Information
of the other party or such other party's Affiliates: (i) to the other party and
its Affiliates or Representatives; (ii) as otherwise required by Law, including
securities Laws; provided, that any such disclosure shall be as limited in scope
--------
as possible and shall be made only after giving the other party as much notice
as practicable of such required disclosure and
-12-
an opportunity to contest such disclosure if possible; (iii) as required by its
existing or potential lending sources (such lending sources to acknowledge that
any such Confidential Information disclosed to them is subject to the provisions
hereof); (iv) as required to enforce its rights under this Agreement; (v) as
required to obtain the Consents specified in Sections 6.1(a) through (c); or
(vi) in the case of TeleCorp and its Affiliates, relating solely to the AT&T
Assets, and in the case of AT&T and its Affiliates, relating solely to the
TeleCorp Assets, on and after the Closing Date.
3.3 Conduct Prior to Closing. Each of the parties to this Agreement agrees
------------------------
that neither it nor any of its respective Affiliates shall knowingly take any
actions that would cause the transactions contemplated hereby to fail to qualify
as a like-kind exchange under Section 1031 of the Code.
3.4 Covenants of AT&T. From and after the execution and delivery of this
-----------------
Agreement to and including the Closing Date, AT&T shall:
(a) Comply with all applicable Laws relating to the AT&T Assets except
to the extent that such failure to comply would not have an AT&T Material
Adverse Effect or a material adverse effect on the Transactions;
(b) Use all commercially reasonable efforts to maintain the Wisconsin
Licenses, the Iowa Licenses, the ABC Acquisition Agreement and its rights under
the Polycell Acquisition Agreement in full force and effect;
(c) Use all commercially reasonable efforts to assist (i) Polycell in
maintaining the Polycell Licenses in full force and effect, and (ii) ABC in
maintaining the ABC Licenses in full force and effect;
(d) Without TeleCorp's prior written consent, such consent not to be
unreasonably withheld, delayed or conditioned, not (i) create, incur or, with
respect to the AT&T Owned Assets only, suffer to exist any Lien of any nature
whatsoever relating to the AT&T Assets or any interest therein (other than
Permitted Liens), (ii) enter into any Contract or agreement relating to any of
the AT&T Assets other than those which are terminable by AT&T without penalty or
any liability at the Closing, (iii) amend or modify any of the Acquisition
Agreements in any material respect, or agree to or otherwise permit any
amendments or modifications to any thereof, or (iv) grant or issue any waivers
under any of the Acquisition Agreements;
(e) Not sell, transfer, assign or dispose of, or offer to, or enter
into any agreement, arrangement or understanding to, sell, transfer, assign or
dispose of any of the AT&T Owned Assets, or any interest therein, or any
interest in any of the Acquisition Agreements, or negotiate therefor;
(f) Furnish TeleCorp with all such information concerning the AT&T
Owned Assets (and, to the extent within AT&T's control and permitted under
applicable confidentiality agreements, concerning the AT&T Acquired Assets) as
TeleCorp may reasonably request and cause the appropriate officers, employees,
consultants, agents,
-13-
accountants and attorneys of AT&T to cooperate with TeleCorp in connection with
such review and examination;
(g) Give written notice to TeleCorp promptly upon the commencement of,
or upon obtaining knowledge of any facts that would give rise to a threat of,
any claim, action or proceeding commenced against or relating to (other than
proceedings affecting the PCS or wireless communications services industry
generally) the AT&T Assets (in the case of AT&T Acquired Assets, to the extent
known by AT&T), and which could reasonably be expected to have an AT&T Material
Adverse Effect or a material adverse effect on the Transactions or AT&T's
ability to consummate the Transactions, and use its commercially reasonable
efforts to challenge and contest any such claim, action or proceeding brought
against or otherwise involving AT&T that could result in any of conditions to
the Closing not being satisfied;
(h) Promptly after obtaining knowledge of the occurrence of, or the
impending or threatened occurrence of, any event which would cause or constitute
a material breach of any of its warranties, representations, covenants or
agreements contained in this Agreement or any Acquisition Agreement, or which
would reasonably be expected to have an AT&T Material Adverse Effect or a
material adverse effect on the Transactions, give notice in writing of such
event or occurrence or impending or threatened event or occurrence (provided,
that such disclosure shall not be deemed to cure any violation or breach of any
such representation, warranty, covenant, agreement or provision), to TeleCorp
and use all commercially reasonable efforts to prevent or to promptly remedy
such breach; and
(i) Cause TeleCorp to be advised promptly in writing of (i) any event,
condition or state of facts known to it, which has had or would reasonably be
expected to have an AT&T Material Adverse Effect or a material adverse effect on
the Transactions (other than proceedings affecting the PCS or wireless
communications services industry generally), (ii) any claim, action or
proceeding which seeks to enjoin the consummation of the Transactions, and (iii)
any event, occurrence, transaction or other item that would have been required
to have been disclosed on any Exhibit or Schedule delivered hereunder, had such
event, occurrence, transaction or item existed on the date hereof.
3.5 Covenants of TeleCorp Affiliates. From and after the execution and
--------------------------------
delivery of this Agreement to and including the Closing Date, TeleCorp and each
other Designated TeleCorp Affiliate, as applicable, including without limitation
TeleCorp LLC, shall operate the TeleCorp Assets in the ordinary course and in a
manner consistent with past practice, and without limitation of the foregoing:
(a) Comply with all applicable Laws, including all such Laws relating
to the TeleCorp Assets, except to the extent that such failure to comply would
not have a TeleCorp Material Adverse Effect or a material adverse effect on the
Transactions or TeleCorp's ability to consummate the Transactions;
(b) Use all commercially reasonable efforts to (i) maintain the Boston
Licenses in full force and effect and (ii) preserve substantially intact the
business
-14-
organization of the TeleCorp Assets, (iii) keep available the services of its
employees and (iv) preserve the current relationships with its customers,
suppliers and other persons with which it has significant business relations;
(c) Without the prior written consent of AT&T, such consent not to be
unreasonably withheld, delayed or conditioned, not (i) create, incur or suffer
to exist any Lien of any nature whatsoever relating to the TeleCorp Assets or
any interest therein (other than Permitted Liens), or (ii) enter into any
Contract or agreement relating exclusively to the TeleCorp Assets other than
those which are terminable by TeleCorp without penalty or any liability at the
Closing;
(d) Not sell, transfer, assign or dispose of, or offer to, or enter
into any agreement, arrangement or understanding to, sell, transfer, assign or
dispose of the TeleCorp Assets or any interest therein, or negotiate therefor;
(e) Furnish AT&T with all such information concerning the TeleCorp
Assets as AT&T may reasonably request and cause the appropriate officers,
employees, consultants, agents, accountants and attorneys of TeleCorp to
cooperate with AT&T in connection with such review and examination;
(f) Give written notice to AT&T promptly upon the commencement of, or
upon obtaining knowledge of any facts that would give rise to a threat of, any
claim, action or proceeding commenced against or relating to (other than
proceedings affecting the PCS or wireless communications services industry
generally) the TeleCorp Assets and which could reasonably be expected to have a
TeleCorp Material Adverse Effect or a material adverse effect on the
Transactions and contest any such claim, action or proceeding brought against or
otherwise involving TeleCorp that could result in any of conditions to the
Closing not being satisfied;
(g) Promptly after obtaining knowledge of the occurrence of, or the
impending or threatened occurrence of, any event which would cause or constitute
a material breach of any of its warranties, representations, covenants or
agreements contained in this Agreement, or which would reasonably be expected to
have a TeleCorp Material Adverse Effect or a material adverse effect on the
Transactions, give notice in writing of such event or occurrence or impending or
threatened event or occurrence (provided, that such disclosure shall not be
deemed to cure any violation or breach of any such representation, warranty,
covenant, agreement or provision), to AT&T and use commercially reasonable
efforts to prevent or to promptly remedy such breach;
(h) Not authorize any capital expenditure that is not provided for in
the capital expenditures budget relating to the TeleCorp Assets previously
provided to AT&T, and make all capital expenditures that are provided for in
such capital expenditures budget relating to the TeleCorp Assets; and
(i) Cause AT&T to be advised promptly in writing of (i) any event,
condition or state of facts known to it, which has had or would reasonably be
expected to have a TeleCorp Material Adverse Effect or a material adverse effect
on the Transactions
-15-
(other than proceedings affecting the PCS or wireless communications services
industry generally), (ii) any claim, action or proceeding which seeks to enjoin
the consummation of the Transactions, and (iii) any event, occurrence,
transaction or other item that would have been required to have been disclosed
on any Exhibit or Schedule delivered hereunder, had such event, occurrence,
transaction or item existed on the date hereof.
3.6 FCC Construction Requirements. TeleCorp and AT&T hereby agree that, upon
-----------------------------
the Closing, (i) TeleCorp shall (A) assume and be obligated to satisfy the
construction requirements set forth in 47 C.F.R. 24.203 with respect to the AT&T
Assets; and (B) be released from the obligation to provide "substantial service"
(as defined in 47 C.F.R. 24.16(a)) throughout the territory covered by the
Boston Licenses and (ii) AT&T shall (A) assume and be obligated to satisfy the
construction requirements set forth in 47 C.F.R. 24.203 with respect to the
Boston Licenses; and (B) be released from the obligation to provide "substantial
service" throughout the territory covered by the Wisconsin and Iowa Licenses.
3.7 Treatment of Employees.
----------------------
(a) Except as set forth in this Section 3.7(a), AT&T may, but shall
have no obligation to employ or offer employment to, any employee of TeleCorp's
PCS business in the area encompassed by the Boston Licenses (collectively, the
"Boston Employees") in connection with the Swap Transactions; provided, however,
-------- -------
that TeleCorp shall be entitled to offer continued employment to its existing
employees set forth on Schedule 3.7(a) attached hereto (the "Excluded
---------------
Employees"), which employees AT&T hereby agrees that, from the date hereof until
12 months following the Closing, it shall not solicit directly or indirectly
(other than general solicitations not directed at such employees) for employment
with AT&T or any of its Affiliates. Within 15 Business Days after the date of
execution of this Agreement, TeleCorp shall provide AT&T a list of all Boston
Employees as of a recent date, showing the original hire date, the then-current
positions and rates of compensation and whether the employee is subject to an
employment agreement, a collective bargaining agreement or represented by a
labor organization. Within 90 days after the date of execution of this
Agreement, or such other date as TeleCorp and AT&T may agree, AT&T will provide
to TeleCorp in writing a list of the Boston Employees to whom it or its
Affiliates will offer employment following the Closing, subject only to the
evaluations permitted by this Section. TeleCorp agrees, and shall cause its
appropriate Affiliates, to cooperate in all reasonable respects with AT&T to
allow AT&T or its Affiliates to evaluate the Boston Employees to make hiring
decisions. In this regard, AT&T shall have the opportunity to make such
appropriate pre-hire investigation of the Boston Employees, as it deems
necessary, including, subject to obtaining the consent of such Employee, the
right to review personnel files and conduct background checks and the right to
interview such Employees during normal working hours so long as such interviews
are conducted after notice to TeleCorp and do not unreasonably interfere with
TeleCorp's operations. TeleCorp will use its good faith efforts to obtain the
consent of each of its Boston Employees (other than the Excluded Employees) to
allow AT&T to review personnel files and to conduct background checks in
connection with the foregoing. AT&T or its Affiliates may, if it wishes,
condition any offer of employment upon the Boston Employee's passing a pre-
placement physical
-16-
examination (including any required screening test) and the completion of a
satisfactory background check. AT&T shall bear the expense of such examination
but TeleCorp shall, upon reasonable notice, cooperate in the scheduling of such
examinations so long as the examinations do not unreasonably interfere with
TeleCorp's operations. As of the Closing Date, other than as specified herein,
AT&T shall have no obligation to TeleCorp, its Affiliates or to the Boston
Employees, with regard to any such Employee it has determined not to hire.
(b) TeleCorp shall pay to all of its Boston Employees all
compensation, including salaries, commissions, bonuses, deferred compensation,
severance (to the extent applicable), insurance, vacation and other compensation
or benefits to which they are entitled for periods prior to the Closing,
including all amounts, if any, payable on account of the termination of their
employment (whether payable before or after the Closing).
(c) TeleCorp shall be responsible for maintenance and distribution of
benefits accrued under any employee benefit plan (as defined in ERISA)
maintained by it, or its appropriate Affiliate, pursuant to the provisions of
such plan and any applicable Law. If TeleCorp determines that the transactions
contemplated by this Agreement will not permit a distribution to be made to a
Hired Employee (as defined below) from TeleCorp's tax qualified plan in
accordance with Section 401(k)(10) of the Code, then AT&T may in its sole
discretion elect to accept a plan-to-plan transfer of Hired Employees' plan
benefits to its own tax qualified plan. If there is no plan-to-plan transfer,
in order to permit TeleCorp, or its appropriate Affiliate, to make distributions
to any former Boston Employee who becomes a Hired Employee of the balance of
such employee's 401(k) account in TeleCorp's or its Affiliate's tax qualified
plan, if any, as soon as legally permitted, AT&T shall confirm, upon the request
of TeleCorp, the date of termination of such Employee's employment with AT&T for
any reason.
(d) All claims and obligations under, pursuant to or in connection
with any welfare, medical, insurance, disability or other employee benefit plans
of TeleCorp or any Affiliate or arising under any applicable Law affecting the
Boston Employees incurred on or before the Closing Date or resulting from or
arising from events or occurrences occurring or commencing on or before the
Closing Date will remain the responsibility of TeleCorp, or the appropriate
Affiliate, whether or not such Employees are hired by AT&T as of or after the
Closing. Neither party will have or assume any obligation or liability under or
in connection with any such plan of the other party or any Affiliate of the
other party.
(e) TeleCorp, or its appropriate Affiliate, will remain solely
responsible for, and will indemnify and hold AT&T harmless from and against all
Losses arising from or with respect to, all salaries and all severance,
vacation, holiday, continuation coverage and other compensation or benefits to
which the Boston Employees may be entitled, whether or not such Employees may be
hired by AT&T or any Affiliate of AT&T, as a result of their employment by
TeleCorp or any Affiliate of TeleCorp on or prior to the Closing Date, the
termination of their employment on or prior to the Closing Date, the
consummation of the transactions contemplated hereby or
-17-
pursuant to any applicable Law or otherwise relating to their employment prior
to the Closing Date. Any liability under the Worker Adjustment and Retraining
Notification Act, 29 U.S.C. ss. 2101, et seq., with regard to any employee
terminated on or prior to the Closing Date, or not hired by AT&T on or after the
Closing Date, shall, as a matter of contract between TeleCorp and AT&T, be the
responsibility of TeleCorp or its Affiliates. AT&T and its Affiliates shall
cooperate with TeleCorp and its Affiliates, if requested, in the giving of WARN
notices.
(f) Notwithstanding anything to the contrary herein, AT&T shall:
(i) recognize the service, before the Closing, with TeleCorp
Communications of each Boston Employee who is offered on or prior to the
Closing employment by AT&T and becomes an employee of AT&T after the
Closing Date (a "Hired Employee") for purposes of determining his or her
vacation time and sick time under AT&T's vacation and sick time policies;
(ii) recognize the service, before the Closing, with TeleCorp
Communications of each Hired Employee for purposes of participation in
AT&T's employee health and life insurance benefit plans to the same extent
as similarly situated employees of AT&T and their dependents are permitted
to participate;
(iii) give each Hired Employee credit for such employee's past
service with TeleCorp and its Affiliates as of the Closing Date (including
past service with any prior owner or operator of the other party's PCS
business) for purposes of eligibility and vesting under AT&T's 401(k) plan
to the same extent as other similarly situated employees of such party;
(iv) not subject any Hired Employee to any waiting periods or
limitations on benefits for pre-existing conditions under AT&T's employee
benefit plans, including any group health and disability plans, except to
the extent such employees were subject to such limitations under the
employee benefit plans of TeleCorp or any of its Affiliates; and
(v) give each Hired Employee credit under any group health plan for
any deductible amount previously met by such Hired Employee as of the
Closing Date under any of the group health plans of TeleCorp or any of its
Affiliates.
AT&T's obligation to comply with the foregoing provisions of this
Section 3.7(f) shall be contingent upon its having received from TeleCorp the
information necessary to enable AT&T to do so.
(g) Nothing in this Section or elsewhere in this Agreement shall be
deemed to make any employee of either party a third party beneficiary of this
Agreement.
-18-
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF AT&T
AT&T represents and warrants to the TeleCorp Affiliates that, except
as set forth on the AT&T Disclosure Schedule previously delivered to TeleCorp
(the "AT&T Disclosure Schedule"), which shall be arranged in paragraphs
corresponding to the numbered and lettered paragraphs contained in this Article
IV, and the disclosure in any paragraph shall qualify only the corresponding
paragraph of this Article IV, unless a reasonable person would determine that
the disclosure contained in such paragraph contains enough information to
qualify or otherwise apply to other paragraphs of this Article IV:
4.1 Organization, Power and Authority.
---------------------------------
(a) It is duly organized, validly existing and in good standing under
the Laws of the State of Delaware and has the requisite power and authority to
hold the Wisconsin Licenses and Iowa Licenses.
(b) It has the requisite power and authority to execute, deliver and
perform this Agreement and each other instrument, document, certificate and
agreement required or contemplated to be executed, delivered and performed by it
hereunder to which it is or will be a party (the "AT&T Related Documents") and
(i) with respect to its rights, as applicable, to the AT&T Acquired Assets, to
assign the rights and obligations to acquire the AT&T Acquired Assets in
accordance with the terms and subject to the conditions of the Acquisition
Agreements, and to consummate the Transactions and (ii) with respect to its
rights, as applicable, to the AT&T Owned Assets, to convey to the Designated
TeleCorp Affiliate, as applicable, good and marketable rights to hold the AT&T
Owned Assets.
(c) It is duly qualified to do business in each jurisdiction where the
nature of its activities makes such qualification necessary other than any such
jurisdiction in which the failure to be so qualified would not have an AT&T
Material Adverse Effect or a material adverse effect on the Transactions.
(d) The execution and delivery of this Agreement and each of the AT&T
Related Documents by it and the consummation of the Transactions by it have been
duly and validly authorized by its Board of Directors (or equivalent body) and
no other corporate proceedings on its part which have not been taken (including
approval of its stockholders, partners or members) are necessary to authorize
this Agreement or to consummate the Transactions.
(e) This Agreement and each of the AT&T Related Documents have been or
will be duly executed and delivered by it and constitute (or will constitute)
its valid and binding obligation, enforceable against it in accordance with its
terms, except as such enforceability may be limited by bankruptcy, insolvency,
moratorium or other
-19-
similar Laws affecting or relating to enforcement of creditors' rights generally
or may be subject to general principles of equity.
4.2 Consents; No Conflicts. Neither the execution, delivery and performance by
----------------------
it of this Agreement and each of the AT&T Related Documents nor the consummation
of the Transactions will (a) conflict with, or result in a breach or violation
of, any provision of its organizational documents; (b) constitute, with or
without the giving of notice or passage of time or both, a breach, violation or
default, create a Lien (other than Permitted Liens) on any of the AT&T Assets,
or give rise to any right of termination, modification, cancellation, prepayment
or acceleration, under (i) any Law applicable to any of the AT&T Owned Assets or
(ii) any note, bond, mortgage, indenture, lease, agreement or other instrument,
in each case which is applicable to or binding upon it or any of its assets; or
(c) (other than under the HSR Act and the Consent of the FCC) require any
Consent, except in the case of clauses (a) and (b), where such breach,
violation, default, Lien or right would not have an AT&T Material Adverse Effect
or a material adverse effect on the Transactions. To its knowledge, there is no
fact relating to it or its Affiliates that could be reasonably expected to
prevent it from consummating the Transactions or performing its obligations
under this Agreement or disqualify AT&T from obtaining the Consents (including
the Consent of the FCC) required in order to consummate the Transactions.
4.3 Litigation. There is no action, proceeding or investigation pending or, to
----------
its knowledge, threatened, or any order, injunction or decree outstanding,
against it or any of its properties or assets that, if adversely determined,
would be reasonably expected to have a material adverse effect on its ability to
consummate the Transactions or to fulfill its obligations under this Agreement
or Intermediary's obligations under any of the Acquisition Agreements or which
seeks to prevent or challenge the Transactions or any part thereof.
4.4 FCC Compliance. To its knowledge, it is in compliance with all eligibility
--------------
rules issued by the FCC to hold broadband PCS Licenses, including FCC rules on
foreign ownership and the CMRS spectrum cap.
4.5 Brokers. AT&T has not employed any broker, finder or investment banker and
-------
has not incurred and will not incur any liability for any brokerage fees,
commissions or finder's fees in connection with the Transactions.
4.6 Licenses. AT&T is the authorized legal and beneficial holder of, and has
--------
good, marketable rights, free and clear of any Liens, to the Wisconsin Licenses
and Iowa Licenses, evidence of which is attached as Schedule 4.6 to the AT&T
------------
Disclosure Schedule. The Wisconsin Licenses and Iowa Licenses are, and on the
Closing Date will be, valid and in full force and effect. Except for proceedings
affecting the PCS or wireless communications services industry generally, there
is not pending, nor to the knowledge of AT&T, threatened against AT&T, against
the Wisconsin Licenses and/or Iowa Licenses any application, action, petition,
objection or other pleading, or any proceeding with the FCC which questions or
contests the validity of, or seeks the revocation, nonrenewal or suspension of,
any of the Wisconsin Licenses or Iowa
-20-
Licenses, which seeks the imposition of any modification or amendment with
respect thereto, or which adversely affects the ability of TeleCorp to employ
any of the Wisconsin Licenses or Iowa Licenses in its business after the Closing
Date. Neither the Wisconsin Licenses nor the Iowa Licenses are subject to any
conditions other than those appearing on the face of Wisconsin Licenses and Iowa
Licenses, as applicable, themselves, and those imposed by FCC Law. All documents
required by 47 C.F.R. Section 73.3526 to be kept in the public inspection file
are in such file, other than documents the absence of which, individually or in
the aggregate, would not be reasonably expected to have any AT&T Material
Adverse Effect, and such file will be maintained in proper order and complete up
to and through the Closing Date, except for immaterial documents.
4.7 Compliance With Laws. With respect to the Wisconsin Licenses and Iowa
--------------------
Licenses, AT&T is in, and has operated in, compliance with all applicable Laws,
including all FCC Laws, except for noncompliance that, individually or in the
aggregate, has not and would not reasonably be expected to have an AT&T Material
Adverse Effect. AT&T has not received notice to the effect that, or otherwise
been advised that, it is not in compliance with any Laws with respect to
Wisconsin Licenses and Iowa Licenses, and AT&T has not taken any action or
failed to take any action that is a violation of any such Laws with respect to
any of the Wisconsin Licenses or Iowa Licenses, except for actions or failures
to take action that, individually or in the aggregate, have not and would not
reasonably be expected to have an AT&T Material Adverse Effect or a material
adverse effect on the Transactions.
4.8 Taxes. All Federal, state, local and foreign income, franchise, sales,
-----
use, property, excise, payroll and other Tax returns and reports required to be
filed by AT&T or its Affiliates by Law where the failure to file such returns on
a duly and timely basis would reasonably be expected to result in a material
Lien on the AT&T Owned Assets or the imposition on TeleCorp of any material
liability for Taxes or assessments have been duly and timely filed in the proper
form with the appropriate Governmental Authority. All Taxes, fees and
assessments of whatever nature due or payable pursuant to said returns or
otherwise by AT&T or its Affiliates have been paid (except for such amounts as
are being contested diligently, in the appropriate forum and in good faith)
where the failure to pay or contest such amounts would reasonably be expected to
result in a material Lien on the AT&T Owned Assets or the imposition on TeleCorp
of any material liability for any Taxes or assessments. There are no Tax audits
pending and no outstanding agreements or waivers extending the statutory period
of limitations applicable to any Federal, state or local income Tax return of
AT&T or its Affiliates for any period, the result of which would reasonably be
expected to result in a material Lien on the AT&T Owned Assets or the imposition
on TeleCorp of any material liability for any Taxes or assessments. There are
no governmental investigations or other legal, administrative or Tax proceedings
pursuant to which AT&T is or could be made liable for any Taxes, penalties,
interest or other charges, the liability for which would reasonably be expected
to extend to TeleCorp as transferee of the AT&T Owned Assets, or which would
reasonably be expected to result in a material Lien on the AT&T Owned Assets
and, to the best of AT&T's knowledge, no event has occurred that would
-21-
reasonably be expected to impose on TeleCorp any material liability for any
Taxes, penalties or interest due or to become due from AT&T.
4.9 Acquisition Agreements. Each of the representations and warranties made by
----------------------
AT&T or any of its Affiliates in any of the Acquisition Agreements is true,
complete and correct in all material respects as of the date hereof.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF TELECORP
TeleCorp and each other Designated TeleCorp Affiliate represents and
warrants to AT&T that, except as set forth on the TeleCorp Disclosure Schedule
previously delivered to AT&T (the "TeleCorp Disclosure Schedule") which shall be
arranged in paragraphs corresponding to the numbered and lettered paragraphs
contained in this Article V, and the disclosure in any paragraph shall qualify
only the corresponding paragraph of this Article V, unless a reasonable person
would determine that the disclosure contained in such paragraph contains enough
information to qualify or otherwise apply to other paragraphs of this Article V:
5.1 Organization, Power and Authority.
---------------------------------
(a) It is a corporation, limited liability company or limited
partnership, as applicable, duly formed, validly existing and in good standing
under the Laws of the State of Delaware and has the requisite power and
authority to hold, own, lease and operate its properties and to carry on its
business as now being conducted and proposed to be conducted.
(b) It has the requisite power and authority to execute, deliver and
perform this Agreement and each other instrument, document, certificate and
agreement required or contemplated to be executed, delivered and performed by it
hereunder and thereunder to which it is or will be a party (the "TeleCorp
Related Documents") and to convey good and marketable title and/or rights to
hold to AT&T with respect to the TeleCorp Assets and to consummate the
Transactions.
(c) It is duly qualified to do business in each jurisdiction where the
character of its properties owned or held under lease or the nature of its
activities makes such qualification necessary other than any such jurisdiction
in which the failure to be so qualified would not have a TeleCorp Material
Adverse Effect or a material adverse effect on the Transactions.
(d) The execution and delivery of this Agreement and each of the
TeleCorp Related Documents by it and the consummation of the Transactions by it,
have been duly and validly authorized by its Board of Directors (or equivalent
body) and no other proceedings on its part which have not been taken (including
stockholders) are necessary to authorize this Agreement or to consummate the
Transactions.
-22-
(e) This Agreement and each of the TeleCorp Related Documents have
been (or will be) duly executed and delivered by it and constitute (or will
constitute) its valid and binding obligations, enforceable against it in
accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, moratorium or other similar Laws affecting or relating
to enforcement of creditors' rights generally or may be subject to general
principles of equity.
5.2 Consents; No Conflicts. Neither the execution, delivery and performance by
----------------------
it of this Agreement and each of the TeleCorp Related Documents nor the
consummation of the Transactions will (a) conflict with, or result in a breach
or violation of, any provision of its organizational documents; (b) constitute,
with or without the giving of notice or passage of time or both, a breach,
violation or default, create a Lien (other than Permitted Liens) on its assets,
including the TeleCorp Assets, or give rise to any right of termination,
modification, cancellation, prepayment or acceleration, under (i) any Law or the
TeleCorp Assets, or (ii) any note, bond, mortgage, indenture, lease, agreement
or other instrument, in each case which is applicable to or binding upon it or
any of its assets; or (c) (other than under the HSR Act and the Consent of the
FCC) require any Consent except in the case of clauses (a) and (b) where such
breach, violation, default, Lien or right would not have a TeleCorp Material
Adverse Effect or a material adverse effect on the Transactions. To its
knowledge, there is no fact relating to it or its Affiliates that would be
reasonably expected to prevent it from consummating the Transactions or
performing its obligations under this Agreement or disqualify it from obtaining
the Consents (including the Consent of the FCC) required in order to consummate
the Transactions.
5.3 Litigation. There is no action, proceeding or investigation pending or, to
----------
its knowledge, threatened, or any order, injunction or decree outstanding,
against it or any of its properties or assets that, if adversely determined,
would have a material adverse effect on its ability to consummate the
Transactions or to fulfill its obligations under this Agreement or to operate
its business after the Closing Date, or which seeks to prevent or challenge the
Transactions. There is no judgment, decree, injunction, rule or order
outstanding against TeleCorp which would limit in any material respect its
ability to operate its business in the manner currently contemplated.
5.4 FCC Compliance. It complies, and after giving effect to the consummation
--------------
of the Transactions will comply, with all eligibility rules issued by the FCC to
hold broadband PCS Licenses, including FCC rules on foreign ownership and the
CMRS spectrum cap.
5.5 Brokers. Except for ▇▇▇▇▇▇ Brothers Inc., whose fees will be paid by
-------
TeleCorp, it has not employed any broker, finder or investment banker and has
not incurred and will not incur any liability for any brokerage fees,
commissions or finder's fees in connection with the Transactions.
-23-
5.6 TeleCorp Assets; Liens.
----------------------
(a) The Designated TeleCorp Affiliates transferring the TeleCorp
Assets are the sole and exclusive legal and beneficial owners of, and have good,
valid and marketable title to, the Boston Business. TeleCorp LLC is the sole
and exclusive legal and beneficial holder of, and has good, valid and
marketable rights to hold the Boston Licenses. None of the TeleCorp Assets is
subject to any Lien except Permitted Liens. Delivery by the Designated TeleCorp
Affiliates of the TeleCorp Assignments will deliver good and marketable title to
the Boston Business, and good and marketable rights to hold the Boston Licenses,
free and clear of Liens other than Permitted Liens.
(b) Sections 1 and 2(a) and Attachment E to Schedule 0.1 set forth an
accurate, correct and complete list of the depreciable assets included as part
of the TeleCorp Assets. All such machinery, equipment and other assets is in
good repair, reasonable wear and tear excepted, has been well maintained and
conforms in all respects to all applicable Laws, and such machinery and
equipment is in good working order.
(c) The applicable Designated TeleCorp Affiliate enjoys peaceful and
undisturbed possession under the TeleCorp Assigned Leases. All such leases are
in writing, valid, subsisting and in full force and effect, and there are no
uncured defaults of TeleCorp (or, to the knowledge of TeleCorp, any other party
thereto) under such leases. There exists no event, occurrence, condition or act
(including the purchase of the TeleCorp Assets hereunder) which, with the giving
of notice, the lapse of time or the happening of any further event or condition,
would become a default by TeleCorp (or, to the knowledge of TeleCorp, any other
party thereto) under any such lease. The TeleCorp Assets, including those
obtained pursuant to said TeleCorp Assigned Leases, are adequate to conduct the
operations currently conducted and presently proposed to be conducted by
TeleCorp and represent all assets of TeleCorp used or useful in the operation of
its business.
(d) Attachments A and C to Schedule 0.1 set forth an accurate, correct
------------
and complete list of the TeleCorp Real Property, including a street address and
Attachment B to Schedule 0.1 sets forth a list of all Contracts and agreements,
oral or written, encumbering, relating to or affecting the TeleCorp Real
Property or any interest therein. TeleCorp has delivered to AT&T accurate,
correct and complete copies of all such Contracts and agreements. A Designated
TeleCorp Affiliate is the sole and exclusive legal and equitable owner of all
right, title and interest in and has good, marketable and insurable title in fee
simple absolute to, and is in possession of, all TeleCorp Real Property which it
purports to own, including the buildings, structures, sidetracks and
improvements situated thereon and appurtenances thereto, in each case free and
clear of all tenancies and other possessory interests, Liens and other burdens.
All Contracts, easements, restrictions, covenants and other agreements and
undertakings affecting the TeleCorp Real Property are set forth in Schedule 0.1
------------
to the TeleCorp Disclosure Schedule and are legally valid and binding and in
full force and effect, and there are no defaults, offsets, counterclaims or
defenses thereunder, and TeleCorp has received no notice of default, offset,
counterclaim or defense under any such Contracts or agreements.
-24-
(e) None of the TeleCorp Real Property is located within a flood or
lakeshore erosion hazard area. Neither the whole nor any portion of any
TeleCorp Real Property has been condemned, requisitioned or otherwise taken by
any public authority, and no notice of any such condemnation, requisition or
taking has been received. No such condemnation, requisition or taking is
threatened or contemplated. TeleCorp has no knowledge of any public
improvements which may result in special assessments against or otherwise affect
the TeleCorp Real Property.
(f) The TeleCorp Real Property is in compliance in all material
respects with all applicable zoning, building, health, fire, water, use or
similar Laws. The zoning of each parcel of TeleCorp Real Property permits the
existing improvements and the continuation following consummation of the
transaction contemplated hereby of the operations of TeleCorp as presently
conducted thereon. TeleCorp has all licenses, certificates of occupancy,
permits and authorizations required to operate TeleCorp and utilize the TeleCorp
Real Property. TeleCorp has all easements and rights necessary to conduct its
business, including easements for all utilities, services, roadway, railway and
other means of ingress and egress. The TeleCorp Real Property as conveyed
pursuant to this Agreement shall include all rights to any off-site facilities
necessary to ensure compliance in all material respects with all zoning,
building, health, fire, water, use or similar statutes, codes, ordinances, Laws,
rules or regulations. No fact or condition exists which would result in the
termination or impairment of access to the TeleCorp Real Property or
discontinuation of sewer, water, electric, gas, telephone, waste disposal or
other utilities or services. The facilities servicing the TeleCorp Real
Property are in full compliance with all codes, Laws, rules and regulations.
(g) TeleCorp has delivered to AT&T accurate, correct and complete
copies of all existing title insurance policies, title reports, surveys,
environmental audits and similar reports, if any, with respect to each parcel of
TeleCorp Real Property.
5.7 TeleCorp Assets. Except for items included in the TeleCorp Excluded
---------------
Assets, the TeleCorp Assets constitute all of the assets primarily relating to,
and includes substantially all the assets necessary to conduct, the Boston
Business as it is being conducted on the date of this Agreement and in
compliance with all applicable legal requirements.
5.8 Environmental and Safety Laws.
-----------------------------
(a) Each parcel of TeleCorp Real Property is, and has in the past
been, in compliance in all material respects with all, and is not subject to any
liability under any, Environmental Laws and all applicable statutes, Laws or
regulations relating to occupational health and safety. There are no actions,
activities, circumstances, conditions, events or incidents, including the
release, emission, discharge, presence or disposal of any Materials of
Environmental Concern, which could interfere with or prevent continued
compliance with all Environmental Laws (as defined below).
(b) Except as expressly authorized under applicable Environmental
Laws, there is not currently, and has not in the past been, any release,
emission,
-25-
discharge, presence or disposal of any Materials of Environmental Concern into
the environment (including the air, surface and groundwater and surface and
subsurface soils) at, on, into, under, or originating at any TeleCorp Real
Property. No TeleCorp Real Property is or has been the location of any hazardous
waste treatment, storage or disposal facility, any underground storage tank, or
any facilities or equipment containing asbestos or polychlorinated biphenyls. No
Lien has been imposed by a governmental entity or third party in connection with
the presence of any Materials of Environmental Concern on any TeleCorp Real
Property.
(c) TeleCorp has not (i) received any written communication from a
governmental, quasi-governmental or regulatory agency or other entity, citizens'
group, director, officer or employee of TeleCorp or other Person, alleging that
TeleCorp, any of its predecessors in interest or any Affiliate of TeleCorp is
not in compliance with or has violated any Environmental Law or that TeleCorp,
any of its predecessors in interest or any Affiliate of TeleCorp has any
liability under any Environmental Law or under common Law with respect to
pollution and/or protection of human health and/or the environment (including,
without limitation, any release, emission, discharge, presence or disposal of
any Materials of Environmental Concern); (ii) received any request for
information, notice or administrative inquiry under any Environmental Law; or
(iii) entered into or been subject to any consent decree, compliance order, or
administrative order with respect to any Environmental Law or any liability
under common Law with respect to pollution and/or protection of human health
and/or the environment (including, without limitation, any release, emission,
discharge, presence or disposal of any Materials of Environmental Concern), in
any event with respect to any parcel of TeleCorp Real Property.
(d) Neither TeleCorp, nor any Affiliate of TeleCorp, has conducted, or
arranged for the conduct of, an environmental audit, investigation or assessment
of any of TeleCorp's facilities or operations or of any TeleCorp Real Property.
TeleCorp has not received and has no knowledge of, and none of its Affiliates
has received, any such audit, investigation or assessment conducted by any other
party.
5.9 TeleCorp Assigned Agreements. Schedule 5.9 to the TeleCorp Disclosure
---------------------------- ------------
Schedule contains a complete and accurate list of all material agreements of
TeleCorp (including the TeleCorp Assigned Leases) relating primarily to the
conduct of the Boston Business (the "TeleCorp Assigned Agreements"). Schedule
--------
5.9 to the TeleCorp Disclosure Schedule includes with respect to each TeleCorp
---
Assigned Agreement, whether oral or written, the names of the parties, the date
thereof, and its title or other general description. Each TeleCorp Assigned
Agreement sets forth the entire arrangement and understanding between TeleCorp
and the respective third-parties with respect to the subject matter thereof and,
except as indicated in such Schedule, there have been no amendments or side or
supplemental arrangements to or in respect of any TeleCorp Assigned Agreement.
TeleCorp has furnished to AT&T true and correct copies of all written TeleCorp
Assigned Agreements as currently in effect. Each TeleCorp Assigned Agreement is
valid and in full force and effect, and TeleCorp has performed all obligations
required to be performed by it thereunder. TeleCorp is not in default under or
in breach or violation of any TeleCorp Assigned Agreement or any other
agreement,
-26-
decree, order, statute or governmental rule or regulation applicable to it,
except where such breach, violation or default would not have a TeleCorp
Material Adverse Effect or a material adverse effect on the Swap Transactions.
The execution and delivery of this Agreement and the consummation of the
Transactions will not result in default, breach or violation of any TeleCorp
Assigned Agreement, except where such breach, violation or default would not
have a TeleCorp Material Adverse Effect or a material adverse effect on the Swap
Transactions. There is no event which has occurred or existing condition which
constitutes, or with notice or lapse of time or both, would constitute a default
under any TeleCorp Assigned Agreement or would cause the acceleration of any
obligation of any party thereto, or give rise to any right of termination or
cancellation or cause the creation of any Lien (other than Permitted Liens) on
any of the TeleCorp Assets except where such default would not have a TeleCorp
Material Adverse Effect or a material adverse effect on the Swap Transactions.
With respect to each TeleCorp Assigned Agreement which is to be assigned to AT&T
pursuant to the terms thereof, AT&T will succeed to all the rights and benefits
of TeleCorp thereunder, subject only to the obligations of TeleCorp arising
thereunder after the Closing Date. TeleCorp will not modify, amend or waive any
provisions of any TeleCorp Assigned Agreement in a manner that would adversely
affect the TeleCorp Assets or terminate any TeleCorp Assigned Agreement prior to
the Closing other than in the ordinary course of business and with the prior
written consent of AT&T.
5.10 License. TeleCorp LLC is the authorized legal holder, free and clear of any
-------
Liens, of the Boston Licenses, evidence of which is attached as Schedule 5.10.
-------------
The Boston Licenses are, and on the Closing Date the Boston Licenses will be,
valid and in full force and effect. Except for proceedings affecting the PCS or
wireless communications services industry generally, there is not pending, nor
to the knowledge of TeleCorp, threatened against it or against the Boston
Licenses, any application, action, petition, objection or other pleading, or any
proceeding with the FCC which questions or contests the validity of, or seeks
the revocation, nonrenewal or suspension of, the Boston Licenses, which seeks
the imposition of any modification or amendment with respect thereto, or which
adversely affects the ability of AT&T and its Affiliates to employ the Boston
Licenses in its business after the Closing Date. None of the Boston Licenses is
subject to any conditions other than those appearing on the face of such Boston
License itself and those imposed by FCC Law. All documents required by 47
C.F.R. Section 73.3526 to be kept in the public inspection file are in such
file, other than documents the absence of which, individually or in the
aggregate, would not be reasonably expected to have any TeleCorp Material
Adverse Effect, and such file will be maintained in proper order and complete up
to and through the Closing Date, except for immaterial documents. To TeleCorp's
knowledge, each cell site included in the Boston Assets has been constructed,
and is operating substantially in compliance with, the terms of the Boston
Licenses and the Law.
5.11 Compliance With Laws. TeleCorp is in, and has operated in, compliance with
--------------------
all applicable Laws, including all FCC Laws, except for noncompliance that,
individually or in the aggregate, has not and would not reasonably be expected
to have a TeleCorp Material Adverse Effect. It has not received notice to the
effect that, or otherwise been advised that, it is not in compliance with any
Laws, including with respect to the Boston
-27-
Licenses or TeleCorp Assets, and it has not taken any action or failed to take
any action that is a violation of any such Laws, including with respect to the
Boston Licenses or the TeleCorp Assets, except for actions or failures to take
action that, individually or in the aggregate, have not and would not reasonably
be expected to have a TeleCorp Material Adverse Effect or a material adverse
effect on the Transactions.
5.12 Taxes. All Federal, state, local and foreign income, franchise, sales,
-----
use, property, excise, payroll and other Tax returns and reports required to be
filed by TeleCorp or its Affiliates by Law where the failure to file such
returns on a duly and timely basis would reasonably be expected to result in a
material Lien on the TeleCorp Assets or the imposition on AT&T of any material
liability for Taxes or assessments have been duly and timely filed in the proper
form with the appropriate Governmental Authority. All Taxes, fees and
assessments of whatever nature due or payable pursuant to said returns or
otherwise by TeleCorp or its Affiliates have been paid (except for such amounts
as are being contested diligently, in the appropriate forum and in good faith)
where the failure to pay or contest such amounts would reasonably be expected to
result in a material Lien on the TeleCorp Assets or the imposition on AT&T of
any material liability for any Taxes or assessments. There are no Tax audits
pending and no outstanding agreements or waivers extending the statutory period
of limitations applicable to any Federal, state or local income Tax return of
TeleCorp or its Affiliates for any period, the result of which would reasonably
be expected to result in a material Lien on the TeleCorp Assets or the
imposition on AT&T of any material liability for any Taxes or assessments.
There are no governmental investigations or other legal, administrative or Tax
proceedings pursuant to which TeleCorp is or could be made liable for any Taxes,
penalties, interest or other charges, the liability for which would reasonably
be expected to extend to AT&T as transferee of the TeleCorp Assets, or which
would reasonably be expected to result in a material Lien on the TeleCorp Assets
and, to the best of TeleCorp's knowledge, no event has occurred that would
reasonably be expected to impose on AT&T any material liability for any Taxes,
penalties or interest due or to become due from TeleCorp.
5.13 Insurance. TeleCorp and its Affiliates have at all times maintained in
---------
full force and effect property damage, liability and other insurance with
respect to the TeleCorp Assets with financially sound and reputable insurers at
levels of coverage reasonable and customary in the telecommunications industry.
TeleCorp has not received written notice from any such insurance carrier (i)
threatening a suspension, revocation, modification or cancellation of any
insurance policy or a material increase in any premium in connection therewith,
or (ii) informing TeleCorp that any coverage will or may not be available in the
future on substantially the same terms as now in effect.
5.14 Undisclosed Liabilities. Neither TeleCorp nor any of its Affiliates has
-----------------------
any material liabilities, commitments or obligations (including without
limitation unasserted claims whether known or unknown), whether absolute or
contingent, liquidated or unliquidated, or due or to become due or otherwise,
relating to the TeleCorp Assets except for liabilities, commitments and
obligations (i) that have arisen since April 1, 1999 in the ordinary course of
business consistent with past practice or (ii) that are set forth on Section
5.14 of the TeleCorp Disclosure Schedule.
-28-
5.15 Inventory. The values at which inventories of TeleCorp included in the
---------
TeleCorp Assets are shown on the TeleCorp Books and Records have been determined
in accordance with the normal valuation policy of TeleCorp, consistently applied
and in accordance with generally accepted accounting principles. Such
inventories consist of items of (a) usable, merchantable quality which are new,
unused, undamaged, not defective and possess valid manufacturer's warranties,
and (b) a mix which is consistent with TeleCorp's past practices.
5.16 Labor Relations. TeleCorp is not a party to any collective bargaining
---------------
agreement covering the Boston Employees, and there are no controversies,
grievances or arbitrations pending or, to TeleCorp's knowledge, threatened
between TeleCorp and any of its current or former Boston Employees, or any labor
or other collective bargaining unit representing any current or former Boston
Employee, that could reasonably be expected to result in a labor strike,
dispute, slow-down or work stoppage. There are no administrative charges,
arbitration or mediation proceedings or court complaints relating to the Boston
Employees pending or, to TeleCorp's knowledge, threatened against TeleCorp
before the U.S. Equal Employment Opportunity Commission or any state or federal
court or agency or any other entity concerning alleged employment
discrimination, employment contract violation or any other matters relating to
the employment of labor. There is no unfair labor practice charge or complaint
relating to the Boston Employees pending or, to TeleCorp's knowledge, threatened
against TeleCorp before the National Labor Relations Board or any similar state
or local body. To the knowledge of TeleCorp, TeleCorp is not, and for the 12-
month period prior to the date of this Agreement has not been, the subject of
any union organizational campaign with respect to the Boston Employees.
TeleCorp has no material labor negotiations in process with any labor union or
other labor organization covering the Boston Employees.
5.17 Licenses and Permits. All material Licenses (other than FCC Licenses) held
--------------------
in connection with the operation of the TeleCorp Assets are in full force and
effect, except where the failure of any thereof to be in full force and effect
would not reasonably be expected to have a TeleCorp Material Adverse Effect, and
there are no proceedings in which TeleCorp is a party, pending or, to its
knowledge, threatened, which would result in the revocation or modification of
such Licenses, except where such revocation or modification would not reasonably
be expected to have a TeleCorp Material Adverse Effect.
5.18 Employee Benefits. Schedule 5.18 contains a complete list of each material
-----------------
employee benefit plan, program, policy, practice, or other arrangement providing
compensation or benefit to any Boston Employee that is sponsored or maintained
by TeleCorp or any of its Affiliates or to which any of them contributes or is
obligated to contribute, including without limitation any employee welfare
benefit plan within the meaning of Section 3(1) of ERISA, any employee pension
benefit plan within the meaning of Section 3(2) of ERISA (whether or not such
plan is subject to ERISA) and any bonus, incentive, deferred compensation,
vacation, stock purchase, stock option, severance, employment, change of control
or fringe benefit plan, program or agreement.
-29-
5.19 No Material Adverse Change. Since April 1, 1999, there has been no change,
effect, circumstance or condition known to any of the TeleCorp Affiliates that
has had or is reasonably likely to result in a TeleCorp Material Adverse Change.
5.20 Affiliate Agreements. No Affiliate of TeleCorp is a party to any material
transaction with TeleCorp relating to the Boston Business not in the ordinary
course of business.
ARTICLE VI
CLOSING CONDITIONS
6.1 Conditions to Obligations of All Parties. The obligation of each of the
----------------------------------------
parties to consummate the Transactions contemplated to occur at the Closing (or
at any earlier closing of the acquisition of any of the AT&T Acquired Assets)
shall be conditioned on the following (each condition to be applied only to the
applicable AT&T Acquired Asset in respect of any early closing of the
acquisition of such AT&T Acquired Asset), unless waived, in writing, by each of
the parties at or prior to Closing:
(a) Any filings required to be made under the HSR Act shall have been
made and any applicable waiting period under the HSR Act shall have expired or
been terminated.
(b) The Consent of the FCC to each of the License transfers
contemplated as part of the Swap Transaction shall have been obtained pursuant
to a Final Order (as defined below), free of any conditions materially adverse
to TeleCorp or AT&T, other than those applicable to the PCS or wireless
communications services industry generally. For the purposes of this Agreement,
"Final Order" means an action or decision that has been granted by the FCC as to
which (i) no request for a stay or similar request is pending, no stay is in
effect, the action or decision has not been vacated, reversed, set aside,
annulled or suspended and any deadline for filing such request that may be
designated by statute or regulation has passed, (ii) no petition for rehearing
or reconsideration or application for review is pending and the time for the
filing of any such petition or application has passed, (iii) the FCC does not
have the action or decision under reconsideration on its own motion and the time
within which it may effect such reconsideration has passed and (iv) no appeal is
pending, including other administrative or judicial review, or in effect and any
deadline for filing any such appeal that may be designated by statute or rule
has passed.
(c) All Consents by any Governmental Authority (other than the
Consents referred to in paragraphs (a) and (b) above) required to permit the
consummation of the Transactions shall have been obtained, except where the
failure to obtain such Consents would not be reasonably expected to have an AT&T
Material Adverse Effect or a TeleCorp Material Adverse Effect or to materially
adversely affect the Transactions or the ability of any of the parties to
perform its obligations under this Agreement.
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(d) No preliminary or permanent injunction or other order, decree or
ruling issued by a Governmental Authority, nor any Law promulgated or enacted by
any Governmental Authority, shall be in effect that would (i) impose material
limitations on the ability of any party to consummate the Transactions or
prohibit such consummation, or (ii) as a result of the Transactions, impair in
any material respect the operations of TeleCorp or any of its Affiliates or AT&T
or any of its Affiliates.
6.2 Conditions to Obligations of TeleCorp. The obligation of the Designated
-------------------------------------
TeleCorp Affiliates to consummate the Transactions contemplated to occur at the
Closing (or at any earlier closing of the acquisition of any of the AT&T
Acquired Assets) shall be further conditioned upon the satisfaction or
fulfillment, at or prior to the Closing, of the following conditions (each
condition to be applied only to the applicable AT&T Acquired Asset in respect of
any early closing of the acquisition of such AT&T Acquired Asset), unless
waived, in writing, by TeleCorp:
(a) The representations and warranties of AT&T contained herein shall
be true and correct, in each case when made and at and as of the Closing (other
than representations and warranties made as of a specified date, which shall be
true and correct as of such date) with the same force and effect as though made
at and as of such time, except in each case to the extent that the failure of
such representations and warranties to be true and correct in the aggregate does
not have an AT&T Material Adverse Effect.
(b) AT&T and its Affiliates shall have performed in all material
respects all agreements contained herein required to be performed by it at or
before the Closing.
(c) AT&T shall have delivered, or caused to be delivered, (i) to
TeleCorp the documents required pursuant to Section 2.2(b) and (ii) to the
Intermediary the AT&T Assignments, the Cash Consideration, the Asset Payment and
each of the other documents and instruments required pursuant to Section 2.2(a).
(d) TeleCorp shall have received any Consent of the lenders required
pursuant to the terms of that certain Credit Agreement dated as of July 17, 1998
among TeleCorp and the lenders and agents party thereto, as amended.
(e) TeleCorp shall have acquired all right, title and interest in the
assets of Indus pursuant to the Indus Purchase Agreement (or the assets
permitted to be substituted therefor), free of any and all Liens held by AT&T or
any of its Affiliates other than a right of first refusal should TeleCorp sell
such assets.
6.3 Conditions to the Obligations of AT&T. The obligation of AT&T to
-------------------------------------
consummate the Transactions contemplated to occur at the Closing (or at any
earlier closing of the acquisition of any of the AT&T Acquired Assets) shall be
further conditioned upon the satisfaction or fulfillment, at or prior to the
Closing, of the following conditions (each condition to be applied only to the
applicable AT&T Acquired
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Asset in respect of any early closing of the acquisition of such AT&T Acquired
Asset), unless waived, in writing, by AT&T:
(a) The representations and warranties of TeleCorp contained herein
shall be true and correct, in each case when made and at and as of the Closing
(other than representations and warranties made as of a specified date, which
shall be true and correct as of such date) with the same force and effect as
though made at and as of such time, except in each case to the extent that the
failure of such representations and warranties to be true and correct in the
aggregate does not have an TeleCorp Material Adverse Effect.
(b) Each of the TeleCorp Affiliates shall have performed in all
material respects all agreements contained herein required to be performed by it
at or before the Closing.
(c) TeleCorp shall have delivered, or caused to be delivered, (i) to
AT&T the documents required pursuant to Section 2.2(d) and (ii) to Intermediary
the TeleCorp Assignments, the Stock Consideration, if applicable, and other
agreements and instruments required pursuant to Section 2.2(c).
ARTICLE VII
SURVIVAL AND INDEMNIFICATION
7.1 Survival. The representations and warranties contained in Sections 4.1(a),
--------
(b), (d), (e) and (f), and Sections 5.1(a), (b), (d), (e) and (f) and Section
5.6(a) shall survive the Closing, without regard to any investigation made by
any of the parties hereto, until the expiration of the applicable statute of
limitations relating thereto), and the representations and warranties contained
herein in Sections 4.9 shall survive the Closing until the expiration of the
corresponding representations and warranties made by AT&T or any of its
Affiliates in the Acquisition Agreements. The representations and warranties
contained in Sections 4.8 and 5.12 shall not survive the Closing. All other
representations and warranties made in this Agreement shall terminate on the
second anniversary of the Closing Date. The right to indemnification pursuant
to this Article VII in respect of a breach of a representation or warranty that
survives the Closing shall expire upon the application of the applicable
survival period (except to the extent written notice asserting a claim
thereunder and describing such claim in reasonable detail shall have been given
prior to such expiration to the party from whom such indemnification is sought).
After the Closing, the sole and exclusive remedy of the parties for any breach
or inaccuracy of any representation or warranty contained in this Agreement that
survives the Closing or any other claim (whether or not alleging a breach of
this Agreement) that arises out of the facts and circumstances constituting such
breach or inaccuracy, shall be the indemnity provided in this Article VII.
7.2 Indemnification by AT&T. AT&T shall indemnify and hold harmless TeleCorp
-----------------------
and its Affiliates, and the shareholders, members, managers, officers,
employees, agents and/or the legal representatives of any of them (each, a
"TeleCorp Indemnified Party"),
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against all liabilities and expenses (collectively, "Losses") incurred by any
TeleCorp Indemnified Party (including, without limitation, amounts paid in
satisfaction of judgments, in compromise, as fines and penalties, and as counsel
fees and Losses incurred in connection with the investigation, defense, or
disposition of any action, suit or other proceeding in which any TeleCorp
Indemnified Party may be involved or with which any TeleCorp Indemnified Party
may be threatened (whether arising out of or relating to matters asserted by
third parties against a TeleCorp Indemnified Party or incurred or sustained by
such party in the absence of a third-party claim)), that arise out of or result
from (a) any representation or warranty of AT&T contained in this Agreement
being untrue (other than Section 4.8), (b) any default by AT&T or any of its
Affiliates in the performance of their respective obligations under this
Agreement, (c) the ownership or operation of any of the AT&T Owned Assets and
the conduct of AT&T's business prior to the Closing Date or (d) the ownership or
operation of any of the TeleCorp Assets and the conduct of AT&T's business after
the Closing Date, except to the extent (but only to the extent) that any such
Losses arise out of or result from the gross negligence or willful misconduct of
such TeleCorp Indemnified Party or its Affiliates, provided, however, that the
-------- -------
aggregate liability of AT&T to indemnify TeleCorp Indemnified Parties against
Losses arising out of or resulting from (x) any representation or warranty of
AT&T contained in this Agreement being untrue (other than Section 4.8), or (y)
any default by AT&T or any of its Affiliates in the performance of their
respective obligations under this Agreement shall (except, in the case of clause
(y), to the extent (but only to the extent) any such Losses arise out of or
result from the gross negligence or willful misconduct of AT&T) be limited to
$100 Million Dollars.
7.3 Indemnification by TeleCorp. TeleCorp shall indemnify and hold harmless
---------------------------
AT&T and its Affiliates, and the shareholders, members, managers, officers,
employees, agents and/or the legal representatives of any of them (each, an
"AT&T Indemnified Party"), against all Losses incurred by any AT&T Indemnified
Party (including, without limitation, amounts paid in satisfaction of judgments,
in compromise, as fines and penalties, and as counsel fees and Losses incurred
in connection with the investigation, defense, or disposition of any action,
suit or other proceeding in which any AT&T Indemnified Party may be involved or
with which any AT&T Indemnified Party may be threatened (whether arising out of
or relating to matters asserted by third parties against an AT&T Indemnified
Party or incurred or sustained by such party in the absence of a third party
claim)) that arise out of or result from (a) any representation or warranty of
TeleCorp contained in this Agreement (other than Section 5.12) being untrue (b)
any default by TeleCorp or any of its Affiliates in the performance of their
respective obligations under this Agreement, (c) the ownership or operation of
any of the TeleCorp Assets and the conduct of TeleCorp's business prior to the
Closing Date, (d) if the Closing occurs, the ownership or operation of the AT&T
Acquired Assets prior to the Closing Date or the obligations and other
provisions of the Acquisition Agreements, or (e) the ownership or operation of
any of the AT&T Assets and the conduct of TeleCorp's business after the Closing
Date, except to the extent (but only to the extent) that any such Losses arise
out of or result from the gross negligence or willful misconduct of such AT&T
Indemnified Party or its Affiliates; provided, however, that the aggregate
-------- -------
liability of TeleCorp to indemnify AT&T Indemnified Parties against Losses
arising out of or resulting from (x) any representation or warranty of TeleCorp
contained in this
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Agreement (other than Section 5.12) being untrue , or (y) any default by
TeleCorp or any of its Affiliates in the performance of their respective
obligations under this Agreement shall (except, in the case of clause (y), to
the extent (but only to the extent) any such Losses arise out of or result from
the gross negligence or willful misconduct of TeleCorp) be limited to $100
Million Dollars.
7.4 Procedures.
----------
(a) The terms of this Section 7.4 shall apply to any third-party claim
(a "Claim") that may result in indemnification under the terms of Sections 7.2
or 7.3. The TeleCorp Indemnified Party or AT&T Indemnified Party (each, an
"Indemnified Party"), as the case may be, shall give prompt written notice of
such Claim to the indemnifying party (the "Indemnifying Party") under the
applicable Section, which party may assume the defense thereof, provided, that
--------
any delay or failure to so notify the Indemnifying Party shall relieve the
Indemnifying Party of its obligations hereunder only to the extent, if at all,
that it is materially prejudiced by reason of such delay or failure. The
Indemnified Party shall have the right to approve any counsel selected by the
Indemnifying Party and to approve the terms of any proposed settlement, such
approvals not to be unreasonably delayed or withheld (unless, in the case of
approval of a proposed settlement, such settlement provides only, as to the
Indemnified Party, the payment of money damages actually paid by the
Indemnifying Party and a complete release of the Indemnified Party in respect of
the claim in question). Notwithstanding any of the foregoing to the contrary,
the provisions of this Article VII shall not be construed so as to provide for
the indemnification of any Indemnified Party for any liability to the extent
(but only to the extent) that such indemnification would be in violation of
applicable Law or that such liability may not be waived, modified or limited
under applicable Law, but shall be construed so as to effectuate the provisions
of this Article VII to the fullest extent permitted by Law.
(b) If the Indemnifying Party undertakes the defense of any Claim, the
Indemnifying Party will keep the Indemnified Party advised as to all material
developments in connection with such Claim, including promptly furnishing the
Indemnified Party with copies of all material documents filed or served in
connection therewith.
(c) If the Indemnifying Party fails to assume the defense of any Claim
within thirty (30) days after receiving written notice thereof, the Indemnified
Party shall have the right, subject to the Indemnifying Party's right to assume
the defense pursuant to the provisions of this Article VII, to undertake the
defense, compromise or settlement of such Claim for the account of the
Indemnifying Party. Unless and until the Indemnified Party assumes the defense
of any Claim, the Indemnifying Party shall advance to the Indemnified Party any
of its reasonable attorneys' fees and other costs and expenses incurred in
connection with the defense of any such action or proceeding. Each Indemnified
Party shall agree in writing prior to any such advance that, in the event he,
she or it receives any such advance, such Indemnified Party shall reimburse the
Indemnifying Party for such fees, costs and expenses to the extent that it shall
be determined that he, she or it was not entitled to indemnification under this
Article VII.
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(d) In no event shall an Indemnifying Party be required to pay in
connection with any Claim for more than one firm of counsel (and local counsel)
for each of the following groups of Indemnified Parties: (i) AT&T, its
Affiliates, and the shareholders, members, managers, officers, employees, agents
and/or the legal representatives of any of them; and (ii) TeleCorp and its
Affiliates, and the shareholders, members, managers, officers, employees, agents
and/or the legal representatives of any of them.
7.5 Tax costs and Tax benefits. The amount of any Losses for which
--------------------------
indemnification is provided under any of Sections 7.2 or 7.3, shall be (i)
increased to take account of any net Tax cost incurred by the indemnified party
arising from the receipt of indemnity payments hereunder (grossed up for such
increase) and (ii) reduced to take account of any net Tax benefit realized by
the indemnified party arising from the incurrence or payment of any such Losses.
In computing the amount of any such Tax cost or Tax benefit, the indemnified
party shall be deemed to recognize all other items of income, gain, loss,
deduction or credit before recognizing any item arising from the receipt of any
indemnity payment hereunder or the incurrence or payment of any indemnified
Losses. Any indemnification payment hereunder shall initially be made without
regard to this Section and shall be increased or reduced to reflect any such net
Tax cost (including gross-up) or net Tax benefit only after the indemnified
party has actually realized such cost or benefit. For purposes of this
Agreement, an indemnified party shall be deemed to have "actually realized" a
net Tax cost or a net Tax benefit to the extent that, and at such time as, the
amount of Taxes payable by such indemnified party is increased above or reduced
below, as the case may be, the amount of Taxes that such indemnified party would
be required to pay but for the receipt of the indemnity payment or the
incurrence or payment of such Losses, as the case may be. The amount of any
increase or reduction hereunder shall be adjusted to reflect any final
determination (which shall include the execution of Form 870-AD or successor
form) with respect to the indemnified party's liability for Taxes and payments
between the parties to this Agreement to reflect such adjustment shall be made
if necessary. Any indemnity payment under this Agreement shall be treated as an
adjustment to the value of the asset upon which its underlying claim was based,
unless a final determination (which shall include the execution of a Form 870-AD
or successor form) with respect to the indemnified party or any of its
Affiliates causes any such payment not to be treated as an adjustment to the
value of the asset for United States Federal income Tax purposes.
ARTICLE VIII
TERMINATION
8.1 Termination. In addition to any other rights of termination set forth
-----------
herein, this Agreement may be terminated, and the Transactions abandoned,
without further obligation of any party, except as set forth herein, at any time
prior to the Closing Date:
(a) by mutual written consent of the parties;
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(b) by any party by written notice to the other parties, if the
Closing of all the Swap Transactions shall not have occurred on or before
December 31, 2000; provided, however, that if the Transactions shall not have
-------- -------
been consummated solely due to the waiting period (or any extension thereof) or
approvals under the HSR Act or approvals or consent of the FCC not having
expired or been terminated or received, then such date shall be extended to
March 31, 2001; and provided, further, that the party electing to exercise such
-------- -------
right is not otherwise in breach of its obligations under this Agreement; or
(c) by any party by written notice to the other party, if the
consummation of the Transactions shall be prohibited by a final, nonappealable
order, decree or injunction of a court of competent jurisdiction.
8.2 Effect of Termination; Tax Responsibility.
-----------------------------------------
(a) Upon a termination of this Agreement, no party hereto shall have
any liability or further obligation to any other party to this Agreement, except
as set forth in paragraph (b) below, and except that nothing herein will relieve
any party from liability for any breach by such party of this Agreement.
(b) Upon a termination of this Agreement pursuant to Section 8.1, all
provisions of this Agreement shall terminate, except Section 1.4(b), Section 3.2
and this Section 8.2, and Articles VII, IX and X, except that nothing herein
will relieve any party from liability for any breach of this Agreement. Upon
such termination, Intermediary promptly shall return to TeleCorp all documents,
instruments and other property delivered to Intermediary by or at the direction
of TeleCorp pursuant to the provisions hereof, including, without limitation,
the TeleCorp Assignments and the Stock Consideration, if any, and return to AT&T
all documents, instruments and other property delivered to Intermediary by or at
the direction of AT&T pursuant to the provisions hereof, including, without
limitation, the AT&T Assignments, the Cash Consideration and the Asset Payment.
(c) Whether or not the Closing occurs, all costs and expenses incurred
in connection with this Agreement and the Transactions shall be paid by the
party incurring such expenses. Notwithstanding the foregoing, (i) TeleCorp
shall pay or cause to be paid at the Closing or, if due prior to the Closing,
shall reimburse AT&T at Closing for, or thereafter, promptly when due, all
Transfer Taxes (including sales taxes, gross receipts taxes, stamp taxes, and
other similar taxes) payable solely as a result of a transfer of assets pursuant
to this Agreement, but excluding any federal, state, local or other
jurisdictional income Taxes (or franchise, excise, gross receipts or other taxes
that are generally imposed on a party on a periodic basis as a result of a
party's status, presence, conduct of business, holding of assets, income,
revenues, activities or other items) ("Transfer Taxes") relating to the
transfer of the TeleCorp Assets; (ii) AT&T shall pay or cause to be paid at the
Closing or, if due prior to the Closing, shall reimburse TeleCorp at Closing
for, or thereafter, promptly when due, all transfer taxes (including sales
taxes, gross receipts taxes, stamp taxes, and other similar taxes) payable
solely as a result of a transfer of assets pursuant to this Agreement, but
excluding any federal, state, local or
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other jurisdictional income Taxes (or franchise, excise, gross receipts or other
Taxes that are generally imposed on a party on a periodic basis as a result of a
party's status, presence, conduct of business, holding of assets, income,
revenues, activities or other items) relating to the AT&T Owned Assets, (iii) in
the case of any Taxable period that includes (but does not begin on) the Closing
Date (the "Tax Period") (x) real, personal and intangible property Taxes
(collectively, "Property Taxes") of AT&T for the AT&T Owned Assets on the one
hand, and the Property Taxes of TeleCorp for the TeleCorp Assets on the other
hand, for the pre-Closing Tax period shall be equal to the amount of such
Property Taxes for the entire Tax Period multiplied by a fraction, the numerator
of which is the number of full days during the Tax Period that are in the pre-
Closing Tax period and the denominator of which is the number of days in the Tax
Period; and (y) the Taxes (other than Property Taxes, income Taxes and Transfer
Taxes) of AT&T in respect of the AT&T Owned Assets, on the one hand, and
TeleCorp in respect of the TeleCorp Assets on the other hand, for the pre-
Closing Tax period shall be computed as if such Taxable period ended as of the
opening of business on the Closing Date; and (iv) TeleCorp and AT&T shall each
be responsible, with respect to their respective transferred assets, for
preparing and filing all Federal, state, local and other Tax returns and
conducting Tax audits that relate to operations or events affecting Tax periods
ending prior to the Closing Date, including Tax returns the due date of which is
after the Closing Date (or in the case of income Taxes, any Tax period).
(d) Notwithstanding any other provision of this Agreement:
(i) AT&T shall be responsible for, and shall hold the TeleCorp
Indemnified Parties harmless from and against (A) any income Taxes imposed
on AT&T or any of its Affiliates, (B) any Taxes (other than income Taxes)
imposed on AT&T or any of its Affiliates, which Taxes are not related to
nor imposed on or with respect to the AT&T Assets and (C) any Taxes (other
than income Taxes and Transfer Taxes) imposed on or with respect to (x) the
AT&T Owned Assets for any taxable period, or portion thereof, ending prior
to the Closing Date or (y) with respect to the TeleCorp Assets for any
taxable period, or portion thereof, beginning on the Closing Date
(calculated, in the case of (x) and (y) for a Tax Period, as set forth
above in Section 8.2(c));
(ii) TeleCorp shall be responsible for, and shall hold the AT&T
Indemnified Parties harmless from and against (A) any income Taxes imposed
on TeleCorp or any of its Affiliates, (B) any Taxes (other than income
Taxes) imposed on TeleCorp or any of its Affiliates, which Taxes are not
related to nor imposed on or with respect to the TeleCorp Assets and (C)
any Taxes (other than income Taxes and Transfer Taxes) imposed on or with
respect to (x) the TeleCorp Assets for any taxable period, or portion
thereof, ending prior to the Closing Date or (y) with respect to the AT&T
Owned Assets for any taxable period, or portion thereof, beginning on the
Closing Date (calculated, in the case of (x) and (y) for a Tax Period, as
set forth above in Section 8.2(c)); and
(iii) AT&T and TeleCorp, respectively, shall be entitled to control
in all respects (and no other Person shall have any rights with respect to)
any audit,
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examination or other Tax proceeding by or with a Governmental Authority
with respect to any consolidated, combined or unitary Tax return or any
other income Tax Return of AT&T (or any of its Affiliates) or TeleCorp (or
any of its Affiliates), respectively.
(e) In the case of an audit, examination or other Tax proceeding for a
Tax Period by or with a Governmental Authority which may result in
indemnification pursuant to Section 8.2(d)(i)(C) or 8.2(d)(ii)(C), the
provisions of Section 7.4 shall apply, provided that the party with respect to
which the claim by the Governmental Authority is greater shall, solely for
purposes of this sentence, have the rights and obligations set forth in Section
7.4 of the "Indemnifying Party," and the other party shall, solely for purpose
of the sentence, have the rights and obligations set forth in Section 7.4 of the
"Indemnified Party," with respect to such proceeding.
(f) TeleCorp and AT&T shall each pay one-half of all fees required to
be paid (i) under the HSR Act relating to the Transactions hereunder, and (ii)
to the FCC in connection with the filing of the applications for transfer of the
Licenses contemplated to be transferred in the Swap Transactions.
ARTICLE IX
DEFINITIONS
For purposes of this Agreement:
"ABC," "ABC Licenses" and "ABC Acquisition Agreement" have the
meanings set forth in the recitals.
"Acquisition Agreements" has the meaning set forth in the recitals.
"Affiliate" means, with respect to any Person, any other Person that
directly, or indirectly through one or more intermediaries, controls, is
controlled by or is under common control with that Person. For purposes of this
definition, "control" (including the terms "controlling" and "controlled") means
the power to direct or cause the direction of the management and policies of a
Person, directly or indirectly, whether through the ownership of securities or
partnership or other ownership interests, by contract or otherwise.
Notwithstanding the foregoing, for purposes of this Agreement, neither TeleCorp
and its Subsidiaries, on the one hand, nor AT&T and its Subsidiaries , on the
other hand, shall be considered an Affiliate of the other.
"Agreement" has the meaning set forth in the preamble.
"Asset Payment" has the meaning set forth in the recitals.
"AT&T" has the meaning set forth in the preamble.
"AT&T Acquired Assets" has the meaning set forth in the recitals.
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"AT&T Acquisition Assignments" has the meaning set forth in Section
2.2(a).
"AT&T Assets" has the meaning set forth in the recitals.
"AT&T Assignments" has the meaning set forth in Section 2.2(a).
"AT&T Disclosure Schedule" has the meaning set forth in Article IV.
"AT&T Entities" has the meaning set forth in the preamble.
"AT&T Indemnified Party" has the meaning set forth in Section 7.3.
"AT&T License Assignments" has the meaning set forth in Section
2.2(a).
"AT&T Material Adverse Effect" means any change, event or effect that
is materially adverse to the business, assets (including intangible assets),
financial condition or results of operations of the AT&T Assets, taken as a
whole, excluding any adverse change in, or effect on, the financial condition or
revenues of the AT&T Assets to the extent attributable to (i) general economic
conditions in the United States and (ii) conditions affecting the wireless
communications industry generally.
"AT&T Owned Assets" has the meaning set forth in the recitals.
"AT&T Related Documents" has the meaning set forth in Section 4.1(b).
"Boston Business" has the meaning set forth in the recitals.
"Boston Employees" has the meaning set forth in Section 3.7(a).
"Boston Licenses" has the meaning set forth in the recitals.
"BTA" means the unit of division (of which there are four hundred
ninety-three (493)) for the United States of America, devised by Rand ▇▇▇▇▇▇▇
based upon geography, population and other factors, which units form the basis
for the auction by the FCC of a portion of the Licenses for PCS Systems for
Basic Trading Areas, as defined by the FCC.
"Business Day" means any day other than a Saturday, Sunday or a legal
holiday in New York, New York or any other day on which commercial banks in New
York, New York are authorized by law or governmental decree to close.
"Cash Consideration" has the meaning set forth in recitals.
"Closing" has the meaning set forth in Section 2.1.
"Closing Date" has the meaning set forth in Section 2.1.
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"Code" means the Internal Revenue Code of 1986, as amended, or any
successor thereto.
"Confidential Information" means any and all information regarding the
business, finances, operations, products, services and customers of the Person
specified and its Affiliates, in written or oral form or in any other medium.
"Consents" means all consents and approvals of Governmental
Authorities or other third parties necessary to authorize, approve or permit the
parties hereto to consummate the Transactions and for TeleCorp to operate its
business (including the AT&T Assets) after the Closing Date as currently
contemplated.
"Contract" means any contract, mortgage, deed of trust, bond,
indenture, lease, license, note, franchise, certificate, option, warrant, right
or other instrument, document, obligation or agreement, whether written or oral.
"Designated Transferee" has the meaning set forth in Section 10.14.
"DOJ" has the meaning set forth in Section 3.1(d)(iii).
"Environmental Laws" means: the Comprehensive Response, Compensation
and Liability Act, as amended by the Superfund Amendments and Reauthorization
Act (42 U.S.C. (S) 9601 et seq.) ("CERCLA") and/or the Solid Waste Disposal Act,
as amended by the Resource Conservation and Recovery Act (42 U.S.C. (S) 6901 et
seq.) ("RCRA") and/or the Toxic Substances Control Act (15 U.S.C. (S) 2601 et
seq.) ("TSCA") and/or the Federal Insecticide, Fungicide and Rodenticide Act (7
U.S.C. (S) 136 et seq.) ("FIFRA") and/or the Clean Air Act (42 U.S.C. (S) 7401
et seq.) ("CAA") and/or the Federal Water Pollution Control Act (33 U.S.C. (S)
1251 et seq.) ("FWPCA") and/or the Safe Drinking Water Act (42 U.S.C. (S) 300f
et seq.) ("SDWA") and/or the Oil Pollution Act of 1990 (33 U.S.C. (S)(S) 2701-
2761) ("OPA") and/or the Emergency Planning and Community Right-to-Know Act of
1986 (42 U.S.C. (S)(S) 11001-11050) ("EPCRA") including any amendments or
extensions thereof; and/or the Building Occupancy Code Administration,
Occupational Safety and Health Act (29 U.S.C. (S)(S) 651 et seq.) and Codes of
the National Fire Protection Association; and all statutes, laws, regulations,
rules, ordinances, codes, licenses, permits, guidelines, standards, orders,
requirements, approvals and similar items of all governmental agencies,
departments, commissions, boards and instrumentalities of the United States, any
foreign country, or any state, or any political subdivision thereof relating to
pollution and/or the protection of human health and/or the environment,
including, without limitation, those relating to reporting, licensing,
permitting, investigating, removing or remediating Materials of Environmental
Concern.
"Excluded Employees" has the meaning set forth in Section 3.7(a).
"FCC" means the Federal Communications Commission or similar
regulatory authority established in replacement thereof.
"FCC Applications" has the meaning set forth in Section 3.1(d)(i).
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"FCC Law" means the Communications Act of 1934, as amended, including
as amended by the Telecommunications Act of 1996, and the rules, regulations and
policies promulgated thereunder.
"Final Order" has the meaning set forth in Section 6.1(b).
"First Transfer Date" has the meaning set forth in Section 1.4.
"FTC" has the meaning set forth in Section 3.1(d)(iii).
"Governmental Authority" means a Federal, state or local court,
legislature, governmental agency, commission or regulatory or administrative
authority or instrumentality.
"Hired Employee" has the meaning set forth in Section 3.7(f)(i).
"HSR Act" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
1976, as amended, and the rules and regulations promulgated thereunder.
"Indemnified Party" and "Indemnifying Party" have the meanings set
forth in Section 7.4.
"Indus" has the meaning set forth in the recitals.
"Indus Purchase Agreement" has the meaning set forth in the recitals.
"Intellectual Property" means any (a) trademarks, trade dress, trade
names, service marks, logos and other similar proprietary rights, (b) domain
names, (c) copyrights and (d) patents and patentable know-how, inventions and
processes.
"Intermediary" has the meaning set forth in the recitals.
"Intermediary Agreement" has the meaning set forth in the recitals.
"Iowa Licenses" has the meanings set forth in the recitals.
"Law" means applicable common law and any statute, ordinance, code or
other law, rule, permit, permit condition, regulation, order, decree, technical
or other standard, requirement or procedure enacted, adopted, promulgated,
applied or followed by any Governmental Authority.
"Letter of Instruction" has the meaning set forth in Section 2.2(e).
"License" means a license, permit, certificate of authority, waiver,
approval, certificate of public convenience and necessity, registration or other
authorization, consent or clearance to construct or operate a facility,
including any emissions, discharges or releases therefrom, or to transact an
activity or business, to construct a tower or to use an asset or process, in
each case issued or granted by a Governmental Authority.
-41-
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest, option, title defect, restriction, right of first
refusal or right of others therein, or encumbrance of any nature whatsoever in
respect of such asset.
"Losses" has the meaning set forth in Section 7.2.
"Materials of Environmental Concern" means any substance: (a) the
presence of which requires investigation or remediation under any Environmental
Law; or (b) which is defined as a "hazardous waste," "hazardous substance,"
"hazardous material," toxic substance, pollutant or contaminant under any
Environmental Law; or (c) which is identified under any Environmental Laws as
toxic, explosive, corrosive, flammable, ignitable, reactive, infectious,
radioactive, carcinogenic, mutagenic or otherwise hazardous and is or becomes
restricted or regulated by any governmental, quasi-governmental or regulatory
authority, agency, department, commission, board, agency or instrumentality of
the United States, any foreign country, or any state, or any political
subdivision thereof; or (d) without limitation, which includes or contains
gasoline, diesel fuel or other petroleum hydrocarbons or byproducts.
"MTA" means the unit of division (of which there are fifty-one (51))
for the United States of America, devised by Rand ▇▇▇▇▇▇▇ based upon geography,
population and other factors, which units form the basis for the auction by the
FCC of a portion of the Licenses for PCS Systems for Major Trading Areas, as
defined by the FCC.
"New York Courts" has the meaning set forth in Section 10.5.
"PCS" means Personal Communications Services, which is the term to
describe the services that may be provided as a result of obtaining the
Licenses, the exchanges of which are contemplated hereby, under FCC Law.
"Permitted Liens" means (a) Liens for Taxes, assessments and
governmental charges, in each case not yet due and payable, (b) zoning laws or
ordinances or any similar Laws, (c) rights reserved to any Governmental
Authority to regulate the affected property, (d) Liens described on Schedule 5.6
------------
of the TeleCorp Disclosure Schedule, which liens do not individually or in the
aggregate interfere with the right or ability of the applicable party to own,
use enjoy or operate the applicable assets in the manner currently used or to
convey good and marketable title or enforceable rights thereto, (e) as to leased
property the interests of the lessors thereof, (f) FCC Liens, and (g) as to Real
Property, any easements, rights-of-way, servitudes, conditions, covenants,
restrictions and minor imperfections or irregularities in title, in each case,
which are reflected in the public records and which do not individually or in
the aggregate interfere with the right or ability of the applicable party to
own, use, enjoy or operate the Real Property in the manner currently used or to
convey good, marketable and indefeasible fee simple title to the same; provided,
--------
that "Permitted Liens" will not include any Lien which could prevent or inhibit
in any way (other than as permitted under clause (f)) the conduct of the
business of the affected Party.
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"Person" means an individual, corporation, partnership, limited
liability company, association, joint stock company, Governmental Authority,
business trust, unincorporated organization, or other legal entity.
"Polycell," "Polycell Licenses" and "Polycell Acquisition Agreement"
have the meanings set forth in the recitals.
"Polycell Buyer" has the meaning set forth in the recitals.
"POPs" mean the ▇▇▇▇ ▇▇▇▇▇ Associates, Inc. estimate of the 1999
population of a geographic area.
"Property Taxes" has the meaning set forth in Section 8.2(c).
"Qualified Intermediary" means a "qualified intermediary" as defined
in Regulations section 1.1031(k)-1(g)(4)(iii).
"Regulations" means the Treasury Department regulations (including
temporary regulations) promulgated under the Code.
"Replacement Assets" has the meaning set forth in Section 1.4.
"Representatives" has the meaning set forth in Section 3.2(a).
"Stock Consideration" has the meaning set forth in the recitals.
"Subsidiary" shall mean, with respect to any Person, a corporation or
other entity of which 50% or more of the voting power or the voting equity
securities or equity interest is owned, directly or indirectly, by such Person.
"Swap Transactions" has the meaning set forth in the recitals.
"Tax" or "Taxes" means any Federal, state, local or foreign tax, fee
or other like assessment or charge of any kind, including any net income,
alternative or add-on minimum tax, gross income, gross receipts, sales, use, ad
valorem, value-added, transfer, franchise, profits, license, withholding on
amounts paid to or by the taxpayer, payroll, employment, excise, severance,
stamp, capital stock occupation, property, environmental or windfall tax,
premium, custom, duty or other tax of any kind whatsoever, including any
interest, penalty or addition thereto.
"Tax Period" has the meaning set forth in Section 8.2(c).
"TeleCorp" has the meaning set forth in the preamble.
"TeleCorp Assets" has the meaning set forth in the recitals.
"TeleCorp Assigned Agreements" has the meaning set forth in Section
5.9.
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"TeleCorp Assigned Leases" means those leases included in the TeleCorp
Assets.
"TeleCorp Assignments" has the meaning set forth in Section 2.2(c).
"TeleCorp Books and Records" means all engineering records, files,
data, drawings, blueprints, schematics, reports, lists, plans and procedures and
all other files of correspondence, lists, records and reports concerning the
Boston Business, including subscribers and prospective subscribers of the Boston
Business, dealings with Governmental Authorities with respect to the Boston
Business, including all reports filed with respect to the Boston Business by or
on behalf of TeleCorp or any Affiliate with the FCC, and including all
documents, reports and records relating to any employee of the Business who has
given consent to disclosure of such documents, reports and records or which may
otherwise be transferred without violation of the Law.
"TeleCorp Disclosure Schedule" has the meaning set forth in Article V.
"TeleCorp Entities" has the meaning set forth in the preamble.
"TeleCorp Excluded Assets" means (i) bonds, letters of credit, surety
instruments and other similar items; (ii) cash and cash equivalents, including
cash relating to customer subscriber prepayments and deposits, and notes
receivable; (iii) Intellectual Property held by TeleCorp or any of its
Affiliates, other than AT&T; (iv) assets, rights or properties of TeleCorp or
its Affiliates used or held for use other than principally in connection with
the Boston Business, and (v) Claims, rights and interest in and to any refunds
of taxes or fees of any nature, or other Claims against third parties, relating
to the operation of the Boston Business prior to the Closing Date.
"TeleCorp Indemnified Party" has the meaning set forth in Section 7.2.
"TeleCorp Material Adverse Effect" means any change, event or effect
that is materially adverse to the business, assets (including intangible
assets), financial condition or results of operations of the TeleCorp Assets or
the Boston Business, taken as a whole, excluding any adverse change in, or
effect on, the financial condition or revenues of the TeleCorp Assets or the
Boston Business to the extent attributable to (i) general economic conditions in
the United States and (ii) conditions affecting the wireless communications
industry generally.
"TeleCorp Real Property" means (i) any real property or facility
presently or previously owned by TeleCorp or any of its predecessors in
interest; (ii) any real property or facility presently or previously leased to
TeleCorp (or any predecessor in interest) by any Person; (iii) any real property
or facility presently or previously operated for TeleCorp or any of its
predecessors in interest by any Person; (iv) any real property or facility
presently or previously used or occupied by TeleCorp or any of its predecessors
in interest; and/or (v) any real property or facility at which the products or
equipment of TeleCorp or any of its predecessors in interest have been or are
being installed or used, in any event that is or was used in connection with
TeleCorp's operation of a PCS business in the areas covered by, or which are
otherwise included as part of the TeleCorp Assets.
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"TeleCorp Related Documents" has the meaning set forth in Section
5.1(b).
"Transfer Taxes" has the meaning set forth in Section 8.2(c).
"Transactions" means the Swap Transactions and other transactions
contemplated by this Agreement.
"Wisconsin Licenses" have the meanings set forth in the recitals.
When a reference is made in this Agreement to an Article or a Section,
such reference shall be to an Article or a Section of this Agreement unless
otherwise indicated. Unless the context otherwise requires, the terms defined
hereunder shall have the meanings therein specified for all purposes of this
Agreement, applicable to both the singular and plural forms of any of the terms
defined herein. Whenever the words "include," "includes" or "including" are used
in this Agreement, they shall be deemed to be followed by the words "without
limitation." The use of a gender herein shall be deemed to include the neuter,
masculine and feminine genders whenever necessary or appropriate. Whenever the
word "herein" or "hereof" is used in this Agreement, it shall be deemed to refer
to this Agreement and not to a particular Section of this Agreement unless
expressly stated otherwise.
ARTICLE X
MISCELLANEOUS PROVISIONS
10.1 Amendment and Modification. This Agreement may be amended, modified or
--------------------------
supplemented only by written agreement of each of the parties.
10.2 Waiver of Compliance; Consents. Any failure of any of the parties to
------------------------------
comply with any obligation, covenant, agreement or condition herein may be
waived by the party or parties entitled to the benefits thereof only by a
written instrument signed by the party granting such waiver, but such waiver or
failure to insist upon strict compliance with such obligation, covenant,
agreement or condition shall not operate as a waiver of, or estoppel with
respect to, any subsequent or other failure. Whenever this Agreement requires
permits consent by or on behalf of any party hereto, such consent shall be given
in writing in a manner consistent with the requirement for a waiver of
compliance as set forth in this Section 10.2.
10.3 Notices. All notices or other communications hereunder shall be in writing
-------
and shall be given (and shall be deemed to have been duly given upon receipt) by
delivery in person against receipt, by facsimile transmission with confirmation
of receipt, by overnight courier service, or by registered or certified mail
(return receipt requested), postage prepaid, with an acknowledgment of receipt
signed by the addressee or an authorized representative thereof, addressed as
follows (or to such other address for a party as shall be specified by like
notice; provided, that notice of a change of address shall be effective only
--------
upon receipt thereof):
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If to AT&T at:
AT&T Corp.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
Wachtell Lipton, ▇▇▇▇▇ & ▇▇▇▇
▇▇ ▇▇▇▇ ▇▇/▇▇/ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Fax:
If to TeleCorp or its Affiliates, to TeleCorp at:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
Mintz, Levin, Cohn, Ferris, Glovsky & Popeo, P.C.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Cadwalader, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
10.4 Parties in Interest; Assignment. This Agreement is binding upon, and is
-------------------------------
solely for the benefit of (except to the extent set forth in Section 10.13) the
parties hereto and their respective Affiliates, permitted successors, legal
representatives and permitted
-46-
assigns. Subject to Section 10.14, neither party may assign its rights and
obligations hereunder without the prior written consent of the other party.
10.5 Applicable Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
--------------
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE
CONFLICTS OF LAW PRINCIPLES THEREOF. THE PARTIES HERETO HEREBY IRREVOCABLY AND
UNCONDITIONALLY CONSENT TO SUBMIT TO THE NONEXCLUSIVE JURISDICTION OF THE COURTS
OF THE STATE OF NEW YORK AND OF THE UNITED STATES OF AMERICA LOCATED IN THE
STATE OF NEW YORK (THE "NEW YORK COURTS") FOR ANY LITIGATION ARISING OUT OF OR
RELATING TO THIS AGREEMENT AND THE TRANSACTIONS, WAIVE ANY OBJECTION TO THE
LAYING OF VENUE OF ANY SUCH LITIGATION IN THE NEW YORK COURTS AND AGREES NOT TO
PLEAD OR CLAIM IN ANY NEW YORK COURT THAT SUCH LITIGATION BROUGHT THEREIN HAS
BEEN BROUGHT IN AN INCONVENIENT FORUM.
10.6 Counterparts. This Agreement may be executed in two or more counterparts,
------------
each of which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument. Facsimile signatures on this Agreement
shall be deemed to be original signatures for all purposes.
10.7 Interpretation. The article and section headings contained in this
--------------
Agreement are for convenience of reference only, are not part of the agreement
of the parties and shall not affect in any way the meaning or interpretation of
this Agreement.
10.8 Entire Agreement. This Agreement, including the Exhibits and Schedule
----------------
hereto and the certificates and instruments delivered pursuant to the terms of
this Agreement, embody the entire agreement and understanding of the parties
hereto in respect of the Transactions. There are no restrictions, promises,
representations, warranties, covenants or undertakings, other than those
expressly set forth or referred to herein. This Agreement supersedes all prior
agreements and understandings between the parties with respect to the
Transactions.
10.9 Publicity. So long as this Agreement is in effect, the parties agree to
---------
consult with each other in issuing any press release or otherwise making any
public statement with respect to the Transactions, and no party shall issue any
press release or make any such public statement prior to such consultation,
except as may be required by Law, including state and Federal securities Laws.
No press release or other public statement by a party shall disclose any of the
financial terms of the Transactions without the prior consent of the other
party, except as may be required by Law. A breach of the provisions of this
Section 10.9 by a party shall not give rise to any right to terminate this
Agreement.
10.10 Specific Performance. The parties hereto agree that irreparable damage
-------------------
would occur if any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. It is
accordingly agreed that the parties
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shall be entitled to an injunction or injunctions to prevent breaches of this
Agreement and to enforce specifically the terms and provisions hereof in any New
York Courts.
10.11 Remedies Cumulative. All rights, powers and remedies provided under this
-------------------
Agreement or otherwise available in respect hereof at law or in equity shall be
cumulative and not alternative, and the exercise or beginning of the exercise of
any thereof by any party shall not preclude the simultaneous or later exercise
of any other such right, power or remedy by such party.
10.12 Severability. Any provision of this Agreement that is prohibited or
------------
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. If any court determines that any covenant or any part of
any covenant is invalid or unenforceable, such covenant shall be enforced to the
extent permitted by such court, and all other covenants shall not thereby be
affected and shall be given full effect, without regard to the invalid portions.
10.13 Beneficiaries of Agreement. The representations, warranties, covenants
--------------------------
and agreements expressed in this Agreement are for the sole benefit of the
parties hereto and the TeleCorp Indemnified Parties and AT&T Indemnified
Parties, and are not intended to benefit, and may not be relied upon or enforced
by, any other party as a third party beneficiary or otherwise.
10.14 Designated Transferee. It is understood and agreed between the parties
---------------------
that TeleCorp or AT&T, respectively, may cause one or more of its direct or
indirect Affiliates or wholly owned Subsidiaries (each a "Designated
Transferee") to acquire all or part of the AT&T Assets or TeleCorp Assets,
respectively, hereunder; provided, that notwithstanding any such designation,
--------
TeleCorp and AT&T, respectively, shall remain fully liable for all of its
obligations and those of the Designated Transferee hereunder; provided, further,
-------- -------
that AT&T may cause its Designated Transferee to pay all or part of the Asset
Payment or Cash Consideration payable hereunder.
10.15 Access to Records. From and after the Closing Date (i) AT&T shall
-----------------
furnish TeleCorp with reasonable access to AT&T's books and records that after
the Closing are in the custody and control of AT&T and that relate solely to the
AT&T Assets as TeleCorp may reasonably request in order to comply with their
obligations under Law, and (ii) TeleCorp shall furnish AT&T with reasonable
access to TeleCorp's books and records that after the Closing are in the custody
and control of TeleCorp and that relate solely to the Boston Licenses and
TeleCorp Assets as AT&T reasonably request in order to comply with its
obligations under Law.
10.16 Agency. TeleCorp is hereby appointed agent of the Designated TeleCorp
------
Affiliates for purposes of effecting the transactions contemplated hereunder.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
AT&T WIRELESS PCS, LLC
By:
Name:
Title:
TELECORP PCS, INC.
By:
Name:
Title:
TELECORP PCS, LLC
By:
Name:
Title:
TELECORP HOLDING CORP., INC.
By:
Name:
Title:
TELECORP COMMUNICATIONS, INC.
By:
Name:
Title:
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TELECORP EQUIPMENT LEASING, L.P.
By:
Name:
Title:
TELECORP REALTY, LLC
By:
Name:
Title:
-50-
