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ANNEX A
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
NEXTEL COMMUNICATIONS, INC.,
DIAL CALL INDIMICH, INC.
AND
WIRELESS VENTURES OF BRAZIL, INC.
DATED AS OF OCTOBER 28, 1996
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TABLE OF CONTENTS
ARTICLE I DEFINITIONS................................................................. 2
1.1 Defined Terms.............................................................. 2
1.2 Other Definitional Matters................................................. 7
ARTICLE II THE MERGER................................................................. 7
2.1 The Merger................................................................. 7
2.1.1 The Merger of Indimich and WVB................................... 7
2.1.2 Effective Time of the Merger..................................... 7
2.1.3 Articles of Incorporation........................................ 8
2.1.4 Bylaws........................................................... 8
2.1.5 Officers and Directors of Surviving Corporation.................. 8
2.1.6 Effects of Merger................................................ 8
2.2 Conversion of Shares....................................................... 8
2.2.1 Effect of Merger on Capital Stock................................ 8
2.2.2 Exchange of Certificates......................................... 9
2.2.3 Dissenters' Rights............................................... 10
2.3 Closing.................................................................... 10
2.4 Unavailable Channels....................................................... 10
2.4.1 Options to Purchase Equity Interests in Licensees................ 10
2.4.2 Frequency Interference........................................... 11
2.4.3 Revocation of Licenses........................................... 12
2.4.4 Liability........................................................ 13
2.5 Closing Balance Sheet...................................................... 13
2.6 Service of Process......................................................... 15
2.7 Tax Treatment of Adjustments............................................... 15
ARTICLE III REPRESENTATIONS AND WARRANTIES OF WVB..................................... 15
3.1 Organization, Good Standing, Etc........................................... 15
3.2 Authorization, Due Execution and Binding Effect............................ 15
3.3 No Approvals or Notices Required; No Conflicts With Instruments............ 16
3.4 Licenses, Permissions, Permits, Authorizations, Etc........................ 16
3.5 Capitalization of WVB and WVB Affiliates................................... 17
3.6 Ownership of WVB Common Stock and Capital Stock of WVB Affiliates.......... 17
3.7 Financial Statements....................................................... 17
3.7.1 General.......................................................... 17
3.7.2 Interim Financial Statements..................................... 18
3.8 Absence of Certain Changes................................................. 18
3.9 Liabilities................................................................ 19
3.10 Intercompany Transactions.................................................. 20
3.11 Taxes...................................................................... 20
3.12 Assets..................................................................... 20
3.13 Channels................................................................... 21
3.14 Compliance With Environmental Laws......................................... 21
3.15 Contracts.................................................................. 22
3.16 Claims and Legal Proceedings............................................... 22
3.17 Interconnect Rights........................................................ 23
3.18 Labor Matters.............................................................. 23
3.19 Patents, Trademarks, Etc................................................... 24
3.20 Customers.................................................................. 25
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3.21 Applicable Laws............................................................ 25
3.22 Insurance.................................................................. 26
3.23 Brokerage.................................................................. 26
3.24 Business Plan.............................................................. 26
3.25 S-4 Registration Statement and Proxy Statement/Prospectus.................. 26
3.26 Full Disclosure............................................................ 26
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF NEXTEL AND INDIMICH...................... 27
4.1 Organization, Good Standing, Etc........................................... 27
4.2 Authorization, Due Execution and Binding Effect............................ 27
4.3 No Approvals or Notices Required; No Conflicts With Instruments............ 27
4.4 Claims and Legal Proceedings............................................... 28
4.5 Nextel SEC Filings......................................................... 28
4.6 Nextel Common Stock........................................................ 28
4.7 Brokerage.................................................................. 28
4.8 S-4 Registration Statement and Proxy Statement/Prospectus.................. 28
4.9 Tax........................................................................ 29
ARTICLE V FURTHER AGREEMENTS.......................................................... 30
5.1 Schedules.................................................................. 30
5.2 Access..................................................................... 30
5.3 Management Information..................................................... 30
5.4 Advice of Claims........................................................... 31
5.5 Conduct of the Business.................................................... 31
5.6 Compliance With Laws....................................................... 32
5.7 Insurance and Loss of or Damage to Assets.................................. 32
5.8 Confidentiality............................................................ 32
5.9 Founders Meeting........................................................... 32
5.10 Registration Statement/Proxy Materials..................................... 33
5.11 No Solicitations........................................................... 33
5.12 Rule 145 Affiliates........................................................ 34
5.13 Tax Covenant............................................................... 35
5.14 Nextel Common Stock........................................................ 35
5.15 Other Cooperation.......................................................... 36
5.16 Certain Brazilian Regulatory Issues........................................ 36
5.17 Brazilian Certificates..................................................... 37
ARTICLE VI CONDITIONS PRECEDENT TO OBLIGATIONS OF NEXTEL AND INDIMICH................. 37
6.1 Accuracy of Representations and Warranties................................. 37
6.2 Performance of Agreement................................................... 37
6.3 Approvals and Consents..................................................... 37
6.4 Founders' Approval......................................................... 37
6.5 Shareholders Agreement..................................................... 38
6.6 Opinion of WVB Counsel..................................................... 38
6.7 Confidentiality, Noncompetition and Proprietary Information Agreements..... 38
6.8 Resignations of Directors, Officers, Employees, Independent Contractors and
Consultants...................................................................... 38
6.9 Legal Proceedings.......................................................... 38
6.10 S-4 Registration Statement and Listing..................................... 38
6.11 Title...................................................................... 39
6.12 WVB Officers' Certificates................................................. 39
6.13 No Change in Political or Economic Conditions in Brazil.................... 39
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6.14 Affiliate Transactions..................................................... 39
6.15 Rule 145 Affiliate Agreements.............................................. 39
6.16 Documentation Relating to Licenses......................................... 39
6.17 Negative Pledge Agreement.................................................. 39
6.18 Brazilian Regulatory Issues................................................ 40
ARTICLE VII CONDITIONS PRECEDENT TO OBLIGATIONS OF WVB................................ 40
7.1 Accuracy of Representations and Warranties................................. 40
7.2 Performance of Agreement................................................... 40
7.3 Approvals and Consents..................................................... 40
7.4 Founders' Approval......................................................... 40
7.5 Shareholders Agreement..................................................... 40
7.6 Nextel and Indimich Officers' Certificate.................................. 41
7.7 Legal Proceedings.......................................................... 41
7.8 S-4 Registration Statement and Listing..................................... 41
7.9 Opinion of Nextel Counsel.................................................. 41
7.10 No Material Adverse Change................................................. 41
7.11 Transfer of Interests of WVB Affiliates.................................... 41
7.12 Termination of Powers of Attorney.......................................... 42
ARTICLE VIII NONCOMPETITION........................................................... 42
8.1 Noncompetition............................................................. 42
8.2 Specific Performance....................................................... 43
ARTICLE IX INDEMNIFICATION AND SURVIVAL OF WARRANTIES................................. 43
9.1 Indemnification by the Founders............................................ 43
9.2 Indemnification by Nextel.................................................. 44
9.3 Procedure.................................................................. 44
9.4 Survival................................................................... 45
ARTICLE X TERMINATION................................................................. 45
10.1 Termination................................................................ 45
10.2 Effect of Termination...................................................... 46
ARTICLE XI GENERAL.................................................................... 47
11.1 Expenses................................................................... 47
11.2 Amendment.................................................................. 47
11.3 Headings................................................................... 47
11.4 Applicable Law............................................................. 47
11.5 Parties in Interest........................................................ 47
11.6 Waivers.................................................................... 48
11.7 Acknowledgment............................................................. 48
11.8 Notices.................................................................... 48
11.9 Counterparts............................................................... 49
11.10 Entire Understanding........................................................ 50
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SCHEDULES
2.2.1 WVB Options
3.1 Organization
3.3 Approvals and Conflicts
3.4 Additional Payments and Fees
3.5 Capitalization of WVB and WVB Affiliates
3.8 Certain Changes or Events
3.9 Undisclosed Material Liabilities
3.10 Intercompany Balances
3.11 Payments
3.12(a) Leases
3.12(b) Real Property
3.12(d) Liens
3.13 Channels
3.15 Contracts
3.16 Claims and Legal Proceedings
3.18 Labor Matters
3.19 Patents, Trademarks, Etc.
3.20 Customers
3.21 Applicable Laws
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EXHIBITS
2.1.2 Forms of Certificate of Merger and Articles of Merger
2.1.3 Form of Amendment to Articles of Incorporation of WVB
2.1.4 Form of Amended and Restated Bylaws of WVB
2.4 Value of Channels
5.12 Form of Affiliate Agreement
5.17 Brazilian Certificates
6.5 Form of Shareholders Agreement
6.6 Form of Opinion of WVB Counsel
6.7 Form of Confidentiality, Noncompetition and Proprietary Information Agreement
6.12 Form of WVB Officers' Certificate
6.18 Form of Negative Pledge Agreement
7.6 Form of Nextel and Indimich Officers' Certificate
7.9 Form of Opinion of Nextel Counsel
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is made as of October
28, 1996 by and among NEXTEL COMMUNICATIONS, INC., a Delaware corporation
("Nextel"), DIAL CALL INDIMICH, INC., a Delaware corporation and direct wholly
owned subsidiary of Nextel ("Indimich"), and WIRELESS VENTURES OF BRAZIL, INC.,
a Virginia corporation ("WVB").
RECITALS
A. WVB, Nextel and Indimich believe it advisable and in their respective
best interests to effect a merger of WVB and Indimich pursuant to this Agreement
(the "Merger").
B. WVB Controls (as defined below) or has certain interests in certain
Persons (as defined below) that (i) hold trunking licenses issued by the
Federative Republic of Brazil ("Brazil") authorizing the use of the 1,700
Specialized Mobile Radio ("SMR") channels listed on Schedule 3.13 in the
frequency ranges of 851.0125 megahertz ("MHz") to 865.9875 MHz for base to
mobile and 806.0125 MHz to 820.9875 MHz for mobile to base in certain cities in
Brazil (the "Channels") and (ii) own certain assets relating to the SMR business
(the businesses of WVB and of the Persons that WVB Controls or Persons of which
WVB or any WVB Affiliate (as defined below) has an option to acquire Control
(the "WVB Affiliates") being referred to collectively herein as the "Business").
C. Prior to the closing of the Merger, WVB intends to exchange each share
of its outstanding common stock, par value $.01 per share, for 81 shares of
Class A Common Stock, par value $.01 per share, having 90/81 votes per share
(the "Class A Common Stock"), and 19 shares of Class B Common Stock, par value
$.01 per share, having 10/19 vote per share (the "Class B Common Stock";
together with the Class A Common Stock, the "WVB Common Stock").
D. WVB desires and intends to submit to a vote of its shareholders (the
"Founders") a proposal to convert all of the outstanding Class A Common Stock
into Class A common stock, par value $.001 per share, of Nextel (the "Nextel
Common Stock") and to cause the merger of Indimich with and into WVB, and Nextel
desires and intends to cause (i) the merger of Indimich with and into WVB (after
the Merger, the "Surviving Corporation"), on the terms and subject to the
conditions herein set forth, and (ii) the transfer of all of the stock of the
Surviving Corporation held by Nextel to XxXxx International, Ltd., an indirect
and wholly owned subsidiary of Nextel.
E. The parties intend that the transactions contemplated hereby qualify as
a tax-free reorganization under Section 368(a) of the Internal Revenue Code of
1986, and the Treasury regulations promulgated thereunder both as amended and in
effect as of the date hereof (the "Code").
F. The Board of Directors of Nextel, Indimich and WVB, and the sole
shareholder of Indimich have approved the Merger and this Agreement.
In consideration of the mutual promises contained herein, the parties
hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1 DEFINED TERMS
As used in this Agreement, the following terms shall have the following
meanings:
"Acquisition Proposal" has the meaning set forth in Section 5.11(a).
"Affiliate" of any Person (the "Subject") means any other Person which,
directly or indirectly, Controls or is Controlled by or is under common
Control with the Subject and, without limiting the generality of the
foregoing, shall in any event include (a) any Person which beneficially
owns or holds 5% or more of
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any class of voting securities of the Subject or 5% or more of the legal or
beneficial interest in the Subject, and (b) any Person of which the Subject
beneficially owns or holds 5% or more of any class of voting securities or
5% or more of the legal or beneficial interest.
"Affiliate Agreement" has the meaning set forth in Section 5.12.
"Agreement" has the meaning set forth in the introductory paragraph.
"AirLink" has the meaning set forth in Section 2.5(b).
"Assets" has the meaning set forth in Section 3.3.
"Brazil" has the meaning set forth in the Recitals.
"Business" has the meaning set forth in the Recitals.
"Certificates" has the meaning set forth in Section 2.2.2(a).
"Channels" has the meaning set forth in the Recitals.
"Class A Common Stock" has the meaning set forth in the Recitals.
"Class B Common Stock" has the meaning set forth in the Recitals.
"Closing" has the meaning set forth in Section 2.3.
"Closing Average" has the meaning set forth in Section 2.2.1(a).
"Closing Balance Sheet" has the meaning set forth in Section 2.5(a).
"Closing Date" has the meaning set forth in Section 2.3. "Code" has the
meaning set forth in the Recitals.
"Confidentiality Agreement" has the meaning set forth in Section 5.8.
"Control" (including, with correlative meanings, the terms "Controlled by"
and "under common Control with"), as used with respect to any Person, means
the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through
the ownership of voting securities or by contract or otherwise.
"Converted Share" has the meaning set forth in Section 2.2.2(a).
"Corporation" has the meaning set forth in Section 7701(a)(3) of the Code.
"Damages" has the meaning set forth in Section 9.1.
"DGCL" has the meaning set forth in Section 2.1.1(b).
"Effective Time" has the meaning set forth in Section 2.1.2.
"Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time.
"Financial Statements" has the meaning set forth in Section 3.7.1.
"Founder Representative" has the meaning set forth in Section 2.4.3.
"Founders" has the meaning set forth in the Recitals.
"HSR Act" has the meaning set forth in Section 4.3.
"Indemnifying Founder" means Telcom Ventures, LLC, South Beach Ventures,
Inc., Xxxxxxxx Xxxxx, Xxxxx Xxxxx, the Xxxxx Xxx Xxxxx Education Trust and
the Samir Xxx Xxxxx Education Trust, and any successor thereto.
"Indemnifying Party" has the meaning set forth in Section 9.3.
"Indemnitee" has the meaning set forth in Section 9.3.
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"Indimich" has the meaning set forth in the introductory paragraph.
"Interim Financial Statements" has the meaning set forth in Section 3.7.2.
"Knowledge of WVB" means, with respect to the existence or absence of a
fact, matter, event or circumstance, the actual knowledge of any director
or officer of WVB, any Founder, or any director or officer of any WVB
Affiliate.
"LCC" has the meaning set forth in Section 2.5(b).
"License" has the meaning set forth in Section 3.4.
"License Issue" has the meaning set forth in Section 2.4.3.
"License Transfer Date" has the meaning set forth in Section 2.4.3(b).
"Lien" means, with respect to any property or asset, any mortgage, lien,
pledge, deed of trust, charge, security interest, encumbrance or other
adverse claim of any kind with respect to such property or asset.
"Master Service Agreement" has the meaning set forth in Section 2.5(b).
"Merger" has the meaning set forth in the Recitals.
"MHz" has the meaning set forth in the Recitals.
"Ministry" has the meaning set forth in Section 5.16(a).
"Ministry Letter" has the meaning set forth in Section 5.16(a).
"Ministry Memorandum" has the meaning set forth in Section 5.16(a).
"Nextel" has the meaning set forth in the introductory paragraph, and shall
include any successor corporations.
"Nextel Common Stock" has the meaning set forth in the Recitals.
"Nextel Representative" has the meaning set forth in Section 2.4.3.
"Nextel Shares" means the shares of Nextel Common Stock to be issued
pursuant to Section 2.2.1.
"Original Letter" has the meaning set forth in Section 5.10.
"PCS" has the meaning set forth in Section 8.1(a).
"Permitted Liens" has the meaning set forth in Section 3.12(d).
"Person" means any individual, partnership, limited liability company,
joint-stock company, firm, corporation, association, unincorporated
organization, joint venture, trust or other entity.
"Personal Property" has the meaning set forth in Section 3.12(a).
"Pro Rata Share" means, with respect to any Indemnifying Founder, the
number of shares of Nextel Common Stock received by such Indemnifying
Founder at the Closing multiplied by the Closing Average.
"Prohibited Transaction" means (i) a transfer by Nextel of the stock of
WVB, or the transfer by WVB of all or a significant part of its assets,
other than a transfer by Nextel of the stock of WVB or a transfer by WVB of
its assets in a transaction that maintains the tax-free status of the
Merger (to the Founders) by reason of Section 368(a)(2)(C) of the Code,
(ii) a transfer by a member of the WVB Group of all or a significant
portion of its assets to an entity other than a corporation (except
transfers of assets in the ordinary course of the transferor's business),
(iii) a transfer by a member of the WVB Group of all or a significant
portion of its assets to a corporation that the transferor does not control
(within the meaning of Section 368(c) of the Code) after the transfer and
(iv) any transaction that terminates the membership of WVB or a WVB
Affiliate in the WVB Group (other than a termination whereby one member of
the WVB Group merges or liquidates into another member of the WVB Group or
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a corporation controlled (within the meaning of Section 368(c) of the Code)
by a member of the WVB Group).
"Proxy Statement/Prospectus" has the meaning set forth in Section 5.10.
"Radio-Tel" has the meaning set forth in Section 5.16(a).
"Regulatory Issue" has the meaning set forth in Section 5.16(a).
"S-4 Registration Statement" has the meaning set forth in Section 5.10.
"Satisfactory Regulatory Comfort" has the meaning set forth in Section
6.18.
"SEC" means the U.S. Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended from time to
time.
"Shareholders Agreement" has the meaning set forth in Section 6.5.
"SMR" has the meaning set forth in the Recitals.
"Superior Proposal" has the meaning set forth in Section 5.11(a).
"Supplemental WVB Proposal" has the meaning set forth in Section 5.16(a).
"Surviving Corporation" has the meaning set forth in the Recitals.
"Tax" and "Taxes" mean any and all net income, gross income, gross
receipts, sales, use, ad valorem, transfer, franchise, profits, license,
withholding, payroll, employment, excise, estimated, stamp, occupation,
premium, property, customs duty and other tax, fee, assessment, or similar
charge of any kind whatsoever, together with interest and penalties,
additions to the tax, and additional amounts imposed in connection with
such tax by any Tax Authority, whether U.S. or foreign.
"Tax Authority" has the meaning set forth in Section 3.11.
"Tax Returns" means all returns (including information returns), reports,
estimates, elections, declarations, statements, forms, requests for
extensions of time, and other documents (including any schedule, exhibit,
or any other attachment to such documents) relating to or required to be
filed with any Tax Authority or any other Person pursuant to any federal,
state or local law, whether U.S. or foreign.
"Telcom" has the meaning set forth in Section 2.2.1(a).
"Telcom Note" means the promissory note dated January 1, 1995 made by WVB
to Telcom.
"Termination Notice Date" has the meaning set forth in Section 2.4.3(b).
"VSCA" has the meaning set forth in Section 2.1.1(a).
"Working Capital Excess" has the meaning set forth in Section 2.5(b).
"WVB" has the meaning set forth in the introductory paragraph.
"WVB Affiliates" has the meaning set forth in the Recitals.
"WVB Common Stock" has the meaning set forth in the Recitals.
"WVB Group" means the "affiliated group" of corporations of which WVB is
the "common parent" corporation (as those terms are used in Section 1504 of
the Code) as determined immediately prior to the Closing Date and without
regard to Section 1504(b)(3) (concerning foreign corporations).
"WVB Optionholders" has the meaning set forth in Section 2.2.1(a).
"WVB Options" has the meaning set forth in Section 2.2.1(a).
"WVA Response" has the meaning set forth in Section 5.16(a).
"WVB Securities" has the meaning set forth in Section 3.5.
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1.2 OTHER DEFINITIONAL MATTERS
(a) The words "this Agreement," "hereby," "herein," "hereof," "hereunder"
and words of similar import refer to this Agreement as a whole and not to any
particular provisions of this Agreement, and the words "Article," "Section,"
"Schedule," "Exhibit" and like references are to this Agreement unless otherwise
specified.
(b) Singular and plural forms, as the case may be, of terms defined herein
have correlative meanings.
(c) Any defined term which relates to a document includes within its
definition any amendments, modifications, renewals, restatements, extensions,
supplements or substitutions which may heretofore have been or which may
hereafter be executed in accordance with the terms thereof and as may be
permitted by this Agreement.
ARTICLE II
THE MERGER
2.1 THE MERGER
2.1.1 THE MERGER OF INDIMICH AND WVB
(a) Upon the terms and subject to the conditions of this Agreement, at the
Effective Time and in accordance with the Delaware General Corporation Law (the
"DGCL") and the Virginia Stock Corporation Act (the "VSCA"), Indimich shall be
merged with and into WVB, and the separate corporate existence of Indimich shall
thereupon cease.
(b) WVB shall be the surviving corporation in the Merger, shall succeed to
all of the assets and liabilities of each of WVB and Indimich, as provided in
the DGCL and the VSCA, and shall continue its existence under the provisions of
the DGCL and the VSCA.
2.1.2 EFFECTIVE TIME OF THE MERGER
On the Closing Date and subject to the terms and conditions hereof, a
certificate of merger and articles of merger complying with the applicable
provisions of the DGCL and the VSCA, respectively, substantially in the form
attached hereto as Exhibit 2.1.2, shall be executed by the parties to the Merger
and filed with the Secretary of State of the State of Delaware and the Virginia
State Corporate Commission, respectively, pursuant to the DGCL and the VSCA,
respectively. The Merger shall become effective at the time and on the date
specified in the articles of merger as so filed, such time being herein called
the "Effective Time."
2.1.3 ARTICLES OF INCORPORATION
The Articles of Incorporation of WVB shall as of the Effective Time be
amended as set forth in Exhibit 2.1.3, and such Articles of Incorporation as so
amended shall be the Articles of Incorporation of the Surviving Corporation
after the Effective Time until duly amended.
2.1.4 BYLAWS
At the Effective Time, the Bylaws of the Surviving Corporation shall be in
the form attached hereto as Exhibit 2.1.4 and shall be the Bylaws of the
Surviving Corporation after the Effective Time until duly amended.
2.1.5 OFFICERS AND DIRECTORS OF SURVIVING CORPORATION
At the Effective Time, the officers and directors of Indimich immediately
prior to the Merger shall become and continue to be the officers and directors
of the Surviving Corporation.
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2.1.6 EFFECTS OF MERGER
The Merger shall have the effects set forth in Section 257 of the DGCL and
Article 12, Section 13.1-721, of the VSCA.
2.2 CONVERSION OF SHARES
2.2.1 EFFECT OF MERGER ON CAPITAL STOCK
(a) At the Effective Time, by virtue of the Merger, and without any action
on the part of any holder of any capital stock of WVB, all issued and
outstanding shares of Class A Common Stock and all vested options to purchase
WVB Common Stock (the "WVB Options") shall be converted in the aggregate into
the right to receive from Indimich that number of shares of Nextel Common Stock
equal to (i) (y) $186,300,000 minus (z) the sum of principal and interest due to
Telcom Ventures, LLC ("Telcom") under the Telcom Note as of the Effective Time,
divided by (ii) the average of the closing prices of the Nextel Common Stock on
the Nasdaq National Market for the 20 trading days following but excluding the
date hereof (the "Closing Average"), to be distributed to the Founders and to
holders of WVB Options (the "WVB Optionholders") on a pro rata basis based on
(a) the number of shares of Class A Common Stock held by each Founder as shown
on Schedule 3.5 and (b) the number and value of the shares of WVB Common Stock
that the WVB Optionholders would be entitled to receive if they had exercised
their options in full in a cashless manner immediately prior to the Closing, in
each case as set forth on Schedule 2.2.1. Upon such conversion, all such shares
of Class A Common Stock shall be canceled and cease to exist, and each holder of
a certificate representing any such shares or options shall cease to have any
rights with respect thereto, except the right to receive from Indimich the
shares of Nextel Common Stock to be issued and cash to be paid in lieu of
fractional shares of Nextel Common Stock in consideration therefor upon the
surrender of such certificate in accordance with Section 2.2.2(b).
(b) Each share of common stock of Indimich issued and outstanding at the
Effective Time shall be cancelled.
(c) At the Effective Time, without any action on the part of the parties
hereto, the Telcom Note shall be exchanged for a number of shares of Nextel
Common Stock having a value equal to (i) the sum of principal and interest due
to Telcom under the Telcom Note as of the Effective Time, divided by (ii) the
Closing Average and rounded to the nearest whole share. Immediately following
the Effective Time, the Telcom Note shall automatically be deemed canceled.
2.2.2 EXCHANGE OF CERTIFICATES
(a) Exchange Procedures. At the Effective Time, Nextel shall issue the
Nextel Shares to Indimich and Indimich shall deliver the Nextel Shares to the
holders of Class A Common Stock and WVB Options pursuant to Section 2.2.1(a) and
to Telcom pursuant to Section 2.2.1(c). Each holder of record of (i) a
certificate or certificates that immediately prior to the Effective Time
represented outstanding shares of Class A Common Stock (the "Certificates") or
(ii) a WVB Option, in each case that were converted (the "Converted Shares")
into the right to receive from Indimich shares of Nextel Common Stock pursuant
to Section 2.2.1, shall surrender at the Effective Time the Certificates, or
original documentation representing the WVB Options, as the case may be, in
exchange for a certificate representing that number of whole shares of Nextel
Common Stock which such holder has the right to receive pursuant to the
provisions of this Section 2.2. If any Certificate shall have been lost, stolen,
mislaid or destroyed, upon receipt of (i) an affidavit of that fact from the
holder claiming such Certificate to be lost, stolen, mislaid or destroyed, (ii)
such bond, security or indemnity as Indimich may reasonably require and (iii)
any other documentation necessary to evidence and effect the bona fide exchange
thereof, Indimich shall cause Nextel to issue to such holder a certificate
representing the number of shares of Nextel Common Stock into which the shares
represented by such lost, stolen, mislaid or destroyed Certificate shall have
been converted. Each WVB Optionholder shall provide to Indimich evidence
satisfactory to Indimich of the full and complete satisfaction of all
obligations of WVB to such WVB Optionholder.
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(b) No Fractional Securities. Notwithstanding any other provision of this
Agreement, Indimich shall not transfer any fractional share of Nextel Common
Stock upon the surrender for exchange of Converted Shares. In lieu of any such
fractional shares, any holder of WVB Common Stock and any WVB Optionholder who
would otherwise have been entitled to a fractional share of Nextel Common Stock
shall be entitled to receive from Indimich a cash payment in lieu of such
fractional share in an amount equal to the product of such fraction multiplied
by the Closing Average, without any interest thereon.
(c) Restrictions on Transfer of WVB Common Stock and WVB Options. From and
after the date hereof, other than as described in Section 3.5, WVB shall issue
no additional shares of capital stock and grant no additional options to
purchase capital stock of WVB, and no transfer of any capital stock of WVB shall
be made except to any donee which agrees to be bound by the terms of this
Agreement.
2.2.3 DISSENTERS' RIGHTS
Each holder of shares of Class A Common Stock shall have the dissenters'
rights set forth in Article 15 of the VSCA.
2.3 CLOSING
The closing of the Merger (the "Closing") shall take place at the offices
of Nextel, 0000 Xxxx Xxxxxx Xxxxx, XxXxxx, Xxxxxxxx, and the dates of the
Closing shall be within five business days following satisfaction or waiver of
the conditions set forth in Article VII, or at such other place or time as
Nextel and WVB may agree (the "Closing Date").
2.4 UNAVAILABLE CHANNELS
2.4.1 OPTIONS TO PURCHASE EQUITY INTERESTS IN LICENSEES
(a) WVB shall (and, so long as the Founders shall Control WVB, the Founders
shall cause each of the WVB Affiliates to) use its commercially reasonable best
efforts to cause, to the extent permitted by applicable laws and without the
incurrence of any material cost to WVB or the Founders, the restructuring of any
agreement between any WVB Affiliate and any third party which jointly owns
equity interests in another WVB Affiliate to (i) increase WVB's direct and
indirect equity ownership of the WVB Affiliates, (ii) cause the transfer of any
equity interests in a WVB Affiliate held by a third party which is a natural
person to a legal entity Controlled by such natural person, and (iii) cause the
transfer to a WVB Affiliate or a designee of a WVB Affiliate of any equity
interests in another WVB Affiliate held by a third party. Nextel and its
Affiliates shall, and following the Closing Date Nextel shall cause the
Surviving Corporation and the WVB Affiliates to, use their commercially
reasonable best efforts to assist in achieving the objectives set forth in the
preceding sentence, including without limitation after the Closing Date paying
the remaining portion of the purchase price, if any, payable under any such
agreement, to the extent such portion is reflected in the Closing Balance Sheet,
and the costs, if any, incurred in effecting such restructuring or transfer. To
the extent the remaining portion of the purchase price, if any, payable under
any such agreement is not reflected in the Closing Balance Sheet, the
Indemnifying Founders shall pay such portion, if required, whether or not
disclosed in the Schedules hereto.
(b) If, on the second anniversary of the Closing Date, the Surviving
Corporation shall not have acquired, directly or indirectly, at least 99% of the
equity interests in any Person owning the License with respect to any Channel
(despite the commercially reasonable best efforts of the Surviving Corporation
and the WVB Affiliates to acquire such interests), unless the Surviving
Corporation shall have received assurances reasonably satisfactory to the
Surviving Corporation that such percentage ownership will be approved by the
relevant Brazilian authorities within the next succeeding six months, the
Surviving Corporation may provide notice to Telcom within 20 days of such second
anniversary demanding payment in accordance with this Section 2.4.1(b). Within
10 days after such notice, (i) the Indemnifying Founders shall pay to the
Surviving Corporation in cash the value of such Channel, as set forth in Exhibit
2.4, or transfer to the Surviving Corporation shares of Nextel Common Stock
having the same value, rounded to the nearest whole share, based on the average
of the closing prices of the Nextel Common Stock on the principal trading market
on
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which such shares are traded for the 20 trading days prior to the date of
transfer of such stock to Nextel, and (ii) on the date of payment, the Surviving
Corporation shall cause the transfer of the Surviving Corporation's direct or
indirect interests in the Person that owns the License with respect to such
Channel to Telcom or any Person designated by Telcom, subject to applicable
regulatory approval, if any. The Founders' aggregate liabilities under this
Section 2.4.1 shall not exceed $25,000,000.
2.4.2 FREQUENCY INTERFERENCE
(a) If, on the Closing Date, any Channel is subject to actual frequency
interference that materially prejudices such Channel's use for its intended
purpose permitted under the applicable License, other than interference that is
required by applicable law or regulation to be abated within six months after
the Closing Date (so long as the application of such law or regulation shall not
have been enjoined or held invalid by a court of competent jurisdiction), the
Surviving Corporation may provide notice to Telcom within 60 days of the Closing
Date demanding payment in accordance with this Section 2.4.2(a). Within 10 days
after such notice, (i) the Indemnifying Founders shall pay to the Surviving
Corporation in cash the value of such Channel, as set forth on Exhibit 2.4, or
transfer to the Surviving Corporation shares of Nextel Common Stock having the
same value, based on the average of the closing prices of the Nextel Common
Stock on the principal trading market on which such shares are traded for the 20
trading days prior to the date of transfer of such stock to Nextel, and (ii) on
the date of such payment, the Surviving Corporation shall cause the relevant WVB
Affiliate to transfer all of its rights with respect to such Channel to Telcom
or any Person designated by Telcom, subject to applicable regulatory approval,
if any.
(b) Notwithstanding the foregoing, if such interference exists as of the
Closing Date, but is required by applicable law or regulation to be abated more
than six months following the Closing Date, the Surviving Corporation and the
Founders shall use commercially reasonable best efforts to cause the abatement
of such interference. If such interference shall not have been abated as of the
18-month anniversary of the Closing Date, the parties shall take the actions
described in Sections 2.4.2(a)(i) and (ii) above within 10 days after written
notice given by the Surviving Corporation within 10 days following such 18-month
anniversary.
2.4.3 REVOCATION OF LICENSES
(a) If, as of the 15-month anniversary of the Closing Date, WVB or any WVB
Affiliate shall have received notification from the Brazilian government of
termination of the License with respect to any Channel because any action had
not been taken or was not being taken, or because the WVB Affiliate was not in
full compliance with all requirements of any law or regulation relating to such
License, in each case on or prior to the Closing Date, the Indemnifying Founders
shall upon notice given by the Surviving Corporation within 20 days following
such 15-month anniversary (or, subject to Section 2.4.3(b), following the
conclusion of any unsuccessful contest contemplated by Section 2.4.3(b)) within
10 days of such notice pay to the Surviving Corporation in cash the value of
such Channel, as set forth on Exhibit 2.4, or transfer to the Surviving
Corporation shares of Nextel Common Stock having the same value, based on the
average of the closing prices of the Nextel Common Stock on the principal
trading market on which such shares are traded for the 20 trading days prior to
the date of transfer of such stock to Nextel.
(b) Between the date hereof and the 15-month anniversary of the Closing
Date, WVB shall provide to Nextel and the Indemnifying Founders copies of any
correspondence with the Brazilian government relating to any claimed or possible
violation of any law or regulation relating to telecommunications in Brazil (a
"License Issue") and shall further provide all other material information from
any party relating to any such License Issue. Immediately following the receipt
of any information indicating that a License Issue exists, the Surviving
Corporation shall form a two-person team to respond to such termination (the
"Team") composed of a designee of Nextel (the "Nextel Representative") and a
designee of Telcom (the "Founder Representative"); provided, however, that
neither the Founder Representative nor the Nextel Representative nor any other
Person acting on the behalf of either Nextel or Telcom or any of their
Affiliates shall contact, directly or indirectly, any Brazilian official or
governmental entity regarding such termination or any issue related to such
termination without the written consent of the Representative of the other side,
which consent shall not be unreasonably withheld. All reasonable expenses of the
Team shall be borne equally except if the Indemnifying
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Founders are ultimately obligated to make a payment to WVB in respect of such
License revocation, in which case the Indemnifying Founders shall bear the
reasonable expenses of the Team. The Team shall be responsible for all material
actions to be taken with respect to such possible or actual termination. If the
Team is unable to agree on how best to respond to any License Issue, either
member of the Team shall have the right to petition the President of each of
Nextel and Telcom to resolve such disagreement. If any such disagreement is not
resolved within 10 days of such a petition, then Nextel must decide either to
(a) assume control of the response with respect to such License Issue, in which
case the Indemnifying Founders shall have no obligations to WVB with respect to
the relevant Channels pursuant to this Section 2.4.3 or (b) permit Telcom to
control the handling of the License Issue. If any License is terminated by the
Brazilian government on or prior to the 15-month anniversary of the Closing Date
for the reasons set forth in Section 2.4.3(a) (the date which notice of such
termination is received by the Surviving Corporation being referred to as the
"Termination Notice Date"), the Surviving Corporation will give written notice
thereof promptly (and in no event later than 20 days following the 15-month
anniversary of the Closing Date) to the Indemnifying Founders. Upon the later of
the one-year anniversary of the Termination Notice Date and the 15-month
anniversary of the Closing Date, if the termination of such License shall not
have been rescinded, the Indemnifying Founders shall make the payment to the
Surviving Corporation in the amount and in the form required by Section
2.4.3(a), and at the request of Telcom, the Surviving Corporation shall, subject
to applicable law and regulation, transfer all rights to such License, including
the right to contest the termination of such License, to the Indemnifying
Founders or their designees (such date of transfer being referred to as the
"License Transfer Date"). If the Indemnifying Founders shall recover full use of
such License prior to the 12-month anniversary of the License Transfer Date,
then the Indemnifying Founders shall have the right to require the Surviving
Corporation to repurchase such License in cash in exchange for the value of the
relevant Channels as set forth on Exhibit 2.4.
2.4.4 LIABILITY
Each of the Indemnifying Founders, by his, her or its approval of this
Agreement, agrees to be bound by the terms of this Section 2.4. The Indemnifying
Founders' liabilities under this Section 2.4 shall be joint and several;
provided, however, that each Indemnifying Founder's liability under this Section
2.4 shall be limited to such Indemnifying Founder's Pro Rata Share.
2.5 CLOSING BALANCE SHEET
(a) As promptly as practicable, but no later than 30 days after the Closing
Date, Telcom, on behalf of the Founders, shall cause to be delivered to Nextel a
consolidated balance sheet of WVB and the WVB Affiliates as of the Closing Date
(the "Closing Balance Sheet"), which shall have been reviewed by KPMG Peat
Marwick LLP. The Closing Balance Sheet shall (i) fairly present the consolidated
financial position of WVB and the WVB Affiliates as at the close of business on
the Closing Date in accordance with U.S. generally accepted accounting
principles applied on a basis consistent with the Financial Statements, (ii)
include line items substantially consistent with those in the Financial
Statements, and (iii) be prepared in accordance with accounting policies and
practices consistent with those used in the preparation of the Financial
Statements.
(b) To the extent that the Closing Balance Sheet indicates that the
consolidated current liabilities of WVB and the WVB Affiliates exceed the
consolidated current assets of WVB and the WVB Affiliates immediately following
the Effective Time by more than US$6,000,000 (any such excess being referred to
herein as the "Working Capital Excess"), by their approval of this Agreement,
the Indemnifying Founders agree to pay Nextel the Working Capital Excess in cash
or, at the option of Telcom, in Nextel Common Stock (valued at the average of
the closing prices of the Nextel Common Stock on the Nasdaq National Market for
the 20 trading days prior to the date of transfer of such shares) within 15 days
of Telcom's delivery of the Closing Balance Sheet, subject to Section 2.5(c).
The amount payable to LCC, L.C.C. ("LCC") under the Master Service Agreement
between LCC and AirLink Servicos e Comercio, Ltda. ("AirLink") dated as of
September 5, 1996 (the "Master Service Agreement"), as reflected on the Closing
Balance Sheet, shall not exceed $275,000, and the amount payable to LCC under
the ANET Agreement between LCC and AirLink
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dated as of October 21, 1994, as amended March 28, 1996, as reflected on the
Closing Balance Sheet, shall not exceed $200,000.
(c) If Nextel disagrees with Telcom's calculation of the Working Capital
Excess, Nextel may, within 15 days of Telcom's delivery of the Closing Balance
Sheet, deliver a notice to Telcom disagreeing with such calculation and setting
forth Nextel's calculation. Any such notice of disagreement shall specify those
items or amounts as to which Nextel disagrees, and Nextel shall be deemed to
have agreed with all other items and amounts contained in the Closing Balance
Sheet and the calculation of the Working Capital Excess delivered pursuant to
Section 2.5(a).
(d) If a notice of disagreement shall be delivered pursuant to Section
2.5(c), Nextel and Telcom shall, during the 15 days following such delivery, use
their best efforts to reach agreement on the disputed items or amounts in order
to determine, as may be required, the amount of the Working Capital Excess,
which amount shall not be less than the amount thereof shown in Telcom's
calculations delivered pursuant to Section 2.5(b) nor more than the amount
thereof shown in Nextel's calculation delivered pursuant to Section 2.5(c). If,
during such period, Nextel and Telcom are unable to reach such agreement, they
shall promptly thereafter cause an independent accounting firm of nationally
recognized standing reasonably satisfactory to Nextel and Telcom (which shall
not have any material relationship with Nextel or Telcom or any of their
Affiliates), promptly to review this Agreement and the disputed items or amounts
for the purpose of calculating the Working Capital Excess. WVB and Telcom shall
provide all detailed documentation necessary to support the computation
underlying Telcom's calculation of the Working Capital Excess. In making such
calculation, such independent accountants shall consider only those items or
amounts in the Closing Balance Sheet or Telcom's calculation of the Working
Capital Excess as to which Nextel has disagreed. Such independent accountants
shall deliver to Nextel and Telcom, as promptly as practicable, a report setting
forth such calculation. Such report shall be final and binding upon Nextel and
Telcom. The cost of such review and report shall be borne (i) by Nextel if the
difference between the Working Capital Excess and Nextel's calculation of the
Working Capital Excess delivered pursuant to Section 2.5(b) is greater than the
difference between the Working Capital Excess and Telcom's calculation of the
Working Capital Excess delivered pursuant to Section 2.5(c), (ii) by Telcom if
the first such difference is less than the second such difference, and (iii)
otherwise equally by Nextel and Telcom.
(e) Nextel and WVB agree that they will, and agree to cause their
respective independent accountants and each WVB Affiliate to, cooperate and
assist in the preparation of the Closing Balance Sheet and the calculation of
the Working Capital Excess and in the conduct of the audits and reviews referred
to in this Section 2.5, including, without limitation, the making available to
the extent necessary of books, records, work papers and personnel.
2.6 SERVICE OF PROCESS
WVB, as the surviving corporation in the Merger, hereby agrees that it may
be served with process in Delaware in any proceeding referred to in Section
252(d) of the DGCL, and hereby irrevocably appoints the Secretary of State of
Delaware as its agent to accept service of process in any suit or other
proceeding for such purposes; a copy of such process shall be mailed to WVB by
the Secretary of State to the address provided for WVB in Section 11.8.
2.7 TAX TREATMENT OF ADJUSTMENTS
Any payment made pursuant to Section 2.4, Section 2.5 or Article IX shall
be treated by the parties for federal income tax purposes as an adjustment to
the purchase price, unless otherwise required by law.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF WVB
To induce Nextel and Indimich to enter into and perform this Agreement, WVB
represents and warrants to Nextel and Indimich (which representations and
warranties shall survive the Closing as provided in
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Xxxxxxx 9.4) all as follows in this Article III. The contents of any particular
Schedule to this Article III shall not be deemed included in any other Schedule
unless specifically cross-referenced to such Schedule.
3.1 ORGANIZATION, GOOD STANDING, ETC.
WVB is a corporation duly organized, validly existing and in good standing
under the laws of Virginia, and each WVB Affiliate is duly organized, validly
existing and in good standing under the laws of its respective jurisdiction of
organization. Each of WVB and the WVB Affiliates has all corporate power and
authority required to own, operate and lease its properties and assets and to
carry on its business (including the SMR business, when applicable) as now
conducted, except where such failure to have corporate power and authority would
not have a material adverse effect on WVB and the WVB Affiliates, taken as a
whole. Except as listed on Schedule 3.1, neither WVB nor any WVB Affiliate is
required to be qualified to do business as a foreign corporation in any state or
country. Except as listed on Schedule 3.5, WVB does not have any subsidiaries or
any direct or indirect investments in any other Person.
3.2 AUTHORIZATION, DUE EXECUTION AND BINDING EFFECT
Other than the vote of the Founders, all corporate action, including, but
not limited to, the approval of the board of directors of WVB and, if required,
the approval of the boards of directors, shareholders or quotaholders of the WVB
Affiliates, to authorize and perform this Agreement and the transactions
contemplated hereby has been taken. This Agreement has been duly executed and
delivered by WVB and is a legal, valid and binding obligation of WVB enforceable
in accordance with its terms, subject to the approval of the Founders.
3.3 NO APPROVALS OR NOTICES REQUIRED; NO CONFLICTS WITH INSTRUMENTS
Except as listed on Schedule 3.3 and except where a violation would not
have a material adverse effect on WVB and the WVB Affiliates, taken as a whole,
the execution, delivery and performance of this Agreement by WVB and the
consummation of the transactions contemplated hereby, including, but not limited
to, the transfer of control of the Persons holding all SMR rights (which include
but are not limited to telephony and interconnect rights as of the date hereof
and as of the Closing Date) in Brazil of WVB and the WVB Affiliates, do not and
will not (a) violate the corporate charter or other organizational documents of
the Founders, WVB or the WVB Affiliates, (b) constitute a violation (with or
without the giving of notice or lapse of time, or both) of any law, rule,
regulation, judgment, injunction, order or decree applicable to the Founders,
WVB or the WVB Affiliates, (c) require any consent, approval or authorization of
any Person, governmental authority or other organization or entity, (d) result
in a default under, an acceleration or termination of, or the creation in any
party of the right to accelerate, terminate, modify or cancel, or in any other
way materially affect the rights of WVB under, any material agreement, lease,
note or other restriction, encumbrance, obligation or liability to which any of
the Founders, WVB or the WVB Affiliates are a party or by which the Founders,
WVB or the WVB Affiliates are bound or to which the assets (whether real or
personal, tangible or intangible) of WVB and the WVB Affiliates (the "Assets")
are subject, or (e) result in the creation or imposition of any Lien on any of
the Assets. WVB has provided to Nextel true and complete copies of all corporate
and organizational documents of WVB and the WVB Affiliates, and there has been
no change to any such documents since the date of such certification except as
described on Schedule 3.3. WVB has provided to Nextel copies of the minute books
and other customary corporate documents of WVB and the WVB Affiliates, and such
minute books and other customary corporate documents are true, complete and
correct.
3.4 LICENSES, PERMISSIONS, PERMITS, AUTHORIZATIONS, ETC.
WVB and the WVB Affiliates have received all currently required
governmental approvals, authorizations, consents, licenses, orders, permissions,
registrations and permits of all agencies, whether local or national, including,
but not limited to, municipal and national licenses to engage in the business of
trunking throughout Brazil and authorizations to use the Channels (collectively,
the "Licenses"), and all such Licenses are valid and in force, except where the
failure to have any such valid License in force would not, individually
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or in the aggregate, have a material adverse effect on WVB and the WVB
Affiliates, taken as a whole. Except as listed on Schedule 3.4 and except for
"Fistel" payments and other tax obligations generally applicable to SMR Licenses
in Brazil, no additional payments or fees of any kind are required to be paid to
governmental authorities to conduct the Business. Except as listed on Schedule
3.4, all Fistel payments, other tax obligations generally applicable to SMR
Licenses in Brazil and other payments or fees required to be paid to
governmental authorities to conduct the Business have been paid.
3.5 CAPITALIZATION OF WVB AND WVB AFFILIATES
As of the date hereof, there are 1,000,000 authorized shares of WVB Common
Stock and 90,341 shares of WVB Common Stock issued and outstanding. Immediately
prior to the Closing, there shall be 7,317,621 shares of Class A Common Stock
and 1,716,479 shares of Class B Common Stock issued and outstanding. All
outstanding shares of capital stock of WVB and the WVB Affiliates have been duly
authorized and validly issued and are fully paid and non-assessable. Except as
described in this Section 3.5 and on Schedule 3.5, there are no outstanding (a)
shares of capital stock or voting securities of WVB or any WVB Affiliate, (b)
securities of WVB or any WVB Affiliate convertible into or exchangeable for
shares of capital stock or voting securities of WVB or any WVB Affiliate, or (c)
options or other rights to acquire from WVB or any WVB Affiliate, or other
obligation of WVB or any WVB Affiliate to issue, any capital stock, voting
securities or securities convertible into or exchangeable for capital stock or
voting securities of WVB or any WVB Affiliate (the items in clauses (a), (b) and
(c) being referred to collectively as the "WVB Securities"). There are no
outstanding obligations of WVB, any WVB Affiliate or any Affiliate of WVB to
acquire any WVB Securities. Schedule 3.5 is a true and complete list of the
jurisdiction of organization, type of entity, attorney-in-fact (if any),
delegate manager (if any), capitalization and voting rights of WVB and each WVB
Affiliate. All capital invested by WVB and Telcom in the WVB Affiliates in
Brazil has been duly registered with the Central Bank of Brazil as evidenced by
Certificates of Foreign Investment issued by the Central Bank of Brazil, except
as listed on Schedule 3.5.
3.6 OWNERSHIP OF XXX XXXXXX XXXXX XXX XXXXXXX XXXXX XX XXX AFFILIATES
The Founders are the record and legal owners of the shares of WVB Common
Stock listed as owned by them on Schedule 3.5, free and clear of any Lien and
any other limitation or restriction (including any restriction on the right to
vote, sell or otherwise dispose of the WVB Common Stock). WVB and the WVB
Affiliates are the record and legal owners of the capital stock of the WVB
Affiliates owned by them, as disclosed on Schedule 3.5, free and clear of any
Lien and any other limitation or restriction (including any restriction on the
right to vote, sell or otherwise dispose of any such capital stock). All
individuals who own quotas in the WVB Affiliates that are majority-owned by WVB
are nominees who have no rights to transfer or prevent the transfer of such
quotas other than as instructed by WVB or its Affiliates.
3.7 FINANCIAL STATEMENTS
3.7.1 GENERAL
WVB has previously delivered to Nextel consolidated financial statements of
WVB and the WVB Affiliates as of and for the year ended December 31, 1995 and as
of and for the seven months ended July 31, 1996 (the "Financial Statements").
The Financial Statements present fairly the consolidated financial position and
results of operations of WVB and the WVB Affiliates as of the dates and for the
periods indicated therein in accordance with U.S. generally accepted accounting
principles consistently applied; provided, however, that the Financial
Statements for the seven months ended July 31, 1996 may be subject to normal
year-end adjustments of a type consistent with prior years and without
footnotes.
3.7.2 INTERIM FINANCIAL STATEMENTS
WVB has furnished or will furnish to Nextel prior to the Closing monthly
consolidated financial statements of WVB and the WVB Affiliates for periods
subsequent to July 31, 1996 (the "Interim Financial Statements"). Any such
Interim Financial Statements shall be delivered to Nextel within 30 days of the
last
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day of the relevant month. The Interim Financial Statements will have been
prepared and present fairly the consolidated financial condition of WVB and the
WVB Affiliates as of the dates and for the periods indicated thereon in
accordance with U.S. generally accepted accounting principles consistently
applied, subject to normal year-end adjustments of a type consistent with prior
years and without footnotes.
3.8 ABSENCE OF CERTAIN CHANGES
Since July 31, 1996, except as contemplated by this Agreement, and except
as listed on Schedule 3.8, the Business has been conducted in the ordinary
course consistent with past practices and there has not been
(a) to the knowledge of WVB, any event, occurrence, development or state of
circumstances or facts relating to WVB, Telcom or any WVB Affiliate that has had
or could reasonably be expected to have a material adverse effect on the
Business (other than laws or regulations adopted or published for comment,
public court challenges to existing laws or regulations or changes in the
Brazilian economy generally);
(b) any declaration, setting aside or payment of any dividend or other
distribution, whether in cash or securities, with respect to any shares of
capital stock of WVB or any WVB Affiliate, or any repurchase, redemption or
other acquisition by WVB or any WVB Affiliate of any outstanding shares of
capital stock or other securities of, or other ownership interests in, WVB or
any WVB Affiliate;
(c) any amendment of any material term of any outstanding security of WVB
or any WVB Affiliate;
(d) any incurrence, assumption or guarantee by WVB or any WVB Affiliate of
any indebtedness for borrowed money;
(e) any creation or assumption by WVB or any WVB Affiliate of any Lien on
any material asset other than in the ordinary course of business consistent with
past practices;
(f) any making of any loan, advance or capital contributions to or
investment in any Person by WVB or any WVB Affiliate;
(g) any damage, destruction or other casualty loss (whether or not covered
by insurance) affecting the Business or the assets of WVB or any WVB Affiliate
that, individually or in the aggregate, has had or would reasonably be expected
to have a material adverse effect on the Business;
(h) any transaction or commitment made, or any contract or agreement
entered into, by WVB or any WVB Affiliate relating to its assets or the Business
(including the acquisition or disposition of any assets) or any relinquishment
by WVB or any WVB Affiliate of any contract or other right, in either case,
material to WVB or any WVB Affiliate, other than transactions and commitments in
the ordinary course of business consistent with past practices or contemplated
by this Agreement;
(i) any change in any method of accounting or accounting practice by WVB or
any WVB Affiliate;
(j) any (i) employment, deferred compensation, severance, retirement or
other similar agreement entered into by WVB or any WVB Affiliate with any
director, officer or employee thereof or consultant thereto (or any amendment to
any such existing agreement), (ii) grant of any severance or termination pay to
any director, officer or employee of or consultant to WVB or any WVB Affiliate,
or (iii) change in compensation or other benefits payable to any director,
officer or employee of or consultant to WVB or any WVB Affiliate pursuant to any
severance or retirement plans or policies thereof; or
(k) any labor dispute, other than routine individual grievances, or any
activity or proceeding by a labor union or representative thereof to organize
any employees of WVB or any WVB Affiliate, which employees were not subject to a
collective bargaining agreement as of the date of the most recent Interim
Financial Statements, or any lockouts, strikes, slowdowns, work stoppages or
threats thereof by or with respect to any employees of WVB or any WVB Affiliate.
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3.9 LIABILITIES
There are no long-term liabilities of WVB or any WVB Affiliate of any kind
whatsoever, whether accrued, contingent, absolute, determined, determinable or
otherwise, that are required by generally accepted accounting principles to be
reflected in a balance sheet or in the notes thereto, and there is no existing
condition, situation or set of circumstances that is reasonably likely to result
in such a liability, other than liabilities provided for in the Financial
Statements or disclosed on Schedule 3.9. Except as disclosed on Schedule 3.9,
none of the liabilities of WVB or the WVB Affiliates are past due, and all such
liabilities were incurred in the ordinary course of business on terms consistent
with past practices.
3.10 INTERCOMPANY TRANSACTIONS
Except as disclosed on Schedule 3.10, there are no intercompany balances,
and there are no and have not been any intercompany transactions, between WVB or
the WVB Affiliates, on the one hand, and the Founders, on the other hand.
3.11 TAXES
WVB and the WVB Affiliates have accurately prepared in all material
respects and duly filed with the appropriate federal, state, local and foreign
taxing authorities (the "Tax Authorities") all tax returns, information returns
and reports that are, individually and in the aggregate, material and are
required to be filed on or before the date hereof with respect to WVB and the
WVB Affiliates, and, except as disclosed on Schedule 3.11, have paid in full or
made adequate provision for the payment of all material Taxes. Except as
disclosed on Schedule 3.11, neither WVB nor any WVB Affiliate is delinquent in
the payment of any material Taxes, and no deficiencies have been assessed or
threatened with respect to any Taxes. Neither WVB nor any WVB Affiliate has
requested or received from any Tax Authorities any extensions or tolling
arrangements with respect to any Taxes or is subject to any open or threatened
audits by any Tax Authorities.
3.12 ASSETS
(a) WVB has delivered to Nextel true and complete copies of all material
leases, subleases, rental agreements, contracts of sale or licenses of any
portion of the personal property (the "Personal Property") owned, leased or
rented by WVB and the WVB Affiliates as of the date hereof. WVB or the WVB
Affiliates have legal ownership of or other legal rights to use all property
used in the conduct of the Business as presently conducted. Schedule 3.12(a)
lists all leased Personal Property with a monthly lease payment (or annual lease
payment pro-rated on a monthly basis) in excess of 1,000 Brazilian Reals.
(b) Except as listed on Schedule 3.12(b), WVB and the WVB Affiliates do not
own, lease or use any material real property.
(c) Each material lease, license, rental agreement, contract of sale or
other agreement to which any Assets are subject is valid and in good standing;
each of WVB and the WVB Affiliates have performed all material obligations
imposed upon it thereunder, and none of WVB, the WVB Affiliates or, to the
knowledge of WVB, any other party thereto is in material default thereunder in
any material respect, nor is there any event that with or without the giving of
notice or lapse of time, or both, would constitute a material default thereunder
by WVB or the WVB Affiliates or, to the knowledge of WVB, any other party
thereto. Neither WVB nor the WVB Affiliates have received notice, and none of
the Founders is otherwise aware, that any party to any such lease, license,
rental agreement, contract of sale or other agreement intends to cancel,
terminate or refuse to renew the same or to exercise or decline to exercise any
option or other right thereunder. No Assets are subject to any lease, license,
contract of sale or other agreement that is reasonably likely to have a material
adverse effect upon the business, properties or financial condition of WVB or
any WVB Affiliates.
(d) Except as listed on Schedule 3.12(d), the Assets are free and clear of
all Liens other than landlord's Liens, Liens for taxes not yet due or for
overdue taxes disclosed on Schedule 3.9, workmen's Liens, vendor's Liens or
other immaterial Liens arising in the ordinary course of business (collectively,
"Permitted Liens")
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and, other than leased Assets, each of WVB and the WVB Affiliates have good and
marketable title thereto. WVB and the WVB Affiliates have valid leasehold
interests in all leased Assets.
(e) No Person has any right of first refusal or option to acquire any
interest in the Assets or any part thereof, and neither WVB nor the WVB
Affiliates have sold or contracted to sell the Assets or any part thereof or
interest therein other than as set forth herein.
3.13 CHANNELS
WVB directly or indirectly holds licenses for, or has enforceable rights to
acquire Persons that hold licenses for, the Channels, as listed on Schedule
3.13. Schedule 3.13 sets forth the location of each Channel, the number of such
Channel, the WVB Affiliate having rights to such Channel, the dates of grant and
expiration of the License with respect to such Channel, any extension or renewal
periods or requests therefor, and the status thereof with respect to such
License, any required loading dates, and the status thereof, with respect to
such Channel, the number of subscribers using Channels in such location as of
September 30, 1996 and the nature of any frequency interference with the use of
such Channel. Except as listed on Schedule 3.13, the Founders, WVB and the WVB
Affiliates have no other interests, direct or indirect, contingent or pending,
in frequencies capable of being used for SMR service in Brazil. To the knowledge
of WVB, any commercially reasonable action that is necessary to preserve the
rights to any Licenses or Channels has been taken or is being taken, subject to
the policies described on Schedule 3.21. The WVB Affiliates have followed the
policies described on Schedule 3.21, which policies WVB reasonably believes
comply with the requirements of applicable law and regulations.
3.14 COMPLIANCE WITH ENVIRONMENTAL LAWS
None of the Founders, WVB, the WVB Affiliates or any other Person
(including, without limitation, any previous owner, lessee, sublessor or
sublessee) has generated, handled, used, manufactured, processed, distributed in
commerce, transported, treated, stored, disposed of, or released (or arranged
for the transportation, treatment, storage, disposal or release of) petroleum,
petroleum products, hazardous waste, hazardous chemicals or substances, toxic
chemicals, chemical substances or mixtures, pollutants or contaminants on, at or
from any assets or properties owned, leased, subleased or used by WVB or the WVB
Affiliates in the operation of the Business or on, at or from any real property
to which any of the above-listed substances from the above-listed assets or
properties were transported, or at or on which they were treated or disposed, in
a manner that could subject WVB, the WVB Affiliates or Nextel or its Affiliates
to any material liability under any provision of law in existence on or prior to
the Closing Date.
3.15 CONTRACTS
WVB has given to Nextel a copy of, and made available for review by Nextel
originals of, all material contracts, oral or written, to which WVB, Telcom (to
the extent such contract relates to the Business) and the WVB Affiliates are a
party, including, without limitation, security agreements, conditional sale
agreements and instruments relating to the borrowing of money. Schedule 3.15
lists all such contracts. All such contracts are valid and in full force and
effect, WVB or the WVB Affiliates, as the case may be, have performed all
material obligations imposed upon it or them thereunder, and there are not,
under any of such contracts, any defaults or events of default on the part of
WVB or the WVB Affiliates, as the case may be, or, to the knowledge of WVB, any
other party thereto, that would materially adversely affect the business, assets
or financial condition of WVB or such WVB Affiliate or which could reasonably be
expected to materially adversely affect the business prospects of WVB or such
WVB Affiliate. Neither WVB nor any WVB Affiliate has received notice, nor is WVB
otherwise aware, that any party to any such contract intends to cancel,
terminate or refuse to renew such contract or to exercise or decline to exercise
any option or right thereunder.
3.16 CLAIMS AND LEGAL PROCEEDINGS
Except as described on Schedule 3.16, there are no claims, actions, suits,
arbitrations, proceedings or investigations pending or, to the knowledge of WVB,
threatened against any of the Founders, WVB or any
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WVB Affiliate with respect to the Business, before or by any governmental or
nongovernmental department, commission, board, bureau, agency, instrumentality
or any other Person. Except as described on Schedule 3.16, to the knowledge of
WVB, there is no existing or pending legislative or regulatory or existing,
pending or threatened judicial action by any federal, state or local entity in
Brazil that could reasonably be construed or expected to deny or materially
hinder the right of WVB or any WVB Affiliate to use the Channels for their
intended purpose under the applicable License or the ability of WVB or any WVB
Affiliate to interconnect to the public telephone network, to reuse the same
frequency in each License's geographic area, to employ the integrated digital
enhanced network technology in the Channels or to operate all the Channels
together in the manner that they are currently operated. There are no
outstanding or unsatisfied judgments, orders, decrees or stipulations to which
any of the Founders, WVB or any WVB Affiliate is a party that involve the
transactions contemplated hereby or that could individually or in the aggregate
have a material adverse effect upon the business, assets, or financial condition
or business prospects of WVB or any WVB Affiliate.
3.17 INTERCONNECT RIGHTS
To the knowledge of WVB, the WVB Affiliates have the legal right to
interconnect their Channels to the public telephone network in Brazil.
3.18 LABOR MATTERS
There are no material disputes, employee grievances, disciplinary actions
or legal actions pending or threatened between WVB or any WVB Affiliate and any
of their respective employees or independent contractors and no claims under
U.S. or Brazilian law. Each of WVB and the WVB Affiliates have complied in all
material respects with all provisions of all laws in the United States and
Brazil relating to the employment of labor and have no liability for any arrears
of wages, social security payments or taxes or penalties for failure to comply
with any such laws, including but not limited to in connection with work
performed by independent contractors. To the knowledge of WVB, there are no
organizational efforts presently being made or threatened by or on behalf of any
labor union with respect to any of the employees of WVB or the WVB Affiliates.
Except as specifically set forth on Schedule 3.18, neither WVB nor any WVB
Affiliate is a party to any:
(a) management, employment or other contract providing for the employment
or rendition of executive services;
(b) employment contract that is not terminable without penalty by WVB or
any WVB Affiliate on 30 days' notice;
(c) bonus, incentive, deferred compensation, severance pay, pension,
profit-sharing, retirement, stock purchase, stock option, employee benefit or
similar plan, agreement or arrangement;
(d) collective bargaining agreement or other agreement with any labor union
or other employee organization (and no such agreement is currently being
requested by, or is under discussion by management with, any group of employees
or others); or
(e) other employment contract or other compensation agreement or
arrangement, oral or written, affecting or relating to current or former
employees of WVB or any WVB Affiliate.
All such contracts and other agreements and arrangements set forth on
Schedule 3.18 are valid and in full force and effect; each of WVB, Telcom and
each WVB Affiliate has performed all material obligations imposed upon it
thereunder, and there are, under any of such contracts, agreements or
arrangements, no defaults or events of default by WVB or any WVB Affiliate or,
to the knowledge of WVB, any other party thereto that would materially adversely
affect the business, assets or financial condition of WVB or any WVB Affiliate,
that would materially adversely affect the relationship of WVB, any WVB
Affiliate or Nextel or its Affiliates with any employee of WVB or any WVB
Affiliate or that could reasonably be expected to materially adversely affect
the business prospects of WVB. Each employee of WVB and the WVB Affiliates has
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a contract in the form of the standard form contract referred to on Schedule
3.18, and no compensation of any kind is due to any such employee other than as
set forth in such contracts.
From July 31, 1996 to and including the Closing Date, neither WVB nor any
WVB Affiliate has made any loans to any of its officers or employees or any of
the officers or employees of Telcom or its Affiliates.
3.19 PATENTS, TRADEMARKS, ETC.
Except as set forth on Schedule 3.19, each of WVB and each WVB Affiliate
owns, or has full and unrestricted rights within Brazil (to the extent available
under Brazilian law) to:
(a) all material trademarks, trade names and copyrights, including, but not
limited to, "AirLink," now used by WVB or the WVB Affiliates, as the case may
be; and
(b) all material formulae, franchises, processes, techniques and
manufacturing know-how and all trademarks, trade names and copyrights used in
connection with services now being or intended to be offered and sold by WVB or
the WVB Affiliates, as the case may be, except in each case where the failure to
own or have full and unrestricted rights within Brazil to such items would not
have a material adverse effect on WVB and the WVB Affiliates, taken as a whole.
Where registration of the intellectual property listed in clauses (a) and (b)
above is necessary in order to have full and unrestricted rights to such
intellectual property, such intellectual property has been duly registered with
the proper authorities in Brazil.
A true and complete list of (i) all patents, patent applications, patent
agreements, license agreements, proprietary information agreements,
confidentiality agreements, invention agreements, consulting agreements,
trademark registrations and applications therefor, trade names, service marks
and copyright registrations and applications therefor to which WVB or any WVB
Affiliate is a party or that are used in the operation of the Business and (ii)
any interference actions or adverse claims made or threatened in respect thereof
and any claims made or threatened for alleged infringement thereof are
specifically set forth on Schedule 3.19. To the best knowledge of WVB, neither
WVB nor any WVB Affiliate, in its operations, infringes any valid patent,
trademark, trade name, service xxxx or copyright of any other Person. Except as
set forth on Schedule 3.19, all agreements listed on Schedule 3.19 are valid and
enforceable, each of WVB and the WVB Affiliates has performed all material
obligations imposed upon it thereunder, and neither WVB nor any WVB Affiliate
nor, to the knowledge of WVB, any other party thereto is in default thereunder
in any material respect, nor is there any event that with the giving of notice
or lapse of time, or both, would constitute a material default thereunder by
WVB, any WVB Affiliate or, to the knowledge of WVB, any other party thereto.
Neither WVB nor any WVB Affiliate has received notice that any party to any such
agreement intends to cancel, terminate or refuse to renew the same or to
exercise or decline to exercise any option or other right thereunder. Neither
WVB nor any WVB Affiliate has entered into any agreement to indemnify any Person
against any claim or charge of infringement of any patents, trademarks, trade
names, copyrights, technology, know-how, processes or other intangible rights.
3.20 CUSTOMERS
Except as described on Schedule 3.20, none of the Founders, WVB or the WVB
Affiliates have received any customer complaints or expressions of customer
dissatisfaction, in writing or orally, of a material nature concerning the
service provided by WVB or any WVB Affiliate.
3.21 APPLICABLE LAWS
The Founders, WVB and the WVB Affiliates have complied, and are in
compliance, with the U.S. Foreign Corrupt Practices Act. Except where
noncompliance would not individually or in the aggregate have a material adverse
effect on WVB and the WVB Affiliates, taken as a whole, and except to the extent
provided in Section 3.13 and on Schedules 3.13 and 3.21, the Founders, WVB and
the WVB Affiliates have complied, and are in compliance, with all other
presently existing local and national laws, rules, ordinances, decrees and
orders applicable to the operation of the Business or to their owned or leased
properties. None of the Founders,
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WVB or any WVB Affiliate has reasonably been put on notice of any action or
omission which could be deemed an unasserted present or past unremedied failure
by the Founders, WVB or any WVB Affiliate, as the case may be, to comply with
any such laws, rules, ordinances, decrees and orders, other than actions or
omissions which WVB reasonably believes are not failures to comply. None of the
Founders or any director, officer, agent, employee or other Person acting on
behalf of any Founder, WVB or any WVB Affiliate has used any funds or given
anything of value, directly or indirectly, for contributions, payments, gifts or
entertainment or made any expenditures, directly or indirectly, to any
government official, political party or candidate for political office to
influence such Person or entity in the discharge of his, her or its official
duties. Each of WVB and the WVB Affiliates have financial controls and
accounting books and records reasonably designed to ensure that such books and
records accurately reflect corporate transactions and the disposition of assets
to the extent relating to WVB or the WVB Affiliates. None of the Founders or any
director, officer, agent, employee or other Person acting on behalf of any
Founder, WVB or any WVB Affiliate has accepted or received any unlawful
contributions, payments, gifts or expenditures in connection with the operation
of the Business.
3.22 INSURANCE
WVB has provided to Nextel true and complete copies of all insurance
policies relating to WVB, the WVB Affiliates and the Assets.
3.23 BROKERAGE
Neither WVB nor the Founders have retained any broker or finder in
connection with the transactions contemplated by this Agreement. Any brokerage
or finder's fee due to any broker or finder in violation of the foregoing
representation shall be paid by Telcom.
3.24 BUSINESS PLAN
WVB's business plan dated January 1996, which contains projections through
January 1, 2001, was prepared in good faith by Telcom using the assumptions set
forth therein. No representation or warranty is made with respect to such
business plan or projections other than as set forth in the preceding sentence.
3.25 S-4 REGISTRATION STATEMENT AND PROXY STATEMENT/PROSPECTUS
None of the information supplied or to be supplied by WVB for inclusion or
incorporation by reference in the S-4 Registration Statement or the Proxy
Statement/Prospectus will (a) in the case of the S-4 Registration Statement, at
the time it becomes effective, contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading or (b) in the case of the Proxy
Statement/Prospectus, at the time of mailing the Proxy Statement/Prospectus and
at the time consents of the Founders are obtained, contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. If at any time prior
to the Closing Date any event with respect to WVB or its officers and directors
shall occur that is required to be described in the Proxy Statement/Prospectus
or the S-4 Registration Statement, WVB shall notify Nextel thereof by reference
to this Section 3.25 and cooperate with Nextel in preparing and filing with the
SEC and, as required by law, disseminating to the Founders an amendment or
supplement which accurately describes such event or events in compliance with
all provisions of applicable law.
3.26 FULL DISCLOSURE
No information furnished by the Founders, WVB or the WVB Affiliates to
Nextel and its Affiliates in this Agreement (including, but not limited to, the
Financial Statements and all information in the Schedules and Exhibits) is false
or misleading in any material respect. There has been no omission on the part of
WVB or the WVB Affiliates to state a material fact necessary to make such
information provided to Nextel and its Affiliates not misleading.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF NEXTEL AND INDIMICH
To induce WVB to enter into this Agreement and the Founders to approve this
Agreement, Nextel and Indimich jointly and severally represent and warrant to
WVB and the Founders (which representations and warranties shall survive the
Closing as provided in Section 9.4) all as follows in this Article IV. The
contents of any particular Schedule to this Article IV shall not be deemed
included in any other Schedule unless specifically cross-referenced to that
Schedule.
4.1 ORGANIZATION, GOOD STANDING, ETC.
Each of Nextel and Indimich is a corporation duly organized, validly
existing and in good standing under the laws of its respective jurisdiction of
incorporation. Indimich has all requisite power and authority to own, operate
and lease its properties and assets and to carry on its business as now
conducted, and is duly qualified and in good standing in each jurisdiction in
which it owns or leases property or in which the nature of the business
transacted by it makes such qualification necessary. Indimich has no assets or
liabilities and has not conducted and conducts no business.
4.2 AUTHORIZATION, DUE EXECUTION AND BINDING EFFECT
Each of Nextel and Indimich has full power and authority to execute,
deliver and perform this Agreement, including approval of the Board of Directors
of Nextel. This Agreement has been duly executed and delivered by Nextel and
Indimich and is a legal, valid and binding obligation of Nextel and Indimich
enforceable in accordance with its terms.
4.3 NO APPROVALS OR NOTICES REQUIRED; NO CONFLICTS WITH INSTRUMENTS
The execution, delivery and performance of this Agreement by Nextel or
Indimich and the consummation of the transactions contemplated hereby do not and
will not (a) violate the corporate charter or other organizational documents of
Nextel or Indimich, (b) constitute a violation (with or without the giving of
notice or lapse of time, or both) of any law, rule, regulation, judgment,
injunction, order or decree applicable to Nextel or Indimich, (c) require any
consent, approval or authorization of any Person, governmental authority or
other organization or entity other than pursuant to the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended (the "HSR Act"), and except for
compliance with applicable securities laws and the filing of all documents
necessary to consummate the Merger with the Secretary of State of the State of
Delaware and the Virginia State Corporate Commission, or (d) result in a default
under, an acceleration or a termination of, or the creation in any party of the
right to accelerate, terminate, modify or cancel, any material agreement, lease,
note or other restriction, encumbrance, obligation or liability to which Nextel
or Indimich is a party or by which Nextel or Indimich is bound or to which their
assets are subject.
4.4 CLAIMS AND LEGAL PROCEEDINGS
There are no claims, actions, suits, arbitrations, proceedings or
investigations pending or, to the knowledge of Nextel or Indimich, threatened
against Nextel or Indimich, before or by any governmental or nongovernmental
department, commission, board, bureau, agency or instrumentality, or any other
Person, and there are no outstanding or unsatisfied judgments, orders, decrees
or stipulations to which Nextel or Indimich is a party, in each case that relate
to the transactions contemplated by this Agreement.
4.5 NEXTEL SEC FILINGS
All filings made by Nextel with the SEC pursuant to the Exchange Act were
complete and correct in all material respects as of the date filed and, as of
the date hereof, there are no facts that have not been publicly disclosed that
Nextel would be required to have disclosed if Nextel were making a public
offering of securities.
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4.6 NEXTEL COMMON STOCK
The Nextel Shares have been duly authorized and, when issued pursuant to
the terms hereof, will be validly issued and are fully paid and nonassessable.
4.7 BROKERAGE
Neither Nextel nor Indimich has retained any broker or finder in connection
with the transactions contemplated by this Agreement. Any brokerage or finder's
fee due to any broker or finder in violation of the foregoing representation
shall be paid by Nextel or Indimich.
4.8 S-4 REGISTRATION STATEMENT AND PROXY STATEMENT/PROSPECTUS
None of the information supplied or to be supplied by Nextel or Indimich
for inclusion or incorporation by reference in the S-4 Registration Statement or
the Proxy Statement/Prospectus will (a) in the case of the S-4 Registration
Statement, at the time it becomes effective, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading or (b) in the case of
the Proxy Statement/Prospectus, at the time of mailing the Proxy
Statement/Prospectus and at the time the consents of the Founders are obtained,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. If at any time prior to the Closing Date any event with respect to
Nextel or Indimich, their officers and directors or any of their Affiliates
shall occur that is required to be described in an amendment of, or a supplement
to, the Proxy Statement/Prospectus or the S-4 Registration Statement, Nextel
shall notify WVB thereof by reference to this Section 4.8 and, in the case of
the Proxy Statement/Prospectus or the S-4 Registration Statement, such event
shall be so described, and an amendment or supplement shall be promptly filed
with the SEC and, as required by law, disseminated to the Founders, and such
amendment or supplement shall comply with all provisions of applicable law. The
S-4 Registration Statement will comply (with respect to Nextel and Indimich) as
to form in all material respects with the provisions of the Securities Act. The
Proxy Statement/Prospectus will comply (with respect to Nextel and Indimich) in
all material respects with the requirements of the Exchange Act and the
applicable rules and regulations thereunder.
4.9 TAX
(a) Nextel is in "Control Of " Indimich (as such term is defined in Section
4.9(h).
(b) Nextel Common Stock is "voting stock" within the meaning of Section
368(a)(2)(E) of the Code.
(c) The liabilities of Indimich that the Surviving Corporation will assume
and the liabilities to which any transferred assets of Indimich may be subject
are or will be incurred by Indimich in the ordinary course of its business.
(d) Any cash that Indimich will distribute to the Founders in lieu of
fractional shares as provided for in Section 2.2.2(b) is being distributed
solely for the purpose of saving the Surviving Corporation the expense and
inconvenience of issuing and transferring fractional shares, and the
distribution of cash for fractional shares is not separately bargained-for
consideration.
(e) Except for the Nextel Common Stock that Nextel has or will contribute
to Indimich for purposes of effecting the Merger, Indimich has not acquired or
disposed of any assets and has not incurred or liquidated any liabilities in
anticipation of or in connection with the transactions contemplated by this
Agreement.
(f) Nextel has no plan or intention to (i) liquidate or merge the Surviving
Corporation into another corporation, (ii) sell, transfer, or otherwise dispose
of the stock of the Surviving Corporation or (iii) cause or allow the Surviving
Corporation to sell or otherwise dispose of its assets (or any of the assets
that the Surviving Corporation acquires from Indimich pursuant to the Merger
other than the Nextel Common Stock that Nextel will contribute to Indimich to
effect the Merger) other than dispositions of assets made in the ordinary
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course of WVB's business; provided, however, that, notwithstanding clauses (ii)
and (iii) hereof, Nextel may transfer all or part of the stock of WVB, or WVB
may transfer all or part of its assets, to a corporation "Controlled By" (as
defined in Section 4.9(h) below) Nextel or WVB, as the case may be, in a
transaction that maintains the tax-free status of the Merger (to the Founders)
by reason of Section 368(a)(2)(C) of the Code. Nextel has no plan or intention
to cause or allow any direct or indirect subsidiary of WVB to sell, transfer or
otherwise dispose of any material part of its assets other than transfers made
in the ordinary course of business and transfers of the stock of one member of
the WVB Group to another member of the WVB Group or to a corporation Controlled
By a member of the WVB Group.
(g) Neither Nextel nor Indimich is an "investment company," as defined in
Section 368(a)(2)(F)(iii) of the Code.
(h) For purposes of the representations and warranties in this Section 4.9,
(i) the term "Control" is defined in Section 368(c) of the Code and (ii) the
terms "Controlled By" and "Control Of " are defined consistently with the term
"Control."
ARTICLE V
FURTHER AGREEMENTS
Each of the parties hereto agrees to perform and observe the following
agreements applicable to it:
5.1 SCHEDULES
(a) All representations and warranties herein by WVB shall apply to any
exhibits, schedules and certificates delivered by WVB or any officer thereof to
Nextel, and each such certificate shall be deemed to be a representation by WVB
as to the matters set forth therein. All representations and warranties herein
by Nextel and Indimich shall apply to any exhibits, schedules and certificates
delivered by Nextel or Indimich or any officer thereof to WVB, and each such
certificate shall be deemed to be a representation by Nextel and Indimich as to
the matters set forth therein.
(b) On or prior to the Closing Date, WVB may deliver to Nextel one or more
Schedules to this Agreement that are revised and updated to reflect changes to
the operations or condition of WVB and the WVB Affiliates between the date
hereof and the Closing Date. The delivery of any such revised Schedule shall not
affect the rights of Nextel and Indimich under Article VI, but if the Closing
shall occur, the revised Schedules shall be deemed to supersede the Schedules
delivered herewith, but only with respect to the representations and warranties
given as of the Closing Date.
5.2 ACCESS
From the date of this Agreement to and including the Closing Date, WVB
shall (and shall cause the WVB Affiliates to) grant Nextel and its agents,
employees, accountants and attorneys reasonable access during normal business
hours to, and the opportunity to examine and make copies of, all of the books,
records, documents, instruments and papers of WVB and the WVB Affiliates, and
the right to inspect all of their operations, properties and assets at any
reasonable time and provide any authorizations necessary to examine the status
of the Licenses with the Brazilian Ministry of Communications.
5.3 MANAGEMENT INFORMATION
From the date of this Agreement to and including the Closing Date, WVB
shall (and shall cause the WVB Affiliates to) provide to Nextel all material
information specifically requested by Indimich regarding the operation of the
Business during such period. Any such information shall be subject to the
Confidentiality Agreement.
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5.4 ADVICE OF CLAIMS
From the date of this Agreement to and including the Closing Date, WVB
shall (and shall cause the WVB Affiliates to) promptly advise Nextel in writing
if it has notice or knowledge of the commencement or threat of any claims,
litigation or proceedings against or affecting the Founders, WVB or the WVB
Affiliates or any rulings, decrees or other material developments in any claim,
action or suit described on Schedule 3.16 or arising after the date hereof.
5.5 CONDUCT OF THE BUSINESS
From the date hereof until the Closing Date, WVB shall (and shall cause the
WVB Affiliates to) conduct the Business in the ordinary course consistent with
past practices and use its best efforts to preserve intact the business
organizations and relationships with third parties and to keep available the
services of the present employees of the Business. Without limiting the
generality of the foregoing, from the date hereof until the Closing Date, WVB
shall not and will ensure that the WVB Affiliates shall not:
(a) acquire assets from any other Person having a value individually or in
the aggregate in excess of $3 million, except pursuant to existing contracts or
commitments;
(b) sell, lease, license or otherwise dispose of any Assets except (i)
pursuant to existing contracts or commitments and (ii) in the ordinary course
consistent with past practices;
(c) issue any additional shares of capital stock;
(d) make any payments of dividends or other distributions with respect to
its capital stock; or
(e) agree or commit to do any of the foregoing.
WVB and the WVB Affiliates shall to the best of their respective abilities
(i) preserve and protect the right of WVB and the WVB Affiliates to use all the
Channels as currently intended and (ii) take action pursuant to the policies set
forth on Schedule 3.21 to satisfy all applicable build-out and loading
requirements. WVB shall immediately notify Nextel if it receives notification
that any of the Licenses with respect to any Channels may be subject to
revocation or if the policies set forth on Schedule 3.21 are not complied with
in any material respect.
WVB shall not (and, by their approval of this Agreement, the Founders agree
not to) (i) take or agree or commit to take any action that would make any
representation or warranty of WVB hereunder inaccurate in any respect at, or as
of any time prior to, the Closing Date or (ii) omit or agree or commit to omit
to take any commercially reasonable action necessary to prevent any such
representation or warranty from being inaccurate in any respect at any such
time.
5.6 COMPLIANCE WITH LAWS
WVB agrees that it and any director, officer, agent, employee or other
Person acting on its behalf or on behalf of any of the WVB Affiliates (a) will
not be involved in the offering, paying or giving of anything of value, either
directly or indirectly, to a government official, political party or candidate
for political office to influence such Person or entity in the discharge of his,
her or its official duties, (b) will not engage in any such unlawful conduct
during the time of carrying out their duties, (c) will maintain accounting books
and records in reasonable detail and institute internal controls to ensure that
such books and records accurately reflect corporate transactions and the
disposition of assets to the extent relating to WVB or the WVB Affiliates, and
(d) except as permitted by the policies set forth on Schedule 3.21, will not,
directly or indirectly, take any action or fail to take any commercially
reasonable action in each case that could result in the loss of the benefits of
any License. WVB further agrees that it will cause the WVB Affiliates to comply
with the preceding sentence.
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5.7 INSURANCE AND LOSS OF OR DAMAGE TO ASSETS
(a) WVB shall not, and shall not permit any WVB Affiliate to, decrease the
insurance coverage it maintained prior to the date hereof in respect of the
Business from the period commencing on the date hereof and ending on the Closing
Date.
(b) WVB shall give Indimich prompt written notice of (i) any loss, damage
or destruction to any material tangible Assets occurring on or after July 31,
1996 and on or prior to the Closing Date, (ii) the estimated value of the
portion of such Assets so lost, damaged or destroyed, and (iii) the estimated
cost of repair, replacement or reconstruction thereof.
5.8 CONFIDENTIALITY
The Confidentiality Agreement among Telcom, WVB, Wireless Ventures of
Argentina, L.L.C. and XxXxx International, Ltd. dated as of the date hereof (the
"Confidentiality Agreement") shall remain in full force and effect in accordance
with its terms and shall apply to all documents and information supplied in
connection herewith.
5.9 FOUNDERS MEETING
WVB will take all action necessary in accordance with applicable law,
including but not limited to the U.S. federal and state securities laws, and its
Articles of Incorporation and Bylaws to call and hold a meeting of the Founders,
or obtain written consents, to approve this Agreement and the transactions
contemplated hereby. Subject to the fiduciary duties of WVB's Board of Directors
under applicable law as advised by counsel, the Board of Directors of WVB shall
recommend and declare advisable such approval, and WVB shall take all lawful
action to solicit, and use all reasonable efforts to obtain, such approval.
5.10 REGISTRATION STATEMENT/PROXY MATERIALS
Nextel and WVB shall use their respective reasonable best efforts to
prepare and file with the SEC within 15 days of the date hereof preliminary
proxy materials that will constitute a proxy statement in connection with the
vote of the Founders with respect to this Agreement and the transactions
contemplated hereby, together with any amendments thereof or supplements thereto
(in each case in the form or forms mailed to the Founders, the "Proxy
Statement/Prospectus"). Nextel will also, promptly after the date hereof,
prepare and file with the SEC a registration statement on Form S-4 (the "S-4
Registration Statement") containing the Proxy Statement/Prospectus, in
connection with the registration under the Securities Act of the Nextel Shares
issuable in exchange for the WVB Common Stock and the other transactions
contemplated hereby. Nextel and WVB will use all reasonable efforts to cause the
Proxy Statement/Prospectus to be mailed to the Founders at the earliest
practicable date. If at any time prior to the Closing Date any event relating to
or affecting Nextel or WVB shall occur as a result of which it is necessary, in
the opinion of counsel for Nextel or of counsel for WVB, to supplement or amend
the S-4 Registration Statement in order to make such document not misleading in
light of the circumstances existing at the time approval of the Founders is
sought, Nextel and WVB will forthwith prepare and file with the SEC an amendment
or supplement to the S-4 Registration Statement (which may be accomplished, to
the extent provided by law, rule or regulation, by including such information in
a filing made with the SEC under the Exchange Act that is incorporated by
reference into the S-4 Registration Statement) so that such document, as so
supplemented or amended, will not contain any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in light of the circumstances existing at such time, not
misleading. The Founders shall cause KPMG Peat Marwick LLP to deliver to Nextel
on the date that the S-4 Registration Statement is declared effective by the SEC
a comfort letter of the type customarily delivered in transactions of this type
(the "Original Letter") and on the Closing Date a "bring-down" comfort letter
confirming that the statements and conclusions set forth in the Original Letter
are true and correct as of the Closing Date.
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5.11 NO SOLICITATIONS
(a) WVB shall not, directly or indirectly, through any officer, director,
employee, representative or agent of WVB or any of the WVB Affiliates, solicit
or encourage the initiation of any inquiries, discussions, negotiations or
proposals regarding any merger, sale of substantial assets, sale of shares of
capital stock (including without limitation by way of a tender offer) or similar
transactions involving WVB or any WVB Affiliates (any of the foregoing inquiries
or proposals being referred to herein as an "Acquisition Proposal"); provided,
however, that nothing contained in this Agreement shall prevent the Board of
Directors of WVB from referring any third party to this Section 5.11 or from
making a copy of this Section 5.11 available to any third party. Nothing
contained in this Section 5.11 shall prevent the Board of Directors of WVB from
considering, negotiating, approving and recommending to the Founders (after
consultation with its financial advisors, and determining after consulting with
such advisers and upon advice of counsel that the Board of Directors is required
to do so in order to discharge properly its fiduciary duties) an unsolicited
bona fide Acquisition Proposal which the Board of Directors of WVB determines in
good faith would result in a transaction more favorable to the Founders from a
financial point of view than the transaction contemplated by this Agreement (any
such Acquisition Proposal being referred to herein as a "Superior Proposal").
(b) WVB shall immediately notify Nextel after receipt of any Acquisition
Proposal, any material change to an Acquisition Proposal already made or any
request for nonpublic information relating to WVB or any of the WVB Affiliates
in connection with an Acquisition Proposal or for access to the properties,
books or records of WVB or any of the WVB Affiliates by any Person that informs
the Board of Directors of WVB or such WVB Affiliate that it is considering
making, has made, or has made a material change to, an Acquisition Proposal.
Such notice to Nextel shall be made orally and in writing and shall indicate in
reasonable detail the identity of the offeror and the terms and conditions of
such proposal, inquiry or contact.
(c) If the Board of Directors of WVB or of any WVB Affiliate receives a
request for material nonpublic information by a party who makes a bona fide
Acquisition Proposal, and the Board of Directors of WVB determines that such
proposal is a Superior Proposal then, and only in such case, WVB may, subject to
the execution of a confidentiality and standstill agreement substantially
similar to that then in effect between WVB and Nextel, provide such party with
access to information regarding WVB or the WVB Affiliates.
5.12 RULE 145 AFFILIATES
WVB shall identify in a letter to Nextel all persons who will be at the
Closing Date "affiliates" of WVB, as such term is used in Rule 145 under the
Securities Act. WVB shall use all reasonable efforts to cause its affiliates to
deliver to Nextel on or prior to the Closing Date a written agreement
substantially in the form attached as Exhibit 5.12 (each, an "Affiliate
Agreement"). If any affiliate refuses to provide an Affiliate Agreement, Nextel
shall, in lieu of receipt of such written agreement, be entitled to place
appropriate legends on the certificates evidencing the Nextel Shares to be
received by such affiliate pursuant to the terms of this Agreement, and to issue
appropriate stock transfer instructions to the transfer agent for Nextel Common
Stock to the effect that the Nextel Shares received or to be received by such
affiliate pursuant to the terms of this Agreement may only be sold, transferred
or otherwise conveyed, and the holder thereof may only reduce his, her or its
interest in or risks relating to such shares of Nextel Common Stock, pursuant to
an effective registration statement under the Securities Act, in compliance with
Rule 145, as amended from time to time, or in a transaction which, in the
opinion of legal counsel reasonably satisfactory to Nextel, is exempt from the
registration requirements of the Securities Act. The Proxy Statement/Prospectus
and the S-4 Registration Statement shall disclose the foregoing in a reasonably
prominent manner.
5.13 TAX COVENANT
(a) For at least six months following the Merger, (i) WVB will hold at
least 90 percent of the fair market value of the net assets and at least 70
percent of the fair market value of the gross assets that it held immediately
prior to the Merger and (ii) WVB will retain at least 90 percent of the fair
market value of Indimich's net assets and at least 70 percent of the fair market
value of Indimich's gross assets that Indimich held immediately prior to the
Merger. For purposes of this covenant, amounts paid by WVB to dissenters,
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amounts paid by WVB or Indimich to shareholders who receive cash or other
property in connection with the transactions contemplated by this Agreement,
amounts used by WVB or Indimich to pay reorganization expenses, and all
redemptions and distributions of property by WVB or Indimich in connection with
the transactions contemplated by this Agreement will be included as "assets"
immediately prior to the Merger.
(b) Nextel, WVB and Indimich will pay their respective expenses, if any,
incurred in connection with the Merger.
(c) Nextel will continue the business operated by WVB immediately prior to
the Merger, or Nextel will use in a business a significant portion of the
business assets held by WVB immediately prior to the Merger. For purposes of
this Section 5.13, the term "WVB" shall include each of WVB's direct and
indirect subsidiaries.
(d) For a period of six months following the Merger, Nextel will not
effect, directly or indirectly, a Prohibited Transaction without the express
written consent of Telcom, which consent shall not be unreasonably withheld.
(e) For federal income tax purposes, the parties will treat the Merger as a
transaction described in Sections 368(a)(1)(A) and 368(a)(2)(E) of the Code
pursuant to which the Founders exchange their shares of WVB Common Stock for
Nextel Common Stock without the recognition of taxable gain, and the parties
shall report the Merger and the related transactions contemplated by this
Agreement in their Tax Returns in a manner consistent with such treatment.
(f) For purposes of the covenants in this Section 5.13, the term "control"
is defined in Section 368(c) of the Code and the terms "controlled by," "control
of," and similar terms are defined consistently with the term "control."
5.14 NEXTEL COMMON STOCK
During the 20 trading days following but excluding the date hereof, neither
the Founders nor any Affiliates thereof shall engage in any transaction in or
with respect to Nextel Common Stock, including but not limited to purchasing,
selling, selling short, or purchasing or selling options to purchase, Nextel
Common Stock in a manner that reasonably could be expected to have a material
effect on the price of the Nextel Common Stock on the Nasdaq National Market.
5.15 OTHER COOPERATION
All parties shall use their reasonable best efforts to prepare and file
within 15 days of the date hereof filings required by the HSR Act, and will
promptly take, and fully cooperate with the other parties and their legal
counsel and accountants in connection with, any other steps reasonably required
to be taken as part of the obligations of the parties under this Agreement or to
promptly satisfy the conditions precedent hereunder.
5.16 CERTAIN BRAZILIAN REGULATORY ISSUES
(a) WVB has provided Nextel copies of (i) that certain letter dated October
11, 1996 addressed to Radio Telecomunicacoes do Brasil Ltda. ("Radio-Tel") from
the Brazilian Ministry of Communications (the "Ministry") (the "Ministry
Letter"), (ii) that certain internal memorandum of the Ministry written by
Xxxxxxxxx Xxxxxxx Xxxxxxxxx dated July 17, 1996 (the "Ministry Memorandum"), and
(iii) that certain letter from Xx. Xxxxx Xxxxxxx dated October 23, 1996
responding to the Ministry Letter (the "WVA Response"). (The issue of whether
the Services Agreements between any WVB Affiliate and AirLink are not in
compliance with applicable regulation, as referenced in the Ministry Letter, the
Ministry Memoranda and the WVA Response, is referred to as the "Regulatory
Issue.")
(b) WVB shall exercise its commercially reasonable best efforts to secure a
satisfactory resolution of the Regulatory Issue. At any time prior to the
three-month anniversary of the date hereof, WVB may propose in writing to Nextel
how Nextel may secure the Satisfactory Regulatory Comfort (as defined below)
(the "WVB Proposal"). Within 10 business days of Nextel's receipt of the WVB
Proposal, Nextel shall notify WVB in
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writing whether Nextel accepts the WVB Proposal as constituting Satisfactory
Regulatory Comfort, and if Nextel rejects the WVB Proposal, Nextel shall include
a detailed explanation of the reasons for such rejection. If Nextel declines to
accept the WVB Proposal, then WVB shall be provided an additional period of 10
business days to allow it to provide supplemental comfort with respect to the
Regulatory Issue (the "Supplemental WVB Proposal"). Within five business days of
receipt thereof, Nextel shall provide its written response as whether it accepts
the Supplemental WVB Proposal as constituting Satisfactory Regulatory Comfort.
(c) If the Closing occurs, then Nextel shall be deemed to have released the
Indemnifying Founders from any liability or obligations they might otherwise
incur pursuant to this Agreement in connection with the Regulatory Issue,
whether such issue arises in connection with Radio-Tel or any other WVB
Affiliate.
5.17 BRAZILIAN CERTIFICATES
To the extent that Nextel shall not have obtained on or prior to the
Closing Date the negative certificates of Brazilian authorities listed on
Exhibit 5.17 in a form reasonably satisfactory to Nextel, WVB shall use its best
efforts to obtain such certificates.
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF NEXTEL AND INDIMICH
The obligations of each of Nextel and Indimich to perform and observe the
covenants, agreements and conditions hereof to be performed and observed by it
on or before the Closing Date shall be subject to the satisfaction of the
following conditions, any of which may be expressly waived in writing by Nextel:
6.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES
The representations and warranties of WVB contained herein (including
applicable Schedules hereto) shall have been true in all material respects when
made and shall be true in all material respects on and as of the Closing Date
with the same force and effect as though made on and as of such date, except as
affected by transactions contemplated hereby and except to the extent that any
such representations and warranties shall have been made as of a specified date,
in which case such representations and warranties shall have been true as of the
specified date.
6.2 PERFORMANCE OF AGREEMENT
WVB shall have performed in all material respects all obligations and
agreements and complied in all material respects with all covenants and
conditions contained in this Agreement to be performed and complied with it on
or prior to the Closing Date.
6.3 APPROVALS AND CONSENTS
All material approvals and consents listed on Schedule 3.3 shall have been
obtained.
6.4 FOUNDERS' APPROVAL
This Agreement and the transactions contemplated hereby shall have been
duly approved or ratified by the requisite holders of WVB Common Stock in
accordance with applicable provisions of the VSCA and the Articles of
Incorporation and Bylaws of WVB.
6.5 SHAREHOLDERS AGREEMENT
WVB, the Founders and Nextel or any Affiliates of Nextel designated by it
to hold the WVB Common Stock shall have entered into a Shareholders Agreement
(the "Shareholders Agreement") in substantially the form attached hereto as
Exhibit 6.5.
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6.6 OPINION OF WVB COUNSEL
Indimich shall have received opinions of counsel to WVB in the United
States, Brazil and the British Virgin Islands reasonably acceptable to Nextel in
substantially the form attached hereto as Exhibit 6.6.
6.7 CONFIDENTIALITY, NONCOMPETITION AND PROPRIETARY INFORMATION AGREEMENTS
On or before the Closing Date, the Founders, the WVB Affiliates Controlled
by WVB and all Affiliates (other than members of Telcom), officers and directors
thereof shall have entered into confidentiality agreements, noncompetition
agreements and proprietary information agreements relating to paging and SMR
services and operations in Brazil substantially in the form attached hereto as
Exhibit 6.7.
6.8 RESIGNATIONS OF DIRECTORS, OFFICERS, EMPLOYEES, INDEPENDENT CONTRACTORS
AND CONSULTANTS
On or before the Closing Date, the resignation of all directors, officers,
employees, independent contractors and consultants of WVB and the WVB Affiliates
that Nextel shall have requested shall have been obtained.
6.9 LEGAL PROCEEDINGS
No law, regulation, administrative ruling or order of any court or
administrative agency of competent jurisdiction shall be in effect that enjoins,
restrains or prohibits consummation of this Agreement, and no litigation,
investigation or administrative proceeding shall be reasonably likely to enjoin,
restrain or prohibit consummation of this Agreement.
6.10 S-4 REGISTRATION STATEMENT AND LISTING
The S-4 Registration Statement shall have been declared effective by the
SEC under the Securities Act and shall be effective on the Closing Date. No stop
order suspending effectiveness shall have been issued by the SEC, no action,
suit, proceeding or investigation by the SEC to suspend the effectiveness
thereof shall have been initiated and be continuing, and all necessary approvals
under state securities laws or the Securities Act or Exchange Act relating to
the issuance or trading of the Nextel Common Stock shall have been received. The
listing of the Nextel Shares on the Nasdaq National Market shall have been
approved.
6.11 TITLE
To the extent any such Liens exist, WVB shall have caused WVB, Telcom and
the WVB Affiliates to have obtained the release of all material Liens on the
Assets, other than Permitted Liens. WVB shall have supplied to Indimich evidence
satisfactory to Nextel pursuant to Section 6.16 establishing WVB's, Telcom's and
the WVB Affiliates' good and marketable title to the Assets, free and clear of
all Liens, other than Permitted Liens.
6.12 WVB OFFICERS' CERTIFICATES
Nextel shall have received a certificate from the President and the
Secretary of WVB dated the Closing Date, in substantially the form attached as
Exhibit 6.12, certifying that (a) the conditions set forth in this Article VI
have been fulfilled and (b) the representations and warranties of WVB herein are
true and correct in all material respects as of the Closing Date.
6.13 NO CHANGE IN POLITICAL OR ECONOMIC CONDITIONS IN BRAZIL
Since the date of this Agreement, in the reasonable opinion of Nextel,
there shall have been no change in political or economic conditions in Brazil
that has had or could reasonably be expected to have a material adverse effect
on the Business, including, but not limited to, any material change in any
material law or regulation relating to SMR.
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6.14 AFFILIATE TRANSACTIONS
All loans and other transactions between WVB and the WVB Affiliates, on the
one hand, and the Founders or their Affiliates, on the other hand (including,
but not limited to, the Master Service Agreement and any shareholders agreement
between WVB and the Founders) shall have been terminated.
6.15 RULE 145 AFFILIATE AGREEMENTS
Nextel shall have received an executed Affiliate Agreement from each Rule
145 affiliate of WVB.
6.16 DOCUMENTATION RELATING TO LICENSES
Nextel shall have received a true and complete copy of each document
granting the License with respect to each Channel.
6.17 NEGATIVE PLEDGE AGREEMENT
WVB, Telcom and Nextel shall have entered into a Negative Pledge Agreement
in substantially the form attached hereto as Exhibit 6.17.
6.18 BRAZILIAN REGULATORY ISSUES
Subject to the provisions of Section 5.16, Nextel shall have received
comfort in form and in substance, reasonably satisfactory to it, with respect to
the resolution of the Regulatory Issue (the "Satisfactory Regulatory Comfort").
ARTICLE VII
CONDITIONS PRECEDENT TO OBLIGATIONS OF WVB
The obligations of WVB to perform and observe the covenants, agreements and
conditions hereof to be performed and observed by WVB on or before the Closing
Date shall be subject to the satisfaction of the following conditions, any of
which may be expressly waived in writing by WVB:
7.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES
The representations and warranties of Nextel and Indimich contained in
Article IV shall have been true in all material respects when made and shall be
true in all material respects on and as of the Closing Date with the same force
and effect as though made on and as of such date, except as affected by
transactions contemplated hereby and except to the extent that such
representations and warranties shall have been made as of a specified date, in
which case such representations and warranties shall have been true as of the
specified date.
7.2 PERFORMANCE OF AGREEMENT
Nextel and Indimich shall have performed in all material respects all
obligations and agreements and complied in all material respects with all
covenants and conditions contained in this Agreement to be performed and
complied with by them on or prior to the Closing Date.
7.3 APPROVALS AND CONSENTS
All material approvals and consents from third parties listed on Schedule
3.3 shall have been obtained.
7.4 FOUNDERS' APPROVAL
This Agreement and the transactions contemplated hereby shall have been
duly approved or ratified by the Founders in accordance with applicable
provisions of the VSCA and the Articles of Incorporation and Bylaws of WVB.
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7.5 SHAREHOLDERS AGREEMENT
WVB, the Founders and Indimich or any Affiliates of Indimich designated by
it to hold the WVB Common Stock shall have entered into the Shareholders
Agreement.
7.6 NEXTEL AND INDIMICH OFFICERS' CERTIFICATE
The Founders shall have received certificates of a Vice President and the
Secretary of Nextel and of the President and Secretary of Indimich, dated the
Closing Date, in substantially the form attached hereto as Exhibit 7.6,
certifying that all the conditions set forth in this Article VII have been
fulfilled and the representations and warranties of Nextel and Indimich,
respectively, herein are true and correct as of the Closing Date.
7.7 LEGAL PROCEEDINGS
No law, regulation, administrative ruling or order of any court or
administrative agency of competent jurisdiction shall be in effect that enjoins,
restrains or prohibits consummation of this Agreement, and no litigation,
investigation or administrative proceeding shall reasonably likely to be pending
or threatened that would enjoin, restrain or prohibit consummation of this
Agreement.
7.8 S-4 REGISTRATION STATEMENT AND LISTING
The S-4 Registration Statement shall have been declared effective by the
SEC under the Securities Act and shall be effective on the Closing Date. No stop
order suspending effectiveness shall have been issued by the SEC, no action,
suit, proceeding or investigation by the SEC to suspend the effectiveness
thereof shall have been initiated and be continuing, and all necessary approvals
under state securities laws or the Securities Act or Exchange Act relating to
the issuance or trading of the Nextel Common Stock shall have been received. The
listing of the Nextel Shares on the Nasdaq National Market shall have been
approved.
7.9 OPINION OF NEXTEL COUNSEL
WVB shall have received an opinion of counsel to Nextel reasonably
acceptable to WVB substantially in the form attached hereto as Exhibit 7.9.
7.10 NO MATERIAL ADVERSE CHANGE
Since the date of this Agreement, there shall have been no material adverse
change with respect to Nextel that would be required to be publicly disclosed by
Nextel if Nextel were making a public offering of securities.
7.11 TRANSFER OF INTERESTS OF WVB AFFILIATES
All interests in the WVB Affiliates held by Telcom or its Affiliates or by
individuals who are acting as nominees of Telcom or any of its Affiliates shall
have been transferred to Persons designated by Telcom.
7.12 TERMINATION OF POWERS OF ATTORNEY
All powers of attorney relating to the WVB Affiliates and designated for
termination at least 10 days prior to the Closing Date by Nextel shall have been
terminated.
ARTICLE VIII
NONCOMPETITION
8.1 NONCOMPETITION
(a) By their approval of this Agreement, the Founders agree that, until the
earlier of (i) one year following termination of the Shareholders Agreement or
(ii) termination of this Agreement pursuant to
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Article X, neither the Founders nor any Affiliate thereof shall in any way, by
action or inaction, directly or indirectly, for itself or for the benefit of any
other Person, own, manage, operate, join, Control or participate in the
ownership, management, operation or Control of, any Person that competes with
WVB or any Affiliate thereof, or agrees to do any of the foregoing, in the
business of SMR or paging in Brazil, other than wireless radio engineering,
design or program management services and the manufacture and sale of related
software and hardware products; provided, further, that neither the Founders nor
any Affiliate thereof may maintain an equity interest in any Person in which it
owns an equity interest as of the date hereof, which equity interest entitles
any of the Founders or their Affiliates to control the policymaking or
day-to-day operations of such Person or in connection with which any of the
Founders or their Affiliates have a representative on the board of directors, if
such Person elects to engage in the business of cellular communications or
Personal Communications Systems ("PCS") in Brazil. Notwithstanding the
foregoing, the Founders may engage in the business of SMR with respect to any
interests in entities or Licenses acquired from WVB pursuant to the provisions
of Section 2.4 hereof.
(b) Until the earlier of (i) one year following termination of the
Shareholders Agreement or (ii) termination of this Agreement pursuant to Article
X, neither Nextel nor any direct or indirect subsidiary thereof shall in any
way, by action or inaction, directly or indirectly, for itself or for the
benefit of any other Person, own, manage, operate, join, Control or participate
in the ownership, management, operation or Control of any Person that competes
with WVB or any Affiliate thereof, or agrees to do any of the foregoing, in the
business of SMR or paging in Brazil; provided, further, that neither Nextel nor
any direct or indirect subsidiary thereof may maintain an equity interest in any
Person in which it owns an equity interest as of the date hereof, which equity
interest entitles Nextel or any of its direct or indirect subsidiaries to
control the policymaking or day-to-day operations of such Person or in
connection with which any of the Founders or their Affiliates have a
representative on the board of directors, if such Person elects to engage in the
business of cellular communications or PCS in Brazil.
8.2 SPECIFIC PERFORMANCE
The parties hereto acknowledge that it may be impossible to measure in
money the damages that any party may incur as a result of another party's
violation of any provision of this Article VIII. Consequently, in any action
specifically to enforce any provision of this Agreement, each party hereby
waives any claim or defense therein that an adequate remedy at law or in damages
exists. Each party further agrees that the other parties shall be entitled to
injunctive relief, specific performance or other equitable relief to prevent
violation of any provision of this Agreement.
ARTICLE IX
INDEMNIFICATION AND SURVIVAL OF WARRANTIES
9.1 INDEMNIFICATION BY THE FOUNDERS
By their approval of this Agreement, each Indemnifying Founder agrees,
jointly and severally, to indemnify and hold harmless, on an after-tax basis,
Nextel and any of its Affiliates, their respective successors and permitted
assigns, and the officers, directors, Affiliates, employees, Controlling Persons
and agents of the foregoing and to hold each such party harmless against and in
respect of any and all losses, damages, costs and expenses, including attorneys'
fees ("Damages"), incurred by any such party by reason of (a) a breach of any of
the representations or warranties made in this Agreement by WVB, (b) any item
disclosed on Schedule 3.16 or 3.20 or any Fistel payment payable with respect to
any period prior to the Closing Date and not reflected in the Closing Balance
Sheet, whether or not disclosed in the Schedules hereto, (c) the breach of any
covenant contained herein by WVB prior to the Closing, or (d) the breach of
undertakings of WVB or the Founders in this Agreement or any other document,
supplement, instrument, agreement, letter, amendment or assignment executed in
connection herewith, or in any officers' certificate or other certificate
delivered to Nextel or its Affiliates at or in connection with the Closing;
provided, however, that (a) the Indemnifying Founders shall not be obligated to
make any payments under this Section 9.1 unless and until the amount of
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Damages exceeds $500,000, after which the Indemnifying Founders shall be
obligated to pay the entire amount of such Damages, including the first
$500,000, and (b) the remedies set forth in Section 2.4 shall be the sole
remedies for any Claim relating to (i) WVB's ability to acquire, directly or
indirectly, the remaining interests in any Persons owning Licenses, (ii)
frequency interference and (iii) revocation of Licenses. The aggregate
individual liability of each Indemnifying Founder under this Article IX and
Sections 2.4 and 2.5 shall be limited to such Indemnifying Founders' Pro Rata
Share. As between themselves, the Indemnifying Founders agree that if any
Indemnifying Founder shall become obligated to make any indemnification payment
hereunder or under Sections 2.4 or 2.5, each Indemnifying Founder shall
contribute to such payment pro rata in accordance with his, her or its ownership
interests in WVB as of the Closing Date. The Indemnifying Founders may satisfy
their obligations hereunder in cash or in Nextel Common Stock, based on the
average of the closing prices of the Nextel Common Stock on the principal
trading market on which such shares are traded for the 20 trading days prior to
the date of transfer thereof.
9.2 INDEMNIFICATION BY NEXTEL
Nextel agrees to indemnify and hold harmless, on an after-tax basis, WVB
and the Founders, their respective successors and permitted assigns and the
officers, directors, affiliates, employees, Controlling Persons and agents of
the foregoing and to hold each such party harmless against and in respect of any
and all Damages incurred by such party by reason of a breach of any of the
representations or warranties made by Nextel and Indimich in this Agreement or
Damages suffered as a result of the breach of undertakings of Nextel and
Indimich in any other document, supplement, instrument, agreement, letter,
amendment or assignment executed in connection herewith, or in any officers'
certificate or other certificates delivered to the Founders at or in connection
with the Closing; provided, however, that (a) Nextel shall not be obligated to
make any payments under this Section 9.2 unless and until the amount of Damages
exceeds $500,000, after which Nextel shall be obligated to pay the entire amount
of such Damages, including the first $500,000, and (b) Nextel's maximum
liabilities under this Section 9.2 shall not exceed $186,300,000.
9.3 PROCEDURE
With respect to the claims made by third parties, if Nextel, Indimich, any
Founder, WVB or the WVB Affiliates are threatened with any claim, or any such
claim is presented to or any action or proceeding commenced, that may give rise
to the right of indemnification hereunder, Nextel, Indimich, such Founder, WVB
or the WVB Affiliates, as the case may be (the "Indemnitee"), will give written
notice thereof promptly (and in no event later than the last survival date of
the representation and warranty for the breach of which indemnification is
sought) to the party or parties bearing the indemnification obligation (the
"Indemnifying Party"); provided, however, that the failure to give notice in
accordance with this Section 9.3 shall not prevent enforcement hereunder if such
failure is not prejudicial to the Indemnifying Party. The Indemnifying Party
shall have the right to participate in the defense of such claim, action or
proceeding, and, to the extent the Indemnifying Party so desires, jointly with
any other Indemnifying Party similarly notified, to assume the defense thereof
with counsel mutually satisfactory to such parties and the Indemnitee, in which
case every Indemnitee shall have the right to participate through counsel of its
own choosing (and whose fees shall by paid by such Indemnitee). If the
Indemnifying Party and the Indemnitee agree upon mutually satisfactory counsel
to assume the defense, the Indemnifying Party shall assume the expense of such
counsel's fees and shall no longer assume the expense of the Indemnitee's
attorneys' fees. In the event the Indemnifying Party undertakes to compromise or
defend any such liability, the Indemnifying Party shall so notify the Indemnitee
in writing promptly of its intention to do so, and the Indemnitee shall
cooperate with the Indemnifying Party and its counsel in the compromising of or
the defending against any such liabilities or claims, at the expense of the
Indemnifying Party. Such cooperation shall include, but shall not be limited to,
the provision to the Indemnifying Party of reasonable access to the Indemnitee's
business records, research, documents and employees as they relate to the
defense of any indemnified claim. In response to a bona fide settlement offer,
the Indemnifying Party may settle the monetary portion of an indemnifiable
matter that it has duly elected to contest without the consent of the Indemnitee
unless such settlement has an adverse effect upon the Indemnitee, in which case
such matters shall be settled only with the consent of the Indemnitee; provided,
however, that the Indemnifying Party shall not have the right to agree to a
settlement involving injunctive or
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other equitable relief without obtaining the prior written consent of the
Indemnitee. In the event the Indemnitee declines to consent to the monetary
settlement described in the preceding sentence, then the Indemnitee shall have
no right to indemnification beyond, and the Indemnifying Party shall have no
obligation to pay damages and attorneys' fees hereunder in excess of, the amount
of the proposed settlement.
9.4 SURVIVAL
The covenants, agreements, representations and warranties made by the
parties in or pursuant to this Agreement shall survive the Closing for 18
months, except as otherwise set forth herein, and except that (a)
indemnification pursuant to Article IX relating to the representations and
warranties contained in Sections 3.11 and 4.9 shall survive until expiration of
the statute of limitations applicable to the matters covered thereby (giving
effect to any waiver, mitigation or extension thereof), if later, and (b) the
agreements contained in this Article IX shall survive indefinitely. Any claim
for indemnification asserted in accordance with the provisions of this Agreement
prior to the relevant expiration date shall survive until it is resolved.
ARTICLE X
TERMINATION
10.1 TERMINATION
This Agreement may be terminated and the transactions contemplated hereby
may be abandoned at any time prior to the Closing Date, before or after the
approval by the Founders:
(a) by mutual written consent duly authorized by the Boards of Directors of
Nextel and WVB; or
(b) by either Nextel or WVB if the transactions contemplated hereby shall
not have been consummated by the date 30 days after the date hereof; provided,
however, that if, despite the parties' reasonable best efforts, the applicable
waiting period under the HSR Act shall not have been terminated as of such date,
or the S-4 Registration Statement shall not have been declared and remain
effective as of such date, such date shall be extended for a reasonable period
not to exceed an additional 45 days to permit such condition or conditions to be
fulfilled; provided, further, that the right to terminate this Agreement under
this Section 10.1(b) shall not be available to any party whose failure to
fulfill any obligation under this Agreement has been the cause of or resulted in
the failure of the transactions contemplated hereby to occur on or before such
date; or
(c) by either Nextel or WVB if a court of competent jurisdiction or
governmental authority shall have issued a nonappealable final order, decree or
ruling or taken any other action, in each case having the effect of permanently
restraining, enjoining or otherwise prohibiting the transactions contemplated
hereby; or
(d) by Nextel or WVB if, pursuant to WVB's requests for shareholder
approval, the requisite vote of the Founders shall not have been obtained prior
to the date set forth in Section 10.1(b); or
(e) by Nextel if (i) the Board of Directors of WVB shall withdraw, modify
or change its recommendation in favor of this Agreement and the transactions
contemplated hereby in a manner adverse to Nextel or shall have resolved to do
any of the foregoing; (ii) the Board of Directors of WVB shall have recommended
to the Founders an alternative transaction; or (iii) a tender offer or exchange
offer for 15% or more of the outstanding shares of WVB Common Stock is commenced
(other than by Nextel or an Affiliate of Nextel) and the Board of Directors of
WVB recommends that the Founders tender their shares in such tender offer or
exchange offer; or
(f) by Nextel upon a breach of any representation, warranty, covenant or
agreement on the part of WVB set forth in this Agreement such that the
conditions set forth in Section 6.1 or 6.2 would not be satisfied; or by WVB
upon a breach of any representation, warranty, covenant or agreement on the part
of Nextel or Indimich set forth in this Agreement such that the conditions set
forth in Section 7.1 or 7.2 would not be satisfied; or
(g) by Nextel if any representation or warranty of WVB shall have become
untrue such that the conditions set forth in Article VI cannot reasonably be
expected to be satisfied by the date set forth in Section 10.1(b); or by WVB if
any representation or warranty of Nextel or Indimich shall have become untrue
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such that the conditions set forth in Article VII cannot reasonably be expected
to be satisfied by the date set forth in Section 10.1(b); or
(h) by Nextel or WVB if the Board of Directors of WVB shall have resolved
to accept a Superior Proposal.
10.2 EFFECT OF TERMINATION
In the event of any termination pursuant to this Article X (other than
pursuant to Section 10.1(a)), written notice setting forth the reasons therefor
shall forthwith be given by the terminating party to the other party hereto and
neither party shall have any liability to the other party of any nature
whatsoever due to such termination, except for damages resulting from a willful
breach by the other party.
ARTICLE XI
GENERAL
11.1 EXPENSES
If the transactions contemplated by this Agreement are consummated, Nextel
shall pay its own fees, costs and expenses, and the Founders shall pay their own
fees, costs and expenses, incident to the negotiation, preparation and carrying
out of this Agreement; provided, however, that WVB shall not bear any fees,
costs or expenses relating to the Merger for the benefit of any of the Founders,
Nextel or Indimich.
11.2 AMENDMENT
Prior to the Closing, Nextel, Indimich and WVB (and after the Closing,
Nextel, the Surviving Corporation and the Indemnifying Founders), may amend,
modify or supplement this Agreement at any time, but only in a written amendment
duly executed on behalf of each of the parties.
11.3 HEADINGS
The headings preceding the text of Sections of this Agreement are for
convenience only and shall not be deemed parts thereof.
11.4 APPLICABLE LAW
This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Delaware, as applied to contracts
executed and to be fully performed in such state. Each of the parties hereto,
and each of the Founders by his, her or its approval of this Agreement, (a)
consents to submit itself to the personal jurisdiction of any federal court
located in the state of Virginia or any Virginia state court if any dispute
arises out of this Agreement or any of the transactions contemplated by this
Agreement, (b) agrees that it will not attempt to deny or defeat such personal
jurisdiction by motion or other request for leave from any such court, and (c)
agrees that it will not bring any action relating to this Agreement or any of
the transactions contemplated by this Agreement in any court other than a
federal court sitting in the state of Virginia or a Virginia state court.
11.5 PARTIES IN INTEREST
All of the terms and provisions of this Agreement shall be binding upon and
inure to the benefit of and be enforceable by the respective successors and
permitted assigns of the parties hereto, whether herein so expressed or not.
This Agreement shall not be assigned by either party hereto in whole or in part
without the prior written consent of the other party hereto; provided, however,
that Indimich may at any time assign all or part of its right, title and
interest in, to and under this Agreement and the documents, agreements and
supporting papers delivered in connection herewith to any Affiliate of Indimich
that is a wholly owned direct subsidiary of Nextel and that agrees in writing to
be bound by the provisions hereof and which has no assets, liabilities or
operations and which is in all respects in full compliance with all
representations, warranties,
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covenants and agreements contained herein. The representations, warranties,
covenants and agreements of Nextel and Indimich set forth in this Agreement are
made for the benefit of the Founders and, subject to the approval of this
Agreement and the Merger by the Founders, may be enforced by and against the
Founders in accordance with the terms of this Agreement.
11.6 WAIVERS
Any terms, covenants, representations, warranties or agreements of any
party hereto may be waived at any time by an instrument in writing executed by
the party for whose benefit such terms exist. The failure of any party at any
time or times to require performance of any provisions hereof shall in no manner
affect its right at a later time to enforce the same. No waiver by any party of
any condition or breach of any terms, covenants, representations, warranties or
agreements contained in this Agreement shall be effective unless in writing, and
no waiver in any one or more instances shall be deemed to be a further or
continuing waiver of any other condition or any breach of any other terms,
covenants, representations, warranties or agreements.
11.7 ACKNOWLEDGMENT
Each of Nextel and Indimich acknowledges that it has not relied on the
advice of WVB, the Founders or their respective counsel as to matters of
Brazilian law or regulation; provided, however, that this acknowledgment shall
in no way affect the rights of Nextel and Indimich under Article II, III or IX.
11.8 NOTICES
Any notice or demand desired or required to be given hereunder shall be in
writing and deemed given when personally delivered or deposited in the mail,
postage prepaid, sent certified or registered, or when delivered by facsimile,
and addressed as respectively set forth below, or to such other address as any
party shall have previously designated by such a notice. Any notice so delivered
personally or by facsimile, transmission confirmed, shall be deemed to be
received on the date of delivery and any notice so mailed shall be deemed to be
received three days after the date on which it was mailed.
Notices to the parties shall be sent as follows:
(a) To Nextel and Indimich:
Nextel Communications, Inc.
0000 Xxxx Xxxxxx Xxxxx
XxXxxx, XX 00000
Attention: Xxxxxx Xxxxxx, Esq.
Fax: (000) 000-0000
Dial Call Indimich, Inc.
c/x XxXxx International, Ltd.
0000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attention: General Counsel
Fax: (000) 000-0000
with a copy to:
Xxxxxxx Coie
0000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, XX 00000-0000
Attention: Xxxxx X. Xxxxxxx, Esq.
Fax: (000) 000-0000
File: 24570-11
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(b) To WVB:
Wireless Ventures of Brazil, Inc.
c/o Telcom Ventures, LLC
Arlington Courthouse Plaza II
0000 Xxxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Attention: Xx. Xxxxxxxx Xxxxx
Fax: (000) 000-0000
(with a copy to General Counsel)
and with a copy to:
Xxxxx Xxxxxxxxxx
0000 Xxxxxx xx Xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxx, Esq.
Fax: (000) 000-0000
11.9 COUNTERPARTS
This Agreement may be executed simultaneously in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
11.10 ENTIRE UNDERSTANDING
The terms set forth in this Agreement and the Confidentiality Agreement are
intended by the parties as a final, complete and exclusive expression of the
terms of their agreement and may not be contradicted, explained or supplemented
by evidence of any prior agreement, any contemporaneous oral agreement or any
consistent additional terms.
IN WITNESS WHEREOF, the parties hereto have entered into and signed this
Agreement as of the date and year first above written.
NEXTEL COMMUNICATIONS, INC.
By
-------------------------------
Its
---------------------------
DIAL CALL INDIMICH, INC.
By
-------------------------------
Its
---------------------------
WIRELESS VENTURES OF BRAZIL, INC.
By
-------------------------------
Its
---------------------------
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