EXHIBIT 10.11
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (the "Agreement") is entered into this
27th day of February, 2000, by and among MILWAUKEE PCS LLC, a Delaware limited
liability company ("Buyer"), MILWAUKEE ACQUISITION SUBSIDIARY, INC., a Delaware
corporation ("Acquisition Sub"), XXXXXX X. XXX ("Xxx") and INDUS, INC., a
Wisconsin corporation d/b/a Industar Digital PCS ("Indus" and together with the
Buyer, the Acquisition Sub and Xxx, the "Parties" and each a "Party").
RECITALS
WHEREAS, Indus has been granted the PCS License attached as Exhibit A for
the Milwaukee BTA (the "PCS License"); and
WHEREAS, Xxx is the holder of all of the issued and outstanding Class A
Common Stock of Indus.
AGREEMENT
NOW, THEREFORE, in consideration of the promises and to mutual
representations, warranties, covenants, conditions and agreements hereinafter
set forth, the Parties agree as follows:
ARTICLE I
DEFINITIONS
For purposes of this Agreement:
"Acquisition Sub" has the meaning set forth in the preamble.
"Affiliate" means, with respect to Indus, Xxxxxx X. Xxx and Xxxxx Xxx and,
with respect to any other Person, any other Person that directly, or indirectly
through one or more intermediaries, controls, is controlled by or is under
common control with that Person. For purposes of this definition, "control"
(including the term "controlled") means the power to direct or cause the
direction of the management and policies of a Person, directly or indirectly,
whether through the ownership of securities or partnership or other ownership
interests, by contract or otherwise.
"Agreement" means this Agreement and Plan of Merger, as the same may be
amended, modified or supplemented in accordance with the terms hereof.
"Articles of Merger" means the Articles of Merger in the form attached
hereto as Exhibit B-1 and Exhibit B-2, to be filed in accordance with Section
2.2.
"Assets" includes the following, as set forth in greater detail on
Schedules 5.9(a), 5.9(c) and 5.10(a):
(a) the PCS License and all other permits and licenses;
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(b) the towers, antennas, computer hardware and software, cabling,
switches, radios and radio transmission and recovery equipment transmission
lines, air conditioning units, shelters and other fixtures owned or leased by
Indus;
(c) the Leases;
(d) the Indus Agreements;
(e) all prepaid property taxes, prepaid rent and other prepaid
expenses and deposits of Indus relating to the development of a PCS system in
the Milwaukee BTA;
(f) all rights and benefits obtained by Indus in respect of
microwave clearing of the frequencies covered by the PCS License;
(g) all cash on hand, cash equivalents, and accounts receivable; and
(h) all other assets, real and personal, tangible and intangible
including, without limitation, those reflected on the Most Recent Balance Sheet.
"AT&T Sub" means AT&T Milwaukee JV, Inc., a Delaware corporation.
"Benefit Arrangement" means any employment, severance or similar contract
or arrangement (whether or not written) or any plan, policy, fund, program or
contract or arrangement (whether or not written) providing for compensation,
bonus, profit-sharing, stock option, or other stock related rights or other
forms of incentive or deferred compensation, vacation benefits, insurance
coverage (including any self-insured arrangements), health or medical benefits,
disability benefits, workers' compensation, supplemental unemployment benefits,
severance benefits and post-employment or retirement benefits (including
compensation, pension, health, medical or life insurance or other benefits) or
any other benefit that (i) is not an Employee Plan, (ii) is entered into,
maintained, administered or contributed to, as the case may be, by Indus or any
of its Affiliates, and (iii) covers any Employee or former employee of Indus.
"Bridge Note" means that certain Promissory Note (Multiple Advances) dated
December 22, 1999 in the amount of $5,000,000 payable by Indus to the order of
Wireless.
"BTA" means the unit of division (of which there are four hundred
ninety-three (493)) for the United States of America, devised by Rand XxXxxxx,
as modified by the FCC, based upon geography, population and other factors,
which units form the basis for the auction by the FCC of a portion of the
Licenses for PC5 Systems for Basic Trading Areas, as defined by the FCC.
"Business Day" means any day other than a Saturday, Sunday or a legal
holiday in New York, New York or any other day on which commercial banks in New
York, New York are authorized by law or governmental decree to close.
"Buyer" has the meaning set forth in the preamble.
"Claim" has the meaning set forth in Section 8.4(a).
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"Class A Common Stock" means the issued and outstanding Class A Common
Stock, par value $.01, of Indus.
"Class A Merger Consideration" has the meaning set forth in Section
2.2(e).
"Class B Common Stock" means the issued and outstanding Class B Common
Stock, par value $.01, of Indus.
"Class B Merger Consideration" has the meaning set forth in Section
2.2(e).
"Closing" has the meaning set forth in Section 3.1.
"Closing Date" has the meaning set forth in Section 3.1.
"Code" means the Internal Revenue Code of 1986, as amended.
"Confidential Information" means any and all information that is not
publicly available regarding the business, finances, operations, products,
services and customers of the Person specified and its Affiliates, in written or
oral form or in any other medium.
"Consents" means all consents and approvals of Governmental Authorities or
other third parties necessary to authorize, approve or permit the Parties to
consummate the Transactions and for Acquisition Sub or the Buyer to operate its
business after the Closing Date as currently contemplated.
"Designated Purchaser" has the meaning set forth in Section 10.4.
"DGCL" has the meaning set forth in Section 2.1.
"Dissenting Share" means any Indus Share with respect to which the
Stockholder thereof has exercised and perfected his/her/its appraisal rights
under the WBCL.
"Effective Date" has the meaning set forth in Section 2.2.
"Employees" means the employees of Indus as of the date hereof.
"Employee Plan" means any "employee benefit plan," as defined in Section
3(3) of ERISA, that (i) is subject to any provision of ERISA, (ii) is
maintained, administered or contributed to by Indus, and (iii) covers any
Employee or former employee of Indus.
"Employment Contracts" has the meaning set forth in Section 5.21(a).
"Environmental Claim" means any claim, order, investigation, action, suit,
proceeding, injunction, demand or violation of any Environmental Law or
liability under any Environmental Law or liability under common law with respect
to pollution and/or protection of human health and/or the environment (including
any release, emission, discharge, presence or disposal of any Materials of
Environmental Concern), including any claim, order investigation, action, suit,
proceeding, injunction, demand or violation with respect to health effects to
persons, personal injury, investigation and cleanup costs, property damage
and/or damage to natural resources
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brought or alleged by any Governmental Authority or other Person, and any
written notice advising Indus of any of the foregoing.
"Environmental Laws" means the Comprehensive Response, Compensation and
Liability Act, as amended by the Superfund Amendments and Reauthorization Act
(42 X.X.X.xx. 9601 et seq.), the Solid Waste Disposal Act, as amended by the
Resource Conservation and Recovery Act (42 U.S.C.ss.6901 et seq.) and/or the
Toxic Substances Control Act (15 X.X.X.xx. 2601 et seq.), the Federal
Insecticide, Fungicide and Rodenticide Act (7 X.X.X.xx. 136 et seq.), the Clean
Air Act (42 X.X.X.xx. 7401 et seq.), the Federal Water Pollution Control Act (33
U.S.C.ss.1251 et seq.), the Safe Drinking Water Act (42 X.X.X.xx. 300f et seq.),
the Oil Pollution Act of 1990 (33 U.S.C.ss.ss.2701-2761) and/or the Emergency
Planning and Community Right-to-Know Act of 1986 (42 U.S.C.ss.ss.11001-11050)
including any amendments or extensions thereof; and all other applicable Laws
relating to pollution and/or the protection of human health and/or the
environment, including those relating to reporting, licensing, permitting,
investigating, removing or remediating Materials of Environmental Concern.
"Excess Expenses" has the meaning set forth in Section 10.15.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"FCC" means the Federal Communications Commission or similar regulatory
authority established in replacement thereof.
"FCC Debt" means the outstanding balance (including principal and
suspended and accrued interest) of approximately Sixty Million Dollars
($60,000,000) due to the United States Department of the Treasury incurred in
connection with Indus' acquisition of the PCS License, plus all accrued interest
and other obligations incident to license ownership payable through the
FCC-Sanctioned Cost Clearing House, if any, attributable to the PCS License, as
of the Closing Date, as well as any payment obligation imposed by the FCC as a
condition of its approval of the transfer of the PCS License to the Buyer,
Acquisition Sub, or the Designated Purchaser, including any unjust enrichment
penalty imposed pursuant to 47 CFR ss. 1.2111. A copy of the promissory note
evidencing the FCC Debt and the related security agreement is attached as
Exhibit C hereto.
"FCC Law" means the Communications Act of 1934, as amended, including as
amended by the Telecommunications Act of 1996, and the rules, regulations and
policies promulgated thereunder.
"Final Order" has the meaning set forth in Section 7.1(b).
"Financial Statements" has the meaning set forth in Section 5.14.
"Governmental Authority" means a federal, state, local or foreign court,
legislature, governmental agency, commission or regulatory or administrative
authority or instrumentality.
"Holdback Agreement" has the meaning set forth in Section 2.3(e).
"Holdback Funds" has the meaning set forth in Section 2.3(a).
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"HNS Agreements" means any and all agreements, contracts, or commitments
entered into by and between Indus and Xxxxxx Network Systems or its Affiliates
or any participations therein, including (i) that certain Xxxxxx Maintenance
Agreement by and between Indus and Xxxxxx Network Systems dated November 6,
1997, as amended; (ii) that certain Xxxxxx Master Supply Contract by and between
Indus and Xxxxxx Network Systems dated November 6, 1997, as amended; (iii) that
certain Credit Agreement by and between Indus and Xxxxxx Network Systems dated
November 6, 1997, as amended; (iv) that certain Promissory Note by Indus in
favor of Xxxxxx Network Systems dated December 18, 1997; and (v) that certain
Participation Agreement by and between Alcatel and Xxxxxx Network Systems dated
November 6,1997.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976,
as amended, and the rules and regulations promulgated thereunder.
"Indemnified Party" has the meaning set forth in Section 8.4(a).
"Indemnifying Party" has the meaning set forth in Section 8.4(a).
"Indus" has the meaning set forth in the preamble.
"Indus Agreements" has the meaning set forth in Section 5.10.
"Indus Interim Management Agreement" has the meaning set forth in the
Organizational Agreement.
"Indus Investment Agreement" has the meaning set forth in Section 5.2.
"Indus Material Adverse Effect" means a material adverse effect on (i) the
PCS License, the Assets or liabilities of Indus (exclusive of any effect
primarily caused by the actions or decisions of Wireless as manager pursuant to
the Indus Interim Management Agreement) or actions or omissions approved by
Wireless, the Buyer, or the Designated Purchaser or (ii) the Transactions.
"Indus' Knowledge" means, with respect to any of the representations,
warranties and covenants of Indus, the knowledge of Xxx, Xxxxx X'Xxxxxx, R.
Xxxxx Xxxxxxx, Xxxxxxx Xxxx, Xxxxx Xxxx and Xxxxx Xxxxxx.
"Indus Shares" has the meaning set forth in Section 5.2.
"IRS" means the Internal Revenue Service.
"Intellectual Property" means and includes all patents, trademarks,
service marks, trade names, copyrights, mask works, inventions, processes, trade
secrets and know-how, including all such rights in software and any
documentation relating to the manufacture, marketing, installation, service and
operation of products.
"Investments" has the meaning set forth in Section 5.24.
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"Law" means applicable common law and any applicable statute, ordinance,
code or other law, rule, permit, permit condition, regulation, order, decree,
technical or other standard, requirement or procedure enacted, adopted,
promulgated, applied or followed by any Governmental Authority.
"Leased Property" means (i) any real property or facility presently or
previously leased to Indus by any Person; (ii) any real property or facility
presently or previously operated for Indus or any of its predecessors in
interest by any Person; and (iii) any real property or facility presently or
previously used or occupied by Indus or any of its predecessors in interest.
"Leases" has the meaning set forth in Section 5.9(c).
"License" means a license, permit, certificate of authority, waiver,
approval, certificate of public convenience and necessity, registration or other
authorization, consent or clearance to construct or operate a facility,
including any emissions, discharges or releases therefrom, to transact an
activity or business, to construct a tower or to use an asset or process, in
each case issued or granted by a Governmental Authority.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest, right of first refusal or right of others therein, or
encumbrance of any nature whatsoever in respect of such asset.
"Losses" has the meaning set forth in Section 8.2.
"Materials of Environmental Concern" means any substance: (a) the presence
of which requires investigation or remediation under any Environmental Law; (b)
which is defined as a "hazardous waste," "hazardous substance," "hazardous
material," toxic substance, pollutant or contaminant under any Environmental
Law; (c) which is identified under any Environmental Law as toxic, explosive,
corrosive, flammable, ignitable, reactive, infectious, radioactive,
carcinogenic, mutagenic or otherwise hazardous and is or becomes restricted or
regulated by any Governmental Authority; or (d) which includes or contains
gasoline, diesel fuel or other petroleum hydrocarbons or byproducts.
"Maximum Transaction Tax Amount" shall have the meaning set forth in
Section 4.7(c).
"Merger" has the meaning set forth in Section 2.1.
"Merger Consideration" means the Class A Merger Consideration, Class B
Merger Consideration and Preferred Stock Consideration.
"Most Recent Balance Sheet" has the meaning set forth in Section 5.14.
"Most Recent Fiscal Year End' has the meaning set forth in Section 5.14.
"Most Recent Financial Statement" has the meaning set forth in Section
5.14.
"Organizational Agreement" means that certain Organizational Agreement of
even date herewith by and among Xxx, Indus, Buyer, Wireless and AT&T Sub.
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"PCS" means Personal Communications Services as described in, or
authorized under, Part 24 of the rules of the FCC, and which may be provided as
a result of obtaining the PCS License under FCC Law.
"PCS License" has the meaning set forth in the recitals.
"PCS License Assignment" has the meaning set forth in Section 4.1(d)(i).
"Paying Agent" has the meaning set forth in Section 2.3(a).
"Payment Fund" has the meaning set forth in Section 2.3(a).
"Permitted Liens" has the meaning set forth in Section 5.9(a).
"Person" means an individual, corporation, partnership, limited liability
company, association, joint stock company, Governmental Authority, business
trust, unincorporated organization, or other legal entity.
"Preferred Stock" means the 6.50% Convertible Preferred Stock, Series A of
Indus.
"Preferred Stock Consideration" has the meaning set forth in Section
2.2(e).
"Xxx" has the meaning set forth in the preamble.
"Xxx Liabilities" has the meaning set forth in Section 3.3.
"Xxx Notes" has the meaning set forth in Section 3.3.
"Related Agreements" means the Organizational Agreement, the Indus Interim
Management Agreement the Holdback Agreement and each of the other instruments,
documents, certificates and agreements required or contemplated to be executed,
delivered and performed by a Party hereunder and thereunder to which such Party
is or will be a Party.
"Representatives" has the meaning set forth in Section 4.2(a).
"Returns" means all returns, reports, statements, schedules, notices,
forms or other documents or information required to be filed with any
Governmental Authority by, or with respect to, Indus, in connection with the
determination, assessment, collection or payment of any Tax.
"Search Results" has the meaning set forth in Section 4.4.
"Section 8.2 Indemnified Party" has the meaning set forth in Section 8.2.
"Section 8.3 Indemnified Party" has the meaning set forth in Section 8.3.
"Securities Act" means the Securities Act of 1933, as amended.
"Stockholders" means the holders of record of capital stock of Indus.
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"Stub Period" has the meaning set forth in Section 4.7(b).
"Surviving Corporation" has the meaning set forth in Section 2.1.
"Subsidiary" means, with respect to any Person, a corporation or other
entity of which 50% or more of the voting power or the voting equity securities
or equity interests is owned, directly or indirectly, by such Person.
"Tax" (including, with correlative meaning, the terms "Taxes" and
"Taxable") means any federal, state, local, or foreign income, gross receipts,
business, occupation, license, payroll, employment, excise, severance, stamp,
occupation, premium, windfall profits, environmental (including taxes under
Section 59A of the Code), customs duties, capital stock, franchise, profits,
withholding, social security (or similar), unemployment, disability, real
property, personal property, sales, use, transfer, registration, value added,
alternative or add-on minimum, estimated, or other tax of any kind whatsoever,
including any interest, penalty, or addition thereto, whether disputed or not.
"Tax Proceeding" has the meaning set forth in Section 4.7(d).
"Third-Party Proposal" has the meaning specified in Section 4.5(a).
"Transactions" means the transactions contemplated by this Agreement.
"WBCL" has the meaning set forth in Section 2.1.
"Wireless" means AT&T Wireless Services, Inc., a Delaware corporation.
When a reference is made in this Agreement to an Article or a Section,
such reference shall be to an Article or a Section of this Agreement unless
otherwise indicated. Unless the context otherwise requires, the terms defined
hereunder shall have the meanings therein specified for all purposes of this
Agreement, applicable to both the singular and plural forms of any of the terms
defined herein. Whenever the words "include," "includes" or "including" are used
in this Agreement, they shall be deemed to be followed by the words "without
limitation." The use of a gender herein shall be deemed to include the neuter,
masculine and feminine genders whenever necessary or appropriate. Whenever the
word "herein" or "hereof" is used in this Agreement, it shall be deemed to refer
to this Agreement and not to a particular Section of this Agreement unless
expressly stated otherwise.
ARTICLE II
MERGER
2.1 Merger. Subject to the terms and conditions hereof and the
requirements of all applicable Laws, including FCC Law, and pursuant to the
Wisconsin Business Corporation Law ("WBCL") and the General Corporation Law of
the State of Delaware ("DGCL"), and in reliance upon the representations,
warranties, covenants and agreements herein contained, on the Effective Date,
Indus shall be merged with and into Acquisition Sub (the "Merger"). From and
after the Effective Date, Acquisition Sub shall be the surviving corporation
(the "Surviving
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Corporation"), which shall continue to be governed by the laws of the State of
Delaware, and the separate corporate existence of Indus shall thereupon cease.
2.2 Effect of Merger.
(a) General. The Merger shall become effective at the time (the
"Effective Date") the Acquisition Sub and Indus file Articles of Merger with the
Department of Financial Institutions of the State of Wisconsin in the form
attached hereto as Exhibit B-1 and Articles of Merger with the Secretary of the
State of Delaware in the form attached hereto as Exhibit B-2. The Merger shall
have the effect set forth in the WBCL and DGCL. The foregoing merger filings
shall be made simultaneously with or as soon as practicable after the Closing
contemplated by this Agreement. The Surviving Corporation may, at any time after
the Effective Date, take any actions (including executing and delivering any
document) in the name and on behalf of either Acquisition Sub or Indus in order
to carry out and effectuate the Transactions.
(b) Articles of Incorporation. The Articles of Incorporation of
Acquisition Sub shall be those of the Surviving Corporation without modification
or amendment.
(c) Bylaws. The Bylaws of Acquisition Sub shall be those of the
Surviving Corporation without modification or amendment.
(d) Directors and Officers. The directors and officers of the
Acquisition Sub shall continue to be the directors and officers of the Surviving
Corporation at and as of the Effective Date (retaining their respective
positions and terms of office).
(e) Conversion of Indus Shares. At and as of the Effective Date, (A)
each share of Class A Common Stock of Indus shall be converted into the right to
receive an amount (the "Class A Merger Consideration") equal to Two and
Six-and-Two-Thirds Hundredths Dollars ($2.06 2/3) in cash; (B) each share of
Class B Common Stock of Indus (other than any Dissenting Shares) shall be
converted into the right to receive an amount (the "Class B Merger
Consideration") equal to Five Dollars ($5.00) in cash; (C) each share of
Preferred Stock (other than any Dissenting Shares) shall be converted into the
right to receive an amount (the "Preferred Stock Consideration") equal to One
Thousand Twenty-Seven and Seventy-Eight Hundredths Dollars ($1,027.78); and (D)
each Dissenting Share shall be converted into the right to receive payment from
the Surviving Corporation in accordance with the WBCL; provided, however, that
the Class A Merger Consideration, Class B Merger Consideration and Preferred
Stock Consideration shall each be subject to equitable adjustment in the event
of any stock split, stock dividend, reverse stock split, or other change in the
number of outstanding shares of Class A Common Stock, Class B Common Stock and
Preferred Stock, respectively. No Indus Share shall be deemed to be outstanding
or to have any rights other than those set forth in this Section 2.2(e) after
the Effective Date.
2.3 Procedure for Payment.
(a) Immediately after the Effective Date, the Buyer will cause the
Surviving Corporation to furnish to the third party paying agent designated by
the Buyer (the "Paying Agent") an amount (the "Payment Fund") equal to the
Merger Consideration less (i) Three Million Five Hundred Thousand Dollars
($3,500,000) of the Class A Merger Consideration (the
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"Holdback Funds") and (ii) amounts which need to be withheld pursuant to Section
1445 of the Code, if any, from the Merger Consideration for those Stockholders
listed in Schedule 5.17(j). Promptly thereafter, the Buyer will cause the Paying
Agent to mail a letter of transmittal (with instructions for its use) to each
record holder of outstanding Indus Shares (other than Dissenting Shares) for the
holder to use in surrendering the certificates which represented his, her or its
Indus Shares against payment of the Merger Consideration. No interest will
accrue or be paid to the holder of any outstanding Indus Shares. The Buyer shall
have no obligation to pay any amounts of Merger Consideration hereunder beyond
the Payment Fund and the Holdback Funds as provided in Section 2.3(e).
(b) The Buyer may cause the Paying Agent to invest the Payment Fund
in one or more interest bearing accounts; provided, however, that the terms and
conditions thereof shall be such as to permit the Paying Agent to make prompt
payment of the Merger Consideration as necessary. The Buyer may cause the Paying
Agent to pay over to the Surviving Corporation any interest accrued on the
Payment Fund.
(c) The Buyer may cause the Paying Agent to pay over to the
Surviving Corporation any portion of the Payment Fund (including any accrued
interest thereon) remaining six (6) months after the Effective Date, and
thereafter all former Stockholders shall be entitled to look to the Surviving
Corporation (subject to abandoned property, escheat, and other similar laws) as
general creditors thereof with respect to the cash payable upon surrender of
their certificates.
(d) The Buyer shall cause the Surviving Corporation to pay all
charges and expenses of the Paying Agent.
(e) The Holdback Funds shall be released in accordance with the
Holdback Agreement attached hereto as Exhibit D (the "Holdback Agreement").
2.4 Books and Records. On the Effective Date, Indus shall deliver to Buyer
all books, contracts, and records of Indus.
2.5 Closing of Transfer Records. After the close of business on the
Closing Date, transfers of Indus Shares outstanding prior to the Effective Date
shall not be made on the stock transfer books of Indus.
2.6 Allocation of the Merger Consideration. The Parties shall agree upon
an allocation of the Merger Consideration prior to the Closing Date. The Parties
shall report the transaction as an asset acquisition by the Buyer consistently
with the allocation as provided for in this Section 2.6 on all Tax Returns
(including IRS Form 8594, Asset Acquisition Statement).
ARTICLE III
CLOSING
3.1 Time and Place of Closing. Upon the terms and subject to the
conditions hereof, the closing of the Transactions (the "Closing") shall take
place at the offices of Xxxxxxx Xxxxxxxx, X.X., 0000 Xxxxxx Xxxxxx Xxxxx, Xxxxx
0000, Xxxxxxx, Xxxxxxxxxx 00000, at 10:00 a.m. local time on the third (3rd)
Business Day following the date of receipt of the last Consent required by
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subsections (a) through (d) of Section 7.1, or at such other place and/or time
and/or on such other date as the Parties may agree or as may be necessary to
permit the fulfillment or waiver of the conditions set forth in Article VII (the
"Closing Date").
3.2 Closing Actions and Deliveries. Upon the terms and subject to the
satisfaction or waiver by the appropriate Party, if applicable, of the
conditions set forth in Article VII, to effect the Merger and the payment of the
Merger Consideration in consideration therefor, the Parties shall on the Closing
Date take the following actions:
(a) Xxx shall execute and deliver to the Buyer the Holdback
Agreement and shall direct Wireless to deliver to the Buyer the Xxx Notes, and
pay to Indus the amounts owed by Xxx to Indus reflected on Schedule 5.27.
(b) Indus shall execute and deliver or cause to be executed and
delivered to the Buyer:
(i) Articles of Merger in the forms attached as Exhibit B-1
and B-2;
(ii) the opinion of Xxxxx & Xxxxxxx, counsel to Indus, dated
the Closing Date and addressed to the Buyer in form and substance reasonably
acceptable to the Buyer and otherwise as customarily provided in similar
transactions;
(iii) the opinion of Xxxxxxx Xxxx & Xxxxxxxxx, FCC counsel to
Indus, dated the Closing Date and addressed to the Buyer relating to the PCS
License and FCC matters in form and substance reasonably acceptable to the Buyer
and otherwise as customarily provided in similar transactions;
(iv) a certificate signed by Xxx and Xxxxx X'Xxxxxx as
officers of Indus, dated the Closing Date, certifying as to the fulfillment of
the conditions set forth in Sections 7.2(a) and 7.2(b) and that all of the
conditions precedent to the obligations of Indus hereunder have been waived by
Indus or satisfied;
(v) a certificate signed by Xxx and Xxxxx X'Xxxxxx as officers
of Indus, dated the Closing Date, certifying as to (A) the resolutions adopted
by Indus duly authorizing the execution, delivery and performance of this
Agreement by Indus and the execution and delivery by Indus of all Related
Agreements to which it is party, (B) the signatures of the Persons who have been
authorized to execute and deliver on behalf of Indus this Agreement and any
Related Agreements to which it is party, and (C) the Articles of Incorporation
and By-laws of Indus, in each case as amended as of the Closing Date;
(vi) a certificate of corporate status of Indus from the
Department of Financial Institutions of Wisconsin, dated no earlier than thirty
(30) days prior to the Closing Date;
(vii) all Consents set forth on Schedule 5.3 which are
designated as material therein except consents required by the HNS Agreements;
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(viii) the Search Results, as set forth in Section 4.4,
together with all releases and satisfaction pieces required to release the Liens
on the Assets shown in the Search Results (other than Permitted Liens);
(ix) those estoppel certificates that Indus has obtained from
landlords, licensors or lessors under the Leases pursuant to Section 4.6; and
(x) all such other documents and instruments as the Buyer or
its counsel may reasonably request in order to consummate the Transactions.
(c) The Buyer shall execute and deliver or cause to be executed and
delivered to Xxx the Holdback Agreement and shall pay or cause the Xxx
Liabilities to be paid in accordance with Section 3.3.
(d) The Buyer shall execute and deliver or cause to be executed and
delivered the following to Indus:
(i) the opinion of Xxxxxxx Xxxxxxxx, X.X., counsel to the
Buyer or Designated Purchaser's counsel dated the Closing Date, addressed to
Indus and substantially in form and substance reasonably acceptable to Indus and
otherwise as customarily provided in similar transactions;
(ii) a certificate of an officer of each of the Buyer and
Acquisition Sub, dated the Closing Date, certifying as to the fulfillment of the
conditions set forth in Sections 7.3(a) and 7.3(b) and that all of the
conditions precedent to the obligations of the Buyer hereunder have been waived
by the Buyer or satisfied;
(iii) a certificate of an officer of each of the Buyer and
Acquisition Sub, dated the Closing Date, certifying as to (I) the resolutions
adopted by the Buyer and Acquisition Sub, duly authorizing the execution,
delivery and performance of this Agreement by the Buyer and Acquisition Sub and
the execution and delivery by the Buyer and Acquisition Sub of all Related
Agreements to which each of them is party, and (II) the signatures of the
Persons who have been authorized to execute and deliver on behalf of the Buyer
and Acquisition Sub this Agreement;
(iv) good standing certificates of the Buyer and Acquisition
Sub from the Secretary of State of the State of Delaware, dated no earlier than
ten (10) days prior to the Closing;
(v) all such other documents and instruments as Indus or its
counsel may reasonably request in order to consummate the Transactions.
(e) The Buyer shall pay or cause the Payment Fund to be paid to the
Paying Agent.
(f) The Buyer shall pay or cause to be paid the dividends accrued on
the Preferred Stock to the Closing at the rate specified in the Restated
Articles of Incorporation of Indus as amended to date.
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3.3 Xxx Liabilities. The Buyer shall cause Indus on and as of the Closing
Date, and provide Indus with the necessary funds to pay the amounts owed by
Indus to Xxx reflected on the Most Recent Balance Sheet, which consist of
principal and interest payable by Indus to Xxx pursuant to (a) that certain
Multiple Advance Promissory Note in the amount of Three Million Dollars
($3,000,000) (undated); (b) that certain Promissory Note dated July 25, 1999 in
the amount of Two Million Three Hundred Thousand Dollars ($2,300,000) and (c)
that certain Promissory Note dated September 25, 1999 in the amount of Four
Hundred Eighty-Six Thousand Four Hundred Thirty-Three Dollars ($486,433)
(collectively, the "Xxx Notes"), together with additional interest accrued from
December 31, 1999 to the Closing in accordance with the terms of the Xxx Notes
(collectively, the "Xxx Liabilities"). Upon the foregoing payment of the Xxx
Liabilities, Xxx shall deliver all Xxx Promissory Notes to the Buyer marked
"cancelled," and neither Indus nor the Surviving Corporation shall have any
further liability or obligation to Xxx except as expressly provided in this
Agreement or the Organizational Agreement.
3.4 HNS Agreements. Following the Effective Date, the Buyer, Acquisition
Sub or the Designated Purchaser will pay to the person entitled thereto any and
all amounts determined to be owing by Indus, its successors or assigns under the
HNS Agreements, any judgments or arbitration awards for such amounts and the
related legal fees and other expenses incurred by the Buyer, Acquisition Sub, or
the Designated Purchaser.
ARTICLE IV
COVENANTS
4.1 Consummation of Transactions. Each Party shall use all its best
efforts to take, or cause to be taken, all actions, and to do, or cause to be
done, all things necessary, proper or advisable and consistent with Law to carry
out all of their respective obligations under this Agreement to consummate the
Transactions, which efforts shall include the following:
(a) The Parties shall use their best efforts to cause the Closing to
occur and the Transactions to be consummated in accordance with the terms
hereof, and, without limiting the generality of the foregoing and as more
specifically set forth in Section 4.1(d)(i), to obtain all necessary Consents
including the approval of this Agreement and the Transactions by all
Governmental Authorities and third parties (exclusive of consents relating to
the HNS Agreements) and to make all filings with and to give all notices to
third parties which may be necessary or reasonably required in order for the
Parties to consummate the Transactions, and, in the case of Indus, to promptly
obtain the approval of the Transactions by its Board of Directors and
Stockholders; provided, however, that no filings shall be made with Governmental
Authorities unless approved in advance by the Buyer, which approval will not be
unreasonably withheld.
(b) Each Party shall furnish to the other Party all information
concerning such Party and its Affiliates reasonably required for inclusion in
any application or filing to be made by Indus or the Buyer or any other Party in
connection with the Transactions or otherwise to comply with applicable FCC Law.
(c) Upon the request of another Party, each Party shall forthwith
execute and deliver, or cause to be executed and delivered, such further
instruments of assignment, transfer,
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assumption, conveyance, endorsement, direction or authorization and other
documents as may reasonably be requested by such Party in order to effectuate
the purposes of this Agreement.
(d) Each Party covenants and agrees from and after the execution and
delivery of this Agreement to and including the Closing Date as follows:
(i) It is understood that the Closing is subject to prior
approval of the FCC and may be subject to the prior approval of one or more
state regulatory commissions. The Parties shall use their best efforts to file
with the FCC and any relevant state agency or agencies, as soon as practicable
following the date of execution hereof, a joint application requesting the
approval of the assignment of the PCS License by Indus to the Buyer, Acquisition
Sub or the Designated Purchaser as contemplated by this Agreement (the "PCS
License Assignment"). Each of the Parties hereto shall diligently take or
cooperate in the taking of all steps which are necessary or appropriate to
expedite the prosecution and favorable consideration of such applications;
provided, that Indus shall make no filings without the express prior consent of
the Buyer, which consent shall not be unreasonably withheld. The Parties
covenant and agree to undertake all actions reasonably requested by the FCC or
other regulatory authority and to file such material as shall be necessary or
required to obtain any necessary waivers or other authority from the FCC or such
state agency or agencies in connection with the foregoing applications. The
Buyer and Acquisition Sub, or Designated Purchaser respectively agree to bear
the expense of any payments to the United States Treasury that may be required
as a condition to the FCC's approval of PCS License Assignment to the Buyer,
Acquisition Sub, or the Designated Purchaser, including any unjust enrichment
penalty imposed pursuant to 47 CFR ss. 1.2111 of the FCC Law.
(ii) As soon as practicable following the date of execution
hereof, the Parties shall file, or cause to be filed, with the Federal Trade
Commission and the Antitrust Division of the Department of Justice, any and all
reports and notifications required to be filed under the HSR Act or other Law;
provided, that Indus shall make no filings without the express prior consent of
the Buyer, which consent shall not be unreasonably withheld. The Buyer shall pay
any fee under the HSR Act relating to the Transactions, if any HSR Act filing is
required.
4.2 Confidentiality.
(a) Each Party shall, and shall cause each of its Affiliates, and
its and their respective shareholders, members, managers, directors, officers,
employees and agents (collectively, "Representatives") to keep secret, and
retain in strictest confidence, any and all Confidential Information relating to
any other Party that it receives in connection with the negotiation or
performance of this Agreement, and shall not disclose such Confidential
Information, and shall cause its Affiliates and Representatives not to disclose
such Confidential Information, to anyone except the receiving Party's Affiliates
and Representatives and any other Person that agrees in writing to keep in
confidence all Confidential Information in accordance with the terms of this
Section 4.2. Until the Closing, each Party agrees to use Confidential
Information received from another Party only to pursue the Transactions, but not
for any other purpose. All tangible embodiments of Confidential Information
furnished pursuant to this Agreement shall be returned promptly to the Party to
whom it belongs upon request by such Party.
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(b) The obligations set forth in Section 4.2(a) shall not apply to
Confidential Information that (i) is or becomes generally available to the
public other than as a result of disclosure by the receiving Party or its
Affiliates or Representatives, (ii) was available to the receiving Party on a
non-confidential basis prior to its disclosure to the receiving Party, or (iii)
becomes available to the receiving Party on a non-confidential basis from a
source other than the providing Party or its agents, provided that such source
is not known by the receiving Party to be bound by a confidentiality agreement
with the providing Party or the providing Party's agents. In addition, from and
after the Closing the obligations set forth in Section 4.2(a) shall not apply to
the Buyer or its Affiliates or its or their Representatives with respect to
Confidential Information relating to Indus.
(c) To the fullest extent permitted by Law, if a Party or any of its
Affiliates or Representatives breaches, or threatens to commit a breach of, this
Section 4.2, the Party whose Confidential Information shall be disclosed, or
threatened to be disclosed, shall have the right and remedy to have this Section
4.2 specifically enforced by any court having jurisdiction, it being
acknowledged and agreed that monetary damages will not provide an adequate
remedy to such Party. Indus agrees that it will not seek, and hereby waives any
requirement for, the security or posting of a bond or proving actual damages in
connection with the Buyer's seeking or obtaining such relief. Nothing in this
Section 4.2 shall be construed to limit the right of any Party to collect
monetary damages in the event of a breach of this Section 4.2.
(d) Anything else in this Agreement notwithstanding, each Party
shall have the right to disclose any information, including Confidential
Information of the other Party: (i) to the disclosing Party's Affiliates and
Representatives; (ii) in any filing with any Governmental Authority or any
disclosure to a trustee of public debt of a Party to the extent that the
disclosing Party determines in good faith that it is required by Law or the
terms of such debt to do so; provided, that any such disclosure shall be as
limited in scope as possible and shall be made only after giving the other Party
as much notice as practicable of such required disclosure and an opportunity to
contest such disclosure if possible; (iii) as required by its existing or
potential lending sources (such lending sources to acknowledge that any such
Confidential Information disclosed to them is subject to the provisions hereof);
(iv) as required to enforce its rights under this Agreement; or (v) as required
to obtain the Consents specified in Sections 7.1(a) through (d).
4.3 Covenants of Indus. From and after the execution and delivery of this
Agreement to and including the Closing Date, and except as expressly
contemplated hereunder or under the Related Agreements or primarily caused by
the actions or omissions of Wireless as manager pursuant to the Indus Interim
Management Agreement, Indus shall:
(a) Without the Buyer's prior consent, which consent may be withheld
in the Buyer's sole discretion, not (i) sell, transfer, assign or dispose of, or
offer to, or enter into any agreement, arrangement or understanding to, sell,
transfer, assign or dispose of any of its material Assets or any interest
therein, or negotiate therefor, or (ii) create, incur or suffer to exist any
Lien of any nature whatsoever relating to any of Indus' Assets or any interest
therein (other than Permitted Liens);
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(b) Deliver to the Buyer copies of all environmental assessment
reports, if any, that it has in its possession covering any real property that
is leased pursuant to any Lease;
(c) Give notice to the Buyer promptly upon the commencement of, or
upon obtaining knowledge of, any facts that would reasonably be expected to give
rise to a threat of, any claim, action or proceeding commenced against or
relating to Indus or the Transactions contemplated by this Agreement (including
the PCS License Assignment) and which would reasonably be expected to have an
Indus Material Adverse Effect;
(d) Give notice to the Buyer promptly of (i) any event, condition or
state of facts known to Indus, which has had or would reasonably be expected to
have an Indus Material Adverse Effect or which causes or is likely to cause a
breach of any of Indus' representations and warranties hereunder, (ii) any
claim, action or proceeding which seeks to delay, enjoin, prevent or interfere
with the consummation of the Transactions, and (iii) any event, occurrence,
transaction or other item that would have been required to have been disclosed
on any Exhibit or Schedule delivered hereunder, had such event, occurrence,
transaction or item existed on the date hereof (disclosure by Indus pursuant to
this Section 4.3(f) shall not be deemed to amend or supplement the Exhibits or
Schedules hereto or to prevent or cure any misrepresentation, breach of warranty
or breach of covenant hereunder);
(e) Except for the HNS Agreements, use commercially reasonable
efforts to preserve its relationships with all parties to the Indus Agreements
and to perform in all respects all of its payment obligations under the Indus
Agreements according to the terms and conditions thereof, provided that Indus
receives funds loaned by the Buyer or Designated Purchaser sufficient to pay the
same;
(f) Not fail to pay when due any liability or obligations that, if
unpaid, would become a Lien upon any of the Assets, provided that Indus receives
funds loaned by the Buyer or Designated Purchaser sufficient to pay the same;
(g) Obtain the Consents to the Transactions set forth on Schedule
5.3 which are designated as material therein except Consents required by the HNS
Agreements;
(h) Comply with all of the terms and conditions of the Indus Interim
Management Agreement;
(i) Without the prior consent of the Buyer, which consent may be
withheld in the Buyer's sole discretion: (i) issue any additional capital stock
or other equity other than pursuant to the conversion of currently outstanding
Preferred Stock, (ii) incur any additional debt for borrowed money other than
pursuant to the Bridge Note and in accordance with the Indus Interim Management
Agreement, (iii) pay any liabilities of Indus or other amounts other than in
accordance with the Bridge Loan and the Indus Interim Management Agreement, (iv)
modify, amend, cancel, breach or terminate any existing agreement material to
its business or waive any rights of material value thereunder, (v) enter into
any new agreement, contract or commitment, (vi) set aside or pay any
distribution to any of the Stockholders or redeem, purchase or otherwise acquire
any of the equity interests in Indus (other than the Preferred Stock pursuant to
Section 4.10 and payment of the dividends on the Preferred Stock, for which, as
of the date
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hereof no more than Thirty-Five Thousand Dollars ($35,000) is outstanding and
payable), or (vii) otherwise engage in any practice, take any action, or enter
into any transaction of the sort described in Section 4.5 below;
(j) Provide the Buyer and its Representatives with full access at
all reasonable times, and in a manner so as not to interfere with the normal
business operations of Indus, to all premises, properties, personnel, books,
records (including Tax records), contracts, and documents of or pertaining to
Indus for purposes of the Buyer's due diligence review;
(k) Obtain from the holders of each of the options, and any rights
in, or to acquire, any of the capital stock of Indus (including those set forth
on Schedule 5.2(b), but not including any warrant holders listed therein or
pursuant to Section 5.18 of that certain Credit Agreement by and between Indus
and Xxxxxx Network Systems dated November 6, 1997), other than the holders of
the Class A Common Stock, Class B Common Stock and Preferred Stock disclosed on
Schedule 5.2(a), written confirmation of the termination of any such options and
rights, in form and substance satisfactory to, and otherwise on terms acceptable
to, the Buyer.
(l) Comply with all applicable Laws relating to the PCS License and
its Assets and their use; and
(m) Maintain the PCS License in full force and effect, provided that
Indus receives sufficient funds to make required payments under the FCC Debt,
and otherwise keep substantially intact its assets, physical facilities, and
relationships with lessors and licensors, and Employees;
4.4 Lien Searches. Indus shall deliver to the Buyer UCC, tax and judgment
lien search reports issued by all applicable jurisdictions with respect to Indus
(the "Search Results") dated no earlier than thirty (30) days prior to the
Closing Date. If the Search Results reveal that any Liens exist, Indus shall,
unless directed otherwise by the Buyer, have such Liens removed as of the
Closing, except for Permitted Liens.
4.5 Non-Solicitation.
(a) From the date hereof until the Closing Date or the termination
of this Agreement, Indus shall not, and shall cause its Representatives not to,
solicit, initiate, encourage or participate in negotiations in any manner with
respect to, or furnish or cause or permit to be furnished any information to any
Person (other than to the Stockholders, the Buyer and the Buyer's
Representatives) in connection with, any inquiry or offer for any purchase,
sale, lease or other disposition, directly or indirectly, of any of the Assets,
any purchase or sale of the Indus Shares (or options, rights or warrants to
purchase, or securities convertible into, or exchangeable for, such Indus
Shares, or any acquisition of any right to acquire beneficial ownership, as
defined in Rule 13d-3 under the Securities Exchange Act of 1934, of such Indus
Shares), or any merger, consolidation, share exchange, joint venture,
combination, or similar transaction relating to Indus or its Assets
(collectively, a "Third-Party Proposal"). During such period, Indus shall give
prompt notice to the Buyer of the occurrence of a Third-Party Proposal and the
terms thereof (including the identity of the prospective soliciting party).
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(b) If Indus or any of its Representatives breaches or threatens to
commit a breach of any of the provisions of this Section 4.5, the Buyer shall
have the right (in addition to any other rights and remedies available to the
Buyer at law or in equity) to equitable relief (including injunctions) against
such breach or threatened breach, it being acknowledged and agreed that any such
breach or threatened breach will cause irreparable harm to the Buyer and that
monetary damages would not be an adequate remedy to the Buyer. Indus agrees that
it will not seek, and hereby waives any requirement for, the securing or posting
of a bond or proving actual damages in connection with the Buyer's seeking or
obtaining such relief. Nothing in this Section 4.5 shall be construed to limit
the right of any Party to collect monetary damages in the event of a breach of
this Section 4.5.
4.6 Estoppel Agreements. Prior to the Closing, Indus shall use all
reasonable efforts to obtain an estoppel certificate in form and substance
reasonably satisfactory to the Buyer from each of the landlords, licensors or
lessors under each of the Leases.
4.7 Tax Provisions.
(a) Indus shall cause its accountant, Ernst & Young, to prepare,
and, subject to the Buyer's review and approval, shall timely file, all federal
and applicable state and local Tax Returns for Indus which are due on or before
the Closing Date (with such extensions as may be approved by the Buyer) together
with any Tax Returns for 1999.
(b) Following the Closing, the Buyer shall cause to be prepared and
filed on a timely basis federal and applicable state and local Tax Returns for
Indus for the period from January 1, 2000 through the Closing Date (the "Stub
Period"). The Buyer shall provide copies of such Tax Returns as filed to Xxx.
Indus warrants and covenants that (A) the tax basis of Indus in the Assets,
including the PCS License that may be used to reduce Indus' income or gain
required to be recognized on the Transactions and (B) the net operating losses
that may be used to offset Indus' income or gain required to be recognized on
the Transactions together shall not be less than One Hundred Fifteen Million
Dollars ($115,000,000) (the "Transaction Tax Assumptions").
(c) Transaction Taxes. The Buyer agrees to pay those Taxes of Indus
(the "Transaction Taxes") required to be reflected on the Stub Period Tax Return
which relate to income or gain recognized by Indus as a result of the
Transactions contemplated hereby to the extent such Taxes do not exceed the
Maximum Transaction Tax Amount, as defined below. The "Maximum Transaction Tax
Amount" means the amount of Transaction Taxes that would be payable by Indus on
the Stub Return based on the Transaction Tax Assumptions for Indus' tax basis
reducing gain recognized on the Transaction, and Indus' net operating losses
offsetting such gain. The Parties further agree to use all commercially
reasonable efforts permitted by law to minimize the Transaction Taxes.
(d) Tax Proceedings. Whenever any taxing authority sends a notice of
an audit, initiates an examination of Indus or otherwise asserts a claim, makes
an assessment or disputes (each a "Tax Proceeding") the amount of Taxes for any
taxable period that may affect the Buyer's liability for Transaction Taxes under
this Agreement, the Buyer shall promptly inform Xxx pursuant to the procedures
in Section 10.3 and keep Xxx advised of the status of, any Tax Proceeding. The
Buyer shall have the right to control, at its cost, any resulting Tax
18
Proceedings and to determine whether and when to settle any Tax Proceedings that
may affect the amount of the Transaction Taxes for which Buyer or Acquisition
Sub is liable under this Agreement or otherwise in relation to Indus. Xxx shall
indemnify each of the Buyer and its Affiliates for any increases which are not
attributable to the error of the Buyer or any of its Affiliates in the past,
present or future Tax liability of the Buyer or any of its Affiliates as a
result of any Tax Proceeding related to Indus, attributable to the breach of the
warranties and covenants under Section 4.7(b), subject to the threshold amounts
and limits in Section 8.1 and 8.2, and for any adjustment within the Tax
Proceeding that may be timing differences (and not permanent differences),
reduced by the present value of future tax savings resulting from the timing
difference adjustment. The Buyer shall be entitled to receive and retain for its
sole use any refund or other adjustment arising out of any Tax Proceeding.
4.8 Xxx Proxy. Xxx shall execute and deliver to the Buyer contemporaneous
herewith an irrevocable proxy in the form of Exhibit E hereto solely for the
purpose of voting Rao's Indus Shares in favor of the Transactions.
4.9 Approval. Indus shall submit this Agreement for approval at a meeting
of its Board of Directors on or before March 10, 2000, and thereafter, if
approved by the Board of Directors, submit this Agreement to the Stockholders
for approval at a meeting within twenty-five (25) days of the date of approval
of this Agreement by the Indus Board of Directors.
4.10 MEDC Stock Power. Indus shall obtain an irrevocable proxy at least
five (5) days in advance of the special meeting of Stockholders referred to in
Section 4.9 in favor of the Buyer or Designated Purchaser Milwaukee Economic
Development Corporation in form and substance satisfactory to the Buyer for the
purpose of voting Milwaukee Economic Development Corporation's Preferred Stock
in favor of the Transactions. If Indus fails to obtain such irrevocable proxy
within such period, Indus shall thereupon immediately redeem the Preferred Stock
provided that Buyer or Designated Purchaser has loaned Indus the funds for such
redemption in an amount not to exceed the redemption price set forth in the
Articles of Incorporation of Indus.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF INDUS
As a material inducement for the Buyer and Acquisition Sub to enter into
this Agreement and to consummate the Transactions, Indus hereby represents and
warrants to the Buyer and Acquisition Sub that the representations and
warranties contained in this Article V are correct and complete as of the date
of this Agreement and will be correct and complete as of the Closing Date:
5.1 Organization, Power and Authority.
(a) Indus is a corporation duly organized and validly existing under
the laws of Wisconsin and has the requisite corporate power and authority to
own, lease and operate its Assets and to carry on its business as now being
conducted.
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(b) Indus has the requisite power and authority to execute, deliver
and perform this Agreement, the Related Agreements to which it is party and each
other instrument, document, certificate and agreement required or contemplated
to be executed, delivered and performed by it hereunder and thereunder.
(c) Indus is only qualified to do business in Wisconsin, and it need
not be qualified to do business in any other jurisdiction, other than any
jurisdiction in which the failure to be so qualified would not have an Indus
Material Adverse Effect.
(d) The execution, delivery and performance by Indus of this
Agreement and each of the Related Agreements to which it is party, and the
consummation by Indus of the Transactions are subject only to the approvals of
the Board of Directors and of the Stockholders, and there are no other
proceedings on its part which have not been taken that are necessary to
authorize this Agreement or such Related Agreements or to consummate the
Transactions.
(e) This Agreement and each of the Related Agreements to which Indus
is party have been duly executed and delivered by Indus and constitute its valid
and binding obligation, enforceable against it in accordance with their
respective terms, except as such enforceability may be limited by bankruptcy,
insolvency, moratorium or other similar laws affecting or relating to
enforcement of creditors' rights generally or by general principles of equity.
5.2 Capitalization. The entire authorized capital stock of Indus consists
of Fifty Million (50,000,000) shares consisting of (i) Nine Million (9,000,000)
shares of a class designated "Class A Common Stock" with a par value of $.01 per
share; (ii) Forty Million (40,000,000) shares of a class designated "Class B
Common Stock" with a par value of $.01 per share; and (iii) One Million
(1,000,000) shares of a class designated "Preferred Stock" with a par value of
$.01 per share. The issued and outstanding shares of capital stock of Indus (the
"Indus Shares") are held of record by the respective Stockholders as set forth
on Schedule 5.2(a), and no shares of capital stock of Indus are held in
treasury. All of the issued and outstanding Indus Shares have been duly
authorized and are validly issued, fully paid, and nonassessable, except insofar
as personal liability may be imposed upon the holders of Indus Shares pursuant
to Section 180.0622(2)(b) of the WBCL as judicially interpreted. Each
Stockholder holds of record and to Indus' knowledge owns beneficially the number
of Indus Shares set forth next to his/her/its name in Schedule 5.2(a) free and
clear of any restrictions on transfer (other than any restrictions under the
Investment Agreement dated November 6, 1997, between certain investors and Indus
as amended and supplemented (the "Indus Investment Agreement") (which, except
for Sections 5 and 6 thereof, is not implicated by the Transactions), the
Securities Act and state securities laws), Taxes, Liens, options, warrants,
purchase rights, contracts, commitments, equities, claims and demands. To Indus'
Knowledge, no Stockholder is party to any voting trust, proxy, or other
agreement or understanding with respect to the voting of any capital stock of
Indus. Except as set forth on Schedule 5.2(b), there are no outstanding or
authorized options, warrants, purchase rights, subscription rights, conversion
rights, exchange rights, or other contracts or commitments that could require
Indus to issue, sell, or otherwise cause to become outstanding any of its
capital stock. There are no outstanding or authorized stock appreciation,
phantom stock, profit participation, or similar rights with respect to Indus.
20
5.3 Consents; No Conflicts. Assuming that the Buyer, Acquisition Sub or
the Designated Purchaser is a Designated Entity (as such term is defined in 47
CFR ss. 24.709), neither the execution, delivery and performance by Indus of
this Agreement nor the consummation of the Transactions will (a) conflict with,
or result in a breach or violation of, any provision of its organizational
documents or any Law; (b) subject to obtaining the Consents set forth on
Schedule 5.3 constitute, with or without the giving of notice or lapse of time
or both, a breach, violation or default, create a Lien on any of the Assets, or
give rise to any right of termination, modification, cancellation, prepayment or
acceleration, under (i) the PCS License, (ii) any Indus Agreement or Lease, or
(c) require any Consent, other than those set forth on Schedule 5.3. To Indus'
Knowledge, there is no fact relating to Indus or its Affiliates that would
reasonably be expected to prevent it from consummating the Transactions or
disqualify Indus from obtaining the Consents (including the Consent of the FCC
but excluding Consents required by the HNS Agreements) required in order to
consummate the PCS License Assignment and the other Transactions.
5.4 Litigation. Except as set forth in Schedule 5.4. there is no action,
suit, audit, investigation or proceeding at law or in equity by any Person or
any arbitration or any administrative or other proceeding by or before any
Governmental Authority or other instrumentality or agency, pending or to the
knowledge of Indus, threatened, nor to Indus' knowledge, is there any valid
basis therefor (a) against Indus or any of the Assets, (b) which seeks to
prevent or challenge the Transactions, (c) against any director, officer or
Employee of Indus which relates to the affairs of Indus or the right of any
director, officer or Employee to participate in the business of Indus or (d)
with respect to any alleged violation by Indus of any Law, including any FCC
Law.
5.5 FCC Compliance. Indus is in all material respects in compliance with
FCC Law and with all applicable rules, regulations and policies of the FCC.
Except as set forth in Schedule 5.5, no event has occurred which (a) results in,
or alter notice or lapse of time or both would result in, revocation,
suspension, adverse modification, non-renewal, impairment, restriction or
termination of, or order of forfeiture with respect to, the PCS License or (b)
adversely affects or could reasonably be expected in the future to adversely
affect any of the rights of Indus or, following Closing, of Acquisition Sub
thereunder, except for legislation or rule making of general applicability.
Indus has duly filed and paid in a timely manner all fees, reports,
applications, documents, instruments and information required to be filed by it
under FCC Law, and all such filings are true, correct and complete in all
material respects. Indus complied at the time of filing initial applications for
the PCS License, and has since that time complied in all material respects with
all eligibility and basic qualification requirements to hold PCS licenses
generally and to hold the PCS License specifically, including (v) the spectrum
cap rule of 47 C.F.R. Section 20.6; (w) the alien ownership limitations of
Section 310(b) of the FCC Law and 47 C.F.R. Section 20.5; (x) Section 5301 of
the Anti-Drug Abuse Act of 1988, 21 U.S.C. Section 862; (y) the entrepreneurial
eligibility requirements for C Block licenses of 47 C.F.R. Section 24.709(a)(1);
and (z) the small business requirements of 47 C.F.R. Section 24.720(b)(1).
5.6 Brokers. Neither Indus nor any of its Representatives has employed any
broker, finder or investment banker in connection with the Transactions, and
Indus has not incurred and
21
will not incur any liability for any brokerage fees, commissions or finder's
fees in connection with the Transactions.
5.7 No Offer. Except as set forth on Schedule 5.7 and as otherwise
contemplated in this Agreement, or the Related Agreements since December 9,
1999, Indus has not, directly or indirectly, singly or with others, offered,
solicited offers for or sold, assigned, pledged or otherwise transferred any of
the Assets, and none of the foregoing has occurred prior to such date which is
binding upon Indus or its Assets or will result in any claims, liabilities or
obligations for Indus, Buyer, Acquisition Sub, or Designated Purchaser. It has
not, directly or indirectly, through any Representative or otherwise, (i)
solicited, initiated or encouraged any Third-Party Proposal, or (ii)
participated in any discussions or negotiations regarding, furnished to any
other Person any nonpublic information with respect to, or otherwise cooperated
in any way with, assisted, participated in, facilitated or encouraged any effort
or attempt by any other Person to do or seek to do, any Third-Party Proposal.
5.8 License. Indus is the authorized legal holder, free and clear of any
Liens, except as otherwise set forth on Schedule 5.8, of the PCS License,
evidence of which is attached as Exhibit A. The PCS License is, and on the
Closing Date the PCS License will be, valid and in full force and effect. There
is not pending nor, to the knowledge of Indus, threatened against Indus or
against the PCS License, any application, action, petition, or other pleading,
or any proceeding with the FCC which questions or contests the validity of, or
seeks the revocation, nonrenewal or suspension of, the PCS License, which seeks
the imposition of any modification or amendment with respect thereto, or which
adversely affects in any material respect the ability of Acquisition Sub or the
Buyer to employ the PCS License in its business after the Closing Date. The PCS
License is not subject to any conditions other than those appearing on the face
of the PCS License itself and those imposed by FCC Law and the FCC Debt.
5.9 Title to Assets; Encumbrances; Future Operations.
(a) Schedule 5.9(a) sets forth a list of the Assets of Indus which
is accurate, correct, and complete in all material respects. Indus is the sole
and exclusive legal and beneficial owner of, and has good, valid and marketable
title to, all of the Assets, including all those reflected in the Financial
Statements (except for leased Assets and such Assets as may since have been sold
or otherwise disposed of in the ordinary course of business or subsequent to the
date of this Agreement with the prior consent of Wireless pursuant to the Indus
Interim Management Agreement or otherwise or of the Buyer). None of the Assets
is subject to any Lien except (collectively, the "Permitted Liens"):
(i) Liens reflected in Schedule 5.9(a)(i);
(ii) Liens consisting of zoning or planning restrictions,
easements, permits end other restrictions or limitations on the use of real
property or irregularities in title thereto which do not detract from the value
of, or impair the use of, the Assets by Indus in the operation of its business;
22
(iii) Liens and leases incurred or made in the ordinary course
of business which do not impair the usefulness of the Assets in the conduct of
the business of Indus (but excluding Liens securing payment of indebtedness);
(iv) Liens arising by operation of law; and
(v) Liens for current Taxes not yet due and delinquent.
(b) Except as set forth on Schedule 5.9(b), the Assets are in good
operating condition and repair (reasonable wear and tear excepted).
(c) Schedule 5.9(c) sets forth by an accurate, correct, and complete
list of all real property and equipment leases entered into by Indus (the
"Leases"). Indus enjoys peaceful and undisturbed possession under each of the
Leases. Except as disclosed on Schedule 5.9(c), none of the Leases is with Xxx,
any Stockholder, or any officer, Employee or director of Indus or any of their
respective Affiliates. All Leases are in writing, valid, subsisting and in full
force and effect, and, except as disclosed in Schedule 5.10(b), there are no
material uncured defaults of Indus under the Leases. Except as disclosed in
Schedule 5.10(b), there exists no event, occurrence, condition or act (including
the consummation of the Transactions) which, with the giving of notice, the
lapse of time or the happening of any further event or condition, would become a
default by Indus under any of the Leases.
(d) Schedule 5.9(d) sets forth an accurate, correct and complete
list of all motor vehicles operated by Indus, whether owned or leased. All such
vehicles are (a) properly licensed and registered in accordance with applicable
Law; (b) insured as set forth in Schedule 5.23; (c) in good operating condition
and repair (reasonable wear and tear excepted); and (d) not subject to any Lien
except for Permitted Liens or as described in Schedule 5.9(d).
(e) Indus does not own, and has never owned, any real property.
5.10 Indus Agreements.
(a) Schedule 5.10(a) sets forth a list of all of the following to
which Indus is a party or by which it or any of its Assets may be bound, whether
written or oral (the "Indus Agreements"), which is accurate, correct, and
complete in all material respects:
(i) Contracts with respect to Indus' business, including all
contracts between Indus and its customers, suppliers and consultants;
(ii) Licenses, contracts and other arrangements with respect
to any property of Indus or pursuant to which Indus has any right to occupy real
property or use equipment;
(iii) Contracts (written or oral) with respect to which Indus
has any liability or obligation, contingent or otherwise, involving more than
One Thousand Dollars ($1,000), which may otherwise have any continuing effect
after the Closing, or which place any material limitation on the method of
conducting or the scope of Indus' business;
23
(iv) Contracts with Representatives of Indus or the spouses or
relatives of such Persons;
(v) Compensation arrangements for consultants and independent
contractors of Indus including rates of pay and other benefits and the amounts
of compensation and other benefits accrued as of January 1, 2000;
(vi) Agreements, contracts and instruments of Indus relating
to the borrowing of money, or the guaranty of any obligation for the borrowing
of money;
(vii) Contracts between officers, directors or Employees of
Indus and any other Person which purport to restrict Indus' business activities
or use of information in Indus's business, including any covenant not to
compete;
(viii) Confidentiality agreements to which Indus is a party;
(ix) Contracts and agreements between Indus and any
Governmental Authority; and
(x) Other contracts, instruments, commitments, plans and
arrangements of Indus.
Schedules 5.9(c) and 5.10(a) include, with respect to each Indus Agreement and
each Lease, whether oral or written, the names of the parties, the date thereof,
and its title or other general description. Each Indus Agreement and each Lease
sets forth the entire arrangement and understanding between Indus and the
respective third parties with respect to the subject matter thereof and, except
as indicated in such Schedules, there have been no amendments or side or
supplemental arrangements to or in respect of such Indus Agreements or Leases.
Indus has furnished to the Buyer true and correct copies of all written Indus
Agreements and Leases as currently in effect, and will furnish any further
information that the Buyer may reasonably request in connection with any of the
Indus Agreements and the Leases. Each Indus Agreement and each Lease is valid
and in full force and effect, and, except for the HNS Agreements and the Leases
and Indus Agreements specified in Schedule 5.10(b), Indus has performed all
material obligations required to be performed by it thereunder. Indus is not in
default under or in breach or violation of any Indus Agreement or Lease, except
for the HNS Agreements and the Leases and Indus Agreements specified in Schedule
5.10(b), in a manner which has or will have an Indus Material Adverse Effect.
There is no event which has occurred or existing condition which constitutes, or
with notice or lapse of time or both, would constitute a default under any Indus
Agreement or Lease, other than the HNS Agreements and the Leases and Indus
Agreements specified in Schedule 5.10(b), or would cause the acceleration of any
obligation of any party thereto, or give rise to any right of termination or
cancellation or cause the creation of any Lien on any Asset of Indus. No third
party is in default under any provision of any Indus Agreement or Lease other
than the HNS Agreements. There is no term of any Indus Agreement or Lease, other
than the HNS Agreements, which now or in the future may, so far as Indus can now
reasonably foresee, have an Indus Material Adverse Effect. With respect to each
Indus Agreement and each Lease, Acquisition Sub or the Buyer will succeed to all
of the rights and benefits of Indus thereunder.
24
(b) Except as set forth on Schedule 5.10(b), Indus has made all
payments required to be paid by it under all Indus Agreements and the Leases
through and including the date hereof other than the Leases and Indus Agreements
set forth in Schedule 5.10(b). Indus has complied in all material respects with
all of its obligations under the Indus Agreements and the Leases other than the
Leases and Indus Agreements set forth in Schedule 5.10(b) in connection with the
construction by Indus of cell sites. Each of the Indus Agreements and Leases has
been lawfully entered into and, except as otherwise expressly contemplated
herein or pursuant to the Indus Interim Management Agreement, is or will be
valid and in full force and effect and is or will be enforceable in accordance
with its terms at the Effective Date. Except for the HNS Agreements, as of the
date hereof, Indus has not received written notice from any party to any Indus
Agreement or Lease threatening cancellation of, or asserting the existence of,
any outstanding disputes or defaults under, any Indus Agreement or Lease. Indus
will not modify, amend or waive any provisions of any Indus Agreement or Lease
in a manner that would adversely affect the Assets or terminate any Indus
Agreement or Lease prior to the Closing other than in the ordinary course of
business and with the prior consent of the Buyer.
5.11 Environmental and Safety Laws.
(a) Except as set forth on Schedule 5.11(a), to Indus' Knowledge the
Leased Property, is in material compliance with all, and have no liability under
any, applicable Environmental Laws or Laws relating to occupational health and
safety. Indus has been operated and is in material compliance with all
applicable Environmental Laws. Neither Indus nor any of its employees, agents,
representatives or subcontractors have disturbed, moved, or adversely affected
any Materials of Environmental Concern at any of the Leased Property. To Indus'
Knowledge, there are no actions, activities, circumstances, conditions, events
or incidents relating to the Leased Property, including the release, emission,
discharge, presence or disposal of any Materials of Environmental Concern on any
Leased Property, which could interfere with or prevent the continued operation
of the Leased Property in compliance in all material respects with all
applicable Environmental Laws.
(b) Except as set forth on Schedule 5.11(b), Indus has not done or
failed to do anything that has caused or is reasonably likely to cause and, to
Indus' Knowledge, there is not currently, and has not in the past been, any
release, emission, discharge, presence or disposal of any Materials of
Environmental Concern into the environment (including the air, surface and
groundwater and surface and subsurface soils) at, on, into, under, or
originating at the Leased Property in violation of applicable Environmental
Laws. To Indus' Knowledge, except as set forth on Schedule 5.11(b), no Leased
Property is or has been the location of any hazardous waste treatment, storage
or disposal facility, or any underground storage tank, or any facilities or
equipment containing asbestos or polychlorinated biphenyls. No Lien has been
imposed by any Governmental Authority or third party in connection with the
presence of any Materials of Environmental Concern on any Leased Property.
(c) Except as set forth on Schedule 5.11(c), Indus and, to Indus
Knowledge, its predecessors in interest have not (i) received any written
communication from a Governmental Authority, citizens' group, director, officer
or Employee of Indus or other Person, alleging that Indus has any liability
under any Environmental Law or under common law with respect to pollution and/or
protection of human health and/or the environment arising out of
25
conditions relating to any Leased Property (including any release, emission,
discharge, presence or disposal of any materials of Environmental Concern on any
Leased Property); (ii) received any request for information, notice or
administrative inquiry under any Environmental Law relating to any Leased
Property; (iii) entered into or been subject to any consent decree, compliance
order, or administrative order with respect to any Environmental Law arising out
of conditions relating to any Leased Property (including any release, emission,
discharge, presence or disposal of any Materials of Environmental Concern on any
Leased Property).
(d) Except as set forth on Schedule 5.11(d), Indus has not
conducted, or arranged for the conduct of an environmental audit, investigation
or assessment of any of the facilities or operations on any Leased Property, and
Indus has not received and has no knowledge of the results of any such audit,
investigation or assessment performed by any other Person.
(e) Except as set forth on Schedule 5.11(e), to Indus' Knowledge,
there are not any past or present actions, activities, circumstances,
conditions, events or incidents related to any Leased Property, including the
release, emission, discharge, presence or disposal of any Materials of
Environmental Concern, that could reasonably be expected to form the basis of
any Environmental Claim against Indus.
(f) Except as set forth on Schedule 5.11(f), Indus has all material
Licenses that it is required to hold under applicable Environmental Laws.
5.12 Compliance With Laws. Indus is in, and has operated in, compliance
with all applicable Laws, including all FCC Laws, Environmental Laws, federal
and state securities Laws, and Laws relating to Taxes, except for failures to be
in compliance which do not have, or cannot reasonably be expected to have, an
Indus Material Adverse Effect. Indus has not received written notice to the
effect that it is not in compliance with any Laws with respect to its operations
or its Assets, and Indus has not taken any action or failed to take any action
that is a violation of any such Laws with respect to its operations or its
Assets, except for action or failures which do not have, or cannot reasonably be
expected to have, an Indus Material Adverse Effect.
5.13 Subsidiaries and Interests in Other Entities. Indus has no
Subsidiaries and does not, directly or indirectly, own or control, or have any
interest or the right to acquire any equity interest whatsoever in, any other
Person. Indus has not made any investment in or advance of cash or other
extension of credit to any Person. Other than the Stockholders, there is no
Person controlling, controlled by or under control with Indus, nor is there any
Person which on or prior to the Closing Date is or was a member of the same
controlled group or affiliated service group or was under common control with
Indus within the respective meanings of Sections 414(b), (m) and (c) of the
Code.
5.14 Financial Statements. Financial statements, including balance sheets
and statements of income and cash flow, of Indus have been supplied by Indus to
the Buyer as of and for the eight months ended December 31, 1997 and the year
ended December 31, 1998, in each case audited by Indus' independent accountants.
Indus has also supplied to the Buyer unaudited balance sheet (the "Most Recent
Balance Sheet") and an unaudited statement of income and cash flows (together,
the "Most Recent Financial Statements") as of and for the fiscal year ended
26
December 31, 1999 (the "Most Recent Fiscal Year End"). Collectively, all of such
financial statements, including the footnotes thereto, are the "Financial
Statements," and are attached hereto as Exhibit F. All of the Financial
Statements except as indicated therein (i) have been prepared in accordance with
generally accepted accounting principles consistently applied, except for the
absence of footnotes to and subject to normal year end adjustments for, the Most
Recent Financial Statements, (ii) have been prepared on a consistent basis and,
in the case of the Financial Statements other then the Most Recent Financial
Statements, following normal year-end closing procedures, (iii) present fairly
the financial condition of Indus as at their respective dates, (iv) are true,
correct and complete, and (v) are consistent with the books and records of Indus
(which books and records are correct and complete). Indus has no debts,
liabilities or obligations of any nature whatsoever which are not disclosed on
such Financial Statements or set forth on Schedule 5.15(a).
5.15 Undisclosed Liabilities.
(a) Except as set forth on Schedule 5.15(a), Indus does not have any
liability (and there is no basis for any present or future action, suit,
proceeding, hearing, audit, investigation, charge, complaint, claim or demand
against Indus by any Stockholder, any Affiliate of any Stockholder, any former
stockholder of Indus or any Affiliate of any former stockholder of Indus giving
rise to any liability, and there is no basis for any present or future action,
suit, proceeding, hearing, audit, investigation, charge, complaint, claim or
demand against Indus by any other Person giving rise to any liability), fixed,
contingent or otherwise, except for (i) liabilities set forth on the face of the
Most Recent Balance Sheet (rather than in any notes thereto), and (ii)
liabilities which have arisen or may arise in the ordinary course subsequent to
December 31, 1999 or incurred with the approval of Wireless pursuant to the
Indus Interim Management Agreement or with the prior consent of the Buyer or
pursuant to the Indus Interim Management Agreement.
(b) Without in any way limiting the representation and warranty set
forth in Section 5.15(a) above, Indus does not have any unfunded liabilities in
connection with any workers' compensation, employers' liability, or group health
plan except as described in Schedule 5.15(b).
5.16 Powers of Attorney. There are no outstanding powers of attorney
executed on behalf of Indus.
5.17 Taxes.
(a) Indus has timely filed or caused to be timely filed, or will
timely file or cause to be timely filed on or prior to the Closing Date, all
Returns required to be filed on or prior to the Closing Date (taking into
account any extension of time to file granted to or on behalf of Indus). All
such Returns are correct and complete in all respects and no Return of Indus has
ever been audited, except that 1995 and 1996 Wisconsin tax returns have been
audited and such audits have been completed and there are no further liabilities
of Indus with respect thereto. Schedule 5.17(a) lists all Returns filed by
Indus. Indus has delivered complete and correct copies of the Returns. All Taxes
for the respective periods covered by the Returns have been, or prior to the
Closing Date will be, timely paid.
27
(b) Neither the IRS nor any other Governmental Authority has
asserted or threatened to assert, or is now asserting or threatening to assert,
against Indus any deficiency or claim for additional Taxes.
(c) Indus has withheld from its employees' or its other payees'
gross compensation or other payments, and has paid over to appropriate
governmental authorities, all Tax withholdings required by Law.
(d) There are no waivers or extensions in effect of the applicable
statutory period of limitation for the assessment of Taxes of Indus for any
taxable period.
(e) No deficiency assessment or proposed adjustment with respect to
any Tax liability of Indus for any taxable period is pending or, to the
Knowledge of Indus, threatened.
(f) No claim has ever been made by a Governmental Authority in a
jurisdiction where Indus does not file Returns that it is or may be subject to
taxation by that jurisdiction.
(g) There are no Liens for Taxes (other than for current Taxes not
yet due and payable) on any of the Assets of Indus, and no basis exists for the
imposition of any such Liens.
(h) Indus is not a party to, or bound by, any agreement providing
for the allocation or sharing of Taxes.
(i) Indus neither (i) has been a member of an affiliated group
filing a consolidated federal income tax return (other than a group the common
parent of which was Indus), nor (ii) has any liability for the Taxes of any
other Person under Treas. Reg. ss. 1.1502-6 (or any similar provision of Law),
as a transferee or successor, by contract or otherwise.
(j) Except as disclosed in Schedule 5.17(i), none of the
Stockholders is a foreign person within the meaning of, and no Tax is required
to be withheld as a result of the transfers contemplated by this Agreement
pursuant to, Section 1445 of the Code.
(k) None of the Assets owned by Indus is property that is required
to be treated as owned by any other Person pursuant to Section 168(f)(8) of the
Internal Revenue Code of 1954, as amended, as in effect immediately prior to the
enactment of the Tax Reform Act of 1986, or is "tax-exempt use property" within
the meaning of Section 168(h) of the Code.
(l) The unpaid Taxes for Indus (A) did not, as of the Most Recent
Fiscal Year End, exceed the reserve for liability for Taxes set forth on the
face of the Most Recent Balance Sheet and (B) do not exceed that reserve as
adjusted for the passage of time through the Closing Date in accordance with the
past custom and practice of Indus in filing its Returns.
(m) Indus has not filed a consent under Section 341(f) of the Code
concerning collapsible corporations. Indus has not been a United States real
property holding corporation within the meaning of Section 897(c)(2) of the Code
during the applicable period specified in Section 897(c)(1)(A)(ii) of the Code.
Indus has disclosed on its federal income Tax Returns all
28
positions taken therein that could give rise to a substantial understatement of
federal income Tax within the meaning of Section 6662 of the Code.
5.18 Conduct of Business; Absence of Adverse Changes. Since December 31,
1999, except as otherwise contemplated by this Agreement and the Related
Agreements, including the Indus Interim Management Agreement, and except for the
application of the proceeds of the Bridge Note, there has been (i) no sale,
transfer or other disposition of any of the Assets or capital stock of Indus
(except 100 shares of Class B Common Stock issued pursuant to an option
exercise); (ii) no Lien placed upon Indus' Assets; and (iii) no other event or
condition known to Indus which has had or which is reasonably likely to have an
Indus Material Adverse Effect. In particular, and without limiting the
generality of the foregoing, since December 31, 1999, Indus has not done any of
the following, except as otherwise contemplated herein or in the Related
Agreements or primarily caused by the actions or decisions of Wireless as
manager pursuant to the Indus Interim Management Agreement:
(a) terminated the services of any Employee, consultant or agent of
Indus other than Persons disclosed in Schedule 5.18(a);
(b) increased the compensation payable or to become payable to any
officer, director, Employee, consultant, or agent of Indus or made or entered
into any bonus payment arrangement with any officer, director, Employee,
consultant, or agent, or hired or engaged any additional management personnel,
consultants or contractors for the business of Indus;
(c) made any loan to, or entered into any other transaction with,
any of its directors, officers, Employees or Stockholders, or any member of
their respective families, or any Affiliate of any Stockholder, outside of
Indus' ordinary course of business;
(d) adopted, amended, modified or terminated any bonus,
profit-sharing, incentive, severance or other plan, contract or commitment for
the benefit of any of its officers, directors, Employees, consultants or agents
(or taken any such action with respect to any of its Benefit Arrangements or
Employee Plans);
(e) directly or indirectly redeemed, purchased or otherwise acquired
or disposed of any properties or Assets except in the ordinary course of
business;
(f) subjected any of its properties or Assets to any Lien;
(g) modified, amended, canceled or terminated any existing agreement
material to its business, other than the termination of options and warrants,
for which termination Indus shall have no liability or obligation, including the
making of any substantial prepayment on any existing obligation, except in the
ordinary course of business;
(h) made any change in the accounting methods or practices employed
by Indus in respect of the business of Indus;
(i) delayed or postponed the payment of its accounts payable and
other liabilities outside its ordinary course of business, except as set forth
on Schedule 5.18(i), none of
29
which shall individually or in the aggregate have an Indus Material Adverse
Effect, and except for payments pursuant to the HNS Agreements;
(j) entered into any contract or commitment involving in any
instance aggregate payment by Indus of more than One Thousand Dollars ($1,000)
or extending beyond the Closing Date, except in connection with the Transactions
or in the ordinary course of business consistent with past practice;
(k) waived any rights of material value or modified, amended,
altered, breached or terminated any Indus Agreement;
(l) granted or amended any license or sublicense of any of its
rights under or with respect to any of its Intellectual Property; or
(m) directly or indirectly offered, solicited or entertained offers
for or taken any other action with a view to the sale of all or any substantial
part of the assets, capital stock or business of Indus.
5.19 Intellectual Property; Trade Secrets; Software.
(a) Schedule 5.19(a) contains a list of all Intellectual Property
and registrations and applications owned or used by Indus. Indus has clear and
unencumbered title to the Intellectual Property set forth in Schedule 5.19(a)
which is listed as owned by Indus and such title has not been challenged or
threatened by others except for the Liens listed at Schedule 5.19(a). No rights
or licenses to use Intellectual Property have been granted or acquired by Indus
except those listed at Schedule 5.19(a). Except as listed at Schedule 5.19(a),
there have been no written claims or assertions made by others and sent to Indus
that Indus has infringed any rights to any Intellectual Property of others.
Except as listed at Schedule 5.19(a), Indus has not received notice of, and has
no knowledge of, any infringement or allegation of infringement of Intellectual
Property of Indus by others. All granted patents, registered trademarks and
service marks, and registered copyrights owned by Indus are in good standing,
and are recorded on the public record in the name of Indus. All rights of Indus
in and to the Intellectual Property will not be adversely affected by the
Transactions as contemplated herein, and no consent or other approval need be
obtained by Indus in relation thereto. To Indus' Knowledge, the operation by
Acquisition Sub or the Buyer after the Closing in the manner and geographic
areas in which it was previously conducted by Indus will not interfere with or
infringe upon any patent or trademark or any asserted rights of others with
respect to the current trade dress or packaging of any products. Indus is not
subject to any judgment, order, writ, injunction or decree of any Governmental
Authority or any arbitrator, and has not entered into any contract, which
restricts or impairs the use of any Intellectual Property. No filing or
recording fees, stamp or transfer taxes or other governmental fees, costs or
taxes of any kind in excess of $500 will be payable by Indus in connection with
the consummation of the Transactions.
(b) To Indus' Knowledge, Indus has all necessary right, title and
interest to all electronic data processing systems, information systems,
computer software programs, program specifications, charts, procedures, source
codes, input data, routines, data bases and report
30
layouts and formats, record file layouts, diagrams, functional specifications
and narrative descriptions, flow charts and other related material used by it.
5.20 Licenses. Indus presently holds, and at all times prior to the
Closing will hold, all Licenses necessary or appropriate for the conduct of its
business as previously conducted. All such presently held Licenses are listed on
Schedule 5.20. The consummation of the Transactions will not render such
Licenses invalid or otherwise require any notices, applications or other filings
except as noted on Schedule 5.20.
5.21 Employees and Compensation.
(a) Schedule 5.21(a) sets forth an accurate, correct and complete
list and summary description of all agreements, arrangements or understandings,
written or oral, with officers, directors and Employees of Indus, regarding
services to be rendered, terms and conditions of employment, and compensation
(the "Employment Contracts"). To Indus' Knowledge, the services of all Employees
will continue to be available on substantially the same terms and conditions to
Acquisition Sub or the Buyer following the Closing.
(b) Schedule 5.21(b) sets forth an accurate, correct and complete
list of all Employees, including name, title or position, the present annual
compensation (including bonuses, commissions and deferred compensation), years
of service and any interests in any incentive compensation plan. Schedule
5.21(b) sets forth an accurate, correct and complete list of each Employee who
may become entitled to receive supplementary retirement benefits or allowances,
whether pursuant to a contractual obligation or otherwise, and the estimated
amounts of such payments. Except as set forth on Schedule 5.21(b), Indus has not
since December 31, 1999, (i) paid, or made any accrual or arrangement for the
payment of, bonuses or special compensation of any kind, including any severance
or termination pay, to any present or former officer or employee, (ii) made any
general wage or salary increases or (iii) increased any other benefits or
insurance provided to any Employee.
(c) Except as set forth in Schedule 5.21(c), there are no
controversies pending or, to the Knowledge of Indus, threatened involving any
Employees or former employees. Indus has not suffered or sustained any work
stoppage and no such work stoppage is threatened. Indus is not a party to any
collective bargaining agreement. No union organizing or election activities
involving any Employees of Indus are in progress or to the Knowledge of Indus,
threatened.
(d) Indus has complied with all Laws relating to the employment of
labor, including provisions relating to wages, hours, equal opportunity,
occupational health and safety, severance, collective bargaining and the payment
of social security and other taxes. Except as disclosed in Schedule 5.21(d),
there is not and will not be any duty, responsibility, liability or obligation
under any Laws relating to employment or any common law trust or contractual
duty or standard of care arising from an employment relationship attributable to
an event occurring or a state of facts existing prior to the Closing Date. As of
the Closing Date, Indus shall have complied with the Worker Adjustment and
Retaining Notification Act and its regulations, as applicable.
31
5.22 Employee Benefits.
(a) Except as disclosed on Schedule 5.22. there are no Employee
Plans or Benefit Arrangements maintained or contributed to by Indus.
(b) Indus has delivered to the Buyer true and complete copies of all
documents, as they may have been amended to the date hereof, as well as working
copies, embodying or relating to Employee Plans and Benefit Arrangements. Except
as disclosed in Schedule 5.22. there have been no written communications with
respect to any Employee Plan or Benefit Arrangement with the IRS, U.S.
Department of Labor, PBGC or the Securities and Exchange Commission, or with any
other Governmental Authority. Indus shall further make available to the Buyer
any documents or other information relating to the Employee Plans and Benefit
Arrangements as may be reasonably requested by the Buyer.
(c) All Employee Plans and Benefit Arrangements are now, and have
always been, established, maintained and operated in accordance with all
applicable laws (including ERISA and the Code) except for such noncompliance
that cannot reasonably be expected to have an Indus Material Adverse Effect.
(d) Except as disclosed in Schedule 5.22, each Employee Plan and
Benefit Arrangement is now and has always been established in writing. With
respect to any Employee Plan or Benefit Arrangement not established in writing,
a true and complete description of such Employee Plan or Benefit Arrangement is
set forth in Schedule 5.22.
(e) Indus has never maintained an Employee Plan intended to meet the
requirements under Section 401(a) of the Code.
(f) All contributions required to be made to each Employee Plan and
Benefit Arrangement have been timely and completely made.
(g) All benefits and other payments required to be made under or by
each Employee Plan and Benefit Arrangement have been completed and timely paid.
(h) Except as set forth on Schedule 5.22, Indus does not have any
obligations to pay severance benefits that will arise as a result of the
Transactions, and no benefit obligations have given or will give rise to an
"excess parachute payment," as such term is defined in Section 280G of the Code.
(i) No Employee Plan or Benefit Arrangement which is an "employee
welfare benefit plan" provides for continuing benefits or coverage, including
medical, health or life insurance, to an Employee or former employee following
termination of employment with Indus other than that required by Section 4980B
of the Code and Sections 601 through 609 of ERISA.
(j) No Employee Plan is subject to Title IV of ERISA or Section 412
of the Code. No Employees are, or have been, at any time, participants in any
"multiemployer plan" (within the meaning of Section 3(37) of ERISA), "multiple
employer welfare arrangement" (within the meaning of Section 3(40) of ERISA) or
"voluntary employees' beneficiary
32
association" (within the meaning of Section 501(c)(9) of the Code) by virtue of
their employment with Indus.
(k) There is no suit, action, dispute, claim, arbitration or legal,
administrative or other proceeding or governmental investigation pending, or to
Indus' Knowledge threatened, alleging any breach of the terms of any Employee
Plan or Benefit Arrangement or of any fiduciary duties thereunder or violation
of any applicable Law with respect to any Employee Plan or Benefit Arrangement,
nor any arbitration, proceeding or investigation.
Solely for purposes of this Section 5.22, the term Indus includes any controlled
group (within the meaning of Section 414(b) of the Code) of which Indus is a
member, all trades or businesses under common control (within the meaning of
Section 414(c) of the Code) of which Indus is a member, and all affiliated
service groups (within the meaning of Section 414(m) of the Code) of which Indus
is a member. Except as disclosed on Schedule 5.22, Indus is not a member of any
controlled group, any trade or business under common control, or any affiliated
service group as previously defined.
5.23 Insurance. Indus maintains property, general liability and workers'
compensation insurance covering the operations of Indus' business through the
policies listed in Schedule 5.23. Such policies are in full force and effect,
all premiums due thereon have been paid, and Indus has complied in all material
respects with the provisions of such policies. Except as otherwise indicated on
Schedule 5.23, all liability insurance policies are on an "occurrence" basis.
The insurance listed in Schedule 5.23 is in amounts adequate to cover losses on
physical assets. Schedule 5.23 also lists all outstanding claims against such
policies as of the date hereof, and all claims made since July 1, 1996 against
such policies or any prior insurance policies maintained by Indus. To Indus'
Knowledge, all insurance has been issued by financially sound insurance
companies under valid and enforceable policies or binders for the benefit of
Indus, and all such policies or binders are in amounts and for risks, casualties
and contingencies customarily insured against by enterprises in operations
similar to Indus. There are no pending or asserted claims against any such
policies as to which any insurer has denied liability, and there are no claims
under any such policies that have been disallowed or improperly filed. No notice
of cancellation or nonrenewal with respect to, or material increase of premium
for, any insurance has been received by Indus. Indus has no Knowledge of any
facts or the occurrence of any event which (i) might form the basis of any claim
against it relating to the conduct or operations of Indus and which will
materially increase the insurance premiums payable under any insurance, or (ii)
otherwise will materially increase the insurance premiums payable under any
insurance.
5.24 Books and Records. All corporate actions of Indus' board of directors
and the Stockholders have been duly authorized in accordance with applicable law
and the Articles of Incorporation and Bylaws of Indus, and have been duly and
accurately recorded in Indus' minute books. The general ledgers and books of
Indus and all of Indus' other books, accounts and records are complete and
correct in all material respects and have been maintained in accordance with
good business practice and, in all material respects, all applicable Laws.
5.25 Banking Relationships; Investments. All of the arrangements which
Indus has with any banking institutions are completely and accurately described
in all material respects in Schedule 5.25, indicating with respect to each such
arrangement the type of arrangement
33
maintained (including checking account, borrowing arrangement, lockbox or safe
deposit box) and the Person or Persons authorized in respect thereto. Schedule
5.25 sets forth an accurate, correct and complete list of all certificates of
deposit, debt or equity securities and other investments owned beneficially or
of record by Indus ("Investments"). Indus has good and marketable title to all
Investments. The Investments reflected on the Most Recent Balance Sheet are (a)
properly valued at the lower of cost or market, (b) readily marketable, and (c)
fully paid and not subject to assessment or other claims upon the holder
thereof.
5.26 Disclosure. None of the representations and warranties of Indus
contained herein, including the Schedules and Exhibits thereto, nor any other
document certificate or written statement furnished by Indus to the Buyer or the
Buyer's Representatives in connection herewith contains any untrue statement of
a material fact or omits to state a material fact necessary in order to make the
statements contained herein and therein complete and not misleading as of the
dates thereof in light of the circumstances in which they were made. Indus is
not aware of any information necessary to enable a prospective purchaser to make
an informed investment decision to enter into the Transactions which has not
been expressly disclosed to the Buyer in writing. To Indus' Knowledge, there is
no fact which causes, or in the future will (so far as Indus can now foresee)
cause, an Indus Material Adverse Effect, or which materially adversely affects
the ability of Indus to fully perform this Agreement and the Transactions, which
has not been set forth or described in this Agreement or in a Schedule,
certificate or other written statement furnished to the Buyer. To Indus'
Knowledge, there is no fact, other than general economic conditions, which
cause, or might reasonably be expected to cause, an Indus Material Adverse
Effect which has not been set forth or referred to in this Agreement, including
the Schedules.
5.27 Transactions with Affiliates. Since its inception, there has not been
any dividend or other distribution of assets by Indus. Except as set forth in
Schedule 5.27, no Affiliate of Indus:
(a) Owns, directly or indirectly, any debt, equity or other interest
or investment in any Person which is a competitor, lessor, lessee, customer,
supplier or advertiser of Indus;
(b) Except for the Xxx Liabilities and Xxx Notes, has any cause of
action or other claim whatsoever against or owes any material amount to, or is
owed any material amount by, Indus;
(c) Has any interest in or owns any property or right used in the
conduct of Indus' business operations;
(d) Except for the Xxx Liabilities and the Xxx Notes, has lent or
advanced any money to, or is owed any money from, or is the guarantor of or
otherwise liable for any indebtedness or other obligations of Indus;
(e) Is a party to any contract, lease, agreement, arrangement or
commitment with Indus; or
34
(f) Received from or furnished to Indus any goods or services (with
or without consideration) since its inception.
The debt evidenced by the Xxx Note and the Xxx Liabilities reflects amounts
actually loaned by Xxx to, and funds actually provided by Xxx to, Indus.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF BUYER AND ACQUISITION SUB
Each of the Buyer and the Acquisition Sub represents and warrants to Indus
that the statements contained in this Article VI are correct and complete as of
the date of this Agreement and will be correct and complete as of the Closing
Date:
6.1 Organization, Power and Authority.
(a) The Buyer is a limited liability company duly organized, validly
existing and in good standing under the laws of its jurisdiction of formation
and has the requisite company power and authority to own, lease and operate its
properties and to carry on its business as now being conducted and as proposed
to be conducted. The Acquisition Sub is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation and has the requisite corporate power and authority to own, lease
and operate its properties and to carry on its business as now being conducted
and as proposed to be conducted.
(b) Each of the Buyer and the Acquisition Sub has the requisite
power and authority to execute, deliver and perform this Agreement, each of the
Related Agreements to which it is a party, and each other instrument, document,
certificate and agreement required or contemplated to be executed, delivered and
performed by it hereunder and thereunder.
(c) This Agreement and each of the Related Agreements to which the
Buyer or Acquisition Sub is a party has been duly executed and delivered by the
Buyer and Acquisition Sub, as the case may be, and constitutes its valid and
binding obligation, enforceable against it in accordance with its terms, except
as such enforceability may be limited by bankruptcy, insolvency, moratorium or
other similar Laws affecting or relating to enforcement of creditors' rights
generally or by general principles of equity.
6.2 Consents; No Conflicts. Neither the execution, delivery and
performance by the Buyer or the Acquisition Sub of this Agreement or any of the
Related Agreements to which either of them is a party, nor the consummation of
the Transactions will (a) conflict with, or result in a breach or violation of;
any provision of their respective organizational documents; (b) subject to
obtaining the Consents set forth on Schedule 6.2, constitute, with or without
the giving of notice or lapse of time or both, a breach, violation or default,
create a Lien on its assets, or give rise to any right of termination,
modification, cancellation, prepayment or acceleration, monetary forfeiture or
other penalty under any note, bond, mortgage, indenture, lease, agreement or
other instrument, in each case which is applicable to or binding upon it a any
of its assets; or (c) require any Consent other than those set forth on Schedule
6.2 and the approval of the Board of Directors of Acquisition Sub and its
stockholder, the Buyer (which approvals have been obtained), except where such
breach, violation, default, Lien or right would not have a material adverse
effect on the Transactions. To their knowledge, there is no fact relating to
either the
35
Buyer or Acquisition Sub or their Affiliates that would be reasonably expected
to prevent them from consummating the Transactions or performing their
respective obligations under this Agreement or any of the Related Agreements or
disqualify the Buyer or Acquisition Sub from obtaining the Consents (including
the Consent of the FCC) required in order to consummate the Transactions.
6.3 Litigation. There is no action, proceeding or investigation pending
or, to the Buyer's or Acquisition Sub's knowledge, threatened against either of
them or their respective properties or assets that would have a material adverse
effect on their respective abilities to consummate the Transactions or to
fulfill their respective obligations under this Agreement, or which seeks to
prevent or challenge the Transactions.
ARTICLE VII
CLOSING CONDITIONS
7.1 Conditions to Obligations of All Parties. The obligation of each of
the Parties to consummate the Transactions shall be conditioned on the
following, unless waived by each of the Parties at or prior to Closing:
(a) Any applicable waiting period under the HSR Act shall have
expired or been terminated or the Transactions shall have been approved by the
Federal Trade Commission.
(b) The Consent of the FCC to the PCS License Assignment shall have
been obtained pursuant to a Final Order, free of any conditions materially
adverse to the Buyer, Acquisition Sub, or Indus, other than (i) the imposition
of payment obligations by the FCC as a condition to the approval of the PCS
License Assignment, including unjust enrichment penalties pursuant to 47 CFR ss.
1.2111 or (ii) those applicable to the PCS or wireless communications services
industry generally. For the purposes of this Agreement, "Final Order" means an
action or decision that has been granted by the FCC as to which (i) no request
for a stay or similar request is pending, no stay is in effect, the action or
decision has not been vacated, reversed, set aside, annulled or suspended and
any deadline for filing such request that may be designated by Law has passed,
(ii) no petition for rehearing or reconsideration or application for review is
pending and the time for the filing of any such petition or application has
passed, (iii) the FCC does not have the action or decision under reconsideration
on its own motion and the time within which it may effect such reconsideration
has passed and (iv) no appeal is pending, including other administrative or
judicial review, or in effect and any deadline for filing any such appeal that
may be designated by Law rule has passed.
(c) All Consents of Governmental Authorities (other than the
Consents referred to in paragraphs (a) and (b) above) required to permit the
consummation of the Transactions shall have been obtained.
(d) All approvals by the directors, shareholders and members of the
Buyer, Indus, and Acquisition Sub of this Agreement, the Related Agreements and
the Transactions shall have been obtained in accordance with applicable Law and,
in the case of Indus, Section 6 of the Indus Investment Agreement.
36
(e) No preliminary or permanent injunction or other order, decree or
ruling issued by a Governmental Authority, nor any Law promulgated or enacted by
any Governmental Authority, shall be in effect that would (i) impose material
limitations on the ability of any Party to consummate the Transactions or
prohibit such consummation, or (ii) impair in any material respect the operation
by Acquisition Sub or the Buyer of the business previously conducted by Indus.
(f) At the Closing, the Buyer or the Designated Purchaser shall be a
"Designated Entity" (as such term is defined in 47 CFR ss. 24.709) fully
qualified to hold C and F Block PCS Licenses. Notwithstanding any other
provision of this Section 7.1, the condition set forth in this Section 7.1(f)
may not be waived by any Party.
7.2 Conditions to Obligations of the Buyer and Acquisition Sub. The
obligations of the Buyer and Acquisition Sub to consummate the Transactions
contemplated to occur at the Closing shall be further conditioned upon the
satisfaction or fulfillment, at or prior to the Closing, of the following
conditions unless waived by the Buyer and Acquisition Sub, at or prior to
Closing:
(a) The representations and warranties of Indus contained herein
shall be true and correct in all material respects, in each case when made and
at and as of the Closing (except for representations made as of a specified
date, which shall be true and correct as of such date, except for
representations and warranties that are qualified as to materiality which shall
be true and correct to the extent so qualified and except for representations or
warranties that are no longer true at Closing due primarily to acts or omissions
of Wireless pursuant to the Indus Interim Management Agreement or actions or
omissions approved by the Buyer, Wireless or Designated Purchaser) with the same
force and effect as though made at and as of such time.
(b) Indus and Xxx shall have performed and complied with in all
material respects all agreements and covenants contained herein required to be
performed by it at or before the Closing, except for agreements and covenants
that are not performed or not complied with primarily because of Wireless'
actions or omissions as manager pursuant to the Indus Interim Management
Agreement.
(c) Xxx shall have delivered to the Buyer the documents required
pursuant to Section 3(a), and Indus shall have delivered to the Buyer the
documents required pursuant to Section 3(b).
(d) Neither Xxxxxx Network Systems nor its successors or assigns
shall have initiated any actions set forth in Section 7.1(e) or taken any action
that could reasonably be expected to have a material adverse affect upon the
Parties' ability to accomplish the PCS License Assignment or the conditions
therefor.
(e) All Consents (other than Consents required by the HNS
Agreements) shall have been obtained and delivered to the Buyer.
(f) Indus and Xxx shall have each performed all of their respective
agreements and covenants under the Organizational Agreement.
37
(g) The number of Dissenting Shares shall not exceed 20% of the
Indus Shares.
(h) There shall be no outstanding options, or rights in or to
acquire, any of the capital stock of Indus (other than the warrants listed in
Schedule 5.2(b) and any conversion rights pursuant to Section 5.18 of that
certain Credit Agreement by and between Indus and Xxxxxx Network Systems dated
November 6, 1997), and the Buyer shall have received written evidence, in form
satisfactory to the Buyer, of the satisfaction of the foregoing (other than
warrants listed in Schedule 5.2(b) and any conversion rights pursuant to Section
5.18 of that certain Credit Agreement by and between Indus and Xxxxxx Network
Systems dated November 6, 1997).
7.3 Conditions to the Obligations of Indus and Xxx. The obligations of
Indus and Xxx to consummate the Transactions contemplated to occur at the
Closing shall be further conditioned upon the satisfaction or fulfillment, at or
prior to the Closing, of the following conditions, unless waived by Indus and
Xxx at or prior to Closing:
(a) The representations and warranties of the Buyer and the
Acquisition Sub contained herein shall be true and correct in all material
respects, in each case when made and at and as of the Closing (except for
representations and warranties made as of a specified date, which shall be true
and correct as of such date and except for representations and warranties that
are qualified as to materiality which shall be true and correct as so qualified)
with the same force and effect as though made at and as of such time.
(b) The Buyer and Acquisition Sub or the Designated Purchaser shall
have performed in all material respects all agreements contained herein required
to be performed by either of them at or before the Closing, including all
payment obligations under Sections 3.2(c), (e), and (f) and 4.1(d)(i).
(c) The Buyer and Acquisition Sub or the Designated Purchaser shall
have delivered (i) to Indus the documents required pursuant to Section 3(d), and
(ii) to Xxx the documents required pursuant to Section 3(c).
(d) The approval of the Stockholders and the Board of Directors of
Indus of the Merger shall have been obtained in accordance with WBCL and Section
6 of the Indus Investment Agreement.
ARTICLE VIII
SURVIVAL AND INDEMNIFICATION
8.1 Survival. Except for the representations and warranties in Sections
5.1, 5.2, and 5.3, which shall continue indefinitely, and except for the
representations and warranties in Sections 5.8, 5.17, and 5.21, which shall
survive the Closing Date until thirty (30) days following the expiration of the
longest applicable statute of limitations, the representations and warranties
made in this Agreement shall survive the Closing without regard to any
investigation made by any of the Parties until the second anniversary thereof
and shall thereupon expire together with any right to indemnification in respect
thereof (except to the extent a notice asserting a claim for breach of any such
representation or warranty and describing such claim in reasonable detail shall
have been given prior to the expiration of the applicable survival period to the
Party which
38
made such representation or warranty). The covenants and agreements contained
herein to be performed or complied with prior to the Closing shall expire at the
Closing. The covenants and agreements contained in this Agreement to be
performed or complied with after the Closing shall survive the Closing. After
the Closing, the sole and exclusive remedy of the Parties (except in the case of
fraud or where this Agreement expressly provides for specific performance) for
any breach or inaccuracy of any representation or warranty contained in this
Agreement, or any other claim (whether or not alleging a breach of this
Agreement) that arises out of the facts and circumstances constituting such
breach or inaccuracy, shall be the indemnity provided in this Article VIII;
provided, that an indemnified Party shall not be entitled to indemnification
under this Article VIII for breach of a representation or warranty (other than
Section 5.6, for which no indemnification threshold shall apply), unless the
aggregate amount owed to such Party under this Article VIII exceeds $100,000, in
which event, such Party shall be entitled to indemnification in full for all
Losses in excess of $100,000 resulting from breaches of representations and
warranties, subject to any limitations set forth below.
8.2 Indemnification by Indus and Xxx. Indus (prior to the Effective Date)
and Xxx thereafter shall each indemnify and hold harmless Acquisition Sub and
the Buyer, and their respective Affiliates, directors, shareholders, members,
managers, officers, employees, agents and/or the legal representatives of any of
them (each, a "Section 8.2 Indemnified Party"), against all damages, claims,
costs, losses, liabilities and expenses (including amounts paid in satisfaction
of judgements, in compromise, as fines and penalties, and as counsel fees)
(collectively, "Losses") incurred by any Section 8.2 Indemnified Party and
Losses incurred in connection with the investigation, defense, or disposition of
any action, suit or other proceeding in which any Section 8.2 Indemnified Party
may be involved or with which any Section 8.2 Indemnified Party may be
threatened (whether arising out of or relating to matters asserted by third
parties against a Section 8.2 Indemnified Party or incurred or sustained by such
party in the absence of a third-party claim), that arise out of or result from
(a) any representation or warranty of Indus contained in this Agreement being
untrue, (b) any default by Indus or any of its Affiliates in the performance of
their respective obligations under this Agreement or (c) any Excess Expenses and
pursuant to Section 4.7(d); provided that the aggregate liability of Xxx to
indemnify the Section 8.2 Indemnified Parties against Losses and Excess Expenses
shall be limited to the Holdback Funds, and for any Losses under this Article
VIII that are indemnifiable following any release of the Holdback Funds to Xxx
pursuant to the Holdback Agreement, Rao's liability shall be limited to the
amount of such Holdback Funds released to Xxx. Anything to the contrary herein
notwithstanding, Xxx shall not be obligated to indemnify the Buyer or
Acquisition Sub or any other person for (i) any payment obligation imposed by
the FCC as a condition of its approval of the transfer of the PCS License to
Buyer, Acquisition Sub or the Designated Purchaser including any unjust
enrichment penalty, or (ii) any amounts paid or payable by Buyer, Acquisition
Sub or Designated Purchaser pursuant to Section 3.4.
8.3 Indemnification by the Buyer. The Buyer shall indemnify and hold
harmless Indus and its Affiliates, and the directors, shareholders, members,
managers, officers, employees, agents and/or the legal representatives of any of
them (each, a "Section 8.3 Indemnified Party"), against all Losses incurred by
any Section 8.3 Indemnified Party and Losses incurred in connection with the
investigation, defense, or disposition of any action, suit or other proceeding
in which any Section 8.3 Indemnified Party may be involved or with which any
Section 8.3 Indemnified Party may be threatened (whether arising out of or
relating to matters asserted by
39
third parties against a Section 8.3 Indemnified Party or incurred or sustained
by such party in the absence of a third party claim) that arise out of or result
from (a) any representation or warranty of the Buyer contained in this Agreement
being untrue, or (b) any default by the Buyer or the Designated Purchaser or any
of its Affiliates in the performance of their respective obligations under this
Agreement.
8.4 Procedures.
(a) The terms of this Section 8.4 shall apply to any claim (a
"Claim") for indemnification under the terms of Sections 8.2 or 8.3. The Section
8.2 Indemnified Party or Section 8.3 Indemnified Party (each, an "Indemnified
Party"), as the case may be, shall give prompt notice of such Claim to the
indemnifying party (the "Indemnifying Party") under the applicable Section,
which Party may assume the defense thereof, provided, that any delay or failure
to so notify the Indemnifying Party shall relieve the Indemnifying Party of its
obligations hereunder only to the extent, if at all, that it is materially
prejudiced by reason of such delay or failure. The Indemnified Party shall have
the right to approve any counsel selected by the Indemnifying Party and to
approve the terms of any proposed settlement, such approvals not to be
unreasonably delayed or withheld (unless, in the case of approval of a proposed
settlement, such settlement provides only for the payment of monetary damages by
the Indemnifying Party and includes a complete release of the Indemnified Party
in respect of the claim in question). Notwithstanding any of the foregoing to
the contrary, the provisions of this Article VIII shall not be construed so as
to provide for the indemnification of any Indemnified Party for any liability to
the extent (but only to the extent) that such indemnification would be in
violation of applicable Law, but shall be construed so as to effectuate the
provisions of this Article VIII to the fullest extent permitted by Law.
(b) In the event that the Indemnifying Party undertakes the defense
of any Claim, the Indemnifying Party will keep the Indemnified Party advised as
to all material developments in connection with such Claim, including promptly
furnishing the Indemnified Party with copies of all material documents filed or
served in connection therewith.
(c) In the event that the Indemnifying Party fails to assume the
defense of any Claim within ten (10) Business Days after receiving notice
thereof, the Indemnified Party shall have the right, subject to the Indemnifying
Party's right to assume the defense pursuant to the provisions of this Article
VIII, to undertake the defense, compromise or settlement of such Claim for the
account of the Indemnifying Party. Unless and until the Indemnifying Party
assumes the defense of any Claim, the Indemnifying Party shall advance to the
Indemnified Party any of its reasonable attorneys' fees and other costs and
expenses incurred in connection with such Claim. Each Indemnified Party shall
agree in writing prior to any such advancement that, in the event he or it
receives any such advance, such Indemnified Party shall reimburse the
Indemnifying Party for such fees, costs and expenses to the extent that it shall
be determined that he or it was not entitled to indemnification under this
Article VIII.
(d) In no event shall an Indemnifying Party be required to pay in
connection with any Claim for more than one firm of counsel (and local counsel)
for each of the following groups of Indemnified Parties: (i) Indus, its
Affiliates, and the shareholders, members, managers, officers, employees, agents
and/or the legal representatives of any of them; and (ii) the
40
Buyer, Acquisition Sub, and their respective Affiliates, and the shareholders,
members, managers, officers, employees, agents and/or the legal representatives
of any of them.
ARTICLE IX
TERMINATION
9.1 Termination. In addition to any other rights of termination set forth
herein, this Agreement may be terminated, and the Transactions abandoned,
without further obligation of any Party, except as set forth herein, at any time
prior to the Closing Date:
(a) by mutual written consent of the Parties;
(b) by any Party by written notice to the other Parties, if the
Closing shall not have occurred on or before the date that is one (1) year after
the date hereof, provided, that the Party electing to exercise such right is not
otherwise in breach of its obligations under this Agreement, and provided
further that if the reason closing has not occurred within such period is that
the FCC has not approved the PCS License Assignment, but such approval remains
under consideration by the FCC the Parties will extend such date for an
additional six (6) months;
(c) by any Party by written notice to the other Party, if the
consummation of the Transactions shall be prohibited by a final, non-appealable
order, decree or injunction of a court of competent jurisdiction;
(d) by either Party by written notice to the other Party if the
Board of Directors or Stockholders of Indus vote not to approve this Agreement;
or
(e) by the Buyer and Acquisition Sub, by giving written notice to
Indus and Xxx at any time prior to the Closing in the event Xxx or Indus has
breached any material representation, warranty or covenant contained in this
Agreement or the Related Agreements in any material respect, the Buyer and
Acquisition Sub have notified Indus and Xxx of the breach, and the breach has
continued without cure for a period of thirty (30) days after the notice of
breach; or
(f) by Xxx and Indus, by giving written notice to Buyer and
Acquisition Sub at any time prior to the Closing in the event Buyer or
Acquisition Sub has breached any material representation, warranty or covenant
contained in this Agreement or the Related Agreement in any material respect,
Xxx and Indus have notified the Buyer and Acquisition Sub of the breach, and the
breach has continued without cure for a period of thirty (30) days after the
notice of the breach.
9.2 Effect of Termination.
(a) In the event of a termination of this Agreement, no Party hereto
shall have any liability or further obligation to any other Party to this
Agreement, except (i) as set forth in paragraph (b) below, (ii) pursuant to the
Bridge Note and any security for Indus' obligations thereunder, and (iii) that
nothing herein will relieve any Party from liability for any breach by such
Party of this Agreement.
41
(b) In the event of a termination of this Agreement pursuant to
Section 9.1, all provisions of this Agreement shall terminate, except Section
4.2 and Articles VIII and X, except that nothing herein will relieve any Party
from liability for any breach by such Party of this Agreement.
(c) Except as provided in Section 10.15, whether or not the Closing
occurs, all costs and expenses incurred in connection with this Agreement and
the Transactions shall be paid by the Party incurring such expenses.
ARTICLE X
MISCELLANEOUS PROVISIONS
10.1 Amendment and Modification. This Agreement may be amended, modified
or supplemented only by written agreement of each of the Parties.
10.2 Waiver of Compliance; Consents. Any failure of any of the Parties to
comply with any obligation, covenant, agreement or condition herein may be
waived by the Party or Parties entitled to the benefits thereof only by a
written instrument signed by the Party or Parties granting such waiver, but such
waiver or failure to insist upon strict compliance with such obligation,
covenant, agreement or condition shall not operate as a waiver of, or estoppel
with respect to, any subsequent or other failure. Whenever this Agreement
requires or permits consent by or on behalf of any Party, such consent shall be
given in writing in a manner consistent with the requirement for a waiver of
compliance as set forth in this Section 10.2.
10.3 Notices. All notices, consents, approvals or other communications
hereunder shall be in writing and shall be given (and shall be deemed to have
been duly given upon receipt) by delivery in person against receipt, by
facsimile transmission with confirmation of receipt, or by registered or
certified mail (return receipt requested), postage prepaid, with an
acknowledgment of receipt signed by the addressee or an authorized
representative thereof, addressed as follows (or to such other address for a
Party as shall be specified by like notice; provided, that notice of a change of
address shall be effective only upon receipt thereof):
If to the Buyer or Acquisition Sub, to it at:
Milwaukee PCS LLC
c/o AT&T Wireless Services, Inc.
RTC 1
0000 000xx Xxxxxx X.X.
Xxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxxx
Facsimile: (000) 000-0000
42
With a copy (which shall not constitute notice) to:
Xxxxx Xxxxxxxx
Xxxxxxx Xxxxxxxx X.X.
0000 Xxxxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, XX 00000-0000
Facsimile: (000) 000-0000
If to Indus or to Xxx, to it/him at:
Indus, Inc.
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: President
With a copy (which shall not constitute notice) to:
Xxxxxxx X. Xxxxx
Xxxxx & Xxxxxxx
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
10.4 Designated Purchaser. Each of the Buyer and Acquisition Sub (and
their permitted assigns) shall have the right to assign, in whole or in part,
directly or indirectly, its rights and obligations under this Agreement, without
the consent of Indus or Xxx, to TeleCorp PCS, Inc. and/or its Affiliates,
provided that Telecorp PCS, Inc. (and any such Affiliate) shall in all such
cases assume the obligations of Buyer and Acquisition Sub hereunder. Any Person
or Persons to whom an assignment is ultimately made pursuant to this Section
10.4 shall be a designated purchaser (the "Designated Purchaser").
10.5 Parties in Interest; Assignment. This Agreement is binding upon and
is solely for the benefit of the Parties and their respective permitted
successors, legal representatives and permitted assigns. Neither Indus nor Xxx
may assign its or his rights and obligations hereunder without the prior consent
of the Buyer.
10.6 Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Washington without giving effect to the
conflicts of law principles thereof.
10.7 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument. Facsimile signatures on
this Agreement shall be deemed to be original signatures for all purposes.
10.8 Interpretation. The Article and Section headings contained in this
Agreement are for convenience of reference only, are not part of the agreement
of the Parties and shall not affect in any way the meaning or interpretation of
this Agreement.
43
10.9 Entire Agreement. This Agreement, including the Schedules and
Exhibits hereto and the certificates and instruments delivered pursuant to the
terms of this Agreement, the Related Agreements, and the Bridge Note and that
certain Guaranty and Pledge Agreement of even date therewith, embody the entire
agreement and understanding of the Parties hereto in respect of the
Transactions. This Agreement and such other agreements, documents and
instruments supersedes all prior agreements and understandings between the
Parties with respect to the Transactions, including that certain letter of
intent dated December 9, 1999 among Wireless, Xxx and Indus, as amended.
10.10 Publicity. So long as this Agreement is in effect, the Parties agree
to consult with each other in issuing any press release or otherwise making any
public statement with respect to the Transactions, and no Party shall issue any
press release or make any such public statement prior to such consultation,
except as may be required by Law. The Parties acknowledge and agree that Indus
will make a public statement with respect to the Transactions following approval
by its Board of Directors and prior to submitting this Agreement to the
Stockholders for approval, subject, however, to the consultation required by
this Section 10.10. No press release or other public statement by a Party shall
disclose any of the financial terms of the Transactions without the prior
consent of the other Party, except as may be required by Law. A breach of the
provisions of this Section 10.10 by a Party shall not give rise to any right to
terminate this Agreement.
10.11 Specific Performance. The Parties hereto agree that irreparable
damage would occur in the event that any of the provisions of this Agreement
were not performed in accordance with their specific terms or were otherwise
breached prior to the Closing. It is accordingly agreed that the Parties shall
be entitled to an injunction or injunctions to prevent breaches of this
Agreement and to enforce specifically the terms and provisions hereof in any
Designated Courts.
10.12 Remedies Cumulative. All rights, powers and remedies provided under
this Agreement or otherwise available in respect hereof at law or in equity
shall be cumulative and not alternative, and the exercise or beginning of the
exercise of any thereof by any Party shall not preclude the simultaneous or
later exercise of any other such right, power or remedy by such Party.
10.13 Severability. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. If any court determines that any covenant or any part of any
covenant is invalid or unenforceable, such covenant shall be enforced to the
extent permitted by such court, and all other covenants shall not thereby be
affected and shall be given full effect, without regard to the invalid portions.
10.14 Beneficiaries of Agreement. The representations, warranties,
covenants and agreements expressed in this Agreement are for the sole benefit of
the other parties hereto and the Section 8.2 Indemnified Parties and Section 8.3
Indemnified Parties and are not intended to benefit, and may not be relied upon
or enforced by, any other party as a third party beneficiary or otherwise.
Without limiting the foregoing, nothing contained in this Agreement shall confer
44
upon any Employee any right with respect to continued employment by Acquisition
Sub or Buyer following the Closing.
10.15 Expenses. Each of the Parties will bear its costs and expenses
(including legal and accounting fees and expenses) incurred in connection with
this Agreement and the Transactions, provided, that promptly following the
Closing, the Buyer or Acquisition Sub shall pay all of Indus' then reasonable
unpaid costs and expenses incurred in connection with this Agreement and the
Transactions; provided, however, that any such costs and expenses of Indus
beyond those which are reasonable (the "Excess Expenses") shall be subject to a
claim by the Buyer against the Holdback Funds under the Holdback Agreement
without regard to the threshold for making any claims provided in Section 8.1.
10.16 Continued Representation of Xxx by Xxxxx & Xxxxxxx. The Buyer and
Acquisition Sub consent to Xxxxx & Lardner's and/or Willkie, Xxxx & Gallagher's
representation of any one or more of the Stockholders in any matter adverse to
the Buyer, Acquisition Sub, or Designated Purchaser relating to this Agreement,
the Related Agreements or the Transactions notwithstanding such representation
by Xxxxx & Lardner or Willkie, Xxxx & Xxxxxxxxx prior to the Closing and the use
by Xxxxx & Lardner or Willkie, Xxxx & Xxxxxxxxx in connection with such matter
of any confidential or privileged information of Indus obtained by Xxxxx &
Lardner or Willkie, Xxxx & Xxxxxxxxx prior to the Closing, provided that the
foregoing shall not include representation by either of the foregoing law firms
of Xxxxxx Network Systems or its Affiliates or related parties in relation to
this Agreement, the Related Agreements, the Transactions, or the HNS
Agreements..
45
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
date first above written.
MILWAUKEE PCS LLC
By: /s/ Xxxxxxx Xxxxxxxx
---------------------------------
Name: Xxxxxxx Xxxxxxxx
Title:
MILWAUKEE ACQUISITION
SUBSIDIARY, INC.
By: /s/ Xxxxxxx Xxxxxxxx
---------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: VP
____________________________________
Xxxxxx X. Xxx
INDUS, INC.
By: ________________________________
Name:
Title:
Spousal Consent
The undersigned, the spouse of Xxxxxx X. Xxx, has read the foregoing
Agreement and Plan of Merger, consents to the undersigned's spouse's execution
and delivery of the foregoing Agreement and Plan of Merger, and agrees to be
bound thereby.
Signature: _________________________
Name[Print]:________________________
46
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
date first above written.
MILWAUKEE PCS LLC
By: ________________________________
Name:
Title:
MILWAUKEE ACQUISITION
SUBSIDIARY, INC.
By: ________________________________
Name:
Title:
/s/ Xxxxxx X. Xxx
------------------------------------
Xxxxxx X. Xxx
INDUS, INC.
By: /s/ Xxxxxx X. Xxx
---------------------------------
Name: Xxxxxx X. Xxx
Title: President
Spousal Consent
The undersigned, the spouse of Xxxxxx X. Xxx, has read the foregoing
Agreement and Plan of Merger, consents to the undersigned's spouse's execution
and delivery of the foregoing Agreement and Plan of Merger, and agrees to be
bound thereby.
Signature: /s/ Xxxxx X. Xxx
--------------------------
Name[Print]: Xxxxx X. Xxx
------------------------
46
Exhibit A PCS License
Exhibit B-1 Articles of Merger - Wisconsin
Exhibit B-2 Articles of Merger - Delaware
Exhibit C FCC Promissory Note and Security Agreement
Exhibit D Holdback Agreement
Exhibit E Stock Power
Exhibit F Financial Statements
Schedule 5.2(a) Capitalization
Schedule 5.2(b) Options, Warrants, etc.
Schedule 5.3 Indus Consents
Schedule 5.4 Litigation
Schedule 5.5 FCC Compliance
Schedule 5.7 No Offers
Schedule 5.8 Liens on PCS License
Schedule 5.9(a) Assets
Schedule 5.9(a)(i) Permitted Liens
Schedule 5.9(b) No Changes
Schedule 5.9(c) Leases
Schedule 5.9(d) Automobiles
Schedule 5.10(a) Indus Agreements
Schedule 5.10(b) Cancellation or Default of Indus Agreements
Schedules 5.11(a), (b),
(c), (d), (e) and (f) Environmental Matters
Schedule 5.15(a) Undisclosed Liabilities
Schedule 5.15(b) Unfunded Liabilities
Schedule 5.17(a) Tax Returns
Schedule 5.17(j) FIRPTA
Schedule 5.18(a) Termination of Employees
Schedule 5.18(i) Delayed or Postponed Accounts Payable
Schedule 5.19(a) Intellectual Property
Schedule 5.20 Licenses
Schedule 5.21(a) Employment Contracts
Schedule 5.21(b) Employees
Schedule 5.21(c) Employment Disputes
Schedule 5.21(d) Obligations under Employment Laws
Schedule 5.22 Employee Plans and Benefit Arrangements
Schedule 5.23 Insurance
Schedule 5.25 Bank Relationships
Schedule 5.27 Transactions with Affiliates
Schedule 6.2 Buyer/Acquisition Sub Consents
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS .........................................................1
ARTICLE II MERGER .............................................................8
2.1 Merger ............................................................8
2.2 Effect of Merger ..................................................9
2.3 Procedure for Payment .............................................9
2.4 Books and Records ................................................10
2.5 Closing of Transfer Records ......................................10
2.6 Allocation of the Merger Consideration ...........................10
ARTICLE III CLOSING ..........................................................10
3.1 Time and Place of Closing ........................................10
3.2 Closing Actions and Deliveries ...................................11
3.3 Xxx Liabilities ..................................................13
3.4 HNS Agreements ...................................................13
ARTICLE IV COVENANTS .........................................................13
4.1 Consummation of Transactions .....................................13
4.2 Confidentiality ..................................................14
4.3 Covenants of Indus ...............................................15
4.4 Lien Searches ....................................................17
4.5 Non-Solicitation .................................................17
4.6 Estoppel Agreements ..............................................18
4.7 Tax Provisions ...................................................18
4.8 Xxx Proxy ........................................................19
4.9 Approval .........................................................19
4.10 MEDC Stock Power .................................................19
ARTICLE V REPRESENTATIONS AND WARRANTIES OF INDUS ............................19
5.1 Organization, Power and Authority ................................19
5.2 Capitalization ...................................................20
5.3 Consents; No Conflicts ...........................................21
5.4 Litigation .......................................................21
5.5 FCC Compliance ...................................................21
i
TABLE OF CONTENTS
(continued)
Page
5.6 Brokers ..........................................................21
5.7 No Offer .........................................................22
5.8 License ..........................................................22
5.9 Title to Assets; Encumbrances; Future Operations .................22
5.10 Indus Agreements .................................................23
5.11 Environmental and Safety Laws ....................................25
5.12 Compliance With Laws .............................................26
5.13 Subsidiaries and Interests in Other Entities .....................26
5.14 Financial Statements .............................................26
5.15 Undisclosed Liabilities ..........................................27
5.16 Powers of Attorney ...............................................27
5.17 Taxes ............................................................27
5.18 Conduct of Business; Absence of Adverse Changes ..................29
5.19 Intellectual Property; Trade Secrets; Software ...................30
5.20 Licenses .........................................................31
5.21 Employees and Compensation .......................................31
5.22 Employee Benefits ................................................32
5.23 Insurance ........................................................33
5.24 Books and Records ................................................33
5.25 Banking Relationships; Investments ...............................33
5.26 Disclosure .......................................................34
5.27 Transactions with Affiliates .....................................34
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF BUYER AND ACQUISITION SUB .......35
6.1 Organization, Power and Authority ................................35
6.2 Consents; No Conflicts ...........................................35
6.3 Litigation .......................................................36
ARTICLE VII CLOSING CONDITIONS ...............................................36
7.1 Conditions to Obligations of All Parties .........................36
7.2 Conditions to Obligations of the Buyer and Acquisition Sub .......37
ii
TABLE OF CONTENTS
(continued)
Page
7.3 Conditions to the Obligations of Indus and Xxx ...................38
ARTICLE VIII SURVIVAL AND INDEMNIFICATION ....................................38
8.1 Survival .........................................................38
8.2 Indemnification by Indus and Xxx .................................39
8.3 Indemnification by the Buyer .....................................39
8.4 Procedures .......................................................40
ARTICLE IX TERMINATION .......................................................41
9.1 Termination ......................................................41
9.2 Effect of Termination ............................................41
ARTICLE X MISCELLANEOUS PROVISIONS ...........................................42
10.1 Amendment and Modification .......................................42
10.2 Waiver of Compliance; Consents ...................................42
10.3 Notices ..........................................................42
10.4 Designated Purchaser .............................................43
10.5 Parties in Interest; Assignment ..................................43
10.6 Applicable Law ...................................................43
10.7 Counterparts .....................................................43
10.8 Interpretation ...................................................43
10.9 Entire Agreement .................................................44
10.10 Publicity ........................................................44
10.11 Specific Performance .............................................44
10.12 Remedies Cumulative ..............................................44
10.13 Severability .....................................................44
10.14 Beneficiaries of Agreement .......................................44
10.15 Expenses .........................................................45
10.16 Continued Representation of Xxx by Xxxxx & Xxxxxxx ...............45
iii
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Table of Contents/Authorities.
ORGANIZATIONAL AGREEMENT
THIS ORGANIZATIONAL AGREEMENT is entered into and effective as of February
25, 2000, by and among XXXXXX X. XXX ("Xxx"), an individual, INDUS, INC., a
Wisconsin corporation ("Indus"), AT&T WIRELESS SERVICES, INC., a Delaware
corporation ("Wireless"), MILWAUKEE PCS LLC, a Delaware limited liability
company (the "Company"), and AT&T MILWAUKEE JV, INC., a Delaware corporation
("Wireless Sub," and together with Xxx, Indus, Wireless and the Company, the
"Parties," and each a "Party").
RECITALS
A. The Company and Milwaukee Acquisition Subsidiary, Inc., a Delaware
corporation ("Acquisition Sub"), Indus and Xxx have entered into that certain
Agreement and Plan of Merger of even date herewith (the "Merger Agreement")
(capitalized terms used but not defined herein will have the meanings given
those terms in the Merger Agreement).
B. The Parties desire to enter into this Agreement to set forth certain
additional agreements among them in connection with the Transactions.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements herein contained, the Parties hereby agree as follows:
ARTICLE 1
REORGANIZATION OF THE COMPANY
1.1 Membership Interests. Currently, the sole member of the Company is
Wireless Sub, which is a wholly-owned subsidiary of Wireless. Wireless Sub
acquired its membership interest in the Company in exchange for a capital
contribution of $100. Immediately prior to or simultaneous with the Closing, the
Company will redeem this membership interest of Wireless Sub for $100, and the
Company shall be reorganized and capitalized, and new membership and debt
interests in the Company (the "Interests") shall be issued, as follows:
(a) Xxx will contribute $2,000,000 to the capital of the Company in
exchange for (i) an Interest entitling him to 12.5% of the equity of the Company
and 6.25% of the voting rights in the Company, and (ii) a preferred voting
Interest entitling him to .033% of the equity of the Company and 18.7667% of the
voting rights in the Company.
(b) Wireless shall cause one or more Persons selected by Wireless
(such Person or Persons shall be referred to collectively as the "Designated
Member") to contribute $4,000,000 to the capital of the Company in exchange for
(i) one or more Interests entitling the Designated Member to 25% of the equity
of the Company and 12.5% of the voting rights in the Company, and (ii) one or
more preferred voting Interests entitling the Designated Member to .067% of the
equity of the Company and 37.5333% of the voting rights in the Company. Wireless
shall select the Designated
1
Member so that, following the reorganization under this Section 1.1, the
interests of the Designated Member shall not cause the Company to fail to
constitute a "Designated Entity," within the meaning of 47 CFR ss.24.709 of the
FCC Law, fully qualified under the FCC Law to control the PCS License.
(c) Xxx will contribute an additional $2,000,000 to the capital of
the Company in exchange for a nonvoting Interest entitling him to 12.5% of the
equity of the Company. One-third (1/3) of this Interest will vest on each of the
first three (3) anniversaries of the Closing Date. If Rao's employment under the
Employment Agreement (as defined below) terminates for any reason other than
termination of his employment by the Company without cause or by Xxx for good
reason, this Interest will cease vesting and any unvested portion thereof will
automatically be added to the Interests of the Designated Member under Section
1.1(b)(i) (or added proportionately to the respective Interests under Section
1.1(b)(i) of the Persons comprising the Designated Member, if two or more
Persons comprise the Designated Member).
(d) Wireless Sub will contribute $8,000,000 to the capital of the
Company in exchange for an Interest entitling it to 49.9% of the equity of the
Company and 24.95% of the voting rights in the Company.
(e) Wireless Sub will acquire from the Company a nonvoting Interest
(or, at its election, a promissory note) in exchange for its commitment to
advance $275,000,000 to the Company in amounts called by the Company from time
to time (the "Financing Interest"). The Financing Interest will have the right
to distributions (or payments of principal and interest) from the Company, prior
to any distributions to the members holding other Interests, equal to the sum of
(i) the aggregate amounts actually called by the Company, and (ii) an amount
determined in accordance with the following formula (where "n" represents the
number of whole and fractional years elapsed from the Closing Date to the date
of full payment of all distributions (or payments of principal and interest) to
which the Financing Interest is entitled):
$275,000,000 x (1.22/n/-1)
Upon termination of the Management Agreement (as defined below), the Company
shall immediately pay to Wireless Sub all distributions (or payments of
principal and interest) to which it is entitled on account of the Financing
Interest. Any tax deductions allowable to the Company with respect to the
Financing Interest will be specially allocated to Wireless Sub.
(f) References in this Agreement to a percentage Interest in the
"equity" of the Company shall mean the right to share in that percentage of the
profits, losses and distributions from the Company, after payment of any amount
distributable with respect to the Financing Interest.
1.2 LLC Agreement. Effective as of the Closing Date, Wireless Sub and Xxx
shall, and Wireless shall cause the Designated Member to, enter into a limited
liability company agreement with respect to the Company (such agreement, as it
may be
2
amended from time to time, will be referred to as the "LLC Agreement") providing
for the issuance of Interests as described in Section 1.1. The LLC Agreement
shall also contain the following terms and conditions:
(a) Modification of Interests. At such time as the Company shall
have received an opinion of regulatory counsel of nationally recognized standing
to the effect that FCC Law permits the voting Interests to have percentage
voting rights equal to one and one-sevenths (1-1/7) times their percentage
equity rights in the Company, the Company will seek FCC consent to make this
change, to the extent that FCC consent is required under FCC Law. Upon receipt
of such consent or a determination by such regulatory counsel that such consent
is not required under FCC Law, Xxx, Wireless and the Designated Member shall
amend the LLC Agreement as necessary to effectuate this change.
(b) Additional Interests. Wireless Sub shall have a right of first
offer and right of first refusal with respect to the issuances of any additional
Interests by the Company, other than any Interests issued pursuant to Section
1.2(a).
(c) Voting. Except as provided in Section 2.2, Xxx and the
Designated Member (the "Control Group") shall agree to vote their voting
Interests in accordance with the votes of the members of the Control Group
holding a majority of all of the voting Interests held by the Control Group.
(d) Management.
(i) The Company shall be managed by a management committee
consisting of the following: Xxx (chairman), two (2) managers appointed by the
Designated Member, and two (2) managers appointed by Wireless Sub.
(ii) The managers appointed by the Designated Member shall
each receive an annual retainer of $100,000 payable in arrears in quarterly
installments. Xxx shall serve on the management committee without compensation
other than the amounts payable to him under the Employment Agreement.
(iii) The Company and Xxx shall enter into a three-year
employment agreement effective as of the Closing Date (the "Employment
Agreement"). Xxx will receive a $200,000 annual salary, together with a bonus
opportunity of up to $200,000 each year during the term of the Employment
Agreement. Bonus criteria and performance against those criteria will be
determined by the other four managers. Xxx will report to, and be subject to,
the direction of the management committee. Rao's activities on behalf of the
Company will be directed by the other managers in consultation with the senior
operational personnel of the Company. On a daily operations basis, Rao's
activities (e.g. participating in sales calls, contacts with the press, etc.)
will also be subject to the direction of the individual serving as the general
manager under the Management Agreement, who will act under delegated authority
from the other four (4) managers.
3
(iv) The LLC Agreement will include a five-year budget (the
"Budget") mutually agreeable to the Control Group and Wireless Sub. The LLC
Agreement will specify certain significant matters, including the following,
which will require approval of the holders of 80% of the voting Interests: any
transaction between the Company and any member of the Control Group; any sale or
acquisition of material assets; merger, consolidation or business combination;
any issuance of an additional Interest or repurchase of an existing Interest
that, in the judgment of any member voting against the issuance or repurchase,
is not being issued or repurchased at fair market value; any dividends or
distributions with respect to Interests; any capital call against the Financing
Interest (Wireless Sub's consent not to be unreasonably withheld); any
incurrence of debt or capital spending exceeding the amounts set forth in the
Budget by $100,000 in any quarter or $500,000 in any calendar year; and any
settlement of the dispute with Xxxxxx Network Systems. The LLC Agreement will
entitle Wireless Sub to take action on behalf of the Company, without the
approval of any of the managers or the other members, to the extent provided in
Section 1.2(f)(iii) and Section 1.2(f)(v).
(e) Distributions. Except as provided in Section 1.1(e), the Company
shall not make any distributions to any of its members or redeem any Interests
prior to the tenth (10th) anniversary of the Closing Date, other than
distributions to pay taxes on income of the members that is attributable to
their Interests.
(f) Transfers and Liquidity. The Interests of the members of the
Control Group will be subject to the following provisions:
(i) Until the fifth (5th) anniversary of the Closing Date, a
member of the Control Group shall not sell, transfer, encumber or otherwise
dispose of all or any portion of the member's Interests to any Person other than
Wireless Sub or one or more of its Affiliates or designees. In the event of the
death of a member of the Control Group (A) the portion of the member's Interests
that represents the right to share in the equity of the Company may be
transferred pursuant to a will or applicable laws of descent and distribution,
but the transferee or transferees thereof shall continue to be bound by all of
the terms and conditions of the LLC Agreement, and (B) the portion of the
member's Interests that represents voting rights in the Company shall -
(I) if the deceased member is Xxx, automatically be
added to the Interests of the Designated Member under Section 1.1(b)(i)
(or added proportionately to the respective Interests under Section
1.1(b)(i) of the Persons comprising the Designated Member, if two or more
Persons comprise the Designated Member);
(II) if two or more Persons comprise the Designated
Member and the deceased member is one of such Persons, automatically be
added to the Interests under Section 1.1(b)(i) of the other Person
comprising the Designated Member (or added proportionately to the
respective Interests under Section 1.1(b)(i) of the other Persons
comprising the Designated Member, if two or more other Persons comprise
the Designated Member); or
4
(III) if one Person comprises the Designated Member,
pass to the transferee or transferees under clause (A) above of the
portion of the member's Interests that represents the right to share in
the equity of the Company, and the transferee or transferees thereof shall
continue to be bound by all of the terms and conditions of the LLC
Agreement.
(ii) On and after the fifth (5th) anniversary of the Closing
Date, a member of the Control Group may sell, transfer, encumber or otherwise
dispose of all or any portion of the member's Interests, provided that the
member first notifies Wireless Sub in writing of the proposed transfer and
offers to sell the Interests to Wireless Sub at their Fair Market Value (as
defined below).
(iii) Each member of the Control Group shall have the right,
exercisable by written notice to Wireless Sub and the Company, to put all (but
not less than all) of the Interests the member holds to the Company at their
Fair Market Value; provided that (A) the exercise of the put is permitted under
the FCC Law, and (B) no unjust enrichment penalty will be imposed on the
exercise. If an unjust enrichment penalty will be imposed on the exercise, the
put can still be exercised if the member or the Company agrees to bear the cost
of the penalty. If neither the member nor the Company agrees to bear the cost of
the penalty, the exercise of the put will be of no force or effect, but the
member shall retain the right to exercise the put on the same terms and
conditions until the put's expiration. The put will terminate at the later of
(I) six (6) months after the first day on which the member could have exercised
the put (without being required to bear the cost of an unjust enrichment penalty
because either no unjust enrichment penalty applies, or Wireless Sub has
notified the member on behalf of the Company that the Company agrees to bear the
cost of any unjust enrichment penalty), and (II) thirty-nine (39) months after
the Closing Date. The members of the Control Group shall agree that, if members
of the Control Group holding a majority of all of the voting Interests held by
the Control Group exercise their put, all other members of the Control Group
shall immediately exercise their put, and this agreement shall be secured by a
pledge to the Company of the Interests of the members of the Control Group.
Wireless Sub shall have the right to determine on behalf of the Company whether
the Company is agreeable to bearing the cost of the unjust enrichment penalty
referred to in this subparagraph (iii). Wireless shall guaranty the performance
of the Company's obligations under the put arrangement.
(iv) The "Fair Market Value" of a member's Interests shall be
either (A) the amount originally paid for the Interests plus such additional
amount as will result in a 20% per annum internal rate of return on that
investment, or (B) the cash price at which a willing seller would sell and a
willing buyer would buy the Interests in a transaction negotiated at arm's
length between unaffiliated parties acting without time constraints or
compulsion and each being apprised of and considering all relevant facts,
circumstances and factors (e.g. the Interests are illiquid, minority interests),
but assuming that (I) neither Wireless nor any Person in which it or any of its
Affiliates has a 10% or greater equity stake is a potential acquiror, (II) the
royalty rate under the Brand Agreement (as defined below) increases to 16%
(which the Parties agree and the Designated Member will agree is a market rate),
and (III) Wireless and its Affiliates
5
have programmed their customers' phones to roam on a network other than the
Company's. A member of the Control Group who may or will be transferring
Interests to Wireless Sub pursuant to the right of first refusal under
subparagraph (ii) above or to the Company upon exercise of the put under
subparagraph (iii) above shall irrevocably elect in the notice under such clause
(the "Notice") whether to have the Fair Market Value of the Interests valued
under clause (A) or clause (B) above, and such election shall be binding on
Wireless Sub or the Company, as the case may be. For purposes of determining the
Fair Market Value of the Interests of Xxx and the Designated Member, each of
such Interests shall be treated separate from the others as a non-controlling
minority interest. The Interests of each member shall be valued separately, even
if more than one member of the Control Group will be transferring their
Interests at or about the same time.
(v) If the Fair Market Value of Interests are to be valued
under clause (B) of subparagraph (iv) above, the following procedure shall
apply: Each of Wireless Sub and the member holding the Interests to be so valued
will select a nationally recognized investment banking firm experienced in the
field of wireless telecommunications (each, an "IBank"). Wireless Sub shall
select the IBank on its own behalf, if the Fair Market Value is being determined
in connection with the exercise of the right of first refusal under subparagraph
(ii) above, or on behalf of the Company, if the Fair Market Value is being
determined in connection with the exercise of the put under subparagraph (iii)
above, and such IBank will in either event be referred to as the "Buyer IBank."
If two or more members hold Interests to be so valued, those members shall
jointly select a single IBank (the IBank selected by the member or members will
be referred to as the "Seller IBank"). The selected IBanks will act for the
Person or Persons on whose behalves they are selected to determine the Fair
Market Value of the Interests to be valued in the manner described in said
clause (B). Each IBank will, within thirty (30) Business Days after the Notice
is received by Wireless Sub (and by the Company, if the Fair Market Value is
being determined in connection with the exercise of the put under subparagraph
(iii) above), deliver to the other IBank and to the Person or Persons on whose
behalves it was selected a written valuation report that sets forth the
delivering IBank's valuation and explains it in reasonable detail. If the value
determined by the Buyer IBank is higher than the value determined by the Seller
IBank, or if the value determined by the Seller IBank is not more than 20%
greater than the value determined by the Buyer IBank, then the Fair Market Value
of the Interests being valued will be the average of such values. If the Fair
Market Value of the Interests as determined by the Seller IBank is more than 20%
higher than the value determined by the Buyer IBank, then the parties shall
attempt for a period of twenty-five (25) Business Days to agree on a value. If
no agreement is reached in such period, either Wireless Sub or the member or
members holding the Interests to be valued may refer the dispute to a third
IBank to be agreed upon by Wireless Sub and such member or members (Wireless Sub
in so doing be acting on its own behalf, if the Fair Market Value is being
determined in connection with the exercise of the right of first refusal under
subparagraph (ii) above, or on behalf of the Company, if the Fair Market Value
is being determined in connection with the exercise of the put under
subparagraph (iii) above). This third IBank will determine the Fair Market Value
of the Interests to be valued in the manner described in said clause (B), taking
into account to the extent appropriate the
6
valuations developed by the other IBanks. The Fair Market Value of the Interests
to be valued shall be the value determined by the third IBank; provided that, if
the third IBank's valuation exceeds the value determined by the Seller IBank,
the third IBank's value shall be deemed to be the value determined by the Seller
IBank, and if the third IBank's valuation is less than the value determined by
the Buyer IBank, the third IBank's value shall be deemed to be the value
determined by the Buyer IBank. The fees and costs of the third IBank shall be
shared equally by the member or members whose Interests are being valued, on the
one hand, and by Wireless Sub (if the Fair Market Value is being determined in
connection with the exercise of the right of first refusal under subparagraph
(ii) above) or the Company (if the Fair Market Value is being determined in
connection with the exercise of the put under subparagraph (iii) above), on the
other hand.
ARTICLE 2
ADDITIONAL AGREEMENTS
2.1 Indus Interim Management Agreement. Indus and Wireless shall promptly
negotiate reasonable terms and conditions of an interim management agreement
(the "Indus Interim Management Agreement") under which, subject to the ultimate
supervision, authority and control of Indus, Wireless will manage the business
of Indus pending the Closing. If the Company and/or Acquisition Sub assign its
or their rights and delegate its or their obligations under the Merger Agreement
to a Designated Purchaser, Wireless shall be entitled to assign its rights and
delegate its obligations under the Indus Interim Management Agreement to such
Designated Purchaser or any Affiliate thereof.
2.2 Management Agreement. Effective as of the Closing Date, the Company
and Wireless will negotiate and enter into a five-year management agreement (the
"Management Agreement"), under which, subject to the ultimate supervision,
authority and control of the Company, Wireless will manage the business of the
Company following the Closing in exchange for reimbursement of its costs plus 6%
of the gross revenues of the Company. The Management Agreement will be
terminable if Wireless does not hit agreed upon standards, or by the Company on
one years notice. On an annual basis, the management committee will review the
Management Agreement and make a determination whether or not to terminate it.
The managers designated by Wireless Sub shall not participate in any decision to
terminate the Management Agreement. Anything else to the contrary herein
notwithstanding (including without limitation the voting agreement under Section
1.2(c)), for termination to be effective, each member of the Control Group must
vote in favor of termination.
2.3 Roaming Agreement. Effective as of the Closing Date, the Company and
Wireless will enter into a twenty-year roaming agreement (the "Roaming
Agreement") under which the Company will commit to interoperability, including
upgrading and changing technology as required to remain interoperable, with the
PCS service of Wireless. The initial rates under the Roaming Agreement will be
the same as the rates under the prior roaming agreement between Indus and
Wireless. If the Management Agreement is terminated, Wireless' obligation to
program its phones to roam on the
7
Company's markets will be terminable at the option of Wireless.
2.4 Brand Agreement. Effective as of the Closing Date, the Company and
Wireless will enter into a five-year branding agreement (the "Brand Agreement")
under which Wireless will grant to the Company a license, and the Company will
commit, to use the "AT&T" brand in connection with the provision of its PCS
service. In consideration of this license, the Company shall pay Wireless an
annual royalty equal to 13% of its gross revenues. If the Management Agreement
is terminated, Wireless will have the option to terminate the Brand Agreement.
2.5 Fees and Expense. Promptly following the Closing Date, the Company
shall pay the reasonable legal and accounting fees incurred by the Parties in
connection with the transactions contemplated by this Agreement.
ARTICLE 3
COVENANTS
3.1 Consummation of Transactions. Each Party will use the Party's best
efforts to enter into the Indus Interim Management Agreement as expeditiously as
practicable and to enter into the LLC Agreement, the Employment Agreement, the
Management Agreement, the Roaming Agreement and the Brand Agreement effective as
of the Closing Date (all of such agreements will be referred to as the
"Ancillary Agreements"). The Parties agree that they are legally obligated in
good faith to negotiate the definitive terms and conditions of the Ancillary
Agreements, which shall consist of the terms and conditions set forth in this
Agreement together with such other terms and conditions and conditions as are
mutually acceptable to the Parties to the respective Ancillary Agreements.
3.2 Financing of Interim Operations. Wireless agrees to lend Indus such
amounts as may be reasonably necessary to provide for Indus' operating expenses
incurred in the ordinary course of Indus' business until the earlier of the
Closing Date or the termination of this Agreement, provided that Wireless will
determine, in its reasonable discretion, the validity, amount and timing of any
loan advances by Wireless to Indus, following receipt by Wireless of all
information reasonably requested in relation thereto. Such loan shall be
evidenced by a promissory note of like tenor with the Bridge Note (the "Second
Bridge Note"), shall be secured by a perfected security interest in all of the
assets of Indus, and shall be further secured by a guaranty from Xxx secured on
a non-recourse basis by a pledge of all of his Class A Common Stock and all of
the Xxx Liabilities (the guaranty and pledge (the "Second Bridge Note Security
Documents") shall be on the same terms and conditions as the Guaranty and Pledge
Agreement of even date with the Bridge Note, except that Xxx shall have no
personal liability thereunder). Wireless' obligation under this Section 3.2 is
subject to the condition that neither Indus nor Xxx shall be in default at any
time under this Agreement, the Merger Agreement, the Bridge Note or the Guaranty
and Pledge Agreement of even date therewith. No further advances will be made
under the Bridge Note.
8
3.3 Further Assurances; Acceleration of Reorganization. Each Party shall
use the Party's best efforts to take, or cause to be taken, all actions, and to
do, or cause to be done, all things necessary, proper or advisable and
consistent with applicable law to carry out its obligations under this Agreement
and to consummate the transactions contemplated hereby. If FCC counsel to
Wireless and Indus reasonably determine that the reorganization of the Company
under Article 1 should be accelerated in order to facilitate the application to
the FCC for approval of the PCS License Transfer, then the Parties agree to
accelerate such reorganization in order that the Company will constitute a
Designated Entity at the time of such application; provided, that payment for
the Interests shall be deferred until immediately prior to or simultaneous with
the Closing.
ARTICLE 4
TERMINATION
4.1 Termination. This Agreement may be terminated by any Party by notice
to the other Parties without further obligation of any Party, except as set
forth herein, at any time prior to the Closing Date, upon any termination of the
Merger Agreement.
4.2 Effect of Termination. In the event of a termination of this
Agreement:
(a) No Party shall have any liability or further obligation to any
other Party, except (i) as set forth in paragraph (b) below, (ii) pursuant to
the Bridge Note and any security for Indus' obligations thereunder, and (iii)
that nothing herein will relieve any Party from liability for any breach by such
Party of this Agreement.
(b) All provisions of this Agreement shall terminate, except that
nothing herein will relieve any Party from liability for any breach by such
Party of this Agreement.
(c) If the Closing does not occur, all costs and expenses incurred
in connection with this Agreement shall be paid by the Party incurring such
expenses.
ARTICLE 5
MISCELLANEOUS
5.1 Amendment and Modification. This Agreement may be amended, modified or
supplemented only by written agreement of each of the Parties.
5.2 Waiver of Compliance; Consents. Any failure of any of the Parties to
comply with any obligation, covenant, agreement or condition herein may be
waived by the Party or Parties entitled to the benefits thereof only by a
written instrument signed by the Party or Parties granting such waiver, but such
waiver or failure to insist upon strict compliance with such obligation,
covenant, agreement or condition shall not operate as a waiver of, or estoppel
with respect to, any subsequent or other failure. Whenever this Agreement
requires or permits consent by or on behalf of any Party, such consent shall be
given in writing in a manner consistent with the requirement for a waiver of
compliance as set forth in this Section 5.2.
9
5.3 Notices. All notices, consents, approvals or other communications
hereunder shall be in writing and shall be given (and shall be deemed to have
been duly given upon receipt) by delivery in person against receipt, by
facsimile transmission with confirmation of receipt, or by registered or
certified mail (return receipt requested), postage prepaid, with an
acknowledgment of receipt signed by the addressee or an authorized
representative thereof, addressed as follows (or to such other address for a
Party as shall be specified by like notice; provided, that notice of a change of
address shall be effective only upon receipt thereof):
If to Xxx or to Indus, to such Party at:
Indus, Inc.
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: President
With a copy (which shall not constitute notice) to:
Xxxxxxx X. Xxxxx
Xxxxx & Xxxxxxx
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
If to Wireless, the Company or Wireless Sub, to it at:
AT&T Wireless Services, Inc.
RTC 1
0000 000xx Xxxxxx X.X.
Xxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxxx
Facsimile: (000) 000-0000
With a copy (which shall not constitute notice) to:
Xxxxx Xxxxxxxx
Xxxxxxx Xxxxxxxx X.X.
0000 Xxxxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, XX 00000-0000
Facsimile: (000) 000-0000
5.4 Parties in Interest; Assignment.
(a) This Agreement is binding upon and is solely for the benefit of
the Parties and their respective permitted successors, legal representatives and
permitted assigns. Neither Indus nor Xxx may assign its or his rights and
obligations hereunder without the prior consent of the other Parties. Any one or
more of Wireless, Wireless Sub and the Company may assign all or any portion of
its rights and obligations
10
hereunder without the prior consent of the other Parties.
(b) If the Company and/or Acquisition Sub directly or indirectly
assign its or their rights and delegate its or their obligations under the
Merger Agreement to a Designated Purchaser, or if Wireless Sub transfers control
of the Company to any other Person that constitutes a "Designated Entity" within
the meaning of 47 CFR ss.24.709 of the FCC Law and is fully qualified under the
FCC Law to control the PCS License, then Wireless, Wireless Sub and the Company
may elect, by notice to Xxx and Indus, to terminate the provisions of Article 1
of this Agreement. If Wireless, Wireless Sub and the Company so elect, then
Wireless shall pay or cause to be paid to Xxx, promptly following the Closing
(but if and only if the Closing occurs), the sum of $3,000,000 (which is
intended to compensate Xxx for the loss of the opportunity to invest in the
Company).
(c) If any one or more of Wireless, Wireless Sub and the Company
shall assign all or any portion of its rights and obligations hereunder, if the
Company and/or Acquisition Sub directly or indirectly assign its or their rights
and delegate its or their obligations under the Merger Agreement to a Designated
Purchaser, or if Wireless Sub transfers control of the Company to any other
Person, Wireless agrees to take such steps as may be necessary so that there
will be a Person with adequate financial resources to assure performance by the
ultimate assignee(s) or transferee(s) of their obligations under this Agreement
and the Merger Agreement.
5.5 Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware without giving effect to the
conflicts of law principles thereof.
5.6 Dispute. If a dispute arises out of or relating to this Agreement or
the transactions contemplated hereby or the construction, interpretation,
performance, breach, termination, enforceability or validity hereof, the
primarily prevailing Party or Parties in such dispute shall be entitled to an
award of all costs and expenses (including reasonable attorney's fees) incurred
in the resolution of such dispute.
5.7 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument. Facsimile signatures on
this Agreement shall be deemed to be original signatures for all purposes.
5.8 Interpretation. The article and section headings contained in this
Agreement are for convenience of reference only, are not part of the agreement
of the
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Parties and shall not affect in any way the meaning or interpretation of this
Agreement.
5.9 Entire Agreement. This Agreement and the other Related Agreement,
together with the Merger Agreement (including the schedules and exhibits
thereto), the Bridge Note, that certain Guaranty and Pledge Agreement of even
date therewith, the Second Bridge Note and the Second Bridge Note Security
Documents embody or will embody the entire agreement and understanding of the
Parties hereto in respect of the transactions contemplated hereby and thereby.
This Agreement and such other agreements, documents and instruments supersede
all prior agreements and understandings between the Parties with respect to such
Transactions, including that certain letter of intent dated December 9, 1999
among Wireless, Xxx and Indus, as amended.
5.10 Remedies Cumulative. All rights, powers and remedies provided under
this Agreement or otherwise available in respect hereof at law or in equity
shall be cumulative and not alternative, and the exercise or beginning of the
exercise of any thereof by any Party shall not preclude the simultaneous or
later exercise of any other such right, power or remedy by such Party.
5.11 Severability. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. If any court determines that any covenant or any part of any
covenant is invalid or unenforceable, such covenant shall be enforced to the
extent permitted by such court, and all other covenants shall not thereby be
affected and shall be given full effect, without regard to the invalid portions.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY BLANK]
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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
date first above written.
XXXXXX X. XXX
INDUS, INC.
By:
Name:
Title:
AT&T WIRELESS SERVICES, INC.
By:
Name:
Title:
MILWAUKEE PCS LLC
By:
Name:
Title:
AT&T MILWAUKEE JV, INC.
By:
Name:
Title:
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