Exhibit 10.2
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INVESTOR AGREEMENT
BY AND AMONG
AT&T CORP.,
AT&T WIRELESS SERVICES, INC.
AND
NTT DOCOMO, INC.
DATED AS OF DECEMBER 20, 2000
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TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS
Section 1.1 Definitions..................................................1
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1 Representations and Warranties of AT&T......................10
Section 2.2 Representations and Warranties of AT&T Wireless.............10
Section 2.3 Representations and Warranties of DoCoMo and each Designee..11
ARTICLE III
GOVERNANCE AND STANDSTILL PROVISIONS
Section 3.1 Board of Directors..........................................11
Section 3.2 Pre-Spin-off Governance Rights..............................14
Section 3.3 Post-Spin-off Governance Rights.............................16
Section 3.4 Senior Leadership Team......................................17
Section 3.5 Management Positions........................................17
Section 3.6 Standstill Restrictions.....................................18
Section 3.7 Termination of the Standstill Restrictions..................22
Section 3.8 Voting......................................................24
ARTICLE IV
OTHER COVENANTS
Section 4.1 Technology Commitment.......................................25
Section 4.2 Joint Research and Development Effort.......................25
Section 4.3 Technology Default Right....................................25
Section 4.4 No Spin-off Repurchase Right................................29
Section 4.5 Reinvestment Right..........................................30
Section 4.6 Financial Statement Cooperation.............................32
ARTICLE V
MOBILE MULTIMEDIA ALLIANCE
Section 5.1 The Mobile Multimedia Alliance and the MMS..................33
Section 5.2 Technology Evolution and Timing.............................33
Section 5.3 Contributions and Resources.................................34
Section 5.4 Advisory Committee and Senior Management....................36
Section 5.5 Business Plan...............................................36
Section 5.6 Termination.................................................37
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PAGE
Section 5.7 Other Operational Cooperation...............................37
ARTICLE VI
TRANSFER RESTRICTIONS
Section 6.1 Transfer Restrictions.......................................38
ARTICLE VII
REGISTRATION RIGHTS
Section 7.1 Demand Registrations........................................40
Section 7.2 Piggy-Back Registration.....................................42
Section 7.3 Limitations on Demand Registrations; Termination
of Registration Obligation................................43
Section 7.4 Registration Procedures.....................................44
Section 7.5 Registration Expenses.......................................49
Section 7.6 Indemnification; Contribution...............................49
ARTICLE VIII
PREEMPTIVE RIGHTS
Section 8.1 Preemptive Rights...........................................52
Section 8.2 Limitation of Preemptive Rights.............................55
ARTICLE IX
EFFECTIVENESS AND TERMINATION
Section 9.1 Effectiveness...............................................55
Section 9.2 Termination.................................................55
Section 9.3 Partial Termination.........................................55
ARTICLE X
NON-COMPETITION; CONFIDENTIALITY
Section 10.1 Non-Competition Restrictions................................55
Section 10.2 Definitions.................................................56
Section 10.3 Duration of and Limitations on Restrictions.................57
Section 10.4 Non-Disclosure Commitment...................................58
ARTICLE XI
MISCELLANEOUS
Section 11.1 Injunctive Relief...........................................60
Section 11.2 Successors and Assigns......................................60
Section 11.3 Amendments; Waiver..........................................60
Section 11.4 Notices.....................................................60
Section 11.5 Governing Law...............................................62
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PAGE
Section 11.6 Arbitration.................................................62
Section 11.7 Headings....................................................64
Section 11.8 Entire Agreement............................................64
Section 11.9 Severability................................................64
Section 11.10 Submission to Jurisdiction; Waivers.........................64
Section 11.11 Waiver of Immunity..........................................65
Section 11.12 Waiver of Jury Trial........................................65
Section 11.13 Counterparts................................................65
Section 11.14 Interpretation..............................................65
Section 11.15 Anti-Dilution Adjustments...................................65
Section 11.16 Effectiveness of this Agreement.............................65
Section 11.17 No Third Party Beneficiaries................................66
Section 11.18 Substitution for AT&T Wireless..............................66
Exhibit A ..............................Cost of Carry
Exhibit B ..............................List of Separation Agreements
Schedule 3.4 ...........................Senior Leadership Team
Schedule 4.1 ...........................Top 50 U.S. BTAs
Schedule 5.3(b) ........................Mobile Multimedia Support/Contribution
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INVESTOR AGREEMENT (this "AGREEMENT"), by and among AT&T Corp., a New
York corporation ("AT&T"), AT&T Wireless Services, Inc., a Delaware corporation
and a wholly-owned subsidiary of AT&T ("AT&T WIRELESS"), and NTT DoCoMo, Inc., a
company incorporated under the laws of Japan ("DOCOMO"), dated as of December
20, 2000, but effective and binding upon the parties only as specified in
Section 11.16.
W I T N E S S E T H:
WHEREAS, AT&T, AT&T Wireless and DoCoMo have entered into a Letter
Agreement, dated November 30, 2000 (including the Term Sheet and other schedules
and attachments thereto, the "LETTER AGREEMENT"), that sets forth the agreements
among the parties for an investment by DoCoMo in the Wireless Group and, after
the Spin-off, in AT&T Wireless, and a related mobile multimedia alliance;
WHEREAS, AT&T, AT&T Wireless and DoCoMo are entering into a Securities
Purchase Agreement, dated as of the date hereof (as it may be amended from time
to time, the "PURCHASE AGREEMENT"), pursuant to which, among other things,
DoCoMo will purchase 812,511.778 shares of New Tracking Stock (as defined in the
Purchase Agreement) and Warrants to purchase an additional 83,496.546 shares of
New Tracking Stock, which will be converted, in connection with the Spin-off,
into shares of Current Wireless Tracking Stock, which shares of Current Wireless
Tracking Stock will then immediately be exchanged for shares of AT&T Wireless
Common Stock, and Warrants to purchase shares of AT&T Wireless Common Stock
(collectively, the "INVESTMENT");
WHEREAS, the Letter Agreement contemplates that the agreements
contained therein would be superseded by definitive agreements, including (1)
the Purchase Agreement, (2) a Warrant Agreement and (3) this Agreement; and
WHEREAS, AT&T, AT&T Wireless and DoCoMo desire to establish in this
Agreement certain terms and conditions concerning the Investment and the
Alliance, and related provisions concerning DoCoMo's relationship with AT&T and
AT&T Wireless following the Closing.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth herein and for other good and valuable consideration,
receipt and sufficiency of which is hereby acknowledged, the parties hereto
hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 DEFINITIONS. In addition to other terms defined elsewhere
in this Agreement, as used in this Agreement, the following terms
shall have the meanings ascribed to them below:
"ACQUIRED SPINCO SHARES" shall have the meaning assigned in Section
4.5.
"ACQUIRED SPINCO WARRANTS" shall have the meaning assigned in Section
4.5.
"ADDITIONAL SECURITIES" shall have the meaning assigned in Section
8.1(a).
"ADVISORY COMMITTEE" shall have the meaning assigned in Section
5.4(b).
"AFFILIATE" shall mean a Person that directly, or indirectly through
one or more intermediaries, controls, or is controlled by, or is under common
control with, a specified Person; PROVIDED, HOWEVER, that for so long as At Home
Corporation, a Delaware corporation or Liberty Media Corporation, a Delaware
corporation, and each other corporation constituting part of the Liberty Media
Group as defined in AT&T's certificate of incorporation, and their successors
and assigns ("AT HOME" and "LIBERTY Media," respectively) has any public
stockholders (directly, or through a tracking stock or similar concept), At Home
or Liberty Media, as the case may be, and any Affiliates or Subsidiaries of
Liberty Media, At Home or any of their respective Subsidiaries shall not be
treated as or deemed to be Affiliates of AT&T or of any of AT&T's Subsidiaries
or Affiliates for purposes hereof. For the purposes of this definition,
"CONTROL," (including, with correlative meanings, the terms "controlling",
"controlled by" and "under common control with"), as applied to any Person,
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of that Person, whether through the
ownership of voting securities or by contract or otherwise.
"AGREEMENT" shall have the meaning assigned in the preamble hereto.
"ALLIANCE" shall have the meaning assigned in Section 5.1(a).
"ALLIANCE PARTNERS" shall have the meaning assigned in Section 5.1(a).
"ARBITRATION CLAIMS" shall have the meaning assigned in Section 11.6.
"AT&T" shall have the meaning assigned in the preamble hereto.
"AT&T WIRELESS" shall have the meaning assigned in the preamble
hereto.
"AT&T WIRELESS COMMON STOCK" shall mean the shares of common stock,
par value $.01 per share, of AT&T Wireless as of and following the Spin-off.
"AT&T WIRELESS STOCK" shall mean, collectively, New Tracking Stock,
Current Wireless Tracking Stock, AT&T Wireless Common Stock and Warrants.
"BENEFICIALLY OWN" shall mean, with respect to any securities, having
"beneficial ownership" of such securities for purposes of Rule 13d-3 or 13d-5
under the Exchange Act as in effect on the date hereof, and "BENEFICIAL
OWNERSHIP" shall have the corresponding meaning.
"BLACKOUT PERIOD" shall have the meaning assigned in Section 7.1(b).
"BOARD" shall mean at any time the Board of Directors of AT&T (if the
Spin-off has not been consummated at such time) or AT&T Wireless (if the
Spin-off has been consummated at such time).
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"BUSINESS DAY" shall mean any day other than a Saturday, Sunday or a
legal holiday in New York City or Tokyo, Japan, or any other day on which
commercial banks in those locations are authorized or required by law or
government decree to close.
"BUSINESS PLAN" shall have the meaning assigned in Section 5.5(a).
"CERTIFICATE OF AMENDMENT" shall mean the Certificate of Amendment
creating the New Tracking Stock, in the form set forth as Exhibit A to the
Purchase Agreement.
"CHTML" shall mean Compact HyperText Markup Languages.
"CLAIMS" shall have the meaning assigned in Section 7.6(a).
"CLOSING" shall have the meaning assigned in the Purchase Agreement.
"CLOSING DATE" shall have the meaning assigned in the Purchase
Agreement.
"COMPETES" shall have the meaning assigned in Section 10.2(a).
"CONTROLLED SUBSIDIARY" shall mean (a) with respect to DoCoMo each of
(i) each Subsidiary of DoCoMo and (ii) each other other Person in which DoCoMo
has a direct or indirect investment or other economic interest and to which
DoCoMo, or any of DoCoMo's Subsidiaries, has disclosed any material non-public
information concerning AT&T, AT&T Wireless, the MMS or the Investment and (b)
with respect to either of AT&T or AT&T Wireless, its Subsidiaries.
"COST OF CARRY" shall mean an interest rate per annum determined in
accordance with Exhibit A hereto.
"CURRENT MARKET PRICE" on any date in question means the average of
the daily Market Values for the relevant security for the five consecutive
trading days ending on the day before the date in question.
"CURRENT WIRELESS TRACKING STOCK" shall mean Wireless Group Common
Stock, par value $1.00 per share, of AT&T.
"DEMAND REGISTRATION" shall have the meaning assigned in Section
7.1(a).
"DEMAND REQUEST" shall have the meaning assigned in Section 7.1(a).
"DEMAND SHARES" shall have the meaning assigned in Section 7.1(a).
"DESIGNEE" shall have the meaning assigned in Section 6.1(a). Each
Person that is a Designee at any relevant time shall be deemed to be a party to
this Agreement for all purposes hereof.
"DIRECTOR" shall mean any member of the Board.
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"DOCOMO" shall have the meaning assigned in the preamble hereto. For
purposes of any provision hereof relating to the ownership of AT&T Wireless
Stock and the rights and obligations attendant thereto, the term "DoCoMo" shall
also include any Person that is a Designee at the relevant time, became such in
accordance with Section 6.1(a) hereof, and has executed and is a party to this
Agreement.
"DOCOMO AT&T NOMINEE" shall have the meaning assigned in Section
3.1(a).
"DOCOMO AT&T WIRELESS NOMINEES" shall have the meaning assigned in
Section 3.1(b).
"ECONOMIC INTEREST PERCENTAGE" of DoCoMo in AT&T Wireless shall mean,
calculated at any particular point in time, the ratio, expressed as a
percentage, of (a) prior to consummation of the Spin-off, (x) the number of
shares of Current Wireless Tracking Stock Beneficially Owned by DoCoMo at the
relevant time assuming conversion of any shares of New Tracking Stock (excluding
any shares Beneficially Owned by virtue of ownership of unexercised Warrants) to
(y) the denominator of the Wireless Group Allocation Fraction at the relevant
time, adjusted on a Fully Diluted Basis but without giving effect to any
unexercised Warrants; and (b) after consummation of the Spin-off, (x) the number
of shares of AT&T Wireless Common Stock Beneficially Owned by DoCoMo at the
relevant time (excluding any shares Beneficially Owned by virtue of ownership of
unexercised Warrants) to (y) the total number of shares of AT&T Wireless Common
Stock outstanding at the relevant time, on a Fully Diluted Basis but without
giving effect to any unexercised Warrants.
"ECONOMIC INTERESTS" in AT&T Wireless or the Wireless Group shall mean
(a) at any time prior to consummation of the Spin-off, (i) AT&T's Retained
Wireless Interest and (ii) shares of Current Wireless Tracking Stock, including
securities of AT&T (including New Tracking Stock) that by their terms are
convertible into or exercisable or exchangeable for shares of Current Wireless
Tracking Stock, and (b) at any time following consummation of the Spin-off, (i)
shares of AT&T Wireless Common Stock, including securities of AT&T Wireless that
by their terms are convertible into or exercisable or exchangeable for shares of
AT&T Wireless Common Stock and (ii) shares of any class of preferred stock of
AT&T Wireless that by their terms are entitled to receive dividends or
participate in dividends together with the AT&T Wireless Common Stock.
"EFFECTIVE PERIOD" shall have the meaning assigned in Section
7.4(a)(iii).
"EQUITY SHARES" shall mean (a) at any time prior to consummation of
the Spin-off, shares of Current Wireless Tracking Stock, including securities
that by their terms are convertible into or exercisable or exchangeable for
shares of Current Wireless Tracking Stock, and any other equity securities of
AT&T that represent solely or primarily economic interests in the Wireless
Group, and (b) at any time following consummation of the Spin-off, (i) shares of
AT&T Wireless Common Stock, including securities that by their terms are
convertible into or exercisable or exchangeable for shares of AT&T Wireless
Common Stock and (ii) shares of any class of preferred stock of AT&T Wireless
that by their terms are entitled to receive dividends or participate in
dividends together with the AT&T Wireless Common Stock, including securities
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that by their terms are convertible into or exercisable or exchangeable for any
such shares of preferred stock.
"EXCESS SECURITIES" shall have the meaning assigned in Section 8.1(e).
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, or any
successor federal statute, and the rules and regulations promulgated thereunder,
all as amended, and as the same may be in effect from time to time.
"EXCHANGE OFFER" shall have the meaning assigned in Section 3.2(a).
"FULLY DILUTED BASIS" shall mean based on the total number of shares
of the relevant class of stock or type of equity interest that would be
outstanding on the relevant date assuming the exercise of all options, warrants
and other rights to acquire such relevant class of stock or type of equity
interest (without regard to exercisability, vesting or similar provisions and
restrictions thereof) and the conversion or exchange of all securities
convertible into or exchangeable for stock or equity interest (without regard to
exercisability, vesting or similar provisions and restrictions thereof);
PROVIDED that the number of such shares or interests that would be outstanding
assuming the exercise of then-outstanding options and warrants shall be computed
on the Treasury Method.
"HDML" shall mean Handheld Device Markup Languages.
"HTML" means HyperText Markup Language.
"HOME TERRITORY" shall mean the nation of Japan for DoCoMo, and the
United States, Canada and Mexico for AT&T Wireless.
"I-MODE MOBILE MULTIMEDIA" shall mean wireless internet access and
related mobile multimedia applications and services from wireless phones and
other wireless access devices based on DoCoMo's i-mode and multimedia expertise,
experience, know-how and technology.
"INVESTMENT" shall have the meaning assigned in the recitals hereto.
"INVESTOR RIGHTS TERMINATION EVENT" shall have the meaning assigned in
Section 3.1(d).
"ISSUER" shall mean AT&T or AT&T Wireless, as the case may be, in its
capacity as issuer of Registrable Securities for purposes of Article VII or as
issuer of Additional Securities for purposes of Article VIII.
"LETTER AGREEMENT" shall have the meaning assigned in the preamble
hereto.
"MARKET VALUE" means, with respect to a particular security, on any
given day, the average of the highest and lowest reported sale prices regular
way or, in case no such reported sales take place on such day, the average of
the highest asked and lowest bid prices regular way, in either case on the
principal national securities exchange on which the applicable security is
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listed or admitted to trading, or if not listed or admitted to trading on any
national securities exchange, (i) the average of the highest and lowest sale
prices for such day reported by the Nasdaq Stock Market if such security is
traded over-the-counter and quoted in the Nasdaq Stock Market, or (ii) if such
security is so traded, but not so quoted, the average of the highest reported
asked and lowest reported bid prices of such security as reported by the Nasdaq
Stock Market or any comparable system, or (iii) if such security is not listed
on the Nasdaq Stock Market or any comparable system, the average of the highest
asked and lowest bid prices as furnished by two members of the National
Association of Securities Dealers, Inc. selected from time to time by the Board
for that purpose.
"MAXIMUM NUMBER" shall have the meaning assigned in Section 7.2(b).
"MMS" shall have the meaning assigned in Section 5.1(c).
"MMS CEO" shall have the meaning assigned in Section 5.4(a).
"MOBILE MULTIMEDIA CONTRIBUTION" shall have the meaning assigned in
Section 10.2(b).
"MOBILE TELECOMMUNICATIONS INFRASTRUCTURE" shall have the meaning
assigned in Section 10.2(d).
"NEW TRACKING STOCK" shall mean shares of Wireless Group Preferred
Tracking Stock, par value $1.00 per share, of AT&T having the terms set forth in
the Certificate of Amendment.
"NO SPIN-OFF REPURCHASE PRICE" shall have the meaning assigned in
Section 4.4(a).
"NO SPIN-OFF RIGHT" shall have the meaning assigned in Section 4.4(a).
"NOMINEE DISCLOSURE INFORMATION" shall have the meaning assigned in
Section 3.1(a).
"NYSE" shall mean the New York Stock Exchange, Inc.
"ORIGINAL INVESTMENT SHARES" means the shares of New Tracking Stock
acquired by DoCoMo pursuant to the Purchase Agreement and any shares of Current
Wireless Tracking Stock issued upon conversion thereof and any shares of AT&T
Wireless Common Stock issued in the Spin-off in exchange for or redemption of
such shares of Current Wireless Tracking Stock.
"ORIGINAL PURCHASE PRICE" shall mean (a) $3,162.602 for each Warrant
to purchase one share of New Tracking Stock; (b) $6.3252 for each Warrant to
purchase one share of Current Tracking Stock or one share of AT&T Wireless
Common Stock; (c) $11,750.00 for each share of New Tracking Stock; and (d)
$23.50 for each share of Current Wireless Tracking Stock or AT&T Wireless Common
Stock.
"OTHER HOLDER" shall have the meaning assigned in Section 7.2(b).
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"PERMITTED REDEMPTION" shall have the meaning assigned in Section 4.5.
"PERSON" shall mean a legal person, including any individual,
corporation, company, partnership, joint venture, association, joint-stock
company, trust, limited liability company or unincorporated association or any
other entity or organization, including a government or any agency or political
subdivision thereof, or any other entity of whatever nature.
"PIGGY-BACK REGISTRATION" shall have the meaning assigned in Section
7.2(a).
"PIGGY-BACK REQUEST" shall have the meaning assigned in Section
7.2(a).
"POST-REDEMPTION SALE" shall have the meaning assigned in Section 4.5.
"POST-REDEMPTION SPIN-OFF" shall have the meaning assigned in Section
4.5.
"PREEMPTIVE RIGHTS" shall have the meaning assigned in Section 8.1(a).
"PROPRIETARY INFORMATION" shall have the meaning set forth in Section
10.4.
"PURCHASE AGREEMENT" shall have the meaning assigned in the recitals
hereto.
"REGISTRABLE SECURITIES" shall mean (i) any shares of Current Wireless
Tracking Stock issued upon conversion of any shares of New Tracking Stock that
were issued pursuant to the Purchase Agreement or this Agreement, or that were
issued upon exercise of any Warrants, (ii) any shares of AT&T Wireless Common
Stock into which any such shares of Current Wireless Tracking Stock shall have
been converted, (iii) any shares of AT&T Wireless Common Stock issued upon
exercise of any Warrants, and (iv) any AT&T Wireless Stock issued in respect of
any of the Registrable Securities referred to in clauses (i), (ii) or (iii)
hereof in connection with stock splits, reverse stock splits, stock dividends or
distributions, or any similar recapitalization, on or after the date hereof, in
each case that are Beneficially Owned by DoCoMo or that have been Transferred
without registration under the Securities Act but in accordance with the terms
of this Agreement to a transferee entitled to the benefit of registration rights
pursuant to Section 6.1(c) of this Agreement. As to any particular Registrable
Securities, such securities shall cease to be Registrable Securities when (i) a
registration statement with respect to the sale of such securities shall have
become effective under the Securities Act and such securities shall have been
disposed of by the selling shareholder in accordance with such registration
statement, (ii) such securities shall have been distributed pursuant to Rule 144
(or any successor provision) under the Securities Act or (iii) such securities
shall have ceased to be outstanding.
"RELATED AGREEMENTS" shall mean the Purchase Agreement, the Warrant
Agreement, that certain letter agreement, dated as of November 30, 2000,
executed and delivered among DoCoMo, AT&T and AT&T Wireless concurrently with
the execution and delivery of the Letter Agreement, that certain roaming side
letter, dated the date hereof, executed and delivered among DoCoMo, AT&T and
AT&T Wireless (and any letters or schedules referred to therein) and the
Certificate of Amendment.
"RELEASE CONDITIONS" shall have the meaning assigned in Section
10.2(e).
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"RESELLER" shall have the meaning assigned in Section 10.2(f).
"RETAINED WIRELESS INTEREST" shall mean, prior to the Spin-off, the
portion of the direct or indirect interests in the Wireless Group that are not
reflected by the shares of Current Wireless Tracking Stock (or by securities of
AT&T that by their terms are convertible into or exercisable or exchangeable for
shares of Current Wireless Tracking Stock).
"SEC" shall mean the United States Securities and Exchange Commission.
"SECURITIES ACT" shall mean the Securities Act of 1933, and any
similar or successor federal statute, and the rules and regulations promulgated
thereunder, all as amended, and as the same may be in effect from time to time.
"SEPARATION AGREEMENTS" shall mean the draft agreements or term sheets
relating to the Spin-off and the separation of the Wireless Group from AT&T and
the schedules related thereto other than those that collectively are not
material to AT&T Wireless or the Wireless Group, in each case in the respective
forms annexed to the Letter Agreement (and listed in Exhibit B hereto), in all
cases as amended or revised to the extent not prohibited by this Agreement.
"SOLD BUSINESSES" shall have the meaning assigned in Section 4.5.
"SPINCO" shall have the meaning assigned in Section 4.5.
"SPINCO WARRANT NUMBER" shall have the meaning assigned in Section
4.5.
"SPIN-OFF" shall mean the spin-off of AT&T Wireless in accordance with
the Separation Agreements. The Spin-off shall be deemed to have been consummated
following completion of the exchange of AT&T Wireless Common Stock for Current
Wireless Tracking Stock and the distribution of the remaining shares of AT&T
Wireless Common Stock to holders of common stock of AT&T. For all purposes of
this Agreement, the Spin-off shall not be a "transaction contemplated by this
Agreement."
"STANDSTILL AFFILIATES" shall mean each of (i) DoCoMo, (ii) each
Controlled Subsidiary of DoCoMo and (iii) when acting on behalf of DoCoMo or any
of its Controlled Subsidiaries, any officer, director, employee or agent of
DoCoMo or any such Controlled Subsidiary of DoCoMo.
"SUBSIDIARY" means, with respect to any Person, any other Person more
than fifty percent (50%) of the shares of the voting stock or other voting
interests of which are owned or controlled, or the ability to select or elect
more than fifty percent (50%) of the directors or similar managers is held,
directly or indirectly, by such first Person or one or more of its Subsidiaries
or by such first Person and one or more of its Subsidiaries; PROVIDED, HOWEVER,
that for so long as At Home or Liberty Media, as the case may be, has any public
stockholders (directly, or through a tracking stock or similar concept), At Home
and Liberty Media, as the case may be, and their respective Subsidiaries shall
not be treated as or deemed to be Subsidiaries of AT&T or of any of AT&T's
Subsidiaries or Affiliates for purposes hereof. A
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Subsidiary that is directly or indirectly wholly owned by another Person except
for directors' qualifying shares shall be deemed wholly owned for the purposes
of this Agreement.
"3G" shall mean third generation mobile communications systems that
are, or are based on technology that is, defined as IMT-2000 by the
International Telecommunications Union.
"TECHNOLOGY DEFAULT EXERCISE NOTICE" shall have the meaning assigned
in Section 4.3(b).
"TECHNOLOGY DEFAULT REPURCHASE PRICE" shall have the meaning assigned
in Section 4.3(c).
"TECHNOLOGY DEFAULT RIGHT" shall have the meaning assigned in Section
4.3(a).
"TOLLING PERIOD" shall have the meaning assigned in Section 3.1(d).
"TRANSFER" shall mean any sale (including forward sale), transfer, or
other disposition to any Person, including pursuant to any redemption, the No
Spin-off Right or the Technology Default Right, and including Transfers
resulting from the exercise of any remedy by any Person to which the relevant
securities have been pledged.
"TREASURY METHOD" shall mean treating options and warrants as they
would be treated under the "treasury stock method" of calculating diluted
earnings per share under Statement of Financial Accounting Standards No. 128 as
in effect as of the date hereof.
"ULTIMATE PARENT" shall mean Nippon Telegraph and Telephone
Corporation ("NTT") or any Person (other than any government or political
subdivision or agency or instrumentality thereof) of which NTT is a Subsidiary
and that is not itself a Subsidiary of any other Person (other than any
government or political subdivision or agency or instrumentality thereof).
"UNDERLYING STOCK" shall have the meaning set forth in the Warrant
Agreement.
"WAP-NG" shall mean wireless access protocol - next generation.
"WARRANT AGREEMENT" shall mean the Warrant Agreement with respect to
the issuance of the Warrants in the form attached to the Purchase Agreement as
Exhibit B.
"WARRANT PERCENTAGE" shall have the meaning assigned in Section 4.5.
"WARRANTS" shall have the meaning assigned in the Purchase Agreement.
"W-CDMA" shall mean the CDMA-based radio access technology defined and
specified in the Third Generation Partnership Project for IMT-2000 systems,
specifications of which may be modified from time to time by the Third
Generation Partnership Project.
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"WIRELESS GROUP" has the meaning assigned to it in the Certificate of
Incorporation of AT&T, as amended.
"WIRELESS GROUP ALLOCATION FRACTION" has the meaning assigned to such
term in the Certificate of Incorporation of AT&T, as amended, as in effect on
November 30, 2000.
"WIRELESS OPERATOR" shall have the meaning assigned in Section 3.3(a).
"WML" shall mean Wireless Markup Language.
"XHTML" shall mean Extensible HyperText Markup Language.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1 REPRESENTATIONS AND WARRANTIES OF AT&T. AT&T
represents and warrants to DoCoMo as of the date hereof as follows:
(a) AT&T has been duly incorporated and is validly existing in good
standing under the laws of the State of New York, and has all requisite
power and authority to execute and deliver this Agreement and to perform
its obligations hereunder and to consummate the transactions contemplated
hereby.
(b) This Agreement and all transactions contemplated hereby have been
duly and validly authorized by all necessary action on the part of AT&T.
(c) This Agreement has been duly executed and delivered by AT&T and,
assuming due authorization and valid execution and delivery by DoCoMo, is a
valid and legally binding obligation of AT&T, enforceable against it in
accordance with its terms subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights.
Section 2.2 REPRESENTATIONS AND WARRANTIES OF AT&T WIRELESS. AT&T
Wireless represents and warrants to DoCoMo as of the date hereof as follows:
(a) AT&T Wireless has been duly incorporated and is validly existing
in good standing under the laws of the State of Delaware, and has all
requisite power and authority to execute and deliver this Agreement and to
perform its obligations hereunder and to consummate the transactions
contemplated hereby.
(b) This Agreement and all transactions contemplated hereby have been
duly and validly authorized by all necessary action on the part of AT&T
Wireless.
(c) This Agreement has been duly executed and delivered by AT&T
Wireless and, assuming due authorization and valid execution and delivery
by DoCoMo, is a valid and legally binding obligation of AT&T Wireless,
enforceable against it in accordance with its terms subject to bankruptcy,
insolvency, fraudulent transfer, reorganization,
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moratorium and similar laws of general applicability relating to or affecting
creditors' rights.
Section 2.3 REPRESENTATIONS AND WARRANTIES OF DOCOMO AND EACH
DESIGNEE. DoCoMo and each Designee represents and warrants to AT&T and AT&T
Wireless as of the date hereof or, with respect to any Designee that becomes
such after the date hereof, as of the date that such Designee becomes such, as
follows:
(a) DoCoMo and each Designee has been duly incorporated and is validly
existing and in good standing under the laws of the jurisdiction of its
organization and has all requisite power and authority to execute and
deliver this Agreement and to perform its obligations hereunder and to
consummate the transactions contemplated hereby.
(b) This Agreement and all transactions contemplated hereby have been
duly and validly authorized by all necessary action on the part of DoCoMo
and each Designee.
(c) This Agreement has been duly executed and delivered by DoCoMo and
each Designee and, assuming due authorization and valid execution and
delivery by AT&T and AT&T Wireless, is a valid and legally binding
obligation of DoCoMo and each Designee, enforceable against it in
accordance with its terms subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights.
ARTICLE III
GOVERNANCE AND STANDSTILL PROVISIONS
Section 3.1 BOARD OF DIRECTORS. (a) At the Closing or as soon as
reasonably practicable thereafter (but in no event later than the first meeting
of the AT&T Board held after the Closing), (i) the number of directors on the
AT&T Board will be increased by one and (ii) the AT&T Board will elect to the
AT&T Board a senior officer of DoCoMo to be designated in writing to AT&T at
least 10 days prior to the Closing Date who is reasonably acceptable to AT&T
(the "DOCOMO AT&T NOMINEE"). If no such person reasonably acceptable to AT&T is
identified at least 10 days prior to the Closing Date, then the AT&T Board shall
not be obligated to elect such person until the tenth day following the date a
reasonably acceptable senior officer of DoCoMo is identified in writing to AT&T.
Until the earlier of (x) the consummation of the Spin-off or (y) an Investor
Rights Termination Event, at any annual or special meeting of shareholders of
AT&T at which Directors are to be elected (and at which the seat held by the
DoCoMo AT&T Nominee is subject to election), AT&T shall renominate the DoCoMo
AT&T Nominee, or nominate another senior officer of DoCoMo designated by DoCoMo
who is reasonably acceptable to AT&T, to be elected to the AT&T Board, and shall
use its reasonable efforts to cause such person to be elected to such position.
DoCoMo shall notify AT&T of its proposed nominee to the AT&T Board, in writing,
no later than 30 days prior to the first anniversary of the mailing of the proxy
statement related to the previous year's annual meeting of stockholders,
together with all information concerning such nominee reasonably requested by
AT&T, so that AT&T may determine whether such nominee is reasonably acceptable
to AT&T
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and so that AT&T can comply with applicable disclosure rules (the "NOMINEE
DISCLOSURE INFORMATION"); PROVIDED that in the event DoCoMo fails to provide any
such notice, the DoCoMo AT&T Nominee shall be the person then serving in such
capacity hereunder as long as DoCoMo provides the Nominee Disclosure Information
to AT&T promptly upon request by AT&T. Concurrently with electing such person to
the AT&T Board pursuant to the first two sentences of this Section 3.1(a), the
AT&T Board will elect the DoCoMo AT&T Nominee to the AT&T Wireless Capital Stock
Committee, and, so long as DoCoMo has the right pursuant to this Section 3.1(a)
to have its nominee nominated for election to the AT&T Board, the DoCoMo AT&T
Nominee will be a member of the AT&T Wireless Capital Stock Committee. In the
event of the death, disability, resignation or removal of the DoCoMo AT&T
Nominee, the AT&T Board will promptly elect to the AT&T Board a senior officer
of DoCoMo designated by DoCoMo who is reasonably acceptable to AT&T to fill the
resulting vacancy, which such individual shall then be deemed a DoCoMo AT&T
Nominee for all purposes hereunder. All obligations of AT&T pursuant to this
Section 3.1(a) shall terminate, and DoCoMo shall cause the DoCoMo AT&T Nominee
to resign from the AT&T Board and all committees thereof (including the AT&T
Wireless Capital Stock Committee) immediately upon the earlier of (x) the
consummation of the Spin-off and (y) the occurrence of an Investor Rights
Termination Event. The obligations of AT&T pursuant to this Section 3.1(a), and
the obligations of AT&T Wireless pursuant to Sections 3.1(b) and (c), shall also
be subject to limitation or termination as otherwise expressly set forth herein,
including pursuant to Sections 3.6(c), 4.3(d) and 10.2(e).
(b) Following the consummation of the Spin-off, for so long as an
Investor Rights Termination Event has not occurred, DoCoMo will be entitled to
designate a number of nominees (the "DOCOMO AT&T WIRELESS NOMINEES") to the AT&T
Wireless Board in proportion to DoCoMo's Economic Interest Percentage in AT&T
Wireless (such number of nominees to be rounded up in the case of a fraction of
.5 or greater or down in the case of a fraction less than .5 to the nearest
whole number), without reference to any Economic Interests acquired after the
Closing other than by the exercise of Preemptive Rights or upon exercise of the
Warrants (or acquired in exchange for such Economic Interests in connection with
the Spin-off); PROVIDED that, unless an Investor Rights Termination Event has
occurred, in no event shall the number of DoCoMo AT&T Wireless Nominees be less
than one. Each DoCoMo AT&T Wireless Nominee shall be a senior officer of DoCoMo
and be reasonably acceptable to AT&T Wireless. AT&T and AT&T Wireless agree to
cause the AT&T Wireless Board as of immediately prior to the consummation of the
Spin-off to be classified into three classes. AT&T and AT&T Wireless agree that
the initial DoCoMo AT&T Wireless Nominees shall be staggered among such classes,
PROVIDED that in the event there are fewer than three DoCoMo AT&T Wireless
Nominees, AT&T and AT&T Wireless agree that the initial DoCoMo AT&T Wireless
Nominees (in the event there are two) will be appointed to the classes the terms
of which will expire at the second and third annual meeting of shareholders
following the consummation of the Spin-off, or that the initial DoCoMo AT&T
Wireless Nominee (in the event there is only one) will be appointed to the class
the term of which will expire at the third annual meeting of shareholders
following the consummation of the Spin-off, and in any event that as of the
consummation of the Spin-off the DoCoMo AT&T Wireless Nominees shall be members
of the AT&T Wireless Board.
(c) Until an Investor Rights Termination Event has occurred, at any
annual or special meeting of shareholders at which Directors of AT&T Wireless
are to be elected (and after
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which, if a DoCoMo AT&T Wireless Nominee were not elected, there would not exist
the number of DoCoMo AT&T Wireless Nominees to which DoCoMo is then entitled
pursuant to Section 3.1(b)), AT&T Wireless shall nominate another senior officer
of DoCoMo designated by DoCoMo who is reasonably acceptable to AT&T Wireless, to
be elected to the AT&T Wireless Board, and shall use its reasonable efforts to
cause such person to be elected to such position. DoCoMo shall notify AT&T
Wireless of each proposed nominee to the AT&T Wireless Board, in writing, a
reasonable time in advance of the mailing of any proxy statement, information
statement or registration statement in which any Board nominee or Board member
of AT&T Wireless would be named (which in the event of any proxy statement
relating to an annual meeting of stockholders of AT&T Wireless, other than the
first such annual meeting, shall be no later than 30 days prior to the first
anniversary of the mailing of the proxy statement related to the previous year's
annual meeting of stockholders), together with all the Nominee Disclosure
Information; PROVIDED that in the event DoCoMo fails to provide any such notice,
the DoCoMo AT&T Wireless Nominees shall be the persons, if any, then serving in
such capacity hereunder as long as DoCoMo provides the Nominee Disclosure
Information to AT&T promptly upon request by AT&T. In the event of the death,
disability, resignation or removal of any DoCoMo AT&T Wireless Nominee at a time
when DoCoMo is otherwise entitled to nominate a director to fill such vacancy,
the AT&T Wireless Board will promptly elect to the AT&T Wireless Board a senior
officer of DoCoMo designated by DoCoMo who is reasonably acceptable to AT&T
Wireless to fill the resulting vacancy, which such individual shall then be
deemed a DoCoMo AT&T Wireless Nominee for all purposes hereunder. All
obligations of AT&T Wireless pursuant to this Section 3.1(c) shall terminate,
and DoCoMo shall cause all DoCoMo AT&T Wireless Nominees to resign from the AT&T
Wireless Board, immediately upon the occurrence of an Investor Rights
Termination Event. In addition, DoCoMo will cause any excess DoCoMo AT&T
Wireless Nominees to resign at any time that there exist more DoCoMo AT&T
Wireless Nominees than DoCoMo is entitled to hereunder. DoCoMo will cause such
resignation to occur within 60 days, in the case of a reduction in the number of
DoCoMo AT&T Wireless Nominees to which it is entitled, or within 10 Business
Days in the case of a loss of its right to nominate any Board nominees. In the
case of a loss of the right to nominate any Board nominees, no DoCoMo AT&T
Wireless Nominees will vote or exercise any other rights or powers of office
during the period pending resignation. In the event that at any time prior to
the occurrence of an Investor Rights Termination Event, DoCoMo becomes entitled
pursuant to Section 3.1(b) as a result of the exercise of its Preemptive Rights
to designate a greater number of DoCoMo AT&T Wireless Nominees than it has at
such time, AT&T Wireless agrees to use its reasonable efforts to cause to be
appointed to the AT&T Wireless Board in accordance with the last sentence of
this paragraph a number of new DoCoMo AT&T Wireless Nominees such that the
number of existing DoCoMo AT&T Wireless Nominees or the AT&T Wireless Board
equals the number to which DoCoMo is entitled at that time pursuant to Section
3.1(b), such appointment or appointments to be made not later than the first
meeting of the AT&T Wireless Board held at least 10 Business Days subsequent to
the date AT&T Wireless receives notification of the identity of such new DoCoMo
AT&T Wireless Nominee and the Nominee Disclosure Information with respect to
such person. Any such new DoCoMo AT&T Wireless Nominees shall be senior officers
of DoCoMo reasonably acceptable to AT&T Wireless.
(d) An "INVESTOR RIGHTS TERMINATION EVENT" shall be deemed to have
occurred if, for any period of 60 consecutive days, DoCoMo has an Economic
Interest Percentage in AT&T Wireless that is less than 10%; PROVIDED, HOWEVER,
that so long as DoCoMo has not
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Transferred from and after the Closing Date in the aggregate (other than to its
direct or indirect wholly owned Subsidiaries that at the time of determination
remain direct or indirect wholly owned Subsidiaries) in excess of 304,692
Original Investment Shares (with each share of Current Wireless Tracking Stock
or AT&T Wireless Common Stock included within the Original Investment Shares
being counted as 1/500 of a share, appropriately adjusted in the event of any
anti-dilution adjustments to the conversion rights of the New Tracking Stock or
in the event the Spin-off exchange ratio of AT&T Wireless Common Stock for
Current Wireless Tracking Stock is other than one-for-one), an Investor Rights
Termination Event will be deemed to occur only if for a period of 60 consecutive
days DoCoMo has an Economic Interest Percentage in AT&T Wireless that is less
than 8%. The 60 consecutive day periods referred to in this definition shall be
tolled beginning on the fifty-ninth consecutive day, for a period (the "TOLLING
PERIOD") of not more than an additional six months, if (1) DoCoMo has exercised
Preemptive Rights hereunder prior to the thirtieth consecutive day and such
exercise would result in DoCoMo having an Economic Interest Percentage
sufficient to avoid an Investor Rights Termination Event, (2) DoCoMo has not
completed the acquisition of securities pursuant to such exercise of Preemptive
Rights as of such fifty-ninth day solely because a required regulatory approval
has not been received or an applicable regulatory waiting period has not expired
or terminated, and (3) DoCoMo has used and continues in good faith to use all
reasonable efforts to complete the acquisition of securities pursuant to such
exercise of Preemptive Rights, including seeking such regulatory approvals or
expirations or terminations of applicable waiting periods; PROVIDED that such
period shall cease to be tolled and shall resume running as if from the
fifty-ninth consecutive day immediately upon any of (w) DoCoMo failing or
ceasing to act in accordance with clause (3) above, (x) any application for a
required regulatory approval being denied and such denial becoming final and
nonappealable, (y) any event occurring as a result of which clause (2) above is
no longer true and correct, or (z) DoCoMo Transfering any securities, or failing
to exercise any subsequent Preemptive Rights, such that completion of the
exercise of Preemptive Rights with respect to which the Tolling Period applies
would not result in DoCoMo having an Economic Interest Percentage sufficient to
avoid an Investor Rights Termination Event.
Section 3.2 PRE-SPIN-OFF GOVERNANCE RIGHTS. (a) Subject to Sections
3.2(b) and (c) hereof, prior to the consummation of the Spin-off, AT&T will not,
and will not permit its Subsidiaries to, take any of the following actions
without the prior written consent of DoCoMo:
(i) a sale of all or substantially all the assets of the Wireless
Group taken as a whole;
(ii) a merger, consolidation or similar business combination involving
all or substantially all of the business of the Wireless Group,
other than any such transaction in which the holders of the
Economic Interests in the Wireless Group as of immediately prior
to the consummation of the first of such transactions to occur
after November 30, 2000 continue to hold, directly or indirectly,
at least two-thirds of such Economic Interests following each of
such transactions;
(iii) the acquisition (including by merger or other similar
transaction) of any business or assets by the Wireless Group or
by AT&T on behalf of or that
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are to be contributed to the Wireless Group, PROVIDED that AT&T
or the Wireless Group may make such acquisitions to the extent
that the consideration paid by AT&T or the Wireless Group with
respect to all such acquisitions made after November 30, 2000
does not exceed $17 billion (other than acquisitions of spectrum,
which may be made without regard to and without counting against
such dollar limitation);
(iv) any further issuance of Economic Interests in or rights to the
Wireless Group (including the issuance of additional shares of
New Tracking Stock or Current Wireless Tracking Stock but
excluding issuances of shares of Economic Interests pursuant to
the Purchase Agreement or upon the exercise of Preemptive
Rights), except: (A) for issuances of Economic Interests in the
Wireless Group that do not, in the aggregate for all such
issuances made after November 30, 2000, exceed 15% of the market
capitalization (including the value of AT&T's Retained Wireless
Interest) of the Wireless Group as of November 30, 2000; (B) with
respect to the issuance to officers, employees or directors of
Current Wireless Tracking Stock or options to acquire shares of
Current Wireless Tracking Stock (or options exercisable after the
Spin-off to acquire AT&T Wireless Common Stock) in the ordinary
course of business consistent with past practice or in connection
with the Spin-off; (C) issuances of Current Wireless Tracking
Stock upon exercise of such options; (D) issuances of Current
Wireless Tracking Stock in connection with acquisitions or merger
transactions not prohibited by clauses (ii) and (iii) hereof; (E)
issuances of New Tracking Stock upon exercise of the Warrants or
of Current Wireless Tracking Stock upon conversion of shares of
New Tracking Stock or upon exercise of the Warrants; and (F) the
issuance of shares of Current Wireless Tracking Stock that
reflects the disposition of any portion of AT&T's Retained
Wireless Interest, including without limitation in the publicly
announced proposed exchange offer of Current Wireless Tracking
Stock for common stock of AT&T (the "EXCHANGE OFFER") to be
effected prior to the Spin-off (provided that in any such
disposition to a party unaffiliated with AT&T that is not in
connection with the Spin-off or Exchange Offer, no Person or
group of related Persons may acquire any governance or board
participation rights in excess of the normal rights of ownership
of Current Wireless Tracking Stock); PROVIDED that the aggregate
issuances after November 30, 2000 permitted in clauses (A)
through (D) of this clause (iv) shall not result in the holders
of the Economic Interests in the Wireless Group immediately after
giving effect to the Investment ceasing to hold at least
two-thirds of such Economic Interests following such issuances;
(v) the payment of any cash dividends to holders of the Current
Wireless Tracking Stock, any repurchase of Current Wireless
Tracking Stock (other than repurchases (A) to offset option
exercises by employees, (B) repurchases which are not material in
amount in connection with employee settlements or similar matters
and (C) other repurchases for
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consideration not in excess of $5 million in the aggregate) or
any repurchase of AT&T's Retained Wireless Interest (it being
understood that the allocation of a portion of the proceeds of
the Investment to AT&T and the resulting adjustment of the
Wireless Group Allocation Fraction to reduce AT&T's Retained
Wireless Interest shall not give rise to a veto right under this
provision); and
(vi) any (A) amendment to the certificate of incorporation (including
with respect to the definition of the "Wireless Group" or the
"Wireless Group Allocation Fraction" therein) or by-laws of AT&T
to the extent such amendments would have an adverse effect on the
rights of the holders of the New Tracking Stock (it being
understood that any proposed amendment to the certificate of
incorporation of AT&T to reduce the required vote for a merger or
for a sale or other disposition of substantially all the assets
from the currently required two-thirds vote to a simple majority
vote will not violate this provision), (B) changes to the
Separation Agreements that would, in the aggregate, have a
material adverse effect on the Wireless Group, or (C) material
new agreements between AT&T or its Subsidiaries (other than AT&T
Wireless and its Subsidiaries), on the one hand, and the Wireless
Group, on the other hand, other than those that are on
arm's-length terms comparable to those which the Wireless Group
would enter into with an unaffiliated third party.
(b) The foregoing notwithstanding, DoCoMo will not have any right to
veto (i) the Spin-off, (ii) any redemption of the New Tracking Stock pursuant to
the terms of the New Tracking Stock or (iii) any redemption of the Current
Wireless Tracking Stock.
(c) The foregoing notwithstanding, DoCoMo will cease to have any
rights, and AT&T and AT&T Wireless will cease to have any obligations, under
this Section 3.2 upon the occurrence of an Investor Rights Termination Event.
The rights of DoCoMo under this Section 3.2 shall also be subject to limitation
or termination as otherwise expressly set forth herein, including pursuant to
Section 4.3(d).
Section 3.3 POST-SPIN-OFF GOVERNANCE RIGHTS. (a) Following the
Spin-off, AT&T Wireless will not take any of the following actions without
DoCoMo's prior written consent:
(i) change the scope of its business such that the Wireless Group's
current businesses (including those businesses that are part of
the Wireless Group's current business plan and including any
natural evolution of such current businesses) taken as a whole no
longer constitute AT&T Wireless's primary business; or
(ii) enter into a strategic alliance with another Wireless Operator
that would result in such Wireless Operator owning more than 15%
but less than 50% of the Economic Interests in AT&T Wireless (it
being understood that a merger with a third party that results in
a Wireless Operator owning more
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than 15% but less than 50% of the resulting entity by reason of
such Wireless Operator's prior shareholdings in such third party
shall not be deemed to violate this clause (ii) unless such
merger is undertaken solely to effect such a strategic alliance
with such Wireless Operator).
For purposes of the foregoing, "WIRELESS OPERATOR" shall mean any
Person that owns or operates a Mobile Telecommunications Infrastructure or that
is a Reseller.
(b) DoCoMo will cease to be entitled to the foregoing veto rights upon
the occurrence of an Investor Rights Termination Event. The foregoing rights
shall also be subject to limitation or termination as otherwise expressly set
forth herein, including pursuant to Section 4.3(d).
Section 3.4 SENIOR LEADERSHIP TEAM. From and after the Closing, AT&T
Wireless hereby agrees that DoCoMo will be entitled to select one senior
executive of DoCoMo reasonably acceptable to AT&T Wireless to be a member of
AT&T Wireless's Senior Leadership Team and to participate in its meetings, which
will be scheduled regularly and no less frequently than monthly. AT&T Wireless
hereby represents and warrants to DoCoMo that AT&T Wireless's Senior Leadership
Team is the current body (other than the AT&T Board and its committees) in which
principal decisions with respect to the Wireless Group are discussed by the
principal decision-makers of AT&T Wireless. The members of the Senior Leadership
Team as of November 30, 2000 are set forth in Schedule 3.4 hereto. AT&T Wireless
hereby agrees to give DoCoMo's designee at least three Business Days' notice of
meetings of its Senior Leadership Team, to the extent practicable, and in any
event will use its reasonable efforts to provide such individual at least as
much notice of meetings as is given to the other members of the Senior
Leadership Team. DoCoMo's designee may attend such meetings by telephone and,
upon request, will be given a briefing by another member of the Senior
Leadership Team with respect to any meeting that such individual does not
attend. AT&T Wireless hereby agrees that the senior executive designated by
DoCoMo will also be a member of any similar AT&T Wireless body that may be
formed to address matters of similar importance to the matters currently
considered by AT&T Wireless's Senior Leadership Team. AT&T Wireless's
obligations and DoCoMo's rights under this Section 3.4 shall terminate on the
earlier of (a) consummation of the Spin-off or (b) the occurrence of an Investor
Rights Termination Event. Such obligations and rights shall also be subject to
limitation or termination as otherwise expressly set forth herein, including
pursuant to Sections 3.6(c), 4.3(d) and 10.2(e).
Section 3.5 MANAGEMENT POSITIONS. (a) AT&T Wireless agrees that, both
before and after the Spin-off, DoCoMo will have the right to appoint at least
two and no more than five of its employees as employees of AT&T Wireless, with
such titles as "Manager-Finance" and/or "Director of Technology" of AT&T
Wireless (and such other titles as may be agreed with AT&T Wireless), and such
employees will have powers, obligations and responsibilities consistent with
such titles. Such employees will report directly to the Chief Financial Officer,
Chief Technology Officer or, with respect to other titles, to other appropriate
officers of AT&T Wireless. DoCoMo's nominees for such appointments, and the
continued employment by AT&T Wireless of such individuals, will be subject to
the reasonable approval of AT&T Wireless. So long as DoCoMo has the right
pursuant to this Section 3.5(a) to have the right to appoint employees, in the
event of the death, disability, resignation or termination of any
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such employee, DoCoMo shall be entitled to appoint a replacement, subject to the
reasonable approval of AT&T Wireless.
(b) DoCoMo will cease to have any rights under, and AT&T Wireless will
cease to have any obligations under, this Section 3.5 upon the occurrence of an
Investor Rights Termination Event. DoCoMo will cause the resignation of its
employees appointed pursuant to Section 3.5(a) to occur within 10 Business Days
following the loss of such rights, and no DoCoMo appointee will vote or exercise
any other rights or powers of office during such 10-Business Day period. Such
rights and obligations shall also be subject to limitation or termination as
otherwise expressly set forth herein, including pursuant to Sections 3.6(c) and
4.3(d).
Section 3.6 STANDSTILL RESTRICTIONS. (a) Subject to Section 3.7, prior
to the fifth anniversary of the Closing Date, DoCoMo shall not, and shall not
permit any of its Standstill Affiliates to, in any manner, whether publicly or
otherwise, directly or indirectly, without the prior written consent of AT&T (to
the extent related to AT&T or its securities, Subsidiaries or assets) or AT&T
Wireless (to the extent related to AT&T Wireless or its securities, Subsidiaries
or assets):
(i) acquire, agree to acquire or make any public proposal to acquire,
directly or indirectly, Beneficial Ownership of any voting
securities or assets of AT&T or AT&T Wireless or the Subsidiaries
of either, except (A) pursuant to the exercise of Preemptive
Rights pursuant to Article VIII, (B) the acquisition of shares of
Current Wireless Tracking Stock upon conversion of shares of New
Tracking Stock in accordance with the terms of the New Tracking
Stock, (C) the acquisition of shares of New Tracking Stock,
Current Wireless Tracking Stock or AT&T Wireless Common Stock
upon exercise of Warrants in accordance with the terms of the
Warrants, (D) the acquisition of shares of AT&T Wireless Common
Stock in exchange for shares of Current Wireless Tracking Stock
pursuant to the Spin-off (provided that such shares of Current
Wireless Tracking Stock shall have been acquired in accordance
with the foregoing), (E) the acquisition of securities by DoCoMo
or any of its wholly owned subsidiaries (who agree to become
Designees as a result of such acquisition) from DoCoMo or any of
its Designees in accordance with and to the extent permitted by
Section 6.1(a) hereof, (F) Beneficial Ownership resulting from
the acquisition of interests in any unrelated Person that has
Beneficial Ownership of shares of Current Wireless Tracking Stock
or AT&T Wireless Common Stock, PROVIDED, in the case of this
clause (F) that (1) the acquisition of Beneficial Ownership of
Current Wireless Tracking Stock or AT&T Wireless Common Stock was
not an important purpose of the acquisition of interest in such
unrelated Person, (2) DoCoMo or the relevant Standstill Affiliate
divests, or causes the unrelated Person to divest, any such
shares of Current Wireless Tracking Stock or AT&T Wireless Common
Stock as promptly as commercially practicable and, until such
divestiture, does not, and causes such unrelated Person not to,
vote any such shares other than in accordance with this
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Agreement, and (3) any such shares of Current Wireless Tracking
Stock or AT&T Wireless Common Stock shall not be counted in any
calculation of DoCoMo's Economic Interest Percentage, and (G)
Beneficial Ownership of Current Wireless Tracking Stock or AT&T
Wireless Common Stock arising from equity compensation issued to
DoCoMo employees seconded to the Wireless Group or AT&T Wireless
or its Subsidiaries, PROVIDED, in the case of this clause (G)
that (1) if DoCoMo or any of its Standstill Affiliates comes to
have direct ownership of any such shares issued to any such
seconded employee (including upon exercise of any option), DoCoMo
or the relevant Standstill Affiliate shall divest any such shares
as promptly as practicable and, until such divestiture, shall
not, and shall cause such employee not to, vote any such shares
other than in accordance with this Agreement, and (2) any such
shares of Current Wireless Tracking Stock or AT&T Wireless Common
Stock shall not be counted in any calculation of DoCoMo's
Economic Interest Percentage;
(ii) enter into or publicly propose to enter into, directly or
indirectly, any merger or other business combination or similar
transaction or change in control transaction involving AT&T or
AT&T Wireless, or the Subsidiaries of either;
(iii) make, or in any way participate, directly or indirectly, in any
"solicitation" of "proxies" (as such terms are used in the proxy
rules of the SEC) to vote, or seek to advise or influence any
Person with respect to the voting of, any securities of AT&T or
AT&T Wireless, or the Subsidiaries of either;
(iv) call, or seek to call, a meeting of the shareholders of AT&T or
AT&T Wireless or initiate any shareholder proposal for action by
shareholders of AT&T or AT&T Wireless;
(v) bring any action or otherwise act to contest the validity of any
of the provisions of this Section 3.6 or seek a release of the
restrictions contained in this Section 3.6, in each case in any
manner that would require or lead to public disclosure thereof;
(vi) form, join or in any way participate in a "group" (within the
meaning of Section 13(d)(3) of the Exchange Act) that, with
respect to any securities of AT&T or AT&T Wireless or any
Subsidiary of either, would be required under Section 13(d) of
the Exchange Act and the rules and regulations thereunder to file
a Statement on Schedule 13D with the SEC as a "person" (within
the meaning of Section 13(d)(3) of the Exchange Act);
(vii) seek representation on the Board of AT&T or AT&T Wireless, other
than any seat on the Board with respect to which DoCoMo is then
entitled to make a nomination pursuant to Section 3.1 of this
Agreement, or seek the removal of any Directors (other than the
DoCoMo AT&T Nominee or the
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DoCoMo AT&T Wireless Nominees) from either such board or seek a
change in size or composition of either such board (including,
without limitation, by voting for any directors not nominated by
the Board of AT&T or AT&T Wireless);
(viii) enter into any discussions, negotiations or arrangements
(whether written or oral) with any other Person with respect to
any of the foregoing (other than action taken by a Director in
his or her capacity as a member of the Board of AT&T or AT&T
Wireless or taken by an employee of AT&T Wireless in the
authorized course of such employment);
(ix) disclose any intention, plan or arrangement inconsistent with the
foregoing;
(x) take, or solicit, or propose to or agree with any other Person to
take, any actions designed to obtain, affect or change the
control of the Board, senior executive management or voting
equity of AT&T or AT&T Wireless (other than action taken by a
Director in his or her capacity as a member of the Board of AT&T
or AT&T Wireless and, with respect to the senior executive
management of AT&T Wireless, as expressly contemplated
hereunder); or
(xi) advise, assist or encourage any other Persons in connection with
any of the foregoing.
(b) Prior to the fifth anniversary of the Closing Date, without
limiting Section 3.6(a), in the event DoCoMo's Ultimate Parent or any of its
Ultimate Parent's Subsidiaries (other than DoCoMo and its Controlled
Subsidiaries), or, when acting on behalf of the Ultimate Parent or such
Subsidiaries, any Affiliate thereof, takes any action of the types referred to
in any of clauses (i) - (xi) of Section 3.6(a) hereof, then, without limiting
any of the obligations of DoCoMo and its Controlled Subsidiaries under Section
3.6(a) hereof, DoCoMo and its Controlled Subsidiaries shall not:
(i) with respect to any matter proposed or supported by DoCoMo's
Ultimate Parent (or its Subsidiaries or Affiliates) or any vote
of AT&T's or AT&T Wireless's stockholders related to or occurring
as a result of any such action by DoCoMo's Ultimate Parent (or
its Subsidiaries or Affiliates), vote any of their securities of
AT&T or AT&T Wireless other than, at DoCoMo's election, either
(A) as directed by the Board or (B) in proportion to the votes
cast by the stockholders of AT&T or AT&T Wireless who are not
Affiliates of DoCoMo or of DoCoMo's Ultimate Parent, and
(ii) with respect to any tender or exchange offer or other offer to
purchase securities proposed or supported by DoCoMo's Ultimate
Parent (or its Affiliates or Subsidiaries), tender, offer, sell
or transfer any of their securities of AT&T or AT&T Wireless to
the Person making such offer
-20-
without the prior written consent of the Board; PROVIDED,
HOWEVER, that DoCoMo and its Controlled Subsidiaries may tender
their shares of Current Wireless Tracking Stock or AT&T Wireless
Common Stock into such a tender offer after (but only after) such
time as all material conditions to such offer (including any
financing condition and any condition with respect to removal of
AT&T Wireless's rights plan or any other takeover protections)
that are capable of being satisfied prior to expiration of the
offer have been satisfied or irrevocably waived by the offeror;
PROVIDED, FURTHER, that DoCoMo and its Controlled Subsidiaries
shall not, prior to such time, announce or disclose their intent
to tender their shares into such offer following satisfaction or
waiver of such conditions.
(c) From and after the fifth anniversary of the Closing Date, and for
so long as DoCoMo has the right to nominate a Director pursuant to Section 3.1
hereof, DoCoMo shall not and shall not permit any of its Standstill Affiliates
to, take any action described in either of Section 3.6(a) or Section 3.6(b)
hereof, PROVIDED, HOWEVER, that DoCoMo shall be released from the restrictions
of and its obligations under this Section 3.6(c) on the 91st day after both of
the following events have occurred: (i) all DoCoMo AT&T Nominees and all DoCoMo
AT&T Wireless Nominees shall have resigned and DoCoMo shall not have replaced
any of them with new representatives or nominees, and (ii) all other DoCoMo
representatives or designees appointed to the management or any governance body
or committee of AT&T Wireless (including under Sections 3.1, 3.4, 3.5 and 5.4
hereunder) shall have resigned and shall not have been replaced with new DoCoMo
representatives or designees. Immediately upon the resignation of all of
DoCoMo's representatives or designees appointed to the management or any
governance body or committee of AT&T Wireless (including under Sections 3.1,
3.4, 3.5 and 5.4 hereunder) as contemplated by the foregoing clause (ii), (A)
DoCoMo shall be deemed to have irrevocably waived its rights to Board
representation and to designate any representatives or designees to the
management or any governance body or committee hereunder (including under
Sections 3.1, 3.4, 3.5 and 5.4 hereunder), but shall not be deemed to have
waived any rights it may have as a result of being a shareholder of AT&T
Wireless and (B) AT&T Wireless may take such action with respect to any other
employees of, or persons providing service to, AT&T Wireless (including the MMS)
in its sole discretion, including terminating or sequestering or separating such
employees, without regard to the fact that any such persons may have been
appointed or nominated by DoCoMo. The foregoing notwithstanding, in the event
the resignations contemplated by foregoing clauses (i) and (ii) occur
concurrently with the delivery by DoCoMo to AT&T or AT&T Wireless, as the case
may be, of a notice to the effect that such resignations are not intended to
commence the 90-day time period for releasing DoCoMo from the restrictions of
and its obligations under this Section 3.6 and that DoCoMo intends to replace
the individuals who have resigned, then such 90-day time period will not
commence and the consequences set forth in the foregoing clauses (A) and (B)
will not apply.
(d) From and after the Spin-off, the obligations set forth above, to
the extent related to AT&T and its Subsidiaries and assets, but not to AT&T
Wireless and its Subsidiaries and assets, shall be enforceable by AT&T, and not
by AT&T Wireless.
-21-
(e) DoCoMo agrees not to provide to DoCoMo's Ultimate Parent or its
Subsidiaries (including as a result of any representation DoCoMo's Ultimate
Parent or Subsidiaries may have on the DoCoMo board or in DoCoMo management),
other than DoCoMo and its Subsidiaries, any non-public information concerning
AT&T or AT&T Wireless or any of their respective Subsidiaries or businesses
obtained by DoCoMo as a result of its Board, management or other rights under
this Agreement or any of the Related Agreements or as a result of its investment
in AT&T or AT&T Wireless; PROVIDED that DoCoMo may provide to its Ultimate
Parent such non-public information to the extent, but only to the extent, DoCoMo
and its Ultimate Parent are required to obtain such non-public information in
order to prepare such consolidated financial reports as either of them is
required to prepare under applicable law, but only so long as (i) such
non-public information is disclosed pursuant to customary confidentiality
restrictions that (A) limit dissemination of such information to those employees
and agents of DoCoMo and its Ultimate Parent having a need to know in connection
with the preparation of such consolidated financial reports, (B) prohibit public
disclosure of such non-public information and (C) prohibit inclusion of such
information in any portion of the consolidated financial reports that become
publicly disclosed, in each case prior to the time any such information is
publicly disclosed by AT&T or AT&T Wireless, as the case may be, (ii) DoCoMo
agrees to be responsible for the performance by its Ultimate Parent of the
provisions of this paragraph and otherwise to use all reasonable efforts to
prevent such non-public information from becoming disclosed or disseminated,
prior to the time any such information is publicly disclosed by AT&T or AT&T
Wireless, as the case may be, other than to those having a need to know in
connection with the preparation of such consolidated financial reports, and
(iii) DoCoMo concurrently provides to AT&T and AT&T Wireless a copy of the
information so disclosed to its Ultimate Parent and DoCoMo certifies to its
compliance with respect to the foregoing clauses (i) and (ii).
Section 3.7 TERMINATION OF THE STANDSTILL RESTRICTIONS. (a) To the
extent the restrictions on and the obligations of DoCoMo and its Standstill
Affiliates under Sections 3.6(a), (b) and (c) relate to AT&T Wireless or its
securities, Subsidiaries or assets, such restrictions and obligations shall
terminate if any of the following three events occurs:
(i) a third party unaffiliated with AT&T Wireless commences a tender
or exchange offer seeking to acquire 15% or more of AT&T
Wireless's outstanding voting securities and AT&T Wireless does
not (within 10 Business Days following such commencement)
publicly recommend that its shareholders not accept such offer;
(ii) AT&T Wireless enters into a definitive agreement (or binding
letter of intent) with a third party (or group of related
parties) to effectuate a merger or consolidation with or sale of
all or substantially all of its assets and properties to, any
unaffiliated third party, unless immediately following such
transaction the Persons that immediately prior to such
transaction held the AT&T Wireless Common Stock hold, directly or
indirectly, at least 50% of the equity and at least 50% of the
voting power of the entity surviving such merger or consolidation
or to whom such assets will be transferred; or
-22-
(iii) if AT&T Wireless enters into a definitive agreement (or binding
letter of intent) providing for a sale by AT&T Wireless of AT&T
Wireless securities, or a merger or consolidation, in either case
that would result in any one Person (or group of related Persons)
acquiring in excess of 35% of the voting power of AT&T Wireless
outstanding after completion of such transaction; provided that
(x) if the acquiror of the greater-than 35% block is subject to a
standstill that restricts its ability to acquire more than its
initial percentage of the voting power of AT&T Wireless or to
appoint a majority of its board of directors (and such standstill
is otherwise on substantially similar terms as the provisions of
Section 3.6 or, to the extent such other terms are not
substantially similar to the provisions of Section 3.6, AT&T
Wireless amends the provisions of Section 3.6 to make the
provisions of Section 3.6 substantially similar to such terms of
the other standstill), then the obligations set forth in Section
3.6 (as so amended, if applicable) shall not terminate by virtue
of this clause (iii) unless and until the standstill restrictions
on the acquiror lapse or are waived, and (y) anything in this
clause (iii) notwithstanding, DoCoMo shall continue to be subject
to each provision of Section 3.6 to the extent such provision
relates to the ability of DoCoMo to support, encourage, cooperate
with, participate with or act as a group or in concert with the
greater-than-35% acquiror with respect to the securities of AT&T
Wireless or AT&T Wireless's Board or management.
(b) To the extent the restrictions on and the obligations of DoCoMo
and its Standstill Affiliates under Sections 3.6(a), (b) and (c) relate to AT&T
or its securities, Subsidiaries or assets, such restrictions and obligations
shall terminate on the second anniversary of the consummation of the Spin-off.
(c) To the extent the restrictions on and the obligations of DoCoMo
and its Standstill Affiliates under Sections 3.6(a), (b) and (c) relate to AT&T
or its securities, Subsidiaries or assets, then such restrictions and
obligations shall terminate if any of the following three events occurs, but
only if at such time the Spin-off shall not have occurred and the No Spin-off
Purchase Right shall have accrued to DoCoMo and DoCoMo shall have elected not to
exercise such right within the time period provided for in Section 4.4:
(i) a third party unaffiliated with AT&T commences a tender or
exchange offer seeking to acquire 15% or more of AT&T's
outstanding voting securities and AT&T does not (within 10
Business Days following such commencement) publicly recommend
that its shareholders not accept such offer;
(ii) AT&T enters into a definitive agreement (or binding letter of
intent) with a third party (or group of related parties) to
effectuate a merger or consolidation with or sale of all or
substantially all of its assets and properties to, any
unaffiliated third party, unless immediately following such
transaction the Persons that immediately prior to such
transaction held the all of the classes of common stock of AT&T,
taken as a whole,
-23-
directly or indirectly, at least 50% of the equity and at least
50% of the voting power of the entity surviving such merger or
consolidation or to whom such assets will be transferred; or
(iii) if AT&T enters into a definitive agreement (or binding letter of
intent) providing for a sale by AT&T of AT&T securities, or a
merger or consolidation, in either case that would result in any
one Person (or group of related Persons) acquiring in excess of
35% of the voting power of AT&T outstanding after completion of
such transaction; provided that (x) if the acquiror of the
greater-than 35% block is subject to a standstill that restricts
its ability to acquire more than its initial percentage of the
voting power of AT&T or to appoint a majority of its Board (and
such standstill is otherwise on substantially similar terms as
the provisions of Section 3.6 or, to the extent such other terms
are not substantially similar to the provisions of Section 3.6,
AT&T amends the provisions of Section 3.6 to make the provisions
of Section 3.6 substantially similar to such terms of the other
standstill), then the obligations set forth in Section 3.6 (as so
amended, if applicable) shall not terminate by virtue of this
clause (iii) unless and until the standstill restrictions on the
acquiror lapse or are waived, and (y) anything in this clause
(iii) notwithstanding, DoCoMo shall continue to be subject to
each provision of Section 3.6 to the extent such provision
relates to the ability of DoCoMo to support, encourage, cooperate
with, participate with or act as a group or in concert with the
greater-than-35% acquiror with respect to the securities of AT&T
or AT&T's Board or management.
(d) The termination provisions of this Section 3.7 shall be in
addition to any limitations on or termination of the obligations of Section 3.6
expressly provided for above, including pursuant to Section 3.6(c).
Section 3.8 VOTING. (a) DoCoMo agrees to cause each share of AT&T
Wireless Stock Beneficially Owned by it that is entitled to vote in any election
for Directors to be present in person or represented by proxy at all meetings of
stockholders of AT&T or AT&T Wireless, as the case may be, at which Directors
are to be elected, so that all such shares shall be counted as present for
determining the presence of a quorum at such meetings.
(b) DoCoMo agrees that at any meeting of the type referred to in
Section 3.8(a) it shall vote or cause to be voted all of the shares of AT&T
Wireless Stock Beneficially Owned by it that it is entitled to vote at such
meeting in accordance with one of the following (as determined by DoCoMo in its
sole discretion): (i) in favor of the slate of Directors nominated by the Board,
or (ii) for, against or abstain with respect to each nominee for Director in the
same proportion as the votes of all stockholders other than DoCoMo and its
Affiliates.
(c) The provisions of Section 3.8(a) and (b) shall not apply at any
time that AT&T or AT&T Wireless, as the case may be, is not in compliance with
its obligations under Section 3.1 or following the occurrence of an Investor
Rights Termination Event.
-24-
ARTICLE IV
OTHER COVENANTS
Section 4.1 TECHNOLOGY COMMITMENT. (a) AT&T (prior to consummation of
the Spin-off) and AT&T Wireless (after consummation of the Spin-off) agree that,
except as set forth below, the Wireless Group (prior to the Spin-off) or AT&T
Wireless (after the Spin-off) will have launched service based on W-CDMA
technology in 13 of the top 50 wireless markets in the United States (defined as
BTAs numbered 1 through 50 set forth on Schedule 4.1 hereto) by June 30, 2004.
Failure to achieve this target will be excused (i) if DoCoMo at any time ceases
to actively support and promote W-CDMA technology as the primary standard for
its delivery of wireless services based on 3G technology or if DoCoMo is no
longer actively supporting and promoting wireless services based on 3G
technology, (ii) if the failure is due to factors beyond AT&T's (prior to
consummation of the Spin-off) or AT&T Wireless's (after consummation of the
Spin-off) reasonable power to affect or control, including, without limitation,
delay in availability, or unavailability, of equipment, software, spectrum, cell
sites or other items needed for the construction and operation of the W-CDMA
service, PROVIDED that AT&T (prior to consummation of the Spin-off) or AT&T
Wireless (after the consummation of the Spin-off) shall have used commercially
reasonable efforts to take reasonable steps to acquire such equipment, software,
spectrum, cell sites or other items so needed, (iii) if AT&T (prior to
consummation of the Spin-off) or AT&T Wireless (after the consummation of the
Spin-off) is unable to obtain regulatory approvals, licenses and permits
necessary for the launch of services based on W-CDMA technology on a timely
basis and without the imposition of burdensome conditions or restrictions,
PROVIDED that AT&T (prior to consummation of the Spin-off) and AT&T Wireless
(after the consummation of the Spin-off) shall have used commercially reasonable
efforts to take reasonable steps to obtain such approvals, licenses and permits,
or (iv) if the Board determines in good faith that the Wireless Group's (prior
to consummation of the Spin-off) or AT&T Wireless's (after consummation of the
Spin-off) business plan for constructing such a system has deteriorated
significantly due to regulatory or legal changes, intellectual property
disputes, health, safety or other similar issues, or acts of God or other
natural events.
(b) The Wireless Group or AT&T Wireless, as the case may be, agrees
not to abandon W-CDMA technology without the prior approval of the Board of AT&T
or AT&T Wireless, as the case may be.
Section 4.2 JOINT RESEARCH AND DEVELOPMENT EFFORT. Within twelve
months of the Closing Date or such other date as the parties mutually agree
upon, AT&T, AT&T Wireless and DoCoMo will discuss in good faith joint research
and development efforts.
Section 4.3 TECHNOLOGY DEFAULT RIGHT. (a) In the event that either (i)
the Board requires or approves a change in the Wireless Group's (prior to
consummation of the Spin-off) or AT&T Wireless's (after consummation of the
Spin-off) use of W-CDMA technology as the primary standard for its delivery of
wireless services based on 3G technology (other than migration to successor
technologies and other than for one or more of the reasons set forth in clauses
(i) through (iv) of Section 4.1(a)) prior to June 30, 2004, or (ii) if AT&T
Wireless fails to meet the technology commitment set forth in Section 4.1(a)
above (other than
-25-
for one or more of the reasons set forth in clauses (i) through (iv) of Section
4.1(a)), DoCoMo may require AT&T (if prior to the Spin-off) to repurchase (x)
the shares of New Tracking Stock originally issued to DoCoMo pursuant to the
Purchase Agreement or shares of Current Wireless Tracking Stock issued upon
conversion of such originally issued shares of New Tracking Stock and (y) the
Warrants issued to DoCoMo pursuant to the Warrant Agreement, in each of cases
(x) and (y) that have not been Transferred by DoCoMo (other than to a Designee
in accordance with Section 6.1(a) hereof), or to require AT&T Wireless (if after
the Spin-off) to repurchase (1) the shares of AT&T Wireless Common Stock that
were issued in exchange for the shares of Current Wireless Tracking Stock issued
upon conversion of shares of New Tracking Stock that were originally issued to
DoCoMo pursuant to the Purchase Agreement, and (2) the Warrants, in each of
cases (1) and (2) that have not been Transferred by DoCoMo (other than to a
Designee in accordance with Section 6.1(a) hereof) (the "TECHNOLOGY DEFAULT
RIGHT"); PROVIDED, HOWEVER, that the Technology Default Right will terminate,
and DoCoMo will not be entitled to require such repurchase, if DoCoMo, at any
time prior to delivery of the Technology Default Exercise Notice, ceases to
actively support and promote W-CDMA technology as the primary standard for its
delivery of wireless services based on 3G technology. AT&T or AT&T Wireless, as
the case may be, shall give written notice to DoCoMo promptly following any
Board action described in Section 4.3(a)(i).
(b) The Technology Default Right will be exercisable only if notice of
exercise (the "TECHNOLOGY DEFAULT EXERCISE NOTICE") is given within 30 days of
written notice to DoCoMo of such Board action (in the case of clause (i) of
Section 4.3(a)) or by July 31, 2004 (in the case of clause (ii) of Section
4.3(a)).
(c) The repurchase price with respect to the Technology Default Right
will be the Original Purchase Price of each Warrant and each share of New
Tracking Stock, Current Wireless Tracking Stock or AT&T Wireless Common Stock so
repurchased, in each case plus the Cost of Carry on the Original Purchase Price
from the Closing Date to the date of payment or, in the event AT&T or AT&T
Wireless exercises its rights under Section 4.3(e), to the date DoCoMo receives
the last of the proceeds from the sales contemplated thereunder necessary for
DoCoMo to have received the aggregate Technology Default Repurchase Price (the
"TECHNOLOGY DEFAULT REPURCHASE PRICE"). Subject to Section 4.3(e), the closing
of the repurchase by AT&T or AT&T Wireless, as the case may be, of New Tracking
Stock, Current Wireless Tracking Stock or AT&T Wireless Common Stock, as the
case may be, and Warrants pursuant to this Section 4.3 shall take place as
promptly as determined by AT&T or AT&T Wireless, as the case may be, to be
reasonably practicable (taking into account the availability of financing and
other considerations) following delivery of the Technology Default Exercise
Notice, but in any event no later than 9:00 A.M., New York time, on the first
Business Day that is four months after the Technology Default Exercise Notice is
deemed to have been duly given to AT&T (if prior to the Spin-off) or to AT&T
Wireless (if after the Spin-off), pursuant to Section 11.4 of this Agreement, or
at such other time and place as DoCoMo and AT&T or AT&T Wireless, as the case
may be, shall agree. At such closing, DoCoMo shall deliver to AT&T or AT&T
Wireless, as the case may be, certificates representing the securities and
warrants to be sold by it and AT&T or AT&T Wireless, as the case may be, shall
transfer to DoCoMo the aggregate Technology Default Repurchase Price in United
States dollars by wire transfer of immediately available funds to an account
designated by DoCoMo (which designation shall be made not less than two Business
Days prior to such closing). Subject to Section 4.3(e), upon valid exercise by
-26-
DoCoMo of the Technology Default Right hereunder, AT&T or AT&T Wireless, as the
case may be, and DoCoMo shall be legally obligated to consummate the purchase
contemplated thereby within the time period required and shall use their
reasonable efforts to secure any approvals required, and to comply with all
Federal, state and Japanese and other foreign laws and regulations and
securities exchange listing requirements applicable, in connection therewith as
soon as practicable.
(d) Upon exercise of the Technology Default Right hereunder, DoCoMo
shall cease to be entitled to any veto, Board representation, management
representation or other governance or management rights that it may have
hereunder (including without limitation under Sections 3.1, 3.2, 3.3, 3.4, 3.5
and 5.4 hereof) or under any of the Related Agreements, and DoCoMo will cause
the resignation of any of its appointees, nominees or representatives and
managers (including without limitation under Sections 3.1, 3.2, 3.3, 3.4, 3.5
and 5.4 hereof) to occur within five Business Days following the exercise of
such rights, and no DoCoMo appointee, nominee or designee will vote or exercise
any other rights or powers of office during such five Business Day period;
PROVIDED, HOWEVER, that until payment of the Technology Default Repurchase Price
(or satisfaction of the alternative obligation set forth in Section 4.3(e)), and
so long as DoCoMo would otherwise be entitled to Board representation under
Section 3.1 hereof, DoCoMo shall be entitled to designate one individual to
serve on the AT&T Board (if prior to the Spin-off) or the AT&T Wireless Board
(if after the Spin-off) reasonably acceptable to AT&T or AT&T Wireless, for the
purpose of monitoring AT&T's or AT&T Wireless's compliance with the repurchase
obligations set forth in this Section 4.3, which individual shall be
unaffiliated with DoCoMo and shall agree not to provide DoCoMo or its Affiliates
with any confidential information of AT&T or AT&T Wireless other than
information directly related to AT&T's or AT&T Wireless's compliance with such
repurchase obligations; and PROVIDED FURTHER, that until payment of the
Technology Default Repurchase Price (or satisfaction of the alternative
obligation set forth in Section 4.3(e)), nothing herein shall impair DoCoMo's
rights as a stockholder of AT&T or AT&T Wireless, as the case may be.
(e) In lieu of paying all or part of the Technology Default Repurchase
Price, AT&T or AT&T Wireless, as the case may be, will have the right to cause
DoCoMo to sell all or part of its shares of Current Wireless Tracking Stock
(issuable upon conversion of the New Tracking Stock or exercise of the Warrants)
or AT&T Wireless Common Stock (including shares issuable upon exercise of the
Warrants) into the market (upon registrations in accordance with the
registration rights procedures set forth in Article VII), subject to AT&T
Wireless paying DoCoMo the amount by which the proceeds received by DoCoMo (net
of underwriting commissions and discounts) in such sale or sales are less than
the aggregate Technology Default Repurchase Price with respect to all shares so
sold by DoCoMo. In connection with the exercise of such right, AT&T or AT&T
Wireless, as the case may be, shall have the right to cause DoCoMo to convert
any shares of New Tracking Stock into shares of Current Wireless Tracking Stock,
and the right to cause DoCoMo to exercise any Warrants that are in the money and
to convert any shares of New Tracking Stock received upon such exercise into
shares of Current Wireless Tracking Stock. In the event that AT&T or AT&T
Wireless, as the case may be, elects to cause DoCoMo to exercise any Warrants in
order for AT&T or AT&T Wireless to cause the sale of the Underlying Stock, then
AT&T Wireless shall make such provisions as are necessary so that any required
exercise of Warrants pursuant to the immediately preceding sentence will be done
on a "cashless" basis, such that, upon exercise of such Warrants, DoCoMo shall
be deemed
-27-
to have surrendered a number of shares of Underlying Stock (as defined in the
Warrant Agreement) having an aggregate Current Market Price (as defined in the
Warrant Agreement, but substituting five days for the 20-day period referred to
therein) equal to the aggregate exercise price payable with respect to all of
the exercised Warrants, and DoCoMo shall receive in respect of such Warrants a
number of shares of Underlying Stock equal to the difference between the total
number of shares subject to such exercised Warrants less the number of such
shares deemed to have been so surrendered, and AT&T and AT&T Wireless shall be
deemed to have agreed to repurchase such surrendered Warrants pursuant to
Section 4.3(c). The size and timing of such registered sales will be determined
mutually by AT&T or AT&T Wireless, as the case may be, and DoCoMo in their good
faith judgment, in consultation with their underwriters and taking into account
DoCoMo's desire to sell its shares as quickly as reasonably practicable and
AT&T's or AT&T Wireless's desire not to disrupt or depress the market for
Current Wireless Tracking Stock or AT&T Wireless Common Stock. Such sales will
be completed as promptly as reasonably practicable, but if such sales are not
completed within 10 months of the date the Technology Default Exercise Notice is
deemed to have been duly given pursuant to Section 11.4, AT&T or AT&T Wireless,
as the case may be, will promptly (but in any event within 10 days after such
10-month anniversary) repurchase from DoCoMo, and DoCoMo shall agree to sell to
AT&T or AT&T Wireless, as the case may be, any shares of AT&T Wireless Stock and
unexercised Warrants that were subject to the Technology Default Right and that
were not previously repurchased pursuant to Section 4.3(c) or sold in the
registered offerings contemplated by this Section 4.3(e) for an aggregate
purchase price equal to the difference between the (A) aggregate Technology
Default Repurchase Price that AT&T or AT&T Wireless, as the case may be, would
have been obligated to pay to DoCoMo pursuant to Section 4.3(c) if AT&T or AT&T
Wireless, as the case may be, had not exercised its rights under this Section
4.3(e) to cause DoCoMo to sell shares in registered sales (assuming, for
purposes of determining the amount of Cost of Carry thereon, that AT&T or AT&T
Wireless, as the case may be, would have made payments to DoCoMo at the times
DoCoMo received proceeds from such registered sales) and (B) the aggregate
proceeds received by DoCoMo (net of underwriting commissions and discounts) in
the registered sales or previously received pursuant to Section 4.3(c). Except
as provided in the immediately preceding sentence, such repurchases shall be
made in accordance with the last two sentences of Section 4.3(c). In connection
with any underwritten sales pursuant to this Section 4.3(e), AT&T or AT&T
Wireless, as the case may be, and DoCoMo shall enter into a customary
underwriting agreement as contemplated by Article VII hereof no later than
immediately prior to the effectiveness of the registration of the shares to be
sold.
(f) AT&T hereby irrevocably guarantees and promises to pay AT&T
Wireless's obligations pursuant to this Section 4.3 up to a maximum of $3.65
billion plus the Cost of Carry thereon to the date of payment by AT&T; PROVIDED
that AT&T will not be obligated to make any payment under this guarantee unless
AT&T Wireless fails to make a payment that it is obligated to make pursuant to
this Section 4.3; PROVIDED, FURTHER, that in the event there is a dispute as to
AT&T Wireless's obligation to make all or any portion of any payment pursuant to
this Section 4.3, AT&T will not be obligated to make such payment under this
guarantee unless and until such dispute is resolved in favor of DoCoMo by a
final and nonappealable order and AT&T Wireless thereafter fails to make such
payment; and PROVIDED, FURTHER, that in any event DoCoMo shall have used
commercially reasonable efforts to first collect payment from AT&T Wireless. In
the event AT&T makes any payment to DoCoMo
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pursuant to this guarantee, AT&T Wireless shall be obligated to reimburse and
indemnify AT&T for such payment (including any costs incurred by AT&T). AT&T
hereby agrees that any liability or obligation AT&T Wireless may have to AT&T as
a result of the immediately preceding sentence is hereby subordinated and made
junior to all obligations and liabilities of AT&T Wireless to DoCoMo under this
Section 4.3 and that AT&T will not receive or retain any payments with respect
to AT&T Wireless's liabilities or obligations as a result of the immediately
preceding sentence until the prior indefeasible payment in full of AT&T
Wireless's obligations to DoCoMo under this Section 4.3.
(g) The parties agree and acknowledge that exercise of the Technology
Default Right shall be DoCoMo's sole remedy in the event that the technology
commitment set forth in Section 4.1 is not met, and DoCoMo agrees not to pursue
any other remedy at law or in equity (it being understood that nothing in this
paragraph (g) shall impair any rights that DoCoMo might have with respect to the
breach of any provision of this Agreement to the extent not related to
implementation of technology or deployment of operating assets or services).
Section 4.4 NO SPIN-OFF REPURCHASE RIGHT. (a) In the event that AT&T
has not consummated the Spin-off on or prior to January 1, 2002 (or, at AT&T's
election, on or prior to March 15, 2002, which election shall be made in writing
to DoCoMo not later than December 15, 2001, in the event AT&T has not received a
satisfactory tax ruling with respect to the Spin-off as of the date of such
election but reasonably believes as of such date that it is possible to obtain
such a ruling by, or effect the Spin-off without a ruling by, March 15, 2002,
and is continuing in good faith to seek such a ruling or to effect the Spin-off
without a ruling), DoCoMo will have the right, at its election (the "NO SPIN-OFF
RIGHT"), to require AT&T to:
(i) repurchase from DoCoMo (x) the New Tracking Stock initially
issued to DoCoMo pursuant to the Purchase Agreement or the shares
of Current Wireless Tracking Stock issued upon conversion of such
shares of New Tracking Stock and (y) the Warrants issued to
DoCoMo pursuant to the Warrant Agreement and in each case that
have not been Transferred by DoCoMo (other than to any Designee
in accordance with Section 6.1(a) hereof), at the Original
Purchase Price of each Warrant and each share of New Tracking
Stock or Current Wireless Tracking Stock so repurchased, in each
case plus the Cost of Carry thereon from the Closing Date to the
date of payment (the "NO SPIN-OFF REPURCHASE PRICE"); or
(ii) enable DoCoMo to sell shares of Current Wireless Tracking Stock
issuable upon conversion of such shares of New Tracking Stock and
exercise of such Warrants, by registering the sale of such shares
of Current Wireless Tracking Stock through registrations in
accordance with the registration rights procedures set forth in
Article VII.
(b) The No Spin-off Right will be exercisable only if DoCoMo provides
AT&T with written notice thereof within 30 days following January 1, 2002 or
March 15, 2002, whichever is the applicable date for triggering the No Spin-off
Right.
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(c) In the event DoCoMo makes the election set forth in clause (i) of
Section 4.4(a), the closing of the repurchase by AT&T of (i) the New Tracking
Stock or Current Wireless Tracking Stock and (ii) Warrants contemplated thereby
shall take place no later than 9:00 A.M., New York time, on April 15, 2002 (if
the applicable triggering date is January 1, 2002), or as soon as reasonably
practicable but no later than June 15, 2002 (if the applicable triggering date
is March 15, 2002), at the offices of AT&T as indicated in Section 11.4 of this
Agreement, or at such other time and place as DoCoMo and AT&T shall agree. At
such closing, DoCoMo shall deliver to AT&T certificates representing the New
Tracking Stock or Current Wireless Tracking Stock and Warrants to be sold by it
and AT&T shall transfer to DoCoMo the aggregate No Spin-off Repurchase Price in
United States dollars by wire transfer of immediately available funds to an
account designated by DoCoMo (which designation shall be made not less than two
Business Days prior to such closing). Upon valid exercise by DoCoMo of the
election set forth in clause (i) of Section 4.4(a), AT&T and DoCoMo shall be
legally obligated to consummate the purchase contemplated thereby within the
time period required and shall use their reasonable efforts to secure any
approvals required, and to comply with all Federal, state and Japanese and other
foreign laws and regulations and securities exchange listing requirements
applicable, in connection therewith as soon as practicable.
(d) In the event DoCoMo makes the election set forth in clause (ii) of
Section 4.4(a), the size and timing of such registered sales will be determined
mutually by AT&T and DoCoMo in their good faith judgment, in consultation with
their underwriters and taking into account DoCoMo's desire to sell its shares as
quickly as reasonably practicable and AT&T's desire not to disrupt or depress
the market for Current Wireless Tracking Stock. In connection with any
underwritten sales pursuant to this Section 4.4, AT&T and DoCoMo shall enter
into a customary underwriting agreement as contemplated by Article VII hereof no
later than immediately prior to the effectiveness of the registration of the
shares to be sold.
(e) AT&T agrees to use its commercially reasonable efforts to obtain a
satisfactory tax ruling with respect to the Spin-off.
Section 4.5 REINVESTMENT RIGHT. (a) In the event AT&T redeems the New
Tracking Stock under the circumstances referred to in Section 5(a) or 5(b) of
the Certificate of Amendment (a "PERMITTED REDEMPTION"), and within one year of
such Permitted Redemption AT&T completes a spin-off to its shareholders, by way
of dividend distribution or similar pro rata distribution to the holders of
common stock of AT&T, of all or substantially all of the businesses that
currently constitute the businesses of the Wireless Group (a "POST-REDEMPTION
SPIN-OFF"), then DoCoMo shall have the right to invest in and acquire, and AT&T
shall provide DoCoMo with such right to invest in and acquire shares of such
spun-off entity ("SPINCO"), as follows:
(i) If AT&T intends to effect a Post-Redemption Spin-off within one
year of a Permitted Redemption, it shall provide DoCoMo with not
less than 90 days' notice of the earliest expected date for
consummation of such Post-Redemption Spin-off.
(ii) If DoCoMo desires to exercise its rights under this Section
4.5(a), then not later than 90 days prior to the earliest
expected date for consummation of
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the Post-Redemption Spin-off as set forth in such notice (or, if
AT&T has not provided at least 120 days' advance notice of the
earliest expected consummation date, within 30 days of receipt by
DoCoMo of notice from AT&T of the earliest expected consummation
date), DoCoMo shall deliver to AT&T a notice stating that DoCoMo
desires to exercise its rights under this Section 4.5(a). DoCoMo
may withdraw such notice of exercise only if the actual
consummation is delayed more than 120 days beyond the earliest
expected consummation date set forth in the notice referred to in
clause (i).
(iii)Unless DoCoMo's notice of exercise has been withdrawn in
accordance with clause (ii), concurrently with (or, at AT&T's
election, immediately prior to) the consummation of the
Post-Redemption Spin-off, (A) DoCoMo shall purchase a number of
shares of common stock of SpinCo (the "ACQUIRED SPINCO SHARES")
equal to (1) the Economic Interest Percentage that would be
represented as of immediately prior to the Permitted Redemption
solely by the shares of New Tracking Stock redeemed in such
Permitted Redemption multiplied by (2) the number of shares of
SpinCo common stock that would be outstanding on a Fully Diluted
Basis immediately after the Post-Redemption Spin-off and after
giving effect to the issuance of the Acquired SpinCo Shares, (B)
the aggregate purchase price for such Acquired SpinCo Shares
shall be equal to the aggregate amount received by DoCoMo in
respect of its New Tracking Stock in the Permitted Redemption,
(C) if DoCoMo held any Warrants that were redeemed concurrently
with such Permitted Redemption as contemplated by Section 6.1 of
the Warrant Agreement, then DoCoMo shall be entitled to purchase
warrants (the "ACQUIRED SPINCO WARRANTS") to purchase a number of
shares SpinCo common stock (the "SPINCO WARRANT NUMBER")
determined by multiplying (1) the Warrant Percentage by (2) the
number of shares of SpinCo common stock that would be outstanding
on a Fully Diluted Basis immediately after the Post-Redemption
Spin-off and after giving effect to the issuance of the Acquired
SpinCo Shares and the exercise of the Acquired SpinCo Warrants,
at an exercise price per share of SpinCo common stock equal to
the aggregate exercise price of all of the Warrants held by
DoCoMo that were redeemed concurrently with the Permitted
Redemption divided by the SpinCo Warrant Number, (D) the
aggregate purchase price for such Acquired SpinCo Warrants shall
be equal to the aggregate amount received by DoCoMo in respect of
its Warrants that were redeemed concurrently with the Permitted
Redemption, and (E) DoCoMo, SpinCo and/or AT&T shall enter into
an investor agreement, warrant agreement and such other
agreements as may be necessary and appropriate such that the
terms and conditions of DoCoMo's investment in SpinCo are, as
nearly as possible, comparable to the terms and conditions of the
Investment and the Alliance as set forth in this Agreement and
the Related Agreements. For purposes of the foregoing, the
"WARRANT PERCENTAGE" shall mean the Economic Interest Percentage
that would be represented as
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of immediately prior to the Permitted Redemption solely by the
shares of New Tracking Stock issuable upon exercise of any
Warrants held by DoCoMo that were redeemed in such Permitted
Redemption, if such Warrants had been exercised immediately prior
to the Permitted Redemption.
(iv) The aggregate purchase price payable pursuant to clause (iii)
above shall be paid to AT&T at the closing of such purchase in
United States dollars by wire transfer of immediately available
funds to an account designated by AT&T (which designation shall
be made not less than two Business Days prior to such closing).
AT&T agrees that if AT&T Wireless paid any portion of the
redemption price paid to DoCoMo and its Subsidiaries in
connection with any Permitted Redemption, then at the closing of
the purchase referred to in the previous sentence, AT&T shall
contribute to SpinCo a portion of the purchase price paid in
respect of such purchase equal to the portion of the redemption
price paid by AT&T Wireless.
(b) In the event that AT&T redeems the New Tracking Stock in a
Permitted Redemption pursuant to Section 5(b) of the Certificate of Amendment
and, within one year of such Permitted Redemption, AT&T announces that it has
entered into a binding agreement to sell (a "POST-REDEMPTION SALE") all or
substantially all of the businesses that currently constitute the businesses of
the Wireless Group (the "SOLD BUSINESSES"), then, upon consummation of such
Post-Redemption Sale, AT&T shall pay or deliver to DoCoMo the excess, if any, of
(i) the product of (A) DoCoMo's Economic Interest Percentage immediately prior
to such Permitted Redemption (assuming exercise of all Warrants held by DoCoMo
that were redeemed in such Permitted Redemption) and (B) the net proceeds to
AT&T from the Post-Redemption Sale, over (ii) the sum of (A) the aggregate
proceeds received by DoCoMo in respect of the Permitted Redemption of its New
Tracking Stock and the concurrent redemption of any Warrants held by DoCoMo plus
(B) the aggregate exercise price that would have been payable upon exercise of
such Warrants. The form of consideration AT&T shall use to satisfy its
obligation pursuant to the immediately preceding sentence shall be the same form
of consideration (or same mix if a mix of consideration is received) received by
AT&T in the Post-Redemption Sale. The foregoing notwithstanding, DoCoMo may
elect to have such payment, if any, calculated without regard to the Warrants,
in which event all references to the Warrants in the foregoing calculation shall
be disregarded. AT&T shall make such payment to DoCoMo, if any, not later than
10 Business Days following the consummation of the Post-Redemption Sale, such
payment to be made in United States dollars by wire transfer of immediately
available funds to an account designated by DoCoMo (which designation shall be
made not less than two Business Days prior to the date such payment is due).
Section 4.6 FINANCIAL STATEMENT COOPERATION. AT&T (prior to the
Spin-off) and AT&T Wireless (after the Spin-off) agree to use all reasonable
efforts to provide DoCoMo with such financial information as it may reasonably
request from time to time, as may be necessary in order for DoCoMo to prepare
such consolidated financial reports as it is required to prepare under
applicable law; PROVIDED that to the extent any of such information is
non-public information, (i) such non-public information shall be disclosed
pursuant to customary confidentiality restrictions that (A) limit dissemination
of such information to those employees
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and agents of DoCoMo and its Subsidiaries having a need to know in connection
with the preparation of such consolidated financial reports, (B) prohibit public
disclosure of such non-public information and (C) prohibit inclusion of such
information in any portion of the consolidated financial statements that become
publicly disclosed, in each case prior to the time any such information is
publicly disclosed by AT&T or AT&T Wireless, as the case may be, and (ii) DoCoMo
agrees to use all reasonable efforts to prevent such non-public information from
becoming disclosed or disseminated prior to the time any such information is
publicly disclosed by AT&T or AT&T Wireless, as the case may be, other than to
those having a need to know in connection with the preparation of such
consolidated financial reports.
ARTICLE V
MOBILE MULTIMEDIA ALLIANCE
Section 5.1 THE MOBILE MULTIMEDIA ALLIANCE AND THE MMS. (a) As soon as
practicable after the Closing, DoCoMo and AT&T Wireless (the "ALLIANCE
PARTNERS") shall form a mobile multimedia alliance (the "ALLIANCE") on the terms
and conditions described in this Article V, having the goals described in
Section 5.1(b). Pursuant to the Alliance, each of the Alliance Partners shall
cooperate in operational and technological matters affecting the delivery of
i-mode mobile multimedia services to subscribers, as well as the development and
delivery of i-mode mobile multimedia content and applications.
(b) The Alliance will have the following goals: (i) to develop
wireless internet access and related mobile multimedia applications and services
from wireless phones and other wireless access devices based on DoCoMo's i-mode
and multimedia expertise, experience, know-how and technology; (ii) to achieve
synergies with AT&T Wireless' mobility division, including to develop and
provide advanced data and multimedia services offerings that create and enhance
customer loyalty and create new revenue sources for AT&T Wireless; and (iii) to
accelerate the growth of each Alliance Partner's existing mobile multimedia and
data service businesses by utilizing each other's current and future technology,
experience and know-how in their respective Home Territories.
(c) As soon as practicable following the Closing (and with the
Alliance Partners using commercially reasonable efforts to do so within three
months of Closing), AT&T Wireless shall form a wholly owned subsidiary (which
subsidiary may be a limited liability company, corporation or other entity),
which will be wholly owned and controlled (directly or indirectly) by AT&T
Wireless (such entity is referred to herein as the "MMS"). The MMS will be
responsible for the development and commercialization of i-mode mobile
multimedia content and applications over the AT&T Wireless network in the AT&T
Wireless Home Territory.
Section 5.2 TECHNOLOGY EVOLUTION AND TIMING. (a) The Alliance Partners
each shall use commercially reasonable efforts to jointly: (i) seek to enable
users to access diverse HTML and x-HTML applications and content on mobile
wireless terminals, and (ii) encourage terminal manufacturers to produce a
variety of attractive and economical devices that are compatible with the
following technology path:
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HDML/WML-->cHTML (as commercially reasonable in the United
States)-->xHTML/WAP-NG
(b) As an interim step toward the development of xHTML/WAP-NG, and in
furtherance of the goals set forth in Section 5.1(b) and Section 5.2(a), the
Alliance Partners shall jointly approach terminal manufacturers concerning the
development, production and marketing of dual browser handsets, and shall work
jointly with such manufacturers with respect to functions, specification and
design for such handsets.
(c) The Alliance Partners shall use commercially reasonable efforts to
adopt 3G technology paths that target convergence upon worldwide standards for
data and air interface protocols (i.e., WAP-NG and W-CDMA).
(d) As soon as practicable following the Closing, the Alliance
Partners jointly shall (i) commence study on DoCoMo's service platform elements
that may be of benefit to the MMS, including, but not limited to, profiling
engines, data warehouses and clickstream analysis and (ii) study the feasibility
of accelerating the delivery to market of advanced devices and related
technologies that can increase the growth and performance of AT&T Wireless and
the MMS. The Alliance Partners acknowledge and agree that any business plan
resulting from these studies, including the Business Plan referred to in Section
5.5 below, should be efficient and have a benefit/cost relationship that is
positive in terms of economics and market position for AT&T Wireless.
Section 5.3 CONTRIBUTIONS AND RESOURCES. (a) AT&T Wireless shall
contribute the following to the MMS:
(i) Multimedia resources:
(A) PocketNet service, experience and personnel;
(B) rights to current content, commerce and applications; and
(C) gateway, email and related application servers.
(ii) AT&T Wireless agrees that it will earmark an amount of cash
sufficient to fund the business plan of the MMS (as described in
Section 5.5 below), until such time as the business is cash flow
positive; PROVIDED, HOWEVER, that AT&T Wireless shall not be
required to make available to the MMS in excess of $200 million.
(b) DoCoMo shall, among other things, assist AT&T Wireless and the MMS
in achieving the goals set forth in Sections 5.1 and 5.2 hereof by providing the
MMS with information exchange opportunities and access to technology, know-how
and resources, including support in the categories outlined in Schedule 5.3(b)
hereto. Such contributions shall include, without limitation:
(i) the exclusivity and noncompete provisions set forth in Article X;
(ii) the items and support described in Schedule 5.3(b) hereof;
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(iii) handset specifications and development expertise and influence;
(iv) standardization influence;
(v) i-mode experience, such as negotiations with content providers;
and
(vi) licenses to all DoCoMo know-how, technology and intellectual
property rights related to i-mode mobile multimedia services (up
to and including 3G) as it is developed; sole use of the i-mode
brand in the USA, and other know-how developed for mobile
multimedia services. It is understood, for purposes of
clarification, that "i-mode mobile multimedia technology (up to
and including 3G)" as used herein includes mobile Internet
gateway designs, and user interface designs, but does not include
technology which solely relates to 3G network architecture and
infrastructure, which will be subject to separate negotiations
based upon commercially reasonable licensing terms and
conditions. Such licenses shall be subject to that certain letter
agreement, dated November 30, 2000, by and among DoCoMo, AT&T and
AT&T Wireless.
Although, with respect to the contributions and licenses made or granted by
DoCoMo under this Section 5.3(b) and in particular with respect to 5.3(b)(ii)
and (vi), DoCoMo agrees to provide these contributions and licenses based on and
including all of its rights (now held or later acquired) to such contributions
and licenses in Japan and, if any, in the Home Territory of AT&T Wireless,
DoCoMo does not make any representation or warranty as to whether such rights,
experience, know-how and technology can be lawfully used in the Home Territory
of AT&T Wireless in the same manner as used in Japan, or at all. DoCoMo does
represent and warrant, however, that, at the time of the execution of this
Agreement, to the actual knowledge of the Executive Manager of the Intellectual
Property Department of DoCoMo (upon reasonable inquiry of persons reporting to
him), there are no third-party rights or claims that would render the use of the
contributions or licenses by AT&T Wireless in its Home Territory unlawful or
infringing, or actual knowledge of any limitations on the use of these
contributions and licenses in the Home Territory of AT&T Wireless, except as
disclosed in that certain letter pertaining to this paragraph sent by DoCoMo to
AT&T Wireless on the date of this Agreement. Accordingly, DoCoMo shall not be
responsible to AT&T Wireless, other than for breach of the representations and
warranties in the immediately preceding sentence, for any damages that may arise
in connection with the use of these contributions and licenses by AT&T Wireless
in its Home Territory. DoCoMo shall make all commercially reasonable efforts as
AT&T may reasonably request from time to time to assist AT&T Wireless in
obtaining for AT&T Wireless the right to use or exploit these contributions and
licenses in its Home Territory.
(c) Subject to mutual agreement by AT&T Wireless and DoCoMo based on
the needs of the MMS and resource availability, DoCoMo shall second to AT&T
Wireless such employees as may be mutually beneficial for the free exchange of
information. The Alliance Partners anticipate that DoCoMo will provide
approximately two to three employees for the initial two years following the
Closing, approximately three to five employees during the period of AT&T
Wireless's deployment of 3G technology, and two to three employees thereafter.
The ultimate number of employees of DoCoMo seconded each year shall be
determined by the
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Advisory Committee. DoCoMo will also accept up to two employees from AT&T
Wireless to work in Tokyo with DoCoMo's gateway, mobile multimedia or other
appropriate division in the Tokyo region. DoCoMo will credit $1 million per year
to cover the cost of DoCoMo secondees to AT&T Wireless, and the Alliance
Partners have agreed to discuss whether such amount would also cover AT&T
Wireless employees exchanged to DoCoMo. The Alliance Partners also agree to use
commercially reasonable efforts to set up regular meetings to facilitate
transfer of know-how. The qualifications of DoCoMo personnel available for
secondment will be provided to AT&T Wireless for consideration as opportunities
arise for placement within the MMS.
(d) Neither DoCoMo nor, except as specifically set forth in Section
5.3(a)(ii), AT&T Wireless shall have any obligation to fund losses of the MMS,
and except as set forth in this Section 5.3, no Person shall have any obligation
to make any contribution to the MMS. The foregoing notwithstanding, AT&T
Wireless and, prior to the Spin-off, AT&T, shall be entitled to any tax benefits
attributable to losses of the MMS.
Section 5.4 ADVISORY COMMITTEE AND SENIOR MANAGEMENT. (a) As soon as
practicable after the Closing, AT&T Wireless shall appoint an interim Chief
Executive Officer of the MMS (the "MMS CEO"), following consultation with
DoCoMo, to oversee and manage the initial activities of the MMS, or to manage
the MMS during any periods in which the office of MMS CEO is vacant. DoCoMo and
AT&T Wireless will use their commercially reasonable efforts to select and
appoint a mutually satisfactory permanent MMS CEO within six months after the
Closing or within six months of the creation of any vacancy. The MMS CEO shall
be a person with extensive experience and background with data related services
or similar skills in the United States and be sufficiently familiar with United
States markets. The MMS CEO, as MMS CEO, shall be an employee of AT&T Wireless
(or one of its subsidiaries) and work in the headquarters of AT&T Wireless or
such other location as may be determined for the primary offices of the MMS.
(b) As soon as practicable after the Closing, AT&T Wireless and DoCoMo
shall establish a management advisory committee (the "ADVISORY COMMITTEE") to
assist and advise the MMS CEO. The Advisory Committee will, among other things,
assist and advise the MMS CEO in reviewing and updating the business plan and
strategy of the MMS. The Alliance Partners anticipate that the Advisory
Committee will meet on a regular basis or as requested by the MMS CEO. The
composition and size of the Advisory Committee will be mutually agreed upon by
the Alliance Partners, it being understood and agreed that DoCoMo will have
significant, but not majority, representation on the Advisory Committee.
(c) DoCoMo shall have the right to appoint the Chief Technology
Officer of the MMS, subject to the approval of AT&T Wireless.
Section 5.5 BUSINESS PLAN. (a) As soon as practicable following the
Closing, AT&T Wireless, in consultation with DoCoMo, shall prepare a business
strategy and plan (the "BUSINESS PLAN") for the first 18 months of operations of
the MMS. The Business Plan will be updated as appropriate in light of changing
business dynamics and business needs.
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(b) Subject to the Business Plan in effect from time to time, it is
anticipated that the MMS will have responsibility for AT&T Wireless's mobile
multimedia business, such as:
(i) mobile Internet server operation;
(ii) application/service deployment, including streaming of music and
video and e-commerce applications;
(iii) negotiations with content providers;
(iv) terminal functions planning, design and specifications in
conjunction with AT&T Wireless's mobile services division;
(v) development of operational and technical standards in conjunction
with AT&T Wireless's mobile services division; and
(vi) brand development for the MMS.
Section 5.6 TERMINATION. (a) All obligations of the Alliance Partners
set forth in this Article V may be terminated upon delivery of written notice in
accordance with Section 11.4 hereof by either Alliance Partner following the
occurrence of an Investor Rights Termination Event, except that (i) all DoCoMo
technology and intellectual property rights licenses shall continue for 18
months after delivery of such notice by either Alliance Partner and (ii)
termination of any agreements entered into pursuant to Section 5.7 hereof shall
be pursuant to the terms of those agreements.
(b) In the event that an Investor Rights Termination Event has
occurred as a result of the exercise by DoCoMo of its Technology Default Right
or No Spin-off Right, or as a result of a Permitted Redemption, all obligations
of the Alliance Partners with respect to this Article V will terminate at the
end of the 90 day period giving rise to the Investor Rights Termination Event.
(c) In the event that DoCoMo ceases to provide access to licenses on
the basis and as described in Section 5.3(b)(vi) and pursuant to that certain
letter dated November 30, 2000 relating to the licensing of such technology,
AT&T Wireless may, without limitation of any other remedies that may be
available, terminate all obligations of the Alliance Partners with respect to
the Alliance.
Section 5.7 OTHER OPERATIONAL COOPERATION. (a) DoCoMo and AT&T
Wireless shall negotiate in good faith and use reasonable efforts to enter into
separate definitive agreements memorializing the principles set forth in this
Section 5.7(a). DoCoMo and AT&T Wireless will each recognize the other party as
its primary and preferred operating partner for mobile wireless services in the
other party's Home Territory. Specific areas of operational cooperation by
DoCoMo and AT&T Wireless will include:
(i) ROAMING. DoCoMo and AT&T Wireless will, subject to technical and
commercial feasibility, each recognize the other party as its
primary and
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preferred roaming partner in the other party's Home Territory
service area, subject to both parties' existing roaming
arrangements and agreements as of November 30, 2000. Nothing
contained herein shall provide either party with any rights that
would conflict with such existing roaming agreements for so long
as such existing roaming agreements remain in effect. DoCoMo and
AT&T Wireless shall use commercially reasonable efforts to
negotiate in good faith roaming arrangements with each other on
reciprocal terms no less favorable than those provided to similar
wireless providers; provided that such arrangements shall not in
any way conflict with either party's existing roaming agreements.
Each party acknowledges that there may be substantial technical
and other obstacles to achieving such roaming arrangements and
each party agrees to take commercially reasonable steps, if any
such exist, to overcome such obstacles; PROVIDED that no party
shall be required to take any such steps that, from an
economic perspective, would not be commercially reasonable.
Nothing contained herein shall be deemed to create any obligation
of exclusivity between DoCoMo and AT&T Wireless with respect to
their roaming agreements in each other's Home Territory.
(ii) JOINT-MARKETING PROGRAMS AND OFFERS. DoCoMo and AT&T Wireless
will use commercially reasonable efforts to cooperate in
designing, to the extent commercially feasible, programs and
offers that market and provide mobile wireless services that are
intended to extend from one party's Home Territory into the other
party's Home Territory. The sharing of customer information will
be subject to such limitations as may be imposed by applicable
law and regulation.
(iii) MAJOR ACCOUNT SERVICES. DoCoMo and AT&T Wireless will both
participate, to the extent commercially feasible, in programs
that will enable each to provide differentiated services to major
customers with global mobile wireless telecommunication needs in
the United States and Japan. Such programs will include AT&T
Wireless's Worldview program, which allows large business
customers to receive monthly consolidated reports covering
wireless usage in relevant territories.
ARTICLE VI
TRANSFER RESTRICTIONS
Section 6.1 TRANSFER RESTRICTIONS. (a) Without the prior written
consent of AT&T Wireless, DoCoMo will not Transfer (i) any shares of New
Tracking Stock and (ii) for a period of eighteen months following the Closing
Date (except as otherwise provided below), any shares of Current Wireless
Tracking Stock, AT&T Wireless Common Stock or Warrants, except Transfers by
DoCoMo to any directly or indirectly wholly owned Subsidiary of DoCoMo (each
such transferee, a "DESIGNEE"); PROVIDED that prior to such Transfer such
Designee agrees in writing with AT&T Wireless to itself be bound by all the
provisions of this Agreement as if such transferee were DoCoMo. Nothing in this
Section 6.1(a) shall limit DoCoMo's right to make
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Transfers in accordance with and to the extent provided in Sections 4.3 and 4.4
hereof. In the event that during the initial 18-month period any such transferee
that is a directly or indirectly wholly owned Subsidiary of DoCoMo ceases to be
a directly or indirectly wholly owned Subsidiary, then any prior Transfer to
such Subsidiary shall immediately become null and void and ownership and title
to any securities previously Transferred to such Subsidiary shall revert to
DoCoMo.
(b) The foregoing notwithstanding, DoCoMo may Transfer shares of
Current Wireless Tracking Stock, AT&T Wireless Common Stock or Warrants without
AT&T Wireless's prior written consent prior to the expiration of 18 months
following the Closing Date, subject to the other provisions of this Section 6.1,
upon the occurrence of either of the following events: (1) a sale of all or
substantially all the assets of the Wireless Group, or a merger, consolidation
or similar business combination involving all or substantially all of the
business of the Wireless Group, other than any such transaction in which the
holders of the Economic Interests in the Wireless Group as of immediately prior
to the consummation of such transaction continue to hold, directly or
indirectly, at least two-thirds of such Economic Interests in the Wireless Group
or the successor corporation to the Wireless Group following such transaction,
or (2) the acquisition or acquisitions (including by merger or other similar
transaction) of any business or assets by the Wireless Group (other than
acquisitions of spectrum) after the Closing Date if the consideration paid by or
on behalf of the Wireless Group with respect to all such acquisitions exceeds
$25 billion. In addition, DoCoMo may tender shares of Current Wireless Tracking
Stock or AT&T Wireless Common Stock, prior to the expiration of 18 months
following the Closing Date, into a tender offer or exchange offer that is
approved by the Board.
(c) Except as set forth in the next sentence, DoCoMo's rights under
this Agreement (and the Related Agreements) will not be transferable to any
transferee of any shares of AT&T Wireless Stock, other than a transferee that is
and remains a wholly owned Subsidiary of DoCoMo (and has entered into an
agreement with AT&T Wireless as set forth in Section 6.1(a)). DoCoMo may
transfer registration rights described in Article VII hereof to any transferee
of more than $1 billion of AT&T Wireless Stock from DoCoMo, and may transfer one
of its demand registration rights to any transferee of the Warrants (which
registration right shall apply only to registration of the Current Wireless
Tracking Stock or AT&T Wireless Common Stock issuable upon exercise of the
Warrants and not to the Warrants themselves and not to any New Tracking Stock
issued upon exercise of Warrants, but shall apply even if the amount of
Registrable Securities is less than the $500 million minimum contemplated by
Section 7.1(a)). DoCoMo shall provide written notice to AT&T and AT&T Wireless
within 10 Business Days from the date of consummation of the Transfer of any
such transfer of registration rights, which notice shall set forth in detail the
terms of any such Transfer. Unless and until such notice is received by AT&T or
AT&T Wireless, as the case may be, neither AT&T nor AT&T Wireless shall be
required to honor any registration rights of any such Transferee. In the event
demand registration rights are transferred in accordance with this Section
6.1(c), each reference to DoCoMo in Article VII hereof, to the extent such
reference and the relevant circumstances pertain to a Demand Registration, shall
be deemed to be or include, as appropriate, such transferee of demand
registration rights hereunder. Anything herein to the contrary notwithstanding,
nothing herein, and no such transfers of rights, shall alter or enlarge AT&T's
or AT&T Wireless's aggregate registration obligations under this Agreement.
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(d) Without AT&T's approval (prior to the Spin-off) or AT&T Wireless's
approval (following the Spin-off), DoCoMo may not at any time Transfer
securities to any one Person such that, after giving effect to the Transfer,
such Person would Beneficially Own in excess of 6% of the outstanding Current
Wireless Tracking Stock (before the Spin-off) or in excess of 6% of the
outstanding AT&T Wireless Common Stock (following the Spin-off); PROVIDED that
in the case of a Transfer of shares to a Person specified in Rule
13d-1(b)(1)(ii) under the Exchange Act that would be eligible based on such
Person's status and passive intent with respect to the ownership, holding and
voting of such shares to report such Person's ownership on Schedule 13G under
the Exchange Act, DoCoMo may Transfer to such Person up to a number of shares
such that, after giving effect to the Transfer, such Person would not
beneficially own in excess of 10% of the outstanding Current Wireless Tracking
Stock (before the Spin-off) or in excess of 10% of the outstanding AT&T Wireless
Common Stock (following the Spin-off). Any Transfer of the Warrants will be
subject to the foregoing restrictions (applied as if the Transferee had fully
exercised the transferred Warrants), and to all other transfer restrictions set
forth herein or in the Warrant Agreement.
(e) Any certificates for shares of AT&T Wireless Stock issued pursuant
to the Purchase Agreement or issued thereafter in respect of any Transfer shall
bear a legend or legends referencing restrictions on transfer of such shares
under the Securities Act and under this Agreement; PROVIDED, that the holder of
any certificate(s) bearing any such legend referencing restrictions under the
Securities Act shall be entitled to receive from AT&T, with respect to Current
Wireless Tracking Stock, or AT&T Wireless, with respect to AT&T Wireless Common
Stock, new certificates for a like number of shares of such AT&T Wireless Stock
not bearing such legend upon the request of such holder and upon (x) such time
as such restriction under this Agreement is no longer applicable, with respect
to restrictions related to this Agreement and (y) delivery of an opinion of
counsel to such holder, which opinion is reasonably satisfactory in form and
substance to AT&T or to AT&T Wireless, as the case may be, and its counsel, that
the restriction referenced in such legend is no longer required in order to
ensure compliance with the Securities Act.
ARTICLE VII
REGISTRATION RIGHTS
Section 7.1 DEMAND REGISTRATIONS. (a) Subject to Section 7.3, at any
time following the eighteen-month anniversary of the Closing (or with respect to
a registration that would become effective following such eighteen-month
anniversary, following the seventeen-month anniversary of the Closing or at any
time following the occurrence of an event described in Section 6.1(b)), DoCoMo
may, on not more than six (6) separate occasions in the aggregate, require (i)
prior to the Spin-off, AT&T to file a registration statement under the
Securities Act in respect of all or a portion of DoCoMo's Registrable Securities
or (ii) following the Spin-off, AT&T Wireless to file a registration statement
under the Securities Act in respect of all or a portion of DoCoMo's Registrable
Securities; PROVIDED, in each case, that such request involves Registrable
Securities having an aggregate Market Value on the date of delivery of such
request of at least $500 million, by delivering to the Issuer written notice
stating that such right is being exercised, specifying the number of shares of
Current Wireless Tracking Stock or AT&T Wireless Common Stock to be included in
such registration (the shares subject to such request,
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the "DEMAND SHARES") and describing the intended method of distribution thereof,
which may include an underwritten offering (a "DEMAND REQUEST"). Upon receiving
a Demand Request, the Issuer shall (i) use all reasonable efforts to file as
promptly as reasonably practicable a registration statement on such form as it
may reasonably deem appropriate (PROVIDED that in no event shall the Issuer be
obligated to register any securities on a "shelf" registration statement or
otherwise to register securities for offer or sale on a continuous or delayed
basis) providing for the registration of the sale of such Demand Shares pursuant
to the intended method of distribution (a "DEMAND REGISTRATION") and (ii) after
the filing of an initial version of the registration statement, use all
reasonable efforts to cause such registration statement to be declared effective
under the Securities Act as promptly as practicable after the date of filing of
such registration statement. DoCoMo (including any transferee to which DoCoMo
shall have transferred registration rights as permitted hereunder) may not
exercise more than one Demand Request in any 7 1/2 month period. In the event
that a Demand Request is delivered to AT&T prior to the Spin-off, but the Demand
Shares are not registered by the time of consummation of the Spin-off, such
Demand Request shall be deemed withdrawn and shall not count for the purposes of
determining the number of Demand Registrations to which DoCoMo is entitled
hereunder.
(b) Anything in this Agreement to the contrary notwithstanding, the
Issuer shall be entitled to postpone and delay, for reasonable periods of time,
but in no event more than an aggregate of 90 days during any 12-month period (a
"BLACKOUT PERIOD"), the filing or effectiveness of any Demand Registration if
the Issuer shall determine that any such filing or the offering of any
Registrable Securities would (i) in the good faith judgment of the Board,
impede, delay or otherwise interfere with any pending or contemplated material
acquisition, corporate reorganization or other similar material transaction
involving the Issuer, including without limitation the Spin-off and the proposed
Exchange Offer, (ii) based upon advice from the Issuer's investment banker or
financial advisor, adversely affect any pending or contemplated financing,
offering or sale of any class of securities by the Issuer or the Spin-off or the
proposed Exchange Offer or (iii) in the good faith judgment of the Board,
require disclosure of material non-public information (other than information
relating to an event described in clauses (i) or (ii) above) which, if disclosed
at such time, would be harmful to the best interests of the Issuer and its
stockholders; PROVIDED, HOWEVER, that the Issuer shall give written notice to
DoCoMo of its determination to postpone or delay the filing of any Demand
Registration; PROVIDED, FURTHER, that except in the case of a registration
related to the Spin-off or the Exchange Offer, in the event that the Issuer
proposes to register AT&T Wireless Stock, whether or not for sale for its own
account, during a Blackout Period, DoCoMo shall have the right to exercise its
rights under Section 7.2 of this Agreement with respect to such registration,
subject to the limitations contained in this Agreement on the exercise of such
rights; and PROVIDED FURTHER that AT&T or AT&T Wireless, as the case may be,
shall file such registration statement or post-effective amendment and otherwise
continue with such registration as soon as practicable thereafter. Upon notice
by the Issuer to DoCoMo of any such determination, DoCoMo shall keep the fact of
any such notice strictly confidential, and during any Blackout Period, promptly
halt any offer, sale, trading or Transfer by it of any AT&T Wireless Stock for
the duration of the Blackout Period set forth in such notice (or until such
Blackout Period shall be earlier terminated in writing by the Issuer) and
promptly halt any use, publication, dissemination or distribution of the Demand
Registration, each prospectus included therein, and any amendment or supplement
thereto by it for the duration of the Blackout Period set forth in such notice
(or until such Blackout Period shall be earlier
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terminated in writing by the Issuer) and, if so directed by the Issuer, will
deliver to the Issuer any copies then in its possession of the prospectus
covering such Registrable Securities.
(c) In connection with an underwritten offering, if the managing
underwriter or co-managing underwriter reasonably and in good faith shall have
advised the Issuer or DoCoMo that, in its opinion, the number of Demand Shares
subject to a Demand Request exceeds the number that can be sold in such
offering, the Issuer shall include in such registration the number of Demand
Shares that, in the opinion of such managing underwriter or underwriters, can be
sold in such offering; PROVIDED that if as a result of any reduction pursuant to
this paragraph (c) the aggregate Market Value of the Demand Shares to be so
included is less than $500 million, DoCoMo may withdraw such Demand Request with
respect to all Demand Shares covered thereby and such registration shall not
count for the purposes of determining the number of Demand Registrations to
which DoCoMo is entitled under Section 7.1(a); PROVIDED, FURTHER, that if
pursuant to the Demand Request DoCoMo has given the Issuer the right to select
the managing underwriter (reasonably acceptable to DoCoMo) and the managing
underwriter so selected by the Issuer makes the determination that results in
the reduction pursuant to this paragraph (c) such that the aggregate Market
Value of the Demand Shares to be so included is less than $500 million, then
DoCoMo may elect to proceed with the registration, and such registration shall
not count for the purposes of determining the number of Demand Registrations to
which DoCoMo is entitled under Section 7.1(a).
(d) In connection with any underwritten offering, the managing
underwriter or underwriters for such Demand Registration shall be selected by
DoCoMo; PROVIDED that such managing underwriter shall be a nationally recognized
investment banking firm and shall be reasonably acceptable to the Issuer and
provided, further that with respect to any registration effected in connection
with Section 4.3(e) hereof, AT&T or AT&T Wireless, as the case may be, will be
entitled to select the managing underwriter or underwriters. In addition to the
foregoing, the Issuer may, at its option, select a nationally recognized
investment banking firm reasonably acceptable to DoCoMo to act as a co-managing
underwriter. The Issuer shall have the right to approve the selection of the
counsel to any managing underwriter hereunder, which approval will not be
unreasonably withheld.
Section 7.2 PIGGY-BACK REGISTRATION. (a) If, at any time following the
expiration or termination of the transfer restrictions set forth in Section 6.1,
for so long as DoCoMo owns Registrable Securities having an aggregate Market
Value of at least $1 billion or representing at least 2% of the Economic
Interest Percentage of AT&T Wireless (prior to the Spin-off) or of the
outstanding voting securities of AT&T Wireless (after the Spin-off), AT&T (prior
to the Spin-off) or AT&T Wireless (after the Spin-off) proposes to register any
Equity Shares on its behalf or on behalf of any of its stockholders, on a form
and in a manner that would permit registration of the Registrable Securities
(other than in connection with dividend reinvestment plans, rights offerings or
a registration statement on Form S-4 or S-8 or any similar successor form), the
Issuer shall give reasonably prompt written notice to DoCoMo of its intention to
do so, which notice shall be given to DoCoMo not less than 45 days prior to the
contemplated filing date, if it is reasonably practicable to do so at such time,
and otherwise promptly after an initial filing date is first contemplated, but
in no event less than 12 Business Days prior to the contemplated filing date for
such registration statement. Upon the written election of DoCoMo (a "PIGGY-BACK
REQUEST") given within 20 Business Days following the
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receipt of written notice from the Issuer (but in no event later than two
Business Days prior to the contemplated filing date for such registration
statement indicated in such notice), which election shall specify the number of
the Registrable Securities intended to be disposed of by DoCoMo, the Issuer
shall include in such registration statement (a "PIGGY-BACK REGISTRATION"),
subject to the provisions of this Section 7.2, such number of the Registrable
Securities as shall be set forth in such Piggy-Back Request. No registration
effected under this Section 7.2 shall relieve the Issuer of its obligations to
effect a Demand Registration required under Section 7.1.
(b) In the event that, following the expiration or termination of the
transfer restrictions set forth in Section 6.1, AT&T (prior to the Spin-off) or
AT&T Wireless (after the Spin-off) proposes to register Equity Shares in
connection with an underwritten offering and a nationally recognized investment
banking firm selected by AT&T or AT&T Wireless, as the case may be, to act as
managing underwriter thereof reasonably and in good faith shall have advised the
Issuer, DoCoMo, or any other holder of Equity Shares intending to offer Equity
Shares in the offering (each, an "OTHER HOLDER") that, in its opinion, the
inclusion in the registration statement of some or all of the Registrable
Securities sought to be registered by DoCoMo would adversely affect the price or
success of the offering, the Issuer shall include in such registration statement
such number of Equity Shares as it was advised can be sold in such offering
without such an effect (the "MAXIMUM NUMBER") as follows and in the following
order of priority: (A) FIRST, if such registration was initiated by AT&T or AT&T
Wireless, such number of shares of AT&T Wireless Stock as AT&T or AT&T Wireless
intended to be registered and sold, or, if such registration is on behalf of any
Other Holders, such number of Equity Shares as such Other Holders intended to be
registered and sold, and (B) SECOND, if and to the extent that the number of
Equity Shares to be registered under clause (A) is less than the Maximum Number,
such number of Equity Shares as DoCoMo, AT&T or AT&T Wireless (if such
registration was not initiated by AT&T or AT&T Wireless) and any Other Holders
(or additional Other Holders) shall have intended to register that, when added
to the number of Equity Shares to be registered under clause (A), is less than
or equal to the Maximum Number, on a pro rata basis according to the total
number of Equity Shares intended to be registered by each such Person.
(c) The rights set forth in this Section 7.2 shall not apply to any
registration in connection with the Spin-off or the Exchange Offer.
Section 7.3 LIMITATIONS ON DEMAND REGISTRATIONS; TERMINATION OF
REGISTRATION OBLIGATION. (a) Except to the extent DoCoMo is entitled to exercise
demand registration rights after the seventeen-month anniversary of the Closing
in accordance with the first sentence of Section 7.1(a), DoCoMo will not be
entitled to exercise demand registration rights under this Agreement at any time
that it is prohibited from transferring the relevant securities pursuant to the
Transfer restrictions contained in Section 6.1. Nothing in this Article VII
shall affect or supersede any of the Transfer restrictions set forth in Article
VI hereof.
(b) Without limiting the rights of a transferee of Warrants as set
forth in the second sentence of Section 6.1(c), DoCoMo will be entitled to
exercise demand registration rights under this Agreement only if at the time of
exercise of any such demand DoCoMo (together with its wholly owned Subsidiaries)
owns Registrable Securities having an aggregate Market Value of at least $1
billion or representing at least 2% of the Economic Interest
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Percentage of AT&T Wireless (prior to the Spin-off) or of the outstanding voting
securities of AT&T Wireless (after the Spin-off).
(c) Anything in this Agreement to the contrary notwithstanding, if at
any time AT&T, with respect to Current Wireless Tracking Stock, or AT&T
Wireless, with respect to AT&T Wireless Common Stock, shall obtain a written
opinion of legal counsel reasonably satisfactory to DoCoMo to the effect that
the Registrable Securities may be publicly offered for sale in the United States
by DoCoMo without restriction as to manner of sale and amount of securities sold
and without registration under the Securities Act, the Issuer shall no longer be
obligated to file or maintain a registration statement with respect to the
Registrable Securities pursuant to this Agreement, unless at a later date DoCoMo
delivers to the Issuer an opinion of counsel to DoCoMo, which opinion is
reasonably satisfactory in form and substance to counsel to the Issuer, that
registration is then required as a result of a change in applicable law.
Section 7.4 REGISTRATION PROCEDURES. (a) In connection with each
registration statement prepared pursuant to this Article VII, and in accordance
with the intended method or methods of distribution of the Registrable
Securities as described in such registration statement, the Issuer, as soon as
reasonably practicable and to the extent practicable, shall:
(i) prepare and file with the SEC a registration statement on an
appropriate registration form of the SEC and use reasonable
efforts to cause such registration statement to become and remain
effective, which registration statement shall comply as to form
in all material respects with the requirements of the applicable
form and include all financial statements required by such form
to be filed therewith; PROVIDED that before filing a registration
statement or prospectus or any amendments or supplements thereto,
the Issuer shall furnish to one counsel selected by DoCoMo, draft
copies of all such documents proposed to be filed at least 15
Business Days (in the case of a Demand Registration) or 10
Business Days (in the case of any other registration) prior to
such filing (in each case, only if it is reasonably practicable
to do so at such times, and otherwise promptly upon circulation
of the first draft of such documents circulated to the
underwriters, but in no event less than 10 days or five days,
respectively), which documents will be subject to the reasonable
review and comment of DoCoMo and its agents and representatives
and the underwriters, if any;
(ii) furnish without charge to DoCoMo, and the underwriters, if any,
at least one conformed copy of the registration statement and
each post-effective amendment or supplement thereto (including
all schedules and exhibits but excluding all documents
incorporated or deemed incorporated therein by reference, unless
requested in writing by DoCoMo, or an underwriter) and such
number of copies of the registration statement and each amendment
or supplement thereto and the summary, preliminary, final,
amended or supplemented prospectuses included in such
registration statement as DoCoMo or such underwriter may
reasonably request in order to facilitate the public sale or
other disposition of the Registrable Securities being sold by
DoCoMo (the Issuer hereby consents to the use in
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accordance with the U.S. securities laws of such registration
statement (or post-effective amendment thereto) and each such
prospectus (or preliminary prospectus or supplement thereto) by
DoCoMo and the underwriters, if any, in connection with the
offering and sale of the Registrable Securities covered by such
registration statement or prospectus);
(iii) use all reasonable efforts to keep such registration statement
effective for the earlier of (A) 60 days and (B) such time as all
of the securities covered by the registration statement have been
disposed (the "EFFECTIVE PERIOD"); prepare and file with the SEC
such amendments, post-effective amendments and supplements to the
registration statement and the prospectus as may be necessary to
maintain the effectiveness of the registration for the Effective
Period and to cause the prospectus (and any amendments or
supplements thereto) to be filed;
(iv) use all reasonable efforts to register or qualify the Registrable
Securities covered by such registration statement under such
other securities or "blue sky" laws of such jurisdictions in the
United States as are reasonably necessary, keep such
registrations or qualifications in effect for so long as the
registration statement remains in effect, and do any and all
other acts and things that may be reasonably necessary to enable
DoCoMo or any underwriter to consummate the disposition of the
Registrable Securities in such jurisdictions; PROVIDED, HOWEVER,
that in no event shall the Issuer be required: to qualify to do
business as a foreign corporation in any jurisdiction where it
would not, but for the requirements of this subparagraph (iv), be
required to be so qualified; to execute or file any general
consent to service of process under the laws of any jurisdiction;
to take any action that would subject it to service of process in
suits other than those arising out of the offer and sale of the
securities covered by the registration statement; or to subject
itself to taxation in any jurisdiction where it would not
otherwise be obligated to do so, but for this subparagraph (iv);
(v) use all reasonable efforts to cause the Registrable Securities to
be registered with or approved by such other governmental
agencies or authorities as may be necessary to enable DoCoMo to
consummate the disposition of the Registrable Securities;
(vi) use all reasonable efforts to cause all Registrable Securities
covered by such registration statement to be listed on the NYSE
or on the principal securities exchange on which the AT&T
Wireless Stock of the same class as such Registrable Securities
is then listed, or if no similar securities are then so listed,
cause all such Registrable Securities to be listed on a United
States national securities exchange or secure designation of each
such Registrable Security as a Nasdaq National Market "national
market system security" within the meaning of Rule 11Aa2-1 of the
SEC or secure
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National Association of Securities Dealers Automated Quotation
authorization for such shares and, without limiting the
generality of the foregoing, use all reasonable efforts to take
such actions as may be required by the Issuer as the issuer of
such Registrable Securities to facilitate the registration of at
least two market makers as such with respect to such shares with
the National Association of Securities Dealers, Inc.;
(vii) promptly notify DoCoMo and the managing underwriter or
underwriters, if any, after becoming aware thereof, (A) when the
registration statement or any related prospectus or any amendment
or supplement thereto has been filed, and, with respect to the
registration statement or any post-effective amendment, when the
same has become effective, (B) of any request by the SEC or any
United States state securities authority for amendments or
supplements to the registration statement or the related
prospectus or for additional information, (C) of the issuance by
the SEC of any stop order suspending the effectiveness of the
registration statement or the initiation of any proceedings for
that purpose, (D) of the receipt by the Issuer of any
notification with respect to the suspension of the qualification
of the Registrable Securities for sale in any jurisdiction or the
initiation of any proceeding for such purpose or (E) within the
Effective Period of the happening of any event or the existence
of any fact that makes any statement in the registration
statement or any post-effective amendment thereto, prospectus or
any amendment or supplement thereto, or any document incorporated
therein by reference untrue in any material respect or that
requires the making of any changes in the registration statement
or post-effective amendment thereto or any prospectus or
amendment or supplement thereto so that they will not contain any
untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which
they were made, not misleading;
(viii) during the Effective Period, use all reasonable efforts to
obtain, as promptly as practicable, the withdrawal of any order
enjoining or suspending the use or effectiveness of the
registration statement or any post-effective amendment thereto or
the lifting of any suspension of the qualification of any of the
Registrable Securities for sale in any jurisdiction;
(ix) deliver promptly to DoCoMo and the managing underwriters, if any,
copies of all correspondence between the SEC and the Issuer, its
counsel or auditors and all memoranda relating to discussions
with the SEC or its staff with respect to the registration
statement and permit DoCoMo to do such investigation, with
respect to information contained in or omitted from the
registration statement as it deems reasonably necessary for the
purpose of conducting customary due diligence with respect to the
Issuer,
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PROVIDED any such investigation shall not interfere unreasonably
with the Issuer's business;
(x) use all reasonable efforts to provide and cause to be maintained
a transfer agent and registrar for all such Registrable
Securities covered by such registration statement not later than
the effective date of such registration statement;
(xi) cooperate with DoCoMo and the managing underwriter or
underwriters, if any, to facilitate the timely preparation and
delivery of certificates representing such Registrable Securities
to be sold under the registration statement in a form eligible
for deposit with the Depository Trust Corporation not bearing any
restrictive legends and not subject to any stop transfer order
with any transfer agent, and cause such Registrable Securities to
be issued in such denominations and registered in such names as
the managing underwriters, if any, may request in writing or, if
not an underwritten offering, in accordance with the instructions
of DoCoMo, in each case at least two Business Days prior to any
sale of Registrable Securities;
(xii) in the case of an underwritten offering, use all reasonable
efforts to enter into an underwriting agreement customary in form
and scope for underwritten secondary offerings of the nature
contemplated by the applicable registration statement;
(xiii) use all reasonable efforts to obtain an opinion from the
Issuer's counsel and a "cold comfort" letter from the Issuer's
independent public accountants (and, if necessary, any other
independent certified public accountants of any Subsidiary of the
Issuer or of any business acquired by the Issuer for which
financial statements and financial data is, or is required to be,
included in the registration statement) in customary form and
covering such matters as are customarily covered by such opinions
and "cold comfort" letters in connection with an offering of the
nature contemplated by the applicable registration statement;
(xiv) not later than the effective date of the applicable registration
statement, provide a CUSIP number for all Registrable Securities;
(xv) provide reasonable assistance to the underwriters in the
marketing of such Registrable Securities, including by making
reasonably available appropriate members of its management (but
without unduly burdening such individuals or the Issuer) as part
of the road shows in support of such offering (it being
understood that the reasonable level of such assistance will take
into account the size of the offering and other relevant
factors); and
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(xvi) use all reasonable efforts to provide to counsel to DoCoMo and
to the managing underwriters, if any, no later than the time of
filing of any document that is to be incorporated by reference
into the registration statement or prospectus (after the initial
filing of such registration statement), copies of any such
document.
(b) In the event that the Issuer would be required, pursuant to
Section 7.4(a)(vii)(E) above, to notify DoCoMo or the managing underwriter or
underwriters, if any, of the happening of any event specified therein, the
Issuer shall, subject to the provisions of Section 7.1(b) hereof, as promptly as
practicable, prepare and furnish to DoCoMo and to each such underwriter a
reasonable number of copies of a prospectus supplemented or amended so that, as
thereafter delivered to purchasers of Registrable Securities that have been
registered pursuant to this Agreement, such prospectus shall not contain an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading. DoCoMo agrees
that, upon receipt of any notice from the Issuer pursuant to Section
7.4(a)(vii)(E) hereof, DoCoMo shall, and shall use all reasonable efforts to,
cause any sales or placement agent or agents for the Registrable Securities and
the underwriters, if any, to forthwith discontinue disposition of the
Registrable Securities until such Person shall have received copies of such
amended or supplemented prospectus and, if so directed by the Issuer, to destroy
or to deliver to the Issuer all copies, other than permanent file copies, then
in its possession of the prospectus (prior to such amendment or supplement)
covering such Registrable Securities as soon as practicable after DoCoMo's
receipt of such notice.
(c) DoCoMo shall furnish to the Issuer in writing such information
regarding DoCoMo and its intended method of distribution of the Registrable
Securities as the Issuer may from time to time reasonably request in writing, to
the extent that such information is required in order for the Issuer to comply
with its obligations under all applicable securities and other laws and to
ensure that the prospectus relating to such Registrable Securities conforms to
the applicable requirements of the Securities Act and the rules and regulations
thereunder. DoCoMo shall notify the Issuer as promptly as practicable of any
inaccuracy or change in information previously furnished by DoCoMo to the Issuer
or of the occurrence of any event, in either case as a result of which any
prospectus relating to the Registrable Securities contains or would contain an
untrue statement of a material fact or omits to state any material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading, and promptly
furnish to the Issuer any additional information required to correct and update
any previously furnished information or required so that such prospectus shall
not contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading.
(d) DoCoMo agrees not to effect any public sale or distribution of any
Registrable Securities, including any sale pursuant to Rule 144 under the
Securities Act, and not to effect any such public sale or distribution of any
other equity security of Issuer or of any security convertible into or
exchangeable or exercisable for any equity security of the Issuer (in each case,
other than as part of such underwritten public offering) during the 10 days
prior to, and during the 90 day period (or such longer period as DoCoMo agrees
with the underwriter of
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such offering) beginning on, the consummation of any underwritten public
offering of the Registrable Securities covered by a registration statement
referred to in Section 7.2 to the extent DoCoMo's Registrable Securities are
being sold thereunder.
(e) In the case of any registration under Section 7.1 pursuant to an
underwritten offering, or in the case of a registration under Section 7.2 if the
Issuer has entered into an underwriting agreement in connection therewith, all
shares of AT&T Wireless Stock to be included in such registration shall be
subject to the applicable underwriting agreement and no Person may participate
in such registration unless such Person agrees to sell such Person's securities
on the basis provided therein and completes and executes all questionnaires,
indemnities, underwriting agreements and other documents (other than powers of
attorney) that must be executed in connection therewith, and provides such other
information to the Issuer or the underwriter as may be reasonably requested to
register such Person's AT&T Wireless Stock.
Section 7.5 REGISTRATION EXPENSES. DoCoMo shall bear all agent fees
and commissions, underwriting discounts and commissions and fees and
disbursements of its counsel and accountants in connection with any registration
of any Registrable Securities pursuant to Section 7.1 or 7.2; PROVIDED that with
respect to any registration effected in connection with Section 4.3(e) hereof,
the Issuer will pay the reasonable fees and expenses of DoCoMo's counsel related
to such registration. The Issuer shall bear all other fees and expenses in
connection with any registration statement pursuant to Section 7.1 or 7.2,
including all registration and filing fees, all printing costs, and all fees and
expenses of counsel and accountants for the Issuer.
Section 7.6 INDEMNIFICATION; CONTRIBUTION. (a) The Issuer of the
securities to be registered in the relevant registration shall, and it hereby
agrees to, indemnify and hold harmless DoCoMo and its respective directors,
officers, employees and controlling Persons, if any, and each underwriter, its
partners, directors, officers, employees and controlling Persons, if any, in any
offering or sale of the Registrable Securities, against any losses, claims,
damages or liabilities, actions or proceedings (whether commenced or threatened)
in respect thereof and expenses (including reasonable fees of counsel)
(collectively, "CLAIMS") to which each such indemnified party may become
subject, insofar as such Claims (including any amounts paid in settlement
effected with the consent of the Issuer as provided herein), or actions or
proceedings in respect thereof, arise out of or are based upon an untrue
statement or alleged untrue statement of a material fact contained in any
registration statement, or any preliminary or final prospectus contained
therein, or any amendment or supplement thereto, or any document incorporated by
reference therein, or arise out of or are based upon any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances in which
they were made, not misleading, and the Issuer shall, and it hereby agrees to,
reimburse periodically DoCoMo or any such underwriter for any legal or other
out-of-pocket expenses reasonably incurred by them in connection with
investigating or defending any such Claims; PROVIDED, HOWEVER, that the Issuer
shall not be liable to any such Person in any such case to the extent that any
such Claims arise out of or are based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in such registration statement,
or preliminary or final prospectus, or amendment or supplement thereto, (i) in
reliance upon and in conformity with information furnished to the Issuer by
DoCoMo or any underwriter or representative of DoCoMo expressly for use therein,
or by DoCoMo's failure to furnish the Issuer, upon request, with the information
with respect to DoCoMo, or any
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underwriter or representative of DoCoMo, or DoCoMo's intended method of
distribution, that is the subject of the untrue statement or omission or (ii) if
the Issuer shall sustain the burden of proving that DoCoMo or such underwriter
sold securities to the Person alleging such Claims without sending or giving, at
or prior to the written confirmation of such sale, a copy of the applicable
prospectus (excluding any documents incorporated by reference therein) or of the
applicable prospectus, as then amended or supplemented (excluding any documents
incorporated by reference therein), if the Issuer had previously furnished
copies thereof to DoCoMo or such underwriter, and such prospectus corrected such
untrue statement or alleged untrue statement or omission or alleged omission
made in such registration statement.
(b) DoCoMo shall, and hereby agrees to (i) indemnify and hold harmless
AT&T, with respect to the registration of Current Wireless Tracking Stock, or
AT&T Wireless, with respect to the registration of AT&T Wireless Common Stock,
its directors, officers, employees and controlling Persons, if any, and each
underwriter, its partners, officers, directors, employees and controlling
Persons, if any, in any offering or sale of Registrable Securities, against any
Claims to which each such indemnified party may become subject, insofar as such
Claims (including any amounts paid in settlement effected with the consent of
DoCoMo as provided herein), or actions or proceedings in respect thereof, arise
out of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in such registration statement, or any preliminary or
final prospectus contained therein, or any amendment or supplement thereto, or
any document incorporated by reference therein, or arise out of or are based
upon any omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
in each case only to the extent that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to AT&T or AT&T Wireless, as the
case may be, by DoCoMo expressly for use therein, and (ii) periodically
reimburse AT&T or AT&T Wireless, as the case may be, for any legal or other
out-of-pocket expenses reasonably incurred by AT&T or AT&T Wireless, as the case
may be, in connection with investigating or defending any such Claim.
(c) Promptly after receipt by an indemnified party under Section
7.6(a) or Section 7.6(b) of written notice of the commencement of any action or
proceeding for which indemnification under Section 7.6(a) or Section 7.6(b) may
be requested, such indemnified party shall notify such indemnifying party in
writing of the commencement of such action or proceeding; but the omission so to
notify the indemnifying party shall not relieve it from any liability which it
may have to any indemnified party in respect of such action or proceeding
hereunder unless the indemnifying party was materially prejudiced by such
failure of the indemnified party to give such notice, and in no event shall such
omission relieve the indemnifying party from any other liability it may have to
such indemnified party. In case any such action or proceeding shall be brought
against any indemnified party and it shall notify an indemnifying party of the
commencement thereof, such indemnifying party shall be entitled to participate
therein and, to the extent that it shall determine, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified party, and, after notice
from the indemnifying party to such indemnified party of its election so to
assume the defense thereof, such indemnifying party shall not be liable to such
indemnified party for any legal or any other expenses subsequently incurred by
such indemnified party in connection with the defense thereof other than
reasonable costs of
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investigation; PROVIDED, HOWEVER, that (i) if the indemnifying party fails to
take reasonable steps necessary to defend diligently the action or proceeding
within 20 days after receiving notice from such indemnified party that the
indemnified party believes it has failed to do so; (ii) if such indemnified
party who is a defendant in any action or proceeding that is also brought
against the indemnifying party reasonably shall have concluded that there may be
one or more legal defenses available to such indemnified party that are not
available to the indemnifying party; or (iii) if representation of both parties
by the same counsel is otherwise inappropriate under applicable standards of
professional conduct, then, in any such case, the indemnified party shall have
the right to assume or continue its own defense as set forth above (but with no
more than one firm of counsel for all indemnified parties in each jurisdiction)
and the indemnifying party shall be liable for any expenses therefor (including,
without limitation, any such reasonable counsel's fees). If the indemnifying
party is not entitled to, or elects not to, assume the defense of a claim, it
will not be obligated to pay the fees and expenses of more than one counsel (and
one local counsel per jurisdiction) for each indemnified party with respect to
such claim. The indemnifying party will not be subject to any liability for any
settlement made without its consent, which consent shall not be unreasonably
withheld or delayed. No indemnifying party shall, without the prior written
consent of the indemnified party, compromise or consent to entry of any judgment
or enter into any settlement agreement with respect to any action or proceeding
in respect of which indemnification is sought under Section 7.6(a) or Section
7.6(b) (whether or not the indemnified party is an actual or potential party
thereto), unless such compromise, consent or settlement includes an
unconditional release of the indemnified party from all liability in respect of
such claim or litigation, does not subject the indemnified party to any material
injunctive relief or other material equitable remedy and does not include a
statement or admission of fault, culpability or a failure to act, by or on
behalf of the indemnified party.
(d) DoCoMo, AT&T and AT&T Wireless agree that if, for any reason, the
indemnification provisions contemplated by Sections 7.6(a) or 7.6(b) hereof are
unavailable to or are insufficient to hold harmless an indemnified party in
respect of any Claims referred to therein, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of such Claims in such proportion as is appropriate to reflect the relative
fault of, the indemnifying party, on the one hand, and the indemnified party, on
the other hand, with respect to such offering of securities. The relative fault
of such indemnifying party and indemnified party shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or omission or alleged omission to state a material fact
relates to information supplied by such indemnifying party or by such
indemnified party, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
If, however, the allocation in the second preceding sentence is not permitted by
applicable law, then each indemnifying party shall contribute to the amount paid
or payable by such indemnified party in such proportion as is appropriate to
reflect not only such relative faults, but also the relative benefits of the
indemnifying party and the indemnified party, as well as any other relevant
equitable considerations. The parties hereto agree that it would not be just and
equitable if contributions pursuant to this Section 7.6(d) were to be determined
by pro rata allocation or by any other method of allocation that does not take
into account the equitable considerations referred to in the preceding sentences
of this Section 7.6(d). The amount paid or payable by an indemnified party as a
result of the Claims referred to above shall be deemed to include (subject to
the limitations set forth in Section 7.6(c) hereof) any legal or other fees or
expenses reasonably
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incurred by such indemnified party in connection with investigating or defending
any such action, proceeding or claim. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act or
any successor provision thereof) shall be entitled to contribution from any
Person who was not guilty of such fraudulent misrepresentation.
ARTICLE VIII
PREEMPTIVE RIGHTS
Section 8.1 PREEMPTIVE RIGHTS. (a) Subject to Section 8.2, as soon as
practicable after AT&T decides to issue any additional Equity Shares (other than
any Equity Shares representing all or any portion of AT&T's Retained Wireless
Interest), prior to the consummation of the Spin-off, or AT&T Wireless decides
to issue any Equity Shares after the consummation of the Spin-off (collectively,
the "ADDITIONAL SECURITIES") (other than to a wholly owned Subsidiary of the
Issuer and exclusive of any Equity Shares issued upon exercise of the Warrants),
but in any event at least ten Business Days prior to issuing such Additional
Securities to any Person other than DoCoMo or any of its Subsidiaries, the
Issuer shall notify DoCoMo by written notice of such proposed issuance (which
notice shall specify, to the extent practicable, the purchase price, if any,
for, and the terms and conditions of, such Additional Securities) and shall
offer to sell to DoCoMo and/or its designated wholly owned Subsidiaries such
Additional Securities as may be designated by DoCoMo at the Purchase Price as
provided in Section 8.1(e); PROVIDED that, with respect to any issuances
pursuant to employee, officer or director benefit plans or arrangements, such
notice and offer shall only be required within 10 Business Days of each March 31
and September 30 and shall be made in respect of all such issuances made during
the six month period ending on such March 31 or September 30 (except with
respect to the first such notice after the Closing Date, which shall relate only
to issuance made during the period from the Closing Date through such March 31,
2001, or September 30, 2001, as applicable). DoCoMo's right to purchase
Additional Securities in accordance with Sections 8.1(c) and (d) and this
Article VIII are referred to herein as "PREEMPTIVE RIGHTS." In the case of a
proposed public offering as to which the price is not known as of the time
notice is given, the notice shall specify the range of expected prices as
determined in good faith by the Issuer. The Preemptive Rights shall not be
triggered by issuances of securities upon exchange or conversion of previously
outstanding securities (including, without limitation, issuances in connection
with any rights plan but not including issuances in connection with the exercise
of options or other rights granted to employees, officers, directors or
consultants of the Issuer) or by pro rata distributions to shareholders
(including without limitation stock dividends and stock splits); PROVIDED that
DoCoMo may exercise its Preemptive Rights hereunder upon the conversion of
convertible securities that become outstanding after the Closing and that,
because of the nature of the security, the number of shares of common stock into
which such security is convertible was not calculable and therefore DoCoMo could
not exercise its Preemptive Rights with respect thereto. For the avoidance of
doubt, the Preemptive Rights shall not apply to the exchange of AT&T Wireless
Common Stock for Current Wireless Tracking Stock or New Tracking Stock, or the
distribution of AT&T Wireless Common Stock to holders of common stock of AT&T,
in each case pursuant to the Spin-off, or to securities issued in the Exchange
Offer.
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(b) The Preemptive Rights may be exercised, in whole or in part, by
DoCoMo by its acceptance in writing of an offer referred to in Section 8.1(a)
within 30 days of the notice given to DoCoMo. If DoCoMo wishes to subscribe for
a number of Additional Securities less than the number to which it is entitled
under this section, DoCoMo may do so and shall, in the notice of exercise of the
offer, specify the number of Additional Securities that DoCoMo wishes to
purchase. The closing of the purchase and sale of Additional Securities pursuant
to any exercise of Preemptive Rights shall occur as promptly as practicable
following DoCoMo's notice of exercise, PROVIDED that the closing shall be
subject to and shall occur no earlier than concurrently with the consummation of
the issuance giving rise to the Preemptive Rights. The closing shall also be
subject to the receipt of any necessary regulatory approvals, the expiration of
any required waiting periods and the absence of any legal prohibition on such
closing, and the Issuer and DoCoMo will use their reasonable best efforts to
satisfy the conditions set forth in this sentence, PROVIDED that the Issuer will
have no obligation to DoCoMo to consummate or to use any efforts to consummate,
the issuance giving rise to the Preemptive Rights.
(c) If the Preemptive Rights are exercised and if DoCoMo's Economic
Interest Percentage prior to the issuance of Additional Securities is at least
12%, the Issuer shall sell to DoCoMo and/or its wholly owned Subsidiaries as may
be designated by DoCoMo all or any portion specified by DoCoMo of an amount of
Additional Securities such that, after giving effect to the proposed issuance
(including the issuance to DoCoMo pursuant to the Preemptive Rights and
including any related issuance resulting from the exercise of preemptive rights
by any unrelated Person with respect to the same issuance that gave rise to the
exercise of Preemptive Rights by DoCoMo), but without considering (either as
owned by DoCoMo or as outstanding) any Equity Shares acquired by DoCoMo upon
exercise of the Warrants, DoCoMo's Economic Interest Percentage would equal 16%
(which amount shall constitute the "PREEMPTIVE SHARE AMOUNT" for purposes of any
exercise of Preemptive Rights to which this paragraph (c) applies). If, at the
time of the determination of any Preemptive Share Amount, any other Person has
preemptive or other equity purchase rights similar to the Preemptive Rights,
such Preemptive Share Amount shall be recalculated to take into account the
amount of Equity Shares to be sold to such Persons, rounding up such Preemptive
Share Amount to the nearest whole Equity Share.
(d) If the Preemptive Rights are exercised and if DoCoMo's Economic
Interest Percentage prior to the issuance of Additional Securities is less than
12%, the Issuer shall sell to DoCoMo and/or its wholly owned Subsidiaries as may
be designated by DoCoMo all or any portion specified by DoCoMo of an amount of
Additional Securities such that, after giving effect to the proposed issuance
(including the issuance to DoCoMo pursuant to the Preemptive Rights and
including any related issuance resulting from the exercise of preemptive rights
by any unrelated Person with respect to the same issuance that gave rise to the
exercise of Preemptive Rights by DoCoMo), DoCoMo's Economic Interest Percentage
would equal its Economic Interest Percentage immediately prior to such issuance
(which amount shall constitute the "PREEMPTIVE SHARE AMOUNT" for purposes of any
exercise of Preemptive Rights to which this paragraph (d) applies). If, at the
time of the determination of any Preemptive Share Amount, any other Person has
preemptive or other equity purchase rights similar to the Preemptive Rights,
such Preemptive Share Amount shall be recalculated to take into account the
amount of Equity Shares to be sold to such Persons, rounding up such Preemptive
Share Amount to the nearest whole Equity Share.
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(e) The "PURCHASE PRICE" for the Additional Securities to be issued
pursuant to the exercise of Preemptive Rights shall be payable only in cash
(unless otherwise mutually agreed by the Issuer and DoCoMo) and, except as
otherwise set forth below, shall equal per Additional Security the per security
issuance price for the Additional Securities giving rise to such Preemptive
Right. In the case of exercise of Preemptive Rights resulting from issuances
pursuant to employee, officer or director benefit plans or arrangements, the
Purchase Price shall be based on the average closing price for the shares of
Current Wireless Tracking Stock or AT&T Wireless Common Stock, as the case may
be, for the 30-trading day period ending on the relevant March 31 or September
30, as the case may be. In the case of the exercise of Preemptive Rights under
Section 8.1(c) for Additional Securities in excess of the number of Additional
Securities necessary to maintain DoCoMo's Economic Interest Percentage as in
effect immediately prior to the applicable issuance (the "EXCESS SECURITIES"),
the Purchase Price for the Excess Securities per Excess Security shall be the
greater of (i) the per security issuance price for the Additional Securities
giving rise to such exercise of Preemptive Right and (ii) the per security
issuance price for the most recent preceding issuance with respect to which
DoCoMo did not exercise its full Preemptive Rights and that previously diluted
DoCoMo's Economic Interest Percentage (with the reference price under this
clause (ii) being the issuance price in the first such immediately preceding
issuance with respect to a number of Additional Securities up to the number that
DoCoMo was entitled to but did not purchase pursuant to exercise of its
Preemptive Rights with respect to such issuance and, to the extent such number
is less than the number of Excess Securities being purchased pursuant to Section
8.1(c), then repeating the same procedure with respect to the next immediately
preceding issuance or issuances); PROVIDED that, upon DoCoMo exercising
Preemptive Rights for Excess Securities pursuant to Section 8.1(c) in an amount
sufficient to make up all or part of the dilution resulting from a prior
issuance or issuances as to which DoCoMo did not exercise its full Preemptive
Rights, DoCoMo shall be deemed to have exercised Preemptive Rights in full or in
such part, as applicable, with respect to such prior issuance for purposes of
any subsequent application of the reference price in the foregoing clause (ii);
PROVIDED, FURTHER, that in the event DoCoMo attempts to exercise but is unable
to exercise any Preemptive Rights by virtue of Section 8.2(b), any subsequent
purchase of Excess Securities shall be applied, first, against the number of
Additional Securities that DoCoMo was prevented from purchasing pursuant to
Section 8.2(b), and the Purchase Price for such Excess Securities, up to such
number, shall be determined only by reference to clause (i) of this sentence and
without regard to clause (ii) of this sentence. The issuance price with respect
to any issuance of Additional Securities shall be the actual price paid by the
other Person or Persons for such Additional Securities (without deducting any
costs or expenses of the Issuer in connection therewith). In the case of any
issuance of Additional Securities other than solely for cash, the Issuer and
DoCoMo shall in good faith seek to agree upon the value of the non-cash
consideration; PROVIDED that the value of any publicly traded securities shall
be deemed to be the Market Value of such securities as of the date of the
consummation of such issuance. If the Issuer and DoCoMo fail to agree on such
value during the 30-day period contemplated by the first sentence of Section
8.1(b), then the Issuer will refer the items in dispute to a nationally
recognized investment banking firm that is selected by the Board and reasonably
acceptable to DoCoMo and that shall make a final and binding determination of
the fair market value of such items within 10 days. If such a determination is
required, the deadline for DoCoMo's exercise of its Preemptive Rights with
respect to such issuance pursuant to Section 8.1(b) shall be extended until the
fifth Business Day following the date of such determination. Whichever of the
Issuer or
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DoCoMo whose last estimate differed the most from that finally decided by the
investment banking firm shall be responsible for and pay all of the fees and
expenses of such investment banking firm. All determinations made by such
investment banking firm shall be final and binding on the Issuer and DoCoMo.
Section 8.2 LIMITATION OF PREEMPTIVE RIGHTS. (a) Upon an Investor
Rights Termination Event, DoCoMo's Preemptive Rights shall terminate and cease
immediately including with respect to any pending but uncompleted exercises.
(b) Anything herein to the contrary notwithstanding, DoCoMo shall not
be entitled to exercise Preemptive Rights if and to the extent AT&T or AT&T
Wireless reasonably determines that the exercise of such Preemptive Rights
would, taking into account all relevant facts in existence at the time of the
issuance to DoCoMo, create a substantial risk that such issuance would cause the
Spin-off to be taxable to AT&T or its shareholders under Section 355(e) of the
Internal Revenue Code of 1986, as amended.
ARTICLE IX
EFFECTIVENESS AND TERMINATION
Section 9.1 EFFECTIVENESS. This Agreement shall take effect
immediately upon the Closing and shall remain in effect until it is terminated
pursuant to Section 9.2 hereof.
Section 9.2 TERMINATION. Other than the termination provisions
applicable to particular Sections of this Agreement that are specifically
provided elsewhere in this Agreement, this Agreement shall terminate (a) upon
the mutual written agreement of AT&T, AT&T Wireless and DoCoMo or (b) at such
time as DoCoMo no longer holds any Equity Shares.
Section 9.3 PARTIAL TERMINATION. Effective immediately on consummation
of the Spin-off, (i) except (x) for AT&T's guarantee of a portion of AT&T
Wireless's obligations as specified in Section 4.3(f) hereof and (y) with
respect to liabilities arising from any breach of this Agreement prior to the
consummation of the Spin-off, AT&T shall be released and terminated as a party
hereto and shall have no further liability or obligation hereunder to any party
hereto or any other Person hereby, and this Agreement shall no longer represent
an agreement of AT&T enforceable against AT&T by any other Person, and (ii)
except (x) with respect to liabilities arising from any breach of this Agreement
prior to the consummation of the Spin-off, (y) as specified in Sections 3.6 and
3.7 and (z) for obligations or liabilities to AT&T relating to any obligations
or liabilities retained by AT&T pursuant to Section 4.3(f) arising hereunder as
a result of the Spin-off, no party hereto shall have any further liability or
obligation hereunder to AT&T.
ARTICLE X
NON-COMPETITION; CONFIDENTIALITY
Section 10.1 NON-COMPETITION RESTRICTIONS. (a) Each of AT&T and AT&T
Wireless, on the one hand, and DoCoMo, on the other, agrees with respect to
itself and with respect to each of its Subsidiaries, not to own or operate, or
acquire or increase, except pursuant
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to existing preemptive rights, any equity interest in any Person that owns (or
has entered an agreement to acquire) or operates (or whose Affiliate owns (or
has entered an agreement to acquire) or operates) a Mobile Telecommunications
Infrastructure (as defined below) in the other party's Home Territory.
(b) Each of AT&T and AT&T Wireless, on the one hand, and DoCoMo, on
the other, agrees with respect to itself and with respect to each of its
Subsidiaries, that it will not be a Reseller (as defined below) in the other
party's Home Territory nor will it acquire or increase, except pursuant to
existing preemptive rights, any equity interest in any Person that is, or has
entered an agreement to acquire (or whose Affiliate is (or has entered an
agreement to acquire)), a Reseller in the other party's Home Territory.
(c) Each of AT&T and AT&T Wireless, on the one hand, and DoCoMo, on
the other, agrees with respect to itself, and with respect to each of its
Subsidiaries, not to provide any, or provide rights to any, Mobile Multimedia
Contribution (as defined below) to any Person that is (or whose Affiliate is)
engaged in any of the businesses described in Sections 10.1(a) or (b) in the
other party's Home Territory, except that DoCoMo may provide such contribution
outside of AT&T Wireless's Home Territory if the recipient thereof is bound by
non-exportation restrictions with respect to AT&T Wireless's Home Territory
similar to those imposed upon AT&T Wireless herein.
(d) Nothing in Sections 10.1(a) or (b) shall be construed to prohibit
any party from entering into customary commercial roaming agreements.
(e) Without limiting Sections 10.1(a), (b) or (c), for a period of 48
months from the Closing Date, each of AT&T and AT&T Wireless, on the one hand,
and DoCoMo, on the other, agrees with respect to itself, and with respect to
each of its Subsidiaries, not to provide Mobile Multimedia Contribution to any
Person that engages or intends, to the party's actual knowledge, to engage (or
whose Affiliate engages or intends, to the party's actual knowledge, to engage)
in the other party's Home Territory in the business of developing or maintaining
a Mobile Portal (as defined below). After the expiration of the 48-month period,
DoCoMo and AT&T Wireless will discuss in good faith appropriate revisions to the
restrictions on competition or the termination of such restrictions with respect
to Mobile Portals in light of the then current state of the mobile
telecommunications markets. Unless an alternate agreement is reached, after such
48-month period, DoCoMo may take any of the actions otherwise prohibited under
the first sentence of this Section 10.1(e), but only in accordance with the
Release Conditions (as defined below). After such 48-month period, AT&T and AT&T
Wireless shall no longer be subject to the restrictions contained in this
Section 10.1(e).
Section 10.2 DEFINITIONS. (a) A Person "COMPETES" if (i) it (and/or
its Affiliate) offers products and/or services that are substantially
substitutable with products and/or services of the other party's products and/or
services by customers (including resellers) located in substantially similar
geographic locales in each party's Home Territory such that there is a
reasonable likelihood of customers (including resellers) substituting the
competing product or service, and (ii) the competing products and services,
taken together, compete for a substantial portion of the customers (including
resellers) of AT&T Wireless, the MMS or DoCoMo, as the case may be, in the
geographic locale where such competition occurs.
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(b) "MOBILE MULTIMEDIA CONTRIBUTION" means the provision of the
support, advice, services, activities, and technology included in Section 5.3(b)
hereof (including Schedule 5.3(b) hereto) by way of any joint venture agreement,
technology and know-how transfer agreement, services and support agreement that
has been reduced to writing or any similar type of written agreement or in any
other manner at a level that would not be considered to be DE MINIMIS.
(c) "MOBILE PORTAL" means the provision of portal functionality by
aggregating content or providing content that includes third party content to be
supplied to consumers through a cell phone browser or other wireless access
device. Without limiting the foregoing, it is agreed and understood that the
portal functionality provided or enabled by the i-mode services is included
within the definition of Mobile Portal.
(d) "MOBILE TELECOMMUNICATIONS INFRASTRUCTURE" means a wireless mobile
radio network to provide digital or analog voice and data transmission services
to mobile communications terminals anywhere in the relevant Home Territory,
unless such network does not have more than 100,000 subscribers and does not, or
when operational would not, cover more than 10 million POPs.
(e) An action described herein as being permitted in accordance with
the "RELEASE CONDITIONS" will be permitted only: (i) if the written consent of
AT&T Wireless has been obtained, or (ii) if prior to taking such action all
DoCoMo representatives on the AT&T board, but not the AT&T Wireless board, and
all other DoCoMo representatives or designees appointed to the management or any
governance body or committee of the MMS (including under Section 5.4 hereof)
shall have resigned, and in each case DoCoMo shall have relinquished its right
to nominate, appoint or designate any such directors, representatives or
designees in the future. In the case of any such resignations, DoCoMo shall be
released from any and all of its obligations and duties relating to any
management, directorships or membership or participation in any such governance
body.
(f) "RESELLER" is an Person that (i) provides mobile telecommunication
services without owning its own infrastructure but by using a third party's
Mobile Telecommunications Infrastructure, (ii) has at least 100,000 subscribers
and (iii) serves, or has the right or licenses to offer services in, an area or
areas covering at least 10 million POPs.
Section 10.3. DURATION OF AND LIMITATIONS ON RESTRICTIONS. (a) With
respect to Sections 10.1(a), (b) and (c), DoCoMo shall be subject to the
restrictions and obligations set forth therein unless and until (i) an Investor
Rights Termination Event shall have occurred as a result of DoCoMo's exercise of
the Technology Default Right or the No Spin-off Right or a Permitted Redemption,
PROVIDED that for purposes of this clause (i) only, the reference to 60 days
appearing in the definition of Investor Rights Termination Event shall be deemed
to be a reference to 90 days, or (ii) an Investor Rights Termination Event shall
have occurred other than as a result of an event covered by clause (i) of this
sentence, PROVIDED that for purposes of this clause (ii) only, the reference to
60 days appearing in the definition of Investor Rights Termination Event shall
be deemed to be a reference to one year.
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(b) AT&T shall be subject to the restrictions and obligations set
forth in Section 10.1 until the earlier of the Spin-off and the first date that
DoCoMo exercises the No-Spin-off Right.
(c) AT&T Wireless shall be subject to the restrictions and obligations
set forth in Section 10.1 until the earlier of (i) the date DoCoMo first ceases
to be subject to the restrictions and obligations set forth in Sections 10.1(a),
(b) or (c), and (ii) the date DoCoMo first relinquishes its board and management
rights in accordance with clause (ii) of the definition of Release Conditions.
(d) AT&T's and AT&T Wireless's current investment in Japan Telecom
Co., Ltd shall not be subject to the Section 10.1 restrictions.
(e) Nothing in the restrictions above will prohibit either party from
making any investment if the investing party (i) does not hold a beneficial
interest in the target entity in excess of 5% of any equity or management class
of shares of such target entity and (ii) does not exercise control of, or
management authority in, or provide any Mobile Multimedia Contribution to, such
target entity.
(f) If AT&T or AT&T Wireless, on the one hand, or DoCoMo, on the
other, materially breaches any of its obligations under this Article X and fails
to cure such breach within 30 days of receiving notice from the other party or
parties, than such other party or parties shall immediately be released from all
of the restrictions hereunder.
Section 10.4 NON-DISCLOSURE COMMITMENT. (a) AT&T Wireless and DoCoMo
each hereby agree to keep confidential and protect each other's Proprietary
Information. This will include ensuring that directors, secondees and any other
employees with access to Proprietary Information of the other party remain bound
by strict nondisclosure policies and procedures consistent with this Section
10.4, and only utilize Proprietary Information for purposes related to the
purposes for which such information was disclosed. In addition, each party
further agrees that in no case shall any Proprietary Information of the other
party be transferred in any form (including orally and visually) outside of the
respective Home Territories. "PROPRIETARY INFORMATION" shall mean any and all
information of either party of a confidential nature, including without
limitation non-public information relating to the disclosing party's technology,
technical data, trade secrets, know-how, customers, business plans, marketing
activities, financial data and other business affairs that is disclosed by one
party to the other party or that is otherwise learned by a party in the course
of its discussions or business dealings with, or its physical or electronic
access to the premises of, the other party that, if disclosed in written form,
is conspicuously marked at the time of initial disclosure, or promptly
thereafter, as the disclosing party's Proprietary Information, and, if in oral
or visual form, is promptly followed by a writing delivered to the receiving
party designating the information considered confidential; PROVIDED, HOWEVER,
that "Proprietary Information" does not include any information that: (i) was in
possession of or known to the receiving party, without any obligation of
confidentiality to the disclosing party, prior to receiving it from the
disclosing party; (ii) is, or subsequently becomes, publicly available without
breach of these confidentiality provisions; (iii) is or becomes known or
available to the receiving party from a source other than the disclosing party
that, to the receiving party's knowledge, is not prohibited from disclosing
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such Proprietary Information to the receiving party by a contractual, legal or
fiduciary obligation owed by such other third party to the disclosing party;
(iv) is developed by or for the receiving party without use of the Proprietary
Information; (v) is or becomes available to the receiving party by lawful
inspection or analysis of products or services offered for sale; or (vi) is
disclosed to the receiving party by the disclosing party after receiving written
notification from the receiving party that does not desire to receive any
further Proprietary Information.
(b) Section 10.4(a) notwithstanding, the terms of confidentiality
hereunder shall not be construed to in any way limit either party's right to
independently develop or acquire products, services or other information without
use of the other party's Proprietary Information. Each party acknowledges that
the other party has developed and intends to continue to develop, both
internally and with the assistance of third parties, products, services and
other information related to Mobile Portals and data networks, including
products, services and other information that may be similar to Proprietary
Information disclosed by the other party. Accordingly, nothing herein, or any
other agreement between the parties, will be construed as a representation or
agreement that the receiving party will not develop or have developed for it (or
deploy) products, services, concepts, systems or techniques that are similar to
or compete with the products, concepts, systems or techniques contemplated by or
embodied in the Proprietary Information of the other party, provided that the
receiving party does not violate any of its obligations under this Section 10.4
in connection with such development. Further, any other provision hereof or
agreement between the parties notwithstanding, both parties shall be free to use
for any lawful purpose the residuals resulting from access to or work with any
Proprietary Information, provided that such party shall maintain the
confidentiality of the Proprietary Information as provided herein. The term
"residuals" means information in non-tangible form, which may be retained by
persons who have had access to the Proprietary Information, including ideas,
concepts, know-how or techniques contained therein so long as such "residuals"
are not themselves substantially identical to the Proprietary Information on
which any such residual is based. Neither party shall have any obligation to
limit or restrict the assignment of such persons or to make payment of any kind
to the other party for any work resulting from the use of residuals.
(c) In the event that the receiving party is requested or becomes
legally compelled to disclose any Proprietary Information, then before
substantively responding to any such request or requirement, the receiving party
will provide the disclosing party with prompt written notice of any such request
or requirement so that the disclosing party may seek a protective order or other
appropriate remedy, or both, or waive compliance with the provisions of this
Section 10.4 or other appropriate remedy, or if the disclosing party so directs,
the receiving party will exercise its own reasonable best efforts to assist the
disclosing party in obtaining a protective order or other appropriate remedy at
the disclosing party's expense. If, failing the entry of a protective order or
other appropriate remedy or the receipt of a waiver hereunder, disclosure of any
Proprietary Information is, in the opinion of the receiving party's counsel,
required, the receiving party may furnish only that portion of the Proprietary
Information which is in the opinion of the receiving party's counsel legally
required to be furnished. In any event, the receiving party will cooperate fully
with any action by the disclosing party to obtain an appropriate protective
order or other reliable assurance that confidential treatment will be accorded
the Proprietary Information.
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(d) The obligations and covenants contained in this Section 10.4 shall
be subject to and performed in accordance with any applicable U.S. and Japanese
laws and regulations.
ARTICLE XI
MISCELLANEOUS
Section 11.1 INJUNCTIVE RELIEF. Each party hereto acknowledges that it
would be impossible to determine the amount of damages that would result from
any breach of any of the provisions of this Agreement and that the remedy at law
for any breach, or threatened breach, of any of such provisions would likely be
inadequate and, accordingly, agrees that each other party shall, in addition to
any other rights or remedies which it may have, be entitled to seek such
equitable and injunctive relief as may be available from any court of competent
jurisdiction to compel specific performance of, or restrain any party from
violating, any of such provisions. In connection with any action or proceeding
for injunctive relief, each party hereto hereby waives the claim or defense that
a remedy at law alone is adequate and agrees, to the maximum extent permitted by
law, to have each provision of this Agreement specifically enforced against it,
without the necessity of posting bond or other security against it, and consents
to the entry of injunctive relief against it enjoining or restraining any breach
or threatened breach of such provisions of this Agreement.
Section 11.2 SUCCESSORS AND ASSIGNS. Except as and to the extent set
forth in Section 6.1(a) or Section 6.1(c), neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any of the
parties hereto, in whole or in part (whether by operation of law or otherwise),
without the prior written consent of each of the other parties. Subject to the
preceding sentence, this Agreement will be binding upon, inure to the benefit of
and be enforceable by the parties and their respective successors and assigns.
Any attempted assignment in violation of this Section 11.2 shall be void.
Section 11.3 AMENDMENTS; WAIVER. This Agreement may be amended only by
an agreement in writing executed by DoCoMo (on behalf of itself and all of its
Designees), AT&T and AT&T Wireless; PROVIDED that, after the Spin-off, this
Agreement may be amended by an agreement in writing executed by AT&T Wireless
and DoCoMo (on behalf of itself and all of its Designees) to the extent (but
only to the extent) such amendment does not affect any rights or obligations of
AT&T. Any party may waive in whole or in part any benefit or right provided to
it under this Agreement, such waiver being effective only if contained in a
writing executed by the waiving party. No failure by any party to insist upon
the strict performance of any covenant, duty, agreement or condition of this
Agreement or to exercise any right or remedy consequent upon breach thereof
shall constitute a waiver of any such breach or of any other covenant, duty,
agreement or condition, nor shall any delay or omission of any party to exercise
any right hereunder in any manner impair the exercise of any such right accruing
to it thereafter.
Section 11.4 NOTICES. Except as otherwise provided in this Agreement,
all notices, requests, claims, demands, waivers and other communications
hereunder shall be in writing and shall be deemed to have been duly given when
delivered by hand, or if mailed, five
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(5) Business Days after mailing (three (3) Business Days in the case of express
mail or overnight counter service), or when received by facsimile transmission
if promptly confirmed, as follows:
If to DoCoMo:
Xxxxx Xxxx Xxxxx - 00xx Xxxxx
00-0, Xxxxxx-xxx 2-chome
Chiyoda-ku,
Tokyo 100-6150
Attention: Global Business Department,
Xxxxxxxx Xxxxxxxxx,
Managing Director
Fax: 00-0-0000-0000
with a copy to:
Xxxxxxxx & Xxxxxxxx
0000 Xxxxxxx Xxxx Xxxx
Xxx Xxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx
Fax: (000) 000-0000
If to AT&T:
AT&T Corp.
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxx Xxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx
Secretary and Vice President - Law
Fax: (000) 000-0000
with a copy to:
Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxxx
Xxxxx X. Silk
Fax: (000) 000-0000
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If to AT&T Wireless:
AT&T Wireless Services, Inc.
0000 000xx Xxxxxx, Xxxxxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx Xxxxxx
General Counsel
Fax: (000) 000-0000
with a copy to:
Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxxx
Xxxxx X. Silk
Fax: (000) 000-0000
or to such other address, facsimile number or telephone as either party may,
from time to time, designate in a written notice given in a like manner.
Section 11.5 GOVERNING LAW. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of New York
applicable to contracts executed in and to be performed entirely within such
State, without giving effect to the conflicts of laws principles thereof that
would govern, construe or enforce the Agreement under laws other than the State
of New York.
Section 11.6 ARBITRATION. The parties encourage the prompt and
equitable settlement of all controversies or claims between or among the parties
arising out of or relating to this Agreement, the Purchase Agreement and the
Warrant Agreement including any claim based on or arising from an alleged tort,
and agree as follows:
(i) Any controversy or claim arising out of or relating to the
above-referenced Agreements ("ARBITRATION CLAIMS"), including
Arbitration Claims arising under Article VI, shall be determined by
arbitration in accordance with the International Arbitration Rules of
the American Arbitration Association or any successor organization
thereof and Title 9 of the U.S. Arbitration Act in New York, New York.
(ii) Within fifteen (15) days after the delivery in accordance
with Section 11.4 hereof by any party to the other (treating AT&T and
AT&T Wireless as one party and treating DoCoMo and all of its Designees
as one party) of written notice of the commencement of arbitration,
each party shall select one person to act as an arbitrator; and the two
selected shall select a third arbitrator within fifteen (15) days of
the second arbitrator's appointment. If the arbitrators selected by the
parties are unable or fail to agree upon the third arbitrator, the
third arbitrator shall
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be selected by the American Arbitration Association pursuant to its
rules. Arbitration proceedings shall be conducted in the English
language.
(iii) The parties shall agree upon what, if any, discovery
shall be permitted. If the parties do not agree on the extent and form
of discovery within ten (10) days after the appointment of the third
arbitrator, then there shall be neither discovery nor the issuance of
subpoenas except as otherwise expressly directed in accordance with the
unanimous determination of the arbitrators.
(iv) The powers of the arbitrators to fashion remedies
hereunder shall be no broader than the powers to award legal and
equitable remedies available to a court, unless the parties expressly
state elsewhere in the relevant above-referenced Agreements that the
arbitrators may order broader or narrower legal and equitable remedies.
The arbitrators shall not have the power to award any punitive damages,
and each party expressly waives any claim thereto. This Section 11.6
shall govern if any conflict arises between this Section and any other
remedy terms in the above-referenced Agreements.
(v) The arbitrators shall make their award within thirty (30)
days after the conclusion of arbitration hearings. Subject to paragraph
(vi) of this Section 11.6, the award shall be final and binding, and
judgment therein may be entered by any court having jurisdiction
thereof.
(vi) Within thirty (30) days after receipt of any award (which
shall not be binding if an appeal is taken hereunder), any party
(treating AT&T and AT&T Wireless as one party and treating DoCoMo and
all of its Designees as one party) may notify the American Arbitration
Association of its intent to appeal to a second three-arbitrator
tribunal, selected in the same fashion as the initial tribunal (with
the 15-day arbitrator selection period commencing on the first Business
Day after such notification is received by the other party). At least
two of the three appellate arbitrators shall be former judges of state
or federal courts. The appeal tribunal shall be entitled to adopt the
initial award as its own, modify the initial award or substitute its
own award for the initial award. The appeal tribunal shall not modify
or replace the initial award except for errors of law or because of
clear and convincing factual errors. If an appeal is taken, the award
of the appeal tribunal shall be final and binding, and judgment may be
entered therein by any court having jurisdiction thereof. The review by
the appeal tribunal will be completed and its order issued within
thirty (30) days of the final submission of the parties to the panel.
(vii) The parties (treating AT&T and AT&T Wireless as one
party and treating DoCoMo and all of its Designees and as one party)
shall equally bear the costs and fees of the arbitration, including
court reporter expenses, and each party shall bear its own legal
expenses.
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(viii) The parties waive recourse to any court, including all
courts in the United States and Japan, except for enforcement of this
Section 11.6 or for enforcement of any arbitral award hereunder.
(ix) The duty of the parties to arbitrate any Arbitration
Claim within the scope of this Section 11.6 shall survive the
expiration or termination of this Agreement for any reason.
Section 11.7 HEADINGS. The descriptive headings of the several
sections in this Agreement are for convenience only and do not constitute a part
of this Agreement and shall not be deemed to limit or affect in any way the
meaning or interpretation of this Agreement.
Section 11.8 ENTIRE AGREEMENT. This Agreement, the Related Agreements
and the schedules and exhibits attached to any such documents constitute the
entire agreement among DoCoMo, each Designee, AT&T and AT&T Wireless with
respect to the subject matter hereof. This Agreement and the Related Agreements
supersede all prior agreements with respect to the subject matter hereof, and
supersede the Letter Agreement in its entirety.
Section 11.9 SEVERABILITY. If any term or provision of this Agreement
or any application thereof shall be declared or held invalid, illegal or
unenforceable, in whole or in part, whether generally or in any particular
jurisdiction, such provision shall be deemed amended to the extent, but only to
the extent, necessary to cure such invalidity, illegality or unenforceability,
and the validity, legality and enforceability of the remaining provisions, both
generally and in every other jurisdiction, shall not in any way be affected or
impaired thereby.
Section 11.10 SUBMISSION TO JURISDICTION; WAIVERS. Subject to the
provisions of Section 11.6, each of the parties (including each Designee) hereto
irrevocably agrees that any legal action or proceeding with respect to this
Agreement or for recognition and enforcement of any judgment in respect hereof,
other than with respect to any dispute subject to arbitration under Section 11.6
(but including for enforcement of the arbitration provisions contained in
Section 11.6 or any award resulting therefrom) brought by any other party hereto
or its successors or assigns shall be brought and determined only in the United
States District Court for the Southern District of New York, or in the event
(but only in the event) that such court does not have subject matter
jurisdiction over such action or proceeding, only in the courts of the State of
New York. Each of the parties hereto hereby irrevocably submits with regard to
any such action or proceeding for itself and in respect of its property,
generally and unconditionally, to the personal jurisdiction of the aforesaid
courts. Each of the parties hereto hereby irrevocably waives, and agrees not to
assert, by way of motion, as a defense, counterclaim or otherwise, in any action
or proceeding with respect to this Agreement or the transactions contemplated
hereby, (a) any claim that it is not personally subject to the jurisdiction of
the above-named courts for any reason other than the failure to serve in
accordance with Section 11.4, (b) that it or its property is exempt or immune
from jurisdiction of any such court or from any legal process commenced in such
courts (whether through service of notice, attachment prior to judgment,
attachment in aid of execution of judgment, execution of judgment or otherwise),
and (c) to the fullest extent permitted by the applicable law, that (i) the
suit, action or proceeding in such court is brought in an inconvenient forum,
(ii) the venue of such suit, action or proceeding is improper and (iii) this
Agreement, or the subject matter hereof, may not be enforced in or by such
courts.
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Section 11.11 WAIVER OF IMMUNITY. DoCoMo agrees that, to the extent
that it or any of its Subsidiaries or any of its property or the property of its
Subsidiaries is or becomes entitled to any immunity on the grounds of
sovereignty or otherwise based upon its status as an agency or instrumentality
of a government from any legal action, suit or proceeding or from set-off or
counterclaim relating to this Agreement from the jurisdiction of any competent
court or arbitrator, from service of process, from attachment prior to judgment,
from attachment in aid of execution, from execution pursuant to a judgment or an
arbitral award or from any other legal or arbitral process in any jurisdiction,
it, for itself and its property, and for each of its Subsidiaries and its
property, expressly, irrevocably and unconditionally waives, and agrees not to
plead or claim, any such immunity with respect to matters arising with respect
to this Agreement or the subject matter hereof (including any obligation for the
payment of money). DoCoMo agrees that the foregoing waiver is irrevocable and is
not subject to withdrawal in any jurisdiction or under any statute, including
the Foreign Sovereign Immunities Act, 28 U.S.C. ss. 1602 et seq. The foregoing
waiver shall constitute a present waiver of immunity at any time any action is
initiated against DoCoMo with respect to this Agreement or the subject matter
hereof (including any obligation for the payment of money).
Section 11.12 WAIVER OF JURY TRIAL. Each party hereto hereby waives
any right it may have to a trial by jury in respect of any action, proceeding or
litigation directly or indirectly arising out of, under or in connection with
this Agreement or the transactions contemplated hereby.
Section 11.13 COUNTERPARTS. This Agreement may be executed by the
parties hereto in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
Section 11.14 INTERPRETATION. When a reference is made in this
Agreement to an Article, Section, Exhibit or Schedule, such reference is to an
Article or Section of, or an Exhibit or Schedule to, this Agreement unless
otherwise indicated. The table of contents and headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. Whenever the words "include,"
"includes" and "including" are used in this Agreement, they are deemed to be
followed by the words "without limitation." For all purposes of this Agreement,
except as otherwise expressly provided or unless the context otherwise requires,
(a) the terms defined include the plural as well as the singular, (b) all
accounting terms not otherwise defined herein have the meanings assigned under
generally accepted accounting principles in the United States, and (c) the words
"herein," "hereof" and "hereunder" and other words of similar import refer to
this Agreement as a whole and not to any particular Article, Section or other
subdivision.
Section 11.15 ANTI-DILUTION ADJUSTMENTS. Any references herein to any
number of shares of any class or series of stock, or any price per share with
respect to such shares, shall be appropriately adjusted, without duplication of
any other provision of this Agreement or any Related Agreement having the same
purpose, to reflect any stock split, reverse stock split, stock dividend or
distribution or similar recapitalization of such shares.
Section 11.16 EFFECTIVENESS OF THIS AGREEMENT. The parties agree that
this Agreement shall become effective on the Closing Date immediately following
the Closing, and
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that prior thereto, neither this Agreement nor any provision of hereof shall be
effective or binding upon any of the parties hereto (other than this Section
11.16), and each party agrees not to seek to enforce any provision of this
Agreement (other than this Section 11.16) prior to, or with respect to the
period prior to, the Closing. In the event the Purchase Agreement is terminated
without the Closing having occurred, this Agreement shall be terminated and
shall be null and void, without any liability of any party, and shall be deemed
by all parties as if it had not been executed by any of the parties.
Section 11.17 NO THIRD PARTY BENEFICIARIES. Except as set forth in
Section 6.1(c), nothing in this Agreement, expressed or implied, is intended to
confer upon any Person, other than the parties hereto or their respective
successors (including, without limitation, each Designee and any successor to
AT&T Wireless pursuant to Section 11.18), any rights, remedies, obligations or
liabilities under or by reason of this Agreement.
Section 11.18 SUBSTITUTION FOR AT&T WIRELESS. In the event the
Spin-off is to be effected by spinning off an entity other than AT&T Wireless,
AT&T shall cause the corporation that is the subject of the Spin-off (and that
is to be the issuer of publicly traded common stock representing the former
Wireless Group) to execute this Agreement. Upon such execution, such corporation
shall be substituted for AT&T Wireless for all purposes of this Agreement, and
all references herein and therein to AT&T Wireless Common Stock shall be deemed
to refer to the publicly traded common stock of such corporation outstanding as
of and following the Spin-off.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed by their respective authorized officers as of the date set forth at the
head of this Agreement.
AT&T CORP.
By: /s/ C. Xxxxxxx Xxxxxxxxx
---------------------------------------
Name: C. Xxxxxxx Xxxxxxxxx
Title: Chairman and Chief Executive Officer
AT&T WIRELESS SERVICES, INC.
By: /s/ Xxxx X. Xxxxxx
---------------------------------------
Name: Xxxx X. Xxxxxx
Title: Chief Executive Officer
NTT DOCOMO, INC.
By: /s/ Xxxxx Xxxxxxxxx
----------------------------------------
Name: Xxxxx Xxxxxxxxx
Title: President and Chief Executive Officer
[SIGNATURE PAGE TO INVESTOR AGREEMENT]
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IN WITNESS WHEREOF, each Designee referred to on this page has caused
this Agreement to be duly executed by its authorized officer as of the date
indicated beneath its signature.
Name of Designee #1:________________
By:
Name:
Title:
Date:
Name of Designee #2:________________
By:
Name:
Title:
Date:
[Designee Signature Page to Investor Agreement]
EXHIBIT A
---------
"Cost of Carry" means the applicable interest rate set forth on the
table below for the following time periods (expressed in days, based on a
360-day year of twelve 30-day months, except for periods of 12 months or less
which will be expressed in actual days of 365 based on a 360-day year according
to the money market convention).
RELEVANT PERIOD INTEREST RATE
--------------- -------------
90 days or less 6.477%
180 days 6.348%
360 days 6.336%
540 days 6.563%
720 days 6.475%
1,080 days 6.499%
1,440 days 6.673%
1,800 days 6.647%
2,160 days 6.758%
2,520 days or more 6.819%
The interest rate that will apply to any time period between any two
points in the foregoing table will be an interpolated rate, which interpolated
rate will apply to the entire time period. As an example only: using the rate of
6.475% for 720 days and the rate 6.499% for 1,080 days, then (i) the rate for
900 days (half way between the two points) would be 6.487% (half way between the
two rates); (ii) the rate for 810 days (one quarter of the way between the two
points) would be 6.481% (one quarter of the way between the two rates); and
(iii) the rate for 990 days (three quarters of the way between the two points)
would be 6.493% (three quarters of the way between the two rates). The
applicable interest rate will be compounded over the applicable time period
based on a semi-annual bond equivalent yield using a 360-day year of twelve
30-day months, except for periods of 12 months or less which will be expressed
in actual days of 365 based on a 360-day year according to the money market
convention.
