1
EXHIBIT 2.2
AMENDED AND RESTATED
AGREEMENT AND PLAN OF REORGANIZATION
by and among
ALAMOSA PCS HOLDINGS, INC.
ALAMOSA HOLDINGS, INC. and
ALAMOSA SUB I, INC.
and
XXXXXXX WIRELESS COMMUNICATIONS, L.L.C. and
MEMBERS OF XXXXXXX WIRELESS COMMUNICATIONS, L.L.C.
July 31, 2000
An Index of Defined Terms begins on Page vii
2
TABLE OF CONTENTS
PAGE
----
ARTICLE 1 Mergers.................................................................................................B-3
1.1 The Mergers..........................................................................................B-3
(a) The Mergers......................................................................................B-3
(b) Consummation of the Mergers......................................................................B-4
(c) Effective Time of the Mergers....................................................................B-4
(d) Effect of the Mergers............................................................................B-4
(e) The Surviving Corporations' Certificates of Incorporation; Bylaws; Directors and Officers........B-4
1.2 Terms of the Merger..................................................................................B-5
(a) Consideration for the Parent Merger..............................................................B-5
(b) Right to Withhold................................................................................B-5
(c) Consideration Subject to Agreements..............................................................B-6
(d) Antidilution.....................................................................................B-6
(e) Sister Agreements................................................................................B-6
(f) Conversion of Public Stock.......................................................................B-6
(g) Conversion of Merger Sub Stock...................................................................B-6
(h) Treasury Stock...................................................................................B-6
(i) Rights as Holders................................................................................B-7
1.3 Stock Options........................................................................................B-7
(a) [Intentionally deleted]..........................................................................B-7
(b) [Intentionally deleted]..........................................................................B-7
(c) [Intentionally deleted]..........................................................................B-7
1.4 Exchange Agent.......................................................................................B-7
1.5 Exchange Procedure...................................................................................B-7
1.6 Distributions with Respect to Unexchanged Shares.....................................................B-8
1.7 Cancellation and Retirement of Units.................................................................B-8
1.8 No Fractional Shares.................................................................................B-8
(a) No Certificates..................................................................................B-8
(b) Cash Payments....................................................................................B-8
1.9 Investment of Exchange Fund..........................................................................B-9
1.10 Termination of Exchange Fund.........................................................................B-9
1.11 No Liability.........................................................................................B-9
1.12 Tax Withholding......................................................................................B-9
ARTICLE 2 Closing the Transaction................................................................................B-10
2.1 Closing.............................................................................................B-10
2.2 LLC Parties' Deliveries at Closing to Superholdings.................................................B-10
(a) Closing Certificate.............................................................................B-10
(b) Consents and Approvals..........................................................................B-10
(c) Proceedings and Documents.......................................................................B-10
i
3
(d) Good Standing Certificates.................................................B-11
(e) Opinions of LLC Parties' Counsel...........................................B-11
(f) Tower Closing Certificate..................................................B-11
(g) Other Instruments..........................................................B-11
2.3 Superholdings' and Public's Deliveries at Closing to LLC.......................B-11
(a) Closing Certificate........................................................B-11
(b) Proceedings and Documents..................................................B-11
(c) Consents and Approvals.....................................................B-11
(d) Opinion of Public's, Superholdings' and Merger Sub's Counsel...............B-12
(e) Other Instruments..........................................................B-12
2.4 Related Agreements.............................................................B-12
(a) Prior to Closing...........................................................B-12
(b) At Closing.................................................................B-12
(c) At Closing if Completed....................................................B-13
ARTICLE 3 Conditions To Consummating The Transaction........................................B-13
3.1 Joint Conditions...............................................................B-13
(a) Public Stockholder Approval................................................B-14
(b) LLC Members Approval.......................................................B-14
(c) HSR Act....................................................................B-14
(d) Nasdaq Listing.............................................................B-14
(e) Merger.....................................................................B-14
(f) Subsidiary Merger..........................................................B-14
3.2 Public's, Superholdings' and Merger Sub's Conditions...........................B-14
(a) LLC Parties' Representations True..........................................B-14
(b) LLC Parties' Compliance with Agreement.....................................B-15
(c) LLC Parties Consents.......................................................B-15
(d) Public Consents............................................................B-16
(e) Permits....................................................................B-16
(f) LLC Members Approval.......................................................B-16
(g) Form S-4...................................................................B-16
(h) No Litigation..............................................................B-16
(i) Approvals..................................................................B-16
(j) Members Obligations........................................................B-17
(k) Related Agreements.........................................................B-17
(l) Landlord Consents..........................................................B-17
3.3 LLC Parties' Conditions to Closing.............................................B-17
(a) Public's, Superholdings' and Merger Sub's Representations True.............B-17
(b) Public's Superholdings' and Merger Sub's Compliance with Agreement.........B-17
(c) No Litigation..............................................................B-17
(d) Public Consents............................................................B-18
(e) Approvals..................................................................B-18
ARTICLE 4 Covenants Regarding Consummation of the Transaction...............................B-18
ii
4
4.1 Satisfaction of Conditions to Closing............................B-18
(a) Joint Responsibilities.......................................B-18
(b) LLC Parties' Responsibilities................................B-18
(c) Public's, Superholdings' and Merger Sub's Responsibilities...B-19
4.2 Preparation of the Proxy Statement, Form S-4 and Form S-1........B-20
(a) Preparation..................................................B-20
(b) Proxy Statement and Form S-4.................................B-20
(c) Form S-1.....................................................B-21
(d) Public's and Superholdings' Actions..........................B-21
4.3 Accountants' Letters.............................................B-22
(a) From LLC Holdings............................................B-22
(b) From Public and Superholdings................................B-22
4.4 Public Stockholders Meeting......................................B-22
4.5 Votes and Recommendations........................................B-22
4.6 LLC Members Meeting; LLC Holdings................................B-23
4.7 Public Announcements.............................................B-23
4.8 No Solicitation; Acquisition Proposals...........................B-23
(a) No Solicitation..............................................B-23
(b) Approval.....................................................B-23
(c) Voting Agreement.............................................B-23
(d) Acquisition Proposal.........................................B-24
4.9 Leases...........................................................B-24
4.10 Affiliates and Certain Members...................................B-24
4.11 Pooling of Interests.............................................B-25
4.12 Employment Agreements............................................B-25
4.13 Consulting Agreements............................................B-25
4.14 Reissuance of LLC Audited Financial Statements...................B-25
4.15 Master Lease Agreement...........................................B-25
4.16 Asset Transfers..................................................B-26
4.17 Joint Venture Development Agreement..............................B-26
4.18 Resale Agreement.................................................B-27
4.19 Stock Options....................................................B-27
4.20 Other Assets.....................................................B-27
4.21 Fee for Consent of Senior Lender.................................B-27
4.22 Sprint Payments by Members.......................................B-27
4.23 Superholdings Sprint Payments....................................B-28
4.24 Legends..........................................................B-28
4.25 Directors........................................................B-29
ARTICLE 5 Termination.........................................................B-29
5.1 Reasons for Termination..........................................B-29
(a) By Mutual Consent............................................B-29
(b) By Public or Superholdings...................................B-29
(c) By LLC.......................................................B-29
iii
5
(d) Drop Dead Date............................................B-30
(e) Prohibition of the Reorganization.........................B-30
5.2 Notice of Problems............................................B-30
5.3 Public and Superholdings Termination Procedure................B-30
5.4 LLC's Termination Procedure..................................B-31
5.5 Effect of Termination.........................................B-31
ARTICLE 6 Representations and Warranties of LLC and the Members............B-32
6.1 LLC; Entry Into Agreements....................................B-32
(a) Organization and Good Standing............................B-32
(b) Validity and Authorization; Power and Authority...........B-32
(c) Subsidiaries..............................................B-33
(d) No Conflict...............................................B-33
(e) LLC Parties Consents Required.............................B-34
(f) State Takeover Statutes...................................B-34
6.2 Financial Information.........................................B-34
(a) Financial Statements; Books and Records...................B-34
(b) Conduct of Business.......................................B-35
(c) No Material Adverse Effect................................B-36
(d) Projections...............................................B-36
6.3 Members' Interests............................................B-36
(a) Capitalization............................................B-36
(b) Capitalization of LLC Holdings............................B-36
(c) Ownership and Transfer by Members.........................B-37
6.4 Assets........................................................B-37
(a) Personal Property.........................................B-37
(b) Real Property.............................................B-38
(c) Intellectual Property.....................................B-40
(d) Contracts.................................................B-42
(e) Necessary Assets..........................................B-45
6.5 Liabilities...................................................B-45
(a) No Liabilities............................................B-45
(b) Tax Matters...............................................B-45
(c) Litigation................................................B-47
(d) Employee Liabilities......................................B-47
(e) Warranties................................................B-48
(f) Products Liability........................................B-48
6.6 Business......................................................B-48
(a) Customers and Suppliers...................................B-48
(b) Insurance.................................................B-48
(c) Employees.................................................B-48
(d) Worker's Compensation.....................................B-49
(e) ERISA.....................................................B-49
(f) Conflicts of Interest.....................................B-51
(g) LLC Legal Requirements....................................B-51
(h) Environmental Matters.....................................B-52
iv
6
(i) Build-out Plan.......................................................B-53
6.7 Other....................................................................B-53
(a) Certain Information..................................................B-53
(b) Documents Delivered..................................................B-54
(c) No Brokers Fees; No Commissions......................................B-54
(d) Advice...............................................................B-54
(e) Disclosure...........................................................B-54
6.8 Investment Representations...............................................B-54
ARTICLE 7 Representations and Warranties of Public, Superholdings and Merger Sub......B-56
7.1 Entry Into Agreements....................................................B-56
(a) Organization and Good Standing.......................................B-56
(b) Corporate Power and Authority; Validity and Authorization............B-56
7.2 Conflicts and Consents...................................................B-56
(a) No Conflict..........................................................B-56
(b) Consents Obtained....................................................B-57
7.3 No Brokers Fees; No Commissions..........................................B-57
7.4 Superholdings Stock......................................................B-57
7.5 SEC Documents............................................................B-57
7.6 No Material Adverse Effect...............................................B-57
7.7 Capitalization...........................................................B-57
7.8 Capitalization of Superholdings..........................................B-58
7.9 No Liabilities...........................................................B-58
7.10 Compliance with Laws.....................................................B-58
7.11 Certain Information......................................................B-58
7.12 Litigation...............................................................B-59
7.13 Disclosure...............................................................B-59
7.14 Reorganization...........................................................B-59
ARTICLE 8 Covenants of the Parties ...................................................B-59
8.1 Services Agreement.......................................................B-59
8.2 Conduct of Business of LLC Pending Closing...............................B-59
8.3 Access to Information and Employees......................................B-60
8.4 Financial Statements.....................................................B-60
8.5 Payment of Indebtedness of Related Persons...............................B-60
8.6 Records of LLC...........................................................B-61
8.7 Employee Benefit Plans...................................................B-61
8.8 Tower Payables...........................................................B-61
ARTICLE 9 Post-Closing Agreements.....................................................B-61
9.1 Further Actions..........................................................B-61
9.2 Cooperation. ...........................................................B-61
9.3 Tax Returns..............................................................B-62
9.4 Access to Information; Confidentiality...................................B-62
9.5 [Intentionally deleted]..................................................B-62
v
7
9.6 Name........................................................B-62
9.7 Tower Payables..............................................B-62
9.8 Reorganization..............................................B-62
9.9 Insurance...................................................B-62
ARTICLE 10 Indemnification...............................................B-62
10.1 Survival; Etc...............................................B-63
(a) Contents of this Agreement..............................B-63
(b) No Effect on Liability..................................B-63
(c) Survival................................................B-63
(d) Commencing Actions......................................B-63
(e) Materiality.............................................B-64
10.2 Indemnities.................................................B-64
(a) Indemnification of Superholdings........................B-64
(b) Indemnification of the Members..........................B-65
(c) Contribution............................................B-65
(d) Form of Payment; Interim Losses.........................B-66
(e) Termination Fee.........................................B-67
10.3 Limitations on Indemnities..................................B-67
(a) Basket..................................................B-67
(b) Cap.....................................................B-68
(c) Services Agreement......................................B-68
(d) Damages.................................................B-68
(e) Exclusivity.............................................B-68
(f) Indemnification of Escrow Agent.........................B-68
10.4 Notice and Opportunity to Defend............................B-69
(a) Notice, Etc.............................................B-69
(b) Defense Costs...........................................B-69
(c) Third Party Claims......................................B-70
10.5 Delays or Omissions, Etc....................................B-70
10.6 Governing Law; Attorneys' Fees..............................B-70
10.7 Dispute Resolution..........................................B-71
(a) Arbitration.............................................B-71
(b) Emergency Relief........................................B-72
(c) Definition of Parties...................................B-72
ARTICLE 11 Miscellaneous.................................................B-72
11.1 Successors and Assigns......................................B-72
11.2 Entire Agreement............................................B-73
11.3 Amendment...................................................B-73
11.4 Extension; Waiver...........................................B-73
11.5 Notices, Etc................................................B-73
11.6 Third Party Beneficiary, Etc................................B-74
11.7 Reformation; Severability...................................B-74
11.8 Counterparts................................................B-74
11.9 Titles and Subtitles........................................B-74
11.10 Confidentiality.............................................B-75
vi
8
(a) Confidential Information................................B-75
(b) Disclosure..............................................B-75
11.11 Expenses....................................................B-76
11.12 Responsibility for Superholdings and Merger Sub.............B-77
11.13 Knowledge...................................................B-77
vii
9
INDEX OF DEFINED TERMS
Page
AAA........................................................................B-71
Accounts ..................................................................B-38
Accounts Receivable .......................................................B-38
Acquisition Proposal.......................................................B-24
Affiliate .................................................................B-51
Affiliate Letter ..........................................................B-24
Agreement ..................................................................B-1
Alliance Party ............................................................B-48
Analysis ..................................................................B-75
Approvals .................................................................B-16
Articles ..................................................................B-75
Asserted Liability ........................................................B-69
Associate .................................................................B-51
Breach ....................................................................B-63
Certificates of Merger......................................................B-4
Closing ...................................................................B-10
Closing Date ..............................................................B-10
Code .......................................................................B-2
Companies .................................................................B-32
Confidential Information...................................................B-75
Consulting Agreements......................................................B-25
Contracts .................................................................B-42
Copyrights ................................................................B-40
Credit Agreement ..........................................................B-44
Default ...................................................................B-44
Defense Costs .............................................................B-69
DGCL .......................................................................B-4
Disclosing Party ..........................................................B-75
Disclosure Schedules........................................................B-3
EDC .......................................................................B-16
Effective Time .............................................................B-4
Employee Benefit Plans.....................................................B-49
Employment Agreements......................................................B-25
Environmental Claim .......................................................B-53
Environmental Laws ........................................................B-52
Equipment Leases ..........................................................B-37
ERISA .....................................................................B-49
ERISA Affiliate ...........................................................B-50
Escrow Account .............................................................B-5
viii
10
Escrow Adjustment ................................................B-66
Escrow Agent ......................................................B-5
Escrow Agreement ..................................................B-5
Escrow Deposit ...................................................B-66
Escrow Funds ......................................................B-5
Event of Default .................................................B-44
Exchange Act .....................................................B-20
Exchange Agent ....................................................B-7
Exchange Fund .....................................................B-7
Exhibits ..........................................................B-3
Form S-1 .........................................................B-21
Form S-4 .........................................................B-20
GAAP .............................................................B-34
Good Standing Certificate.........................................B-11
HSR Act ..........................................................B-14
Indemnified Party ................................................B-69
Indemnifying Party ...............................................B-69
Indemnity Agreement ..............................................B-13
Intellectual Property.............................................B-40
Interim Loss Value ...............................................B-66
Interim Losses ...................................................B-66
Joint Venture Development Agreement...............................B-27
K.G. .............................................................B-25
Landlord Consents ................................................B-17
Leases ...........................................................B-24
Leased Premises ..................................................B-39
Lenders ..........................................................B-44
Letters ..........................................................B-73
Licenses .........................................................B-52
Liens ............................................................B-37
LLC ...............................................................B-1
LLC Financial Statements..........................................B-34
LLC Holdings ......................................................B-1
LLC Legal Requirements............................................B-51
LLC Material Adverse Change.......................................B-15
LLC Parties .......................................................B-1
LLC Parties Closing Certificate...................................B-11
LLC Parties Consents..............................................B-34
LLC Parties' Delegated Conditions.................................B-18
LLC Records ......................................................B-54
Lock-Up Agreement ................................................B-12
Losses ...........................................................B-64
M.R. .............................................................B-13
Management Agreement..............................................B-13
ix
11
Marks ...................................................................B-40
Master Lease Agreement...................................................B-25
Member Indemnified Claim.................................................B-64
Member Indemnitors ......................................................B-64
Members ..................................................................B-1
Members Meeting .........................................................B-23
Members' Releases .......................................................B-13
Members Required Vote....................................................B-32
Members' Interests .......................................................B-1
Members' Releases .......................................................B-13
Merger Sub ...............................................................B-1
Merger Sub Stock .........................................................B-2
Orders ..................................................................B-47
Outside Confidentiality Agreement........................................B-48
Parent Merger ............................................................B-1
Parent Surviving Corporation..............................................B-4
Patents .................................................................B-41
Paying Member Indemnitor.................................................B-65
Per Unit Cash Consideration...............................................B-5
Per Unit LLC Consideration................................................B-5
Permits .................................................................B-16
Permitted Liens .........................................................B-37
Personal Property .......................................................B-37
Policies ................................................................B-48
Prior Policies ..........................................................B-48
Proceedings .............................................................B-47
Projections .............................................................B-36
Proxy Statement .........................................................B-20
Public ...................................................................B-1
Public Consents .........................................................B-57
Public Legal Requirements................................................B-58
Public Loan Agreement....................................................B-12
Public Material Adverse Change...........................................B-15
Public Stock .............................................................B-6
Public Stockholders Meeting..............................................B-22
Public's, Superholdings' and Merger Sub's Delegated Conditions...........B-20
Real Estate Contracts....................................................B-39
Real Property ...........................................................B-38
Receiving Party .........................................................B-75
Related Agreements ......................................................B-12
Remaining Member Indemnitors.............................................B-65
Reorganization ...........................................................B-2
Representatives .........................................................B-60
Resale Agreement ........................................................B-27
S.R. ....................................................................B-13
x
12
SEC ......................................................................B-16
SEC Documents ............................................................B-57
SEC Filing Date ..........................................................B-20
Sections .................................................................B-75
Securities Act ...........................................................B-20
Services Agreement .......................................................B-12
Significant Customer......................................................B-48
Significant Supplier......................................................B-48
Sister Agreements .........................................................B-3
Sister Lockup ............................................................B-12
Sprint ...................................................................B-43
Sprint Management Agreement...............................................B-43
Subsidiaries .............................................................B-33
Subsidiary Merger .........................................................B-1
Subsidiary Merger Agreement................................................B-1
Subsidiary Surviving Corporation...........................................B-4
Superholdings .............................................................B-1
Superholdings Closing Certificate.........................................B-11
Superholdings Indemnitees.................................................B-65
Superholdings Indemnitors.................................................B-65
Superholdings Stock .......................................................B-2
Tax ......................................................................B-47
Tax Returns ..............................................................B-47
Taxes ....................................................................B-47
Technology Contracts......................................................B-40
Termination Date .........................................................B-30
Termination Fee ..........................................................B-67
Tower Closing Certificate.................................................B-11
Tower Company ............................................................B-11
Tower Leases .............................................................B-39
Trade Secrets ............................................................B-41
Transferrable Licenses....................................................B-52
xi
13
TABLE OF EXHIBITS
Escrow Agreement..................................................................Exhibit 1.2(b)
Subsidiary Merger Agreement ......................................................Exhibit 1.2(f)
LLC Parties Closing Certificate...................................................Exhibit 2.2(a)
Form of Opinion of LLC Parties' Counsel...........................................Exhibit 2.2(e)
Superholdings' Closing Certificate................................................Exhibit 2.3(a)
Form of Opinion of Public's, Superholdings' and Merger Sub's Counsel..............Exhibit 2.3(d)
Tower Closing Certificate.........................................................Exhibit 2.2(g)
Services Agreement................................................................Exhibit 2.4(a)(i)
Public Loan Agreement.............................................................Exhibit 2.4(a)(ii)
Lock-Up Agreement (contained in Member Agreement).................................Exhibit 2.4(b)(i)
Indemnity Agreement (contained in Member Agreement)...............................Exhibit 2.4(b)(ii)
Members' Releases (contained in Member Agreement).................................Exhibit 2.4(b)(iii)
xii
14
AMENDED AND RESTATED AGREEMENT AND PLAN OF REORGANIZATION
THIS AMENDED AND RESTATED AGREEMENT AND PLAN OF REORGANIZATION (this
"Agreement") is entered into as of July 31, 2000, by and among Alamosa PCS
Holdings, Inc., a Delaware corporation ("Public"), Alamosa Holdings, Inc., a
Delaware corporation ("Superholdings"), Alamosa Sub I, Inc., a Delaware
corporation and wholly-owned direct subsidiary of Superholdings ("Merger Sub"),
and Xxxxxxx Wireless Communications, L.L.C., a Missouri limited liability
company ("LLC"), and members of LLC (the "Members").
R E C I T A L S
- - - - - - - -
A. The Members own, in the aggregate, all of the issued and outstanding
units of membership interests of LLC, consisting in the aggregate of
20,000 units (all of the authorized membership interests of LLC,
whether or not owned by a Member, and any interest received with
respect to or in exchange for any such interest (including, without
limitation, units of LLC Holdings), being referred to as "Members'
Interests"). LLC, LLC Holdings and the Members are sometimes
collectively referred to herein as the "LLC Parties."
B. The Board of Managers of LLC deems it advisable and in the best
interests of its members that LLC and its members form a limited
liability company to hold all of the Members' Interests of LLC ("LLC
Holdings"), and that LLC Holdings, merge with and into Superholdings
(the "Parent Merger") simultaneously with the merger of Merger Sub and
Public (the "Subsidiary Merger"). The Parent Merger may include the
merger of any other business entity with which Superholdings has
agreed to merge, which mergers would take place immediately after the
merger of LLC Holdings into Superholdings. In furtherance thereof, the
Board of Directors of Superholdings and the Board of Managers of LLC
Holdings have approved the Parent Merger, upon the terms and subject
to the conditions set forth herein. In addition, the Members have
agreed to vote in favor of the Parent Merger.
C. The Board of Directors of Public have deemed it advisable and in the
best interests of its stockholders to enter into the Agreement and Plan
of Reorganization dated as of July 31, 2000 (the "Subsidiary Merger
Agreement") by and among Merger Sub, Public and Superholdings and to
consummate the Subsidiary Merger simultaneously with the consummation
of the Parent Merger. In furtherance thereof, the Board of Directors of
Public has approved the Subsidiary Merger Agreement and the Subsidiary
Merger, upon the terms and subject to the conditions set forth herein.
B-1
15
D. Similarly, the Board of Directors of Superholdings have deemed it
advisable to enter into the Subsidiary Merger Agreement and to
consummate the Subsidiary Merger simultaneously with the consummation
of the Parent Merger. In furtherance thereof, the Board of Directors of
Superholdings has approved the Subsidiary Merger Agreement and the
Subsidiary Merger, upon the terms and subject to the conditions set
forth herein.
E. Further, the Board of Directors of Merger Sub have deemed it advisable
and in the best interests of its stockholders to enter into the
Subsidiary Merger Agreement and to consummate the Subsidiary Merger
simultaneously with the consummation of the Parent Merger. In
furtherance thereof, the Board of Directors of Merger Sub has approved
the Subsidiary Merger Agreement and Subsidiary Merger, upon the terms
and subject to the conditions set forth herein. The Parent Merger, the
Subsidiary Merger and the other transactions contemplated herein,
collectively referred to as the "Reorganization," and Sister
Agreements consummated contemporaneously herewith are part of a single
reorganization.
F. As of the date hereof, there are no shares of common stock of
Superholdings, par value $0.01 per share ("Superholdings Stock"),
issued and outstanding and as of the date hereof, Superholdings holds
of record all of the issued and outstanding shares of common stock of
Merger Sub, par value $0.01 per share ("Merger Sub Stock").
G. The Board of Directors of Public has determined that in order to
complete the Parent Merger in a tax-efficient manner, such acquisition
should be structured as a transaction described in Section 351(a) of
the Internal Revenue Code of 1986, as amended (the "Code") (all
citations to the Code, or to the Treasury Regulations promulgated
thereunder, shall include any amendments or any substitute or
successor provisions thereto), which will require Public to form a new
holding company. The parties desire that the Parent Merger, except as
provided in Sections 1.2(a)(ii) (Cash) and 1.8(b) (Cash Payments)
herein, qualifies as a transaction described in Section 351(a) of the
Code.
H. The parties desire that the Subsidiary Merger qualify as a transaction
described in Sections 351(a) and 368(a)(1)(A) of the Code by virtue of
Section 368(a)(2)(E) of the Code. It is contemplated that the
Subsidiary Merger will be completed substantially simultaneously with
the merger or consolidation of Superholdings or one or more of its
subsidiaries with or into one or more business entities (including,
without limitation, the Parent Merger) in a transaction of the type
described in Section 351(a) of the Code.
I. For financial accounting purposes, Public and Superholdings may
determine that
B-2
16
Superholdings' merger with LLC will be accounted for as a pooling of
interests transaction.
J. Public, Superholdings, Merger Sub and the LLC Parties acknowledge that
they have received adequate consideration for entering into, and have
relied upon the promises, covenants, representations and warranties
contained in, this Agreement, and that they will be benefitted by the
transactions contemplated herein.
K. The LLC Parties have delivered to Superholdings certain disclosure
schedules of even date herewith referred to herein. Public,
Superholdings and Merger Sub have delivered to the LLC Parties certain
disclosure schedules of even date herewith referred to herein. Any
such disclosure schedules are referred to herein as "Disclosure
Schedules." The Disclosure Schedules and the Exhibits (herein so
called) referred to herein are a part of this Agreement.
L. Public, Superholdings and Merger Sub may enter into other agreements
(the "Sister Agreements") pursuant to which other business entities
join in the Parent Merger.
A G R E E M E N T
- - - - - - - - -
Based on the recitals set forth above and the representations,
warranties, covenants and agreements contained herein, the parties hereto,
intending to be legally bound, agree as follows:
ARTICLE 1
Mergers
-------
1.1 The Mergers.
(a) The Mergers. Upon the terms and subject to the conditions
set forth in this Agreement:
(i) Parent Surviving Corporation. Not later than
August 7, 2000, LLC and its members shall form LLC Holdings, which at such time
shall hold all of the Members' Interests of LLC. At the Effective Time, LLC
Holdings will merge with and into Superholdings in accordance with the terms set
forth herein (one or more other parties, if any, that Public and Superholdings
agree to be constituents in the Parent Merger, pursuant to the terms of a Sister
Agreement may merge into Superholdings immediately following the merger of LLC
Holdings into Superholdings). From and after
B-3
17
the Effective Time, the separate existence of LLC Holdings and such other
constituents shall cease to exist. Superholdings shall continue as the surviving
corporation in the Parent Merger (the "Parent Surviving Corporation") and shall
continue to be governed by the laws of the State of Delaware. (LLC shall
continue as a subsidiary of Superholdings.)
(ii) Subsidiary Surviving Corporation. Simultaneously
with the Parent Merger, Merger Sub will merge with and into Public, in
accordance with the terms set forth herein and the terms of the Subsidiary
Merger Agreement. From and after the Effective Time, the separate corporate
existence of Merger Sub shall cease to exist. Public shall continue as the
surviving corporation in the Subsidiary Merger (the "Subsidiary Surviving
Corporation") and shall continue to be governed by the laws of the State of
Delaware. At the sole discretion of the Board of Directors of Public, as an
alternative structure to the Subsidiary Merger, Public may merge directly with
and into Superholdings, and Superholdings shall continue as the surviving
corporation and shall continue to be governed by the laws of the State of
Delaware.
(b) Consummation of the Mergers. The Parent Merger and the
Subsidiary Merger shall be consummated by filing Certificates of Merger (herein
so called) with the secretaries of state of the State of Delaware and State of
Missouri, together with all other documents, notices and filings required by the
Delaware General Corporation Law ("DGCL") and the Missouri Limited Liability
Company Act.
(c) Effective Time of the Mergers. The Certificates of Merger
shall provide that the Parent Merger and the Subsidiary Merger shall be
effective as of the date and time set forth in the Certificates of Merger filed
with the Secretary of State of the State of Delaware (the "Effective Time").
(d) Effect of the Mergers. At the Effective Time, the effect
of the Parent Merger shall be as provided in Section 264 of the DGCL and other
applicable provisions of the DGCL and Sections 347.700 through 347.735 of the
Missouri Limited Liability Company Act and other applicable provisions of such
act, and the effect of the Subsidiary Merger shall be as provided in Sections
259 and 261 of the DGCL.
(e) The Surviving Corporations' Certificates of Incorporation;
Bylaws; Directors and Officers. The certificates of incorporation and bylaws of
Superholdings and Public, in each case as in effect at the Effective Time, shall
be the certificates of incorporation and bylaws of Parent Surviving Corporation
and Subsidiary Surviving Corporation, respectively. At the Effective Time, the
Board of Directors and officers of each of Parent Surviving Corporation and
Subsidiary Surviving Corporation shall be composed of the directors and officers
of Superholdings and Public serving immediately before the Effective Time,
respectively, to hold office until their respective successors are duly elected
or appointed and qualified. The rights and obligations of the current members of
LLC, whether as members of LLC or LLC Holdings, (i) under their respective
operating agreements, limited liability company agreements, or similar
B-4
18
agreements, including without limitation the obligations to make capital
contributions and (ii) with respect to Members' Interests shall terminate.
1.2 Terms of the Merger.
(a) Consideration for the Parent Merger. Each unit of the
Members' Interests that are units of LLC Holdings (which the members of LLC
shall have received in exchange for their units of LLC) issued and outstanding
immediately prior to the Effective Time shall, at the Effective Time, by virtue
of the Parent Merger and without any action on the part of the holder thereof,
be converted into, as specified by and pursuant to the terms of this Section
1.2(a), into the following:
(i) Superholdings Stock. The right to receive a
number of duly authorized, validly issued, fully paid and nonassessable shares
of Superholdings Stock, along with any dividends or distributions thereon after
the Effective Time, equal to the Per Unit LLC Consideration. "Per Unit LLC
Consideration" shall be equal to 675 shares of Superholdings Stock per unit of
the Members' Interests of LLC Holdings; provided, that, the aggregate number of
shares of Superholdings Stock that shall be issued in connection with the Parent
Merger pursuant to this Section 1.2(a) for all of such Members' Interests
outstanding shall be equal to 13,500,000 shares.
(ii) Cash. The right to receive cash equal up to
$200.00 per unit of Members' Interests of LLC Holdings, without any interest
thereon (the "Per Unit Cash Consideration"); provided, that, the aggregate
amount of Per Unit Cash Consideration shall be determined pursuant to Section
4.16 (Asset Transfers) and not exceed $4,000,000.
(iii) Adjustment of Cash. The amount of Per Unit Cash
Consideration shall be subject to adjustment as provided below and shall be
reduced by the amount of any transfer Taxes owed as a result of the formation of
LLC Holdings or LLC's or LLC Holdings' participation in the Parent Merger,
although no such taxes are anticipated.
(b) Right to Withhold.
(i) Escrow. At the Closing, Superholdings shall have
the right to withhold from the aggregate amount of the Per Unit LLC
Consideration the amounts of any Interim Losses, as described in further detail
in Section 10.2(d) (Form of Payment; Interim Losses). The aggregate amount of
all such amounts withheld at any time is defined herein as the "Escrow Funds."
An escrow agent (the "Escrow Agent") shall keep the Escrow Funds in a separate
escrow account, maintained on behalf of the Members (the "Escrow Account"),
subject to the terms of the Escrow Agreement (the "Escrow Agreement")
substantially in the form attached as the Exhibit to this Section 1.2(b).
(ii) Debt of Members. At the Closing, Public,
Superholdings and
B-5
19
Merger Sub shall have the right to withhold from the aggregate amount of the Per
Unit Cash Consideration, the amounts, including interest, then owing from the
Members to Public pursuant to any outstanding borrowings.
(c) Consideration Subject to Agreements. The consideration to
be paid pursuant to the Parent Merger pursuant to Section 1.2(a) (Consideration
for the Parent Merger) shall be subject to the terms of the Escrow Agreement,
Lock-Up Agreement, and the Indemnity Agreement and, to the extent applicable,
Affiliate Letters. Superholdings shall retain possession of such consideration
until the later of (i) the expiration of the Lock-Up Agreement or (ii) the
resolutions of all claims for Losses that arise pursuant to Section 10.2(a)
(Indemnification of Superholdings), unless the person or entity and, if
applicable, its direct and indirect owners, entitled to receive such
consideration execute a Lock-Up Agreement, and an Indemnity Agreement, and to
the extent applicable, Affiliate Letters, whereupon Superholdings shall release
such consideration.
(d) Antidilution. In the event of any stock dividend, stock
split, reclassification, recapitalization, combination or exchange of shares
with respect to, or rights issued in respect of, Public Stock on or after the
date hereof and prior to the Effective Time, the Per Unit LLC Consideration
shall be adjusted accordingly.
(e) Sister Agreements. The Sister Agreements, if any, shall
set forth the consideration to be paid to the other parties to the Parent
Merger.
(f) Conversion of Public Stock. Each share of common stock of
Public, par value $0.01 (the "Public Stock"), issued and outstanding immediately
prior to the Effective Time together with the related rights distributed to
holders of Public Stock pursuant to the Rights Agreement, dated as of January
31, 2000, between Public and ChaseMellon Shareholder Services, L.L.C., as Rights
Agent (other than shares of Public Stock held in Public's treasury) shall, at
the Effective Time, by virtue of the Subsidiary Merger and without any action on
the part of the holder thereof, be converted into, as specified and pursuant to
the terms of this Section 1.2(f), the right to receive one duly authorized,
validly issued, fully paid and nonassessable share of Superholdings Stock, along
with any dividends or distributions thereon after the Effective Time pursuant to
the terms of the Subsidiary Merger Agreement in the form attached as the Exhibit
to this Section 1.2(f), which agreement shall not be amended in a manner adverse
to the LLC Parties without the consent of the Members.
(g) Conversion of Merger Sub Stock. Each share of Merger Sub
Stock issued and outstanding immediately prior to the Effective Time (other than
shares of Merger Sub Stock held in Merger Sub's treasury) shall, at the
Effective Time, by virtue of the Subsidiary Merger and without any action on the
part of the holder thereof, be converted into one duly authorized, validly
issued, fully paid nonassessable share of stock of the Subsidiary Surviving
Corporation.
(h) Treasury Stock. All shares of Public Stock and Merger Sub
Stock that are owned by Public or Merger Sub, respectively, as treasury stock
shall, at the Effective Time, be canceled and retired and shall cease to exist,
and no shares of Superholdings Stock or other
B-6
20
consideration shall be delivered or owing in exchange therefor.
(i) Rights as Holders. On or after the Effective Time, holders
of Members' Interests shall cease to have any rights as members of LLC and LLC
Holdings, except the right to receive the consideration set forth herein in
Section 1.2(a) (Consideration for the Parent Merger) with respect to Members'
Interests held by them, and such Members' Interests shall be extinguished. On
and after the Effective Time, holders of certificates which immediately prior to
the Effective Time represented issued and outstanding shares of Public Stock
shall cease to have any rights as stockholders of Public, except the right to
receive the consideration set forth herein in Section 1.2(f) (Conversion of
Public Stock) with respect to each share held by them. The merger consideration
paid upon the surrender for exchange of units of Members' Interests or shares of
Public Stock in accordance with the terms of this Agreement shall be deemed,
when paid or issued hereunder, to have been paid or issued, as the case may be,
in full satisfaction of all rights and obligations pertaining to the Members'
Interests or shares theretofore represented by such unit of Members' Interests
or shares of Public Stock.
1.3 Stock Options.
(a) [Intentionally deleted].
(b) [Intentionally deleted].
(c) [Intentionally deleted].
1.4 Exchange Agent. Prior to or concurrently with the Effective
Time, Superholdings shall enter into an agreement with such bank or trust
company as may be designated by Superholdings (the "Exchange Agent"), which
shall provide that Superholdings shall deposit with the Exchange Agent as of the
Effective Time, for the benefit of the holders of units of Members' Interests,
for exchange in accordance with this Agreement, through the Exchange Agent, (a)
certificates representing the shares of Superholdings Stock, (b) any dividends
or distributions with respect thereto with a record date after the Effective
Time, (c) any cash payable in lieu of any fractional shares of Superholdings
Stock and (d) the aggregate Per Unit Cash Consideration (collectively, the
"Exchange Fund") issuable pursuant to this Agreement in exchange for outstanding
units of Members' Interests.
1.5 Exchange Procedure. After the Effective Time, each holder of
Members' Interests shall surrender the certificates representing same or, if the
Members' Interests are not certificated, deliver a release of members' interest,
in a form, duly endorsed or executed as the Parent Surviving Corporation may
reasonably require, to the Exchange Agent, together with a Lock-Up Agreement,
Members' Release and an Indemnity Agreement. Subject to Sections 1.2(b) (Right
to Withhold), 1.2(c) (Consideration Subject to Agreements) and 1.12 (Tax
Withholding), at the time of such surrender or delivery, the merger
consideration applicable to such Members' Interests shall be delivered to such
holder. The merger consideration shall be deemed, when paid or issued hereunder,
to have been paid or issued, as the case may be, in full satisfaction of all
rights and obligations pertaining to the surrendered units. No interest shall be
B-7
21
paid or accrued on any cash payable upon the surrender of any unit of Members'
Interests. If cash payment is to be made, or shares of Superholdings Stock
issued, to a person other than the person who surrendered the units of Members'
Interests, it shall be a condition of payment that the units of Members'
Interests so surrendered shall be properly endorsed or otherwise in proper form
for transfer and that the person requesting such payment shall pay any transfer
or other taxes required by reason of the payment to a person other than the
registered holder of the surrendered units of Members' Interests, or established
to the satisfaction of Superholdings that such taxes have been paid or are not
applicable.
1.6 Distributions with Respect to Unexchanged Shares. No dividends
or other distributions with respect to Superholdings Stock shall be paid to the
holder of any unsurrendered units of Members' Interests with respect to the
shares of Superholdings Stock issuable upon the surrender of such units of
Members' Interests pursuant to Section 1.5 (Exchange Procedure) and no cash
payment in lieu of fractional shares shall be paid to any such holder pursuant
to Section 1.8 (No Fractional Shares) and all such dividends, other
distributions and cash in lieu of fractional shares of Superholdings Stock shall
be paid by Superholdings to the Exchange Agent and shall be included in the
Exchange Fund, in each case until the surrender of such units of Members'
Interests pursuant to Section 1.5 (Exchange Procedure). Subject to the effect of
applicable escheat or similar laws and subject to Sections 1.2(b) (Right to
Withhold), 1.2(c) (Consideration Subject to Agreements) and 1.12 (Tax
Withholding), following the surrender of any such units of Members' Interests
pursuant to Section 1.5 (Exchange Procedure) there shall be paid to the holder
of the units of Members' Interests, (i) any such dividends or other
distributions, without any interest thereon, which theretofore had become
payable (with a record date or payment date prior to the surrender of units of
Members' Interests) with respect to shares of Superholdings Stock represented by
such units of Members' Interests and (ii) the amount of any cash payable in lieu
of a fractional share of Superholdings Stock to which such holder is entitled
pursuant to Sections 1.8(a) (No Certificates) and 1.8(b) (Cash Payments). No
holder of unsurrendered units of Members' Interests shall be entitled, until the
surrender of such units, to vote the shares of Superholdings Stock into which
the shares of Members' Interests represented thereby shall have been converted.
1.7 Cancellation and Retirement of Units. As of the Effective
Time, all units of Members' Interests of LLC Holdings issued and outstanding
immediately prior to the Effective Time shall cease to be outstanding and shall
automatically be canceled and retired and shall cease to exist.
1.8 No Fractional Shares.
(a) No Certificates. No certificates representing fractional
shares of Superholdings Stock shall be issued upon the surrender for exchange of
units of Members' Interests which have been converted pursuant to this
Agreement, and such fractional share interests shall not entitle the owner
thereof to vote or to have any rights of a stockholder of Superholdings.
(b) Cash Payments. In lieu of any such fractional shares, each
holder of units
B-8
22
who would otherwise have been entitled to a fraction of a share of Superholdings
Stock upon surrender of units for exchange pursuant to this Article 1 will be
paid an amount in cash (without interest), rounded to the nearest cent,
determined by multiplying (i) the per share closing price on The Nasdaq Stock
Market of Superholdings Stock on the date on which the Effective Time occurs
(or, if Superholdings Stock does not trade on The Nasdaq Stock Market on such
date, the first date of trading of Superholdings Stock on The Nasdaq Stock
Market after the Effective Time) by (ii) the fractional interest to which such
holder otherwise would be entitled. Such amount in cash shall be deemed to be
substituted for any such fractional share and to constitute a portion of the
merger consideration with respect to the related units.
1.9 Investment of Exchange Fund. The Exchange Agent shall invest
any cash included in the Exchange Fund, as directed by Superholdings, in (a)
direct obligations of the United States of America, (b) obligations for which
the full faith and credit of the United States of America is pledged to provide
for the payment of principal and interest, (c) commercial paper rated the
highest quality by either Xxxxx'x Investors Services, Inc. or Standard & Poor's
Corporation, or (d) certificates of deposit, bank repurchase agreements or
bankers' acceptances of commercial banks with capital exceeding $500.0 million.
Any net earnings with respect to the Exchange Fund shall be the property of and
paid over to Superholdings as and when requested by Superholdings.
1.10 Termination of Exchange Fund. Any portion of the Exchange Fund
which remains undistributed to the holders of units of Members' Interests for
180 days after the Effective Time shall be delivered to Superholdings, upon
demand, and any holders of units of Members' Interests that have not theretofore
complied with this Article 1 shall thereafter look only to Superholdings, and
only as general creditors thereof, for payment of their claim for any merger
consideration, any cash in lieu of fractional shares of Superholdings Stock and
any dividends or distributions with respect to Superholdings Stock, as provided
herein.
1.11 No Liability. None of Public, Superholdings, Merger Sub,
Parent Surviving Corporation, Subsidiary Surviving Corporation or the Exchange
Agent shall be liable to any person in respect of any payments or distributions
payable from the Exchange Fund delivered to a public official pursuant to any
applicable abandoned property, escheat or similar law. If any units of Members'
Interests shall not have been surrendered prior to five years after the
Effective Time (or immediately prior to such earlier date on which any merger
consideration in respect of such units of Members' Interests would otherwise
escheat to or become the property of any governmental entity); any amounts
payable in respect of such units of Members' Interests shall, to the extent
permitted by applicable law, become the property of Superholdings, free and
clear of all claims or interest of any person previously entitled thereto.
1.12 Tax Withholding. Superholdings shall be entitled to deduct and
withhold, or cause to be deducted or withheld, from the consideration otherwise
payable pursuant to this Agreement to any holder of options or units of Members'
Interests such amounts, if any, as are required to be deducted and withheld with
respect to the making of such payment under the Code, or any provision of
applicable state, local or foreign tax law. To the extent that amounts are so
deducted and withheld, such deducted and withheld amounts shall be treated for
all
B-9
23
purposes of this Agreement as having been paid to such holders in respect of
which such deduction and withholding was made.
ARTICLE 2
Closing the Transaction
-----------------------
2.1 Closing. On the third business day after the satisfaction or
written waiver of the conditions (other than execution, filing or delivery of
agreements, certificates, legal opinions or other instruments to be delivered at
Closing) contained (a) herein, (b) in the Subsidiary Merger Agreement and (c) at
the option of Superholdings and Public, any Sister Agreements that have not been
validly terminated in accordance with their terms, or as otherwise agreed by the
parties hereto, and unless this Agreement has been terminated pursuant to the
provisions of Article 5 (Termination), the consummation of the transactions
provided for herein and in such other agreements (the "Closing") shall take
place at the offices of Xxxxxx and Xxxxx, LLP, counsel to Superholdings, Public
and Merger Sub, located at 0000 X. Xxxxxxx Xxxx., Xxxxx 0000, Xxxxxxxxxx, Xxxxx
00000, at 10:00 a.m., local time, or at such other place or by such other means
as the parties hereto may agree; provided, however, that if the conditions
(other than execution, filing or delivery of agreements, certificates, legal
opinions or other instruments to be delivered at Closing) contained herein and
in the Subsidiary Merger Agreement are satisfied or waived in writing, then
Superholdings and Public may not delay the Closing beyond March 31, 2001 (or
April 30, 2001 if the termination date of this Agreement or any Sister Agreement
has been extended in accordance with its terms to allow a party to cure any
matter under this Agreement or such Sister Agreement) in order to achieve
satisfaction or waiver of the conditions contained in a Sister Agreement;
provided, further, that if (i) the closing of a Sister Agreement occurs prior to
March 31, 2001 and (ii) the conditions contained herein are satisfied or waived
in writing, then the Closing of this Agreement shall also occur on the closing
date of such Sister Agreement. The time and date of the Closing are referred to
herein as the "Closing Date."
2.2 LLC Parties' Deliveries at Closing to Superholdings. At the
Closing, the LLC Parties shall deliver, or cause to be delivered, to
Superholdings the following items:
(a) Closing Certificate. The LLC Parties shall jointly deliver
to Superholdings a closing certificate executed by each of the LLC Parties (the
"LLC Parties Closing Certificate") in the form attached as the Exhibit to this
Section 2.2(a).
(b) Consents and Approvals. The LLC Parties jointly shall
deliver copies of all LLC Parties' Consents that have been obtained, and all
Approvals obtained by the LLC Parties.
(c) Proceedings and Documents. The LLC Parties shall deliver
copies, certified or otherwise identified to Superholdings' reasonable
satisfaction, of all company documents that Superholdings shall reasonably
request, including resolutions of the Board of
B-10
24
Managers of LLC Holdings and resolutions of the members of LLC Holdings, dated
on or before the date hereof to authorize this Agreement, the Related Agreements
and the transactions and other acts contemplated either by this Agreement or the
Related Agreements.
(d) Good Standing Certificates. LLC Holdings shall deliver
certificates, issued within 10 days of the date of the Closing, (i) from the
Secretary of State of Missouri, evidencing that LLC, LLC Holdings and the
Subsidiaries are validly existing under the laws of their jurisdictions of
organization and (ii) from each state listed on the Disclosure Schedule to
Section 6.1(a) (Organization and Good Standing) evidencing that LLC, LLC
Holdings and the Subsidiaries are qualified to do business as foreign entities
(each, a "Good Standing Certificate") in each such state.
(e) Opinions of LLC Parties' Counsel. The LLC Parties shall
deliver an opinion of Xxxxxxxxx Xxxxxxxx LLP, counsel to the LLC Parties, dated
as of the Closing Date, in form and substance reasonably satisfactory to
Superholdings regarding the matters set forth in the Exhibit to this Section
2.2(e).
(f) Tower Closing Certificate. The LLC Parties shall cause
Xxxxxxx Tower Company, a Missouri corporation owned and operated by the Members
("Tower Company"), to deliver to Superholdings a closing certificate executed by
Tower Company (the "Tower Closing Certificate"), in the form attached as the
Exhibit to this Section 2.2(f), regarding environmental liabilities.
(g) Other Instruments. Such other instruments, documents or
information that Superholdings reasonably requests in order to more effectively
consummate the transactions contemplated hereby.
2.3 Superholdings' and Public's Deliveries at Closing to LLC. At
the Closing, Superholdings and Public shall deliver the following items to the
Members:
(a) Closing Certificate. Superholdings shall deliver to the
Members a closing certificate executed by Superholdings (the "Superholdings
Closing Certificate") in the form attached as the Exhibit to this Section
2.3(a).
(b) Proceedings and Documents. Superholdings, Public and
Merger Sub shall deliver copies, certified or otherwise, identified to LLC
Holdings' reasonable satisfaction, of all company documents that LLC Holdings
shall reasonably request, including resolutions of their respective boards of
directors, dated on or before the date hereof to authorize this Agreement, the
Related Agreements and the transactions and other acts contemplated either by
this Agreement or the Related Agreements.
(c) Consents and Approvals. Public and Superholdings jointly
shall deliver copies of all of the Public Consents that have been obtained, and
all Approvals obtained by Public and Superholdings.
X-00
00
(x) Opinion of Public's, Superholdings' and Merger Sub's
Counsel. Superholdings shall deliver an opinion of Xxxxxx and Xxxxx, LLP, dated
as of the Closing Date, in form and substance reasonably satisfactory to LLC
Holdings regarding the matters set forth in the Exhibit to this Section 2.3(d).
(e) Other Instruments. Such other instruments, documents or
information that LLC Holdings reasonably requests in order to more effectively
consummate the transactions contemplated hereby.
2.4 Related Agreements. The parties, as appropriate, shall execute
and deliver the following documents. All agreements, documents or instruments
executed among Public, Superholdings and Merger Sub on the one hand, and any of
the LLC Parties on the other, pursuant to this Agreement or the transactions
contemplated hereby are referred to as the "Related Agreements." Without
limitation, the Related Agreements include:
(a) Prior to Closing. The following documents, which shall be
executed prior to Closing:
(i) Services Agreement. On the date hereof, the
parties will execute a services agreement substantially in the form attached as
the Exhibit to this Section 2.4(a)(i) (the "Services Agreement"), which
Services Agreement shall become effective as provided therein on the date the
condition contained in Section 3.1(c) (HSR Act) has been satisfied, until the
earlier of the Closing Date or the Termination Date.
(ii) Public Loan Agreement. Public shall loan funds
to LLC, pursuant to a loan agreement (the "Public Loan Agreement") which shall
be executed simultaneously with this Agreement in the form attached as the
Exhibit to this Section 2.4(a)(ii).
(b) At Closing. The following documents, which shall be
executed at the Closing:
(i) Lock-Up Agreement. Each member of LLC Holdings
will enter into a Lock-Up Agreement (herein so called) in the form attached as
the Exhibit to this Section 2.4(b)(i) with Superholdings, which agreement shall
prohibit the sale or other disposition of their holdings of Superholdings Stock
until September 30, 2001, without the prior written consent of Superholdings.
Notwithstanding the foregoing, the members shall have the right to pledge up to
40% of their Superholdings Stock as collateral for margin loans. If
Superholdings enters into a lock-up agreement (a "Sister Lock-Up") having a
shorter term with any person who receives at least 25% of the Superholdings
Stock issued pursuant to a Sister Agreement, then any Member who executes a
Lock-Up Agreement may substitute such Lock-up Agreement in its entirety for a
lock-up agreement having the same terms as this Sister Lock-Up Agreement.
(ii) Indemnity Agreement. Each member of LLC
Holdings and its
B-12
26
direct and indirect owners will enter into an indemnity agreement with
Superholdings, pursuant to which agreement each member shall agree to be bound
by the provisions of Article 10 (Indemnification) ("Indemnity Agreement"), in
the form attached hereto as the exhibit to this Section 2.4(b)(ii) and its
direct and indirect owners shall be so bound to the extent that they receive any
distribution of any merger consideration or proceeds thereof.
(iii) Members' Releases. The members of LLC Holdings
shall execute and deliver releases (the "Members' Releases") which release any
and all claims held or to be held by the Members against LLC, LLC Holdings and
their successors, assigns, officers, directors, employees and agents, but
excluding any claims the members may have to unpaid compensation and benefits,
in the form attached hereto as the Exhibit to this Section 2.4(b)(iii).
(iv) Affiliate Letters. If applicable, the members
of LLC Holdings shall deliver Affiliate Letters.
(v) Master Lease Agreement. The Master Lease
Agreement described in Section 4.15 (Master Lease Agreement).
(vi) Joint Venture Development Agreement. The Joint
Venture Development Agreement described in Section 4.17 (Joint Venture
Development Agreement).
(vii) Closing Certificates. The LLC Parties Closing
Certificate and the Superholdings Closing Certificate.
(viii) Escrow Agreement. Superholdings, the Members
and the Escrow Agent shall, if there are Interim Losses, execute the Escrow
Agreement in the form attached as the Exhibit to Section 1.2(b) (Right to
Withhold), with such changes as the Escrow Agent may reasonably request.
(c) At Closing if Completed. The following documents shall be
delivered at the Closing if they are completed by the Closing.
(i) Leases. The Leases described in Section 4.9
(Leases).
(ii) Consulting Agreements. The Consulting Agreements
with Xxxxxxx X. Xxxxxxx ("M.R.") and Xxxxxx X. Xxxxxxx ("S.R.") described in
Section 4.13 (Consulting Agreements).
ARTICLE 3
Conditions To Consummating The Transaction
3.1 Joint Conditions. The obligations of Public, Superholdings, Merger
Sub and the LLC Parties to consummate the transactions provided for in this
Agreement and the Related Agreements are subject to the satisfaction, at or
prior to the Closing Date, of the following
B-13
27
conditions:
(a) Public Stockholder Approval. The issuance of the shares of
Superholdings' common stock pursuant to the Parent Merger shall have been
approved by the affirmative vote of the holders of the requisite number of
shares of capital stock of Public in the manner required pursuant to the rules
of The Nasdaq Stock Market.
(b) LLC Members Approval. This Agreement shall have been
adopted by the affirmative vote of the holders of the requisite number of units
of Members' Interests of LLC and LLC Holdings in the manner required pursuant to
LLC's and LLC Holdings' organizational documents, LLC agreement, the Missouri
Limited Liability Company Act and other applicable law.
(c) HSR Act. The waiting period prescribed by the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976 and the rules and
regulations promulgated thereunder (the "HSR Act") shall have expired or early
termination of the waiting period under the HSR Act shall have been granted.
(d) Nasdaq Listing. The Superholdings Stock issuable to the
LLC Parties and to Public's stockholders shall have been approved for listing on
The Nasdaq Stock Market, subject to official notice of issuance.
(e) Merger. The secretaries of state of the State of Delaware
and the State of Missouri shall have accepted for filing the Certificates of
Merger for the Parent Merger and the Subsidiary Merger.
(f) Subsidiary Merger. All conditions to the consummation of
the Subsidiary Merger, set forth in Section 3.1 of the Subsidiary Merger
Agreement, shall have been satisfied, including the adoption of the Subsidiary
Merger Agreement by the requisite vote of the stockholders of Public pursuant to
Public's certificate of incorporation and bylaws and applicable law; provided,
however, that the condition precedent of the Subsidiary Merger Agreement which
states that all conditions precedent to the consummation of at least this
Agreement or a Sister Agreement shall have been satisfied or duly waived, need
not be satisfied or duly waived.
3.2 Public's, Superholdings' and Merger Sub's Conditions. The
obligations of Public, Superholdings and Merger Sub to consummate the
transactions contemplated by this Agreement and the Related Agreements are
subject to the satisfaction or waiver by Public, Superholdings and Merger Sub,
at or prior to the Closing Date, of the following conditions:
(a) LLC Parties' Representations True. The LLC Parties'
representations and warranties made in this Agreement or any Related Agreement
shall be true and correct in all respects at the Closing Date, except as
affected by the transactions contemplated hereby and except as will not
constitute an LLC Material Adverse Change, and the LLC Parties shall have
delivered the LLC Parties' Closing Certificate which shall so indicate.
Notwithstanding the foregoing, this condition shall be deemed to have been
satisfied even though an LLC Material
B-14
28
Adverse Change has occurred, unless the LLC Material Adverse Change (i)
occurred on or prior to the date of this Agreement, (ii) was caused after the
date of this Agreement by the actions of the Members, the Board of Managers of
LLC or LLC Holdings, or any agent of LLC or LLC Holdings, which agent is not
under the supervision of Public pursuant to the Services Agreement or (iii) was
caused by the failure of any of the persons identified in clause (ii) to take
actions that (A) would be taken in the ordinary course of LLC's and LLC
Holdings' business in the exercise of reasonable judgment and (B) have not been
delegated to Public under the Services Agreement.
"LLC Material Adverse Change" means any change, effect, event
or occurrence that would reasonably be expected to (i) result in liabilities to
Superholdings (on a consolidated basis) at or after the Closing of at least $40
million, (ii) result in a reduction of cash flow or increased losses, of
Superholdings (on a consolidated basis) at or after the Closing, discounted at
10%, having a net present value of at least $40 million or (iii) materially
impair or delay the ability of Public, Superholdings, Merger Sub or the LLC
Parties to consummate the transactions contemplated hereby.
"Public Material Adverse Change" means any change, effect,
event or occurrence that would reasonably be expected to (i) result in
liabilities to Superholdings (on a consolidated basis) at or after the Closing
of at least $190 million, (ii) result in a reduction of cash flow, or increased
losses, of Superholdings (on a consolidated basis) at or after the Closing,
discounted at 10%, having a net present value of at least $190 million or (iii)
materially impair the ability of Public, Superholdings or Merger Sub to
consummate the transactions contemplated hereby including, without limitation,
failure to deliver the merger consideration described herein.
(b) LLC Parties' Compliance with Agreement. The LLC Parties,
in all respects, shall have performed each agreement, and shall have complied
with each covenant, to be performed or complied with by them, or any of them, on
or prior to the Closing Date under this Agreement or any Related Agreement
except as will not constitute an LLC Material Adverse Change, and the LLC
Parties shall have delivered the LLC Parties' Closing Certificate which shall
indicate that no LLC Material Adverse Change has occurred. Notwithstanding the
foregoing, this condition shall be deemed to have been satisfied even though an
LLC Material Adverse Change has occurred, unless the LLC Material Adverse Change
(i) occurred on or prior to the date of this Agreement, (ii) was caused after
the date of this Agreement by the actions of the Members, the Board of Managers
of LLC or LLC Holdings, or any agent of LLC or LLC Holdings, which agent is not
under the supervision of Public pursuant to the Services Agreement or (iii) was
caused by the failure of any of the persons identified in clause (ii) to take
actions that (A) would be taken in the ordinary course of LLC's and LLC
Holdings' business in the exercise of reasonable judgment and (B) have not been
delegated to Public under the Services Agreement. The LLC Parties shall have
delivered the LLC Parties Closing Certificate which shall so indicate.
(c) LLC Parties Consents. The LLC Parties shall have obtained
the LLC Parties Consents except for those LLC Parties Consents that, if not
obtained, would not constitute an LLC Material Adverse Change. Without
limitation, the failure to obtain the
B-15
29
following LLC Parties Consents wouldconstitute an LLC Material Adverse Change:
(i) Sprint; (ii) Lucent Technologies Inc. and its assignees under the Credit
Agreement and (iii) Lucent Technologies, Inc. under the PCS Procurement and
Services Contract dated March 26, 1999.
(d) Public Consents. Public shall have obtained the Public
Consents except for those Public Consents that, if not obtained, would not
constitute a Public Material Adverse Change. Without limitation, the failure to
obtain the consent of Export Development Corporation ("EDC") would constitute a
Public Material Adverse Change.
(e) Permits. Superholdings shall have obtained all
governmental licenses and permits, or binding commitments, if any, from
governmental authorities to issue, transfer or consent to a change of control
with respect to, all governmental licenses and permits necessary to enable
Superholdings to conduct the business of LLC after the Closing as previously,
and as presently proposed to be, conducted (the "Permits"), except for those
Permits that, if not obtained, would not constitute an LLC Material Adverse
Change.
(f) LLC Members Approval. This Agreement shall have been
adopted by the affirmative vote of the holders of the requisite number of units
of Members' Interests of LLC and LLC Holdings in the manner required pursuant to
LLC's and LLC Holdings' organizational documents, LLC agreements, the Missouri
Limited Liability Company Act and other applicable law.
(g) Form S-4. The Form S-4 shall have become effective under
the Securities Act and no stop order suspending the effectiveness of the Form
S-4 shall have been issued and no proceedings for that purpose shall have been
initiated or threatened by the Securities and Exchange Commission (the "SEC").
(h) No Litigation. No action, suit or proceeding (other than
such an action, suit or proceeding directly or indirectly instituted by a party
hereto) shall be threatened or pending, and no preliminary or permanent
injunction, order, decree or ruling shall be in effect, seeking to restrain or
prohibit, or to obtain damages or other relief in connection with, the execution
and delivery of this Agreement, any Related Agreement or the consummation of the
transactions contemplated by any of the foregoing except as would not constitute
an LLC Material Adverse Change. The LLC Parties shall have delivered the LLC
Parties Closing Certificate, which shall so indicate with respect to the LLC
Parties.
(i) Approvals. All authorizations, consents and approvals, if
any, of and filings, if any, with any governmental authority that are required
to (i) validly execute, deliver and perform this Agreement or the Related
Agreements, (ii) to consummate the transactions provided for in this Agreement
or the Related Agreements or (iii) to enable Superholdings to operate the
business of LLC after the Closing in substantially the same manner as such
business was conducted before the Closing (collectively, "Approvals"), shall
have been obtained or made except for those Approvals that, if not obtained,
would not constitute an LLC Material Adverse Change. Without limitation, the
failure to obtain the Approval described in Section 3.1(c) (HSR Act) would
constitute an LLC Material Adverse Change.
B-16
30
(j) Members Obligations. The Members shall have repaid to LLC
all amounts, if any, owed by the Members to LLC other than unpaid capital
contributions called and payable after the date hereof.
(k) Related Agreements. The LLC Parties shall have entered
into the Related Agreements.
(l) Landlord Consents. The Members shall have delivered to
Superholdings landlord subordination agreements, landlord consents (to include
consents to access to the property and right to remove equipment), landlord
waivers, landlord consents to subleases, landlord agreements to assign leases in
favor of any lender of LLC and to assign or sublease leases to Superholdings or
any Affiliate of Superholdings, and mortgage holder non-disturbance agreements
in forms reasonably acceptable to Superholdings ("Landlord Consents") for all
tower properties they or their affiliates own that are leased to LLC and shall
use their reasonable best efforts to obtain Landlord Consents for all tower
properties that LLC leases. The Landlord Consents shall relate to any financings
or refinancings of Superholdings or its affiliates.
3.3 LLC Parties' Conditions to Closing. The obligations of the LLC
Parties to consummate the transactions contemplated by this Agreement and the
Related Agreements are subject to the satisfaction or waiver in writing by the
LLC Parties, at or prior to the Closing Date, of the following conditions:
(a) Public's, Superholdings' and Merger Sub's Representations
True. The representations and warranties made by Public, Superholdings and
Merger Sub herein shall be true and correct in all respects at the Closing Date,
except as affected by the transactions contemplated hereby and except as will
not constitute a Public Material Adverse Change and Superholdings shall have
delivered the Superholdings Closing Certificate which shall so indicate.
(b) Public's Superholdings' and Merger Sub's Compliance with
Agreement. Each of Public, Superholdings and Merger Sub, in all respects, shall
have performed each agreement, and complied with each covenant to be performed
or complied with by it on or prior to the Closing Date under this Agreement or
any Related Agreement, except as will not constitute a Public Material Adverse
Change and Superholdings shall have delivered the Superholdings Closing
Certificate which shall indicate that no Public Material Adverse Change has
occurred.
(c) No Litigation. No action, suit or proceeding (other than
such an action, suit or proceeding directly or indirectly instituted by a party
hereto) shall be threatened or pending, and no preliminary or permanent
injunction, order, decree or ruling shall be in effect, seeking to restrain or
prohibit, or to obtain damages or other relief in connection with, the execution
and delivery of this Agreement, any Related Agreement or the consummation of the
transactions contemplated by any of the foregoing except as would not constitute
a Public Material Adverse Change. Superholdings shall have delivered the
Superholdings Closing Certificate, which shall so indicate with respect to
Superholdings, Public and Merger Sub.
X-00
00
(x) Public Consents. Public shall have obtained the Public
Consents except for those Public Consents that, if not obtained, would not
constitute a Public Material Adverse Change or constitute a Public Material
Adverse Change. Without limitation, the failure to obtain the consent of EDC
would constitute a Public Material Adverse Change.
(e) Approvals. All Approvals to be obtained by Public shall
have been obtained or made except for those Approvals that, if not obtained,
would not constitute a Public Material Adverse Change. The Approval described in
Section 3.1(c) (HSR Act) shall have been obtained.
ARTICLE 4
Covenants Regarding Consummation of the Transaction
4.1 Satisfaction of Conditions to Closing.
(a) Joint Responsibilities. Each party shall use his, her or
its reasonable best efforts to satisfy the conditions to the obligations of the
parties hereunder, and to consummate and make effective as promptly as
practicable the transactions provided for herein including:
(i) Defending the Agreement. Defending lawsuits or
other legal proceedings challenging this Agreement or any Related Agreement or
the consummation of the transactions provided for in this Agreement or any
Related Agreement;
(ii) Lifting Injunctions. Using reasonable best
efforts to lift or rescind any injunction, restraining order or other order
adversely affecting the ability of the parties to consummate the transactions
provided for in this Agreement or any Related Agreement;
(iii) Other Actions. Taking such other reasonable
actions that are necessary, appropriate or advisable, unless responsibility for
taking such actions has been delegated to certain parties pursuant to
Sections 4.1(b) (LLC Parties' Responsibilities) or 4.1(c) Public's,
Superholdings' and Merger Sub's Responsibilities), including without limitation
using reasonable best efforts to obtain all Approvals, and all consents of
third parties to contracts as are necessary for the consummation of the
Reorganization. In case at any time after the Effective Time any further action
is necessary or desirable to carry out the purposes of this Agreement, each
party and its officers and directors shall use their reasonable best efforts
to take all such action.
(b) LLC Parties' Responsibilities.
(i) LLC Parties' Delegated Conditions. The LLC
Parties shall have the responsibility for satisfying the following conditions
("LLC Parties' Delegated Conditions"), for which the LLC Parties shall have the
obligations set forth in this Section 4.1(b)(i). Public, Superholdings and
Merger Sub shall reasonably cooperate and assist with the LLC Parties in
B-18
32
connection with the following:
(A) Section 3.2(a) (LLC Parties'
Representations True), for which the LLC Parties' obligation shall be as
follows: (x) the LLC Parties shall take no action that will cause any of their
representations or warranties to be or remain untrue or incorrect in any
material respect and (y) the LLC Parties shall not omit any action that any of
them would take in the ordinary course of prudent business, which omission will
cause any of their representations or warranties to be or remain untrue or
incorrect in any material respect, provided that the LLC Parties shall not be
required to take any action for which Public has assumed responsibility under
the Services Agreement; and
(B) Section 3.2(b) (LLC Parties' Compliance
with Agreement), for which the LLC Parties shall have the obligations set forth
elsewhere herein.
(ii) HSR Act Filings. The LLC Parties shall make
their HSR Act filings, if required, in compliance with such act as soon as
possible after thedate of this Agreement and provide any additional information
that the Federal Trade Commission or the Justice Department requests as promptly
as practicable, and perform all other acts required of them under the HSR Act
in order to satisfy the condition contained in Section 3.1(c) (HSR Act), in all
cases in coordination with Public and Superholdings. The LLC Parties shall
provide to Public and Superholdings the information with respect to the LLC
Parties required by such filings or other filings to be made by Public or
Superholdings under the HSR Act as is reasonably requested by Public or
Superholdings as soon as possible, but no later than two business days after
the date of such request. The LLC Parties shall pay the HSR Act filing fee, if
any, relating to any filing requirement arising out of the LLC Parties'
participation in the Parent Merger.
(iii) LLC Parties' Consents. The LLC Parties shall
use their reasonable best efforts to obtain the LLC Parties Consents.
(c) Public's, Superholdings' and Merger Sub's
Responsibilities.
(i) Public's, Superholdings' and Merger Sub's
Delegated Conditions. Public, Superholdings and Merger Sub shall have the
responsibility for satisfying the following conditions ("Public's,
Superholdings' and Merger Sub's Delegated Conditions"), for which Public,
Superholdings and Merger Sub shall have the obligations set forth in this
Section 4.1(c)(i). The LLC Parties shall reasonably cooperate with and assist
Public, Superholdings and Merger Sub in connection with the following:
(A) Section 3.3(a) (Public's, Superholdings'
and Merger Sub's Representations True), for which Public's, Superholdings' and
Merger Sub's obligation shall be as follows: (x) Public, Superholdings and
Merger Sub shall take no action that will cause any of their representations and
warranties to be or remain untrue or incorrect in any material respect and
(y) Public, Superholdings and Merger Sub shall not omit any action that they
would take in
B-19
33
the ordinary course of prudent business, which omission will cause any of their
representations and warranties to be or remain untrue or incorrect in any
material respect; and
(B) Section 3.3(b) (Public's, Superholdings'
and Merger Sub's Compliance with Agreement), for which Public, Superholdings
and Merger Sub shall have the obligations set forth elsewhere herein.
(ii) HSR Act Filings. Public, Superholdings and
Merger Sub shall make their HSR Act filings, if required, in compliance with
such act as soon as possible after the date of this Agreement and provide any
additional information that the Federal Trade Commission or the Justice
Department requests as promptly as practicable, and perform all other acts
required of them under the HSR Act in order to satisfy the condition contained
in Section 3.1(c) (HSR Act); provided, however, that in no event shall Public,
Superholdings or Merger Sub or any of their subsidiaries be required to divest,
hold separate, offer for sale, abandon, limit its operation of or take similar
action with respect to any assets or any business interest in connection with
any Approval (including, without limitation under the HSR Act). Public shall
pay the HSR Act filing fee relating to any filing requirement arising out of
its participation in the Subsidiary Merger.
(iii) Public's and Superholdings' Consents and
Permits. Public and Superholdings shall use their reasonable best efforts to
obtain the Public Consents and the Permits.
4.2 Preparation of the Proxy Statement, Form S-4 and Form S-1.
(a) Preparation. Public and Superholdings shall prepare and
file with the SEC as promptly as practicable, but no later than October 10, 2000
(the "SEC Filing Date") in accordance with the Securities Act of 1933, as
amended (the "Securities Act"), on behalf of Superholdings, the Form S-4. Public
and Superholdings shall use reasonable best efforts to have the Form S-4
declared effective under the Securities Act as promptly as practicable after
such filing. Public and Superholdings shall keep the LLC Parties advised of the
status of the filing and effectiveness of the Form S-4.
(b) Proxy Statement and Form S-4. Public, Superholdings and,
if requested by Public, LLC Holdings shall jointly prepare for inclusion in the
registration statement on Form S-4 to be filed with the SEC by Public and
Superholdings, on behalf of Superholdings, in connection with the issuance by
Superholdings of shares of Superholdings Stock in the Reorganization (the "Form
S-4") a proxy statement (the "Proxy Statement"), in accordance with the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and the rules
and regulations under the Exchange Act, with respect to the Reorganization, it
being understood that Public and Superholdings may, in their sole discretion,
include in the S-4 any shares of Superholdings Stock to be issued pursuant to
any Sister Agreements and may include in the Proxy Statement any matters to be
voted upon pursuant to any Sister Agreement. Public, Superholdings and LLC
Holdings shall cooperate with each other in the preparation of the Proxy
Statement. Public, Superholdings and LLC Holdings shall use reasonable best
efforts to respond
B-20
34
promptly to any comments made by the SEC with respect to theProxy Statement
and to cause the Form S-4 to be declared effective under the Securities Act as
promptly as practicable after the filing thereof with the SEC. Public and
Superholdings shall use reasonable best efforts to cause the Proxy Statement to
be mailed to the members of LLC Holdings (if applicable) and the Public
stockholders, as determined by Public, at the earliest practicable date after
the Form S-4 is declared effective by the SEC. The LLC Parties shall as promptly
as practicable provide any information reasonably requested by Public or
Superholdings or their respective counsel in connection with the preparation of
the Proxy Statement and the S-4 and any amendments or supplements thereto.
(c) Form S-1. If the shares of Superholdings Stock to be
received by the members in the Reorganization are not registered on the
Form S-4, then Public, Superholdings and LLC shall jointly prepare a
registration statement on Form S-1 (or other appropriate form) to be filed
with the SEC by Superholdings by July 31, 2001 in connection with the resale
by the members of the shares of Superholdings Stock the LLC Parties receive
pursuant to the terms of the Reorganization (the "Form S-1") in accordance with
the Securities Act, it being understood that Public and Superholdings may, in
their sole discretion, include in the Form S-1 any shares of Superholdings Stock
issued pursuant to any Sister Agreement and not registered on the Form S-4.
Public, Superholdings and LLC shall use reasonable best efforts to respond
promptly to any comments made by the SEC with respect to the Form S-1 and to
cause the Form S-1 to be declared effective under the Securities Act by
October 1, 2001, or as promptly thereafter as practicable. If a Form S-1 is
declared effective under the Securities Act, then Superholdings shall use
reasonable best efforts to prepare and file such amendments and supplements to
the Form S-1 and the prospectus used in connection therewith as may be necessary
to keep the Form S-1 effective for a period of not less than one year from the
later of the first day that the Form S-1 is declared effective or October 1,
2001; provided, however, that if the Superholdings Stock that the LLC Parties
receive pursuant to the Reorganization becomes freely tradeable pursuant to Rule
144(k) of the Securities Act prior to the termination of the effective period,
then Superholdings shall have no further obligation to keep the Form S-1
effective; provided, further, that, if in connection with a Sister Agreement,
Superholdings agrees to registration rights of Superholdings Stock that are more
beneficial than the registration rights contained herein, then the Members may
substitute in their entirety the more beneficial registration rights for the
registration rights in this Section 4.2(c). If the shares of Superholdings Stock
to be received by the members in the Reorganization are registered on the Form
S-4, then Public and Superholdings may satisfy their obligations under this
Section 4.2(c) by filing a post-effective amendment to the Form S-4 in lieu of
filing the Form S-1.
(d) Public's and Superholdings' Actions. Public and
Superholdings shall, as promptly as practicable, take any action (other than
qualifying to do business in any jurisdiction in which it is not now so
qualified) required to be taken under any applicable state securities laws in
connection with the issuance of Superholdings Stock in connection with the
Parent Merger, and LLC and LLC Holdings shall furnish all information concerning
LLC, LLC Holdings and the Members as may be reasonably requested in connection
with any such action. Public and Superholdings shall keep the LLC Parties
advised of the status of any actions taken under any applicable state securities
laws.
B-21
35
4.3 Accountants' Letters.
(a) From LLC Holdings. LLC Holdings shall use its reasonable
best efforts to cause to be delivered to Public and Superholdings a letter of
Xxxxxx, Xxxxx & Co., the LLC Parties' independent certified public accountants,
dated a date within two business days before the date on which the Form S-4 or
Form S-1 shall become effective, and a letter of Xxxxxx, Xxxxx & Co. dated a
date within two business days before the Closing Date, each addressed to Public
and Superholdings, in form and substance reasonably satisfactory to Public and
Superholdings and customary in scope and substance for letters delivered by
independent accountants in connection with similar such registration statements
and permitting the use of the accountant's report in subsequent filings by
Public or Superholdings under the Securities Act or Exchange Act.
The LLC Parties shall use their reasonable efforts to cause to
be delivered to Public and Superholdings a letter of Xxxxxx, Xxxxx & Co.
consenting to the inclusion of its report on LLC's audited financial statements
in the Form S-4 and the Form S-1 and any other filings required by the
Securities Act or Exchange Act.
(b) From Public and Superholdings. Public and Superholdings
shall each use its reasonable best efforts to cause to be delivered to LLC
Holdings a letter of PricewaterhouseCoopers, LLP, Public's and Superholdings'
independent certified public accountants, dated a date within two business days
before the date on which the Form S-4 or Form S-1 registering shares of
Superholdings Stock received by the Members of LLC Holdings, or anyamendment,
shall become effective, or any supplement is filed, and a letter of
PricewaterhouseCoopers, LLP, dated a date within two business days before the
Closing Date, each addressed to LLC Holdings and the Members and customary in
scope and substance for letters delivered by independent public accountants in
connection with similar such registration statements.
4.4 Public Stockholders Meeting. Public shall take all action
necessary, in accordance with the DGCL, the Exchange Act and other applicable
law and its certificate of incorporation and bylaws, to convene and hold a
special meeting of the stockholders of Public (the "Public Stockholders
Meeting") as promptly as practicable after the date hereof for the purpose of
considering and voting upon the Subsidiary Merger Agreement and the issuance of
shares of Superholdings Stock pursuant to the Parent Merger.
4.5 Votes and Recommendations. The Board of Directors of Public
shall (a) recommend that the stockholders of Public vote in favor of the
adoption of the Subsidiary Merger Agreement and the issuance of shares of
Superholdings Stock pursuant to this Agreement at the Public Stockholders
Meetings, (b) cause such recommendation to be included in the Proxy Statement,
(c) solicit proxies in favor of the adoption of the Subsidiary Merger Agreement
and the issuance of shares of Superholdings Stock pursuant to this Agreement and
(d) use reasonable best efforts to obtain the required votes of the stockholders
of Public.
B-22
36
4.6 LLC Members Meeting; LLC Holdings. If requested by Public, LLC
and LLC Holdings shall take all action necessary, in accordance with the
Missouri Limited Liability Company Act, the Exchange Act, other applicable
law and its organizational documents, to convene and hold a special meeting of
the members of LLC and LLC Holdings (the "Members Meeting") as promptly as
practicable after the date hereof for the purpose of considering and voting upon
this Agreement and to solicit proxies pursuant to the Proxy Statement in
connection therewith. The Boards of Managers of LLC and LLC Holdings shall (a)
recommend that the holders of the Members' Interests vote in favor of the
adoption of this Agreement at the Members Meeting, (b) cause such recommendation
to be included in the Proxy Statement, (c) solicit proxies in favor of the
adoption of this Agreement and (d) use reasonable best efforts to obtain the
Members Required Vote.
4.7 Public Announcements. The LLC Parties shall not issue any
press release with respect to the transactions contemplated hereby. Public,
Superholdings and Merger Sub may issue press releases with respect to the
transactions contemplated hereby but, if practicable, shall allow LLC to review,
and shall consult with LLC before issuing, any press release.
4.8 No Solicitation; Acquisition Proposals.
(a) No Solicitation. During the period from and including the
date of this Agreement to and including the Effective Time, the LLC Parties
shall not, and shall not authorize or permit any Subsidiary, or any of its or
their Affiliates, officers, directors, employees, agents or representatives
(including without limitation any investment banker, financial advisor, attorney
or accountant retained by the LLC Parties or any Subsidiary), to, directly or
indirectly, initiate, solicit or encourage (including by way of furnishing
information or assistance), or take any other action to facilitate, any
inquiries, any expression of interest or the making of any proposal that
constitutes, or may reasonably be expected to lead to, an Acquisition Proposal,
or enter into or maintain or continue discussions or negotiate with any person
in furtherance of such inquiries or to obtain an Acquisition Proposal or agree
to or endorse any Acquisition Proposal.
(b) Approval. During the period from and including the date of
this Agreement to and including the Effective Time, neither the Board of
Managers of LLC or LLC Holdings nor any committee thereof shall withdraw or
modify, or propose publicly to withdraw or modify, in a manner adverse to
Public, Superholdings or Merger Sub, the approval or recommendation of this
Agreement or the transactions contemplated hereby.
(c) Voting Agreement. Not later than August 7, 2000, the
Members shall approve this Agreement. If requested by Public, the Members shall
from time to time (i) vote, or consent, their Members' Interests in favor of the
Parent Merger and against any Acquisition Proposal whether or not at a members
meeting, (ii) take all reasonable actions in support of or to consummate as
promptly as practicable the transactions contemplated hereby, (iii) take no
action that will impede or impair the consummation of the transactions
contemplated hereby, (iv) not grant to any other person or entity a proxy or
other right to vote any Members' Interests, (v) not
B-23
37
transfer or dispose of or agree to transfer or dispose of any Members'
Interests and (vi) not exercise dissenters', appraisal or other rights to
receive cash or other consideration instead of Superholdings Stock.
In conjunction with the approval of this Agreement by LLC and its
members, the Members shall cause LLC Holdings to (i) be formed, (ii) issue one
unit of Members' Interests in LLC Holdings in exchange for one unit of Members'
Interests in LLC, (iii) approve this Agreement and (iv) obtain its members'
approval of this Agreement.
(d) Acquisition Proposal. For purposes of this Agreement,
"Acquisition Proposal" means an inquiry, offer, proposal or other indication of
interest regarding any of the following (other than the transactions provided
for in this Agreement) involving LLC or LLC Holdings: (i) any merger,
consolidation, share exchange, recapitalization, business combination or other
similar transaction; (ii) any sale, lease, exchange, mortgage, pledge, transfer
or other disposition of all or substantially all the assets of LLC or LLC
Holdings and its Subsidiaries, taken as a whole, or any substantial portion of
its assets or business, in a single transaction or series of related
transactions; (iii) any tender offer or exchange offer for any of the
outstanding Members' Interests or the filing of a registration statement under
the Securities Act in connection therewith; (iv) issuance of any Members'
Interests; or (v) any public announcement of a proposal, plan or intention to do
any of the foregoing or any agreement to engage in any of the foregoing.
4.9 Leases. Superholdings and the Members, through one or more
entities controlled by them, shall use their reasonable best good faith
efforts to, within two weeks after the date hereof, enter into leases (the
"Leases") by LLC of the assets described on the Disclosure Schedule to this
Section, which shall include, among other things, the St. Louis office and
certain of the assets transferred to the Members pursuant to Section 4.16
(Asset Transfers). The Leases shall provide that LLC will pay $1,400 per
month for the initial terms of the Leases for towers within the LLC footprint as
of June 30, 2000, with such tower rents commencing on the Sprint network ready
date, will provide a return based on dollars invested in the switch and retail
locations that is consistent with comparable lease rates within the respective
markets (which will be on a triple-net basis if leases in the market are
triple-net leases) and shall otherwise be on terms reasonably satisfactory to
Superholdings that are similar to other comparable leases to which either Public
or LLC are parties with nonaffiliates; provided, however, that the failure to
enter into the Leases, for any reason, shall not be a breach of this Agreement.
4.10 Affiliates and Certain Members. If requested by Public, prior
to the Closing Date, LLC shall deliver to Public and Superholdings a letter
identifying all persons who are, at the time the Parent Merger is submitted for
approval to the members of LLC or LLC Holdings, "affiliates" of LLC or LLC
Holdings for purposes of Rule 145 under the Securities Act. If requested by
Public, on or prior to the Closing Date, LLC shall cause each such person to
deliver to Public and Superholdings a written agreement (an "Affiliate Letter").
The certificates representing Superholdings Stock received by such affiliates in
the Parent Merger shall bear a customary legend regarding applicable Securities
Act restrictions.
B-24
38
4.11 Pooling of Interests. If requested by Public or Superholdings,
the parties shall use their reasonable best efforts to cause the Reorganization
to be accounted for as a pooling of interests under Opinion 16 of the Accounting
Principles Board and applicable SEC rules and regulations, and to cause such
accounting treatment to be accepted by each of the parties' independent
certified public accountants and by the SEC. None of the parties shall knowingly
take any action that would cause such accounting treatment to be unattainable.
4.12 Employment Agreements. Each party shall use his or its
reasonable best efforts to cause Superholdings or any of its Subsidiaries
and each of Xxxxx Xxxxxx and Xxxxxxx Xxxxx to execute and deliver at Closing an
employment agreement (collectively, the "Employment Agreements"), reasonably
acceptable to Superholdings; provided, however, that the failure to enter into
any Employment Agreement, for any reason, shall not be a breach of this
Agreement. The Employment Agreements will provide, among other things, that the
employees will be eligible for compensation, benefits, and stock options under
Superholdings' guidelines and policies, which shall be substantially identical
to Public's guidelines and policies existing on the date hereof for similarly
situated employees. Benefits will include Superholdings' matching of the
employees' contributions under Superholdings' 401(k) plan, if applicable, and
consistent with Superholdings' employment practices. Benefits for each employee
will also include credit for eligibility and vesting purposes for all past
services of such employee with LLC.
4.13 Consulting Agreements. Superholdings, or Public, as
applicable, and the Members shall use their reasonable best efforts to enter
into, and shall use their reasonable best efforts to cause the Members and
Xxx Xxxxxxx ("K.G."). to enter into, five-year consulting agreements
(collectively, the "Consulting Agreements") reasonably acceptable to
Superholdings, or Public, as applicable; provided, however, that the failure to
enter into any Consulting Agreement, for any reason, shall not be a breach
of this Agreement. The Members' Consulting Agreements will be with Public and
will provide, among other things, that the Members will each receive annual
compensation of $125,000, to be paid monthly, and will be reimbursed for
reasonable, approved expenses incurred by them while conducting business for
Superholdings. K.G.'s Consulting Agreement will be with Public and will provide,
among other things, that it will be effective as of July 1, 2000, that she will
receive monthly compensation of $1,000, and that she will receive options for
40,000 shares of Public common stock vesting over five years (beginning with
July 1, 2000) at an exercise price of 90% of the market value of Public common
stock on July 1, 2000. At the Closing, Superholdings shall offer K. G. a
five-year consulting agreement with annual compensation of $100,000 payable
monthly.
4.14 Reissuance of LLC Audited Financial Statements. The LLC
Parties shall cause LLC's and LLC Holdings' audited financial statements that
are required to be included in the Form S-1 and, if necessary, Form S-4, to
be reissued in accordance with GAAP and in a form reasonably acceptable to
Superholdings.
4.15 Master Lease Agreement. Superholdings and the Members through
one or more entities controlled by them shall use their reasonable best good
faith efforts to enter into a master lease agreement (the "Master Lease
Agreement") reasonably acceptable to Superholdings providing for the first
right to negotiate tower space leases on a "build-to-suit" basis within
B-25
39
Superholdings' present and future territory with terms similar to Public's
current leases for towers. The Master Lease Agreement will provide, among other
things, that (i) the Master Lease Agreement will have a five-year term, will not
terminate during that term if Superholdings retains its Sprint PCS affiliation,
and will be subject to five-year extensions if agreed by all parties thereto,
(ii) the Master Lease Agreement will be subject to performance criteria, (iii)
Public is currently a party to contracts for certain tower space and that, to
prevent a violation of existing contracts, new contracts with the Members will
have to be negotiated after the Phase I build-out under the existing contracts
is complete and (iv) the Master Lease Agreement will extend to any acquisitions
by Superholdings. The Master Lease Agreement will also provide that from time to
time as Superholdings determines that it requires additional tower sites, it
will notify Tower Company and provide Tower Company with information concerning
the proposed locations of such sites, the technical requirements and any
available search rings. After Tower Company has been provided with such
information, Superholdings shall grant Tower Company the exclusive right for a
period of 30 days to negotiate with Superholdings for Tower Company to provide
such tower sites. Superholdings agrees that during such 30-day period it will
negotiate with Tower Company in good faith for Tower Company to provide such
tower sites. After such 30 day period, Superholdings may obtain such tower sites
from third parties; provided, that, if Superholdings has not entered into an
agreement to obtain such tower sites within 12 months after such notice to Tower
Company, Superholdings shall again comply with the foregoing notice and
negotiation procedure. Superholdings and the Members shall use their reasonable
best efforts to agree upon the final form of the Master Lease Agreement within
two weeks of the date of this Agreement.
4.16 Asset Transfers. Prior to the Closing Date, LLC shall transfer
to the Members or, at the election of the Members, Tower Company or other
entities controlled by them the assets listed on the Disclosure Schedule to
this Section 4.16, which shall consist, among other things, of certain real
estate, towers, Nortel base stations, and retail store sites that were funded
directly or indirectly with capital contributions by the Members. The total fair
market value of the assets transferred plus the cash received by the Members
pursuant to Section 1.2 (a)(ii) (Cash) hereof shall not exceed $12,000,000 or
such other amount equal to the Members' actual capital investment that the
parties shall agree upon, and the maximum amount of cash shall not exceed
$4,000,000. If any assets of LLC or LLC Holdings other than those listed on the
Disclosure Schedule to this Section 4.16 are transferred to the members or Tower
Company, then the aggregate cost of such assets shall be deducted from the
amount of cash to be received by the Members pursuant to Section 1.2(a)(ii)
(Cash) hereof.
Upon execution of this Agreement or as soon thereafter as practicable,
LLC shall submit to Public a proposed fair market value of the transferred
assets. If the parties cannot agree on the fair market value of the transferred
assets within 30 days of the date hereof, then the fair market value will be
determined by an independent third party appraiser selected by Public and
subject to LLC's approval (which approval shall not be unreasonably withheld).
Public shall bear the cost of such appraisal, unless the value determined by the
appraiser is more than 10% greater than the value originally proposed by LLC,
whereupon LLC shall bear such costs.
4.17 Joint Venture Development Agreement. Superholdings and the Members
or an
B-26
40
entity controlled by them will use their reasonable best good faith efforts
to enter into a joint venture development agreement (the "Joint Venture
Development Agreement") reasonably acceptable to Superholdings providing for the
formation of international joint ventures on a non-exclusive basis. The Joint
Venture Development Agreement will provide, among other things, that (i) entry
by Superholdings into any specific joint venture will be conditioned upon and
subject to Superholdings' approval of a business plan for the joint venture,
(ii) Superholdings will finance all costs of any joint venture into which it
enters and (iii) each joint venture will be owned 50% by the Members and 50% by
Superholdings, provided that Superholdings will be the manager of the joint
venture.
4.18 Resale Agreement. Superholdings and its subsidiaries and the
Members or an entity controlled by them will use their reasonable best good
faith efforts to enter into a resale agreement (the "Resale Agreement")
reasonably acceptable to Superholdings and its subsidiaries permitting the
Members or their controlled entities to buy air time at a discount for resale on
a basis no less favorable than any other similar agreement Superholdings may
have; provided, however, that the failure to enter into any Resale Agreement,
for any reason, shall not be a breach of this Agreement.
4.19 Stock Options. At the Closing Superholdings will cause stock
options to purchase a total of 75,000 shares of Superholdings Common Stock to be
issued to the employees and consultants of LLC listed on a list to be provided
by the Members prior to Closing with an exercise price of 90% of the market
value of Superholdings common stock on the date of grant and other terms as
specified on such list.
4.20 Other Assets. Prior to the Closing LLC will assign to the
Members LLC's FCC F Block licenses, the contract rights LLC has to the
Cause of Action described on the Schedule to this Section 4.20 (the "Cause of
Action") and all Proceedings. The Members will be entitled to all damages
recovered with respect to the Cause of Action and the Proceedings and will
assume all liabilities and obligations with respect to the Cause of Action and
the Proceedings, including the costs and liabilities with respect to any
counterclaims filed with respect to the Cause of Action or the Proceedings.
After the Closing, Superholdings shall cooperate with the Members in the
prosecution of the Cause of Action by making employees available as witnesses
and providing documents, provided that the Members shall bear all expenses
related thereto.
4.21 Fee for Consent of Senior Lender. If the Closing fails to
occur due to a Breach by one or more of the LLC Parties, then Superholdings,
Public and Merger Sub shall be entitled to receive from the LLC Parties in
addition to any other remedies pursuant to this Agreement, at law or in equity,
an amount equal to the consent fee paid under the Credit Agreement to obtain
consent to the Parent Merger. If the Closing fails to occur due to a Breach by
Superholdings, Public or Merger Sub, then Section 10.2 (e) (Termination Fee)
shall apply. If the Closing fails to occur for any other reason, then each of
the LLC Parties, on one hand, and Superholdings, Public and Merger Sub, on the
other, shall be entitled to receive an amount equal to one half of the consent
fee paid under the Credit Agreement to obtain consent to the Parent Merger.
4.22 Sprint Payments by Members. The Members shall pay when due all
penalties
B-27
41
owed to Sprint pursuant to Addendum VII to the Sprint Management Agreement
except as provided in Section 4.23 (Superholdings Sprint Payments).
4.23 Superholdings Sprint Payments. At the Closing, Superholdings
shall make the following payments to Sprint:
(a) if the date of a Hard Launch or the actual Full Buildout
Date in any A Market or B Market (as such terms are defined in the Sprint
Management Agreement) is on or after the 6th day and on or before the 60th day
after the Contractual Launch Date or the Full Buildout Date as set forth in
Exhibit 2.1 to Addendum VII (as such terms are defined in the Sprint Management
Agreement), respectively, Superholdings shall deliver to Sprint either (1) the
number of shares of Superholdings Stock equal to the product of (i) the number
of shares of Superholdings Stock LLC owes Sprint pursuant to Addendum VII
multiplied by (ii) 0.25; or (2) an amount of cash equal to the product of (i)
the cash amount LLC owes Spring pursuant to Addendum VII multiplied by (ii)
0.25;
(b) if the date of a Hard Launch or the actual Full Buildout
Date in any A Market or B Market is on or after the 61st day and on or before
the 120th day after the Contractual Launch Date or the Full Buildout Date as set
forth in Exhibit 2.1 to Addendum VII, respectively, Superholdings shall deliver
to Sprint either (1) the number of shares of Superholdings Stock equal to the
product of (i) the number of shares of Superholdings Stock LLC owes Sprint
pursuant to Addendum VII multiplied by (ii) 0.5; or (2) an amount of cash equal
to the product of (i) the cash amount LLC owes Sprint pursuant to Addendum VII
multiplied by (ii) 0.5; and
(c) if the date of a Hard Launch or the actual Full Buildout
Date in any A Market or B Market is after the 120th day after the Contractual
Launch Date or the Full Buildout Date as set forth in Exhibit 2.1 to Addendum
VII, respectively, Superholdings shall deliver to Sprint either (1) the number
of shares of Superholdings Stock LLC owes Sprint pursuant to Addendum VII; or
(2) the cash amount LLC owes Sprint pursuant to Addendum VII.
4.24 Legends. The Members consent to the placement of a legend on
the shares of Superholdings Stock to be issued to each of the LLC Parties in the
Reorganization, which legend shall be substantially as follows:
"THESE SECURITIES ARE NOT REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED, SOLD
OR OTHERWISE DISTRIBUTED FOR VALUE, NOR MAY THESE SECURITIES BE
TRANSFERRED ON THE BOOKS OF SUPERHOLDINGS, IN THE ABSENCE OF SUCH
REGISTRATION UNLESS SUPERHOLDINGS HAS RECEIVED AN OPINION OF COUNSEL OR
OTHER EVIDENCE, SATISFACTORY TO SUPERHOLDINGS AND ITS COUNSEL, THAT
SUCH REGISTRATION IS
B-28
42
NOT REQUIRED."
4.25 Directors. At the Effective Time, M.R. and S.R. shall be
appointed to the Superholdings Board of Directors at the Closing Date as
class III and class II directors, respectively, with M.R. nominated to serve as
vice-chairman of the Board. Class II directors of Superholdings will stand for
election at the annual meeting of Superholdings stockholders to be held in 2002.
Class III directors of Superholdings will stand for election at the annual
meeting of Superholdings stockholders to be held in 2003.
ARTICLE 5
Termination
5.1 Reasons for Termination. This Agreement may be terminated
and the transactions contemplated hereby may be abandoned at any time prior
to the Effective Time, notwithstanding approval thereof by the stockholders of
Public, Superholdings or Merger Sub or by the members of the LLC or LLC
Holdings, only by following the termination procedures set forth in this
Article, for the following reasons:
(a) By Mutual Consent. By the mutual written consent of
Public, Superholdings, LLC and LLC Holdings, duly authorized by the Boards of
Directors of Public, Superholdings and by LLC's and LLC Holdings' Board of
Managers.
(b) By Public or Superholdings. By Public or Superholdings
after compliance with the procedure set forth in this Article 5, if (i) any of
the LLC Parties' representations or warranties contained herein is or becomes
or, when executed any Related Agreement would be, untrue or incorrect in
any respect, except as will not constitute an LLC Material Adverse Change, (ii)
any of the LLC Parties fails to perform any of his, her or its covenants or
agreements contained herein, or would be in breach of his or its covenants upon
execution of any Related Agreement, in any respect, except as will not
constitute an LLC Material Adverse Change, or (iii) any of Public's,
Superholdings' or Merger Sub's conditions to the consummation of the
transactions provided for herein shall have become impossible to satisfy.
Notwithstanding the foregoing, Public or Superholdings may only terminate this
Agreement pursuant to clauses (i) or (ii) above even though an LLC Material
Adverse Change has occurred, if the LLC Material Adverse Change (A) occurred on
or prior to the date of this Agreement, (B) was caused after the date of this
Agreement by the actions of the Members, the Board of Managers of LLC or LLC
Holdings, or any agent of LLC or LLC Holdings, which agent is not under the
supervision of Public or any of its Affiliates pursuant to the Services
Agreement or (C) was caused by the failure of any of the persons identified in
clause (B) to take actions that (x) would be taken in the ordinary course of
LLC's and LLC Holdings' business in the exercise of reasonable judgment and (y)
have not been delegated to Public under the Services Agreement.
(c) By LLC. By LLC, after compliance with the procedure set
forth in this Article 5, if (i) any of Public's, Superholdings' or Merger Sub's
representations or warranties contained herein is or becomes or, when executed
any Related Agreement would be, untrue or
B-29
43
incorrect in any material respect, except as will not constitute a Public
Material Adverse Change, (ii) Public, Superholdings or Merger Sub fails to
perform its covenants or agreements contained herein, or would be in breach of
its respective covenants upon execution of any Related Agreement, in any
respect, except as will not have a Public Material Adverse Change at or after
the Closing, or (iii) any of LLC's conditions to the consummation of the
transactions provided for herein shall become impossible to satisfy.
(d) Drop Dead Date. By any of Public, Superholdings or the LLC
if the Effective Time shall not have occurred on or before March 31, 2001 (the
"Termination Date"), otherwise than as a result of any material breach of any
provision of this Agreement by the party seeking to effect such termination;
provided, however, that the Termination Date shall be extended by the number of
days, if any, to cure any curable matter that is the subject of a notice under
Section 5.3 (Public and Superholdings Termination Procedure) or Section 5.4
(LLC's Termination Procedure).
(e) Prohibition of the Reorganization. By any of Public,
Superholdings or LLC if any federal or state court of competent jurisdiction or
other governmental entity shall have issued an order, decree or ruling, or taken
any other action permanently restraining, enjoining or otherwise prohibiting the
Reorganization and such order, decree, ruling or other action shall have become
final and non-appealable, provided that neither party may terminate this
Agreement pursuant to this Section 5.1(e) if it has not complied with its
obligations under Section 4.1(a) (Joint Responsibilities).
provided, however, except pursuant to Section 5.1(d) (Drop Dead Date), the right
to terminate this Agreement under this Section 5.1 shall not be available to any
party (i) that is in material breach of its obligations hereunder or (ii) whose
failure to fulfill its obligations or to comply withits covenants under this
Agreement has been the cause of, or resulted in, the failure to satisfy any
condition to the obligations of either party hereunder.
5.2 Notice of Problems. Each party will promptly give written
notice to the other parties when any of them becomes aware of the occurrence or
failure to occur, or the impending or threatened occurrence or failure to
occur, of any fact or event that would cause or constitute, or would be likely
to cause or constitute (i) any of its representations or warranties contained
herein being or becoming untrue or incorrect, (ii) its failure to perform any of
its covenants or agreements contained herein or (iii) any of its Delegated
Conditions, or any condition to the obligation of the parties contained in
Section 3.1 (Joint Conditions), being or becoming impossible to satisfy.
No such notice shall affect the representations, warranties, covenants,
agreements or conditions of the parties hereunder, or prevent any party from
relying on the representations and warranties contained herein.
5.3 Public and Superholdings Termination Procedure. If, pursuant
to the Services Agreement, the chief financial officer of Public becomes aware
of circumstances that lead him to conclude that the LLC Parties are in Breach of
this Agreement or any Related Agreement, then
B-30
44
the chief financial officer shall deliver a notice to the LLC Parties of
such Breach, specifying the factual basis therefor in reasonable detail.
Furthermore, if Public or Superholdings discovers, by reason of a notice given
pursuant hereto or otherwise, circumstances that would give it the right to
terminate this Agreement pursuant to Section 5.1(b) (By Public or Superholdings)
(other than pursuant to clause (iv) thereof), then Public or Superholdings may
deliver a notice to the LLC Parties of such circumstances, specifying the
factual basis therefor in reasonable detail. The LLC Parties shall have the
right to cure any such matter within 20 business days following the date of
delivery of such notice. If such circumstances create a termination right
pursuant to clauses (i), (ii), or (iii) of Section 5.1(b) (By Public or
Superholdings), then after such notice and the LLC Parties' failure to cure,
either of Public or Superholdings may terminate this Agreement by giving a
notice of termination to the LLC Parties. If the circumstance described in
clause (iv) of Section 5.1(b) (By Public or Superholdings) occurs, Public or
Superholdings may terminate this Agreement by giving written notice of
termination to the LLC Parties.
5.4 LLC's Termination Procedure. If LLC discovers by reason of a
notice given pursuant hereto or otherwise, circumstances that would give it
the right to terminate this Agreement pursuant to Section 5.1(c) (By LLC), then
LLC shall deliver a notice to Public, Superholdings and Merger Sub of such
circumstances, specifying the factual basis therefor in reasonable detail.
Public, Superholdings and Merger Sub shall have the right to cure any such
matter within 20 business days following the date of delivery of such notice.
Upon such notice and upon Public's, Superholdings' or Merger Sub's failure to
cure, LLC may terminate this Agreement by giving a notice of termination to
Public, Superholdings and Merger Sub.
5.5 Effect of Termination. Upon termination hereof pursuant to
this Article 5, no party shall have any liability or continuing obligation to
another party arising out of this Agreement, or out of actions taken in
connection herewith, except that Article 10 (Indemnification) and Article 11
(Miscellaneous) shall survive termination hereof. Notwithstanding the foregoing,
termination hereof shall not relieve any party from its liability for (i) the
failure, prior to termination, of such party to perform or comply with its
covenants or agreements or (ii) the representations or warranties made by such
party being untrue or incorrect when made. In addition to the foregoing, (a) if
LLC terminates this Agreement because the issuance of the shares of
Superholdings Stock pursuant to the Parent Merger or the adoption of the
Subsidiary Merger Agreement shall not have been adopted by the holders of the
requisite number of shares of capital stock of Public (including, without
limitation, pursuant to Section 4.4 (Public Stockholders Meeting)) in the manner
required pursuant to Public's certificate of incorporation and bylaws, the DGCL,
or the rules of The Nasdaq Stock Market, as applicable, or other applicable law,
when all other conditions to Closing are satisfied or waived, then Public shall
pay a termination fee of $7.5 million to the LLC Parties, and (b) if Public
terminates this Agreement because it was not adopted by the requisite number of
members interests of LLC Holdings (including, without limitation, pursuant to
Section 4.6 (LLC Members Meeting; LLC Holdings)) in the manner required pursuant
to LLC Holdings' organizational documents, the Missouri Limited Liability
Company Act and other applicable law, if such approval is necessary, when all
other conditions to Closing are satisfied or waived, then the LLC Parties shall
pay a
B-31
45
termination fee of $7.5 million to Public.
ARTICLE 6
Representations and Warranties of LLC and the Members
In this Article 6, LLC, LLC Holdings and the Subsidiaries are referred
to collectively as the "Companies." The Companies (solely prior to Closing and
with the understanding that the representations and warranties by or concerning
LLC Holdings shall become effective on the date LLC Holdings enters into this
Agreement) and the Members, jointly and severally, represent and warrant to
Public, Superholdings and Merger Sub that except as set specifically forth on
the Disclosure Schedules (which exceptions shall relate only to the Sections
specifically identified in such Disclosure Schedules):
6.1 LLC; Entry Into Agreements.
(a) Organization and Good Standing. Each of the Companies is a
limited liability company duly organized and validly existing under the laws of
the State of Missouri and is in good standing under such laws. Each of the
Companies has all requisite power and authority to own, lease and operate all
properties and assets owned or leased by it and to conduct its business as
previously and currently conducted by it. Each of the Companies is qualified to
do business and is in good standing in each jurisdiction in which it is required
to be so qualified, except where the lack of such qualification would not have a
material adverse effect on such Company. The Disclosure Schedule to this Section
6.1(a) lists all jurisdictions in which any Company is qualified to do business
as a foreign corporation and indicates which of the Companies is so qualified in
each such jurisdiction.
(b) Validity and Authorization; Power and Authority. Each of
the Companies has full power and authority to consummate the Parent Merger and
to execute, deliver and perform this Agreement, the Related Agreements and the
other instruments called for hereby or thereby to which it is a party.
The only vote of the holders (the "Members Required Vote") of the
Members' Interests that is necessary to approve this Agreement, the Related
Agreements, the Parent Merger, and the transactions contemplated hereby is the
affirmative vote of the holders of 100% of the Members' Interests. No other
action by the LLC Parties is necessary to approve this Agreement, the Related
Agreements, the Parent Merger, and the transactions contemplated hereby or
thereby.
This Agreement, the Related Agreements and the other instruments called
for hereby or thereby to which it is a party have been duly authorized, executed
and delivered by each of the Companies and upon obtaining the Members Required
Vote, will constitute (or, in the case of Related Agreements or instruments
called for hereby or thereby, to be executed by such Company at or before the
Closing, upon execution will constitute) the legal, valid and binding obligation
of such Company, enforceable against such Company in accordance with its terms.
B-32
46
The Members have full requisite power and authority (or if natural
persons, capacity) to execute, deliver and perform this Agreement, the Related
Agreements and the other instruments called for hereby or thereby to which the
Members are a party. This Agreement has been duly executed and delivered by the
Members and constitutes (or, in the case of Related Agreements or instruments
called for hereby, to be executed by the Members at or before the Closing, will
constitute) the legal, valid and binding obligation of the Members, enforceable
against the Members in accordance with its terms. The Disclosure Schedule to
this Section 6.1(b) sets forth (i) the identity of all of the Members and (ii)
their respective ownership of units of Members' Interests, including fully-paid
units and subscribed, but unpaid, units.
The consent or vote of the Members in favor of the transactions
contemplated by this Agreement and the Related Agreements was or will be duly
obtained pursuant to the organizational documents of LLC and LLC Holdings and
all applicable state law.
(c) Subsidiaries. Except as set forth in the Disclosure
Schedule to this Section 6.1(c), no Company owns a majority of the capital stock
or other equity interests entitled to vote generally in the election of the
board of directors, board of managers, general partners or similar governing
body of, directly or indirectly, any other corporation, partnership, association
or other business entity and no Company is a party to any agreement relating to
the acquisition or disposition of such an interest (such scheduled entities, the
"Subsidiaries").
The Subsidiaries are duly organized and validly existing under the laws
of their states of organization and are in good standing under such laws. The
Subsidiaries have all requisite power and authority to own, lease and operate
all properties and assets owned or leased by them and to conduct their business
as previously and currently conducted by them. The Subsidiaries are qualified to
do business and are in good standing in each jurisdiction in which they are
required to be so qualified, except where the lack of such qualification would
not have a material adverse effect on the Subsidiaries. The Disclosure Schedule
to this Section 6.1(c) lists all jurisdictions in which the Subsidiaries are
respectively qualified to do business as a foreign entity.
LLC has good, valid and marketable title to all of the issued
and outstanding equity interests of each of the Subsidiaries, free and clear of
any Liens.
(d) No Conflict. Except as set forth in the Disclosure
Schedule to this Section 6.1(d), neither the execution, delivery or performance
of this Agreement or the Related Agreements, nor the consummation of the Parent
Merger or the transactions contemplated hereby or thereby will (i) result in any
violation of the terms of, (ii) contravene or conflict with, (iii) accelerate
the performance of the obligations required under, (iv) constitute a default
under, (v) give any right of termination or cancellation under, (vi) give any
right to make any change in any of the liabilities or obligations under, the
certificate of incorporation or similar organizational documents, bylaws,
regulations or operating agreement of any Company, as appropriate, any Order, or
any agreement, contract, note, bond, debenture, indenture, mortgage, deed of
trust, lease, license, judgment, decree, order, law, rule or regulation or other
restriction applicable to any Company or any Member or to which any Company or
any Member is a party or by which any Company or any Member or their respective
property or assets are bound or affected or (vii)
B-33
47
result in a material adverse effect on any Company. Neither the execution,
delivery and performance of this Agreement or the Related Agreements, nor the
consummation of the transactions contemplated hereby or thereby will result in
the creation of any Lien upon any of the properties or assets of any Company or
the Members' Interests. No Member shall have the right to assert dissenters' or
appraisal rights under applicable state law or otherwise have the right to
demand cash or other payment for Members' Interests in the Parent Merger, other
than the consideration provided in Section 1.2 (Terms of the Merger).
(e) LLC Parties Consents Required. The Disclosure Schedule to
this Section 6.1(e) lists all material consents, approvals or authorizations of
third parties required in connection with each party's (other than Public's,
Superholdings' and Merger Sub's) valid execution, delivery or performance of
this Agreement and the Related Agreements or the consummation of the Parent
Merger or the Subsidiary Merger or any of the transactions contemplated hereby
or thereby on the part of any of them (collectively, the "LLC Parties
Consents"), including but not limited to the consents required under the
Contracts and consents required in connection with the Approvals to be obtained
by the LLC Parties and Licenses. The Members have taken, or on or prior to
Closing the Members shall have taken, all other limited liability company
actions necessary for the consummation by the Companies of the transactions
contemplated by this Agreement and the Related Agreements.
(f) State Takeover Statutes. No state takeover statute is
applicable to any Company in connection with this Agreement, the Parent Merger
or the other transactions contemplated hereby.
6.2 Financial Information.
(a) Financial Statements; Books and Records. Included in the
Disclosure Schedule to this Section 6.2(a) are true and correct copies of (i)
the audited consolidated balance sheets for LLC and the Subsidiaries at December
31, 1999 and the related statement of profit and loss and cash flows for the
periods then ended, (ii) the unaudited consolidated balance sheet for the
Subsidiaries at March 31, 2000 and the related statement of profit and loss for
the three-month period then ended prepared internally by LLC and (iii) when
delivered pursuant hereto, similar financial statements for each additional
month ending after the date hereof (collectively, the "LLC Financial
Statements").
The LLC Financial Statements fairly present the financial position of
LLC and the Subsidiaries as of the dates thereof and the results of LLC's and
the Subsidiaries' operations and cash flows for the periods then ended, in
accordance with GAAP, except for the variances from GAAP set forth in the notes
to the LLC Financial Statements, subject, in the case of the LLC Financial
Statements listed in items (ii) and (iii) of the immediately-preceding
paragraph, to normal recurring period-end adjustments and absence of notes and a
statement of cash flows. LLC maintains a standard system of accounting,
including without limitation internal controls, established and administered in
accordance with GAAP, except for the variances from GAAP set
B-34
48
forth in the notes to the LLC Financial Statements.
LLC's books and records (including without limitation all financial
records, business records, minute books, ownership transfer records, customers
lists, referral source lists and records pertaining to services or products
delivered to customers) (i) are complete and correct in all material respects
and all transactions to which LLC is or has been a party are accurately
reflected therein, (ii) reflect all discounts, returns and allowances granted by
LLC with respect to the periods covered thereby, (iii) have been maintained in
accordance with customary and sound business practices in LLC's industry, (iv)
form the basis for the LLC Financial Statements and (v) accurately reflect the
assets, liabilities, financial position, results of operations and cash flows of
LLC. LLC's management information systems are adequate for the preservation of
relevant information and the preparation of accurate reports.
"GAAP" shall mean those generally accepted accounting principles and
practices which are used in the United States and recognized as such by the
American Institute of Certified Public Accountants acting through its Accounting
Principles Board or by the Financial Accounting Standards Board or through other
appropriate boards or committees thereof and which are consistently applied for
all periods, so as to properly reflect the financial position, results of
operations and operating cash flow on a consolidated basis of the party, except
that any accounting principle or practice required to be changed by the
Accounting Principles Board or Financial Accounting Standards Board (or other
appropriate board or committee) in order to continue as a generally accepted
accounting principle or practice may be so changed for periods for which such
change is applicable.
(b) Conduct of Business. Except as specifically contemplated
herein, since March 31, 2000, no Company has (i) changed its authorized or
issued members' interests; granted any option or right to purchase members'
interests; issued any security convertible into members' interests; granted any
registration rights; purchased, redeemed, retired or otherwise acquired any
members' interests; or declared or paid any distribution or payment in respect
of members' interests; (ii) amended its organizational documents or regulations
or operating agreement; (iii) sold or transferred (other than in the ordinary
course of business) any assets with a fair market value in excess of $50,000
individually, or $100,000 in the aggregate; (iv) mortgaged, pledged or subjected
to any Lien or other encumbrance any assets; (v) except as set forth in the LLC
Financial Statements, incurred or become subject to any debt, liability
(including indemnification, guaranty and repurchase obligations) or lease
obligation, other than current liabilities incurred in the ordinary course of
business that do not exceed $50,000 individually, or $100,000 in the aggregate;
(vi) incurred obligations or entered into contracts outside of the ordinary
course of business or providing aggregate payments in excess of $100,000; (vii)
suffered any damage, destruction or loss of any assets in the aggregate in
excess of $100,000; (viii) experienced any equipment malfunction that materially
interferes with the conduct of its business; (ix) waived or relinquished any
rights or canceled or compromised any debt or claim owing to it, in either case
without adequate consideration or not in the ordinary course of business, in
excess of $100,000 in the aggregate; (x) made any change in its accounting
methods or practices or increased any reserves for Taxes; (xi) made any material
change in its billing and collection practices and procedures; (xii) paid any
bonuses or made any increase in
B-35
49
the compensation, commissions or benefits payable or to become payable to
any of its officers, directors, employees, consultants or agents over the
amounts paid or payable as of such date, or entered into or terminated any
employment, consulting, deferred compensation, severance or bonus agreement with
any of such parties, or made any loan, or commitment to loan, monies to any such
parties, other than customary cash travel advances which do not exceed $100,000
in the aggregate at any time; (xiii) declared or made any dividend, payment or
distribution to its or LLC's members other than ordinary employment
compensation; (xiv) entered into any transaction with any of its or LLC's
Affiliates (including without limitation by paying, distributing or transferring
any funds or assets to the members of LLC, whether in their capacity as members
of LLC or in any other capacity, other than the payment of employment
compensation to members of LLC who are employees); (xv) made any capital
expenditures except as set forth in the budget model attached as the Disclosure
Schedule to this Section 6.2(b); (xvi) acquired any business or business
operations or (xvii) agreed to do any of the foregoing.
(c) No Material Adverse Effect. Except as contemplated by this
Agreement, since the date of the most recent LLC Financial Statements delivered
prior to the date hereof, each Company has conducted its business only in the
ordinary course consistent with past practice and there has been no event or
occurrence that has caused a material adverse effect on such Company other than
(i) operating losses in the ordinary course of business, (ii) economic
conditions affecting the U.S. economy generally or the telecommunications
industry generally or (iii) delays in completing LLC's buildout for which LLC
may incur a penalty under Addendum VII to the Sprint Management Agreement.
(d) Projections. The forecasts and projections (the
"Projections") attached as the Disclosure Schedule to this Section 6.2(d) have
been prepared on the basis of the assumptions set forth therein and are
arithmetically correct. As of the date of this Agreement, all of the estimates
and assumptions upon which the Projections are based were and are believed by
each Company to be reasonable, and no Company has reason to believe that the
Projections or the assumptions underlying the Projections, taken as a whole,
would be required to be revised negatively in any material respect.
6.3 Members' Interests.
(a) Capitalization. The authorized and issued and outstanding
equity interests of each Company are as set forth in the Disclosure Schedule to
this Section 6.3(a). There are no other equity interests of any Company either
authorized or outstanding. All of the issued and outstanding units have been
duly authorized and validly issued, are fully paid and nonassessable and are
free and clear of any preemptive rights. No certificates have been issued to
represent the Members' Interests or the equity interests of any Company. There
are no outstanding preemptive, conversion or other rights, or other options,
warrants or agreements granted by, issued by, or binding upon, any Company for
the issuance, sale, purchase, repurchase, redemption, acquisition or other
transfer of its equity securities. The Disclosure Schedule to this Section
6.3(a) identifies the holders of all of the equity interests of each Company.
(b) Capitalization of LLC Holdings. Upon formation, the
Members' Interests
B-36
50
of LLC Holdings shall consist of 20,000 units. There will be no other equity
interests of LLC Holdings either authorized or outstanding. All of the issued
and outstanding units will be duly authorized and validly issued, fully paid and
nonassessable and free and clear of any preemptive rights. No certificates
will be issued to represent the Members' Interests of LLC Holdings. There will
be no outstanding preemptive, conversion or other rights, or other options,
warrants or agreements granted by, issued by, or binding upon, LLC Holdings for
the issuance, sale, purchase, repurchase, redemption, acquisition or other
transfer of its equity securities. The Disclosure Schedule to this Section
6.3(b) identifies the holders of all of the Members' Interests of LLC Holdings.
The formation of LLC Holdings and its acquisition of LLC as contemplated hereby
will result in LLC Holdings becoming the sole owner of LLC, holding its interest
in LLC free and clear of Liens other than a pledge under the Credit Agreement.
(c) Ownership and Transfer by Members. Each Member represents
that it has good, valid and marketable title to the units of Members' Interests
owned by it, free and clear of any Liens other than the pledge under the Credit
Agreement. Each Member represents that it is not a party to any contract,
agreement or understanding (other than this Agreement) relating to the issuance,
sale, redemption, purchase, repurchase, acquisition or other transfer or voting
of any units of Members' Interests or any other equity security of any Company,
other than LLC's operating agreement. There is no plan or intention on the part
of any Member to sell, exchange, transfer or otherwise dispose of any Members'
Interests to be received by such Member. Consummation of the transactions
contemplated by this Agreement will result in Superholdings becoming the sole
owner of LLC Holdings and LLC, holding its interests in LLC Holdings and LLC
free and clear of Liens.
6.4 Assets.
(a) Personal Property.
(i) Title. Except asset transfers to the Members
contemplated hereby, LLC or a Subsidiary is the sole owner of the assets
reflected in the LLC Financial Statements and has good and marketable title to
all such assets that are personalty (the "Personal Property") (other than the
leased Personal Property described below), in each case free and clear of all
Liens, except for (A) liens for non-delinquent taxes and assessments, (B) liens
of lessors arising under statute (C) other claims and encumbrances, charges or
statutory liens that do not materially detract from the value of, or impair the
use or transfer of, such Personal Property, (D) inchoate statutory liens for
amounts not yet payable and (E) the liens securing indebtedness under the Credit
Agreement ("Permitted Liens"). For purposes hereof, "Liens" shall mean security
interests, liens (xxxxxx or inchoate), encumbrances, mortgages, pledges,
equities, charges, assessments, easements, covenants, restrictions,
reservations, defects in title, encroachments and other burdens, whether arising
by contract or under law. With respect to any Personal Property that is leased,
LLC or the applicable Subsidiary is in compliance in all material respects with
each such lease and is the sole holder of a valid and subsisting leasehold
interest, free and clear of any Liens, other than Permitted Liens. The
Disclosure Schedule to this Section 6.4(a)(i) lists all lease agreements,
service agreements or other agreements related to leased Personal Property (the
"Equipment Leases").
B-37
51
(ii) Inventory. LLC maintains an inventory of
telephones and accessories as required under LLC's agreements with Sprint,
which inventory is reflected as required by GAAP in the LLC Financial Statements
and covered by the manufacturers' applicable warranties.
(iii) Facilities and Equipment. All buildings,
facilities, offices, improvements on real estate, fixtures, machinery,
equipment, computer hardware and software, vehicles and other properties, owned
or leased by the Company for the conduct of its business (A) have been
maintained in accordance with maintenance practices that are standard for such
Company's industry, are prudent, and are in compliance in all material respects
with all applicable laws and regulations and (B) are adequate and sufficient for
all business operations conducted by such Company and are in condition and
repair adequate and sufficient for all business operations conducted by such
Company and comply in all material respects with all contractual obligations of
such Company.
(iv) Notes and Accounts Receivable. Except as set
forth on the Disclosure Schedule to this Section 6.4(a)(iv), all notes payable
to, and accounts receivable of, each Company (the "Accounts Receivable")
were created in the ordinary course of business and have been collected or are
collectible in the amounts thereof reflected in the books and records of such
Company, net of reserves or contractual allowances reflected in the LLC
Financial Statements. For purposes of this Agreement and the Related Agreements,
Accounts Receivable shall be deemed to be uncollectible if payment is not
collected through the utilization of ordinary collection efforts on the
ninetieth day after the applicable payment date. Payments to each Company in
respect of Accounts Receivable are deposited, upon receipt, directly into such
Company's Accounts and such amounts can only be withdrawn therefrom by such
Company or its duly authorized agents. To each Company's knowledge, none of the
Accounts Receivable is or was subject to any counterclaim or set off. All of
such Accounts Receivable arose out of bona fide, arms-length transactions.
(v) Bank Accounts. The Disclosure Schedule to this
Section 6.4(a)(v) sets forth the names and locations of all banks, trust
companies, savings and loan associations and other financial institutions at
which any Company maintains accounts of any nature (collectively, the
"Accounts"), the numbers of such accounts and the names of all persons
authorized to draw thereon or to make withdrawals therefrom.
(b) Real Property.
(i) Fee Simple. The Disclosure Schedule to this
Section 6.4(b)(i) sets forth a summary description of each parcel of real
property and the use thereof owned by any Company and identifies which Company
owns such real property, including but not limited to those properties reflected
on the LLC Financial Statements, (the "Real Property"). Except as set forth in
the Disclosure Schedule to this Section 6.4(b)(i), such Company has good and
marketable title in fee simple absolute to all Real Property, and to the
buildings, structures and improvements thereon, in each case free and clear of
all Liens other than Permitted Liens.
B-38
52
Except for such leases and tenancies as are particularly described in the
Disclosure Schedule to this Section 6.4(b)(i), such Company has not granted any
leases on, and there are no tenancies of, the Real Property or any part thereof.
(ii) Leases; Easements and Other Interests. The
Disclosure Schedule to this Section 6.4(b)(ii) sets forth a summary
description of the nature of each Company's use of the land, premises,
buildings, structures and improvements held by lease or license. The interests
described above are collectively referred to herein as the "Leased Premises" and
the leases and licenses described above and the leases and tenancies described
in the Disclosure Schedule to Section 6.4(b)(i) (Fee Simple) are collectively
referred to herein as the "Real Estate Contracts."
The Company identified as such in the Disclosure Schedule to this
Section 6.4(b)(ii) is the sole holder of valid and subsisting leasehold
interests in the Leased Premises free and clear of any Liens, other than
Permitted Liens except, in the case of Tower Leases, subject to the co- location
rights of other tenants. All lease or rental payments and other amounts due and
payable in connection with the Leased Premises are current, there are no
defaults by such Company with respect thereto or, to the Companies' knowledge,
by any other party thereto and no event has occurred that with the passing of
time or the giving of notice or both would constitute a default (x) by such
Company thereunder or (y), to the Companies' knowledge, by any other party
thereunder. All options in favor of such Company to purchase any of the Leased
Premises, if any, are in full force and effect and are described in the
Disclosure Schedule to this Section 6.4(b)(ii). Such Company is in possession of
the Leased Premises and has the right to quiet enjoyment of the Leased Premises
for the full term of the related Real Estate Contract and any renewal option
related thereto. No Real Estate Contract is terminable as a result of the
transactions contemplated herein, and no leasehold or other interest of such
Company in such real property is subject or subordinate to any Lien, other than
Permitted Liens.
(iii) Tower Leases. With respect to leases or
licenses of tower space to which LLC is a party (the "Tower Leases"), (A) to
LLC's knowledge, there are no applications, ordinances, petitions, resolutions
or other matters pending before any governmental agency having jurisdiction
to act on zoning changes that would prohibit or make nonconforming the use of
any of the Leased Premises by LLC in any material respect, (B) LLC has good and
valid easement rights providing reasonable access and utilities to and from the
Leased Premises under the Tower Leases, (C) LLC has not voluntarily granted any,
and is not a party to any agreement providing for, and LLC has no knowledge of,
any easements, conditions, restrictions, reservations, rights or options that
would materially adversely affect the use of any of the Leased Premises under
the Tower Leases for the same purposes and uses as such Leased Premises have
been used by LLC, except for Permitted Liens.
(iv) Eminent Domain. Neither the whole nor any
portion of any Real Property or Leased Premises has been condemned, taken
by right of eminent domain, requisitioned or otherwise taken by any public
authority and no Company has received written notice from any governmental body
with power of eminent domain of any pending or threatened taking by eminent
domain, requisition or condemnation.
B-39
53
(v) Ingress and Egress. Each Company has all
easements and rights of ingress and egress necessary for utilities and
services and for all operations of its business in the manner and to the extent
previously conducted by it.
(vi) Improvements. None of the improvements included
in the Real Property or Leased Premises (A) are in violation in any material
respect of any building line or use or occupancy restriction, limitation,
condition or covenant of record or any zoning or building law, code or ordinance
or public utility or other easement or (B) encroaches on the property rights of
any other person or entity. Each facility located on the Real Property or Leased
Premises currently is served by gas, electricity, water, sewage and waste
disposal and rail and other utilities adequate to operate such facility, and
none of the utility companies serving any such facility has threatened any
Company with any reduction in service. Such utilities either enter the Real
Property and Leased Premises through adjoining public streets or, if they pass
through adjoining private land, do so in accordance with valid, permanent public
or private easements which, following the Closing, will inure to the benefit of
Superholdings, its successors and assigns. All of said utilities are installed
and operating and all installation and connection charges have been paid for in
full.
(vii) Leased Premises Taxes. To the extent any
Company is liable for payment therefor, there is no Tax assessment pending
or, to the Companies' knowledge, threatened, with respect to any portion of the
Leased Premises, except for ad valorem taxes for the calendar year 2000.
(c) Intellectual Property.
(i) Intellectual Property. The term "Intellectual
Property" shall include all fictitious business names, trade names, registered
and unregistered trademarks, service marks and applications owned, used or
licensed by any Company (collectively, "Marks"), all patents and patent
applications (if any) owned, used or licensed by any Company (collectively,
"Patents"), all registered and unregistered copyrights (if any) in both
published works and unpublished works owned, used or licensed by any Company
(collectively, "Copyrights"), and all know-how, inventions, trade secrets,
confidential information, software, technical information, process technology,
plans, drawings and blue prints owned, used or licensed by any Company as
licensee or licensor (collectively, "Trade Secrets"). The Intellectual Property
also includes all such rights and assets of any Company under all contracts to
which any Company is a party or by which any Company is bound relating to the
Intellectual Property including, without limitation, contracts by which any
Company licenses Intellectual Property to third parties and contracts by which
any third party licenses to, or otherwise permits the use of its intellectual
property by, any Company (collectively, "Technology Contracts"). Each Company
is, and to the Companies' knowledge, each other party to the Technology
Contracts is, in compliance with all Technology Contracts, is not currently in
default thereunder, and no event has occurred that with the passing of time or
the giving of notice or both would constitute a default thereunder.
(ii) Ownership. Except with respect to Intellectual
Property licensed
B-40
54
by a Company from a third party pursuant to a Technology Contract, one or more
of the Companies is the owner of all right, title and interest in and to the
Intellectual Property free and clear of all Liens other than Permitted Liens.
The Intellectual Property includes all such property necessary for the operation
of the respective businesses of the Companies (A) as they currently are proposed
to be, and have been, conducted and (B) without violating or infringing upon the
rights of any third party. Without limiting the foregoing, each Company is
properly licensed to use all computer software (and copies thereof) used by it.
No current or former employee of any Company has any rights to any Intellectual
Property. No right, license or consent of, or payment to, any third party will
be required after consummation of the transactions contemplated hereby for the
continued use of the Intellectual Property by LLC and the Subsidiaries.
(iii) Technology Contracts. The Disclosure Schedule
to this Section 6.4(c)(iii) contains an accurate and complete list of all of
the Technology Contracts, including all of the parties to each Technology
Contract.
(iv) Trademarks. The Disclosure Schedule to this
Section 6.4(c)(iv) contains an accurate and complete list of all Marks for
which registration has been obtained or for which application to registration
has been filed, including application and registration dates and numbers, and
jurisdiction thereof, and all other Marks, as well as which Company owns each
Xxxx. No Xxxx is infringed or has been challenged or threatened in any way, and
the Companies are not aware of any potentially interfering xxxx or application
therefor of any third party. None of the Marks infringe or are, or have been,
alleged to infringe any business name, trade name, trademark, service xxxx or
other right of any third party.
(v) Patents. The Disclosure Schedule to this
Section 6.4(c)(v) contains an accurate and complete list of all Patents,
including application and issuance dates and numbers, jurisdictions thereof, and
which Company holds each Patent. All the Patents are currently in compliance
with formal legal requirements (including payment of filing, examination and
maintenance fees), are valid and enforceable, and are not subject to any
maintenance fees or Taxes or actions falling due within one year from the date
hereof. No Patent has been or is now involved in any interference, reissue,
reexamination or opposition proceeding. To the Companies' knowledge after due
inquiry, there is no potentially interfering patent or patent application of any
third party. No Patent is infringed or, to the best of the Companies' knowledge,
has been challenged or threatened in any way. None of any Company's goods or
services, nor any processes or know-how used by any Company, infringe or are
alleged to infringe any patent or other right of any third party.
(vi) Copyrights. The Disclosure Schedule to this
Section 6.4(c)(vi) contains an accurate and complete list of all registered
Copyrights, including application and registration dates and numbers,
jurisdictions thereof and which Company holds each Copyright. None of the
Copyrights infringe or are, or have been, alleged to infringe any copyright or
any other right of any third party.
(vii) Trade Secrets. The Disclosure Schedule to this
Section 6.4(c)(vii) contains an accurate and complete listing and summary
description of each Trade Secret and
B-41
55
which Company owns each Trade Secret. With respect to each Trade Secret the
documentation relating to such Trade Secret is current, accurate and sufficient
in detail and content to identify and explain it, and to allow its full and
proper use without reliance on the special knowledge or memory of any
individual. The Companies have taken all reasonable precautions to protect the
secrecy, confidentiality and value of the Trade Secrets. The Trade Secrets are
not part of the public knowledge or literature, nor have they been used,
divulged, or appropriated for the benefit of any third party. No Trade Secret is
subject to any adverse claim nor has any Trade Secret been challenged or, to the
Companies' knowledge, threatened in any way. None of the Trade Secrets infringe
or are alleged to infringe any right of any third party.
(d) Contracts.
(i) Definition. The Disclosure Schedule to this
Section 6.4(d)(i) lists as of May 31, 2000 all agreements, contracts, notes,
bonds, debentures, indentures, mortgages, deeds of trust, leases, licenses,
obligations, promises, settlements, repurchase obligations (including, but not
limited to, repurchase obligations pertaining to whole loan sales,
securitizations, pooling and servicing agreements and other such agreements and
understandings (whether written or oral and whether express or implied)
(together with the Equipment Leases, the Real Estate Contracts and the
Technology Contracts, the "Contracts")) that are material to the business of any
Company, including without limitation all of the foregoing (A) that provide for
future payments, claims or obligations to or from any Company of $25,000 or more
per year or $100,000 or more over the term thereof or (B) that are (1)
collective bargaining agreements or other agreements with any labor union, (2)
joint venture agreements, partnership agreements or other agreements involving
a sharing of profits, losses, costs or liabilities, (3) agreements containing
covenants that in any way purport to restrict the business activity of any
Company or limit the freedom of any Company to engage in any line of business or
to compete with any other person, (4) standard forms of agreements providing for
payments to or for any person based on sales, originations, closings, purchases
or profits (other than direct payments for goods), (5) powers of attorney, (6)
agreements providing for the payment of special or consequential damages in
excess of $100,000 by any Company, (7) agreements relating to capital
expenditures in excess of $200,00 by any Company, (8) warranties regarding
products or services, guarantees or other similar undertakings by any Company in
excess of $100,000, exclusive of manufacturers' warranties on telephones and
accessories (9) agreements involving indemnification for obligations of third
parties, (10) employment, secrecy, proprietary information, noncompetition,
restrictive covenant, or confidentiality agreements with key employees, (11)
requirements or output contracts, (12) business alliance or joint marketing
agreements, (13) agreements with Sprint, Sprint Spectrum or Sprint PCS or any of
their affiliates, (14) documents related to debt for borrowed money or (15)
amendments, modifications or supplements to any of the foregoing. As used
herein, the term "Contracts" also shall be deemed to refer to all agreements
between any Company, on the one hand, and any Member, any affiliate of any
Member, or any director or executive officer of any Company, on the other hand.
(ii) Sprint Agreements. LLC has complied in all
material respects with
B-42
56
the following agreements with Sprint Corporation ("Sprint") (which agreements
are included in the definition of "Contracts," set forth above):
(A) Sprint PCS Management Agreement, dated
as of June 8, 1998, by and between Sprint Spectrum, LP, SprintCom, Inc. and
LLC, as amended by addenda dated June 8, 1998, October 6, 1998, January 21,
1999, September 1, 1999, February 17, 2000 and May 5, 2000 and July 27, 2000
(collectively, the "Sprint Management Agreement").
(B) Sprint Spectrum Service Xxxx and
Trademark License Agreement dated June 8, 1998, by and between Sprint Spectrum
LP and LLC.
(C) Sprint Service Xxxx and Trademark
License Agreement, dated as of June 8, 1998, by and between Sprint
Communications Company, LP and LLC.
(D) Sprint PCS Services Agreement, dated as
of June 8, 1998 by and between Sprint Spectrum, LP and LLC.
(E) Interim Network Operating Agreement
between Sprint Spectrum, LP and LLC, dated January 21, 1999, as amended on
August 27, 1999, September 8, 1999 and February 17, 2000.
(F) Asset Purchase Agreement, dated
October 6, 1998, between Sprint Spectrum, LP and LLC, as amended on July 21,
1999 and September 6, 1999.
(G) Build-out. The LLC Parties' build-out
of the Service Area Network in the Service Area, as such terms are defined
pursuant to the Build-out Plan approved by Sprint, is currently on schedule. As
of the date hereof, no Company has failed to meet any contract date except as
has been waived or modified in writing.
(H) Sprint PCS Technical Program
Requirements. LLC has complied with all Sprint PCS Technical Program
Requirements, as defined in the Sprint Management Agreement, in all material
respects except as have been waived or modified in writing.
(I) Sprint PCS Program Requirements. LLC has
complied with all Sprint PCS Program Requirements, as defined in the Sprint
Management Agreement, in all material respects except as have been waived or
modified in writing.
(J) Sprint PCS Customer Service Standards.
LLC has complied with all Sprint PCS Customer Service Standards, as defined in
the Sprint Management Agreement, in all material respects except as have been
waived or modified in writing.
(K) Sprint PCS Insurance Requirements. LLC
has complied with the Sprint PCS Insurance Requirements, as defined in the
Sprint Management Agreement, in all material respects except as have been waived
or modified in writing.
B-43
57
(L) Sprint Management Agreement. No Event of
Termination (as defined therein) has occurred under the Sprint Management
Agreement.
(iii) LLC Credit Agreement.
(A) As of the date hereof, the Credit
Agreement (the "Credit Agreement") by and among LLC, as borrower, and Lucent
Technologies, Inc., as administrative agent and a lender, and the other lenders
referred to in the Credit Agreement (collectively, the "Lenders") and all other
Loan Documents (as that term is defined in the Credit Agreement), are in full
force and effect, without any amendments, and no Default (as that term is
defined in the Credit Agreement) (a "Default") exists and no Event of Default
(as that term is defined in the Credit Agreement) (an "Event of Default") has
occurred or is continuing under the Credit Agreement, nor has any Company
received any notice from any Lender alleging that a Default or an Event of
Default has occurred or is continuing, except as listed and explained on the
Disclosure Schedule to this Section 6.4(d)(iii)(A).
(B) As of the date hereof, the LLC has
borrowed the full amount of the Commitment (as that term is defined in the
Credit Agreement) under the Credit Agreement. The amount borrowed by LLC and
outstanding under the Credit Agreement is $56,000,000.00 exclusive of accrued
interest.
(C) As of the date hereof, LLC has not been
required to make any mandatory repayments under the Credit Agreement, except as
listed on the Disclosure Schedule to this Section 6.4(d)(iii)(C).
(D) The transactions contemplated herein
will not cause an Event of Default, or otherwise cause LLC to violate any
covenant or warranty of LLC under the Credit Agreement. LLC has obtained all
consents required to be obtained (from any party whatsoever) under the Credit
Agreement, with respect to the transactions contemplated herein. LLC has
attached copies of all necessary consents as the Disclosure Schedule to this
Section 6.4(d)(iii)(D).
(E) All representations and warranties made
to the Lenders under the Credit Agreement are true and correct as of the date
hereof, except as listed and explained on the Disclosure Schedule to this
Section 6.4(d)(iii)(E).
(iv) Legally Binding. All of the Contracts are legal,
valid and binding on the parties thereto, are in full force and effect and
represent legitimate transactions; no Company is in violation of or default
under any of the Contracts in any material respect and, to the Companies'
knowledge, no other party to any Contract is in material violation or default
thereunder; no event, occurrence or condition exists which, with the lapse of
time, the giving of notice, or both, or the happening of any further event or
condition, would become a material violation or default by any Company or any
other party thereto, under any Contract; there are no outstanding, and to the
Companies' knowledge, no threatened, disputes or disagreements with
B-44
58
respect to any of the Contracts; no Company has released any material rights
under any Contract; no Company is subject to any legal obligations to
renegotiate, nor is there any right to renegotiate, any Contract; and no Company
is subject to any liability, or claim therefor, for or with respect to price
adjustment under any Contract with the United States Government or any agency
thereof, including any liability for defective pricing.
(v) Material Contracts. The Contracts constitute all
of the material contracts, leases and agreements necessary for the conduct of
the businesses of the Companies in the manner and to the extent conducted
respectively by them. All rights of the Companies under the Contracts will be
enforceable by Superholdings, LLC or a Subsidiary after the Closing without the
consent or agreement of any other party.
(vi) Copies. The Companies have delivered or made
available to Public true and complete copies of each Contract, including all
amendments thereto and waivers thereunder. There are no unwritten amendments to,
or waivers under, any Contract.
(e) Necessary Assets. Each Company owns or has the right to
use all assets, rights, and properties necessary for the conduct of its business
in the manner and to the extent currently conducted including, without
limitation, all items of property located on the Real Property.
6.5 Liabilities.
(a) No Liabilities. Except for the obligations of the Members
or their affiliates to distribute assets contemplated hereby, no Company has any
debt, guaranty, liability or obligation of any nature to any Member or an
Associate or Affiliate of such Member; no Company has any interest-bearing debt,
liability or obligation or any guaranty of any nature in excess of $50,000
individually or $100,000 in the aggregate, in each case, whether accrued,
absolute, contingent or otherwise, whether due or to become due, and whether
known or unknown, and there is no basis for the assertion against it of any such
debt, guaranty, liability or obligation except to the extent set forth or
reserved against in full in the LLC Financial Statements. The current
liabilities of the Companies incurred in the ordinary course of business
(excluding current maturities of interest-bearing debt and accounts payable for
fixed-asset purchases) do not exceed $400,000.
(b) Tax Matters.
(i) Filings. Each Company has filed or will timely
file all Tax Returns that it was, is or will be required to file on its behalf
and on behalf of any other party. All such Tax Returns were, are and will be
correct and complete in all respects. All Taxes due and owing by any Company
(whether or not shown on any Tax Return, whether known or unknown, asserted or
unasserted) have been paid. No Company is a party to any tax sharing or other
agreement that will require any payment with respect to Taxes. No Company
currently is
B-45
59
the beneficiary of any extension of time within which to file any Tax Return
except that LLC has extended the due date of its 1999 Federal income tax return.
No Company has waived any statute of limitations in respect of Taxes or has
agreed to any extension of time with respect to a Tax assessment or deficiency
or the collection of Taxes.
(ii) Additional Taxes. No Company expects any taxing
authority or other governmental unit to assess any additional Taxes. No taxing
authority or other governmental unit has proposed or threatened any assessment,
deficiency, adjustment, dispute or claim concerning any Tax Return or any Tax
liability of any Company. There is no unpaid assessment, deficiency or
adjustment concerning any Tax Return or Tax liability of any Company. To the
Companies' knowledge, none of the Tax Returns of any Company has been selected
for or is now under audit or examination by any taxing authority or other
governmental unit. There are no suits, actions, proceedings or investigations
pending or, to the Companies' knowledge, threatened against any Company with
respect to any Taxes.
(iii) Withholdings. Each Company has withheld and
timely deposited or paid all Taxes required to have been withheld and deposited
or paid in connection with amounts paid or owing to any employee, independent
contractor, creditor, Members or other third party.
(iv) Specific Code Provisions. No Company has made
any payments, is obligated to make any payments, or is a party to any agreement
that under any circumstances could obligate it to make any payments that would
be characterized as "excess parachute payments" under Section 280G of the Code.
None of the assets of any Company (A) is property which is required to be
treated as being owned by any other person pursuant to the so-called "safe
harbor lease" provisions of former Section 168(f)(8) of the Code; (B) directly
or indirectly secures any debt the interest on which is tax exempt under Section
103(a) of the Code; or (C) is "tax-exempt use property" within the meaning of
Section 168(h) of the Code. No Company (x) is a party to any Tax allocation or
sharing agreement; (y) has been a member of an affiliated group filing a
consolidated federal income Tax Return; or (z) has liability for the Taxes of
any person under Treasury Regulations Section 1.1502-6 or any similar provision
of state, local, or foreign law, as a member of a consolidated group, transferee
or successor, by contract, or otherwise. No Company has agreed to make, nor is
any Company required to make, any adjustment under Section 481(e) by reason of a
change in accounting method or otherwise. Neither the Members nor any Company is
a person other than a United States person within the meaning of the Code and
the transaction contemplated herein is not subject to the withholding provisions
of Section 3406 of the Code or subchapter A of Chapter 3 of the Code.
(v) Unpaid Taxes. The unpaid Taxes of the Companies,
including all Taxes not yet due for any and all periods through the Closing
Date, whether known or unknown, asserted or unasserted (A) do not exceed the
reserve for Tax liability (other than any reserve for deferred Taxes established
to reflect timing differences between book and Tax basis in assets and
liabilities) included in LLC Financial Statements and (B) do not exceed those
reserves as adjusted for the passage of time through the Closing Date.
B-46
60
As used herein, the term "Taxes" means all federal, state, local,
foreign and other governmental net income, gross income, gross receipts, sales,
use, ad valorem, transfer, franchise, profits, license, lease, service, service
use, withholding, payroll, employment, unemployment, excise, severance, stamp,
occupation, premium, property, windfall profits, customs, duties or other taxes,
fees, assessments or charges of any kind whatsoever, together with any interest
and any penalties, additions to tax or additional amounts with respect thereto,
and the term "Tax" means any one of the foregoing Taxes, and the term "Tax
Returns" means all returns, declarations, reports, statements and other
documents required to be filed in respect of Taxes.
(c) Litigation.
(i) Proceedings. There is no pending or, to the
Companies' knowledge, threatened, action, arbitration, audit, charge,
complaint, demand, hearing, investigation, litigation or suit (whether civil,
criminal, administrative (including, without limitation, Equal Employment
Opportunity Commission, Department of Labor or Office of Federal Contract
Compliance, National Labor Relations Board, and similar state or federal
agencies), investigative or informal) (A) that has been received or commenced by
or against any Company or that otherwise relates to or may affect the Parent
Merger, the Subsidiary Merger, the LLC Parties, the Members' Interests, this
Agreement, any Related Agreement or the transactions contemplated herein or
therein or (B) that has been received or commenced by or against any Member and
that relates to the LLC Parties or that otherwise relates to or may affect the
Parent Merger, the Subsidiary Merger, the LLC Parties, the Members' Interests,
this Agreement, any Related Agreement or the transactions contemplated herein
or therein (collectively, the "Proceedings") nor is there any basis therefor.
(ii) Orders. There is no award, decision, injunction,
judgment, order, ruling, subpoena, writ or verdict of any court, arbitrator or
government agency or instrumentality (A) to which the Parent Merger, the
Subsidiary Merger, the LLC Parties, the Members' Interests, this Agreement, any
Related Agreement or the transactions contemplated herein or therein is subject
or by which any of the foregoing may be affected or (B) to which any Member is
subject and that relates to or affects the Parent Merger, the Subsidiary Merger,
the LLC Parties, the Members' Interests, this Agreement, any Related Agreement
or the transactions contemplated herein and therein (collectively, the
"Orders").
(iii) Disclosure Schedule. The Disclosure Schedule to
this Section 6.5(c)(iii) sets forth a brief description of each Proceeding
pending or, to the Companies' knowledge, threatened, at the date hereof.
(d) Employee Liabilities. The Disclosure Schedule to this
Section 6.5(d) accurately lists as of the date set forth therein, (i) the hire
date of and year-to-date compensation paid to each current employee of each
Company (specifying as to each such employee the respective amounts of base
salary, bonus and commissions paid to such employee) (ii) all written employee
policies of each Company and (iii) all accrued and unpaid commissions, bonus
payments and vacation pay due to employees of each Company as of May 31, 2000.
B-47
61
(e) Warranties. There are no warranties with respect to the
quality or absence of defects of its products or services that any Company has
sold or performed which are in force as of the date hereof except as are
described in the Disclosure Schedule to this Section 6.5(e).
(f) Products Liability. The Company has no liability for
products or services sold or distributed by it except such as for which the
manufacturers are exclusively liable.
6.6 Business.
(a) Customers and Suppliers. No Company has been informed in
writing of any intention or indication of intention by a Significant Customer, a
Significant Supplier or an Alliance Party to terminate its business relationship
with any Company or to limit its business relationship with any Company in any
respect. As used herein, (i) "Significant Customer" means any customer or
referral source (including without limitation consultants), responsible for in
excess of $100,000 of sales of any Company, measured in terms of dollar sales
volume for the twelve months ended May 31, 2000; (ii) "Significant Supplier"
means any supplier responsible for over $250,00 in sales to any Company
(measured by dollar value of goods purchased) for the twelve month period ended
May 31, 2000 and (iii) "Alliance Party" means any party with which any Company
had a joint venture, joint marketing or joint sales relationship during the
twelve month period ended May 31, 2000.
(b) Insurance. Each Company maintains insurance policies on
its assets, and upon its business and operations, against loss or damage, risks,
hazards and liabilities of the kinds customarily insured against by entities
similarly situated and engaged in the same or similar businesses in adequate
amounts under valid and enforceable policies (the "Policies"), with insurers the
Companies reasonably believe to be financially sound and reputable. The premiums
due and owing with respect to the Policies have been paid, premiums not yet due
have been adequately accrued for, and no Company has received any notice of
cancellation or of intention not to renew any such Policy. The Disclosure
Schedule to this Section 6.6(b) contains a list of the Policies, copies of which
have been provided to Public and the holder of each of the Policies. The
Disclosure Schedule to this Section 6.6(b) sets forth a list of each other
insurance policy or insurance contract relating to any Company or the business
of any Company pursuant to which any Company is or may hereafter be entitled to
assert claims for insurance coverage (the "Prior Policies"). The covered Company
or Companies have timely pursued all rights to recover (if any) under the
Policies and the Prior Policies.
(c) Employees. No officer, employee or independent contractor
of any Company is in violation of any term of any contract, proprietary
information agreement, noncompetition agreement, or any other agreement or any
restrictive covenant or any other common law obligation to a former employer
relating to the right of any such person to be engaged by such Company or to the
use of trade secrets or proprietary information of others (an "Outside
Confidentiality Agreement"), and the engagement of such persons by such Company
B-48
62
before or after the Closing does not and will not subject any Company,
Superholdings or Public to any liability with respect thereto. There are neither
pending, nor to the Companies' knowledge, threatened, any Proceedings with
respect to any Outside Confidentiality Agreement. The Disclosure Schedule to
this Section 6.6(c) lists every Outside Confidentiality Agreement to which any
Company's officers or technical staff are a party, and all others about which
the Companies have knowledge.
There is no labor strike, dispute, slowdown, picketing or stoppage
pending or, to the Companies' knowledge, threatened against or directly
affecting any Company, nor has any Company experienced any of the foregoing
since its formation. No Company is subject to any collective bargaining
agreement. No union representation question exists and, to the Companies'
knowledge, there has been no union organization effort respecting the employees
of any Company. No Company is delinquent in payments to any of its employees for
any wages, salaries, commissions, bonuses or other direct compensation for any
services performed by them or amounts required to be reimbursed to such
employees. The Disclosure Schedule to this Section 6.6(c) lists every retired
employee entitled to receive compensation from any Company or to participate in
any benefit plan of any Company. The books and records of each Company
accurately reflect all changes in compensation since such Company's formation.
There are no employment agreements with any past or former employees of
any Company which provide or create a right to continued employment or
compensation. All employees of each Company are, and have been, employed for an
indefinite period and are, and have been, terminable at will, with or without
cause, and without cost to any Company for severance obligations, or any other
liability, except for payment of accrued salaries or wages and vacation
pay. No employee or former employee has any right to be rehired by any Company
prior to the hiring of a person not previously employed by such Company. To the
Companies' knowledge, no officer, director or key employee intends to terminate
employment with any Company.
(d) Worker's Compensation. Each Company subscribes to, or is
otherwise insured under, the worker's compensation or similar statute in every
state in which it owns or leases real estate or has employees. The Disclosure
Schedule to this Section 6.6(d) lists all material claims filed by employees of
any Company in respect of employment-related injury or illness since its
formation. No Company has received any report or notice from the Occupational
Safety and Health Administration.
(e) ERISA. The Disclosure Schedule to this Section 6.6(e)
lists each employee benefit plan, program, arrangement and contract (including
each "employee benefit plan" as defined in Section 3(3) of Title I of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA")), and any
bonus, deferred compensation, stock bonus, stock, purchase, restricted stock,
stock option, employment, termination, stay agreement or bonus, value
appreciation, change in control and severance plan, program, arrangement or
contract that any Company maintains or ever has maintained, or to which any
Company contributes, ever has contributed or ever has been required to
contribute (collectively, the "Employee Benefit Plans"). Each Employee Benefit
Plan (and each related trust, insurance contract or fund) complies in form
B-49
63
and in operation in all material respects with the applicable requirements of
all laws, rules and regulations governing or applying to such Employee Benefit
Plan, including without limitation ERISA and the Code, and each such Plan has
been operated in accordance with its terms in all material respects, except as
will not have an adverse effect on any Company, Superholdings or Public. No
liability has been incurred and there exists no condition or circumstance which
could result in any liability to any Company under ERISA, the Code or any other
applicable law, other than liability for benefits due under the appropriate
Employee Benefit Plan. All contributions (including all employer and employee
salary reduction contributions) which are due have been paid in a timely manner
to each such Employee Benefit Plan. No Company has engaged in or permitted to
occur and, to the Companies' knowledge, no other party has engaged in or
permitted to occur, any transaction prohibited by ERISA Title I ss. 406 or any
"prohibited transaction" under Code ss. 4975(c) or any breach of fiduciary duty
under ERISA with respect to any Employee Benefit Plan, except for any
transactions which are exempt under ERISA Title I ss. 408 or Code ss. 4975. All
filings required by ERISA and the Code as to each Employee Benefit Plan have
been timely filed, and all notices and disclosures to participants required by
either ERISA or the Code, including all notices required under ERISA Title I ss.
601 et seq. and Code ss. 4980B, have been timely provided. Each Company has
complied with all of the provisions of Parts 6 and 7 of Title I of ERISA and
Code ss. 4980B. The Companies have delivered or made available to Public correct
and complete copies of the plan documents or contracts and summary plan
descriptions, where applicable, the most recent Form 5500 Annual Report, where
applicable, all related trust agreements, insurance contracts and other funding
agreements which implement each Employee Benefit Plan, and such other documents
requested by Public with respect to each Employee Benefit Plan. No Company has
ever sponsored or has any liability under any employee pension benefit plan as
defined in ERISA Section 3(3).
No action, suit, proceeding, hearing or investigation with respect to
the administration or the investment of the assets of any Employee Benefit Plan
is pending or, to the Companies' knowledge, threatened, except for routine
claims for benefits under such plans.
The Disclosure Schedule to this Section 6.6(e) lists all contracts with
third-party administrators, insurers, actuaries, investment managers,
consultants and other independent contractors that relate to any Employee
Benefit Plan.
No Company has or has ever had any ERISA Affiliates other than the
Companies. "ERISA Affiliate" shall mean any person that, together with any
Company, is or at any time within the six-year period preceding the date of this
Agreement would be treated as a single employer under Code ss. 414. No Employee
Pension Benefit Plan is or has ever been subject to Title IV of ERISA or Code
ss. 412.
No employee of any Company will be entitled to any additional benefits
or any acceleration of the time of payment or vesting of any benefits under any
Employee Benefit Plan as a result of the transactions contemplated by this
Agreement. No Person is entitled to receive any additional payment from any
Company or any other party in the event that the excise tax of Code ss. 4999 is
imposed on that Person.
B-50
64
(f) Conflicts of Interest.
(i) Affiliated Transactions. Except as contemplated
by this Agreement, since its formation, there have not been, nor are there
presently pending, any transactions between any Company and any member holding
more than 1% of the equity interests in any Company, or an "Associate" or
"Affiliate" (as such terms are defined in Rule 405 promulgated pursuant to the
Securities Act) of any Company or any such member, or any transaction with any
Company in which any of the foregoing persons or entities has a direct or
indirect financial interest other than public companies in which such person has
less than a 1% interest.
(ii) Ownership in Competitive Entities. Except as set
forth on the Disclosure Schedule to this Section 6.6(f)(ii), the Members (and
their respective spouses and relatives) do not, and to the best knowledge of the
Members, none of the Companies' officers, directors, employees, contractors or
consultants (or any of their respective spouses or relatives), directly or
indirectly, own any interest in any entity that is a competitor, customer or
supplier of, or has any existing contractual relationship with, any Company
other than public companies in which such person has less than a 1% interest.
(g) LLC Legal Requirements.
(i) Compliance with Laws. No Company has violated any
term of any judgment, writ, decree, order, law, statute, rule or regulation to
which it is subject or a party, or by which its business or assets are bound or
affected (collectively, "LLC Legal Requirements"), except as would not have a
material adverse effect on any Company, Superholdings or Public. No Company has
received notice of any actual, alleged or potential violation of an LLC Legal
Requirement. No Company is a public utility holding company, as defined in the
Public Utility Holding Company Act of 1935, as amended. No Company is an
investment company, as defined in the Investment Company Act of 1940, as
amended.
(ii) Certain Acts. Neither any of the LLC Parties nor
any of their former or current officers, directors, employees, agents or
representatives has made or agreed to make, directly or indirectly, with respect
to the businesses or assets of any Company, any (A) bribes or kickbacks, illegal
political contributions, payments from corporate funds not recorded on the books
and records of such Company, or funds to governmental officials (or any such
official's family members or affiliates) for the purpose of affecting their
action or the action of the government they represent, to obtain favorable
treatment in securing business or licenses or to obtain special concessions, or
illegal payments from corporate funds to obtain or retain business or (B)
payments from corporate funds to governmental officials for the purpose of
affecting their action or the action of the government they represent, to obtain
favorable treatment in securing business or licenses or to obtain special
concessions. Without limiting the generality of the foregoing, none of the
foregoing persons or entities has made or agreed to make, directly or
indirectly, (whether or not said payment is lawful) any payment to obtain, or
with respect to, sales other than usual and regular compensation to its
employees and sales representatives with respect to such sales.
B-51
65
(iii) Licenses. Each Company has all governmental
licenses, permits, approvals, authorizations, exemptions, classifications,
registrations and certificates, and all consents or agreements with governmental
authorities (collectively, "Licenses") necessary to conduct its business in the
manner and to the extent that it has been conducted. All of the Licences and the
parties thereto are listed on the Disclosure Schedule to this Section
6.6(g)(iii). The Disclosure Schedule to this Section 6.6(g)(iii) also lists
every license that is in effect or has been applied for or is pending and
identifies all Licenses and applications for Licenses (collectively,
"Transferrable Licenses") that will be unimpaired as a result of the Parent
Merger and describes any action to be taken such that the Transferrable Licenses
will be enforceable by LLC, Superholdings or a Subsidiary after the Closing. The
Companies have delivered to Public true and complete copies of all of the
Licenses.
All Licenses are in full force and effect. No event
has occurred that may constitute or result in a violation of a License, or
result in the revocation, suspension, modification or nonrenewal of any License.
No LLC Party has received any notice of any actual, alleged or potential
violation, revocation, suspension, modification or nonrenewal of any License.
(h) Environmental Matters.
(i) Compliance. Each Company is in compliance in all
material respects with all applicable Environmental Laws and no Company has
received any written communication from any person that alleges that any Company
is not in compliance with any Environmental Law. As used herein, "Environmental
Laws" mean all laws or orders relating to the regulation or protection of human
health, safety or the environment (including, without limitation, ambient air,
soil, surface water, ground water, wetlands, land or subsurface strata),
including, without limitation, laws and regulations relating to releases or
threatened releases of hazardous materials or pollutants, archaeological or
historical sites or surveys, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport,
recycling, handling, discharge, removal or remediation of hazardous materials or
pollutants, the National Historic Preservation Act, and the National
Environmental Policy Act of 1969.
(ii) Environmental Claims. There is no Environmental
Claim pending or, to the Companies' knowledge, threatened (A) against any
Company, (B) against any person or entity whose liability for any Environmental
Claim any Company has or may have retained or assumed either contractually or by
operation of law or (C) with respect to any real or personal property or
operations which are now or have been previously owned, leased, operated or
managed, in whole or in part, by any Company, or any real property to which any
Company has transported any hazardous materials or pollutants.
(iii) Permits. No Company is required under any
Environmental Law to apply for or maintain any permit or authorization with
respect to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport, recycling, handling or discharge of any hazardous materials
or pollutants.
B-52
66
(iv) Pollutants. None of the Real Property or Leased
Property (including without limitation the soils, surface water or groundwater
thereof) are or have been impacted by the presence of hazardous materials or
pollutants.
As used herein, "Environmental Claim" means any and
all administrative, regulatory or judicial actions, suits, demands, demand
letters, directives, claims, Liens, investigations, proceedings or notices of
non-compliance or violation (written or oral) by any person or entity (including
any governmental authority), alleging potential liability (including, without
limitation, potential liability for enforcement, investigatory costs, cleanup
costs, governmental response costs, removal costs, remedial costs, natural
resources damages, property damages, personal injuries, or penalties) arising
out of, based on or resulting from (A) the presence, or release or threatened
release into the environment of any hazardous material or pollutant at any
location; or (B) any violation, or alleged violation, of any Environmental Law,
and including, without limitation, any and all claims by any third party seeking
damages, contribution, indemnification, cost recovery, compensation or
injunctive relief in connection with the presence or release of any hazardous
materials or pollutants.
(v) Underground and Above Ground Storage Tanks.
Except as set forth on the Disclosure Schedule to this Section 6.6(h)(v), there
are no underground storage tanks or above ground storage tanks located on any of
the Real Property or Leased Premises or on any property located adjacent to any
Real Property or Leased Premises and no underground storage tanks or above
ground storage tanks have ever been located on the Real Property or Leased
Premises or on any property located adjacent to any Real Property or Leased
Premises.
(vi) Environmental Assessments. Except as set forth
on the Disclosure Schedule to this Section 6.6(h)(vi), environmental
assessments have been performed on all real properties which are now or have
been previously owned, leased, operated or managed by any Company, and such
assessments have been provided to Superholdings.
(i) Build-out Plan. The technical aspects of the build-out
plan attached as the Disclosure Schedule to this Section 6.6(i) have been
approved by Sprint. The Disclosure Schedule to this Section 6.6(i) sets forth
the extent of LLC's progress in the completion of the build-out and network
launch at the date hereof.
6.7 Other.
(a) Certain Information. None of the information supplied or
to be supplied by the LLC Parties in written form specifically for inclusion or
incorporation by reference in, or which may be deemed to be incorporated by
reference in, the Form S-4 or the Form S-1 will, at the time the Form S-4 or
Form S-1, as applicable, is filed with the SEC, at any time that such form is
amended or supplemented and at the time it becomes effective under the
Securities Act, 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 not misleading. None of the information supplied or to be
supplied by the LLC Parties in written form specifically for
B-53
67
inclusion or incorporation by reference in, or which may be deemed to be
incorporated by reference in, the Proxy Statement will, at the time it is filed
with the SEC, at any time that it is amended or supplemented, at the time it is
mailed to the holders of Public Stock and at the time of the Public Stockholders
Meeting and, if it is mailed to the Members, at the time it is mailed to the
Members and at the time of the Members Meeting, contain any untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading.
(b) Documents Delivered. The written responses, documents,
copies and information delivered by the LLC Parties pursuant to requests by
Public or pursuant to the terms of this Agreement are true, complete and correct
in all respects. The ownership transfer records of each Company (the "LLC
Records") that have been made available to Public, Superholdings, Merger Sub or
their agents are complete in all material respects. At the Closing, all of the
LLC Records will be in the possession of LLC.
(c) No Brokers Fees; No Commissions. All negotiations relative
hereto and the transactions contemplated hereby have been carried on by the
Companies directly with Public and Merger Sub without any act by any Company
that would give rise to any claim against any Company, Public, Superholdings,
Merger Sub or their respective Affiliates for a brokerage commission, finder's
fee or other similar payment.
(d) Advice. Each Company has received and the Members have had
the opportunity to receive advice from their own accounting, financial, tax,
legal and other advisors regarding the Reorganization. The LLC Parties have
received no advice, agreement or representation from, and are not relying in any
way upon, Public, Superholdings, Merger Sub,Parent Surviving Corporation,
Subsidiary Surviving Corporation or any of their agents or advisors with regard
to advice on the Reorganization.
(e) Disclosure. None of the representations or warranties of
the LLC Parties contained in this Agreement, the Related Agreements the
Disclosure Schedules, or any other document delivered pursuant hereto or
thereto, none of the information contained in this Agreement, the Related
Agreements or the Disclosures Schedules, and none of the other information or
documents furnished or to be furnished to Superholdings, Public or their agents
by the LLC Parties or provided pursuant to the terms of this Agreement, the
Related Agreements or the Disclosure Schedules, contained, contains or will
contain on the date such agreement, document or information was delivered, or on
the Closing Date, any untrue statement of a material fact or omits or will omit
to state a material fact herein or therein necessary in order to make the
statements contained herein or therein not misleading.
6.8 Investment Representations.
(a) The Members understand and acknowledge that the
Superholdings Stock is being offered and sold under the exemptions from
registration provided for in Section 4(2) of the Securities Act, including
Regulation D promulgated thereunder, and that Superholdings' reliance upon such
exemption is based in part upon the Members' representations, warranties and
B-54
68
agreements contained in this Agreement.
(b) The Members have carefully read this Agreement and, to the
extent believed necessary, have discussed the representations, warranties and
agreements which the Members make by signing it and the applicable limitations
upon the Members' resale of the shares of Superholdings Stock with the Members'
counsel.
(c) The Superholdings Stock to be issued to such Members in
the Reorganization is being acquired by the Members solely for the Members' own
account, for investment purposes only, and is not being acquired for resale,
resyndication, distribution, subdivision of fractionalization thereof, except
pursuant to an effective registration under the Securities Act or in a
transaction exempt from registration under the Securities Act. The Members have
no contract or arrangement with any person to sell, transfer or pledge to any
person the shares of Superholdings Stock or any part thereof, any interest
herein or any rights thereto, and the Members have no present plans to enter
into any such contract or arrangement.
(d) Each of the Members understands that it may not sell or
otherwise transfer its shares of Superholdings Stock unless such sale or other
transfer is registered under the Securities Act and the applicable state
securities laws or unless the sale or other transfer is exempt from the
registration requirements under the Securities Act and such other securities
laws, and that, as a result, the Members must bear the economic risk of the
investment for an indefinite period of time. The Members understand that
Superholdings may require the Members to furnish an opinion of counsel
satisfactory to Superholdings that such sale or transfer is so exempt.
(e) Each of the Members is able (i) to bear the economic risk
of an investment in Superholdings Stock, (ii) to hold the shares of
Superholdings Stock indefinitely, and (iii) to afford a complete loss of this
investment. Each of the Members has adequate means of providing for current
needs and has no present need for liquidity in this investment.
(f) Each of the Members is an "accredited investor" as that
term is defined under Rule 501(a) of Regulation D, as amended, under the
Securities Act and possesses such knowledge and experience in financial and
business matters so that each of the Members is capable of evaluating the merits
and risks of an investment in Superholdings Stock, and of making an informed
investment decision.
(g) Each of the Members confirms that, in making the decision
to acquire the shares of Superholdings Stock in the Reorganization, the Members
have relied solely upon independent investigations made by each of the Members
and/or by its representatives, including each of the Members' own professional
tax and other advisors and that the Members and such representatives and
advisors have been given the opportunity to ask questions of, and to receive
answers from, Superholdings concerning this Agreement and the terms and
conditions of the Reorganization, and to obtain any information requested by
Members concerning Superholdings from such person, to the extent such persons
possessed such information or could acquire it without unreasonable effort or
expense, necessary for each of the Members to make an informed
B-55
69
investment in Superholdings Stock.
ARTICLE 7
Representations and Warranties of Public, Superholdings and Merger Sub
Public, Superholdings and Merger Sub, jointly and severally, represent
and warrant to the LLC Parties that except as set specifically forth on the
Disclosure Schedules (which exception shall relate only to the Sections
specifically identified in such Disclosure Schedules):
7.1 Entry Into Agreements.
(a) Organization and Good Standing. Public, Superholdings and
Merger Sub are corporations duly organized and validly existing under the laws
of the State of Delaware and are in good standing under such laws. Superholdings
owns, beneficially and of record, all of the issued and outstanding shares of
capital stock of Merger Sub.
(b) Corporate Power and Authority; Validity and Authorization.
Each of Public, Superholdings and Merger Sub has full corporate power and
authority to execute, deliver and perform this Agreement and the Related
Agreements to which it is a party. This Agreement has been duly authorized,
executed and delivered by Public, Superholdings and Merger Sub, and is
enforceable against Superholdings and Merger Sub, and upon approval by the
Public stockholders will be enforceable against Public, in accordance with its
terms.
When the Related Agreements to which each of Public,
Superholdings and Merger Sub is a party are delivered at the Closing, such
agreements will have been duly authorized, executed and delivered by Public,
Superholdings and Merger Sub, and will constitute the legal, valid and binding
obligations of Public, Superholdings and Merger Sub, enforceable against Public,
Superholdings and Merger Sub in accordance with their terms.
7.2 Conflicts and Consents.
(a) No Conflict. The execution, delivery and performance of
this Agreement and the Related Agreements, and the consummation of the
transactions contemplated hereby and thereby will not result in any violation of
the terms of and will not contravene, conflict with, accelerate the performance
of the obligations required under, or constitute a default under, the
certificate of incorporation or bylaws of Public, Superholdings or Merger Sub,
or any material agreement, judgment, decree, order, law, rule or regulation or
other restriction applicable to any of them, or to which any of them is a party
or by which Public, Superholdings or Merger Sub or their property or assets is
bound, or result in the creation of any mortgage, pledge, lien, encumbrance or
charge upon any of the properties or assets of Public, Superholdings or Merger
Sub.
B-56
70
(b) Consents Obtained. Other than the approvals referred to in
Section 3.1(a) (Stockholder Approval) and Section 3.1(c) (HSR Act), the Permits
and the consents listed on the Disclosure Schedule to this Section 7.2(b) (the
"Public Consents"), no material consents, approvals or authorizations of third
parties are required in connection with Public's, Superholdings' and Merger
Sub's valid execution, delivery, or performance of this Agreement and the
Related Agreements or the consummation of any of the transactions contemplated
hereby or thereby on the part of such party.
7.3 No Brokers Fees; No Commissions. All negotiations relative
hereto and the transactions contemplated hereby have been carried on by Public
and Merger Sub directly with the LLC Parties without any act by Public or Merger
Sub that would give rise to any claim against the LLC Parties or their
Affiliates for a brokerage commission, finder's fee or other similar payment.
7.4 Superholdings Stock. The shares of Superholdings Stock, when
issued, sold and delivered in accordance with the terms hereof will be duly and
validly issued, fully paid and nonassessable and issued free and clear of any
Liens.
7.5 SEC Documents. Public has heretofore delivered or made
available to the LLC Parties Public's Prospectus dated February 3, 2000 and all
reports required to be filed by Public under Sections 13(a), 14(a), 14(c) and
15(d) with the SEC on or after February 3, 2000 (the "SEC Documents"). As of
their respective dates, each of the SEC Documents complied in all material
respects with all applicable requirements of the Securities Act and the Exchange
Act and the rules and regulations of the SEC applicable to such reports and did
not contain any 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. The
audited consolidated financial statements and unaudited consolidated financial
statements of Public included in the SEC Documents fairly present the financial
position of Public as of the dates of such financial statements and the results
of Public's operations and cash flows for the periods then ended, in accordance
with GAAP, except for the variances from GAAP set forth in the notes thereto.
7.6 No Material Adverse Effect. Since the date of the most recent
filing by Public under the Exchange Act prior to the date hereof, there has been
no event or occurrence that has caused or is reasonably expected to cause a
material adverse effect on Public other than (i) operating losses in the
ordinary course of business or (ii) economic conditions affecting the U.S.
economy generally or the telecommunications industry generally.
7.7 Capitalization. The authorized capital stock of Public
consists (i) of 95,000,000 shares of Public Stock, of which 61,354,606 shares
were issued and outstanding as of April 20, 2000 and (ii) 5,000,000 shares of
preferred stock, par value $.01 per share, of which no shares were issued and
outstanding as of April 20, 2000. All of the issued and outstanding shares of
Public Stock have been duly authorized and validly issued, are fully paid and
nonassessable and are free and clear of any preemptive rights. As of March 31,
2000, there were no outstanding preemptive, conversion or other rights, or other
options, warrants or agreements granted by,
B-57
71
issued by, or binding upon, Public for the issuance, sale, purchase,
repurchase, redemption, acquisition or other transfer of its equity securities,
other than stock that may be issued pursuant to stock option plans or agreements
described in the SEC Documents and obligations under the Sister Agreements.
7.8 Capitalization of Superholdings. The authorized capital stock
of Superholdings immediately prior to the Closing will consist (i) of at least
290,000,000 shares of Superholdings Stock, and (ii) at least 10,000,000 shares
of preferred stock. All of the issued and outstanding shares of Superholdings
Stock will be duly authorized and validly issued, fully paid and nonassessable
and will be free and clear of any preemptive rights. On the date of this
Agreement, there are no outstanding preemptive, conversion or other rights, or
other options, warrants or agreements granted by, issued by, or binding upon,
Superholdings for the issuance, sale, purchase, repurchase, redemption,
acquisition or other transfer of its equity securities, other than stock that
may be issued pursuant to the stock option plans and agreements of Public
described above (after consummation of the Subsidiary Merger) or pursuant to the
Sister Agreements.
7.9 No Liabilities. At the date of this Agreement, Public has no
debt, guaranty, liability or obligation of any nature in excess of $5,000,000,
whether accrued, absolute, contingent or otherwise, whether due or to become
due, and whether known or unknown, and there is no basis for the assertion
against it of any such debt, guaranty, liability or obligation except (i) to the
extent set forth or reserved against in full in Public's audited consolidated
financial statements and unaudited consolidated financial statements included in
the SEC Documents and (ii) liabilities incurred in the ordinary course of
business since March 31, 2000.
7.10 Compliance with Laws. Public has not violated any term of any
judgment, writ, decree, order, law, statute, rule or regulation to which it is
subject or a party, or by which the business or assets of Public are bound or
affected (collectively, "Public Legal Requirements"), except as would not have a
material adverse effect on Public. Public has not received notice of any actual,
alleged or potential violation of a Public Legal Requirement.
7.11 Certain Information. None of the information supplied or to be
supplied by Public, Superholdings or Merger Sub in written form specifically for
inclusion or incorporation by reference in, or which may be deemed to be
incorporated by reference in, the Form S-4 or the Form S-1 will, at the time the
Form S-4 or Form S-1, as applicable, is filed with the SEC, at any time that
such form is amended or supplemented and at the time it becomes effective under
the Securities Act, 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 not misleading. None of the information supplied or to be
supplied by Public, Superholdings or Merger Sub in written form specifically
for inclusion or incorporation by reference in, or which may be deemed to be
incorporated by reference in, the Proxy Statement will, at the time it is filed
with the SEC, at any time that it is amended or supplemented, at the time it is
mailed to the holders of Public Stock and at the time of the Public
Stockholders Meeting and, if it is mailed to the Members, at the time it is
mailed to the Members and at the time of the Members Meeting, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or
B-58
72
necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading. The Proxy Statement
will comply as to form in all material respects with the requirements of the
Exchange Act and the rules and regulations thereunder, except that no
representation or warranty is made by Public, Superholdings or Merger Sub with
respect to statements made or incorporated by reference therein based on
information supplied by the LLC Parties or other parties to Sister Agreements
specifically for inclusion therein.
7.12 Litigation. There are no suits, actions or proceedings pending
against Public or any of its subsidiaries or, to the knowledge of Public,
threatened against Public or any of its subsidiaries, at law or in equity, or
before any federal or state commission, board, agency or instrumentality, that
are likely to have, individually or in the aggregate, a material adverse effect
on Public. There are no outstanding judgments, decrees, injunctions, awards or
orders against Public or any of its subsidiaries that are likely to have,
individually or in the aggregate, a material adverse effect on Public.
7.13 Disclosure. None of the representations or warranties of
Public, Superholdings or Merger Sub contained in this Agreement, the Related
Agreements or the Disclosure Schedules contains any untrue statement of a
material fact or omits to state a material fact herein or therein necessary in
order to make the statements contained herein or therein not misleading in any
material respect.
7.14 Reorganization. Neither Public, Superholdings nor Merger Sub
has knowingly taken, or knowingly failed to take, any action that would
reasonably result in the Parent Merger not qualifying as a transaction described
in Section 351(a) of the Code.
ARTICLE 8
Covenants of the Parties
During the periods from the date of this Agreement and continuing until
the Effective Time, the parties agree that:
8.1 Services Agreement. On the date hereof, the parties will
execute the Services Agreement. The Services Agreement sets forth the terms
pursuant to which Public will manage the LLC's business after HSR Act approval
has been obtained and until the earlier of the Closing Date or the Termination
Date.
8.2 Conduct of Business of LLC Pending Closing. Unless otherwise
expressly contemplated hereby including, without limitation, pursuant to the
terms of the Services Agreement or approved in writing by Public and
Superholdings, each of LLC, LLC Holdings and the Subsidiaries shall conduct
their respective businesses and operations only in, and each of LLC, LLC
Holdings and the Subsidiaries shall not take any action except in, the ordinary
course of their respective businesses and consistent with their respective past
practices. In the conduct
B-59
73
of their respective businesses, each of LLC, LLC Holdings and the Subsidiaries
shall comply with the covenants set forth in Section 4.1(b) (LLC Parties'
Responsibilities).
The LLC Parties shall use reasonable best efforts to:
(a) maintain LLC's, LLC Holdings' and the Subsidiaries'
respective rights and franchises and preserve their respective relationships
with customers, suppliers and others having business dealings with them with the
objective of minimization of the impairment of their respective ongoing
businesses;
(b) preserve, protect and maintain for Public and
Superholdings the good will of LLC's, LLC Holdings' and the Subsidiaries'
respective employees; and
(c) to keep available to Public and Superholdings the present
officers and employees of LLC, LLC Holdings, and the Subsidiaries.
The LLC Parties shall consult with Public and Superholdings on
strategies for maintaining and preserving LLC's, LLC Holdings' and the
Subsidiaries' respective businesses and effecting an orderly transition to
Public and Superholdings' ownership of such businesses.
8.3 Access to Information and Employees. The LLC Parties shall
permit, upon reasonable notice during normal business hours, Public and their
Representatives to visit and inspect any of the properties of LLC, LLC Holdings
and the Subsidiaries, including books and records, and to discuss the affairs,
finances and accounts of LLC, LLC Holdings and the Subsidiaries, and Public's
and Superholdings' prospects, plans and intentions with LLC's, LLC Holdings' and
the Subsidiaries' respective officers, employees, brokers and independent public
accountants, as often as any such person may deem necessary or desirable and
reasonably request. The LLC Parties shall furnish to Public copies of any Phase
1 or other environmental reports relating to the Real Property or the Leased
Premises that are created after the date of this Agreement. The LLC Parties
shall permit Public to conduct, subject to the rights of the lessors thereof, at
Public's sole discretion, environmental investigations and analyses of the Real
Property.
In this Agreement, "Representatives" means, collectively, a party's
directors, officers, employees, stockholders or members (as the case may be),
partners, financial parties in interest, agents, advisors, attorneys,
accountants, consultants, Affiliates, Associates, financing sources and
representatives of any such source, representatives, and any person or entity
being considered for any such role.
8.4 Financial Statements. The LLC Parties shall deliver to Public
and Superholdings not later than the 15th business day of each succeeding month,
financial statements of the kind described in Section 6.2 (Financial
Information) for the month ended July 31, 2000 and each subsequent month before
the Closing.
8.5 Payment of Indebtedness of Related Persons. The Members will
cause all
B-60
74
indebtedness that any of the Members or any of LLC's, LLC Holdings' or the
Subsidiaries' Affiliates owes to LLC, LLC Holdings or any Subsidiary to be paid
in full prior to Closing (other than travel advances in the ordinary course of
business not to exceed $10,000 in the aggregate).
8.6 Records of LLC. On or prior to the Closing Date, the LLC
Parties shall transfer or cause to be transferred to LLC any files, books,
records or other documents relating to the business of LLC, LLC Holdings or any
Subsidiary that are the property of LLC, LLC Holdings or any Subsidiary and that
are possessed by any LLC Party or any Affiliate of any LLC Party and that are
not otherwise possessed by LLC. The LLC Parties may make and retain copies (at
their expense) of any such files, books, records and documents transferred to
LLC.
8.7 Employee Benefit Plans. LLC shall maintain in accordance with
all legal requirements the Employee Benefit Plans and prior to Closing shall
not take any action to terminate or discontinue any such plan without Public's
and Superholdings' prior written consent.
8.8 Tower Payables. The LLC Parties shall cause Tower Company to
assume all existing and future tower payables of LLC and LLC Holdings and shall
cause LLC, LLC Holdings, and Tower Company to inform all vendors to invoice
Tower Company for all such tower payables incurred after June 30, 2000.
ARTICLE 9
Post-Closing Agreements
The Members and Superholdings covenant and agree that after the
Closing:
9.1 Further Actions. Superholdings shall have the right to act in
the name and on the behalf of LLC and LLC Holdings, including, without
limitation, with respect to the execution and performance of such further
instruments of transfer and conveyance, documents and certificates as may be
reasonably requested by Superholdings in order to more effectively convey and
transfer to Superholdings all of the Members' Interests and businesses of LLC,
LLC Holdings and the Subsidiaries, to aid and assist in reducing to possession
or exercising rights with respect to same, or to consummate any of the
transactions contemplated hereby.
The Members shall as promptly as practical after receipt deliver to
Superholdings any cash, checks, mail, packages, notices and other similar
communications of or to LLC, LLC Holdings or the Subsidiaries that any of them
receives. The Members shall endorse in favor of Superholdings any checks or
other instruments of payment that by their terms are payable to the Members but
that are property of LLC, LLC Holdings or the Subsidiaries.
9.2 Cooperation. The Members shall use reasonable best efforts to
aid Superholdings in establishing itself as the new owner and operator of the
businesses of LLC, LLC Holdings and the Subsidiaries and, in connection
therewith, shall use reasonable best efforts to maintain LLC's, LLC Holdings'
and the Subsidiaries' goodwill and reputation with all suppliers,
B-61
75
customers, distributors, creditors and others having business relations with
LLC, LLC Holdings or the Subsidiaries and in the business community generally.
The Members shall cooperate, at Superholdings' expense, and shall cause their
Representatives to cooperate, with Superholdings in connection with
Superholdings' preparation and filing under the Securities Act or Exchange Act
of any registration statement for which the assistance of the LLC Parties or
their respective Representatives is reasonably required.
9.3 Tax Returns. The Members shall file on behalf of LLC (and, if
necessary, on behalf of any other LLC Party), all tax returns for the fiscal
year ended December 31, 2000, by not later than the unextended due date, and all
tax returns for the short period by not later than the unextended due date and
shall provide copies of such returns to Superholdings immediately after the
filing of such returns.
9.4 Access to Information; Confidentiality. The Members and
Superholdings shall afford to the other and their respective Representatives
reasonable access to their respective books and records in order to prepare tax
returns within 30 days after the end of the reporting period therefor and other
governmental filings within reasonable time to permit the timely filing thereof.
9.5 [Intentionally deleted].
9.6 Name. After the Closing, M.R. and S.R. shall have the right
to conduct business under the name "Xxxxxxx Wireless Communications" and all
derivatives thereof.
9.7 Tower Payables. The Members shall cause Tower Company to
assume all existing and future tower payables of LLC and LLC Holdings not
otherwise assumed pursuant to Section 8.8 (Tower Payables) and shall cause Tower
Company to inform all vendors to invoice Tower Company for all such tower
payables incurred after June 30, 2000.
9.8 Reorganization. Following the Closing, Superholdings will not
knowingly take or knowingly permit any of its subsidiaries or Affiliates to take
any action or knowingly fail to take any action that would reasonably cause the
Parent Merger not to qualify as a transaction described in Section 351(a) of the
Code.
9.9 Insurance. Public and Superholdings acknowledge that LLC's
insurance coverage and health insurance are provided under blanket policies
covering other affiliates of LLC not included in this transaction and that such
coverages will be terminated with respect to LLC and LLC Holdings at Closing.
Accordingly, Superholdings will be responsible for providing replacement
coverage effective at the Closing, provided that LLC's coverages shall apply
with respect to insured events occurring prior to the Closing.
ARTICLE 10
B-62
76
Indemnification
10.1 Survival; Etc.
(a) Contents of this Agreement. The representations,
warranties, covenants and agreements made in Superholdings Closing Certificate,
LLC Parties Closing Certificate, and any Disclosure Schedule shall be deemed
representations, warranties, covenants and agreements made herein.
(b) No Effect on Liability. None of (i) the consummation of
the transactions contemplated by this Agreement or the Related Agreements, (ii)
the delay or omission of any party to exercise any of its rights under this
Agreement or any Related Agreement or (iii) any investigation or disclosure that
any party makes, any notice or certificate that any party gives, or any
knowledge that any party obtains as a result thereof, or otherwise, shall (A)
affect the liability of the parties to one another for Breaches of this
Agreement or any Related Agreement or (B) prevent any party from relying on the
representations or warranties contained in this Agreement or any Related
Agreement.
As used herein, a party's "Breach" shall mean any
representation or warranty being untrue when made by such party, any breach of
any of such party's covenants or agreements or any other claim that may be
asserted against such party arising from the document in question or the
transactions contemplated thereby.
(c) Survival. The representations and warranties of Public,
Superholdings, Merger Sub and the Members made in this Agreement or any Related
Agreement shall survive the Closing, subject to the limitations set forth in
Section 10.1(d) (Commencing Actions). The representations and warranties of LLC,
LLC Holdings and Subsidiaries made herein shall be extinguished at the Closing
and LLC, LLC Holdings and Subsidiaries shall each have no liability thereafter
for Breach hereof. Effective at the Closing, the Members waive and release any
claim for Breach of this Agreement or any Related Agreement by LLC, LLC Holdings
or the Subsidiaries, including without limitation any claim for indemnification
or contribution.
(d) Commencing Actions. If the Closing occurs, then any action
against any party hereto for Breaches of this Agreement (other than breaches of
covenants or agreements) occurring on or prior to the time of the Closing that
is not commenced prior to the Closing pursuant to Section 10.7 (Dispute
Resolution) or withheld against pursuant to Section 10.2(d) (Form of Payment;
Interim Losses) shall be deemed waived, and no person shall have any remedy
against any party for any such Breaches; provided, however, (i) if any
Indemnified Party is subject to Losses for Breaches in Sections 6.1(b) (Validity
and Authorization; Power and Authority), 6.3 (Members' Interests), 7.1(b)
(Corporate Power and Authority; Validity and Authorization) or 7.4
(Superholdings Stock) such Indemnified Party may commence an action against the
Indemnifying Party to recover such Losses at any time that such Indemnified
Party is subject to Losses with respect thereto and shall not be barred by the
first clause of this Section and (ii) if any Superholdings Indemnitee is subject
to Losses for Breaches in Section 6.5(b) (Tax Matters), such Superholdings
Indemnitee may commence an action against the Members to
B-63
77
recover such Losses for one year after the Closing Date and shall not be barred
by the first clause of this Section; provided, further, that any such
Indemnified Party shall use reasonable best efforts to obtain for itself and for
the Indemnifying Party the benefit of any statute of limitations applicable as
against any third party.
(e) Materiality. In determining whether (i) a party's
representations and warranties are true and correct in any respect, (ii) a party
has performed any of his, her or its covenants or agreements contained herein or
(iii) a Breach of this Agreement or any Related Agreement has occurred, such
representations, warranties, covenants, agreements and Breaches shall be deemed
to not include any qualification or limitation with respect to materiality
(whether by reference to a "Material Adverse Change," "material adverse effect"
or otherwise). The terms "material," "material adverse effect" and similar terms
(other than Public Material Adverse Change and LLC Material Adverse Change)
shall be construed in the customary manner, but in any event shall mean changes,
effects, events, occurrences, and other matters substantially less in magnitude
than a Public Material Adverse Change in the case of Public, Superholdings or
Merger Sub or an LLC Material Adverse Change in the case of the LLC Parties.
10.2 Indemnities.
(a) Indemnification of Superholdings. Subject to the other
provisions of this Article, before the Closing the LLC Parties jointly and
severally, and after the Closing, the members of LLC Holdings jointly and
severally (collectively, as applicable, the "Member Indemnitors"), shall defend,
indemnify and hold Superholdings and its Affiliates, and their respective
directors, officers, employees, stockholders or members (as the case may be),
agents, advisors, attorneys, accountants, consultants and affiliates
(collectively, the "Superholdings Indemnitees"), harmless from and against, and
promptly reimburse Superholdings Indemnitees for, any loss, expense, damage,
deficiency, liability, claim or obligation, including investigative costs, costs
of defense, settlement costs (subject to approval as provided below) and
attorneys' and accountants' fees (collectively, "Losses") that any Superholdings
Indemnitee suffers or incurs or to which any Superholdings Indemnitee becomes
subject, which Losses arise out of or in connection with (i) any Breach by any
of the LLC Parties of this Agreement, (ii) any claim asserted by any third party
that, assuming the truth thereof, would constitute a Breach by any of the LLC
Parties of this Agreement, (iii) the Cause of Action and all Proceedings or (iv)
all matters listed in the LLC Parties Closing Certificate.
The amount of the Losses payable by such Member Indemnitors shall bear
interest from the date the Losses are incurred at a rate of interest per annum
that shall, from day to day, equal the lesser of (x) the variable rate of
interest published in the "Money Rates" section of the Wall Street Journal (or
the comparable section of such newspaper) as the prime rate of interest on
corporate loans at large United States money center commercial banks and (y) the
maximum rate allowed under applicable law.
Each Member Indemnitor agrees that any liability for indemnification (a
"Member Indemnified Claim") under this Section 10.2(a) shall be borne by the
Member Indemnitors jointly and severally regardless of which Member Indemnitor
is required to make any payments
B-64
78
to a Superholdings Indemnitee for a Member Indemnified Claim pursuant to this
Section 10.2(a). If any Member Indemnitor ("Paying Member Indemnitor") is
required to pay or is held liable for any amount with respect to a Member
Indemnified Claim, each of the other Member Indemnitors (the "Remaining Member
Indemnitors") shall be liable to the Paying Member Indemnitor for, and shall
contribute to and hold the Paying Member Indemnitor harmless from and against,
an amount equal to such Remaining Member Indemnitor's pro rata share of such
liability (based upon the aggregate dollar value of the Per Unit LLC
Consideration and the Per Unit Cash Consideration received by such Remaining
Member Indemnitor pursuant to the Parent Merger), as adjusted to account for a
default by any Member Indemnitor in meeting its obligations hereunder. Such
amount shall be paid within five days of the date any Paying Member Indemnitor
is held liable for, or is required to pay, a Member Indemnified Claim.
(b) Indemnification of the Members. Subject to the other
provisions of this Article before the Closing, Public, and after the Closing,
Superholdings, (the "Superholdings Indemnitors") shall defend, indemnify and
hold the Members harmless from and against, and promptly reimburse them for, any
Losses that the Members incur or to which the Members become subject, which
Losses arise out of or in connection with (i) any Breach by Public,
Superholdings or Merger Sub of this Agreement or (ii) any claim asserted by any
third party that, assuming the truth thereof, would constitute a Breach by
Public, Superholdings or Merger Sub of this Agreement.
The amount of the Losses payable by the Superholdings Indemnitors shall
bear interest from the date the Losses are incurred at a rate of interest per
annum that shall, from day to day, equal the lesser of (x) the variable rate of
interest published in the "Money Rates" section of the Wall Street Journal (or
the comparable section of such newspaper) as the prime rate of interest on
corporate loans at large United States money center commercial banks and (y) the
maximum rate allowed under applicable law.
(c) Contribution. If the indemnification provided for in this
Section 10.2 is unavailable to an indemnified party under Sections 10.2(a)
(Indemnification of Superholdings) or 10.2(b) (Indemnification of the Members)
(other than by reason of exceptions provided in this Article 10) in respect of
any Losses, then each applicable indemnifying party, in lieu of indemnifying
such indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such Losses in such proportion as is
appropriate to reflect the relative fault of the LLC Parties (for Losses arising
prior to the Closing) or the Members (for Losses arising after Closing), on the
one hand, and of Public (for Losses arising prior to the Closing) or
Superholdings (for Losses arising after the Closing), on the other hand, in
connection with the Breaches which resulted in such Losses, as well as any other
relevant equitable considerations.
The LLC Parties, Public and Superholdings agree that it would not be
just and equitable if contribution pursuant to this Section 10.2(c) were
determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to in the
immediately preceding paragraph. Notwithstanding the provisions of this Section
10.2(c), no person guilty of fraudulent misrepresentation shall be entitled to
contribution from
B-65
79
any person who was not guilty of such fraudulent misrepresentation.
(d) Form of Payment; Interim Losses.
(i) Escrow Deposit. Subject to the provisions of this
Section 10.2(d), at the Closing, Superholdings may, after notice to the Members
specifying the factual basis therefor in reasonable detail, collectively
withhold from the aggregate amount of the Per Unit LLC Consideration a number of
shares of Superholdings Stock representing up to $40 million in value (using the
average of the last reported sales prices as reported by The Nasdaq Stock Market
for Public Stock for the 10 days preceding the Closing Date) (the "Escrow
Deposit") to satisfy Losses for which claims of indemnity may have arisen at or
prior to the Closing Date for which Superholdings claims indemnity pursuant to
this Agreement ("Interim Losses").
(ii) Interim Loss Value. In order to quantify the
actual value of the Interim Losses, after the Closing a national accounting
firm, independent of the parties hereto and selected by Superholdings, shall
attempt to estimate the amount of Interim Losses (the "Interim Loss Value"). If
such accounting firm is able to reasonably estimate the amount of each claim
comprising the Interim Loss Value, as a fixed amount or as a range of amounts,
then the amount withheld shall equal the estimated fixed amount(s) and/or the
maximum amount of such estimated range(s) of amounts for each claim comprising
the Interim Loss Value. If such accounting firm is unable, for any reason
whatsoever, to reasonably estimate the amount of any claim comprising the
Interim Loss Value, as a fixed amount or as a range of amounts, then
Superholdings shall have no right to withhold any amount with respect to such
claim.
(iii) Escrow Adjustment. On the third business day
following the date on which the amount of the Interim Loss Value has been
determined pursuant to Section 10.2(d)(ii)(Interim Loss Value), the difference,
if any, between the Interim Loss Value and the Escrow Deposit (the "Escrow
Adjustment") shall be paid in shares of Superholdings Stock (using the average
of the last reported sales prices as reported by The Nasdaq Stock Market for
Public Stock for the 10 days preceding the Closing Date) as follows:
(A) If the amount of the Interim Loss Value
is less than the Escrow Deposit, then the Escrow Agent shall pay and cause to
be paid to the Members the Escrow Adjustment, as provided in the Escrow
Agreement.
(B) If the amount of the Interim Loss Value
is greater than the Escrow Deposit, then the Members shall pay and cause to be
paid to the Escrow Agent the Escrow Adjustment, as provided in the Escrow
Agreement.
(iv) Resolution of Claims. The Escrow Agent shall
hold the Escrow Funds in the Escrow Account until final resolution of the
matters giving rise to the Losses or potential Losses as well as other Losses
that Superholdings subsequently asserts, and then deliver the Escrow Funds in
accordance with such resolution, as provided in the Escrow Agreement.
B-66
80
After such final resolution, the Escrow Agent shall deliver to Superholdings
the Superholdings Stock, together with any dividends or other distributions with
respect thereto, in satisfaction of any liability in accordance with Section
10.2(d)(v) (Satisfaction of Liability). After the distribution to Superholdings,
the Escrow Agent will release the remaining balance of the Escrow Funds not
subject to further claims to the Members, as provided in the Escrow Agreement.
(v) Satisfaction of Liability. After Closing, any
party may satisfy its liability under this Article 10 by (A) delivering shares
of Superholdings Stock valued at the average of the last reported sale prices as
reported by The Nasdaq Stock Market for the 10 days preceding the date of
delivery, together with any dividends or other distributions with respect
thereto or (B) cash payments, at the sole option of such party. If a Member
satisfies its liability by cash payment instead of Superholdings Stock, then the
Escrow Agent shall release to such Member the shares of Superholdings Stock as
determined pursuant to Section 1.2(a)(i) (Superholdings Stock), valued at the
average of the last reported sale prices as reported by The Nasdaq Stock Market
for the 10 days preceding the date of delivery, together with any dividends or
other distributions with respect thereto; provided, however, that Superholdings
and the Members must provide the Escrow Agent with the proper instruments, as
detailed in the Escrow Agreement, as a condition to the Escrow Agent making any
distribution of the Escrow Funds.
(e) Termination Fee. If the Closing fails to occur due to a
Breach by Superholdings, Public or Merger Sub, then the LLC Parties shall be
entitled to receive an aggregate of (i) the total amount of management fees paid
to Public under the Services Agreement plus (ii) any consent fee paid to obtain
consent to the Parent Merger under the Credit Agreement in immediately available
funds (the "Termination Fee") from either Superholdings or Public.
Notwithstanding any other provisions of this Agreement, the receipt of the
Termination Fee shall be the sole and exclusive remedy available to the LLC
Parties for any failure of the Closing due to Breach by Superholdings, Public,
or Merger Sub, and the LLC Parties hereby waive their rights to any other
remedies, whether at law or in equity, for such failure caused by such Breach.
10.3 Limitations on Indemnities.
(a) Basket.
(i) Member Indemnitors. Notwithstanding anything to
the contrary in this Article, after the Closing, the Member Indemnitors shall
not have any obligation to indemnify the Superholdings Indemnitees for Losses
arising from a Breach of this Agreement at or prior to the Closing until the
indemnifiable Losses incurred by the Superholdings Indemnitees or to which the
Superholdings Indemnitees become subject, arising from a Breach of this
Agreement at or prior to the Closing, exceed $1.0 million, at which time the
Member Indemnitors shall indemnify the Superholdings Indemnitees pursuant to
this Article 10 for the full amount of the Losses; provided, however, that the
Member Indemnitors shall indemnify the Superholdings Indemnitees for the full
amount of all Losses incurred by the Superholdings Indemnitees related to a
Breach of (i) Section 6.4(a)(iv) hereof (Notes and Accounts Receivable), (ii)
Section 6.5(b) (Tax Matters) related to sales tax on asset purchase transactions
with Sprint or
B-67
81
its Affiliates, (iii) this Agreement relating to or resulting from the failure
by any Company to perform archaeological studies or surveys with respect to
cellular tower sites without regard to whether such Losses exceed such dollar
amount, or (iv) Section 4.22 (Sprint Payments).
(ii) Superholdings Indemnitors. Notwithstanding
anything to the contrary in this Article, the Superholdings Indemnitors shall
not have any obligation to indemnify the Members for Losses arising from a
Breach of this Agreement at or prior to the Closing until the indemnifiable
Losses incurred by the Members or to which the Members become subject, arising
from a Breach of this Agreement at or prior to the Closing, exceed $1.0 million,
at which time the Superholdings Indemnitors shall indemnify the Members pursuant
to this Article 10 for the full amount of the Losses.
(b) Cap. After the Closing, no Indemnifying Party shall incur
any liability for Losses pursuant to this Article in excess of the aggregate
dollar value (with appropriate reductions for amounts received by such
Indemnifying Party pursuant to Section 10.2(c) (Contribution)) of the Per Unit
LLC Consideration (with each share of Superholdings Stock valued at the average
of the last reported sale prices of a share of Public Stock as reported by The
Nasdaq Stock Market for the ten (10) days preceding the Closing Date) and the
Per Unit Cash Consideration paid or received, as the case may be, by such
Indemnifying Party pursuant to the Parent Merger; provided however, that no
Member Indemnitor shall have any liability for Losses after he has satisfied
Losses by delivering to Indemnified Parties (i) the number of shares of
Superholdings Stock he received as his aggregate Per Unit LLC Consideration and
(ii) cash in an amount equal to his aggregate Per Unit Cash Consideration.
(c) Services Agreement. Notwithstanding anything to the
contrary in this Article 10, the Member Indemnitors shall not have any
obligation to indemnify the Superholdings Indemnitees for Losses to the extent
such Losses have been caused primarily by the actions of Public or any of its
Affiliates under the Services Agreement or by the failure of Public to or any of
its Affiliates take actions under the Services Agreement that would reasonably
be taken in the ordinary course of LLC's business.
(d) Damages. Losses recoverable for breach of this Agreement
shall be limited to actual damages, and no party shall recover consequential,
punitive, lost opportunity or special damages of any nature, regardless of the
nature of such party's claim or such party's theory of liability.
(e) Exclusivity. In the absence of fraud, the indemnification
provisions of this Article 10 shall be the exclusive remedy for any loss,
expense, damage, deficiency, liability, claim or obligation, including
investigative costs, costs of defense, settlement costs (subject to consent as
provided in Section 10.4(b) (Defense Costs)) and attorneys' and accountants'
fees in connection with this Agreement or any Breach hereof.
(f) Indemnification of Escrow Agent. Regarding Section 7
(Indemnification of Escrow Agent) of the Escrow Agreement, (i) the Superholdings
Indemnitors' liability pursuant to Section 7 of the Escrow Agreement shall not
exceed 50% of the aggregate loss, liability or
B-68
82
expenses incurred by the Escrow Agent and (ii) the Member Indemnitors'
aggregate liability pursuant to Section 7 of the Escrow Agreement shall not
exceed 50% of the aggregate loss, liability or expenses incurred by the Escrow
Agent; provided, that, each Member Indemnitors' liability pursuant to Section 7
of the Escrow Agreement shall not exceed, and shall be in proportion to, the
aggregate dollar value of the Per Unit LLC Consideration (with each share of
Superholdings Stock valued at the average of the last reported sale prices of a
share of Public Stock as reported by The Nasdaq Stock Market for the ten (10)
days preceding the Closing Date) and the Per Unit Cash Consideration received by
such Member Indemnitor pursuant to the Parent Merger.
10.4 Notice and Opportunity to Defend.
(a) Notice, Etc. If any party (the "Indemnified Party")
receives notice of any third-party claim or commencement of any third-party
action or proceeding (an "Asserted Liability") with respect to which any other
party (an "Indemnifying Party") is obligated to provide indemnification pursuant
to Section 10.2(a) (Indemnification of Superholdings ) or Section 10.2(b)
(Indemnification of the Members), the Indemnified Party shall promptly give all
Indemnifying Parties notice thereof. The Indemnified Party's failure so to
notify an Indemnifying Party shall not cause the Indemnified Party to lose its
right to indemnification under this Article 10, except to the extent that such
failure materially prejudices the Indemnifying Party's ability to defend against
an Asserted Liability that such Indemnifying Party has the right to defend
against hereunder (and except as otherwise set forth in this Article 10). Such
notice shall describe the Asserted Liability in reasonable detail, and if
practicable shall indicate the amount (which may be estimated) of the Losses
that have been or may be asserted by the Indemnified Party. Each of the
Indemnifying Parties may defend against an Asserted Liability on behalf of the
Indemnified Party utilizing counsel reasonably acceptable to the Indemnified
Party, unless (i) the Indemnified Party reasonably objects to the assumption of
such defense on the grounds that counsel for such Indemnifying Party cannot
represent both the Indemnified Party and such Indemnifying Party because such
representation would be reasonably likely to result in a conflict of interest or
because there may be defenses available to the Indemnified Party that are not
available to such Indemnifying Party, (ii) such Indemnifying Party is not
capable (by reason of insufficient financial capacity, bankruptcy, receivership,
liquidation, managerial deadlock, managerial neglect or similar events) of
maintaining a reasonable defense of such action or proceeding, or (iii) the
action or proceeding seeks injunctive or other equitable relief against the
Indemnified Party.
(b) Defense Costs. If any Indemnifying Party defends an
Asserted Liability, it shall do so at its own expense and shall not be
responsible for the costs of defense, investigative costs, attorney's fees or
other expenses incurred to defend the Asserted Liability (collectively, "Defense
Costs") of the Indemnified Party (which may continue to defend, at its own
expense). Notwithstanding the foregoing, if the person or entity asserting the
Asserted Liability against the Indemnified Party claims or seeks amounts in
excess of the amount set forth in Section 10.3(b) (Cap), then the Indemnifying
Party shall remain liable for the Defense Costs incurred by the Indemnified
Party. If the Indemnified Party assumes the defense of an Asserted Liability by
reason of clauses (i), (ii) or (iii) of subsection (a) above, or because the
Indemnifying Party has
B-69
83
not elected to assume the defense, then such Indemnifying Party shall indemnify
the Indemnified Party for its Defense Costs; provided, however, the Indemnifying
Parties shall not be liable for the costs of more than one counsel for all
Indemnified Parties in any one jurisdiction. An Indemnifying Party may settle
any Asserted Liability only with the consent of the Indemnified Party, which
consent shall not be unreasonably withheld.
(c) Third Party Claims. The parties shall cooperate with each
other with respect to the defense of any claims or litigation made or commenced
by third parties subsequent to the Closing Date arising out of or in connection
with the transactions contemplated by this Agreement or any Related Agreement
and with respect to which indemnification is not available (for any reason)
under this Article 10, provided that the party requesting cooperation shall
reimburse the other party for the other party's reasonable out-of-pocket costs
and expenses of furnishing such cooperation.
10.5 Delays or Omissions, Etc. Except as provided in Section 10.1
(Survival; Etc.) and Section 10.4(a) (Notice, Etc.), no delay or omission to
exercise any right, power or remedy inuring to any party upon any breach or
default of any party under this Agreement or any Related Agreement shall impair
any such right, power or remedy of such party nor shall it be construed to be a
waiver of any such breach or default, or an acquiescence therein, or of or in
any similar breach or default thereafter occurring; nor shall any waiver of any
single breach or default be deemed a waiver of any other breach or default
theretofore or thereafter occurring. Neither the exercise of nor the failure to
exercise any remedy under this Agreement or any Related Agreement will
constitute an election of remedies or limit in any manner enforcement of any
remedies. All remedies either under this Agreement or any Related Agreement or
by law or otherwise afforded to the parties shall be cumulative and not
alternative.
10.6 Governing Law; Attorneys' Fees. This Agreement and the Related
Agreements shall be governed by, construed, interpreted and applied in
accordance with the laws of the State of Texas, without giving effect to any
conflict of laws rules that would refer the matter to the laws of another
jurisdiction.
Subject to Section 10.7 (Dispute Resolution), each party hereto hereby
irrevocably submits to the exclusive jurisdiction of the United States District
Court for the District of Kansas, Kansas City Division and, if such court does
not have jurisdiction, of the courts of the State of Kansas in Wyandotte County,
for the purposes of any action arising out of this Agreement or any of the
Related Agreements, or the subject matter hereof or thereof, brought by any
other party hereto or thereto.
Subject to Section 10.7 (Dispute Resolution), to the extent permitted
by applicable law, each party hereby waives and agrees not to assert, by way of
motion, as a defense or otherwise in any such action, any claim (i) that it is
not subject to the jurisdiction of the above-named courts, (ii) that the action
is brought in an inconvenient forum, (iii) that it is immune from any legal
process with respect to itself or its property, (iv) that the venue of the suit,
action or proceeding is
B-70
84
improper or (v) that this Agreement or any Related Agreement, or the subject
matter hereof or thereof, may not be enforced in or by such courts.
The prevailing party in any action or proceeding relating to this
Agreement or any Related Agreement shall be entitled to recover reasonable
attorneys' fees and other costs from the non-prevailing parties, in addition to
any other relief to which such prevailing party may be entitled.
10.7 Dispute Resolution.
(a) Arbitration. All disputes and controversies of every kind
and nature between the parties hereto arising out of or in connection with this
Agreement (including without limitation this Article 10) or the Related
Agreements as to the construction, validity, interpretation or meaning,
performance, non-performance, enforcement, operation, or breach, shall be
submitted to arbitration pursuant to the following procedures:
(i) Notice. After a dispute or controversy arises,
either party may, in a written notice delivered to the other party, demand such
arbitration. Such notice shall designate the name of the arbitrator (who shall
be an impartial person) appointed by the party demanding arbitration, together
with a statement of the matter in controversy.
(ii) AAA. Within 30 days after receipt of such
demand, the other party shall, in a written notice delivered to the party
demanding arbitration, name such party's arbitrator (who shall be an impartial
person). If such party fails to name an arbitrator, then the second arbitrator
shall be named by the American Arbitration Association (the "AAA"). The two
arbitrators so selected shall name a third arbitrator (who shall be an impartial
person) within 30 days, or in lieu of such agreement on a third arbitrator by
the two arbitrators so appointed, the third arbitrator shall be appointed by the
AAA. If any arbitrator appointed hereunder shall die, resign, refuse, or become
unable to act before an arbitration decision is rendered, then the vacancy shall
be filled by the methods set forth in this Section 10.7(a)(ii) for the original
appointment of such arbitrator.
(iii) Costs. Each party shall bear its own
arbitration costs and expenses. The arbitration hearing shall be held in Kansas
City, Kansas at a location designated by a majority of the arbitrators. The
Commercial Arbitration Rules of the American Arbitration Association shall
govern at such hearing and the substantive laws of the State of Texas (excluding
conflict of laws provisions) shall apply.
(iv) Hearing. The arbitration hearing shall be
concluded within ten days unless otherwise ordered by the arbitrators and the
written award thereon shall be made within 15 days after the close of submission
of evidence. An award rendered by a majority of the arbitrators appointed
pursuant hereto shall be final and binding on all parties to the proceeding,
shall resolve the question of costs of the arbitrators and all related matters,
and judgment on such award may be entered and enforced by either party in any
court of competent jurisdiction.
B-71
85
(v) Complete Defense. Except as set forth in
Section 10.7(b) (Emergency Relief), the parties stipulate that the provisions
of this Section 10.7 shall be a complete defense to any suit, action or
proceeding instituted in any federal, state or local court or before any
administrative tribunal with respect to any controversy or dispute arising out
of this Agreement or any of the Related Agreements. The arbitration provisions
hereof shall, with respect to such controversy or dispute, survive the
termination or expiration of this Agreement or the Related Agreements.
Except in response to a subpoena or other legal process or disclosure
to professional advisors, lenders and investors, neither any party hereto nor
the arbitrators may disclose the existence or results of any arbitration
hereunder without the prior written consent of the other party; nor will any
party hereto disclose to any third party any confidential information disclosed
by any other party hereto in the course of an arbitration hereunder without the
prior written consent of such other party. Notwithstanding the foregoing, the
parties acknowledge that Public or Superholdings may disclose the existence or
results of an arbitration hereunder, as well as information otherwise required
to be disclosed by deposition, subpoena or other court or governmental action in
connection with Public's or Superholdings' obligations under the Exchange Act
and the rules and regulations promulgated thereunder and in connection with
Public's or Superholdings' registration of offerings of securities under the
Securities Act and the rules and regulations promulgated thereunder, other laws,
regulations or stock exchange requirements.
(b) Emergency Relief. Notwithstanding anything in this Section
10.7 to the contrary and subject to the provisions of Section 10.6 (Governing
Law; Attorneys' Fees), either party may seek from a court any provisional remedy
that may be necessary to protect any rights or property of such party pending
the establishment of the arbitral tribunal or its determination of the merits of
the controversy.
(c) Definition of Parties. For purposes of this Section 10.7
only, prior to the Closing, the LLC Parties shall be considered one "party" and
Public, Superholdings and Merger Sub shall be considered one "party" and, after
the Closing, the Members shall be considered one "party" and Public,
Superholdings and LLC shall be considered one "party".
ARTICLE 11
Miscellaneous
11.1 Successors and Assigns. The provisions hereof shall inure to the
benefit of, and be binding upon, the permitted assigns, successors, heirs,
executors and administrators of the parties hereto. This Agreement may not be
assigned without the written consent of Public, Superholdings and the LLC
Parties and any attempted assignment without such consent shall be null and
void; provided, however, each of Public, Superholdings and Merger Sub may assign
any of its rights and obligations hereunder to one of its Affiliates; provided
further, that the LLC Parties may assign their rights to the lenders as
collateral under the Credit Agreement; provided further, that any assignment
hereunder shall not relieve any party of any obligations or liabilities
B-72
86
hereunder.
11.2 Entire Agreement. This Agreement (including the Disclosure
Schedules and Exhibits hereto), the other documents delivered pursuant hereto
and referenced herein constitute the full and entire understanding and agreement
between the parties hereto and supersede any other agreement, written or oral,
with regard to the subject matter hereof. This Agreement supersedes those
certain letters dated May 11, 2000, as amended, among certain of the parties
hereto (the "Letters") and hereby supercedes and replaces in its entirety that
certain previous Agreement and Plan of Reorganization by and among Public,
Superholdings, Merger Sub, LLC and Members dated as of July 31, 2000.
11.3 Amendment. Subject to any applicable provisions of the DGCL,
at any time prior to the Effective Time, the parties hereto may modify or amend
this Agreement by written agreement executed and delivered by duly authorized
officers of the respective parties; provided, however, that after adoption of
this Agreement at the Public Stockholders Meeting, and, if necessary, the
Members Meeting, no amendment shall be made which would reduce the amount or
change the type of consideration into which shares of Public Stock or Members'
Interests shall be converted upon consummation of the Reorganization. This
Agreement may not be modified or amended except by written agreement executed
and delivered by each of the respective parties hereto. Notwithstanding the
foregoing, the merger consideration that the LLC Holdings' members shall receive
can be adjusted if all of the members of LLC Holdings approve of any such
changes.
11.4 Extension; Waiver. At any time prior to the Effective Time,
the parties may (a) extend the time for the performance of any of the
obligations or other acts of the other parties, (b) waive any inaccuracies in
the representations and warranties of the other parties contained in this
Agreement or in any document delivered pursuant to this Agreement, or (c)
subject to Section 11.3 (Amendment), waive compliance with any of the agreements
or conditions of the other parties contained in this Agreement. Any agreement
on the part of a party to any such extension or waiver shall be valid only if
set forth in a written instrument executed and delivered by a duly authorized
officer on behalf of such party. The failure of any party to this Agreement to
assert any of its rights under this Agreement or otherwise shall not constitute
a waiver of such rights.
11.5 Notices, Etc. All notices and other communications required or
permitted hereunder shall be in writing and shall be sent by certified or
registered mail, postage prepaid with return receipt requested, telecopy (with
hard copy delivered by overnight courier service), or delivered by hand,
messenger or overnight courier service, and shall be deemed given when received
at the addresses or telecopy numbers of the parties set forth below, or at such
other address or telecopy number furnished in writing to the other parties
hereto:
If to LLC, LLC Holdings Xxxxxxx Wireless Communications, L.L.C.
0000 Xxxxx Xxxxxxxxxxxx, Xxxxx 000
Xxxxx Xxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
B-73
87
(000) 000-0000 (fax)
with copies to: Xxxxxx X. xxx Xxxxxx, Esq.
Xxxxxxxxx Xxxxxxxx LLP
Xxx Xxxxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxx Xxxxx, Xxxxxxxx 00000
(000) 000-0000 (fax)
If to Public or Merger Sub: Alamosa PCS Holdings, Inc.
0000 X. Xxxx 000
Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxxxxxx,
Chief Executive Officer
(000) 000-0000 (fax)
with copies to: Xxxxxx and Xxxxx, LLP
0000 Xxxxx Xxxxxxx Xxxxxxxxx, Xxxxx 0000
Xxxxxxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx
(000) 000-0000 (fax)
11.6 Third Party Beneficiary, Etc. Except as otherwise specifically
hereinabove provided, there shall be no third party beneficiary hereof. Neither
the availability of, nor any limit on, any remedy hereunder limits the remedies
of any party hereto against third parties.
11.7 Reformation; Severability. In case any provision hereof shall
be invalid, illegal or unenforceable, such provision shall be reformed to best
effectuate the intent of the parties and permit enforcement hereof, and the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby. If such provision is not capable of
reformation, it shall be severed from this Agreement and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
11.8 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one and the same instrument. Any counterpart may be delivered
by facsimile and shall be treated as an original, provided that attachment
thereof shall constitute the representation and warranty of the person
delivering such signature that such person has full power and authority to
attach such signature and to deliver this Agreement.
11.9 Titles and Subtitles. The titles of the paragraphs and
subparagraphs hereof are for
B-74
88
convenience of reference only and are not to be considered in construing this
Agreement. References to "Articles" and "Sections" herein are references to
articles and sections of this Agreement, respectively. The words "herein,"
"hereof," "hereto" 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.
11.10 Confidentiality.
(a) Confidential Information. As used herein, "Confidential
Information" means confidential business information regarding any party hereto
or its Affiliates, including, without limitation, marketing lists used by LLC or
any information identifying the source of, and the process used by LLC to
obtain, such marketing lists; customer lists and files; prices and costs;
business and financial records; information relating to personnel contracts;
stock ownership; liabilities; litigation and the terms of this Agreement or any
Related Agreement and any written analysis or other document reflecting such
information that a party hereto prepared (an "Analysis"). For purposes of this
Section 11.10, the party or parties disclosing Confidential Information are
referred to collectively as the "Disclosing Party" and the party or parties
receiving Confidential Information are referred to collectively as the
"Receiving Party." However, "Confidential Information" shall not include:
(i) any information properly obtained and already in
the possession of the Receiving Party, prior to the execution of the letter
agreement, dated May 11, 2000, as amended, or information available to the
Receiving Party from public records or from other sources in accordance with
law,
(ii) any information that is in the public domain or
subsequently enters the public domain otherwise than through disclosure by the
Receiving Party or any of the Receiving Party's Representatives,
(iii) any information that is independently developed
by or on behalf of the Receiving Party without reference to the Confidential
Information,
(iv) any information that is acquired from a person
(other than Public, Superholdings, Merger Sub or the LLC Parties) not known by
the Receiving Party to be providing such information in breach of a
confidentiality obligation, or
(v) information the release of which has been
approved in writing by the Disclosing Party;
provided, that, further information received by Public, Superholdings or Merger
Sub shall cease to be Confidential Information after the Closing.
(b) Disclosure. The LLC Parties, on the one hand, and Public,
Superholdings, and Merger Sub, collectively on the other, will treat the
Confidential Information disclosed by the other as confidential, will use the
Confidential Information only in connection with their
B-75
89
evaluation of the transactions hereunder, and will not disclose it to others,
except that each party shall have the right to communicate the information to
any of such party's Representatives; provided, that, such Representative is
informed that the Confidential Information is confidential and such
Representative agrees to be bound by the terms of this Section 11.10. The
parties shall be liable for any breach of this Section 11.10 by any of their
Representatives.
The parties acknowledge that Public and Superholdings may disclose
Confidential Information in connection with Public's and Superholdings'
obligations under the Exchange Act and the rules and regulations promulgated
thereunder, and in connection with Public's and Superholdings' registration of
offerings of securities under the Securities Act, and the rules and regulations
promulgated thereunder; provided, however, that prior to any such disclosure of
Confidential Information, Public or Superholdings shall provide LLC with the
opportunity to review and comment, if practicable, upon the disclosure. Any such
disclosures of Confidential Information by Public or Superholdings shall not be
a breach or violation of this Section 11.10.
Each of the LLC Parties acknowledge that (a) it is aware that the
United States securities laws prohibit any person who has material, nonpublic
information about a company from purchasing or selling securities of that
company, or from communicating that information to any other person under
circumstances in which it is reasonably foreseeable that such person is likely
to purchase or sell those securities and (b) it is familiar with the Exchange
Act and the rules and regulations promulgated thereunder, and agrees that it
will neither use, nor cause any third party to use, any Confidential Information
in contravention of the Exchange Act or any such rules and regulations,
including Rules 10b-5 and 14e-3.
If any Receiving Party becomes legally compelled by deposition,
subpoena or other court or governmental action to disclose any of the
Confidential Information, then such Receiving Party will give the Disclosing
Party prompt notice to that effect, and will cooperate with the Disclosing Party
if the Disclosing Party seeks to obtain a protective order concerning the
Confidential Information. The Receiving Party will disclose only such
Confidential Information as its counsel shall advise is legally required.
The parties acknowledge that remedies at law may be inadequate to
protect against breach of this Section 11.10. Each party hereby agrees in
advance to the granting of injunctive relief in the non-breaching party's or
parties' favor without proof of actual damages as a remedy for breach of this
Section 11.10.
Upon termination of this Agreement pursuant to the provisions of
Article 5 (Termination), the Receiving Party will, at the Disclosing Party's
request, return to the Disclosing Party or destroy all originals, copies,
extracts or other reproductions of the Confidential Information that the
Disclosing Party provides, and destroy any Analysis.
11.11 Expenses. Except as otherwise expressly provided herein, each
party hereto will bear its respective expenses (third-party or otherwise)
incurred in connection with the preparation, execution and performance of this
Agreement, the Related Agreements and the transactions contemplated herein or
therein, including without limitation all fees and expenses of
B-76
90
agents, representatives, counsel and accountants. The LLC Parties shall not
utilize assets of LLC to pay such expenses. Notwithstanding the foregoing, LLC
may pay up to $400,000 for the expenses it incurs in connection with this
Agreement for its accountants, attorneys, and fairness opinions plus any filing
fees of the LLC Parties required under the HSR Act.
11.12 Responsibility for Superholdings and Merger Sub. Public shall
be directly responsible for assuring that Superholdings and Merger Sub perform
all of their obligations hereunder.
11.13 Knowledge. Statements herein based on the knowledge of LLC or
LLC Holdings or words of similar import shall mean only the actual knowledge
after due inquiry of S.R., M.R. or K.G.
* * * * *
B-77
91
This Agreement has been executed and delivered as of the date first
written above.
Xxxxxxx Wireless Communications, L.L.C.:
---------------------------------------
By: /s/ Xxxxxxx X. Xxxxxxx
--------------------------
Its: Member
The Members:
-----------
/s/ Xxxxxx X. Xxxxxxx
---------------------
Xxxxxx X. Xxxxxxx
/s/ Xxxxxxx X. Xxxxxxx
----------------------
Xxxxxxx X. Xxxxxxx
Alamosa PCS Holdings, Inc.:
--------------------------
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Chief Executive Officer
Alamosa Holdings, Inc.:
----------------------
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------
Name: Xxxxx X. Xxxxxxxx
Title: President
Alamosa Sub I, Inc.:
-------------------
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------
Name: Xxxxx X. Xxxxxxxx
Title: President
B-78
92
EXHIBIT 1.2(b)
ESCROW AGREEMENT
This Escrow Agreement (the "Escrow Agreement") is dated
_____________________, 2000 by and among Alamosa Holdings, Inc., a Delaware
corporation ("Superholdings"), Xxxxxx X. Xxxxxxx and Xxxxxxx X. Xxxxxxx
(collectively, the "Members") and _______________ the ("Escrow Agent").
RECITALS
A. The parties are entering into this Escrow Agreement pursuant to
Section 1.2(b) of that certain Agreement and Plan of Reorganization (the
"Agreement") dated as of July 31, 2000.
B. All capitalized terms used herein and not otherwise defined in this
Escrow Agreement will have the meanings assigned to them in the Agreement.
AGREEMENT
In consideration of the mutual covenants and agreements herein
contained and in the Agreement, the parties hereby agree as follows:
1. Creation of Escrow Account; Delivery of Funds. An escrow account
designated by Superholdings (the "Escrow Account") has been established by the
Escrow Agent. Superholdings has delivered to the Escrow Agent ________ shares of
Superholdings Stock (the "Escrow Deposit"), and corresponding stock powers, to
be held in the Escrow Account, and the Escrow Agent acknowledges receipt of the
Escrow Deposit pursuant to the terms and conditions of this Escrow Agreement.
2. Escrow Adjustment. The Members may deposit additional shares of
Superholdings Stock with the Escrow Agent pursuant to the terms of the Agreement
(the "Escrow Adjustment") after the date hereof. The aggregate of the Escrow
Deposit and the Escrow Adjustment shall be defined as the "Escrow Funds."
3. Holding Period. The Escrow Agent shall hold the Escrow Funds until
instructed pursuant to (a) instruments delivered to the Escrow Agent, signed by
the Members and Superholdings (each of whom covenant to deliver such instruments
to effectuate the terms of the Agreement) authorizing the Escrow Agent to
distribute all or part of the Escrow Funds in the manner described in the
instruments or (b) a final arbitration decision, pursuant to the terms of
Section 10.7 of the Agreement. The distribution of Escrow Funds shall be made no
later than two business days after receipt by the Escrow Agent of such
instruments or a copy of such arbitration decision.
4. Termination of Escrow. This Escrow Agreement shall terminate upon
the distribution of all Escrow Funds pursuant to the terms hereof.
5. Duties and Responsibilities of Escrow Agent.
5.1 Escrow Funds. By signing this Escrow Agreement, the Escrow
Agent agrees to hold and dispose of any and all Escrow Funds delivered to it in
accordance with the terms of the Escrow Agreement.
B-79
93
5.2 Attachment; Orders. If any property subject hereto is at
any time attached, garnished or levied upon under any arbitration or court
order, or in case the payment, assignment, transfer, conveyance or delivery of
any such property shall be stayed or enjoined by any arbitration or court order,
or in case any order, judgment or decree shall be made or entered by any
arbitrator or court affecting such property or any part thereof, then and in any
of such events, the Escrow Agent is authorized to rely upon and comply with any
such order, writ, judgment or decree which is deemed by any legal counsel of the
Escrow Agent's own choosing to be binding upon it; and if the Escrow Agent
complies with any such order, writ, judgment or decree, it shall not be liable
to any of the parties hereto or to any other person, firm or corporation by
reason of such compliance, even though such order, writ, judgment or decree may
be subsequently reversed, modified, annulled, set aside or vacated.
5.3 No Liabilities. The Escrow Agent shall not be personally
liable for any act taken or omitted hereunder if taken or omitted by it in good
faith and without gross negligence or wilful misconduct. The Escrow Agent also
shall be fully protected in relying upon any written notice, demand, certificate
or document that it believes in good faith to be genuine and effective.
5.4 Documents. The Escrow Agent shall not be responsible for
the sufficiency or accuracy of the form, execution, validity or genuineness of
documents now or hereafter deposited hereunder, or of any endorsement thereon,
or for any lack of endorsement thereon, nor shall it be responsible or liable in
any respect on account of the identity, authority or rights of the persons
executing or delivering or purporting to execute or deliver any such document or
endorsement, or this Escrow Agreement.
5.5 Instruments. The Escrow Agent shall follow all reasonable
instructions contained within instruments executed by the Members and
Superholdings.
6. Fees and Expenses of Escrow Agent. The Escrow Agent's fees for
performance of its duties hereunder are described in Exhibit A. The Escrow
Agent's fees, and any reimbursements owed to the Escrow Agent for out-of-pocket
expenses incurred by it in connection with the performance of such duties, shall
be paid by Superholdings.
7. Indemnification of Escrow Agent. Superholdings and the Members
covenant and agree to jointly and severally indemnify the Escrow Agent and hold
it harmless against any loss, liability or expenses arising out of or in
connection with the performance of its duties hereunder, including but not
limited to, reasonable legal and other fees and expenses, and including
specifically, but without limitation, any legal or other expenses with respect
to any action for interpleader by the Escrow Agent, except that the Escrow Agent
shall not be indemnified against any such loss, liability or expense arising out
of its gross negligence or wilful misconduct. The Escrow Agent shall be under no
obligation to institute or defend any action, suit or legal proceeding in
connection herewith, unless first indemnified and held harmless to its
satisfaction in accordance with the foregoing.
8. Miscellaneous.
8.1. Notices. All notices and other communications required or
permitted hereunder shall be in writing and shall be sent by certified or
registered mail, postage prepaid with return receipt requested, telecopy (with
hard copy delivered by overnight courier service), or delivered by hand,
messenger or overnight courier service, and shall be deemed given when received
at the addresses or telecopy numbers of the parties set forth below, or at such
other address or telecopy number furnished in writing to the other parties
hereto:
B-80
94
If to Superholdings: Alamosa Holdings, Inc.
0000 Xxxxxxxxxx Xxxxxxx
Xxxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxxxxxx, Chief Executive Officer
(000) 000-0000 (fax)
with copies to: Xxxxxx and Xxxxx, LLP
0000 Xxxxx Xxxxxxx Xxxxxxxxx,
Xxxxx 0000
Xxxxxxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx
(000) 000-0000 (fax)
If to the Members: Xxxxxxx Wireless Communications
0000 Xxxxx Xxxxxxxxxxxx, Xxxxx 000
Xxxxx Xxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
(000) 000-0000 (fax)
with copies to: Xxxxxx X. xxx Xxxxxx, Esq.
Xxxxxxxxx Xxxxxxxx LLP
Xxx Xxxxxxxxxxxx Xxxxxx,
Xxxxx 0000
Xxxxx Xxxxx, Xxxxxxxx
(000) 000-0000 (fax)
If to Escrow Agent:
Attention:
(fax)
with copies to:
Attention:
(fax)
8.2 Assignment. Neither this Escrow Agreement nor any of the
parties' rights hereunder shall be assignable without the prior written consent
of the other parties.
8.3 Governing Law. This Escrow Agreement shall be construed in
accordance with the laws of the State of Texas, regardless of the choice of law
provisions of that state or any other jurisdiction.
8.4 Entire Escrow Agreement; Amendments. This Escrow Agreement
constitutes the complete agreement of the parties with respect to the subject
matter hereof. The waiver, amendment
B-81
95
or modification of any provision of this Escrow Agreement or any right, power or
remedy hereunder, shall be effective if (but only if) in writing and signed by
each of the parties hereto.
8.5 Power and Authority. Each of the parties represents and
warrants that such party has full power and authority to execute, deliver and
perform this Escrow Agreement and to take any and all actions necessary with
respect to the Escrow Funds.
8.6 Counterparts. This Escrow Agreement may be executed in one
or more counterparts with all such counterparts constituting one and the same
instrument.
* * * * *
B-82
96
The parties hereto have executed and delivered this Escrow Agreement as
of the day and year first set forth above.
ALAMOSA HOLDINGS, INC.:
By:
Name:
Title:
MEMBERS:
Xxxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxxxx
ESCROW AGENT:
By:
Name:
Title:
B-83
97
EXHIBIT 2.2(a)
LLC PARTIES CLOSING CERTIFICATE
This LLC Parties Closing Certificate (the "Certificate") is delivered
pursuant to Section 2.2(a) (Closing Certificate) of that certain Agreement and
Plan of Reorganization (the "Agreement") entered into as of July 31, 2000, by
and among Alamosa PCS Holdings, Inc., a Delaware corporation ("Public"), Alamosa
Holdings, Inc., a Delaware corporation ("Superholdings"), Alamosa Sub I, Inc., a
Delaware corporation and wholly-owned direct subsidiary of Superholdings
("Merger Sub"), and Xxxxxxx Wireless Communications, L.L.C., a Missouri limited
liability company ("LLC"), and members of LLC (the "Members"). LLC (prior to
Closing), LLC Holdings (when formed but prior to Closing) and the Members are
sometimes collectively referred to herein as the "LLC Parties". All capitalized
terms used herein and not otherwise defined in this Certificate will have the
meanings assigned to them in the Agreement.
The undersigned hereby certify, and represent and warrant to Public,
Superholdings and Merger Sub as follows:
1. Representations and Warranties. Except as set forth on the Schedule
to this Certificate, the LLC Parties' representations and warranties made in the
Agreement or any Related Agreement were true and correct in all respects at the
Closing Date, except as affected by the transactions contemplated by the
Agreement and except as did not and will not constitute an LLC Material Adverse
Change.
2. Covenants. Except as set forth on the Schedule to this Certificate,
the LLC Parties, in all respects, have performed each agreement, and have
complied with each covenant, to be performed or complied with by them, or any of
them, on or prior to the Closing Date under the Agreement or any Related
Agreement except as has not constituted and will not constitute an LLC Material
Adverse Change.
3. No Litigation. Except as set forth on the Schedule to this
Certificate, no action, suit or proceeding (other than such an action, suit or
proceeding directly or indirectly instituted by a party to the Agreement) is
threatened or pending, and no preliminary or permanent injunction, order, decree
or ruling is in effect, seeking to restrain or prohibit, or to obtain damages or
other relief in connection with, the execution and delivery of the Agreement,
any Related Agreement or the consummation of the transactions contemplated by
any of the foregoing, except as has not constituted and will not constitute an
LLC Material Adverse Change.
4. No LLC Material Adverse Change. No LLC Material Adverse Change has
occurred.
* * * * *
B-84
98
SCHEDULE:
B-85
99
Executed as of _______________ ____, 2000.
Xxxxxxx Wireless Communications, L.L.C.
By:
Name:
Title:
The Members:
Name: Xxxxxx X. Xxxxxxx
Name: Xxxxxxx X. Xxxxxxx
B-86
100
EXHIBIT 2.2(e)
Form of Opinion of LLC Parties' Counsel
1. Each of the Companies is a limited liability company duly organized and
validly existing under the laws of the State of Missouri. Each of the Companies
has all requisite power and authority to own, lease and operate all properties
and assets owned or leased by it and to conduct its business as previously and
currently conducted by it. Each of the Companies is qualified to do business in
each jurisdiction in which it is required to be so qualified, except where the
lack of such qualification would not have a material adverse effect on such
Company.
2. Each of the Companies has full power and authority to consummate the Parent
Merger and to execute, deliver and perform the Agreement, the Related Agreements
and the other instruments called for therein to which it is a party.
3. The Agreement and the Related Agreements have been duly authorized, executed
and delivered by each of the Companies and, upon obtaining the Members Required
Vote, will constitute (or, in the case of Related Agreements or instruments
called for by the Agreement or the Related Agreements, to be executed by such
Company at or before the Closing, upon execution will constitute) the legal,
valid and binding obligation of such Company, enforceable against such Company
in accordance with their terms.
4. Each of the Members has full requisite power and authority (or if a natural
person, capacity) to execute, deliver and perform the Agreement, the Related
Agreements and the other instruments called for therein to which such Member is
a party. The Agreement, the Related Agreements and the other instruments called
for therein to which such Member is a party have been duly executed and
delivered by each of the Members and constitute (or, in the case of Related
Agreements or instruments called for in the Agreement, to be executed by the
Member at or before the Closing, will constitute) the legal, valid and binding
obligation of the Member, enforceable against the Member in accordance with
their terms.
5. Each of the Companies is the holder of record of all of the issued and
outstanding shares of capital stock or interests, as appropriate, of its
Subsidiaries free and clear of any Liens.
6. The Members' Interests of LLC consist of 20,000 units and no preferred units.
There are no other equity interests of LLC either authorized or outstanding. All
of the issued and outstanding units have been duly authorized and validly
issued, are fully paid and nonassessable and are free and clear of any
preemptive rights. No certificates have been issued to represent the Members'
Interests in LLC. There are no outstanding preemptive, conversion or other
rights, or other options, warrants or agreements granted by, issued by, or
binding upon, LLC for the issuance, sale, purchase, repurchase, redemption,
acquisition or other transfer of its equity securities.
B-87
101
7. Each Member is the holder of record of the units set forth in the Agreement.
To our knowledge, no Member is a party to any contract, agreement or
understanding (other than the Agreement) relating to the issuance, sale,
redemption, purchase, repurchase, acquisition or other transfer or voting of any
units of Members' Interests or any other equity security of any Company, other
than LLC's operating agreement.
8. The Members' Interests of LLC Holdings consists of 20,000 units and no
preferred units. There are no other equity interests of LLC Holdings either
authorized or outstanding pursuant to LLC's certificate of formation or
organizational agreements. All of the issued and outstanding units are duly
authorized and validly issued, fully paid and nonassessable and free and clear
of any preemptive rights. No certificates were issued to represent the Members'
Interests in LLC Holdings. There are no outstanding preemptive, conversion or
other rights, or other options, warrants or agreements granted by, issued by, or
binding upon, LLC Holdings for the issuance, sale, purchase, repurchase,
redemption, acquisition or other transfer of its equity securities pursuant to
LLC's certificate of formation or organizational agreements.
9. The formation of LLC Holdings transferred all of the Members' Interests of
LLC to LLC Holdings free and clear of Liens. Consummation of the transactions
contemplated by the Agreement will transfer to Superholdings all of the Members'
Interests of LLC Holdings free and clear of Liens.
10. The transactions contemplated by the Agreement do not conflict with any
provisions of the Contracts (as such term is defined in Section 6.4(d)(i)
(Definition) of the Agreement), except as listed on the exhibit hereto. Except
as specified on the Disclosure Schedule to Section 6.1(e) (LLC Parties Consents
Required), the transactions contemplated by the Agreement do not require any
consents. Notwithstanding the foregoing, the consents of Sprint, DLJ and Lucent
are sufficient such that the Sprint, DLJ and Lucent contracts do not otherwise
conflict with the transactions contemplated by the Agreement.
11. To our knowledge, there are no Proceedings or Orders.
12. No state takeover statute is applicable to any Company in connection with
the Agreement, the Parent Merger or the other transactions contemplated thereby.
B-88
102
EXHIBIT 2.2(f)
TOWER CLOSING CERTIFICATE
This Tower Closing Certificate (the "Certificate") is delivered
pursuant to Section 2.2(f) (Tower Closing Certificate) of that certain Agreement
and Plan of Reorganization (the "Agreement") entered into as of July 31, 2000,
by and among Alamosa PCS Holdings, Inc., a Delaware corporation ("Public"),
Alamosa Holdings, Inc., a Delaware corporation ("Superholdings"), Alamosa Sub I,
Inc., a Delaware corporation and wholly-owned direct subsidiary of Superholdings
("Merger Sub"), and Xxxxxxx Wireless Communications, L.L.C., a Missouri limited
liability company ("LLC"), and members of LLC (the "Members"). LLC (prior to
Closing), LLC Holdings (when formed but prior to Closing) and the Members are
sometimes collectively referred to herein as the "LLC Parties." All capitalized
terms used herein and not otherwise defined in this Certificate will have the
meanings assigned to them in the Agreement.
The undersigned hereby certifies, represents and warrants to Public,
Superholdings and Merger Sub as follows:
1. Representations and Warranties. The undersigned hereby makes the LLC
Parties' representations and warranties made in Section 6.6(h) (Environmental
Matters) of the Agreement as if the undersigned were one of the LLC Parties on
the date of the Agreement and had entered into the Agreement on such date.
2. Liabilities. The undersigned hereby acknowledges and expressly
assumes all liabilities of the LLC Parties with respect to the foregoing
representations and warranties including, but not limited to, the
indemnification and other obligations of any or all of the LLC Parties contained
in Article 10 (Indemnification) of the Agreement, with the further express
acknowledgment that if any Indemnified Party is subject to Losses for Breaches
in this Certificate, such Indemnified Party may commence an action against the
undersigned to recover such Losses at any time that such Indemnified Party is
subject to Losses with respect thereto and shall not be barred by the first
clause of Section 10.1(d) (Commencing Actions) of the Agreement.
* * * * *
B-89
103
Executed as of _________________________, 2000.
XXXXXXX TOWER COMPANY:
By:
Name:
Title:
B-90
104
EXHIBIT 2.3(a)
SUPERHOLDINGS CLOSING CERTIFICATE
This Superholdings Closing Certificate (the "Certificate") is delivered
pursuant to Section 2.3(a) (Closing Certificate) of that certain Agreement and
Plan of Reorganization (the "Agreement") entered into as of July 31, 2000, by
and among Alamosa PCS Holdings, Inc., a Delaware corporation ("Public"), Alamosa
Holdings, Inc., a Delaware corporation ("Superholdings"), Alamosa Sub I, Inc., a
Delaware corporation and wholly-owned direct subsidiary of Superholdings
("Merger Sub"), and Xxxxxxx Wireless Communications, L.L.C., a Missouri limited
liability company ("LLC"), and members of LLC (the "Members"). LLC (prior to
Closing), LLC Holdings (when formed but prior to Closing) and the Members are
sometimes collectively referred to herein as the "LLC Parties." All capitalized
terms used herein and not otherwise defined in this Certificate will have the
meanings assigned to them in the Agreement.
The undersigned hereby certify, and represent and warrant to the LLC
Parties as follows:
1. Representations and Warranties. Except as set forth on the Schedule
to this Certificate, the representations and warranties made in the Agreement by
Superholdings, Public and Merger Sub were true and correct in all respects at
the Closing Date, except as affected by the transactions contemplated by the
Agreement or except as did not have a Public Material Adverse Change at the
Closing and will not have a Public Material Adverse Change after the Closing.
2. Covenants. Except as set forth on the Schedule to this Certificate,
each of Superholdings, Public and Merger Sub, in all respects, have performed
each agreement, and have complied with each covenant to be performed or complied
with by it on or prior to the Closing Date under the Agreement or any Related
Agreement, except as has had a Public Material Adverse Change at the Closing and
will not have a Public Material Adverse Change after the Closing.
3. No Litigation. Except as set forth on the Schedule to this
Certificate, no action, suit or proceeding (other than such an action, suit or
proceeding directly or indirectly instituted by a party to the Agreement) is
threatened or pending, and no preliminary or permanent injunction, order, decree
or ruling is in effect, seeking to restrain or prohibit, or to obtain damages or
other relief in connection with, the execution and delivery of the Agreement,
any Related Agreement or the consummation of the transactions contemplated by
any of the foregoing, except as has not constituted and will not constitute an
LLC Material Adverse Change.
4. No Public Material Adverse Change. No Public Material Adverse Change has
occurred.
* * * * *
B-91
105
Executed as of _______________ ____, 2000.
Alamosa Holdings, Inc:
By:
Name:
Title:
Alamosa PCS Holdings, Inc:
By:
Name:
Title:
Alamosa Sub I, Inc.:
By:
Name:
Title:
B-92
106
EXHIBIT 2.3(d)
Form of Opinion of Public's, Superholdings' and Merger Sub's Counsel
1. Each of Public, Superholdings and Merger Sub is a corporation duly and
validly existing under the laws of the State of Delaware and is in good standing
under such laws. Superholdings owns, beneficially and of record, all of the
issued and outstanding shares of capital stock of Merger Sub.
2. Each of Public, Superholdings and Merger Sub has full corporate power and
authority to execute, deliver and perform the Agreement and the Related
Agreements. The Agreement has been duly authorized, executed and delivered by
each of Public, Superholdings and Merger Sub. Upon approval by their respective
stockholders, the Agreement will be enforceable against Public, Superholdings
and Merger Sub, in accordance with its terms.
3. When the Related Agreements to which each of Public, Superholdings and Merger
Sub is a party are delivered at the Closing, and upon approval of the Related
Agreements by the respective stockholders of Public, Superholdings and Merger
Sub, such agreements will have been duly authorized, executed and delivered by
Public, Superholdings and Merger Sub, and will constitute the legal, valid and
binding obligations of Public, Superholdings and Merger Sub, enforceable against
Public, Superholdings and Merger Sub in accordance with their terms.
4. The authorized capital stock of Public consists (i) of 95,000,000 shares of
Public Stock, of which 61,354,606 shares were issued and outstanding as of April
20, 2000 and (ii) 5,000,000 shares of preferred stock, par value $.01 per share,
of which no shares were issued and outstanding as of April 20, 2000. All of the
issued and outstanding shares of Public Stock have been duly authorized and
validly issued, are fully paid and nonassessable and are free and clear of any
preemptive rights.
5. The authorized capital stock of Superholdings immediately prior to the
Closing will consist (i) of at least 290,000,000 shares of Superholdings Stock
and (ii) at least 10,000,000 shares of preferred stock, par value $0.01 per
share. All of the issued and outstanding shares of Superholdings Stock will have
been duly authorized and validly issued, fully paid and nonassessable and free
and clear of any preemptive rights.
6. The shares of Superholdings Stock, when issued, sold and delivered in
accordance with the terms of the Agreement will be duly and validly issued,
fully paid and nonassessable and issued free and clear of any Liens.
X-00
000
XXXXXXX 0.0(x)(x), (xx), (xxx)
MEMBER AGREEMENT
This Member Agreement (the "Member Agreement") is delivered pursuant to
Sections 1.2(c) (Consideration Subject to Agreements), 2.4(b)(i) (Lock-Up
Agreement), 2.4(b)(ii) (Indemnity Agreement) 2.4(b)(iii) (Members' Releases) and
10.2 (Indemnities) of that certain Agreement and Plan of Reorganization (the
"Agreement") entered into as of July 31, 2000, by and among Alamosa PCS
Holdings, Inc., a Delaware corporation ("Public"), Alamosa Holdings, Inc., a
Delaware corporation ("Superholdings"), Alamosa Sub I, Inc., a Delaware
corporation and wholly-owned direct subsidiary of Superholdings ("Merger Sub"),
and Xxxxxxx Wireless Communications, L.L.C., a Missouri limited liability
company ("LLC"), and members of LLC (the "Members"). All capitalized terms used
herein and not otherwise defined in this Certificate will have the meanings
assigned to them in the Agreement. The parties hereto agree as follows:
1. Lock-Up. Each of the undersigned hereby covenants to Public and
Superholdings that before September 30, 2001, the undersigned will not, without
the prior written consent of Superholdings, offer, sell, contract to sell,
pledge or otherwise dispose of, (or enter into any transaction which is designed
to, or might reasonably be expected to, result in the disposition (whether by
actual disposition or effective economic disposition due to cash settlement or
otherwise) of the undersigned's holdings of Superholdings Stock) or establish or
increase a put equivalent position or liquidate or decrease a call equivalent
position within the meaning of Section 16 of the Securities Exchange Act of
1934, as amended, and the rules and regulations of the Securities and Exchange
Commission promulgated thereunder, with respect to any Superholdings Stock, or
any securities convertible into, or exercisable or exchangeable for,
Superholdings Stock, or publicly announce an intention to effect any such
transaction, other than (a) shares of Superholdings Stock disposed of as bona
fide gifts to persons who also enter into lock-up agreements in the form hereof
and (b) shares of Superholdings Stock acquired other than pursuant to the
Reorganization. This Section 1 of this Member Agreement is the "Lock-Up
Agreement" referred to in the Agreement.
2. Registration Provisions.
(a) Certain Information. The undersigned Member hereby covenants to
provide to Public and Superholdings the information required by the Form S-1, as
provided by Section 4.2(c) (Form S-1) of the Agreement, as is reasonably
requested by Public or Superholdings as soon as possible, but no later than five
business days after the date of such request. In addition, the undersigned
Member hereby covenants that none of the information supplied or to be supplied
by the undersigned Member specifically for inclusion in the Form S-1 will, at
the time the Form S-1 is filed with the SEC, at any time that such form is
amended or supplemented and at the time it becomes effective or remains in
effect under the Securities Act, 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 not misleading. Notwithstanding the foregoing, if
the undersigned Member becomes aware, at any time, of any untrue statement of a
material fact or omission of any material fact required to be stated in the Form
S-1 (or other appropriate
B-94
108
registration statement form), then the undersigned Member shall promptly notify
Public and Superholdings of such untrue statement, pursuant to Section 11.5
(Notices, Etc.) of the Agreement.
(b) Blackout. The undersigned member hereby agrees that if
Superholdings furnishes to the undersigned member a notice signed by the
President of Superholdings stating that Superholdings has determined in good
faith that it would be seriously detrimental to Superholdings and its
stockholders for the Form S-1 to be filed (or remain in effect) and it is
therefore essential to defer the filing of such Form S-1 (or temporarily suspend
the effectiveness of such registration statement or use of the related
prospectus) (a "Blackout Notice"), then Superholdings shall have the right (i)
immediately to defer such filing for a period of not more than sixty (60) days
beyond the date by which such Form S-1 was otherwise planned to be filed or (ii)
suspend such effectiveness for a period of not more than sixty (60) days (any
such deferral or suspension period of up to sixty (60) days, a "Blackout
Period"). The undersigned member agrees to cease any disposition during such
Blackout Period of the Superholdings Stock received by the undersigned member in
connection with the Reorganization. Superholdings may not utilize any of its
rights under this Section 2 of this Member Agreement to defer the filing of the
Form S-1 (or suspend the effectiveness of the Form S-1) more than twice in any
twelve (12) month period.
3. Indemnity. Each of the undersigned hereby agrees to be bound by all
of the provisions of Article 10 of the Agreement (Indemnification), and the
direct and indirect owners of the undersigned's Members' Interests (who are
signatories below) shall also be so bound to the extent that they receive any
merger consideration or proceeds thereof. This Section 2 of this Member
Agreement is the "Indemnity Agreement" referred to in the Agreement.
4. Intent to Sell. The undersigned hereby agrees that it has no plan or
intention to sell, exchange, transfer or otherwise dispose of any of the
Superholdings Stock received by such undersigned member in connection with the
Reorganization.
5. Releases. Superholdings hereby releases on its own behalf any and
all claims held or to be held by Superholdings against LLC, LLC Holdings, and
their successors, assigns, officers, directors, employees and agents, after the
Closing. Each of the undersigned hereby releases any and all claims held or to
be held by the undersigned member against LLC, LLC Holdings, and their
successors, assigns, officers, directors, employees and agents, but excluding
any claims each of the undersigned may have to unpaid compensation and benefits.
Each of the undersigned hereby agrees to be released from any obligation under
the operating agreements of LLC or LLC Holdings. This Section 5 of this Member
Agreement is the "Members Releases" referred to in the Agreement.
6. Consideration. Each of the undersigned hereby acknowledges that the
consideration received by him pursuant to the Agreement represents the amount of
consideration he is entitled to receive under the operating agreements of LLC
and LLC Holdings and satisfies
B-95
109
in full any and all claims held or to be held by him with respect to his
membership interests in LLC and LLC Holdings.
7. Deliveries. Each of the undersigned shall deliver their respective
holdings of Superholdings Stock, and corresponding stock powers, to the Escrow
Agent, if applicable, in accordance with the Escrow Agreement and Section 10.2
(Indemnities) of the Agreement.
Executed as of _______________ ____, 2000.
* * * * *
X-00
000
XXXXXXX HOLDINGS, INC.
By:
Name:
Title:
THE MEMBERS:
Name: Xxxxxx X. Xxxxxxx
Name: Xxxxxxx X. Xxxxxxx
B-97
