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Exhibit 2.1
AGREEMENT AND PLAN OF MERGER
By and Among
US UNWIRED INC.,
NORTHEAST UNWIRED INC.
and
IWO HOLDINGS, INC.
dated as of
December 19, 2001
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TABLE OF CONTENTS
ARTICLE I
THE MERGER
Section 1.01. The Merger..................................................... 1
Section 1.02. Closing; Closing Date; Effective Time.......................... 1
Section 1.03. Effect of the Merger........................................... 2
Section 1.04. Certificate of Incorporation; Bylaws........................... 2
Section 1.05. Directors and Officers......................................... 2
ARTICLE II
CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES
Section 2.01. Merger Consideration; Conversion and Cancellation of Securities 2
Section 2.02. Exchange and Surrender of Certificates......................... 3
Section 2.03. Options and Warrants to Purchase IWO Common Stock.............. 4
Section 2.04. Dissenting Stockholders........................................ 5
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF IWO
Section 3.01. Organization and Qualification; Subsidiaries................... 6
Section 3.02. Charter and Bylaws............................................. 6
Section 3.03. Capitalization................................................. 6
Section 3.04. Authority...................................................... 8
Section 3.05. No Conflict; Required Filings and Consents..................... 8
Section 3.06. Permits; Compliance............................................ 9
Section 3.07. Reports; Financial Statements.................................. 9
Section 3.08. Absence of Certain Changes or Events........................... 10
Section 3.09. Absence of Litigation.......................................... 10
Section 3.10. IWO Employee Benefit Plans; Labor Matters...................... 10
Section 3.11. Taxes.......................................................... 12
Section 3.12. Tax Matters.................................................... 13
Section 3.13. Opinion of Financial Advisor................................... 13
Section 3.14. Environmental Matters.......................................... 13
Section 3.15. Takeover Statutes.............................................. 14
Section 3.16. Brokers........................................................ 14
Section 3.17. Insurance...................................................... 14
Section 3.18. Properties..................................................... 15
Section 3.19. Leases......................................................... 15
Section 3.20. No Undisclosed Liabilities..................................... 15
Section 3.21. Certain Contracts.............................................. 15
Section 3.22. Distributors and Suppliers..................................... 17
Section 3.23. Sprint Agreement Compliance.................................... 17
Section 3.24. Intellectual Property.......................................... 18
Section 3.25. Related Party Transactions..................................... 18
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF USU
Section 4.01. Organization and Qualification............ 19
Section 4.02. Charter and Bylaws........................ 19
Section 4.03. Capitalization............................ 19
Section 4.04. Authority................................. 20
Section 4.05. No Conflict; Required Filings and Consents 21
Section 4.06. Permits; Compliance....................... 21
Section 4.07. Reports; Financial Statements............. 22
Section 4.08. Absence of Certain Changes or Events...... 22
Section 4.09. Absence of Litigation..................... 22
Section 4.10. USU Employee Benefit Plans; Labor Matters. 23
Section 4.11. Taxes..................................... 23
Section 4.12. Tax Matters............................... 24
Section 4.13. Environmental Matters..................... 24
Section 4.14. Brokers................................... 25
Section 4.15. Takeover Statutes......................... 25
Section 4.16. Insurance................................. 25
Section 4.17. Properties................................ 25
Section 4.18. Leases.................................... 25
Section 4.19. No Undisclosed Liabilities................ 26
Section 4.20. Certain Contracts......................... 26
Section 4.21. Distributors and Suppliers................ 27
Section 4.22. Sprint Agreement Compliance............... 28
Section 4.23. Intellectual Property..................... 28
Section 4.24. Related Party Transactions................ 29
Section 4.25. Merger Sub................................ 29
ARTICLE V
COVENANTS
Section 5.01. Affirmative Covenants of USU and IWO...... 29
Section 5.02. Negative Covenants of IWO................. 29
Section 5.03. Negative Covenants of USU................. 31
Section 5.04. Access and Information.................... 33
Section 5.05. FCC Compliance............................ 33
ARTICLE VI
ADDITIONAL AGREEMENTS
Section 6.01. Meetings of Stockholders.................. 34
Section 6.02. Registration Statement; Proxy Statements.. 34
Section 6.03. Appropriate Action; Consents; Filings..... 35
Section 6.04. Affiliates................................ 37
Section 6.05. Tax Treatment............................. 37
Section 6.06. Public Announcements...................... 37
Section 6.07. Nasdaq Listing............................ 37
Section 6.08. IWO Stockholders Agreements............... 37
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Section 6.09. Employee Benefit Plans..................................... 37
Section 6.10. Rule 16b-3................................................. 38
Section 6.11. Merger Sub................................................. 38
Section 6.12. Indemnification and Insurance.............................. 38
Section 6.13. Post-Merger Directors and Management....................... 38
Section 6.14. Supplemental Warrant Agreement; Warrant Notices............ 40
Section 6.15. Registration Rights Agreements............................. 40
Section 6.16. Lock-Up Agreements......................................... 40
Section 6.17. Support Agreements; Standstill Agreement................... 41
Section 6.18. Conversion to USU Common Stock............................. 42
Section 6.19. Communications Act Compliance.............................. 42
Section 6.20. Subsequent SEC Reports..................................... 42
Section 6.21. Warrant Cancellation Agreements............................ 42
ARTICLE VII
CONDITIONS
Section 7.01. Conditions to Obligations of Each Party.................... 42
Section 7.02. Additional Conditions to Obligations of the USU Companies.. 43
Section 7.03. Additional Conditions to Obligations of IWO................ 44
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
Section 8.01. Termination................................................ 45
Section 8.02. Effect of Termination...................................... 46
Section 8.03. Amendment.................................................. 46
Section 8.04. Waiver..................................................... 46
Section 8.05. Fees, Expenses and Other Payments.......................... 46
ARTICLE IX
GENERAL PROVISIONS
Section 9.01. Effectiveness of Representations, Warranties and Agreements 47
Section 9.02. Notices.................................................... 47
Section 9.03. Certain Definitions........................................ 48
Section 9.04. Headings................................................... 50
Section 9.05. Severability............................................... 50
Section 9.06. Entire Agreement........................................... 50
Section 9.07. Assignment................................................. 50
Section 9.08. Parties in Interest........................................ 50
Section 9.09. Specific Performance....................................... 50
Section 9.10. Failure or Indulgence Not Waiver; Remedies Cumulative...... 50
Section 9.11. Governing Law; Consent Jurisdiction; Venue................. 50
Section 9.12. Waiver of Trial by Jury.................................... 51
Section 9.13. Counterparts............................................... 51
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Exhibit A Form of IWO Affiliate's Agreement
Exhibit B Form of USU Support Agreement
Exhibit C Form of IWO Support Agreement
Exhibit D Form of Registration Rights Agreement
Exhibit E Form of Standstill Agreement
Exhibit F Form of Warrant Exchange Agreement
Exhibit G Form of Xxxxxxx Warrant Exchange Agreement
Exhibit H Form of Warrant Cancellation Agreement
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER, dated as of December 19, 2001 (this
"Agreement"), is by and among US Unwired Inc., a Louisiana corporation ("USU"),
Northeast Unwired Inc., a Delaware corporation and wholly owned indirect
subsidiary of USU ("Merger Sub"), and IWO Holdings, Inc., a Delaware
corporation ("IWO"). USU and Merger Sub are sometimes referred to herein as the
"USU Companies."
WHEREAS, Merger Sub, upon the terms and subject to the conditions of this
Agreement and in accordance with the General Corporation Law of the State of
Delaware ("Delaware Law"), will merge with and into IWO (the "Merger");
WHEREAS, the respective boards of directors of IWO and USU have determined
that the Merger is fair to, and in the best interests of, it and its
stockholders and have approved and adopted this Agreement and the transactions
contemplated hereby;
WHEREAS, as an inducement to USU and IWO entering into this Agreement,
certain stockholders of USU and IWO, respectively, are simultaneously with the
execution and delivery of this Agreement entering into Support Agreements in
the forms of Exhibit B hereto (the "USU Support Agreement") or Exhibit C hereto
(the "IWO Support Agreement"), respectively;
WHEREAS, USU has agreed to enter into an agreement with certain stockholders
of IWO pursuant to which USU will grant certain rights to such stockholders
regarding the registration of the common stock, $0.01 par value per share, of
USU (the "USU Common Stock") to be received by them in the Merger;
WHEREAS, for federal income tax purposes, it is intended that the Merger
qualify as a reorganization under the provisions of Section 368(a) of the
United States Internal Revenue Code of 1986, as amended (the "Code"); and
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth in this
Agreement, the parties hereto agree as follows:
ARTICLE I
THE MERGER
Section 1.01. The Merger.
Upon the terms and subject to the conditions set forth in this Agreement,
and in accordance with Delaware Law, at the Effective Time (as defined in
Section 1.02 of this Agreement), Merger Sub shall be merged with and into IWO,
whereby the separate corporate existence of Merger Sub shall cease and IWO
shall continue as the surviving corporation (the "Surviving Corporation"). The
name of the Surviving Corporation shall be Northeast Unwired Inc.
Section 1.02. Closing; Closing Date; Effective Time.
The consummation of the Merger and the closing of the transactions
contemplated by this Agreement (the "Closing") shall take place at the offices
of Xxxxxx & Xxxxxx L.L.P., 0000 Xxxxxx, Xxxxxxx, Xxxxx as soon as practicable
(but in any event within two business days) after the satisfaction or, if
permissible, waiver of the conditions set forth in Article VII, or at such
other date, time and place as USU and IWO may agree in writing (the date of the
Closing being the "Closing Date"). As promptly as practicable on the Closing
Date, the parties hereto shall cause the Merger to be consummated by filing a
Certificate of Merger with the Secretary of State of the State of Delaware, in
such form as required by, and executed in accordance with, the relevant
provisions of, Delaware Law (the time of such filing being the "Effective
Time").
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Section 1.03. Effect of the Merger.
At the Effective Time, the effect of the Merger shall be as provided in the
applicable provisions of Delaware Law. Without limiting the generality of the
foregoing, and subject thereto, at the Effective Time, all the property,
rights, privileges, powers and franchises of IWO and Merger Sub shall continue
with, or vest in, as the case may be, the Surviving Corporation, and all debts,
liabilities and duties of IWO and Merger Sub shall continue to be, or become,
as the case may be, the debts, liabilities and duties of the Surviving
Corporation. As of the Effective Time, the Surviving Corporation shall be a
direct wholly-owned subsidiary of USU.
Section 1.04. Certificate of Incorporation; Bylaws.
At the Effective Time, the certificate of incorporation and bylaws of the
Surviving Corporation shall be the certificate of incorporation and bylaws,
respectively, of Merger Sub, in each case, as in effect immediately prior to
the Effective Time and shall thereafter continue to be the certificate of
incorporation and bylaws, respectively, of the Surviving Corporation until
amended as provided therein and pursuant to Delaware Law.
Section 1.05. Directors and Officers.
The directors and officers of Merger Sub immediately prior to the Effective
Time shall continue to serve in their respective offices of the Surviving
Corporation from and after the Effective Time, in each case until their
respective successors are duly elected or appointed and qualified or until
their resignation or removal; provided that so long as required by the USU
Indenture at least one director of the Surviving Corporation shall not be a
director or executive officer of USU or any of its Restricted Subsidiaries (as
defined in the USU Indenture) and at least one executive officer of the
Surviving Corporation shall not be a director or executive officer of USU or
any of its Restricted Subsidiaries.
ARTICLE II
CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES
Section 2.01. Merger Consideration; Conversion and Cancellation of
Securities.
At the Effective Time, by virtue of the Merger and without any action on the
part of the USU Companies, IWO or their respective stockholders:
(a) Subject to Sections 2.01(b) and 2.02(e), each share of IWO Common
Stock (as defined in Section 3.03(a)) issued and outstanding immediately
prior to the Effective Time shall be converted into 1.0371 shares (the
"Exchange Ratio") of USU Common Stock. If between the date of this Agreement
and the Effective Time the outstanding shares of USU Common Stock or IWO
Common Stock shall have been changed into a different number of shares or a
different class, by reason of any stock dividend, subdivision,
reclassification, recapitalization, split, combination or exchange of
shares, the Exchange Ratio shall be correspondingly adjusted to reflect such
stock dividend, subdivision, reclassification, recapitalization, split,
combination or exchange of shares.
(b) Each share of IWO Common Stock held in the treasury of IWO or owned,
directly or indirectly, by USU or any subsidiary of IWO immediately prior to
the Effective Time shall be cancelled and retired without any conversion
thereof, and no other securities of USU or the Surviving Corporation shall
be issuable, and no payment shall be made, with respect thereto.
(c) All shares of IWO Common Stock converted pursuant to Section 2.01(a)
shall no longer be outstanding and shall automatically be cancelled and
retired and cease to exist, and each holder of a certificate (the
"Certificates") previously evidencing IWO Common Stock ("Converted Shares")
shall cease to have any rights with respect thereto except the right to
receive, subject to Section 2.04, shares of USU Common Stock in accordance
with Section 2.01(a), cash in lieu of fractional shares to be paid in
accordance with Section 2.02(e) and any dividends or other distributions to
the extent provided in Section 2.02(a). Such
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shares of USU Common Stock and cash payable pursuant to Section 2.02(e) are
referred to herein as the "Merger Consideration."
(d) Each share of common stock, par value $.01 per share, of Merger Sub
("Merger Sub Common Stock") issued and outstanding immediately prior to the
Effective Time, and all rights in respect thereof, shall cease to exist and
be converted into one validly issued, fully paid and non-assessable share of
common stock, par value $.01 per share, of the Surviving Corporation.
(e) Except for any shares of USU Common Stock owned by IWO or any of its
subsidiaries, which shall be converted into treasury stock of USU, the
shares of USU Common Stock issued and outstanding immediately prior to the
Effective Time shall be unaffected by the Merger and such shares shall
remain issued and outstanding.
Section 2.02. Exchange and Surrender of Certificates.
(a) Subject to Section 2.04, as soon as practicable after the Effective
Time, each holder of a Certificate shall be entitled, upon surrender of the
Certificate to USU or its transfer agent (as specified in the letter of
transmittal described in Section 2.02(c)), to receive in exchange therefor a
certificate or certificates representing the number of whole shares of USU
Common Stock that such holder has a right to receive in accordance with Section
2.01(a), certain dividends and other distributions to the extent provided in
this Section 2.02(a) and a cash payment in lieu of fractional shares of USU
Common Stock, if any, in accordance with Section 2.02(e). Unless and until any
such Certificates shall be so surrendered and exchanged, no dividends or other
distributions payable to the holders of record of USU Common Stock as of any
time subsequent to the Effective Time shall be paid to the holders of such
Certificates. Upon the surrender and exchange of such Certificates, however,
there shall be paid to the record holders of such Certificates the amount of
dividends and other distributions, if any, which as of a record date on or
after the Effective Time and prior to such surrender shall have become payable
with respect to such whole shares of USU Common Stock. No party hereto (or
USU's transfer agent) shall be liable to any former holder of Converted Shares
for any cash, USU Common Stock or dividends or other distributions thereon
delivered to a public official pursuant to applicable abandoned property,
escheat or similar Law.
(b) All shares of USU Common Stock issued upon the surrender for exchange of
Certificates in accordance with the terms hereof including any cash paid in
accordance with Section 2.02(e) shall be deemed to have been issued and paid in
full satisfaction of all rights pertaining to such Converted Shares. From the
Effective Time, there shall be no further registration of transfers of IWO
Common Stock on the stock transfer books of the Surviving Corporation. If,
after the Effective Time, Certificates are presented to the Surviving
Corporation for any reason, they shall be cancelled and exchanged in accordance
with this Article II.
(c) As promptly as practicable after the Effective Time, USU will send or
cause to be sent to each record holder of IWO Common Stock at the Effective
Time a letter of transmittal and other appropriate materials for use in
surrendering Certificates as contemplated by Section 2.02(a).
(d) If any certificate for shares of USU Common Stock is to be issued in a
name other than that in which the Certificate surrendered in exchange therefor
is registered, it shall be a condition of the issuance thereof that the
Certificate so surrendered shall be properly endorsed, with signatures
guaranteed, and otherwise in proper form for transfer and that the person
requesting such exchange shall have paid to USU or its transfer agent any
transfer or other Taxes required by reason of the issuance of a certificate for
shares of USU Common Stock in such other name, or established to the
satisfaction of USU or its transfer agent that such Tax has been paid or is not
payable.
(e) No fraction of a share of USU Common Stock will be issued as a result of
the Merger. In lieu of any such fractional shares that otherwise would have
been issued in the Merger, USU will pay each applicable holder an amount in
cash (without interest and rounded to the nearest cent) determined by
multiplying (a) the average per share last reported price of USU Common Stock
as quoted by The Nasdaq National Market ("Nasdaq") as reported in The Wall
Street Journal for the five trading day period ending two trading days
immediately preceding the date on which the Effective Time occurs by (b) the
fractional interest of a share of USU Common Stock to which such holder would
otherwise be entitled (after taking into account all Converted Shares held of
record by such holder at the Effective Time).
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(f) If any Certificate shall have been lost, stolen or destroyed, (i) upon
the making of an affidavit of that fact by the person claiming such Certificate
to be lost, stolen or destroyed and (ii) unless otherwise agreed by USU, if
such Certificate represents more than 5,000 Converted Shares, the posting by
such person of a bond, in such amount as USU may direct and in a form
satisfactory to USU, as indemnity from such person to USU against any claim
that may be made against USU with respect to such Certificate, provided that
Investcorp IWO Limited Partnership, Investcorp Investment Equity Limited,
Odyssey (as defined in Section 9.03), TCW (as defined in Section 9.03) and
Paribas (as defined in Section 9.03) shall only be required to provide an
indemnity from such person to USU against any claim that may be made against
USU with respect to such person's Certificate, USU will issue, in exchange for
such lost, stolen or destroyed Certificate, the Merger Consideration and any
dividends or other distributions to which the holder thereof is entitled to
receive pursuant to Section 2.02(a) in the manner provided in this Article II.
(g) USU shall be entitled to deduct and withhold from the consideration
otherwise payable pursuant to this Agreement to any former holder of Converted
Shares such amounts as USU (or any affiliate thereof) is required to deduct and
withhold with respect to the making of such payment under the Code, or any
provision of state, local or foreign Tax Law. To the extent that amounts are so
withheld by USU, such withheld amounts shall be treated for all purposes of
this Agreement as having been paid to the former holder of the Converted Shares
in respect of which such deduction and withholding was made by USU (or any
affiliate thereof).
Section 2.03. Options and Warrants to Purchase IWO Common Stock.
(a) Each option granted by IWO to purchase shares of IWO Common Stock (a
"IWO Option") that is outstanding and unexercised immediately prior to the
Effective Time shall, without the approval or consent of the optionee, cease to
represent a right to acquire shares of IWO Common Stock and shall be assumed by
USU and converted automatically into an option (a "Converted IWO Option") to
purchase shares of USU Common Stock in an amount and at an exercise price
determined as provided below (and otherwise subject to the terms and conditions
of the IWO Management Stock Incentive Plan, as amended prior to the date hereof
(the "IWO Option Plan"), the agreements evidencing grants thereunder, and any
other written agreements between IWO and an optionee regarding IWO Options
prior to the date hereof):
(i) the number of shares of USU Common Stock to be subject to the
Converted IWO Option shall be equal to the product of the number of shares
of IWO Common Stock subject to the IWO Option immediately prior to the
Effective Time and the Exchange Ratio, rounded down to the nearest whole
share; and
(ii) the exercise price per share of USU Common Stock under the Converted
IWO Option shall be equal to the exercise price per share of IWO Common
Stock under the IWO Option immediately prior to the Effective Time divided
by the Exchange Ratio, rounded up to the nearest whole cent.
(b) The adjustment provided in Section 2.03(a) with respect to any IWO
Options that are "incentive stock options" (as defined in Section 422 of the
Code) shall be and is intended to be effected in a manner that is consistent
with Section 424(a) of the Code and the regulations thereunder, and to the
extent it is not so consistent, such Section 424(a) and the regulations
thereunder shall override anything to the contrary contained herein. The
duration and other terms of the Converted IWO Options shall be the same as the
original IWO Options, except that all references to IWO shall be deemed to be
references to USU. As soon as practicable (but in any event not more than five
business days) after the Effective Time, USU shall file a registration
statement on Form S-8 or other appropriate form to register under the
Securities Act of 1933, as amended (the "Securities Act"), the shares of USU
Common Stock issuable pursuant to all IWO Options converted pursuant to Section
2.03(a) and shall use its reasonable best efforts to cause such registration
statement to become effective (and shall use its reasonable best efforts to
maintain the effectiveness thereof and maintain the current status of the
prospectus or prospectuses contained therein) for so long as there are any
outstanding Converted IWO Options or as required under applicable securities
Laws. USU agrees to reserve a number of shares of USU Common Stock equal to the
number of shares of USU Common Stock issuable upon the exercise of the
Converted IWO Options.
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(c) USU shall assume and cause to be performed all obligations of IWO under
the warrants outstanding at the Effective Time and issued pursuant to the
Warrant Agreement, dated as of February 2, 2001, between IWO and Firstar Bank,
N.A., as warrant agent (the "Warrant Agreement") to purchase shares of IWO
Class C Common Stock (as defined in Section 3.03(a)), which warrants were
issued in connection with the issuance of the IWO 14% Senior Notes due 0000
(xxx "XXX Xxxx Xxxxx Xxxxxxxx"). Each IWO High Yield Warrant assumed by USU
under this Agreement will continue to have, and be subject to, the same terms
and conditions set forth in the applicable warrant agreement immediately prior
to the Effective Time, except that:
(i) each outstanding IWO High Yield Warrant outstanding at the Effective
Time will be exercisable (or will become exercisable in accordance with its
terms) for that number of whole shares of USU Common Stock equal to the
product of the number of shares of IWO Common Stock that were issuable upon
exercise of such IWO High Yield Warrant immediately prior to the Effective
Time multiplied by the Exchange Ratio, rounded down to the nearest whole
share; and
(ii) the per share exercise price for the USU Common Stock issuable upon
exercise of such IWO High Yield Warrant shall be equal to the exercise price
per share of IWO Common Stock of such IWO High Yield Warrant immediately
prior to the Effective Time divided by the Exchange Ratio, rounded up to the
nearest whole cent.
(d) Other than the Xxxxxxx Warrants (as defined in Section 9.03), each
Founders Warrant and each Management Warrant (each as defined in Section 9.03)
in each case outstanding immediately prior to the Effective Time shall be
cancelled and exchanged for warrants ("Exchanged Founders/Management Warrants")
to purchase shares of USU Common Stock in accordance with the terms and
conditions set forth in the warrant exchange agreement attached as Exhibit F
(the "Warrant Exchange Agreement"). Each Xxxxxxx Warrant outstanding
immediately prior to the Effective Time shall be cancelled and exchanged for a
warrant (the "Exchanged Xxxxxxx Warrants") to purchase shares of USU Common
Stock in accordance with the terms and conditions set forth in the warrant
exchange agreement attached as Exhibit G (the "Xxxxxxx Warrant Exchange
Agreement"). Each of the IWO Class A Warrants and the IWO Class E Warrants
(each as defined in the Amended and Restated Certificate of Incorporation of
IWO) outstanding immediately prior to the Effective Time shall be surrendered
to IWO and cancelled without consideration therefor pursuant to the warrant
cancellation agreement in the form attached as Exhibit G and shall not be
assumed by USU or the Surviving Corporation at the Effective Time. The IWO High
Yield Warrants, together with the Founders Warrants, the Management Warrants,
the Xxxxxxx Warrants, the IWO Class A Warrants and the IWO Class E Warrants,
are collectively referred to herein as the "IWO Warrants."
(e) At the Effective Time, USU shall file a shelf registration statement on
Form S-3 (or if USU is not eligible to use such form, Form S-1) under the
Securities Act covering the resale of the IWO High Yield Warrants and the offer
and sale of shares of USU Common Stock issuable upon exercise of the IWO High
Yield Warrants, the Exchanged Founders/Management Warrants and the Exchanged
Xxxxxxx Warrants and shall use its reasonable best efforts to cause such shelf
registration statement to become effective and shall use its reasonable best
efforts to maintain the effectiveness of such registration (and maintain the
current status of the prospectus or prospectuses contained therein) for the
periods specified in the Warrant Registration Rights Agreement, dated as of
February 2, 2001, among IWO, Xxxxxxxxx Xxxxxx & Xxxxxxxx Securities Corporation
(an affiliate of Credit Suisse First Boston Corporation), Chase Securities
Inc., BNP Paribas Securities Corp. and UBS Warburg LLC.
Section 2.04. Dissenting Stockholders.Any shares of IWO Common Stock that
are issued and outstanding immediately prior to the Effective Time and that are
held by a stockholder who did not vote in favor of the Merger and who has
properly exercised appraisal rights (the "Dissenting Shares") under Delaware
Law will not be converted into the right to receive the Merger Consideration
unless and until such holder shall have failed to perfect, or shall have
effectively withdrawn or lost, such holder's right to appraisal under Delaware
Law. Any such holder of Dissenting Shares shall be entitled only to receive the
value of such shares in cash as determined in accordance with Delaware Law upon
surrender of the certificate or certificates representing such Dissenting
Shares. If any such holder shall have failed to perfect or shall have
effectively withdrawn or lost the right to appraisal, then as of the occurrence
of such event, each share of IWO Common Stock held by such holder shall
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thereupon be deemed to have been converted into and to have become, as of the
Effective Time, the right to receive, without any interest thereon, the Merger
Consideration and any dividends or other distributions to which such holder is
entitled to receive pursuant to Section 2.02(a). IWO shall give USU (i) prompt
notice of any notice or demand for appraisal received by IWO and (ii) the right
to participate in all negotiations and proceedings with respect to any such
demands or notices. IWO shall not, without the prior written consent of USU,
make any payment with respect to, or settle, offer to settle or otherwise
negotiate, any such demands.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF IWO
IWO hereby represents and warrants to the USU Companies that:
Section 3.01. Organization and Qualification; Subsidiaries. Each of IWO
and its subsidiaries is a corporation or other legal entity duly organized,
validly existing and in good standing under the Laws of the jurisdiction of its
incorporation or organization, has all requisite power and authority to own,
lease and operate its properties and to carry on its business as it is now
being conducted and is duly qualified and in good standing to do business in
each jurisdiction in which the nature of the business conducted by it or the
ownership or leasing of its properties makes such qualification necessary,
other than where the failure to be so duly qualified and in good standing would
not reasonably be expected to have a IWO Material Adverse Effect. The term "IWO
Material Adverse Effect" as used in this Agreement shall mean any change,
effect, event or occurrence that is or would reasonably be expected to be
materially adverse to the financial condition, results of operations, business,
properties or operations of IWO and its subsidiaries, taken as a whole;
provided, however, that any such change, effect, event or occurrence arising
out of or attributable to (A) changes or developments in the industries in
which IWO and its subsidiaries operate to the extent generally affecting all
other persons operating in such industries, (B) general economic, political or
financial market conditions, (C) action taken by IWO with the prior written
consent of USU, (D) IWO's compliance with its covenants under, or the terms and
conditions of, this Agreement, or (E) the execution or announcement of this
Agreement, shall be excluded from the determination of a IWO Material Adverse
Effect. Schedule 3.01 of the disclosure schedule delivered to USU by IWO on the
date hereof (the "IWO Disclosure Schedule") sets forth, as of the date of this
Agreement, a true and complete list of all of IWO's directly or indirectly
owned subsidiaries, together with (A) the jurisdiction of incorporation or
organization of each such subsidiary and the percentage of each such
subsidiary's outstanding capital stock or other equity interests owned by IWO
or another subsidiary of IWO, and (B) an indication of whether each such
subsidiary is a Significant Subsidiary.
Section 3.02. Charter and Bylaws. IWO has heretofore made available to USU
complete and correct copies of the charter and the bylaws or the equivalent
organizational documents, in each case as amended or restated, of IWO and each
of its subsidiaries. Neither IWO nor any of its subsidiaries is in violation of
any of the provisions of its charter or any material provision of its bylaws
(or equivalent organizational documents).
Section 3.03. Capitalization.
(a) The authorized capital stock of IWO consists of (i) 15,000,000 shares of
class A non-voting common stock, $0.01 par value per share (the "IWO Class A
Common Stock"), of which as of the date of this Agreement all such shares were
issued and outstanding, (ii) 18,750,000 shares of class B voting common stock,
$0.01 par value per share (the "IWO Class B Common Stock"), of which as of the
date of this Agreement 13,429,098.6995 shares were issued and outstanding,
(iii) 18,750,000 shares of class C non-voting common stock, $0.01 par value per
share (the "IWO Class C Common Stock"), of which as of the date of this
Agreement 3,555,630.4609 shares were issued and outstanding, (iv) 60,000 shares
of class D voting common stock, $0.01 par value per share (the "IWO Class D
Common Stock"), of which as of the date of this Agreement all such shares were
issued and outstanding, (v) 5,545,000 shares of class E non-voting common
stock, $0.01 par value per share (the "IWO Class E Common Stock"), of which as
of the date of this Agreement 5,543,654.5364 shares were issued and outstanding
(the "Class E Common Stock"), (vi) 58,105,000 shares of voting common stock,
$0.01 par value per
6
share (the "IWO Ordinary Common Stock"), of which as of the date of this
Agreement no shares were issued and outstanding (the IWO Class A Common Stock,
the IWO Class B Common Stock, the IWO Class C Common Stock, the IWO Class D
Common Stock, the IWO Class E Common Stock and the IWO Ordinary Common Stock
are collectively referred to herein as the "IWO Common Stock") and (vii)
500,000 shares of non-voting preferred stock, $0.01 par value per share, of
which as of the date of this Agreement no shares were issued and outstanding.
As of the date of this Agreement, (A) 104,012.3430 shares of IWO Class B Common
Stock were held in treasury by IWO, (B) 4,109,467.1171 shares of IWO Class B
Common Stock were reserved for future issuance pursuant to outstanding IWO
Options granted pursuant to the IWO Option Plan and individual stock option
agreements, (C) 827,999.9910 shares of IWO Class B Common Stock were reserved
for issuance upon exercise of outstanding Founders Warrants, (D) 148,800.0000
shares of IWO Class B Common Stock were reserved for issuance upon exercise of
outstanding Management Warrants, and (E) 2,000,040.0000 shares of IWO Class C
Common Stock were reserved for future issuance upon the exercise of IWO High
Yield Warrants issued pursuant to the Warrant Agreement.
(b) Except as described in this Section 3.03 or in Schedule 3.03(b) of the
IWO Disclosure Schedule, as of the date of this Agreement, no shares of capital
stock or other equity securities of IWO are issued or outstanding or reserved
for any purpose. Except as set forth in Schedule 3.03(b) of the IWO Disclosure
Schedule, each of the outstanding shares of capital stock of, or other equity
interests in, each of IWO and its subsidiaries is, and each such share or
interest issuable upon the exercise of IWO Options and IWO Warrants will be
when issued, duly authorized, validly issued, and, in the case of shares of
capital stock, fully paid and nonassessable, and has not been, or will not be,
issued in violation of (nor are any of the authorized shares of capital stock
of, or other equity interests in, such entities subject to) any preemptive or
similar rights created by statute, the charter or bylaws (or the equivalent
organizational documents) of IWO or any of its subsidiaries, or any agreement
to which IWO or any of its subsidiaries is a party or bound, and such
outstanding shares or other equity interests owned by IWO or a subsidiary of
IWO are owned free and clear of all security interests, liens, claims, pledges,
agreements, limitations on IWO's or such subsidiaries' voting rights, charges
or other encumbrances of any nature whatsoever. Except as set forth in Schedule
3.03(b) of the IWO Disclosure Schedule, all shares of capital stock or other
equity interests in each subsidiary of IWO are owned by IWO or by a direct or
indirect wholly-owned subsidiary of IWO.
(c) Except as set forth in Section 3.03(a) above or in Schedule 3.03(c)(i),
Schedule 3.03(d) or Schedule 3.03(e) of the IWO Disclosure Schedule, there are
no outstanding securities, options, warrants or other rights (including
registration rights), agreements or commitments of any character to which IWO
or any of its subsidiaries is a party relating to the issued or unissued
capital stock or other equity interests of IWO or any of its subsidiaries or
obligating IWO or any of its subsidiaries to grant, issue, deliver or sell, or
cause to be granted, issued, delivered or sold, any shares of the capital stock
or other equity interests of IWO or any of its subsidiaries, by sale, lease,
license or otherwise. Except as set forth in Schedule 3.03(c)(ii) of the IWO
Disclosure Schedule, there are no obligations, contingent or otherwise, of IWO
or any subsidiary of IWO to (i) repurchase, redeem or otherwise acquire any
shares of capital stock or other equity interests of IWO or any subsidiary of
IWO; or (ii) dispose of any shares of capital stock or other equity interest in
IWO or any subsidiary of IWO. Except as described in Schedule 3.03(c)(iii) of
the IWO Disclosure Schedule, none of IWO nor any of its subsidiaries (x)
directly or indirectly owns, (y) has agreed to purchase or otherwise acquire or
(z) holds any interest convertible into or exchangeable or exercisable for, 5%
or more of the capital stock or other equity interests of any person (other
than the subsidiaries of IWO set forth in Schedule 3.01 of the IWO Disclosure
Schedule). Except as set forth in Schedule 3.03(c)(iv) of the IWO Disclosure
Schedule, there are no voting trusts, proxies or other agreements or
understandings to which IWO or any of its subsidiaries is a party or by which
IWO or any of its subsidiaries is bound with respect to the voting of any
shares of capital stock or equity interests of IWO or any of its subsidiaries.
Except as set forth in Schedule 3.03(c)(v) of the IWO Disclosure Schedule,
there are no bonds, debentures, notes or other indebtedness of IWO or any of
its subsidiaries having the right to vote (or convertible into, or exchangeable
for, securities having the right to vote) on any matters on which stockholders
of IWO may vote.
7
(d) IWO has made available to USU complete and correct copies of (i) the IWO
Option Plan and the form of IWO Option issued pursuant to such plan, including
all amendments thereto, and (ii) all IWO Options that are not in the respective
forms thereof provided under clause (i) above. Schedule 3.03(d) of the IWO
Disclosure Schedule sets forth a complete and correct list of all outstanding
IWO Options, including any not granted pursuant to the IWO Option Plan, as of
the date hereof (i) the exercise price of each outstanding IWO Option, (ii) the
number of IWO Options presently exercisable, and (iii) assuming no amendment or
waiver of the terms thereof, the number of IWO Options that will become
exercisable on account of the Merger or any other transaction contemplated
hereby.
(e) IWO has made available to USU complete and correct copies of (i) the
Warrant Agreement and the form of IWO High Yield Warrant issued pursuant
thereto, including all amendments thereto, and (ii) all other IWO Warrants that
are not in the respective forms thereof provided under clause (i) above,
including the Management Warrants, the Founders Warrants, the IWO Class A
Warrants and the IWO Class E Warrants. Schedule 3.03(e) of the IWO Disclosure
Schedule sets forth a complete and correct list of all outstanding IWO Warrants
as of the date hereof (i) the exercise price of each such IWO Warrant, (ii) the
number of IWO Warrants presently exercisable, and (iii) assuming no amendment
or waiver thereof, the number of IWO Warrants that will become exercisable on
account of the Merger or any other transaction contemplated hereby.
(f) As of the date hereof to the knowledge of IWO, not more than an
aggregate of 70% of the capital stock of IWO or any of its subsidiaries is, or
will at the Effective Time be, owned beneficially or of record by any person or
persons who are aliens or corporations organized under the laws of a foreign
government within the meaning of Section 310(b) of the Federal Communications
Act of 1934, as amended (the "Communications Act").
Section 3.04. Authority. IWO has all requisite corporate power and
authority to execute and deliver this Agreement, to perform its obligations
hereunder and, subject to the Required IWO Vote (as defined below), to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement by IWO and the consummation by IWO of the transactions
contemplated hereby have been duly authorized by all necessary corporate action
and no other corporate proceedings on the part of IWO are necessary to
authorize this Agreement or, subject to the Required IWO Vote, to consummate
the transactions contemplated hereby. The Board of Directors of IWO has
unanimously approved this Agreement, the Merger and the other transactions
contemplated hereby. Except for the affirmative vote of the holders of at least
a majority of the issued and outstanding shares of IWO Class B Common Stock and
IWO Class D Common Stock, voting together as a single class, entitled to vote
thereon to adopt this Agreement and approve and consummate the Merger (the
"Required IWO Vote"), no vote of the stockholders of IWO or any class thereof,
or of the holders of any other securities of IWO (equity or otherwise), is
required by Law or the certificate of incorporation or bylaws of IWO for IWO to
adopt this Agreement and approve and consummate the Merger. This Agreement has
been duly executed and delivered by IWO and, assuming the due authorization,
execution and delivery thereof by the USU Companies, constitutes the legal,
valid and binding obligation of IWO enforceable against IWO in accordance with
its terms.
Section 3.05. No Conflict; Required Filings and Consents.
(a) Assuming that the Approvals (as defined in Section 3.05(b)), filings and
notifications described in Section 3.05(b) have been obtained or made, as the
case may be, the execution and delivery of this Agreement by IWO does not, and
the consummation of the transactions contemplated hereby will not (i) conflict
with or violate the charter or bylaws, or the equivalent organizational
documents, in each case as amended or restated, of IWO or any of its
subsidiaries, (ii) conflict with or violate any federal, state, foreign or
local law, statute, ordinance, rule, regulation, order, judgment or decree
(collectively, "Laws") applicable to IWO or any of its subsidiaries or by which
any of their respective assets or properties is bound or subject or (iii)
except as described in Schedule 3.05(a) of the IWO Disclosure Schedule, result
in any breach of or constitute a default (or an event that with notice or lapse
of time or both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or require payment
under, or result in the creation of a lien or
8
encumbrance on any of the properties or assets of IWO or any of its
subsidiaries pursuant to, any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or obligation
to which IWO or any of its subsidiaries is a party or by or to which IWO or any
of its subsidiaries or any of their respective assets or properties is bound or
subject, except for any such conflicts or violations described in clause (ii)
or breaches, defaults, events, rights of termination, amendment, acceleration
or cancellation, payment obligations or liens or encumbrances described in
clause (iii) that would not reasonably be expected to have a IWO Material
Adverse Effect.
(b) The execution and delivery of this Agreement by IWO does not, and
consummation of the transactions contemplated hereby will not, require IWO or
any of its subsidiaries to obtain any consent, license, permit, approval,
waiver, authorization or order (collectively, the "Approvals") of or from, or
to make any filing with or notification to, any governmental, administrative or
regulatory authority, agency, commission, court or instrumentality, whether
national, federal, regional, state, provincial, territorial, local, domestic or
foreign (collectively, "Governmental Entities") or third person, except (i) as
set forth in Schedule 3.05(b) of the IWO Disclosure Schedule, (ii) for
applicable requirements, if any, of the Securities Act and the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), state securities or blue
sky Laws ("Blue Sky Laws"), the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended (the "HSR Act"), the Communications Act and the filing and
recordation of appropriate merger documents as required by Delaware Law and
(iii) where the failure to obtain such Approvals, or to make such filings or
notifications, would not prevent, materially delay or materially impair the
ability of IWO to consummate the transactions contemplated by this Agreement
and would not reasonably be expected to have a IWO Material Adverse Effect.
Section 3.06. Permits; Compliance. Each of IWO and its subsidiaries is in
possession of all franchises, grants, authorizations, licenses, permits,
easements, variances, exemptions, consents, certificates, approvals and orders
necessary to own, lease and operate its properties and to carry on its business
as it is now being conducted (collectively, the "IWO Permits"), and there is no
action, proceeding or investigation pending or threatened in writing regarding,
and no event has occurred that has resulted in or after notice or lapse of time
or both could reasonably be expected to result in, revocation, suspension,
adverse modification, non-renewal, impairment, restriction, termination or
cancellation of, or order of forfeiture or substantial fine with respect to,
any of the IWO Permits or, to the knowledge of IWO, the personal communications
service licenses held by WirelessCo L.P., Sprint Spectrum L.P. or any of their
respective affiliates (collectively, "Sprint PCS") that are the subject of the
IWO Sprint Agreements (as defined in Section 3.23(a)) (the "IWO Sprint
Licenses"), except in any such case where the failure to possess such IWO
Permits or where any such action, proceeding, investigation or event would not
reasonably be expected to have a IWO Material Adverse Effect or prevent,
materially delay or materially impair the ability of IWO to consummate the
transactions contemplated by this Agreement. None of IWO nor any of its
subsidiaries is or has been in conflict with, or in default or violation of (a)
any Law applicable to IWO or any of its subsidiaries or by or to which any of
their respective assets or properties are bound or subject or (b) any of the
IWO Permits, including the IWO Sprint Licenses, except for any such conflicts,
defaults or violations described in the IWO SEC Reports (as defined below)
filed prior to the date hereof or as described in Schedule 3.06 of the IWO
Disclosure Schedule or which would not reasonably be expected to have a IWO
Material Adverse Effect. Except as set forth in Schedule 3.06 of the IWO
Disclosure Schedule, none of IWO nor any of its subsidiaries has received from
any Governmental Entity any written notification with respect to possible
conflicts, defaults or violations of Laws or IWO Permits, except for written
notices relating to possible conflicts, defaults or violations described in the
IWO SEC Reports filed prior to the date hereof or that would not reasonably be
expected to have a IWO Material Adverse Effect.
Section 3.07. Reports; Financial Statements.
(a) Since April 13, 2001, IWO and its subsidiaries have filed (i) all forms,
reports, statements and other documents required to be filed with the
Securities and Exchange Commission (the "SEC") including, without limitation,
(1) all Annual Reports on Form 10-K, (2) all Quarterly Reports on Form 10-Q,
(3) all proxy statements relating to meetings of stockholders (whether annual
or special), (4) all Current Reports on Form 8-K
9
and (5) all other reports, schedules, registration statements or other
documents (collectively, together with the Registration Statement on Form S-4
filed on April 13, 2001, as amended, the "IWO SEC Reports"). The IWO SEC
Reports, including all IWO SEC Reports filed after the date of this Agreement
and prior to the Effective Time, were or will be prepared in all material
respects in accordance with the requirements of the Securities Act and the
Exchange Act, as the case may be, and the rules and regulations of the SEC
thereunder applicable to such IWO SEC Reports. The IWO SEC Reports, including
all IWO SEC Reports filed after the date of this Agreement and prior to the
Effective Time, did not at the time they were filed, or will not at the time
they are filed, contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading unless such misstatement or omission was corrected in
a subsequent IWO SEC Report filed prior to the date hereof.
(b) Each of the consolidated financial statements (including, in each case,
any related notes thereto) contained in the IWO SEC Reports filed prior to the
Effective Time (i) have been or will be prepared in all material respects in
accordance with the published rules and regulations of the SEC and generally
accepted accounting principles ("GAAP") applied on a consistent basis
throughout the periods involved (except (A) to the extent required by changes
in GAAP and (B) with respect to the IWO SEC Reports filed prior to the date of
this Agreement, as may be indicated in the notes thereto) and (ii) fairly
present or will fairly present the consolidated financial position of IWO and
its subsidiaries as of the respective dates thereof and the consolidated
results of operations and cash flows for the periods indicated, except that any
unaudited interim financial statements were or will be subject to normal and
recurring year-end adjustments.
(c) As of November 30, 2001, IWO and its consolidated subsidiaries had
$300,000,000 in outstanding long term debt including under the IWO Credit
Agreement and the IWO Indenture and $143,700,000 in cash, cash equivalents,
restricted cash and investment securities within the meaning of GAAP.
Section 3.08. Absence of Certain Changes or Events. Except as disclosed in
the IWO SEC Reports filed prior to the date of this Agreement, since December
31, 2000, IWO and its subsidiaries have conducted their businesses only in the
ordinary course and in a manner consistent with past practice and there has not
been any material change by IWO or its subsidiaries in their accounting
methods, principles or practices or a IWO Material Adverse Effect or any event,
occurrence or development which would reasonably be expected to have a IWO
Material Adverse Effect.
Section 3.09. Absence of Litigation. Except as disclosed in the IWO SEC
Reports filed prior to the date of this Agreement or as set forth in Schedule
3.09 of the IWO Disclosure Schedule, there is no claim, action, suit,
litigation, proceeding, arbitration or, to the knowledge of IWO, investigation
of any kind, at Law or in equity, pending or, to the knowledge of IWO,
threatened against IWO or any of its subsidiaries or any properties or rights
of IWO or any of its subsidiaries, and none of such claims, actions, suits,
litigation, proceedings, arbitrations or investigations would reasonably be
expected to have a IWO Material Adverse Effect. Neither IWO nor any of its
subsidiaries is subject to any continuing order, consent decree or settlement
agreement of, or other similar written agreement with, or, to the knowledge of
IWO, continuing investigation by, any Governmental Entity, court or arbitration
tribunal, or any judgment, order, writ, injunction, decree, cease-and-desist
order or award of any Governmental Entity, court or arbitrational tribunal,
except for matters which would not reasonably be expected to have a IWO
Material Adverse Effect.
Section 3.10. IWO Employee Benefit Plans; Labor Matters
(a) Schedule 3.10(a) of the IWO Disclosure Schedule sets forth each employee
benefit plan, program, commitment and contract (including, without limitation,
any "employee benefit plan", as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA") and any
compensation or equity plan, program, commitment or contract), including all
amendments thereto, maintained or contributed to by IWO or any of its
subsidiaries, or with respect to which IWO or any of its subsidiaries has or
could incur
10
liability, including without limitation, under Section 4069, 4212(c) or 4204 of
ERISA (the "IWO Benefit Plans"). IWO has made available to USU a true and
correct copy of (i) the most recent annual report (Form 5500) filed with the
Internal Revenue Service (the "IRS") with respect to each IWO Benefit Plan for
which a Form 5500 is required to be filed, (ii) each IWO Benefit Plan, (iii)
each trust agreement relating to each IWO Benefit Plan, (iv) the most recent
summary plan description for each IWO Benefit Plan for which a summary plan
description is required, including any summary of material modifications, (v)
the most recent actuarial report or valuation relating to each IWO Benefit Plan
subject to Title IV of ERISA and (vi) the most recent determination letter, if
any, issued by the IRS with respect to any IWO Benefit Plan intended to be
qualified under Section 401(a) of the Code.
(b) With respect to the IWO Benefit Plans, no event has occurred and, to the
knowledge of IWO, there exists no condition or set of circumstances, in
connection with which IWO or any of its subsidiaries could be subject to any
liability under the terms of such IWO Benefit Plans (other than the payment or
provision of benefits contemplated by such Plans), ERISA, the Code or any other
applicable Law which would reasonably be expected to have a IWO Material
Adverse Effect. Except as otherwise set forth in Schedule 3.10(b) of the IWO
Disclosure Schedule:
(i) Each IWO Benefit Plan has been administered in all material respects
in accordance with its terms and applicable Law and, as to any IWO Benefit
Plan intended to be qualified under Section 401(a) of the Code, such IWO
Benefit Plan satisfies the requirements of such Section or has received a
favorable IRS determination letter that includes all changes required to be
made by applicable Law or has timely filed a request for a determination
letter covering such required amendments to the extent the deadline for
filing such request has passed as of the date hereof;
(ii) There are no actions, suits or claims pending (other than routine
claims for benefits) or, to the knowledge of IWO, threatened against, or
with respect to, any of the IWO Benefit Plans or their assets, and to the
knowledge of IWO there is no basis for any such action, suit or claim, which
in any case would reasonably be expected to have a IWO Material Adverse
Effect;
(iii) All contributions required to be made to the IWO Benefit Plans
pursuant to their terms and provisions and applicable Law have been timely
made;
(iv) No IWO Benefit Plan is subject to Title IV of ERISA; and
(v) In connection with the consummation of the transactions contemplated
by this Agreement, no payments have or will be made (including the
acceleration of any vesting) under the IWO Benefit Plans or any of the
programs, agreements, policies or other arrangements described in Section
3.10(d) of this Agreement which, in the aggregate, would result in an excess
parachute payment within the meaning of Section 280G of the Code.
(c) Neither IWO nor any of its subsidiaries is a party to any collective
bargaining or other labor union contracts. No collective bargaining agreement
is being negotiated by IWO or any of its subsidiaries. There is no pending or,
to the knowledge of IWO, threatened labor dispute, strike or work stoppage
against IWO or any of its subsidiaries which would materially interfere with
the business activities of IWO and its subsidiaries, taken as a whole. To the
knowledge of IWO, as of the date hereof, there is no pending or threatened
charge or complaint against IWO or any of its subsidiaries by the National
Labor Relations Board or any comparable state agency.
(d) Except as set forth in Schedule 3.10(d) of the IWO Disclosure Schedule,
as of the date hereof, none of IWO nor any of its subsidiaries is a party to or
is bound by any change of control or severance plans, agreements, programs or
policies.
(e) Except as provided in Schedule 3.10(e) of the IWO Disclosure Schedule,
(x) no IWO Benefit Plan provides retiree medical or retiree life insurance
benefits to any person and (y) neither IWO nor any of its
11
subsidiaries is contractually or otherwise obligated (whether or not in
writing) to provide any person with post-employment life insurance or medical
benefits, other than as required by the provisions of Sections 601 through 608
of ERISA and Section 4980B of the Code.
(f) Except as provided in Schedule 3.10(f) of the IWO Disclosure Schedule,
neither IWO nor any of its subsidiaries contributes to or has an obligation
(including any secondary obligation) to contribute to, and prior to the date of
this Agreement has not contributed to or had an obligation to contribute to, a
multiemployer plan within the meaning of Section 3(37) of ERISA.
(g) Except as set forth in Schedule 3.10(g) of the IWO Disclosure Schedule,
IWO has not amended any of the IWO Benefit Plans or any of the plans, programs,
agreements, policies or other commitments described in Sections 3.10(d),
3.21(a)(iv), or 3.21(a)(v) of this Agreement since December 31, 2000, except as
may be required by applicable Law.
(h) Subject to applicable Law, each IWO Benefit Plan may be unilaterally
amended or terminated at any time by IWO or a subsidiary of IWO without
liability other than for benefits accrued thereunder prior to the date of such
amendment or termination.
Section 3.11. Taxes
(a) Except for such matters as would not reasonably be expected to have a
IWO Material Adverse Effect, and except as set forth in Schedule 3.11(a) of the
IWO Disclosure Schedule, (i) all returns and reports ("Tax Returns") of or with
respect to any Tax which are required to be filed on or before the Closing Date
by or with respect to IWO or any its subsidiaries have been or will be duly and
timely filed, (ii) all items of income, gain, loss, deduction and credit or
other items required to be included in each such Tax Return have been or will
be so included and all information provided in each such Tax Return is true,
correct and complete, (iii) all Taxes which have become or will become due with
respect to the period covered by each such Tax Return have been or will be
timely paid in full, (iv) all withholding Tax requirements imposed on or with
respect to IWO or any of its subsidiaries have been or will be satisfied in
full in all respects, and (v) no penalty, interest or other charge is or will
become due with respect to the late filing of any such Tax Return or late
payment of any such Tax.
(b) All Tax Returns of or with respect to IWO or any of its subsidiaries
with unexpired or extended statutes of limitations which have been audited by
the applicable governmental authority are set forth in Schedule 3.11(b) of the
IWO Disclosure Schedule.
(c) Except as set forth in Schedule 3.11(c) of the IWO Disclosure Schedule,
there is not in force any extension of time with respect to the due date for
the filing of any Tax Return of or with respect to IWO or any its subsidiaries
or any waiver or agreement for any extension of time for the assessment or
payment of any Tax of or with respect to IWO or any of its subsidiaries or any
agreement pursuant to which IWO or any of its subsidiaries has agreed to settle
any liability for Taxes.
(d) There is no claim against IWO or any of its subsidiaries for any Taxes,
and no assessment, deficiency or adjustment has been asserted or proposed with
respect to any Tax Return of or with respect to IWO or any of its subsidiaries
other than those disclosed in Schedule 3.11(d) of the IWO Disclosure Schedule
and those which would not reasonably be expected to have a IWO Material Adverse
Effect.
(e) IWO has previously delivered to USU true and complete copies of each
written Tax allocation or sharing agreement and a true and complete description
of each unwritten Tax allocation or sharing arrangement affecting IWO or any of
its subsidiaries.
(f) Except for statutory liens for current Taxes not yet due, no material
liens for Taxes exist upon the assets of any of IWO or its subsidiaries.
12
(g) Except as set forth in Schedule 3.11(g) of the IWO Disclosure Schedule,
neither IWO nor any of its subsidiaries will be required to include, for Tax
purposes, any amount in income for any taxable period beginning after December
31, 2000 as a result of a change in accounting method for any taxable period
ending on or before December 31, 2000 or pursuant to any agreement with any Tax
authority with respect to any such taxable period.
(h) Except as set forth in Schedule 3.11(h) of the IWO Disclosure Schedule,
none of the property of IWO or any of its subsidiaries is held in an
arrangement for which partnership Tax Returns are being filed, and neither IWO
nor any of its subsidiaries owns any interest in any controlled foreign
corporation (as defined in section 957 of the Code), passive foreign investment
company (as defined in section 1296 of the Code) or other entity the income of
which is required to be included in the income of IWO or such subsidiary.
(i) Except as set forth in Schedule 3.11(i) of the IWO Disclosure Schedule,
none of the property of IWO or any of its subsidiaries is subject to a
safe-harbor lease (pursuant to section 168(f)(8) of the Internal Revenue Code
of 1954 as in effect after the Economic Recovery Tax Act of 1981 and before the
Tax Reform Act of 1986) or is "tax-exempt use property" (within the meaning of
section 168(h) of the Code) or "tax-exempt bond financed property" (within the
meaning of section 168(g)(5) of the Code).
(j) None of IWO nor any of its subsidiaries has made an election under
section 341(f) of the Code.
Section 3.12. Tax Matters. None of IWO nor any of its affiliates has taken
or agreed to take any action that would prevent the Merger from constituting a
reorganization qualifying under the provisions of Section 368(a) of the Code,
and IWO has no knowledge of any fact or circumstance that would prevent the
Merger from qualifying as a reorganization within the meaning of Section 368(a)
of the Code or would cause their counsel to be unable to render the opinion
described in Section 7.03(d).
Section 3.13. Opinion of Financial Advisor. IWO has received the opinion
of Credit Suisse First Boston Corporation to the effect that, as of the date of
delivery of such opinion, the Merger Consideration to be received by the
holders of IWO Common Stock in the Merger is fair, from a financial point of
view, to such holders. IWO will promptly deliver to USU a true and complete
written copy of such opinion.
Section 3.14. Environmental Matters. Except for matters disclosed in the
IWO SEC Reports filed prior to the date hereof or in Schedule 3.14 of the IWO
Disclosure Schedule and except for matters that would not reasonably be
expected to have a IWO Material Adverse Effect: (i) the properties, operations
and activities of IWO and its subsidiaries are in compliance with all
applicable Environmental Laws; (ii) IWO and its subsidiaries and the properties
and operations of IWO and its subsidiaries are not subject to any existing,
pending or, to the knowledge of IWO, threatened action, suit, investigation,
inquiry or proceeding by any third party, including without limitation, any
governmental authority, under any Environmental Law; (iii) all notices,
permits, exemptions, registrations, licenses, or similar authorizations, if
any, required to be obtained or filed by IWO or any of its subsidiaries under
any Environmental Law in connection with any aspect of the business of IWO or
its subsidiaries, including without limitation, those relating to the
generation, treatment, storage, transport, disposal or release of a Hazardous
Substance, have been duly obtained or filed and will remain valid and in effect
after the Merger, and IWO and its subsidiaries are in compliance with the terms
and conditions of all such notices, permits, exemptions, registrations,
licenses and similar authorizations; (iv) IWO and its subsidiaries have
satisfied and are currently in compliance with all financial responsibility
requirements applicable to their operations and imposed by any governmental
authority under any Environmental Law, and IWO and its subsidiaries have not
received any notice of noncompliance with any such financial responsibility
requirements; (v) there are no physical or environmental conditions existing on
any property of IWO or its subsidiaries or resulting from IWO's or such
subsidiaries' operations or activities, past or present, at any on-site or, to
the knowledge of IWO, offsite location, that would reasonably be expected to
give rise to any on-site or offsite investigatory or remedial obligations
imposed on IWO or any of its subsidiaries under any Environmental Laws; (vi) to
IWO's knowledge, since the effective date of the relevant requirements of
applicable Environmental Laws and to the extent required by such applicable
Environmental Laws, all Hazardous Substances generated by IWO
13
and its subsidiaries have been transported only by carriers duly licensed, as
applicable, by governmental authorities and authorized under Environmental Laws
to transport such substances, and disposed of only at treatment, storage, and
disposal facilities duly licensed, as applicable, by governmental authorities
and authorized under Environmental Laws to treat, store or dispose of such
substances; (vii) there has been no exposure of any person or property to
Hazardous Substances, nor has there been any release of Hazardous Substances
into the environment by IWO or its subsidiaries or in connection with their
properties, operations or activities that would reasonably be expected to give
rise to any claim against IWO or any of its subsidiaries for damages or
compensation; and (viii) IWO and its subsidiaries have made available to USU
all internal and external environmental audits, studies, correspondence and
related documents on environmental matters in the possession of IWO or its
subsidiaries relating to any of the current or former properties, operations or
activities of IWO and its subsidiaries.
For purposes of this Agreement, the term "Environmental Laws" shall mean any
and all laws, statutes, ordinances, rules, regulations, common law, judgments,
settlements, decrees or orders of any governmental authority pertaining to
health, safety or the environment currently in effect in any and all
jurisdictions in which the party in question and its subsidiaries own or have
owned property or conduct or have conducted business, including without
limitation, the Clean Air Act, as amended, the Comprehensive Environmental,
Response, Compensation, and Liability Act of 1980 ("CERCLA"), as amended, the
Federal Water Pollution Control Act, as amended, the Occupational Safety and
Health Act of 1970, as amended, the Resource Conservation and Recovery Act of
1976 ("RCRA"), as amended, the Safe Drinking Water Act, as amended, the Toxic
Substances Control Act, as amended, the Hazardous & Solid Waste Amendments Act
of 1984, as amended, the Superfund Amendments and Reauthorization Act of 1986,
as amended, the Hazardous Materials Transportation Act, as amended, the Oil
Pollution Act of 1990, as amended, any state Laws implementing the foregoing
federal Laws, and any state Laws pertaining to the handling of oil and gas
exploration and production wastes or the use, maintenance, and closure of pits
and impoundments, and all other environmental conservation or protection Laws.
For purposes of this Agreement, the term "Hazardous Substances" shall mean: (i)
any "waste," "hazardous waste," "industrial waste," "solid waste," "hazardous
material," "hazardous substance," "toxic substance," "hazardous material,"
"pollutant," or "contaminant" as those or similar terms are defined,
identified, or regulated under any Environmental Laws; (2) any asbestos,
polychlorinated biphenyls, or radon; (3) any petroleum, petroleum hydrocarbons,
petroleum products, crude oil and any components, fractions, or derivatives
thereof; and (4) any substance that, whether by its nature or its use, is
subject to regulation under any Environmental Law or results in any
governmental authority requiring any environmental investigation, remediation,
or monitoring thereof. Also for purposes of this Agreement, "release" shall
have the meaning specified in CERCLA, and "disposal" shall have the meaning
specified in RCRA; provided, however, that to the extent the Laws of the state
in which the property is located establish a meaning for "release" or
"disposal" that is broader than that specified in either CERCLA or RCRA, such
broader meaning shall apply.
Section 3.15. Takeover Statutes. No "fair price," "moratorium," "control
share acquisition" or other similar anti-takeover Law, state or federal (each,
a "Takeover Statute") is applicable to the Merger or the other transactions
contemplated hereby.
Section 3.16. Brokers. Except for Credit Suisse First Boston Corporation,
UBS Warburg LLC and XX Xxxxxx Securities Inc., no broker, finder or investment
banker is entitled to any brokerage, finder's or other fee or commission in
connection with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of IWO or any of its subsidiaries. Prior to
the date of this Agreement, IWO has delivered to USU a complete and correct
copy of all compensation agreements pursuant to which Credit Suisse First
Boston Corporation, UBS Warburg LLC and XX Xxxxxx Securities Inc. will be
entitled to any payment relating to the transactions contemplated by this
Agreement.
Section 3.17. Insurance. Schedule 3.17 of the IWO Disclosure Schedule sets
forth an accurate and complete list of all insurance coverage currently in
effect for IWO and its subsidiaries, including in each case the name of the
underwriter, the risks insured, the coverage amounts and related limits, the
deductibles, the
14
expiration date and all significant riders. Except as set forth in Schedule
3.17 of the IWO Disclosure Schedule, none of IWO nor any of its subsidiaries
has received any notice, which remains outstanding, of cancellation or
termination with respect to any material insurance policy of IWO or its
subsidiaries.
Section 3.18. Properties
(a) Except as set forth in Schedule 3.18(a) of the IWO Disclosure Schedule,
each of IWO and its subsidiaries has good and marketable title, free and clear
of all liens, encumbrances, mortgages, pledges, charges, defaults or equitable
interests, to all of the properties and assets, real and personal, tangible or
intangible, that are reflected on the latest balance sheet contained in IWO's
most recent IWO SEC Report on Form 10-Q filed prior to the date hereof or
acquired after the date of such balance sheet, except for dispositions of such
properties or assets in the ordinary course of business consistent with past
practice and except for (i) liens for Taxes not yet due and payable or
contested in good faith by appropriate proceedings, (ii) such imperfections of
title, easements and encumbrances, if any, as would not reasonably be expected
to have a IWO Material Adverse Effect, and (iii) mechanic's, materialmen's,
workmen's, repairmen's, warehousemen's, carrier's and other similar liens and
encumbrances arising in the ordinary course of business (the items in clauses
(i) (ii) and (iii) and the items set forth in Schedule 3.18(a) of the IWO
Disclosure Schedule, collectively, the "IWO Permitted Liens").
(b) Schedule 3.18(b) of the IWO Disclosure Schedule sets forth an accurate
and complete list and description of all real property owned by IWO or any of
its subsidiaries.
Section 3.19. Leases
(a) Schedule 3.19(a) of the IWO Disclosure Schedule contains an accurate and
complete list of each IWO Site Lease and each IWO Space Lease (each, a "IWO
Lease"). A true and complete copy of each IWO Lease has heretofore been made
available to USU.
(b) To the knowledge of IWO, each IWO Lease is valid, binding and
enforceable in accordance with its terms and is in full force and effect,
except as would not reasonably be expected to have a IWO Material Adverse
Effect. The interest of IWO and its subsidiaries under each IWO Lease is free
and clear of all liens and encumbrances other than any IWO Permitted Liens.
Except as set forth in Schedule 3.19(b) of the IWO Disclosure Schedule, there
are no existing defaults by IWO or any of its subsidiaries under any of the IWO
Leases, and to the knowledge of IWO no event has occurred that (whether with or
without notice, lapse of time or the happening or occurrence of any other
event) would constitute a default under any IWO Lease, except in each case for
defaults that would not reasonably be expected to have a IWO Material Adverse
Effect. None of IWO nor any of its subsidiaries has received any notice that
any lessor under any IWO Lease will not consent (where such consent is
necessary) to the consummation of the Merger without requiring any material
modification of the rights or obligations of the lessee thereunder.
Section 3.20. No Undisclosed Liabilities. Except (i) as disclosed in the
consolidated financial statements contained in the IWO SEC Reports filed prior
to the date hereof, (ii) for liabilities and obligations incurred in the
ordinary course of business and consistent with past practice of IWO and its
subsidiaries since the date of the latest balance sheet contained in the most
recent IWO SEC Report on Form 10-Q filed prior to the date hereof, (iii) as
disclosed in Schedule 3.20 of the IWO Disclosure Schedule and (iv) for
liabilities that would not reasonably be expected to have a IWO Material
Adverse Effect, none of IWO nor any of its subsidiaries has any liability or
obligation of any nature, whether or not absolute, accrued, contingent or
otherwise that would be required to be reflected or reserved against in a
consolidated balance sheet of IWO and its subsidiaries prepared in accordance
with GAAP as of the date hereof.
Section 3.21. Certain Contracts
(a) Except for the IWO Sprint Agreements and the IWO Leases and contracts or
agreements described in clauses (iii), (iv), (v), (vi), (vii) and (xvi) that
provide for aggregate payments to any person in any calendar year
15
of less than $100,000, Schedule 3.21(a) of the IWO Disclosure Schedule contains
as of the date of this Agreement a complete and accurate list of each of the
following contracts, and a true and correct copy of each such contract has been
made available to USU by IWO:
(i) contracts or agreements of IWO or any of its subsidiaries relating to
indebtedness, liability for borrowed money or the deferred purchase price of
property (excluding trade payables in the ordinary course of business) or
any guarantee or other contingent liability in respect of any indebtedness
or obligation of any person other than IWO or any of its subsidiaries (other
than the endorsement of negotiable instruments for collection in the
ordinary course of business), in any case providing for or relating to
aggregate payments to any person in excess of $250,000;
(ii) contracts or agreements that contain restrictions with respect to
payment of dividends or any other distribution in respect of the equity of
IWO or any of its subsidiaries;
(iii) any letters of credit or similar arrangements relating to IWO or
any of its subsidiaries;
(iv) any employment or consulting agreements with any employee of IWO or
any of its subsidiaries or other person on a consulting basis;
(v) any management, consulting or advisory agreements with any former
employee of IWO or any of its subsidiaries pursuant to which IWO or any of
its subsidiaries has any existing or future obligations;
(vi) any agreement under which IWO or any of its subsidiaries is lessee
of or holds or operates any property, real or personal;
(vii) any agreement under which IWO or any of its subsidiaries is lessor
of or permits any third party to hold or operate any property, real or
personal;
(viii) any powers of attorney granted by or on behalf of IWO or any of
its subsidiaries;
(ix) [intentionally omitted]
(x) any agreement that in any way purports to prohibit IWO or any of its
subsidiaries from freely engaging in business anywhere in the world or
competing with any other person;
(xi) any guaranty or other similar undertaking with respect to a
contractual performance of any third party extended by IWO or any of its
subsidiaries, in any case relating to amounts in excess of $250,000;
(xii) any agreement pursuant to which IWO or any of its subsidiaries has
agreed to defend, indemnify or hold harmless any other person;
(xiii) any agreement pursuant to which IWO may be required to file a
registration statement under the Securities Act with respect to any
securities issued by IWO;
(xiv) any joint venture agreement or partnership agreement to which IWO
or any of its subsidiaries is a party;
(xv) any vendor agreements to which IWO or any of its subsidiaries is a
party, in any case providing for aggregate payments to any person in any
calendar year of more than $250,000;
(xvi) any construction contracts or construction management contracts to
which IWO or any of its subsidiaries is a party;
(xvii) any agreement between IWO or any of its subsidiaries, on the one
hand, and any of their respective stockholders, on the other hand under
which IWO or any of its subsidiaries has any existing or future obligations;
(xviii) any agreement of any character (contingent or otherwise) pursuant
to which any person is or may be entitled to receive any payment based on
the revenues or earnings, or calculated in accordance therewith, of IWO or
any of its subsidiaries, except between IWO and its subsidiaries or between
such subsidiaries;
16
(xix) any agreement to make any loans, advances or capital contributions
to, or investments in, any person, other than by IWO or a subsidiary of IWO
to or in IWO or any direct or indirect wholly owned subsidiary of IWO; and
(xx) any other agreement to which IWO or any of its subsidiaries is a
party or by which IWO or any of its subsidiaries is bound and which is
material to IWO and its subsidiaries taken as a whole, other than any
agreement filed as an exhibit to a IWO SEC Report filed prior to the date
hereof.
(b) Except as set forth in Schedule 3.21(b) of the IWO Disclosure Schedule,
with respect to each IWO Contract that is individually material to the business
or operations of IWO and its subsidiaries taken as a whole: (i) such IWO
Contract is valid, binding and enforceable in accordance with its terms and is
in full force and effect; (ii) none of IWO nor any of its subsidiaries is in
breach or default thereof, nor has IWO or any of its subsidiaries received
notice that it is in breach of or default thereof; and (iii) no event has
occurred which, with notice, or lapse of time or both, would constitute a
breach or default thereof by IWO or any of its subsidiaries or by any other
party thereto or would permit termination, modification, or acceleration
thereof by any other party thereto, except in each case as would not reasonably
be expected to have a IWO Material Adverse Effect. Except as set forth in
Schedule 3.21(b) of the IWO Disclosure Schedule, none of IWO nor any of its
subsidiaries is a party to any oral contract, agreement, or other commitment
which, if reduced to written form, would be required to be listed in Schedule
3.21(a) of the IWO Disclosure Schedule under the terms of this Section 3.21.
IWO has made available to USU a materially accurate description of each oral
contract, agreement or other commitment set forth in Schedule 3.21(b) of the
IWO Disclosure Schedule.
(c) Each contract, arrangement, commitment or understanding of any type or
form required to be set forth in Schedule 3.21(a) of the IWO Disclosure
Schedule, whether or not set forth in Schedule 3.21(a) of the IWO Disclosure
Schedule, is referred to herein as a "IWO Contract."
Section 3.22. Distributors and Suppliers. Except as set forth in Schedule
3.22 of the IWO Disclosure Schedule, since December 31, 2000, there has not
been any material adverse change in the business relationship of IWO or any of
its subsidiaries with any distributor who accounted for more than 2% of IWO's
sales (on a consolidated basis) during the period from December 31, 2000 to
September 30, 2001, or with any supplier from whom IWO or any of its
subsidiaries purchased more than 5% of the goods or services (on a consolidated
basis) which it purchased during the period from December 31, 2000 to September
30, 2001. Except as set forth in Schedule 3.22 of the IWO Disclosure Schedule,
none of IWO nor any of its subsidiaries has knowledge of any termination or
intended termination by any such distributor or supplier of its business
relationship with IWO or any of its subsidiaries or any modification or
intended modification of its business relationship with IWO or any of its
subsidiaries in a manner which is adverse in any material respect to IWO, and
none of IWO nor any of its subsidiaries has knowledge of any facts which could
reasonably be expected to form an adequate basis for such termination or
modification.
Section 3.23. Sprint Agreement Compliance
(a) Schedule 3.23(a) of the IWO Disclosure Schedule sets forth a complete
and accurate list of all agreements, together with all amendments, waivers or
other changes thereto, between IWO, its subsidiaries or any of its affiliates,
on the one hand, and Sprint PCS, on the other hand (collectively, the "IWO
Sprint Agreements"). IWO has made available to USU a true and complete copy of
each of the IWO Sprint Agreements. There are no unwritten amendments to, or
waivers or other changes under, any IWO Sprint Agreement.
(b) Each of the IWO Sprint Agreements is valid, binding and enforceable in
accordance with its terms and is in full force and effect, except in any such
case as would not reasonably be expected to have a IWO Material Adverse Effect.
IWO and its subsidiaries have performed all obligations required to be
performed by them under, and they are not in default under or in breach of, nor
in receipt of any claim of default or breach under, any of the IWO Sprint
Agreements, except in any such case as would not reasonably be expected to have
a IWO Material
17
Adverse Effect. No event has occurred which with the passage of time or the
giving of notice or both would result in a default, breach or event of
noncompliance by IWO or any of its subsidiaries, or which would permit
termination, cancellation or modification by Sprint PCS, under any of the IWO
Sprint Agreements, except in any such case as would not reasonably be expected
to have a IWO Material Adverse Effect. None of IWO nor any of its subsidiaries
has knowledge of any cancellation or anticipated cancellation by Sprint PCS of
any of the IWO Sprint Agreements. IWO and its subsidiaries have made available
to USU copies of all written notices received by them from Sprint PCS during
the last six months (i) delivered pursuant to the official notice provisions of
IWO Sprint Agreements or (ii) alleging a breach of the IWO Sprint Agreements.
(c) IWO and its subsidiaries are in material compliance with the schedule
and other goals established by the network build-out plan set forth in the IWO
Sprint Agreements to the extent required by the IWO Sprint Agreements. Except
as set forth in the Exhibit 2.1 Update IWO/Sprint PCS Build Out Plan of Years
2000, 2001 and 2002, dated September 30, 2001, and Presentation Materials on
Executive Summary of IWO/Sprint PCS Build Out Plan for Years 2000, 2001 and
2002, dated September 30, 2001, together with all associated documentation and
mapping, copies of which have been provided to USU, IWO and its subsidiaries
have completed their build-out and network launch as of the date of such report.
Section 3.24. Intellectual Property.
(a) "Intellectual Property" means all intellectual property rights of every
kind, including (i) all United States or foreign patents and all United States
or foreign patent applications, (ii) all trade secret or confidential
information, including without limitation, marketing, customer, planning,
financial, research, development and technical information and data; (iii) all
rights of copyright, including registrations and applications for registration
thereof, and (iv) all trademarks, service marks, trademark registrations and
applications, service xxxx registrations and applications, trade names and
trade dress.
(b) IWO and its subsidiaries own or have the right to use or license, and to
license others to use, all Intellectual Property material to the businesses of
IWO and its subsidiaries as such businesses are conducted on the date hereof
(the "IWO Intellectual Property"). Except as set forth in Schedule 3.24 of the
IWO Disclosure Schedule: (i) no written claim of invalidity or conflicting
ownership rights with respect to any IWO Intellectual Property has been made by
a third person and the IWO Intellectual Property is not the subject of any
pending or, to IWO's knowledge, threatened action, suit, claim, investigation,
arbitration or other proceeding; (ii) no person has given notice to IWO or any
of its subsidiaries that IWO or any of its subsidiaries or licensees is
infringing or misappropriating or has infringed or misappropriated the
Intellectual Property of any third person; (iii) to IWO's knowledge, the
conduct of the businesses of IWO and its subsidiaries and the use of any IWO
Intellectual Property in the businesses of IWO and its subsidiaries as such
businesses are conducted on the date hereof does not and will not infringe or
misappropriate any Intellectual Property of any third person; (iv) to IWO's
knowledge, no other person is interfering with, infringing upon,
misappropriating or otherwise coming into conflict with the rights of IWO and
its subsidiaries to use or exploit any IWO Intellectual Property; and (v) the
execution, delivery and performance of this Agreement by IWO and the
consummation of the transactions contemplated hereby will not impair the right
of the Surviving Corporation to make, use, sell, license or dispose of, or to
bring any action for the infringement of, any IWO Intellectual Property.
Section 3.25. Related Party Transactions. Except as set forth in Schedule
3.25 of the IWO Disclosure Schedule, to the knowledge of IWO, no stockholder
nor any officer or director of IWO or any of its subsidiaries owns or holds,
directly or indirectly, any interest in (excepting holdings solely for passive
investment purposes of securities of publicly held and traded entities
constituting less than 5% of the equity of any such entity), or is an officer,
director, employee or consultant of any person that is, a competitor, lessor,
lessee, customer or supplier of IWO or any of its subsidiaries or which
conducts a business similar to any business conducted by IWO or any of its
subsidiaries. No stockholder, officer or director of IWO or any of its
subsidiaries (a) owns or holds, directly or indirectly, in whole or in part,
any IWO Intellectual Property, (b) to the knowledge of IWO has any claim,
charge, action or cause of action against IWO or any of its subsidiaries,
except for claims for reasonable
18
unreimbursed travel or entertainment expenses, accrued vacation pay or accrued
benefits under any employee benefit plan existing on the date hereof, (c) to
the knowledge of IWO, has made, on behalf of IWO or any of its subsidiaries,
any payment or commitment to pay any commission, fee or other amount to, or to
purchase or obtain or otherwise contract to purchase or obtain any goods or
services from, any other person of which any stockholder, officer or director
of IWO or any of its subsidiaries is a partner or shareholder (except holdings
solely for passive investment purposes of securities of publicly held and
traded entities constituting less than 5% of the equity of any such entity),
(d) owes any money to IWO or any of its subsidiaries or (e) has any interest in
any property, real or personal, tangible or intangible, used in or pertaining
to the business of IWO or any of its subsidiaries.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF USU
The USU Companies hereby represent and warrant to IWO that:
Section 4.01. Organization and Qualification. Each of the USU Companies is
a corporation duly organized, validly existing and in good standing under the
Laws of the jurisdiction of its incorporation and has all requisite corporate
power and authority to own, lease and operate its properties and to carry on
its business as it is now being conducted and is duly qualified and in good
standing to do business in each jurisdiction in which the nature of the
business conducted by it or the ownership or leasing of its properties makes
such qualification necessary, other than where the failure to be so duly
qualified and in good standing would not reasonably be expected to have a USU
Material Adverse Effect. The term "USU Material Adverse Effect" as used in this
Agreement shall mean any change, effect, event or occurrence that is or would
reasonably be expected to be materially adverse to the financial condition,
results of operations, business, properties or operations of USU and its
subsidiaries, taken as a whole; provided, however, that any such change,
effect, event or occurrence arising out of or attributable to (A) changes or
developments in the industries in which USU and its subsidiaries operate to the
extent generally affecting all other persons operating in such industries, (B)
general economic, political or financial market conditions, (C) action taken by
USU with the prior written consent of IWO, (D) USU's compliance with its
covenants under, or the terms and conditions of, this Agreement, (E) the
execution or announcement of this Agreement or (F) any decline in the market
price per share of USU Common Stock (but not any change, effect, event or
occurrence underlying such decline to the extent such change, effect, event or
occurrence would otherwise constitute a USU Material Adverse Effect) shall also
be excluded from the determination of a USU Material Adverse Effect. Schedule
4.01 of the disclosure schedule delivered to IWO by USU on the date hereof (the
"USU Disclosure Schedule") sets forth, as of the date of this Agreement, a true
and complete list of all USU's directly or indirectly owned subsidiaries,
together with (A) the jurisdiction of incorporation or organization of each
such subsidiary and the percentage of each such subsidiary's outstanding
capital stock or other equity interests owned by USU or another subsidiary of
USU and (B) an indication of whether each such subsidiary is a Significant
Subsidiary.
Section 4.02. Charter and Bylaws. USU has heretofore made available to IWO
a complete and correct copy of the charter and bylaws, as amended or restated,
of each of the USU Companies. None of the USU Companies is in violation of any
of the provisions of its charter or any material provision of its bylaws.
Section 4.03. Capitalization.
(a) The authorized capital stock of USU consists of (i) 500,000,000 shares
of class A common stock, $0.01 par value per share (the "USU Class A Common
Stock"), of which as of December 10, 2001, 27,751,598 shares were issued and
outstanding, (ii) 300,000,000 shares of class B common stock, $0.01 par value
per share (the "USU Class B Common Stock" and, together with the USU Class A
Common Stock, the "USU Common Stock"), of which as of December 10, 2001,
56,600,144 shares were issued and outstanding and (iii) 200,000,000 shares of
preferred stock, $0.01 per value per share, of which as of December 10, 2001,
no shares were issued
19
and outstanding. As of December 10, 2001, no shares were held in treasury by
USU and 6,635,580 shares of USU Class A Common Stock were reserved for future
issuance pursuant to outstanding options granted under the 1999 Amended and
Restated USU Equity Incentive Plan. Except as described in this Section 4.03 or
in Schedule 4.03(a) of the USU Disclosure Schedule, as of December 10, 2001, no
shares of capital stock or other equity securities of USU are issued or
outstanding or reserved for any purpose. Each of the outstanding shares of
capital stock of or other equity interests in, each of USU and each of its
subsidiaries is duly authorized, validly issued and, in the case of shares of
capital stock, fully paid and nonassessable, and has not been issued in
violation of (nor are any of the authorized shares of capital stock or other
equity securities of USU or any of its subsidiaries subject to) any preemptive
or similar rights created by statute, the charter or bylaws of USU or any of
its subsidiaries, or any agreement to which USU or any of its subsidiaries is a
party or bound, and, except as set forth in Schedule 4.03(a) of the USU
Disclosure Schedule, such outstanding shares or other equity interests owned by
USU or a subsidiary of USU are owned free and clear of all security interests,
liens, claims, pledges, agreements, limitations on USU's or such subsidiaries'
voting rights, charges or other encumbrances of any nature whatsoever. Except
as set forth in Schedule 4.03(a) of the USU Disclosure Schedule, all shares of
capital stock or other equity interests in each subsidiary of USU are owned by
USU or by a direct or indirect wholly-owned subsidiary of USU.
(b) Except as set forth in Section 4.03(a) above or in Schedule 4.03(b)(i)
of the USU Disclosure Schedule, there are no outstanding securities, options,
warrants or other rights (including registration rights), agreements or
commitments of any character to which USU or any of its subsidiaries is a party
relating to the issued or unissued capital stock or other equity interests of
USU or any of its subsidiaries or obligating USU or any of its subsidiaries to
grant, issue, deliver or sell, or cause to be granted, issued, delivered or
sold, any shares of the capital stock or other equity interests of USU or any
of its subsidiaries, by sale, lease, license or otherwise. Except as set forth
in Schedule 4.03(b)(ii) of the USU Disclosure Schedule, there are no
obligations, contingent or otherwise, of USU or any of its subsidiaries (i) to
repurchase, redeem or otherwise acquire any shares of capital stock or other
equity interest of USU or any of its subsidiaries or (ii) to dispose of any
shares of capital stock or equity interests in any subsidiary of USU. Except as
set forth in Schedule 4.03(b)(iii) of the USU Disclosure Schedule, there are no
voting trusts, proxies or other agreements or understandings to which USU or
any of its subsidiaries is a party or by which USU or any of its subsidiaries
is bound with respect to the voting of any shares of capital stock of USU.
There are no bonds, debentures, notes or other indebtedness of USU or any of
its subsidiaries having the right to vote (or convertible into, or exchangeable
for, securities having the right to vote) on any matters on which stockholders
of USU may vote.
(c) The authorized capital stock of Merger Sub consists of 1000 shares of
common stock, $0.01 par value per share (the "Merger Sub Common Stock"). As of
the date of this Agreement, 1000 shares of Merger Sub Common Stock were issued
and outstanding and held by a direct or indirect subsidiary of USU, all of
which are duly authorized, validly issued, fully paid and nonassessable and not
subject to preemptive rights created by statute, Merger Sub's charter or bylaws
or any agreement to which Merger Sub is a party or is bound.
(d) The shares of USU Common Stock to be issued pursuant to the Merger will
be, and all shares of USU Common Stock issuable upon exercise of any options or
warrants to purchase IWO Common Stock to be assumed by USU in the Merger will
be, when issued in accordance with the terms of such options or warrants, as
applicable, duly authorized, validly issued, fully paid and nonassessable and
not subject to preemptive rights created by statute, USU's charter or bylaws or
any agreement to which USU is a party or is bound.
(e) As of the date of this Agreement, USU and its subsidiaries are in
compliance with the foreign ownership and voting provisions of Section 310(b)
of the Communications Act.
Section 4.04. Authority. Each of the USU Companies has all requisite
corporate power and authority to execute and deliver this Agreement, to perform
its obligations hereunder and, subject to the Required USU Vote (as defined
below), to consummate the transactions contemplated hereby. The execution and
delivery of this Agreement by each of the USU Companies and the consummation by
each of the USU Companies of the
20
transactions contemplated hereby have been duly authorized by all necessary
corporate action and no other corporate proceedings on the part of any of the
USU Companies are necessary to authorize this Agreement or, subject to the
Required USU Vote, to consummate the transactions contemplated hereby. The
Board of Directors of USU has unanimously approved this Agreement, the Merger
and the other transactions contemplated hereby. Except for the affirmative vote
of the holders of a majority of the issued and outstanding shares of USU Class
A Common Stock and USU Class B Common Stock, voting together as a single class,
as required by the applicable rules of Nasdaq to approve the issuance of the
USU Common Stock pursuant to the Merger (the "Required USU Vote"), no vote of
the stockholders of USU or any class thereof, or of the holders of any other
securities of USU (equity or otherwise), is required by Law or the certificate
of incorporation or bylaws of USU for USU to consummate the Merger. This
Agreement has been duly executed and delivered by each of the USU Companies
and, assuming the due authorization, execution and delivery thereof by IWO,
constitutes the legal, valid and binding obligation of each of the USU
Companies enforceable against each of the USU Companies in accordance with its
terms.
Section 4.05. No Conflict; Required Filings and Consents.
(a) Assuming that the Approvals (as defined in Section 4.05(b)), filings and
notifications described in Section 4.05(b) have been obtained or made, as the
case may be, the execution and delivery of this Agreement by each of the USU
Companies does not, and the consummation of the transactions contemplated
hereby will not (i) conflict with or violate the charter or bylaws, or the
equivalent organizational documents, in each case as amended or restated, of
USU or any of its subsidiaries, (ii) conflict with or violate any Laws
applicable to USU or any of its subsidiaries or by which any of their
respective assets or properties is bound or subject, or (iii) result in any
breach of or constitute a default (or an event that with notice or lapse of
time or both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or require payment
under, or result in the creation of a lien or encumbrance on any of the
properties or assets of USU or any of its subsidiaries pursuant to, any note,
bond, mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other instrument or obligation to which USU or any of its
subsidiaries is a party or by or to which USU or any of its subsidiaries or any
of their respective assets or properties is bound or subject, except for any
such conflicts or violations described in clause (ii) or breaches, defaults,
events, rights of termination, amendment, acceleration or cancellation, payment
obligations or liens or encumbrances described in clause (iii) that would not
reasonably be expected to have a USU Material Adverse Effect.
(b) The execution and delivery of this Agreement by each of the USU
Companies does not, and the consummation of the transactions contemplated
hereby will not, require any of the USU Companies to obtain any Approvals of or
from, or to make any filing with or notification to, any Governmental Entity or
third person, except (i) as disclosed in Schedule 4.05(b) of the USU Disclosure
Schedule, (ii) for applicable requirements, if any, of the Securities Act, the
Exchange Act, Blue Sky Laws, the HSR Act, the Communications Act and the filing
and recordation of appropriate merger documents as required by Delaware Law,
and (iii) where the failure to obtain such Approvals, or to make such filings
or notifications, would not prevent, materially delay or materially impair the
ability of the USU Companies to consummate the transactions contemplated by
this Agreement and would not reasonably be expected to have a USU Material
Adverse Effect.
Section 4.06. Permits; Compliance. Each of USU and its subsidiaries is in
possession of all franchises, grants, authorizations, licenses, permits,
easements, variances, exemptions, consents, certificates, approvals and orders
necessary to own, lease and operate its properties and to carry on its business
as it is now being conducted (collectively, the "USU Permits"); and there is no
action, proceeding or investigation pending or threatened in writing regarding,
and no event has occurred that has resulted in or after notice or lapse of time
or both could reasonably be expected to result in, revocation, suspension,
adverse modification, non-renewal, impairment, restriction, termination or
cancellation of, or order of forfeiture or substantial fine with respect to,
any of the USU Permits or, to the knowledge of USU, the personal communications
services licenses held by Sprint PCS and that are the subject of the USU Sprint
Agreements (as defined in Section 4.22(a)) (the "USU Sprint Licenses"), except
in any such case where the failure to possess such USU Permits or where any
such action,
21
proceeding, investigation or event would not reasonably be expected to have a
USU Material Adverse Effect or prevent, materially delay or materially impair
the ability of the USU Companies to consummate the transactions contemplated by
this Agreement. None of USU nor any of its subsidiaries is in conflict with, or
in default or violation of (a) any Law applicable to USU or any of its
subsidiaries or by or to which any of their respective assets or properties is
bound or subject or (b) any of the USU Permits, including the USU Sprint
Licenses, except for any such conflicts, defaults or violations described in
the USU SEC Reports (as defined below) filed prior to the date hereof or
described in Schedule 4.06 of the USU Disclosure Schedule or which would not
reasonably be expected to have a USU Material Adverse Effect. None of USU nor
any of its subsidiaries has received from any Governmental Entity any written
notification with respect to possible conflicts, defaults or violations of Laws
or the USU Permits, except for written notices relating to possible conflicts,
defaults or violations described in the USU SEC Reports filed prior to the date
hereof or that would not reasonably be expected to have a USU Material Adverse
Effect.
Section 4.07. Reports; Financial Statements.
(a) Since April 4, 2000, USU and its subsidiaries have filed (i) all forms,
reports, statements and other documents required to be filed with the SEC,
including, without limitation, (1) all Annual Reports on Form 10-K, (2) all
Quarterly Reports on Form 10-Q, (3) all proxy statements relating to meetings
of stockholders (whether annual or special), (4) all Current Reports on Form
8-K and (5) all other reports, schedules, registration statements or other
documents (collectively, the "USU SEC Reports"). The USU SEC Reports, including
all USU SEC Reports filed after the date of this Agreement and prior to the
Effective Time were or will be prepared in all material respects in accordance
with the requirements of the Securities Act and the Exchange Act, as the case
may be, and the rules and regulations of the SEC thereunder applicable to such
USU SEC Reports. The USU SEC Reports, including all USU SEC Reports filed after
the date of this Agreement and prior to the Effective Time, did not at the time
they were filed, or will not at the time they are filed, contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading unless
such misstatement or omission was corrected in a subsequent USU SEC Report
filed prior to the date hereof.
(b) Each of the consolidated financial statements (including, in each case,
any related notes thereto) contained in the USU SEC Reports filed prior to the
Effective Time (i) have been or will be prepared in all material respects in
accordance with the published rules and regulations of the SEC and GAAP applied
on a consistent basis throughout the periods involved (except (A) to the extent
required by changes in GAAP and (B) with respect to the USU SEC Reports filed
prior to the date of this Agreement, as may be indicated in the notes thereto)
and (ii) fairly present or will fairly present the consolidated financial
position of USU and its subsidiaries as of the respective dates thereof and the
consolidated results of operations and cash flows for the periods indicated,
except that any unaudited interim financial statements were or will be subject
to normal recurring year-end adjustments.
(c) As of November 30, 2001, USU and its consolidated subsidiaries had
$336,318,246 in outstanding long term debt and $111,844,124 in cash, cash
equivalents, restricted cash and investment securities within the meaning of
GAAP.
Section 4.08. Absence of Certain Changes or Events. Except as disclosed in
the USU SEC Reports filed prior to the date of this Agreement or as set forth
in Schedule 4.08 of the USU Disclosure Schedule, since December 31, 2000, USU
and its subsidiaries have conducted their businesses only in the ordinary
course and in a manner consistent with past practice and there has not been any
material change by USU or its subsidiaries in their accounting methods,
principles or practices or a USU Material Adverse Effect or any event,
occurrence or development which would be reasonably expected to have a USU
Material Adverse Effect.
Section 4.09. Absence of Litigation. Except as disclosed in the USU SEC
Reports filed prior to the date of this Agreement or as set forth in Schedule
4.09 of the USU Disclosure Schedule, there is no claim, action, suit,
litigation, proceeding, arbitration or, to the knowledge of USU, investigation
of any kind, at Law or in equity,
22
pending or, to the knowledge of USU, threatened against USU or any of its
subsidiaries or any properties or rights of USU or any of its subsidiaries, and
none of such claims, actions, suits, litigation, proceedings, arbitrations or
investigations would reasonably be expected to have a USU Material Adverse
Effect. Neither USU nor any of its subsidiaries is subject to any continuing
order, consent, decree or settlement agreement of, or other similar written
agreement with, or, to the knowledge of USU, continuing investigation by, any
Governmental Entity, court or arbitration tribunal, or any judgment, order,
writ, injunction, decree, cease-and-desist order or award of any Governmental
Entity, court or arbitrational tribunal, except for matters which would not
reasonably be expected to have a USU Material Adverse Effect.
Section 4.10. USU Employee Benefit Plans; Labor Matters
(a) For purposes of this Agreement, "USU Benefit Plans" shall mean each
employee benefit plan, program, commitment and contract (including, without
limitation, any "employee benefit plan", as defined in Section 3(3) of ERISA
and any compensation or equity plan, program, commitment or contract), and all
amendments thereto, maintained or contributed to by USU or any of its
subsidiaries, or with respect to which USU or any of its subsidiaries has or
could incur liability, including without limitation, under Section 4069,
4212(c) or 4204 of ERISA, or with or relating to any employee, director or
consultant of USU or any of its subsidiaries, whether or not such plan,
program, arrangement or contract has been terminated as of the date of this
Agreement.
(b) With respect to the USU Benefit Plans, no event has occurred and, to the
knowledge of USU, there exists no condition or set of circumstances, in
connection with which USU or any of its subsidiaries could be subject to any
liability under the terms of such USU Benefit Plans (other than the payment or
provision of benefits contemplated by such Plans), ERISA, the Code or any other
applicable Law which would reasonably be expected to have a USU Material
Adverse Effect. Except as otherwise set forth in Schedule 4.10(b) of the USU
Disclosure Schedule:
(i) Each USU Benefit Plan has been administered in all material respects
with its terms and applicable Law and, as to any USU Benefit Plan intended
to be qualified under Section 401(a) of the Code, such USU Benefit Plan
satisfies the requirements of such Section and has received a favorable IRS
determination letter that includes all changes required to be made by
applicable Law or has timely filed a request for a determination letter
covering such required amendments to the extent the deadline for filing such
request has passed as of the date hereof;
(ii) There are no actions, suits or claims pending (other than routine
claims for benefits) or, to the knowledge of USU, threatened against, or
with respect to, any of the USU Benefit Plans or their assets, and there is
no basis for any such action, suit or claim, which in any case would
reasonably be expected to have a USU Material Adverse Effect;
(iii) All contributions required to be made to the USU Benefit Plans
pursuant to their terms and provisions and applicable Law have been timely
made; and
(iv) No USU Benefit Plan is subject to Title IV of ERISA.
(c) There is no pending or, to the knowledge of USU, threatened labor
dispute, strike or work stoppage against USU or any of its subsidiaries which
would materially interfere with the business activities of USU and its
subsidiaries, taken as a whole. To the knowledge of USU, as of the date hereof,
there is no pending or threatened charge or complaint against USU or any of its
subsidiaries by the National Labor Relations Board or any comparable state
agency.
Section 4.11. Taxes
(a) Except for such matters as would not reasonably be expected to have a
USU Material Adverse Effect, and except as set forth in Schedule 4.11(a) of the
USU Disclosure Schedule, (i) all Tax Returns of or with respect to any Tax
which are required to be filed on or before the Closing Date by or with respect
to USU or any its subsidiaries have been or will be duly and timely filed, (ii)
all items of income, gain, loss, deduction and credit or
23
other items required to be included in each such Tax Return have been or will
be so included and all information provided in each such Tax Return is true,
correct and complete, (iii) all Taxes which have become or will become due with
respect to the period covered by each such Tax Return have been or will be
timely paid in full, (iv) all withholding Tax requirements imposed on or with
respect to USU or any of its subsidiaries have been or will be satisfied in
full in all respects, and (v) no penalty, interest or other charge is or will
become due with respect to the late filing of any such Tax Return or late
payment of any such Tax.
(b) All Tax Returns of or with respect to USU or any of its subsidiaries
with unexpired or extended statutes of limitations which have been audited by
the applicable governmental authority are set forth in Schedule 4.11(b) of the
USU Disclosure Schedule.
(c) Except as set forth in Schedule 4.11(c) of the USU Disclosure Schedule,
there is not in force any extension of time with respect to the due date for
the filing of any Tax Return of or with respect to USU or any its subsidiaries
or any waiver or agreement for any extension of time for the assessment or
payment of any Tax of or with respect to USU or any of its subsidiaries or any
agreement pursuant to which USU or any of its subsidiaries has agreed to settle
any liability for Taxes.
(d) There is no claim against USU or any of its subsidiaries for any Taxes,
and no assessment, deficiency or adjustment has been asserted or proposed with
respect to any Tax Return of or with respect to USU or any of its subsidiaries
other than those disclosed in Schedule 4.11(d) of the USU Disclosure Schedule
and those which would not reasonably be expected to have a USU Material Adverse
Effect.
(e) Except for statutory liens for current Taxes not yet due, no material
liens for Taxes exist upon the assets of any of USU or its subsidiaries.
(f) Except as set forth in Schedule 4.11(f) of the USU Disclosure Schedule,
neither USU nor any of its subsidiaries will be required to include, for Tax
purposes, any amount in income for any taxable period beginning after December
31, 2000 as a result of a change in accounting method for any taxable period
ending on or before December 31, 2000 or pursuant to any agreement with any Tax
authority with respect to any such taxable period.
Section 4.12. Tax Matters. None of the USU Companies nor any of their
affiliates has taken or agreed to take any action that would prevent the Merger
from constituting a reorganization qualifying under the provisions of Section
368(a) of the Code, and none of the USU Companies has knowledge of any fact or
circumstance that would prevent the Merger from qualifying as a reorganization
within the meaning of Section 368(a) of the Code or would cause their counsel
to be unable to render the opinion described in Section 7.02(d).
Section 4.13. Environmental Matters. Except for matters disclosed in
Schedule 4.13 of the USU Disclosure Letter and except for matters that would
not reasonably be expected to have a USU Material Adverse Effect: (i) the
properties, operations and activities of USU and its subsidiaries are in
compliance with all applicable Environmental Laws; (ii) USU and its
subsidiaries and the properties and operations of USU and its subsidiaries are
not subject to any existing, pending or, to the knowledge of USU, threatened
action, suit, investigation, inquiry or proceeding by any third party,
including without limitation, any governmental authority, under any
Environmental Law; (iii) all notices, permits, exemptions, registrations,
licenses, or similar authorizations, if any, required to be obtained or filed
by USU or any of its subsidiaries under any Environmental Law in connection
with any aspect of the business of USU or its subsidiaries, including without
limitation, those relating to the generation, treatment, storage, transport,
disposal or release of a Hazardous Substance, have been duly obtained or filed,
and USU and its subsidiaries are in compliance with the terms and conditions of
all such notices, permits, exemptions, registrations, licenses and similar
authorizations; (iv) USU and its subsidiaries have satisfied and are currently
in compliance with all financial responsibility requirements applicable to
their operations and imposed by any governmental authority under any
Environmental Law, and USU and its subsidiaries have not received any notice of
noncompliance with any such financial responsibility requirements; (v) there
are no physical or environmental conditions existing on any property of USU or
its subsidiaries or
24
resulting from USU's or such subsidiaries' operations or activities, past or
present, at any on-site or, to the knowledge of USU, offsite location, that
would reasonably be expected to give rise to any on-site or offsite
investigatory or remedial obligations imposed on USU or any of its subsidiaries
under any Environmental Laws; (vi) to USU's knowledge, since the effective date
of the relevant requirements of applicable Environmental Laws and to the extent
required by such applicable Environmental Laws, all Hazardous Substances
generated by USU and its subsidiaries have been transported only by carriers
duly licensed, as applicable, by governmental authorities and authorized under
Environmental Laws to transport such substances, and disposed of only at
treatment, storage and disposal facilities duly licensed, as applicable, by
governmental authorities and authorized under Environmental Laws to treat,
store or dispose of such substances; (vii) there has been no exposure of any
person or property to Hazardous Substances, nor has there been any release of
Hazardous Substances into the environment by USU or its subsidiaries or in
connection with their properties, operations or activities that would
reasonably be expected to give rise to any claim against USU or any of its
subsidiaries for damages or compensation and (viii) USU and its subsidiaries
have made available to IWO all internal and external environmental audits,
studies, correspondence and related documents on environmental matters in the
possession of USU and its subsidiaries relating to any of the current or former
properties, operations or activities of USU and its subsidiaries.
Section 4.14. Brokers. Except for Xxxxxx Xxxxxxx & Co. Incorporated, no
broker, finder or investment banker is entitled to any brokerage, finder's or
other fee or commission in connection with the transactions contemplated by
this Agreement based upon arrangements made by or on behalf of any of the USU
Companies.
Section 4.15. Takeover Statutes. The Board of Directors of USU has taken
all action necessary such that no Takeover Statute is applicable to the Merger
or the other transactions contemplated hereby.
Section 4.16. Insurance. Schedule 4.16 of the USU Disclosure Schedule sets
forth an accurate and complete list of all insurance coverage currently in
effect for USU and its subsidiaries, including in each case the name of the
underwriter, the risks insured, the coverage amounts and related limits, the
deductibles, the expiration date and all significant riders. Except as set
forth in Schedule 4.16 of the USU Disclosure Schedule, none of USU nor any of
its subsidiaries has received any notice, which remains outstanding, of
cancellation or termination with respect to any material insurance policy of
USU or its subsidiaries.
Section 4.17. Properties. (a) Except as set forth in Schedule 4.17(a) of
USU Disclosure Schedule, each of USU and its subsidiaries has good and
marketable title, free and clear of all liens, encumbrances, mortgages,
pledges, charges, defaults or equitable interests, to all of the properties and
assets, real and personal, tangible or intangible, that are reflected on the
latest balance sheet contained in USU's most recent USU SEC Report on Form 10-Q
filed prior to the date hereof or acquired after the date of such balance
sheet, except for dispositions of such properties or assets in the ordinary
course of business consistent with past practice and except for (i) liens for
Taxes not yet due and payable or contested in good faith by appropriate
proceedings, (ii) such imperfections of title, easements and encumbrances, if
any, as would not reasonably be expected to have a USU Material Adverse Effect,
and (iii) mechanic's, materialmen's, workmen's, repairmen's, warehousemen's,
carrier's and other similar liens and encumbrances arising in the ordinary
course of business (the items in clauses (i) (ii) and (iii) and the matters set
forth in Schedule 4.17(a) of the USU Disclosure Schedule, collectively, the
"USU Permitted Liens").
(b) Schedule 4.17(b) of the USU Disclosure Schedule sets forth an accurate
and complete list and description of all real property owned by USU or any of
its subsidiaries.
Section 4.18. Leases. (a) Schedule 4.18(a) of the USU Disclosure Schedule
contains an accurate and complete list of each USU Site Lease and each USU
Space Lease (each, a "USU Lease"). A true and complete copy of each USU Lease
has heretofore been made available to IWO.
(b) To the knowledge of USU, each USU Lease is valid, binding and
enforceable in accordance with its terms and is in full force and effect,
except as would not reasonably be expected to have a USU Material Adverse
25
Effect. The interest of USU and its subsidiaries under each USU Lease is free
and clear of all liens and encumbrances other than USU Permitted Liens. There
are no existing defaults by USU or any of its subsidiaries under any of the USU
Leases, and to the knowledge of USU no event has occurred that (whether with or
without notice, lapse of time or the happening or occurrence of any other
event) would constitute a default under any USU Lease, except in each case for
such defaults that would not reasonably be expected to have a USU Material
Adverse Effect. None of USU nor any of its subsidiaries has received any notice
that any lessor under any USU Lease will not consent (where such consent is
necessary) to the consummation of the Merger without requiring any material
modification of the rights or obligations of the lessee thereunder.
Section 4.19. No Undisclosed Liabilities. Except (i) as disclosed in the
consolidated financial statements contained in the USU SEC Reports filed prior
to the date hereof, (ii) for liabilities and obligations incurred in the
ordinary course of business and consistent with past practice of USU and its
subsidiaries since the date of the latest balance sheet contained in the most
recent USU SEC Report on Form 10-Q filed prior to the date hereof, (iii) as
disclosed in Schedule 4.19 of the USU Disclosure Schedule and (iv) for
liabilities that would not reasonably be expected to have a USU Material
Adverse Effect, none of USU nor any of its subsidiaries has any liability or
obligation of any nature, whether or not absolute, accrued, contingent or
otherwise that would be required to be reflected or reserved against in a
consolidated balance sheet of USU and its subsidiaries prepared in accordance
with GAAP as of the date hereof.
Section 4.20. Certain Contracts
(a) Except for the USU Sprint Agreements and the USU Leases and contracts or
agreements described in clauses (iii), (iv), (v), (vi), (vii) and (xvi) that
provide for aggregate payments to any person in any calendar year of less than
$100,000, Schedule 4.20(a) of the USU Disclosure Schedule contains as of the
date of this Agreement a complete and accurate list of each of the following
contracts and a true and correct copy of each such contract has been made
available to IWO by USU:
(i) contracts or agreements of USU or any of its subsidiaries relating to
indebtedness, liability for borrowed money or the deferred purchase price of
property (excluding trade payables in the ordinary course of business) or
any guarantee or other contingent liability in respect of any indebtedness
or obligation of any person other than USU or any of its subsidiaries (other
than the endorsement of negotiable instruments for collection in the
ordinary course of business), in any case providing for or relating to
aggregate payments to any person in excess of $250,000;
(ii) contracts or agreements that contain restrictions with respect to
payment of dividends or any other distribution in respect of the equity of
USU or any of its subsidiaries;
(iii) any letters of credit or similar arrangements relating to USU or
any of its subsidiaries;
(iv) any employment or consulting agreements with any employee of USU or
any of its subsidiaries or other person on a consulting basis;
(v) any management, consulting or advisory agreements with any former
employee of USU or any of its subsidiaries pursuant to which USU or any of
its subsidiaries has any existing or future obligations;
(vi) any agreement under which USU or any of its subsidiaries is lessee
of or holds or operates any property, real or personal;
(vii) any agreement under which USU or any of its subsidiaries is lessor
of or permits any third party to hold or operate any property, real or
personal;
(viii) any powers of attorney granted by or on behalf of USU or any of
its subsidiaries;
(ix) [intentionally omitted]
(x) any agreement that in any way purports to prohibit USU or any of its
subsidiaries from freely engaging in business anywhere in the world or
competing with any other person;
26
(xi) any guaranty or other similar undertaking with respect to a
contractual performance of any third party extended by USU or any of its
subsidiaries, in any case relating to amounts in excess of $250,000;
(xii) any agreement pursuant to which USU or any of its subsidiaries has
agreed to defend, indemnify or hold harmless any other person;
(xiii) any agreement pursuant to which USU may be required to file a
registration statement under the Securities Act with respect to any
securities issued by USU;
(xiv) any joint venture agreement or partnership agreement to which USU
or any of its subsidiaries is a party;
(xv) any vendor agreements to which USU or any of its subsidiaries is a
party, in any case providing for aggregate payments to any person in any
calendar year of more than $250,000;
(xvi) any construction contracts or construction management contracts to
which USU or any of its subsidiaries is a party;
(xvii) any agreement between USU or any of its subsidiaries, on the one
hand, and any of their respective stockholders, on the other hand under
which USU or any of its subsidiaries has any existing or future obligations;
(xviii) any agreement of any character (contingent or otherwise) pursuant
to which any person is or may be entitled to receive any payment based on
the revenues or earnings, or calculated in accordance therewith, of USU or
any of its subsidiaries, except between USU and its subsidiaries or between
such subsidiaries;
(xix) any agreement to make any loans, advances or capital contributions
to, or investments in, any person, other than by USU or a subsidiary of USU
to or in USU or any direct or indirect wholly owned subsidiary of USU; and
(xx) any other agreement to which USU or any of its subsidiaries is a
party or by which USU or any of its subsidiaries is bound and which is
material to USU and its subsidiaries taken as a whole, other than any
agreement filed as an exhibit to a USU SEC Report filed prior to the date
hereof.
(b) Except as set forth in Schedule 4.20(b) of the USU Disclosure Schedule,
with respect to each USU Contract that is individually material to the business
or operations of USU and its subsidiaries taken as a whole: (i) such USU
Contract is valid, binding and enforceable in accordance with its terms and is
in full force and effect; (ii) none of USU nor any of its subsidiaries is in
breach or default thereof, nor has USU or any of its subsidiaries received
notice that it is in breach of or default thereof; and (iii) no event has
occurred which, with notice, or lapse of time or both, would constitute a
breach or default thereof by USU or any of its subsidiaries or by any other
party thereto or would permit termination, modification, or acceleration
thereof by any other party thereto, except in each case as would not reasonably
be expected to have a USU Material Adverse Effect. Except as set forth in
Schedule 4.20(b) of the USU Disclosure Schedule, none of USU nor any of its
subsidiaries is a party to any oral contract, agreement, or other commitment
which, if reduced to written form, would be required to be listed in Schedule
4.20(a) of the USU Disclosure Schedule under the terms of this Section 4.20.
USU has made available to IWO a materially accurate description of each oral
contract, agreement or other commitment set forth in Schedule 4.20(b) of the
USU Disclosure Schedule.
(c) Each contract, arrangement, commitment or understanding of any type or
form required to be set forth in Schedule 4.20(a) of the USU Disclosure
Schedule, whether or not set forth in Schedule 4.20(a) of the USU Disclosure
Schedule, is referred to herein as a "USU Contract."
Section 4.21. Distributors and Suppliers. Except as set forth in Schedule
4.21 of the USU Disclosure Schedule, since December 31, 2000, there has not
been any material adverse change in the business relationship of USU or any of
its subsidiaries with any distributor who accounted for more than 2% of USU's
sales (on a
27
consolidated basis) during the period from December 31, 2000 to September 30,
2001, or with any supplier from whom USU or any of its subsidiaries purchased
more than 5% of the goods or services (on a consolidated basis) which it
purchased during the period from December 31, 2000 to September 30, 2001.
Except as set forth in Schedule 4.21 of the USU Disclosure Schedule, none of
USU nor any of its subsidiaries has knowledge of any termination or intended
termination by any such distributor or supplier of its business relationship
with USU or any of its subsidiaries or any modification or intended
modification of its business relationship with USU or any of its subsidiaries
in a manner which is adverse in any material respect to USU, and none of USU
nor any of its subsidiaries has knowledge of any facts which could reasonably
be expected to form an adequate basis for such termination or modification.
Section 4.22. Sprint Agreement Compliance
(a) Schedule 4.22(a) of the USU Disclosure Schedule sets forth a complete
and accurate list of all agreements, together with all amendments, waivers or
other changes thereto, between USU, its subsidiaries or any of its affiliates,
on the one hand, and Sprint PCS, on the other hand (collectively, the "USU
Sprint Agreements"). USU has made available to IWO a true and complete copy of
each of the USU Sprint Agreements. There are no unwritten amendments to, or
waivers or other changes under, any USU Sprint Agreement.
(b) Each of the USU Sprint Agreements is valid, binding and enforceable in
accordance with its terms and is in full force and effect, except in any such
case as would not reasonably be expected to have a USU Material Adverse Effect.
USU and its subsidiaries have performed all obligations required to be
performed by them under, and they are not in default under or in breach of, nor
in receipt of any claim of default or breach under, any of the USU Sprint
Agreements, except in any such case as would not reasonably be expected to have
a USU Material Adverse Effect. No event has occurred which with the passage of
time or the giving of notice or both would result in a default, breach or event
of noncompliance by USU or any of its subsidiaries, or which would permit
termination, cancellation or modification by Sprint PCS, under any of the USU
Sprint Agreements, except in any such case as would not reasonably be expected
to have a USU Material Adverse Effect. None of USU nor any of its subsidiaries
has knowledge of any cancellation or anticipated cancellation by Sprint PCS of
any of the USU Sprint Agreements. USU and its subsidiaries have made available
to IWO copies of all written notices received by them from Sprint PCS during
the last six months (i) delivered pursuant to the official notice provisions of
the USU Sprint Agreements or (ii) alleging a breach of the USU Sprint
Agreements.
(c) USU and its subsidiaries are in material compliance with the schedule
and other goals established by the network build-out plan set forth in the USU
Sprint Agreements to the extent required by the USU Sprint Agreements. Except
as set forth in the Sprint Compliance Report dated as of December 6, 2001 and
the Exhibit 2.1 Compliance Memorandum dated December 18, 2001, copies of which
have been provided to IWO, USU and its subsidiaries have completed their
build-out and network launch as of the date of such report.
Section 4.23. Intellectual Property. USU and its subsidiaries own or have
the right to use, and to license others to use, all Intellectual Property
material to the businesses of USU and its subsidiaries as such businesses are
conducted on the date hereof ("USU Intellectual Property"). Except as set forth
in Schedule 4.23 of the USU Disclosure Schedule: (i) no written claim of
invalidity or conflicting ownership rights with respect to any USU Intellectual
Property has been made by a third person and the USU Intellectual Property is
not the subject of any pending or, to USU's knowledge, threatened action, suit,
claim, investigation, arbitration or other proceeding; (ii) no person has given
notice to USU or any of its subsidiaries that USU or any of its subsidiaries or
licensees is infringing or misappropriating or has infringed or misappropriated
the Intellectual Property of any third person; (iii) to USU's knowledge, the
conduct of the businesses of USU and its subsidiaries and the use of any USU
Intellectual Property in the business of USU and its subsidiaries as such
businesses are conducted on the date hereof does not and will not infringe or
misappropriate any Intellectual Property of any third person; and (iv) to USU's
knowledge, no other person is interfering with, infringing upon,
misappropriating or otherwise coming into conflict with the rights of USU and
its subsidiaries to use or exploit any USU Intellectual Property.
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Section 4.24. Related Party Transactions. Except as set forth in Schedule
4.24 of the USU Disclosure Schedule, to the knowledge of USU, no stockholder
nor any officer or director of USU or any of its subsidiaries owns or holds,
directly or indirectly, any interest in (excepting holdings solely for passive
investment purposes of securities of publicly held and traded entities
constituting less than 5% of the equity of any such entity), or is an officer,
director, employee or consultant of any person that is, a competitor, lessor,
lessee, customer or supplier of USU or any of its subsidiaries or which
conducts a business similar to any business conducted by USU or any of its
subsidiaries. No stockholder, officer or director of USU or any of its
subsidiaries (a) owns or holds, directly or indirectly, in whole or in part,
any USU Intellectual Property, (b) to the knowledge of USU has any claim,
charge, action or cause of action against USU or any of its subsidiaries,
except for claims for reasonable unreimbursed travel or entertainment expenses,
accrued vacation pay or accrued benefits under any employee benefit plan
existing on the date hereof, (c) to the knowledge of USU, has made, on behalf
of USU or any of its subsidiaries, any payment or commitment to pay any
commission, fee or other amount to, or to purchase or obtain or otherwise
contract to purchase or obtain any goods or services from, any other person of
which any stockholder, officer or director of USU or any of its subsidiaries is
a partner or shareholder (except holdings solely for passive investment
purposes of securities of publicly held and traded entities constituting less
than 5% of the equity of any such entity), (d) owes any money to USU or any of
its subsidiaries or (e) has any interest in any property, real or personal,
tangible or intangible, used in or pertaining to the business of USU or any of
its subsidiaries.
Section 4.25. Merger Sub. Prior to the Effective Time, Merger Sub (i) has
not conducted any activities other than in connection with its organization,
the negotiation and execution of this Agreement and the consummation of the
transactions contemplated hereby; (ii) has no material assets or liabilities
except as necessary for purposes of consummating the transactions contemplated
hereby; and (iii) has no subsidiaries. At the Effective Time, Merger Sub will
be, and, at and after the Effective Time, the Surviving Corporation will be, an
"Unrestricted Subsidiary" as defined in the USU Indenture.
ARTICLE V
COVENANTS
Section 5.01. Affirmative Covenants of USU and IWO. Each of USU and IWO
hereby covenants and agrees that, prior to the Effective Time, unless otherwise
expressly contemplated by this Agreement or consented to in writing by the
other, it will and will cause its subsidiaries to:
(a) operate its business in all material respects in the usual and
ordinary course consistent with past practices;
(b) use its reasonable best efforts to preserve substantially intact its
business organization, maintain its material rights and franchises, retain
the services of its respective officers and key employees and maintain its
relationships and goodwill with its customers and suppliers;
(c) maintain and keep its material properties and assets in as good
repair and condition as at present, ordinary wear and tear excepted, and
maintain supplies and inventories in quantities consistent with its
customary business practice; and
(d) use its reasonable best efforts to keep in full force and effect
insurance and bonds comparable in amount and scope of coverage to that
currently maintained.
Section 5.02. Negative Covenants of IWO. Except as expressly contemplated
by this Agreement or otherwise consented to in writing by USU, from the date of
this Agreement until the Effective Time, IWO will not do, and will not permit
any of its subsidiaries to do, any of the foregoing:
(a) (i) increase the compensation payable to or to become payable to any
director, officer or employee, except for increases in salary or wages
payable or to become payable in the ordinary course of business and
29
consistent with past practice; (ii) grant any severance or termination pay
(other than pursuant to the normal severance policies of IWO or its
subsidiaries as in effect on the date of this Agreement, copies of which
policies have been furnished to USU) to, or enter into or amend any
employment or severance agreement with, any director, officer or employee;
(iii) establish, adopt or enter into any employee benefit plan or
arrangement; or (iv) except as may be required by applicable Law, amend, or
take any other actions with respect to, any of the IWO Benefit Plans or any
of the plans, programs, agreements, policies or other arrangements described
in Sections 3.10(d), 3.21(a)(iv), 3.21(a)(v) or 3.21(a)(xi) of this
Agreement;
(b) declare or pay any dividend on, or make any other distribution in
respect of, outstanding shares of capital stock or other equity interests of
IWO or any of its subsidiaries, except for dividends by a wholly owned
subsidiary of IWO to IWO or another wholly owned subsidiary of IWO;
(c) (i) except as described in Schedule 3.03(c)(ii) of the IWO Disclosure
Schedule, redeem, purchase or otherwise acquire any shares of its or any of
its subsidiaries' capital stock or other equity interests or any securities
or obligations convertible into or exchangeable for any shares of its or its
subsidiaries' capital stock or other equity interests (other than any such
acquisition directly from any wholly owned subsidiary of IWO in exchange for
capital contributions or loans to such subsidiary), or any options, warrants
or conversion or other rights to acquire any shares of its or its
subsidiaries' capital stock or other equity interests or any such securities
or obligations (except in connection with the exercise of outstanding IWO
Options and IWO Warrants in accordance with their terms); (ii) effect any
reorganization or recapitalization; or (iii) split, combine or reclassify
any of its or its subsidiaries' capital stock or other equity interests or
issue or authorize or propose the issuance of any other securities in
respect of, in lieu of or in substitution for, shares of its or its
subsidiaries' capital stock or other equity interests;
(d) (i) except as described in Schedule 3.03(c)(i) of the IWO Disclosure
Schedule, issue, deliver, award, grant or sell, or authorize or propose the
issuance, delivery, award, grant or sale (including the grant of any
security interests, liens, claims, pledges, limitations in voting rights,
charges or other encumbrances) of, any shares of any class of its or its
subsidiaries' capital stock or other equity interests (including shares held
in treasury), any securities convertible into or exercisable or exchangeable
for any such shares or interests, or any rights, warrants or options to
acquire any such shares or interests (except for the issuance of shares upon
the exercise of outstanding IWO Options or IWO Warrants in accordance with
their terms); (ii) amend or otherwise modify the terms of any such rights,
warrants or options the effect of which shall be to make such terms more
favorable to the holders thereof; (iii) take any action to optionally
accelerate the exercisability of any such rights, options or warrants;
(e) acquire or agree to acquire, by merging or consolidating with, by
purchasing an equity interest in or a portion of the assets of, or by any
other manner, any other person or division thereof, or otherwise acquire or
agree to acquire any assets of any other person (other than the purchase of
assets from suppliers or vendors in the ordinary course of business and
consistent with past practice) in each case that are material, individually
or in the aggregate, to IWO and its subsidiaries, taken as a whole;
(f) sell, lease (as lessor), exchange, mortgage, pledge, transfer or
otherwise dispose of, or agree to sell, lease (as lessor), exchange,
mortgage, pledge, transfer or otherwise dispose of, any of its material
assets or any material assets of any of its subsidiaries, except for
dispositions of inventories and of assets in the ordinary course of business
and consistent with past practice;
(g) release any third party from its obligations, or grant any consent,
under any existing standstill provision under any confidentiality or other
agreement, or fail to enforce any such agreement upon the request of USU;
(h) adopt or propose to adopt any amendments to its charter or bylaws;
(i) (i) change any of its methods of accounting in effect at September
30, 2001, except as required by Law or GAAP, or (ii) make or rescind any
express or deemed election relating to Taxes, settle or compromise any
claim, action, suit, litigation, proceeding, arbitration, investigation,
audit or controversy relating to Taxes (except where the amount of such
settlements or controversies, individually or in the
30
aggregate, does not exceed $250,000), or change any of its methods of
reporting income or deductions for federal income tax purposes from those
employed in the preparation of the federal income tax returns for the
taxable year ending December 31, 2000, except, in each case, as may be
required by Law;
(j) incur any obligation for borrowed money or purchase money
indebtedness, whether or not evidenced by a note, bond, debenture or similar
instrument, except (i) in the ordinary course of business consistent with
past practice and in no event in excess of $1,000,000 in the aggregate and
(ii) for borrowings under the IWO Credit Agreement not exceeding $10,000,000
in the aggregate plus an additional $30,000,000 in aggregate borrowings
under the delay draw portion of the Tranche A Term Loan Commitments under
the IWO Credit Agreement;
(k) enter into any material arrangement, agreement or contract with any
third party (other than customers in the ordinary course of business) which
provides for an exclusive arrangement with that third party or is
substantially more restrictive on IWO or substantially less advantageous to
IWO than arrangements, agreements or contracts existing on the date hereof
except in connection with any required Sprint PCS program changes;
(l) (i) enter into, renew, amend or waive in any material manner, or
terminate or give notice of a proposed renewal or material amendment, waiver
or termination of, any IWO Contract or IWO Lease, other than in the ordinary
course of business or (ii) except as set forth in Schedule 5.02(l) of the
IWO Disclosure Schedule, enter into, renew, amend, waive or terminate, or
give notice of a proposed renewal, amendment, waiver or termination of, any
IWO Sprint Agreement;
(m) take or cause to be taken any action that could reasonably be
expected to materially delay, or materially and adversely affect, the
consummation of the transactions contemplated hereby;
(n) enter into or amend in any material manner any contract, agreement or
commitment with any officer, director, employee or stockholder of IWO or any
of its subsidiaries or with any affiliate or associate of any of the
foregoing, except to the extent permitted under subsection (a) hereof;
(o) acquire additional territory or related assets from Sprint PCS;
(p) pay, satisfy, discharge or settle any claims, liabilities or
obligations (absolute, accrued, contingent or otherwise), other than in the
ordinary course of business and consistent with past practice or pursuant to
mandatory terms of any contract in effect on the date hereof, involving
payments by IWO or any of its subsidiaries in excess of $1,000,000,
individually or in the aggregate;
(q) make any loans, advances or capital contributions to, or investments
in any person other than (i) by IWO or a subsidiary of IWO to or in IWO or
any direct or indirect wholly owned subsidiary of IWO or (ii) pursuant to
and in accordance with the terms of any IWO Contract or other legal
obligations of IWO or any of its wholly owned subsidiaries existing at the
date of this Agreement;
(r) enter into any new line of business;
(s) make any capital expenditures other than as set forth in the Capital
Expenditure Spending Plan included in the IWO business plan provided to USU
by IWO on November 19, 2001 previously made available to USU plus, with
respect to each capital expenditure provided for therein, 5%; or
(t) agree in writing or otherwise to do any of the foregoing.
Section 5.03. Negative Covenants of USU. Except as expressly contemplated
by this Agreement or otherwise consented to in writing by IWO, from the date of
this Agreement until the Effective Time, USU will not do, and will not permit
any of its subsidiaries to do, any of the following:
(a) declare or pay any dividend on, or make any other distribution in
respect of, outstanding shares of capital stock or other equity interests of
USU or any of its subsidiaries, except for dividends by a wholly owned
subsidiary of USU to USU or another wholly owned subsidiary of USU;
31
(b) adopt or propose to adopt any amendments to its charter or bylaws,
which would have a material adverse impact on the holders of USU Common
Stock or consummation of the transactions contemplated by this Agreement;
(c) (i) except as described in Schedule 4.03(b)(ii) of the USU Disclosure
Schedule, redeem, purchase or otherwise acquire any shares of its or any of
its subsidiaries' capital stock or other equity interests or any securities
or obligations convertible into or exchangeable for any shares of its or its
subsidiaries' capital stock or other equity interests (other than any such
acquisition directly from any wholly owned subsidiary of USU in exchange for
capital contributions or loans to such subsidiary), or any options, warrants
or conversion or other rights to acquire any shares of its or its
subsidiaries' capital stock or other equity interests or any such securities
or obligations (except in connection with the exercise of outstanding
options to purchase capital stock of USU in accordance with their terms);
(ii) effect any reorganization or recapitalization; or (iii) split, combine
or reclassify any of its or its subsidiaries' capital stock or other equity
interests or issue or authorize or propose the issuance of any other
securities in respect of, in lieu of or in substitution for, shares of its
or its subsidiaries' capital stock or other equity interests;
(d) (i) except as described in Schedule 4.03(b)(i) of the USU Disclosure
Schedule, issue, deliver, award, grant or sell, or authorize or propose the
issuance, delivery, award, grant or sale (including the grant of any
security interests, liens, claims, pledges, limitations in voting rights,
charges or other encumbrances) of, any shares of any class of its or its
subsidiaries' capital stock or other equity interests (including shares held
in treasury), any securities convertible into or exercisable or exchangeable
for any such shares or interests, or any rights, warrants or options to
acquire any such shares or interests (except for the issuance of shares upon
the exercise of outstanding options or warrants to purchase capital stock of
USU in accordance with their terms); (ii) amend or otherwise modify the
terms of any such rights, warrants or options the effect of which shall be
to make such terms more favorable to the holders thereof; or (iii) take any
action to optionally accelerate the exercisability of such rights, options
or warrants;
(e) sell, lease (as lessor), exchange, mortgage, pledge, transfer or
otherwise dispose of, or agree to sell, lease (as lessor), exchange,
mortgage, pledge, transfer or otherwise dispose of, any of its material
assets or any material assets of any of its subsidiaries, except for
dispositions of inventories and of assets in the ordinary course of business
and consistent with past practice;
(f) incur any obligation for borrowed money or purchase money
indebtedness, whether or not evidenced by a note, bond, debenture or similar
instrument, except in the ordinary course of business consistent with past
practice and in no event in excess of $1,000,000 in the aggregate and except
for borrowings under the USU Credit Agreement not exceeding $40,000,000 in
the aggregate;
(g) acquire or agree to acquire, by merging or consolidating with, by
purchasing an equity interest in or a portion of the assets of, or by any
other manner, any other person or division thereof, or otherwise acquire or
agree to acquire any assets of any other person (other than the purchase of
assets from suppliers or vendors in the ordinary course of business and
consistent with past practice) in each case which are material, individually
or in the aggregate, to USU and its subsidiaries, taken as a whole;
(h) take or cause to be taken any action that could reasonably be
expected to materially delay, or materially and adversely affect, the
consummation of the transactions contemplated hereby;
(i) release any third party from its obligations, or grant any consent,
under any existing standstill provision under any confidentiality or other
agreement, or fail to enforce any such agreement upon the request of IWO;
(j) enter into, renew, amend, waive or terminate or give notice of a
proposed renewal amendment, waiver or termination of, any USU Sprint
Agreement;
(k) enter into or amend any contract, agreement or commitment (i)
relating to or providing for payments of more than $100,000 with any
officer, director or member of the Xxxxxxx family or (ii) with any affiliate
of the Xxxxxxx family, except (A) with the approval of the independent
directors (as defined for
32
purposes of listing on the Nasdaq) of USU, (B) for increases in the
compensation payable to or to become payable to any director, officer or
employee in the ordinary course of business and consistent with past
practice and (C) for grants of severance or termination pay pursuant to the
normal severance policies of USU and its subsidiaries as in effect on the
date of this Agreement or pursuant to any employment or severance agreement
with any officer, director or employee as in effect on the date of this
Agreement;
(l) enter into any new line of business; or
(m) agree in writing or otherwise to do any of the foregoing.
Notwithstanding the foregoing provisions of this Section 5.03, at any time
prior to the Effective Time USU shall be entitled to take all action necessary
to effect the Reclassification (as defined in Section 6.01(a)).
Section 5.04. Access and Information
(a) Each of USU and IWO shall, and shall cause its subsidiaries to (i)
afford to the other party and such other party's officers, directors,
employees, accountants, consultants, legal counsel, agents and other
representatives (collectively, the "Representatives") reasonable access at
reasonable times, upon reasonable prior notice, to its officers, employees,
agents, properties, offices and other facilities and to the books and records
thereof and (ii) furnish promptly to the other party and its Representatives
such information concerning its business, properties, contracts, records and
personnel (including, without limitation, financial, operating and other data
and information) as may be reasonably requested, from time to time, by such
other party.
(b) Notwithstanding the foregoing provisions of this Section 5.04, neither
party shall be required to grant access or furnish information to the other
party to the extent that such access or the furnishing of such information is
prohibited by Law. No investigation by the parties hereto made heretofore or
hereafter shall affect the representations and warranties of the parties which
are herein contained and each such representation and warranty shall survive
such investigation.
(c) The information received pursuant to Section 5.04(a) that is non-public
shall be deemed to be "Confidential Information" for purposes of the
Confidentiality Agreement.
(d) From the date of this Agreement until the Effective Time, each of USU
and IWO agrees to provide the other party with copies of any and all material
written correspondence between such party and its subsidiaries on the one hand
and Sprint PCS on the other hand.
Section 5.05. FCC Compliance
(a) Prior to the Effective Time, IWO and USU shall work together to
accurately assess the level of foreign ownership and voting among their
respective shareholders for purposes of Section 310(b) of the Communications
Act and exchange such information at the earliest possible date. Within ten
(10) days of this Agreement, IWO shall provide to USU the percentage of foreign
ownership in IWO broken down by country. If USU reasonably determines, after
consultation with IWO, that USU would, after giving effect to the Merger, have
foreign ownership in excess of 23.0%, USU shall file a request for declaratory
ruling with the FCC requesting authority to exceed the foreign ownership
benchmarks established in Section 310(b) and both parties agree to use their
reasonable best efforts to prosecute and support such filing, including
providing the FCC with information the FCC may request in connection with such
filing. If the FCC does not grant the petition for declaratory ruling, the
termination date as computed pursuant to Section 8.01(e) herein shall be
extended for an additional ninety (90) days to give the parties an opportunity
to bring USU into compliance with Section 310(b) of the Communications Act.
(b) USU shall undertake to ensure that, as of the Effective Time, no radio
license subject to the foreign ownership and voting provisions of Section
310(b) of the Communications Act shall be held directly by USU and USU shall
provide to IWO evidence reasonably satisfactory to IWO with respect to any
transfer required to effect compliance with the foregoing.
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ARTICLE VI
ADDITIONAL AGREEMENTS
Section 6.01. Meetings of Stockholders
(a) USU shall promptly after the date of this Agreement take all actions
necessary in accordance with the federal securities Laws, the Louisiana
Business Corporation Law, and its charter and bylaws to duly call, give notice
of, convene and hold a special meeting of its stockholders (the "USU
Stockholders Meeting") to be held as soon as practicable after the date of this
Agreement or a date determined in consultation with IWO for the purpose of (i)
obtaining the Required USU Vote and (ii) if USU so elects, approving an
amendment to the charter of USU for the purpose of renaming the USU Class A
Common Stock and reclassifying the USU Class B Common Stock into a single class
of common stock of USU (the "Reclassification"); provided however, that USU may
obtain the Required USU Vote and/or the approval of the Reclassification by
written consents in lieu of having a stockholders meeting in accordance with
applicable Law and its organizational documents. USU, through its Board of
Directors, shall, unless the Board of Directors of USU has determined in good
faith (based upon the written opinion of its outside legal counsel) that the
proper discharge of its fiduciary duties prohibits such actions (i) recommend
to its stockholders approval of the Reclassification, if applicable, and the
issuance of the USU Common Stock pursuant to the Merger and (ii) use its
reasonable best efforts (including the solicitation of proxies) to solicit such
approval and shall take all other action necessary or advisable to secure such
approval.
(b) IWO shall, promptly after the date of this Agreement, take all actions
necessary in accordance with the federal securities Laws, Delaware Law and its
charter and bylaws to duly call, give notice of, convene and hold a special
meeting of its stockholders (the "IWO Common Stockholders Meeting") to be held
as soon as practicable after the date of this Agreement for the purpose of
obtaining the Required IWO Vote; provided, however, that IWO may obtain the
Required IWO Vote by written consents in lieu of having a stockholder meeting
in accordance with applicable Law and its organizational documents. IWO,
through its Board of Directors, shall, unless the Board of Directors of IWO has
determined in good faith (based upon the written opinion of outside legal
counsel) that the proper discharge of its fiduciary duties prohibits such
actions (i) recommend to its stockholders approval and adoption of this
Agreement and the Merger and (ii) use its reasonable best efforts (including
the solicitation of proxies), to solicit such approval and adoption and shall
take all other action necessary or advisable to secure such approval and
adoption.
(c) Notwithstanding any other provision of this Agreement, unless this
Agreement is terminated in accordance with the terms hereof, USU and IWO shall
each submit to its stockholders the matters described in Sections 6.01(a) and
6.01(b), as applicable, whether or not the Board of Directors of USU or IWO, as
the case may be, withdraws, modifies or changes its recommendation regarding
such matters.
Section 6.02. Registration Statement; Proxy Statements
(a) As promptly as practicable after the execution of this Agreement, USU
and IWO shall prepare and USU shall file with the SEC a Registration Statement
on Form S-4 (including the Proxy Statement/Prospectus (as defined below)
constituting a part thereof) in connection with the registration under the
Securities Act of the offer and sale of USU Common Stock to be issued in the
Merger (the "Registration Statement"). The Registration Statement will also
serve as the joint proxy statement with respect to the USU Stockholders Meeting
and, if IWO elects to solicit proxies, with respect to the IWO Common
Stockholders Meeting (the "Proxy Statement/Prospectus"). Each of USU and IWO
will use its reasonable best efforts to cause the Registration Statement to be
declared effective as promptly as practicable, and USU shall take any action
required to be taken under any applicable federal or state securities Laws in
connection with the issuance of shares of USU Common Stock in the Merger;
provided, that USU shall not be required to qualify to do business in any
jurisdiction in which it is not now so qualified to do business, to file a
general consent to service of process in any jurisdiction in which it is not
now so qualified or to subject itself to taxation in any jurisdiction in which
it is not now so qualified to do business. As promptly as practicable after the
Registration Statement shall have been declared effective, each of USU and IWO
shall mail the Proxy Statement/Prospectus to its stockholders entitled to notice
34
of and to vote at the USU Stockholders Meeting and the IWO Common Stockholders
Meeting, as applicable. Subject to the foregoing and Sections 6.01(a) and
6.01(b), as applicable, the Proxy Statement/Prospectus shall include the
recommendation of IWO's Board of Directors in favor of approval of the Merger
and adoption and approval of this Agreement and the recommendation of USU's
Board of Directors in favor of approval of the issuance of the USU Common Stock
pursuant to the Merger.
(b) The information supplied by IWO for inclusion or incorporation by
reference in the Registration Statement shall not, at the time the Registration
Statement is declared effective, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein not misleading. The
information supplied by IWO for inclusion in the Proxy Statement/Prospectus to
be sent to the stockholders of IWO in connection with the IWO Common
Stockholders Meeting and to the stockholders of USU in connection with the USU
Stockholders Meeting shall not, at the date the Proxy Statement/Prospectus (or
any supplement thereto) is first mailed to such stockholders, at the time of
the IWO Common Stockholders Meeting or the USU Stockholders Meeting or at the
Effective Time, 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 the light of the circumstances under which they
are made, not misleading. If at any time prior to the Effective Time any event
or circumstance relating to IWO or any of its subsidiaries or affiliates, or
its or their respective officers or directors, should be discovered by IWO that
should be set forth in an amendment to the Registration Statement or a
supplement to the Proxy Statement/Prospectus, IWO shall promptly inform USU
thereof in writing. All documents that IWO is responsible for filing with the
SEC in connection with the transactions contemplated hereby will comply as to
form in all material respects with the applicable requirements of the
Securities Act and the rules and regulations thereunder and the Exchange Act
and the rules and regulations thereunder.
(c) The information supplied by USU for inclusion or incorporation by
reference in the Registration Statement shall not, at the time the Registration
Statement is declared effective, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein not misleading. The
information supplied by USU for inclusion in the Proxy Statement/Prospectus to
be sent to the stockholders of IWO in connection with the IWO Common
Stockholders Meeting and to the stockholders of USU in connection with the USU
Stockholders Meeting shall not, at the date the Proxy Statement/Prospectus (or
any supplement thereto) is first mailed to such stockholders, at the time of
the IWO Common Stockholders Meeting or the USU Stockholders Meeting or at the
Effective Time, 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 the light of the circumstances under which they
are made, not misleading. If at any time prior to the Effective Time any event
or circumstance relating to USU or any of its subsidiaries or affiliates, or to
its or respective officers or directors, should be discovered by USU that
should be set forth in an amendment to the Registration Statement or a
supplement to the Proxy Statement/Prospectus, USU shall promptly inform IWO
thereof in writing. All documents that USU is responsible for filing with the
SEC in connection with the transactions contemplated hereby will comply as to
form in all material respects with the applicable requirements of the
Securities Act and the rules and regulations thereunder and the Exchange Act
and the rules and regulations thereunder.
Section 6.03. Appropriate Action; Consents; Filings
(a) IWO and USU shall each use, and shall cause each of their respective
subsidiaries to use, their reasonable best efforts to (i) take, or cause to be
taken, all appropriate action, and do, or cause to be done, all things
necessary, proper or advisable under applicable Law or otherwise to consummate
and make effective the transactions contemplated by this Agreement, (ii) obtain
from any Governmental Entities any consents, licenses, permits, waivers,
approvals, authorizations or orders required to be obtained or make any filings
with or notifications or submissions to any Governmental Entity (other than
described in the following clause (iii)) required to be made by USU or IWO or
any of their subsidiaries in connection with the authorization, execution and
delivery of this Agreement and the consummation of the transactions
contemplated hereby, including,
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without limitation, the Merger, (iii) make all necessary filings, and
thereafter make any other required submissions, with respect to this Agreement
and the Merger, required under (A) the Securities Act and the Exchange Act and
the rules and regulations thereunder, and any other applicable federal or state
securities Laws, (B) the HSR Act, (C) the Communications Act and (D) any other
applicable Law; provided that USU and IWO shall cooperate with each other in
connection with the making of all such filings and submissions, including
providing copies of all such documents to the nonfiling party and its advisors
prior to filings and, if requested, shall accept all reasonable additions,
deletions or changes suggested in connection therewith. Each of IWO and USU,
upon request, shall furnish to the other and to any Governmental Entity all
information concerning itself and its subsidiaries, directors, officers and
stockholders and such other matters as may be reasonably necessary, advisable
or required for any application or other filing or submission to be made
pursuant to the rules and regulations of any applicable Law (including all
information required to be included in the Proxy Statement/Prospectus or the
Registration Statement and all information required to determine compliance by
IWO, USU and the Surviving Corporation with the foreign ownership and voting
requirements of Section 310(b) of the Communications Act) in connection with
the transactions contemplated by this Agreement. USU and IWO shall request
early termination of the waiting period with respect to the Merger under the
HSR Act.
(b) USU and IWO agree to cooperate with respect to, and shall cause each of
their respective subsidiaries to cooperate with respect to, and agree to use
their reasonable best efforts to contest and resist, any action, including
legislative, administrative or judicial action, and to have vacated, lifted,
reversed or overturned any decree, judgment, injunction or other order (whether
temporary, preliminary or permanent) of any Governmental Entity that is in
effect and that restricts, prevents or prohibits the consummation of the Merger
or any other transactions contemplated by this Agreement.
(c) (i) Each of IWO and USU shall give (or shall cause their respective
subsidiaries to give) any notices to third persons, and use, and cause their
respective subsidiaries to use, their reasonable best efforts to obtain any
third persons consents (A) necessary, proper or advisable to consummate the
transactions contemplated by this Agreement, (B) otherwise required under any
contracts, licenses, leases or other agreements in connection with the
consummation of the transactions contemplated hereby or (C) required to prevent
a IWO Material Adverse Effect from occurring prior to the Effective Time or a
USU Material Adverse Effect from occurring after the Effective Time.
(ii) In the event that any party shall fail to obtain any third person
consent described in subsection (c)(i) above, such party shall use its
reasonable best efforts, and shall take any such actions reasonably requested
by the other parties, to limit the adverse effect upon IWO and USU, their
respective subsidiaries, and their respective businesses resulting, or which
could reasonably be expected to result after the Effective Time, from the
failure to obtain such consent.
(d) Nothing in this Agreement shall require USU or Merger Sub to agree to,
or permit IWO to agree to, the imposition of conditions, the payment of any
material amounts or any requirement of divestiture to obtain any Approval, and
in no event shall any party take, or be required to take, any action that would
or could reasonably be expected to have a USU Material Adverse Effect or a IWO
Material Adverse Effect.
(e) Each of USU and IWO shall promptly notify the other of (i) any material
change in its current or future business, financial condition or results of
operations, (ii) any complaints, investigations or hearings (or communications
indicating that the same may be contemplated) of any Governmental Entities with
respect to the transactions contemplated hereby or its business, (iii) the
institution or the threat of material litigation involving it or any of its
subsidiaries or (iv) any event or condition that might reasonably be expected
to cause any of its representations, warranties, covenants or agreements set
forth herein not to be true and correct at the Effective Time. As used in the
preceding sentence, "material litigation" means any case, arbitration or
adversary proceeding or other matter which would have been required to be
disclosed on the IWO Disclosure Schedule pursuant to Section 3.09 or the USU
Disclosure Schedule pursuant to Section 4.09, as the case may be, if in
existence on the date hereof, or in respect of which the legal fees and other
costs to IWO might reasonably be expected to exceed $500,000 over the life of
the matter.
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(f) The Board of Directors of USU shall take all action necessary to designate,
in accordance with the USU Indenture, each of the Merger Sub and the
Surviving Corporation as an "Unrestricted Subsidiary" as defined in the USU
Indenture.
Section 6.04. Affiliates. As soon as practicable after the date hereof,
IWO shall use its reasonable best efforts to obtain from each person set forth
in Schedule 6.04 of the IWO Disclosure Schedule a written agreement
substantially in the form of Exhibit A (the "Affiliate Letter") and deliver
such agreement to USU on or prior to the date that is 30 days after the date
hereof. USU shall be entitled to place legends as specified in the Affiliate
Letter on the certificates evidencing any of the USU Common Stock to be
received by (i) any person specified in Schedule 6.04 of the IWO Disclosure
Schedule or (ii) any person who USU reasonably determines is an "affiliate" for
purposes of Rule 145 under the Securities Act, and to issue appropriate stop
transfer instructions to the transfer agent for the USU Common Stock,
consistent with the terms of the Affiliate Letter, regardless of whether such
person has executed the Affiliate Letter and regardless of whether such
person's name appears in Schedule 6.04 of the IWO Disclosure Schedule.
Section 6.05. Tax Treatment. The parties hereto intend that the Merger
shall constitute a reorganization within the meaning of Section 368(a) of the
Code and that this Agreement shall constitute a "plan of reorganization" for
the purposes of Section 368 of the Code and the Treasury Regulations
promulgated thereunder. Each party hereto shall use its reasonable best efforts
to cause the Merger to qualify, and shall not take, and shall use its
reasonable best efforts to prevent any affiliate of such party from taking, any
actions that could prevent the Merger from qualifying, as a reorganization
under the provisions of Section 368(a) of the Code.
Section 6.06. Public Announcements. USU and IWO shall consult with each
other before issuing any press release or otherwise making any public
statements with respect to the Merger and shall not issue any such press
release or make any such public statement prior to such consultation. The press
release announcing the execution and delivery of this Agreement shall be a
joint press release of USU and IWO. Prior to making any filings with any third
person or Governmental Entity with respect to any press release or public
announcement each party shall consult with the other.
Section 6.07. Nasdaq Listing. USU shall use its reasonable best efforts to
cause the shares of USU Common Stock to be issued in the Merger and issuable
upon exercise of the options and warrants assumed by USU pursuant to this
Agreement to be approved for listing (subject to official notice of issuance)
on the Nasdaq prior to the Effective Time.
Section 6.08. IWO Stockholders Agreements. IWO shall use its reasonable
best efforts to cause that certain Amended and Restated Stockholders Agreement
dated December 4, 2000 (the "IWO Stockholders Agreement"), between IWO and the
stockholders signatory thereto either (i) to be terminated on or prior to the
Effective Time or (ii) to be amended, effective as of the Effective Time, to
the reasonable satisfaction of USU; and IWO shall deliver to USU at the Closing
evidence of such termination or amendment reasonably satisfactory to USU.
Section 6.09. Employee Benefit Plans. From the Effective Time through
December 31, 2002, USU will cause the Surviving Corporation or any of its
subsidiaries, as the case may be, to provide generally to Affected Employees
employee benefits under employee benefit and welfare plans on terms and
conditions which when taken as a whole are substantially similar to those
provided by USU and its subsidiaries to their similarly situated officers and
employees; provided that with respect to stock option or other plans involving
the potential issuance of USU Common Stock, this provision shall be satisfied
if Affected Employees who are employed in positions that are comparable to
those of employees of USU and its subsidiaries who are eligible to participate
in stock option plans of USU and its subsidiaries are eligible to receive
awards or grants thereunder. For purposes of participation, vesting and benefit
accrual under employee benefit plans of USU and its subsidiaries, the service
of the Affected Employees prior to the Effective Time shall be treated as
service with USU and its subsidiaries other than for purposes of the accrual of
benefits under a defined benefit plan. Following the Effective Time,
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USU also shall cause the Surviving Corporation and its subsidiaries to honor in
accordance with their terms all employment, severance, consulting and other
compensation contracts (other than with respect to IWO Options, as to which USU
will honor such options in accordance with Section 2.03) disclosed in Schedules
3.10(d), 3.21(a) or 6.09 of the IWO Disclosure Schedule between IWO or any of
its subsidiaries and any current or former director, officer, or employee
thereof, and all provisions for vested benefits or other vested amounts earned
or accrued through the Effective Time under the IWO Benefit Plans in accordance
with their terms. "Affected Employees" means individuals who are actively
employed by IWO or any of its subsidiaries as of the Effective Time and who
remain employed with USU or any subsidiary of USU at and after the Effective
Time.
Section 6.10. Rule 16b-3. The Board of Directors of USU shall, to the
extent permitted by applicable Law, take or cause to be taken all necessary
actions in the manner required by Rule 16b-3 under the Exchange Act such that,
with respect to persons who will or may become officers or directors of USU,
the transactions relating to the Merger that may be considered acquisitions
will be exempt from Section 16 of the Exchange Act.
Section 6.11. Merger Sub. Prior to the Effective Time, Merger Sub shall
not conduct any business or make any investments other than in connection with
its organization and as specifically contemplated by this Agreement and will
not have any material assets or liabilities except as necessary for purposes of
consummating the transactions contemplated hereby and will not have any
subsidiaries.
Section 6.12. Indemnification and Insurance. For a period of six years
after the Effective Time, (i) USU agrees that all rights to indemnification for
acts or omissions occurring prior to the Effective Time existing as of the date
hereof in favor of the former and present directors or officers of IWO as
provided in IWO's charter or bylaws or written agreements shall survive the
Merger and shall continue in full force and effect and USU hereby agrees to
assume, at any time when such assumption would not cause a default (as defined
in the USU Indenture) under the USU Indenture, all such liability and to
indemnify, at any time when such indemnification would not cause a default (as
defined in the USU Indenture) under the USU Indenture, all such persons, in
accordance with and to the extent of such rights, with respect to matters
arising prior to the Effective Time, and (ii) USU shall use its reasonable best
efforts to cause the Surviving Corporation to maintain in effect (at the
expense of the Surviving Corporation) the current policies of directors' and
officers' liability insurance maintained by IWO (or substitute policies
providing at least the same coverage and limits and containing terms and
conditions which are not materially less advantageous) with respect to claims
arising from facts or events which occurred before the Effective Time;
provided, however that in no event shall this covenant require expenditures of
more than 200% of the last annual premiums paid prior to the date hereof by IWO
for such insurance. This Section 6.12 is intended to be for the benefit of, and
shall be enforceable by, the persons referred to in clause (i) of the foregoing
sentence, their heirs and personal representatives, and shall be binding on USU
and its successors and assigns.
Section 6.13. Post-Merger Directors and Management
(a) USU shall cause three of the nine members constituting its Board of
Directors immediately prior to the Effective Time to resign from its Board of
Directors, effective as of the Effective Time, and shall fill the vacancies
created by such resignations with (i) one member designated by the IWO Board of
Directors (the "IWO Director"), (ii) one member designated by Investcorp (the
"Investcorp Director") and (iii) one member designated by the IWO Board of
Directors with the approval of USU, which approval shall not be unreasonably
withheld, provided that such member described in clause (iii) shall be an
"independent director" (as defined for purposes of listing on Nasdaq) (the
"Independent Director") and shall not be a IWO Common Stockholder (as
hereinafter defined) or an affiliate or associate of a IWO Common Stockholder
(the directors contemplated in clause (i), (ii) and (iii) above together with
any directors nominated or designated by them are collectively referred to as
the "IWO Nominated Directors"). For purposes of this Agreement, "IWO Common
Stockholder" shall mean a stockholder of IWO immediately prior to the Effective
Time.
(b) At any meeting of the stockholders of USU held after the Effective Time
for the purpose of electing directors of USU, Investcorp shall be entitled to
nominate by notice at least 60 days prior to the proposed
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meeting date for election to the USU Board of Directors, and USU shall cause to
be nominated for election and shall use its reasonable best efforts to cause to
be elected to its Board, the following number of individuals:
(i) For so long as (A) Investcorp owns 75% or more of the shares of USU
Common Stock acquired by it upon consummation of the Merger and (B) the
shares of USU Common Stock beneficially owned by Investcorp are equal to or
greater than 12% of the issued and outstanding USU Common Stock, Investcorp
shall be entitled to nominate for election to the USU Board of Directors
that number of individuals such that the aggregate number of directors on
the USU Board of Directors that are IWO Nominated Directors after giving
effect to the election of such nominees shall equal the greater of (x) one
director and (y) that number of directors constituting 33% of the total
board seats after giving effect to the election of such nominees rounded
down to the nearest whole number of board seats.
(ii) For so long as (A) Investcorp owns 40% or more of the shares of USU
Common Stock acquired by it upon consummation of the Merger and (B) the
shares of USU Common Stock owned by Investcorp are less than 12% but more
than 6% of the issued and outstanding USU Common Stock and Investcorp is not
entitled to elect directors pursuant to subparagraph (i) above, Investcorp
shall be entitled to nominate for election to the USU Board of Directors
that number of individuals such that the aggregate number of directors on
the USU Board of Directors that are IWO Nominated Directors after giving
effect to the election of such nominees shall equal two.
(iii) For so long as Investcorp owns 20% or more of the shares of USU
Common Stock acquired by it upon consummation of the Merger and Investcorp
is not entitled to elect directors pursuant to subparagraph (i) or (ii)
above, Investcorp shall be entitled to nominate one person for election to
the USU Board of Directors, unless at the time of such election the USU
Board of Directors includes a IWO Nominated Director and such director is
not up for election.
(iv) For purposes of determining the ownership percentages described in
clauses (i), (ii) and (iii) above, Investcorp shall be deemed to include the
following entities:
Investcorp IWO Limited Partnership Wireless International Limited
Ballet Limited Wireless Equity Limited
Denary Limited Wireless Holdings Limited
Gleam Limited Wireless Investments Limited
Highlands Limited IWO Equity Limited
Noble Limited IWO Investments Limited
Outrigger Limited Cellular Equity Limited
Quill Limited Mobile Holdings Limited
Radial Limited Wireless IIP Limited
Shoreline Limited Equity IWO Limited
Zinnia Limited New IWO Equity Limited
Investcorp Investment Equity Limited New Wireless IIP Limited
Xxxxxxx Limited New Equity IWO Limited
Xxxxxxxx Limited
Frankfort Limited
Paugus Limited
(c) Subject to the foregoing, as of the Effective Time (i) the class of
directors whose term expires at USU's 2002 annual meeting of stockholders shall
include the IWO Director, (ii) the class of directors whose term expires at
USU's 2003 annual meeting of stockholders shall include the Independent
Director and (iii) the class of directors whose term expires at USU's 2004
annual meeting of stockholders shall include the Investcorp Director.
(d) In the event that any of the IWO Nominated Directors ceases to serve on
the Board of Directors of USU at any time, Investcorp may promptly designate a
person to replace the IWO Director and USU shall appoint such designated person
to the USU Board of Directors to fill the unexpired term of the IWO Nominated
Director who ceased to serve.
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(e) At the Effective Time, the Board of Directors of USU shall elect (i)
Xxxxx Xxxxxxx to the office of Chief Operating Officer of USU, (ii) Xxxxxx
Xxxxx to the office of President and Chief Executive Officer of USU, and (iii)
Xxxxx Xxxxxx to the office of Chief Financial Officer of USU.
(f) In the event that at any time the number of IWO Nominated Directors
exceeds the number of persons Investcorp shall be entitled to nominate for the
USU Board of Directors pursuant to the provisions of Section 6.13(b), upon the
request of USU one or more IWO Nominated Directors (selected by Investcorp)
shall resign within thirty days of such request such that the number of IWO
Nominated Directors serving on the USU Board of Directors after such
resignations shall equal the number of IWO Nominated Directors to which
Investcorp is then entitled to nominate pursuant to the provisions of Section
6.13(b); provided that in any event the last IWO Nominated Director shall not
be required to resign and may complete his or her term of office.
(g) Each of IWO and USU shall take such action as shall reasonably be deemed
by either thereof to be advisable to give effect to the provisions set forth in
this Section 6.13, including but not limited to incorporating such provisions
in the bylaws of USU in effect at the Effective Time.
(h) If the USU Board of Directors shall create an executive or other
committee to which the USU Board of Directors has delegated it power and
authority with respect to business matters generally, the USU Board of
Directors shall appoint at least one IWO Nominated Director to such committee
if at such time there are any IWO Nominated Directors serving on the USU Board
of Directors.
(i) USU shall deliver to Investcorp International Inc. concurrently with
delivery to the USU Board of Directors all monthly financial or other operating
reports which are regularly prepared by management of USU and provided to
members of the USU Board of Directors for so long as Investcorp continues to
hold in the aggregate 20% of the shares of USU Common Stock held by it at the
Effective Time.
Section 6.14. Supplemental Warrant Agreement; Warrant
Notices. Concurrently with the consummation of the Merger, the Surviving
Corporation and USU shall enter into a supplemental warrant agreement
supplementing the Warrant Agreement and providing for adjustments in accordance
with Section 2.03(c) of this Agreement and Section 8(m) of the Warrant
Agreement. Promptly thereafter, the Surviving Corporation shall provide (i) the
warrant agent under the Warrant Agreement and supplemental warrant agreement
with the certificate required by Section 10(a)(i) of the Warrant Agreement and
(ii) the registered holders of the IWO High Yield Warrants with the notice
required by Section 10(a)(ii) of the Warrant Agreement.
Section 6.15. Registration Rights Agreements. Prior to or at the Effective
Time, USU shall enter into a Registration Rights Agreement, in the form of
Exhibit D attached hereto (the "Registration Rights Agreement") and USU shall
use its reasonable best efforts to obtain a consent from The 1818 Fund III,
L.P. as described in the Registration Rights Agreement and otherwise
substantially consistent with the emails among Xxxxx Xxxxxxx, Xxxxxxx Xxxxx and
E. Xxxxxxx Xxxxxxx on the evening of December 19, 2001.
Section 6.16. Lock-Up Agreements.
(a) Contemporaneously with the execution and delivery of this Agreement, IWO
shall obtain and deliver an agreement (the "Lock-Up Agreements") from IWO
Common Stockholders listed in Schedule 6.16(a) of the IWO Disclosure Schedule
(collectively, the "Restricted IWO Common Stockholders") that from and after
the Effective Time and continuing until the date that is 301 days after the
Effective Time, such stockholder will not sell, transfer, assign, pledge, make
any short sale of, loan, grant any option for the purchase of, or otherwise
directly or indirectly dispose of any of its shares of USU Common Stock
(collectively, "Transfer") without the prior written consent of USU unless such
Transfer complies with the provisions hereof (the "Resale Restriction").
Notwithstanding the foregoing and subject to a 90-day underwriters lock-up (if
required) provided for in the Registration Rights Agreement in connection with
any underwritten offering, (i) 20% of each Restricted IWO Common Stockholder's
shares of USU Common Stock immediately after the Effective Time shall be
released
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from the Resale Restriction on the date that is 120 days after the Effective
Time; (ii) an additional 30% of each Restricted IWO Common Stockholder's shares
of USU Common Stock immediately after the Effective Time shall be released from
the Resale Restriction on the date that is 211 days after the Effective Time
and (iii) the remainder of each Restricted IWO Common Stockholder's shares of
USU Common Stock immediately after the Effective Time shall be released from
the Resale Restriction on the date that is 301 days after the Effective Time.
Notwithstanding the foregoing, (i) if any of the shares of USU Common Stock
held by any of the former IWO stockholders shall be sold pursuant to an
underwritten offering within 120 days after the Effective Time, then the shares
of USU Common Stock held by Investcorp, Odyssey, TCW and Paribas shall be
released from the Resale Restriction on the 90th day after the closing date of
the first such underwritten offering and (ii) if no such underwritten offering
is consummated within 120 days after the Effective Time, (x) 35% of the USU
Common Stock held by each of Investcorp, Odyssey, TCW and Paribas immediately
after the Effective Time shall be released from the Resale Restriction on the
date that is 121 days after the Effective Time, (y) an additional 35% of the
USU Common Stock held by each of Investcorp, Odyssey, TCW and Paribas
immediately after the Effective Time shall be released from the Resale
Restriction on the date that is 181 days after the Effective Time, and (z) the
remainder of the USU Common Stock held by each of Investcorp, Odyssey, TCW and
Paribas immediately after the Effective Time shall be released from the Resale
Restriction on the date that is 241 days after the Effective Time. None of
Investcorp, Odyssey, TCW or Paribas shall be permitted to make any distribution
to their limited partners or investors of any USU Common Stock that is subject
to the Resale Restriction. The provisions of the lock-up agreement referred to
in this Section 6.16 shall not: (A) prohibit any IWO stockholder from
participating in the Underwritten Offering (as defined in Section 2 of the
Registration Rights Agreement); (B) restrict transfers solely among the
Investcorp entities (not including the limited partners thereof) included in
the definition of "Investcorp" set forth in Section 6.13(b)(iv); (C) restrict
transfers solely among the Odyssey entities included in the definition of
"Odyssey" set forth in Section 9.03; or (D) restrict transfers solely among the
TCW entities included in the definition of "TCW" set forth in Section 9,03;
provided, however, that with respect to transfers contemplated by clauses (B)
through (D) above, any such transferees shall execute and deliver to USU a
Lock-Up Agreement.
(b) For purposes of this Section 6.16, "Investcorp" means the entities
listed in Section 6.13(b)(iv) and the limited partners thereof.
(c) As soon as practicable after the date hereof, IWO shall use its
reasonable best efforts to obtain from each IWO Common Stockholder who is not a
Restricted IWO Common Stockholder an agreement in substantially the same form
and with the same terms as the Lock-Up Agreement obtained from the Restricted
IWO Common Stockholders.
(d) The restrictions set forth in this Section 6.16 shall apply to each IWO
Common Stockholder proportionally, and the IWO Common Stockholders shall have
no ability to allocate released percentages disproportionately to any IWO
Common Stockholder or group of IWO Common Stockholders; provided, however, that
the foregoing restrictions of this Section 6.16(d) shall not apply to
Investcorp.
Section 6.17. Support Agreements; Standstill Agreement.
(a) Contemporaneously with the execution of this Agreement, IWO shall cause
each of the stockholders of IWO listed in Schedule 6.17(a) of the IWO
Disclosure Schedule to execute and deliver a IWO Support Agreement, which shall
become effective as of the date hereof, in the form attached hereto as Exhibit
C.
(b) Contemporaneously with the execution of this Agreement, USU shall cause
each of the stockholders of USU listed in Schedule 6.17(b) of the USU
Disclosure Schedule to execute and deliver a USU Support Agreement, which shall
become effective as of the date hereof, in the form attached as Exhibit B.
(c) Contemporaneously with the execution of this Agreement, IWO shall cause
Investcorp (as defined in Section 6.13(b)(iv)) to execute and deliver a
Standstill Agreement, which shall become effective as of the Effective Time, in
the form attached as Exhibit E.
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Section 6.18. Conversion to USU Common Stock. Prior to the Effective Time,
USU shall either cause each share of USU Class B Common Stock issued and
outstanding immediately prior to the Effective Time to be converted into USU
Common Stock in accordance with the provisions of the First Restated Articles
of Incorporation of USU or effect the Reclassification.
Section 6.19. Communications Act Compliance.
(a) Prior to the Effective Time, both parties shall use their reasonable
best efforts not to permit any of the owners of capital stock which is not
freely tradable or other equity interest in the parties or their subsidiaries,
or other securities convertible into or exchangeable for such non-tradable
stock or equity interests, to sell, mortgage, pledge, transfer or otherwise
dispose of any of such non-tradable stock, equity interests or other securities
to any person who is, at the Effective Time, an alien, the representative of an
alien, or an entity organized under the laws of a foreign government within the
meaning of Section 310(b) of the Communications Act. In addition, officers and
directors of USU, as well as members of the Xxxxxxx family, may sell their
holdings in USU pursuant to transactions not violative of Rule 10b5-1 under the
Securities Exchange Act of 1934.
(b) From the Effective Time until two years after the Effective Time, should
USU reasonably determine, in consultation with Investcorp (as defined in
Section 6.13(b)(iv)), that it is advisable to file with the FCC a request for
consent to exceed the benchmarks contained in Section 310(b) of the
Communications Act, or that it has the right under Article III.F. of the First
Restated Articles of Incorporation of USU to redeem shares held by former IWO
stockholders, USU agrees to not exercise such rights until such time as USU has
made such a request and the FCC refuses to grant such request, provided that
USU shall have used reasonable best efforts to prosecute such application.
Section 6.20. Subsequent SEC Reports. Each of USU and IWO shall consult
with the other prior to making publicly available its financial results for any
period after the date of this Agreement and prior to filing any report, form or
other filing with the SEC after the date of this Agreement.
Section 6.21. Warrant Cancellation Agreements. Not later than five days
after the date of this Agreement, IWO shall deliver to USU the executed Warrant
Cancellation Agreements for all of the IWO Class A Warrants and the IWO Class E
Warrants.
ARTICLE VII
CONDITIONS
Section 7.01. Conditions to Obligations of Each Party. The respective
obligations of each party to effect the Merger and the other transactions
contemplated hereby shall be subject to the satisfaction at or prior to the
Closing Date of the following conditions:
(a) Effectiveness of the Registration Statement. The Registration
Statement shall have been declared effective by the SEC under the Securities
Act. No stop order suspending the effectiveness of the Registration
Statement shall be in effect and no proceeding for that purpose shall have
been initiated by the SEC.
(b) Stockholder Approval. This Agreement and the Merger shall have been
approved and adopted by the stockholders of IWO in the manner required by
applicable Law, and the issuance of the USU Common Stock pursuant to the
Merger shall have been approved by the stockholders of USU in the manner
required by applicable Law and the Nasdaq.
(c) No Order. No Governmental Entity of competent jurisdiction shall
have enacted, issued, promulgated, enforced or entered any statute, rule,
regulation, executive order, decree, injunction or other order (whether
temporary, preliminary or permanent) that is in effect and has the effect of
making the
42
Merger or the other transactions contemplated hereby illegal or otherwise
prohibiting consummation of the Merger or the other transactions
contemplated hereby.
(d) Government Consents. The applicable waiting period under the HSR
Act with respect to the Merger and the transactions contemplated by this
Agreement shall have expired or been terminated and any other Approvals of
any Governmental Entity the failure to obtain would constitute a criminal
offense, or individually or in the aggregate would be reasonably expected to
have a IWO Material Adverse Effect or a USU Material Adverse Effect after
the Effective Time, shall have been obtained.
(e) Nasdaq Listing. The shares of USU Common Stock to be issued in the
Merger and which are issuable upon exercise of the Converted IWO Options,
the IWO High Yield Warrants, the Exchanged Founders/Management Warrants and
the Exchanged Xxxxxxx Warrants shall have been approved for listing (subject
to official notice of issuance) on Nasdaq.
(f) FCC Compliance. At the Effective Time, USU shall be in compliance
with the foreign ownership provisions of Section 310(b) of the
Communications Act. If, pursuant to Section 5.05 of this Agreement, a filing
is made with the FCC requesting authority to exceed the benchmarks contained
in Section 310(b), the FCC shall have granted its consent to such request by
a final order.
Section 7.02. Additional Conditions to Obligations of the USU
Companies. The obligations of the USU Companies to effect the Merger and the
other transactions contemplated hereby are also subject to the satisfaction at
or prior to the Closing Date of the following conditions:
(a) Representations and Warranties. Each of the representations and
warranties of IWO contained in this Agreement (which for purposes of this
subparagraph (a) shall be read as though none of them contained any IWO
Material Adverse Effect or other materiality qualifications), except for the
representations and warranties contained in Sections 3.01, 3.03, 3.04 and
3.07(c), shall be true and correct in all respects on the date of this
Agreement and as of the Closing Date as though made on and as of such date
(except to the extent such representations and warranties specifically
relate to a specified date, in which case such representations and
warranties shall be true and correct as of such specified date) except where
the failure of such representations and warranties in the aggregate to be
true and correct in all respects has not had, and would not reasonably be
expected to have, a IWO Material Adverse Effect. Each of the representations
and warranties of IWO set forth in Sections 3.01, 3.03, 3.04 and 3.07(c) of
this Agreement shall be true and correct in all material respects on the
date of this Agreement and on the Closing Date as if made on and as of such
date (except for such representations and warranties made as of a specified
date, which shall be true and correct in all material respects as of such
specified date). The USU Companies shall have received a certificate of the
President and the Chief Financial Officer of IWO, dated the Closing Date, to
such effect.
(b) Agreements and Covenants. IWO shall have performed or complied in
all material respects with all agreements and covenants required by this
Agreement to be performed or complied with by it on or prior to the Closing
Date. The USU Companies shall have received a certificate of the President
and the Chief Financial Officer of IWO, dated the Closing Date, to that
effect.
(c) Absence of Regulatory Conditions. There shall not be any action
taken, or any statute, rule, regulation or order enacted, entered, enforced
or deemed applicable to the Merger, by any Governmental Entity in connection
with the grant of a regulatory approval necessary, which imposes any
condition or restriction upon the USU Companies or the business or
operations of IWO which would reasonably be expected to have a IWO Material
Adverse Effect or a USU Material Adverse Effect.
(d) Tax Opinion. Xxxxxx & Xxxxxx L.L.P. shall have delivered to USU its
written opinion dated as of the Closing Date substantially to the effect
that (i) the Merger will constitute a reorganization within the meaning of
Section 368(a) of the Code, (ii) USU and IWO will each be a party to that
reorganization within the meaning of Section 368(b) of the Code, and (iii)
USU, Merger Sub and IWO will not recognize any gain or loss for U.S. federal
income tax purposes as a result of the Merger, and such opinion shall not
have been
43
withdrawn or modified in any material respect prior to the Closing Date. In
rendering such opinion, such counsel shall be entitled to rely upon
representations of USU, Merger Sub and IWO reasonably satisfactory to such
counsel.
(e) Third Person Consents. IWO shall have provided to USU evidence
reasonably satisfactory to USU that IWO has obtained the consents and
approvals set forth in Schedule 7.02(e) of the IWO Disclosure Schedule.
(f) Dissenting Shares. Holders of no more than 3.0% of the outstanding
IWO Common Stock (on a fully diluted basis) shall have exercised (and not
withdrawn) their dissenter's rights with respect to the Merger under
applicable Law.
(g) Resignation of Directors. IWO shall have delivered to USU a written
resignation from each of the directors of the subsidiaries of IWO effective
as of the Effective Time.
(h) IWO Indenture. No event or circumstance that results in or causes
any of the conditions set forth in clauses (i) through (iv) of subsection
(a) of the definition of "Change of Control" in the IWO Indenture to fail to
be satisfied at the Effective Time shall have occurred and not subsequently
have been removed.
(i) IWO Stockholders Agreement. IWO shall have executed and delivered
to USU evidence reasonably satisfactory to USU of the termination or
amendment of the IWO Stockholders Agreement in accordance with Section 6.08.
(j) Warrant Cancellation Agreements. IWO shall have delivered to USU
executed Warrant Cancellation Agreements for all of the IWO Class A Warrants
and the IWO Class E Warrants.
(k) IWO Credit Agreement. IWO shall have obtained an amendment to the
IWO Credit Agreement, in form and substance reasonably satisfactory to USU,
as necessary to prevent a default under or acceleration of, or a requirement
to redeem or repurchase, the obligations of USU under the USU Indenture.
Section 7.03. Additional Conditions to Obligations of IWO. The obligations
of IWO to effect the Merger and the other transactions contemplated hereby are
also subject to the satisfaction at or prior to the Closing Date of the
following conditions:
(a) Representations and Warranties. Each of the representations and
warranties of the USU Companies contained in this Agreement (which for
purposes of this subparagraph (a) shall be read as though none of them
contained any USU Material Adverse Effect or other materiality
qualification), except for the representations and warranties contained in
Sections 4.01, 4.03, 4.04 and 4.07(c), shall be true and correct in all
respects on the date of this Agreement and as of the Closing Date as though
made on and as of such date (except to the extent such representations and
warranties specifically relate to a specified date, in which case such
representations and warranties shall be true and correct as of such
specified date) except where the failure of such representations and
warranties in the aggregate to be true and correct in all respects has not
had, and would not reasonably be expected to have, a USU Material Adverse
Effect. Each of the representations and warranties of the USU Companies set
forth in Sections 4.01, 4.03, 4.04 and 4.07(c) of this Agreement shall be
true and correct in all material respects on the date of this Agreement and
on the Closing Date as if made on and as of such date (except for such
representations and warranties made as of a specified date, which shall be
true and correct in all material respects as of such specified date). IWO
shall have received a certificate of the President and the Chief Financial
Officer of each of the USU Companies, dated the Closing Date, to such effect.
(b) Agreements and Covenants. The USU Companies shall have performed or
complied in all material respects with all agreements and covenants required
by this Agreement to be performed or complied with by them on or prior to
the Closing Date. IWO shall have received a certificate of the President and
the Chief Financial Officer of each of the USU Companies, dated the Closing
Date, to that effect.
44
(c) Third Person Consents. USU shall have provided to IWO evidence
reasonably satisfactory to IWO that USU has obtained the consents and
approvals set forth in Schedule 7.03(c) of the USU Disclosure Schedule.
(d) Tax Opinion. Xxxxxx, Xxxx & Xxxxxxxx LLP shall have delivered to
IWO its written opinion dated as of the Closing Date substantially to the
effect that (i) the Merger will constitute a reorganization within the
meaning of Section 368(a) of the Code, (ii) USU and IWO will each be a party
to that reorganization within the meaning of Section 368(b) of the Code, and
(iii) no gain or loss for U.S. federal income tax purposes will be
recognized by the holders of IWO Common Stock upon receipt of shares of USU
Common Stock in the Merger, except with respect to any cash received in lieu
of a fractional share interest in USU Common Stock, and such opinion shall
not have been withdrawn or modified in any material respect prior to the
Closing Date. In rendering such opinion, such counsel shall be entitled to
rely upon representations of USU, Merger Sub and IWO reasonably satisfactory
to such counsel.
(e) Conversion of USU Class B Common Stock. Prior to or at the
Effective Time, each share of USU Class B Common Stock issued and
outstanding immediately prior to the Effective Time shall either have been
converted into shares of USU Common Stock in accordance with the terms of
the First Restated Articles of Incorporation of USU or have been
reclassified on a one-for-one basis pursuant to the Reclassification.
(f) Registration Rights Agreement. USU shall have executed and
delivered to IWO an executed counterpart to the Registration Rights
Agreement and there shall have been delivered a consent from The 1818 Fund
III, L.P. as described in the Registration Rights Agreement and otherwise
substantially consistent with the emails among Xxxxx Xxxxxxx, Xxxxxxx Xxxxx
and E. Xxxxxxx Xxxxxxx on the evening of December 19, 2001.
(g) Merger Sub. Merger Sub shall have at least $100,000 in cash at or
prior to the Effective Time.
(h) Amendment to USU Credit Agreement. USU shall have obtained an
amendment to the USU Credit Agreement, in form and substance reasonably
satisfactory to IWO, as necessary to prevent a default under or acceleration
of, or a requirement to redeem or repurchase, the obligations of IWO under
the IWO Indenture.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
Section 8.01. Termination. This Agreement may be terminated at any time
prior to the Effective Time, whether before or after approval by the
stockholders of IWO of the Merger or approval by the stockholders of USU of the
issuance of USU Common Stock pursuant to the Merger:
(a) by mutual written consent of USU and IWO;
(b) by USU, upon a breach of any representation, warranty, covenant or
agreement on the part of IWO set forth in this Agreement, or if any
representation or warranty of IWO shall have become untrue, in either case
only if the conditions set forth in Section 7.02(a) or Section 7.02(b) of
this Agreement, as the case may be, would be incapable of being satisfied;
provided, that such breach or untruth has not been cured within 30 days
following the earlier of receipt by USU of written notice of such breach or
untruth from IWO or receipt by IWO of written notice of such breach or
untruth from USU;
(c) by IWO, upon a breach of any representation, warranty, covenant or
agreement on the part of the USU Companies set forth in this Agreement, or
if any representation or warranty of the USU Companies shall have become
untrue, in either case only if the conditions set forth in Section 7.03(a)
or Section 7.03(b) of this Agreement, as the case may be, would be incapable
of being satisfied; provided, that such breach or untruth has not been cured
within 30 days following the earlier of receipt by IWO of written notice of
such breach or untruth from USU or receipt by USU of written notice of such
breach or untruth from IWO;
45
(d) by either USU or IWO, if there shall be any Law, order, injunction or
decree which is final and nonappealable preventing the consummation of the
Merger;
(e) by either USU or IWO, if the Merger shall not have been consummated
before the 181st day after the date of this Agreement; provided, however,
that the right to terminate this Agreement under this Section 8.01(e) shall
not be available to any party whose failure or whose affiliates' failure to
perform any material covenant, agreement or obligation hereunder has been
the cause of, or resulted in, the failure of the Merger to occur on or
before such date;
(f) by either USU or IWO, (i) if this Agreement and the Merger shall not
be adopted and approved by the requisite vote of the stockholders of IWO at
the IWO Common Stockholders Meeting (or in lieu thereof by written consent
of stockholders of IWO) or (ii) if the issuance of USU Common Stock pursuant
to the Merger shall not be approved by the requisite vote of USU
stockholders at the USU Stockholders Meeting (or in lieu thereof by written
consent of the stockholders of USU);
(g) by USU, if the Board of Directors of IWO withdraws, modifies or
changes its recommendation of this Agreement or the Merger in a manner
adverse to USU or shall have resolved to do so; or
(h) by IWO, if the Board of Directors of USU withdraws, modifies or
changes its recommendation of the issuance of the USU Common Stock in the
Merger in a manner adverse to IWO or shall have resolved to do so.
The right of any party hereto to terminate this Agreement pursuant to this
Section 8.01 shall remain operative and in full force and effect regardless of
any investigation made by or on behalf of any party hereto, any person
controlling any such party or any of their respective officers, directors,
representatives or agents, whether prior to or after the execution of this
Agreement.
Section 8.02. Effect of Termination. Except as provided in Section 8.05 or
Section 9.01 of this Agreement, in the event of the termination of this
Agreement pursuant to Section 8.01, this Agreement shall forthwith become void,
there shall be no liability on the part of the USU Companies or IWO or their
respective officers, directors, or stockholders and all rights and obligations
of any party hereto shall cease, except that nothing herein shall relieve any
party of any liability for (i) any breach of such party's covenants or
agreements contained in this Agreement or (ii) any willful breach of such
party's representations or warranties contained in this Agreement. No
termination of this Agreement shall affect the obligations of the parties under
the Confidentiality Agreement.
Section 8.03. Amendment. This Agreement may be amended by the parties
hereto by action taken by or on behalf of their respective Boards of Directors
at any time prior to the Effective Time; provided, however, that, after
approval of the Merger by the stockholders of IWO, no amendment, which under
applicable Law may not be made without the approval of the stockholders of IWO,
may be made without such approval. This Agreement may not be amended except by
an instrument in writing signed by the parties hereto.
Section 8.04. Waiver. At any time prior to the Effective Time, any party
hereto may (a) extend the time for the performance of any of the obligations or
other acts of the other party hereto, (b) waive any inaccuracies in the
representations and warranties of the other party contained herein or in any
document delivered pursuant hereto and (c) waive compliance by the other party
with any of the agreements or conditions contained herein. Any such extension
or waiver shall be valid only if set forth in an instrument in writing signed
by the party or parties to be bound thereby. For purposes of this Section 8.04,
the USU Companies as a group shall be deemed to be one party.
Section 8.05. Fees, Expenses and Other Payments
(a) Except as provided in Sections 8.02 and 8.05(c) of this Agreement, all
Expenses (as defined in paragraph (b) of this Section 8.05) incurred by the
parties hereto shall be borne solely and entirely by the party which has
incurred such Expenses whether or not the Merger is consummated; provided,
however, that the allocable share
46
of the USU Companies as a group and IWO for all printing and filing costs
related to the Registration Statement and the Proxy Statement/Prospectus and
all SEC and HSR filing fees incurred in connection with the Registration
Statement and the Proxy Statement/Prospectus shall be one-half each.
(b) "Expenses" as used in this Agreement shall include all out-of-pocket
expenses (including, without limitation, all fees and expenses of counsel,
accountants, investment bankers, experts and consultants to a party hereto and
its affiliates) incurred by a party or on its behalf in connection with or
related to the authorization, preparation, negotiation, execution and
performance of this Agreement, the preparation, printing, filing and mailing of
the Registration Statement, the Proxy Statement/Prospectus, the solicitation of
approval of the stockholders of such party and all other matters related to the
consummation of the transactions contemplated hereby.
(c) If (i) this Agreement is terminated pursuant to Section 8.01(e), (ii)
the condition set forth in Section 7.02(f) has not been met and (iii) as of the
drop dead date specified in Section 8.01(e), the holders of 6% or more of the
outstanding IWO Common Stock have exercised (and not withdrawn) their
dissenters rights with respect to the Merger under applicable Law, then IWO
shall, in the case of a termination by USU, within three business days
following such termination or, in the case of a termination by IWO, prior to
such termination, pay to USU in cash by wire transfer in immediately available
funds to an account designated by USU an amount equal to $7,000,000, which
amount is inclusive of all of USU's Expenses. If IWO fails to pay any amount
required to be paid by it under this Section 8.05(c) on the date due, interest
shall accrue and be payable on such amount, or portion of such amount which is
not paid when due, at the prime lending rate of The Whitney National Bank in
effect on the date such payment was due.
ARTICLE IX
GENERAL PROVISIONS
Section 9.01. Effectiveness of Representations, Warranties and Agreements
(a) Except as set forth in Section 9.01(b) of this Agreement, the
representations, warranties and agreements of each party hereto shall remain
operative and in full force and effect regardless of any investigation made by
or on behalf of any other party hereto, any person controlling any such party
or any of their officers, directors, representatives or agents, whether prior
to or after the execution of this Agreement.
(b) The representations and warranties in this Agreement shall terminate at
the Effective Time or upon the termination of this Agreement pursuant to
Article VIII. This Section 9.01(b) shall not limit any covenant or agreement of
the parties hereto which by its terms contemplates performance after the
Effective Time or after termination of this Agreement.
Section 9.02. Notices. All notices and other communications given or made
pursuant hereto shall be in writing and shall be deemed to have been duly given
upon receipt, if delivered personally, mailed by registered or certified mail
(postage prepaid, return receipt requested) to the parties at the following
addresses (or at such other address for a party as shall be specified by like
changes of address) or sent by electronic transmission to the telecopier number
specified below:
(a) If to any of the USU Companies, to:
US Unwired Inc.
000 Xxxxxxxxx Xxxxx
Xxxx Xxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx
Telecopier No.: (000) 000-0000
47
(b) If to IWO:
IWO Holdings, Inc.
00 Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxx
Telecopier No.: (000) 000-0000
with a copy to:
Xxxxxx, Xxxx & Xxxxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: E. Xxxxxxx Xxxxxxx, Esq.
Telecopier No.: (000) 000-0000
Section 9.03. Certain Definitions. For the purposes of this Agreement, the
term:
(a) "affiliate" means a person that directly or indirectly, through one
or more intermediaries, controls, is controlled by, or is under common
control with, another person;
(b) a person shall be deemed a "beneficial owner" of or to have
"beneficial ownership" of capital stock in accordance with the
interpretation of the term "beneficial ownership" as defined in Rule 13d-3
under the Exchange Act, as in effect on the date hereof; provided that a
person shall be deemed to be the beneficial owner of, and to have beneficial
ownership of, capital stock that such person or any affiliate of such person
has the right to acquire (whether such right is exercisable immediately or
only after the passage of time) pursuant to any agreement, arrangement or
understanding or upon the exercise of conversion rights, exchange rights,
warrants or options, or otherwise;
(c) "business day" means any day other than a day on which banks in the
State of New York are authorized or obligated to be closed;
(d) "Confidentiality Agreement" means that certain Confidentiality
Agreement dated as of September 22, 2001 between USU and IWO;
(e) "control" (including the terms "controlled," "controlled by" and
"under common control with") means the possession, directly or indirectly or
as trustee or executor, of the power to direct or cause the direction of the
management or policies of a person, whether through the ownership of stock
or as trustee or executor, by contract or credit arrangement or otherwise;
(f) "First Restated Articles of Incorporation of USU" shall mean the
Articles of Incorporation of USU as amended and restated as of October 23,
2000;
(g) "Founders Warrants" means the warrants to purchase 827,999.9910
shares of IWO Class B Common Stock issued by IWO to certain founders of
Independent Wireless One Corporation in December 1999, each as amended by
the Warrant Exchange Agreement or the Xxxxxxx Warrant Exchange Agreement, as
the case may be;
(h) "IWO Credit Agreement" means that certain Credit Agreement dated as
of December 20, 1999 by and among Independent Wireless One Corporation and
the lenders and other parties specified therein, as amended to the date
hereof;
(i) "IWO Indenture" means that certain Indenture dated as of February 2,
2001 by and among IWO, the Guarantor (as defined therein) and Firstar Bank,
N.A., as Trustee;
(j) "IWO Stockholders Agreement" means that certain Amended and Restated
Stockholders Agreement dated as of December 4, 2000 by and among IWO and the
stockholders of IWO specified therein, as amended;
48
(k) "knowledge" means the actual knowledge after due inquiry of Xxxxxx
Xxxxxxx, Xxxxxxx Xxxxxx, Xxxx Xxxxxxx or Xxxxxxx Xxxxxx, in the case of IWO,
or Xxxxxx X. Xxxxx, Xxxxx X. Xxxxxx, Xxxx Xxxxxxx or Xxxxxx X. Xxxxxxx, in
the case of USU;
(l) "Management Warrants" means the warrants to purchase 148,800 shares
of IWO Class B Common Stock issued by IWO to certain members of its
management in December 1999 and May 2000, each as amended by the Warrant
Exchange Agreement or the Xxxxxxx Warrant Exchange Agreement, as the case
may be;
(m) "Xxxxxxx Warrants" means the Founders Warrants and the Management
Warrants issued to Xxxxxx Xxxxxxx, each as amended by the Xxxxxxx Warrant
Exchange Agreement.
(n) "Odyssey" means each of Odyssey Investment Partners Fund, LP and
Odyssey Coinvestors, LLC.
(o) "Paribas" means Paribas North America Inc.
(p) "person" means an individual, corporation, partnership, limited
liability company, joint stock company, association, trust, estate,
unincorporated organization, other entity or group (as defined in Section
13(d) of the Exchange Act);
(q) "Significant Subsidiary" means any subsidiary of IWO that would
constitute a Significant Subsidiary of such party within the meaning of Rule
1-02 of Regulation S-X of the SEC;
(r) "Site Leases" means all leasehold estates or licenses held by a
specified party to this Agreement or any of its subsidiaries for use
principally as tower space, antenna location, switch site facility, power
facility or other similar uses constituting elements of the personal
communications network of such party or any of its subsidiaries, including
any leases of real property held for such purposes;
(s) "Space Leases" means all leasehold estates or licenses held by a
specified party or any of its subsidiaries to this Agreement of space for
use principally other than as a Site Lease (such as office, administrative
and executive space or space for retail storefronts or warehouse storage) by
such party or any of its subsidiaries;
(t) "subsidiary" or "subsidiaries" of IWO, USU, the Surviving Corporation
or any other person, means any entity, whether incorporated or
unincorporated, of which at least a majority of the securities or ownership
interests having by their terms ordinary voting power to elect a majority of
the board of directors or other persons performing similar functions is
directly or indirectly owned or controlled by such party or by one or more
of its respective subsidiaries or by such party and any one or more of its
respective subsidiaries; and
(u) "Tax" or "Taxes" means any and all taxes, charges, fees, levies,
assessments, duties or other amounts payable to any federal, state, local or
foreign taxing authority or agency, including, without limitation, (A)
income, franchise, profits, gross receipts, minimum, alternative minimum,
estimated, ad valorem, value added, sales, use, service, real or personal
property, capital stock, license, payroll, withholding, disability,
employment, social security, workers compensation, unemployment
compensation, utility, severance, excise, stamp, windfall profits, transfer
and gains taxes, (B) customs, duties, imposts, charges, levies or other
similar assessments of any kind, and (C) interest, penalties and additions
to tax imposed with respect thereto.
(v) "TCW" means each of TCW/Crescent Mezzanine Trust II; TCW/Crescent
Mezzanine Partners II, LP; TCW/Crescent Leveraged Income Trust, LP;
TCW/Crescent Leveraged Income Trust II, LP; and TCW/Crescent Leveraged
Income Trust IV, LP.
(w) "USU Credit Agreement" means that certain Credit Agreement dated as
of October 1, 1999 by and among USU and the lenders and other parties
specified therein, as amended;
(x) "USU Indenture" means that certain Indenture dated as of October 29,
1999 by and among USU, the Guarantors (as defined therein) and State Street
Bank and Trust Company, as trustee;
49
Section 9.04. Headings. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Section references herein are, unless the
context otherwise requires, references to sections of this Agreement.
Section 9.05. Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of Law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties
hereto shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible in an acceptable
manner to the end that transactions contemplated hereby are fulfilled to the
extent possible.
Section 9.06. Entire Agreement. This Agreement (together with the
Exhibits, the IWO Disclosure Schedule and the USU Disclosure Schedule) and the
Confidentiality Agreement constitute the entire agreement of the parties, and
supersede all prior agreements and undertakings, both written and oral, among
the parties or between any of them, with respect to the subject matter hereof.
IWO agrees that nothing contained in this Agreement, or the transactions
contemplated hereby or thereby, shall be deemed to violate the Confidentiality
Agreement.
Section 9.07. Assignment. This Agreement shall not be assigned by any
party prior to the Effective Time by operation of Law or otherwise.
Section 9.08. Parties in Interest. This Agreement shall be binding upon
and inure solely to the benefit of each party hereto, and nothing in this
Agreement, express or implied (other than as contemplated by Section 6.09,
Section 6.10, Section 6.12, Section 6.13 and Section 6.14), is intended to or
shall confer upon any other person any right, benefit or remedy of any nature
whatsoever under or by reason of this Agreement.
Section 9.09. Specific Performance. The parties hereby acknowledge and
agree that the failure of any party to perform its agreements and covenants
hereunder, including its failure to take all actions as are necessary on its
part to the consummation of the Merger, will cause irreparable injury to the
other parties for which damages, even if available, will not be an adequate
remedy. Accordingly, each party hereby consents to the issuance of injunctive
relief by any court of competent jurisdiction to compel performance of such
party's obligations and to the granting by any court of the remedy of specific
performance of its obligations hereunder.
Section 9.10. Failure or Indulgence Not Waiver; Remedies Cumulative. No
failure or delay on the part of any party hereto in the exercise of any right
hereunder shall impair such right or be construed to be a waiver of, or
acquiescence in, any breach of any representation, warranty or agreement
herein, nor shall any single or partial exercise of any such right preclude
other or further exercise thereof or of any other right. All rights and
remedies existing under this Agreement are cumulative to, and not exclusive to,
and not exclusive of, any rights or remedies otherwise available.
Section 9.11. Governing Law; Consent Jurisdiction; Venue
(a) This Agreement shall be governed by, and construed in accordance
with, the Laws of the State of Delaware, regardless of the Laws that might
otherwise govern under applicable principles of conflicts of Law.
(b) Each of the parties hereto irrevocably submits to the exclusive
jurisdiction of the state courts of Delaware and to the jurisdiction of the
United States District Court for the District of Delaware, for the purpose
of any action or proceeding arising out of or relating to this Agreement and
each of the parties hereto irrevocably agrees that all claims in respect to
such action or proceeding may be heard and determined exclusively in any
Delaware state or federal court sitting in the City of Wilmington, Delaware.
Each of the parties hereto agrees that a final judgment in any action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by Law.
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(c) Each of the parties hereto irrevocably consents to the service of any
summons and complaint and any other process in any other action or
proceeding relating to the Merger, on behalf of itself or its property, by
the personal delivery of copies of such process to such party. Nothing in
this Section 9.11 shall affect the right of any party hereto to service
legal process in any other manner permitted by Law.
Section 9.12. Waiver of Trial by Jury. EACH PARTY ACKNOWLEDGES AND AGREES
THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE
COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.
Section 9.13. Counterparts. This Agreement may be executed in multiple
counterparts, and by the different parties hereto in separate counterparts,
each of which when executed shall be deemed to be an original but all of which
taken together shall constitute one and the same agreement.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed as of the date first written above by their respective officers
thereunto duly authorized.
US UNWIRED INC.
By: /s/ Xxxxxx X. Xxxxx
------------------------------------
Name: Xxxxxx X. Xxxxx
Title: President and Chief
Executive Officer
NORTHEAST UNWIRED INC.
By: /s/ Xxxxxx X. Xxxxx
------------------------------------
Name: Xxxxxx X. Xxxxx
Title: President and Chief
Executive Officer
IWO HOLDINGS, INC.
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: President and Chief
Executive Officer
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