EXHIBIT 10.28
Execution Copy
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STOCK PURCHASE AGREEMENT
among
AMERITECH MOBILE COMMUNICATIONS, INC.,
CYBERTEL FINANCIAL CORPORATION,
GTE CONSUMER SERVICES INCORPORATED
and
GTE CORPORATION
Dated as of April 2, 1999
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TABLE OF CONTENTS
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ARTICLE I
Definitions
Section 1.1 Specific Definitions.......................................... 2
Section 1.2 Other Terms................................................... 16
Section 1.3 Other Definitional Provisions................................. 16
ARTICLE II
Purchase and Sale of Shares
Section 2.1 Purchase and Sale of Shares................................... 17
Section 2.2 Adjustment of the Base Purchase Price......................... 17
Section 2.3 Estimated Purchase Price...................................... 17
Section 2.4 Closing; Delivery and Payment................................. 18
Section 2.5 Post-Closing Adjustment....................................... 18
ARTICLE III
Representations and Warranties of Seller
Section 3.1 Organization and Authority of Seller and AMCI................. 21
Section 3.2 Organization and Qualification of the Companies............... 22
Section 3.3 Capitalization of the Companies............................... 22
Section 3.4 Subsidiaries of the Companies; Minority Interests............. 24
Section 3.5 Financial Statements.......................................... 25
Section 3.6 Absence of Certain Changes or Events.......................... 27
Section 3.7 Communications Licenses....................................... 27
Section 3.8 Litigation.................................................... 28
Section 3.9 Compliance with Law and Licenses.............................. 28
Section 3.10 Contracts..................................................... 28
Section 3.11 Consents and Approvals........................................ 31
Section 3.12 Tax Matters................................................... 32
Section 3.13 Labor Matters................................................. 33
Section 3.14 Employee Benefits............................................. 33
Section 3.15 Environmental Matters......................................... 34
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Section 3.16 Property and Leases........................................... 35
Section 3.17 Accounts Receivable; Debt..................................... 36
Section 3.18 Affiliate Transactions........................................ 36
Section 3.19 Year 2000 Compliance.......................................... 36
Section 3.20 Ability to Conduct Business................................... 37
Section 3.21 Brokers and Finders........................................... 37
Section 3.22 Service Marks................................................. 38
Section 3.23 No Other Representations or Warranties........................ 38
ARTICLE IV
Representations and Warranties of Buyer
Section 4.1 Organization and Authority of Buyer and Buyer Parent.......... 38
Section 4.2 Consents and Approvals........................................ 39
Section 4.3 Brokers and Finders........................................... 40
Section 4.4 Financial Capability.......................................... 40
Section 4.5 Securities Act................................................ 40
Section 4.6 Litigation.................................................... 40
Section 4.7 Investigation by Buyer........................................ 41
Section 4.8 Governmental Consents......................................... 41
Section 4.9 No Other Representations or Warranties........................ 41
ARTICLE V
Tax Matters
Section 5.1 Liability for Taxes and Related Matters....................... 41
Section 5.2 Transfer Taxes................................................ 46
Section 5.3 Information to be Provided by Buyer........................... 46
Section 5.4 Assistance and Cooperation.................................... 47
Section 5.5 Miscellaneous................................................. 47
Section 5.6 Section 338(h)(10); Alternative Transaction Structure......... 48
Section 5.7 Survival of Obligations....................................... 49
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ARTICLE VI
Certain Covenants and
Agreements of Seller and Buyer
Section 6.1 Access and Information........................................ 49
Section 6.2 Conduct of Business........................................... 52
Section 6.3 Registrations, Filings and Consents........................... 55
Section 6.4 Employee Benefit Plans........................................ 58
Section 6.5 Retention of Books and Records................................ 61
Section 6.6 Consent Decree................................................ 62
Section 6.7 Company Assets................................................ 62
Section 6.8 Intellectual Property......................................... 62
Section 6.9 Resignations.................................................. 62
Section 6.10 Partnership Agreements........................................ 63
Section 6.11 Litigation.................................................... 63
Section 6.12 Certain Transactions.......................................... 64
Section 6.13 Contracts..................................................... 64
Section 6.14 Transition Services........................................... 66
Section 6.15 Roaming Agreement............................................. 66
Section 6.16 Non-Solicitation.............................................. 66
Section 6.17 Intercompany Obligations...................................... 68
Section 6.18 Customer Communications and Billing........................... 68
Section 6.19 Alternative Transaction Structure............................. 69
Section 6.20 Employee Customers............................................ 70
Section 6.21 Year 2000 Testing............................................. 70
Section 6.22 Transition Committees......................................... 70
Section 6.23 Prepaid Accounts.............................................. 70
Section 6.24 Transition Services Revisions................................. 71
Section 6.25 Restriction on Use............................................ 71
Section 6.26 License....................................................... 72
Section 6.27 Expenditures.................................................. 73
Section 6.28 System Identification Number.................................. 73
Section 6.29 Partnership Interests......................................... 74
Section 6.30 License for Certain Proprietary Software...................... 74
Section 6.31 Further Assurances............................................ 75
ARTICLE VII
Conditions to Closing
Section 7.1 Conditions to Each Party's Obligation to
Effect the Transaction...................................... 75
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Section 7.2 Conditions to Obligations of Buyer............................ 76
Section 7.3 Conditions to Obligations of Seller........................... 77
ARTICLE VIII
Termination
Section 8.1 Termination................................................... 78
Section 8.2 Effect of Termination......................................... 79
ARTICLE IX
Survival And Indemnification
Section 9.1 Survival of Representations, Warranties, Covenants
and Agreements.............................................. 79
Section 9.2 Indemnification by Buyer...................................... 81
Section 9.3 Indemnification by Seller..................................... 81
Section 9.4 Indemnification as Sole Remedy................................ 83
Section 9.5 Method of Asserting Claims, Etc............................... 83
Section 9.6 Calculation of Losses......................................... 86
Section 9.7 Assignment of Claims.......................................... 87
Section 9.8 Overlapping Provisions........................................ 87
ARTICLE X
Miscellaneous
Section 10.1 Amendment and Waiver.......................................... 88
Section 10.2 Expenses...................................................... 88
Section 10.3 Public Disclosure............................................. 88
Section 10.4 Assignment.................................................... 88
Section 10.5 Entire Agreement.............................................. 89
Section 10.6 Fulfillment of Obligations.................................... 89
Section 10.7 Parties in Interest; No Third Party Beneficiaries............. 89
Section 10.8 Guarantee..................................................... 89
Section 10.9 Counterparts.................................................. 90
Section 10.10 Section Headings.............................................. 90
Section 10.11 Notices....................................................... 90
SECTION 10.12 GOVERNING LAW; SUBMISSION TO JURISDICTION; SELECTION OF FORUM. 92
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SECTION 10.13 WAIVER OF JURY TRIAL.......................................... 92
Section 10.14 Certain Constructions......................................... 92
Section 10.15 Severability.................................................. 93
SELLER DISCLOSURE SCHEDULES
Schedule 1.1 Accounting Principles
Schedule 3.2 Organization and Qualification of the Companies
Schedule 3.3(a) Capitalization of Cybertel
Schedule 3.4(a) Subsidiaries of Cybertel
Schedule 3.4(b) Subsidiaries of GSAA
Schedule 3.4(c) Other Equity Interests
Schedule 3.5(a) Cybertel Financial Statements
Schedule 3.5(b) GSAA Financial Statements
Schedule 3.5(c) Cybertel Cellular Financial Statements
Schedule 3.5(e) Companies Pro Forma Balance Sheets
Schedule 3.5(f) Cybertel RSA Pro Forma Balance Sheet
Schedule 3.5(g) Cybertel Cellular Expenditure Budgets
Schedule 3.5(h) Cybertel RSA Pro Forma Expenditure Budgets
Schedule 3.6 Absence of Certain Changes or Events
Schedule 3.7 Communications Licenses
Schedule 3.8 Litigation
Schedule 3.10(a) Contracts
Schedule 3.10(b) Contracts
Schedule 3.10(c) Conflicts
Schedule 3.10(d) Seller and Contracts
Schedule 3.11 Seller Consents and Approvals
Schedule 3.12 Tax Matters
Schedule 3.14(a) Benefit Plans
Schedule 3.14(d) Retiree Health and Life Benefits
Schedule 3.14(e) Severance
Schedule 3.15 Environmental Matters
Schedule 3.16(a) Owned and Leased Real Property
Schedule 3.18 Affiliate Transactions
Schedule 3.20 Services and Assets
Schedule 3.22 Service Marks
Schedule 6.2 Conduct of Business
Schedule 6.7 Asset Transfers
Schedule 6.13 Certain Contracts
Schedule 6.16 National/Large Accounts
Schedule 6.19(a) Alternative Transaction
Schedule 6.19(b) Step Up Tax Loss
Schedule 6.30 Proprietary Software
Schedule 9.3 Certain Litigation
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BUYER DISCLOSURE SCHEDULES
Schedule 4.2 Buyer Consents and Approvals
EXHIBITS
Exhibit A Form of Transition Services Agreement
Exhibit B Form of Roaming Agreement
Exhibit C Form of Trademark License Agreement
Exhibit D-1 Form of Opinion from Seller's Inside Counsel
Exhibit D-2 Form of Opinion from Skadden, Arps,
Slate, Xxxxxxx & Xxxx LLP
Exhibit E Form of Opinion from Buyer's Inside Counsel
Exhibit F EBITDA Subscriber Amount
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STOCK PURCHASE AGREEMENT (the "Agreement"), dated as of April 2, 1999,
among Cybertel Financial Corporation, a Delaware corporation ("Seller"),
Ameritech Mobile Communications Incorporated, a Delaware corporation ("AMCI"),
GTE Consumer Services Incorporated, a Delaware corporation ("Buyer") and solely
for purposes of Section 10.8, GTE Corporation, a New York corporation ("Buyer
Parent").
W I T N E S S E T H:
WHEREAS, Ameritech Corporation, a Delaware corporation ("Parent"), SBC
Communications Inc., a Delaware corporation ("SBC") and SBC Delaware, Inc., a
Delaware corporation ("SBC Sub") have entered into an Agreement and Plan of
Merger, dated as of May 10, 1998 (as such agreement may be amended from time to
time, the "Merger Agreement"), contemplating the merger (the "Merger") of SBC
Sub with and into Parent;
WHEREAS, AMCI is a wholly owned Subsidiary of Parent and Seller is a
wholly owned subsidiary of AMCI;
WHEREAS, Seller owns (i) all of the issued and outstanding shares of
common stock, without par value (the "Cybertel Shares"), of Cybertel
Corporation, an Illinois corporation ("Cybertel"); and (ii) all of the issued
and outstanding shares of common stock, $1.00 par value per share (the "GSAA
Shares"), of GSAA, Inc., a Delaware corporation ("GSAA" and, together with
Cybertel, the "Companies");
WHEREAS, the transactions contemplated by this agreement are necessary
for SBC, following the consummation of the Merger, to be in compliance with the
Commercial Mobile Radio Service spectrum aggregation limit restrictions
contained in 47 C.F.R. Section 20.6 and the Cellular Cross Ownership limitations
contained in 47 C.F.R. Section 22.942;
WHEREAS, in the absence of compliance with such federal regulations,
the Merger could not be consummated; and
WHEREAS, subject to the closing of the Merger, Seller desires to sell
and transfer to Buyer, and Buyer desires to purchase from Seller, all of the
issued and
outstanding shares of capital stock of Cybertel and GSAA, as more specifically
provided herein;
NOW, THEREFORE, in consideration of the mutual covenants and
undertakings contained herein, and subject to and on the terms and conditions
herein set forth, the parties hereto agree as follows:
ARTICLE I
Definitions
Section 1.1 Specific Definitions. As used in this Agreement, the
following terms shall have the meanings set forth or referenced below:
"Affiliate", as applied to any Person, means any other Person directly
or indirectly Controlling, Controlled by or under common Control with such
Person.
"Agreement" shall mean, as the context requires, this Agreement and
all Schedules and Exhibits hereto, as amended, supplemented or otherwise
modified from time to time in accordance with the terms hereof.
"Alternative Transaction" shall have the meaning set forth in Section
6.19.
"AMCI" shall have the meaning set forth in the Preamble.
"Ancillary Agreements" shall mean the Transition Services Agreement
and the Roaming Agreement.
"Applicable Rate" shall mean the one-month LIBOR rate as published in
the Wall Street Journal on the Closing Date.
"Base Purchase Price" shall have the meaning set forth in Section 2.1.
"Benefit Plans" shall have the meaning set forth in Section 3.14(a).
"Business" shall mean the business of (a) operating Commercial Mobile
Radio Service, including, without
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limitation, the business of operating and maintaining equipment necessary to
operate the systems providing such service, and (b) marketing, selling and
providing Telecommunications Service and Information Service via such systems as
well as products (including Customer Premises Equipment) and services that are
ancillary to marketing, selling and providing such Telecommunications Service
and Information Service via such systems, as conducted on the date hereof by the
Companies and their Subsidiaries in the Missouri Market, but shall exclude the
businesses of providing, reselling, operating or managing paging services,
wireline telephony or transport services, including wireline long-distance
services and any fixed wireless services.
"Business Customers" shall mean those customers of the Business who
acquire services pursuant to business volume price plans.
"Business Day" shall mean any day other than a Saturday, a Sunday or a
day on which banks in the City of New York are authorized or obligated by law or
executive order to close.
"Buyer" shall have the meaning set forth in the Preamble.
"Buyer Disclosure Schedule" shall have the meaning set forth in the
Preamble of Article IV.
"Buyer Indemnified Parties" shall have the meaning set forth in
Section 9.3(a).
"Buyer Parent" shall have the meaning set forth in the Preamble.
"Buyer Savings Plan" shall have the meaning set forth in Section
6.4(c).
"Calculation" shall have the meaning set forth in Section 2.5(a).
"Cellular Authorizations" shall have the meaning set forth in Section
3.11.
"Central Illinois Market" shall have the meaning set forth in the
Chicago and Central Illinois Stock Purchase Agreement.
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"Certificate of Convenience and Necessity" shall mean a Certificate of
Public Convenience and Necessity issued by the ICC.
"Chicago and Central Illinois Stock Purchase Agreement" shall mean the
stock purchase agreement dated as of the date hereof, by and among AMCI, Buyer
and Buyer Parent.
"Chicago and Central Illinois Transaction" shall mean the purchase and
sale to be effected in accordance with the terms of the Chicago and Central
Illinois Stock Purchase Agreement.
"Chicago Market" shall have the meaning set forth in the Chicago and
Central Illinois Stock Purchase Agreement.
"Chosen Courts" shall have the meaning set forth in Section 10.12.
"Claim Notice" shall have the meaning set forth in Section 9.5.
"Closing" shall have the meaning set forth in Section 2.4(a).
"Closing Date" shall have the meaning set forth in Section 2.4(a).
"Closing Long Term Liabilities" shall mean the long term liabilities
of the Companies and their Subsidiaries on a combined basis as of the Closing
Date calculated in a manner consistent with the accounting policies, methods,
principles and practices specified on Schedule 1.1 and if not specified thereon,
used in the preparation of the Companies Financial Statements.
"Closing Statement" shall have the meaning set forth in Section
2.5(a).
"Closing Working Capital" shall mean the sum of the Cybertel Cellular
Working Capital and the Cybertel RSA Working Capital, in each case as of the
Closing Date determined in accordance with the provisions of Section 2.5.
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"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Commercial Mobile Radio Service" shall have the meaning set forth in
47 U.S.C. Section 332(d).
"Communications Act" shall mean the Communications Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
"Communications Licenses" shall mean all licenses required to conduct
the Business under applicable requirements of the FCC or state public utilities
commissions, including, without limitation, licenses from the FCC, Certificates
of Convenience and Necessity.
"Companies" shall have the meaning set forth in the Recitals.
"Companies Financial Statements" shall have the meaning set forth in
Section 3.5(b).
"Companies Pro Forma Balance Sheets" shall have the meaning set forth
in Section 3.5(e).
"Confidential Information Memorandum" shall mean that Confidential
Information Memorandum dated January 1999 relating to, among other Persons, the
Companies and their Subsidiaries and sent to Buyer.
"Confidentiality Agreement" shall have the meaning set forth in
Section 6.1(c).
"Consent Decree" shall mean the consent decree related to the Merger,
between the DOJ, on the one hand, and SBC and Parent, on the other hand, filed
with the United States District Court for the District of Columbia in the case
entitled United States v. SBC and Parent on March 23, 1999.
"Contracts" shall mean any agreement, lease, contract, note, mortgage,
indenture, arrangement or other obligation.
"Control" shall mean, and "controlled" and "controlling" shall refer
to the possession, direct or indirect, of the power to direct or cause the
direction of
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the management and policies of a Person, whether through the ownership of voting
securities, by contract, or otherwise.
"CPA Firm" shall have the meaning set forth in Section 2.5(c).
"Customer Premises Equipment" shall have the meaning set forth in 47
U.S.C.ss.3(14).
"Cybertel" shall have the meaning set forth in the Recitals.
"Cybertel Cellular" shall mean Cybertel Cellular Telephone Company, a
Missouri general partnership.
"Cybertel Cellular Expenditure Budgets" shall have the meaning set
forth in Section 3.5(g).
"Cybertel Cellular Financial Statements" shall have the meaning set
forth in Section 3.5(c).
"Cybertel Cellular Required Expenditure Amount" shall mean the sum of
the amounts of capital expenditures set forth in the Cybertel Cellular
Expenditure Budgets for the months in the period from the date hereof through
the Closing Date with the amount included in such sum for any partial months in
such period pro rated based on the number of days elapsed in such period during
such month and the total number of days in such month.
"Cybertel Cellular Working Capital" shall mean (A) (i) the current
assets (including cash and cash equivalents) of Cybertel Cellular, minus (ii)
the current liabilities of Cybertel Cellular, clauses (i) and (ii) being
calculated from time to time in a manner consistent with the accounting
policies, methods, principles and practices specified on Schedule 1.1 and, if
not specified thereon, used in the preparation of the Cybertel Cellular
Financial Statements, plus (iii) the Excess Cybertel Cellular Investment Amount,
if any, minus (iv) the Shortfall Cybertel Cellular Investment Amount, if any,
multiplied by (B) 0.85.
"Cybertel Financial Statements" shall have the meaning set forth in
Section 3.5(a).
"Cybertel Purchase Price" shall have the meaning set forth in Section
2.1.
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"Cybertel RSA" shall mean Cybertel RSA Cellular Limited Partnership, a
Delaware limited partnership.
"Cybertel RSA Pro Forma Balance Sheet" shall have the meaning set
forth in Section 3.5(f).
"Cybertel RSA Pro Forma Expenditure Budgets" shall have the meaning
set forth in Section 3.5(h).
"Cybertel RSA Required Expenditure Amount" shall mean the sum of the
amounts of capital expenditures set forth in the Cybertel RSA Pro Forma
Expenditure Budgets for the months in the period from the date hereof through
the Closing Date with the amount included in such sum for any partial months in
such period pro rated based on the number of days elapsed in such period during
such month and the total number of days in such month.
"Cybertel RSA Working Capital" shall mean (i) the current assets
(including cash and cash equivalents) of Cybertel RSA minus (ii) the current
liabilities of Cybertel RSA, clauses (i) and (ii) being calculated from time to
time in a manner consistent with the accounting policies, methods, principles
and practices specified on Schedule 1.1 and, if not specified thereon, used in
the preparation of the Cybertel Financial Statements, plus (iii) the Excess
Cybertel RSA Investment Amount, if any, minus (iv) the Shortfall Cybertel RSA
Investment Amount, if any.
"Cybertel Shares" shall have the meaning set forth in the Recitals.
"Deductible" shall have the meaning set forth in Section 9.1.
"DOJ" shall mean the United States Department of Justice.
"EBITDA Subscriber Amount" shall have the meaning set forth on Exhibit
F.
"Encumbrances" shall mean liens, pledges, security interests or other
encumbrances.
"Environmental Law" means any law, regulation, code, ordinance,
requirement of common law, license, permit, approval, authorization, notice,
order, judgment, decree or
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injunction, and any written publicly available judicial or administrative
interpretation thereof, of the United States, any interstate authority, any
State or political subdivision thereof (including any court thereof and any
Governmental Entity) regulating the protection of the environment (including
air, water, soil and natural resources), occupational safety as it relates to
Hazardous Substance exposure, or the use, storage, handling, release, treatment
or disposal of any Hazardous Substance as in effect on the date hereof.
"ERISA" shall have the meaning set forth in Section 3.14(b).
"ERISA Affiliate" shall have the meaning set forth in Section 3.14(c).
"Estimated Closing Adjustment" shall have the meaning set forth in
Section 2.3.
"Estimated Purchase Price" shall mean (i) the Base Purchase Price plus
(ii) the amount (positive or negative) of the Estimated Closing Adjustment.
"Excess Cybertel Cellular Investment Amount" shall mean the excess, if
any, of (x) the aggregate of the actual capital expenditures of Cybertel
Cellular from the date hereof through the Closing Date over (y) 105% of the
Cybertel Cellular Required Expenditure Amount, calculated in accordance with
GAAP applied on a basis consistent with those policies used in the Cybertel
Cellular Pro Forma Expenditure Budgets and in accordance with the accounting
policies, methods, principles, and practices used in the preparation of the
Cybertel Cellular Pro Forma Expenditure Budgets; provided, that capital
expenditures in excess of 105% of the Cybertel Cellular Required Expenditure
Amount shall be included in this calculation only to the extent they have been
previously approved in writing by Buyer.
"Excess Cybertel RSA Investment Amount" shall mean the excess, if any,
of (x) the aggregate of the actual capital expenditures of Cybertel RSA from the
date hereof through the Closing Date over (y) 105% of the Cybertel RSA Required
Expenditure Amount calculated in accordance with GAAP applied on a basis
consistent with those policies used in the Cybertel RSA Pro Forma Expenditure
Budgets and in accordance with the accounting policies, methods, principles
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and practices used in the preparation of the Cybertel RSA Pro Forma Expenditure
Budgets; provided, that capital expenditures in excess of 105% of the Cybertel
Cellular Required Expenditure Amount shall be included in this calculation only
to the extent they have been previously approved in writing by Buyer.
"Excluded Business" shall mean the portion of business of the
Companies or their Subsidiaries being transferred by the Companies or their
Subsidiaries to Seller or an Affiliate of Seller (other than the Companies and
its Subsidiaries) as contemplated by the Restructuring.
"Extended Termination Date" shall have the meaning set forth in
Section 8.1(d).
"FCC" shall mean the Federal Communications Commission.
"Financial Statements" shall have the meaning set forth in Section
3.5(c).
"GAAP" shall mean United States generally accepted accounting
principles.
"Governmental Consents" shall have the meaning set forth in Section
7.1(a).
"Governmental Entity" shall mean any governmental or regulatory
authority, agency, commission, body, court or other governmental entity of the
United States of America or any State or political subdivision thereof.
"Government Regulatory Entity" shall have the meaning set forth in
Section 6.3(d).
"GSAA" shall have the meaning set forth in the Recitals.
"GSAA Financial Statements" shall have the meaning set forth in
Section 3.5(b).
"GSAA Purchase Price" shall have the meaning set forth in Section 2.1.
"GSAA Shares" shall have the meaning set forth in the Recitals.
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"Hazardous Substance" shall mean any substance listed, defined,
designated or classified as hazardous, toxic or as a pollutant, contaminant,
solid waste or radioactive waste under any applicable Environmental Law,
including petroleum, petroleum products and any derivative or by-products
thereof, polychlorinated biphenyls, asbestos and radioactive materials.
"HSR Act" shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act
of 1976, as amended.
"ICC" shall mean the Illinois Commerce Commission.
"Indemnified Party" shall have the meaning set forth in Section
9.3(a).
"Indemnifying Party" shall have the meaning set forth in Section 9.5.
"Information Service" shall have the meaning set forth in 47 U.S.C.
ss.3(20).
"Initial Period" shall have the meaning set forth in Section 6.25(b).
"IRS" shall mean the Internal Revenue Service.
"Knowledge", with respect to Seller, shall mean the actual knowledge
of any of the following employees of either AMCI or Seller: Xxxxxx X. Xxxxxx,
Xxx X. Xxxxxxxxx, Xxx Xxxxxxx, Xxxxxxx X. Xxxxx, Xxxxxxx Xxxxxxxxxx, Xxxxx X.
Xxxx, Xxxxxxxx X. Xxxxxxx, Xxxxxxx X. Xxxxxxx, Xxxxxx X. Xxxxx, Xxxx X. Xxxxxx,
Xxxxxxx X. Xxxxx, Xxxxxx X. Xxxxxx, and Xxxxx Xxxxxx, and, with respect to
Buyer, shall mean the actual knowledge of all directors and executive officers
of Buyer, in each case, arising without the conduct by any such Person of any
independent investigation with respect to the facts or matters specified.
"Law" shall have the meaning set forth in Section 3.1.
"Licenses" shall mean all permits, licenses, waivers, and
authorizations other than Communications Licenses from any Governmental Entity.
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"Limit" shall have the meaning set forth in Section 9.1.
"Losses" shall have the meaning set forth in Section 9.2(a).
"Material Adverse Effect" shall mean an effect that is materially
adverse to the business, operations, assets, liabilities or financial condition
of the Companies and their respective Subsidiaries, taken as a whole, and for
these purposes, shall include aspects of the Business to be transferred to or
assumed by Buyer, the Companies or their Subsidiaries on or before the Closing
Date, but shall exclude any change or development after the date of this
Agreement resulting from (i) any change in Law or interpretations thereof, (ii)
changes in interest rates, general economic conditions or changes in the general
economic condition of the Missouri Market, (iii) changes affecting the
Commercial Mobile Radio Service industry generally or (iv) the entry into this
Agreement or the performance of a party's obligations hereunder (other than
changes relating to or resulting from provisions in Contracts breached by,
requiring consents in connection with or the contractual rights under which are
otherwise adversely impacted by, this Agreement or the consummation of the
transactions contemplated hereby, or effects relating to or resulting from
provisions in any License or Communications License or any Law governing such
License or Communications License breached by, requiring consents in connection
with or otherwise adversely impacted by this Agreement or the consummation of
the transactions contemplated hereby).
"Merger" shall have the meaning set forth in the Recitals.
"Merger Agreement" shall have the meaning set forth in the Recitals.
"Missouri Market" shall mean the Xxxxxxxxxxxx Xxxxxxxxxxx Xxxx xx Xx.
Xxxxx, Xxxxxxxx, and the Rural Service Areas of Callaway, Missouri (Missouri RSA
#8), Maries, Missouri (Missouri RSA #12), Perry, Missouri (Missouri RSA #18) and
Xxxxxxxx, Missouri (Missouri RSA #19) taken together.
"National/Large Accounts" shall mean those customers of the Business
set forth on Schedule 6.16, with
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those customers noted with an asterisk on such schedule being "In Market
National/Large Accounts."
"New Marks" shall have the meaning set forth in Section 6.26.
"Notice Period" shall have the meaning set forth in Section 9.5.
"Order" shall have the meaning set forth in Section 7.1(b).
"Parent" shall have the meaning set forth in the Recitals.
"Pension Plan" shall have the meaning set forth in Section 3.14(b).
"Permitted Combination" shall have the meaning set forth in Section
6.26(b).
"Permitted Shares Transferee" shall have the meaning set forth in
Section 6.6.
"Person" shall mean any individual, corporation, partnership, limited
liability company, firm, joint venture, association, joint-stock company, trust,
unincorporated organization, governmental or regulatory body or other entity.
"Post-Closing Adjustment" shall have the meaning set forth in Section
2.5(d).
"Potential Contributor" shall have the meaning set forth on Section
9.7.
"Promotional Items" shall have the meaning set forth in Section
9.5(c).
"Purchase Price" shall have the meaning set forth in Section 2.1.
"Qualifying Customer Litigation" shall have the meaning set forth in
Section 9.3(b).
"Resolution Period" shall have the meaning set forth in Section
2.5(b).
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"Resolved Items" shall have the meaning set forth in Section 2.5(b).
"Restructuring" shall mean the transactions pursuant to which the
business of Cybertel is restructured by transferring from the Companies or their
Subsidiaries to Seller or its Affiliates (other than Companies or their
Subsidiaries) (i) each of the permits, licenses, waivers and authorizations from
any Governmental Entity in the name of Seller or its Affiliates that are
required to conduct Commercial Mobile Radio Service operations in the Columbia,
Missouri Metropolitan Statistical Area, the Rural Service Areas of Saline
(Missouri RSA #7), Xxxxxx (Missouri RSA #10), Lake of the Ozarks (Missouri RSA
#11) and in Kauai, Hawaii (together, the "Excluded Markets"), (ii) all cell site
towers and equipment attached thereto owned or leased by Cybertel or its
Subsidiaries that are not located in the Missouri Market, provided that (a) such
cell site towers and equipment attached thereto are not primarily related to the
Business or reflected on the Companies Pro Forma Balance Sheets as assets to be
owned or leased by the Companies and their Subsidiaries following the
transactions reflected thereon, and (b) such transfers of cell site towers from
the Companies and their Subsidiaries would not, in any individual case or in the
aggregate, adversely affect the Business in any material respect, and (iii) all
other assets (whether tangible or intangible) which are used exclusively in the
Excluded Markets or are not used in any material respect in the Business,
together with all liabilities related to all such transferred assets.
"Roaming Agreement" shall mean the Roaming Agreement between AMCI and
Buyer in the form of Exhibit B to be entered into on the Closing Date.
"SBC" shall have the meaning set forth in the Recitals.
"SBC Sub" shall have the meaning set forth in the Recitals.
"Section 338(h)(10) Election" shall have the meaning set forth in
Section 5.6(a).
"Securities Act" shall mean the Securities Act of 1933, as amended.
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"Seller" shall have the meaning set forth in the Preamble.
"Seller's Accrual" shall have the meaning set forth in Section 6.4(d).
"Seller Disclosure Schedule" shall have the meaning set forth in the
preamble to Article III.
"Seller Indemnified Parties" shall have the meaning set forth in
Section 9.2(a).
"Seller Savings Plan" shall have the meaning set forth in Section
6.4(c).
"Service Marks" shall have the meaning set forth in Section 3.22.
"Shares" shall mean the Cybertel Shares and the GSAA Shares taken
together.
"Shortfall Cybertel Cellular Investment Amount" shall mean the excess,
if any, of (x) 95% of the Cybertel Cellular Required Expenditure Amount over (y)
the aggregate of the actual capital expenditures made by Cybertel Cellular from
the date hereof through the Closing Date, calculated in accordance with the
accounting policies, methods, principles and practices used in the preparation
of the Cybertel Cellular Pro Forma Expenditures Budgets.
"Shortfall Cybertel RSA Investment Amount" shall mean the excess, if
any, of (x) 95% of the Cybertel RSA Required Expenditure Amount over (y) the
aggregate of the actual capital expenditures made by Cybertel RSA on a
consolidated basis from the date hereof through the Closing Date, calculated in
accordance with the accounting policies, methods, principles and practices used
in the preparation of the Cybertel RSA Pro Forma Expenditure Budgets.
"SID" shall have the meaning set forth in Section 6.28.
"SID Change" shall have the meaning set forth in Section 6.28.
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"Step Up" shall have the meaning set forth in Section 6.19.
"Step Up Tax Loss" shall have the meaning set forth in Section 6.19.
"Subsequent Period" shall have the meaning set forth in Section
6.25(c).
"Subsidiary" shall mean, as to any Person, any Person (i) of which
such Person directly or indirectly owns, securities or other equity interests
representing fifty percent (50%) or more of the aggregate voting power, (ii) of
which a Person possesses fifty percent (50%) or more of the right to elect
directors or Persons holding similar positions or (iii) which such Person
Controls directly or indirectly through one or more intermediaries, it being
understood that, subject to Section 10.14 with respect to Cybertel, the term
Subsidiary shall be deemed to include Cybertel RSA.
"Systems" shall have the meaning set forth in Section 3.19.
"Tax Package" shall have the meaning set forth in Section 5.3.
"Tax Returns" shall mean any and all federal, state, local or foreign
returns, reports, claims for refund, information returns, statements or
declarations relating to Taxes.
"Taxes" shall mean any and all taxes, fees, levies, duties, tariffs,
imports and other charges of any kind imposed by any taxing authority, including
but not limited to any and all federal, state, local or foreign income, gross
receipts, windfall or excess profits, severance, property, production, sales,
use, value added, license, stamp, excise, franchise, employment, withholding or
similar taxes, together with any interest, additions or penalties with respect
thereto and any interest in respect of such additions or penalties.
"Telecommunications Service" shall have the meaning set forth in 47
U.S.C. ss.3(46).
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"Termination Date" shall have the meaning set forth in Section 8.1(d).
"Trademark License Agreement" shall mean the Trademark License
Agreement to be entered into between Parent and Buyer in the form of Exhibit C.
"Trademarks" shall have the meaning set forth in Section 6.25.
"Transfer Taxes" shall have the meaning set forth in Section 5.2.
"Transferred Employees" shall have the meaning set forth in Section
6.4(a).
"Transition Services Agreement" shall mean the Transition Services
Agreement between AMCI and Buyer in the form of Exhibit A to be entered into on
the Closing Date.
"Unresolved Items" shall have the meaning set forth in Section 2.5(c).
"Year 2000 Compliant" shall have the meaning set forth in Section
3.19.
"Y2K Plan" shall have the meaning set forth in Section 3.19.
Section 1.2 Other Terms. Other terms may be defined elsewhere in the
text of this Agreement and, unless otherwise indicated, shall have such meaning
indicated throughout this Agreement.
Section 1.3 Other Definitional Provisions. (a) The words "hereof",
"herein", and "hereunder" and words of similar import, when used in this
Agreement, shall refer to this Agreement as a whole and not to any particular
provision of this Agreement.
(b) The terms defined in the singular shall have comparable meaning
when used in the plural, and vice versa.
(c) The terms "dollars" and "$" shall mean United States dollars.
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ARTICLE II
Purchase and Sale of Shares
Section 2.1 Purchase and Sale of Shares. Buyer agrees to purchase from
Seller, and Seller agrees to sell to Buyer, in each case subject to the terms
and conditions of this Agreement, (i) all of the issued and outstanding Cybertel
Shares for a purchase price equal to $666,000,000 (six hundred sixty-six million
dollars) (the "Cybertel Purchase Price"), and (ii) all of the issued and
outstanding GSAA Shares for a purchase price equal to $54,000,000 (fifty-four
million dollars) (the "GSAA Purchase Price", and together with the Cybertel
Purchase Price, the "Base Purchase Price"), as adjusted pursuant to Section 2.2
(as so adjusted, the "Purchase Price").
Section 2.2 Adjustment of the Base Purchase Price. The Base Purchase
Price shall be adjusted as follows: The Purchase Price shall be an amount equal
to (a) the Base Purchase Price plus (b) the amount (positive or negative) of (i)
the Closing Working Capital minus (ii) $3,500,000 (three million five hundred
thousand dollars) minus (c) the amount of the Closing Long Term Liabilities
minus (d) the EBITDA Subscriber Amount, if any.
Section 2.3 Estimated Purchase Price. For the purpose of determining
the amount of cash to be paid by Buyer to Seller on the Closing Date, Seller
shall prepare a calculation of the estimate of the adjustment of the Purchase
Price to be made pursuant to Section 2.2 (the "Estimated Closing Adjustment") as
of the Closing Date based on a good faith estimate by Seller of the amounts
included in such adjustment. Seller shall deliver the calculation of the
Estimated Closing Adjustment to Buyer not less than three Business Days prior to
the Closing Date or, if not practicable, as soon as practicable prior to the
Closing, provided that Seller shall provide such calculation at least three
Business Days prior to the time the Closing is likely to occur. If Buyer objects
to the calculation of the Estimated Closing Adjustment prior to the Closing,
Seller agrees to discuss with Buyer in good faith such objections and to seek to
resolve Buyer's objections and if revised in response to Buyer objections, the
revised amounts shall be the Estimated Closing Adjustment; provided, that if
Buyer and Seller are unable to resolve Buyer's objections prior to
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the Closing, Seller's calculation of the Estimated Closing Adjustment shall be
utilized for purposes of calculating the Estimated Purchase Price.
Section 2.4 Closing; Delivery and Payment. (a) The delivery of the
Shares and payment therefor (the "Closing") shall take place at the offices of
Xxxxxxxx & Xxxxxxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx as promptly as is
practicable on the Business Day on which the conditions set forth in Article VII
hereof have been satisfied or waived (other than those conditions that by their
nature are to be satisfied at the Closing, but subject to the satisfaction or
waiver of those conditions), or at such other time and place as the parties
hereto may mutually agree. The date on which the Closing occurs is called the
"Closing Date". It is understood and agreed that Seller will notify Buyer at
least three Business Days prior to the Closing that the Closing is likely to
occur, specifying the proposed Closing Date and Seller agrees that it will
reimburse Buyer for any interest expense incurred by Buyer (less any earnings
realized by Buyer on borrowed funds) for each day the Closing is delayed. Buyer
agrees at Seller's request to promptly repay any such borrowed funds in the
event the Closing does not occur at the time expected and, in such event, Seller
shall be required to comply with the notice procedures to reschedule the
Closing.
(b) At the Closing:
(i) Seller shall deliver to Buyer (A) certificates representing
the Cybertel Shares being sold to Buyer and (B) certificates representing
the GSAA Shares being sold to Buyer, duly endorsed and in form for transfer
to Buyer; and
(ii) Buyer shall pay to Seller, by wire transfer to an account
designated by Seller in writing, immediately available funds in an amount
equal to the Estimated Purchase Price.
Section 2.5 Post-Closing Adjustment. (a) As soon as practicable, but
in no event later than ninety (90) days following the Closing Date, Buyer shall,
on a basis consistent with the methods, principles, practices and policies
employed in the preparation and presentation of the Financial Statements and,
where applicable, the Cybertel
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Cellular Expenditure Budgets or the Cybertel RSA Pro Forma Expenditure Budgets,
as the case may be, prepare and deliver to Seller a statement (the "Closing
Statement") showing the calculation of the Closing Working Capital, the Closing
Long Term Liabilities and the EBITDA Subscriber Amount (the "Calculation").
(b) After receipt of the Calculation, Seller shall have 30 days to
review the Calculation. Buyer shall provide Seller and its authorized
representatives reasonable access during normal business hours and without
significant disruption to the Business, to (1) all books, records and employees
of Buyer and its Subsidiaries having relevant information concerning the
Calculation to the extent that such information was used in the Calculation and
(2) Buyer's accountants who assisted Buyer in preparing the Calculation and such
accountants' relevant supporting workpapers. Unless Seller delivers written
notice to Buyer on or prior to the 30th day after Buyer's delivery of the
Calculation stating that Seller has objections to the Calculation and describing
any such objections with reasonable particularity (including a basis in the
books and records of the Companies or accounting principles for such objection),
Seller shall be deemed to have accepted and agreed to the Calculation. In
addition, any item included in the Calculation which is not objected to by
Seller shall be deemed to be accepted by Seller ("Resolved Items") and any
amounts included within such item shall be deemed to be final, binding and
conclusive. If Seller notifies Buyer of its objections to the Calculation,
Seller and Buyer shall, within 10 days (or such longer period as the parties may
agree) following such notice (the "Resolution Period"), attempt to resolve their
differences, and any written resolution by them as to any disputed amounts shall
be final, binding and conclusive.
(c) Any amounts remaining in dispute at the conclusion of the
Resolution Period ("Unresolved Items") shall be submitted to KPMG LLP (such firm
being referred to as the "CPA Firm") or, if such firm shall be unable or
unwilling to serve in such capacity or if the parties shall otherwise mutually
agree, such other nationally recognized firm of independent accountants mutually
agreed by Seller and Buyer (and, in such case, such firm shall be deemed to be
the CPA Firm), within 10 days after the expiration of the Resolution Period.
Each party agrees to execute, if requested by the CPA Firm, an engagement letter
with the CPA
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Firm containing reasonable terms. All fees and expenses relating to the work, if
any, to be performed by the CPA Firm shall be borne by Seller and Buyer in
inverse proportion to the allocation of the dollar amount of the Unresolved
Items made by the CPA Firm in favor of Seller or Buyer, as the case may be. The
CPA Firm shall act as an arbitrator and not as an expert to determine, based on
the provisions of this Section 2.5, only the Unresolved Items. The CPA Firm's
determination of the Unresolved Items shall be made within 30 days of the
submission of the Unresolved Items to the CPA Firm, and, together with a
calculation of the Closing Working Capital, the Closing Long Term Liabilities
and the EBITDA Subscriber Amount based upon the amount of Resolved Items and the
CPA Firm's determinations of the Unresolved Items, shall be set forth in a
written statement delivered to Seller and Buyer by the CPA Firm and shall be
final, binding and conclusive on the parties for all purposes.
(d) Within five (5) Business Days following either (i) an agreement by
Buyer and Seller as to the Closing Working Capital, the Closing Long Term
Liabilities and the EBITDA Subscriber Amount or (ii) the CPA Firm's
determination of the Closing Working Capital, the Closing Long Term Liabilities
and the EBITDA Subscriber Amount, Seller shall pay to Buyer the amount, if any,
by which the Estimated Purchase Price exceeds the final calculation of the
Purchase Price determined in accordance with Section 2.2 after resolution of all
disputed items, or Buyer shall pay to Seller the amount, if any, by which the
final calculation of the Purchase Price exceeds the Estimated Purchase Price
(the "Post-Closing Adjustment").
(e) Any payments made pursuant to this Section 2.5 shall be made by
wire transfer of immediately available funds to an account indicated in writing
by the party to receive such funds and shall be accompanied by interest at the
Applicable Rate calculated on the basis of a year of 360 days for the actual
number of days elapsed, accrued from the Closing Date up to and including the
date of payment.
(f) Any payments made in respect of the Post-Closing Adjustment shall
be deemed to be adjustments to the Cybertel Purchase Price or the GSAA Purchase
Price in accordance with the portion of the adjustment pursuant to
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Section 2.2 (Adjustment of the Base Purchase Price) attributable to Cybertel and
GSAA.
ARTICLE III
Representations and Warranties of Seller
Except as otherwise set forth in the correspondingly numbered section
or schedule of the disclosure schedule delivered by Seller to Buyer on the date
of the execution of this Agreement (the "Seller Disclosure Schedule") and
except, if not set forth in the correspondingly numbered schedule of the Seller
Disclosure Schedule, the disclosures therein shall be deemed to be exceptions to
the representations and warranties of Seller to which a reasonable Person would
have considered such disclosure to be an exception, Seller represents and
warrants to Buyer as follows:
Section 3.1 Organization and Authority of Seller and AMCI. Seller is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware, AMCI is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware and each of Seller
and AMCI has all requisite corporate or similar power and authority, and has
taken all corporate action necessary in order to execute, deliver and perform
its obligations under this Agreement and the Ancillary Agreements. This
Agreement is a legal, valid and binding obligation of each of Seller and AMCI,
enforceable in accordance with its terms, and the Ancillary Agreements, when
executed, will each be a legal, valid and binding obligation of AMCI, each, when
executed, enforceable in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights and to general
equity principles. The execution, delivery and performance of this Agreement by
each of Seller and AMCI does not, and the consummation by the Seller and AMCI of
the transactions contemplated hereby will not, constitute or result in (A) a
breach or violation of, or a default under the certificate of incorporation or
by-laws of Seller or AMCI or (B) assuming compliance with the matters referred
to in Sections 3.11 (Consents and Approvals) and 4.2 (Consents and
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Approvals), a violation of any law, rule, regulation, judgment, injunction,
order, decree or other restriction of any court or Governmental Entity ("Law"),
except, in the case of clause (B) above, for any breach, violation or default
that would not be reasonably likely to be material in any individual case or in
the aggregate or to prevent, materially delay or materially impair the ability
of the Seller, AMCI, the Companies or any of their Subsidiaries to consummate
the transactions contemplated by this Agreement or any of the Ancillary
Agreements.
Section 3.2 Organization and Qualification of the Companies. Each of
the Companies is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware or Illinois, as applicable, and
has the corporate power and authority to own or lease its assets and to carry on
its business substantially as it is being conducted on the date hereof, and is
duly qualified as a foreign corporation to do business and is in good standing,
in each jurisdiction where the ownership or operation of its property and assets
or the conduct of its business requires such qualification, except where the
failure to be so qualified or in good standing would not be reasonably likely to
have a Material Adverse Effect. The consummation of the transactions
contemplated hereby will not constitute or result in (A) a breach or violation
of, or a default under, the articles of incorporation or by-laws or similar
organizational documents of the Companies or any of their respective
Subsidiaries or (B) assuming compliance with the matters referred to in Sections
3.11 (Consents and Approvals) and 4.2 (Consents and Approvals), a violation of
any Law or governmental or non-governmental permit or license to which the
Companies or any of their respective Subsidiaries are subject, except, in the
case of clause (B) above, for any breach, violation, default, acceleration or
creation that would not be reasonably likely to, either individually or in the
aggregate, be material or prevent, materially delay or materially impair the
ability of the Seller to consummate the transactions contemplated by this
Agreement or any of the Ancillary Agreements.
Section 3.3 Capitalization of the Companies. (a) The authorized
capital stock of Cybertel consists of 100,000 Cybertel Shares and 175 shares of
preferred stock of which 2,250 Cybertel Shares are the only shares of capital
stock of Cybertel issued and outstanding. The issued and
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outstanding Cybertel Shares have been duly authorized and validly issued, are
fully paid and nonassessable and are owned by Seller free and clear of any
Encumbrances. There are no preemptive or other outstanding rights, options,
warrants, conversion rights, stock appreciation rights, redemption rights,
agreements, arrangements or commitments to issue or sell any shares of capital
stock or other securities of Cybertel or any of its Subsidiaries or any
securities or obligations convertible or exchangeable into or exercisable for,
or giving any Person a right to subscribe for or acquire, any securities of
Cybertel or any of its Subsidiaries, and no securities or obligations evidenc
ing such rights are authorized, issued or outstanding. Cybertel does not have
outstanding any bonds, debentures, notes or other obligations the holders of
which have the right to vote (or which are convertible into or exercisable for
securities having the right to vote) with the stockholders of Cybertel on any
matter.
(b) The authorized capital stock of GSAA consists of 1,000 GSAA Shares
all of which are issued and outstanding. All of the GSAA Shares have been duly
authorized and validly issued, are fully paid and nonassessable and are owned by
Seller free and clear of any Encumbrances. There are no preemptive or other
outstanding rights, options, warrants, conversion rights, stock appreciation
rights, redemption rights, agreements, arrangements or commitments to issue or
sell any shares of capital stock or other securities of GSAA or any of its
Subsidiaries or any securities or obligations convertible or exchangeable into
or exercisable for, or giving any Person a right to subscribe for or acquire,
any securities of GSAA or any of its Subsidiaries, and no securities or
obligations evidencing such rights are authorized, issued or outstanding. GSAA
does not have outstanding any bonds, debentures, notes or other obligations the
holders of which have the right to vote (or which are convertible into or
exercisable for securities having the right to vote) with the stockholders of
GSAA on any matter.
(c) As of the date hereof and except as set forth in the Contracts
listed on Schedule 3.10(a)(vii), the Companies and their Subsidiaries are not
subject to capital calls with respect to any of their respective Subsidiaries.
There are no notices of capital calls outstanding which have not been satisfied
as of the date hereof.
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Section 3.4 Subsidiaries of the Companies; Minority Interests. (a)
Schedule 3.4(a) hereto lists the name of each Subsidiary of Cybertel and the
equity interest of Cybertel or one of its Subsidiaries therein, together with
the jurisdiction of its incorporation or organization, as the case may be, and
to the Knowledge of Seller, the name of each other record and beneficial holder
of the shares of capital stock or other similar equity interests of such
Subsidiary. On or prior to the Closing Date, the transactions described in
Section 6.29 will be consummated and, on or prior to the Closing Date, Cybertel
and/or one or more of its wholly owned Subsidiaries will own 100% of the equity
interests in Cybertel RSA. All shares of capital stock or similar equity
interests of each Subsidiary of Cybertel that are owned by Cybertel or a
Subsidiary of Cybertel are owned by Cybertel or the applicable Subsidiary free
and clear of all Encumbrances, and all such capital stock is duly authorized,
validly issued, fully paid and nonassessable and all other such similar equity
interests are duly authorized, validly issued and fully paid. Each Subsidiary of
Cybertel is a corporation, limited partnership, or general partnership, as the
case may be, duly organized or formed, as the case may be, validly existing and
in good standing under the laws of its jurisdiction of organization or
formation, as the case may be, has the power and authority to own or lease its
assets and to carry on its business substantially as it is being conducted as of
the date hereof, and is duly qualified as a foreign corporation, limited
partnership or general partnership to do business, and is in good standing, in
each jurisdiction where the ownership or operation of its properties and assets
or the conduct of its business requires such qualification, except where the
failure to be so qualified would not be reasonably likely to have a Material
Adverse Effect.
(b) Schedule 3.4(b) hereto lists the name of each Subsidiary of GSAA,
and the equity interest of GSAA or one of its Subsidiaries therein, together
with the jurisdiction of its incorporation or organization, as the case may be,
and to the Knowledge of Seller, the name of each other record and beneficial
holder of the shares of capital stock or other similar equity interests of such
Subsidiary. All shares of capital stock or similar equity interests of each
Subsidiary of GSAA that are owned by GSAA or a Subsidiary of GSAA are owned by
GSAA or the applicable Subsidiary free and clear of all Encumbrances, and all
such capital stock is
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duly authorized, validly issued, fully paid and nonassessable and all other such
similar equity interests are duly authorized, validly issued and fully paid.
Each Subsidiary of GSAA is a corporation or limited partnership, as the case may
be, duly organized or formed, as the case may be, validly existing and in good
standing under the laws of its jurisdiction of organization or formation, as the
case may be, has the power and authority to own or lease its assets and to carry
on its business substantially as it is being conducted as of the date hereof,
and is duly qualified as a foreign corporation or limited partnership to do
business, and is in good standing, in each jurisdiction where the ownership or
operation of its properties and assets or the conduct of its business requires
such qualification, except where the failure to be so qualified would not be
reasonably likely to have a Material Adverse Effect.
Section 3.5 Financial Statements. (a) Attached hereto as Schedule
3.5(a) is a copy of the audited consolidated balance sheet of Cybertel and its
Subsidiaries as of December 31, 1998 and the audited consolidated statements of
loss, changes in shareowners' equity and cash flows for Cybertel and its
Subsidiaries for the year ended December 31, 1998 (collectively, with the notes
thereto, the "Cybertel Financial Statements"). The Cybertel Financial Statements
present fairly, in all material respects, the financial position of Cybertel and
its Subsidiaries as of December 31, 1998, and the results of operations of
Cybertel and its Subsidiaries for the year ended December 31, 1998 and have been
prepared in accordance with GAAP applied on a basis consistent with past
practice.
(b) Attached hereto as Schedule 3.5(b) is a copy of the audited
consolidated balance sheet of GSAA and its Subsidiaries as of December 31, 1998
and the audited statements of loss, changes in shareowners' equity and cash
flows for GSAA and its Subsidiaries for the year ended December 31, 1998
(collectively, with the notes thereto, the "GSAA Financial Statements" and,
together with the Cybertel Financial Statements, the "Companies Financial
Statements"). The GSAA Financial Statements present fairly, in all material
respects, the financial position of GSAA and its Subsidiaries as of December 31,
1998, and the results of operations of GSAA and its Subsidiaries for the year
ended December 31, 1998 and have been prepared in accordance with GAAP applied
on a basis consistent with past practice.
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(c) Attached hereto as Schedule 3.5(c) is a copy of the audited
balance sheet of Cybertel Cellular as of December 31, 1998 and the audited
statements of income, liabilities and partners' capital and cash flows for
Cybertel Cellular for the year ended December 31, 1998 (collectively, with the
notes thereto, the "Cybertel Cellular Financial Statements" and, together with
the Companies Financial Statements, the "Financial Statements"). The Cybertel
Cellular Financial Statements present fairly, in all material respects, the
financial position of Cybertel Cellular as of December 31, 1998, and the results
of operations of Cybertel Cellular for the year ended December 31, 1998 and have
been prepared in accordance with GAAP applied on a basis consistent with past
practice.
(d) The Companies and their Subsidiaries do not have any liability or
obligation of any nature which is required to be disclosed in financial
statements prepared in accordance with GAAP (including the notes thereto) other
than those (i) set forth in the Financial Statements, (ii) incurred after
December 31, 1998 in the ordinary course of the Business consistent with past
practice and which would not be reasonably likely to have a Material Adverse
Effect or (iii) those liabilities relating to or arising out of the Business for
which any Person shall become liable in accordance with the matters contemplated
in Sections 6.4 (Employee Benefit Plans), 6.7 (Company Assets), 6.11
(Litigation) and 6.14 (Contracts).
(e) Attached hereto as Schedule 3.5(e) is the pro forma combined
balance sheet of the Companies and their Subsidiaries as of December 31, 1998
(the "Companies Pro Forma Balance Sheets") reflecting the combined financial
position of the Companies and their respective Subsidiaries after giving effect
to the Restructuring and the other asset transfers required under this
Agreement. The Companies Pro Forma Balance Sheets have been prepared in good
faith from the books and records of Seller and its Subsidiaries.
(f) Attached hereto as Schedule 3.5(f) is a pro forma balance sheet of
Cybertel RSA as of December 31, 1998 (the "Cybertel RSA Pro Forma Balance
Sheet") reflecting the financial position of Cybertel RSA after giving effect to
the Restructuring and the other asset transfers required under this Agreement.
The Cybertel RSA Pro Forma Balance
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Sheet has been prepared in good faith from the books and records of Seller and
its Subsidiaries.
(g) Attached hereto as Schedule 3.5(g) is a true and correct copy of
the capital expenditures budgets for Cybertel Cellular for the twelve month
period ending December 31, 1999 and for the twelve month period ending December
31, 2000 (the "Cybertel Cellular Expenditure Budgets").
(h) Attached hereto as Schedule 3.5(h)are the pro forma capital
expenditure budgets for Cybertel RSA for the twelve month period ending December
31, 1999 and for the twelve month period ending December 31, 2000 (the "Cybertel
RSA Pro Forma Expenditure Budgets") on a pro forma basis to exclude any capital
expenditures related to the Excluded Business. Such Cybertel RSA Pro Forma
Expenditure Budgets have been prepared in good faith from the books and records
of Seller and its Subsidiaries.
Section 3.6 Absence of Certain Changes or Events. Since December 31,
1998 (i) the Companies and their Subsidiaries have conducted their businesses
and Seller has conducted the Business, taken together, in the ordinary course
consistent with past practice except to the extent arising out of or relating to
the consummation of the transactions contemplated by this Agreement (including
the Restructuring), and (ii) there has not been any change in the Companies' and
their Subsidiaries' businesses or results of operations which has resulted in or
would be reasonably likely to result in a Material Adverse Effect.
Section 3.7 Communications Licenses. The Companies and their
respective Subsidiaries have been granted all Communications Licenses, except
for those Communications Licenses the failure of which to have been granted
would not be reasonably likely to be material. Schedule 3.7 sets forth a true,
accurate and complete list of the Communications Licenses held by the Companies
and their Subsidiaries and used directly in connection with the Business, and
the identity of the Person that holds each such Communications License. All
Communications Licenses are valid and in full force and effect, except where the
failure to be valid or in full force and effect would not be reasonably likely
to be material. The Companies and their respective Subsidiaries are not
conducting the Business in violation of any
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Communications License listed on Schedule 3.7, except for those failures which,
individually or in the aggregate, are not material. There is not pending, nor to
the Knowledge of Seller threatened, against the Companies or any of their
respective Subsidiaries, any application, action, petition, objection or other
pleading, or any proceeding, with the FCC, the ICC, or any other Governmental
Entity which questions or contests the validity of, or nonrenewal or suspension
of any Communications License which would be reasonably likely to, either
individually or in the aggregate, be material.
Section 3.8 Litigation. Except for the Consent Decree, as of the date
hereof, there are no (x) decrees, judgments, orders or awards to which the
Business or any of the assets of the Business are subject or (y) civil, criminal
or administrative claims, actions, suits, demands, proceedings or investigations
pending or to the Knowledge of Seller, threatened against the Business or the
Companies or any of their respective Subsidiaries, at law, in equity or
otherwise, in, before, or by, any court or Governmental Entity or authority,
except for such decrees, judgments, orders, awards, claims, actions, suits,
demands, proceedings or investigations which are not, in the aggregate,
material.
Section 3.9 Compliance with Law and Licenses. The Companies and their
respective Subsidiaries (a) are conducting their respective businesses in
compliance, with all applicable Laws (other than Licenses, except to the extent
relating to zoning matters), except for those failures to comply which,
individually or in the aggregate, are not material and (b) have obtained and are
in compliance with the terms of all Licenses, which are required for the
Companies and their Subsidiaries to conduct the Business, except for those the
failure to obtain or to comply with which would not be reasonably likely to
have, either individually or in the aggregate, a Material Adverse Effect; it
being understood, in each case, that nothing set forth in this Section 3.9 is
intended to address any compliance issue that is the subject of any other
representation or warranty set forth herein.
Section 3.10 Contracts. (a) Schedule 3.10(a) lists the following
Contracts (A) to which either of the Companies or one of their respective
Subsidiaries is a party
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or (B) to which Seller or an Affiliate of Seller is a party and which relates
exclusively to the Business:
(i) any agreement which materially restricts or materially limits
the ability of either of the Companies or any of their respective Subsidiaries
or Affiliates to freely conduct cellular telephone operations or otherwise
operate in any market;
(ii) any collective bargaining agreement and any written employment
agreement;
(iii) all agreements which involved payments to or from the Companies
or any of their Subsidiaries or on behalf of the Business of more than
$5,000,000 during the twelve month period ended December 31, 1998;
(iv) all agreements which specifically provide for payments to or
from the Companies or any of their Subsidiaries or on behalf of the Business of
more than $5,000,000 during any twelve-month period beginning after December 31,
1998;
(v) all agreements with respect to outstanding indebtedness for
money borrowed or any guaranty thereof;
(vi) all leases of real property, with an annual rental payment in
excess of $30,000 and all cell site leases;
(vii) all partnership or joint venture agreements or other agreements
relating to the management or control of any such partnership or joint venture;
(viii) volume customer Contracts with each of the top 25 customers of
the Business (by revenue) during the twelve months ended December 31, 1998,
including any national account agreements that meet such criterion;
(ix) all distributor agreements which generated gross line additions
in excess of 1,000 during the twelve months ended December 31, 1998 (such
agreements represent approximately 70% of gross line additions generated by all
agents/distributors for the Business during such period) and all reseller
agreements.
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(x) all sponsorship agreements;
(xi) all interconnection agreements;
(xii) all Contracts which materially restrict the ownership of any
material asset owned by the Companies or their Subsidiaries;
(xiii) any Contract with an Affiliate listed on Schedule 3.18 (which
is incorporated herein by reference); and
(xiv) any roaming agreements not terminable at the option of either
party thereto on 30 days or less notice.
Notwithstanding the foregoing, Schedule 3.10(a) (other than with
respect to subclauses (i), (ii) and (vii) above) shall be deemed updated as of
the Closing Date to delete any Contracts meeting any of the criteria set forth
above which have been terminated, have expired or not been renewed between the
date hereof and the Closing Date and to add any Contracts meeting such criteria
entered into between the date hereof and the Closing Date, provided in each case
such Contracts have been entered into, terminated or expired in the ordinary
course of business of the Companies and their Subsidiaries consistent with past
practice.
(b) Seller has made available to Buyer a correct and complete copy of
each Contract listed on Schedule 3.10(a) as of the date hereof, together with
any and all amendments or modifications thereto. Each Contract listed on
Schedule 3.10(a) is valid, binding, enforceable, and in full force and effect,
the Companies or the applicable Subsidiary are not in breach or default under
any such Contract and no event has occurred which, with notice or lapse of time
or both, would constitute such a breach or default, or permit termination,
modification, or acceleration, under such Contract, except where the failure to
be so valid, binding, enforceable or in full force and effect or such breach or
default, termination, modification or acceleration would not be, either
individually or in the aggregate, reasonably likely to be material.
(c) The execution, delivery and performance of this Agreement by
Seller and AMCI and the execution,
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delivery and performance of the Ancillary Agreements by AMCI does not, and the
consummation by Seller and AMCI of the transactions contemplated hereby and by
AMCI of the transactions contemplated thereby will not, constitute or result in
a breach or violation of, a default under, or the acceleration of any
obligations, a right of early termination, a right of first refusal or the
creation of an Encumbrance (with or without notice, lapse of time or both) on
the assets of Seller, the Companies or any of the Subsidiaries of the Company
pursuant to, any Contracts set forth on Schedule 3.10(a), except for any breach,
violation, default, right, acceleration or creation that would not be reasonably
likely to be material in any individual case or in the aggregate or to prevent,
materially delay or materially impair the ability of Seller, the Companies or
any of their Subsidiaries to consummate the transactions contemplated by this
Agreement or any of the Ancillary Agreements.
(d) Schedule 3.10(d) lists all material Contracts which are not listed
on Schedule 3.10(a) to which Seller or any of its Affiliates are a party (and
none of the Companies or their Subsidiaries are parties) pursuant to which the
Companies or any of their Subsidiaries provide or receive goods, products,
services or other benefits.
Section 3.11 Consents and Approvals. Except for the filings, permits,
authorizations, consents, approvals and/or notices (A) set forth in Schedule
3.11, (B) required under the HSR Act, (C) required by the applicable
requirements of the FCC, or under the Communications Act or (D) required by the
state public utilities commissions or similar communications or utility
regulatory bodies having jurisdiction over Seller, the Companies and the
Companies' Subsidiaries (such consents referred to in clauses (C) and (D) of
this Section 3.11 being collectively referred to herein as, the "Cellular
Authorizations"), no filings, permits, authorizations, consents, approvals
and/or notices are required to be made or obtained by Seller, the Companies or
any of their respective Subsidiaries with or from, as the case may be, any
Governmental Entity, in connection with the execution and delivery of this
Agreement by Seller and the consummation by Seller of the transactions
contemplated hereby, except those for which the failure to make or obtain, as
the case may be, would not be, either individually or in the aggregate,
reasonably likely to be
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materially adverse to the Companies and their Subsidiaries, taken as a whole or
be reasonably likely to prevent, materially delay or materially impair the
ability of Seller to consummate the transactions contemplated by this Agreement.
To the Knowledge of Seller, no issue relating to Seller or its Affiliates exists
that would inhibit Buyer and Seller from promptly obtaining any material
Governmental Consent.
Section 3.12 Tax Matters. (a) All Tax Returns that are required to be
filed by or with respect to each of the Companies and their respective
Subsidiaries have been duly and timely filed or, where not so filed, are covered
under a valid extension that has been obtained therefor, (b) all Taxes shown to
be due on the Tax Returns referred to in clause (a) have been paid in full, and
there are no material liens or encumbrances on any of the assets of the
Companies or any of their Subsidiaries that arose in connection with the failure
or alleged failure to pay any Tax, (c) the Tax Returns referred to in clause (a)
are not subject to examination currently by the IRS or the appropriate state,
local or foreign taxing authority, and no written notice has been received by
Seller, any of the Companies, or any of their Subsidiaries with respect to any
actual or threatened audit or examination, (d) all deficiencies asserted or
assessments made as a result of the examinations of any of the Tax Returns
referred to in clause (a) have been paid in full, (e) no issues that have been
raised by the relevant taxing authority in connection with the examination of
any of the Tax Returns referred to in clause (a) are currently pending, (f) no
waivers of statutes of limitation have been given by or requested with respect
to any Taxes of the Companies or any of their respective Subsidiaries, (g) none
of the Companies or any of their Subsidiaries is obligated to make any material
payments, or is a party to an agreement that under certain circumstances could
obligate it to make any material payments that will not be deductible under
section 280G (and for the purposes of this Section 3.12(g), the term material
shall mean any payment (individually or in the aggregate) of $300,000 or more),
(h) none of the Companies or any of their Subsidiaries have filed a consent
under Section 341(f) of the Code concerning collapsible corporations (i) none of
the Companies or any of their Subsidiaries have been a party to any distribution
occurring during the last 3 years in which the parties to such distribution
treated the distribution as
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one to which Section 355 of the Code applied, and (j) to the Knowledge of
Seller, each of the Companies and their Subsidiaries has withheld and paid all
material Taxes required to have been withheld and paid by them in connection
with (1) amounts paid or owing to any employee, independent contractor,
creditor, stockholder, or other third party, and (2) amounts received from
customers or other third parties (including, but not limited to, sales, use and
excise taxes).
Section 3.13 Labor Matters. As of the date hereof, there is no
pending, or, to the Knowledge of Seller, threatened, strike, walkout or other
work stoppage or any union organizing effort by or respecting the employees of
Seller, AMCI, the Companies or any of their respective Subsidiaries who perform
work in connection with the Business.
Section 3.14 Employee Benefits. (a) Schedule 3.14(a) hereto contains a
complete and accurate list of each employee benefit, stock purchase, stock
option, severance, change-in-control, fringe benefit, bonus, incentive and
deferred compensation plan, agreement, policy or other arrangement maintained by
Parent or its Subsidiaries which covers current or former employees of Seller,
AMCI, the Companies or any of their respective Subsidiaries who perform or have
performed work for the Business (the "Benefit Plans"). There are no employee
benefit plans, other than the Benefit Plans, which cover the current and former
employees of Seller, AMCI, the Companies or any of their respective Subsidiaries
who perform or have performed work for the Business. Copies of all Benefit Plans
and all amendments thereto and of all summary plan descriptions or summaries of
material modifications have been delivered or made available to Buyer.
(b) All Benefit Plans are in substantial compliance with all
applicable laws, including the Code and the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"). The Parent has received a favorable
determination letter from the IRS with respect to the qualified status of each
Benefit Plan which is an "employee pension benefit plan" within the meaning of
Section 3(2) of ERISA (a "Pension Plan") and which is intended to be qualified
under Section 401(a) of the Code and Seller does not have Knowledge of any
circumstances which are reasonably
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likely to cause the revocation of such letter. There is no material pending or,
to the Knowledge of Seller, threatened action, suit or claim relating to the
Benefit Plans that could reasonably be expected to materially increase its
liability with respect to such Benefit Plans. None of Parent, Seller, the
Companies or any of their respective Subsidiaries has engaged in any transaction
with respect to any Benefit Plan that is reasonably likely to subject the
Companies or any of their respective Subsidiaries to a material tax or penalty
imposed by Section 4975 of the Code.
(c) No liability under Title IV of ERISA has been or is expected to be
incurred by either the Companies or any of their respective Subsidiaries with
respect to any ongoing, frozen or terminated "single-employer plan", within the
meaning of Section 4001(a)(15) of ERISA, currently or formerly maintained by any
of them, or the single-employer plan of any entity which is considered one
employer with the Companies under Section 4001 of ERISA or Section 414 of the
Code (an "ERISA Affiliate"), other than the payment of premiums to the Pension
Benefit Guaranty Corporation contributed to by the Companies or any of their
respective Subsidiaries or any ERISA Affiliate. Neither of the Companies nor any
of their respective Subsidiaries has contributed, or been obligated to
contribute, to a "multiemployer plan" (within the meaning of Section 3(37) of
ERISA) at any time during the six-year period prior to the date hereof, or
otherwise has any liability to any multiemployer plan.
(d) Neither of the Companies nor any of their respective Subsidiaries
has any obligations for retiree health and life benefits under any Benefit Plan.
(e) Except as set forth on Schedule 3.14(e), the consummation of the
transactions contemplated by this Agreement will not (x) entitle any of the
employees of the Companies or any of their respective Subsidiaries to severance
pay or (y) accelerate or provide any other rights or credits under, or increase
the amount payable or trigger any other obligation pursuant to, any of the
Benefit Plans. No Transferred Employee is covered by the Parent Management
Employees Severance Pay Plan.
Section 3.15 Environmental Matters. The Business and the Companies and
their Subsidiaries (i) are in
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compliance in all material respects with applicable Environmental Laws; (ii) as
of the date hereof have not received any written notices from any Governmental
Entity alleging the material violation of any applicable Environmental Law and,
to the Knowledge of Seller, are not aware of any conditions which materially
violate any applicable Environmental Law; (iii) are not the subject of any
material court order, administrative order or decree arising under any
Environmental Law; (iv) have not generated, stored, used, emitted, discharged or
disposed of any Hazardous Substance except in material compliance with
applicable Environmental Laws and, to the Knowledge of Seller, are not aware of
the presence of Hazardous Substances in the structures, soil, subsoil,
sediments, and groundwater at, on or beneath the properties owned or leased by
the Companies and their Subsidiaries or to be transferred to the Companies or
their Subsidiaries pursuant to this Agreement which would reasonably be expected
to require remediation under applicable Environmental Laws; and (v) have
constructed all facilities, equipment and structures in material compliance in
all material respects with applicable Environmental Laws. This Section 3.15
constitutes the sole representation and warranty of the Seller with respect to
any Environmental Law or any Hazardous Substance.
Section 3.16 Property and Leases. Schedule 3.16(a) contains a list of
all real property owned by the Companies or any of their respective Subsidiaries
and real property leased pursuant to lease agreements set forth on Schedule
3.10(a) (which includes all cell site leases used in the Business) and the
address of any such owned real property. The Companies and their Subsidiaries
have marketable title to all material owned real property set forth on Schedule
3.16(a), and such owned real property and all cellular switches and cell site
towers and equipment affixed thereto and owned by the Companies and their
Subsidiaries are free and clear of all Encumbrances, except for (i)
materialmen's, mechanics', carriers', workmen's and repairmen's liens and other
similar liens arising in the ordinary course of business, (ii) pledges or
deposits to secure obligations under Workers' Compensation laws or similar
legislation or to secure public or statutory obligations, (iii) Encumbrances for
Taxes or assessments not yet delinquent or being contested in good faith, (iv)
imperfections of title and Encumbrances, if any, that do not materially detract
from the value, or materially interfere
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with the use or marketability of the property affected thereby, (v) Encumbrances
set forth on the title insurance policies relating to such properties and (vi)
rights reserved to or vested in any Governmental Entity to control or regulate
any such entity's property or assets in any manner. Each real property site
which is a leased cell site or is owned real property set forth on Schedule
3.16(a) has lawful rights of ingress and egress to permit sufficient access to
such sites from public roadways, except where the failure to have such rights
would not be material. All cellular switches and cell site towers and equipment
affixed thereto owned by the Companies and their Subsidiaries are in good
operating condition and repair, reasonable wear and tear excepted.
Section 3.17 Accounts Receivable; Debt. Neither the Companies nor any
of their Subsidiaries have sold or assigned any of their respective accounts
receivable (whether or not reflected in the Financial Statements) to any third
party during the past two years.
Section 3.18 Affiliate Transactions. Schedule 3.18 lists all written
Contracts between the Companies or one of their Subsidiaries and any Affiliates
(other than the Companies and one of their Subsidiaries) of Seller.
Section 3.19 Year 2000 Compliance. AMCI has developed a plan (the "Y2K
Plan") designed to confirm that all computer software and systems (including
hardware, firmware, operating system software, utilities, embedded processors
and application's software) used in and material to the Business and owned by
AMCI, Seller, the Companies or their Subsidiaries (the "Systems") are designed
to operate during and after the calendar year 2000 to accurately process data
(including but not limited to calculating, comparing and sequencing) from, into
and between the twentieth and twenty-first centuries, including leap year
calculations ("Year 2000 Compliant"), and AMCI is using its reasonable best
efforts to implement the Y2K Plan with respect to the Business in accordance
with the terms thereof. Seller has delivered a true and complete copy of the Y2K
Plan to Buyer. To the Knowledge of Seller (i) the Y2K Plan, when fully
implemented, will render the Systems Year 2000 Compliant in all material
respects, (ii) no problems have been identified that are not capable of being
remedied which could reasonably be expected to result in the
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Systems not being Year 2000 Compliant in any material respect and (iii) AMCI
has, consistent with industry practice, inquired of all of the vendors and
suppliers of computer software and systems as to whether such vendors and
suppliers are taking reasonable steps to confirm that their systems and software
are Year 2000 Compliant and as of the date hereof no material problems have been
reported to Seller or any of its Affiliates.
Section 3.20 Ability to Conduct Business. The (i) assets listed on
Schedule 6.7 (Company Assets) and being transferred to the Companies and their
Subsidiaries on or before the Closing Date, (ii) tangible and intangible assets
currently leased or owned by the Companies and their Subsidiaries and to be
retained by the Companies or any of their Subsidiaries after the Closing Date,
(iii) services to be provided and assets to be made available pursuant to the
Ancillary Agreements (which in the case of the Transition Services Agreement
shall include only those services and assets set forth on the schedules thereto
as in effect on the date hereof) and (iv) services and arrangements and assets
set forth on Schedule 3.20 (including those provided by third parties), taken
together constitute all of the tangible and intangible assets, services and
arrangements that are required to conduct the Business consistent with levels of
performance as of the date hereof (it being understood and agreed that nothing
set forth in this Section 3.20 constitutes a representation or warranty that the
Business can or will be operated at such performance levels following the
Closing Date) or are otherwise used exclusively in the Business. Except for the
services and assets provided under the Ancillary Agreements and the Trademark
License Agreement and any services and arrangements set forth on Schedule 3.20,
no services or assets required to conduct the Business are provided through
arrangements with Seller or any of its Affiliates (other than the Companies and
their Subsidiaries).
Section 3.21 Brokers and Finders. None of Seller, the Companies or any
of the Companies' respective Subsidiaries or any of their respective Affiliates
have employed any broker, finder, consultant or intermediary in connection with
the transactions contemplated by this Agreement who would be entitled to a
broker's, finder's or similar fee or commission in connection therewith or upon
the consummation thereof.
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Section 3.22 Service Marks. One or more of the Companies owns state
and/or federal registrations for the service marks set forth on Schedule 3.22
(the "Service Marks") and the registrations for the Service Marks are valid and
subsisting. No material claims challenging the ownership, validity or
enforceability of the Service Marks are pending or, to the Knowledge of Seller,
threatened; to the Knowledge of Seller, there is no unauthorized use,
infringement or misappropriation of the Service Marks by any third party; and,
as of the date hereof, there is no pending or, to the Knowledge of Seller,
threatened claims of infringement or misappropriation against any of the Service
Marks which are material to the Business.
Section 3.23 No Other Representations or Warranties. Except for the
representations and warranties contained in this Article III, neither Seller,
the Companies, any Subsidiary of either of the Companies nor any other Person
makes any other express or implied representation or warranty on behalf of
Seller, the Companies or any Subsidiary of either of the Companies.
ARTICLE IV
Representations and Warranties of Buyer
Except as set forth in the correspondingly numbered Section of the
disclosure schedule delivered by Buyer to Seller on the date of this Agreement
(the "Buyer Disclosure Schedule") and except, if not set forth in the
correspondingly numbered section of the Buyer Disclosure Schedule the
disclosures therein shall be deemed to be exceptions to the representations and
warranties of Buyer to which a reasonable Person would have considered such
disclosure to be an exception, Buyer represents and warrants to Seller as
follows:
Section 4.1 Organization and Authority of Buyer and Buyer Parent.
Buyer is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware, Buyer Parent is a corporation duly
organized, validly existing and in good standing under the laws of the State of
New York and each of Buyer and Buyer Parent has all requisite corporate or
similar power and authority, and has taken all corporate action necessary in
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order, to execute, deliver and perform its obligations under this Agreement and,
in the case of Buyer, the Ancillary Agreements. This Agreement is a legal, valid
and binding obligation of each of Buyer and Buyer Parent, enforceable in
accordance with its terms and the Ancillary Agreements, when executed, will each
be a legal, valid and binding obligation of Buyer, each enforceable in
accordance with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity principles. The
execution, delivery and performance of this Agreement by each of Buyer and Buyer
Parent does not, and the consummation by Buyer and Buyer Parent of the
transactions contemplated hereby will not, constitute or result in (a) a breach
or violation of, or a default under, the certificate of incorporation or by-laws
of Buyer or Buyer Parent, (b) a breach or violation of, a default under, or the
acceleration of any obligations, a right of early termination, a right of first
refusal or the creation of any Encumbrance on the assets of Buyer or Buyer
Parent (with or without notice, lapse of time or both) pursuant to, any
Contracts binding upon Buyer or Buyer Parent or (c) assuming compliance with the
matters referred to in Sections 3.11 (Consents and Approvals) and 4.2 (Consents
and Approvals), a violation of any Law or governmental or non-governmental
permit or license to which Buyer or Buyer Parent is subject, except, in the case
of clause (b) or (c) above, for any breach, violation, default, acceleration or
creation that would not be reasonably likely to either, individually or in the
aggregate, be material or materially delay or materially impair the ability of
Buyer or Buyer Parent to consummate the transactions contemplated by this
Agreement or any of the Ancillary Agreements.
Section 4.2 Consents and Approvals. Except for the filings, permits,
authorizations, consents, approvals and/or notices (a) set forth in Schedule
4.2, (b) required under the HSR Act or (c) required to obtain the Cellular
Authorizations, no filings, permits, authorizations, consents, approvals or
notices are required to be made or obtained by Buyer or any of its Subsidiaries
with or from, as the case may be, any Governmental Entity, in connection with
the execution and delivery of this Agreement by Buyer and the consummation by
Buyer of the transactions contemplated hereby, except those for which the
failure to make or obtain would not be, either individually or in the
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aggregate, reasonably likely to be material or reasonably likely to prevent,
materially delay or materially impair the ability of Buyer to consummate the
transactions contemplated by this Agreement.
Section 4.3 Brokers and Finders. Buyer and its Subsidiaries have not
employed any broker, finder, consultant or intermediary in connection with the
transactions contemplated by this Agreement who would be entitled to a broker's,
finder's or similar fee or commission in connection therewith or upon the
consummation thereof, or if the Closing does not occur.
Section 4.4 Financial Capability. Buyer has sufficient funds to
purchase the Shares on the terms and conditions contemplated by this Agreement
and to consummate the transactions contemplated hereby and has sufficient funds
to perform its obligations and the obligations of the Companies (including any
obligations the Companies may have with respect to their Subsidiaries) after the
Closing Date.
Section 4.5 Securities Act. Buyer is acquiring the Shares solely for
the purpose of investment and not with a view to, or for sale in connection
with, any distribution thereof in violation of the Securities Act. Buyer
acknowledges that the Shares are not registered under the Securities Act or any
applicable state securities law, and that such Shares may not be transferred,
sold or otherwise disposed of except pursuant to the registration provisions of
the Securities Act or pursuant to an applicable exemption therefrom and pursuant
to state securities laws and regulations as applicable.
Section 4.6 Litigation. Except for the Consent Decree, as of the date
hereof, there are no (x) decrees, judgments, orders or awards to which Buyer or
its properties are subject to or (y) civil, criminal or administrative claims,
actions, suits, demands, proceedings or investigations pending or to the
Knowledge of Buyer threatened against Buyer or any of its Subsidiaries, at law,
in equity or otherwise, in, before, or by, any court or Governmental Entity or
authority, except for such decrees, judgments, orders, awards, claims, actions,
suits, demands, proceedings, or investigations which would not, in the
aggregate, be reasonably likely to prevent, materially delay or
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materially impair the ability of Buyer to consummate the transactions
contemplated hereby.
Section 4.7 Investigation by Buyer. Buyer acknowledges that it is a
sophisticated purchaser of businesses and has been given sufficient access to
all information with respect to the Companies and their respective Subsidiaries
requested by Buyer and, in entering into this Agreement, has not relied upon
anything other than the representations and warranties of Seller set forth in
Article III. Buyer acknowledges that no other representations and warranties of
Seller other than as are set forth in Article III are required by Buyer to enter
into this Agreement. Buyer acknowledges that none of Parent, Seller, the
Companies, the Subsidiaries of the Companies or any other Person shall have any
liability with respect to the Confidential Information Memorandum or any
information with respect to the Companies or their respective Subsidiaries made
available to Buyer prior to the date hereof; provided, that the foregoing shall
not limit the scope of any representation or warranty contained in this
Agreement or any Ancillary Agreement.
Section 4.8 Governmental Consents. To the Knowledge of Buyer no issue
relating to Buyer or its Affiliates exists that would inhibit Buyer and Seller
from promptly obtaining any material Government Consent.
Section 4.9 No Other Representations or Warranties. Except for the
representations and warranties contained in this Article IV, neither Buyer nor
any other Person makes any other express or implied representation or warranty
on behalf of Buyer.
ARTICLE V
Tax Matters
Section 5.1 Liability for Taxes and Related Matters.
(a) Seller's Indemnification of Buyer. Seller shall be liable for and
shall indemnify Buyer for all Taxes (other than Transfer Taxes, which are
provided for in Section 5.2) (i) attributable to, imposed on, or for which
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the Companies or any of their respective Subsidiaries may otherwise be liable
for events occurring or periods ending on or before the Closing Date (except for
Tax liabilities attributable to extraordinary events caused by Buyer or any of
its Affiliates (including the Companies and any of their Subsidiaries at any
time after the time of the Closing) occurring outside of the ordinary course of
business on the Closing Date, but after the Closing, and that are not
contemplated by this Agreement), (ii) with respect to any taxable year or period
beginning on or before and ending after the Closing Date, the portion of such
taxable year or period ending on and including the Closing Date (except for Tax
liabilities attributable to extraordinary events caused by Buyer or any of its
Affiliates (including the Companies and any of their Subsidiaries at any time
after the time of the Closing) occurring outside of the ordinary course of
business on the Closing Date, but after the Closing, and that are not
contemplated by this Agreement), and (iii) attributable to any Section
338(h)(10) Election.
(b) Buyer's Indemnification of Seller. Buyer shall be liable for and
indemnify Seller for the Taxes of the Companies or any of their respective
Subsidiaries for any taxable year or period that begins after the Closing Date
and, with respect to any taxable year or period beginning on or before and
ending after the Closing Date, the portion of such taxable year or period
beginning after the Closing Date. Buyer shall be entitled to any refund of Taxes
of the Companies or any of their respective Subsidiaries received for such
periods. Buyer shall also be liable for and indemnify Seller for any and all Tax
liabilities attributable to extraordinary events caused by Buyer or any of its
Affiliates (including the Companies and any of their Subsidiaries at any time
after the time of the Closing) occurring outside of the ordinary course of
business on the Closing Date, but after the Closing, that are not contemplated
by this Agreement.
(c) Taxes for Short Taxable Year. For purposes of subsections (a) and
(b) of this Section 5.1, whenever it is necessary to determine the liability for
Taxes of the Companies or any of their Subsidiaries for a portion of a taxable
year or period that begins on or before and ends after the Closing Date, the
determination of the Taxes of the Companies or any of their respective
Subsidiaries for the portion of the year or period ending on, and the portion
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of the year or period beginning after, the Closing Date generally shall be
determined by assuming that each of the Companies and their Subsidiaries had a
taxable year or period which ended on the Closing Date.
For purposes of this Section 5.1(c), in the case of any Taxes (other
than Transfer Taxes) that are imposed on a periodic basis and are payable for a
taxable period that includes (but does not end on) the Closing Date, the portion
of such Tax which relates to the portion of such taxable period ending on the
Closing Date shall (x) in the case of any Taxes other than Taxes based upon or
related to income, receipts or the sale or transfer of any property, be deemed
to be the amount of such Tax for the entire taxable period multiplied by a
fraction the numerator of which is the number of days in the taxable period
ending on the Closing Date and the denominator of which is the number of days in
the entire taxable period, and (y) in the case of any Tax based upon or related
to income, receipts or the sale or transfer of any property, be deemed equal to
the amount which would be payable if the relevant taxable period ended on the
Closing Date (except that Tax liabilities attributable to extraordinary events
caused by Buyer or any of its Affiliates (including the Companies and any of
their Subsidiaries at any time after the time of the Closing) occurring outside
of the ordinary course of business on the Closing Date, but after the Closing,
and that are not contemplated by this Agreement shall be borne by Buyer).
(d) Partnership Subsidiaries. For purposes of subsections (a), (b) and
(c) of this Section 5.1, any liability to indemnify or right to refund with
respect to a Tax imposed on a Subsidiary that is a partnership shall be limited
to the Subsidiary's liability for Taxes or right to refund of Taxes multiplied
by the percentage used to allocate the Subsidiary's taxable income (i) to Seller
and its Affiliates for purposes of subsection (a), and (ii) to Buyer and its
Affiliates for purposes of subsection (b) unless the relevant taxing authority
actually collects additional Taxes from one of the Companies or one of their
Subsidiaries because such Company or Subsidiary is general partner of a
Subsidiary that is a partnership, and such Company or Subsidiary is actually
unable to collect such Taxes from another partner (in which case the liability
of Buyer or Seller, as the case may be, shall not be limited by such
percentage).
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(e) Adjustment to Purchase Price. Any payment made to Buyer or Seller
under this Article V will be treated as an adjustment to the Purchase Price.
(f) Carrybacks. Following the Closing, Buyer and the Companies shall,
to the extent permissible, waive the right to carryback any losses, credits or
similar items attributable to the Companies and from a taxable year or period
that begins after the Closing Date to a taxable year or period that ends on or
before the Closing Date.
(g) Tax Returns. Seller shall file or cause to be filed when due all
Tax Returns that are required to be filed by or with respect to any of the
Companies or any of their Subsidiaries for taxable years or periods ending on or
before the Closing Date and shall pay any Taxes due in respect of such Tax
Returns. Buyer shall file or cause to be filed when due all Tax Returns that are
required to be filed by or with respect to the Companies or any of their
respective Subsidiaries for taxable years or periods ending after the Closing
Date and shall remit any Taxes due in respect of such Tax Returns. With respect
to any Tax Return required to be filed by Buyer or Seller with respect to the
Company and Subsidiaries and as to which an amount of Tax is allocable to the
other party under Section 5.1(a) or (b) hereof, the filing party shall provide
the other party with a copy of such completed Tax Return and a statement
certifying the amount of Tax shown on such Tax Return that is allocable to such
other party pursuant to the principles of this Section 5.1, together with
appropriate supporting information and schedules, at least 20 Business Days
prior to the due date (including any extension thereof) for the filing of such
Tax Return, or in any event, as soon as practicable, and such other party shall
have the right to review and comment on such Tax Return and statement prior to
the filing of such Tax Return. Tax Returns of the Companies and their
Subsidiaries not yet filed for any taxable period that begins on or before the
Closing Date shall be prepared in a manner consistent with past practices
employed with respect to the Companies and their Subsidiaries, except (x) to the
extent counsel for the filing party determines there is no reasonable basis in
law therefor, (y) to the extent there would be no material adverse consequences
to the non-filing party or its Affiliates, or (z) in the case that the filing
party obtains the non-filing party's prior written consent (which consent shall
not be unreasonably withheld or
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delayed). Payment by Buyer and Seller of any amounts due under this Article V in
respect of Taxes shall be made (i) at least 10 Business Days before the due date
of the applicable estimated or final Tax Return required to be filed by Buyer
for a period ending after the Closing Date for which Seller is responsible for
Taxes under Section 5.1(a), without regard to whether the Tax Return shows a net
Tax due for such period, and (ii) within 3 Business Days following an agreement
between Buyer and Seller that an indemnity amount is payable, an assessment of a
Tax (which has not been disputed within the prescribed time) by a taxing
authority, or a "determination" as defined in Section 1313(a) of the Code.
(h) Contest Provisions. (i) Buyer shall promptly notify Seller in
writing upon receipt by Buyer, any of its Affiliates or the Companies or any of
their respective Subsidiaries of written notice of any pending or threatened
federal, state, local or foreign Tax audits, claims for Taxes or assessments
which may affect the Tax liabilities of the Companies or any of their respective
Subsidiaries for which Seller would be required to indemnify Buyer pursuant to
Section 5.1(a) or Section 5.1(i), provided that failure to comply with this
provision shall not affect Buyer's right to indemnification hereunder except to
the extent Seller shall be prejudiced thereby.
(ii) Subject to the provisions of Section 5.1(h)(iii), Seller
shall have the sole right to represent the Companies or any of their respective
Subsidiaries' interests in any Tax audit or administrative or court proceeding
relating to taxable periods ending on or before the Closing Date, and to employ
counsel of its choice at its expense.
(iii) With respect to a proposed adjustment for a period in which
both Seller and Buyer could be liable, (A) each party may participate in the
audit or proceeding, and (B) that portion of the audit or proceeding shall be
controlled by that party which would bear the burden of the greater portion of
the sum of the adjustment and any corresponding adjustments that may reasonably
be anticipated for future taxable periods. The party not controlling such audit
or proceeding may, with the written consent of the other party and at its sole
expense, assume control of such audit or proceeding.
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(iv) Neither Buyer nor Seller shall enter into any compromise or
agree to settle any claim pursuant to any Tax audit or proceeding which would
adversely affect the other party for a particular taxable year without the
written consent of the other party, which consent may not be unreasonably
withheld. Buyer and Seller agree to cooperate, and Buyer agrees to cause the
Company to cooperate, in the defense against or compromise of any claim in any
audit or proceeding.
(i) Breach of Article V Representation or Obligation. Each of Buyer
and Seller shall indemnify the other for any Losses, Taxes or loss of Tax
benefits that result from or are attributable to a breach of a representation or
a failure to perform obligations set forth in this Article V. If a liability
under this Article V is in respect of costs or expenses other than Taxes,
payment by Buyer or Seller of any amounts due under this Article V shall be made
within five Business Days after the date when the indemnifying party is notified
by the indemnified party that the indemnified party has a liability for the
determinable amount under this Article V and is provided with calculations or
other materials supporting such liability.
Section 5.2 Transfer Taxes. Notwithstanding the provisions of Section
5.1, all excise, sales, use, transfer, documentary filing and other similar
Taxes which may be imposed or assessed as a result of Buyer's acquisition of the
Shares ("Transfer Taxes") shall be borne 50% by Buyer and 50% by Seller.
Section 5.3 Information to be Provided by Buyer. With respect to any
taxable year of the Companies or any of their respective Subsidiaries for which
Seller is required to file a Tax Return pursuant to Section 5.1(g) hereof and
for the period prior to the Closing Date in any taxable year of the Companies or
any of their respective Subsidiaries in which the Closing occurs, Buyer shall
promptly cause the Companies or any of their respective Subsidiaries to prepare
and provide to Seller a package of tax information materials (the "Tax
Package"), which shall be completed in accordance with past practice of the
Companies or the relevant Subsidiary including past practice as to providing the
information, schedules and work papers and as to the method of computation of
separate taxable income or other relevant measure of income. Buyer shall
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cause the Tax Package for the portion of the taxable period ending on the
Closing Date to be delivered to Seller within one hundred twenty (120) days
after the Closing Date.
Section 5.4 Assistance and Cooperation. After the Closing Date, each
of Seller and Buyer shall:
(a) assist (and cause their respective Affiliates to assist) the other
party in preparing any Tax Returns or reports for which such other party is
responsible for preparing and filing in accordance with this Article V;
(b) cooperate fully in preparing for any audits of, or disputes with
taxing authorities regarding, any Tax Returns of the Companies or any of their
respective Subsidiaries;
(c) make available to the other party and to any taxing authority as
reasonably requested all information, records, and documents relating to Taxes
of the Companies or any of their respective Subsidiaries;
(d) provide timely notice to the other party in writing of any pending
or threatened Tax audits or assessments of the Companies or any of their
respective Subsidiaries for taxable periods for which the other may have a
liability under this Article V; and
(e) furnish the other party with copies of all correspondence received
from any taxing authority in connection with any Tax audit or information
request with respect to any such taxable period.
Section 5.5 Miscellaneous.
(a) Any Tax sharing agreement or arrangement to which any of the
Companies or their Subsidiaries are a party (which shall not be construed to
include partnership agreements) shall be terminated as of or prior to the
Closing Date and, after the Closing Date, none of the Companies or any of their
Subsidiaries shall be bound thereby or have any liability thereunder.
(b) Buyer and Seller agree to consistently treat any transactions
involving the Companies or their respective Subsidiaries that occur on the
Closing Date as properly
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allocable to Buyer's or Seller's Tax Returns, as the case may be, for all Tax
purposes, consistent with this Article V.
Section 5.6 Section 338(h)(10); Alternative Transaction Structure.
(a) Election. Subject to Section 6.19, Seller shall timely make a
joint election with Buyer under Section 338(h)(10) of the Code with respect to
the purchase of the Companies and their Subsidiaries (which are taxed as
corporations for United States Federal Income Tax purposes) and under any
similar provisions of state, local or foreign law (the "Section 338(h)(10)
Election"). If the Section 338(h)(10) Election is made, Seller represents that
its sale of the shares of the Companies and such Subsidiaries is eligible for,
and Buyer represents that it is qualified to make, such Section 338(h)(10)
Election.
(b) Forms. If a Section 338(h)(10) Election is made or an Alternative
Transaction is effected, Seller and Buyer shall within the later of (i) 150 days
after the Closing Date and (ii) 30 days after the determination of the Post-
Closing Adjustment under Section 2.5 (but, in any event, before the time
required to file any required form) exchange completed and executed copies of
Internal Revenue Service Form 8023 (or any other required form), required
schedules thereto, and any similar state, local and foreign forms. If any
changes are required in these forms as a result of information which is first
available after the Closing Date, the parties will promptly agree on such
changes. If the Section 338(h)(10) Election is made or an Alternative
Transaction is effected, Buyer and Seller shall report, in connection with the
determination of income, franchise, or other Taxes measured by net income, the
transactions being undertaken pursuant to this Agreement in a manner consistent
with the Section 338(h)(10) Election or the Alternative Transaction, as the case
may be (unless otherwise required by Law).
(c) Allocation of Purchase Price. Seller and Buyer will appoint an
appraiser to determine a purchase price and the allocation of that purchase
price among the assets that (i) are deemed to have been acquired pursuant to
Section 338(h)(10) of the Code or any state or foreign law equivalent or (ii)
are or are deemed to have been acquired
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in the Alternative Transaction, as the case may be. Buyer and Seller shall use
the asset values determined from such allocation for purposes of all reports and
returns with respect to Taxes, including Internal Revenue Service Form 8594 if
applicable, or any equivalent statement.
(d) If a Section 338(h)(10) Election is made, or the Alternative
Transaction is effected, Seller shall use its best efforts to ensure that each
entity in which it owns a direct or indirect interest, and which is taxed as a
partnership for United States income tax purposes, will have made an election
under Section 754 of the Code, if such election is not already in effect.
Section 5.7 Survival of Obligations. The representations and
obligations of the parties set forth in this Article V shall be unconditional
and absolute, and shall survive the Closing until the expiration of the relevant
statute of limitations (including any waivers or extensions thereof) with
respect to such matters and shall expire at such time.
ARTICLE VI
Certain Covenants and
Agreements of Seller and Buyer
Section 6.1 Access and Information. (a) Prior to Closing, AMCI and
Seller shall permit Buyer and its representatives to have reasonable access,
during regular business hours and upon reasonable advance notice, to AMCI and
Seller, the Companies and their respective Subsidiaries and to the officers of
AMCI and Seller, the Companies and their respective Subsidiaries for the purpose
of obtaining information about the Business to the extent that such access does
not materially interfere with the business of AMCI, Seller, the Companies or
their Subsidiaries; provided, that Buyer and such representatives comply with
the confidentiality obligations contained herein and in the Confidentiality
Agreement; and provided, further that the foregoing shall not (i) require Seller
to permit any inspection, or to disclose any information, that in its reasonable
judgment would result in any violation of Law or the disclosure of any trade
secrets of third parties or trade secrets of Parent, AMCI or Seller unrelated to
the Companies
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and their respective Subsidiaries and the Business or violate any of AMCI's,
Seller's, the Companies' (including for this purpose the Excluded Business) or
any of their respective Subsidiaries' obligations with respect to
confidentiality if Seller shall have used reasonable best efforts to obtain, but
shall not have been successful in obtaining, the consent of such third party to
such inspection or disclosure or (ii) require any disclosure by AMCI, Seller,
the Companies (including for this purpose the Excluded Business) or any of their
Subsidiaries that could, as a result of such disclosure, have the effect of
causing the waiver of any attorney-client privilege.
(b) In the event of the termination of this Agreement, Buyer, at its
own expense, shall promptly, and shall use its reasonable best efforts to cause
its agents to, deliver (without retaining any copies thereof) to Seller, or (at
Seller's option) confirm in writing to Seller that they have destroyed, all
information furnished to Buyer or its representatives or agents by Seller, AMCI,
the Companies (including for this purpose the Excluded Business) or any of their
respective Subsidiaries or any of their respective agents, employees or
representatives as a result hereof or in connection herewith in their
possession, whether so obtained before or after the execution hereof, and all
analyses, compilations, forecasts, studies or other documents prepared by Buyer
or its representatives which contain or reflect any such information. Buyer
shall at all times prior to the Closing Date, and in the event of termination of
this Agreement, cause any information so obtained to be kept confidential and
will not use, or permit the use of, such information in its business or in any
other manner or for any other purpose except as contemplated hereby and except
as required by Law.
(c) In addition to the confidentiality arrangements contained herein,
all information provided or obtained in connection with the transactions
contemplated by this Agreement (including pursuant to clause (a) above and
clause (e) below) shall be held by Buyer in accordance with and subject to the
terms of the Confidentiality Agreement, dated January 15, 1999, between Buyer
Parent and Parent (the "Confidentiality Agreement"); provided, that from and
after the Closing, Buyer and its Affiliates may use such information in
conducting their business, including for purposes of transition (except to the
extent that such information
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solely relates to the Excluded Business). In the event of a conflict or
inconsistency between the terms of this Agreement and the Confidentiality
Agreement, the terms of this Agreement shall govern.
(d) For a period of two years after the Closing Date, Seller agrees
to, and agrees to use reasonable best efforts to cause its agents,
representatives and Affiliates to (i) except as otherwise required by Law, treat
and hold as confidential any information relating to trade secrets, processes,
patent and trademark applications, product development, price, customer and
supplier lists, pricing and marketing plans, policies and strategies, details of
client and consultant contracts, operations methods, product development
techniques, business acquisition plans, new personnel acquisition plans and any
other confidential information relating to the Business, the Companies and each
Subsidiary of the Companies and (ii) not to use any of the confidential
information described above for the purpose of soliciting any customer of or
otherwise competing with the Business. Except as otherwise expressly permitted
by this Agreement or otherwise required by Law, following the termination of the
Transition Services Agreement, Seller agrees to use its reasonable efforts to
return to the Companies or destroy all confidential information referred to
above that exclusively concerns the Business.
(e) Subject to the provisos set forth in subsection (a) above, prior
to the Closing Date, Seller agrees to keep Buyer reasonably informed, on a
current basis, about significant developments in the business, operations,
assets, liabilities or financial condition of the Companies and their respective
Subsidiaries, other than changes affecting the Commercial Mobile Radio Service
industry generally and changes in the general economic condition of the Missouri
Market. Without limiting the generality of the foregoing, but subject to the
provisos set forth in subsection (a) above, Seller shall, and shall cause the
Companies and their Subsidiaries to (a) deliver to Buyer on a monthly basis
through the Closing Date financial statements for Cybertel Cellular in the
format used to prepare the quarterly financial reports for partners in such
partnership and (b) deliver to Buyer on a monthly basis through the Closing Date
the regularly prepared management reports related to Cybertel RSA provided to
AMCI.
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(f) During the period beginning on the date hereof and ending on the
Closing Date, Seller shall cause the Companies and their Subsidiaries to provide
notice to Buyer, if Seller, the Companies or any of their Subsidiaries receive
written notice from any Governmental Entity alleging the material violation of
any applicable Environmental Law which affects the Business or any of its
properties.
Section 6.2 Conduct of Business. During the period from the date
hereof to the Closing, except (x) as otherwise expressly contemplated by this
Agreement, (y) as set forth on Schedule 6.2, or (z) as Buyer shall otherwise
agree in writing (such agreement not to be unreasonably withheld or delayed),
Seller covenants and agrees that it shall and shall cause the Companies and
their respective Subsidiaries to operate the Business in the ordinary course
consistent with past practice and to use reasonable best efforts to preserve
intact the business and relationships of the Business, the Companies and their
respective Subsidiaries with third parties including distributors, and Seller
shall not (to the extent relating exclusively to the Business) and shall cause
the Companies and their respective Subsidiaries to not:
(i) enter into any lease or sublease agreements with an Affiliate
except with respect to co-location of paging systems in the form provided
to Buyer by Seller on the date hereof;
(ii) sell, lease or otherwise dispose of any capital assets for
consideration in excess of $500,000 individually or $5,000,000 in the
aggregate during any twelve month period;
(iii) except in the ordinary course of business consistent with past
practice and in an amount not to exceed $1,000,000 in the aggregate, incur
or assume any indebtedness for borrowed money or guarantee any such
obligations that is not satisfied prior to Closing;
(iv) except as required by Law or any collective bargaining agreement
or as a result of any change or modification to a Benefit Plan not
principally related to the Companies or their respective Subsidiaries,
grant material salary or wage increases, enter into any employment
contracts, or modify, amend or terminate any
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Benefit Plan in any manner that materially increases the amount of the
liability attributable to the Companies or their Subsidiaries in respect of
such plan;
(v) issue, sell, pledge, dispose of or encumber, repurchase or
redeem any shares of, or securities convertible into or exchangeable or
exercisable for, or options, warrants, calls, commitments or rights of any
kind to acquire any shares of its capital stock or the capital stock or
other equity interests of its Subsidiaries;
(vi) in any material respect amend their respective certificates of
incorporation, by-laws, partnership agreements or other similar
organizational documents, except as required pursuant to the terms thereof;
(vii) split, combine or reclassify their respective outstanding
shares of capital stock;
(viii) merge or consolidate with any other Person or acquire assets of
any other Person outside of the ordinary course of business with a fair
market value in excess of $10,000,000 individually or in the aggregate,
except for any transaction between the Companies and their Subsidiaries;
(ix) make any material loan, advance or capital contributions to or
investments in any Person except for loans, advances or capital
contributions to or investments in Subsidiaries or other Persons in which
the Companies or their Subsidiaries hold equity interests or capital
contributions required under the organizational documents of the
Subsidiaries or the other Persons in which the Companies or their
Subsidiaries hold equity interests;
(x) (1) enter into any Contract that, if existing on the date
hereof, would be required to be listed on Schedule 3.18 or Schedule 3.10(a)
pursuant to clauses (i), (ii), (vii), (xii) or (xiv) of Section 3.10; or
(2) other than in the ordinary course of business, terminate, cancel, waive
or fail to exercise rights to renew or extend (a) any Contract which is
both material and described in (A) Section 3.18
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(Affiliate Agreements), if and to the extent such Contract is anticipated,
pursuant to this Agreement, to be in effect for the benefit of the
Companies and/or their Subsidiaries following the Closing or (B) clauses
(i), (ii), (iv), clause (vi) as it relates to leases of cell sites, (vii)
and (xi) of Section 3.10 or (b) the Contracts listed on Schedule 3.10(a)
pursuant to clauses (viii) and (ix) of Section 3.10;
For purposes of this clause (x), any Contract that, in accordance with
Section 6.7 or Section 6.14, will on or prior to the Closing Date be
transferred or assigned, in whole or in part, to the Companies, shall, when
entered into, waived or modified by Seller or an Affiliate of Seller for or
on behalf of the Companies, be deemed to have been entered into, waived or
modified by the Companies;
(xi) make any material change in accounting policies or procedures,
other than actions in the ordinary course of business consistent with past
practice or except as required by GAAP;
(xii) pay, loan or advance any amount to, or sell, transfer or lease
any properties or assets to, or enter into any agreement or arrangement
with, any of its officers or directors or, if material, to Affiliates
outside of the ordinary course of business except for directors' fees or
compensation to officers;
(xiii) initiate communications with customers of the Business with
respect to this transaction except as required by Law or in accordance with
communications plans developed in consultation with Buyer;
(xiv) fail to initiate appropriate steps to renew any Communications
License that is scheduled to terminate within 30 calendar days after the
Closing Date unless such failure would not be material;
(xv) create any material Encumbrance on any material asset other
than in the ordinary course of business consistent with past practice;
(xvi) make any material Tax election or adopt a method of Tax
accounting that is inconsistent with
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elections made or methods used in prior periods that would result in a
material adverse consequence to Buyer, the Companies or their Subsidiaries
after the Closing (including without limitation any deferral of income or
acceleration of Tax benefits); or
(xvii) authorize or enter into an agreement to do any of the
foregoing.
Notwithstanding the foregoing in this Section 6.2, to the extent Seller, the
Companies or their Subsidiaries are required to take, or forbear from taking,
any action as a result of (x) conditions imposed on Parent, SBC or any of their
Subsidiaries by any Governmental Entity in connection with the Merger or (y)
fiduciary duties to third parties, and such action or forbearance would
otherwise violate any provision of this Section 6.2, such action or forbearance
shall not be deemed to constitute a breach of Section 6.2 except for purposes of
Article VII. If reasonably practicable, Seller shall provide Buyer with notice
prior to taking or forebearing to take any such action pursuant to the preceding
sentence or, if not practicable, as promptly as reasonably practicable, after
taking or forebearing to take any such action.
Section 6.3 Registrations, Filings and Consents. (a) AMCI, Seller and
Buyer shall cooperate with each other and use (and shall cause their respective
Subsidiaries to use) all their respective reasonable best efforts to take or
cause to be taken all actions, and do or cause to be done all things, necessary,
proper or advisable on its part under this Agreement and applicable Laws to
consummate and make effective the transactions contemplated by this Agreement as
soon as reasonably practicable, including preparing and filing as promptly as
reasonably practicable all documentation to effect all necessary applications,
notices, petitions, filings and other documents and to obtain as promptly as
reasonably practicable all consents, registrations, approvals, permits and
authorizations necessary or advisable to be obtained from any third party and/or
any Governmental Entity in order to consummate the transactions contemplated by
this Agreement. Seller and Buyer agree to use their respective best efforts to
provide any information requested by any Governmental Entity pursuant to the
Consent Decree. In addition to the foregoing, Seller and Buyer, as applicable,
agree to use their
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respective best efforts to file promptly and in any event within twenty-five
(25) Business Days following the date of this Agreement (i) in the case of
Buyer, all documentation, filings and other documents necessary to obtain a
Certificate of Convenience and Necessity to enable it to conduct the operations
of the Companies or any of their respective Subsidiaries from and after the
Closing, (ii) the notification and report form, if any, required for the
transactions contemplated by this Agreement and any supplemental information
required in connection therewith pursuant to the HSR Act, and (iii) any required
application, report or other filing or request for approval or notifications
with the FCC and any state regulatory authority from whom consent or clearance
is required to be obtained in connection with the transactions contemplated
hereby; provided, that neither Buyer nor Seller shall be deemed to be in breach
of this Agreement if any such filing is not made within twenty-five (25)
Business Days. Subject to applicable Laws relating to the exchange of
information, Buyer and Seller shall have the right to review in advance, and to
the extent practicable each will consult the other on, all the information
relating to Seller or the Companies or Buyer, as the case may be, and any of
their respective Subsidiaries, that appear in any filing made with, or written
materials submitted to, any third party and/or any Governmental Entity in
connection with the transactions contemplated by this Agreement. In exercising
the foregoing right, each of the Buyer and Seller shall act reasonably and as
promptly as reasonably practicable.
(b) Buyer and Seller each shall, upon request by the other, furnish
the other with all information concerning itself, its Subsidiaries, directors,
officers and stockholders and such other matters as may be reasonably necessary
or advisable in connection with any statement, filing, notice or application
made by or on behalf of Seller, the Companies, Buyer or any of their respective
Subsidiaries or Affiliates to any third party and/or any Governmental Entity in
connection with the transactions contemplated by this Agreement.
(c) Buyer and Seller each shall keep the other apprised of the status
of matters relating to completion of the transactions contemplated hereby,
including promptly furnishing the other with copies of notice or other
communications received by Buyer or Seller, as the case may
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be, the Companies or any of their respective Subsidiaries, from any third party
and/or any Governmental Entity with respect to the transactions contemplated by
this Agreement (other than the Merger).
(d) Without limiting the generality of the undertakings pursuant to
this Section 6.3, Seller (in the case of clauses (i) and (iii)) and Buyer (in
all cases set forth below) agree to take or cause to be taken, including by
causing its Affiliates to take, the following actions: (i) provide promptly to
any and all federal, state, local or foreign court or Governmental Entity with
jurisdiction over enforcement of any applicable antitrust laws or
telecommunications laws (each a "Government Regulatory Entity") information and
documents requested by any Government Regulatory Entity or necessary, proper or
advisable to permit consummation of the transactions contemplated by this
Agreement; (ii) the proffer by Buyer of its willingness (w) to sell or otherwise
dispose of, or hold separate and agree to sell or otherwise dispose of, such
interests in overlapping wireless properties as the relevant Government
Regulatory Entity may require or (x) to hold separate its interests in the
Companies and their Subsidiaries pending the sale or other disposition of such
interests in such overlapping wireless properties or another resolution of the
pertinent overlaps satisfactory to the relevant Governmental Entity and, (y) in
the case of either (w) or (x) to accept as conditions to relevant approvals
requirements that it agree in the future to take the steps contemplated by
clauses (w) and (x) above in the event it acquires such interests in such
overlapping wireless properties and, (z) in the case of either (w) or (x) to
accept as conditions to relevant approvals general requirements that it operate
the Business in a vigorous, competitive manner and similar qualitative
conditions (including in each case (w), (x), (y) or (z) above, using reasonable
best efforts to enter into agreements or stipulations with the relevant
Government Regulatory Entity reflecting the foregoing in any such case, no later
than 220 days from the date hereof), if such action(s) shall be reasonably
necessary to obtain any consent required from the relevant Government Regulatory
Entity or to prevent or avoid the commencement of a proceeding to delay,
restrain, enjoin or otherwise prohibit consummation of the transactions
contemplated hereby by any Government Regulatory Entity; and (iii) take
promptly, in the event that any permanent or preliminary injunction or
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other order is entered or becomes reasonably foreseeable to be entered in any
proceeding that would make consummation of the transactions contemplated by the
terms of this Agreement unlawful or that would prevent or delay consummation of
the transactions contemplated hereby, any and all steps (including the appeal
thereof, the posting of a bond or the taking by Buyer of the steps contemplated
by clause (ii) of this paragraph) necessary to vacate, modify or suspend such
injunction or order so as to permit such consummation on a schedule as close as
possible to that contemplated by this Agreement; provided, that nothing, set
forth in this Section 6.3 shall be deemed to require Seller to take any action
that it concludes in its sole discretion is reasonably likely to materially
reduce the benefits either SBC or Parent expects to realize from the Merger.
Section 6.4 Employee Benefit Plans. (a) As of the Closing Date, Buyer
shall continue, or shall cause to be continued, the employment of all employees
who are employed by the Companies or any of their Subsidiaries immediately prior
to the Closing Date (the "Transferred Employees") at the same annual base rate
of salary as in effect on the Closing Date. Buyer agrees that, for a period of
at least 12 months following the Closing Date, it shall, or it shall cause the
Companies and their respective Subsidiaries to, provide the Transferred
Employees with employee compensation and benefit plans, programs and policies
that will provide a level of benefits substantially comparable in the aggregate
to the Benefit Plans listed on Schedule 3.14(a) as in effect on the date hereof
for the Transferred Employees. Notwithstanding the above aggregation, Buyer
agrees that it shall cover the Transferred Employees under the Buyer Parent's
standard severance plan for comparable employees for no less than 12 months
following the Closing Date.
(b) Transferred Employees shall be given credit for all service with
the Companies, their respective Subsidiaries, Parent and Seller and their
respective Affiliates (including any other service credited for purposes of the
Benefit Plans) under all employee benefits plans, programs and policies of Buyer
in which they become participants, to the extent such service was recognized
under Seller's or its Affiliates' comparable benefit plans, solely for purposes
of eligibility, vesting, vacation entitlement and severance benefits. Buyer
shall cover Transferred Employees in a medical, dental and health plan
maintained by Buyer or any
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of its Subsidiaries effective as of the Closing Date and Buyer shall cause such
plan to (i) waive any preexisting condition limitations for conditions covered
under the applicable medical, health or dental plans of Parent or its Affiliates
which cover the employees of the Companies and their respective Subsidiaries and
(ii) honor any deductible and out of pocket expenses incurred by such employees
and their beneficiaries under the applicable medical, health or dental plans of
Parent or its Affiliates which cover the employees of the Companies and their
respective Subsidiaries during the portion of such calendar year preceding the
Closing Date. If Transferred Employees become eligible to participate in a group
term life insurance plan maintained by Buyer or any of its Subsidiaries in the
year in which the Closing Date occurs, Buyer shall cause such plan to waive any
medical certification for such employees up to the amount of coverage the
employees had under the life insurance plan of Seller and its Affiliates (but
subject to any limits on the maximum amount of coverage under Buyer's life
insurance plan).
(c) Effective as of the Closing Date, Buyer shall take all actions
necessary to cause the defined contribution plan designated by Buyer (the "Buyer
Savings Plan") to permit each Transferred Employee who is a participant in the
Parent Savings Plan for Salaried Employees or the Parent Savings and Security
Plan for Non-Salaried Employees (collectively, the "Seller Savings Plan") as of
the Closing Date to effect a direct rollover of the taxable portion of such
participant's accrued benefits under the Seller Savings Plan to the Buyer
Savings Plan. In connection with any such direct rollover elected by any such
Transferred Employee, Buyer shall allow any such employee's outstanding loan and
related promissory note under the Seller Savings Plan to be directly rolled-over
into the Buyer Savings Plan.
(d) Buyer agrees that it shall cause bonus payments to be made to the
bonus-eligible Transferred Employees (as determined by Seller) for performance
in the calendar year in which the Closing occurs, based upon (i) for the portion
of the calendar year through the Closing Date, each eligible Transferred
Employee's total target bonus in effect immediately prior to the Closing Date,
adjusted by reference to the financial performance of Parent, AMCI and/or
Parent's Affiliates, as the case may be, that would have applied to adjust such
Transferred
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Employee's target bonus had the Transferred Employee remained employed by Seller
or any of its Affiliates through the payment date pro-rated through the Closing
(as directed by Seller) and (ii) for the portion of the calendar year following
the Closing Date, the cash incentive payment determined by Buyer, in its
discretion, provided however, that each bonus-eligible Transferred Employee's
total target bonus for the calendar year in which the Closing occurs shall be no
less than was established by AMCI. Such payments shall be made by Buyer as soon
as practicable after Buyer is informed by AMCI of the bonus amounts or the rate
of payout (e.g., 100% of target, 120% of target, etc.) being paid by AMCI. If
the Closing Date occurs in the calendar year 2000 prior to the date on which the
bonus-eligible Transferred Employees' bonuses based on 1999 performance are
paid, Buyer also agrees that it shall cause bonus payments to be made to each
bonus-eligible Transferred Employee in an amount equal to the bonus payment
which such Transferred Employee would have received had such Transferred
Employee remained employed with Seller or its Affiliates on such payment date.
Such payments shall be made by Buyer as soon as practicable after Buyer is
informed by Seller of the bonus amounts. Seller agrees that the Closing Working
Capital shall reflect the portion of such bonus amounts accrued, solely for
accounting purposes, as of the Closing Date for the Transferred Employees at
target (the "Seller's Accrual"). To the extent that the Seller's Accrual is less
than the sum of (i) the actual amounts payable by Buyer in respect of bonus
payments under this Section 6.4(d) with respect to the calendar year in which
the Closing occurs, divided by 365 and multiplied by the number of days elapsed
in the calendar year in which the Closing occurs through the Closing Date, and
(ii) if the Closing occurs in calendar year 2000, the amount, if any, of any
1999 bonuses not paid prior to the Closing, Seller shall reimburse Buyer for
such shortfall. To the extent that the Seller's Accrual taken into account in
determining Closing Working Capital is in excess of the sum of (i) the actual
amounts payable by Buyer in respect of bonus payments under this Section 6.4(d)
with respect to the calendar year in which the Closing occurs, divided by 365
and multiplied by the number of days in the applicable calendar year in which
the Closing occurs elapsed through the Closing Date, and (ii) if the Closing
occurs in calendar year 2000, the amount, if any, of any 1999 bonuses not paid
prior to the Closing, Buyer shall reimburse Seller for such surplus.
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(e) Seller, AMCI or Parent, as applicable, shall retain sponsorship
of the Benefit Plans following the Closing Date. Following the Closing Date, the
Companies and their respective Subsidiaries shall not be participating employers
in any of the Benefit Plans and shall have no further liabilities with respect
to the Benefit Plans. Except as provided in the financial statements underlying
the Closing Working Capital or Closing Long Term Liabilities, there shall be no
transfer of assets or liabilities with respect to the Benefit Plans. Seller and
its Affiliates shall be responsible for "qualifying events" within the meaning
of Section 603 of ERISA or Section 4980B(f) of the Code that occur on or before
the Closing Date and for any continuation coverage resulting from such
qualifying events.
(f) Seller and its Affiliates shall not take or fail to take any
action if such act or failure to act would be reasonably likely to result in a
change in the composition of the employees of the Companies or any of their
respective Subsidiaries outside of the ordinary course of business; provided,
however, that Seller and its Affiliates may not hire any such employee into a
different Affiliate of Seller (including by way of promotion or transfer) if
such action would prevent such employee from becoming a Transferred Employee as
of the Closing Date.
Section 6.5 Retention of Books and Records. Buyer shall cause the
Companies and their respective Subsidiaries to retain, until all applicable tax
statutes of limitations (including periods of waiver) have expired, all books,
records and other documents pertaining to the Companies and their respective
Subsidiaries that relate to the period prior to the Closing Date that are
required to be retained under current retention policies of Buyer and to make
the same available after the Closing Date for inspection (at an office of the
Companies or any of their respective Affiliates designated by Seller) and
copying by Seller or its agents at Seller's expense, during regular business
hours and upon reasonable request and upon reasonable advance notice. After the
expiration of such period, no such books and records shall be destroyed by Buyer
if Seller has previously requested in writing (with reasonable detail) that such
books and records be preserved. Seller agrees that such records will be kept
strictly confidential and used only for tax or litigation purposes.
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Section 6.6 Consent Decree. Buyer acknowledges that the conditions to
the consummation of the transactions contemplated by this Agreement may not be
satisfied or waived at the Effective Time (as defined in the Merger Agreement)
and that the Consent Decree effectively requires Parent in connection with the
consummation of the Merger to transfer the Shares to a Person to hold the Shares
following the Effective Time for the primary purpose of disposing of the Shares
(a "Permitted Shares Transferee"). Buyer agrees that Seller may, subject to
Section 10.4, assign title to the Shares to a Permitted Shares Transferee in
accordance with the terms of the Consent Decree. Buyer acknowledges that it has
been provided with a copy of the Consent Decree and agrees to be bound by the
provisions of Section X thereof as if Buyer were a "defendant" therein. Buyer
agrees that, notwithstanding anything else in this Agreement to the contrary, to
the extent Seller, the Companies or their Subsidiaries are required to take or
forbear from taking, any action in connection with the requirements of the
Consent Decree or to avoid acting in violation of the Consent Decree, and such
action or forbearance would otherwise violate this Agreement, such action or
forbearance shall not be deemed to constitute a violation of this Agreement for
any purpose other than Article VII.
Section 6.7 Company Assets. On or before the Closing Date, either AMCI
or Seller, as applicable, shall, transfer the assets set forth on Part A of
Schedule 6.7 to the Companies or their Subsidiaries (subject to Section 6.13 in
the case of any Contracts listed thereon).
Section 6.8 Intellectual Property. Buyer acknowledges and agrees that
nothing in this Agreement grants or shall be deemed to grant to Buyer, the
Companies or their Affiliates any license to, or transfer of ownership interests
in, any patents, copyrights or trade secrets of Parent or any of its Affiliates
other than the Companies and their Subsidiaries.
Section 6.9 Resignations. Seller shall deliver to Buyer the
resignations of all directors of the Companies and their respective Subsidiaries
from their position as directors of the Companies or their respective
Subsidiaries, as the case may be, at or prior to the Closing Date.
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Section 6.10 Partnership Agreements. Until the Closing, Seller agrees
to cause the Companies and their Subsidiaries to comply with the provisions
contained in the organizational documents of the Persons in which the Companies
and their Subsidiaries (including, in the case of the Companies, the
Subsidiaries of the Companies) have a direct or indirect equity interest
(including any provisions relating to transfer restrictions). Each of AMCI and
Seller agrees that it will not, without the consent of Buyer, take any action
not required by Law or the terms of the applicable partnership agreement with
respect to determining or agreeing to the price or other terms for the purchase
of any partnership interest in connection with any change of control. AMCI,
Seller and Buyer further agree that if the transactions contemplated by this
Agreement result in any sale of a partnership interest after the Closing and
Seller or AMCI receives any proceeds in connection with a partner ship interest
owned by Buyer in any Subsidiary of the Companies, then AMCI or Seller, as
applicable, shall deliver any proceeds received in respect of such partnership
interest to Buyer against delivery of the partnership interest to the person
entitled to receive such partnership interest.
Section 6.11 Litigation. (a) From and after the Closing, Buyer and its
Subsidiaries, on the one hand, and AMCI, Seller and its Subsidiaries on the
other shall give to one another and their respective representatives reasonable
access, during normal business hours and upon reasonable advance notice, to
their Subsidiaries, to their officers, directors and employees and their
respective books and records in connection with all matters arising from, in
connection with or relating to any claim, suit, investigation or proceeding
relating to the business of the Companies or their Subsidiaries and for which
the party seeking information or access may (after the Closing) have any
liability (including liability through indemnification).
(b) From and after the Closing, the Companies and their Subsidiaries
will indemnify and hold Seller and its Affiliates harmless against any damages
paid by Seller and its Affiliates to third parties, or any amounts paid by
Seller and its Affiliates to third parties in settlements, which damages were
determined to be owing by a final decision of a court of competent jurisdiction
or which settlement amounts were incurred pursuant to a settlement approved by
Buyer, such approval not to be unreasonably
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withheld or delayed, if and to the extent that (i) the litigation out of which
such final decision or settlement arose relates to the Business and only to the
extent such damages or other amounts relate to the Business and (ii) Buyer would
not have been entitled to indemnification hereunder if such damages or amount
paid in settlement had been paid by Buyer, the Companies or their Subsidiaries.
Section 6.12 Certain Transactions. From the date hereof until the
Closing Date, Buyer shall not and shall cause its Affiliates not to enter into
any agreement, arrangement or transaction which would be reasonably likely to
interfere with promptly obtaining all Governmental Consents to the transactions
contemplated hereby.
Section 6.13 Contracts. (a) Seller and AMCI agree that they shall use
their respective reasonable best efforts, and cause its Subsidiaries to use
their reasonable best efforts, to (i) have the Contracts listed in Part A of
Schedule 6.13 assigned (to the full extent related to the Business) to either of
the Companies or a Subsidiary of one of the Companies on or prior to the Closing
Date and to obtain all consents required for such assignments or enter into a
Contract for the same goods, property or services provided on terms
substantially identical to such Contracts on behalf of one of the Companies or a
Subsidiary of any of the Companies, as applicable, (ii) have either of the
Companies or a Subsidiary of one of the Companies enter into a Contract
substantially similar to those set forth on Part B of Schedule 6.13 (where
applicable, entered into on a basis to proportionately reflect the benefits (and
corresponding obligations) received by either of the Companies or the applicable
Subsidiary as of the time of entry into such Contract) on or before the Closing
Date and (iii) obtain all consents of third parties to any Contracts of the
Companies and their Subsidiaries required in connection with the consummation
of the transactions contemplated by this Agreement and the Ancillary Agreements.
Buyer agrees to use its reasonable best efforts to assist Seller, the Companies
and their Subsidiaries in effecting the transactions described above. Buyer and
Seller acknowledge that in taking the actions described above, payments to
counterparties to certain Contracts may be required. In using their reasonable
best efforts as provided above Buyer and Seller agree that (i) Seller and AMCI
(together) shall be required to pay the first $2,000,000 of any such amounts
paid to third parties and (ii) any such amounts approved by
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Buyer in excess of $2,000,000, but not to exceed an additional $6,000,000, shall
be paid 50% by Seller and AMCI (together) and 50% by Buyer and for the avoidance
of doubt Seller's and AMCI's aggregate obligation to pay such amounts shall not
exceed $5,000,000 (five million dollars).
(b) To the extent the Companies or any of their Subsidiaries are not
parties to any of the Contracts listed on Schedule 6.13 as of the Closing Date
or an alternative arrangement as provided in Section 6.13(a) has not been
established, AMCI agrees at the written request of Buyer to use its reasonable
best efforts to provide the Companies and their Subsidiaries the benefits of
such Contracts pursuant to which the Companies and their Subsidiaries were
provided benefits prior to the Closing Date for a period not to exceed the term
of such Contract, subject to clause (d) below.
(c) To the extent any Contract listed or described in Part C of
Schedule 6.13 is not assigned to the Companies or their Subsidiaries, or, where
applicable, a new Contract substantially similar to a Contract set forth on
Schedule 6.13 has not been entered into by the Companies or their Subsidiaries,
on or before the Closing Date, or in either case such Contract is not in full
force and effect without material default thereunder on the Closing Date, AMCI
agrees to indemnify and hold harmless Buyer, the Companies and their
Subsidiaries for 50% of any Losses incurred by them as a result thereof. Any
such non-assignment or failure shall not be a breach of this Agreement for
purposes of Article VII hereof and the foregoing indemnification shall be
Buyer's sole remedy for any failure by AMCI or Seller to obtain any consent to
the assignment of any Contract listed on Schedule 6.13, the assignment of any
such Contract or a replacement for any such Contract in the name of Companies
and their Subsidiaries.
(d) From and after the Closing Date, Buyer agrees to assume and
discharge all obligations arising out of or under any Contracts (i) assigned to
the Companies or their Subsidiaries in accordance with this Section 6.13, or
(ii) under which the Companies and the Subsidiaries receive benefits after the
Closing Date pursuant to Section 6.13(b), but in each case only to the extent
such obligations relate to the Business (with an equitable proportionate
allocation made of any obligations under such Contract to the extent they relate
in part to the Business and in part to other
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businesses of the Seller or its Affiliates), and provided that nothing set forth
herein is intended to modify, as between AMCI and Seller on the one hand, and
Buyer and its Subsidiaries on the other hand, any risk allocation arrangements
set forth elsewhere in this agreement (such as the representations and
warranties and indemnities set forth herein) and for purposes of such
representations, warranties, indemnities and other provisions all Contracts
described in clauses (i) and (ii) hereof shall be deemed to have been assigned
to, or in the name of, the Companies and their Subsidiaries prior to the Closing
Date.
Section 6.14 Transition Services. On the Closing Date, Buyer and AMCI
shall enter into the Transition Service Agreement in the form of Exhibit A
hereto.
Section 6.15 Roaming Agreement. On the Closing Date, Buyer and AMCI
shall enter into the Roaming Agreement in the form of Exhibit B hereto.
Section 6.16 Non-Solicitation. (a) Each of AMCI and Seller agrees for
the eighteen month period beginning on the Closing Date, it shall not, and shall
not permit any of its Affiliates to, directly or indirectly, (i) enter into any
agreements relating to the wireless telephone service business with any
agent/distributor who distributes products or services of the Business
(excluding any reseller of products and services of the Business) in the
Missouri Market as of the date hereof or during the period thereafter and prior
to the Closing Date or otherwise interfere or attempt to interfere with any
relationships or arrangements of the Companies and their Subsidiaries relating
to the Business with such agents, (ii) engage in any solicitation targeted at
resellers of products and services of the Business in the Missouri Market as of
the Closing Date, (iii) except as provided in Section 6.20 (Employee Customers),
engage in any solicitation targeted at customers of the Business as of the date
of this Agreement or during the period thereafter prior to the Closing Date, or
(iv) solicit, hire or employ any Transferred Employees for employment; provided,
however, that this Section 6.16 shall not prevent Seller or any of its
Affiliates from (x) engaging in a general solicitation for customers, or (y)
engaging in a solicitation directed at, or hiring or employing, any Transferred
Employee whose employment has been involuntarily terminated on or after the
Closing Date.
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(b) Each of AMCI and Seller agrees for the eighteen month period
beginning on the Closing Date, it shall not, and shall not permit any of its
Affiliates to, directly or indirectly (i) enter into any Contracts for the
provision inside or outside the Missouri Market of products and services of the
type provided by the Business or for the provision of wireless telephone service
(except that SBC may continue to serve and renew existing Contracts of SBC and
its Subsidiaries with such customers) with any In Market National/Large Accounts
or (ii) enter into any Contracts with other National/Large Accounts providing
for the provision within the Missouri Market of products and services of the
type provided by the Business unless such Contracts have terms and conditions
that retain for the Companies and their Subsidiaries the lines of such customers
(either through arrangements with the Companies or their Subsidiaries or by
using a reseller that, is not affiliated with AMCI or Seller, of the service of
the Companies or their Subsidiaries). Seller, AMCI and Buyer agree that for
National/Large Accounts with lines both inside and outside the Missouri Market
and, if the Chicago and Central Illinois Transaction has been completed, in the
Chicago Market and the Central Illinois Market, they shall cooperate to continue
to provide service to such customers on the same terms as in existing Contracts
(without giving effect to any renewal or extension thereof). On or before the
Closing Date, Seller or AMCI, as the case may be, shall assign or cause to be
assigned to the Companies or their Subsidiaries existing Contracts for the
provision of products and services of the Business with National/Large Accounts
that have lines only in the Missouri Markets or, if the Chicago and Central
Illinois Transaction has been completed, in the Chicago Market and Central
Illinois Market and all other Contracts which include only customers of the
Business with lines only in the Missouri Market (or, if the Chicago and Central
Illinois Transaction has been completed, only such customers and customers with
lines only in the Chicago Market and the Central Illinois Market).
(c) Buyer, AMCI and Seller agree that promptly following the date
hereof they shall organize a transition team, chaired by a representative of
Seller and including equal representation of Buyer and Seller, for the purposes
of (i) developing a detailed plan for servicing National/ Large Accounts with a
goal of maximizing revenue retention for such accounts, (ii) developing a plan
to handle the accounts of Business Customers (other than National/Large
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Accounts) with lines both in the Missouri Market and the Chicago Market and the
Central Illinois Market, on the one hand, and in the remainder of Seller's
wireless telephone service business on the other hand, it being understood that
unless otherwise agreed, lines in the Missouri Market will be assigned to the
Companies or their Subsidiaries and lines outside the Missouri Market will be
retained by Seller and (iii) coordinating the obtaining of vendor and other
third party contracts and consents.
(d) Buyer agrees that after the Closing it will cooperate, and cause
the Companies and their Subsidiaries to cooperate, in entering into commercially
reasonable arrangements that will permit Seller and its Affiliates to offer
National/Large Accounts that are not In Market National Large Accounts a package
of services that includes products and services of the type provided by the
Business to the extent necessary to retain lines of customers of the Business as
contemplated in subsection (b)(ii) above.
Section 6.17 Intercompany Obligations. Buyer acknowledges and Seller
and AMCI agree that not later than the day prior to the Closing Date all
intercompany obligations and agreements between the Companies and their
Subsidiaries, on the one hand, and Seller and its other Affiliates, on the other
hand, shall be settled and/or terminated so that at the close of business on the
day prior to the Closing Date no such intercompany obligations shall remain
outstanding other than those intercompany arrangements set forth in the
Ancillary Agreements, those set forth on Schedule 6.13 and intercompany payables
incurred in the ordinary course and taken into account on the Closing Statement
or in the Closing Long Term Liabilities.
Section 6.18 Customer Communications and Billing. AMCI agrees that
prior to the Closing Date it shall (A) provide customers of the Business
receiving bundled billing with a notification, in a form approved by Buyer, such
approval not to be unreasonably withheld or delayed, disclosing the possibility
of a transfer of the Business to Buyer and explaining that after the Closing
bills for wireless telephone service charges will be unbundled from bills for
wireline telephone, paging and other services and (B) use reasonable best
efforts to take all actions necessary to be able to send customers of the
Business unbundled bills for wireless telephone services not
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later than five business days after the Closing (subject to normal billing
cycles).
Section 6.19 Alternative Transaction Structure. Seller and Buyer agree
that (a) in lieu of making the Section 338(h)(10) Election, Seller may effect,
and cause the Companies and their Subsidiaries to effect, in whole or in part,
one of the alternative transactions set forth in Schedule 6.19(a) (the
"Alternative Transaction") in order to provide Buyer with a "step-up" in tax
basis of the assets (tangible and intangible) equivalent to the step-up that
would have resulted from the Section 338(h)(10) Election (the "Step Up"), (b)
after the Closing Date, Seller shall indemnify and hold harmless Buyer from and
against any and all Losses arising out of or relating to the implementation of
the Alternative Transaction in lieu of making the Section 338(h)(10) Election
(which for these purposes includes the loss of any Tax benefits that would have
resulted from the Step-Up), (c) if the Alternative Transaction is effected, all
representations, warranties, covenants and other agreements and Seller
Disclosure Schedules shall be deemed modified to the extent necessary to
appropriately reflect the Alternative Transaction and the effects thereof, and
(d) if at any time within 90 days after the Closing, Seller determines it is
unable to effectively make the Section 338(h)(10) Election, and cannot or does
not effect the Alternative Transaction, no Section 338(h)(10) Election shall be
made, and the Purchase Price shall be reduced by the aggregate amount of the
"Step-up Tax Loss" incurred by Buyer (as defined below) with respect to the
entity or entities as to which such Step Up is not obtained (such adjustment to
be effected in accordance with Section 2.5(e)) and, if not previously paid
(through a purchase price reduction in accordance with Section 2.5(e)), Seller
shall pay to Buyer the aggregate amount of the purchase price adjustment under
this Section 6.20 together with interest on such amount at the Applicable Rate
calculated on the basis of a year of 360 days for the actual number of days
elapsed, accrued from the Closing Date up to and including the date of payment.
"Step-up Tax Loss" means with respect to any entity the amount set forth for
such entity on Schedule 6.19(b). Seller shall have the right to amend Schedule
6.19(a) to reflect an alternative structure that provides Buyer with an increase
in Tax Benefits attributable to the increase in the Tax basis of such assets
equivalent to the increase in Tax benefits that would have resulted from the
Section 338(h)(10) Election, if Buyer consents to such
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amendment (which consent shall not be unreasonably withheld or delayed).
Section 6.20 Employee Customers. Buyer acknowledges and agrees that
notwithstanding any other provision of this Agreement, (a) Parent and each
Affiliate of Parent (other than the Companies and their Subsidiaries), together
with any customer of the Business who is a director or an employee of Seller or
any of its Affiliates or a family member of such director or employee and whose
bills are paid by Parent or any Affiliate of Parent (other than the Companies or
their Subsidiaries) after the Closing will terminate, without penalty, their
purchases of products and services from the Companies and their Subsidiaries and
become customers of the competing business of SBC and (b) any customers of the
Business who are on employee pricing plans of Parent or any Affiliate of Parent
(other than Transferred Employees ultimately employed by Buyer) may receive
targeted solicitations for the provision of products and services that compete
with those offered by the Companies and their Subsidiaries and Seller or its
Affiliates may provide such Persons with products and services.
Section 6.21 Year 2000 Testing. AMCI agrees that following the date
hereof, AMCI shall cause its Subsidiaries to use reasonable best efforts, to
continue implementing the Y2K Plan in accordance with the terms thereof and
shall provide Buyer with an update on a monthly basis of the implementation
status and testing results.
Section 6.22 Transition Committees. Buyer, AMCI and Seller agree that
following the date hereof, they shall cooperate with each other and shall take
such actions as are reasonably required or requested for the purpose of
facilitating the occurrence of the following mutually agreed actions at or prior
to the Closing: (i) the transfer of the assets listed on Section 6.7 of the
Seller Disclosure Schedules and the verification of such transfers, (ii) the
implementation of the Transition Services Agreement, and (iii) the establishment
of arrangements designed to provide the Companies and their Subsidiaries with
the categories of services and arrangements and the types of assets set forth on
Schedule 3.20.
Section 6.23 Prepaid Accounts. As of the Closing, AMCI and Seller
agree that they will have terminated
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those accounts of prepaid customers of the Business to the extent relating to
the Business who have not used AMCI's or Seller's prepaid cellular service
within the prior six months.
Section 6.24 Transition Services Revisions. Between the date hereof
and the Closing Date, the Schedules to the Transition Services Agreement may be
revised in accordance with the terms of the form of Transition Services
Agreement.
Section 6.25 Restriction on Use. Buyer, AMCI and Seller hereby agree
and acknowledge as follows:
(a) subject to the restrictions set forth in subparts (b) and (c) of
this Section 6.25 (Restriction on Use), no restriction or limitation shall apply
to Seller's and Seller's Affiliate's use of the trademarks, service marks and
logos listed on Exhibit A to the Trademark License Agreement and the trade
dress, brand names, trade names and domain names associated therewith
(collectively, the "Trademarks") in connection with (i) any use of the
Trademarks outside the Missouri Market, (ii) any use of the Trademarks in the
Missouri Market other than in connection with types of business engaged in by
the Business, (iii) any advertising not specifically focused on the types of
business engaged in by the Business, and (iv) any use in conjunction with the
marketing and promotion of services offered as a package by Seller or its
Affiliates (other than services provided by the Business) which include wireless
telephone services offered by SBC and its Affiliates in the Missouri Market.
(b) For a period beginning on the Closing Date and lasting until the
expiration of thirty months after the Closing Date (the "Initial Period"),
neither AMCI nor Seller will, nor will either permit its respective Affiliates
to, use (or license others to use) the Trademarks in connection with the types
of business engaged in by the Business in the Missouri Market.
(c) Without limiting the other restrictions set forth in subpart (b)
of Section 6.26, for a period beginning on the day following the expiration of
the Initial Period and ending eighteen months thereafter (the "Subsequent
Period"), neither AMCI nor Seller will, nor will either permit its respective
Affiliates to, use (or license others
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to use) the Trademarks in connection with the types of business engaged in by
the Business in the Missouri Market; provided, that during the Subsequent Period
Seller and its Affiliates may use "Ameritech" as a modifier of the Southwestern
Xxxx name used by SBC or its Affiliates in the Missouri Market.
(d) After the expiration of the Subsequent Period, AMCI, Seller and
their respective Affiliates shall have no limitation or restriction whatsoever
on its use of any of the Trademarks.
Section 6.26 License. (a) At the Closing, Parent and Buyer shall enter
into the Trademark License Agreement in the form attached hereto as Exhibit C
granting Buyer a non-exclusive, royalty free license to use and authorize others
to use the trademarks, service marks and logos set forth as Exhibit A thereto
(the "Trademarks"), representing all trademarks, service marks and logos used in
the Business and that are the exclusive property of Seller, Parent or one of its
Subsidiaries or that Seller, Parent or one of its Subsidiaries has rights to
license or sublicense to Buyer, for a term that will end on the later of (i) six
months after the effective time of Buyer Parent's business combination with Xxxx
Atlantic or the termination of the merger agreement with respect thereto or (ii)
one year from the Closing Date, (but in no event later than December 31, 2000)
(the "Transitional Period") in the Markets solely in connection with the
Business. Parent shall also permit Buyer to make use of all trade dress as
presently used by Seller or the Companies in the Business and related to the
Trademarks on the same terms and conditions as are applicable to the Trademarks.
It is the intention of Buyer to transition to a new corporate name ("Newco"),
trademarks, service marks, trade dress and logos (the "New Marks"), for itself
as soon as practicable consistent with its overall corporate branding
strategies.
(b) Nothing in such license agreement shall be construed to allow
Buyer or any of its Affiliates to use in any manner, including without
limitation, in any corporate communications policy or program, in combination
with the Trademarks either (i) any of Buyer's or its Affiliates existing
corporate names, trademarks, service marks, trade dress or logos ("Existing
Marks"), or (ii) any New Marks; provided that Buyer may use in a manner
consistent with the existing presentation of such Trademark in the Markets and
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other trade dress "Ameritech Cellular" (and no other Trademarks) in such
combination (the "Permitted Combination") solely to communicate that Buyer or
its Affiliates are changing their corporate name or adopting new marks, in which
event Buyer or its Affiliates may not represent that Newco is the company
formerly known as Ameritech or Ameritech Cellular or any similar formulation;
and, provided further that except as specifically set forth below nothing herein
shall limit any use by Buyer and its Affiliates of Existing Marks or New Marks
in the Markets or elsewhere.
(c) Unless earlier terminated pursuant to paragraph (a) above, except
as set forth in the last sentence hereof the license granted pursuant to this
Section 6.27, and the License Agreement related hereto, shall terminate on the
date 30 days from the first date on which Buyer or any Affiliate of Buyer uses
or authorizes others to use, and such others do use, any Existing Xxxx or New
Xxxx (a) in any Permitted Combination or (b) in connection with the actual
provision of cellular telephone service or products in the Markets. Thereafter,
Buyer shall have a limited right to use, for a period to end as promptly as
reasonably practicable and in no event later than 40 days, the Trademarks to
complete its transition in the Markets to any Existing Xxxx or New Xxxx and to
sell off or otherwise utilize existing inventory and remove signage containing
trademarks, but Buyer or any Affiliate of Buyer shall not initiate any new uses
of the Trademarks during such 40-day period.
(d) In the event of any conflict between this Section 6.26 and the
Trademark License Agreement this Section 6.26 shall control.
Section 6.27 Expenditures. From the date hereof until the Closing
Date, Seller shall cause the Companies and their Subsidiaries to make
expenditures consistent in all material respects with the Cybertel Cellular
Expenditure Budgets and the Cybertel RSA Pro Forma Expenditure Budgets, as
applicable.
Section 6.28 System Identification Number. Seller and Buyer shall
cooperate with each other and AMCI shall use (and shall cause its Subsidiaries
to use) all of its reasonable best efforts to change the System Identification
Number ("SID") utilized in that portion of the Excluded Business which operates
in Missouri, to a SID
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number other than the SID number utilized in the Business (the "SID Change")
within 120 days after the Closing Date. Each of Seller and Buyer shall be
responsible for its costs incurred by it in implementing the SID Change;
provided, that Buyer shall not be required to incur any material costs in
connection with the SID Change.
Section 6.29 Partnership Interests. On or before the Closing Date,
AMCI shall either (a) transfer all interests it holds in Cybertel RSA to
Cybertel (or to its successor under the Alternative Transaction set forth in
Section 6.19, if applicable) or (b) transfer a portion of the interest it holds
in Cybertel RSA to Cybertel (or to its successor under the Alternative
Transaction set forth in Section 6.19, if applicable) and thereafter cause
Cybertel RSA to distribute the Excluded Businesses to AMCI in redemption of the
remainder of AMCI's interest in Cybertel RSA. As of the Closing Date, Cybertel
and its Subsidiaries shall, taken as a whole, directly or indirectly, own all of
the outstanding equity interests in Cybertel RSA.
Section 6.30 License for Certain Proprietary Software. To the extent
the proprietary software systems of AMCI set forth on Schedule 6.30 hereof are
(i) used to support the Business and (ii) the exclusive property of AMCI or AMCI
otherwise has rights to sublicense or convey rights to Buyer and its
Subsidiaries, AMCI agrees to grant to the Companies and their Subsidiaries at
the Closing a royalty free, non-exclusive license to use (subject to customary
restrictions that will not impair Buyer's ability to use such systems in the
wireless telephone business of the Companies and their Subsidiaries in the
Missouri Market) such proprietary software systems during the term of the
Transition Services Agreement, but only to the extent such proprietary software
is used to support the wireless telephone business of the Companies and their
Subsidiaries in the Missouri Market, such license to be freely transferrable,
subject to the limitations set forth above, to any successor of Buyer and its
Subsidiaries. At the time such license is granted, no license will be granted to
distribute such proprietary software systems to third parties or to modify or
make derivative works of any proprietary software systems licensed hereunder
other than as required to use such proprietary software systems in the conduct
of the wireless telephone business of the Companies and their Subsidiaries in
the Missouri Market. To the extent any consent from a third party is required to
grant a
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license or otherwise convey to Buyer and its Subsidiaries a right to use in any
of the systems set forth on Schedule 6.30, such consent will be pursued in
accordance with Section 6.13 and such software license shall be deemed to be
included on Parts B or C of Schedule 6.13 for purposes thereof.
Section 6.31 Further Assurances. At any time following the Closing
Date, AMCI, Seller and Buyer shall, and Buyer shall cause the Companies or any
of their respective Subsidiaries to, promptly execute, acknowledge and deliver
any other assurances or documents reasonably requested by Buyer or Seller, as
the case may be, and necessary for Buyer, AMCI or Seller, as the case may be, to
satisfy its obligations hereunder or obtain the benefits contemplated hereby.
ARTICLE VII
Conditions to Closing
Section 7.1 Conditions to Each Party's Obligation to Effect the
Transaction. The respective obligations of the parties to consummate the
transactions contemplated hereby is subject to the satisfaction or waiver on or
prior to the Closing Date of each of the following conditions:
(a) (i) The waiting period, if any, applicable to the consummation of
the transactions contemplated hereby under the HSR Act shall have expired or
been earlier terminated and the DOJ, on behalf of the United States of America,
shall have provided written notice under the Consent Decree that it does not
object to the divestiture of the Companies and their Subsidiaries to Buyer, and
(ii)(A) all notices and other filings required to be made prior to Closing by
Seller or Buyer or any of their respective Subsidiaries, with, and all permits,
authorizations, consents and approvals required to be obtained prior to Closing
by, Seller or Buyer or any of their respective Subsidiaries from, any
Governmental Entity (collectively, together with the Cellular Authorizations,
"Governmental Consents") in connection with the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby the
failure of which to be made or obtained would be reasonably likely to,
individually or in the aggregate have a Material Adverse Effect or prevent or
materially delay or
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impair the consummation of the transactions contemplated hereby and (B) the
Cellular Authorizations, in each case shall have been made or obtained (as the
case may be).
(b) No court or Governmental Entity of competent jurisdiction shall
have enacted, issued, promulgated, enforced or entered any Law (whether
temporary, preliminary or permanent) that is in effect and enjoins or otherwise
prohibits consummation of the transactions contemplated by this Agreement (an
"Order").
Section 7.2 Conditions to Obligations of Buyer. The obligation of
Buyer to consummate the transactions contemplated by this Agreement is subject
to the satisfaction or waiver by Buyer in writing on or prior to the Closing
Date of each of the following conditions:
(a) The representations and warranties of Seller contained herein
shall be true and correct as of the Closing as if made as of the Closing Date,
except for such inaccuracies as would not individually or in the aggregate be
reasonably likely to have a Material Adverse Effect (except that representations
and warranties that are made as of a specific date or as of the date hereof need
be true and correct only as of such date), and Buyer shall have received a
certificate to such effect dated the Closing Date and executed by a duly
authorized officer of Seller. For purposes of this Section 7.2, the
representations and warranties of Seller contained in this Agreement shall be
deemed to have been made without any qualification as to knowledge or
materiality and, accordingly, all references in such representations and
warranties to "material," "Material Adverse Effect," "in all material respects,"
"knowledge," "best knowledge" and similar terms and phrases (including dollar
thresholds therein) shall be deemed deleted therefrom;
(b) SBC shall have provided Buyer with a letter agreement stating that
SBC agrees to be bound after the Closing by the provisions of section 6.16 of
this Agreement applicable to Affiliates of Seller;
(c) The covenants and agreements of Seller and AMCI to be performed on
or prior to the Closing shall have been duly performed in all material respects,
and Buyer shall have received a certificate to such effect dated the
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Closing Date and executed by duly authorized officers of Seller and AMCI;
(d) Buyer shall have received an opinion from inside counsel to AMCI,
substantially in the form set forth in Exhibit D-1;
(e) Buyer shall have received an opinion from Skadden, Arps, Slate,
Xxxxxxx & Xxxx LLP, substantially in the form set forth in Exhibit D-2; and
(f) Parent shall have executed and delivered to Buyer the Trademark
License Agreement, substantially in the form of Exhibit C.
Section 7.3 Conditions to Obligations of Seller. The obligation of
Seller to consummate the transactions contemplated by this Agreement is subject
to the satisfaction or waiver in writing by Seller on or prior to the Closing
Date of each of the following conditions:
(a) The representations and warranties of Buyer contained herein shall
have been true and correct in all material respects as of the Closing, as if
made as of the Closing Date (except that representations and warranties that are
made as of a specific date or as of the date hereof need be true in all material
respects only as of such date), and Seller shall have received a certificate to
such effect dated the Closing Date and executed by a duly authorized officer of
Buyer;
(b) The covenants and agreements of Buyer to be performed on or prior
to the Closing shall have been duly performed in all material respects, and
Seller shall have received a certificate to such effect dated the Closing Date
and executed by a duly authorized officer of Buyer;
(c) The Effective Time (as defined in the Merger Agreement) shall have
occurred;
(d) Seller shall have received an opinion from inside counsel to Buyer
Parent in the form set forth in Exhibit E; and
(e) if the Closing does not occur immediately after the Effective
Time, then either (i) Parent or SBC shall have received a private letter ruling
from the
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Internal Revenue Service confirming that the Companies and any of their
Subsidiaries which are taxed as corporations for United States federal income
tax purposes are properly includible in the SBC affiliated group, or (ii) 60
days shall have elapsed since the Effective Time.
ARTICLE VIII
Termination
Section 8.1 Termination. This Agreement may be terminated at any time
prior to the Closing:
(a) by mutual written agreement of Seller and Buyer; or
(b) by either Buyer or Seller, by giving written notice of such
termination to the other party, if such other party (including, in the case of
Seller, AMCI) shall breach any of its material obligations or agreements under
this Agreement and such breach shall be incapable of cure or has not been cured
within sixty (60) days following the giving of written notice of such breach to
the breaching party; or
(c) by either Buyer or Seller, by giving written notice of such
termination to the other party, if any Order permanently enjoining or otherwise
prohibiting consummation of the transactions contemplated hereby shall become
final and non-appealable; or
(d) by either Buyer or Seller, by giving written notice of such
termination to the other, if any condition to such party's obligations hereunder
has not been satisfied or waived and the Closing shall not have occurred on or
prior to March 31, 2000 (the "Termination Date"); provided, that the terminating
party is not in material breach of its obligations under this Agreement; and;
provided, further, that the Termination Date shall be extended to September 30,
2000 (the "Extended Termination Date") if Seller provides written notice thereof
to Buyer on or prior to March 31, 2000 and on the Termination Date the
transaction under the Merger Agreement shall not have been consummated; or
(e) by Buyer, by giving written notice of such termination to Seller,
if there has been a breach of the representations and warranties of Seller
contained in this
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Agreement which (x) would result in the failure of the condition set forth in
Section 7.2(a) (Conditions to Obliga Obligations of Buyer) and (y) cannot be or
is not cured prior to the Termination Date, or, if extended, the Extended
Termination Date; or
(f) by Seller, by giving written notice of such termination to Buyer,
if there has been a breach of the representations and warranties of Buyer
contained in this Agreement which (x) would result in the failure of the
condition set forth in Section 7.3(a) (Conditions to Obligations of Seller) and
(y) cannot be or is not cured prior to the Termination Date, or, if extended,
the Extended Termination Date; or
(g) by Seller, by giving written notice of such termination to Buyer,
if the Merger Agreement shall have been terminated.
Section 8.2 Effect of Termination. In the event of the termination of
this Agreement in accordance with Section 8.1 (Termination) hereof, this
Agreement shall thereafter become void and have no effect, and no party hereto
or its respective Affiliates or their directors, officers, employees or agents
shall have any liability to the other party hereto or their respective
Affiliates, directors, officers or employees, except for the obligations of the
parties hereto contained in this Section 8.2 and in Sections 10.2 (Expenses),
10.3 (Public Disclosure) 10.11 (Notices), 10.12 (Governing Law) and 10.13
(Waiver of Jury Trial) hereof, and except that nothing herein will relieve any
party from liability for any breach of this Agreement prior to such termination.
ARTICLE IX
Survival And Indemnification
Section 9.1 Survival of Representations, Warranties, Covenants and
Agreements. The representations and warranties included or provided for (x) in
Sections 3.5 through 3.11, and Sections 3.16 (except for the last sentence of
Section 3.16 (Property and Leases) referred to in (bb) below) through Section
3.20, and Section 3.22 (Service Marks) Section 4.2 and Sections 4.4, 4.6 and 4.8
herein shall survive the Closing until the 120th day
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following the end of the first full calendar year after the Closing, (y) in
Section 3.12 (Tax Matters) herein shall survive the Closing until the expiration
of the applicable statute of limitations (including any waivers or extensions
thereof) with respect to such matters and shall expire at such time, (z) in
Sections 3.13 (Labor Matters), 3.14 (Employee Benefits) and 3.15 (Environmental
Matters) shall survive the Closing until the fourth anniversary of the Closing
Date and shall expire at such time, (aa) in Sections 3.1 (Organization and
Authority of Seller), 3.2 (Organization and Qualification of the Companies), 3.3
(Capitalization of the Companies), 3.4 (Subsidiaries of the Companies), 3.21
(Brokers and Finders), 3.23 (No Other Representations and Warranties), 4.1
(Organization and Authority of Buyer), 4.3 (Brokers and Finders), 4.5
(Securities Act), 4.7 (Investigation by Buyer) and 4.9 (No Other Representations
and Warranties) shall have no expiration date and (bb) in the last sentence of
Section 3.16 (Property and Leases) shall survive the Closing until the 180th day
following the Closing. In the event that any Claim Notice or any other written
notice of a claim shall be given hereunder within the applicable survival
period, the representations and warranties that are the subject of such
indemnity claim shall survive until such claim is finally resolved. The
covenants and other agreements contained in this Agreement shall survive the
Closing until the date or dates specified therein or the expiration of the
applicable statute of limitations (including any waivers or extensions thereof)
with respect to such matters, whichever is later. Except with respect to the
representations and warranties contained in Sections 3.21 (Brokers and Finders),
3.3 (Capitalization of the Companies), 3.4 (Subsidiaries of the Companies;
Minority Interests), 3.12 (Tax Matters) and 3.20 (Ability to Conduct Business),
in no event shall Seller be liable to Buyer for any breach of the
representations or warranties included or provided for herein or in any other
document delivered pursuant to this Agreement, unless and until all claims for
which Losses are recoverable by Buyer exceed $7,200,000 (seven million two
hundred thousand dollars) (the "Deductible") and Seller shall be liable only for
the amount by which all such recoverable Losses exceed the Deductible. In
addition, (x) except for breaches of (1) Sections 3.3 (Capitalization of the
Companies), 3.4 (Subsidiaries of the Companies) and 3.21 (Brokers and Finders),
(2) breaches of covenants and indemnities outside this Article IX and (3) the
special indemnity under clauses 9.3(a)(ii), 9.3(a)(iii), 9.3(a)(iv) and
9.3(a)(v) for which
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there shall be no limit, any payments under this Article IX by Seller to Buyer
for Losses shall not exceed in the aggregate $180,000,000 (one hundred eighty
million dollars) (the "Limit").
Section 9.2 Indemnification by Buyer. (a) For the period commencing on
the Closing Date and ending, as the case may be, upon the expiration of the
periods specified in Section 9.1 (Survival of Representations, Warranties,
Covenants and Agreements) hereof (if applicable), Buyer shall indemnify, defend
and hold harmless Seller and its Affiliates, and their respective directors,
officers, employees, shareholders and agents ("Seller Indemnified Parties")
against and in respect of all losses, damages (excluding punitive and
consequential damages, other than those claimed by third parties and actual non-
speculative lost profits of the Companies and their Subsidiaries), liabilities,
costs and expenses (including reasonable attorneys' fees and expenses incurred
in investigating, preparing or defending any claims covered hereby)
(collectively, "Losses") sustained or incurred arising out of, in connection
with or relating to any breaches of Buyer's representations and warranties set
forth in this Agreement (other than representations and warranties set forth in
Article V, as to which the indemnification provisions set forth in Article V
shall govern).
(b) Any payments pursuant to this Section 9.2 or Article V shall be
treated as an adjustment to the Purchase Price.
Section 9.3 Indemnification by Seller. (a) For the period commencing
on the Closing Date and ending, as the case may be, upon the expiration of the
periods specified in Section 9.1 (Survival of Representations, Warranties,
Covenants and Agreements) hereof (if applicable), Seller shall, subject to the
limitations set forth in Section 9.1 (Survival of Representations, Warranties,
Covenants and Agreements) hereof, indemnify, defend and hold harmless Buyer and
its respective directors, officers, employees, shareholders and agents ("Buyer
Indemnified Parties" and, collectively with the Seller Indemnified Parties, the
"Indemnified Parties") against and in respect of (i) all Losses sustained,
incurred, arising out of, in connection with or relating to any breaches of
Seller's representations and warranties set forth in this Agreement (other than
representations and warranties set forth in Article V (Tax
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Matters), as to which the indemnification provisions set forth in Article V (Tax
Matters) shall govern), (ii) Losses arising out of or relating to the matters
set forth on Schedule 9.3 to the extent set forth thereon, (iii) all Losses
incurred in connection with litigation that was omitted from the Schedules
hereto in breach of the representations set forth in Section 3.8 (Litigation)
hereof and (iv) all Losses to the extent relating to any assets, properties or
businesses of the Companies and their Subsidiaries transferred or to be
transferred to Seller or any of its Affiliates (other than the Companies and
their Subsidiaries), in connection with the transactions contemplated hereby on
or prior to the Closing Date.
(b) In addition to the foregoing, and without regard to and without
being counted in calculating the Deductible, but to be included in determining
if the Limit has been reached, from and after the Closing Seller shall
indemnify, defend and hold harmless the Buyer Indemnified Parties against and in
respect of fifty percent (50%) of all Losses in excess of $5 million per
Qualifying Customer Litigation (as defined below). A "Qualifying Customer
Litigation" is a case or group of consolidated cases with substantially
identical claims brought by customers of both the Business and customers of
similar businesses of Seller to the extent relating to the conduct of the
Business prior to the Closing Date and filed with a Court after the date hereof
and prior to the third anniversary of the Closing Date. For purposes of this
Section 9.3(b), any case filed against Seller or its Affiliates before the date
hereof which does not currently name or involve the Companies or their
Subsidiaries or the Business, but subsequent to the date hereof, is modified so
that it does name or involve the Companies or their Subsidiaries or the
Business, shall be deemed to have been filed after the date hereof. Except as
specifically provided in this Agreement, Seller shall have no liability to Buyer
with respect to any Losses to the extent relating or arising out of the conduct
of the Business on or after the Closing Date.
(c) No indemnity shall be recoverable by the Buyer Indemnified
Parties with respect to any matter to the extent such matter was reflected in
the final calculation of the adjustment to the Purchase Price, if any, pursuant
to Article II and any Losses related thereto to the extent reflected in the
final calculation of the adjustment to the
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Purchase Price shall not be counted in determining if the Deductible has been
satisfied.
(d) Any payments pursuant to this Section 9.3 or Article V (Tax
Matters) shall be treated as an adjustment to the Purchase Price.
Section 9.4 Indemnification as Sole Remedy. Following the Closing, the
indemnities provided in Article V (Tax Matters), this Article IX and Article VI
shall be the sole and exclusive remedy of the parties hereto, their Affiliates,
successors and assigns with respect to any and all claims for Losses sustained
or incurred arising out of, in connection with or relating to this Agreement and
the transactions contemplated by this Agreement, except for damages for breach
of any covenants or agreements set forth in this Agreement or any of the other
agreements contemplated hereby or for the right of the parties hereto to seek
specific performance of the obligations set forth herein.
Section 9.5 Method of Asserting Claims, Etc. (a) Except as provided in
Article V with respect to matters related to Taxes and as set forth in paragraph
(b) below, all claims for indemnification by the Indemnified Party hereunder
with respect to third-party claims shall be asserted and resolved as set forth
in this Section 9.5(a). In the event that any written claim or demand for which
Seller or Buyer, as the case may be (in such capacity, an "Indemnifying Party"),
may be liable to any Indemnified Party hereunder is asserted against or sought
to be collected from any Indemnified Party by a third party, such Indemnified
Party shall promptly, but in no event later than 15 days following such
Indemnified Party's receipt of such claim or demand, notify in writing the
Indemnifying Party of such claim or demand and the amount or the estimated
amount thereof to the extent then feasible (which estimate shall not be
conclusive of the final amount of such claim or demand) (the "Claim Notice").
The Indemnifying Party shall (i) have no liability with respect to any expenses
incurred by the Indemnified Party with respect to the relevant third-party
claims prior to the time the Claim Notice is delivered to the Indemnifying Party
and such expenses shall be deemed not to be Losses of the Indemnified Party and
(ii) be relieved of its obligations to indemnify the Indemnified Party with
respect to such claim or demand if the Indemnified Party fails to timely deliver
the Claim Notice,
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but only to the extent the Indemnifying Party is prejudiced thereby. The
Indemnifying Party shall have 30 days from the personal delivery or mailing of
the Claim Notice, whichever is later, (the "Notice Period") to notify the
Indemnified Party whether or not it desires to defend the Indemnified Party
against such claim or demand and shall during the Notice Period and thereafter
be provided by the Indemnified Party with such information relating to the claim
or demand as the Indemnifying Party shall request. All costs and expenses
incurred by the Indemnifying Party in defending such claim or demand shall be
borne by the Indemnifying Party. Except as hereinafter provided, in the event
that the Indemnifying Party notifies the Indemnified Party within the Notice
Period that it desires to defend the Indemnified Party against such claim or
demand, the Indemnifying Party shall have the sole power to direct and control
such defense. If the Indemnifying Party so elects to assume the defense of such
claim, the Indemnifying Party shall not be liable to the Indemnified Party for
any legal expenses subsequently incurred by the Indemnified Party. If any
Indemnified Party desires to participate in, but not control, any such defense
it may do so at its sole cost and expense; provided that in any action seeking
an injunction or decree which would restrict the future activity or conduct of
the Indemnified Party or any Subsidiary or Affiliate thereof, the Indemnified
Party shall be entitled to participate in the defense of such action at the
expense of the Indemnifying Party. The Indemnified Party shall not settle,
compromise or discharge a claim or demand for which it is indemnified by the
Indemnifying Party or admit to any liability with respect to such claim or
demand without the prior written consent of the Indemnifying Party (which
consent shall not be unreasonably withheld). The Indemnifying Party shall not,
without the written consent of the Indemnified Party (which consent shall not be
unreasonably withheld), settle, compromise or offer to settle or compromise any
such claim or demand on a basis which would result in the imposition of a
consent order, injunction or decree which would restrict the future activity or
conduct of the Indemnified Party or any Subsidiary or Affiliate thereof. To the
extent the Indemnifying Party shall direct, control or participate in the
defense or settlement of any third party claim or demand, the Indemnified Party
will provide the Indemnifying Party and its counsel access to all relevant
business records and other documents, and shall use its reasonable best efforts
to assist, and to cause the employees and counsel of the
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Indemnified Party to assist, in defense of such claim. If the Indemnifying Party
elects not to defend the Indemnified Party, the Indemnified Party shall have the
right to defend the claim or demand by appropriate proceedings and shall have
the sole power to direct and control such defense. In any event, the
Indemnifying Party shall have the right to participate in the defense or
settlement of any third party claim or demand for which the Indemnifying Party
may be liable hereunder at its own expense.
(b) All claims for indemnification by Seller or Buyer with respect
to litigation for which the party seeking indemnification is indemnified solely
pursuant to one or more of Sections 6.11(b), 9.3(a)(ii) or 9.3(b), and the
defense of the relevant litigation, shall be handled as contemplated in this
Section 9.5(b). Upon receipt of a summons and complaint or other notice (which
is also filed with a Court) of any such litigation from which it may be
reasonably inferred that the other party may be entitled to or required to be
provided indemnification hereunder, the receiving party shall promptly notify
the other.
(i) If and for so long as the particular litigation is of the type
described in Section 9.3(a)(ii) or 9.3(b) (without reference to the three
year limitation set forth therein) or of a type described under Section
6.11(b) in which the parties otherwise each have financial exposure not
fully covered by indemnification from the other party (without regard to
caps and deductibles), Buyer and Seller shall each retain their own counsel
and participate in the defense thereof and shall cooperate with one another
in the course thereof. In any such litigation, neither party shall enter
into a settlement adversely affecting the liability of the other without
the consent of the other, which consent shall not be unreasonably withheld
or delayed.
(ii) If and for so long as the particular litigation is one in which
only one party has a financial exposure not covered by indemnification from
the other party, then the party having such exposure shall defend and
control the defense of such litigation. With respect to the particular
cases set forth on Schedule 3.8 that relate exclusively to the Business
(that are not also set forth on Schedule 9(a)(ii)) (the "Schedule 3.8
Cases"), on the Closing
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Date Buyer agrees to assume, and Seller agrees to transfer to Buyer, the
defense thereof in accordance with this clause (ii), and Buyer shall
control such cases, provided, that, Buyer agrees to continue to utilize the
same outside counsel as are presently responsible for such cases unless it
reasonably determines such continuing representation is inadvisable. Buyer
agrees that any counsel selected to defend the Schedule 3.8 cases
controlled by Buyer shall be reasonably acceptable to Seller.
(iii) In all cases the parties shall cooperate with each other by
providing access to relevant employees and business records and otherwise
as contemplated by Section 9.5(a).
(c) In determining the amount of Losses sustained or incurred by
Buyer for purposes of the indemnification under Sections 9.3(a)(ii) or 9.3(b),
Promotional Items constituting a portion of a Loss shall be deemed to be a Loss
only to the extent of the actual cost to Buyer or its Affiliates of providing
any such Promotional Item and such Losses shall be offset by any actual profits
realized in providing such Promotional Items. For such purposes, the actual cost
shall be deemed to be the actual cost of providing the good or service
constituting the Promotional Item on a fully allocated basis to the Companies
and their Subsidiaries and shall not be deemed to include any lost profit or
xxxx-up which might be obtained if such service or product was sold to a
customer of the Companies or their Subsidiaries. For purposes of this Section
9.5(c) "Promotional Items" shall be deemed to include all non-monetary items
provided in settlement of any claim or as the result of an adjudication of any
litigation and shall be deemed to include services such as certificates for free
minutes of use, discounts on minutes of use, discounts on handsets, discounts on
other products sold by Buyer or its Affiliates and other products, goods,
services or rights to obtain any products, goods or services.
Section 9.6 Calculation of Losses. The amount of any Losses payable by
the Indemnifying Party to the Indemnified Party shall take into account any (i)
amounts recovered or recoverable by the Indemnified Party under applicable
insurance policies (with third party carriers), (ii) Tax cost incurred by the
Indemnified Party arising from the receipt of indemnity payments and (iii) Tax
benefit
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actually realized by the Indemnified Party arising from the incurrence or
payment of any such Loss.
Section 9.7 Assignment of Claims. If the Indemnified Party receives
any payment from an Indemnifying Party in respect of any Losses and the
Indemnified Party could have recovered all or a part of such Losses from a third
party (a "Potential Contributor") based on the underlying claim or demand
asserted against the Indemnifying Party, the Indemnified Party shall, to the
extent permitted by Law or any applicable contractual arrangement, assign such
of its rights to proceed against the Potential Contributor as are necessary to
permit the Indemnifying Party to recover from the Potential Contributor the
amount of such payment.
Section 9.8 Overlapping Provisions. Except as provided in the last
sentence of Section 3.15, in the parenthetical at the end of clause (i) in the
last sentence of Section 9.3(a) or in the last sentence of Section 6.13(c),
where (i) more than one representation in this Agreement is breached or
otherwise rendered inaccurate or incomplete by virtue of an event or occurrence;
(ii) more than one covenant or other provision hereunder is breached or violated
by a party's action or failure to act; or (iii) more than one indemnification
provision herein is by its terms applicable to any litigation, event,
occurrence, action, failure to act or other breach, the party seeking
indemnification or another remedy hereunder shall be entitled to proceed under
any applicable provision hereunder, and to obtain any indemnification or remedy
available thereunder, regardless of whether the indemnification or remedy
available thereunder would not have been available, or would have been available
to a lesser extent or in a lesser amount, under another provision relating
thereto. No party shall be entitled under this Section 9.8 or any other
provision of this Agreement to obtain duplicative indemnification or remedies.
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ARTICLE X
Miscellaneous
Section 10.1 Amendment and Waiver. Any provision of this Agreement may
be amended or waived if, and only if, such amendment or waiver is in writing and
signed, in the case of an amendment, by Seller and Buyer, or in the case of a
waiver, by the party against whom the waiver is to be effective. No failure or
delay by any party in exercising any right, power or privilege hereunder shall
operate as a waiver thereof nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege.
Section 10.2 Expenses. Except as otherwise expressly provided in this
Agreement, whether or not the transactions contemplated by this Agreement are
consummated, the parties shall bear their own respective expenses (including,
but not limited to, all compensation and expenses of counsel, financial
advisors, consultants, actuaries and independent accountants) incurred in
connection with this Agreement and the transactions contemplated hereby.
Section 10.3 Public Disclosure. The parties to this Agreement hereby
agree with the other party hereto that, except as may be required to comply with
the requirements of applicable Law or the rules and regulations of any national
securities exchange upon which the securities of one of the parties or its
Affiliates is listed, no press release or similar public announcement or
communication will be made or caused to be made concerning the execution or
performance of this Agreement unless specifically approved in advance by all
parties hereto; provided, however, that to the extent that either party to this
Agreement is required by Law or the rules and regulations of any stock exchange
upon which the securities of one or more of the parties or its Affiliates is
listed to make such a public disclosure, such public disclosure shall only be
made after prior consultation with the other party to this Agreement, if
consultation is reasonably practicable.
Section 10.4 Assignment. No party to this Agreement may assign any of
its rights or obligations under this Agreement without the prior written consent
of the
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other party hereto; provided, that Seller shall be entitled to assign its
obligations under this agreement to any Permitted Share Transferee so long as
such Permitted Share Transferee agrees to be bound by all of the terms and
conditions of this Agreement (and shall thereafter be "Seller" and "AMCI" for
all purposes of this Agreement) and Seller and AMCI each agree to remain liable
as guarantor of the Permitted Share Transferee, and Buyer may assign any of its
rights hereunder to any Affiliate so long as (i) Buyer remains obligated to
perform or agrees to unconditionally guarantee performance of any obligations of
Buyer hereunder through the Closing Date and (ii) such assignment does not delay
receipt of any Governmental Consents or third party consents that are a
condition to completion of the transactions contemplated by this Agreement.
Section 10.5 Entire Agreement. This Agreement, the Ancillary
Agreements, the Trademark License Agreement and the Chicago and Central Illinois
Stock Purchase Agreement (including all Annexes and Schedules hereto) contains
the entire agreement between the parties hereto with respect to the subject
matter hereof and supersedes all prior agreements and understandings, oral or
written, with respect to such matters, except for the Confidentiality Agreement
which will remain in full force and effect for the term provided for therein.
Section 10.6 Fulfillment of Obligations. Any obligation of any party
to any other party under this Agreement, which obligation is performed,
satisfied or fulfilled by an Affiliate of such party, shall be deemed to have
been performed, satisfied or fulfilled by such party.
Section 10.7 Parties in Interest; No Third Party Beneficiaries. This
Agreement shall inure to the benefit of and be binding upon the parties hereto
and their respective successors and permitted assigns. Nothing in this
Agreement, express or implied, is intended to confer upon any Person other than
Buyer, Seller or their successors, any rights or remedies under or by reason of
this Agreement.
Section 10.8 Guarantees. Buyer Parent hereby unconditionally
guarantees performance of Buyer's obligations hereunder and payment of damages
or liabilities which Buyer may be obligated to pay in connection with a breach
of this Agreement on or prior to the Closing Date. AMCI hereby (i)
unconditionally guarantees performance of Seller's
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obligations hereunder (including, without limitation all indemnification
obligations of Seller hereunder and payment of damages or liabilities which
Seller may be obligated to pay in connection with a breach of this Agreement,
and (ii) without limiting the generality of the payment and performance
guarantee under clause (i) agrees to be bound by the covenants set forth in
Articles V and VI herein, but only to the extent Seller is bound by such
provisions, as though each reference to "Seller" therein included a reference to
AMCI and no implication to the contrary should be drawn by the fact that certain
provisions contain specific reference to AMCI while others do not. AMCI's
obligations under this Section 10.8 shall survive the Closing; provided, that
nothing set forth in this Section 10.8 shall be deemed to extend the duration of
time applicable to any provision set forth in this Agreement.
Section 10.9 Counterparts. This Agreement and any amendments hereto
may be executed in one or more counterparts, each of which shall be deemed to be
an original by the parties executing such counterpart, but all of which shall be
considered one and the same instrument.
Section 10.10 Section Headings. The section and paragraph headings and
table of contents contained in this Agreement are for reference purposes only
and shall not in any way affect the meaning or interpretation of this Agreement.
Section 10.11 Notices. All notices or other communications hereunder
shall be deemed to have been duly given and made if in writing and if served by
personal delivery upon the party for whom it is intended, if delivered by
registered or certified mail, return receipt requested, or by a national courier
service, or if sent by facsimile; provided that the facsimile is promptly
confirmed by written confirmation by registered mail thereof, to the person at
the address set forth below, or such other address as may be designated in
writing hereafter, in the same manner, by such person:
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(a) if to Seller or AMCI, to:
Ameritech Mobile Communications, Inc.
c/o Ameritech Corporation
00 Xxxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
facsimile: (000) 000-0000
Attention: Assistant General
Counsel - Transactions
With a copy to:
Xxxxxxxx & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx
and to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx
(Illinois)
000 Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
facsimile: (000) 000-0000
Attention: Xxxxxxx Xxxxxxx
(b) if to Buyer, to:
GTE Consumer Services Incorporated
0000 Xxxxxxxxx Xxxxx
Xxxxxx, Xxxxx 00000-0000
facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxxx
With a copy to:
O'Melveny & Xxxxx LLP
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxx
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(c) if to Buyer Parent:
GTE Corporation
0000 Xxxxxxxxx Xxxxx
Xxxxxx, Xxxxx 00000-0000
facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxxx
Any notice given by mail shall be effective when received.
SECTION 10.12 GOVERNING LAW; SUBMISSION TO JURISDICTION; SELECTION OF
FORUM. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO THE CHOICE OF LAW
PRINCIPLES THEREOF. EACH PARTY HERETO AGREES THAT IT SHALL BRING ANY ACTION OR
PROCEEDING IN RESPECT OF ANY CLAIM ARISING OUT OF OR RELATED TO THIS AGREEMENT
OR THE TRANSACTIONS CONTAINED IN OR CONTEMPLATED BY THIS AGREEMENT, WHETHER IN
TORT OR CONTRACT OR AT LAW OR IN EQUITY, EXCLUSIVELY IN THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK OR THE SUPREME COURT OF THE
STATE OF NEW YORK FOR THE COUNTY OF NEW YORK (THE "CHOSEN COURTS") AND (I)
IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE CHOSEN COURTS, (II)
WAIVES ANY OBJECTION TO LAYING VENUE IN ANY SUCH ACTION OR PROCEEDING IN THE
CHOSEN COURTS, (III) WAIVES ANY OBJECTION THAT THE CHOSEN COURTS ARE AN
INCONVENIENT FORUM OR DO NOT HAVE JURISDICTION OVER ANY PARTY HERETO AND (IV)
AGREES THAT SERVICE OF PROCESS UPON SUCH PARTY IN ANY SUCH ACTION OR PROCEEDING
SHALL BE EFFECTIVE IF NOTICE IS GIVEN IN ACCORDANCE WITH SECTION 10.11 OF THIS
AGREEMENT.
SECTION 10.13 WAIVER OF JURY TRIAL. THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATED TO THE AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
Section 10.14 Certain Constructions. Except as set forth in 3.5(a) or
otherwise expressly provided in this Agreement, for purposes of the
representations, warranties and covenants of Seller and AMCI contained herein,
the references to the terms "Companies" and "Cybertel" shall be deemed to
exclude the Excluded Business.
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Section 10.15 Severability. The provisions of this Agreement shall be
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity or enforceability of the other provisions hereof unless
such invalidity or unenforceability, after taking into account the mitigation
contemplated by the next sentence, deprives a party of a material benefit contem
plated by this Agreement. If any provision of this Agreement, or the application
thereof to any Person or any circumstance, is invalid or unenforceable, (a) a
suitable and equitable provision shall be substituted therefor in order to carry
out, so far as may be valid and enforceable, the intent and purpose of such
invalid or unenforceable provision and (b) the remainder of this Agreement and
the application of such provision to other persons, entities or circumstances
shall not be affected by such invalidity or unenforceability, nor shall such
invalidity or unenforce ability affect the validity or enforceability of such
provision, or the application thereof, in any other jurisdiction.
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IN WITNESS WHEREOF, this Agreement has been signed on behalf of each
of the parties hereto as of the date first written above.
AMERITECH
By: /s/ Xxxxxxx X. Xxxxxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Chairman of the Board,
President and CEO of Ameritech Corporation
the Sole Shareholder of
Ameritech Mobile Communications, Inc.
GTE CONSUMER SERVICES INCORPORATED
By: /s/ Xxxxx Xxxxxxx
-----------------------------------
Name: Xxxxx Xxxxxxx
Title:
GTE CORPORATION
By: /s/ Xxxxxxx X. Xxx
-----------------------------------
Name: Xxxxxxx X. Xxx
Title:
EXHIBIT F
For purposes of this Exhibit F, the projected and actual financial and
operational results of Cybertel RSA exclude the results of the Excluded
Business.
"EBITDA Subscriber Amount" shall mean, in the event that there shall exist
(a) an Excess EBITDA Amount and an Excess Subscriber Equivalent
Amount, zero;
(b) a Shortfall EBITDA Amount and a Shortfall Subscriber Equivalent
Amount,
(i) the greater of such shortfall amounts multiplied by 0.75
plus
(ii) the lesser of such shortfall amounts multiplied by 0.25; and
(c) an Excess EBITDA Amount and a Shortfall Subscriber Equivalent
Amount or an Excess Subscriber Equivalent Amount and a Shortfall EBITDA
Amount,
(i) such shortfall amount multiplied by 0.75 minus
(ii) such excess amount; provided, that, in no event shall the
product derived in subparagraph (c)(i) above, be reduced by more than
the product of such shortfall amount multiplied by 0.1875.
F-1
(Excess and Shortfall Amount Definitions)
"Excess EBITDA Amount" shall mean the product of (i) the EBITDA Surplus
Amount, if any, multiplied by (ii) 7.188, multiplied by (iii) a fraction the
numerator of which is (x) 12 and the denominator of which is (y) the number of
months in the Operational Adjustment Period (such fraction, the "Closing Period
Fraction"), multiplied by (iv) 0.877.
"Shortfall EBITDA Amount" shall mean the product of (i) the EBITDA Deficit
Amount, if any, multiplied by (ii) 7.188, multiplied by (iii) the Closing Period
Fraction, multiplied by (iv) 0.877.
"Excess Subscriber Equivalent Amount" shall mean the product of (i) the
Subscriber Equivalent Surplus Amount, if any, multiplied by (ii) $37.66,
multiplied by (iii) 12, multiplied by (iv) 0.3872, multiplied by (v) 11.406,
multiplied by (vi) 0.877.
"Shortfall Subscriber Equivalent Amount" shall mean the product of (i) the
Subscriber Equivalent Deficit Amount, if any, multiplied by (ii) $37.66,
multiplied by (iii) 12, multiplied by (iv) 0.3872, multiplied by (v) 11.406,
multiplied by (vi) 0.877.
F-2
(Surplus and Deficit Amount Definitions)
"EBITDA Surplus Amount" shall mean the excess, if any, of (x) the Actual
Pre-Marketing EBITDA Amount over (y) the Projected Pre-Marketing EBITDA Amount.
"EBITDA Deficit Amount" shall mean the excess, if any, of (x) the product
of (i) 0.95 multiplied by (ii) the Projected Pre-Marketing EBITDA Amount over
(y) the Actual Pre-Marketing EBITDA Amount.
"Subscriber Equivalent Surplus Amount" shall mean in the event that there
shall exist:
(a) a Non Pre-Paid Subscriber Surplus Amount and a Pre-Paid Subscriber
Equivalent Surplus Amount, the sum of such amounts;
(b) a Non Pre-Paid Subscriber Deficit Amount and a Pre-Paid Subscriber
Equivalent Deficit Amount, zero;
(c) a Non Pre-Paid Subscriber Surplus Amount and a Pre-Paid Subscriber
Equivalent Deficit Amount or a Non Pre-Paid Subscriber Deficit Amount and a
Pre-Paid Subscriber Equivalent Surplus Amount, the excess, if any, of such
surplus amount over such deficit amount.
"Subscriber Equivalent Deficit Amount" shall mean in the event that there
shall exist:
(a) a Non Pre-Paid Subscriber Deficit Amount and a Pre-Paid Subscriber
Equivalent Deficit Amount, the sum of such amounts;
(b) a Non Pre-Paid Subscriber Surplus Amount and a Pre-Paid Subscriber
Equivalent Surplus Amount, zero; or
(c) a Non Pre-Paid Subscriber Deficit Amount and Pre-Paid Subscriber
Equivalent Surplus Amount or a Non Pre-Paid Subscriber Surplus Amount and a
Pre-Paid Subscriber Equivalent Deficit Amount, the excess, if any, of such
deficit amount over such surplus amount.
F-3
"Pre-Paid Subscriber Equivalent Surplus Amount" shall mean the excess, if
any, of (x) the Actual Pre-Paid Subscriber Equivalent Net Adds over (y) the
Projected Pre-Paid Subscriber Equivalent Net Adds.
"Pre-Paid Subscriber Equivalent Deficit Amount" shall mean the excess, if
any, of (x) the product of (i) 0.95 multiplied by (ii) the Projected Pre-Paid
Subscriber Equivalent Net Adds over (y) the Actual Pre-Paid Subscriber
Equivalent Net Adds.
"Non Pre-Paid Subscriber Surplus Amount" shall mean the excess, if any, of
(x) the Actual Non Pre-Paid Subscriber Net Adds over (y) the Projected Non Pre-
Paid Subscriber Net Adds.
"Non Pre-Paid Subscriber Deficit Amount" shall mean the excess, if any, of
(x) the product of (i) 0.95 multiplied by (ii) the Projected Non Pre-Paid
Subscriber Net Adds over (y) the Actual Non Pre-Paid Subscriber Net Adds.
F-4
(Projected and Actual Definitions)
"Projected Pre-Marketing EBITDA Amount" shall mean the projected aggregate
Pre-Marketing EBITDA of Cybertel Cellular and Cybertel RSA set forth on Annex I
to this Exhibit F for the months in the Operational Adjustment Period.
"Actual Pre-Marketing EBITDA Amount" shall mean the actual aggregate Pre-
Marketing EBITDA of Cybertel Cellular and Cybertel RSA for the Operational
Adjustment Period, calculated on a basis consistent with the calculation of the
Projected Pre-Marketing EBITDA Amount.
"Projected Pre-Paid Subscriber Equivalent Net Adds" shall mean the
projected aggregate Pre-Paid Subscriber Equivalent Net Adds set forth on Annex
II to this Exhibit F for the months in the Operational Adjustment Period.
"Actual Pre-Paid Subscriber Equivalent Net Adds" shall mean the actual
aggregate Pre-Paid Subscriber Equivalent Net Adds for the Operational Adjustment
Period, calculated on a basis consistent with the calculation of the Projected
Pre-Paid Subscriber Equivalent Net Adds; provided, that, in no event shall such
sum be greater than 150% of the Projected Pre-Paid Subscriber Equivalent Net
Adds.
"Projected Non Pre-Paid Subscriber Net Adds" shall mean the projected
aggregate Non Pre-Paid Subscriber Net Adds set forth on Annex III to this
Exhibit F for the months in the Operational Adjustment Period.
"Actual Non Pre-Paid Subscriber Net Adds" shall mean the actual aggregate
Non Pre-Paid Subscriber Net Adds for the Operational Adjustment Period,
calculated on a basis consistent with the calculation of the Projected Non Pre-
Paid Subscriber Net Adds.
F-5
(Miscellaneous Definitions)
"Pre-Marketing EBITDA" shall mean Operating Income plus Depreciation and
Amortization expenses plus Sales and Marketing expenses, excluding the effect of
any and all non-recurring items (including, without limitation, any expenses,
directly or indirectly incurred in connection with the acquisition of the
Companies by Buyer pursuant to the Agreement) and calculated in accordance with
the accounting policies and procedures used in the preparation of the applicable
budgets for Cybertel Cellular and Cybertel RSA and their respective Subsidiaries
on a consolidated basis for the twelve-month periods ending December 31, 1999
and December 31, 2000.
"Pre-Paid Subscriber Equivalent Net Adds" shall mean the product of (a) 0.5
multiplied by (b)(i) the aggregate number of gross additions of Pre-Paid
Subscribers minus (ii) the aggregate number of gross terminations of Pre-Paid
Subscribers of Cybertel Cellular and Cybertel RSA (such number of gross
terminations, for purposes of this calculation, excluding the termination of
5,319 prepaid accounts as described in Section 6.23 (Prepaid Accounts) of the
Agreement).
"Non Pre-Paid Subscriber Net Adds" shall mean (a) the aggregate number of
gross additions of Non Pre-Paid Subscribers minus (b) the aggregate number of
gross terminations of Non Pre-Paid Subscribers (such number of gross
terminations, for purposes of this calculation, excluding the termination of any
Employee Customers as described in Section 6.20(a) (Employee Customers) of the
Agreement).
"Pre-Paid Subscribers" shall mean customers of Cybertel Cellular and
Cybertel RSA who pay for cellular services in advance and who do not receive a
monthly xxxx for such services.
"Non Pre-Paid Subscribers" shall mean all customers of Cybertel Cellular
and Cybertel RSA other than Pre-Paid Subscribers.
F-6
"Operational Adjustment Period" shall mean the period commencing March 1,
1999 through the end of the month preceding the month in which the Closing
occurs.
F-7
