AMENDMENT TO U.S. WIRELESS ALLIANCE AGREEMENT
This Amendment dated as of April 3, 2000 (the "Omnibus Amendment") to that
certain U.S. Wireless Alliance Agreement dated as of September 21, 1999 between
Vodafone AirTouch Plc and Xxxx Atlantic Corporation (the "Agreement"),
WITNESSETH:
WHEREAS, the undersigned constitute all of the parties to the Agreement
and desire to amend the Agreement as set forth herein;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements herein contained, the parties do hereby amend certain
provisions and sections of the Agreement as follows (capitalized terms used but
not defined herein having the meanings ascribed to such terms in the
Agreement):
Tower Amendments
1. Vodafone Excluded Assets. Section 2.4.3(G) of the Agreement is hereby
amended and restated to read in its entirety as follows:
(G) all proceeds from any transaction involving the sale/leaseback,
lease, sublease or other transfer or disposition (with leaseback or
similar rights to access space on such towers) of communication tower
structures and related assets (including, without limitation, third party
leases or subleases of tower capacity, ground leases and related
easements, rights of way, building permits, zoning approvals and similar
rights of use or occupancy) (each, a "Tower Monetization Transaction")
which transactions were or are entered into for the purpose of monetizing
(which term shall include, without limitation, any other form of
transaction which may be characterized as a financing and any other form
of transaction in which some form of consideration is received in return
for a conveyance of any of the assets or rights described above) its
interests in such communications tower structures and related assets,
whether such proceeds are in the form of cash, promissory notes or other
debt instruments, incoming payment streams under leases, licenses or other
agreements, equity interests in an Entity including the right to receive
distributions in respect of such equity interest (including the right to
receive cash, property or assets upon the dissolution of such Entity), or
any other form of consideration whatsoever (such proceeds collectively,
"Tower Proceeds"), which communication tower structures and related assets
are used in the Vodafone Wireless Business and which Tower Monetization
Transactions:
(1) were or are entered into (i) by Vodafone and/or Affiliates of
Vodafone (including without limitation entities to be conveyed to the
Partnership at the Stage II Closing and entities which are After-Acquired
Entities and including pursuant to the
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exercise of rights under arrangements between Vodafone or any Affiliate of
Vodafone and any third party) or (ii) after such towers have been conveyed
to the Partnership hereunder, by the Partnership or an Entity controlled
by the Partnership at the direction of such Affiliates of Vodafone, in
each case not later than the first anniversary of the Stage I Closing
Date, and
(2) are consummated not later than the third anniversary of the Stage
I Closing Date, and
(3) are pursuant to (i) master lease or transfer arrangements which
are existing as of the date hereof and disclosed in the Vodafone
Disclosure Schedule or (ii) master lease or transfer/leaseback or other
arrangements giving the Partnership or Affiliates of the Partnership
rights to use or occupy a portion of such communications towers and
related assets entered into not later than the first anniversary of the
Stage I Closing Date so long as such arrangements reflect substantially
comparable lease terms and financial commitments to the tower lessee (or,
in a sale/leaseback or other arrangement, the tower lessor), adjusted to
reflect the number of towers subject to the transaction, compared to the
tower arrangements disclosed in the Vodafone Disclosure Schedule or the
Xxxx Atlantic Disclosure Schedule (such arrangements meeting all of the
foregoing requirements in clauses (1), (2) and (3), "Compliant Tower
Monetizations") and
(4) for the avoidance of doubt, neither the tower structures and
related assets that are used by Primeco or Primeco's direct or indirect
Subsidiaries or by Primeco PCS, L.P. (including without limitation those
used in the PrimeCo MTA's as defined in the PrimeCo Agreement) nor any
proceeds from any Tower Monetization Transactions with respect thereto
shall be Vodafone Excluded Assets; or
2. Xxxx Atlantic Excluded Assets. Section 2.5.2(H) of the Agreement is
hereby amended and restated to read in its entirety as follows:
(H) Tower Proceeds from any Compliant Tower Monetization involving
communication tower structures and related assets that are used in the
Xxxx Atlantic Wireless Business and which Compliant Tower Monetization (A)
is or was entered into (i) by Xxxx Atlantic or Affiliates of Xxxx Atlantic
(including, without limitation, entities which are to be conveyed to the
Partnership at the Stage II Closing or which are After-Acquired Entities
and including pursuant to the exercise of rights under arrangements
between an Affiliate of Xxxx Atlantic and Crown Castle), or (ii) after
such towers have been conveyed to the Partnership hereunder, by the
Partnership or any Entity controlled by the Partnership at the direction
of Xxxx Atlantic, in each case not later than the first anniversary of the
Stage I Closing Date, and (B) is consummated no later than the third
anniversary of the Stage I Closing Date; or
3. Excluded Cellco Assets. Section 2.5.4 of the Agreement is hereby
amended and restated to read in its entirety as follows:
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2.5.4 Excluded Cellco Assets. Notwithstanding anything to the
contrary herein, the Cellco Assets shall not include any Tower Proceeds
from any Compliant Tower Monetization involving communication tower
structures and related assets that are used in the Cellco Wireless
Business and which Compliant Tower Monetization:
(1) is or was entered into by Cellco or its controlled Affiliates;
and
(2) is consummated not later than the third anniversary of the Stage
I Closing Date.
For the avoidance of doubt, neither the tower structures and related
assets that are used by Primeco or Primeco's direct or indirect
Subsidiaries or by Primeco PCS, L.P. (including without limitation those
used in the PCSCO MTA's as defined in the PrimeCo Agreement) nor any
proceeds from any Tower Monetization Transactions with respect thereto
shall be excluded from the Cellco Assets.
4. Amendment of Section 2.10. Section 2.10 of the Agreement is hereby
amended to read in full as follows:
2.10 Tower Assets. (a) In furtherance of the provisions of Sections
2.4.3(G), 2.5.2(H) and 2.5.4, which reflect the intent of the Parties to
enable the monetization of communication tower structures and related
assets used in their respective Wireless Businesses, each Party and its
Affiliates:
(i) will be entitled to retain any Tower Proceeds from Compliant
Tower Monetizations that have been entered into no later than the first
anniversary of the Stage I Closing Date and are consummated no later than
the third anniversary of the Stage I Closing Date; provided, however, that
if, subsequent to the execution of any such monetization transaction that
involves the sale, transfer or other disposition to any person or Entity
of title to communications towers and related assets, the Party thereto
(or any of its Affiliates) receives or is distributed any such towers or
assets (other than through a distribution in dissolution or liquidation of
an Entity whose equity interests constituted Tower Proceeds), then such
towers and assets will be promptly contributed to the Partnership and
shall be deemed to constitute Conveyed Assets as of the date of
contribution;
(ii) after the Stage I Closing, will have the right to reasonable
access to all relevant documents and records of the Partnership and
Entities controlled by the Partnership, and will have the right to direct
and receive sufficient and timely assistance from appropriate personnel of
the Partnership and such Entities during normal business hours, in order
for such Party and its Affiliates to take (or cause such personnel and the
Partnership to take) all steps necessary to execute and implement
Compliant Tower Monetizations with respect to towers and related assets
conveyed to the Partnership by such Party or its Affiliates, including the
completion and execution of related agreements and documents (including
leasing documents, disclosure schedules and other supporting
documentation), the securing of all necessary Governmental Permits and
other consents and approvals
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from any Person or Entity, the recording of related real estate documents,
taking all actions necessary to comply with pre-closing conditions and
requirements under the applicable transactional documents, and reasonable
assistance in the preparation of descriptive memoranda or other materials
reasonably required for the marketing of such transactions, provided in
each case that the Party requesting such action (including for this
purpose Xxxx Atlantic, in the case of actions by the Partnership to effect
monetizations whose proceeds are excluded from the Cellco Assets pursuant
to Section 2.5.4) shall reimburse the Partnership for (a) all
out-of-pocket costs and expenses of the Partnership reasonably incurred in
connection with the foregoing actions, including any filing fees paid by
the Partnership and reasonable legal fees, and (b) an appropriate
allocation of the salaries and benefits payable by the Partnership
(excluding overhead and other indirect costs) to the Partnership personnel
providing the foregoing assistance (items referred to in (a) and (b)
collectively defined as the "Partnership Costs"); and
(iii) will consult with the Partnership concerning the negotiation
and terms of such Compliant Tower Monetizations (it being understood,
however, that such Party shall not be required to amend the structure or
other terms of any such monetization transaction so long as it is a
Compliant Tower Monetization).
(b) At the Stage I Closing and at all times thereafter through the first
anniversary of the Stage I Closing Date, (a) the Party whose communication
towers (or those of its Affiliates) are the subject of any then-pending or
consummated Compliant Tower Monetization shall, subject to obtaining any
necessary consents, transfer and convey to the Partnership all right,
title and interest of such Party and its Affiliates in and to all of the
agreements involved in such transaction (including any covenant by such
Party or any of its Affiliates to guarantee the obligations of such
Party's Affiliates thereunder, and all other covenants, payment
obligations and other obligations under such agreements, but excluding (i)
any guarantees of indebtedness for borrowed money incurred by any party to
such transaction and (ii) any agreements whose sole purpose is to create
or provide for rights and restrictions of equity interests that constitute
Tower Proceeds), and (b) the Partnership shall accept such agreement or
agreements as Conveyed Assets of such Party and shall fully and
unconditionally assume as Assumed Liabilities of the applicable Party all
covenants and obligations of such Party and its Affiliates thereunder, and
(c) upon such transfer, conveyance and assumption as provided in the
foregoing clauses (a) and (b), all obligations of such Party and/or such
Party's Affiliates under such agreement or agreements shall be released
(or, in the case of obligations of any Vodafone Conveyed Partnerships and
Vodafone Conveyed Subsidiaries, shall be deemed Assumed Liabilities)
without further action by any Party or the Partnership.
(c) Through and including the first anniversary of the Stage I Closing
Date (or, as to communications towers and related assets that have become
at any time the subject of a pending Compliant Tower Monetization, the
third anniversary of the Stage I Closing Date), the Partnership and its
Affiliates (i) shall not sell, transfer, convey or otherwise dispose of
any communication towers and related assets other than in a Compliant
Tower Monetization to which the Party (or its Affiliates) that conveyed
such towers and assets to the Partnership shall have consented in writing,
and (ii) shall use commercially
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reasonable efforts to take all necessary action to effectuate promptly
Compliant Tower Monetizations upon the written direction of the Party (or
its Affiliates) that conveyed the applicable towers and assets to the
Partnership.
5. Indemnification. Section 2.11 is hereby added to the Agreement to read
in its entirety as follows:
2.11 Indemnification for Pre-Closing Tower Transaction Matters.
(a) Xxxx Atlantic (directly or through its controlled Affiliates that
are partners in the Partnership) shall indemnify and hold harmless (on an
after-Tax basis using an assumed Tax rate of 40%) the Partnership and each
of the Partnership's controlled Affiliates from and against all Losses (as
defined in Section 9.1(a)) that any such indemnified parties may sustain,
suffer or incur and that result from, arise out of or relate to any breach
by Xxxx Atlantic, Cellco or their Affiliates of any of their pre-closing
representations and pre-closing covenants in any agreement relating to
Compliant Tower Monetizations executed for the benefit of Xxxx Atlantic or
any of its Affiliates, except to the extent that such Losses are caused by
any action or inaction by Vodafone or any of its Affiliates. For purposes
of this Section 2.11(a), "pre-closing representations" and "pre-closing
covenants" refer to representations or warranties made and covenants to be
performed (in each case on a tower-by-tower basis) by Xxxx Atlantic,
Cellco or their Affiliates on or before the closing of the applicable
tower under the related monetization agreement. The foregoing
indemnification obligations shall not be subject to any cap, "basket,"
deductible or expiration date.
(b) Vodafone shall indemnify and hold harmless (on an after-Tax basis
using an assumed Tax rate of 40%) the Partnership and each of the
Partnership's controlled Affiliates from and against all Losses that any
such indemnified parties may sustain, suffer or incur and that result
from, arise out of or relate to any breach by Vodafone or its Affiliates
of any pre-closing representations and pre-closing covenants in any of the
agreements relating to Compliant Tower Monetizations executed for the
benefit of Vodafone or any of its Affiliates, except to the extent that
such Losses are caused by any action or inaction by the Partnership, Xxxx
Atlantic or their controlled Affiliates. For purposes of this Section
2.11(b), "pre-closing representations" and "pre-closing covenants" refer
to representations or warranties made and covenants to be performed (in
each case on a tower-by-tower basis) by Vodafone or its Affiliates on or
before the closing of the applicable tower under the related monetization
agreement. The foregoing indemnification obligations shall not be subject
to any cap, "basket," deductible or expiration date.
(c) Either Vodafone, in the case of indemnification under paragraph
(a) of this Section, or Xxxx Atlantic, in the case of indemnification
under paragraph (b) of this Section, shall have the right, for and on
behalf of the Partnership, to enforce the rights of the Partnership to
indemnification under this Section 2.11. The procedures set forth in
Section 9.4 (other than references therein to Expiration Dates, which
shall not apply to indemnification under this Section 2.11) and Sections
9.10 and 9.11 (Losses Net of
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Insurance; Access and Cooperation) of this Agreement shall apply to Claims
for which indemnification is sought under this Section 2.11.
6. Distribution of Tower Proceeds. A new Schedule 2.12.1(a) and 2.12.1(b)
are hereby added to the Agreement in the form set forth as Annex I hereto,
and Section 2.12 is hereby added to the Agreement to read in its entirety
as follows:
2.12 Reimbursement of Preformation Capital Expenditures.
2.12.1 Vodafone Reimbursements. The Partnership shall, in
accordance with the provisions of Treasury Regulation Section
1.707-4(d), reimburse the preformation capital expenditures incurred
by the Vodafone controlled Affiliates that are partners (the
"Vodafone Partners") as follows:
(a) In consideration of the conveyance of the Vodafone Stage I
Conveyed Assets, the Partnership shall distribute in
reimbursement of preformation capital expenditures to the
respective Vodafone Partners the amounts set forth on
Schedule 2.12.1(a). Such distributions shall be made by the
Partnership on the dates set forth in Schedule 2.12.1(a).
(b) In consideration of and upon the conveyance of the Vodafone
Stage II Conveyed Assets, the Partnership shall distribute
in reimbursement of preformation capital expenditures to
the respective Vodafone Partners the amounts set forth on
Schedule 2.12.1(b).
(c) Within seven (7) days after each closing under each
Compliant Tower Monetization transaction with respect to
assets described in Section 2.4.3(G) hereof (or in the case
of non-cash proceeds that are to be monetized, within seven
(7) days after the monetization for cash of such proceeds)
the Partnership shall distribute to the Vodafone Partners,
as specified by Vodafone, the "Vodafone Reimbursement
Amount." For purposes of this Agreement, the "Vodafone
Reimbursement Amount" means with respect to the Vodafone
Partners, as a class, an amount equal to the Net Proceeds
(as defined below) realized by the Partnership, directly or
indirectly (determined by reference to the Partnership's
ownership percentage in lower tier entities) as a result of
Compliant Tower Monetization transactions with respect to
assets described in Section 2.4.3(G) of this Agreement. For
purposes of this provision, the term "Net Proceeds" shall
mean the gross Tower Proceeds received on a Compliant Tower
Monetization transaction (including any American Tower
Warrants or any other noncash consideration, or any
proceeds thereof if monetized pursuant to Section 2.13(a)
or (b)) reduced by the sum of (i) the Partnership's share
of any investment banker fees paid or incurred by the
Partnership that relate to such Compliant Tower
Monetization transactions and any Partnership Costs (as
defined in Section 2.10(ii)) in connection with such
transaction and (ii) to the extent such assets were owned
by a
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corporation (as determined for federal income tax purposes)
prior to the Stage I Closing the stock of which was
contributed to the Partnership by the Vodafone Partners,
the corporate income tax deemed incurred with respect to
the gain recognized from such Compliant Tower Monetization
transactions. Such deemed corporate income tax rate shall
be 40%. A distribution under this Section 2.12.1 may be
made in cash or, at the election of Vodafone, in the form
of a distribution of non-cash proceeds from a Compliant
Tower Monetization described in Section 2.4.3(G).
2.12.2 Xxxx Atlantic Reimbursements. Within seven (7) days after
each closing under each Compliant Tower Monetization
transaction with respect to assets described in Section
2.5.2(H) and Section 2.5.4 hereof (or in the case of
non-cash proceeds that are to be monetized, within seven
(7) days after the monetization for cash of such proceeds)
the Partnership shall be obligated to distribute to Xxxx
Atlantic's controlled Affiliates that are partners (the
"Xxxx Atlantic Partners") in the Partnership as
reimbursement of preformation capital expenditures incurred
by such partners, in accordance with the provisions of
Treasury Regulationss.1.707-4(d) (or as otherwise specified
by the Xxxx Atlantic Partners) the "Xxxx Atlantic
Reimbursement Amount." For purposes of this Agreement, the
"Xxxx Atlantic Reimbursement Amount" means with respect to
the Xxxx Atlantic Partners, as a class, an amount equal to
the Net Proceeds (as defined below) realized by the
Partnership, directly or indirectly (determined by
reference to the Partnership's ownership percentage in
lower tier entities) as a result of Compliant Tower
Monetization transactions with respect to assets described
in Section 2.5.2(H) and Section 2.5.4 of this Agreement.
For purposes of this provision, the term "Net Proceeds"
shall mean the gross proceeds received in a Compliant Tower
Monetization transaction (including the value of any
noncash consideration, or any proceeds thereof if monetized
pursuant to Section 2.13(b)) reduced by the sum of (i) the
Partnership's share of any investment banker fees paid or
incurred by the Partnership that relate to such Compliant
Tower Monetization transactions and any Partnership Costs
(as defined in Section 2.10(ii)) in connection with such
transaction and (ii) to the extent such assets were owned
by a corporation (as determined for federal income tax
purposes) prior to the Stage I Closing the stock of which
was contributed to the Partnership by the Xxxx Atlantic
Partners, the corporate income tax deemed incurred with
respect to the gain recognized from such Compliant Tower
Monetization transactions. Such deemed corporate income tax
rate shall be 40%. A distribution under this Section 2.12.2
may be made in cash or, at the election of Xxxx Atlantic,
in the form of a distribution of non-cash proceeds from a
Compliant Tower Monetization described in Section 2.5.2(H).
2.12.3 The distributions pursuant to Section 2.12.1(a) and (b)
shall be made in the form of cash distributions or, at the
election of the Vodafone Partners, the assumption of
Vodafone Indebtedness. Any amounts distributed to
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Vodafone or assumed by the Partnership pursuant to Sections
2.12.1(a) or (b) shall be treated in accordance with
Section 2.6.1 hereof. Upon the occurrence of a closing
under a Compliant Tower Monetization transaction, the
distributions set forth in Section 2.12.1(c) and Section
2.12.2 hereof shall be made before any other partnership
distributions otherwise provided for in Article 7 of the
Partnership Agreement. Neither a distribution pursuant to
Section 2.12.1(c) or Section 12.2.2 hereof nor any
Compliant Tower Monetization shall result in a distribution
by the Partnership pursuant to Section 7.1(a) or Section
7.1(b) of the Partnership Agreement. The distributions
pursuant to this Section 2.12 shall be made to the Vodafone
Partners and the Xxxx Atlantic Partners as directed by
Vodafone and Xxxx Atlantic, respectively. Until such time
as the communication tower structures and related assets
that are not owned, directly or indirectly, by a
corporation can no longer be the subject of a Compliant
Tower Monetization, except with respect to book gain from a
Compliant Tower Monetization, all the Partnership's book
items of income, gain, loss, deduction and credit that
relate to such assets shall be allocated in accordance with
Section 6.6 of the Partnership Agreement. Notwithstanding
the preceding sentence, the book items of income, gain,
loss, deduction, and credit that relate to the
communications towers and related assets currently held by
Xxxx Atlantic's Affiliate UCN shall be allocated solely to
Xxxx Atlantic.
7. Monetization of Non-Cash Tower Proceeds. Section 2.13 is hereby added
to the Agreement to read in its entirety as follows:
2.13 Monetization of Non-Cash Tower Proceeds.
(a) With respect to the warrants to purchase Class A Common Stock of
American Tower Corporation issued and to be issued pursuant to that
certain Agreement to Sublease dated August 6, 1999, as amended, among
American Tower Corporation, AirTouch Communications, Inc., and the other
parties thereto (the "American Tower Agreement to Sublease") to those
Entities named as "Sublessors" in such agreement (the "American Tower
Warrants"), it being understood that such warrants constitute Tower
Proceeds of Vodafone and its Affiliates hereunder:
(i) The Partnership shall not cause or permit any sale, transfer
or other disposition of any American Tower Warrants that are at any time
owned beneficially or of record by the Partnership or any of the
Partnership's controlled Affiliates (collectively, the "Partnership
Warrant Holders") without Vodafone's written consent;
(ii) After the Stage I Closing, Xxxx Atlantic and the Partnership
will use commercially reasonable efforts to take promptly, and cause their
controlled Affiliates to use commercially reasonable efforts to take
promptly, all steps necessary to cause the monetization for cash or cash
equivalents (on such terms and conditions, with such counterparty(ies) and
for such amount and type of consideration as Vodafone or
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AirTouch Communications, Inc. may direct) of all American Tower Warrants
owned beneficially or of record by any Partnership Warrant Holder, such
monetization to occur within ten (10) Business Days after the final
closing under the American Tower Agreement to Sublease for communications
towers for which American Tower Warrants are part of the consideration or
at such other time as Vodafone or AirTouch Communications, Inc. may
direct;
(iii) Vodafone agrees to reimburse the Partnership for any
Partnership Costs (as defined in Section 2.10(ii)) incurred in connection
with the actions described in clause (ii) above; and
(iv) The proceeds of the foregoing warrant monetization shall
constitute "Tower Proceeds" of Vodafone and its Affiliates, and shall be
distributed as provided in Section 2.12 hereof.
(b) Other Non-Cash Proceeds. To the extent that the Partnership or
its controlled Affiliates hold or receive non-cash Tower Proceeds other
than the American Tower Warrants after the Closing, the Party whose
communication towers and related assets were the source of such non-cash
Tower Proceeds shall have the right to determine whether, when and on what
terms such non-cash items shall be monetized for cash or cash equivalents.
Such Party agrees to reimburse the Partnership for any Partnership Costs
(as defined in Section 2.10(ii)) incurred in connection with such
monetization. The proceeds of any such monetization shall constitute
"Tower Proceeds" of the applicable Party, and shall be distributed as
provided in Section 2.12 hereof.
(c) Additional Rights of Parties. At Xxxx Atlantic's or Vodafone's
election, such Party may cause the Partnership to distribute to it the
towers and related assets which are, or become, the subject of a Compliant
Tower Monetization transaction by such Party or its Affiliates, as a
preliminary step in including such towers and related assets in a
Compliant Tower Monetization transaction, so long as (i) such Compliant
Tower Monetization transaction is consummated within ninety (90) days of
such distribution and (ii) such Party reimburses the Partnership for any
Partnership Costs incurred in connection with such distribution. With
respect to communications towers and related assets held by Xxxx
Atlantic's Affiliate UCN, it is Xxxx Atlantic's intention to contribute
such towers and related assets to its joint venture with Crown Castle.
Upon the completion of such transaction the Partnership or its Affiliates
will enter into one or more leases of capacity on the contributed towers,
effective as of April 1, 2000. Any payments under such leases will be
reduced by any expenses incurred by the Partnership with respect to such
towers (other than the payments due under such leases) (i.e., ground
rents, real estate and taxes and maintenance expenses except to the extent
any of the foregoing relate to communications equipment that will continue
to be owned or operated by the Partnership).
8. Partnership Retention of Certain Proceeds. Section 2.14 is hereby added
to the Agreement to read in its entirety as follows:
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2.14 Partnership Retention of Certain Tower Monetization Proceeds. The
Parties intend that proceeds from the monetization of towers acquired in
exchange for Conflicted Systems (as defined herein) whose towers were
already monetized for the benefit of a Party hereto (or its Affiliates)
shall not be Vodafone Excluded Assets, Xxxx Atlantic Excluded Assets or
assets excluded from the Cellco Assets under Section 2.5.4, but shall be
the exclusive property of the Partnership. Accordingly, the Parties agree
that the Partnership shall have the exclusive right to all Tower Proceeds
from (i) any monetization of any or all communication towers and related
assets acquired in the ALLTEL transaction dated January 31, 2000, (ii) any
monetization of communication towers and related assets in markets
acquired by the Partnership (or any controlled Affiliate thereof) in
exchange for Conflicted Systems whose communication towers and related
assets were previously subject to a Compliant Tower Monetization by a
Party hereto (or its Affiliates), and (iii) any monetization of any or all
communications towers and related assets of Primeco or Primeco PCS, L.P.
or any direct or indirect Subsidiary thereof, and that the foregoing Tower
Proceeds shall not be deemed Vodafone Excluded Assets or Xxxx Atlantic
Excluded Assets.
9. Sale of Assets Covenants. The reference in Section 5.1.4 to a
"transaction with respect to towers permitted by Section 2.4.3(G)" is
replaced by a reference to a "Compliant Tower Monetization as provided in
Section 2.4.3(G)." The reference in Section 5.2.4 to a "transaction with
respect to towers permitted by Section 2.5.2(H)" is replaced by a
reference to a "Compliant Tower Monetization as provided in Section
2.5.2(H)."
10. Further Assurances. Section 3.3 (Further Assurances) of the Agreement
is hereby amended by adding the following at the end of paragraph (a)
thereof:
Without limiting the generality of the foregoing, each of the Parties
will, and will cause its Affiliates to, cooperate with the other Party and
its Affiliates and take all steps as any Party may reasonably request in
order to cause the Partnership to (i) execute and implement Compliant
Tower Monetizations (subject to the Parties' and their Affiliates' rights
to the related Tower Proceeds hereunder) as provided in Section 2.10 and
(ii) take such other actions, and execute and deliver such instruments and
document, as any Party may reasonably request in order to evidence and
confirm the Parties' and their Affiliates' rights under Sections 2.10,
2.12 and 2.13 hereof, in each case without modifying the obligations
herein of the Parties to reimburse the Partnership for any Partnership
Costs (as defined in Section 2.10(ii)) or the Parties' indemnification
obligations herein.
11. Disclosure Schedules. The Parties have provided each other with copies
of all agreements and documents, including exhibits and schedules thereto,
intended to constitute Compliant Tower Monetizations, and the Disclosure
Schedules to the Agreement shall be deemed to refer thereto.
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Section 7.2(c)
Section 7.2(c) is hereby amended and restated in its entirety as follows:
(c) Neither Vodafone nor any of its Affiliates shall use the name
"AirTouch" or any variant thereof or name similar thereto ("AirTouch
Name") in the Domestic United States, except as provided herein or
otherwise agreed to in writing by the Parties, from the Stage I Closing
Date until the last day of the thirtieth (30th) full calendar month after
the Stage I Closing Date; provided that Vodafone and its Affiliates shall
be permitted to continue to maintain their corporate name(s) during such
period; and, provided further, that such corporate name(s) may not be used
by Vodafone or its Affiliates in connection with the marketing in the
Domestic United States of any commercial product or service until the
expiration of such aforementioned period. Notwithstanding the foregoing,
nothing in this Section 7.2(c) shall restrict or otherwise modify the
rights and obligations of Vodafone or its Affiliates under any agreements
existing as of the Stage I Closing Date whereby Vodafone or its Affiliates
have licensed to any Person (other than Vodafone or an Affiliate of
Vodafone) a right to use the AirTouch Name, and all such agreements shall
continue in full force and effect in accordance with the terms thereof,
except that after the Stage I Closing Date and at the request of the
Partnership, Vodafone and its Affiliates shall reasonably cooperate to
modify or terminate any such agreements as they pertain to use of the
AirTouch Name in connection with the marketing in the Domestic United
States of any commercial product or service, provided that Partnership
shall indemnify and hold harmless Vodafone and its Affiliates (on an
after-Tax basis using an assumed Tax rate of 40%) from and against all
Losses that any such indemnified parties may sustain, suffer or incur and
that result from, arise out of or relate to any such actions taken by
Vodafone or its Affiliates at the request of the Partnership. The
immediately preceding sentence shall apply, without limitation, to
existing agreements between Vodafone and/or its Affiliates and Xxxxxx
Communications and/or its Affiliates ("Xxxxxx") authorizing Xxxxxx to use
the AirTouch Name as the brand for providing commercial mobile radio
services in Xxxxxxx XXX # 0, Xxxx XXX # 0 xxx Xxxxxxxxxx XXX # 7, which
are the only agreements existing as of the Stage I Closing Date whereby
Vodafone or an Affiliate of Vodafone has granted to a Person that
possesses an FCC License to provide Domestic commercial mobile radio
services (other than Vodafone or an Affiliate of Vodafone) a right to use
the AirTouch Name as the brand for providing such services in markets
other than those managed and/or wholly or partially owned by Vodafone or
an Affiliate of Vodafone.
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Conflicted Properties
1. The seventh and eighth sentences of Section 2.6.2(A) are hereby amended
and restated in their entirety as follows:
Except as otherwise provided in (D) below with respect to the Alltel
Transactions (as defined below) and in (E) below with respect to the CMT
Transactions and the AirTouch Cellular Transaction (as each is defined
below) the "Net Proceeds" means the cash sale price and/or other assets
received upon the disposition of (i) any Conflicted System (other than a
PrimeCo Distributed System (as defined in Section 7.1) or a System
identified on Schedule 7.6A) or (ii) any other property or System not
identified on Schedule 7.6A (other than a PrimeCo Distributed System) if
such disposition was part of a transaction or series of related
transactions involving a disposition of a Conflicted System (any such
other Property or System being a "Conflict-Related System"), in either
case less the out-of-pocket expenses (including Taxes other than federal,
state, local, and foreign income Taxes) directly related thereto
("Out-of-Pocket Expenses"), and less any Taxes deemed imposed on the gain
recognized by the selling Party (or any of its Affiliates) as a result of
such disposition (such deemed Taxes ("Conflicted Income Taxes") shall be
calculated as the product of the gain recognized for federal income tax
purposes on such sale (the "Gain Recognition Amount") multiplied by 40%
(the Conflicted Income Taxes, together with the Out-of Pocket Expenses,
being the "Netting Expenses"). The "Gross Proceeds" means the cash sale
price and/or fair market value of any non-cash consideration received by
the Party or Affiliate thereof that disposed of a Conflicted System
identified on Schedule 7.6A. Notwithstanding anything to the contrary in
this Section 2.6.2(A), Vodafone shall direct the disposition of AirTouch's
50% interest in CMT (San Francisco Bay Area Cellular); provided, however,
that the actual disposition transaction shall require the consent of Xxxx
Atlantic, which consent shall not be unreasonably withheld. The above
terms shall have the same meanings regardless of the nature of the
Conflicted Systems when such terms are used in connection with a
specifically identified Conflicted System but, as appropriate, only to
carry out the purposes of the specific provision in which such term (or
terms) is so used.
2. The last four sentences of Section 2.6.2(A) are hereby redesignated as the
first four sentences of a new Section 2.6.2(C), and amended and restated
in their entirety as follows:
Except to the extent otherwise provided in Section 2.6.2.(D) below for the
Alltel Transactions, in the event that (i) a Tax audit or proceeding with
respect to the disposition of a Conflicted System (other than a PrimeCo
Distributed System or a System identified on Schedule 7.6A) or a
Conflict-Related System results after the Measurement Date (as defined in
Section 7.6) in a final adjustment to a Party's Gain Recognition Amount
("Final Adjustment"), or (ii) a Party receives a refund, credit or offset
in connection with the reduction of a Party's Gain Recognition Amount
("Refund Adjustment"), then such Party shall promptly notify the other
Party in writing of such adjustment. If the Final
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Adjustment or Refund Adjustment decreases such Party's Conflicted Income
Taxes, then such Party shall contribute to the Partnership cash equal to
the amount of such decrease. If the Final Adjustment increases such
Party's Conflicted Income Taxes, then the Partnership shall distribute to
such Party cash equal to the amount of such increase. Such contribution to
or distribution by the Partnership shall be made no later than the fifth
Business Day after receipt by the other Party of the written notice
described in the third preceding sentence. In the event that such Final
Adjustment or Refund Adjustment occurs on or prior to the Measurement
Date, such Party's Netting Expenses shall be adjusted accordingly.
3. A new Schedule 2.6.2D is hereby added to the Agreement in the form set
forth as Annex II hereto, and Section 2.6.2 is hereby amended to add the
following paragraph (D):
"Affiliates of Xxxx Atlantic have entered into the agreements
described in Schedule 2.6.2D providing for the consummation of a
series of transactions with affiliates of Alltel (the "AllTel
Transactions"). The provisions of Sections 2.6.2(A) and 2.6.2(C)
shall apply in all respects to the Alltel Transactions, except as
provided below:
(1) The initial Conflicted Income Taxes with respect to the
disposition of the Cleveland Cluster referred to on Schedule 7.6
shall be limited to gain recognized pursuant to Section 751(b)
of the Code in connection with such disposition.
(2) In the event that there is a Final Adjustment or Refund
Adjustment that results in a change in the Conflicted Income
Taxes for Florida or Alabama/Louisiana as set forth on Schedule
7.6, then the following shall occur. First, if such a Final
Adjustment or Refund Adjustment occurs after the Measurement
Date, then Xxxx Atlantic shall promptly notify Vodafone in
writing of such adjustment. If such Final Adjustment or Refund
Adjustment occurs after the Measurement Date and decreases Xxxx
Atlantic's Conflicted Income Taxes, then Xxxx Atlantic shall
contribute to the Partnership cash equal to 50.25% of the amount
of such excess. If such Final Adjustment occurs after the
Measurement Date and increases Xxxx Atlantic's Conflicted Income
Taxes, then the Partnership shall distribute to Xxxx Atlantic
cash equal to 50.25% of the amount of such shortfall. In the
event that such Final Adjustment or Refund Adjustment occurs on
or prior to the Measurement Date, Xxxx Atlantic's Netting
Expenses shall be adjusted in accordance with the principles of
the preceding sentence. For purposes of determining whether a
Final Adjustment or Refund Adjustment increases or decreases
such Conflicted Income Taxes, the adjustment shall be measured
against the Conflicted Income Taxes initially payable or, if
applicable, the Conflicted Income Taxes determined in connection
with any previous Final Adjustment or Refund Adjustment.
(3) The Conflicted Income Taxes imposed on the disposition of the
Conflicted Systems referred to as "Southwest Cluster" on
Schedule 7.6B and the El Paso Cellular System referred to on
Schedule 7.6A shall be determined by allocating the total
Conflicted
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Income Taxes imposed on the disposition of the Southwest Cluster
and the El Paso Cellular System between the Southwest Cluster
and the El Paso Cellular System on the basis of their relative
values; provided, however, that any Final Adjustment or Refund
Adjustment specifically identified with either the Southwest
Cluster or the El Paso Cellular System shall not be allocated
between the systems but shall affect only the system so
identified.
(4) To the extent not inconsistent with the agreements in the Alltel
Transactions, as currently documented, in initially reporting
any like-kind exchange included in the Alltel Transactions
(whether on any initial or any voluntarily amended federal
income tax return), Xxxx Atlantic agrees to take consistent
filing positions with respect to each like-kind exchange, and
agrees to consult with Vodafone before taking any inconsistent
filing positions that could be taken without violating the
agreements in the Alltel Transactions, as currently documented.
4. Section 2.6.2 is hereby amended to add the following paragraph (E):
"The "CMT Transactions" means any transaction occurring after January 1,
2000 and involving the equity or assets of AirTouch CMT Holdings I, Inc.,
a Delaware corporation, or any successor thereto (including any successor
limited liability company) ("Holdings I") or the interests in or assets of
AirTouch Group LLC, a Delaware LLC (the only asset of which is an interest
in CMT Partners) ("Group LLC"), including, without limitation, any actual
or deemed disposition (including any actual or deemed distribution) by
AirTouch Cellular, a California corporation ("AirTouch Cellular"), of any
interest in the equity or assets of Holdings I or Group LLC. Similarly, in
connection with the Stage I Closing, the stock of AirTouch Cellular will
be contributed to the Partnership (the "AirTouch Cellular Transaction").
Notwithstanding the foregoing, the CMT Transactions and the AirTouch
Cellular Transactions shall be limited to those actions or transactions
taken in connection with the contribution of AirTouch Cellular to the
Partnership and the distribution of the equity interests or assets of CMT
Holding I or Group LLC from AirTouch Cellular.
(1) For purposes of applying Section 2.6.2(A) and (C), any CMT Taxes and
any AirTouch Cellular Taxes (in each case, as defined below) shall be
treated as Netting Expenses to the extent such Taxes are imposed on
or prior to the Measurement Date. Such characterization shall apply
(without duplication( regardless of whether there is a disposition of
or the generation of any proceeds with respect to Holdings I, Group
LLC or AirTouch Cellular.
(2) For purposes of applying Section 2.6.2(C), any gain recognized for
federal income tax purposes with respect to the CMT Transactions,
including without limitation under Sections 311 or 355 of the Code,
shall be treated as a Gain Recognition Amount on which Conflict
Income Taxes shall be deemed to be imposed ( "CMT Gain Recognition
Amount" and " CMT Conflict Income Taxes").
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(3) "CMT Taxes" shall mean any Taxes (other than federal, state, local,
and foreign income Taxes) imposed in connection with the CMT
Transactions plus any CMT Conflict Income Taxes.
(4) For purposes of applying Section 2.6.2(C), with respect to the
AirTouch Cellular Transaction, any AirTouch Cellular Gain Recognition
Amount (as described below) shall be treated as a Gain Recognition
Amount on which Conflicted Income Taxes shall be deemed imposed (such
Taxes, "AirTouch Cellular Conflicted Income Taxes"). "AirTouch
Cellular Gain Recognition Amount" shall mean any income or gain
recognized for federal income tax purposes that is attributable to
the fact that the stock of AirTouch Cellular was contributed to the
Partnership to the extent that such income or gain exceeds the income
or gain that would have been recognized had the assets, rather than
the stock, of AirTouch Cellular been contributed to the Partnership.
For this purpose, "AirTouch Cellular Gain Recognition Amount" shall
include any such income or gain recognized in connection with the
interest of the Vodafone Partners in the Partnership that is
attributable to the AirTouch Cellular Transaction but such income or
gain shall be included only to the extent that such income or gain
exceeds the Vodafone Partner's share of such Partnership income or
gain (with such share calculated on the basis of the Percentage
Interest of the Vodafone Partners at the time such income or gain was
recognized) and to the extent that Vodafone can establish that it was
actually harmed thereby. Any liquidation of AirTouch Cellular shall
be treated as a disposal of the stock of AirTouch Cellular for
purposes of Section 7.1(a) of the Partnership Agreement. The
foregoing is not intended to create any presumptions as to the 704(c)
methodology addressed in Section 6.8(a) of the Partnership Agreement
or to duplicate the right to a distribution under Section 7.1(a) of
the Partnership Agreement. AirTouch Cellular Gain Recognition Amount
shall not include any income or gain recognized for federal income
tax purposes that is (v) not attributable to the Vodafone Wireless
Business; (w) attributable to any restructuring transaction (it being
understood that the restructuring transactions described above and
involving Holdings I and Group LLC are addressed therein); (x)
attributable to the treatment for federal income tax purposes of
Vodafone's transfer of the Vodafone Conveyed Assets to the
Partnership in other than its capacity as a partner to the extent
that the tax payable with respect to such issue would exceed $ 191
million (plus associated interest, penalties and additions to tax);
(y) attributable to deferred intercompany gain or (z) attributable to
any inability to engage in a split-off transaction with AT&T or
MediaOne.
(5) "AirTouch Cellular Taxes" shall mean any Taxes (other than federal,
state, local and foreign income Taxes, or CMT Taxes) imposed upon
Vodafone or any Affiliate thereof with respect to the AirTouch
Cellular Transaction as a result of the fact that the stock of
AirTouch Cellular rather than its assets was contributed to the
Partnership, plus any AirTouch Cellular Conflicted Income Taxes.
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5. Section 2.6.2 is hereby amended to add the following paragraph (F):
Solely in connection with any Tax audit, administrative or court
proceeding (collectively "Tax Proceeding") relating to any AirTouch
Cellular Tax, Vodafone shall promptly provide the Partnership written
notice of any claim by any relevant taxing authority (such relevant
taxing authority, "Taxing Authority") asserted in writing which, if
successful, might result in any AirTouch Cellular Tax (and shall
provide the Partnership with copies of any such written claim). For
purposes of this section 2.6.2(F), the following shall apply:
(i) Vodafone and its Affiliates will act in good faith in connection
with such Tax Proceedings and will use its reasonable best
efforts to minimize such AirTouch Cellular Taxes.
(ii) Except as specifically provided herein,Vodafone and its
Affiliates have the sole right to control and manage the Tax
Proceedings, including the conduct of communications,
discussions and negotiations with the Taxing Authority.
(iii) Vodafone will provide the Partnership with reasonable advance
notice of, and a reasonable opportunity to consult with respect
to, (i) all communications regarding settlement options with the
Taxing Authority, (ii) all settlement offers or proposals made
by Vodafone or its Affiliates to, or received by Vodafone or its
Affiliates, from the Taxing Authority and (iii) all negotiations
and discussions with the Taxing Authority with respect to
settlement of any AirTouch Cellular Tax. The Partnership will
respond promptly to all requests for review or consultation made
by Vodafone pursuant to this Section 2.6.2(F) but failure to
respond pursuant to this clause (iii) shall not waive any of the
Partnership's rights under this clause (iii).
(iv) In connection with any claim for which indemnification is sought
hereunder, Vodafone shall provide such information as may be
requested by the Partnership to the extent relevant to such
claim.
(v) Notwithstanding the foregoing, as long as the Partnership has
provided written notice to Vodafone that the Partnership agrees
that the claim would result in AirTouch Cellular Taxes, Vodafone
shall not enter into any settlement agreement with the Taxing
Authority as to such AirTouch Cellular Taxes without the prior
written consent of the Partnership. The Partnership shall be
given a reasonable period of time following the presentation by
Vodafone of a settlement recommendation to make a determination
as to whether or not to exercise its rights under this clause
(v) but in no event not less than 15 business days from the date
such settlement offer was recommended by Vodafone.
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(vi) From and after the point the Partnership agrees that the claim
would result in AirTouch Cellular Taxes, it shall have the right
to participate with Vodafone inthe resolution of the portion of
the claim relating to such Taxes, including, without limitation,
the right to have participation of counsel.
(vii) Vodafone and its Affiliates shall not be subject to this
Section 2.6.2(F) with respect to any Tax Proceeding involving
AirTouch Cellular Taxes to the extent that Vodafone has waived
its rights against the Partnership under Section 2.6.2(E)(4) and
(5) with respect to such Taxes.
(viii) Nothing contained herein shall require Vodafone or its
Affiliates to contest any issue or prohibit them from settling
any issue involving an AirTouch Cellular Tax if Vodafone or its
Affiliates has received a negative opinion with respect to such
issue from a court of competent jurisdiction.
6. Clause (ii) of Section 2.4.1 is hereby amended and restated in its
entirety to read as follows:
"(ii) the Net Proceeds (other than cash) from a Vodafone Other
Disposition (as defined in Section 2.4.2), the disposition of any
Vodafone Stage I Conflicted Systems and, if Vodafone has disposed of
any Conflict-Related System at or prior to the Stage I Closing, the
disposition of such Conflict-Related System."
7. The second sentence of Section 2.6.2(B) is hereby amended and restated in
its entirety to read as follows:
"At the Stage I Closing, Xxxx Atlantic shall contribute (or shall
have contributed) the Net Proceeds or Gross Proceeds, as applicable
(in each case, other than cash), from the disposition of any removed
Conflicted System or shall have recontributed the removed Conflicted
System to Cellco.
8. Clause (A) of Section 1.16 is hereby amended to add the following phrase
to the end thereof and immediately prior to "and (B)":
", in which case it shall include such proceeds therefrom,"
9. Schedules 1.25A, 1.25B, 1.25C-1 and 1.25C-2 are hereby amended and
restated in their entirety to read as set forth on Annex III.
10. Schedule 7.6 is hereby amended and restated in its entirety to read as set
forth on Annex IV.
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11. Exhibits B and C are hereby amended to delete all references to the
Richmond System, and the Chicago System and the Houston System,
respectively.
12. Section 2.4.2 is hereby amended to change the location of the designation
"(i)" so that it instead immediately precedes the phrase "all right, title
and interest".
13. Clause (ii) of Section 2.4.2 is hereby deleted in its entirety and
replaced with the following:
"(ii) the Net Proceeds (other than cash) from the disposition of (A)
any Vodafone Stage II Conflicted Systems (other than the Chicago
System and the Houston System) and (B) if Vodafone has disposed of any
Conflict-Related System at or prior to the Stage II Closing, such
Conflict-Related System, and (iii) the Net Proceeds (other than cash)
from the disposition of any property or System permitted by clause
(iv) of Section 5.1.4 but not by any other clause thereof ("Vodafone
Other Dispositions ")."
14. Section 2.5.1 is hereby amended to change the location of the designation
"(i)" so that it instead immediately precedes the phrase "all right, title
and interest".
15. Clause (ii) of Section 2.5.1 is hereby deleted in its entirety and
replaced with the following:
"(ii) the Net Proceeds or Gross Proceeds, as applicable (in each case,
other than cash), from the disposition of any Xxxx Atlantic Conflicted
Systems (other than the Richmond System), (iii) if Xxxx Atlantic has
disposed of any Conflict-Related System at or prior to the Stage I
Closing, the Net Proceeds (other than cash) from the disposition of
such Conflict-Related System, and (iv) the Net Proceeds (other than
cash) from the disposition of any property or System permitted by
clause (iv) of Section 5.2.4 but not by any other clause thereof
("Xxxx Atlantic Other Dispositions"), except to the extent that such
Xxxx Atlantic Other Disposition was in connection with resolving any
claimed right of consent, right of first refusal, put right, Default,
dissolution or similar claim, in which case the Gross Proceeds from
such Xxxx Atlantic Other Disposition (the "Xxxx Atlantic Net Proceeds
Other Dispositions" and "Xxxx Atlantic Gross Proceeds Other
Dispositions," respectively)."
16. Section 7.6 is hereby amended and restated in its entirety as follows:
"(a) On the later of the Stage II Closing or the tenth Business Day
after the receipt by Vodafone, Xxxx Atlantic or their respective
Affiliates, as the case may be, of the last of the payments of any
consideration described in clauses (i) through (viii) below (the
"Measurement Date"), Vodafone and Xxxx Atlantic shall agree on each
Party's Conflicted Systems Proceeds Amount. Subject to the second
succeeding sentence, the "Conflicted Systems Proceeds Amount" for each
of Vodafone and Xxxx Atlantic shall equal the sum of the following
amounts received (in such case a positive amount) or incurred (in such
case a negative amount), respectively, by each of Vodafone and Xxxx
Atlantic and their respective Affiliates (other than Cellco or the
Partnership, unless specifically provided):
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(i) the Gross Proceeds, to the extent comprised of cash, derived
from the disposition of any of the Conflicted Systems referred
to on Schedule 7.6A or from any Xxxx Atlantic Gross Proceeds
Other Dispositions;
(ii) with respect to the disposition (other than by Cellco) of any
Conflicted System referred to on Schedule 7.6B, the disposition
of any Conflict-Related System, any Vodafone Other Disposition
and any Xxxx Atlantic Net Proceeds Other Disposition, the
difference between the cash proceeds received therefrom and the
Netting Expenses associated therewith;
(iii) any Netting Expenses actually paid by Cellco prior to the Stage
I Closing associated with a disposition by Cellco of a Cellco
Conflicted System referred to on Schedule 7.6B or a
Conflict-Related System, which Netting Expenses by virtue of
Cellco's payment shall be deemed to have been incurred by Xxxx
Atlantic;
(iv) any Netting Expenses (other than those described in clause (iii)
above) associated with a disposition prior to the Stage I
Closing by Cellco of a Cellco Conflicted System referred to on
Schedule 7.6B or a Conflict-Related System, to the extent paid
or payable by Xxxx Atlantic and not by Cellco or the
Partnership;
(v) cash acquisition payments incurred to acquire properties or
Systems in a transaction or series of related transactions
involving the disposition of Conflicted Systems;
(vi) Taxes imposed on Vodafone or any Affiliate thereof as a result
of the disposition by Cellco or the Partnership of any of the
Conflicted Systems referred to on Schedule 7.6A, divided for
purposes of this Section 7.6 computation by the Vodafone
Measurement Percentage (as defined below), expressed as a
fraction.
(vii) the Netting Expenses incurred by Cellco or the Partnership as a
result of the disposition thereby of any of the Conflicted
Systems referred to on Schedule 7.6(A), which amount by virtue
of Cellco's or the Partnership's payment thereof shall be deemed
to have been received by Xxxx Atlantic;
(viii) the Obligee Adjustment Amount (as defined in paragraph (b)
below); and
(ix) CMT Taxes or AirTouch Cellular Taxes imposed upon Vodafone or
any Affiliate thereof in connection with the CMT Transactions or
the AirTouch Cellular Transactions (to the extent not taken into
account in any of the above clauses).
(x) the accretion (which may be positive or negative) in the amounts
described in clauses (i) through (viii) above at the LIBO Rate
from the date of the receipt or incurrence of such amounts until
the Measurement Date.
When determining the amounts described in clauses (i) through (ix) of
the preceding sentence, the component amounts similarly shall accrete
at the LIBO Rate from the date of receipt or incurrence thereof until
the date as of which they are applied when making such determination,
unless otherwise specifically provided. If, before giving effect to
this
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sentence, a Party's Conflicted Systems Proceeds Amount would be a
negative amount, then such Party's Conflicted Systems Proceeds Amount
shall be increased to zero (the amount of such increase being the
"Positive Adjustment"), and the other Party's Conflicted Systems
Proceeds Amount shall be increased by an amount equal to such Positive
Adjustment. Each Party's percentage Partnership Interest as of the
Measurement Date (which, if Measurement Date is the Stage II Closing
Date, shall give effect to such closing) then shall be multiplied by
the sum of Vodafone's Conflicted Systems Proceeds Amount and Xxxx
Atlantic's Conflicted Systems Proceeds Amount, with the result being
referred to as such Party's "Target Amount." Next, the "Initial
Conflict Payment Amount" shall be calculated for the Party whose
Conflicted Systems Proceeds Amount is greater than its Target Amount.
Such Party's Initial Conflict Payment Amount shall equal (x) the
excess of the Conflicted Systems Proceeds Amount of such Party over
the Target Amount of such Party, divided by (y) the percentage
Partnership Interest of the other Party. Finally, the "Conflict
Payment Amount" and the Party by whom it is to be paid shall be
determined. If Xxxx Atlantic is the Party whose Conflicted Systems
Proceeds Amount is greater than its Target Amount, then Xxxx Atlantic
shall pay the Conflict Payment Amount, which shall be an amount equal
to the sum of its Initial Conflict Payment Amount and the Debt
Adjustment Amount (as defined below). If Vodafone is the Party whose
Conflicted Systems Proceeds Amount is greater than its Target Amount,
then (i) if Vodafone's Initial Conflict Payment Amount exceeds the
Debt Adjustment Amount (the "Clause (i) Excess"), Vodafone shall pay
to the Company the Conflict Payment Amount, which shall be an amount
equal to the Clause (i) Excess, (ii) if the Debt Adjustment Amount
exceeds Vodafone's Initial Conflict Payment Amount (the Clause (ii)
Excess"), Xxxx Atlantic shall pay to the Company the Conflict Payment
Amount, which shall be an amount equal to the Clause (ii) Excess, and
(iii) if Vodafone's Initial Conflict Payment Amount and the Debt
Adjustment Amount are equal, neither Party shall pay the Conflict
Payment Amount. The "Debt Adjustment Amount" shall be an amount equal
to (A) $500,000,000 accreted at (B) the LIBO Rate from the Stage I
Closing Date until the Measurement Date. The Conflict Payment Amount
shall be paid to the Partnership no later than the fifth Business Day
after the Measurement Date.
(b) The "Obligee Adjustment Amount" shall be deemed to have been
incurred by the Obligee Party, and shall mean the quotient derived by
dividing (i) the difference (such difference being the "Initial
Adjustment Amount") between (A) $83 million and (B) the PCS Amount, by
(ii) the percentage Partnership Interest, expressed as a fraction, of
the Vodafone Group, if Vodafone is the Obligee Party, or the Xxxx
Atlantic Group, if Xxxx Atlantic is the Obligee Party, as of the
Measurement Date (which if the Measurement Date is the Stage II
Closing Date shall give effect to such Closing). For purposes of this
definition:
"Adjustment Percentage" means the positive or negative percentage
derived as the difference between (i) fifty percent and (ii) the
Vodafone Measurement Percentage.
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"Associated Systems Costs" means the sum of (i) the Out-of-Pocket
Expenses directly related to the disposition of the PrimeCo
Distributed Systems and (ii) the product of (A) forty percent and (B)
the amount of gain recognized for federal income tax purposes in
connection with the disposition of the PrimeCo Distributed Systems.
"Obligor Party" means (i) Xxxx Atlantic if the Initial Adjustment
Amount is a positive number, and (ii) Vodafone if the Adjustment
Amount is a negative number.
"PCS Amount" means the positive or negative number derived as the
difference between (i) the product of (A) the Adjustment Percentage
and (B) the Systems Cash Flow and (ii) the Richmond Adjustment.
"Obligee Party" means the party that is not the Obligor Party (i.e.,
Vodafone if Xxxx Atlantic is the Obligor Party and Xxxx Atlantic if
Vodafone is the Obligor Party).
"Richmond Adjustment" means the product of (i) the Vodafone
Measurement Percentage, (ii) forty percent and (iii) the amount of
gain recognized for federal income tax purposes in connection with the
disposition of the Richmond System.
"Systems Cash Flow" means the difference between (i) the Systems
Proceeds and (ii) the Associated System Costs.
"Systems Proceeds" means the aggregate of all sale prices and/or other
assets received by PrimeCo PCS, LP and PrimeCo 10MHz, LP upon their
disposition of the PrimeCo Distributed Systems.
"Vodafone Measurement Percentage" means the percentage Partnership
Interest of the Vodafone Group (as defined in the Partnership
Agreement) as of the Measurement Date (which if the Measurement Date
is the Stage II Closing Date shall give effect to such Closing).
16. Section 2.4.3 is hereby amended to add the following paragraph:
"(I) any contract providing for a Vodafone Other Disposition or
pursuant to which a Vodafone Stage I Conflicted System, a Vodafone
Stage II Conflicted System or a Conflict-Related System has been or is
to be disposed (each such contract being a "Vodafone Disposition
Contract")."
17. Section 2.5.2 is hereby amended to add the following paragraph:
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"(J) any contract providing for a Xxxx Atlantic Other Disposition or
pursuant to which a Xxxx Atlantic Conflicted System or a
Conflict-Related System has been or is to be disposed (each such
contract being a "Xxxx Atlantic Disposition Contract")."
18. Section 2.4 is hereby amended to add the following:
"Section 2.4.6. Indemnity Agreement. Upon the later to occur of the
Stage I Closing, on the one hand, and any of a Vodafone Other
Disposition or the disposition of a Vodafone Stage I Conflicted System
or a Conflict-Related System, on the other, Vodafone and the
Partnership shall enter into an indemnity agreement in the form of
Exhibit F hereto (an "Indemnity Agreement") with respect to any such
disposition. Upon the later to occur of the Stage II Closing or the
disposition of a Vodafone Stage II Conflicted System, Vodafone and the
Partnership shall enter into an Indemnity Agreement with respect to
any such disposed System. (Each Indemnity Agreement entered into
pursuant to this Section 2.4.6 shall be a "Vodafone Indemnity
Agreement.")
Section 2.4.7. Delayed Dispositions of Conflicted Systems or
Conflict-Related Systems. To the extent that Net Proceeds from (i) a
Vodafone Other Disposition or the disposition of a Vodafone Stage I
Conflicted System or a Conflict-Related System, or (ii) the
disposition of a Vodafone Stage II Conflicted System, are not received
by Vodafone until after (x) the Stage I Closing or (y) the Stage II
Closing, respectively, such Net Proceeds (other than, with respect to
Vodafone Other Dispositions, Conflicted Systems or Conflict-Related
Systems, cash or, as to the MediaOne Split-Off Transactions, any CMT
Gross Proceeds) shall be contributed to the Partnership within ten
Business Days after such receipt. The contribution of the foregoing
shall not change the Parties' Stage I or Stage II ownership interests
in the Partnership."
19. Section 2.5 is hereby amended to add the following:
"Section 2.5.5 Indemnity Agreement. Upon the later to occur of the
Stage II Closing, on the one hand, and any of a Xxxx Atlantic Other
Disposition or the disposition of a Xxxx Atlantic Conflicted System or
a Conflict-Related System, on the other, Xxxx Atlantic and the
Partnership shall enter into an Indemnity Agreement with respect to
such disposition ( each such Indemnity Agreement being a "Xxxx
Atlantic Indemnity Agreement").
Section 2.5.6. Delayed Dispositions of Systems. To the extent that
Net Proceeds or Gross Proceeds, as appropriate, from a Xxxx Atlantic
Other Disposition or the disposition of a Xxxx Atlantic Conflicted
System or a Conflict-Related System are not received by Xxxx Atlantic
until after the Stage II Closing, such Net Proceeds or Gross Proceeds
therefrom (other than cash) shall be contributed to the Partnership
within ten Business Days after such receipt. The contribution of the
foregoing shall not change the Parties' Stage I or Stage II ownership
interests in the Partnership."
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20. Clause (v) of Section 5.1.4 is hereby amended and restated to read in its
entirety as follows:
"other divestitures (excluding divestitures of Conflict-Related
Systems) contemplated by the Transaction Documents,"
21. Clause (v) of Section 5.2.4 is hereby amended and restated to read in its
entirety as follows:
"other divestitures (excluding divestitures of Conflict-Related Systems)
contemplated by the Transaction Documents,"
22. Section 9.1(a) is hereby amended to delete the word "or" immediately
preceding clause (iv) and to add the following to the end thereof:
"or (v) any Xxxx Atlantic Indemnity Agreement, if the facts of
circumstances giving rise to the claim under the Xxxx Atlantic
Disposition Contract which is the subject of such payment would have
given rise to (A) a Loss under any of the preceding clauses of this
Section 9.1(a) or (B) a reimbursement, indemnification or hold
harmless obligation under Section 8.1, were the assets and liabilities
disposed of pursuant to such Xxxx Atlantic Disposition Contract
instead to have been Xxxx Atlantic Conveyed Assets and Liabilities of
Xxxx Atlantic, respectively, contributed to the Partnership at the
Stage II Closing. In the event clause (v)(B) of the foregoing sentence
is applicable, the amount and manner of any payment shall be
determined in accordance with the principles of Article VIII."
23. Section 9.2 (a) is hereby amended to delete the word "or" immediately
preceding clause (iii) and to add the following to the end thereof:
"or (iv) any Vodafone Indemnity Agreement, if the facts or
circumstances giving rise to the claim under the Xxxx Atlantic
Disposition Contract which is the subject of such payment would have
given rise to (A) a Loss under any of the preceding clauses of this
Section 9.2(a) or (B) a reimbursement, indemnification or hold
harmless obligation under Section 8.1, were the assets and liabilities
disposed of pursuant to such Xxxx Atlantic Disposition Contract
instead to have been, with respect to such assets, (W) Vodafone Stage
I Conveyed Assets, if such Xxxx Atlantic Disposition Contract relates
to Vodafone Stage I Conflicted Systems, Conflict-Related Systems that
otherwise would have been Vodafone Stage I Conveyed Assets, or
Vodafone Other Dispositions, or (X) as to all other assets, Vodafone
Stage II Contributed Assets, and with respect to such liabilities, (Y)
Liabilities relating to or arising from Vodafone Stage I Conveyed
Assets as of the Stage I Closing Date, if relating to or arising from
assets described in (A) above, or (Z) as to all other liabilities,
Liabilities relating to or arising from Vodafone Stage II Conveyed
Assets as of the Stage II Closing Date. In the event clause (v)(B) of
the foregoing sentence is applicable, the amount and manner of any
payment shall be determined in accordance with the principles of
Article VIII."
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PrimeCo-Related Amendments
The second sentence of Section 7.1 is hereby amended and restated in its
entirety as follows:
"The Parties shall, or shall cause the appropriate Affiliates to (i)
amend the PrimeCo Agreement to cause (A) the Distribution Date to occur on
the 60th day following the date that Xxxx Atlantic or Vodafone gives
written notice of its intent to effectuate the PrimeCo Agreement, but in
no event earlier than February 1, 2000; and (B) the PrimeCo Agreement to
terminate upon consummation of the Stage I Closing; (ii) prior to the
Stage I Closing, cause the Richmond, Chicago and Houston PCS licenses and
related assets and liabilities (the "Richmond System," the "Chicago
System" and the "Houston System," respectively, and collectively the
"PrimeCo Distributed Systems") to be distributed directly or indirectly to
the partners of PrimeCo in proportion to their respective ownership
interests in PrimeCo and then contributed by such partners to PrimeCo PCS,
L.P. and PrimeCo 10MHz, LP; and (iii) prior to the Stage I Closing, cause
PrimeCo and PrimeCo PCS, L.P. to enter into an appropriate services and
guarantee agreements. The Parties shall cause PrimeCo PCS, L.P. to
dispose, subject to the contribution of the Xxxx Atlantic Conveyed Assets
at the Stage II Closing, of substantially all of the assets and
liabilities thereof pursuant to Section 2.6.2 and to promptly distribute
the proceeds from each such disposition to the partners thereof in
proportion to their respective ownership interests. Notwithstanding
anything to the contrary in Section 2.6.2(A), Vodafone shall direct the
disposition of the Chicago System, on the one hand, and Xxxx Atlantic
shall direct the disposition of the Houston System and the Richmond
System, on the other, on behalf of PrimeCo PCS, L.P.; provided, however,
that the actual disposition transaction covering the Chicago System shall
require the consent of Xxxx Atlantic, which consent shall not be
unreasonably withheld. In the event that any BTA license is partitioned
from an MTA license held by PrimeCo PCS, L.P. and not disposed of by
PrimeCo PCS, L.P. in connection with the sale of such MTA, the Parties
shall cause such BTA license to be distributed in kind by PrimeCo PCS,
L.P. to the partners thereof and then contributed by such partners to the
Partnership in a manner that does not alter the percentage ownership
interests in the Partnership. The Parties may or may not cause PrimeCo
10MHz, L.P. to dispose of any of its assets or liabilities. At such time
as each of the corresponding MTA licenses have been disposed of by PrimeCo
PCS, L.P., the Parties shall cause the distribution by PrimeCo 10MHz, L.P.
to the partners thereof, in proportion to their respective ownership
interests therein, of the proceeds from the disposition, if any, of the
relevant MTA license held by the partnership or, if such relevant MTA
license has not been disposed of, the distribution in kind to the partners
thereof, in proportion to their respective ownership interests, of such
relevant MTA license and the contribution thereof by such partners to the
Partnership in a manner that does not alter the percentage ownership
interests in the Partnership. Notwithstanding the foregoing four
sentences, the Parties shall cause the partners of each of PrimeCo PCS,
L.P. and PrimeCo 10MHz, L.P. to contribute their respective ownership
interests therein to (i) PrimeCo, promptly after any termination of this
Agreement prior to the Stage I
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Closing, or (ii) the Partnership, in a manner that does not alter the
percentage ownership interests therein, promptly after the Stage II
Closing if at the time thereof the condition specified in clause (2) of
the first sentence of Section 3.2 has not been satisfied. PrimeCo PCS,
L.P. and PrimeCo 10MHz, L.P. shall reimburse their respective partners for
any out-of-pocket expenses (other than Taxes) incurred by such partner or
an Affiliate thereof and directly related to the disposition by such
partnership of the Chicago System and the Houston System. The Parties
agree to cooperate in good faith to explore the possibility of (i) a
split-off transaction by Vodafone involving the Houston System and (ii) a
sale of the Chicago System as part of a combined sale of all the PrimeCo
Distributed Systems."
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Debt-Related Amendments
1. The second sentence of Section 2.6.l is hereby amended to delete the last
three words from the end thereof and replace them with the following words
"Vodafone Stage I Debt Cap".
2. The third sentence of Section 2.6.l is hereby amended to delete the fourth
word from the end thereof and replace it with the word "Xxxx Atlantic".
3. The seventh sentence of Section 2.6.1 is hereby amended by replacing the
following words "Stage I Partnership Loans" with "Vodafone Stage I Loan
and Xxxx Atlantic Stage I Loan".
4. The last sentence of Section 2.6.1 is hereby amended to delete the term
"Vodafone Stage II Debt Cap" and to replace the reference to "Xxxx
Atlantic Debt Cap" with the term "Xxxx Atlantic Stage II Debt Cap".
5. A new Schedule 2.6.1(a) shall be added to the Agreement in the form set
forth as Annex V hereto.
6. Schedule 2.6.1 is hereby amended and restated in its entirety as follows:
STAGE I CALCULATIONS, PERMITTED INDEBTEDNESS AND PAYMENTS:
At or immediately after the Stage I Closing, Vodafone and/or Xxxx
Atlantic or the Partnership may require the Partnership to incur
Indebtedness through a debt facility to be established at the
Partnership in an aggregate principal amount of $5,100,000,000, (the
"Stage I Partnership Loan"). This loan shall be for the purpose of
refinancing Vodafone Contributed Debt and financing Initial Vodafone
Indebtedness (together, the "Vodafone Stage I Loan"), refinancing the
Xxxx Atlantic Contributed Debt (the "Xxxx Atlantic Stage I Loan"),
and financing the acquisition of additional assets for the
Partnership not included in Vodafone Conveyed Assets, Xxxx Atlantic
Conveyed Assets or Cellco Assets (the "Additional Acquisition
Loans"). First, Vodafone shall have the right to draw down up to
$4,000,000,000 on the Stage I Partnership Loan, prior to any other
draws against the Stage I Partnership Loan. The difference between
the Stage I Partnership Loan and the Vodafone Stage I Loan shall be
the "Additional Acquisition Indebtedness Cap".
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STAGE I CALCULATIONS, PERMITTED INDEBTEDNESS AND PAYMENTS: Vodafone Stage I
Contributed Indebtedness
The Vodafone Stage I Debt Cap shall be equal to $4,500,000,000. At
the Stage I Closing Vodafone shall contribute to the Partnership
Indebtedness associated with the Vodafone Wireless Business in an
aggregate outstanding principal amount (such contributed debt, the
"Vodafone Contributed Debt") not to exceed the difference (the
"Adjusted Vodafone Stage I Debt Cap") between the Vodafone Stage I
Debt Cap and $500,000,000 (the "Vodafone Debt Adjustment"). The
Vodafone Contributed Debt will be comprised of, but not limited to,
one or all of the following: (1) qualified liabilities as determined
under Treas. Reg. 1.707-5(a)(6); (2) other Indebtedness (including
intercompany loans) allocable to capital expenditures of Vodafone;
and (3) recourse indebtedness. At or immediately after the Stage I
Closing, Vodafone may require the Partnership to refinance the
Vodafone Contributed Debt through the Stage I Partnership Loan. In
addition, at or immediately after the Stage I Closing, Vodafone may
require the Partnership to incur additional Indebtedness through the
Stage I Partnership Loan up to the amount by which the Adjusted
Vodafone Stage I Debt Cap exceeds the sum of the outstanding
principal balance of the Vodafone Contributed Debt (the "Initial
Vodafone Indebtedness"). The cash proceeds of the Vodafone Stage I
Loan shall be distributed immediately by the Partnership to Vodafone
or such of its subsidiaries as Vodafone shall designate in writing.
The "Vodafone Stage I Debt Amount," which means the sum of (i) the
aggregate principal amount outstanding immediately after the Stage I
Closing under the Vodafone Contributed Debt after taking into account
the application of the proceeds of a Vodafone Stage I Loan to repay
any Vodafone Contributed Debt, (ii) the Vodafone Stage I Loan and
(iii) the Vodafone Debt Adjustment, shall not exceed the Vodafone
Stage I Debt Cap.
STAGE I CALCULATIONS, PERMITTED INDEBTEDNESS AND PAYMENTS: Xxxx Atlantic Stage
I Indebtedness
"Xxxx Atlantic shall be entitled to contribute to the Partnership, or
cause the Partnership to retain or refinance, Indebtedness associated
with the Xxxx Atlantic Wireless Business in an aggregate outstanding
principal amount not to exceed the Xxxx Atlantic Stage I Debt Cap. At
or immediately after the Stage I Closing, Xxxx Atlantic may require
the Partnership to refinance the Xxxx Atlantic Contributed Debt
through the Stage I Partnership Loan, (the "Xxxx Atlantic Stage I
Loan") for an amount up to the Xxxx Atlantic Stage I Loan Cap
(defined below). The "Xxxx Atlantic Stage I Debt Amount", which means
the sum of (i) the aggregate principal amount outstanding immediately
after the Stage I Closing under the
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Xxxx Xxxxxxxx Contributed Debt (after taking into account the
application of the proceeds of a Xxxx Atlantic Stage I Loan to repay
any Xxxx Atlantic Contributed Debt), and (ii) the Xxxx Atlantic Stage
I Loan, shall not exceed the Xxxx Atlantic Stage I Debt Cap. The
"Xxxx Atlantic Stage I Debt Cap" shall be equal to the product of (i)
a fraction, the numerator of which is the Percentage Interest of Xxxx
Atlantic immediately after the Stage I Closing and the denominator of
which is the Percentage Interest of Vodafone immediately after the
Stage I Closing, multiplied by (ii) the Vodafone Stage I Debt Amount.
STAGE II CALCULATIONS, PERMITTED INDEBTEDNESS AND PAYMENTS: Xxxx Atlantic Stage
II Indebtedness
"At the Stage II Closing, Xxxx Atlantic shall be entitled to
contribute to the Partnership Indebtedness (the "Xxxx Atlantic Stage
II Indebtedness") associated with the Xxxx Atlantic Wireless Business
in an outstanding principal amount not to exceed the Xxxx Atlantic
Stage II Debt Cap; provided, however, that if the principal amount of
the Xxxx Atlantic Stage II Indebtedness exceeds at the Xxxx Atlantic
Stage II Debt Cap, Xxxx Atlantic shall contribute to the Partnership
at the Stage II Closing cash in the amount of such excess. The "Xxxx
Atlantic Stage II Debt Cap" shall be that aggregate principal amount
outstanding of the Xxxx Atlantic Stage II Indebtedness equal to the
remainder of (A) the product of (i) a fraction the numerator of which
is the Percentage Interest of Xxxx Atlantic immediately after the
Stage II Closing and the denominator of which is the Percentage
Interest of Vodafone immediately after the Stage II Closing,
multiplied by (ii) the Vodafone Stage I Debt Amount, minus (B) the
aggregate principal amount of the Xxxx Atlantic Stage I Debt Amount.
ADDITIONAL ACQUISITION INDEBTEDNESS:
Notwithstanding anything to the contrary in the Alliance Agreement or
this Schedule 2.6.1, but subject nevertheless to the following two
sentences, each Party may contribute to the Partnership, in addition
to the Vodafone Stage I Debt Amount and Xxxx Atlantic Stage I Debt
Amount or Xxxx Atlantic Stage II Indebtedness determined in
accordance with the Vodafone Stage I Debt Cap and the Xxxx Atlantic
Stage I or II Debt Cap, Indebtedness ("Additional Acquisition
Indebtedness") incurred in connection with acquisitions of properties
contributed to the Partnership that are not included in the Vodafone
Conveyed Assets, the Xxxx Atlantic Conveyed Assets or the Cellco
Assets. No Party shall be entitled to contribute Additional
Acquisition Indebtedness to the Partnership pursuant to the preceding
sentence to the extent it would exceed, an amount equal to the
product of (i) the Additional Acquisition Indebtedness Cap and (ii)
the percentage Partnership Interest, expressed as a fraction, of the
Vodafone Group (if
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Vodafone is the Party) (the "Vodafone Additional Acquisition Debt
Cap") or the Xxxx Atlantic Group (if Xxxx Atlantic is the Party) (the
"Xxxx Atlantic Stage I Loan Cap"), and in the case of Xxxx Atlantic
less the Xxxx Atlantic Stage I Loan. Any Indebtedness so contributed
shall either have been incurred through a drawdown of the Stage I
Partnership Loan or, as a condition to its contribution, shall be
refinanceable by the Partnership at the time of such contribution
through a drawdown of the Stage I Partnership Loan. The amounts of
such contributed Indebtedness shall be set forth on Schedule
2.6.1(a), which shall be amended from time to time as necessary to
reflect the same, and such amounts shall not be deemed to be Stage I
Indebtedness or Stage II Indebtedness of a Party for purposes of the
calculations specified in this Schedule 2.6.1.
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Miscellaneous Amendments
1. The first sentence of Section 5.9 is hereby amended to insert immediately
prior to "Stage I Closing" the following language: "the 90th day after".
2. The last sentence of Section 2.6.4 is hereby amended to read in its entirety
as follows:
Both prior to and after the Stage I Closing and the Stage II Closing, each
Party will (i) use commercially reasonable efforts to obtain any required
consents to the assignment of any Non-Assignable Contracts or any other assets
included in the Conveyed Assets to be transferred by such Party to the
Partnership, (ii) upon obtaining such consent shall immediately assign such
Non-Assignable Contract or other asset to the Partnership, and (iii) prior to
obtaining such consent shall cooperate with the Partnership in any reasonable
arrangement designed to provide to the Partnership the rights, benefits,
obligations and liabilities under the Non-Assignable Contract or such other
asset.
3. Section 8.11 shall be amended as follows:
a. The introductory words, "Prior to the Relevant Closing Date," shall be
replaced with the following: "Within 90 days after the Stage II Closing or by
October 31, 2000, if earlier,".
b. The following sentence shall be added: "The tax basis of the assets shall be
the tax basis of the assets on the date the assets were contributed to the
Partnership."
4. The second sentence of Section 10.10 is hereby amended to delete the phrase
"in exchange for Partnership interests in the Partnership Stage I and" and to
insert immediately prior to the word "contribution" the words "tax-free."
5. Section 8.1 of the Alliance Agreement is hereby amended to add the following
paragraph (d):
(d) Xxxx Atlantic shall reimburse, indemnify, and hold harmless (on an
after-Tax basis using an assumed rate of 40%) Vodafone and its Affiliates
from and against (i) any actual loss of Tax benefits plus any loss of
future Tax benefits (with the calculation of the loss of future Tax
benefits calculated based upon present value concepts), in each case,
attributable to the application of section 708(b)(1)(B) of the Code, or
any similar provision of state or local law, in connection with the
contribution of PrimeCo to the Partnership, and (ii) any Losses (as
defined in Section 9.1(a)) that Vodafone, its Affiliates or the
Partnership may sustain, suffer or incur in connection with any such
termination and that result from, arise out of or relate to the leases to
which PrimeCo is a party known as the Japanese leveraged leases. For
purposes of determining the amounts described in clause (i) of the first
sentence of Section 8.1(d), (x) the loss, if any, of actual Tax benefits
-30-
shall include any interest, penalties or additions imposed because such
Tax benefits had been claimed and (y) the loss, if any, of future Tax
benefits shall be calculated using the LIBO Rate and an assumed tax rate
of 40%.
6. Section 9.5 is hereby amended to add the words "or Article VIII" immediately
before clause (i).thereof.
7. Section 9.12 is hereby amended to insert the words ", Article VIII, and any
Transactional Document entered into contemporaneously with the Omnibus
Amendment," after the reference to 9.3(c)in the second sentence thereof.
Other Provisions
1. Dispute Resolution; Governing Law. Sections 10.1 (Dispute Resolution) and
10.11 (Delaware Law to Govern) of the Agreement shall also apply to this
Amendment.
2. Other Terms. Except as modified herein, all other terms and provisions of
the Agreement (including the Exhibits and Schedules thereto) are unchanged and
remain in full force and effect. The Parties agree that each of the Texas MTA
LLP Amendment entered into in December 1999 and the letter agreement dated
February 1, 2000, entered into between the Parties, is hereby terminated and of
no further force or effect.
3. Counterparts. This Amendment may be executed in counterparts, each of which
shall be deemed to be an original and all of which shall together constitute a
single instrument.
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IN WITNESS WHEREOF, the parties have caused this Amendment to be duly
executed by their duly authorized representatives as of the date first written
above.
VODAFONE AIRTOUCH Plc,
an English public limited company
By /s/ Xxxx Xxxxx
----------------------------------
Name: Xxxx Xxxxx
Title: Chief Executive Officer
XXXX ATLANTIC CORPORATION,
a Delaware corporation
By /s/ Xxxxxxxx X. Xxxxxxx
----------------------------------
Name: Xxxxxxxx X. Xxxxxxx
Title: Senior Executive Vice
President and Chief
Financial Officer
-32-
