EXHIBIT 99.2
EXECUTION COPY
PURCHASE AGREEMENT
AMONG
TELEPHONE AND DATA SYSTEMS, INC.,
a Delaware Corporation,
AERIAL COMMUNICATIONS, INC.,
a Delaware Corporation,
APT OPERATING COMPANY, INC.,
a Delaware Corporation,
AND
SONERA CORPORATION
a Finnish Limited Liability Company
dated: June __, 1998
TABLE OF CONTENTS
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ARTICLE 1...............................................................3
DEFINITIONS....................................................3
ARTICLE 2...............................................................10
PURCHASE OF STOCK; CLOSING.....................................10
2.1 Purchase of Common Stock.....................10
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2.2 Closing......................................10
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2.3 Purchase Price Adjustment.......................11
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2.4 Effect of Aerial Merger or Distribution.........14
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ARTICLE 3...............................................................15
COVENANTS AND AGREEMENTS.......................................15
3.1 Covenants of TDS and the Aerial Parties......15
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3.2 Covenants of the Investor....................19
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3.3 Governmental Filings.........................20
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ARTICLE 4...............................................................22
REPRESENTATIONS AND WARRANTIES.................................22
4.1 Representations and Warranties of the
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Aerial Parties ..............................22
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4.2 Representations and Warranties of
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the Investor ................................30
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4.3 Representations and Warranties of TDS........34
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ARTICLE 5...............................................................38
CONDITIONS TO OBLIGATIONS......................................38
5.1 Conditions to the Obligation of TDS and
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the Aerial Parties .........................38
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5.2 Conditions to the Obligation of the Investor
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ARTICLE 6...............................................................43
SURVIVAL ......................................................43
6.1 Survival of Representations and Warranties. 43
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6.2 Indemnity by TDS and the Aerial Parties......43
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6.3 Indemnity by the Investor....................45
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6.4 Procedure....................................46
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6.5 Indemnity Sole Remedy........................47
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ARTICLE 7...............................................................48
MISCELLANEOUS..................................................48
7.1 Expenses.....................................48
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7.2 Equitable Remedies...........................48
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7.3 Notices......................................48
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7.4 Entire Agreement.............................51
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7.5 Remedies Cumulative..........................52
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7.6 Governing Law................................52
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7.7 Counterparts.................................52
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7.8 Waivers......................................52
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7.9 Successors and Assigns.......................52
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7.10 Further Assurances...........................53
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7.11 Disclosures..................................53
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7.12 Termination..................................54
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7.13 No Claim of Immunity.........................56
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7.14 Severability.................................56
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ARTICLE 8...............................................................57
DISPUTES ......................................................57
8.1 General......................................57
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8.2 Negotiation Procedure........................57
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8.3 Unresolved Disputes..........................58
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8.4 Jurisdiction; Consent to Service of Process..58
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PURCHASE AGREEMENT
This PURCHASE AGREEMENT, is made as of June __, 1998 (the
"Agreement"), by and among TELEPHONE AND DATA SYSTEMS, INC., a Delaware
corporation ("TDS"), AERIAL COMMUNICATIONS, INC., a Delaware corporation
("Aerial"), APT OPERATING COMPANY, INC., a Delaware corporation (the "Company"
and, together with Aerial, the "Aerial Parties"), and SONERA CORPORATION, a
limited liability company organized under the laws of the Republic of Finland
(the "Investor").
R E C I T A L S :
WHEREAS, TDS is the owner of more than 80% of the outstanding
capital stock of Aerial;
WHEREAS, Aerial is the owner of all of the outstanding capital
stock of the Company;
WHEREAS, the Company is engaged in the business of providing
broadband personal communications services in the United States;
WHEREAS, the Investor is engaged directly or through
Affiliates in the communications business in, among other places, Finland;
WHEREAS, Aerial and the Investor, acting through their
respective subsidiaries, desire to form a joint venture for the purpose of
investing in and operating systems in the United States providing broadband
personal communications services using Global Systems for Mobile Communications
technology;
WHEREAS, in addition to forming the joint venture, upon the
terms and conditions set forth in this Agreement, the Company has determined to
issue and sell, and the Investor has determined to purchase, an aggregate of
2,410,482 shares of the Company's common stock, par value $0.001 per share (the
"Common Stock"), which upon issuance will constitute 19.423% of the issued and
outstanding Common Stock of the Company;
WHEREAS, Telephone and Data Systems, Inc., an Iowa corporation
and TDS's immediate predecessor ("TDS Iowa"), and one of its wholly-owned
Subsidiaries, filed with the Securities and Exchange Commission a Registration
Statement on Form S-4, and Amendments No. 1 and 2 thereto, which included a
Proxy Statement and Prospectus (the "TDS Proxy Statement"), copies of which, as
amended and supplemented, were furnished to the Investor;
WHEREAS, the shareholders of TDS Iowa approved the proposal
(the "Tracking Stock Proposal") described in the TDS Proxy Statement dated March
24, 1998, as amended by a Proxy Statement Supplement dated April 20, 1998;
WHEREAS, effective May 22, 1998, TDS Iowa was merged with and
into TDS;
WHEREAS, immediately prior to the effective time of such
merger, the Certificate of Incorporation of TDS was amended and restated to
among other things, authorize a new class of common stock of TDS Delaware
("Aerial Group Shares") intended to separately reflect the performance of the
personal communications service business of Aerial and its Subsidiaries,
including all assets and liabilities allocated thereto (the "Aerial Group"); and
WHEREAS, (i) TDS Iowa has offered to issue Aerial Group Shares
in exchange for all outstanding Aerial Common Shares pursuant to a merger
between Aerial and a wholly-owned subsidiary of TDS, and (ii) TDS intends to
make a distribution of Aerial Group Shares, in the form of a stock dividend,
with respect to each outstanding Common and Series A Common Share of TDS;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants, conditions and promises hereinafter set forth, the parties
hereby agree as follows:
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ARTICLE 1
DEFINITIONS
Unless the context otherwise requires, the terms defined
hereunder shall have the meanings therein specified for all purposes of this
Agreement, applicable to both the singular and plural forms of any of the terms
defined herein. For purposes of this Agreement:
"Additional Agreements" shall mean the Investment Agreement,
the Joint Venture Agreement and the Registration Rights Agreement to be executed
at the Closing.
"Aerial" shall have the meaning set forth in the preamble
hereof.
"Aerial Acquisition Proposal" shall have the meaning set forth
in Section 3.1(i) hereof.
"Aerial Adjustment Event" shall have the meaning set forth in
Section 2.3(b) hereof.
"Aerial Average" shall mean (i) for any period of reference
prior to the earlier to occur of the Aerial Merger or the Distribution, the
average of the daily means of the high and low sales prices for Aerial Common
Shares, as reported in the applicable composite transactions section or national
market issues section of The Wall Street Journal , and (ii) for any period of
reference thereafter, the average of the daily means of the high and low sales
prices for Aerial Group Shares, as reported in the applicable composite
transactions section or national market issues section of The Wall Street
Journal.
"Aerial Benefit Plans" shall have the meaning set forth in
Section 4.1(l) hereof.
"Aerial Common Shares" shall mean the class of shares of
Aerial designated as Common Shares in its Certificate of Incorporation, as in
effect on the Closing Date.
"Aerial Common Stock" shall mean Aerial Common Shares and the
class of shares of Aerial designated as Series A Common Shares in its
Certificate of Incorporation, as in effect on the Closing Date.
"Aerial Group" shall have the meaning set forth in the
preamble hereof.
"Aerial Group Shares" shall have the meaning set forth in the
preamble hereof.
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"Aerial Merger" shall mean the acquisition by TDS of all of
the Aerial Common Shares that it does not own, pursuant to (i) a transaction,
including the Aerial Merger (as that term is defined in the TDS Proxy
Statement), in which Aerial Group Shares are issued and immediately after which
Aerial Group Shares are listed on a national securities exchange or authorized
for quotation on NASDAQ or (ii) any other transaction upon the consummation of
which Aerial becomes a wholly-owned subsidiary of TDS and TDS has issued and
outstanding Aerial Group Shares that are listed on a national securities
exchange or authorized for quotation on NASDAQ.
"Aerial Parties" shall have the meaning set forth in the
preamble hereof.
"Aerial Shares" shall mean (i) with respect to any time of
reference prior to the earlier of (A) the date of the Aerial Merger, or (B) the
date of the Distribution, Aerial Common Shares, and (ii) with respect to any
time of reference thereafter, Aerial Group Shares.
"Affiliate" shall mean, with respect to any party hereto, any
corporation or other business entity which, directly or indirectly, through
stock ownership or through any other arrangement, controls, is controlled by or
is under common control with, such party. The term "control" shall mean the
possession, direct or indirect, of the power to direct or cause the direction of
the management or policies of such person, whether by reason of ownership of
voting stock or other equity interests, by contract or otherwise.
"Agreement" shall have the meaning set forth in the preamble
hereof.
"Amended Tax Allocation Agreement" shall mean the Tax
Allocation Agreement, as amended as of the Closing Date, by and among TDS,
Aerial and the Company.
"Anniversary" shall mean the date occurring 12 months after
the Closing Date and the date occurring each 12 months thereafter.
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"AOC Revolving Credit Agreement" shall mean the Revolving
Credit Agreement, dated as of the Closing Date, by and between TDS and the
Company.
"Authorization" shall mean any franchise, license,
authorization, consent, permit, waiver, approval, qualification or registration
of, with or from the FCC, any state public utility or public service commission,
or any other governmental authority, agency or instrumentality having
jurisdiction over the relevant party and matter.
"Business Day" shall mean any day other than a Saturday,
Sunday, legal holiday in Chicago, Illinois, or other day on which commercial
banks in Chicago are authorized by law or governmental decree to close.
"Closing" shall have the meaning set forth in Section 2.2
hereof.
"Closing Date" shall have the meaning set forth in Section 2.2
hereof.
"Code" shall mean the Internal Revenue Code of 1986, as
amended.
"Common Stock" shall have the meaning set forth in the
preamble hereof.
"Communications Act" shall mean the Communications Act of
1934, and any similar or successor federal statute, and the rules and
regulations of the FCC thereunder, all as amended and as the same may be in
effect from time to time.
"Company" shall have the meaning set forth in the preamble
hereof.
"Disclosures" shall have the meaning set forth in Section 7.11
(a) hereof.
"Distribution" shall mean the distribution by TDS of Aerial
Group Shares, in the form of a stock dividend, with respect to each outstanding
Common and Series A Common Share of TDS.
"Dollar" or "$" shall mean the basic unit of the lawful
currency of the United States of America.
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"ERISA" shall have the meaning set forth in Section 4.1(l)
hereof.
"Exchange Rate" shall have the meaning provided for it in the
Investment Agreement.
"Exchange Rate Applicable to Aerial Common Shares" shall have
the meaning provided it in the Investment Agreement.
"Exchange Rate Applicable to Aerial Group Shares" shall have
the meaning provided it in the Investment Agreement.
"Favorable Declaratory Ruling" shall have the meaning set
forth in Section 3.3(a) hereof.
"FCC" shall mean the United States Federal Communications
Commission, or any other similar or successor agency of the federal government
administering the Communications Act.
"Final Order" shall mean an action or decision as to which:
(i) no request for a stay is pending, no stay is in effect, and any deadline for
filing such request that may be designated by statute or regulation has passed;
(ii) no petition for rehearing or reconsideration or application for review is
pending and the time for filing any such petition or application has passed;
(iii) the FCC, public utility commission or public service commission (or
comparable bodies exercising jurisdiction over the Company or its communications
businesses) does not have the action or decision under reconsideration on its
own motion and the time for initiating such reconsideration has passed; and (iv)
no appeal is pending or in effect and any deadline for filing any such appeal
that may be designated by statute or rule has passed.
"HSR Act" shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended.
"Indemnification Period" shall mean the period ending on the
second Anniversary.
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"Indemnitee" shall mean that party which has sustained or
incurred Losses and is seeking indemnification pursuant to Article 6 hereof.
"Indemnitor" shall mean that party which is providing
indemnification pursuant to Article 6 hereof.
"Investment Agreement" shall mean the agreement substantially
in the form attached as EXHIBIT 1.1 hereto.
"Investor" shall have the meaning set forth in the preamble
hereof.
"Joint Venture Agreement" shall mean the agreement
substantially in the form attached as EXHIBIT 1.2 hereto.
"Lien" shall mean any lien, claim, security interest, charge,
encumbrance or title retention agreement of any nature.
"Losses" shall have the meaning set forth in Section 6.2(a)
hereof.
"Material Adverse Effect" shall mean a material adverse effect
on the financial condition, operations or business of Aerial and its
Subsidiaries, taken as a whole, or on the ability of TDS, Aerial or the Company
to enter into and consummate the transactions contemplated by, and lawfully
perform their obligations under, this Agreement and the Additional Agreements in
accordance with their respective terms.
"NASDAQ" shall mean National Association of Securities Dealers,
Inc. Automated Quotation System.
"Number of Aerial Group Shares" shall have the meaning
provided for it in the Investment Agreement.
"Operating Financial Statements" shall have the meaning set
forth in Section 4.1(g) hereof.
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"PCS Authorization" shall mean any FCC Authorization for
providing broadband PCS mobile communications services through the use of
microcells with low-power transmitters, each serving a small area operating in
the 1850-1910 MHz and the 1930-1990 MHz bands.
"Permitted Affiliate Transferees" shall have the meaning
provided it in the Investment Agreement.
"Person" shall mean any general or limited partnership,
corporation, limited liability company, joint venture, trust, business trust,
governmental agency, cooperative, association, individual or other entity, and
heirs, executors, administrators, legal representatives, successors and assigns
of such person.
"Purchase Price" shall have the meaning set forth in Section
2.1 hereof.
"Purchased Shares" shall have the meaning set forth in Section
2.1 hereof.
"Registration Rights Agreement" shall mean the agreement
substantially in the form attached as EXHIBIT 1.3 hereto.
"Securities Act" shall mean the Securities Act of 1933, and
any similar or successor federal statute, and the rules and regulations
promulgated thereunder, all as amended, and as the same may be in effect from
time to time.
"Sonera Parties" shall mean the Investor and Sonera U.S.
"Sonera U.S." shall mean Sonera Corporation U.S., a Delaware
corporation and wholly-owned subsidiary of the Investor and a party to the Joint
Venture Agreement.
"Subsidiary" of a Person shall mean a corporation as to which
a majority of the voting power is owned or controlled by such Person, either
directly or indirectly; but any such corporation shall be deemed to be a
Subsidiary of such Person only as long as such ownership or control exists.
"Taxes" shall mean all taxes, charges, levies or other
assessments of any kind, including income, gross receipts, sales, use, ad
valorem, franchise, profits, license, withholding, payroll, employment, excise,
severance, stamp, occupation, premium, property or windfall profits taxes,
customs duties or similar fees, assessments or charges of any kind whatsoever,
together with any interest and penalties, additions to tax or additional amounts
imposed by any taxing authority,
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domestic or foreign and any expenses incurred in connection with the
determination, settlement or litigation of any liability for any of the
foregoing.
"Tax Return" shall mean a report, return or other information
required to be supplied to a taxing authority with respect to Taxes.
"TDS" shall have the meaning set forth in the preamble hereof.
"TDS Adjustment Event" shall have the meaning set forth in
Section 2.3(d) hereof.
"TDS Iowa" shall have the meaning set forth in the preamble
hereof.
"TDS Parties" shall mean TDS, Aerial and the Company.
"Threshold Prices" shall have the meaning set forth in Section
2.3(b) hereof.
"Tracking Stock Proposal" shall have the meaning set forth in
the preamble hereof.
"20-Day Aerial Average" shall have the meaning set forth in
Section 2.3(a) hereof.
When a reference is made in this Agreement to a Section, such
reference shall be to a Section of this Agreement unless otherwise indicated.
Whenever the words "include," "includes" or "including" are used in this
Agreement, they shall be deemed to be followed by the words "without
limitation." The use of a gender herein shall be deemed to include the neuter,
masculine and feminine genders whenever necessary or appropriate. Whenever the
word "herein" or "hereof" is
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used in this Agreement, it shall be deemed to refer to this Agreement and not to
a particular Section of this Agreement unless expressly stated otherwise.
ARTICLE 2
PURCHASE OF STOCK; CLOSING
2.1 Purchase of Common Stock. The Investor hereby subscribes
for and agrees to purchase from the Company, and the Company hereby accepts the
Investor's subscription for and agrees to sell to the Investor, 2,410,482 newly
issued, fully paid and non-assessable shares of Common Stock (the "Purchased
Shares") for a purchase price of approximately Eighty-Two Dollars Ninety-Seven
and One-Tenth Cents ($82.971) per share, which shall result in an aggregate
purchase price of $200,000,000 (the "Purchase Price") and represent 19.423% of
the Company's outstanding capital stock (on a fully diluted basis).
2.2 Closing. (a) Closing Date. Consummation of the
transactions contemplated hereby (the "Closing") shall take place, subject to
the satisfaction (or express written waiver) of all conditions to the Closing
under Article 5 hereof, on the tenth Business Day after the later to occur of
(i) the day on which all FCC and state regulatory approvals, if any, including
the Favorable Declaratory Ruling, necessary in order to consummate lawfully the
transactions contemplated hereby have been received and shall have become Final
Orders, or (ii) the day on which all applicable waiting periods under the HSR
Act shall have expired or been terminated without objection by the Federal Trade
Commission. The date on which the Closing takes place shall be referred to
herein as the "Closing Date."
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(b) Location. The Closing shall take place at 10:00 A.M. on
the Closing Date, at the offices of Sidley & Austin located at One First
Xxxxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx, XX 00000, or at such other place as the
parties hereto shall agree to in writing. At the Closing, the Company shall,
upon receipt of the Purchase Price by wire transfer of immediately available
funds to an account designated by the Company at least five Business Days prior
to the Closing Date, promptly deliver to the Investor duly executed and issued
stock certificates evidencing the Purchased Shares.
2.3 Purchase Price Adjustment. (a) In the event that the
Aerial Average for any 20 consecutive trading day period (the "20-day Aerial
Average") from the Closing through the third Anniversary exceeds $9.50, then,
within ten Business Days after the Investor's receipt of a notice from Aerial of
such 20-day Aerial Average, the Investor shall deliver to the Company for
cancellation 256,375 Purchased Shares. In the event that the 20-day Aerial
Average from the Closing through the third Anniversary exceeds $10.50, then,
within ten Business Days after the Investor's receipt of a notice from Aerial of
such 20-day Aerial Average, the Investor shall deliver to the Company for
cancellation 207,082 additional Purchased Shares. In the event that the 20-day
Aerial Average from the Closing through the third Anniversary exceeds $11.50,
then, within ten Business Days after the Investor's receipt of a notice from
Aerial of such 20-day Aerial Average, the Investor shall deliver to the Company
for cancellation 170,759 additional Purchased Shares.
(b) In the event that, at any time after the date hereof and
prior to the earlier of the Aerial Merger and the Distribution, Aerial shall
effect any transaction, including (i) the payment of a dividend on the
outstanding Aerial Common Shares in the form of Aerial Common Shares, (ii) a
subdivision of the outstanding Aerial Common Shares into a larger number of such
Aerial Common
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Shares, (iii) a combination of the outstanding Aerial Common Shares into a
smaller number of such Aerial Common Shares, or (iv) any reorganization or
reclassification of the Aerial Common Shares, or any consolidation or merger
with another corporation, or the sale of all or substantially all of its assets
to another corporation, in such a way that the holders of the outstanding Aerial
Common Shares shall be entitled to receive (either directly or upon subsequent
liquidation) stock, securities, or other property with respect to or in exchange
for such Aerial Common Shares (any such transaction or event being referred to
as an "Aerial Adjustment Event"), then the 20-day average prices at or above
which the Investor shall present shares for cancellation (the "Threshold
Prices"), as provided in Section 2.3(a) hereof, shall be proportionately
adjusted to reflect such Aerial Adjustment Event. In the event that Aerial shall
effect an Aerial Adjustment Event at any time after the date hereof and prior to
the earlier of (A) Aerial Merger, (B) the Distribution, and (C) the delivery of
the Purchased Shares on the Closing Date, then the Exchange Rate provided for in
the Investment Agreement shall be proportionately adjusted to reflect such
Aerial Adjustment Event.
(c) In the event that the Aerial Merger or the Distribution
shall occur at any time after the date hereof and prior to the third Anniversary
then, upon the earlier of such events to occur, the Threshold Prices provided
for in Section 2.3(a) hereof shall be adjusted as set forth below:
(i) In the event that the Aerial Merger occurs
prior to the Distribution, each of the Threshold Prices shall be adjusted by
dividing such Threshold Price by a fraction, the numerator of which shall be the
Number of Aerial Group Shares, determined immediately after the Aerial Merger,
and the denominator of which shall be the total number of shares of Aerial
Common Stock outstanding immediately prior to the Aerial Merger; and
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(ii) In the event that the Distribution shall
occur prior to the Aerial Merger, (A) each of the Threshold Prices shall be
adjusted by dividing such Threshold Price by a fraction, the numerator of which
shall be the quotient obtained by dividing the Number of Aerial Group Shares by
TDS's percentage ownership of Aerial Common Stock, in each case determined
immediately after the Distribution, and the denominator of which shall be the
total number of shares of Aerial Common Stock outstanding immediately prior to
such Distribution, and (B) in the event that the Aerial Merger shall thereafter
occur, the Threshold Prices shall be adjusted by dividing such prices by a
fraction, the numerator of which shall be the Number of Aerial Group Shares,
determined immediately after the Aerial Merger, and the denominator of which
shall be the quotient obtained by dividing the Number of Aerial Group Shares by
TDS's percentage ownership of Aerial Common Stock, determined in each case
immediately before the Aerial Merger.
(d) In the event that either the Aerial Merger or the
Distribution shall occur at any time after the date hereof then, in the event
that TDS shall thereafter effect any transaction, including (i) the payment of a
dividend on the outstanding Aerial Group Shares in the form of Aerial Group
Shares, (ii) a subdivision of the outstanding Aerial Group Shares into a larger
number of such Aerial Group Shares, (iii) a combination of the outstanding
Aerial Group Shares into a smaller number of such Aerial Group Shares, or (iv)
any reorganization or reclassification of the Aerial Group Shares, or the sale
of all or substantially all of the assets of the Aerial Group to another
corporation, in such a way that the holders of Aerial Group Shares shall be
entitled to receive (either directly or upon subsequent liquidation) stock,
securities or other property with respect to or in exchange for such Aerial
Group Shares (any such transaction or event being referred to as a "TDS
Adjustment Event"), the Threshold Prices referred to in Section 2.4(a) hereof
shall be proportionately adjusted to reflect such TDS Adjustment Event. In the
event that either the Aerial Merger or the Distribution shall occur at any time
after the date hereof and prior to the delivery of the Purchased Shares on the
Closing
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Date then, in the event that TDS shall thereafter effect a TDS Adjustment Event
at any time prior to the Closing Date, the Exchange Rate provided for in the
Investment Agreement shall be proportionately adjusted to reflect such TDS
Adjustment Event.
2.4 Effect of Aerial Merger or Distribution. In addition to
any adjustment otherwise required by Section 2.3 hereof:
(a) in the event that the Aerial Merger shall occur at any
time after the date of this Agreement and prior to both the Distribution and the
delivery of the Purchased Shares on the Closing Date, then the Exchange Rate
Applicable to Aerial Common Shares set forth in Section 7.2 of the Investment
Agreement shall be adjusted (to determine the Exchange Rate Applicable to Aerial
Group Shares, referred to in the Investment Agreement) by multiplying such
exchange rate by a fraction, the numerator of which shall be the Number of
Aerial Group Shares, determined immediately after the Aerial Merger, and the
denominator of which shall be the total number of shares of Aerial Common Stock
outstanding immediately prior to the Aerial Merger; and
(b) in the event that the Distribution shall occur at any time
after the date of this Agreement and prior to both the Aerial Merger and the
delivery of the Purchased Shares on the Closing Date, then:
(i) the Exchange Rate Applicable to Aerial
Common Shares set forth in Section 7.2 of the Investment Agreement shall be
adjusted (to determine the Exchange Rate Applicable to Aerial Group Shares,
referred to in the Investment Agreement) by multiplying such
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exchange rate by a fraction, the numerator of which shall be the quotient
obtained by dividing the Number of Aerial Group Shares by TDS's percentage
ownership of Aerial Common Stock, in each case determined immediately after the
Distribution, and the denominator of which shall be the total number of shares
of Aerial Common Stock outstanding immediately prior to such Distribution; and
(ii) in the event that the Aerial Merger shall
thereafter occur, the Exchange Rate Applicable to Aerial Group Shares in effect
immediately prior to the date of such merger shall be adjusted so that,
immediately after such merger, the quotient obtained by dividing (A) the product
of the aggregate number of shares of Common Stock owned by the Investor and its
Permitted Affiliate Transferees (as defined in the Investment Agreement),
determined immediately after such merger, multiplied by such exchange rate, as
adjusted pursuant to this Section 2.4(b)(ii)(B), by (B) the sum of (I) the
Number of Aerial Group Shares, determined immediately after such merger, and
(II) the product referred to in (A) above, shall be equal to the quotient
obtained by dividing (1) the product of the aggregate number of shares of Common
Stock owned by the Investor and its Permitted Affiliate Transferees, multiplied
by the Exchange Rate Applicable to Aerial Group Shares, in each case determined
immediately before such merger, by (2) the sum of (x) the quotient obtained by
dividing the Number of Aerial Group Shares by TDS's percentage ownership of
Aerial Common Stock (determined immediately before such merger), and (y) the
product referred to in (1) above.
ARTICLE 3
COVENANTS AND AGREEMENTS
3.1 Covenants of TDS and the Aerial Parties. (a)
Consummate Transactions. From and after the execution and delivery of this
Agreement to and including the Closing Date, TDS
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and the Aerial Parties shall use their reasonable best efforts to cause the
transactions contemplated by this Agreement to be consummated in accordance with
the terms hereof, including (i) using their reasonable best efforts to obtain
all Authorizations of, and make all filings with and give all notices to, all
governmental authorities and agencies having jurisdiction, including, without
limitation, the FCC (including the Favorable Declaratory Ruling), and any state
public utilities or public service commission, and (ii) using their reasonable
best efforts to obtain all Authorizations of, and making all filings with, and
giving all notices to, third parties, which in any such case may be necessary or
reasonably required of TDS or either of the Aerial Parties in order to
consummate the transactions contemplated hereby. Aerial hereby irrevocably and
unconditionally agrees to cause the Company to perform its obligations
(including causing or enabling the Company to issue the Purchased Shares to the
Investor) hereunder.
(b) Access. From and after the execution and delivery of this
Agreement to and including the Closing Date, TDS and the Aerial Parties shall
give to the Investor and its agents and representatives (including its
independent auditors and attorneys) all reasonably requested access (such access
not to interfere unreasonably with TDS, the Aerial Parties or their respective
operations), during normal business hours and upon reasonable notice as
described below, to all of the personnel, premises, properties, assets,
financial statements and records, books, contracts, documents and commitments of
TDS, Aerial and Aerial's Subsidiaries, in each case of or relating to or
affecting Aerial and its Subsidiaries, and shall furnish the Investor and its
agents and representatives with all such information and copies thereof
concerning the affairs of or relating to or affecting Aerial and its
Subsidiaries, as the Investor may reasonably request.
(c) Ordinary Course. From and after the execution and
delivery of this Agreement to and including the Closing Date, Aerial and the
Company will, and Aerial and the Company will
-16-
cause Aerial's Subsidiaries to, conduct their respective businesses in the
ordinary and normal course thereof.
(d) Compliance with Law. From and after the execution and
delivery of this Agreement to and including the Closing Date, TDS, Aerial and
the Company shall, and Aerial and the Company shall cause Aerial's Subsidiaries
to, comply with all applicable laws, rules, ordinances, regulations, codes,
orders, decrees, licenses and permits of all applicable jurisdictions and
governmental authorities or agencies relating to Aerial and its Subsidiaries, to
the properties of Aerial and its Subsidiaries or to the conduct of the
businesses of Aerial and its Subsidiaries, except to the extent a failure to
comply would not have a Material Adverse Effect or a material adverse effect on
any PCS Authorization.
(e) Approvals, Consents. From and after the execution and
delivery of this Agreement to and including the Closing Date, TDS, Aerial and
the Company shall, and Aerial and the Company shall cause Aerial's Subsidiaries
to, obtain and maintain in full force and effect all Authorizations necessary or
required for the operation of the businesses of Aerial and its Subsidiaries as
presently conducted, except, in the case of Authorizations other than PCS
Authorizations, where such failure would not have a Material Adverse Effect.
(f) No Amendments. Except as otherwise contemplated hereby or
by the Investment Agreement, from and after the execution and delivery of this
Agreement to and including the Closing Date, none of TDS, Aerial or the Company
shall, nor shall Aerial or the Company permit any of Aerial's Subsidiaries to,
amend its respective Certificate of Incorporation or By-laws or any Intercompany
Agreement, in any way to alter or change the rights of the Investor (i) provided
in this Agreement, the Additional Agreements or any Intercompany Agreement, or
(ii) provided by such
-17-
Certificate of Incorporation or By-laws, in either case so as to affect the
Investor adversely. On or prior to the Closing Date, the Company shall file an
amendment to its Certificate of Incorporation in the form of EXHIBIT 3.1(f)
annexed hereto.
(g) Books and Records. From and after the execution and
delivery of this Agreement to and including the Closing Date, TDS, Aerial and
the Company shall, and Aerial and the Company shall cause Aerial's Subsidiaries
to, maintain its books, accounts and records in the usual manner, on a basis
consistent with prior years and in accordance with generally accepted accounting
principles.
(h) Certain Actions. From and after the execution and delivery
of this Agreement to and including the Closing Date, none of TDS, Aerial or the
Company shall, nor shall Aerial or the Company permit any of Aerial's
Subsidiaries to, take any action which would materially interfere with or
preclude the consummation of the transactions contemplated by, or the
performance of their respective obligations under, this Agreement or any
Additional Agreement, result in any of the representations and warranties of any
party hereto contained herein being incorrect or incomplete in any material
respect, or result in any of the conditions to the obligations of the Investor
to consummate the transactions contemplated by this Agreement as set forth in
Section 5.2 hereof being unsatisfied in accordance with the terms hereof.
(i) No Solicitation, Etc. From the date hereof through the
Closing or the earlier termination of this Agreement, none of TDS, Aerial or the
Company or any of Aerial's Subsidiaries or Affiliates, nor any of their
respective officers, directors, employees, agents or representatives (including,
without limitation, investment bankers, attorneys and accountants) shall,
directly or indirectly, (i) solicit any merger, consolidation, liquidation,
dissolution or exclusive licensing
-18-
arrangement or similar transaction involving Aerial or its Subsidiaries (an
"Aerial Acquisition Proposal"), or (ii) enter into substantive negotiations with
any third party in response to an Aerial Acquisition Proposal unless the Board
of Directors of Aerial determines in good faith that it is in the best interests
of Aerial's stockholders to engage in such substantive negotiations (after
considering the benefits to Aerial of the transactions contemplated by this
Agreement and the Joint Venture Agreement and the potential impact of such
negotiations on such Agreements). Aerial shall promptly notify the Investor if
any discussions or negotiations are sought to be initiated, any inquiry or
proposal is made, or any information is requested with respect to any Aerial
Acquisition Proposal and notify the Investor of the terms of any proposal which
it may receive in respect of any such Aerial Acquisition Proposal, including,
without limitation, the identity of the prospective purchaser or soliciting
party, except to the extent that any such notification would violate any
agreement of Aerial or the Company.
(j) Tax Filings. From and after the execution and delivery of
this Agreement to and including the Closing Date, the Company shall, and TDS and
Aerial shall cause all members of Aerial's consolidated group to, timely file
all federal, state and local Tax Returns and all information returns and reports
required to be filed by or with respect to it under the laws of the United
States or any state or other jurisdiction and pay as and when due all Taxes
payable thereunder.
3.2 Covenants of the Investor.
-------------------------
(a) Consummate Transactions. The Investor covenants and
agrees from and after the execution and delivery of this Agreement to and
including the Closing Date that it shall use its
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reasonable best efforts, and cause Sonera U.S. to use its reasonable best
efforts, to cause the transactions contemplated by this Agreement to be
consummated in accordance with the terms hereof, including (i) using its
reasonable best efforts to obtain all Authorizations of, and make all filings
with and give all notices to, all governmental authorities and agencies, having
jurisdiction, including, without limitation, the FCC (including the Favorable
Declaratory Ruling), and any state public utilities or public service
commission, and (ii) using its reasonable best efforts to obtain all
Authorizations of, and making all filings with, and giving all notices to, third
parties, which in any such case may be necessary or reasonably required of the
Investor in order to consummate the transactions contemplated hereby. The
Investor hereby irrevocably and unconditionally agrees to cause Sonera U.S. to
execute and deliver the Joint Venture Agreement on the Closing Date if all of
the provisions of Section 5.2 hereof are satisfied or waived on or prior to the
Closing Date.
(b) Certain Actions. From and after the execution and delivery of this
Agreement to and including the Closing Date, the Investor shall not take any
action which would materially interfere with or preclude the consummation of the
transactions contemplated by, or the performance of the Sonera Parties'
respective obligations under, this Agreement or any Additional Agreement, as
applicable, result in any of the representations and warranties of any party
hereto contained herein being incorrect or incomplete in any material respect,
or result in any of the conditions to the obligations of TDS and the Aerial
Parties to consummate the transactions contemplated by this Agreement as set
forth in Section 5.1 hereof being unsatisfied in accordance with the terms
hereof.
3.3 Governmental Filings. Each of the parties hereto covenants
and agrees from and after the execution and delivery of this Agreement to and
including the Closing Date as follows:
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(a) Regulatory Agencies. It is understood that the
consummation of this transaction is subject to obtaining from the FCC a
Favorable Declaratory Ruling (as defined below), which has become a Final Order,
and may be subject to the prior approval pursuant to Final Orders of one or more
state regulatory commissions. As soon as practicable following the date hereof
and in no event later than ten Business Days from the date hereof, the parties
shall use their reasonable best efforts to file with (i) the FCC a petition for
a declaratory ruling seeking FCC approval under Section 310(b)(4) of the
Communications Act to permit indirect foreign investment in the Aerial Group as
contemplated by this Agreement, including the purchase by the Investor of the
Purchased Shares (the "Favorable Declaratory Ruling"), and (ii) any relevant
regulatory agency(ies) a joint application(s) requesting the approval of such
agency(ies) to the transactions contemplated hereby. Each of the parties hereto
shall diligently take or cooperate in the taking of all steps which are
necessary or appropriate to expedite the prosecution and favorable consideration
of such applications. The parties covenant and agree to undertake all such
actions and to file all such material as may be reasonably requested by the FCC
or other regulatory authority and to obtain any necessary Authorization from the
FCC or such state agency or agencies in connection with the foregoing
applications.
(b) HSR Act. It is understood that the consummation of this
transaction is subject to the filing with the Federal Trade Commission and the
Antitrust Division of the Department of Justice of all reports and notifications
which are required under the HSR Act and the expiration or termination of
certain applicable waiting periods under the HSR Act without objection by such
authorities. Within ten Business Days of the date of execution hereof, the
parties hereto shall file, or cause to be filed, with the Federal Trade
Commission and the Antitrust Division of the Department of Justice any and all
such reports or notifications and any other filings required under any other
-21-
federal law or administrative regulations in connection with the purchase of the
Purchased Shares under this Agreement.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
4.1 Representations and Warranties of the Aerial Parties. Each
of the Aerial Parties represents and warrants, jointly and severally, to the
Investor, which representations and warranties shall survive the execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby, as follows:
(a) Due Organization. Aerial is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware.
Aerial is duly qualified to do business and is in good standing in all
jurisdictions where the conduct of its business or the ownership of its
properties makes such qualification necessary, except where the failure to so
qualify would not have a Material Adverse Effect.
(b) Power and Authority; No Violation. Each Aerial Party has
full power and authority to execute, deliver and perform its obligations under
this Agreement and the Additional Agreements and to consummate the transactions
contemplated hereby or thereby, except that the Company shall be required to
amend its Certificate of Incorporation pursuant to Section 3.1(f) hereof prior
to the Closing Date. This Agreement, the Additional Agreements and all
transactions contemplated hereby or thereby have been duly and validly
authorized by all necessary action on the part of each of the Aerial Parties
and, assuming the due authorization and execution of this
-22-
Agreement by the Investor, this Agreement constitutes a legal, valid and binding
obligation of each of the Aerial Parties, as applicable, enforceable in
accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting or relating to enforcement of creditors' rights generally. Except as
described on EXHIBIT 4.1(b) annexed hereto, neither the execution, delivery or
performance of this Agreement or, upon their execution, the Additional
Agreements, nor the consummation of the transactions contemplated hereby or
thereby by the Aerial Parties will, with or without the giving of notice or the
passage of time, or both, (i) conflict with, violate, result in a default,
breach or loss of rights (or give rise to any right of termination, cancellation
or acceleration) under, or result in the creation of any Lien, pursuant to (A)
any provision of the Certificate of Incorporation, By-laws, or other constituent
documents of either Aerial Party or any of their respective Subsidiaries; (B)
any material note, bond, indenture, mortgage, deed of trust, contract,
agreement, lease or other instrument or obligation to which either Aerial or any
of its Subsidiaries is a party or by which Aerial or any of its Subsidiaries or
their respective property may be bound or affected; or (C) any law, order,
judgment, ordinance, rule, regulation or decree to which Aerial or any of its
Subsidiaries is a party or by which they or their respective property is bound
or affected; or (ii) give rise to any right of first refusal or similar right
with respect to any interest, or any properties or assets, of Aerial or any of
its Subsidiaries. Except as described on EXHIBIT 4.1(b) annexed hereto, no
permit, consent, approval, authorization, qualification or registration of, or
declaration to or filing with, any governmental or regulatory authority or
agency or any third party is required to be obtained or made by Aerial or any of
its Subsidiaries in connection with the execution and delivery of, and
performance by Aerial or the Company of their respective obligations under, this
Agreement, the Additional Agreements, or the consummation by Aerial or the
Company of the transactions contemplated hereby or thereby, in order to render
this Agreement, the Additional Agreements and the transactions contemplated
hereby or thereby valid and effective.
-23-
(c) Legal Matters. Except as set forth on EXHIBIT 4.1(c)
annexed hereto, there is no claim, legal action, counterclaim, suit,
arbitration, governmental investigation or other legal, administrative or tax
proceeding, or any order, decree or judgment, in progress or pending, or to the
knowledge of the Aerial Parties threatened, against or relating to the right of
either Aerial Party to execute and deliver this Agreement or the Additional
Agreements or perform its obligations under this Agreement or any Additional
Agreement, or which could reasonably be expected to have a Material Adverse
Effect, nor does either Aerial Party know of any basis for the same. There is
outstanding no order, writ, injunction, judgment or decree of any court,
governmental agency or arbitration tribunal which would individually or in the
aggregate have a Material Adverse Effect or otherwise impair in any material
respect the performance of the obligations of either Aerial Party hereunder or
under the Additional Agreements, or the consummation of the transactions
contemplated hereby or thereby.
(d) Truth and Correctness. No representation or warranty by
either Aerial Party in this Agreement or any Additional Agreement contains or
will contain any untrue statement of a material fact or omits or will omit to
state a material fact necessary to make the statements contained herein or
therein, in light of the circumstances under which such statements are made, not
misleading.
(e) Purchased Shares. The Purchased Shares will, at the
Closing, be duly authorized by all necessary corporate action on the part of the
Company, will be (when issued in accordance with the terms of this Agreement)
validly issued and outstanding, fully paid and nonassessable, and will not be
subject to any preemptive rights of the holders of any other class or series of
the capital stock of the Company. Upon the issuance of the Purchased Shares to
the Investor at the Closing, the Purchased Shares will be free and clear of all
Liens of any nature
-24-
whatsoever, with the exception of any restrictions on transferability set forth
in the Investment Agreement or under the Securities Act or any securities laws
of any jurisdiction.
(f) No Brokers. No agent, broker, investment banker, Person or
firm is or will be entitled to any broker's or finder's fee or any other
commission or similar fee directly or indirectly in connection with the
transactions contemplated by this Agreement based in any way on any
arrangements, agreements or understandings made by or on behalf of either Aerial
Party or any Affiliate of either of them, and the Aerial Parties hereby jointly
and severally agree to indemnify the Investor and to hold harmless the Investor
against and in respect of any claims for brokerage and other commissions
relating to such transactions based in any way on any arrangements, agreements
or understandings made by or on behalf of either Aerial Party or any Affiliate
of either of them.
(g) Financial Statements. EXHIBIT 4.1(g) annexed hereto
contains a list of financial statements of Aerial and its Subsidiaries for the
periods indicated on such EXHIBIT 4.1(g) (the "Operating Financial Statements").
True and complete copies of each item listed thereon have previously been
delivered to the Investor. The Operating Financial Statements have been prepared
on a consistent basis in accordance with generally accepted accounting
principles as in effect in the United States, and fairly present in all material
respects the financial position of Aerial and its Subsidiaries, as of such date
and for the period then ended, except that any unaudited Operating Financial
Statements are subject to normal year-end adjustments.
(h) Compliance with Laws. Except as set forth on EXHIBIT
4.1(c) annexed hereto, each of Aerial and its Subsidiaries is in compliance with
all applicable laws, regulations,
-25-
administrative orders and Authorizations of the United States and the states in
which Aerial or its Subsidiaries transact business (including all applicable
rules, regulations and Authorizations of the FCC, any state public utilities or
public service commission, or any other federal or state governmental agency or
instrumentality exercising jurisdiction over the Company), and of each
municipality, county or subdivision of any thereof, to which any of its
businesses or any of its properties may be subject, the non-compliance with
which would have a Material Adverse Effect.
(i) Authorizations. (i) Each of Aerial and its Subsidiaries
has (A) all requisite Authorizations of the FCC (including all PCS
Authorizations) and of all state public utility or public service commissions
and (B) all other material Authorizations of governmental agencies exercising
jurisdiction over Aerial or any of its Subsidiaries required to carry on its or
their business as now conducted or as contemplated to be conducted, except for
any Authorizations, the failure of which to obtain would not have a Material
Adverse Effect or a material adverse effect on any PCS Authorization. All PCS
Authorizations which are contemplated by this Agreement to be held, directly or
indirectly, by Aerial are listed on EXHIBIT 4.1(i) annexed hereto.
(ii) All Authorizations of Aerial and its Subsidiaries are in
full force and effect and have not been suspended, modified in any material
adverse respect, canceled or revoked, and each of Aerial and its Subsidiaries
has operated in compliance with all terms thereof applicable to it except where
failure to so comply would not have a Material Adverse Effect or a material
adverse effect on any PCS Authorization. No event has occurred or, to the best
knowledge of Aerial and the Company, is threatened to occur with respect to any
Authorization of Aerial or any of its Subsidiaries which permits, or after
notice or lapse of time or both would permit, revocation or termination thereof
or would result in any other material impairment of the rights of the holder of
any such Authorization, except to the extent such revocation, termination or
impairment would not have a Material Adverse
-26-
Effect or a material adverse effect on any PCS Authorization. Except as set
forth on EXHIBIT 4.1(i) annexed hereto, there is not pending nor, to the best
knowledge of Aerial and the Company, threatened as of the date hereof any
application, petition, objection or other pleading with the FCC or any public
service commission or similar body having jurisdiction or authority over the
communications operations of Aerial or any of its Subsidiaries which questions
the validity of, or which presents a substantial risk that, if accepted or
granted, would result in the revocation, cancellation, suspension or
modification of, any such Authorization, except to the extent that such
invalidity, revocation, cancellation, suspension or modification would not have
a Material Adverse Effect.
(j) Taxes. Aerial and its Subsidiaries have timely filed all
federal, state, county, local and foreign Tax Returns required to be filed by
them, and have paid all Taxes which have become due pursuant thereto or
otherwise, other than Taxes the liability for which is being contested in good
faith and appropriate reserves for which have been made in the financial
statements of Aerial or the Company. Except as set forth on EXHIBIT 4.1(j)
annexed hereto, there are no additional assessments or adjustments of Taxes
pending or threatened against TDS, Aerial or Aerial's Subsidiaries for any
period.
(k) No Material Adverse Change. Since December 31, 1997, there
has not been any event or condition, including any change in the capital
structure of TDS, Aerial or any of Aerial's Subsidiaries, which has caused, or
is reasonably likely to cause, a Material Adverse Effect, other than as a result
of conditions affecting broadband personal communications systems generally.
-27-
(l) Employee Benefit Plans. All employee benefit or employee
welfare plans maintained by TDS, Aerial or any of Aerial's Subsidiaries in each
case for the benefit of employees of Aerial or any of Aerial's Subsidiaries
("Aerial Benefit Plans") which are subject to the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), comply in all material respects with
the requirements of ERISA, and no such Aerial Benefit Plan which is subject to
Part 3 of Subtitle B of Title 1 of ERISA has incurred any "Accumulated Funding
Deficiency" within the meaning of Section 302 of ERISA or Section 412 of the
Code, and none of TDS, Aerial or any Subsidiary of Aerial has incurred any
liability on account of such an "Accumulated Funding Deficiency" with respect to
any such Aerial Benefit Plan subject to ERISA. No liability to the Pension
Benefit Guaranty Corporation established under ERISA has been incurred with
respect to any such Aerial Benefit Plan subject to ERISA and none of TDS, Aerial
or any Subsidiary of Aerial has incurred any liability for any tax implied by
Section 4975 of the Code. As of the most recent valuation date of any such
Aerial Benefit Plan, there are no "unfunded benefit liabilities" within the
meaning of Section 4001(a)(18) of ERISA; and no "prohibited transaction" has
occurred within the meaning of Section 4975 of the Code or Section 406 of ERISA
that would subject Aerial or any of its Subsidiaries to tax or penalty.
(m) Compliance with other Instruments. Neither Aerial nor any
of its Subsidiaries is in violation of any term of (i) any agreement or
instrument related to indebtedness for borrowed money or any other material
agreement to which it is a party or by which it is bound, or (ii) any applicable
order, judgment or decree of any court, arbitrator or governmental authority,
the consequences of which violation, whether individually or in the aggregate,
would result in a Material Adverse Effect. Neither Aerial Party is a party to or
bound by any agreement, instrument or constituent document compliance with which
could reasonably be expected to result in a Material Adverse Effect.
-28-
(n) Organization of Subsidiaries. Each Subsidiary of the
Company is listed on EXHIBIT 4.1(n) annexed hereto and is a corporation or other
legal entity duly organized and in good standing under the laws of the
jurisdiction of its organization and is duly qualified and has the full power
and authority in each applicable jurisdiction to own its properties and conduct
its business and operations as currently conducted, except to the extent that
any failure to qualify would not have a Material Adverse Effect. Except as set
forth in Exhibit 4.1(n), none of Aerial or any of its Subsidiaries has any
equity investment, or holds any interest convertible into equity, in any Person.
(o) Capital Stock. After giving effect to the filing of the
amendment to the Company's Certificate of Incorporation contemplated by Section
3.1(f) hereof and the Closing hereunder, 12,410,482 shares of Common Stock will
be outstanding, of which 10,000,000 shares shall have been issued to Aerial, and
2,410,482 shares shall have been issued to the Investor, and such shares shall
constitute all of the outstanding capital stock of the Company (including all
outstanding interests convertible into capital stock). All outstanding shares of
the capital stock of the Company at the date hereof are (and will after the
Closing be) duly authorized, validly issued, fully paid and nonassessable, and
no class of capital stock of the Company will at the Closing be entitled to
preemptive rights, other than as set forth in the Certificate of Incorporation,
as amended. Except as contemplated in the Investment Agreement, there are
outstanding no options, warrants or other obligations or rights of any Person to
issue, redeem, repurchase, cancel, exchange, convert or acquire capital stock
from Aerial or the Company.
(p) Investment Company Act. None of Aerial or its Subsidiaries
is, or will become as a result of the Closing, an "investment company" within
the meaning of the Investment Company Act of 1940, as amended.
-29-
4.2 Representations and Warranties of the Investor. The
Investor represents and warrants to TDS and the Aerial Parties, which
representations and warranties shall survive the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby, as
follows:
(a) Due Organization. The Investor is a limited liability
company duly organized, validly existing and in good standing under the laws of
Finland. The Investor is duly qualified to do business and is in good standing
in all jurisdictions where the conduct of its business or the ownership of its
properties makes such qualification necessary, except where the failure to so
qualify would not have a material adverse effect on the Investor or its
financial condition, or the transactions contemplated hereby.
(b) Power and Authority; No Violation. The Investor has, and
prior to the Closing Date Sonera U.S. will have, full power and authority to
execute, deliver and perform its obligations under this Agreement and the
Additional Agreements, as applicable, and to consummate the transactions
contemplated hereby or thereby, as applicable. This Agreement, the Additional
Agreements and all transactions contemplated hereby or thereby have been duly
and validly authorized by all necessary action on the part of the Investor, and
prior to the Closing Date the Joint Venture Agreement and all transactions
contemplated thereby will have been duly and validly authorized by all necessary
action on the part of Sonera U.S., and, assuming the due authorization and
execution of this Agreement by TDS and the Aerial Parties, this Agreement
constitutes a legal, valid and binding obligation of the Investor, enforceable
in accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting or relating to enforcement of creditors' rights generally. Except as
described on EXHIBIT 4.2(b) annexed hereto, neither the execution, delivery or
performance of this Agreement
-30-
or, upon their execution, the Additional Agreements, nor the consummation of the
transactions contemplated hereby or thereby by the Sonera Parties, as
applicable, will, with or without the giving of notice or the passage of time,
or both, (i) conflict with, violate, result in a default, breach or loss of
rights (or give rise to any right of termination, cancellation or acceleration)
under, or result in the creation of any Lien, pursuant to (A) any provision of
the Certificates of Incorporation or By-laws, or other constituent documents of
either Sonera Party, (B) any material note, bond, indenture, mortgage, deed of
trust, contract, agreement, lease or other instrument or obligation to which
either Sonera Party is a party or by which either of them or their respective
property may be bound or affected, or (C) any law, order, judgment, ordinance,
rule, regulation or decree to which either Sonera Party is a party or by which
either of them or their respective property is bound or affected, or (ii) give
rise to any right of first refusal or similar right with respect to any
interest, or any properties or assets, of either Sonera Party that, in the case
of either clause (i) or (ii), would have a material adverse effect on the
ability or capacity of either Sonera Party to execute and deliver, or to
consummate the transactions contemplated by or perform their obligations under,
this Agreement or any Additional Agreement. Except as described on EXHIBIT
4.2(b) annexed hereto, no permit, consent, approval, authorization,
qualification or registration of, or declaration to or filing with, any
governmental or regulatory authority or agency or any third party is required to
be obtained or made by either Sonera Party in connection with the execution and
delivery of, and performance by either Sonera Party of their respective
obligations under, this Agreement or the Additional Agreements, as applicable,
or the consummation by either Sonera Party of the transactions contemplated
hereby or thereby, as applicable, in order to render this Agreement, the
Additional Agreements and the transactions contemplated hereby or thereby valid
and effective.
(c) Legal Matters. Except as set forth on EXHIBIT 4.2(c)
annexed hereto, there is no claim, legal action, counterclaim, suit,
arbitration, governmental investigation or other legal, administrative or tax
-31-
proceeding, or any order, decree or judgment, in progress or pending, or to the
knowledge of the Investor threatened, against or relating to the right of
either Sonera Party to execute and deliver this Agreement or the Additional
Agreements, as applicable, or perform its obligations under this Agreement
or the Additional Agreements, as applicable, nor does Investor know of any
basis for the same. There is outstanding no order, writ, injunction,
judgment or decree of any court, governmental agency or arbitration tribunal
which would individually or in the aggregate impair in any material respect the
performance of the obligations of either Sonera Party hereunder or under the
Additional Agreements, as applicable, or the consummation of the transactions
contemplated hereby or thereby.
(d) Securities Representation. The Investor acknowledges that:
(i) it is not a "U.S. person" (as defined in Rule 902 under the Securities Act)
and, in determining to acquire the Purchased Shares hereunder, has made its
buying decision outside the United States; (ii) it is an accredited investor (as
defined in Rule 501 under the Securities Act); (iii) it has such knowledge and
experience in financial and business matters that it is capable of evaluating
the merits and risks of investing in the Company as contemplated hereby or,
alternatively, that it has engaged the services of a representative who has such
knowledge and experience in financial and business matters as to be capable of
evaluating the merits and risks of the proposed investment and who has reviewed
the proposed investment on its behalf; (iv) the Purchased Shares to be delivered
by the Company to the Investor at the Closing Date have not been registered
under the Securities Act or under the securities laws of any state in reliance
upon federal and state exemptions for transactions not involving a public
offering and are not being acquired with a view to the distribution thereof
except pursuant to a registration statement in compliance with federal and state
securities laws or an exemption therefrom; (v) the Purchased Shares must be held
by the Investor indefinitely unless subsequently so registered or an exemption
from such registration is available; and (vi) it has
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received information concerning Aerial and the Company and has had the
opportunity to obtain additional information as desired in order to evaluate the
merits and risks inherent in holding the Purchased Shares. The Investor agrees
that the share certificate(s) which the Investor receives from the Company shall
be legended with the following legends:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), AND NO TRANSFER OR OTHER DISTRIBUTION THEREOF CAN BE
MADE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR
THE SHARES UNDER THE ACT, OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED
UNDER THE ACT OR ANY APPLICABLE STATE SECURITIES LAWS." AND
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
CERTAIN RESTRICTIONS ON TRANSFER AND VOTING SET FORTH IN AN
INVESTMENT AGREEMENT DATED AS OF _________, 1998. A COPY OF
SUCH AGREEMENT MAY BE OBTAINED FROM THE COMPANY UPON REQUEST."
(e) Investment Company Act. The Investor is not, nor will
become as a result of the Closing, an "investment company" within the meaning of
the Investment Company Act of 1940, as amended.
(f) Truth and Correctness. No representation or warranty
by the Investor in this Agreement or any Additional Agreement contains or will
contain any untrue statement of a material
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fact or omits or will omit to state a material fact necessary to make the
statements contained herein or therein, in light of the circumstances under
which such statements are made, not misleading.
(g) No Brokers. Except for Credit Suisse First Boston
Corporation, no agent, broker, investment banker, Person or firm is or will be
entitled to any broker's or finder's fee or any other commission or similar fee
directly or indirectly in connection with the transactions contemplated by this
Agreement based in any way on any arrangements, agreements or understandings
made by or on behalf of the Investor or any Affiliate thereof, and the Investor
hereby agrees to indemnify TDS and the Aerial Parties and to hold harmless TDS
and the Aerial Parties against and in respect of any claims for brokerage and
other commissions relating to such transactions based in any way on any
arrangements, agreements or understandings made by or on behalf of the Investor
or any Affiliate of the Investor.
(h) No Interest in FCC Licenses. Except as set forth in
Exhibit 4.2(h) annexed hereto, neither the Investor nor any of its Subsidiaries
has any license to provide or is providing, or owns, directly or indirectly, any
interest in any entity which has a license to provide or which is providing,
commercial mobile radio services in the United States, nor has the Investor or
any of its Subsidiaries entered into any agreement or other arrangement with any
Person (other than an Aerial Party) to acquire such a license or interest.
4.3 Representations and Warranties of TDS. TDS represents and
warrants to Sonera, which representations and warranties shall survive the
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby, as follows:
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(a) Due Organization. TDS is a corporation duly incorporated
and validly existing under the laws of the State of Delaware. TDS is duly
qualified to do business and is in good standing in all jurisdictions where the
conduct of its business or the ownership of its properties makes such
qualification necessary, except where the failure to so qualify would not have a
Material Adverse Effect.
(b) Power and Authority; No Violation. TDS has full power and
authority to execute, deliver and perform its obligations under this Agreement
and to consummate the transactions contemplated hereby. This Agreement and any
transactions contemplated hereby have been duly and validly authorized by all
necessary action on the part of TDS and this Agreement constitutes a legal,
valid and binding obligation of TDS enforceable in accordance with its terms,
except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting or relating to
enforcement of creditors' rights generally. Neither the execution, delivery or
performance of this Agreement, nor the consummation by TDS of the transactions
contemplated hereby will, with or without the giving of notice or the passage of
time, or both, (i) conflict with, violate, result in a default, breach or loss
of rights (or give rise to any right of termination, cancellation or
acceleration) under, or result in the creation of any Lien, pursuant to (A) any
provision of the Restated Certificate (as defined in the Investment Agreement)
or By-laws of TDS, (B) any material note, bond, indenture, mortgage, deed of
trust, contract, agreement, lease or other instrument or obligation to which TDS
is a party or by which TDS or any of its property may be bound, or (C) any law,
order, judgment, ordinance, rule, regulation or decree to which TDS or any of
its property is bound, or (ii) give rise to any right of first refusal,
subscription or similar right with respect to any interest in, or any properties
or assets of, TDS or any of its Subsidiaries. Except as described on EXHIBIT
4.1(b) annexed hereto, no permit, consent, approval, authorization,
qualification or registration of, or declaration to or filing with, any
governmental or regulatory authority
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or agency or any third party is required to be obtained or made by TDS or any of
its Subsidiaries in connection with the execution and delivery of, and
performance by TDS of its obligations under, this Agreement, the Additional
Agreements, or the consummation by TDS of the transactions contemplated hereby
or thereby, in order to render this Agreement, the Additional Agreements and the
transactions contemplated hereby or thereby valid and effective.
(c) Legal Matters. There is no claim, legal action,
counterclaim, suit, arbitration, governmental investigation or other legal,
administrative or tax proceeding, nor any order, decree or judgment, in progress
or pending, or to the knowledge of TDS threatened, against or relating to the
right of TDS to execute and deliver this Agreement or perform its obligations
hereunder, or which could reasonably be expected to have a Material Adverse
Effect on TDS, nor does TDS know of any basis for the same. There is outstanding
no order, writ, injunction, judgment or decree of any court, governmental agency
or arbitration tribunal which, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect on TDS, other than
orders or decrees involving the wireless telephone industry in general.
(d) Truth and Correctness. No representation or warranty by
TDS in this Agreement contains or will contain any untrue statement of a
material fact or omits or will omit to state a material fact necessary to make
the statements contained herein, in light of the circumstances under which such
statements are made, not misleading.
(e) Compliance with Laws. Except as set forth on EXHIBIT
4.3(e) annexed hereto, each of TDS and its Subsidiaries is in compliance with
all applicable laws, regulations, administrative orders and authorizations of
the United States and States in which they transact their respective businesses
(including all applicable rules, regulations and authorizations of FCC, any
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state public utilities or public service commission, or any other federal or
state governmental agency or instrumentality exercising jurisdiction over TDS),
and of each municipality, county or subdivision of any thereof, to which any of
their respective businesses or any of their respective properties may be
subject, the non-compliance with which would have a Material Adverse Effect.
(f) Authorization. Each of TDS and its Subsidiaries has (i)
all requisite Authorizations of the FCC (including all PCS Authorizations) and
of all state public utility or public service commissions and (ii) all other
material Authorizations of governmental agencies exercising jurisdiction over
TDS or such Subsidiary, respectively, required to carry on its business as now
conducted or as contemplated to be conducted, except for any Authorizations, the
failure of which to obtain would not have a Material Adverse Effect.
(g) Taxes. TDS and its Subsidiaries have timely filed all
federal, state, county, local and foreign Tax Returns required to be filed by
them, and have paid all Taxes which have become due pursuant thereto or
otherwise, other than Taxes the liability for which is being contested in good
faith and appropriate reserves for which have been made in TDS's financial
statements. Except to the extent set forth on EXHIBIT 4.3(g) annexed hereto or
appropriately reserved for in TDS's financial statements, there are no
additional assessments or adjustments of Taxes pending or threatened against TDS
or its Subsidiaries for any period.
(h) No Material Adverse Change. Since December 31, 1997, there
has not been any event or condition which has caused, or is reasonably likely to
cause, a Material Adverse Effect on TDS, other than as a result of conditions
affecting the U.S. telecommunications industry generally.
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ARTICLE 5
CONDITIONS TO OBLIGATIONS
5.1 Conditions to the Obligation of TDS and the Aerial
Parties. The obligation of TDS and each of the Aerial Parties to perform its
obligations hereunder is and shall be subject to fulfillment of or compliance
with, on or prior to the Closing Date, the following conditions precedent, any
of which may be waived in writing by TDS and the Aerial Parties in their sole
discretion, in whole or in part:
(a) Representations and Warranties True. Each of the
representations and warranties of the Investor contained in this Agreement shall
be deemed to have been made at and as of the time of the Closing Date and shall
then be true in all material respects. The Investor shall have performed and
complied in all material respects with all agreements and covenants required by
this Agreement to be performed or complied with by it prior to or at the Closing
Date. TDS and the Aerial Parties shall have been furnished with a certificate of
the Investor signed by one of its senior executive officers, dated the Closing
Date, certifying to the fulfillment of the foregoing conditions by it and to the
truth and correctness in all material respects, except for changes contemplated
by this Agreement, as of the Closing Date, of the representations and warranties
made by it contained herein and the satisfaction on its part of all conditions
to the obligations of TDS and the Aerial Parties under this Section 5.1.
(b) No Suit Pending. There shall not then be pending by any
third party any suit or proceeding to restrain or invalidate, in whole or in
part, this Agreement or the transactions contemplated hereby.
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(c) Opinions of Counsel. TDS and the Aerial Parties shall have
been furnished with an opinion of Xxxxxx Xxxxx, L.L.P., counsel for the Sonera
Parties, and, as necessary with respect to matters of foreign law, such other
counsel for the Sonera Parties, reasonably acceptable to TDS and the Aerial
Parties, dated the Closing Date.
(d) HSR Act. The waiting periods, if applicable, of the HSR
Act shall have expired or been terminated.
(e) Consents Obtained. All consents, waivers, approvals and
actions of third parties including all necessary waivers and approvals
identified on Exhibits 4.1(b) and 4.2(b) shall have been obtained (and in the
case of FCC waivers or approvals pursuant to a Final Order) or made (which
consents, waivers and approvals shall not contain any conditions or restrictions
which, in the case of FCC waivers or approvals, are not customary in
transactions of this nature). Notwithstanding anything to the contrary herein
contained, it shall not be a condition to the obligations of TDS and the Aerial
Parties under this Agreement for the Sonera Parties to obtain each individual
required waiver or consent (other than any waivers or consents of the FCC or of
any public utility or public service commission or comparable body exercising
jurisdiction over the Sonera Parties), so long as the failure to obtain any such
individual waiver or consent would not individually or together with all such
other failures to obtain waivers or consents have a material adverse effect on
the ability of the Sonera Parties to enter into and consummate the transactions
contemplated by, and lawfully perform their obligations under, this Agreement
and the Additional Agreements, as applicable, in accordance with their
respective terms.
(f) Purchase Price. The Investor shall have delivered
the Purchase Price to the Company as required hereby.
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(g) Resolutions. TDS and the Aerial Parties shall have been
furnished with certified copies of the resolutions duly adopted by the boards of
directors of each of the Sonera Parties authorizing the execution, delivery and
performance of this Agreement and the Additional Agreements, as applicable.
(h) No New Statutes. No statute, rule or regulation shall have
been enacted by any state or federal government or governmental agency in the
United States or Finland which would render the consummation of this Agreement
or the Additional Agreements unlawful.
(i) Additional Agreements. TDS, the Aerial Parties and
the Sonera Parties, as applicable, shall have executed and delivered the
Additional Agreements.
5.2 Conditions to the Obligation of the Investor. The
obligation of the Investor to perform its obligations hereunder is and shall be
subject to fulfillment of or compliance with, on or prior to the Closing Date,
the following conditions precedent, any of which may be waived in writing by the
Investor, in its sole discretion, in whole or in part.
(a) Representations and Warranties True. Each of the
representations and warranties of the TDS Parties contained in this Agreement
shall be deemed to have been made at and as of the time of the Closing Date and
shall then be true in all material respects. TDS and each of the Aerial Parties
shall have performed and complied in all material respects with all agreements
and covenants required by this Agreement to be performed or complied with by it
prior to or at the Closing Date. The Investor shall have been furnished with a
certificate of each of the TDS Parties, signed by one of its senior executive
officers, dated the Closing Date, certifying to the fulfillment of the foregoing
conditions by it and to the truth and correctness in all material respects,
except for
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changes contemplated by this Agreement, as of the Closing Date, of the
representations and warranties made by the TDS Parties contained herein, and the
satisfaction on its part of all conditions to the obligations of the Investor
under this Section 5.2.
(b) No Suit Pending. There shall not then be pending by any
third party any suit or proceeding to restrain or invalidate, in whole or in
part, this Agreement or the transactions contemplated hereby.
(c) Opinion of Counsel. The Investor shall have been furnished
with an opinion of Sidley & Austin, counsel for TDS and the Aerial Parties,
reasonably acceptable to Sonera, dated the Closing Date.
(d) Opinion of FCC Counsel. The Investor shall have been
furnished with an opinion of Xxxxxx & Xxxxxxxx, FCC counsel for TDS and the
Aerial Parties, reasonably acceptable to Sonera, dated the Closing Date.
(e) HSR Act. The waiting periods, if applicable, of the HSR
Act shall have expired or been terminated.
(f) Consents Obtained. All consents, waivers, approvals and
actions of third parties identified in Exhibits 4.1(b) and 4.2(b) shall have
been obtained (and in the case of FCC waivers or approvals pursuant to a Final
Order), or made (which consents, waivers and approvals shall not contain any
conditions or restrictions which, in the case of FCC waivers or approvals, are
not customary in transactions of this nature). Notwithstanding anything to the
contrary herein contained, it shall not be a condition to the obligations of the
Investor under this Agreement for the
-41-
Aerial Parties to obtain each individual required waiver or consent (other than
any waivers or consents of the FCC or of any public utility or public service
commission or comparable body exercising jurisdiction over the Aerial Parties),
so long as the failure to obtain any such individual waiver or consent would not
individually or together with all such other failures to obtain waivers or
consents have a Material Adverse Effect.
(g) Stock Certificates. The Company shall have delivered to
the Investor duly issued stock certificates representing the Purchased Shares.
(h) Resolutions. The Investor shall have been furnished with
certified copies of the resolutions duly adopted by the boards of directors of
TDS and each of the Aerial Parties authorizing the execution, delivery and
performance of this Agreement and the Additional Agreements, and Aerial shall
have delivered a certified copy of resolutions duly adopted by its board of
directors electing the designees of the Investor to Aerial's board of directors
effective as of the Closing in accordance with the Investment Agreement.
(i) No New Statutes. No statute, rule or regulation shall have
been enacted by any state or federal government or governmental agency in the
United States or Finland which would render the consummation of this Agreement
or the Additional Agreements unlawful.
(j) Additional Agreements. TDS, the Aerial Parties and the
Sonera Parties, as applicable, shall have executed and delivered the Additional
Agreements.
-42-
(k) Certain Intercompany Agreements. TDS and the Aerial
Parties, as applicable, shall have executed and delivered (i) the Amended Tax
Allocation Agreement, and (ii) the AOC Revolving Credit Agreement.
ARTICLE 6
SURVIVAL; INDEMNITY
6.1 Survival of Representations and Warranties.
Notwithstanding any investigation or review made at any time by or on behalf of
any party hereto, all representations and warranties contained in this Agreement
or in the EXHIBITS annexed hereto or in any of the agreements, certificates or
instruments delivered in connection herewith shall survive until the termination
of the Indemnification Period and shall thereupon expire together with any right
to indemnification (except with respect to any claim for breach of any such
representation or warranty for which written notice shall have been given prior
to the termination of the Indemnification Period to the party which made such
representation or warranty).
6.2 Indemnity by TDS and the Aerial Parties. (a) (i) During
the Indemnification Period (or thereafter solely with respect to any claim for
which indemnification has been made prior to the expiration of the
Indemnification Period), in addition to any other indemnification provided for
under this Agreement or any Additional Agreement, (A) the Company (and, solely
to the extent the Company is unable to do so, Aerial) shall indemnify and hold
harmless the Investor and its officers, directors, agents and representatives
from and against any and all demands, claims, losses, liabilities, actions or
causes of action, assessments, actual damages (but excluding consequential
damages), fines, Taxes (including excise and penalty Taxes), penalties, costs
and expenses,
-43-
including interest, expenses of investigation, reasonable fees and disbursements
of counsel, accountants and other experts (collectively, "Losses") incurred or
suffered by any such indemnified Person arising out of, resulting from, or
relating to any breach of any of the representations or warranties made by the
Aerial Parties in this Agreement or in any agreement, certificate, EXHIBIT or
other instrument delivered by the Aerial Parties pursuant to this Agreement and
(B) TDS shall indemnify and hold harmless the Investor and its officers,
directors, agents and representatives from and against any and all Losses
incurred or suffered by any such indemnified Person arising out of, resulting
from or relating to any breach of any of the representations and warranties made
by TDS in this Agreement or in any agreement, certificate, EXHIBIT or other
instrument delivered by TDS pursuant to this Agreement.
(ii) In addition to any other indemnification provided for
under this Agreement or any Additional Agreement, (A) the Company (and, solely
to the extent the Company is unable to do so, Aerial) shall indemnify and hold
harmless the Investor and its officers, directors, agents and representatives
from and against any and all Losses incurred or suffered by any such indemnified
Person arising out of, resulting from, or relating to any failure by either of
the Aerial Parties to perform any of its covenants or agreements contained in
this Agreement or in any agreement, certificate or other instrument delivered by
it pursuant to this Agreement and (B) TDS shall indemnify and hold harmless the
Investor and its officers, directors, agents and representatives from and
against any and all Losses incurred of suffered by any such indemnified Person
arising out of, resulting from or relating to any failure by TDS to perform any
of its covenants or agreements contained in this Agreement or in any agreement,
certificate or other instrument delivered by it pursuant to this Agreement.
-44-
(b) Notwithstanding anything to the contrary contained in this
Section 6.2, none of TDS, Aerial or the Company shall be required to pay or
reimburse the Investor for Losses pursuant to any of their respective
indemnification obligations pursuant to this Section 6.2, unless the aggregate
amount of Losses claimed by the Investor in respect of all such matters exceeds
$500,000, in which event the Investor shall be entitled to seek indemnification
under this Section 6.2 for the entire amount of all such Losses.
6.3 Indemnity by the Investor. (a) (i) During the
Indemnification Period (or thereafter solely with respect to any claim for which
indemnification has been made prior to the expiration of the Indemnification
Period), in addition to any other indemnification provided for under this
Agreement or any Additional Agreement, the Investor shall indemnify and hold
harmless TDS and the Aerial Parties and their respective officers, directors,
agents and representatives from and against any and all Losses incurred or
suffered by any such indemnified person arising out of, resulting from, or
relating to any breach of any of the representations or warranties made by the
Sonera Parties in this Agreement or in any agreement, certificate, EXHIBIT or
other instrument delivered by the Sonera Parties pursuant to this Agreement, as
applicable.
(ii) In addition to any other indemnification provided for
under this Agreement or any Additional Agreement, the Investor shall indemnify
and hold harmless TDS and the Aerial Parties and their respective officers,
directors, agents and representatives from and against any and all Losses
incurred or suffered by any such indemnified Person arising out of, resulting
from, or relating to any failure by either of the Sonera Parties to perform any
of its covenants or agreements contained in this Agreement or in any agreement,
certificate or other instrument delivered by it pursuant to this Agreement, as
applicable.
-45-
(b) Notwithstanding anything to the contrary contained in this
Section 6.3, the Investor shall not be required to pay or reimburse TDS or
either Aerial Party for Losses pursuant to any of the indemnification
obligations pursuant to this Section 6.3, unless the aggregate amount of Losses
claimed by TDS and the Aerial Parties in respect of all such matters exceeds
$500,000, in which event TDS and the Aerial Parties shall be entitled to seek
indemnification under this Section 6.3 for the entire amount of all such Losses.
6.4 Procedure. (a) Notice of Claim; Assumption of Defense by
Indemnitor. In the event that any Person hereto shall sustain or incur any
Losses in respect of which indemnification may be sought by such Person (the
"Indemnitee") pursuant to this Article 6, the Indemnitee shall assert a claim
for indemnification by giving prompt notice to the indemnifying party or parties
(collectively, the "Indemnitor") and shall thereafter keep the Indemnitor
reasonably informed with respect thereto; provided that failure of the
Indemnitee to give the Indemnitor notice as provided herein shall not relieve
the Indemnitor of any of its obligations hereunder, except to the extent that
the Indemnitor is materially prejudiced by such failure. In case a claim is
brought against any Indemnitee, the Indemnitor shall have the right to assume,
conduct and control the defense, compromise or settlement thereof, by written
notice to the Indemnitee of its intention to do so within 30 days after receipt
of the notice, with counsel reasonably satisfactory to the Indemnitee, at the
Indemnitor's own expense, and thereupon to prosecute in the name and on behalf
of the Indemnitee any available cross-claims, counterclaims or third-party
claims arising with respect to the claim. If the Indemnitor shall assume the
defense of such claim, it shall not settle such claim unless such settlement
includes as an unconditional term thereof the giving by the claimant or the
plaintiff of a release of the Indemnitee, reasonably satisfactory to the
Indemnitee, from all liability with respect to such claim and any related
claims. As long as the Indemnitor is contesting any such claim in good faith and
on a timely basis, the Indemnitee shall not pay or settle any such claim.
Notwithstanding
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the assumption by the Indemnitor of the defense of any claim as provided in this
Section 6.4 and without limiting the Indemnitor's right to assume, conduct and
control the defense, compromise or settlement thereof, the Indemnitee shall be
permitted to join in the defense of such claim and to employ counsel at its own
expense. Assumption by the Indemnitor of the defense of any claim shall not be
deemed a concession by the Indemnitor that it is required to indemnify the
Indemnitee for the subject matter of such claim.
(b) Assumption of Defense by Indemnitee. If the Indemnitor
shall fail to notify the Indemnitee of its desire to assume the defense of any
such claim within the prescribed 30-day period set forth in Section 6.4(a)
hereof, or shall notify the Indemnitee that it will not assume the defense of
any such claim, then the Indemnitee may assume the defense of any such claim, in
which event it may do so in such manner as it may deem appropriate, and the
Indemnitor shall be bound by any determinations made in any litigation with
respect to such claim or any settlement thereof effected by the Indemnitee,
provided that any such determinations or settlement shall not affect the right
of the Indemnitor to dispute the Indemnitee's claim for indemnification.
(c) Payments. Amounts payable by the Indemnitor to the
Indemnitee in respect of any Losses for which any Person is entitled to
indemnification hereunder shall be payable by the Indemnitor as incurred by the
Indemnitee. Any payments by any Indemnitor in indemnification hereunder shall be
treated as adjustments to the Purchase Price.
6.5 Indemnity Sole Remedy. In the absence of fraud or of an
action seeking equitable remedies or relief as contemplated by this Agreement,
the remedies provided to TDS, the Aerial Parties and the Investor by the
foregoing provisions of this Article 6 shall after the Closing Date
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be in lieu of any other remedies to which the respective party is entitled at
law or in equity for any breach or noncompliance by a party with the provisions
of this Agreement.
ARTICLE 7
MISCELLANEOUS
7.1 Expenses. Each party shall bear its own expenses incident
to the negotiation, preparation, authorization and consummation of this
Agreement and the transactions contemplated hereby, including all fees and
expenses of its counsel and accountants, whether or not such transactions are
consummated.
7.2 Equitable Remedies. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with the specific terms of the
provisions or were otherwise breached. It is accordingly agreed that the parties
shall be entitled to an injunction or injunctions to prevent breaches of this
Agreement and to enforce specifically the terms and provisions hereof in any
court of the United States or any state having jurisdiction, this being in
addition to any other remedy to which they are entitled at law or in equity.
Each party agrees that it will not assert, as a defense against a claim for
specific performance or other equitable remedy, that the party seeking such
equitable remedy has an adequate remedy at law.
7.3 Notices. All notices, claims and other communications
hereunder shall be in writing and shall be made by hand delivery, facsimile, or
overnight air courier guaranteeing next day delivery
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(a) if to TDS, at:
Telephone and Data Systems, Inc.
00 Xxxxx XxXxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xx. XxXxx X. Xxxxxxx, Xx.
Phone: (000) 000-0000
Fax: (000) 000-0000
with a copy (which shall not constitute notice) to:
Aerial Communications, Inc.
0000 Xxxx Xxxx Xxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xx. Xxxxxx X. Xxxxxxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
with a copy (which shall not constitute notice) to:
Sidley & Austin
One First Xxxxxxxx Xxxxx
00xx Xxxxx - XX
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxx, Esq.
Phone: (000) 000-0000
Fax: (000) 000-0000
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(b) if to either Aerial Party, at:
Aerial Communications, Inc.
0000 Xxxx Xxxx Xxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xx. Xxxxxx X. Xxxxxxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
with a copy (which shall not constitute notice) to:
Telephone and Data Systems, Inc.
00 Xxxxx XxXxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xx. XxXxx X. Xxxxxxx, Xx.
Phone: (000) 000-0000
Fax: (000) 000-0000
with a copy (which shall not constitute notice) to:
Sidley & Austin
One First Xxxxxxxx Xxxxx
00xx Xxxxx - XX
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxx, Esq.
Phone: (000) 000-0000
Fax: (000) 000-0000
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(c) if to Sonera, at:
Sonera Corporation
X.X. Xxx 000
XXX-00000-XXXX
Xxxxxxxxxxxxxx 00, XXXXXXXX
Attention: Xxxxx Xxxxxxxx, Esq.
Phone: 000-00-0-0000-0000
Fax: 000-00-0-0000-0000
with a copy (which shall not constitute notice) to:
Xxxxxx Xxxxx, L.L.P.
0000 X. Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000-0000
Attention: Xxxxxxx X. Xxxxxxxx, Esq.
Phone: (000) 000-0000
Fax: (000) 000-0000
or at such other address as any party may from time to time furnish to the other
parties by a notice given in accordance with the provisions of this Section 7.3.
All such notices and communications shall be delivered by hand or sent by
facsimile or overnight air courier service guaranteeing next day delivery and
shall be deemed to have been duly given at the time delivered by hand, if
personally delivered; when receipt confirmed, if sent by facsimile; and the next
Business Day after timely delivery to the courier, if sent by an overnight air
courier service.
7.4 Entire Agreement. This Agreement, together with the
EXHIBITS annexed hereto, contains the entire understanding among the parties
hereto concerning the subject matter hereof and this Agreement may not be
changed, modified, altered or terminated except by an
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agreement in writing executed by the parties hereto. Any waiver by any party of
any of its rights under this Agreement or of any breach of this Agreement shall
not constitute a waiver of any other rights or of any other or future breach.
7.5 Remedies Cumulative. Except as otherwise provided in
Section 6.5 hereof, each and all of the rights and remedies in this Agreement
provided, and each and all of the rights and remedies allowed at law and in
equity in like case, shall be cumulative, and the exercise of one right or
remedy shall not be exclusive of the right to exercise or resort to any and all
other rights or remedies provided in this Agreement or at law or in equity.
7.6 Governing Law. This Agreement shall be construed in
accordance with and subject to the laws and decisions of the State of Delaware
applicable to contracts made and to be performed entirely therein.
7.7 Counterparts. This Agreement may be executed in several
counterparts hereof, and by the different parties hereto on separate
counterparts hereof, each of which shall be an original; but such counterparts
shall together constitute one and the same instrument.
7.8 Waivers. No provision in this Agreement shall be deemed
waived except by an instrument in writing signed by the party waiving such
provision.
7.9 Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and to their respective
permitted successors and assigns; provided, however, that, except as otherwise
expressly set forth in this Agreement, neither the rights nor the obligations of
any party may be assigned or delegated without the prior written consent of
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the other parties. The Investor shall be permitted to assign its rights and
obligations under this Agreement to a wholly-owned subsidiary of the Investor;
provided, however, that the Investor shall irrevocably and unconditionally
guarantee the performance by such subsidiary of all of the obligations of the
Investor hereunder.
7.10 Further Assurances. The Investor shall, at the request of
a TDS Party, and each of the TDS Parties shall, at the request of the Investor,
from time to time, execute and deliver such other assignments, transfers,
conveyances and other instruments and documents and do and perform such other
acts and things as may be reasonably necessary or desirable for effecting
complete consummation of this Agreement and the transactions contemplated
hereby.
7.11 Disclosures. (a) Confidentiality. The Investor and each
of the TDS Parties acknowledges and confirms in connection with the negotiation
of this Agreement and the execution hereof, during the period from the date
hereof through the Closing Date, the parties hereto will have furnished to one
another certain materials, information, data and other documentation
("Disclosures") concerning their business, financial condition and operations
which are proprietary and confidential. Each party acknowledges the party making
such Disclosures considers them secret and confidential and asserts a
proprietary interest therein. Accordingly, the Investor, on the one hand, and
each of the TDS Parties, on the other hand, covenants and agrees that it shall
maintain all Disclosures made by another party in strict confidence and shall
not use such Disclosures for its own benefit or disclose them to third parties,
except to its agents, representatives, bankers, investment bankers, counsel and
employees involved in evaluating the transactions contemplated by this Agreement
and informed of this requirement of confidentiality, or as otherwise required by
law (including the requirement of TDS or Aerial to disclose such terms under the
federal securities laws or under the rules of any securities exchange on which
its securities are listed, and including the requirement of the Investor or any
of
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its Affiliates to disclose such terms under the securities laws of Finland or
other applicable jurisdiction).
(b) Public Announcements. No public announcement with regard
to the transactions contemplated hereby or the material terms hereof shall be
issued by any party hereto without the mutual prior written consent of the other
parties, except to the extent that the parties are unable to agree on a press
release and legal counsel for one party is of the opinion that such press
release is required by law.
(c) Non-Confidential Information. This Agreement shall not
restrict any party hereto from using information already known to it, to which
it is entitled under existing agreements, or information generally in the public
domain or any information coming into its possession received from a third party
with a right to possess or make disclosure thereof.
7.12 Termination. (a) Events Triggering Termination. This
Agreement may be terminated and the transactions contemplated hereby may be
abandoned, without further obligation of the TDS Parties or the Investor, at any
time prior to the Closing Date as follows:
(i) by mutual written consent duly authorized by the
boards of directors of the TDS Parties and the Investor; or
(ii) by any party hereto if the Closing Date shall not have
occurred on or before December 31, 1998 or such later date, if any, as the
parties shall agree in writing, provided, that the party exercising such right
is not in default of its obligations under this Agreement in a manner which
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results in the failure to satisfy the conditions to the transactions
contemplated hereby of the other parties; or
(iii) by any party hereto if the consummation of the
transactions contemplated hereby shall be prohibited by a final, non-appealable
order, decree or injunction of a court of competent jurisdiction, or if the FCC
shall have by Final Order denied the application for a Favorable Declaratory
Ruling; or
(iv) by the TDS Parties in the event that the Investor shall
have materially breached any of its representations, warranties or covenants
contained in this Agreement; provided, however, that at the time and in the case
of a termination pursuant to this Section 7.12(a)(iv), no TDS Party is itself in
material breach of its representations, warranties and covenants contained
herein, and the TDS Parties (A) promptly notify the Investor in writing of their
intention to terminate this Agreement pursuant to this Section 7.12(a)(iv), (B)
specify in such termination notice the representation, warranty or covenant of
which the Investor is allegedly in material breach and (C) provide the Investor
with 30 days in which to cure such alleged breach or, if it cannot be cured, to
fairly compensate the TDS Parties for such breach; or
(v) by the Investor in the event that any TDS Party shall have
materially breached any of its representations, warranties or covenants
contained in this Agreement; provided, however, that at the time and in the case
of a termination pursuant to this Section 7.12(a)(v), the Investor is not itself
in material breach of its representations, warranties and covenants contained
herein, and the Investor (A) promptly notifies the TDS Parties in writing of its
intention to terminate this Agreement pursuant to this Section 7.12(a)(v), (B)
specifies in such termination notice the representation, warranty or covenant of
which the TDS Party is allegedly in material breach and (C)
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provides the TDS Parties with 30 days in which to cure such alleged breach or,
if it cannot be cured, to fairly compensate the Investor for such breach.
(b) No Further Obligation. In the event of a termination of
this Agreement, no party hereto shall have any liability or further obligation
to any other party to this Agreement except that nothing herein will relieve any
party from liability for any breach of this Agreement.
7.13 No Claim of Immunity. The Investor agrees that, to the
extent that it or any of its property, its Affiliates, or property of its
Affiliates is or becomes entitled at any time to any immunity, on the grounds of
sovereignty or otherwise, based upon its status as an agency or instrumentality
of government, from any legal action, suit or proceeding or from setoff or
counterclaim relating to this Agreement from the jurisdiction of any competent
court, from service of process, from attachment prior to judgment, from
attachment in aid of execution of a judgment, from execution pursuant to a
judgement or arbitration award, or from any other legal process in any
jurisdiction, it, for itself, its Affiliates, its property and that of its
Affiliates, expressly, irrevocably and unconditionally agrees not to plead or
claim, any such immunity with respect to such matters arising with respect to
this Agreement or the subject matter hereof (including any obligation for the
payment of money).
7.14 Severability. In the event any provision of this
Agreement is found to be invalid or unenforceable in whole or in part, the
remaining provisions of this Agreement nevertheless shall be binding and the
invalid or unenforceable provision shall be replaced by a valid and enforceable
provision which comes closest to the intent or economic effect of the provision
to be replaced.
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ARTICLE 8
DISPUTES
8.1 General. The parties agree to resolve disagreements,
disputes and controversies between them arising out of or related to this
Agreement or the breach thereof through the procedures set forth in this Article
8.
8.2 Negotiation Procedure. (a) The TDS Parties, on the one
hand, and the Investor, on the other hand, shall designate one or more officers
who will be the initial contact for resolving any disputes that may arise under
this Agreement. The TDS Parties and the Investor shall first raise any such
disputes with a designated officer of the other party. These officers will work
together to resolve the disputes so referred in a manner that meets the
interests of both the TDS Parties and the Investor, either until such agreement
is reached, or until an impasse is declared by either the TDS Parties or the
Investor; provided, however, that an impasse shall not be declared by either the
TDS Parties or the Investor prior to the thirtieth day after such dispute has
first been referred to such designated officers. Notice of declaration of any
impasse shall be given in accordance with Section 7.3 hereof.
(b) The officers initially designated by the TDS Parties and
the Investor for purposes of this Section 8.2 are set forth in Schedule 8.2(b)
to this Agreement. Parties may change such designation by giving notice of such
change pursuant to Section 7.3 hereof.
(c) Any resolution of a dispute by the designated officers
pursuant to Section 8.2(b) hereof shall be in writing signed by such persons on
behalf of the parties. Notwithstanding any
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provision of this Article 8, no resolution of any dispute by any designated
officer shall constitute an amendment of this Agreement without the approval of
the respective boards of directors of each party hereto.
8.3 Unresolved Disputes. The parties shall be entitled to
exercise or resort to any and all rights and remedies provided in this Agreement
or at law or in equity with respect to any controversy or claim not resolved
through the procedures set forth above.
8.4 Jurisdiction; Consent to Service of Process. (a) Each
party hereby irrevocably consents and submits to the jurisdiction of the United
States District Court for the District of Delaware and any court of the State of
Delaware in any action, suit or proceeding arising out of, resulting from or
relating to this Agreement, and agrees that any such action, suit or proceeding
shall be brought only in such courts (and waives any objection based on forum
non conveniens or any other objection to venue therein); provided, however, that
such consent to jurisdiction is solely for the purpose referred to in this
Section 8.4 and shall not be deemed to be a general submission to the
jurisdiction of said courts or the State of Delaware other than for such
purpose.
(b) The Investor hereby irrevocably appoints The Corporation
Trust Company, at its office at 0000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx, Xxxxxx
Xxxxxx of America, its lawful agent and attorney to accept and acknowledge
service of any and all process against it in any action, suit or proceeding
arising out of, resulting from or relating to this Agreement, and upon whom such
process may be served, with the same effect as if it were a resident of the
State of Delaware, and had been lawfully served with such process in such
jurisdiction, and waives all claim of error by reason of such service, provided
that in the case of any service upon such agent and attorney, the TDS Parties
shall also deliver a copy thereof to the Investor at the address and in the
manner
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specified in Section 7.3 hereof. In the event that such agent and attorney
resigns or otherwise becomes incapable of acting as such, the Investor will
appoint a successor agent and attorney in Wilmington, Delaware, reasonably
satisfactory to the TDS Parties, with like powers or, if the Investor fails to
make such appointment, the Investor hereby authorizes the TDS Parties to appoint
such agent. The Investor shall pay the annual fee due The Corporation Trust
Company or such successor agent for acting in such capacity; provided, however,
that if the Investor shall fail to make such payment, then the TDS Parties shall
have the right to do so.
* * * * *
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above written.
TELEPHONE AND DATA SYSTEMS, INC.
By:_______________________________
Name:_____________________________
Title:____________________________
AERIAL COMMUNICATIONS, INC.
By:_______________________________
Name:_____________________________
Title:____________________________
APT OPERATING CO., INC.
By:_______________________________
Name:_____________________________
Title:____________________________
SONERA CORPORATION
By:_______________________________
Name:_____________________________
Title:____________________________
SIGNATURE PAGE TO PURCHASE AGREEMENT DATED AS OF JUNE ___, 1998
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