EXHIBIT 10.1
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AGREEMENT AND PLAN OF MERGER
by and between
AIRGATE PCS, INC.
and
iPCS, INC.
dated as of August 28, 2001
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TABLE OF CONTENTS
Page
ARTICLE I THE MERGER................................................................ 3
1.1 The Merger.................................................................... 3
1.2 Effective Time................................................................ 3
1.3 Effects of the Merger......................................................... 3
1.4 Conversion of Company Common Stock............................................ 3
1.5 Stock Options................................................................. 4
1.6 Assumption of Warrants........................................................ 5
1.7 Public Common Stock; Merger Sub Common Stock.................................. 6
1.8 Shares of Dissenting Stockholders............................................. 6
1.9 Certificate of Incorporation and By-Laws...................................... 7
1.10 Directors and Officers........................................................ 7
1.11 Tax Consequences.............................................................. 7
ARTICLE II EXCHANGE OF SHARES........................................................ 7
2.1 Exchange of Shares, Distributions; Voting Rights.............................. 7
ARTICLE III DISCLOSURE SCHEDULES...................................................... 9
3.1 Disclosure Schedules.......................................................... 9
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY............................. 10
4.1 Corporate Organization........................................................ 10
4.2 Capitalization................................................................ 11
4.3 Authority; No Violation....................................................... 12
4.4 Consents and Approvals........................................................ 13
4.5 Financial Statements.......................................................... 14
4.6 No Undisclosed Liabilities.................................................... 15
4.7 Absence of Certain Changes or Events.......................................... 15
4.8 SEC Reports................................................................... 15
4.9 Property...................................................................... 16
4.10 Leases........................................................................ 16
4.11 Environmental Matters......................................................... 16
4.12 Certain Contracts............................................................. 18
4.13 Distributors and Suppliers.................................................... 21
4.14 Insurance..................................................................... 21
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TABLE OF CONTENTS
(continued)
Page
4.15 Legal Proceedings............................................................. 21
4.16 Compliance with Applicable Law................................................ 22
4.17 Benefit Plans................................................................. 23
4.18 Taxes......................................................................... 24
4.19 Sprint Agreement Compliance................................................... 25
4.20 Intellectual Property......................................................... 26
4.21 Labor Matters................................................................. 27
4.22 Reorganization................................................................ 27
4.23 Broker's Fees................................................................. 28
4.24 Related Party Transactions.................................................... 28
4.25 Company Information........................................................... 28
4.26 Required Vote of the Company.................................................. 29
4.27 Takeover Statutes............................................................. 29
4.28 Amount of Indebtedness........................................................ 29
ARTICLE V REPRESENTATIONS AND WARRANTIES OF PUBLIC.................................. 29
5.1 Corporate Organization........................................................ 29
5.2 Capitalization................................................................ 30
5.3 Authority; No Violation....................................................... 31
5.4 Consents and Approvals........................................................ 32
5.5 Financial Statements.......................................................... 33
5.6 No Undisclosed Liabilities.................................................... 34
5.7 Absence of Certain Changes or Events.......................................... 34
5.8 SEC Reports................................................................... 34
5.9 Property...................................................................... 34
5.10 Leases........................................................................ 35
5.11 Environmental Matters......................................................... 35
5.12 Certain Contracts............................................................. 36
5.13 Distributors and Suppliers.................................................... 39
5.14 Insurance..................................................................... 39
5.15 Legal Proceedings............................................................. 39
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TABLE OF CONTENTS
(continued)
Page
5.16 Compliance with Applicable Law................................................ 40
5.17 Benefit Plans................................................................. 40
5.18 Taxes......................................................................... 42
5.19 Sprint Agreement Compliance................................................... 42
5.20 Intellectual Property......................................................... 43
5.21 Labor Matters................................................................. 44
5.22 Reorganization................................................................ 45
5.23 Broker's Fees................................................................. 45
5.24 Related Party Transactions.................................................... 45
5.25 Public Information............................................................ 46
5.26 Required Vote of Public....................................................... 46
5.27 Amount of Indebtedness........................................................ 46
ARTICLE VI COVENANTS RELATING TO CONDUCT OF BUSINESS................................. 46
6.1 Covenants of the Company...................................................... 46
6.2 Covenants of Public........................................................... 51
ARTICLE VII ADDITIONAL AGREEMENTS..................................................... 54
7.1 Regulatory Matters............................................................ 54
7.2 Access to Information......................................................... 56
7.3 Stockholder Meeting........................................................... 58
7.4 Legal Conditions to Merger.................................................... 58
7.5 Affiliates.................................................................... 58
7.6 Nasdaq Listing................................................................ 59
7.7 Employee Benefit Plans; Existing Agreements................................... 59
7.8 Additional Agreements......................................................... 59
7.9 Advice of Changes............................................................. 60
7.10 Current Information........................................................... 60
7.11 Accountants' Letter........................................................... 60
7.12 Additional Reports and Information............................................ 60
7.13 Section 16(b) Matters......................................................... 60
7.14 Nomination of Directors....................................................... 61
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TABLE OF CONTENTS
(continued)
Page
7.15 Supplemental Warrant Agreement; Warrant Notices............................... 62
7.16 Expenses...................................................................... 62
7.17 Indemnification............................................................... 62
7.18 Takeover Statute.............................................................. 63
7.19 Registration Rights Agreement................................................. 63
7.20 Plan of Reorganization........................................................ 63
7.21 Lock-Up Agreements............................................................ 63
7.22 Transfer of Company Records................................................... 65
7.23 Formation of Merger Sub and Execution and Delivery of Sub Joinder Agreement... 65
ARTICLE VIII CONDITIONS PRECEDENT...................................................... 65
8.1 Conditions to Each Party's Obligation To Effect the Merger.................... 65
8.2 Conditions to Obligations of Public and Merger Sub............................ 66
8.3 Conditions to Obligations of the Company...................................... 69
8.4 Standards..................................................................... 70
ARTICLE IX TERMINATION AND AMENDMENT................................................. 70
9.1 Termination................................................................... 70
9.2 Effect of Termination......................................................... 71
9.3 Amendment..................................................................... 72
9.4 Extension; Waiver............................................................. 72
ARTICLE X GENERAL PROVISIONS........................................................ 72
10.1 No Survival of Representations and Warranties................................. 72
10.2 Closing....................................................................... 73
10.3 Notices....................................................................... 73
10.4 Interpretation, Certain Definitions........................................... 74
10.5 Counterparts.................................................................. 75
10.6 Entire Agreement.............................................................. 75
10.7 Governing Law and Venue....................................................... 75
10.8 Enforcement of Agreement...................................................... 75
10.9 Severability.................................................................. 76
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TABLE OF CONTENTS
(continued)
Page
10.10 Publicity, etc................................................................ 76
10.11 Assignment.................................................................... 76
10.12 No Third Party Beneficiaries.................................................. 76
Exhibit A - Form of Company Support Agreement
Exhibit B - Form of Registration Rights Agreement
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INDEX
Affiliate....................................................................................... 68
Agreement....................................................................................... 2
Associate....................................................................................... 68
Balance Sheets.................................................................................. 13
Blackstone...................................................................................... 60
Blackstone Director............................................................................. 56
Business Day.................................................................................... 69
Certificate..................................................................................... 3
Certificate of Designations..................................................................... 3
Certificate of Merger........................................................................... 3
ChaseMellon..................................................................................... 5
Closing......................................................................................... 67
Closing Date.................................................................................... 67
Code............................................................................................ 2
Company......................................................................................... 2
Company Audited Financial Documents............................................................. 13
Company Balance Sheet........................................................................... 13
Company Benefit Plans........................................................................... 21
Company Common Stock............................................................................ 3
Company Contract................................................................................ 19
Company Credit Facility......................................................................... 45
Company Director................................................................................ 56
Company Disclosure Schedule..................................................................... 9
Company Employees............................................................................... 54
Company ERISA Affiliate......................................................................... 21
Company Financial Statements.................................................................... 13
Company Indenture............................................................................... 45
Company Lease................................................................................... 15
Company Material Intellectual Property.......................................................... 24
Company Nominated Directors..................................................................... 57
Company Option.................................................................................. 4
Company Option Plan............................................................................. 4
Company Permitted Liens......................................................................... 15
Company Preferred Stock......................................................................... 3
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INDEX
(continued)
Page
Company Reports................................................................................. 14
Company Sprint Agreements....................................................................... 23
Company Stockholders............................................................................ 57
Company Support Agreement....................................................................... 2
Company Tower Leases............................................................................ 15
Company Unaudited Financial Statements.......................................................... 13
Company Warrants................................................................................ 5
Converted Company Option........................................................................ 4
Coverage Period................................................................................. 58
Delaware Courts................................................................................. 69
Dissenting Shares............................................................................... 6
Effective Time.................................................................................. 3
ERISA........................................................................................... 21
Exchange Act.................................................................................... 13
Exchange Ratio.................................................................................. 3
FCC............................................................................................. 20
GAAP............................................................................................ 14
Governmental Entity............................................................................. 13
holders of Series A-1 Preferred Stock........................................................... 62
HSR Act......................................................................................... 50
Indemnified Parties............................................................................. 58
Independent Director............................................................................ 56
Injunction...................................................................................... 61
Lease Agreement................................................................................. 15
LLC............................................................................................. 9
LLC Balance Sheet............................................................................... 13
Merger.......................................................................................... 2
Merger Consideration............................................................................ 7
Merger Sub...................................................................................... 2
Merger Sub Common Stock......................................................................... 6
Nasdaq.......................................................................................... 8
Permit.......................................................................................... 20
Person.......................................................................................... 69
Prospectus/Proxy Statement...................................................................... 26
Public.......................................................................................... .2
Public Audited Financial Statements............................................................. 31
Public Benefit Plans............................................................................ 38
Public Certificates............................................................................. 7
Public Common Stock............................................................................. 2
Public Credit Facility.......................................................................... 49
Public Disclosure Schedule...................................................................... 9
Public ERISA Affiliate.......................................................................... 38
Public Financial Statements..................................................................... 31
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INDEX
(continued)
Page
Public Indenture................................................................................ 49
Public Lease.................................................................................... 32
Public Leased Premise........................................................................... 32
Public Material Intellectual Property........................................................... 40
Public Permit................................................................................... 37
Public Permitted Liens.......................................................................... 32
Public Plans.................................................................................... 55
Public Preferred Stock.......................................................................... 28
Public Reports.................................................................................. 32
Public Sprint Agreements........................................................................ 40
Public Tower Lease.............................................................................. 32
Public Unaudited Financial Statements........................................................... 31
Resale Restriction.............................................................................. 59
Restraints...................................................................................... 61
S-3 Registration Statement...................................................................... 50
S-4 Registration Statement...................................................................... 26
Secretary....................................................................................... 3
Securities Act.................................................................................. 5
Series A-1 Preferred Stock...................................................................... 3
Series A-2 Preferred Stock...................................................................... 3
Sprint Licenses................................................................................. 20
Sprint Spectrum................................................................................. 5
Sprint Warrant.................................................................................. 5
Sub Joinder Agreement........................................................................... 2
Subsidiary...................................................................................... 69
Surviving Corporation........................................................................... 3
TCW............................................................................................. 60
Termination Fee Shares.......................................................................... 66
Transfer........................................................................................ 59
Warrant Agreement............................................................................... 5
Warrants........................................................................................ 5
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of August 28, 2001 (this
"Agreement"), by and between AirGate PCS, Inc., a Delaware corporation
("Public"), and iPCS, Inc., a Delaware corporation (the "Company"). It is
contemplated that upon its formation as contemplated herein, a newly formed
Delaware corporation and wholly owned subsidiary of Public, or another wholly
owned subsidiary of Public as the parties may agree ("Merger Sub"), shall enter
into a joinder agreement (the "Sub Joinder Agreement") pursuant to which it will
become a party to this Agreement.
WHEREAS, the respective Boards of Directors of Public and the Company
have approved and declared advisable this Agreement, the merger of Merger Sub
with and into the Company (the "Merger") and the other transactions contemplated
hereby (including all approvals necessary under Section 203 of the General
Corporation Law of the State of Delaware (the "DGCL") upon the terms and subject
to the conditions set forth herein;
WHEREAS, the Board of Directors of Public has agreed to recommend that
the holders of common stock, par value $.01 per share, of Public (the "Public
Common Stock") approve the issuance of shares of Public Common Stock pursuant to
the Merger and the other matters contemplated to be submitted to its
stockholders in connection with this Agreement;
WHEREAS, Public and the Company acknowledge and agree that as of the
date hereof, Merger Sub has not been formed and has not executed this Agreement.
The Company acknowledges that Public has agreed in this Agreement to form Merger
Sub upon obtaining the requisite Public Bank Consent (as hereinafter defined)
and to cause Merger Sub (or another wholly owned subsidiary of Public as the
parties may agree) to execute the Sub Joinder Agreement upon its formation;
WHEREAS, as an inducement to and a condition to Public entering into
this Agreement, certain stockholders of the Company are simultaneously herewith
entering into a Support Agreement, in the form of Exhibit A hereto (the "Company
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Support Agreement"), relating to the agreement of such stockholders to vote to
approve and adopt this Agreement, the Merger and the transactions contemplated
hereby;
WHEREAS, the parties hereto intend that the Merger shall constitute a
reorganization within the meaning of Section 368(a) of the United States
Internal Revenue Code of 1986, as amended (the "Code"); and
WHEREAS, the parties desire to make certain representations,
warranties and agreements in connection with the Merger and also to prescribe
certain conditions to the Merger.
NOW, THEREFORE, in consideration of the mutual covenants,
representations, warranties and agreements contained herein, and intending to be
legally bound hereby, the parties agree as follows:
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ARTICLE I
THE MERGER
1.1 The Merger. Subject to the terms and conditions of this
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Agreement, in accordance with the DGCL, at the Effective Time (as defined in
Section 1.2 hereof), Merger Sub shall merge with and into the Company. The
Company shall be the surviving corporation (hereinafter sometimes called the
"Surviving Corporation") in the Merger, and shall continue its corporate
existence under the laws of the State of Delaware. The name of the Surviving
Corporation shall continue to be iPCS, Inc. Upon consummation of the Merger,
the separate corporate existence of Merger Sub shall terminate.
1.2 Effective Time. No later than three Business Days after the
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satisfaction or, if permissible, waiver of the conditions set forth in Article
VIII, the parties hereto shall cause the Merger to be consummated by filing a
certificate of merger (the "Certificate of Merger") with the Secretary of State
of the State of Delaware (the "Secretary"), in such form as required by and
executed in accordance with, the relevant provisions of the DGCL (the date and
time of such filing, or, if another date and time is specified in such filing,
such specified date and time, being the "Effective Time").
1.3 Effects of the Merger. At and after the Effective Time, the
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Merger shall have the effects set forth in Sections 259 and 261 of the DGCL.
1.4 Conversion of Company Common Stock.
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(a) At the Effective Time, subject to Section 1.8 and Section 2.1(e)
hereof, each share of common stock, par value $0.01 per share, of the Company
(the "Company Common Stock") issued and outstanding immediately prior to the
Effective Time (other than shares of Company Common Stock held (x) in the
Company's treasury or (y) directly or indirectly by Public or the Company or any
of their respective Subsidiaries (as defined below)) (including all shares of
Series A-1 Convertible Participating Preferred Stock, par value $.01 per share,
of the Company ("Series A-1 Preferred Stock") and Series A-2 Convertible
Participating Preferred Stock, par value $.01 per share, of the Company ("Series
A-2 Preferred Stock" and together with the Series A-1 Preferred Stock, the
"Company Preferred Stock") which shall have been converted into Company Common
Stock immediately prior to the Effective Time in accordance with Section
5(b)(ii) of the respective Certificates of Designations (each, a "Certificate of
Designations") with respect thereto) shall, by virtue of this Agreement and
without any action on the part of the holder thereof, be converted into 0.1594
shares (the "Exchange Ratio") of Public Common Stock. All shares of Company
Common Stock converted into Public Common Stock pursuant to this Article I shall
no longer be outstanding and shall automatically be cancelled and shall cease to
exist, and each certificate (each, a "Certificate") previously representing any
such shares of Company Common Stock shall thereafter only represent the right to
receive (i) certificates evidencing the number of whole shares of Public Common
Stock and (ii) the cash in lieu of fractional shares into which the shares of
Company Common Stock represented by such Certificate have been converted
pursuant to this Section 1.4(a) and Section 2.1(e). Certificates previously
representing shares of Company Common Stock shall be exchanged for certificates
representing whole shares of Public Common Stock and
3
cash in lieu of fractional shares issued in consideration therefore upon the
surrender of such Certificates in accordance with Section 2.1 hereof, without
any interest thereon. The parties understand and agree that the Exchange Ratio
has been calculated based upon the accuracy of the representations and
warranties set forth in Section 4.2 and that, in the event the number of
outstanding shares of Company Common Stock, Company Preferred Stock, Company
Options, Company Warrants or other stock equivalents of the Company is greater
than or less than the amounts specifically set forth in Section 4.2 (including,
without limitation, as a result of (i) any inaccuracy in the representations and
warranties set forth in Section 4.2, (ii) the issuance or expiration after the
date of this Agreement of options, warrants or other rights to purchase Company
Common Stock or (iii) any stock split, reverse stock split, stock dividend,
including any dividend or distribution of securities convertible into stock or
any stock equivalent of the Company, recapitalization, reclassification or other
like change occurring after the date of this Agreement), the Exchange Ratio
shall be appropriately adjusted. Notwithstanding anything to the contrary, in no
event shall the aggregate number of shares of Public Common Stock issued (i) at
the Effective Time pursuant to this Section 1.4(a) and (ii) upon the exercise of
all options, warrants or other rights to purchase Company Common Stock assumed
by Public pursuant to this Agreement, exceed 13,500,000.
(b) At the Effective Time, all shares of Company Common Stock that are
owned by the Company as treasury stock and all shares of Company Common Stock
that are owned directly or indirectly by Public or the Company or any of their
respective Subsidiaries shall, by virtue of this Agreement and without any
action on the part of the holder thereof, be cancelled and shall cease to exist
and no stock of Public or other consideration shall be delivered in exchange
therefore. All shares of Public Common Stock that are owned by the Company or
any of its Subsidiaries shall become treasury stock of Public.
1.5 Stock Options. (a) At the Effective Time, each option
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granted by the Company to purchase shares of Company Common Stock (a "Company
Option") which is outstanding and unexercised immediately prior thereto shall
cease to represent a right to acquire shares of Company Common Stock and shall
be converted automatically into a fully vested option (a "Converted Company
Option") to purchase shares of Public Common Stock in an amount and at any
exercise price determined as provided below (and otherwise subject to the terms
of the Company's Amended and Restated 2000 Long Term Incentive Plan, as amended
(the "Company Option Plan"), the agreements evidencing grants thereunder, and
any other agreements between the Company and an optionee regarding Company
Options):
(i) the number of shares of Public Common Stock to be subject to
the Converted Company Option shall be equal to the product of the
number of shares of Company Common Stock subject to the Company Option
and the Exchange Ratio, provided that any fractional share of Public
Common Stock resulting from such multiplication shall be rounded down
to the nearest whole share; and
(ii) the exercise price per share of Public Common Stock under the
Converted Company Option shall be equal to the exercise price per
share of Company Common Stock under the Company Option divided by the
Exchange Ratio, provided that such exercise price shall be rounded up
to the nearest whole cent.
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(b) The adjustment provided herein with respect to any options which are
"incentive stock options" (as defined in Section 422 of the Code) shall be and
is intended to be effected in a manner which is consistent with Section 424(a)
of the Code, and to the extent it is not so consistent, such Section 424(a)
shall override anything to the contrary contained herein. The duration and
other terms of the Converted Company Options shall be the same as the original
Company Options, except that all references to the Company shall be deemed to be
references to Public. As soon as practicable after the Effective Time (but in
no event later than ten Business Days), Public shall use its reasonable best
efforts to register under the Securities Act of 1933, as amended (the
"Securities Act"), on Form S-8 or other appropriate form (and use its reasonable
best efforts to maintain the effectiveness thereof) shares of Public Common
Stock issuable pursuant to all Company Options converted pursuant to this
Section 1.5.
1.6 Assumption of Warrants. (a) At the Effective Time, Public
----------------------
shall assume and cause to be performed all obligations of the Company under:
(1) the warrants (the "Warrants") issued pursuant to the Warrant
Agreement, dated as of July 12, 2000, between the Company and ChaseMellon
Shareholder Services, L.L.C. ("ChaseMellon"), as Warrant Agent (the "Warrant
Agreement") to purchase 2,982,699 shares of Company Common Stock; and
(2) the warrant (the "Sprint Warrant" and together with the Warrants,
the "Company Warrants") issued to Sprint Spectrum L.P. ("Sprint Spectrum") to
purchase 1,151,938 shares of Company Common Stock.
(b) Each Company Warrant so assumed by Public under this Agreement will
continue to have, and be subject to, the same terms and conditions set forth in
the applicable warrant agreement immediately prior to the Effective Time, except
that (i) each outstanding Company Warrant will be exercisable (or will become
exercisable in accordance with its terms), for that number of whole shares of
Public Common Stock equal to the product of the number of shares of Company
Common Stock that were issuable upon exercise of such Company Warrant
immediately prior to the Effective Time multiplied by the Exchange Ratio,
rounded to the nearest whole number of shares of Public Common Stock and (ii)
the per share exercise price for the Public Common Stock issuable upon exercise
of such Company Warrant shall be equal to the exercise price per share of
Company Common Stock of such Company Warrant divided by the Exchange Ratio,
rounded to the nearest whole cent.
(c) At the Effective Time, Public shall cause a shelf registration
statement on Form S-3 under the Securities Act covering Public Common Stock
issuable upon exercise of the Warrants to become effective and shall maintain
the effectiveness thereof until the earlier of the expiration of the Warrants or
the date on which all of the Warrants have been exercised by the holders
thereof.
1.7 Public Common Stock; Merger Sub Common Stock. (a) Except
--------------------------------------------
for any shares of Public Common Stock owned by the Company or any of its
Subsidiaries, which shall be converted into treasury stock of Public as
contemplated by Section 1.4 hereof, the shares of Public Common Stock issued and
outstanding immediately prior to the Effective Time shall be unaffected by the
Merger and such shares shall remain issued and outstanding.
5
(b) At the Effective Time, each share of common stock, par value $.01
per share, of Merger Sub (the "Merger Sub Common Stock") issued and outstanding
immediately prior to the Effective Time shall, by virtue of this Agreement and
without any action on the part of the holder thereof, be converted into one
share of common stock of the Surviving Corporation, and the Surviving
Corporation shall thereby become a wholly owned subsidiary of Public.
1.8 Shares of Dissenting Stockholders. Notwithstanding anything
---------------------------------
in this Agreement to the contrary, any shares of Company Common Stock and
Company Preferred Stock that are issued and outstanding immediately prior to the
Effective Time and that are held by a stockholder who did not vote in favor of
the Merger or consent to the Merger in writing and has properly exercised
appraisal rights (the "Dissenting Shares") under the DGCL shall not be converted
into the right to receive the Merger Consideration (as defined below) unless and
until the holder shall have failed to perfect, or shall have effectively
withdrawn or lost, such holder's right to appraisal under the DGCL. If any such
holder shall have failed to perfect or shall have effectively withdrawn or lost
the right to appraisal, then as of the occurrence of such event, each share of
Company Common Stock and Company Preferred Stock held by such holder shall
thereupon be deemed to have been converted into and to have become, as of the
Effective Time, the right to receive, without any interest thereon, the Merger
Consideration. The Company shall give Public (i) prompt notice of any notice or
demand for appraisal or payment for shares of Company Common Stock or attempted
withdrawals of such demands received by the Company and (ii) the right to
participate in all negotiations and proceedings with respect to any such demands
or notices. The Company shall not, without the prior written consent of Public,
make any payment with respect to, or settle, offer to settle or otherwise
negotiate, any such demands.
1.9 Certificate of Incorporation and By-Laws. At the Effective
----------------------------------------
Time, the Certificate of Incorporation and the By-Laws of the Surviving
Corporation shall be amended in their entirety to contain the provisions set
forth in the Certificate of Incorporation and By-Laws of Merger Sub, as in
effect immediately prior to the Effective Time.
1.10 Directors and Officers. The directors of Merger Sub
----------------------
immediately prior to the Effective Time shall be the initial directors of the
Surviving Corporation, each to hold office in accordance with the Certificate of
Incorporation and By-Laws of the Surviving Corporation. The officers of Merger
Sub immediately prior to the Effective Time shall be the initial officers of the
Surviving Corporation, each to hold office in accordance with the Certificate of
Incorporation and By-Laws of the Surviving Corporation.
1.11 Tax Consequences. It is intended that the Merger shall
----------------
constitute a reorganization within the meaning of Section 368(a) of the Code and
that this Agreement shall constitute a "plan of reorganization" for the purposes
of Section 368 of the Code and the Treasury Regulations promulgated thereunder.
ARTICLE II
EXCHANGE OF SHARES
6
2.1 Exchange of Shares, Distributions; Voting Rights. Subject
------------------------------------------------
to the terms and conditions of this Agreement, the parties hereto shall take, or
cause to be taken, the following actions:
(a) At the Effective Time, each record holder of shares of
Company Common Stock whose shares were converted into the Merger Consideration
shall receive from Public in exchange therefor, upon surrender of such holder's
Certificates and delivery to Public of a property completed letter of
transmittal (which letter of transmittal shall be executed and delivered to
Public prior to the Closing and shall specify that, by surrendering such
Certificates, subject only to such holder's receipt of the Merger Consideration
and any dividends or other distributions to which such holder is entitled to
receive pursuant to Section 2.1(b), the holder shall be deemed to have waived
all rights and claims and to have released and discharged Public, Merger Sub,
the Company and their affiliates from any and all claims and liabilities
whatsoever, whether known or unknown, both at law and in equity, arising out of
any matter, cause or event occurring contemporaneously with or prior to the
Effective Time, that such holder would otherwise be entitled to assert against
such Persons solely by virtue of being or having been a stockholder of the
Company ), (x) certificates ("Public Certificates") representing the number of
whole shares of Public Common Stock which such record holder has the right to
receive pursuant to the provisions of Article I hereof and (y) a check
representing the amount of cash in lieu of fractional shares of Public Common
Stock, if any, which such holder has the right to receive pursuant to Section
2.1(e) (together with the Public Common Stock represented by the Public
Certificates, the "Merger Consideration"), and the Certificates so surrendered
shall forthwith be cancelled. No interest will be paid or accrued on any cash in
lieu of fractional shares or on any unpaid dividends and distributions payable
to holders of Certificates. In the event of a transfer of ownership of shares of
Company Common Stock which is not registered in the transfer records of the
Company, a certificate representing the proper number of shares of Public Common
Stock may be issued to a transferee if the Certificate representing such shares
of Company Common Stock is presented to Public, accompanied by all documents
required to evidence and effect such transfer and to evidence that any
applicable stock transfer taxes have been paid. Until surrendered as
contemplated by this Section 2.1, each Certificate shall be deemed at any time
after the Effective Time to represent only the right to receive upon such
surrender the Merger Consideration and any dividends or other distributions to
which such holder is entitled pursuant to Section 2.1(b).
(b) No dividends or other distributions declared or made
after the Effective Time with respect to Public Common Stock with a record date
after the Effective Time shall be paid to the holder of record of any
unsurrendered Certificate until the holder thereof shall surrender such
Certificate in accordance with this Article II. At the time of the surrender of
a Certificate in accordance with this Article II, the record holder thereof
shall be issued or paid any such dividends or other distributions, without any
interest thereon, which theretofore had become payable with respect to shares of
Public Common Stock represented by such Certificate. For purposes of dividends
or other distributions in respect of shares of Public Common Stock, all shares
of Public Common Stock to be issued pursuant to the Merger shall be deemed
issued and outstanding as of the Effective Time. Registered holders of
unsurrendered Certificates shall be entitled to vote after the Effective Time at
any meeting of Public stockholders with a record date at or after the Effective
Time the number of whole shares of Public Common Stock represented by such
Certificates, regardless of whether such holders have exchanged their
Certificates.
7
(c) If any certificate representing shares of Public Common Stock is to
be issued in a name other than that in which the Certificate surrendered in
exchange therefor is registered, it shall be a condition of the issuance thereof
that the Certificate so surrendered shall be properly endorsed (or accompanied
by an appropriate instrument of transfer) and otherwise in proper form for
transfer, and that the Person requesting such exchange shall pay to Public in
advance any transfer or other taxes required by reason of the issuance of a
certificate representing shares of Public Common Stock in any name other than
that of the registered holder of the Certificate surrendered, or required for
any other reason, or shall establish to the reasonable satisfaction of Public
that such tax has been paid or is not payable.
(d) Immediately upon and after the Effective Time, there shall be no
transfers on the stock transfer books of the Company of the shares of Company
Common Stock or Company Preferred Stock which were issued and outstanding
immediately prior to the Effective Time. If, after the Effective Time,
Certificates representing such shares are presented for transfer to Public, they
shall be cancelled and converted into the Merger Consideration and any dividends
or other distributions to which the holders thereof are entitled to receive
pursuant to Section 2.2(b) in the manner provided in this Article II.
(e) Notwithstanding anything to the contrary contained herein, no
certificates or scrip representing fractional shares of Public Common Stock
shall be issued upon the surrender for exchange of Certificates, no dividend or
distribution with respect to Public Common Stock or Surviving Corporation Common
Stock shall be payable on or with respect to any fractional share, and such
fractional share interests shall not entitle the owner thereof to vote or to any
other rights of a shareholder of Public. In lieu of the issuance of any such
fractional share, Public shall pay to each former stockholder of the Company who
otherwise would be entitled to receive a fractional share of Public Common Stock
an amount in cash determined by multiplying (i) the average of the closing sale
prices per share of Public Common Stock on The Nasdaq Stock Market ("Nasdaq") as
reported by The Wall Street Journal, New York City edition, for the five trading
-----------------------
days immediately preceding the date on which the Effective Time shall occur by
(ii) the fraction of a share of Public Common Stock to which such holder would
otherwise be entitled to receive pursuant to Section 1.4 hereof.
(f) If any Certificate shall have been lost, stolen or destroyed, upon
the making of an affidavit of that fact by the Person claiming such Certificate
to be lost, stolen or destroyed and, unless otherwise agreed, the posting by
such Person of a bond, in such reasonable amount as Public may direct and in a
form reasonably satisfactory to Public, as indemnity against any such claim that
may be made against it with respect to such Certificate, Public will issue, in
exchange for such lost, stolen or destroyed Certificate, the Merger
Consideration and any dividends or other distributions to which the holders
thereof are entitled to receive pursuant to Section 2.1(b) in the manner
provided in this Article II.
(g) Public shall be entitled to deduct and withhold from the
consideration otherwise payable pursuant to this Agreement to any holder of
Company Common Stock such amounts as Public is required to deduct and withhold
under the Code, or any provision of state, local or foreign tax law, with
respect to the making of such payment. To the extent that amounts are so
withheld by Public, such withheld amounts shall be treated for all purposes of
this Agreement as having been paid to the holder of Company Common Stock in
8
respect of whom such deduction and withholding was made by Public. With respect
to any stockholder who is not a foreign person, Public shall receive a
certificate of nonforeign status in a form reasonably acceptable to it at or
prior to the time such stockholder surrenders its Certificates for exchange in
accordance with this Article II. The Company shall deliver to Public on or
prior to the Effective Time a certificate from the Company in a form reasonably
acceptable to Public that the Company is not a "United States Real Property
Holding Company" within the meaning of section 897(c)(2) of the Code.
ARTICLE III
DISCLOSURE SCHEDULES
3.1 Disclosure Schedules. Prior to the execution and delivery
--------------------
of this Agreement, the Company has delivered to Public, and Public has delivered
to the Company, a schedule (in the case of the Company, the "Company Disclosure
Schedule," and in the case of Public, the "Public Disclosure Schedule") setting
forth, among other things, items the disclosure of which is necessary or
appropriate either in response to an express disclosure requirement contained in
a provision hereof or as an exception to one or more of such party's
representations or warranties contained in Article IV, in the case of the
Company, or Article V, in the case of Public, or to one or more of such party's
covenants contained in Article VI; provided, however, that notwithstanding
-------- -------
anything in this Agreement to the contrary the mere inclusion of an item in a
Disclosure Schedule as an exception to a representation or warranty shall not be
deemed an admission by a party that such item represents a material exception or
material fact, event or circumstance or that such item has had or is reasonably
likely to have a Material Adverse Effect (as defined herein) with respect to
either the Company or Public, respectively.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY
Except as set forth in the Company Disclosure Schedule (each reference
contained herein to such Company Disclosure Schedule qualifies the referenced
representation and warranty to the extent specified in the Company Disclosure
Schedule), the Company hereby represents and warrants to Public and Merger Sub
as follows (for purposes of this Article IV, references to the Company, where
appropriate, shall also include Illinois PCS, L.L.C. ("LLC"), the Company's
predecessor):
4.1 Corporate Organization. (a) The Company is a corporation
----------------------
duly organized, validly existing and in good standing under the laws of the
State of Delaware.
(b) The Company has the corporate power and authority to own or
lease all of its properties and assets and to carry on its business as it is now
being conducted, and is duly licensed or qualified to do business and in good
standing in each jurisdiction in which the nature of the business conducted by
it or the character or location of the properties and assets owned or leased by
it makes such licensing or qualification necessary, except where the failure to
9
be so qualified or in good standing could not reasonably be expected to have a
Material Adverse Effect on the Company.
(c) Each of the Company's Subsidiaries is a corporation duly organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation. Each of the Company's Subsidiaries has the corporate power and
authority to own or lease all of its properties and assets and to carry on its
business as it is now being conducted, and is duly licensed or qualified to do
business in each jurisdiction in which the nature of the business conducted by
it or the character or the location of the properties and assets owned or leased
by it makes such licensing or qualification necessary, except where the failure
to be so qualified or licensed could not reasonably be expected to have a
Material Adverse Effect on the Company. The articles of incorporation, by-laws
and similar governing documents of each Subsidiary of the Company, copies of
which have previously been made available to Public, are true, complete and
correct copies of such documents as in effect as of the date of this Agreement.
(d) Each of the Company and its Subsidiaries is qualified, authorized,
registered and licensed to do business as a foreign corporation in the
jurisdictions identified in Section 4.1(d) of the Company Disclosure Schedule.
Each of the Company and its Subsidiaries are in good standing as a foreign
corporation in each of the jurisdictions identified in Section 4.1(d) of the
Company Disclosure Schedule.
(e) The certificate of incorporation and by-laws of the Company and
each of its Subsidiaries, copies of which have previously been made available to
Public, are true, complete and correct copies of such documents as in effect as
of the date of this Agreement. Neither the Company nor any of its Subsidiaries
is in violation of any provision of its respective certificate of incorporation
or by-laws.
4.2 Capitalization. (a) The authorized capital stock of the
--------------
Company consists of 300,000,000 shares of Company Common Stock and 75,000,000
shares of Company Preferred Stock. As of the date of this Agreement, (i)
44,869,643 shares of Company Common Stock are issued and outstanding and no
shares of Company Common Stock are held in the Company's treasury, (ii) no
shares of Company Common Stock are reserved for issuance upon exercise of
outstanding stock options or otherwise, other than (A) 8,000,000 shares of
Company Common Stock reserved for issuance pursuant to Company Options granted
pursuant to the Company Option Plan and identified in Section 4.2(a) of the
Company Disclosure Schedule, (B) 4,134,637 shares of Company Common Stock
reserved for issuance upon exercise of the Company Warrants and (C) 25,000,000
shares of Company Common Stock, plus such additional shares of Company Common
Stock as may be required by the terms of the Company Preferred Stock, reserved
for issuance upon conversion of the shares of Company Preferred Stock, (iii)
35,000,000 shares of Company Preferred Stock are designated Series A-1 Preferred
Stock, 9,090,909 of which shares are issued and outstanding (not including
4,046,963 additional shares required to be issued in respect of accrued but
unpaid dividends, including as a result of the Merger) and (iv) 40,000,000
shares of Company Preferred Stock are designated Series A-2 Preferred Stock,
14,000,000 of which shares are issued and outstanding (not including 5,564,426
additional shares required to be issued in respect of accrued but unpaid
dividends, including as a result of the Merger). Each share of Series A-1
Preferred Stock and Series A-2 Preferred Stock
10
is convertible into one share of Company Common Stock as of the date hereof, and
such conversion rate shall be the conversion rate as of the Effective Time. Each
Warrant represents the right to purchase 9.94233 shares of Company Common Stock.
Each Sprint Warrant represents the right to purchase one share of Company Common
Stock. Immediately prior to the Effective Time, all issued and outstanding
shares of Company Preferred Stock (including, without limitation, all of the
shares of Company Preferred Stock issuable as a special dividend pursuant to
Section 2(h) of the applicable Certificate of Designations and all of the shares
of Company Preferred Stock to be issued in respect of accrued but unpaid
dividends) will automatically convert into Company Common Stock pursuant to
Section 5(b)(ii) of the applicable Certificate of Designations so that
immediately prior to the Effective Time there will be no shares of Company
Preferred Stock outstanding and all shares of Company Common Stock issued upon
such automatic conversion shall be converted in the Merger pursuant to Section
1.4 of this Agreement. All of the issued and outstanding shares of Company
Common Stock are, and all shares reserved for issuance will be, upon issuance in
accordance with the terms specified in the instruments or agreements pursuant to
which they are isssuable, duly authorized, validly issued, fully paid and
nonassessable and, except as set forth in Section 4.2(a) of the Company
Disclosure Schedule, free of preemptive rights, with no personal liability
attaching to the ownership thereof. Except as referred to above or reflected in
Section 4.2(a) of the Company Disclosure Schedule, the Company does not have and
is not bound by any outstanding subscriptions, options, warrants, calls,
commitments or agreements of any character calling for the purchase or issuance
of any shares of Company Common Stock or Company Preferred Stock or any other
equity security of the Company or any securities representing the right to
purchase or otherwise receive any shares of Company Common Stock, Company
Preferred Stock or any other equity security of the Company. Section 4.2(a) of
the Company Disclosure Schedule sets forth, as of the date hereof (i) the name
of each holder of Company Common Stock, Company Preferred Stock and Company
Options and the number of shares of Company Common Stock, Company Preferred
Stock and Company Options held by each such holder, respectively; (ii) the date
of each Company Option granted, the number of shares subject to each Company
Option, the expiration date of each Company Option, and the price at which each
Company Option may be exercised under the Company Option Plan and (iii) the
number of shares subject to Company Warrants and the price at which such Company
Warrants may be exercised. All shares of Company Common Stock subject to
issuance upon exercise of the Company Options and the Company Warrants, upon
issuance prior to the Effective Time on the terms and conditions specified in
the instruments pursuant to which they are issuable, will be duly authorized,
validly issued, fully paid, nonassessable and free of preemptive rights.
(b) Section 4.2(b) of the Company Disclosure Schedule sets forth a true
and correct list of all of the Subsidiaries of the Company. Except as set forth
in Section 4.2(b) of the Company Disclosure Schedule, the Company owns, directly
or indirectly, all of the issued and outstanding shares of the capital stock (or
all of the other equity ownership interests) of each of such Subsidiaries, free
and clear of all liens, charges, encumbrances and security interests whatsoever,
and all of such shares (or other equity or ownership interests) are duly
authorized and validly issued and are fully paid, nonassessable and free of
preemptive rights, with no personal liability attaching to the ownership
thereof. No Subsidiary of the Company has or is bound by any outstanding
subscriptions, options, warrants, calls, commitments or agreements of any
character calling for the purchase or issuance of any shares of capital stock or
any other equity security of such Subsidiary or any securities representing the
right to purchase
11
or otherwise receive any shares of capital stock or any other equity security of
such Subsidiary. Assuming compliance by Public with Section 1.5 and Section 1.6
hereof, at the Effective Time, there will not be any outstanding subscriptions,
options, warrants, calls, commitments or agreements of any character by which
the Company or any of its Subsidiaries will be bound calling for the purchase or
issuance of any shares of the capital stock of the Company or any of its
Subsidiaries. Except as described in Section 4.2 of the Company Disclosure
Schedule, neither the Company nor any of its Subsidiaries owns, directly or
indirectly, any interest, or has made any investment in, any partnership, joint
venture, corporation, trust or other entity.
4.3 Authority; No Violation. (a) The Company has full corporate
-----------------------
power and authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
and the consummation of the Merger and the other transactions contemplated by
this Agreement have been duly and validly approved by the Board of Directors of
the Company and, subject only to the approval and adoption of this Agreement and
the Merger by the stockholders of the Company in accordance with the DGCL and
the Amended and Restated Certificate of Incorporation and the Amended and
Restated By-Laws of the Company, no other corporate proceedings on the part of
the Company or its stockholders are necessary to approve this Agreement and to
consummate the Merger and the other transactions contemplated hereby. This
Agreement has been duly and validly executed and delivered by the Company, and
(assuming due authorization, execution and delivery by Public and Merger Sub)
this Agreement constitutes a valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except as
enforcement may be limited by general principles of equity whether applied in a
court of law or a court of equity and by bankruptcy, insolvency and similar laws
affecting creditors' rights and remedies generally.
(b) Except as set forth in Section 4.3(b) of the Company
Disclosure Schedule, neither the execution and delivery of this Agreement by the
Company, nor the consummation by the Company of the Merger or of any of the
other transactions contemplated by this Agreement, nor compliance by the Company
with any of the terms or provisions hereof, will (i) violate any provision of
the Amended and Restated Certificate of Incorporation or Amended and Restated
By-Laws of the Company or the certificate of incorporation, by-laws or similar
governing documents of any of its Subsidiaries, or (ii) assuming that the
consents and approvals referred to in Section 4.4 are duly obtained, (x) violate
any statute, code, ordinance, rule, regulation, judgment, order, writ, decree or
injunction applicable to the Company or any of its Subsidiaries, or any of their
respective properties or assets, or (y) violate, conflict with, result in a
breach of any provision of or the loss of any benefit under, constitute a
default (or an event which, with or without notice or lapse of time, or both,
would constitute a default) under, result in the termination of or a right of
termination or cancellation under, accelerate the performance required by, or
result in the creation of any lien, pledge, security interest, charge or other
encumbrance upon any of the respective properties or assets of the Company or
any of its Subsidiaries under, any of the terms, conditions or provisions of any
loan, guarantee of indebtedness, note, bond, mortgage, indenture, deed of trust,
license, permit, concession, franchise, lease, agreement or other instrument or
obligation to which the Company or any of its Subsidiaries is a party, or by
which they or any of their respective properties or assets may be bound or
affected.
12
4.4 Consents and Approvals. Except for (a) the filing of a
----------------------
notification under the HSR Act (as defined in Section 7.1(b)), (b) the approval
and adoption of this Agreement and the Merger by the stockholders of the Company
in accordance with the DGCL, the Amended and Restated Certificate of
Incorporation and the Amended and Restated By-Laws of the Company, (c) the
filing of the Certificate of Merger with the Secretary pursuant to the DGCL, (d)
the consent of Sprint Communications Company, L.P., Sprint Spectrum L.P. and
WirelessCo, L.P. (collectively, "Sprint PCS") required pursuant to the terms of
the Company Sprint Agreements and (e) such filings, authorizations or approvals
as may be set forth in Section 4.4 of the Company Disclosure Schedule, no
consents or approvals of, or filings or registrations with, any court,
administrative agency or commission or other governmental authority or
instrumentality (each a "Governmental Entity") or with any third party are
necessary in connection with the execution and delivery by the Company of this
Agreement or the consummation by the Company of the Merger and the other
transactions contemplated hereby.
4.5 Financial Statements. (a) The Company has previously made
--------------------
available to Public copies of the financial statements of LLC and the Company,
consisting of (i) an audited consolidated statement of financial condition of
LLC as of December 31, 1999 (the "LLC Balance Sheet") and the related statements
of operations, members' equity, and cash flows for the period from January 22,
1999 (date of inception) through December 31, 1999 and an audited consolidated
balance sheet of the Company and its Subsidiaries as of December 31, 2000 (the
"Company Balance Sheet" and together with the LLC Balance Sheet, the "Balance
Sheets") and the related consolidated statements of operations, cash flows and
redeemable preferred stock and equity for the year ended December 31, 2000 as
reported in the Annual Report on Form 10-K of the Company for the fiscal year
ended December 31, 2000 filed with the SEC under the Securities Exchange Act of
1934, as amended (the "Exchange Act") (collectively, and including the notes
thereto, the "Company Audited Financial Statements"), in each case accompanied
by the audit report of Deloitte & Touche LLP, independent public accountants
with respect to the Company, and (ii) the unaudited consolidated balance sheets
of the Company and its Subsidiaries and LLC as of June 30, 2000 and 2001 and the
related unaudited consolidated statements of operations, cash flows and
redeemable preferred stock and equity for the six-month periods ended June 30,
2000 and 2001 as reported in the Company's Quarterly Report on Form 10-Q for the
period ended June 30, 2001 filed with the SEC under the Exchange Act (the
"Company Unaudited Financial Statements" and, together with the Company Audited
Financial Statements, the "Company Financial Statements"). The Company
Financial Statements (including the related notes, where applicable) fairly
present, and the financial statements to be delivered by the Company to Public
after the date of this Agreement pursuant to Section 7.12 hereof and to be filed
by the Company with the SEC after the date of this Agreement will fairly
present, the consolidated financial position of the Company and its
Subsidiaries, as the case may be, as of the respective dates thereof, and the
results of the consolidated operations and consolidated financial position of
the parties to which they relate for the respective fiscal periods or as of the
respective dates therein set forth (subject, in the case of the unaudited
statements, to recurring audit adjustments normal in amount and nature and to
any other adjustments described therein) in conformity with GAAP (except in the
case of the unaudited statements for the lack of complete notes thereto) applied
on a consistent basis during the periods involved (except as may be indicated
therein or in the notes thereto).
13
(b) Each of the Company Financial Statements (including the
related notes) complies in all material respects with the applicable accounting
requirements and with the published rules and regulations of the SEC with
respect thereto at the date of their filing. Each of the Company Financial
Statements (including, in each case, any notes thereto) has been prepared in
accordance with generally accepted accounting principles ("GAAP") consistently
applied during the periods involved (except (i) as may be indicated in the notes
thereto, (ii) with respect to any unaudited financial statements, for normal
period-end adjustments, and (iii) with respect to any monthly financial
statements, for the absence of notes thereto). The books and records of the
Company and its Subsidiaries have been, and are being, maintained in accordance
with GAAP and reflect only actual transactions.
4.6 No Undisclosed Liabilities. Except (a) as disclosed in the Company
--------------------------
Financial Statements, (b) for liabilities and obligations incurred in the
ordinary course of business and consistent with past practice of the Company
since the date of the Company Balance Sheet and (c) liabilities that could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on the Company, neither the Company nor any of its Subsidiaries
has any liability or obligation of any nature, whether or not absolute, accrued,
contingent or otherwise.
4.7 Absence of Certain Changes or Events. Except as may be set forth in
------------------------------------
Section 4.7 of the Company Disclosure Schedule or as disclosed in any Company
Report (as defined in Section 4.8) filed with the SEC prior to the date of this
Agreement or in the Company Financial Statements, since December 31, 2000, (i)
neither the Company nor any of its Subsidiaries has incurred any liability,
except in the ordinary course of their business and consistent with their past
practices, (ii) there has been no change or development or combination of
changes or developments which has had, or could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect on the Company;
(iii) other than with respect to the accrual of in-kind dividends on the Company
Preferred Stock, there has been no declaration, setting aside or payment of any
dividend or distribution of any kind by the Company on any class of its equity
securities; (iv) there has been no material increase in the compensation payable
or to become payable by the Company or any Subsidiary to its directors, officers
or employees and no material increase in any bonus, insurance, pension or other
employee benefit plan, payment or arrangement made to, for or with such
directors, officers or employees and (v) there has been no material change in
tax accounting or other accounting methods, principles or practices by the
Company or any Subsidiary.
4.8 SEC Reports. The Company has previously made available to Public a
-----------
true and correct copy of each (a) final registration statement, prospectus,
report, schedule and definitive proxy statement filed by the Company with the
SEC pursuant to the Securities Act or the Exchange Act (the "Company Reports"),
(b) material written communication between the Company and the SEC, and (c)
communication mailed by the Company to its stockholders and no such registration
statement, prospectus, report, schedule, proxy statement or communication as of
its date of filing contained any untrue statement of a material fact or omitted
to state any material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances in which they were
made, not misleading. The Company has timely filed all Company Reports and other
documents required to be filed by it under the Securities Act and the Exchange
Act, and, as of their respective dates, all Company Reports complied with the
14
published rules and regulations of the SEC with respect thereto, including rules
and regulations relating to the filing of exhibits thereto.
4.9 Property. (a) Each of the Company and its Subsidiaries has
--------
good and marketable title, free and clear of all liens, encumbrances, mortgages,
pledges, charges, defaults or equitable interests, to all of the properties and
assets, real and personal, tangible or intangible, which are reflected on the
Company Balance Sheet or acquired after the date of the Company Balance Sheet,
except (i) liens under the Company Credit Facility, (ii) liens for taxes not yet
due and payable or contested in good faith by appropriate proceedings, (iii)
pledges to secure deposits and other liens incurred in the ordinary course of
business, (iv) such imperfections of title, easements and encumbrances, if any,
as do not interfere with the use of the property as such property is used on the
date of this Agreement, (v) for dispositions of and encumbrances on such
properties or assets in the ordinary course of business or (vi) mechanics',
materialmen's, workmen's, repairmen's, warehousemen's, carrier's and other
similar liens and encumbrances arising in the ordinary course of business (the
items in clauses (i) (ii), (iii) (iv) and (vi) collectively, the "Company
Permitted Liens").
(b) Section 4.9(b) of the Company Disclosure Schedule sets
forth an accurate and complete list and description of all real property owned
by the Company or any of its Subsidiaries and all buildings and improvements
thereon.
4.10 Leases. (a) Section 4.10(a) of the Company Disclosure
------
Schedule contains an accurate and complete list of each lease pursuant to which
the Company or any of its Subsidiaries leases any real property (excluding
leases or licenses of tower space to which the Company or any of its
Subsidiaries is a party ("Company Tower Leases") and leases of land containing
towers) (each a "Company Lease")). A true and complete copy of each Company
Lease has heretofore been made available to Public. As of June 30, 2001, the
Company was making rental payments on 522 Company Tower Leases to which the
Company or any of its Subsidiaries is a party.
(b) To the knowledge of the Company, each Company Lease is
valid, binding and enforceable in accordance with its terms and is in full force
and effect. The leasehold estate created by each Company Lease of real property
(a "Leased Premise") is free and clear of all encumbrances other than Company
Permitted Liens. There are no existing defaults by the Company or any of its
Subsidiaries under any of the Company Leases, and to the knowledge of the
Company no event has occurred that (whether with or without notice, lapse of
time or the happening or occurrence of any other event) would constitute a
default under any Company Lease. The Company has received no notice, and has no
other reason to believe, that any lessor under any Company Lease will not
consent (where such consent is necessary) to the consummation of the Merger
without requiring any material modification of the rights or obligations of the
lessee thereunder.
4.11 Environmental Matters. Except as set forth in Section 4.11
---------------------
of the Company Disclosure Schedule:
(a) The Company and each of its Subsidiaries (1) are in
compliance in all material respects with all, and, to the knowledge of the
Company, are not subject to any
15
liability with respect to any, applicable Environmental Laws, (2) hold or have
applied for all Environmental Permits necessary to conduct their current
operations and (3) are in compliance with their respective Environmental Permits
and such Environmental Permits are in full force and effect.
(b) Neither the Company nor any of its Subsidiaries has received any
written notice, demand, letter, claim or request for information alleging that
the Company or any of its Subsidiaries is in violation of any Environmental Law
or liable for remediation, cost recovery or contribution under CERCLA.
(c) Neither the Company nor any of its Subsidiaries (1) has entered into
or agreed to any consent decree or order or is subject to any judgment, decree
or judicial order relating to compliance with Environmental Laws, Environmental
Permits or the investigation, sampling, monitoring, treatment, remediation,
removal or cleanup of Hazardous Materials and, to the knowledge of the Company,
no investigation, litigation or other proceeding is pending or threatened in
writing with respect thereto, or (2) is an indemnitor in connection with any
claim threatened or asserted in writing by any third-party indemnitee for any
liability under any Environmental Law or relating to any Hazardous Materials.
(d) None of the real property owned or leased by the Company or any
Company Subsidiary is listed or, to the knowledge of the Company, proposed for
listing on the "National Priorities List" under CERCLA, as updated through the
date hereof, or any similar state or foreign list of sites requiring
investigation or cleanup.
(e) To the knowledge of the Company, there are no underground storage
tanks or above-ground storage tanks located on any Real Property which are now,
or in the past were, used to store Hazardous Materials. "Real Property" shall
mean all real property that is owned or used by the Company or any of its
Subsidiaries or that is reflected as an asset of the Company or any of its
Subsidiaries on the Company Balance Sheet.
(f) For purposes of this Agreement:
"CERCLA" means the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended as of the date hereof.
"Environmental Laws" means any federal, state, local or foreign statute,
law, ordinance, regulation, rule, code, treaty, writ or order and any
enforceable judicial or administrative interpretation thereof, including any
judicial or administrative order, consent, decree, judgment, stipulation,
injunction, authorization, policy, opinion, or agency requirement, in each case
having the force and effect of law, relating to the pollution, protection,
investigation or restoration of the environment, historic preservation, or
health and safety as affected by the environment or natural resources,
including, without limitation, the National Environmental Policy Act of 1969, as
amended as of the date hereof, the National Historic Preservation Act, and those
relating to the use, handling, presence, transportation, treatment, storage,
disposal, release, threatened release or discharge of Hazardous Materials or
noise, odor, wetlands, pollution or contamination.
16
"Environmental Permits" means any permit, approval, identification
number, license and other authorization required under any applicable
Environmental Law.
"Hazardous Materials" means (a) any petroleum, petroleum products,
byproducts or breakdown products, radioactive materials, asbestos-containing
materials or polychlorinated biphenyls or (b) any chemical, material or other
substance defined or regulated as toxic or hazardous or as a pollutant or
contaminant or waste under any applicable Environmental Law.
4.12 Certain Contracts. (a) Except for Contracts described in clauses
-----------------
(i), (iii), (iv), (v), (vii), (viii), (xiii), (xiv), (xvi), (xvii), (xx), (xxi)
and (xxii) that provide for aggregate payments to any Person in any calendar
year of less than $100,000, Section 4.12(a) of the Company Disclosure Schedule
contains a complete and accurate list of each of the following Contracts:
(i) Contracts of the Company or any of its Subsidiaries
relating to indebtedness, liability for borrowed money or the deferred
purchase price of property (excluding trade payables in the ordinary
course of business) or any guarantee or other contingent liability in
respect of any indebtedness or obligation of any Person (other than
the endorsement of negotiable instruments for collection in the
ordinary course of business);
(ii) Contracts that contain restrictions with respect to
payment of dividends or any other distribution in respect of the
equity of the Company or any of its Subsidiaries;
(iii) any letters of credit or similar arrangements relating to
the Company or any of its Subsidiaries;
(iv) any employment agreements with any employee of the
Company or any of its Subsidiaries or other Person on a consulting
basis;
(v) any management, consulting or advisory agreements, or
severance plans or arrangements for any present or former employee of
the Company or any of its Subsidiaries;
(vi) any non-disclosure agreements and non-compete agreements
binding present and former employees of the Company or any of its
Subsidiaries;
(vii) any agreement under which the Company or any of its
Subsidiaries is lessee of or holds or operates any property, real or
personal;
(viii) any agreement under which the Company or any of its
Subsidiaries is lessor of or permits any third party to hold or
operate any property, real or personal;
(ix) any agreement relating to the acquisition or divestiture
of the capital stock or other equity securities, assets or business of
any Person involving
17
the Company or any of its Subsidiaries or pursuant to which or the
Company or any of its Subsidiaries has any liability, contingent or
otherwise;
(x) any powers of attorney granted by or on behalf of the
Company or any of its Subsidiaries;
(xi) any agreement, other than agreements entered into in the
ordinary course of the Company's or any of its Subsidiaries' business
consistent with past practice, which prevents the Company or any of
its Subsidiaries from disclosing confidential information;
(xii) any agreement which in any way purports to prohibit the
Company or any of its Subsidiaries from freely engaging in business
anywhere in the world or competing with any other Person;
(xiii) any sales distribution agreements, franchise agreements and
advertising agreements relating to the Company or any of its
Subsidiaries;
(xiv) any warranty, guaranty or other similar undertaking with
respect to a contractual performance extended by the Company or any of
its Subsidiaries;
(xv) any agreement pursuant to which the Company or any of its
Subsidiaries has agreed to defend, indemnify or hold harmless any
other Person, other than Company Tower Leases;
(xvi) any agreement pursuant to which the Company or any of its
Subsidiaries has agreed to settle any liability for Taxes;
(xvii) any agreement pursuant to which the Company has agreed to
shift or allocate the liability of the Company, any of its
Subsidiaries or any other Person for Taxes;
(xviii) any agreement pursuant to which the Company may be
required to file a registration statement under the Securities Act
with respect to any securities issued by the Company; and
(xix) any joint venture agreement or partnership agreement;
(xx) any requirements or output contracts;
(xxi) any vendor agreements;
(xxii) any construction contracts or construction management
contracts;
(xxiii) any agreement between the Company or any of its
Subsidiaries and any of their respective stockholders; and
18
(xxiv) any other agreement to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its
Subsidiaries is bound and which is material to the Company and its
Subsidiaries taken as a whole.
(b) Except as set forth in Section 4.12(b) of the Company
Disclosure Schedule, with respect to each Company Contract (as defined below):
(i) the Company Contract is in full force and effect and is valid and
enforceable in accordance with its terms; (ii) neither the Company nor any of
its Subsidiaries is in breach or default thereof, nor has the Company or any of
its Subsidiaries received notice that it is in breach of or default thereof;
(iii) to the knowledge of the Company, no event has occurred which, with notice,
or lapse of time or both, would constitute a breach or default thereof by the
Company or any of its Subsidiaries or by any other party thereto; (iv) to the
knowledge of the Company, no event has occurred that would permit termination,
modification, or acceleration thereof by any other party thereto; and (v)
neither the Company nor any of its Subsidiaries nor, to the knowledge of the
Company, any other party thereto has repudiated or acted in a manner
inconsistent with any provision thereof. Neither the Company nor any of its
Subsidiaries is a party to any verbal contract, agreement, or other arrangement
which, if reduced to written form, would be required to be listed on Section
4.12(a) of the Company Disclosure Schedule under the terms of this Section 4.12.
(c) Except as disclosed in the Company Reports filed with the
SEC prior to the date of this Agreement or as disclosed in Section 4.12(c) of
the Company Disclosure Schedule, no "Event of Default" (as defined in the
Company Indenture and the Company Credit Facility, respectively) has occurred
and is continuing under either of the Company Indenture or the Company Credit
Facility and neither the Company nor any of its Subsidiaries has previously
received a waiver of any Event of Default (as defined in the Company Indenture
and the Company Credit Facility, respectively) under the Company Indenture or
the Company Credit Facility.
(d) Each contract, arrangement, commitment or understanding of
any type or form required to be described in Section 4.12(a), whether or not set
forth in Section 4.12(a) of the Company Disclosure Schedule, is referred to
herein as a "Company Contract. "
4.13 Distributors and Suppliers. Except as set forth on Section 4.13 of
--------------------------
the Company Disclosure Schedule, since December 31, 2000, there has not been any
material adverse change in the business relationship of the Company or any of
its Subsidiaries with any distributor who accounted for more than 2% of the
Company's sales (on a consolidated basis) during the period from December 31,
2000 to July 31, 2001, or with any supplier from whom the Company or any of its
Subsidiaries purchased more than 5% of the goods or services (on a consolidated
basis) which it purchased during the period from December 31, 2000 to July 31,
2001. Except as set forth in Section 4.13 of the Company Disclosure Schedule,
neither the Company nor any of its Subsidiaries has knowledge of any termination
or intended termination by any such 2% distributor or 5% supplier of its
business relationship with the Company or any modification or intended
modification of its business relationship with the Company in a manner which is
adverse in any material respect to the Company, and neither the Company nor any
of its Subsidiaries has knowledge of any facts which could reasonably be
expected to form an adequate basis for such termination or modification.
19
4.14 Insurance. Except as set forth in Section 4.14 of the
---------
Company Disclosure Schedule, each of the Company and its Subsidiaries is insured
with financially responsible insurers in such amounts and against such risks and
losses as are customary for companies conducting the business as conducted by
the Company and its Subsidiaries. Except as set forth in Section 4.14 of the
Company Disclosure Schedule, neither the Company nor any of its Subsidiaries has
received any notice of cancellation or termination with respect to any material
insurance policy of the Company or its Subsidiaries. The insurance policies of
the Company and of its Subsidiaries are valid and enforceable policies in all
material respects.
4.15 Legal Proceedings. (a) Except as set forth in Section 4.15
-----------------
of the Company Disclosure Schedule, neither the Company nor any of its
Subsidiaries is a party to any, and there are no pending or, to the Company's
knowledge, threatened, legal, administrative, arbitral or other proceedings,
claims, actions or governmental or regulatory investigations of any nature
against the Company or any of its Subsidiaries or, to the knowledge of the
Company, any of the Company's or its Subsidiaries' current or former directors
or officers or any other person whom the Company to any of its Subsidiaries has
agreed to indemnify, as such, or challenging the validity or propriety of the
transactions contemplated by this Agreement and, to the knowledge of the
Company, no event has occurred, and no state of facts exists, that could
reasonably be expected to result in any such action, suit or proceeding.
(b) There is no injunction, order, judgment, decree or
regulatory restriction imposed upon the Company, any of its Subsidiaries or the
assets of the Company or any of its Subsidiaries or, to the knowledge of the
Company, any of the Company's or its Subsidiaries' current or former directors
or officers or any other person whom the Company or any of its Subsidiaries has
agreed to indemnify, as such.
4.16 Compliance with Applicable Law. (a) Except for the Sprint
------------------------------
Licenses (as defined below), the Company and each of its Subsidiaries hold, and
have at all times held, all licenses, franchises, permits and authorizations
(each a "Company Permit") necessary for the lawful conduct of their respective
businesses and the lawful ownership, use and operation of its assets under and
pursuant to all, and have complied with and are not in default in any material
respect under any, applicable law, statute, order, rule, regulation, policy
and/or guideline of any Governmental Entity relating to the Company or any of
its Subsidiaries, and neither the Company nor any of its Subsidiaries knows of,
or has received notice of, any violations of any of the above.
(b) To the actual knowledge of the Company, there has been
no investigation, notice of apparent liability, violation, forfeiture or other
order or complaint issued by or before the Federal Communications Commission
(the "FCC") or any other Governmental Entity or of any other proceedings of or
before the FCC or any other Governmental Entity relating to the Company or any
of its Subsidiaries or LLC or to any authorizations under which the Company
conducts its business. No proceedings are pending or, to the actual knowledge of
the Company, threatened to revoke or limit any of the Company Permits or the
personal communications service licenses held by Sprint PCS or its Affiliates
(the "Sprint Licenses"). For purposes of this Section 4.16(b) only, "actual
knowledge of the Company" means the actual knowledge of the Chief Executive
Officer, the Chief Financial Officer, the Chief Operating Officer or the Chief
Technology Officer of the Company.
20
(c) To the knowledge of the Company, no event has occurred
which (i) results in, or after notice or lapse of time or both could reasonably
be expected to result in, revocation, suspension, adverse modification, non-
renewal, impairment, restriction or termination of, or order of forfeiture or
substantial fine with respect to, any of the Company Permits or the Sprint
Licenses, or (ii) affects or could reasonably be expected in the future to
affect any of the rights of the Company or its Subsidiaries under any material
Company Permits or any of the rights of Sprint PCS or its Affiliates under the
Sprint Licenses. No facts are known to the Company or the Company Subsidiaries
which if known by a Governmental Entity of competent jurisdiction would present
a substantial risk that any Company Permit could be revoked, suspended,
adversely modified, not renewed, impaired, restricted, terminated, forfeited or
a substantial fine imposed against the Company or any of the Company
Subsidiaries, and neither the execution by the Company of this Agreement nor the
consummation of the Merger or any of the other transactions contemplated by this
Agreement is reasonably likely to result in the occurrence of any of the
consequences set forth in this Section 4.16(c).
4.17 Benefit Plans. (a) Section 4.17(a) of the Company
-------------
Disclosure Schedule sets forth a true and complete list of each "employee
benefit plan" (within the meaning of section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA")); each deferred compensation
plan, incentive compensation plan, equity compensation plan, employment,
termination or severance agreement; and each other employee benefit plan, fund,
program, agreement or arrangement, in each case, that is sponsored, maintained
or contributed to or required to be contributed to by the Company or by any
trade or business, whether or not incorporated, that together with the Company
would be deemed a "single employer" within the meaning of Section 414 of the
Code (a "Company ERISA Affiliate"), for the benefit of any current or former
employee of the Company or any Company ERISA Affiliate (the "Company Benefit
Plans").
(b) The Company has heretofore made available to Public true
and complete copies of each of the Company Benefit Plans and all related
documents, including but not limited to (i) the most recent actuarial report for
such Company Benefit Plan (if applicable), and (ii) the most recent
determination letter from the Internal Revenue Service (if applicable) for such
Company Benefit Plan.
(c) Except as set forth in Section 4.17(c) of the Company
Disclosure Schedule, (i) each of the Company Benefit Plans has been operated and
administered in material compliance with its terms and applicable law, including
but not limited to the Exchange Act, the Securities Act, ERISA and the Code,
(ii) to the knowledge of the Company, each of the Company Benefit Plans intended
to be "qualified" within the meaning of Section 401(a) of the Code, either (1)
has received a favorable determination letter from the IRS, or (2) is or will be
the subject of an application for a favorable determination letter, and the
Company is not aware of any circumstances reasonably likely to result in the
revocation or denial of any such favorable determination letter, (iii) no
Company Benefit Plan provides benefits, including without limitation death or
medical benefits (whether or not insured), with respect to current or former
employees of the Company or any Company ERISA Affiliate beyond their retirement
or other termination of service, other than (w) coverage mandated by applicable
law, (x) death benefits or retirement benefits under any "employee pension
plan," as that term is defined in Section 3(2) of ERISA, (y) deferred
compensation benefits accrued as liabilities on the books of the Company or
21
the Company ERISA Affiliates or (z) benefits which are fully insured or the full
cost of which is borne by the current or former employee (or his beneficiary),
(iv) no Company Benefit Plan is subject to Title IV of ERISA, and no liability
under Title IV of ERISA has been incurred by the Company or any Company ERISA
Affiliate that has not been satisfied in full, and neither the Company nor a
Company ERISA Affiliate has any contingent liability under Title IV of ERISA,
(v) no Company Benefit Plan is a "multiemployer pension plan," as such term is
defined in Section 3(37) of ERISA, (vi) all contributions or other amounts
payable by the Company or any Company ERISA Affiliates as of the Effective Time
with respect to each Company Benefit Plan in respect of current or prior plan
years have been paid or accrued in accordance with GAAP, (vii) neither the
Company nor any Company ERISA Affiliate has engaged in a transaction or has
taken or failed to take any action in connection with which the Company or any
Company ERISA Affiliate reasonably could be subject to either a civil penalty
assessed pursuant to Section 409 or 502(i) of ERISA or a tax imposed pursuant to
Section 4975, 4976 or 4980B of the Code, (viii) there are no pending, or, to the
best knowledge of the Company, threatened or anticipated claims or proceedings
(other than routine claims for benefits) by, on behalf of or against any of the
Company Benefit Plans or any trusts related thereto, and (ix) the consummation
of the transactions contemplated by this Agreement will not, either alone or in
combination with any other event, (y) entitle any current or former employee,
officer, director or consultant of the Company or any Company ERISA Affiliate to
severance pay, termination pay or any other payment or benefit, except as
expressly provided in this Agreement or (z) accelerate the time of payment or
vesting or increase the amount or value of compensation or benefits due any such
employee, officer, director or consultant.
4.18 Taxes. (a) Except as set forth in Section 4.18(a) of the
-----
Company Disclosure Schedule, each of the Company and its Subsidiaries has (i)
duly and timely filed (including applicable extensions granted without penalty)
all Tax Returns (as hereinafter defined) required to be filed at or prior to the
Effective Time, and such Tax Returns are true, correct and complete in all
material respects, and (ii) paid in full or made adequate provision in the
financial statements of the Company (in accordance with GAAP) for all Taxes (as
hereinafter defined) due to be paid or accrued at or prior to the Effective
Time. No deficiencies for any Taxes have been proposed, asserted, assessed or,
to the knowledge of the Company, threatened against or with respect to the
Company or any of its Subsidiaries. Except as set forth in Section 4.18(a) of
the Company Disclosure Schedule, (i) there are no liens for Taxes upon the
assets of either the Company or its Subsidiaries except for statutory liens for
current Taxes not yet due, (ii) neither the Company nor any of its Subsidiaries
has requested any extension of time within which to file any Tax Returns in
respect of any fiscal year which have not since been filed and no request for
waivers of the time to assess any Taxes are pending or outstanding, (iii) with
respect to each taxable period of the Company and its Subsidiaries, (A) the
federal and state income Tax Returns of the Company and its Subsidiaries have
been audited by the Internal Revenue Service or appropriate state tax
authorities, (B) the time for assessing and collecting income Tax with respect
to such taxable period has closed and such taxable period is not subject to
review, or (C) the time for assessing and collecting income Tax with respect to
such taxable period has not closed, but no audit or review of such taxable
period has yet been initiated or threatened, (iv) neither the Company nor any of
its Subsidiaries has filed or been included in a combined, consolidated or
unitary income Tax Return other than one in which the Company was the parent of
the group filing such Tax Return, (v) neither the Company nor any of its
Subsidiaries is a party to any agreement providing for the allocation or sharing
of Taxes (other
22
than the allocation of federal income taxes as provided by Regulation 1.1552-
1(a)(1) under the Code), (vi) neither the Company nor any of its Subsidiaries is
required to include in income any adjustment pursuant to Section 481(a) of the
Code (or any similar or corresponding provision or requirement of state, local
or foreign income Tax law), by reason of the voluntary change in accounting
method (nor has any taxing authority proposed any such adjustment or change of
accounting method), (vii) neither the Company nor any of its Subsidiaries has
filed a consent pursuant to Section 341(f) of the Code, (viii) neither the
Company nor its Subsidiaries has any liability for Taxes of any Person (other
than a liability of the Company for Taxes of any of its Subsidiaries or a
liability of any of the Company's Subsidiaries for Taxes of the Company) under
Regulation 1.1502-6 or 1.1502-78(b)(2) under the Code (or similar provisions of
state, local or foreign law), as a transferee or successor, by contract or
otherwise, and (ix) neither the Company nor any of its Subsidiaries has made any
payment or may be obligated to make any payment (by contract or otherwise) which
will not be deductible by reason of Section 280G or Section 162(m) of the Code.
(b) For the purposes of this Agreement, "Taxes" shall mean
all taxes, charges, fees, levies, penalties or other assessments imposed by any
United States federal, state, local or foreign taxing authority, including, but
not limited to income, excise, property, sales, transfer, franchise, payroll,
withholding, social security or other taxes, including any interest, penalties
or additions attributable thereto. For purposes of this Agreement, "Tax Return"
shall mean any return, report, information return or other document (including
any related or supporting information) with respect to Taxes.
4.19 Sprint Agreement Compliance. (a) Neither the Company nor
---------------------------
any of its Subsidiaries has violated or failed to meet any deadline or
requirement in the Company Sprint Agreements, except as has been remedied,
waived or modified and previously disclosed to Public in writing. Section
4.19(a) of the Company Disclosure Schedule sets forth the extent of the
Company's progress in the completion of its build-out and network launch as of
the date of this Agreement.
(b) Section 4.19(b) of the Company Disclosure Schedule sets
forth a list of all agreements between the Company, its Subsidiaries or any of
its Affiliates, on the one hand, and Sprint PCS and any of its Affiliates, on
the other hand (collectively, the "Company Sprint Agreements"). The Company has
made available to Public a true and complete copy of each of the written
instruments, plans, contracts and agreements, including the Company Sprint
Agreements, and an accurate description of each of the oral arrangements, oral
contracts and oral agreements, which are listed on Section 4.12(a) and Section
4.19(b) of the Company Disclosure Schedule, together with all amendments,
waivers or other changes thereto. There are no unwritten amendments to, or
waivers under, any Sprint Agreement.
(c) The Company Sprint Agreements are valid, binding and
enforceable against the Company or its Subsidiaries, in accordance with their
respective terms, and shall be in full force and effect without penalty in
accordance with their terms upon consummation of the Merger and the other
transactions contemplated by this Agreement, except as enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or other laws
affecting creditors' rights generally and limitations on the availability of
equitable remedies. The Company and its Subsidiaries have performed in all
material respects all
23
obligations required to be performed by them under, and they are not in default
under or in breach of, nor in receipt of any claim of default or breach under,
any of the Company Sprint Agreements. To the knowledge of the Company, no event
has occurred which with the passage of time or the giving of notice or both
would result in a default, breach or event of noncompliance by the Company or
any Subsidiary, or would permit termination or modification by Sprint PCS or any
of its Affiliates, under any of the Company Sprint Agreements. Neither the
Company nor any Subsidiary has knowledge of any cancellation or anticipated
cancellation by Sprint PCS or any of its Affiliates of any of the Company Sprint
Agreements. The Company has provided Public with copies of all written notices
(excluding e-mail messages) received by it from Sprint PCS during the last six
months (i) delivered pursuant to the official notice provisions of the Company
Sprint Agreements or (ii) alleging a material breach of the Company Sprint
Agreements.
4.20 Intellectual Property. (a) "Intellectual Property' means
---------------------
all intellectual property or other proprietary rights of every kind, including
all domestic or foreign patents, patent rights, domestic or foreign patent
applications, inventions (whether or not patentable), processes, products,
technologies, discoveries, copyrightable and copyrighted works, apparatus, trade
secrets, trademarks, trademark registrations and applications, service marks,
service xxxx registrations and applications, trade names, trade dress, copyright
registrations, customer lists, confidential marketing and customer information,
licenses, confidential technical information, software, inventions (whether or
not patentable), and all documentation thereof.
(b) The Company owns or has the right to use, whether
through licensing or otherwise, and to authorize others to use, all Intellectual
Property significant to the businesses of the Company and its Subsidiaries in
substantially the same manner as such businesses are conducted on the date
hereof ("Company Material Intellectual Property"). Except as set forth in
Section 4.20 of the Company Disclosure Schedule: (1) no written claim of
invalidity or conflicting ownership rights with respect to any Company Material
Intellectual Property has been made by a third party and no such Intellectual
Property is the subject of any pending or, to the Company's knowledge,
threatened action, suit, claim, investigation, arbitration or other proceeding;
(2) no Person or entity has given notice to the Company or any of its
Subsidiaries that the use of any Company Material Intellectual Property by the
Company, any Company Subsidiary or any licensee is infringing or has infringed
any domestic or foreign patent, trademark, service xxxx, trade name, or
copyright or design right, or that the Company, any of its Subsidiaries or any
licensee has misappropriated or improperly used or disclosed any trade secret,
confidential information or know-how; (3) to the Company's knowledge after due
inquiry for such purpose, the making, using, selling, manufacturing, marketing,
licensing, reproduction, distribution, or publishing of any process, machine,
manufacture or product related to any Company Material Intellectual Property,
does not and will not infringe any domestic or foreign patent, trademark,
service xxxx, trade name, copyright or other intellectual property right of any
third party, and does not and will not involve the misappropriation or improper
use or disclosure of any trade secrets, confidential information or know-how of
any third party; (4) to the Company's knowledge, there exists no prior act or
current conduct or use by the Company, any of its Subsidiaries or any third
party that would void or invalidate any Company Material Intellectual Property;
(5) to the Company's knowledge, no other Person is interfering with, infringing
upon, misappropriating or otherwise coming into conflict with any Intellectual
Property of the Company or any of its Subsidiaries; and (6) the execution,
delivery and
24
performance of this Agreement by the Company and the consummation of the
transactions contemplated hereby and thereby will not breach, violate or
conflict with any instrument or agreement concerning any Company Material
Intellectual Property, will not cause the forfeiture or termination of or give
rise to a right of forfeiture or termination of any of the Company Material
Intellectual Property, or trigger additional fees or transfer costs payable by
the Company or any of its Subsidiaries with respect to, or impair the right of
the Surviving Corporation to make, use, sell, license or dispose of, or to bring
any action for the infringement of, any Company Material Intellectual Property.
In addition, the matters disclosed on Section 4.20 of the Company Disclosure
Schedule would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect on the Company.
4.21 Labor Matters. (a) Neither the Company nor any of its
-------------
Subsidiaries is a party to any collective bargaining agreement or other labor
union contract applicable to Persons employed by them. No union representation
question exists and, to the knowledge of the Company and its Subsidiaries, there
has been no union organization effort respecting the employees of the Company
and its Subsidiaries. Neither the Company nor any of its Subsidiaries is
delinquent in payments to any of its employees for any wages, salaries,
commissions, bonuses or other direct compensation for any services performed by
them or amounts required to be reimbursed to such employees. No retired
employees of the Company are entitled to (i) receive current or future
compensation from the Company or its Subsidiaries other than pursuant to the
terms of any Company Benefit Plan or (ii) participate in any Company Benefit
Plan (except as required by section 4980B of the Code or similar provisions of
applicable state law).
(b) (i) Each of the Company and its Subsidiaries is in
compliance with all federal, state and other applicable laws, domestic or
foreign, respecting employment and employment practices, terms and conditions of
employment, wages and hours, immigration, the payment of social security and
similar taxes, occupational safety and health and plant closing, and has not and
is not engaged in any unfair labor practice; (ii) no unfair labor practice
complaint against the Company or any of its Subsidiaries is pending before the
National Labor Relations Board; (iii) there is no labor strike, dispute,
slowdown or stoppage actually pending or threatened against or involving the
Company or any of its Subsidiaries; (iv) no grievance that might have an adverse
effect upon the Company or any of its Subsidiaries or the conduct of their
respective businesses exists, no arbitration proceeding arising out of or under
any collective bargaining agreement is pending and no claim therefor has been
asserted; and (v) no collective bargaining agreement is currently being
negotiated by the Company or any of its Subsidiaries.
(c) Except for employees who are parties to employment
agreements with the Company or any of its Subsidiaries, which agreements are set
forth in Section 4.21 (c) of the Company Disclosure Schedule, and except as
otherwise disclosed in Section 4.21(c) of the Company Disclosure Schedule, all
employees of the Company and its Subsidiaries are terminable at will, with or
without cause, and without cost to the Company and its Subsidiaries for
severance obligations, or any other liability, except for payment of accrued
salaries or wages and vacation pay. No employee or former employee has any right
to be rehired by the Company or its Subsidiaries prior to the hiring of a person
not previously employed by the Company or such Subsidiary.
25
4.22 Reorganization. As of the date of this Agreement, the
--------------
Company has no reason to believe that the Merger will fail to qualify as a
reorganization under Section 368(a) of the Code. As of the date of this
Agreement, the Company knows of no reason why it will be unable to deliver to
Xxxxx, Xxxxx & Xxxxx and to Winston & Xxxxxx representation letters with respect
to the Company in form and substance sufficient to enable such counsel to render
the opinions required by Sections 8.2(e) and 8.3(d).
4.23 Broker's Fees. Except as set forth on Section 4.23 of the
-------------
Company Disclosure Schedule, neither the Company nor any of its Subsidiaries,
nor any of their respective officers or directors has employed any broker or
finder or incurred any liability for any broker's fees, commissions or finder's
fees in connection with the Merger or any of the transactions contemplated by
this Agreement. The terms of any such broker's fees, commissions or finder's
fees are as set forth in Section 4.23 of the Company Disclosure Schedule.
4.24 Related Party Transactions. Except as set forth on Section
--------------------------
4.24 of the Company Disclosure Schedule, to the knowledge of the Company, no
stockholder nor any officer or director of the Company or any of its
Subsidiaries owns or holds, directly or indirectly, any interest in (excepting
holdings solely for passive investment purposes of securities of publicly held
and traded entities constituting less than 5% of the equity of any such entity),
or is an officer, director, employee or consultant of any Person that is, a
competitor, lessor, lessee, customer or supplier of the Company or which
conducts a business similar to any business conducted by the Company. No
stockholder, officer or director of the Company or any of its Subsidiaries (a)
owns or holds, directly or indirectly, in whole or in part, any Intellectual
Property used by the Company or any of its Subsidiaries, (b) to the knowledge of
the Company has any claim, charge, action or cause of action against the Company
or any of its Subsidiaries, except for claims for reasonable unreimbursed travel
or entertainment expenses, accrued vacation pay or accrued benefits under any
employee benefit plan existing on the date hereof, (c) to the knowledge of the
Company, has made, on behalf of the Company or any of its Subsidiaries, any
payment or commitment to pay any commission, fee or other amount to, or to
purchase or obtain or otherwise contract to purchase or obtain any goods or
services from, any other Person of which any stockholder, officer or director of
the Company or any of its Subsidiaries is a partner or shareholder (except
holdings solely for passive investment purposes of securities of publicly held
and traded entities constituting less than 5% of the equity of any such entity),
(d) owes any money to the Company or any of its Subsidiaries or (e) has any
material interest in any property, real or personal, tangible or intangible,
used in or pertaining to the business of the Company or any of its Subsidiaries.
4.25 Company Information. None of the information supplied or
-------------------
to be supplied by the Company or its Subsidiaries for inclusion or incorporation
by reference in (i) the Registration Statement on Form S-4 to be filed with the
SEC by Public in connection with the issuance of shares of Public Common Stock
in the Merger (including the proxy statement and prospectus (the
"Prospectus/Proxy Statement") constituting a part thereof) (the "S-4
Registration Statement") will, at the time the S-4 Registration Statement
becomes effective under the Securities Act, and (ii) the Prospectus/Proxy
Statement and any amendment or supplement thereto will, at the date of mailing
to stockholders and at the time of the Public Special Meeting (as hereinafter
defined), in any such case, contain any untrue statement of a material fact or
omit
26
to state any material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under which they
were made, not misleading.
4.26 Required Vote of the Company. Except as set forth in Section
----------------------------
4.26 of the Company Disclosure Schedule, and except for the affirmative vote of
the holders of at least a majority of the issued and outstanding shares of
capital stock of the Company to adopt and approve this Agreement and the Merger,
no vote of the stockholders of the Company, or any class thereof, or of the
holders of any securities of the Company (equity or otherwise), is required by
law, the Amended and Restated Certificate of Incorporation or the Amended and
Restated By-Laws of the Company or otherwise in order for the Company to
consummate the Merger and the other transactions contemplated by this Agreement.
The total number of shares of capital stock subject to Company Support
Agreements constitutes in excess of 50% of the voting power of the issued and
outstanding capital stock of the Company on a fully diluted basis.
4.27 Takeover Statutes. No "fair price," "moratorium," "control
-----------------
share acquisition" or other similar anti-takeover statute or regulation enacted
under state and federal laws in the United States (each a "Takeover Statute")
(with the exception of Section 203 of the DGCL) is applicable to the
transactions contemplated by this Agreement (including the Merger). The action
previously taken by the Board of Directors of the Company in approving this
Agreement and the transactions contemplated hereby is sufficient to render
inapplicable to this Agreement and the transactions contemplated hereby the
restrictions on business combinations with interested stockholders set forth in
Section 203 of the DGCL.
4.28 Amount of Indebtedness. The aggregate principal amount of
----------------------
indebtedness for borrowed money (not including capital leases and amounts under
the Company Indenture) of the Company and its Subsidiaries outstanding as of the
date hereof is approximately $50,000,000. Except as set forth in Section 4.28
of the Company Disclosure Schedule, the Company and its Subsidiaries are not
subject to any prepayment penalties with respect to any such indebtedness.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF PUBLIC
Except as set forth in the Public Disclosure Schedule (each reference
contained herein to such Public Disclosure Schedule qualifies the referenced
representation and warranty to the extent specified in the Public Disclosure
Schedule), Public, on behalf of itself and Merger Sub, hereby represents and
warrants to the Company as follows:
5.1 Corporate Organization. (a) Public is a corporation duly
----------------------
organized, validly existing and in good standing under the laws of the State of
Delaware.
(b) Public has the corporate power and authority to own or lease
all of its properties and assets and to carry on its business as it is now being
conducted, and is duly licensed or qualified to do business and in good standing
in each jurisdiction in which the nature of the business conducted by it or the
character or location of the properties and assets owned or
27
leased by it makes such licensing or qualification necessary, except where the
failure to be so qualified or in good standing could not reasonably be expected
to have a Material Adverse Effect on Public. Upon Merger Sub's execution of this
Agreement, Merger Sub will be a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware.
(c) Each of Public's Subsidiaries is duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation or organization. Each of Public's Subsidiaries has the corporate
power and authority to own or lease all of its properties and assets and to
carry on its business as it is now being conducted, and is duly licensed or
qualified to do business in each jurisdiction in which the nature of the
business conducted by it or the character or location of the properties and
assets owned or leased by it makes such licensing or qualification necessary,
except where the failure to be so qualified or licensed could not reasonably be
expected to have a Material Adverse Effect on Public. The articles of
incorporation, by-laws and similar governing documents of each Subsidiary of
Public, copies of which have previously been made available to the Company, are
true, complete and correct copies of such documents as in effect as of the date
of this Agreement.
(d) Each of Public and its Subsidiaries is qualified,
authorized, registered and licensed to do business as a foreign corporation in
the jurisdictions identified in Section 5.1(d) of the Public Disclosure
Schedule. Each of Public and its Subsidiaries are in good standing as a foreign
corporation in each of the jurisdictions identified in Section 5.1(d) of the
Public Disclosure Schedule.
(e) The certificate of incorporation and by-laws of Public and
each of its Subsidiaries, copies of which have previously been made available to
the Company, are true, complete and correct copies of such documents as in
effect as of the date of this Agreement. Neither Public nor any of its
Subsidiaries is in violation of any provision of its respective certificate of
incorporation or by-laws.
5.2 Capitalization. (a) The authorized capital stock of Public
--------------
consists of 150,000,000 shares of Public Common Stock and 5,000,000 shares of
preferred stock, par value $0.01 per share ("Public Preferred Stock"). As of
the date of this Agreement, (i) 13,359,734 shares of Public Common Stock are
issued and outstanding and no shares of Public Common Stock are held in Public's
treasury, (ii) no shares of Public Preferred Stock were issued and outstanding
and (iii) 2,000,000 shares of Public Common Stock are authorized for issuance
under Public's 1999 Stock Option Plan, 200,000 shares of Public Common Stock
are authorized for issuance under Public's 2001 Stock Option Plan and 150,000
shares of Public Common Stock are authorized for issuance under the Public
Employee Stock Purchase Plan. All of the issued and outstanding shares of
Common Stock are, and all shares authorized for issuance under Public's 1999
Stock Option Plan, 2001 Stock Option Plan and Public Employee Stock Purchase
Plan will be, upon issuance in accordance with the terms specified in such plans
and agreements, duly authorized, validly issued, fully paid and nonassessable
and, except as set forth in Section 5.2(a) of the Public Disclosure Schedule,
free of preemptive rights, with no personal liability attaching to the ownership
thereof. Except as referred to above or reflected in Section 5.2(a) of the
Public Disclosure Schedule, Public does not have and is not bound by any
outstanding subscriptions, options, warrants, calls, commitments or agreements
of any character calling for the purchase or issuance of any shares of Public
Common Stock, Public Preferred Stock or any
28
other equity security of Public or any securities representing the right to
purchase or otherwise receive any shares of Public Common Stock, Public
Preferred Stock or any other equity security of Public. The shares of Public
Common Stock to be issued pursuant to the Merger (including the shares of Public
Common Stock issuable upon exercise of the Converted Company Options) will be
duly authorized and validly issued and, at the Effective Time, all such shares
will be fully paid, nonassessable and free of preemptive rights, with no
personal liability attaching to the ownership thereof.
(b) Section 5.2(b) of the Public Disclosure Schedule sets forth
a true and correct list of all of the Subsidiaries of Public. Except as set
forth in Section 5.2(b) of the Public Disclosure Schedule, Public owns, directly
or indirectly, all of the issued and outstanding shares of capital stock of each
of such Subsidiaries, free and clear of all liens, charges, encumbrances and
security interests whatsoever, and all of such shares are duly authorized and
validly issued and are fully paid, nonassessable and free of preemptive rights,
with no personal liability attaching to the ownership thereof. No Subsidiary of
Public has or is bound by any outstanding subscriptions, options, warrants,
calls, commitments or agreements of any character calling for the purchase or
issuance of any shares of capital stock or any other equity security of such
Subsidiary or any securities representing the right to purchase or otherwise
receive any shares of capital stock or any other equity security of such
Subsidiary. Except as described in Section 5.2 of the Public Disclosure
Schedule, neither the Company nor any of its Subsidiaries owns, directly or
indirectly, any interest, or has made any investment in, any partnership, joint
venture, corporation, trust or other entity.
(c) Upon Merger Sub's execution of this Agreement, the
authorized capital stock of Merger Sub will consist of 1,000 shares of Merger
Sub Common Stock and 100 shares of Merger Sub Common Stock will be issued and
outstanding.
5.3 Authority; No Violation. (a) Public has full corporate power and
-----------------------
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
and the consummation of the Merger and the other transactions contemplated by
this Agreement have been duly and validly approved by the Board of Directors of
Public and, subject only to (ii) the approval of the issuance of Public Common
Stock in connection with the Merger as required by the applicable rules of
Nasdaq (the "Required Public Vote"), no other corporate proceedings on the part
of Public or its respective stockholders are necessary to approve this Agreement
and to consummate the Merger and the other transactions contemplated hereby.
This Agreement has been duly and validly executed and delivered by Public and
(assuming due authorization, execution and delivery by the Company) this
Agreement constitutes a valid and binding obligation of Public, enforceable
against it in accordance with its terms, except as enforcement may be limited by
general principles of equity whether applied in a court of law or a court of
equity and by bankruptcy, insolvency and similar laws affecting creditors'
rights and remedies generally.
(b) Upon Merger Sub's execution of this Agreement, Merger Sub
will have full corporate power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated hereby. Upon Merger
Sub's execution of this Agreement, the execution and delivery of this Agreement
and the consummation of the Merger and the other transactions contemplated by
this Agreement will have been duly and validly
29
approved by the Board of Directors of Merger Sub and the sole stockholder of
Merger Sub, and no other corporate proceedings on the part of Merger Sub or its
stockholders will be necessary to approve this Agreement and to consummate the
Merger and the other transactions contemplated hereby. Upon Merger Sub's
execution of this Agreement, this Agreement will have been duly and validly
executed and delivered by Merger Sub and (assuming due authorization, execution
and delivery by the Company) this Agreement constitutes a valid and binding
obligation of Merger Sub, enforceable against it in accordance with its terms,
except as enforcement may be limited by general principles of equity whether
applied in a court of law or a court of equity and by bankruptcy, insolvency and
similar laws affecting creditors' rights and remedies generally.
(c) Except as set forth in Section 5.3(c) of the Public
Disclosure Schedule, neither the execution and delivery of this Agreement by
Public (or Merger Sub upon its execution of this Agreement) nor the consummation
by Public (or Merger Sub upon its execution of this Agreement) of the Merger or
of any of the other transactions contemplated by this Agreement, nor compliance
by Public (or Merger Sub upon its execution of this Agreement) with any of the
terms or provisions hereof, will (i) violate any provision of the Certificate of
Incorporation or By-Laws of Public or the articles of incorporation, by-laws or
similar governing documents of any of its Subsidiaries or (ii) assuming that the
consents and approvals referred to in Section 5.4 are duly obtained, (x) violate
any statute, code, ordinance, rule, regulation, judgment, order, writ, decree or
injunction applicable to Public or any of its Subsidiaries or any of their
respective properties or assets, or (y) violate, conflict with, result in a
breach of any provision of or the loss of any benefit under, constitute a
default (or an event which, with or without notice or lapse of time, or both,
would constitute a default) under, result in the termination of or a right of
termination or cancellation under, accelerate the performance required by, or
result in the creation of any lien, pledge, security interest, charge or other
encumbrance upon any of the respective properties or assets of Public or any of
its Subsidiaries under, any of the terms, conditions or provisions of any loan,
guarantee of indebtedness, note, bond, mortgage, indenture, deed of trust,
license, permit, concession, franchise, lease, agreement or other instrument or
obligation to which Public or any of its Subsidiaries is a party, or by which
they or any of their respective properties or assets may be bound or affected.
5.4 Consents and Approvals. Except for (a) the filing of a
----------------------
notification under the HSR Act (as defined in Section 8.1(b)), (b) the receipt
of the Required Public Vote, (c) the filing of the Certificate of Merger with
the Secretary pursuant to the DGCL, (d) such filings and approvals as are
required to be made or obtained under the securities or "Blue Sky" laws of
various states in connection with the issuance of the shares of Public Common
Stock pursuant to this Agreement, and (e) such filings, authorizations or
approvals as may be set forth in Section 5.4 of the Public Disclosure Schedule,
no consents or approvals of, or filings or registrations with, any Governmental
Entity or with any third party are necessary in connection with the execution
and delivery by Public and Merger Sub of this Agreement or the consummation by
Public and Merger Sub of the Merger and the other transactions contemplated
thereby.
5.5 Financial Statements. (a) Public has previously made
--------------------
available to the Company copies of (i) the consolidated balance sheets of Public
and its Subsidiaries as of September 30, 1999 and 2000 and the related
consolidated statements of operations, changes in stockholders' equity and cash
flows for such periods, as reported in the Annual Report on Form 10-K of Public
for the fiscal years ended September 30, 2000, 1999 and 1998 filed with the SEC
30
under the Exchange Act, in each case accompanied by the audit report of KPMG
LLP, independent public accountants with respect to Public (the "Public Audited
Financial Statements"), and (ii) the unaudited consolidated balance sheets of
Public and its Subsidiaries as of June 30, 2000 and 2001 and the related
unaudited consolidated statements of operations, changes in stockholders' equity
and cash flows for the nine-month periods ended as reported in Public's
Quarterly Report on Form 10-Q for the period ended June 30, 2001 filed with the
SEC under the Exchange Act (the "Public Unaudited Financial Statements" and,
together with the Public Audited Financial Statements, the "Public Financial
Statements"). The Public Financial Statements (including the related notes,
where applicable) fairly present, and the financial statements to be delivered
by Public to the Company after the date of this Agreement pursuant to Section
7.12 hereof and to be filed by Public with the SEC after the date of this
Agreement will fairly present, the consolidated financial positions of Public
and its Subsidiaries as of the respective dates thereof and the results of the
consolidated operations and consolidated financial position of the parties to
which they relate for the respective fiscal periods or as of the respective
dates therein set forth (subject, in the case of the unaudited statements, to
recurring audit adjustments normal in amount and nature and to any other
adjustments described therein) in conformity with GAAP (except in the case of
the unaudited statements for the lack of complete notes thereto) applied on a
consistent basis during the periods involved (except as may be indicated therein
or in the notes thereto. Since December 31, 2000, Public has not made any
change in the accounting practices or policies applied in the preparation of its
financial statements.
(b) Each of the Public Financial Statements (including the
related notes) complies in all material respects with applicable accounting
requirements and with the published rules and regulations of the SEC with
respect thereto at the date of their filing. Each of such statements (including,
in each case, any notes thereto) has been prepared in accordance with GAAP
consistently applied during the periods involved, (i) except as indicated in the
notes thereto, (ii) with respect to unaudited financial statements, as permitted
by Form 10-Q and (iii) with respect to monthly financial statements, for the
absence of notes thereto. The books and records of Public and its Subsidiaries
have been, and are being, maintained in accordance with GAAP and reflect only
actual transactions.
(c) For purposes of this Agreement, "Public Balance Sheet" shall
mean the most recent audited balance sheet of Public included in the Public
Financial Statements.
5.6 No Undisclosed Liabilities. Except (a) as disclosed in the
--------------------------
Public Financial Statements, (b) for liabilities and obligations incurred in the
ordinary course of business and consistent with past practice since the date of
the Public Balance Sheet and (c) liabilities that could not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect on
Public, neither Public nor any of its Subsidiaries has any liability or
obligation of any nature, whether or not accrued, contingent or otherwise.
5.7 Absence of Certain Changes or Events. Except as may be set
------------------------------------
forth in Section 5.7 of the Public Disclosure Schedule or as disclosed in any
Public Report (as defined in Section 5.8) filed with the SEC prior to the date
of this Agreement or in the Public Financial Statements, since December 31,
2000, (i) neither Public nor any of its Subsidiaries has incurred
31
any liability, except in the ordinary course of their business and consistent
with their past practices and (ii) there has been no change or development or
combination of changes or developments which has had, or is reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on Public.
5.8 SEC Reports. Public has previously made available to the
-----------
Company a true and correct copy of each (a) final registration statement,
prospectus, report, schedule and definitive proxy statement filed by Public with
the SEC pursuant to the Securities Act or the Exchange Act (the "Public
Reports"), (b) material written communication between Public and the SEC, and
(c) communication mailed by Public to its stockholders and no such registration
statement, prospectus, report, schedule, proxy statement or communication as of
its date of filing contained any untrue statement of a material fact or omitted
to state any material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances in which they were
made, not misleading. Public has timely filed all Public Reports and other
documents required to be filed by it under the Securities Act and the Exchange
Act, and, as of their respective dates, all Public Reports complied with the
published rules and regulations of the SEC with respect thereto, including rules
and regulations relating to the filing of exhibits thereto.
5.9 Property. (a) Each of Public and its Subsidiaries has good and
--------
marketable title, free and clear of all liens, encumbrances, mortgages, pledges,
charges, defaults or equitable interests, to all of the properties and assets,
real and personal, tangible or intangible, which are reflected on the Public
Balance Sheet or acquired after the date of the Public Balance Sheet, except (i)
liens under the Public Credit Facility, (ii) liens for taxes not yet due and
payable or contested in good faith by appropriate proceedings, (iii) pledges to
secure deposits and other liens incurred in the ordinary course of business,
(iv) such imperfections of title, easements and encumbrances, if any, as do not
interfere with the use of the property as such property is used on the date of
this Agreement, (v) for dispositions of and encumbrances on such properties or
assets in the ordinary course of business or (vi) mechanics', materialmen's,
workmen's, repairmen's, warehousemen's, carrier's and other similar liens and
encumbrances arising in the ordinary course of business (the items in clauses
(i), (ii), (iii), (iv) and (vi) are collectively referred to as the "Public
Permitted Liens").
(b) Section 5.9(b) of the Public Disclosure Schedule sets forth
an accurate and complete list and description of all real property owned by
Public or any of its Subsidiaries and all buildings and improvements thereon.
5.10 Leases. (a) Section 5.10(a) of the Public Disclosure Schedule
------
contains an accurate and complete list of each lease pursuant to which Public or
any of its Subsidiaries leases any real property (excluding leases or licenses
of tower space to which either Public or any of its Subsidiaries is a party
("Public Tower Leases") and leases of land containing towers))(each a "Public
Lease"). A true and complete copy of each Public Lease has heretofore been made
available to the Company.
(b) To the knowledge of Public, each Public Lease is valid,
binding and enforceable in accordance with its terms and is in full force and
effect. The leasehold estate created by each Public Lease of real property (a
"Public Leased Premise") is free and clear of all
32
encumbrances other than Public Permitted Liens. There are no existing defaults
by Public or any of its Subsidiaries under any of the Public Leases, and to the
knowledge of Public no event has occurred that (whether with or without notice,
lapse of time or the happening or occurrence of any other event) would
constitute a default under any Public Lease. Public has received no notice, and
has no other reason to believe, that any lessor under any Public Lease will not
consent (where such consent is necessary) to the consummation of the Merger
without requiring any material modification of the rights or obligations of the
lessee thereunder.
5.11 Environmental Matters. Except as set forth in Section 5.11 of
---------------------
the Public Disclosure Schedule:
(a) Public and each of its Subsidiaries (1) are in compliance
in all material respects with all, and, to the knowledge of Public, are not
subject to any liability with respect to any, applicable Environmental Laws, (2)
hold or have applied for all Environmental Permits necessary to conduct their
current operations and (3) are in compliance with their respective Environmental
Permits and such Environmental Permits are in full force and effect.
(b) Neither Public nor any of its Subsidiaries has received any
written notice, demand, letter, claim or request for information alleging that
Public or any of its Subsidiaries is in violation of any Environmental Law or
liable for remediation, cost recovery or contribution under CERCLA.
(c) Neither Public nor any of its Subsidiaries (1) has entered
into or agreed to any consent decree or order or is subject to any judgment,
decree or judicial order relating to compliance with Environmental Laws,
Environmental Permits or the investigation, sampling, monitoring, treatment,
remediation, removal or cleanup of Hazardous Materials and, to the knowledge of
Public, no investigation, litigation or other proceeding is pending or
threatened in writing with respect thereto, or (2) is an indemnitor in
connection with any claim threatened or asserted in writing by any third-party
indemnitee for any liability under any Environmental Law or relating to any
Hazardous Materials.
(d) None of the real property owned or leased by Public or any
Public Subsidiary is listed or, to the knowledge of the Public, proposed for
listing on the "National Priorities List" under CERCLA, as updated through the
date hereof, or any similar state or foreign list of sites requiring
investigation or cleanup.
(e) To the knowledge of Public, there are no underground
storage tanks or above-ground storage tanks located on any Public Real Property
which are now, or in the past were, used to store Hazardous Materials. "Public
Real Property" shall mean all real property that is owned or used by Public or
any of its Subsidiaries or that is reflected as an asset of Public or any of its
Subsidiaries on the Public Balance Sheet.
5.12 Certain Contracts. (a) Except for Contracts described in
-----------------
clauses (i), (iii), (iv), (v), (vii), (viii), (xiii), (xiv), (xvi), (xvii),
(xx), (xxi) and (xxii) that provide for aggregate payments to any Person in any
calendar year of less than $100,000, Section 5.12(a) of the Public Disclosure
Schedule contains a complete and accurate list of each of the following
Contracts:
33
(i) Contracts of Public or any of its Subsidiaries relating to
indebtedness, liability for borrowed money or the deferred purchase
price of property (excluding trade payables in the ordinary course of
business) or any guarantee or other contingent liability in respect of
any indebtedness or obligation of any Person (other than the
endorsement of negotiable instruments for collection in the ordinary
course of business);
(ii) Contracts that contain restrictions with respect to
payment of dividends or any other distribution in respect of the
equity of Public or any of its Subsidiaries;
(iii) any letters of credit or similar arrangements relating to
Public or any of its Subsidiaries;
(iv) any employment agreements with any employee of Public or
any of its Subsidiaries or other Person on a consulting basis;
(v) any management, consulting or advisory agreements, or
severance plans or arrangements for any present or former employee of
Public or any of its Subsidiaries;
(vi) any non-disclosure agreements and non-compete agreements
binding present and former employees of Public or any of its
Subsidiaries;
(vii) any agreement under which Public or any of its
Subsidiaries is lessee of or holds or operates any property, real or
personal;
(viii) any agreement under which Public or any of its
Subsidiaries is lessor of or permits any third party to hold or
operate any property, real or personal;
(ix) any agreement relating to the acquisition or divestiture
of the capital stock or other equity securities, assets or business of
any Person involving Public or any of its Subsidiaries or pursuant to
which Public or any of its Subsidiaries has any liability, contingent
or otherwise;
(x) any powers of attorney granted by or on behalf of Public
or any of its Subsidiaries;
(xi) any agreement, other than agreements entered into in the
ordinary course of Public's or any of its Subsidiaries' business
consistent with past practice, which prevents Public or any of its
Subsidiaries from disclosing confidential information;
(xii) any agreement which in any way purports to prohibit Public
or any of its Subsidiaries from freely engaging in business anywhere
in the world or competing with any other Person;
34
(xiii) any sales distribution agreements, franchise agreements
and advertising agreements relating to Public or any of its
Subsidiaries;
(xiv) any warranty, guaranty or other similar undertaking with
respect to a contractual performance extended by Public or any of its
Subsidiaries;
(xv) any agreement pursuant to which Public or any of its
Subsidiaries has agreed to defend, indemnify or hold harmless any
other Person, other than Public Tower Leases;
(xvi) any agreement pursuant to which Public or any of its
Subsidiaries has agreed to settle any liability for Taxes;
(xvii) any agreement pursuant to which Public has agreed to
shift or allocate the liability of Public, any of its Subsidiaries or
any other Person for Taxes;
(xviii) any agreement pursuant to which Public may be required to
file a registration statement under the Securities Act with respect to
any securities issued by Public;
(xix) any joint venture agreement or partnership agreement
(xx) any requirement or output contracts;
(xxi) any vendor agreements
(xxii) any construction contracts or construction management
contracts;
(xxiii) any agreement between Public or any of its Subsidiaries
and any of their respective stockholders; and
(xxiv) any other agreement to which Public or any of its
Subsidiaries is a party or by which Public or any of its Subsidiaries
is bound and which is material to Public and its Subsidiaries taken as
a whole.
(b) Except as set forth in Section 5.12(b) of the Public
Disclosure Schedule, with respect to each Public Contract (as defined below):
(i) the Public Contract is in full force and effect and is valid and enforceable
in accordance with its terms; (ii) neither Public nor any of its Subsidiaries is
in breach or default thereof, nor has Public or any of its Subsidiaries received
notice that it is in breach of or default thereof; (iii) to the knowledge of
Public, no event has occurred which, with notice, or lapse of time or both,
would constitute a breach or default thereof by Public or any of its
Subsidiaries or by any other party thereto; (iv) to the knowledge of Public, no
event has occurred that would permit termination, modification, or acceleration
thereof by any other party thereto; and (v) neither Public nor any of its
Subsidiaries nor to the knowledge of Public, any other party thereto has
repudiated or acted in a manner inconsistent with any provision thereof. Neither
Public nor any of its Subsidiaries is a party to any verbal contract, agreement,
or other arrangement which, if reduced to written form, would be required
35
to be listed on Section 5.12(b) of the Public Disclosure Schedule under the
terms of this Section 5.12.
(c) Except as disclosed in the Public Reports filed with the SEC
prior to the date of this Agreement or as disclosed in Section 5.12(c) of the
Company Disclosure Schedule, no "Event of Default" (as defined in the Public
Indenture and the Public Credit Facility, respectively) has occurred and is
continuing under either of the Public Indenture or the Public Credit Facility
and neither Public nor any of its Subsidiaries has previously received a waiver
of any Event of Default (as defined in the Public Indenture and the Public
Credit Facility, respectively) under the Public Indenture or the Public Credit
Facility.
(d) Each contract, arrangement, commitment or understanding of
any type or form required to be described in Section 5.12(a), whether or not set
forth in Section 5.12(a) of the Public Disclosure Schedule, is referred to
herein as a "Public Contract."
5.13 Distributors and Suppliers. Except as set forth on Section
--------------------------
5.13 of the Public Disclosure Schedule, since September 30, 2000, there has not
been any material adverse change in the business relationship of Public or any
of its Subsidiaries with any distributor who accounted for more than 2% of the
Company's sales (on a consolidated basis) during the period from December 31,
2000 to the date of this Agreement, or with any supplier from whom Public or any
of its Subsidiaries purchased more than 5% of the goods or services (on a
consolidated basis) which it purchased during the period from September 30, 2000
to the date of this Agreement. Except as set forth in Section 5.13 of the
Public Disclosure Schedule, neither Public nor any of its Subsidiaries has
knowledge of any termination or intended termination by any such 2% distributor
or 5% supplier of its business relationship with Public or any modification or
intended modification of its business relationship with Public in a manner which
is adverse in any material respect to Public, and neither Public nor any of its
Subsidiaries has knowledge of any facts which would could reasonably be expected
to form an adequate basis for such termination or modification.
5.14 Insurance. Except as set forth in Section 5.14 of the Public
---------
Disclosure Schedule, each of Public and its Subsidiaries is insured with
financially responsible insurers in such amounts and against such risks and
losses as are customary for companies conducting the business as conducted by
Public and its Subsidiaries. Except as set forth in Section 5.14 of the Public
Disclosure Schedule, neither Public nor any of its Subsidiaries has received any
notice of cancellation or termination with respect to any material insurance
policy of Public or its Subsidiaries. The insurance policies of Public and of
its Subsidiaries are valid and enforceable policies in all material respects.
5.15 Legal Proceedings. (a) Except as set forth in Section 5.15 of
-----------------
the Public Disclosure Schedule, neither Public nor any of its Subsidiaries is a
party to any, and there are no pending or, to Public's knowledge, threatened,
legal, administrative, arbitral or other proceedings, claims, actions or
governmental or regulatory investigations of any nature against Public or any of
its Subsidiaries or, to the knowledge of Public, any of Public's or its
Subsidiaries' current or former directors or officers or any other person whom
Public or any of its Subsidiaries has agreed to indemnify, as such, challenging
the validity or propriety of the transactions contemplated by this Agreement
and, to the knowledge of Public, no event has
36
occurred, and no state of facts exists, that could reasonably be expected to
result in any such action, suit or proceeding.
(b) There is no injunction, order, judgment, decree, or
regulatory restriction imposed upon Public, any of its Subsidiaries or the
assets of Public or any of its Subsidiaries or, to the knowledge of Public, any
of Public's or its Subsidiaries' current or former directors or officers or any
other person whom Public or any of its Subsidiaries has agreed to indemnify, as
such.
5.16 Compliance with Applicable Law. (a) Except for the Sprint
------------------------------
Licenses, Public and its Subsidiaries hold, and have at all times held, all
licenses, franchises, permits and authorizations (each, a "Public Permit")
necessary for the lawful conduct of their respective businesses and the lawful
ownership, use and operation of its assets under and pursuant to all, and have
complied with and are not in default in any material respect under any,
applicable law, statute, order, rule, regulation, policy and/or guideline of any
Governmental Entity relating to Public or any of its Subsidiaries, and neither
Public nor any of its Subsidiaries knows of, or has received notice of violation
of, any violations of any of the above.
(b) Public has no knowledge of any investigation, notice of
apparent liability, violation, forfeiture or other order or complaint issued by
or before the FCC or any other Governmental Entity or of any other proceedings
of or before the FCC or any other Governmental Entity relating to Public or any
of its Subsidiaries or to any authorizations under which Public conducts its
business. No proceedings are pending or, to the knowledge of Public, threatened
to revoke or limit any of the Public Permits or the Sprint Licenses.
(c) To the knowledge of Public, no event has occurred which (i)
results in, or after notice or lapse of time or both could reasonably be
expected to result in, revocation, suspension, adverse modification, non-
renewal, impairment, restriction or termination of, or order of forfeiture or
substantial fine with respect to, any of the Public Permits or the Sprint
Licenses, or (ii) affects or could reasonably be expected in the future to
affect any of the rights of Public or its Subsidiaries under any material Public
Permits or any of the rights of Sprint PCS or its Affiliates under the Sprint
Licenses. No facts are known to Public or the Public Subsidiaries which if known
by a Governmental Entity of competent jurisdiction would present a substantial
risk that any Public Permit could be revoked, suspended, adversely modified, not
renewed, impaired, restricted, terminated, forfeited or a substantial fine
imposed against Public or any of the Public Subsidiaries, and neither the
execution by Public or Merger Sub of this Agreement nor the consummation of the
Merger or any of the other transactions contemplated by this Agreement is
reasonably likely to result in the occurrence of any of the consequences set
forth in this Section 5.16(c).
5.17 Benefit Plans. (a) Section 5.17(a) of the Public Disclosure
-------------
Schedule sets forth a true and complete list of each "employee benefit plan"
(within the meaning of section 3(3) of ERISA); each deferred compensation plan,
incentive compensation plan, equity compensation plan, employment, termination
or severance agreement; and each other employee benefit plan, fund, program,
agreement or arrangement, in each case, that is sponsored, maintained or
contributed to or required to be contributed to by Public or by any trade or
business, whether or not incorporated, that together with Public would be deemed
a "single
37
employer" within the meaning of Section 414 of the Code (a "Public ERISA
Affiliate"), for the benefit of any current or former employee of Public or any
Public ERISA Affiliate (the "Public Benefit Plans").
(b) Public has heretofore made available to the Company true and
complete copies of each of the Public Benefit Plans and all related documents,
including but not limited to (i) the most recent actuarial report for such
Public Benefit Plan (if applicable), and (ii) the most recent determination
letter from the Internal Revenue Service (if applicable) for such Public Benefit
Plan.
(c) Except as set forth in Section 5.17(c) of the Public
Disclosure Schedule, (i) each of the Public Benefit Plans has been operated and
administered in material compliance with its terms and applicable law, including
but not limited to the Exchange Act, the Securities Act, ERISA and the Code,
(ii) to the knowledge of Public, each of the Public Benefit Plans intended to be
"qualified" within the meaning of Section 401(a) of the Code either (1) has
received a favorable determination letter from the IRS, or (2) is or will be the
subject of an application for a favorable determination letter, and Public is
not aware of any circumstances reasonably likely to result in the revocation or
denial of any such favorable determination letter, (iii) no Public Benefit Plan
provides benefits, including without limitation death or medical benefits
(whether or not insured), with respect to current or former employees of Public
or any Public ERISA Affiliate beyond their retirement or other termination of
service, other than (w) coverage mandated by applicable law, (x) death benefits
or retirement benefits under any "employee pension plan," as that term is
defined in Section 3(2) of ERISA, (y) deferred compensation benefits accrued as
liabilities on the books of Public or the Public ERISA Affiliates or (z)
benefits which are fully insured or the full cost of which is borne by the
current or former employee (or his beneficiary), (iv) no Public Benefit Plan is
subject to Title IV of ERISA and no liability under Title IV of ERISA has been
incurred by Public or any Public ERISA Affiliate that has not been satisfied in
full, and neither Public nor a Public ERISA Affiliate has any contingent
liability under Title IV of ERISA, (v) no Public Benefit Plan is a
"multiemployer pension plan," as such term is defined in Section 3(37) of ERISA,
(vi) all contributions or other amounts payable by Public or any Public ERISA
Affiliates as of the Effective Time with respect to each Public Benefit Plan in
respect of current or prior plan years have been paid or accrued in accordance
with GAAP, (vii) neither Public nor any Public ERISA Affiliate has engaged in a
transaction or has taken or failed to take any action in connection with which
Public or any Public ERISA Affiliate reasonably could be subject to either a
civil penalty assessed pursuant to Section 409 or 502(i) of ERISA or a tax
imposed pursuant to Section 4975, 4976 or 4980B of the Code, (viii) there are no
pending, or, to the best knowledge of Public, threatened or anticipated claims
or proceedings (other than routine claims for benefits) by, on behalf of or
against any of the Public Benefit Plans or any trusts related thereto, and (ix)
the consummation of the transactions contemplated by this Agreement will not,
either alone or in combination with any other event, (y) entitle any current or
former employee, officer, director or consultant of Public or any Public ERISA
Affiliate to severance pay, termination pay or any other payment or benefit,
except as expressly provided in this Agreement or (z) accelerate the time of
payment or vesting or increase the amount or value of compensation or benefits
due any such employee, officer, director or consultant.
38
5.18 Taxes. Except as set forth in Section 5.18 of the Public
-----
Disclosure Schedule, each of Public and its Subsidiaries has (i) duly and timely
filed (including applicable extensions granted without penalty) all Tax Returns
required to be filed at or prior to the Effective Time, and such Tax Returns are
true, correct and complete in all material respects, and (ii) paid in full or
made adequate provision in the financial statements of Public (in accordance
with GAAP) for all Taxes due to be paid or accrued at or prior to the Effective
Time. No deficiencies for any Taxes have been proposed, asserted, assessed or,
to the knowledge of Public, threatened against or with respect to Public or any
of its Subsidiaries. Except as set forth in Section 5.18 of the Public
Disclosure Schedule, (i) there are no liens for Taxes upon the assets of either
Public or its Subsidiaries except for statutory liens for current Taxes not yet
due, (ii) neither Public nor any of its Subsidiaries has requested any extension
of time within which to file any Tax Returns in respect of any fiscal year which
have not since been filed and no request for waivers of the time to assess any
Taxes are pending or outstanding, (iii) with respect to each taxable period of
Public and its Subsidiaries, (A) the federal and state income Tax Returns of
Public and its Subsidiaries have been audited by the Internal Revenue Service or
appropriate state tax authorities, (B) the time for assessing and collecting
income Tax with respect to such taxable period has closed and such taxable
period is not subject to review, or (C) the time for assessing and collecting
income Tax with respect to such taxable period has not closed, but no audit or
review of such taxable period has yet been initiated or threatened, (iv) neither
Public nor any of its Subsidiaries has filed or been included in a combined,
consolidated or unitary income Tax Return other than one in which Public was the
parent of the group filing such Tax Return, (v) neither Public nor any of its
Subsidiaries is a party to any agreement providing for the allocation or sharing
of Taxes (other than the allocation of federal income taxes as provided by
Regulation 1.1552-1(a)(1) under the Code), (vi) neither Public nor any of its
Subsidiaries is required to include in income any adjustment pursuant to Section
481(a) of the Code (or any similar or corresponding provision or requirement of
state, local or foreign income Tax law), by reason of the voluntary change in
accounting method (nor has any taxing authority proposed any such adjustment or
change of accounting method), (vii) neither Public nor any of its Subsidiaries
has filed a consent pursuant to Section 341(f) of the Code, (viii) neither
Public nor its Subsidiaries has any liability for Taxes of any Person (other
than a liability of Public for Taxes of any of its Subsidiaries or a liability
of any of the Public's Subsidiaries for Taxes of Public) under Regulation
1.1502-6 or 1.1502-78(b)(2) under the Code (or similar provisions of state,
local or foreign law), as a transferee or successor, by contract or otherwise,
and (ix) neither Public nor any of its Subsidiaries has made any payment or may
be obligated to make any payment (by contract or otherwise) which will not be
deductible by reason of Section 280G or Section 162(m) of the Code.
5.19 Sprint Agreement Compliance. (a) Neither Public nor any of its
---------------------------
Subsidiaries has violated or failed to meet any deadline or requirement in the
Public Sprint Agreements, except as has been remedied, waived or modified prior
to the date hereof and previously disclosed to the Company in writing. Section
5.19(a) of the Public Disclosure Schedule sets forth the extent of Public's
progress in the completion of its build-out and network launch as of the date of
this Agreement.
(b) Section 5.19(b) of the Public Disclosure Schedule sets forth
a list of all agreements between Public, its Subsidiaries or any of its
Affiliates, on the one hand, and Sprint PCS and any of its Affiliates, on the
other hand (collectively, the "Public Sprint
39
Agreements"). Public has made available to the Company a true and complete copy
of each of the written instruments, plans, contracts and agreements, including
the Public Sprint Agreements, and an accurate description of each of the oral
arrangements, oral contracts and oral agreements, which are listed on Section
5.12(a) and Section 5.19(b) of the Public Disclosure Schedule, together with all
amendments, waivers or other changes thereto. There are no unwritten amendments
to, or waivers under, any Sprint Agreement.
(c) The Public Sprint Agreements are valid, binding and
enforceable against Public or its Subsidiaries, in accordance with their
respective terms, and shall be in full force and effect without penalty in
accordance with their terms upon consummation of the Merger and the other
transactions contemplated by this Agreement, except as enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or other laws
affecting creditors' rights generally and limitations on the availability of
equitable remedies. Public and its Subsidiaries have performed all obligations
required to be performed by them under, and they are not in default under or in
breach of, nor in receipt of any claim of default or breach under, any of the
Public Sprint Agreements. To the knowledge of Public, no event has occurred
which with the passage of time or the giving of notice or both would result in a
default, breach or event of noncompliance by Public or any Subsidiary, or would
permit termination or modification by Sprint PCS or any of its Affiliates, under
any of the Public Sprint Agreements. Neither Public nor any Subsidiary has
knowledge of any cancellation or anticipated cancellation by Sprint PCS or any
of its Affiliates of any of the Public Sprint Agreements. Public has provided
the Company with copies of all written notices (excluding e-mail messages)
received by it from Sprint PCS during the last six months (i) delivered pursuant
to the official notice provisions of Public Sprint Agreements or (ii) alleging a
material breach of Public Sprint Agreements.
5.20 Intellectual Property. Public owns or has the right to use,
---------------------
whether through licensing or otherwise, and to authorize others to use, all
Intellectual Property significant to the businesses of Public and its
Subsidiaries in substantially the same manner as such businesses are conducted
on the date hereof ("Public Material Intellectual Property"). Except as set
forth in Section 5.20 of the Public Disclosure Schedule: (1) no written claim of
invalidity or conflicting ownership rights with respect to any Public Material
Intellectual Property has been made by a third party and no such Intellectual
Property is the subject of any pending or, to Public's knowledge, threatened
action, suit, claim, investigation, arbitration or other proceeding; (2) no
Person or entity has given notice to Public or any of its Subsidiaries that the
use of any Public Material Intellectual Property by Public, any Public
Subsidiary or any licensee is infringing or has infringed any domestic or
foreign patent, trademark, service xxxx, trade name, or copyright or design
right, or that Public, any of its Subsidiaries or any licensee has
misappropriated or improperly used or disclosed any trade secret, confidential
information or know-how; (3) to Public's knowledge after due inquiry for such
purpose, the making, using, selling, manufacturing, marketing, licensing,
reproduction, distribution, or publishing of any process, machine, manufacture
or product related to any Public Material Intellectual Property, does not and
will not infringe any domestic or foreign patent, trademark, service xxxx, trade
name, copyright or other intellectual property right of any third party, and
does not and will not involve the misappropriation or improper use or disclosure
of any trade secrets, confidential information or know-how of any third party;
(4) to Public's knowledge, there exists no prior act or current conduct or use
by Public, any of its Subsidiaries or any third party that would void or
invalidate any Public Material Intellectual Property; (5) to Public's knowledge,
no other Person is
40
interfering with, infringing upon, misappropriating or otherwise coming into
conflict with any Intellectual Property of Public or any of its Subsidiaries;
and (6) the execution, delivery and performance of this Agreement by Public and
the consummation of the transactions contemplated hereby and thereby will not
breach, violate or conflict with any instrument or agreement concerning any
Public Material Intellectual Property, will not cause the forfeiture or
termination of or give rise to a right of forfeiture or termination of any of
the Public Material Intellectual Property, or trigger additional fees or
transfer costs payable by the Company or any of its Subsidiaries with respect
to, or impair the right of Public to make, use, sell, license or dispose of, or
to bring any action for the infringement of, any Public Material Intellectual
Property. In addition, the matters disclosed on Section 5.20 of the Public
Disclosure Schedule would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect on Public.
5.21 Labor Matters. (a) Neither Public nor any of its
-------------
Subsidiaries is a party to any collective bargaining agreement or other labor
union contract applicable to Persons employed by them. No union representation
question exists and, to the knowledge of Public and its Subsidiaries, there has
been no union organization effort respecting the employees of Public and its
Subsidiaries. Neither Public nor any of its Subsidiaries is delinquent in
payments to any of its employees for any wages, salaries, commissions, bonuses
or other direct compensation for any services performed by them or amounts
required to be reimbursed to such employees. No retired employees of Public are
entitled to (i) receive current or future compensation from Public or its
Subsidiaries other than pursuant to the terms of any Public Benefit Plan or
pursuant to a termination agreement previously entered into with Public or (ii)
participate in any Public Benefit Plan (except as required by section 4980B of
the Code or similar provisions of applicable state law).
(b) (i) Each of Public and its Subsidiaries is in compliance
with all federal, state and other applicable laws, domestic or foreign,
respecting employment and employment practices, terms and conditions of
employment, wages and hours, immigration, the payment of social security and
similar taxes, occupational safety and health and plant closing, and has not and
is not engaged in any unfair labor practice; (ii) no unfair labor practice
complaint against Public or any of its Subsidiaries is pending before the
National Labor Relations Board; (iii) there is no labor strike, dispute,
slowdown or stoppage actually pending or threatened against or involving Public
or any of its Subsidiaries; (iv) no grievance that might have an adverse effect
upon Public or any of its Subsidiaries or the conduct of their respective
businesses exists, no arbitration proceeding arising out of or under any
collective bargaining agreement is pending and no claim therefor has been
asserted; and (v) no collective bargaining agreement is currently being
negotiated by Public or any of its Subsidiaries.
(c) Except for employees who are parties to employment
agreements with Public or any of its Subsidiaries, which agreements are set
forth in Section 5.21(c) of the Company Disclosure Schedule, and except as
otherwise disclosed in Section 5.21(c) of Public Disclosure Schedule, all
employees of Public and its Subsidiaries are terminable at will, with or without
cause, and without cost to Public and its Subsidiaries for severance
obligations, or any other liability, except for payment of accrued salaries or
wages and vacation pay. No employee or former employee has any right to be
rehired by Public or its Subsidiaries prior to the hiring of a person not
previously employed by Public or such Subsidiary.
41
5.22 Reorganization. As of the date of this Agreement, Public
--------------
has no reason to believe that the Merger will fail to qualify as a
reorganization under Section 368(a) of the Code. As of the date of this
Agreement, Public knows of no reason why it will be unable to deliver to Xxxxx,
Xxxxx & Xxxxx and to Winston & Xxxxxx representation letters with respect to
Public and Merger Sub in form and substance sufficient to enable such counsel to
render the opinions required by Sections 8.2(e) and 8.3(d).
5.23 Broker's Fees. Except as set forth on Section 5.23 of the
-------------
Public Disclosure Schedule, neither Public nor any of its Subsidiaries, nor any
of their respective officers or directors, has employed any broker or finder or
incurred any liability for any broker's fees, commissions or finder's fees in
connection with the Merger or any of the other transactions contemplated by this
Agreement. The terms of any such broker's fees, commissions or finder's fees
are as set forth in Section 5.23 of the Public Disclosure Schedule.
5.24 Related Party Transactions. Except as set forth on Section
--------------------------
5.24 of the Public Disclosure Schedule, to the knowledge of Public, no
stockholder, officer or director of Public or any of its Subsidiaries owns or
holds, directly or indirectly, any interest in (excepting holdings solely for
passive investment purposes of securities of publicly held and traded entities
constituting less than 5% of the equity of any such entity), or is an officer,
director, employee or consultant of any Person that is, a competitor, lessor,
lessee, customer or supplier of Public or which conducts a business similar to
any business conducted by Public. No stockholder, officer or director of Public
or any of its Subsidiaries (a) owns or holds, directly or indirectly, in whole
or in part, any Intellectual Property used by Public or any of its Subsidiaries,
(b) to the knowledge of Public has any claim, charge, action or cause of action
against Public or any of its Subsidiaries, except for claims for reasonable
unreimbursed travel or entertainment expenses, accrued vacation pay or accrued
benefits under any employee benefit plan existing on the date hereof, (c) to the
knowledge of Public, has made, on behalf of Public or any of its Subsidiaries,
any payment or commitment to pay any commission, fee or other amount to, or to
purchase or obtain or otherwise contract to purchase or obtain any goods or
services from, any other Person of which any stockholder, officer or director of
Public or any of its Subsidiaries is a partner or shareholder (except holdings
solely for passive investment purposes of securities of publicly held and traded
entities constituting less than 5% of the equity of any such entity), (d) owes
any money to Public or any of its Subsidiaries or (e) has any material interest
in any property, real or personal, tangible or intangible, used in or pertaining
to the business of Public or any of its Subsidiaries.
5.25 Public Information. None of the information relating to
------------------
Public and its Subsidiaries to be contained in or incorporated by reference in
(i) the S-4 Registration Statement (including the Prospectus/Proxy Statement
constituting a part thereof) will, at the time the S-4 Registration Statement
becomes effective under the Securities Act, and (ii) the Prospectus/Proxy
Statement and any amendment or supplement thereto will, at the date of mailing
to stockholders and at the time of the Public Special Meeting (as hereinafter
defined), in any such case, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading. The S-4 Registration Statement and the
Prospectus/Proxy Statement will comply with the provisions of the Securities Act
and the Exchange Act, respectively, and the rules and regulations thereunder.
42
5.26 Required Vote of Public. Except for the Required Public
-----------------------
Vote, no vote of the stockholders of Public, or any class thereof, or of the
holders of any securities of Public (equity or otherwise), is required by law,
the Certificate of Incorporation or Bylaws of Public or otherwise in order for
Public to consummate the Merger and the other transactions contemplated by this
Agreement.
5.27 Amount of Indebtedness. The aggregate principal amount of
----------------------
indebtedness for borrowed money (not including capital leases and amounts under
the Public Indenture) of Public and its Subsidiaries outstanding as of the date
hereof is approximately $75,300,000. Except as set forth in Section 5.27 of the
Public Disclosure Schedule, Public and its Subsidiaries are not subject to any
prepayment penalties with respect to any such indebtedness.
ARTICLE VI
COVENANTS RELATING TO CONDUCT OF BUSINESS
6.1 Covenants of the Company. During the period from the date
------------------------
of this Agreement and continuing until the Effective Time, except as expressly
contemplated or permitted by this Agreement or with the prior written consent of
Public, the Company and its Subsidiaries shall carry on their respective
businesses in the ordinary course consistent with the past practice of the
Company and in compliance with applicable law (including all applicable
Environmental Laws). The Company will use its reasonable best efforts to (x)
preserve its business organization and that of its Subsidiaries intact, (y) keep
available to itself the present services of the employees of the Company and its
Subsidiaries and (z) preserve for itself the existing business relationships and
the goodwill of the customers and distributors of the Company and its
Subsidiaries and others with whom business relationships exist. Without
limiting the generality of the foregoing, and except as set forth in Section 6.1
of the Company Disclosure Schedule or as otherwise contemplated by this
Agreement or consented to in writing by Public, prior to the Effective Time or
the date this Agreement terminates, the Company shall not, and shall not permit
any of its Subsidiaries to:
(a) other than dividends from one Subsidiary to another
Subsidiary or to the Company, declare, set aside, or pay any dividends on, or
make any other distributions in respect of, any of its capital stock, other than
the distribution of additional shares of Company Preferred Stock to the holders
of Company Preferred Stock prior to the Effective Time pursuant to Sections 2(a)
or 2(h) of the applicable Certificate of Designations;
(b) (i) split, combine or reclassify any shares of its
capital stock, or issue or authorize or propose the issuance of any other
securities in respect of, in lieu of or in substitution for shares of its
capital stock; (ii) repurchase, redeem or otherwise acquire any shares of the
capital stock of the Company or any of its Subsidiaries, or any securities
convertible into or exercisable for any shares of the capital stock of the
Company or any of its Subsidiaries; or (iii) issue, deliver or sell, or
authorize or propose the issuance, delivery or sale of, any shares of its
capital stock or any securities convertible into or exercisable for, or any
rights, warrants or options to acquire, any such shares, or enter into any
agreement with respect to any of the foregoing, except, in the case of this
clause (iii), for (A) the issuance of Company Common Stock upon the exercise of
options, warrants or other rights to purchase Company
43
Common Stock outstanding and in existence on the date of this Agreement or
issued as permitted by clauses (B) and (C) hereof, in each case in accordance
with their terms, (B) the issuance of options to purchase shares of Company
Common Stock in the ordinary course of the Company's business, including,
without limitation, option grants to future employees of the Company consistent
with past practice and (C) the issuance of Company Common Stock upon the
conversion of Company Preferred Stock immediately prior to the Effective Time in
accordance with Section 5(b) of the applicable Certificate of Designations with
respect thereto;
(c) amend its Amended and Restated Certificate of
Incorporation, Amended and Restated By-laws or other similar governing
documents, other than immaterial amendments relating to corporate procedure and
which do not adversely affect the ability of the Company to consummate the
transactions contemplated hereby or to perform its obligations hereunder;
(d) (i) acquire, be acquired or agree to acquire or be
acquired, by merging or consolidating with, or by purchasing or selling a
substantial equity interest in or a substantial portion of the assets of, or by
any other manner, any business or any corporation, partnership, association or
other business organization or division thereof, which would, individually or in
the aggregate, exceed $2,500,000 or (ii) approve any transaction that would
permit any Person or group to acquire shares of Company Common Stock if such
acquisition would cause such Person or group to be deemed to own 15% or more of
the shares of Company Common Stock for purposes of Section 203 of the DGCL;
(e) take any action that is intended or may reasonably be
expected to result in any of its representations and warranties set forth in
this Agreement being or becoming untrue in any material respect, or in any of
the conditions to the Merger set forth in Article VIII not being satisfied;
(f) change its methods of accounting in effect at December
31, 2000, except as required to comply with changes in GAAP as concurred with by
the Company's independent auditors;
(g) (i) except as required by applicable law or as required
to maintain qualification pursuant to the Code, adopt, enter into, amend, renew
or terminate any employee benefit plan (including, without limitation, any
Company Benefit Plan) or any agreement, arrangement, plan or policy between the
Company or any Subsidiary of the Company and one or more of its current or
former directors, officers or employees, (ii) except for normal increases to
employees other than directors and officers of the Company that are made in the
ordinary course of business consistent with past practice and except as required
by applicable law, increase in any manner the compensation or fringe benefits of
any director, officer or employee or pay any benefit not required by any Company
Benefit Plan or agreement as in effect as of the date hereof (including, without
limitation, the granting of stock options, stock appreciation rights, restricted
stock, restricted stock units or performance units or shares) or (iii) make any
loans to any of its officers, directors, employees, Affiliates, agents or
consultants or make any change in its existing borrowing or lending arrangements
for or on behalf of any of such Persons, whether pursuant to an employee benefit
plan or otherwise; provided, however, that the Company shall be permitted to
-------- -------
amend the Company's 401(k) Plan to provide for full vesting, as of the time of
termination of
44
employment, of the unvested portion of the Company match in the 401(k) account
of any Company Employee whose employment with the Company is terminated by the
Company other than for cause at the later of: (i) 90 days after the Effective
Time or (ii) the date provided in a severance agreement;
(h) take or cause to be taken any action that could
reasonably be expected to disqualify the Merger as a tax free reorganization
under Section 368(a) of the Code;
(i) sell, lease, encumber, assign or otherwise dispose of,
or agree to sell, lease, encumber, assign or otherwise dispose of, any of its
assets, properties or other rights or agreements, other than (i) dispositions
required to be made pursuant to an agreement or contract to which the Company or
any of its Subsidiaries is a party or by which it is bound as of the date of
this Agreement and which has been disclosed to Public, (ii) dispositions of
inventory and excess or obsolete assets, (iii) the sale of towers and the
leaseback of availability of towers that result in proceeds of at least $200,000
per tower and (iv) sales or dispositions not included in clauses (i), (ii) or
(iii) above involving consideration not to exceed $5,000,000 in the aggregate;
(j) create, incur, assume, or suffer to exist any
indebtedness or issuances of debt securities or assume, guarantee, endorse or
otherwise as an accommodation become responsible for the obligations of any
other individual, corporation or other entity, other than (i) the accretion of
indebtedness under the Indenture, dated as of July 12, 2000 (the "Company
Indenture"), (ii) borrowings under the Senior Credit Facility, dated July 12,
2000, among the Company, its Subsidiaries, Toronto Dominion (Texas), Inc., GE
Capital Corporation and the other lenders party thereto (the "Company Credit
Facility") or any replacement facilities (iii) borrowings in connection with
intercompany loans solely between and among the Company and its Subsidiaries,
provided that the indebtedness under the Company Credit Facility shall not
--------
exceed $100,000,000 in the aggregate prior to the Effective Time;
(k) (i) enter into, renew, amend or waive in any material
manner, or terminate or give notice of a proposed renewal or material amendment,
waiver or termination of, any Company Contract, agreement or lease to which the
Company or any of its Subsidiaries is a party or by which the Company or any of
its Subsidiaries or their respective properties is bound, other than in the
ordinary course of business or (ii) enter into, renew, amend, waive or
terminate, or give notice of a proposed renewal, amendment, waiver or
termination of, any Company Sprint Agreement.
(l) take or cause to be taken any action that could
reasonably be expected to delay the consummation of the transactions
contemplated hereby, including without limitation, the consummation of the
Merger and the filing and the effectiveness of the S-4 Registration Statement;
(m) other than (i) elections made on the Company's and its
Subsidiaries' initial corporation federal and state tax returns, and (ii) the
election made by the Company and its Subsidiaries pursuant to Nebraska
Regulation, Reg. 1-009.05, make any material election relating to Taxes, change
any material election relating to Taxes already made, adopt any new accounting
method relating to Taxes, change any accounting method relating to Taxes unless
required by GAAP, enter into any closing agreement relating to Taxes, settle any
45
claim or assessment relating to Taxes or consent to any claim or assessment
relating to Taxes or any waiver of the statute of limitations for any such claim
or assessment;
(n) enter into or amend in any material manner any contract,
agreement or arrangement with any officer, director, employee, consultant or
stockholder of the Company or any of its Subsidiaries or with any Affiliate or
Associate of any of the foregoing;
(o) acquire additional territory or related assets from
Sprint PCS except if Public has failed to object in writing in its sole
discretion within ten business days after receipt of notification from the
Company of a proposal from Sprint PCS as to such territory or assets;
(p) authorize for issuance, issue, deliver, sell, pledge,
dispose of, encumber or grant any lien on, or authorize or propose the issuance,
delivery, sale, pledge, disposition of, encumbrance or grant of any lien on, any
shares of its capital stock or capital stock of any of its Subsidiaries, or
other voting securities or any securities convertible into or exercisable for,
or any rights, warrants or options to acquire, any such securities or voting
securities or any other ownership interest (or interest the value of which is
derived by reference to any of the foregoing), or enter into any agreement with
respect to any of the foregoing;
(q) pay, satisfy, discharge or settle any claims,
liabilities or obligations (absolute, accrued, contingent or otherwise), other
than in the ordinary course of business and consistent with past practice or
pursuant to mandatory terms of any contract in effect on the date hereof,
involving payments by the Company in excess of $2,500,000, individually or in
the aggregate;
(r) make any loans, advances or capital contributions to, or
investments in any other Person in excess of $1,000,000, individually or in the
aggregate, other than (i) by the Company or a Subsidiary of the Company to or in
the Company or any direct or indirect wholly owned Subsidiary of the Company or
(ii) pursuant to and in accordance with the terms of any contract or other legal
obligations of the Company or any of its Subsidiaries existing at the date of
this Agreement and set forth in Section 6.1(r) of the Company Disclosure
Schedule;
(s) enter into any new line of business;
(t) enter into, implement, or otherwise become subject to or
bound by any new employment agreement, arrangement, commitment or program which
provides for severance payments or benefits, individually or in the aggregate,
or amend any existing employment agreement, arrangement, commitment or program
in a manner that increases any severance payments or benefits by more than
$100,000, individually or in the aggregate;
(u) authorize or permit any of its officers, directors,
employees or agents to directly or indirectly solicit, initiate or encourage any
inquiries relating to, or the making of any proposal which constitutes, a
"takeover proposal" (as defined below), or recommend or endorse any takeover
proposal, or participate in any discussions or negotiations, enter into any
agreement with respect to any takeover proposal or provide third parties with
any nonpublic information, relating to any such inquiry or proposal or otherwise
facilitate any effort
46
or attempt to make or implement a takeover proposal. The Company will
immediately cease and cause to be terminated any existing activities,
discussions or negotiations previously conducted with any parties other than
Public with respect to any of the foregoing. The Company will take all actions
necessary or advisable to inform the appropriate individuals or entities
referred to in the first sentence hereof of the obligations undertaken in this
Section 6.1(u). The Company will notify Public immediately if any such inquiries
or takeover proposals are received by, any such information is requested from,
or any such negotiations or discussions are sought to be initiated or continued
with, the Company, and the Company will promptly inform Public in writing of all
of the relevant details with respect to the foregoing. As used in this
Agreement, "takeover proposal" shall mean any tender or exchange offer, proposal
for a merger, consolidation or other business combination involving the Company
or any Subsidiary of the Company or any proposal or offer to acquire in any
manner a substantial equity interest in, or a substantial portion of the assets
of, the Company or any Subsidiary of the Company other than the transactions
contemplated or permitted by this Agreement;
(v) make any capital expenditures other than those which are
in an amount of no more than $75,000,000 in the aggregate;
(w) voluntarily permit any material insurance policy naming
the Company or any Subsidiary of the Company as a beneficiary or a loss payee to
be canceled or terminated other than in the ordinary course of business; or
(x) agree to do any of the foregoing.
6.2 Covenants of Public. During the period from the date of
-------------------
this Agreement and continuing until the Effective Time, except as expressly
contemplated or permitted by this Agreement or with the prior written consent of
the Company, Public and its Subsidiaries shall carry on their respective
businesses in the ordinary course consistent with past practice and in
compliance with applicable law (including all applicable Environmental Laws).
Public will use its reasonable best efforts to (x) preserve its business
organization and that of its Subsidiaries intact, (y) keep available to itself
the present services of the employees of Public and its Subsidiaries and (z)
preserve for itself the existing business relationships and the goodwill of the
customers and distributors of Public and its Subsidiaries and others with whom
business relationships exist. Without limiting the generality of the foregoing,
and except as set forth in Section 6.2 of the Public Disclosure Schedule or as
otherwise contemplated by this Agreement or consented to in writing by the
Company, prior to the Effective Time or the date this Agreement terminates,
Public shall not, and shall not permit any of its Subsidiaries to:
(a) other than dividends from one Subsidiary to another
Subsidiary or to Public, declare, set aside, or pay any dividends on or make any
other distributions in respect of any of its capital stock;
(b) (i) split, combine or reclassify any shares of its
capital stock, or issue or authorize or propose the issuance of any other
securities in respect of, in lieu of or in substitution for shares of its
capital stock; (ii) repurchase, redeem or otherwise acquire any shares of the
capital stock of Public or any of its Subsidiaries, or any securities
convertible into or exercisable for any shares of the capital stock of Public or
any of its Subsidiaries; or (iii) issue,
47
deliver or sell, or authorize or propose the issuance, delivery or sale of, any
shares of its capital stock or any securities convertible into or exercisable
for, or any rights, warrants or options to acquire, any such shares, or enter
into any agreement with respect to any of the foregoing, except in the case of
this clause (iii), for (A) the issuance of Public Common Stock upon the exercise
of options, warrants or other rights to purchase Public Common Stock outstanding
and in existence on the date of this Agreement or issued as permitted by clause
(B) hereof, in each case in accordance with their terms and (B) the issuance of
options to purchase up to 400,000 shares of Public Common Stock in the aggregate
in the ordinary course of Public's business, including, without limitation,
option grants to future employees of Public consistent with past practice;
(c) amend its Certificate of Incorporation, By-Laws or other similar
governing documents, other than immaterial amendments relating to corporate
procedure and which do not adversely affect the ability of Public to consummate
the transactions contemplated hereby or to perform its obligations hereunder;
(d) (i) acquire, be acquired, or agree to acquire or be acquired, by
merging or consolidating with, or by purchasing or selling a substantial equity
interest in or a substantial portion of the assets of, or by any other manner,
any business or any corporation, partnership, association or other business
organization or division thereof, or otherwise acquire or sell any assets, which
would, individually or in the aggregate, exceed $5,000,000; (ii) authorize or
permit any of its officers, directors, employees or Agents to directly or
indirectly solicit, initiate or encourage any inquiries relating to, or the
making of any proposal which constitutes a takeover proposal; (iii) approve any
transaction that would permit any Person or group to acquire shares of Public
Common Stock if such acquisition would cause such Person or group to be deemed
to beneficially own 15% or more of the shares of Public Common Stock for
purposes of Section 203 of the DGCL or (iv) participate in any discussions or
negotiations or provide third parties with any nonpublic information relating to
a takeover proposal unless the Public Board of Directors determines in good
faith that it would be inconsistent with its fiduciary duties not to participate
in such discussions or negotiations or provide such information, after receipt
of advice from its outside legal counsel to such effect;
(e) take any action that is intended or may reasonably be expected to
result in any of its representations and warranties set forth in this Agreement
being or becoming untrue in any material respect, or in any of the conditions to
the Merger set forth in Article VIII not being satisfied;
(f) change its methods of accounting in effect at December 31, 2000,
except as required to comply with changes in GAAP as concurred with by Public's
independent auditors;
(g) take or cause to be taken any action that could reasonably be
expected to disqualify the Merger as a tax free reorganization under Section
368(a) of the Code;
(h) sell, lease, encumber, assign or otherwise dispose of, or agree to
sell, lease, encumber, assign or otherwise dispose of, any of its assets,
properties or other rights or agreements, other than (i) dispositions required
to be made pursuant to an agreement or contract to which Public or any of its
Subsidiaries is a party or by which it is bound as of the date
48
of this Agreement and which has been disclosed to Public, (ii) dispositions of
inventory and excess or obsolete assets, (iii) the sale of towers and the
leaseback of availability of towers that result in proceeds of at least $200,000
per tower and (iv) sales or dispositions not included in clauses (i), (ii) or
(iii) above involving consideration not to exceed $25,000,000 in the aggregate;
(i) create, incur, assume, or suffer to exist any indebtedness or
issuances of debt securities or assume, guarantee, endorse or otherwise as an
accommodation become responsible for the obligations of any other individual,
corporation or other entity, other than (i) the accretion of indebtedness under
the Indenture, dated as of September 30, 1999, by and among Public, AGW Leasing
Company, Inc. and Bankers Trust Company (the "Public Indenture"), (ii)
borrowings under the Credit Agreement, dated as of August 16, 1999, among
Public, State Street Bank and Trust Company (as Collateral Agent), certain
Lenders thereto and Lucent Technologies Inc. (the "Public Credit Facility") or
any replacement facilities and (iii) borrowings in connection with intercompany
loans solely between and among Public and its Subsidiaries, provided, that the
--------
indebtedness under the Public Credit Facility shall not exceed $125,300,000 in
the aggregate prior to the Effective Time;
(j) (i) enter into, renew, amend or waive in any material manner, or
terminate or give notice of a proposed renewal or material amendment, waiver or
termination of, any Public Contract, agreement or lease to which Public or any
of its Subsidiaries is a party or by which Public or any of its Subsidiaries or
their respective properties is bound, other than in the ordinary course of
business or (ii) enter into, renew, amend, waive or terminate, or give notice of
a proposed renewal, amendment, waiver or termination of, any Public Sprint
Agreement.
(k) take or cause to be taken any action that could reasonably be
expected to delay the consummation of the transactions contemplated hereby,
including without limitation, the consummation of the Merger and the filing and
the effectiveness of the S-4 Registration Statement;
(l) acquire additional territory or related assets from Sprint PCS
except if the Company has failed to object in writing in its sole discretion
within ten business days after receipt of notification from Public of a proposal
from Sprint PCS as to such territory or assets;
(m) make any loans, advances or capital contributions to, or investments
in any other Person in excess of $1,000,000, individually or in the aggregate,
other than by Public or a Subsidiary of Public to or in Public or any direct or
indirect wholly owned Subsidiary of Public;
(n) enter into any new line of business;
(o) make any capital expenditures other than those which are in an
amount of no more than $65,000,000 in the aggregate; or
(p) agree to do any of the foregoing.
49
ARTICLE VII
ADDITIONAL AGREEMENTS
7.1 Regulatory Matters. (a) Public shall prepare and file with
------------------
the SEC, as promptly as practicable following the date hereof (but in no event
later than September 30, 2001) the S-4 Registration Statement (including the
Prospectus/Proxy Statement constituting a part thereof) in a form which
contemplates the public reoffering of all of the Public Common Stock issued to
the former stockholders of the Company. Public shall use its reasonable best
efforts to have the S-4 Registration Statement declared effective under the
Securities Act as promptly as practicable after such filing, and promptly
thereafter shall mail the Prospectus/Proxy Statement to its stockholders.
Public shall also use its reasonable best efforts to obtain prior to the
effective date of the S-4 Registration Statement all necessary state securities
law or "Blue Sky" permits and approvals required in connection with the Merger
and the other transactions contemplated by this Agreement and will pay all
expenses incident thereto; provided, that Public shall not be required to
--------
qualify to do business in any jurisdiction in which it is not now so qualified
to do business, to file a general consent to service of process in any
jurisdiction in which it is not now so qualified or to subject itself to
taxation in any jurisdiction in which it is not now so qualified to do business.
In addition to the foregoing, as promptly as is reasonably practicable following
the date that the S-4 Registration statement is declared effective under the
Securities Act, Public shall prepare and file with the SEC a registration
statement on Form S-3 (the "S-3 Registration Statement") relating to the
proposed "Underwritten Offering" (as defined in Section 2 of the Registration
Rights Agreement). The Company shall furnish all information concerning the
Company and the holders of Company Common Stock and Company Preferred Stock as
may be reasonably requested in connection with any of the foregoing actions.
Prior to filing the S-4 Registration Statement and the S-3 Registration
Statement with the SEC pursuant to this Section 7.1(a), Public shall provide the
Company and its representatives a reasonable opportunity to review and comment
on the S-4 Registration Statement and the S-3 Registration Statement.
(b) The parties hereto shall cooperate with each other and use all
reasonable efforts to promptly prepare and file following the date of this
Agreement all necessary documentation (including, without limitation, assisting
each party's stockholders with filing notifications required to be filed by any
such stockholder under the HSR Act in connection with the Merger) to effect all
applications, notices, petitions and filings, and to obtain as promptly as
practicable all permits, consents, approvals and authorizations of all third
parties and Governmental Entities which are necessary or advisable to consummate
the transactions contemplated by this Agreement (including, without limitation,
filing the notification provided for under the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended (the "HSR Act")) in connection with the
Merger, and taking all necessary action to cause the expiration of the notice
periods under the HSR Act with respect to the Merger as promptly as reasonably
practicable after the date of this Agreement; provided, however, that nothing in
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this Section 7.1(b) shall require Public or Merger Sub to agree to the
imposition of conditions or any requirement of divestiture as a result of
antitrust concerns. The Company and Public shall have the right to review in
advance, and to the extent practicable each will consult the other on, in each
case subject to applicable laws relating to the exchange of information, all the
information relating to the Company or Public, as the case may be, and any of
their respective Subsidiaries, which appears in any filing made with, or written
materials submitted to, any third party or any
50
Governmental Entity in connection with the transactions contemplated by this
Agreement, except for documents filed pursuant to Item 4(c) of the Pre-Merger
Notification and Report Form filed under the HSR Act or communications regarding
the same or documents or information submitted in response to any request for
additional information or documents pursuant to the HSR Act which reveal
Public's or the Company's negotiating objectives or strategies or purchase price
expectations. In exercising the foregoing right, each of the parties hereto
shall act reasonably and as promptly as practicable. The parties hereto agree
that they will consult with each other with respect to the obtaining of all
permits, consents, approvals and authorizations of all third parties and
Governmental Entities necessary or advisable to consummate the transactions
contemplated by this Agreement and each party will keep the other apprised of
the status of matters relating to completion of the transactions contemplated
herein. In the event that either party shall fail to obtain any third party
consent described above, such party shall use its reasonable best efforts, and
shall take any such actions reasonably requested by the other party hereto, to
minimize any adverse effect upon the business of the Company, Public and any of
their respective Subsidiaries after the Effective Time which results from, or
could reasonably be expected to result from, the failure to obtain such consent.
(c) Each of Public and the Company shall, upon request, furnish the
other with all information concerning themselves, their Subsidiaries, directors,
officers and stockholders and such other matters as may be reasonably necessary
or advisable in connection with the S-4 Registration Statement, the
Prospectus/Proxy Statement, the Public Shelf Registration Statement (as defined
in Section 7.1(f)) or any other statement, filing, notice or application made by
or on behalf of Public, the Company or any of their respective Subsidiaries to
any Governmental Entity in connection with the Merger and the other transactions
contemplated by this Agreement.
(d) If at any time prior to the Effective Time any information relating
to Public or the Company, or any of their respective Affiliates, officers or
directors is discovered by Public or the Company which should be set forth in an
amendment or supplement to any of the S-4 Registration Statement, the
Prospectus/Proxy Statement or any other statement, filing, notice or application
made by or on behalf of Public, the Company or any of their Subsidiaries to any
Governmental Entity in connection with the Merger and the other transactions
contemplated by this Agreement, so that any of such documents would not include
any misstatement of a material fact or would omit to state any material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading, the party
which discovers such information shall promptly notify the other parties to this
Agreement and an appropriate amendment or supplement describing such information
shall be filed as soon as practicable with the SEC or such Governmental Entity,
as the case may be, and, to the extent required by law, disseminated to the
stockholders of Public.
(e) Each of Public and the Company shall promptly furnish each other
with true and correct copies of written communications received by Public or the
Company, as the case may be, or any of their respective Subsidiaries, Affiliates
or Associates from, or delivered by any of the foregoing to, any Governmental
Entity in respect of the transactions contemplated hereby (including, (i) in the
case of Public, all written correspondence with the SEC in connection with the
S-4 Registration Statement, the S-3 Registration Statement and the
Prospectus/Proxy Statement and all other documents filed by Public with the SEC
prior to the
51
Effective Time and not available via XXXXX, and (ii) in the case of the Company,
all written communication between the Company and the SEC prior to the Effective
Time), except for documents filed pursuant to Item 4(c) of the Pre-Merger
Notification and Report Form filed under the HSR Act or communications regarding
the same or documents or information submitted in response to any request for
additional information or documents pursuant to the HSR Act which reveal
Public's or the Company's negotiating objectives or strategies or purchase price
expectations.
(f) Public shall file a reoffering prospectus (which shall
include a description of the plan of distribution of the shares of Public Common
Stock received pursuant to the Merger, including, without limitation, a
description that contemplates all anticipated forms of sales into the market,
including underwritten offerings, as well as block trades, and sales by in-kind
distributees, which description shall be in the form reasonably requested by the
former stockholders of the Company) as part of the S-4 Registration Statement or
if not permitted by the SEC to be included in the S-4 Registration Statement
then promptly after the Effective Time but in no event later than 15 days,
Public shall file (i) pursuant to Rule 424 promulgated under the Securities Act
or (ii) if not permitted under Rule 424, then a post-effective amendment to the
S-4 Registration Statement (together with the prospectus included therein, in
either case the "Public Shelf Registration Statement") pursuant to Rule 415
promulgated under the Securities Act in order to cover the resale from time to
time of shares of Public Common Stock received pursuant to the Merger, and any
securities issued or distributed in respect thereof, or in substitution
therefor, in connection with any stock split, dividend, spin-off or combination,
or any reclassification, merger, consolidation, exchange or other similar
reorganization or business combination (collectively, the "Merger Common
Shares"). If required to be filed as a post-effective amendment, Public shall
use its reasonable best efforts to cause such Public Shelf Registration
Statement to be declared effective as soon thereafter as practicable. Public
will use all reasonable efforts to keep such Public Shelf Registration Statement
effective, including, without limitation, maintaining current disclosure
required under the Exchange Act, until the earliest to occur of: (A) such date
as all of the Merger Common Shares have been resold, (B) such time as all Merger
Common Shares held by the former stockholders of the Company can be resold
pursuant to Rule 144(k) under the Securities Act and (C) the third anniversary
of the Effective Time. Public shall provide customary indemnification to all
holders of Public Common Stock whose shares are included in the Public Shelf
Registration Statement.
7.2 Access to Information. (a) Upon reasonable notice and
---------------------
subject to applicable laws relating to the exchange of information, the Company
shall, and shall cause each of its Subsidiaries to, afford to the officers,
employees, accountants, counsel and other representatives of Public, access,
during normal business hours during the period prior to the Effective Time, to
all its properties, books, contracts, commitments, records, officers, employees,
accountants, counsel and other representatives and, during such period, the
Company shall, and shall cause its Subsidiaries to, make available to Public all
information concerning its business, properties and personnel as Public may
reasonably request. Under no circumstance shall Public conduct any sampling of
the air, land, surface, water, groundwater or building structures or materials
without the prior written consent from the Company. Neither the Company nor any
of its Subsidiaries shall be required to provide access to or to disclose
information where such access or disclosure would violate or prejudice the
rights of the Company's customers, jeopardize any attorney-client privilege or
contravene any law, rule, regulation, order, judgment,
52
decree or binding agreement entered into prior to the date of this Agreement.
The parties hereto will make appropriate substitute disclosure arrangements
under circumstances in which the restrictions of the preceding sentence apply.
(b) Upon reasonable notice and subject to applicable laws relating to
the exchange of information, Public shall, and shall cause each of its
Subsidiaries to, afford to the officers, employees, accountants, counsel and
other representatives of the Company, access, during normal business hours
during the period prior to the Effective Time, to such information regarding
Public and its Subsidiaries as shall be reasonably necessary for the Company to
confirm that the representations and warranties of Public contained herein are
true and correct and that the covenants of Public contained herein have been
performed in all material respects. Neither Public nor any of its Subsidiaries
shall be required to provide access to or to disclose information where such
access or disclosure would violate or prejudice the rights of Public's
customers, jeopardize any attorney-client privilege or contravene any law, rule,
regulation, order, judgment, decree or binding agreement entered into prior to
the date of this Agreement. The parties hereto will make appropriate substitute
disclosure arrangements under circumstances in which the restrictions of the
preceding sentence apply.
(c) All information furnished by either party to the other party or its
representatives pursuant hereto shall be treated as the sole property of the
delivering party and, if the Merger shall not occur, the receiving party and its
representatives shall, if requested by the delivering party, return to the
delivering party all of such written information and all documents, notes,
summaries or other materials containing, reflecting or referring to, or derived
from, such information. The receiving party shall, and shall use all reasonable
efforts to cause its representatives to, keep confidential all such information,
and shall not directly or indirectly use such information for any competitive or
other commercial purpose. The obligation to keep such information confidential
shall continue for five years from the date the proposed Merger is abandoned and
shall not apply to any information which (x) was already in the receiving
party's possession prior to the disclosure thereof by the delivering party; (y)
was then generally known to the public or (z) was disclosed to the receiving
party by a third party not bound by an obligation of confidentiality. It is
further agreed that, if the receiving party, in the opinion of its counsel, is
required by applicable law, regulation or legal process to disclose information
concerning the delivering party to any tribunal or governmental body or agency
or else stand liable for contempt or suffer other censure or penalty, the
receiving party may disclose such information to such tribunal or governmental
body or agency without liability hereunder, provided, however, that prior to any
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such disclosure, the receiving party shall promptly notify the delivering party
so that the delivering party may seek a protective order or other appropriate
remedy.
(d) Each of Public and the Company agrees to provide the other with
copies of any and all material correspondence between such party and Sprint PCS
during the period prior to the Effective Time.
(e) No investigation by either of the parties or their respective
representatives shall affect the representations, warranties, covenants or
agreements of the other set forth herein.
53
7.3 Stockholder Meeting. (a) Public shall take all steps
-------------------
necessary to duly call, give notice of, convene and hold a meeting of its
stockholders to be held as soon as practicable after the date on which the S-4
Registration Statement becomes effective for the purpose of obtaining Public
stockholder approval of the Required Public Vote. Public, through its Board of
Directors, shall (i) recommend to its stockholders approval of the Required
Public Vote and (ii) use its best efforts (including the solicitation of
proxies) to solicit such approval and shall take all other action necessary or
advisable to secure the Required Public Vote.
(b) The Company shall take all steps necessary to duly call, give
notice of, convene and hold a meeting of its stockholders to be held prior to
the Effective Time for the purpose of voting to approve and adopt this Agreement
and the Merger; provided, however, that the Company may obtain the approval and
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adoption of the Agreement and the Merger by its stockholders by written consents
in lieu of having a stockholder meeting. The Company will, through its Board of
Directors, recommend to its stockholders approval and adoption of this Agreement
and the Merger.
7.4 Legal Conditions to Merger. Prior to the Effective Time,
--------------------------
each of Public and the Company shall, and shall cause its Subsidiaries to, use
all reasonable efforts (a) to take, or cause to be taken, all actions necessary,
proper or advisable to comply promptly with all legal requirements which may be
imposed on such party or its Subsidiaries with respect to the Merger and,
subject to the conditions set forth in Article VIII hereof, to consummate the
Merger and (b) to obtain (and to cooperate with the other party to obtain) any
consent, authorization, order or approval of, or any exemption by, any
Governmental Entity and any other third party which is required to be obtained
by Public or the Company or any of their respective Subsidiaries in connection
with the Merger and the other transactions contemplated by this Agreement, and
to comply with the terms and conditions of such consent, authorization, order or
approval; provided, however, that nothing in this Section 7.4 shall require
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Public or Merger Sub to agree to the requirement of any divestiture in exchange
for such consent.
7.5 Affiliates. Prior to the Closing, if requested by Public,
----------
the Company shall use its reasonable best efforts to cause each director,
executive officer and other Person who may be deemed an "affiliate" (for
purposes of Rule 145 under the Securities Act) of Public following consummation
of the Merger to deliver to Public a written agreement in a form reasonably
acceptable to Public and the Company with respect to such Person's shares of
Public Common Stock to be acquired in connection with the Merger.
7.6 Nasdaq Listing. Public shall use its best efforts to cause
--------------
the shares of Public Common Stock to be issued in the Merger and upon exercise
of Company Options and Company Warrants assumed by Public pursuant to Section
1.5 and Section 1.6 hereof to be approved for listing on Nasdaq, subject only to
official notice of issuance, prior to the Effective Time.
7.7 Employee Benefit Plans; Existing Agreements. (a) It is the
-------------------------------------------
present intention of Public that for one year following the Effective Time,
employees and former employees of the Company and its Subsidiaries (the "Company
Employees") shall either continue to participate in the Company Benefit Plans on
the same terms and conditions as applied immediately prior to the Effective Time
or shall participate in plans, policies, programs
54
and arrangements ("Public Plans") with substantially similar benefits in which
similarly-situated employees of Public and its Subsidiaries participate.
(b) With respect to each Public Plan that is an "employee
benefit plan," as defined in Section 3(3) of ERISA, for purposes of determining
eligibility to participate, vesting, and entitlement to benefits, including for
severance benefits and vacation entitlement (but not for accrual of pension
benefits), service with the Company and its Affiliates shall be treated as
service with Public; provided, however, that such service shall not be
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recognized to the extent that such recognition would result in a duplication of
benefits. Such service also shall apply for purposes of satisfying any waiting
periods, evidence of insurability requirements, or the application of any
preexisting condition limitations. Company Employees shall be given credit for
amounts paid under a corresponding benefit plan during the same period for
purposes of applying deductibles, co-payments and out-of-pocket maximums as
though such amounts had been paid in accordance with the terms and conditions of
the Public Plan.
(c) Following the Effective Time, Public shall honor and shall
cause the appropriate Subsidiaries of Public (including the Company) to honor in
accordance with their terms all employment, severance and other compensation
agreements and arrangements existing prior to the execution of this Agreement
which are between the Company or any of its Subsidiaries and any director,
officer or employee thereof and which have been disclosed in the Company
Disclosure Schedule and previously have been delivered to Public.
(d) The Company agrees not to allow any cashless option
exercises prior to the Effective Time, and agrees not to take any action prior
to the Effective Time that would allow for cashless option exercises following
the Effective Time.
7.8 Additional Agreements. In case at any time after the Effective
---------------------
Time any further action is necessary or desirable to carry out the purposes of
this Agreement, the proper officers and directors of each party to this
Agreement and their respective Subsidiaries shall take all such necessary action
as may be reasonably requested by Public.
7.9 Advice of Changes. Prior to the Effective Time, each of Public
-----------------
and the Company shall promptly advise the other party of any change or event
having a Material Adverse Effect on it or which it believes has had or could
reasonably be expected to cause or constitute a material breach of any of its
representations, warranties or covenants contained herein. From time to time
prior to the Effective Time (and on the date prior to the Closing Date), each
party will supplement or amend its Disclosure Schedules delivered in connection
with the execution of this Agreement to reflect any matter which, if existing,
occurring or known at the date of this Agreement, would have been required to be
set forth or described in such Disclosure Schedules or which is necessary to
correct any information in such Disclosure Schedules which has been rendered
inaccurate thereby. No supplement or amendment to such Disclosure Schedules
shall have any effect for the purpose of determining satisfaction of the
conditions set forth in Sections 8.2(a) or 8.3(a) hereof, as the case may be, or
the compliance by the Company or Public, as the case may be, with the respective
covenants and agreements of such parties contained herein.
55
7.10 Current Information. During the period from the date of this
-------------------
Agreement to the Effective Time, each of the Company and Public will cause one
or more of its designated representatives to confer on a regular and frequent
basis (not less than monthly) with representatives of the other and to report
the general status of its respective ongoing operations. Prior to the Effective
Time, each of the Company and Public will promptly notify the other of any
material change in the normal course of its business or in the operation of its
properties and of any governmental complaints, investigations or hearings (or
communications indicating that the same may be contemplated), or the institution
or the threat of significant litigation involving it, its Subsidiaries, and will
keep the other fully informed of such events.
7.11 Accountants' Letter. The Company shall use its reasonable efforts
-------------------
to cause to be delivered to Public a letter of its independent public
accountants dated (i) the date on which the S-4 Registration Statement shall
become effective (or if the Proxy Statement is not included in the S-4
Registration Statement, the date of the Proxy Statement) and (ii) the Closing
Date, and in each case addressed to the Board of Directors of Public and in form
and substance customary for "comfort" letters delivered by independent
accountants in connection with registration statements similar to the S-4
Registration Statement.
7.12 Additional Reports and Information. (a) The Company shall deliver
----------------------------------
to Public, concurrently with delivery to the members of the Company's Board of
Directors, all financial statements of the Company and its Subsidiaries
delivered to the Company's Board of Directors.
(b) Public shall deliver to the Company, concurrently with
delivery to the members of Public's Board of Directors, all financial statements
of Public and its Subsidiaries delivered to Public's Board of Directors.
7.13 Section 16(b) Matters. Prior to the Effective Time, Public shall
---------------------
take all such steps as may be required to cause any acquisitions of Public
Common Stock (including derivative securities with respect to Public Common
Stock), resulting from the transactions contemplated by this Agreement, by each
Person who will be subject to the reporting requirements of Section 16(a) of the
Exchange Act with respect to Public, to be exempt under Rule 16b-3 promulgated
under the Exchange Act, such steps to be taken in accordance with the
interpretive guidance of the SEC.
7.14 Nomination of Directors. (a) Public shall cause two of the eight
-----------------------
members constituting its Board of Directors immediately prior to the Effective
Time to resign from the Board of Directors, effective as of the Effective Time.
Effective as of the Effective Time, the authorized number of members on the
Board of Directors of Public shall be increased by one member such that the size
of the Board of Directors of Public shall be fixed at nine members and Public
shall cause its remaining directors to fill the vacancies created by such
resignations so that Public's Board of Directors shall be comprised of (i) one
member designated by the Company (the "Company Director"), (ii) one member
designated by Blackstone (the "Blackstone Director") and (iii) one member
designated by the Company with the approval of Public, which approval shall not
be unreasonably withheld, provided that such member shall be an "independent
--------
director" (as defined for purposes of listing on Nasdaq) (the "Independent
Director") and shall not be a Company Stockholder or an Affiliate or Associate
of a Company
56
Stockholder (the directors contemplated in clause (i), (ii) and (iii) above are
collectively referred to as the "Company Nominated Directors").
(b) Subject to the foregoing, as of the Effective Time (i) the
class of directors whose term expires at Public's 2002 annual meeting of
stockholders shall include the Company Director, (ii) the class of directors
whose term expires at Public's 2003 annual meeting of stockholders shall include
the Blackstone Director and (iii) the class of directors whose term expires at
Public's 2004 annual meeting of stockholders shall include the Independent
Director. Public shall nominate the Company Director for re-election to the
Public Board of Directors at the 2002 annual meeting of stockholders for a term
expiring at Public's 2005 annual meeting of stockholders. In the event that the
Company Director ceases to serve on the Board of Directors of Public at any time
prior to Public's 2005 annual meeting of stockholders, the Company Stockholders
shall promptly designate a person to replace the Company Director and Public
shall appoint such designated person to the Public Board of Directors. "Company
Stockholders" shall mean the stockholders of the Company immediately prior to
the Effective Time.
(c) Effective as of the Effective Time, the Public Board of
Directors shall appoint one of the Company Nominated Directors to all committees
of the Public Board of Directors (including, without limitation, the Executive
Committee); provided, however, that if any committee of the Public Board of
Directors shall be comprised of more than four members, then the Public Board of
Directors shall appoint two of the Company Nominated Directors to such
committee.
(d) Immediately upon any sales or in-kind distributions by
Blackstone of a cumulative aggregate number of shares of Public Common Stock
equal to or greater than 75% of the number of shares of Public Common Stock
received by Blackstone pursuant to the Merger, the Blackstone Director shall
deliver to Public his or her resignation as a member of the Public Board of
Directors, such resignation to be effective as of the day of completion of such
sale or in-kind distribution which satisfies or exceeds such cumulative
aggregate threshold and thereafter the Public Board of Directors shall be
reduced by one member.
7.15 Supplemental Warrant Agreement; Warrant Notices. On or prior to
-----------------------------------------------
the Closing Date, (i) the Company and Public shall execute a supplemental
warrant agreement with ChaseMellon, pursuant to Section 8(m) of the Warrant
Agreement, and the Company shall provide ChaseMellon with a certificate from the
appropriate officer of the Company in accordance with the terms of Section 16 of
the Warrant Agreement and (ii) the Company and Public shall deliver the notice
required by Section 2(d) of the Sprint Warrant. The Company shall also provide
any and all notices required to be provided on or prior to the Closing Date
pursuant to the Warrant Agreement (including without limitation pursuant to
Sections 8(m) and 10 of the Warrant Agreement).
7.16 Expenses. Whether or not the Merger is consummated, all costs and
--------
expenses incurred in connection with this Agreement, the Merger and the
transactions contemplated hereby shall be paid by the party incurring or
required to incur such expense. The expenses incurred in connection with filing
the S-4 Registration Statement (including the filing fee), printing and mailing
the Prospectus/Proxy Statement and the filing fees for all notifications
required to be filed in connection with the Merger under the HSR Act shall be
paid by Public.
57
Nothing contained in this Section 7.16 shall limit either party's rights to
recover any liabilities or damages arising out of the other party's willful\l
breach of any provision of this Agreement.
7.17 Indemnification. (a) From and after the Effective Time, Public
---------------
shall cause the Surviving Corporation to indemnify and hold harmless each
present and former director and officer of the Company (the "Indemnified
Parties") against any costs or expenses (including attorneys' fees), judgments,
fines, losses, claims, damages, liabilities or amounts paid in settlement
incurred in connection with any claim, action, suit, proceeding or
investigation, whether civil, criminal, administrative or investigative, arising
out of or pertaining to matters existing or occurring at or prior to the
Effective Time, whether asserted or claimed prior to, at or after the Effective
Time, to the fullest extent that the Company would have been permitted under the
DGCL and its Certificate of Incorporation or Bylaws in effect on the date hereof
to indemnify and to provide advancement of expenses to such Indemnified Party.
(b) The provisions of this Section 7.17 are intended to be in
addition to the rights otherwise available to the current officers and directors
of the Company by law, charter, statute, bylaw or agreement, and shall operate
for the benefit of, and shall be enforceable by, each of the Indemnified
Parties, their heirs and their representatives.
(c) Public shall cause the persons serving as officers and
directors of the Company immediately prior to the Effective Time to be covered
for a period of six (6) years from the Effective Time (the "Coverage Period") by
the directors' and officers' liability insurance policy currently maintained by
the Company with respect to acts and omissions occurring prior to the Effective
Time which were committed by such officers and directors in their capacity as
such; provided, that only in the event that such existing policy is not
--------
available Public may substitute for such policy, policies of directors' and
officers' liability insurance of at least the same coverage and amounts and
containing terms and conditions which are not less advantageous to such
directors and officers of the Company than the terms and conditions of such
policy; provided further, that Public shall not be required as to any such
----------------
policy to pay premiums in excess of an amount equal to (i) 200% of the amount
currently expended annually by the Company to obtain such insurance and (ii) the
amount of any unearned premium under the policy currently maintained by the
Company, and if such insurance cannot be obtained for such premium Public shall
obtain for such persons the maximum coverage that may be obtained for such
premiums.
7.18 Takeover Statute. If any Takeover Statute is or may become
----------------
applicable to the Merger or any of the other transactions contemplated by this
Agreement, Public and its Board of Directors shall grant such approvals and take
such actions as are necessary so that such transactions may be consummated as
promptly as practicable on the terms contemplated by this Agreement or by the
Merger and otherwise act to eliminate or minimize the effects of such statute or
regulation on such transactions.
7.19 Registration Rights Agreement. Prior to the Effective Time,
-----------------------------
Public shall enter into a Registration Rights Agreement, in the form of Exhibit
-------
B attached hereto (the "Registration Rights Agreement"). Prior to the Effective
-
Time, Public hereby agrees not to grant registration rights to any party or to
amend or modify any existing registration rights agreement
58
or provisions or any lock-up agreement or provisions in a manner which benefits
the other parties covered thereby or otherwise increases Public's obligations
thereunder.
7.20 Plan of Reorganization. This Agreement is intended to constitute
----------------------
a "plan of reorganization" within the meaning of section 1.368-2(g) of the
income tax regulations promulgated under the Code. From and after the date
hereof and until the Effective Time, each party hereto shall use its reasonable
best efforts to cause the Merger to qualify, and will not knowingly take any
actions or cause any actions to be taken which could reasonably be expected to
prevent the Merger from qualifying, as a reorganization under the provisions of
section 368(a) of the Code.
7.21 Lock-Up Agreements. (a) The Company shall obtain and deliver an
------------------
agreement from each stockholder of the Company on the date of this Agreement
owning more than 50,000 shares of Company Common Stock or Company Preferred
Stock (the "Restricted Company Stockholders") that from and after the Effective
Time and continuing until the date that is 301 days after the Effective Time,
such stockholders will not sell, transfer, assign, pledge, make any short sale
of, loan, grant any option for the purchase of, or otherwise directly or
indirectly dispose of any of its shares of Public Common Stock (collectively,
"Transfer") without the prior written consent of Public unless such Transfer
complies with the provisions hereof (the "Resale Restriction"). Notwithstanding
the foregoing and subject to a 90-day underwriters lock-up (if required)
provided for in the Registration Rights Agreement in connection with any
underwritten offering, (i) 20% of each Restricted Company Stockholder's shares
of Public Common Stock immediately after the Effective Time shall be released
from the Resale Restriction on the date that is 120 days after the Effective
Time; (ii) an additional 30% of each Restricted Company Stockholder's shares of
Public Common Stock immediately after the Effective Time shall be released from
the Resale Restriction on the date that is 211 days after the Effective Time and
(iii) the remaining 50% of each Restricted Company Stockholder's shares of
Public Common immediately after the Effective Time shall be released from the
Resale Restriction on the date 301 days after the Effective Time.
Notwithstanding the foregoing, Blackstone and TCW (each as defined below) shall
be free of the lock-up restrictions set forth in this Section 7.21 on the later
of (i) the 121st day after the Effective Time and (ii) the 90th day after the
closing date of the first underwritten offering of shares held by any Company
Stockholder, if such offering is consummated within 120 days of the Effective
Time. The provisions of the lock-up agreement referred to in this Section 7.21
shall not: (A) prohibit any Company Stockholder from participating in the
Underwritten Offering (as defined in Section 2 of the Registration Rights
Agreement); (B) restrict transfers solely among the eight TCW entities included
in the definition of "TCW" set forth in Section 7.21(c); and (C) restrict
transfers solely among the three Blackstone entities (not including the limited
partners thereof) included in the definition of "Blackstone" set forth in
Section 7.21(c); provided, however, that with respect to transfers contemplated
by clauses (B) and (C) above, any such transferees shall remain subject to the
provisions of the lock-up agreement referred to in this Section 7.21.
(b) The restrictions set forth in Section 7.21(a) shall apply to
each Company Stockholder proportionally, and the Company Stockholders shall have
no ability to allocate released percentages disproportionately to any Company
Stockholder or group of Company Stockholders.
59
(c) In addition to the release schedule set forth in Section
7.21(a) above, Blackstone may, in its sole discretion upon written notice to
Public, elect to distribute a portion or all of its shares of Public Common
Stock to the Blackstone limited partners or other investors on the later of (i)
the 121st day after the Effective Time and (ii) the 90th day after the closing
date of the first underwritten offering of shares held by any Company
Stockholder, if such offering is consummated within 120 days of the Effective
Time. "Blackstone" means Blackstone/iPCS L.L.C., a Delaware limited liability
company, Blackstone iPCS Capital Partners L.P., a Delaware limited partnership,
and Blackstone Communications Partners I, L.P., a Delaware limited partnership,
and the limited partners thereof collectively. "TCW" means, collectively,
TCW/Crescent Mezzanine Partners II, L.P., TCW/Crescent Mezzanine Trust II, TCW
Leveraged Income Trust, L.P., TCW Leveraged Income Trust II, L.P., TCW Leveraged
Income Trust IV, L.P., TCW Shared Opportunity Fund II, L.P., Shared Opportunity
Fund IIB, L.L.C. and TCW Shared Opportunity Fund III, L.P.
7.22 Transfer of Company Records. Prior to the Closing, the Company
---------------------------
shall cooperate with and assist Public in transferring after the Effective Time
or causing to be transferred to Public after the Effective Time any files,
books, records or other documents relating to the business of the Company or any
of its Subsidiaries that are the property of the Company or any of its
Subsidiaries, that are located on premises which will not be occupied by the
Company or any of its Subsidiaries after the Closing and that are not otherwise
in the possession of the Company or any of its Subsidiaries.
7.23 Formation of Merger Sub and Execution and Delivery of Sub Joinder
-----------------------------------------------------------------
Agreement. Prior to the Effective Time and promptly after obtaining the
---------
requisite consent under the Public Credit Facility, Public shall form Merger Sub
and cause Merger Sub to execute the Sub Joinder Agreement, an executed
counterpart of which shall be delivered to the Company; provided, however, that
-------- -------
the parties may agree to utilize \another wholly owned subsidiary of Public as
the Merger Sub referred to herein.
ARTICLE VIII
CONDITIONS PRECEDENT
8.1 Conditions to Each Party's Obligation To Effect the Merger. The
----------------------------------------------------------
respective obligations of each party to effect the Merger shall be subject to
the satisfaction at or prior to the Effective Time of the following conditions,
any or all of which may be waived by the parties, in whole or in part, to the
extent permitted by applicable law:
(a) Stockholder Approval. This Agreement and the Merger shall
--------------------
have been duly approved and adopted by the stockholders of the Company in
accordance with the DGCL, the Amended and Restated Certificate of Incorporation
and the Amended and Restated Bylaws of the Company, and the issuance of the
shares of Public Common Stock in connection with the Merger shall have been
approved by the stockholders of Public in accordance with the applicable rules
and requirements of Nasdaq.
(b) HSR Act and Other Governmental Approvals. All waiting
----------------------------------------
periods, if any, under the HSR Act with respect to the Merger (including without
limitation the waiting
60
periods under the HSR Act applicable to notifications filed by any stockholder
of the Company) shall have expired or been terminated. All consents, permits,
licenses and approvals required by any Governmental Entity for the Merger and
the other transactions contemplated by this Agreement shall have been obtained,
in each case, without the requirement of divestiture.
(c) No Injunctions or Restraints; Illegality. No order,
----------------------------------------
injunction or decree issued by any court or agency of competent jurisdiction or
other legal restraint or prohibition (an "Injunction") preventing the
consummation of the Merger shall be in effect (collectively, the "Restraints");
provided, however, that each of the parties shall have used its reasonable best
-------- -------
efforts to prevent the entry of such Restraints and to appeal as promptly as
possible any such Restraints that may be entered. No statute, rule, regulation,
order, injunction or decree shall have been enacted, entered, promulgated or
enforced by any Governmental Entity which prohibits, restricts or makes illegal
consummation of the Merger.
(d) S-4. The S-4 Registration Statement shall have become
---
effective under the Securities Act. No stop order suspending the effectiveness
of the S-4 Registration Statement shall have been issued, and no proceedings for
that purpose shall have been initiated or be threatened by the SEC.
(e) Certificate of Merger. Prior to the Effective Time, the
---------------------
Certificate of Merger shall be accepted for filing with the Secretary of State
of the State of Delaware.
(f) No Downgrade Event. No event or circumstance that results
------------------
in or causes any of the conditions set forth in clauses (i) through (iv) of the
definition of "Change of Control" in the Company Indenture to fail to be
satisfied shall have occurred and not subsequently have been removed.
(g) Public Consents Under Agreements. The consent, approval or
--------------------------------
waiver of each Person whose consent or approval shall be required in connection
with the transactions contemplated hereby under any loan or credit agreement
(including the Public Credit Facility), note, mortgage, indenture, lease,
license or other agreement or instrument set forth in Section 5.4 of the Public
Disclosure Schedule shall have been obtained.
(h) Company Consents Under Agreements. The consent, approval or
---------------------------------
waiver of each Person whose consent or approval shall be required in order to
permit the succession by the Surviving Corporation pursuant to the Merger to any
obligation, right or interest of the Company or any Subsidiary of the Company
under any loan or credit agreement (including the Company Credit Facility),
note, mortgage, indenture, lease, license or other agreement or instrument set
forth in Schedule 8.1(h) of the Company Disclosure Schedule shall have been
obtained.
8.2 Conditions to Obligations of Public and Merger Sub. The
--------------------------------------------------
obligation of each of Public and Merger Sub to effect the Merger is also subject
to the satisfaction, or waiver by each of Public and Merger Sub, at or prior to
the Effective Time of the following conditions:
(a) Representations and Warranties. The representations and
------------------------------
warranties of the Company set forth in Article IV of this Agreement shall be
true and correct in all material respects as of the date of this Agreement
(except to the extent such representations and warranties speak as of an earlier
date) and as of the Closing Date (except to the extent such representations
61
and warranties speak as of an earlier date) as though made on and as of the
Closing Date, except in each case where the failure of such representations and
warranties to be true and correct in all material respects, considered in the
aggregate, has not had, and is not reasonably likely to have, a Material Adverse
Effect on the Company. The Company shall have delivered to Public and Merger Sub
a certificate signed on behalf of the Company by the Chief Executive Officer and
the Chief Financial Officer of the Company to the foregoing effect.
(b) Performance of Obligations of the Company. The Company
-----------------------------------------
shall have performed all of its obligations in all material respects required to
be performed by it under this Agreement at or prior to the Closing Date, and the
Company shall have delivered to Public and Merger Sub a certificate signed on
behalf of the Company by the Chief Executive Officer and the Chief Financial
Officer of the Company to such effect.
(c) No Pending Governmental Actions. No proceeding initiated by
-------------------------------
any Governmental Entity seeking an Injunction shall be pending.
(d) Resignation of Directors. The Company shall have delivered
------------------------
to Public and Merger Sub a written resignation from each of the directors of the
Company and its Subsidiaries effective as of the Effective Time.
(e) Tax Opinion. Public shall have received a written opinion
-----------
of Winston & Xxxxxx, in form and substance reasonably satisfactory to it, to the
effect that the Merger will constitute a reorganization within the meaning of
Section 368(a) of the Code. The issuance of such opinion shall be conditioned on
the receipt by such tax counsel of representation letters from each of Public,
Merger Sub and the Company. The specific provisions of each representation
letter shall be in a form and substance reasonably satisfactory to such tax
counsel, and each representation letter shall be dated on or before the date of
such opinion and shall not have been withdrawn or modified in any material
respect.
(f) Termination of Listed Agreements. Each of the parties to
--------------------------------
(i) the Stockholders Agreement, dated as of July 12, 2000, by and among TCW
(together with Blackstone, the "holders of Series A-1 Preferred Stock") ,
Blackstone, Geneseo Communications, Inc., an Illinois corporation, Cambridge
Telcom, Inc., an Illinois corporation, and the Company, (ii) the Investment
Agreement, dated as of July 12, 2000, among the holders of Series A-1 Preferred
Stock and the Company and (iii) the Registration Rights Agreement, dated as of
July 12, 2000 among the holders of Series A-1 Preferred Stock and the Company
(collectively, the "Listed Agreements") shall have executed and delivered an
agreement in form and substance reasonably satisfactory to Public, terminating
and extinguishing, as of the Effective Time, all of such Persons' rights and
obligations under such Listed Agreements.
(g) Company Documents. The Company shall have delivered to
-----------------
Public and Merger Sub (a) a certificate, validly executed by the Secretary of
the Company and dated as of the date of the Effective Time, certifying as to (i)
the terms and effectiveness of the Company's Amended and Restated Certificate of
Incorporation and Amended and Restated By-Laws and (ii) the valid adoption of
resolutions of the Board of Directors of the Company and the resolutions validly
adopted by written consent of the stockholders of the Company approving
62
and adopting this Agreement and the consummation of the transactions
contemplated hereby and (b) certificates, issued not more than seven days prior
to the date of the Closing, (i) from the Secretary of State of the State of
Delaware, evidencing that the Company is validly existing under the laws of such
state, (ii) from every jurisdiction where the Company is qualified, authorized,
registered or licensed to do business as a foreign entity, as set forth in
Section 4.1(b) of the Company Disclosure Schedule, evidencing that the Company
is qualified, authorized, registered or licensed to do business as a foreign
entity in such jurisdiction and (c) a bring down certificate or other reasonably
reliable confirmation that the Company is validly existing under the laws of
Delaware as of the Closing Date.
(h) Subsidiary Documents. Each Subsidiary of the Company shall
--------------------
deliver to Public and Merger Sub (a) a certificate, validly executed by a duly
authorized officer, general partner or managing member of such Subsidiary, and
dated as of the date of the Effective Time, certifying as to the terms and
effectiveness of such Subsidiary's Certificate of Incorporation and By-Laws and
(b) certificates, issued not more than seven days prior to the date of the
Closing, (i) from the Secretary of State of the State of Delaware, evidencing
that each Subsidiary is validly existing under the laws of such state, (ii) from
every jurisdiction where such Subsidiary is qualified, authorized, registered or
licensed to do business as a foreign entity, as set forth in Section 4.1(b) of
the Company Disclosure Schedule, evidencing that such Subsidiary is qualified,
authorized, registered or licensed to do business as a foreign entity in such
jurisdiction and (c) bring down certificates or other reasonably reliable
confirmation that each Subsidiary of the Company incorporated under the laws of
Delaware is validly existing under the laws of Delaware as of the Closing Date.
(i) Accountant Letters. Public shall have received the "cold
------------------
comfort" letter of the Company's independent public accountants dated (i) the
date on which the S-4 Registration Statement shall become effective and (ii) the
Closing Date, and in each case addressed to the Board of Directors of Public, in
form and substance reasonably satisfactory to Public, and reasonably customary
in scope and substance for comfort letters delivered by independent public
accountants.
(j) Registration Rights Agreement. The stockholders of the
-----------------------------
Company identified in the Registration Rights Agreement shall have executed and
delivered to Public the Registration Rights Agreement.
(k) Company Indenture; Company Credit Facility. No "Event of
------------------------------------------
Default" (as defined in the Company Indenture and the Company Credit Facility,
respectively) shall have occurred and be continuing under either of the Company
Indenture or the Company Credit Facility.
(l) Company Sprint Agreements. No material default by the
-------------------------
Company or any of its Subsidiaries shall have occurred and be continuing under
the Company Sprint Agreements.
8.3 Conditions to Obligations of the Company. The obligation of the
----------------------------------------
Company to effect the Merger is also subject to the satisfaction, or waiver by
the Company, at or prior to the Effective Time of the following conditions:
63
(a) Representations and Warranties. The representations and
------------------------------
warranties of Public set forth in Article V of this Agreement shall be true and
correct in all material respects as of the date of this Agreement (except to the
extent such representations and warranties speak as of an earlier date) and as
of the Closing Date (except to the extent such representations and warranties
speak as of an earlier date) as though made on and as of the Closing Date,
except in each case where the failure of such representations and warranties to
be true and correct in all material respects, considered in the aggregate, has
not had, and is not reasonably likely to have, a Material Adverse Effect on
Public. Public shall have delivered to the Company a certificate signed on
behalf of Public by the Chief Executive Officer and the Chief Financial Officer
of Public to the foregoing effect.
(b) Performance of Obligations of Public and Merger Sub. Each
---------------------------------------------------
of Public and Merger Sub shall have performed all of its obligations in all
material respects required to be performed by it under this Agreement at or
prior to the Closing Date, and the Company shall have received a certificate
signed on behalf of Public and Merger Sub by the Chief Executive Officer and the
Chief Financial Officer of each of them to such effect.
(c) No Pending Governmental Actions. No proceeding initiated by
-------------------------------
any Governmental Entity seeking an Injunction shall be pending.
(d) Tax Opinion. The Company shall have received a written
-----------
opinion of Xxxxx, Xxxxx & Xxxxx, in form and substance reasonably satisfactory
to it, to the effect that the Merger will constitute a reorganization within the
meaning of Section 368(a) of the Code. The issuance of such opinion shall be
conditioned on the receipt by such tax counsel of representation letters from
each of Public, Merger Sub and the Company. The specific provisions of each
representation letter shall be in a form and substance reasonably satisfactory
to such tax counsel, and each representation letter shall be dated on or before
the date of such opinion and shall not have been withdrawn or modified in any
material respect.
(e) Nasdaq Listing. The shares of Public Common Stock to be
--------------
issued to the stockholders of the Company upon consummation of the Merger and
upon exercise of Company Options and Company Warrants assumed by Public pursuant
to Section 1.5 and Section 1.6 hereof shall have been authorized for listing on
Nasdaq, subject to official notice of issuance.
(f) Registration Rights Agreement. Public shall have executed
-----------------------------
and delivered to the Company the Registration Rights Agreement.
(g) Public Indenture; Public Credit Facility. No "Event of
----------------------------------------
Default" (as defined in the Public Indenture and the Public Credit Facility,
respectively) shall have occurred and be continuing under either of the Public
Indenture or the Public Credit Facility.
(h) Public Sprint Agreements. No material default by Public or
------------------------
any of its Subsidiaries shall have occurred and be continuing under the Public
Sprint Agreements.
8.4 Standards. (a) Solely for purposes of Sections 8.2(a) and 8.3(a)
---------
of this Agreement, no representation or warranty of the Company contained in
Article IV (other than the representations and warranties contained in Sections
4.1(a), 4.2, 4.3(a) 4.3(b)(i), 4.5, 4.23 and
64
4.26, which shall be true and correct in all material respects) or of Public
contained in Article V (other than the representations and warranties contained
in Sections 5.1(a), 5.2, 5.3(a), 5.3(c)(i), 5.5 and 5.26, which shall be true
and correct in all material respects) shall be deemed untrue or incorrect as a
consequence of the existence or absence of any fact, circumstance or event
unless such fact, circumstance or event, individually or when taken together
with all other facts, circumstances or events inconsistent with any other
representations or warranties contained in Article IV, in the case of the
Company, or Article V, in the case of Public, has had or is reasonably likely to
have a Material Adverse Effect with respect to the Company or Public,
respectively. For purposes of applying the standard set forth in the previous
sentence pursuant to Section 8.2(a) and 8.3(a), no effect shall be given to any
qualifications contained in any such representations or warranties concerning
"materiality," "in all material respects" or "Material Adverse Effect."
ARTICLE IX
TERMINATION AND AMENDMENT
9.1 Termination. This Agreement may be terminated by action of the
-----------
Board of Directors of the terminating party or parties and the Merger may be
abandoned at any time prior to the Effective Time, whether before or after the
approval by the stockholders of the Company or the approval by the stockholders
of Public of the respective matters referred to in Section 8.1(a):
(a) by mutual written consent of the Company and Public;
(b) by either Public or the Company if the Merger shall not have
been consummated on or before March 1, 2002, unless the failure of the Closing
to occur by such date shall be due to the failure of the party seeking to
terminate this Agreement to perform or observe the covenants and agreements of
such party set forth herein;
(c) by either Public or the Company (provided that the party
seeking to terminate this Agreement shall not be in material breach of any of
its obligations under Section 7.3 hereof) if any approval of the stockholders of
either Public or the Company required for the consummation of the Merger or any
of the other transactions contemplated by this Agreement (including, in the case
of Public, the Required Public Vote) shall not have been obtained by reason of
the failure to obtain the required vote at a duly held meeting of such
stockholders thereof;
(d) by either Public or the Company (provided that the
terminating party is not then in material breach of any representation,
warranty, covenant or other agreement contained herein) if there shall have been
a material breach of any of the representations or warranties set forth in this
Agreement on the part of the other party, which breach is not cured within
thirty days following written notice to the party committing such breach, or
sooner if such breach, by its nature, cannot be cured prior to the Closing;
provided, however, that neither party shall have the right to terminate this
-------- -------
Agreement pursuant to this Section 9.1(d) unless the breach of a representation
or warranty, together with all other such breaches, would entitle the party
receiving such representation not to consummate the transactions contemplated
hereby under
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Section 8.2(a) (in the case of a breach of representation or warranty by the
Company) or Section 8.3(a) (in the case of a breach of representation or
warranty by Public);
(e) by either Public or the Company (provided that the
terminating party is not then in material breach of any representation,
warranty, covenant or other agreement contained herein) if there shall have been
a material breach of any of the material covenants or agreements set forth in
this Agreement on the part of the other party, which breach shall not have been
cured within thirty days following receipt by the breaching party of written
notice of such breach from the other party hereto, or sooner if such breach, by
its nature, cannot be cured prior to the Closing;
(f) by either Public or the Company if any decree, permanent
injunction, judgment, order or other action by any court of competent
jurisdiction or any Governmental Entity preventing or prohibiting consummation
of the Merger shall have become final and nonappealable.
9.2 Effect of Termination. (a) In the event of termination of this
---------------------
Agreement by either Public or the Company as provided in Section 9.1, this
Agreement shall forthwith become void and have no effect except that (i)
Sections 7.2(c), 7.16, 9.2 and 10.3 shall survive any termination of this
Agreement and (ii) notwithstanding anything to the contrary contained in this
Agreement, no party shall be relieved or released from any liabilities or
damages arising out of its willful breach of any provision of this Agreement.
(b) If this Agreement is terminated by the Company as a result
of the failure to obtain the Required Public Vote pursuant to Section 9.1(c),
(i) Public shall pay to the Company a termination fee which consists of 257,000
shares of Public Common Stock (the "Termination Fee Shares"), which shares shall
be issued to the Company as soon as practicable but in no event later than two
Business Days after the date of such termination and shall be exclusive of any
expenses to be paid by Public pursuant to Section 7.16 and (ii) as soon as
practicable following the issuance of the Termination Fee Shares, Public shall
file a shelf registration statement providing for the registration and
reoffering of the Termination Fee Shares by the Company.
(c) The payment of a termination fee by Public pursuant to this
Section 9.2 shall be the sole and exclusive remedy of the Company, its
Subsidiaries and their respective stockholders, directors, officers, employees,
agents, advisors or other representatives with respect to the occurrence giving
rise to such payment; provided that this limitation shall not apply in the event
--------
of a willful breach of this Agreement by Public.
9.3 Amendment. Subject to compliance with applicable law, this
---------
Agreement may be amended by the parties hereto, by action taken or authorized by
their respective Boards of Directors, if applicable, at any time before or after
the approval by the stockholders of the Company or the approval by the
stockholders of Public of the respective matters referred to in Section 8.1(a);
provided, however, that after any such approval by the stockholders of the
-------- -------
Company or by the stockholders of Public, there may not be, without further
approval of such stockholders, any amendment or change to the provisions hereof
which by law or in accordance with the rules of any relevant stock exchange
required further approval by such stockholders.
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This Agreement may not be amended except by an instrument in writing signed on
behalf of each of the parties hereto.
9.4 Extension; Waiver. At any time prior to the Effective Time,
----------------
Public, on the one hand, and the Company, on the other hand, by action taken or
authorized by its respective Board of Directors, may, to the extent legally
allowed, (a) extend the time for the performance of any of the obligations or
other acts of the Company, on the one hand, and Public or Merger Sub, on the
other hand, (b) waive any inaccuracies in the representations and warranties of
the Company, on one hand, and Public or Merger Sub, on the other hand, contained
herein or in any document delivered pursuant hereto and (c) waive compliance by
the Company, on the one hand, and Public or Merger Sub, on the other hand, with
any of its agreements contained herein, or waive compliance with any of the
conditions to its obligations hereunder. Any agreement on the part of a party
hereto to any such extension or waiver shall be valid only if set forth in a
written instrument signed on behalf of such party, but such extension or waiver
or failure to insist on strict compliance with an obligation, covenant,
agreement or condition shall not operate as a waiver of, or estoppel with
respect to, any subsequent or other failure.
ARTICLE X
GENERAL PROVISIONS
10.1 No Survival of Representations and Warranties. None of the
---------------------------------------------
representations, warranties, covenants and agreements in this Agreement or in
any instrument delivered pursuant to this Agreement shall survive the Effective
Time, except for those covenants and agreements contained herein and therein
which by their terms are to be performed in whole or in part after the Effective
Time.
10.2 Closing. Subject to the terms and conditions of this
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Agreement, the closing of the Merger (the "Closing") will take place at 10:00
a.m. no later than three Business Days after the satisfaction or waiver
(subject to applicable law) of the latest to occur of the conditions set forth
in Article IX hereof (other than those conditions which relate to actions to be
taken at the Closing) (the "Closing Date"), at the offices of Winston & Xxxxxx,
00 Xxxx Xxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx 00000, unless another time, date or
place is agreed to in writing by the parties hereto.
10.3 Notices. All notices and other communications hereunder
-------
shall be in writing and shall be deemed given if delivered personally,
telecopied (with confirmation), mailed by registered or certified mail (return
receipt requested) or delivered by an express courier (with confirmation) to the
parties at the following addresses (or at such other address for a party as
shall be specified by like notice):
(a) if to Public or Merger Sub, to:
AirGate PCS, Inc.
Xxxxxx Tower
000 Xxxxxxxxx Xxxxxx XX, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
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Attention: Xxxxxxx X. Xxxxxxxxx
with a copy to:
Winston & Xxxxxx
00 Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxx
R. Xxxxxxx Xxxxxx, Xx.
and
(b) if to the Company, to:
iPCS, Inc.
0000 Xxxx Xxxx Xxxx
Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxx
Xxxxxxxx X. Xxxxxxx, Xx.
with a copy to:
Xxxxx, Xxxxx & Xxxxx
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxx X. Xxxxxx
Xxxxxx X. Wild
10.4 Interpretation, Certain Definitions. When a reference is
-----------------------------------
made in this Agreement to Sections, Exhibits or Schedules, such reference shall
be to a Section of or Exhibit or Schedule to this Agreement unless otherwise
indicated. The table of contents and headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. 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 phrases "the date of this Agreement", "the
date hereof" and terms of similar import, unless the context otherwise requires,
shall be deemed to refer to August 28, 2001.
For purposes of this Agreement, except as otherwise expressly
provided:
(a) "Affiliate" shall have the meaning set forth in Rule 12b-2
promulgated under the Exchange Act.
(b) "Associate" shall have the meaning set forth in Rule 12b-2
promulgated under the Exchange Act.
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(c) "Business Day" means any day other than a day on which banks
in the State of New York are authorized or obligated to be closed.
(d) "Material Adverse Effect" means, with respect to any Person,
a material adverse effect on (i) the business, assets, properties, liabilities,
working capital, cash flows, results of operations or financial condition of
such Person and its Subsidiaries taken as a whole, or (ii) the ability of such
Person and its Subsidiaries to consummate the transactions contemplated hereby
or to perform its obligations hereunder; provided, however, that "Material
-------- -------
Adverse Effect" shall not be deemed to include the impact of (A) actions and
omissions of such Person or any of its Subsidiaries taken with the prior written
informed consent of the other Person in contemplation of the transactions
contemplated hereby, (B) conditions or effects resulting from the announcement
of the existence of this Agreement and the direct effects of compliance with
Sections 6.1 or 6.2 of this Agreement on the operating performance of such
Person, including expenses incurred in consummating the transactions
contemplated hereby; or (C) changes in program requirements implemented by
Sprint PCS which are generally applicable to Sprint PCS Affiliates; or (D)
changes in laws of general applicability or interpretations thereof by courts or
governmental authorities or changes in GAAP, except to the extent any such
change adversely affects the referenced Person to a materially greater degree
than other companies engaged in the same industry or business are affected
generally.
(e) "Person" means a natural person, partnership, corporation,
limited liability company, business trust, joint stock company, trust,
unincorporated association, joint venture, Governmental Entity or other entity
or organization.
(f) "Subsidiary" means, with respect to any Person, any
corporation or other organization, whether incorporated or unincorporated, of
which (i) such Person or any other Subsidiary of such Person is a general
partner or (ii) at least a majority of the securities or other interests having
by their terms ordinary voting power to elect a majority of the board of
directors or others performing similar functions with respect to such
corporation or other organization is, directly or indirectly, owned or
controlled by such Person or by any one or more of its Subsidiaries, or by such
Person and any one or more of its Subsidiaries.
10.5 Counterparts. This Agreement may be executed in counterparts,
------------
all of which shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each of the parties and
delivered to the other parties, it being understood that all parties need not
sign the same counterpart.
10.6 Entire Agreement. This Agreement (including the documents and
----------------
the instruments referred to herein) constitutes the entire agreement and
supersedes all prior agreements and understandings, both written and oral, among
the parties with respect to the subject matter hereof.
10.7 Governing Law and Venue. This Agreement shall be governed and
-----------------------
construed in accordance with the laws of the State of Delaware, without regard
to any applicable conflict of law principles. The parties hereby irrevocably and
unconditionally consent to submit to the exclusive jurisdiction of the courts of
the State of Delaware and of the United States of America located in Wilmington,
Delaware (the "Delaware Courts"), and consent to service of
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process served in accordance with the notice provisions set forth in Section
10.3, for any litigation arising out of or relating to this Agreement (and agree
not to commence any litigation relating thereto except in such Delaware Courts),
waive any objection to the laying of venue of any such litigation in the
Delaware Courts and agree not to plead or claim in any Delaware Court that such
litigation brought therein has been brought in an inconvenient forum.
10.8 Enforcement of Agreement. The parties hereto agree that
------------------------
irreparable damage would occur in the event that the provisions of this
Agreement were not performed in accordance with their specific terms or was
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 thereof 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.
10.9 Severability. Any term or provision of this Agreement
------------
which is invalid or unenforceable in any jurisdiction shall, as to that
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement or affecting the validity or enforceability of
any of the terms or provisions of this Agreement in any other jurisdiction. If
any provision of this Agreement is so broad as to be unenforceable, the
provision shall be interpreted to be only so broad as is enforceable.
10.10 Publicity, etc. Except as otherwise required by law or by
--------------
the rules of Nasdaq, so long as this Agreement is in effect, neither Public nor
the Company shall, or shall permit any of its Subsidiaries to, issue or cause
the publication of any press release or other public announcement with respect
to, or otherwise make any public statement concerning, the transactions
contemplated by this Agreement without the consent of the other party, which
consent shall not be unreasonably withheld. In the event that Public desires to
effect an amendment to the Company Credit Facility prior to the Effective Time,
the Company agrees to cooperate in any such effort, it being understood that any
such amendment shall not be a condition to either party's obligations to
consummate the Merger, and such effort shall not be undertaken in conjunction
with obtaining a consent to the Merger under the Company Credit Facility.
10.11 Assignment. Except as otherwise provided herein, neither
----------
this Agreement nor any of the rights, interests or obligations hereunder shall
be assigned by any of the parties hereto (whether by operation of law or
otherwise) without the prior written consent of the other parties. Subject to
the preceding sentence, this Agreement will be binding upon, inure to the
benefit of and be enforceable by the parties and their respective successors and
assigns.
10.12 No Third Party Beneficiaries. Except as provided in
----------------------------
Sections 1.4, 1.5, 1.6, 2.1, 7.1, 7.6, 7.13, 7.14, 7.17 and 7.21, this Agreement
is not intended to confer upon any Person other than the parties to this
Agreement any rights or remedies under this Agreement.
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IN WITNESS WHEREOF, Public and the Company have caused this Agreement
to be executed by their respective officers thereunto duly authorized as of the
date first above written.
AIRGATE PCS, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
Name: Xxxxxx X. Xxxxxxxxx
Title: President and Chief Executive Officer
iPCS, INC.
By: /s/ Xxxxxxx X. Xxxxx
Name: Xxxxxxx X. Xxxxx
Title: President and Chief Executive Officer
