Exhibit 99.1
AGREEMENT AND PLAN OF MERGER
By and Among
AT&T WIRELESS SERVICES, INC.,
CINGULAR WIRELESS CORPORATION,
CINGULAR WIRELESS LLC
and
LINKS I CORPORATION
and, solely with respect to Sections 5.3, 6.1(b), 6.5(b) and Article IX
of the Agreement and Plan of Merger,
SBC COMMUNICATIONS INC.
and
BELLSOUTH CORPORATION
Dated as of February 17, 2004
TABLE OF CONTENTS
PAGE
ARTICLE I The Merger; Closing; Effective Time....................................... 1
1.1. The Merger................................................................... 1
1.2. Closing...................................................................... 2
1.3. Effective Time............................................................... 2
ARTICLE II Certificate of Incorporation and By-Laws of the Surviving Corporation.... 2
2.1. The Certificate of Incorporation............................................. 2
2.2. The By-Laws.................................................................. 2
ARTICLE III Officers and Directors of the Surviving Corporation..................... 2
3.1. Directors.................................................................... 2
3.2. Officers..................................................................... 3
ARTICLE IV Effect of the Merger on Capital Stock; Exchange of Certificates.......... 3
4.1. Effect on Capital Stock...................................................... 3
4.2. Exchange of Certificates for Shares.......................................... 4
4.3. Dissenters' Rights........................................................... 6
4.4. Adjustments to Prevent Dilution.............................................. 6
4.5. Treatment of Company Options/Other Equity Awards............................. 6
4.6. Treatment of DoCoMo Warrant.................................................. 7
ARTICLE V Representations and Warranties............................................ 8
5.1. Representations and Warranties of the Company................................ 8
5.2. Representations and Warranties of Cingular and Merger Sub.................... 28
5.3. Representations and Warranties of SBC and BellSouth.......................... 31
ARTICLE VI Covenants 33
6.1. Interim Operations........................................................... 33
6.2. Acquisition Proposals........................................................ 38
6.3. Information Supplied......................................................... 39
6.4. Stockholders Meeting......................................................... 40
6.5. Filings; Other Actions; Notification......................................... 40
6.6. Access....................................................................... 42
6.7. Consent/Tender Offers........................................................ 43
6.8. Employee Benefits............................................................ 44
6.9. Indemnification; Directors' and Officers' Insurance.......................... 46
6.10. Other Actions by the Company................................................. 48
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PAGE
ARTICLE VII Conditions.............................................................. 50
7.1. Conditions to the Obligations of the Company, Cingular and Merger Sub to
Effect the Merger........................................................... 50
7.2. Conditions to Obligations of Cingular and Merger Sub......................... 51
7.3. Conditions to Obligation of the Company...................................... 53
ARTICLE VIII Termination............................................................ 53
8.1. Termination by Mutual Consent................................................ 53
8.2. Termination by Either Cingular or the Company................................ 53
8.3. Termination by the Company................................................... 54
8.4. Termination by Cingular...................................................... 54
8.5. Effect of Termination and Abandonment........................................ 55
ARTICLE IX Miscellaneous and General................................................ 56
9.1. Survival..................................................................... 56
9.2. Modification or Amendment.................................................... 56
9.3. Waiver of Conditions......................................................... 56
9.4. Counterparts................................................................. 56
9.5. GOVERNING LAW AND VENUE; WAIVER OF JURY TRIAL................................ 56
9.6. Notices...................................................................... 57
9.7. Entire Agreement; NO OTHER REPRESENTATIONS................................... 59
9.8. No Third Party Beneficiaries................................................. 59
9.9. Obligations of Cingular and of the Company................................... 60
9.10. Definitions.................................................................. 60
9.11. Severability................................................................. 60
9.12. Interpretation; Construction................................................. 60
9.13. Guarantee; Breach............................................................ 61
9.14. Publicity.................................................................... 61
9.15. Expenses..................................................................... 61
9.16. Assignment................................................................... 61
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (hereinafter called this "Agreement"),
dated as of February 17, 2004, by and among AT&T Wireless Services, Inc., a
Delaware corporation (the "Company"), Cingular Wireless Corporation, a Delaware
corporation ("Cingular"), Cingular Wireless LLC, a Delaware limited liability
company ("Cingular Wireless"), and Links I Corporation, a Delaware corporation
and a wholly-owned Subsidiary of Cingular ("Merger Sub", the Company and Merger
Sub sometimes being hereinafter collectively referred to as the "Constituent
Corporations") and, solely with respect to Sections 5.3, 6.1(b), 6.5(b) and
Article IX of this Agreement, SBC Communications Inc., a Delaware corporation
("SBC") and BellSouth Corporation, a Georgia corporation ("BellSouth").
RECITALS
WHEREAS, the board of directors ("Board of Directors") of each of
Cingular, Merger Sub and the Company has determined that the merger of Merger
Sub with and into the Company (the "Merger") upon the terms and subject to the
conditions set forth in this Agreement is advisable and by resolutions duly
adopted, has approved and adopted this Agreement; and
WHEREAS, the Company, Cingular Wireless, Cingular, Merger Sub, SBC
and BellSouth desire to make those representations, warranties, covenants and
agreements specified herein in connection with this Agreement.
NOW, THEREFORE, in consideration of the premises, and of the
representations, warranties, covenants and agreements contained herein,
Cingular, Cingular Wireless, Merger Sub, the Company and, solely with respect to
Sections 5.3, 6.1(b), 6.5(b) and Article IX of this Agreement, SBC and BellSouth
agree as follows:
ARTICLE I
The Merger; Closing; Effective Time
1.1. The Merger. Upon the terms and subject to the conditions set
forth in this Agreement, at the Effective Time, Merger Sub shall be merged with
and into the Company and the separate corporate existence of Merger Sub shall
thereupon cease. The Company shall be the surviving corporation in the Merger
(sometimes hereinafter referred to as the "Surviving Corporation"), and the
separate corporate existence of the Company with all its rights, privileges,
immunities, powers and franchises shall continue unaffected by the Merger,
except as set forth in Article II of this Agreement. The Merger
shall have the effects specified in the Delaware General Corporation Law, as
amended (the "DGCL").
1.2. Closing. Unless otherwise mutually agreed in writing between
the Company and Cingular, the closing for the Merger (the "Closing") shall take
place (i) at the offices of Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx LLP, Xxx
Xxx Xxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, at 9:00 A.M. local time on the fifth
business day (the "Closing Date") following the day on which the last to be
satisfied or waived of the conditions set forth in Article VII (other than those
conditions that by their nature are to be satisfied at the Closing, but subject
to the satisfaction or waiver of those conditions) shall be satisfied or waived
in accordance with this Agreement.
1.3. Effective Time. As soon as practicable following the Closing,
the Company and Cingular will cause a Certificate of Merger (the "Delaware
Certificate of Merger") to be executed, acknowledged and filed with the
Secretary of State of the State of Delaware as provided in Section 251 of the
DGCL. The Merger shall become effective at the time when the Delaware
Certificate of Merger has been duly filed with the Secretary of State of the
State of Delaware or at such later time as may be agreed by the parties in
writing and specified in the Delaware Certificate of Merger (the "Effective
Time").
ARTICLE II
Certificate of Incorporation and By-Laws
of the Surviving Corporation
2.1. The Certificate of Incorporation. At the Effective Time, the
certificate of incorporation of the Surviving Corporation (the "Charter") shall
be amended in its entirety to read as set forth in Exhibit A hereto, until
thereafter amended as provided therein or by applicable Law.
2.2. The By-Laws. The by-laws of Merger Sub in effect at the
Effective Time shall be the by-laws of the Surviving Corporation (the
"By-Laws"), until thereafter amended as provided therein or by applicable Law.
ARTICLE III
Officers and Directors
of the Surviving Corporation
3.1. Directors. The directors of Merger Sub at the Effective Time
shall, from and after the Effective Time, be the directors of the Surviving
Corporation until their successors have been duly elected or appointed and
qualified or until their earlier death, resignation or removal in accordance
with the Charter and the By-Laws.
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3.2. Officers. The officers of Merger Sub at the Effective Time
shall, from and after the Effective Time, be the officers of the Surviving
Corporation until their successors have been duly elected or appointed and
qualified or until their earlier death, resignation or removal in accordance
with the Charter and the By-Laws.
ARTICLE IV
Effect of the Merger on Capital Stock;
Exchange of Certificates
4.1. Effect on Capital Stock. At the Effective Time, as a result of
the Merger and without any action on the part of the holder of any capital stock
of the Company:
(a) Merger Consideration. Each share of the Common Stock, par value
$0.01 per share, of the Company (the "Common Stock") issued and outstanding
immediately prior to the Effective Time (other than shares of Common Stock (i)
owned by Cingular or any direct or indirect Subsidiary of Cingular
(collectively, the "Cingular Companies"), (ii) owned by the Company or any
direct or indirect Subsidiary of the Company, except, in the case of each of
clauses (i) and (ii), for any such shares held on behalf of third parties, or
(iii) shares of Common Stock (the "Dissenting Common Shares") that are owned by
stockholders (the "Dissenting Common Stockholders") properly exercising
appraisal rights pursuant to Section 262 of the DGCL (each, an "Excluded Common
Share" and collectively, "Excluded Common Shares")) shall be converted into the
right to receive $15.00 in cash (the "Common Stock Merger Consideration"). At
the Effective Time, all shares of Common Stock shall no longer be outstanding
and shares of Common Stock shall be cancelled and retired and shall cease to
exist, and each certificate (a "Common Stock Certificate") formerly
representing any such shares of Common Stock (other than Excluded Common
Shares) shall thereafter represent only the right to the Common Stock Merger
Consideration and any Dissenting Common Shares shall thereafter represent only
the right to receive the applicable payments set forth in Section 4.3.
(b) Preferred Stock. At the Effective Time, each share of Series C
preferred stock, par value $0.01 per share, of the Company (the "Series C
Preferred Stock") and each share of Series E preferred stock, par value $0.01
per share, of the Company (the "Series E Preferred Stock" and together with the
Series C Preferred Stock, the "Preferred Stock"; and the Preferred Stock
together with the Common Stock, the "Shares"), issued and outstanding
immediately prior to the Effective Time other than
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shares of Preferred Stock (the "Dissenting Preferred Shares" and together with
Dissenting Common Shares, "Dissenting Shares") that are held by stockholders
(the "Dissenting Preferred Stockholders" and together with the Dissenting Common
Stockholders, the "Dissenting Stockholders") properly exercising appraisal
rights pursuant to Section 262 of the DGCL (together with the Excluded Common
Shares, the "Excluded Shares") shall be converted into the right to receive an
amount in cash equal to the Liquidation Preference (as defined in the Company's
certificate of incorporation) as of immediately prior to the Effective Time for
such share of Series C Preferred Stock or Series E Preferred Stock, as
applicable (the "Preferred Stock Merger Consideration", together with the Common
Stock Merger Consideration, the "Merger Consideration"). At the Effective Time,
all shares of Preferred Stock shall no longer be outstanding and shares of
Preferred Stock shall be cancelled and retired and shall cease to exist, and
each certificate (a "Preferred Stock Certificate" and together with the Common
Stock Certificates, the "Certificates") formerly representing any such shares of
Preferred Stock (other than Excluded Shares) shall thereafter represent only the
right to receive the Preferred Stock Merger Consideration and any Dissenting
Preferred Shares shall thereafter represent only the right to receive the
applicable payments set forth in Section 4.3.
(c) Cancellation of Shares. Each Share issued and outstanding
immediately prior to the Effective Time and owned by any of the Cingular
Companies or owned by the Company or any direct or indirect Subsidiary of the
Company (in each case, other than such Shares that are held on behalf of third
parties) shall, by virtue of the Merger and without any action on the part of
the holder thereof, cease to be outstanding, shall be cancelled and retired
without payment of any consideration therefor and shall cease to exist.
(d) Merger Sub. At the Effective Time, each share of common stock,
par value $0.01 per share, of Merger Sub issued and outstanding immediately
prior to the Effective Time shall be converted into one share of common stock,
par value $0.01 per share, of the Surviving Corporation.
4.2. Exchange of Certificates for Shares.
(a) Paying Agent. As of the Effective Time, Cingular shall deposit,
or shall cause to be deposited, with a paying agent appointed by Cingular and
approved in advance by the Company (such approval not to be unreasonably
withheld or delayed) (the "Paying Agent"), for the benefit of the holders of
Shares, cash sufficient to pay the aggregate Merger Consideration in exchange
for Shares outstanding immediately prior to the Effective Time (other than
Excluded Shares), deliverable upon due surrender of the Certificates (or
effective affidavits of loss in lieu thereof) pursuant to the provisions of this
Article IV (such cash being hereinafter referred to as the "Exchange Fund").
(b) Payment Procedures. Promptly after the Effective Time (and in
any event no later than five business days after the Effective Time), the
Surviving
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Corporation shall cause the Paying Agent to mail to each holder of record of
Shares (i) a letter of transmittal specifying that delivery shall be effected,
and risk of loss and title to Certificates shall pass, only upon delivery of
Certificates (or effective affidavits of loss in lieu thereof) to the Paying
Agent and (ii) instructions for use in effecting the surrender of the
Certificates (or effective affidavits of loss in lieu thereof) in exchange for
the Common Stock Merger Consideration or Preferred Stock Merger Consideration,
as the case may be. Upon the surrender of a Certificate (or effective affidavit
of loss in lieu thereof) to the Paying Agent in accordance with the terms of
such letter of transmittal, duly executed, the holder of such Certificate shall
be entitled to receive in exchange therefor a check in the amount (after giving
effect to any required tax withholdings) of (x) the number of Shares represented
by such Certificate (or effective affidavit of loss in lieu thereof) multiplied
by (y) the Common Stock Merger Consideration or Preferred Stock Merger
Consideration, as the case may be, and the Certificate so surrendered shall
forthwith be cancelled. No interest will be paid or accrued on any amount
payable upon due surrender of the Certificates. In the event of a transfer of
ownership of Shares that is not registered in the transfer records of the
Company, a check for any cash to be paid upon due surrender of the Certificate
may be paid to such a transferee if the Certificate formerly representing such
Shares is presented to the Paying Agent, accompanied by all documents required
to evidence and effect such transfer and to evidence that any applicable stock
transfer taxes have been paid or are not applicable.
(c) Transfers. At or after the Effective Time, there shall be no
transfers on the stock transfer books of the Company of the Shares that were
outstanding immediately prior to the Effective Time. If, after the Effective
Time, Certificates are presented to the Surviving Corporation or Cingular for
transfer, they shall be cancelled and exchanged for a check in the proper amount
pursuant to this Article IV.
(d) Termination of Exchange Fund. Any portion of the Exchange Fund
(including the proceeds of any investments thereof) that remains unclaimed by
the stockholders of the Company for 180 days after the Effective Time shall be
delivered to the Surviving Corporation. Any holders of Shares (other than
Excluded Shares) who have not theretofore complied with this Article IV shall
thereafter look only to the Surviving Corporation for payment of (after giving
effect to any required tax withholdings) the Common Stock Merger Consideration
or the Preferred Stock Merger Consideration, as the case may be, upon due
surrender of their Certificates (or effective affidavits of loss in lieu
thereof), without any interest thereon. Notwithstanding the foregoing, none of
Cingular, Merger Sub, the Company, the Surviving Corporation, the Paying Agent
or any other Person shall be liable to any former holder of Shares for any
amount properly delivered to a public official pursuant to applicable abandoned
property, escheat or similar Laws. For the purposes of this Agreement, the term
"Person" shall mean any individual, corporation (including not-for-profit),
general or limited partnership, limited liability company, joint venture,
estate, trust, association, organization, Governmental Entity or other entity of
any kind or nature.
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(e) Lost, Stolen or Destroyed Certificates. In the event 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 the posting by such Person of a bond in customary amount
and upon such terms as may be required by Cingular as indemnity against any
claim that may be made against it with respect to such Certificate, the Paying
Agent will issue a check in the amount (after giving effect to any required tax
withholdings) of the number of Shares represented by such lost, stolen or
destroyed Certificate multiplied by the applicable Merger Consideration upon due
surrender of such lost, stolen or destroyed Certificate being surrendered. Any
affidavit of loss presented pursuant to this Article IV, to be deemed effective,
must be in form and substance reasonably satisfactory to the Surviving
Corporation.
4.3. Dissenters' Rights. Any Person who otherwise would be deemed a
Dissenting Stockholder shall not be entitled to receive the applicable Merger
Consideration with respect to the Shares owned by such Person unless and until
such Person shall have failed to perfect or shall have effectively withdrawn or
lost such holder's right to dissent from the Merger under the DGCL. Each
Dissenting Stockholder shall be entitled to receive only the payment provided by
Section 262 of the DGCL with respect to shares of Common Stock or Preferred
Stock owned by such Dissenting Stockholder. The Company shall give Cingular (i)
prompt notice of any written demands for appraisal, attempted withdrawals of
such demands, and any other instruments served pursuant to applicable Law
received by the Company relating to stockholders' rights of appraisal and (ii)
the opportunity to direct all negotiations and proceedings with respect to
demand for appraisal under the DGCL. The Company shall not, except with the
prior written consent of Cingular, voluntarily make any payment with respect to
any demands for appraisals of Dissenting Shares, offer to settle or settle any
such demands or approve any withdrawal of any such demands.
4.4. Adjustments to Prevent Dilution. In the event that the Company
changes the number of Shares, or securities convertible or exchangeable into or
exercisable for Shares, issued and outstanding prior to the Effective Time as a
result of a reclassification, stock split (including a reverse stock split),
stock dividend or distribution, recapitalization, merger, subdivision, issuer
tender or exchange offer, or other similar transaction, the Common Stock Merger
Consideration or the Preferred Stock Merger Consideration, as the case may be,
shall be equitably adjusted to reflect such change.
4.5. Treatment of Company Options/Other Equity Awards. (a)
Immediately prior to the Effective Time, each Company Option then outstanding
shall become fully vested and shall be converted into the right to receive, upon
the exercise thereof, an amount in cash (without interest) equal to the Common
Stock Merger Consideration multiplied by each share of Common Stock subject to
the portion of the Company Option so exercised. Each outstanding Company Option
so converted shall, immediately following such conversion, be cancelled and the
holder thereof shall be entitled to receive, as soon as practicable thereafter,
an amount of cash (without interest)
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equal to the product of (x) the total number of shares of Common Stock subject
to such Company Option multiplied by (y) the excess, if any, of the amount of
the Common Stock Merger Consideration over the exercise price per share of
Common Stock under such Company Option (with the aggregate amount of such
payment rounded to the nearest cent) less applicable Taxes, if any, required to
be withheld with respect to such payment.
(b) Immediately prior to the Effective Time, each outstanding
restricted stock unit (including outstanding restricted stock units resulting
from the conversion of performance shares and deferred stock units) shall become
fully vested and shall entitle the holder thereof to receive, as soon as
practicable thereafter, an amount in cash (without interest) equal to the Common
Stock Merger Consideration, subject to any deferral election in effect
immediately prior to the Effective Time made by such holder under the Company's
deferred compensation plans, less applicable Taxes, if any, required to be
withheld with respect to such payment.
(c) If the Effective Time occurs prior to the date on which awards
granted under the Company's performance share program are converted into
restricted stock units, such awards shall, subject to Section 6.1(a)(xvii) of
the Company Disclosure Letter, be paid to the holders thereof promptly following
the Effective Time based upon the satisfaction of the performance goals
applicable thereto immediately prior to the Effective Time (as determined by the
compensation committee of the Board of Directors of the Company as in effect
immediately prior to the Effective Time), and, if less than a full year,
annualized for the full year.
(d) The compensation committee of the Board of Directors of the
Company shall make such adjustments and amendments to or make such
determinations with respect to the Company Options, restricted stock units and
performance share awards to implement the foregoing provisions of this Section
4.5.
4.6. Treatment of DoCoMo Warrant. At the Effective Time, the warrant
to purchase Common Stock issued pursuant to the Warrant Agreement, dated as of
December 20, 2000 (the "DoCoMo Warrant Agreement"), by and among the Company,
NTT DoCoMo, Inc., a corporation organized under the laws of Japan ("DoCoMo") and
AT&T Corp., a New York corporation ("Former Parent") shall only entitle the
holder thereof to receive upon exercise thereof and payment of the exercise
price in respect thereof, an amount in cash equal to (x) the number of shares of
Common Stock as to which the warrant would be exercisable for at the Effective
Time multiplied by (y) the Common Stock Merger Consideration. Cingular agrees to
honor, and to cause the Surviving Corporation to honor, the obligations of the
Company and/or any other party (other than the holder of the Warrant) pursuant
to Section 4.3 of the DoCoMo Warrant Agreement.
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ARTICLE V
Representations and Warranties
5.1. Representations and Warranties of the Company. Except as set
forth in the disclosure letter (subject to Section 9.12(c) of this Agreement)
delivered to Cingular by the Company at the time of entering into this Agreement
(the "Company Disclosure Letter") or, to the extent the qualifying nature of
such disclosure is readily apparent therefrom, as set forth in the Company
Reports filed on or after January 1, 2003 and prior to the date hereof
(excluding the disclosures in "Additional Factors That May Affect Our Business,
Future Operating Results, and Financial Condition" and "Forward-Looking
Statements" sections of any such Company Report and any other disclosures
included in any such Company Report which are predictive or forward-looking in
nature), the Company hereby represents and warrants to Cingular and Merger Sub
that:
(a) Organization, Good Standing and Qualification. Each of the
Company and its Subsidiaries is a legal entity duly organized, validly existing
and in good standing under the Laws of its respective jurisdiction of
organization and has all requisite corporate or similar power and authority to
own, lease and operate its properties and assets and to carry on its business as
presently conducted and is qualified to do business and is in good standing as a
foreign corporation in each jurisdiction where the ownership, leasing or
operation of its assets or properties or conduct of its business requires such
qualification, except where the failure to be so organized, qualified or in good
standing, or to have such power or authority, would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. The Company
has made available to Cingular prior to the date of this Agreement a true and
complete copy of the Company's certificate of incorporation and by-laws, each as
amended through the date hereof.
As used in this Agreement, the term (i) "Subsidiary" means, with
respect to any Person, any other Person, whether incorporated or unincorporated,
of which at least a majority of the securities or ownership interests having by
their terms voting power to elect a majority of the board of directors or other
Persons performing similar functions is directly or indirectly owned or
controlled by such Person or by one or more of its respective Subsidiaries (it
being agreed that, with respect to Cingular, such term shall include Cingular
Wireless and its Subsidiaries), (ii) "Material Adverse Effect" means (x) a
material adverse effect on the financial condition, properties, assets,
liabilities, business or results of operations of the Company and its
Subsidiaries, taken as a whole, excluding any such effect resulting from or
arising in connection with (A) changes or conditions generally affecting the
U.S. mobile wireless voice and data industry or (B) changes or conditions
generally affecting the U.S. economy or financial markets or (y) an effect that
would prevent, materially delay or materially impair the ability of the Company
to consummate the Merger and the transactions contemplated by this Agreement,
and (iii) "Affiliate" means, with respect to any Person, another Person that
directly or indirectly controls, is controlled by, or is under common control
with,
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such first Person, where "control" means the possession, directly or indirectly,
of the power to direct or cause the direction of the management policies of a
Person, whether through the ownership of voting securities, by contract, as
trustee or executor, or otherwise (it being agreed that none of DoCoMo or any of
its Affiliates (other than the Company and its Subsidiaries) shall be considered
an Affiliate of the Company, its Subsidiaries or any of their respective other
Affiliates so long as such Persons' ownership interest in the Company does not
increase to over 18% of the outstanding shares of Common Stock after the date
hereof).
(b) Capital Structure. (i) The authorized capital stock of the
Company consists of 10,000,000,000 shares of Common Stock, of which, as of
January 31, 2004, 2,719,301,543 shares are outstanding, and 1,000,000,000 shares
of Preferred Stock, par value $.01 per share, of which, as of the date of this
Agreement, 207,537 shares of Series C Preferred Stock and 25,428 shares of
Series E Preferred Stock are outstanding. All of the outstanding Shares have
been duly authorized and are validly issued, fully paid and nonassessable. The
Company has no Shares reserved for issuance, except that, as of January 31,
2004, there were 230,079,174 shares issuable pursuant to outstanding awards
under the Company's Amended and Restated Long Term Incentive Plan and the
Company Adjustment Plan (the "Stock Plans"), 41,748,273 shares of Common Stock
reserved for issuance pursuant to the DoCoMo Warrant Agreement and 50,000,000
shares of Series A Preferred Stock reserved for issuance pursuant to the Amended
and Restated Rights Agreement, dated as of September 1, 2002, between the
Company and Mellon Investor Services LLC, as Rights Agent, as amended as
described in this Agreement (the "Rights Agreement"). A true and complete copy
of the Rights Agreement as in effect as of the date of this Agreement has been
made available to Cingular. Section 5.1(b) of the Company Disclosure Letter
contains a true and complete list as of January 31, 2004 of (I) the number of
outstanding options to purchase shares of Common Stock which the Company is
obligated to honor, whether through the issuance of shares of Common Stock or
otherwise, including those issued under the Stock Plans (each, a "Company
Option"), the exercise price of all Company Options and number of shares of
Common Stock issuable at such exercise price and (II) the number of outstanding
rights, including those issued under the Stock Plans, to receive, or right the
value of which is determined by reference to, shares of Common Stock, the date
of grant and number of shares of Common Stock subject thereto (including without
limitation restricted stock units) (each a "Common Stock Unit"). From January
31, 2004 to the date hereof the Company has not issued any shares of Common
Stock except pursuant to the exercise of Company Options and the settlement of
Common Stock Units outstanding on January 31, 2004 in accordance with their
terms. From January 31, 2004 through the date of this Agreement, neither the
Company nor any of its Subsidiaries have granted or issued any Company Options
or Common Stock Units. All grants of Common Stock Units and restricted shares
were made under the Stock Plans. Each of the outstanding shares of capital stock
or other securities of each of the Company's Subsidiaries is duly authorized,
validly issued, fully paid and nonassessable and owned by the Company or by a
direct or indirect wholly-owned Subsidiary of the Company, free and clear of any
Lien. As of December 31, 2003, the aggregate Liquidation Preference for the
Series C
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Preferred Stock and Series E Preferred Stock is $291 million and such
Liquidation Preference may vary from time to time only in accordance with the
certificate of incorporation of the Company in effect on the date of this
Agreement. Except as set forth above and pursuant to the Rights Agreement and
the Amended and Restated Investor Agreement, dated as of December 20, 2000, and
amended as of December 26, 2002, between Former Parent, the Company and DoCoMo
(the "DoCoMo Investor Agreement") and the DoCoMo Warrant Agreement, there are no
preemptive or other outstanding rights, options, warrants, conversion rights,
stock appreciation rights, redemption rights, repurchase rights, agreements,
arrangements, calls, commitments or rights of any kind that obligate the Company
or any of its Subsidiaries to issue or sell any shares of capital stock or other
securities of the Company or any of its Subsidiaries or any securities or
obligations convertible or exchangeable into or exercisable for, or giving any
Person a right to subscribe for or acquire, any securities of the Company or any
of its Subsidiaries, and no securities or obligations evidencing such rights are
authorized, issued or outstanding. The Company has made available to Cingular
prior to the date of this Agreement true and complete copies of the Rights
Agreement, the DoCoMo Investor Agreement and the DoCoMo Warrant Agreement, each
as amended.
(ii) Section 5.1(b) of the Company Disclosure Letter sets forth the
name of each Person (other than direct and indirect wholly-owned Subsidiaries)
in which the Company or any of its Subsidiaries owns any equity or similar
interest in or any interest convertible into or exchangeable or exercisable for
any equity or similar interest in, any corporation, partnership, joint venture
or other business as of the date of this Agreement (in each case other than any
such interests that had a carrying value of less than $5 million on the
Company's consolidated balance sheet as of September 30, 2003), that Person's
jurisdiction of incorporation or organization and the percentage of and kind of
interest owned.
(iii) Other than the rights of DoCoMo pursuant to Section 4.3 of the
DoCoMo Investor Agreement, and the rights of DoCoMo pursuant to the DoCoMo
Warrant Agreement, there are no outstanding contractual obligations of the
Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire
any capital stock (or options (other than options issued pursuant to Company
Compensation and Benefits Plans listed on Section 5.1(h)(i) of the Company
Disclosure Letter) to acquire any such capital stock) or other security or
equity interest of the Company or its Subsidiaries. The Company does not have
outstanding any bonds, debentures, notes or other obligations the holders of
which have the right to vote (or convertible into or exercisable for securities
having the right to vote) with the stockholders of the Company on any matter.
Section 5.1(b) of the Company Disclosure Letter contains a true and complete
list of each Person (other than Subsidiaries of the Company) in which the
Company owns, directly or indirectly, any voting interest that may require the
filing of a report or notification form by Cingular or any Affiliate of Cingular
under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the
"HSR Act").
- 10 -
(c) Corporate Authority; Approval and Fairness. (i) The Company has
all requisite corporate power and authority and has taken all corporate action
necessary in order to execute, deliver and perform its obligations under this
Agreement, subject only to adoption of this Agreement by its stockholders by the
Company Requisite Vote, and to consummate the Merger. The affirmative vote of a
majority of the voting power of all of the outstanding Shares, voting together
as one class (with the Common Stock entitled to one vote for each share
outstanding, the Series C Preferred Stock entitled to an aggregate of 1,926,069
votes and the Series E Preferred Stock entitled to an aggregate of 251,189
votes, in each case voting only as part of the same class as the Common Stock)
(such affirmative vote, the "Company Requisite Vote"), is the only vote of the
holders of any class or series of capital stock of the Company necessary to
adopt, approve or authorize this Agreement, the Merger and the other
transactions contemplated hereby in their capacity as stockholders of the
Company. This Agreement is a valid and binding agreement of the Company
enforceable against the Company in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar Laws of general applicability relating to or affecting creditors' rights
and to general equity principles (the "Bankruptcy and Equity Exception").
(ii) The Board of Directors of the Company has (A) by the
affirmative vote of all directors voting, duly approved and declared advisable
this Agreement and the Merger and the other transactions contemplated hereby;
(B) received the opinion of its financial advisors, Xxxxxxx Xxxxx & Co., to the
effect that (i) the Common Stock Merger Consideration to be received by the
holders of Common Stock and (ii) the Preferred Stock Merger Consideration to be
received by the holders of the Preferred Stock, pursuant to the Merger is fair
from a financial point of view to the holders of the Common Stock and to the
holders of the Preferred Stock, respectively, other than Colonial and its
Affiliates; (C) determined that this Agreement and the transactions contemplated
hereby are advisable and in the best interests of the holders of Shares; (D)
resolved to recommend adoption of this Agreement, the Merger and the other
transactions contemplated hereby to the holders of Shares (such recommendations
being the "Directors' Recommendation"); and (E) directed that this Agreement be
submitted to the holders of Shares for their adoption.
(d) Governmental Filings; No Violations; Certain Contracts, Etc. (i)
Other than the reports, filings, registrations, consents, approvals, permits,
authorizations and/or notices (A) pursuant to Section 1.3; (B) under the HSR Act
and the Securities Exchange Act of 1934, as amended (the "Exchange Act"); (C)
required to be made with the New York Stock Exchange (the "NYSE"); (D) with or
to the Federal Communications Commission (the "FCC"); (E) with or to those state
public service or public utility commissions or similar state regulatory bodies
("State Commissions") set forth in Section 5.1(d)(i)(E) of the Company
Disclosure Letter and (F) with or to those foreign Governmental Entities
regulating competition and telecommunications businesses set forth in Section
5.1(d)(i)(F) of the Company Disclosure Letter, no notices, reports or other
filings are required to be made by the Company with, nor are any consents,
registrations, approvals, permits or authorizations required to be obtained by
the
- 11 -
Company from, any governmental or regulatory authority, agency, commission,
body, court or other governmental entity (each a "Governmental Entity"), in
connection with the execution and delivery of this Agreement by the Company and
the consummation by the Company of the Merger and the other transactions
contemplated hereby, except those that the failure to make or obtain would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
(ii) The execution, delivery and performance of this Agreement by
the Company do not, and the consummation by the Company of the Merger and the
other transactions contemplated hereby will not, constitute or result in (A) a
breach or violation of, or a default under, the certificate of incorporation or
by-laws of the Company or the comparable governing instruments of any of its
Subsidiaries; (B) with or without notice, lapse of time or both, a breach or
violation of, a termination (or right of termination) or a default under, the
acceleration of or creation of any obligations or the creation of a lien,
charge, pledge, judgment, claim security interest or other encumbrance (each a
"Lien") on the assets of the Company or any of its Subsidiaries pursuant to, any
agreement, lease, license, contract, note, mortgage, indenture, loan, credit
agreement or arrangement or other obligation (each a "Contract") binding upon
the Company or any of its Subsidiaries or any Laws or governmental or
non-governmental License to which the Company or any of its Subsidiaries is
subject; or (C) any change in the rights or obligations of any party under any
Contracts to which the Company or any of its Subsidiaries is a party (including
without limitation any change in pricing, put or call rights, rights of first
offer, rights of first refusal, tag-along or drag-along rights or any similar
rights or obligations which may be exercised in connection with the Merger and
the other transactions contemplated hereby), except, in the case of clause (B)
or (C) above, for any breach, violation, termination, default, acceleration,
creation or change that would not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect.
(e) Company Reports; Financial Statements. (i) The Company has made
available to Cingular each registration statement, report, proxy statement or
information statement prepared by it since December 31, 2002 (the "Audit Date"),
including (x) the Company's Annual Report on Form 10-K for the year ended
December 31, 2002, and (y) the Company's Quarterly Reports on Form 10-Q for the
periods ended March 31, 2003, June 30, 2003, and September 30, 2003, each in the
form (including exhibits, annexes and any amendments thereto) filed with the
Securities and Exchange Commission (the "SEC"). The Company has filed and
furnished all forms, statements, reports and documents required to be filed or
furnished by it with the SEC pursuant to applicable securities statutes,
regulations, policies and rules since January 1, 2002 (the forms, statements,
reports and documents filed since January 1, 2002, or those filed subsequent to
the date of this Agreement, and as amended, the "Company Reports"). The Company
Reports were prepared in all material respects in accordance with the applicable
requirements of the Securities Act of 1933, as amended (the "Securities Act"),
the Exchange Act and the rules and regulations thereunder and complied in all
material respects with the then applicable accounting standards. As of their
respective dates (and, if amended, as of the date of such amendment) the Company
Reports did not, and any
- 12 -
Company Reports filed with the SEC subsequent to the date of this Agreement will
not, contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements made
therein, in light of the circumstances in which they were made, not misleading.
(ii) Each of the consolidated balance sheets included in or
incorporated by reference into the Company Reports (including the related notes
and schedules) filed prior to the date of this Agreement fairly presents, and,
if filed after the date of this Agreement, will fairly present, the consolidated
financial position of the Company or any other entity included therein and their
respective Subsidiaries, as of its date, and each of the consolidated statements
of operations, cash flows and of changes in shareholders' equity included in or
incorporated by reference into the Company Reports (including any related notes
and schedules) fairly presents, and, if filed after the date of this Agreement,
will fairly present, the results of operations, retained earnings and changes in
financial position, as the case may be, of the Company or any other entity
included therein and their respective Subsidiaries for the periods set forth
therein (subject, in the case of unaudited statements, to notes and normal
year-end audit adjustments that will not be material in amount or effect), in
each case in accordance with U.S. generally accepted accounting principles
("GAAP") consistently applied during the periods involved, except as may be
noted therein.
(iii) The management of the Company has (x) implemented disclosure
controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act) to
ensure that material information relating to the Company, including its
consolidated Subsidiaries, is made known to the management of the Company by
others within those entities, and (y) has disclosed, based on its most recent
evaluation, to the Company's outside auditors and the audit committee of the
Board of Directors of the Company (A) all significant deficiencies and material
weaknesses in the design or operation of internal control over financial
reporting (as defined in Rule 13a-15(f) of the Exchange Act) which are
reasonably likely to adversely affect the Company's ability to record, process,
summarize and report financial data and (B) any fraud, whether or not material,
that involves management or other employees who have a significant role in the
Company's internal control over financial reporting. A summary of any of those
disclosures made by management to the Company's auditors and audit committee is
set forth in Section 5.1(e)(iii) of the Company Disclosure Letter.
(iv) Since July 30, 2002, (x) through the date hereof, neither the
Company nor any of its Subsidiaries nor, to the knowledge of the officers of the
Company, any director, officer, employee, auditor, accountant or representative
of the Company or any of its Subsidiaries has received or otherwise had or
obtained knowledge of any material complaint, allegation, assertion or claim,
whether written or oral, regarding the accounting or auditing practices,
procedures, methodologies or methods of the Company or any of its Subsidiaries
or their respective internal accounting controls, including any material
complaint, allegation, assertion or claim that the Company or any of its
Subsidiaries has engaged in questionable accounting or auditing practices, and
(y)
- 13 -
no attorney representing the Company or any of its Subsidiaries, whether or not
employed by the Company or any of its Subsidiaries, has reported evidence of a
material violation of securities Laws, breach of fiduciary duty or similar
violation by the Company or any of its officers, directors, employees or agents
to the Board of Directors of the Company or any committee thereof or to any
director or officer of the Company.
(f) Absence of Certain Changes. Since September 30, 2003 there has
not been any Material Adverse Effect or any event, occurrence, discovery or
development which would, individually or in the aggregate, reasonably be
expected to have or result in a Material Adverse Effect and since September 30,
2003 and through the date hereof, the Company and its Subsidiaries have
conducted their respective businesses only in, and have not engaged in any
material transaction other than according to, the ordinary course of such
businesses and since September 30, 2003 there has not been:
(i) prior to the date hereof, any merger or consolidation of the
Company or any of its Subsidiaries with any other Person;
(ii) prior to the date hereof, any acquisition of any asset or
assets from any other Person outside the ordinary course of business, other than
acquisitions for a purchase price not in excess of $25,000,000 in any single
transaction or series of related transactions;
(iii) prior to the date hereof, any incurrence of any material Lien
on any asset used in the business of the Company and its Subsidiaries;
(iv) prior to the date hereof, any making of any loan, advance or
capital contribution to, or investment in, any Person other than loans, advances
or capital contributions to, or investments in, wholly-owned Subsidiaries of the
Company and other than any loans, advances, capital contributions, or
investments for an amount not in excess of $15,000,000 in any single transaction
or series of related transactions;
(v) prior to the date hereof, any declaration, setting aside or
payment of any dividend or other distribution with respect to any shares of
capital stock of the Company or any of its Subsidiaries (except for dividends or
other distributions by any direct or indirect wholly-owned Subsidiary to the
Company or any wholly-owned Subsidiary of the Company and except for dividends
or other distributions by non-wholly-owned Subsidiaries of the Company for which
the portion of such dividends or distributions not payable to a direct or
indirect wholly-owned Subsidiary of the Company did not exceed $10,000,000 in
value in the aggregate for all such dividends and distributions), or any
repurchase, redemption or other acquisition by the Company or any of its
Subsidiaries of any outstanding shares of capital stock or other securities of
the Company or any of its Subsidiaries;
(vi) prior to the date hereof, any incurrence of indebtedness for
borrowed money or issuance of any guarantee of indebtedness of another Person by
the Company or any of its Subsidiaries, or issuance or sale of any debt
securities or warrants
- 14 -
or other rights to acquire any debt security of the Company or any of its
Subsidiaries, in the case of any of the foregoing involving an aggregate
principal amount or potential guaranteed amount in excess of $25,000,000;
(vii) prior to the date hereof, any material change in any method of
accounting or accounting practice by the Company or any of its Subsidiaries,
except for any such change required by changes in GAAP;
(viii) prior to the date hereof, (A) any increase in the
compensation payable or to become payable to its officers or employees (except
for increases in the ordinary course of business in salaries or wages of
employees of the Company or any of its Subsidiaries who are not officers of the
Company) or (B) any establishment, adoption, entry into or amendment of any
collective bargaining, bonus, profit sharing, thrift, compensation, employment,
termination, severance or other plan, agreement, trust, fund, policy or
arrangement for the benefit of any director, officer or employee, except to the
extent required by applicable Law;
(ix) prior to the date hereof, any sale, lease, license, or other
disposition of any of the assets of the Company or its Subsidiaries except for
ordinary course sales of mobile telephone equipment to customers of the Company,
sales of obsolete assets and sales, leases, licenses or other dispositions for a
purchase price or assets with a fair market value not in excess of $25,000,000
in any single transaction or series of related transactions; or
(x) prior to the date hereof, any agreement to do any of the
foregoing.
(g) Litigation and Liabilities. (i) There are no (A) civil, criminal
or administrative actions, suits, claims, hearings, investigations or
proceedings pending or, to the knowledge of the officers of the Company,
threatened against the Company or any of its Subsidiaries or Affiliates, or (B)
litigations, arbitrations, investigations or other proceedings, or injunctions
or final judgments relating thereto, pending or, to the knowledge of the
officers of the Company, threatened against the Company or any of its
Subsidiaries or Affiliates before any Governmental Entity, including, without
limitation, the FCC, except in the case of either clause (A) or (B), for those
that would not, individually or in the aggregate, reasonably be expected to have
a Material Adverse Effect. None of the Company, any of its Subsidiaries or
Affiliates is a party to or subject to the provisions of any judgment, order,
writ, injunction, decree or award of any Governmental Entity which would,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
(ii) There are no liabilities or obligations of the Company or any
Subsidiary of the Company, whether or not accrued, contingent or otherwise and
whether or not required to be disclosed, or any other facts or circumstances
that would reasonably be expected to result in any obligations or liabilities
of, the Company or any of its Subsidiaries, other than:
- 15 -
(A) liabilities or obligations to the extent (a) reflected on the
consolidated balance sheet of the Company or (b) readily apparent in the
notes thereto, included in the Company's quarterly report on Form 10-Q for
the period ended September 30, 2003;
(B) liabilities or obligations incurred in the ordinary course of
business since September 30, 2003;
(C) performance obligations under Material Contracts required in
accordance with their terms, or performance obligations, to the extent
required under applicable Law, in each case to the extent arising after
the date hereof; or
(D) liabilities or obligations that, individually or in the
aggregate, would not be reasonably expected to have a Material Adverse
Effect.
(h) Employee Benefits.
(i) Each benefit and compensation plan, contract, policy or
arrangement maintained, sponsored or contributed to by the Company or any of its
Subsidiaries covering current or former employees of the Company and its
Subsidiaries (the "Employees") and current or former directors of the Company,
including, but not limited to, "employee benefit plans" within the meaning of
Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), and incentive and bonus, deferred compensation, stock purchase,
restricted stock, stock option, stock appreciation rights or stock based plans
(the "Company Compensation and Benefit Plans"), other than Company Compensation
and Benefit Plans maintained outside of the United States primarily for the
benefit of Employees working outside of the United States (such plans
hereinafter being referred to as "Company Non-U.S. Compensation and Benefit
Plans"), that is material is listed in Section 5.1(h)(i) of the Company
Disclosure Letter and each such Company Compensation and Benefit Plan which has
received a favorable determination letter from the Internal Revenue Service
National Office has been separately identified. True and complete copies of each
material Company Compensation and Benefit Plans listed in Section 5.1(h)(i) of
the Company Disclosure Letter, including, but not limited to, any trust
agreement or insurance contract forming a part of any Company Compensation and
Benefit Plans, and all amendments thereto, have been provided or made available
to Cingular.
(ii) All Company Compensation and Benefit Plans, other than
"multiemployer plans" within the meaning of Section 3(37) of ERISA (each, a
"Multiemployer Plan") and Company Non-U.S. Compensation and Benefit Plans
(collectively, the "Company U.S. Compensation and Benefit Plans"), are in
substantial compliance with, to the extent applicable, ERISA and, the Internal
Revenue Code of 1986, as amended, and the rules and regulations promulgated
thereunder (the "Code"), and other applicable Laws except for such failures as
would not reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect. Each Company U.S. Compensation and Benefit Plan which
is subject to ERISA (the "ERISA Plans") that is an
- 16 -
"employee pension benefit plan" within the meaning of Section 3(2) of ERISA (a
"Company Pension Plan") and that is intended to be qualified under Section
401(a) of the Code has received a favorable determination letter from the
Internal Revenue Service (the "IRS") covering all tax Law changes prior to the
Economic Growth and Tax Relief Reconciliation Act of 2001 or has applied to the
IRS for such favorable determination letter within the applicable remedial
amendment period under Section 401(b) of the Code, and the Company is not aware
of any circumstances likely to result in the loss of the qualification of such
plan under Section 401(a) of the Code. No Company U.S. Compensation Benefit Plan
is intended to be part of a voluntary employees' beneficiary association within
the meaning of Section 501(c)(9) of the Code. As of the date of this Agreement,
there is no pending or, to the knowledge of the officers of the Company,
threatened litigation relating to the Company U.S. Compensation and Benefit
Plans except as would not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect. Neither the Company nor any of its
Subsidiaries has engaged in a transaction with respect to any ERISA Plan that
would subject the Company or any of its Subsidiaries to a tax or penalty imposed
by either Section 4975 of the Code or Section 502(i) of ERISA except as would
not reasonably be expected, individually or in the aggregate, to have a Material
Adverse Effect. Neither the Company nor any Subsidiary has incurred or
reasonably expects to incur a tax or penalty imposed by Section 4980F of the
Code or Section 502 of ERISA except as would not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect.
(iii) No liability under Subtitle C or D of Title IV of ERISA has
been or is expected to be incurred by the Company or any Subsidiary with respect
to any ongoing, frozen or terminated "single-employer plan", within the meaning
of Section 4001(a)(15) of ERISA, currently or formerly maintained by any of
them, or the single-employer plan of any entity which is considered one employer
with the Company under Section 4001 of ERISA or Section 414 of the Code (an
"ERISA Affiliate") except as would not reasonably be expected, individually or
in the aggregate, to have a Material Adverse Effect. The Company and its
Subsidiaries have not incurred and do not expect to incur any withdrawal
liability with respect to a Multiemployer Plan under Subtitle E of Title IV of
ERISA (regardless of whether based on contributions of an ERISA Affiliate)
except as would not reasonably be expected, individually or in the aggregate, to
have a Material Adverse Effect. Neither the Company nor any ERISA Affiliate
maintains or contributes to or has within the past six years maintained or
contributed to any Company U.S. Compensation and Benefit Plan subject to Title
IV of ERISA, Section 302 of ERISA or Section 412 of the Code. No notice of a
"reportable event", within the meaning of Section 4043 of ERISA for which the
30-day reporting requirement has not been waived or extended, other than
pursuant to Pension Benefit Guaranty Corporation Reg. Section 4043.66, has been
required to be filed for any Company Pension Plan or by any ERISA Affiliate
within the 12-month period ending on the date of this Agreement.
(iv) All contributions required to be made under each Company
Compensation and Benefit Plan as of the date of this Agreement have been timely
made and all obligations in respect of each Company Compensation and Benefit
Plan have
- 17 -
been properly accrued and reflected on the most recent consolidated balance
sheet filed or incorporated by reference in the Company Reports prior to the
date of this Agreement to the extent required by GAAP. Neither any Company
Pension Plan nor any single-employer plan of an ERISA Affiliate has an
"accumulated funding deficiency" (whether or not waived) within the meaning of
Section 412 of the Code or Section 302 of ERISA and no ERISA Affiliate of the
Company has an outstanding funding waiver. Neither the Company nor its
Subsidiaries has provided, or is required to provide, security to any Company
Pension Plan or to any single-employer plan of an ERISA Affiliate of the Company
pursuant to Section 401(a)(29) of the Code.
(v) Neither the Company nor its Subsidiaries have any obligations
for retiree health or life benefits under any ERISA Plan or collective
bargaining agreement, except as required by Section 4980B of the Code or Section
601 of ERISA. The Company or its Subsidiaries may amend or terminate any such
plan under the terms of such plan at any time without incurring any material
liability thereunder other than in respect of claims incurred prior to such
amendment or termination.
(vi) There has been no amendment to, announcement by the Company or
any of its Subsidiaries relating to, or change in employee participation or
coverage under, any Company Compensation and Benefit Plan that would increase
materially the expense of maintaining such plan above the level of the expense
incurred therefor for the most recent fiscal year, except as required by Law.
None of the execution of this Agreement, stockholder approval of this Agreement,
receipt of approval or clearance from any one or more Governmental Entities of
the Merger or the other transactions contemplated by this Agreement, or the
consummation of the Merger and the other transactions contemplated by this
Agreement will (A) entitle any employees of the Company or its Subsidiaries to
severance pay or any increase in severance pay upon any termination of
employment after the date of this Agreement; (B) accelerate the time of payment
or vesting or result in any payment or funding (through a grantor trust or
otherwise) of compensation or benefits under, increase the amount payable or
result in any other material obligation pursuant to, any of the Company
Compensation and Benefit Plans; or (C) limit or restrict the right of the
Company, or, after the consummation of the transactions contemplated by this
Agreement, Cingular, to merge, amend or terminate any of the Company
Compensation and Benefit Plans.
(vii) All Company Non-U.S. Compensation and Benefit Plans are listed
in Section 5.1(h)(vii) of the Company Disclosure Letter and comply with
applicable local Law except as would not reasonably be expected, individually or
in the aggregate, to have a Material Adverse Effect. The Company and its
Subsidiaries have no unfunded liabilities with respect to any such Company
Non-U.S. Compensation and Benefit Plan that are not set forth in the
consolidated balance sheets included in or incorporated by reference into the
Company Reports filed prior to the date hereof, except as would not reasonably
be expected, individually or in the aggregate, to have a Material Adverse
Effect. As of the date of this Agreement, there is no pending or, to the
knowledge of the officers of the Company, threatened material litigation
relating to the Company Non-U.S.
- 18 -
Compensation and Benefit Plans, except as would not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect.
(viii) The Company estimates that the aggregate contributions to the
rabbi trust to be established under the Amended and Restated Senior Officer
Severance Plan are not, as of the date of this Agreement, expected to exceed the
amount set forth on Section 5.1(h)(viii) of the Company Disclosure Letter,
assuming that the Effective Time occurs prior to December 31, 2004.
(i) Compliance with Laws; Licenses. (i) The businesses of each of
the Company and its Subsidiaries have not been conducted in violation of any
federal, state, local or foreign law, statute, ordinance, rule, regulation,
judgment, order, injunction, decree, arbitration award, agency requirement,
license or permit of any Governmental Entity (collectively, "Laws"), except for
such violations that would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. No investigation or review by any
Governmental Entity with respect to the Company or any of its Subsidiaries is
pending or, to the knowledge of the officers of the Company, threatened, nor has
any Governmental Entity indicated an intention to conduct the same except for
such investigations or reviews that would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect. The Company and its
Subsidiaries each has all governmental permits, licenses, franchises, variances,
exemptions, orders issued or granted by a Governmental Entity and all other
authorizations, consents and approvals issued or granted by a Governmental
Entity ("Licenses") necessary to conduct its business as presently conducted,
except those the absence of which would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect (the "Material
Licenses").
(ii) Section 5.1(i)(ii) of the Company Disclosure Letter sets forth
a true and complete list, as of the date of this Agreement, of (A) all Material
Licenses and, to the extent not otherwise constituting Material Licenses, all
Licenses issued or granted to the Company or any of its Subsidiaries by the FCC
("FCC Licenses") (other than point to point microwave licenses), all Licenses
issued or granted to the Company or any of its Subsidiaries by State Commissions
regulating telecommunications businesses ("State Licenses"), and all Licenses
issued or granted to the Company or any of its Subsidiaries by foreign
Governmental Entities regulating telecommunications businesses (together with
the Material Licenses, FCC Licenses and State Licenses, the "Company Licenses");
(B) all pending applications for Licenses that would be Company Licenses if
issued or granted; and (C) all pending applications by the Company or any of its
Subsidiaries for modification, extension or renewal or any Company License. Each
of the Company and its Subsidiaries is in compliance with its obligations under
each of the FCC Licenses and the rules and regulations of the FCC, and with its
obligations under each of the Licenses and State Licenses, in each case except
for such failures to be in compliance as would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. There is
not pending or, to the knowledge of the officers of the Company, threatened
before the FCC, the Federal Aviation Administration (the "FAA") or any other
- 19 -
Governmental Entity any proceeding, notice of violation, order of forfeiture or
complaint or investigation against the Company or any of its Subsidiaries
relating to any of the Company Licenses, in each case, except as would not
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. The FCC actions granting all FCC Licenses, together with all
underlying construction permits, have not been reversed, stayed, enjoined,
annulled or suspended, and there is not pending or, to the knowledge of the
officers of the Company, threatened, any application, petition, objection or
other pleading with the FCC, the FAA or any other Governmental Entity which
challenges or questions the validity of or any rights of the holder under any
such License, in each case, except as would not individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
(iii) All of the cell sites and microwave paths of the Company and
its Subsidiaries in respect of which a filing with the FCC or the FAA was
required have been constructed and are currently operated in all respects as
represented to the FCC or the FAA in currently effective filings, and
modifications to such cell sites and microwave paths have been preceded by the
submission to the FCC or the FAA of all required filings, in each case, except
as would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
(iv) All transmission towers located on property owned or leased by
the Company and its Subsidiaries are obstruction-marked and lighted to the
extent required by, and in accordance with, the rules and regulations of the FAA
(the "FAA Rules") (except as would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect). Appropriate
notification to the FAA has been made for each transmission tower located on
property owned or leased by the Company and its Subsidiaries, in each case,
except as would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect.
(j) Material Contracts. (i) As of the date of this Agreement,
neither the Company nor any of its Subsidiaries is a party to or bound by:
(A) any lease of real or personal property providing for annual
payments of $5,000,000 or more;
(B) any Contract or series of related Contracts for the purchase of
materials, supplies, goods, services, equipment or other assets (other
than any Contract (I) that is terminable without any payment or penalty on
not more than 90 days notice by the Company or its Subsidiaries or (II)
that is otherwise terminable by the Company or its Subsidiaries without
payment or penalty on or prior to December 31, 2004, (and thereafter, if
not so terminated, is terminable as specified in Clause (I) (either of the
foregoing, a "Terminable Contract")) that provides for or is reasonably
likely to require either (x) annual payments by the Company and its
Subsidiaries of $50,000,000 or more or (y) aggregate payments by the
Company and its Subsidiaries of $100,000,000 or more;
- 20 -
(C) any agency, dealer, reseller or other similar Contract that is
not a Terminable Contract, other than any such Contract (x) that is in all
material respects similar to the relevant form of such agreement furnished
to Cingular prior to the date of this Agreement or (y) providing for or
that is reasonably likely to require either (I) annual payments to or from
the Company and its Subsidiaries of $25,000,000 or less or (II) aggregate
payments to or from the Company and its Subsidiaries of $50,000,000 or
less;
(D) any Contract (other than a Terminable Contract) that contains
(x) any commitment by the Company or its Subsidiaries to provide wireless
service coverage in a particular geographic area, build out tower sites in
a particular geographic area, or (y) use or pay for a specified minimum
number of minutes and that involved payments by the Company and its
Subsidiaries in excess of $10,000,000 in the year ended December 31, 2003
and;
(E) any interconnect or other similar Contract that is not a
Terminable Contract, other than any such Contract (x) that is in all
material respects similar to the relevant form of such agreement furnished
to Cingular prior to the date of this Agreement or (y) providing for or
that is reasonably likely to require either (I) annual payments to or from
the Company and its Subsidiaries of $25,000,000 or less or (II) aggregate
payments to or from the Company and its Subsidiaries of $50,000,000 or
less;
(F) any partnership, joint venture or other similar agreement or
arrangement relating to the formation, creation, operation, management or
control of any partnership or joint venture material to the Company or any
of its Subsidiaries or in which the Company owns more than a 15% voting or
economic interest (in each case other than any such interests that had a
carrying value of less than $10,000,000 on the Company's consolidated
balance sheet as of September 30, 2003 unless pursuant to such Contract
the Company and its Subsidiaries have a future funding obligation
reasonably likely to require funding of $2,500,000 or more in the
aggregate);
(G) any Contract (other than among direct or indirect wholly-owned
Subsidiaries of the Company) relating to indebtedness for borrowed money
or the deferred purchase price of property (in either case, whether
incurred, assumed, guaranteed or secured by any asset) each in excess of
$100,000,000;
(H) any management agreement relating to the management of any
wireless telephone system offering service in the top 000 Xxxxxxxxxxxx
Xxxxxxxxxxx Xxxxx xx xxx Xxxxxx Xxxxxx of America;
(I) any Contract with Former Parent or any of its Subsidiaries;
(J) any Contract with DoCoMo or any of its Subsidiaries;
- 21 -
(K) any Contract required to be filed as an exhibit to the Company's
Annual Report on Form 10-K pursuant to Item 601(b)(10) of Regulation S-K
under the Securities Act;
(L) any non-competition Contract or other Contract that purports to
limit in any material respect either the type of business in which the
Company or its Subsidiaries (or, after giving effect to the Merger,
Cingular or its Affiliates) may engage or services the Company or its
Subsidiaries may provide, or locations in which any of them may engage in
any business or provide any service or which restricts the ability of the
Company or its Subsidiaries (or, after giving effect to the Merger,
Cingular or its Affiliates), to purchase any securities or other assets,
in each case in the United States and excluding any limitations on scope
or territory of use that may be set forth in agreements with respect to
Intellectual Property; and
(M) any Contract that contains a put, call or similar right pursuant
to which the Company or any of its Subsidiaries could be required to
purchase or sell, as applicable, (i) any wireless spectrum or (ii) any
equity interests of any Person or other assets that have a fair market
value or purchase price of at least $10,000,000 (the Contracts described
in clauses (A) - (M) together with all exhibits and schedules to such
Contracts being the "Material Contracts").
(ii) A true and complete copy of each Material Contract has
previously been made available to Cingular (except to the extent prevented by
applicable confidentiality provisions (the "Restricted Contracts")). In the case
of Restricted Contracts, other aggregate disclosure arrangements have been made
by the Company to Cingular in order to provide Cingular with accurate and
adequate information with respect to all such Restricted Contracts in the
aggregate in order to allow Cingular to evaluate the financial and operational
impact of such Contracts after giving effect to the Merger. Each Material
Contract is a valid and binding agreement of the Company or one of its
Subsidiaries, as the case may be, and is in full force and effect, and neither
the Company nor any of its Subsidiaries nor, to the knowledge of the officers of
the Company, any other party thereto is in default or breach in any respect
under the terms of any such Contract, except as would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect. Each
Restricted Contract has been identified in the Company Disclosure Letter by an
asterisk.
(iii) As of the date hereof, the Company and its Subsidiaries have
complied in all material respects with all their respective obligations under
the DoCoMo Investor Agreement and the DoCoMo Warrant Agreement and neither
DoCoMo nor any of its Affiliates has required, and neither DoCoMo nor any of its
Affiliates has any right to require, the Company to repurchase all or any
portion of the capital stock or warrants of the Company owned by DoCoMo or any
of its Affiliates or (other than customary directors fees and immaterial
commercial arrangements) otherwise make any payment to DoCoMo or any of its
Affiliates. The Board of Directors of the Company has not taken,
- 22 -
nor has any committee of the Board of Directors of the Company taken, any
actions to require or approve a change in the Company's use of W-CDMA technology
as the primary standard for its delivery of wireless services based on 3G
technology. From and after the Effective Time, DoCoMo will have no rights under
the DoCoMo Warrant Agreement other than the rights set forth in Section 4.6 of
this Agreement.
(k) Real Property. (i) Except in any such case as would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect, with respect to the real property owned by the Company or its
Subsidiaries, the Company or one of its Subsidiaries, as applicable, has good
and marketable title to the parcel of real property, free and clear of any Lien.
(ii) With respect to the real property leased or subleased to the
Company or its Subsidiaries, (A) the lease or sublease for such property is
legal, valid, binding, enforceable, and in full force and effect and none of the
Company nor any of its Subsidiaries is in breach or default of such lease or
sublease, and no event has occurred which, with notice or lapse of time, would
constitute a breach or default by any of the Company or its Subsidiaries or
permit termination, modification or acceleration by any third party thereunder
and (B) no third party has repudiated or has the right to terminate or repudiate
such lease or sublease (except for the normal exercise of remedies in connection
with a default thereunder or any termination rights set forth in the lease or
sublease) any provision thereof, except in each case, for such illegality,
invalidity, failures to be binding, unenforceability, ineffectiveness, breaches,
defaults, terminations, modifications, accelerations, repudiations and rights to
terminate or repudiate that would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
(l) Takeover Statutes. No "fair price," "moratorium," "control share
acquisition" or other similar anti-takeover statute or regulation (each, a
"Takeover Statute") or any anti-takeover provision in the Company's certificate
of incorporation and by-laws is, or at the Effective Time will be, applicable to
the Shares, the Merger or the other transactions contemplated by this Agreement.
The Board of Directors of the Company has taken or caused to be taken all action
so that Cingular will not be prohibited from entering into a "business
combination" with the Company or any of its Affiliates as an "interested
stockholder" (in each case as such term is used in Section 203 of the DGCL) as a
result of the execution of this Agreement or the consummation of the
transactions contemplated hereby or thereby.
(m) Environmental Matters. Except as would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect, (i) the
Company and its Subsidiaries have complied at all times with all applicable
Environmental Laws; (ii) no property currently owned or operated by the Company
or any of its Subsidiaries (including soils, groundwater, surface water,
buildings or other structures) is contaminated with any Hazardous Substance;
(iii) no property formerly owned or operated by the Company or any of its
Subsidiaries was contaminated with any
- 23 -
Hazardous Substance during or prior to such period of ownership or operation;
(iv) neither the Company nor any of its Subsidiaries is subject to liability for
any Hazardous Substance disposal or contamination on property of any third
party; (v) there has been no release or threat of release of any Hazardous
Substance at, on, under or migrating to or from any properties currently owned
or operated by the Company or any of its Subsidiaries; (vi) neither the Company
nor any of its Subsidiaries has received any notice, demand, letter, claim or
request for information from any Governmental Entity or other third party
indicating that the Company or any of its Subsidiaries may be in violation of or
subject to liability under any Environmental Law; (vii) neither the Company nor
any of its Subsidiaries is subject to any order, decree, injunction or other
arrangement with any Governmental Entity or any indemnity or other agreement
with any third party relating to liability under any Environmental Law or
otherwise relating to any Hazardous Substances; and (viii) there are no past or
present conditions, events, circumstances, facts, activities, practices,
incidents, actions, omissions or plans: (A) that may interfere with or prevent
continued compliance by the Company or any of its Subsidiaries with
Environmental Laws, or (B) that may give rise to any liability or other
obligation under any Environmental Laws.
As used herein, the term "Environmental Law" means any federal,
state, local or foreign statute, law, regulation, order, decree, permit,
authorization, opinion, common law, agency requirement or applicable judicial or
administrative decision, order or decree relating to: (A) the protection,
investigation or restoration of the environment, health, safety, or natural
resources; (B) the handling, use, presence, disposal, release or threatened
release of any Hazardous Substance; or (C) noise, odor, indoor air, employee
exposure, electromagnetic frequency emissions, wetlands, pollution,
contamination or any injury or threat of injury to persons or property relating
to any Hazardous Substance.
As used herein, the term "Hazardous Substance" means any substance
that is: (A) listed, classified or regulated pursuant to any Environmental Law;
and (B) any other substance which is the subject of regulatory action by any
Government Entity in connection with any Environmental Law, including petroleum
products and asbestos.
(n) Taxes. Except as would not individually or in the aggregate
reasonably be expected to have a Material Adverse Effect (i) the Company and
each of its Subsidiaries have prepared in good faith and duly and timely filed
(taking into account any extension of time within which to file) all Tax Returns
required to be filed by any of them and all such filed Tax Returns are complete
and accurate in all respects; (ii) the Company and each of its Subsidiaries have
paid all Taxes that are required to be paid by any of them or that the Company
or any of its Subsidiaries are obligated to withhold from amounts owing to any
employee, creditor or third party, except with respect to matters contested in
good faith or for which adequate reserves are reflected, in accordance with
GAAP, in the financial statements contained in the Company Reports filed on or
prior to the date of this Agreement as that reserve may be adjusted for
operations of the Company and its Subsidiaries after the date of this Agreement
in accordance with past practice of the Company and its Subsidiaries; (iii) the
Company and each of its Subsidiaries have not
- 24 -
waived any statute of limitations with respect to Taxes or agreed to any
extension of time with respect to a Tax assessment or deficiency; (iv) the Tax
Returns referred to in clause (i) have been examined by the IRS or the
appropriate state, local or foreign taxing authority or the period for
assessment of the Taxes in respect of which such Tax Returns were required to be
filed has expired, and all deficiencies asserted or assessments made as a result
of such examinations have been paid in full, settled, or adequately provided
for, in accordance with GAAP, in the financial statements contained in the
Company Reports filed on or prior to the date of this Agreement; (v) as of the
date of this Agreement, there are not pending or, to the knowledge of the
officers of the Company threatened in writing, any audits examinations,
investigations or other proceedings in respect of Taxes or Tax matters; (vi)
there are no Liens on any of the assets of the Company or any of its
Subsidiaries that arose in connection with any failure (or alleged failure) to
pay any Tax; (vii) none of the Company or any of its Subsidiaries has any
liability for the Taxes of any Person (other than the Company or any of its
Subsidiaries) under Treasury Regulation Section 1.1502-6 (or any similar
provision of state, local or foreign law), as a transferee or successor, by
contract, or otherwise; (viii) other than the distribution of the stock of the
Company by Former Parent none of the Company or any of its Subsidiaries has been
a distributing corporation or controlled corporation with respect to any
distribution occurring during the last three years in which the parties to such
distribution treated the distribution as one to which Section 355 of the Code
(or any similar provision of state, local or foreign Law) applied; and (ix) to
the knowledge of the officers of the Company, (x) the distribution by Former
Parent in July 2001 of all of the capital stock of the Company (and any
distributions by any Subsidiaries of the Company related thereto) qualified as a
reorganization under Section 368(a)(1)(D) and Section 355 of the Code, and (y)
neither the Company, any Affiliate of the Company, nor any other Person has
taken or failed to take any action that would reasonably be expected to cause
(A) any such distributions not to qualify as reorganizations or (B) any stock or
securities of the Company to not be treated as "qualified property" for the
purposes of Section 361(c)(2) of the Code. The Company has made available to
Cingular true and correct copies of the U.S. Federal, and material state and
local income Tax Returns filed by the Company and its Subsidiaries for each of
the fiscal years ended December 31, 2002 and 2001. The Company has made
available to Cingular all material closing agreements, private letter rulings,
technical advice memoranda or similar agreements or rulings that have been
entered into or issued after July 9, 2001, or that relate to the distribution by
Former Parent of the capital stock of the Company in July 2001 by any Taxing
authority with respect to the Company or any of its Subsidiaries.
As used in this Agreement, (i) the term "Tax" (including, with
correlative meaning, the terms "Taxes", and "Taxable") includes all federal,
state, local and foreign income, profits, franchise, gross receipts,
environmental, customs duty, capital stock, severances, stamp, payroll, sales,
employment, unemployment, disability, use, property, withholding, excise,
production, value added, occupancy and other taxes, duties or assessments of any
nature whatsoever, together with all interest, penalties and additions imposed
with respect to such amounts and any interest in respect of such penalties and
additions, and (ii) the term "Tax Return" includes all returns and reports
(including
- 25 -
elections, declarations, disclosures, schedules, estimates and information
returns) required to be supplied to a Tax authority relating to Taxes.
(o) Labor Matters. Neither the Company nor any of its Subsidiaries
is a party to or otherwise bound by any collective bargaining agreement or other
Contract with a labor union or labor organization. Neither the Company nor any
of its Subsidiaries is subject to a dispute, strike or work stoppage except as
would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. To the knowledge of the officers of the Company, as of
the date hereof, there are no organizational efforts with respect to the
formation of a collective bargaining unit presently being made or threatened
involving employees of the Company or any of its Subsidiaries, except for those
the formation of which would not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect.
(p) Intellectual Property. (i) Except as would not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect, no
Owned Intellectual Property, Contract for Intellectual Property or Contract for
IT Assets has lapsed, expired or been abandoned or cancelled, or is subject to
any pending, or to the knowledge of the officers of the Company threatened,
opposition, cancellation, interference, public protest, domain name dispute or
other proceeding and no such item, requires within six months immediately
following the date of this Agreement that any material maintenance fee be paid
to Former Parent, or that an affidavit of use or renewal be filed as it relates
to the Company's registered marks, or that a patent application be timely filed
to avoid a rejection under 35 U.S.C. Section 102(b), or that any other material
action required to maintain or preserve such item be taken. Except as would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect, (x) all Owned Intellectual Property is valid, subsisting and
enforceable, (y) no Owned Intellectual Property is subject to any outstanding
order, judgment or decree adversely affecting the use thereof or rights thereto,
and (z) the Company is the exclusive owner or joint owner of all Owned
Intellectual Property free of any Lien. Except as would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect, to the
knowledge of the officers of the Company, the Licensed-In Intellectual Property
is valid, subsisting and enforceable, and no Licensed-In Intellectual Property
is subject to any outstanding order, judgment or decree adversely affecting the
Company's use thereof or its rights thereto.
(ii) The conduct of the business as currently conducted by the
Company and its Subsidiaries and for the three year period immediately preceding
the date of this Agreement does not and did not infringe, misappropriate or
otherwise violate the Intellectual Property rights of any third Person, except
for such infringements, misappropriations or violations that would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect, and except matters resolved prior to September 30, 2003. Except
as would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect, and except matters resolved prior to September 30,
2003, there is no claim asserted, or to the knowledge of the
- 26 -
officers of the Company threatened or any basis for threatening, against the
Company or any indemnitee of the Company concerning the ownership, validity,
registerability, enforceability, infringement, use or licensed right to use any
Owned Intellectual Property, Licensed-In Intellectual Property or IT Assets.
(iii) Except as would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect, the execution,
delivery and performance by the Company of the transactions contemplated by this
Agreement will not alter, impair, diminish or result in the loss of any rights
or interests of the Company in any Owned Intellectual Property, Licensed-In
Intellectual Property, or any IT Assets.
As used herein,
(1) "Computer Software" means all computer software and databases
(including without limitation source code, object code and all related
documentation).
(2) "Intellectual Property" means, collectively, all United States
and foreign (i) trademarks, service marks, brand names, certification marks,
collective marks, d/b/a's, Internet domain names, logos, symbols, trade dress,
assumed names, fictitious names, trade names, and other indicia of origin, all
applications and registrations for the foregoing, and all goodwill associated
therewith and symbolized thereby, including all renewals of same; (ii)
inventions and discoveries, whether patentable or not, and all patents,
registrations, invention disclosures and applications therefor, including
divisions, continuations, continuations-in-part and renewal applications, and
including renewals, extensions and reissues; (iii) trade secrets and
confidential information and know-how, including processes, schematics, business
methods, formulae, drawings, prototypes, models, designs, customer lists and
supplier lists; (iv) published and unpublished works of authorship, whether
copyrightable or not (including without limitation databases and other
compilations of information), copyrights therein and thereto, and registrations
and applications therefor, and all renewals, extensions, restorations and
reversions thereof; (v) moral rights, rights of publicity and rights of privacy;
and (vi) all other intellectual property or proprietary rights.
(3) "IT Assets" means ownership license rights for use of the
computers, Computer Software, firmware, middleware, servers, workstations,
routers, hubs, switches, data communications lines, and all other information
technology equipment and elements, and associated documentation, in each case,
which are necessary for the operation of the business of the Company or any of
its Subsidiaries as currently conducted.
(4) "Licensed-In Intellectual Property" means the Intellectual
Property which is licensed to or otherwise made available for use by the Company
or any of its Subsidiaries pursuant to any Contracts for Intellectual Property.
(5) "Owned Intellectual Property" means the Intellectual Property
owned by the Company or any of its Subsidiaries, including any such Intellectual
Property created by the Company or any of its Subsidiaries, employees or
contractors and excluding any Licensed-In Intellectual Property.
- 27 -
(q) Rights Agreement. (i) The Board of Directors of the Company has
taken all necessary action to render the Rights Agreement inapplicable to the
Merger and the other transactions contemplated by this Agreement.
(ii) The Company has taken all necessary action with respect to all
of the outstanding Rights so that (A) none of Cingular or any of its Associates
or Affiliates (each as defined in the Rights Agreement) shall be deemed an
Acquiring Person (as defined in the Rights Agreement), the Distribution Date (as
defined in the Rights Agreement) shall not occur and the rights issuable
pursuant to the Rights Agreement (the "Rights") will not separate from the
shares of Common Stock, as a result of Cingular's entering into this Agreement
or consummating the Merger and/or the other transactions contemplated hereby;
(B) neither the Company, nor Cingular will have any obligations under the Rights
or the Rights Agreement from and after immediately prior to the Effective Time;
(C) the holders of the Rights will have no rights under the Rights or the Rights
Agreement in connection with the transactions contemplated by this Agreement;
and (D) as of immediately prior to the Effective Time, the Rights will expire.
(r) Affiliate Transactions. As of the date hereof, there are no
transactions, arrangements or Contracts between the Company and its
Subsidiaries, on the one hand, and the Company's Affiliates (other than
wholly-owned Subsidiaries of the Company) or other Persons, on the other hand,
that would be required to be disclosed under Item 404 of Regulation S-K under
the Securities Act.
(s) Brokers and Finders. Neither the Company nor any of its
officers, directors or employees has employed any broker or finder or incurred
any liability for any brokerage fees, commissions or finders fees in connection
with the Merger or the other transactions contemplated in this Agreement except
that the Company has employed Xxxxxxx Xxxxx & Co. as its financial advisor, the
arrangements with which have been disclosed to Cingular prior to the date of
this Agreement.
5.2. Representations and Warranties of Cingular and Merger Sub.
Except as set forth in the disclosure letter delivered to the Company by
Cingular on or prior to entering into this Agreement (the "Cingular Disclosure
Letter"), Cingular and Merger Sub hereby represent and warrant to the Company
that:
(a) Organization, Good Standing and Qualification. Each of Cingular
and its Subsidiaries is a legal entity duly organized, validly existing and in
good standing under the Laws of its respective jurisdiction of organization and
has all requisite corporate or similar power and authority to own and operate
its properties and assets and to carry on its business as presently conducted
and is qualified to do business and is in good standing as a foreign corporation
in each jurisdiction where the ownership or operation of its assets or
properties or conduct of its business requires such qualification, except where
the failure to be so organized, qualified or in such good standing, or to have
- 28 -
such power or authority, would not, individually or in the aggregate, reasonably
be expected to prevent or materially delay or materially impair the ability of
Cingular, Cingular Wireless or Merger Sub to consummate the Merger and the other
transactions contemplated by this Agreement (a "Cingular Material Adverse
Effect"). Cingular has made available to the Company a complete and correct copy
of Cingular's certificate of incorporation and by-laws, each as in effect on the
date of this Agreement.
(b) Corporate Authority. Each of Cingular, Cingular Wireless and
Merger Sub has all requisite corporate power and authority and has taken all
corporate action necessary in order to execute, deliver and perform its
obligations under this Agreement and to consummate the Merger. This Agreement is
a valid and binding agreement of Cingular and Merger Sub, enforceable against
each of Cingular, Cingular Wireless and Merger Sub in accordance with its terms,
subject to the Bankruptcy and Equity Exception.
(c) Governmental Filings; No Violations; Etc. (i) Other than the
reports, filings, registrations, consents, approvals, permits, authorizations
and/or notices (A) pursuant to Section 1.3; (B) under the HSR Act and the
Exchange Act; (C) required to be made with the NYSE; (D) with or to the FCC; (E)
with or to the State Commissions set forth in Section 5.2(c)(i)(E) of the
Cingular Disclosure Letter; and (F) with or to those foreign Governmental
Entities regulating competition and telecommunications businesses set forth in
Section 5.2(c)(i)(F) of the Cingular Disclosure Letter, no notices, reports or
other filings are required to be made by Cingular or Cingular Wireless with, nor
are any consents, registrations, approvals, permits or authorizations required
to be obtained by Cingular or Merger Sub from, any Governmental Entity by reason
of the operation of the businesses of Cingular and its Subsidiaries, in
connection with the execution and delivery of this Agreement by Cingular and the
consummation by Cingular, Cingular Wireless and Merger Sub of the Merger and the
other transactions contemplated hereby, except those that the failure to make or
obtain would not, individually or in the aggregate, reasonably be expected to
have a Cingular Material Adverse Effect.
(ii) The execution, delivery and performance of this Agreement by
Cingular, Cingular Wireless and Merger Sub do not, and the consummation by
Cingular and Merger Sub of the Merger and the other transactions contemplated
hereby will not, constitute or result in (A) a breach or violation of, or a
default under, the certificate of incorporation or by-laws of Cingular or Merger
Sub; (B) with or without notice, lapse of time or both a breach or violation of,
a termination (or right of termination) or a default under, the acceleration of
any obligations or the creation of a Lien on the assets of Cingular or any of
its Subsidiaries pursuant to, any Contracts binding upon Cingular or any of its
Subsidiaries or any Laws or governmental or non-governmental permit or license
to which Cingular or any of its Subsidiaries is subject; or (C) any change in
the rights or obligations of any party under any of such Contracts, except, in
the case of clause (B) or (C) above, for any breach, violation, termination,
default, acceleration, creation or change that would not, individually or in the
aggregate, reasonably be expected to have a Cingular Material Adverse Effect.
- 29 -
(d) Litigation. As of the date of this Agreement, there are no
civil, criminal or administrative actions, suits, claims, hearings,
investigations or proceedings pending or, to the knowledge of the officers of
Cingular, threatened against Cingular or Cingular Wireless that seek to enjoin,
or would reasonably be expected to have the effect of preventing, delaying,
making illegal or otherwise interfering with, any of the transactions
contemplated by this Agreement, except as would not, individually or in the
aggregate, reasonably be expected to have a Cingular Material Adverse Effect.
There are no (A) civil, criminal or administrative actions, suits, claims,
hearings, investigations or proceedings pending or, to the knowledge of the
officers of Cingular, threatened against Cingular or any of its Subsidiaries or
Affiliates, or (B) litigations, arbitrations, investigations or other
proceedings, or injunctions or final judgments relating thereto, pending or, to
the knowledge of the officers of Cingular, threatened against Cingular or any of
its Subsidiaries or Affiliates before any Governmental Entity, including,
without limitation, the FCC, except in the case of either clause (A) or (B), for
those that would not, individually or in the aggregate, reasonably be expected
to have a Cingular Material Adverse Effect.
(e) SEC Filings. (i) Cingular Wireless has filed and furnished all
forms, statements, reports and documents required to be filed or furnished by it
with the SEC pursuant to applicable securities statutes, regulations, policies
and rules since January 1, 2002 (the forms, statements, reports and documents
filed or furnished since January 1, 2002, or those filed or furnished subsequent
to the date of this Agreement, and as amended, the "Cingular Wireless Reports"),
except as would not, individually or in the aggregate, reasonably be expected to
have a Cingular Material Adverse Effect. The Cingular LLC Reports were prepared
in all material respects in accordance with the applicable requirements of the
Securities Act, the Exchange Act and the rules and regulations thereunder and
complied in all material respects in accordance with the then applicable
accounting standards, except as would not, individually or in the aggregate,
reasonably be expected to have a Cingular Material Adverse Effect. As of their
respective dates (and, if amended, as of the date of such amendment) the
Cingular Wireless Reports did not, and any Cingular Wireless Reports filed with
the SEC subsequent to the date of this Agreement will not, contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements made therein, in light of the
circumstances in which they were made, not misleading, except as would not,
individually or in the aggregate, reasonably be expected to have a Cingular
Material Adverse Effect.
(ii) Except as would not, individually or in the aggregate,
reasonably be expected to have a Cingular Material Adverse Effect, each of the
consolidated balance sheets included in or incorporated by reference into the
Cingular Wireless Reports (including the related notes and schedules) filed
prior to the date of this Agreement fairly presents, and, if filed after the
date of this Agreement, will fairly present, the consolidated financial position
of Cingular Wireless or any other entity included therein and their respective
Subsidiaries, as of its date and each of the consolidated statements of cash
flows and of changes in members' capital included in or incorporated by
reference into
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the Cingular Wireless Reports (including any related notes and schedules) fairly
presents, and, if filed after the date of this Agreement, will fairly present,
the results of operations, retained earnings and changes in financial position,
as the case may be, of Cingular Wireless or any other entity included therein
and their respective Subsidiaries for the periods set forth therein (subject, in
the case of unaudited statements, to notes and normal year-end audit adjustments
that will not be material in amount or effect), in each case in accordance with
GAAP consistently applied during the periods involved, except as may be noted
therein.
(f) Compliance with Laws. The businesses of each of Cingular and its
Subsidiaries have not been conducted in violation of any Laws, except for such
violations that would not, individually or in the aggregate, reasonably be
expected to have a Cingular Material Adverse Effect. There is no pending, or to
the knowledge of the officers of Cingular, threatened investigation or review of
Cingular or any of its Subsidiaries or Affiliates by any Governmental Entity
except for any of the foregoing that individually or in the aggregate, would not
reasonably be expected to have a Cingular Material Adverse Effect. Cingular and
its Subsidiaries each have all Licenses necessary to conduct its business as
presently conducted, except those the absence of which would not, individually
or in the aggregate, reasonably be expected to have a Cingular Material Adverse
Effect.
(g) Available Funds. Cingular and Merger Sub have available to them,
or, as of the Effective Time will have available to them, all funds necessary
for the payment of the Merger Consideration and have funds available to them to
satisfy all of their obligations under this Agreement which are required to be
complied with prior to the Closing.
(h) Capitalization of Merger Sub. As of the date of this Agreement,
the authorized capital stock of Merger Sub consists of 1,000 shares of Common
Stock, par value $0.01 per share, all of which are validly issued and
outstanding. All of the issued and outstanding capital stock of Merger Sub is,
and at the Effective Time will be, owned by Cingular or a direct or indirect
wholly-owned Subsidiary of Cingular. Merger Sub has not conducted any business
prior to the date hereof and has no, and prior to the Effective Time will have
no, assets, liabilities or obligations of any nature other than those incident
to its formation and pursuant to this Agreement and the Merger and the other
transactions contemplated by this Agreement.
5.3. Representations and Warranties of SBC and BellSouth. Except in
each case (except paragraphs (g) and (h) of this Section 5.3) as would not
reasonably be expected to prevent or materially delay or materially impair its
ability or the ability of Cingular or Merger Sub to consummate the Merger and
the other transactions contemplated by this Agreement (a "Parental Material
Adverse Effect"), each of SBC and BellSouth hereby severally represents and
warrants with respect to itself to the Company that:
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(a) Organization, Good Standing and Qualification. It is a
corporation duly organized, validly existing and in good standing under the Laws
of its respective jurisdiction of organization and has all requisite corporate
power and authority to own and operate its properties and assets and to carry on
its business as presently conducted.
(b) Corporate Authority. It has all requisite corporate power and
authority and has taken all corporate action necessary in order to execute,
deliver and perform its obligations under this Agreement. Sections 5.3, 6.1(b),
6.5(b) and Article IX of this Agreement are valid and binding agreements of each
of SBC and BellSouth, enforceable against SBC and BellSouth, respectively, in
accordance with their terms, subject to the Bankruptcy and Equity Exception.
(c) No Violations. The execution, delivery and performance of this
Agreement by it do not constitute or result in (A) a breach or violation of, or
a default under, its certificate of incorporation or by-laws; (B) with or
without notice, lapse of time or both a breach or violation of, a termination
(or right of termination) or a default under, the acceleration of any
obligations or the creation of a Lien on its assets or any of its Subsidiaries
pursuant to any Contracts binding upon it or any of its Subsidiaries or any Laws
or governmental or non-governmental permit or license to which it or any of its
Subsidiaries is subject; or (C) any change in the rights or obligations of any
party under any of such Contracts.
(d) Governmental Filings. Other than the reports, filings,
registrations, consents, approvals, permits, authorizations and/or notices (A)
under the HSR Act; (B) with or to the FCC; (C) with or to the State Commissions
set forth in Section 5.3(d)(C) of the Cingular Disclosure Letter; and (D) with
or to those foreign Governmental Entities regulating competition and
telecommunications businesses set forth in Section 5.3(d)(D) of the Cingular
Disclosure Letter, no notices, reports or other filings are required to be made
by it with, nor are any consents, registrations, approvals, permits or
authorizations required to be obtained by it from, any Governmental Entity by
reason of the operation of the businesses of SBC, BellSouth and their respective
Subsidiaries, in connection with the execution and delivery of this Agreement by
it or Cingular and the consummation by it, Cingular and Merger Sub of the Merger
and the other transactions contemplated hereby.
(e) SEC Filings. (i) The Applicable Parent Reports were prepared in
all material respects in accordance with the applicable requirements of the
Securities Act, the Exchange Act and the rules and regulations thereunder and
complied in all material respects with the then applicable accounting standards.
As of their respective dates (and, if amended, as of the date of such amendment)
the Applicable Parent Reports did not, and any Applicable Parent Reports filed
with the SEC subsequent to the date of this Agreement will not, contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements made therein, in light of
the circumstances in which they were made, not misleading. For purposes of this
Agreement, the term "Applicable Parent Reports" shall mean all forms,
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statements, reports and documents filed by BellSouth and SBC with the SEC since
January 1, 2003, or those filed subsequent to the date of this Agreement, and as
amended.
(iI) Each of the consolidated balance sheets included in or
incorporated by reference into the Applicable Parent Reports (including the
related notes and schedules) filed prior to the date of this Agreement fairly
presents, and, if filed after the date of this Agreement, will fairly present,
its consolidated financial position and the consolidated financial position of
any other entity included therein and their respective Subsidiaries, as of its
date and each of the consolidated statements of cash flows and of changes in
shareholders' equity included in or incorporated by reference into the
Applicable Parent Reports (including any related notes and schedules) fairly
presents, and, if filed after the date of this Agreement, will fairly present,
its results of operations, retained earnings and changes in financial position,
as the case may be, and the results of operations, retained earnings and changes
in financial position, as the case may be, of any other entity included therein
and their respective Subsidiaries for the periods set forth therein (subject, in
the case of unaudited statements, to notes and normal year-end audit adjustments
that will not be material in amount or effect), in each case in accordance with
GAAP consistently applied during the periods involved, except as may be noted
therein.
(f) Compliance with Laws. The businesses of it and its Subsidiaries
have not been conducted in violation of any Laws.
(g) Available Funds. It has available to it, or, as of the Effective
Time, will have available to it, all funds necessary for the payment of its
Specified Interest of the Merger Consideration.
(h) Other Agreements. It has disclosed to the Company any agreement
between it and/or Cingular and, in the case of SBC, BellSouth, and in the case
of BellSouth, SBC, in each case which relate to the Merger or the transactions
contemplated hereby and which, individually or in the aggregate, would
reasonably be expected to have a Parental Material Adverse Effect.
ARTICLE VI
Covenants
6.1. Interim Operations. (a) Without limiting the Company's
obligations under Section 6.5 of this Agreement, except as set forth in the
corresponding section of the Company Disclosure Letter or otherwise as expressly
contemplated hereby, the Company covenants and agrees as to itself and its
Subsidiaries that, from the date of this Agreement until the Effective Time
(unless Cingular shall otherwise approve in writing, which approval shall not be
unreasonably withheld or delayed), the business of it and its Subsidiaries shall
be conducted in the ordinary course and, to the extent consistent therewith, it
and its Subsidiaries shall use their respective reasonable best efforts to
preserve its business organization intact and maintain its existing relations
and goodwill
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with Governmental Entities, customers, suppliers, distributors, creditors,
lessors, employees and business associates and keep available the services of
the present employees and agents of the Company and its Subsidiaries. Without
limiting the Company's obligations under Section 6.5 of this Agreement and
without limiting the generality of the foregoing and in furtherance thereof,
from the date of this Agreement until the Effective Time, the Company will not
and will not permit its Subsidiaries to (unless Cingular shall otherwise approve
in writing, which approval shall not be unreasonably withheld or delayed):
(i) adopt or propose any change in its certificate of incorporation
or by-laws or other applicable governing instruments;
(ii) merge or consolidate the Company or any of its Subsidiaries with
any other Person, except for any such transactions among wholly-owned
Subsidiaries of the Company that are not obligors or guarantors of third party
indebtedness;
(iii) acquire assets outside of the ordinary course of business from
any other Person with a value or purchase price in the aggregate in excess of
$50,000,000, other than acquisitions pursuant to Contracts to the extent in
effect immediately prior to the execution of this Agreement and set forth in
Section 6.1(a)(iii) of the Company Disclosure Letter or as otherwise set forth
in Section 6.1(a)(iii) of the Company Disclosure Letter;
(iv) other than pursuant to Contracts to the extent in effect as of
immediately prior to the execution of this Agreement and set forth in Section
6.1(a)(iv) of the Company Disclosure Letter, and other than the issuance of
shares of Common Stock upon the exercise of outstanding Company Options and
pursuant to other equity-based awards granted under the Stock Plans and shares
under the Company's 401(k) plan and the deferred compensation plans, in each
case, in accordance with their terms, issue, sell, pledge, dispose of, grant,
transfer, lease, license, guarantee, encumber, or authorize the issuance, sale,
pledge, disposition, grant, transfer, lease, license, guarantee or encumbrance
of, any shares of capital stock of the Company or any its Subsidiaries (other
than the issuance of shares by a wholly-owned Subsidiary of the Company to the
Company or another wholly-owned Subsidiary), or securities convertible or
exchangeable or exercisable for any shares of such capital stock, or any
options, warrants or other rights of any kind to acquire any shares of such
capital stock or such convertible or exchangeable securities;
(v) other than in connection with existing receivables facilities and
securitizations and renewals thereof in the ordinary course of business, create
or incur any Lien on assets of the Company or any of its Subsidiaries that is
material, individually or in the aggregate, to the Company and its Subsidiaries
taken as a whole;
(vi) other than acquisitions pursuant to Contracts to the extent in
effect as of immediately prior to the execution of this Agreement and set forth
in Section 6.1(a)(vi) of the Company Disclosure Letter, make any loan, advance
or capital
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contribution to or investment in any Person (other than a wholly-owned
Subsidiary of the Company) in excess of $25,000,000 in the aggregate;
(vii) declare, set aside, make or pay any dividend or other
distribution, payable in cash, stock, property or otherwise, with respect to any
of its capital stock (except for dividends or other distributions by any direct
or indirect wholly-owned Subsidiary of the Company to the Company or to any
other direct or indirect wholly-owned Subsidiary of the Company and periodic
dividends and other periodic distributions by non-wholly-owned Subsidiaries
consistent with past practices) or enter into any agreement with respect to the
voting of its capital stock;
(viii) other than the redemption of the Series C Preferred Stock or
the Series E Preferred Stock in accordance with the Company's certificate of
incorporation, reclassify, combine, split, subdivide or redeem, purchase or
otherwise acquire, directly or indirectly, any of its capital stock or
securities convertible or exchangeable into or exercisable for any share of its
capital stock;
(ix) incur any indebtedness for borrowed money or guarantee such
indebtedness of another Person, or issue or sell any debt securities or warrants
or other rights to acquire any debt security of the Company or any of its
Subsidiaries, except for (A) indebtedness for borrowed money incurred in the
ordinary course of business not to exceed $50,000,000 in the aggregate, (B)
indebtedness for borrowed money in replacement of existing indebtedness for
borrowed money on customary commercial terms, (C) guarantees incurred in
compliance with this Section 6.1(a) by the Company of indebtedness of
wholly-owned Subsidiaries of the Company or (D) interest rate swaps on customary
commercial terms, consistent with past practices and not to exceed $750,000,000
of notional debt in the aggregate;
(x) except as set forth in Section 6.1(a)(x) of the Company
Disclosure Letter, make or authorize any capital expenditure;
(xi) enter into any Material Contract that would have been a Material
Contact as described in clauses (J), (L) or (M) of Section 5.1(j)(i) had it been
entered into prior to the execution of this Agreement, and other than in the
ordinary course of business, enter into any other Material Contract that would
have been a Material Contract as described in Section 5.1(j)(i) (other than as
described in clauses (J), (L) or (M)) had it been entered into prior to the
execution of this Agreement;
(xii) make any changes with respect to accounting policies or
procedures, except as required by changes in GAAP or by Law or except as the
Company, based on the advice of its independent auditors and after consultation
with Cingular, determines in good faith is advisable to conform to best
accounting practices;
(xiii) settle any litigation or other proceedings before or
threatened to be brought before a Governmental Entity for an amount in excess of
$10,000,000 or which would be reasonably likely to have any adverse impact on
the operations of the Company
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or any of its Subsidiaries or on any current or future litigation or other
proceeding of the Company or any of its Subsidiaries; provided, that any
litigation or other proceeding with respect to an item relating to Taxes may be
settled for an amount that is not in excess of the amount reserved or accrued
for such item on the most recent balance sheet contained in the Company Reports
filed prior to the date of this Agreement (which reserve and accrual information
shall be furnished by the Company to Cingular upon Cingular's request);
(xiv) other than in the ordinary course of business, amend or modify
in any material respect, or terminate or waive any material right or benefit
under any Material Contract;
(xv) except as required by Law, make any material Tax election or
take any material position on any material Tax Return filed on or after the date
of this Agreement or adopt any material method therefor that is inconsistent
with elections made, positions taken or methods used in preparing or filing
similar Tax Returns in prior periods. Notwithstanding the foregoing, the Company
shall consult with Cingular and its Representatives prior to claiming any
depreciation allowance under Section 168(k) of the Code;
(xvi) sell, lease, license, or otherwise dispose of any assets of the
Company or its Subsidiaries except for ordinary course sales of mobile telephone
equipment to customers of the Company, services provided in the ordinary course
of business or obsolete assets and except for sales, leases, licenses or other
dispositions of assets with a fair market value not in excess of $25,000,000 in
the aggregate, other than pursuant to Contracts in effect prior to the execution
of this Agreement and set forth in Section 6.1(a)(iii) of the Company Disclosure
Letter or as otherwise set forth in Section 6.1(a)(iii) of the Company
Disclosure Letter and other than any dispositions of assets to the extent used
as consideration for acquisitions that are permitted pursuant to Section
6.1(a)(iii);
(xvii) except as required pursuant to existing written, binding
agreements in effect prior to the execution of this Agreement, as otherwise
required by Law, or in the ordinary course of business consistent with past
practice (which with respect to annual bonus plans and performance share awards
is set forth in Section 6.1(a)(xvii) of the Company Disclosure Letter), (i)
enter into any commitment to provide any severance or termination benefits to
(or amend any existing arrangement with) any director, officer or employee of
the Company or any of its Subsidiaries, (ii) increase the benefits payable under
any existing severance or termination benefit policy or employment agreement
(other than as required to be increased pursuant to the existing terms of any
such policy or agreement), (iii) enter into any employment, deferred
compensation or other similar agreement (or amend any such existing agreement)
with any director or officer of the Company or any of its Subsidiaries other
than for new hires, (iv) establish, adopt, amend, terminate or make any new
awards under any bonus, profit-sharing, thrift, pension, retirement, deferred
compensation, compensation, stock option, restricted stock or other
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benefit plan or arrangement covering any director, officer or employee of the
Company or any of its Subsidiaries (v) increase the compensation, bonus or other
benefits payable to any director, officer, employee, consultant or independent
contractor of the Company or any of its Subsidiaries, or (vi) amend the terms of
any outstanding Company Option or other equity-based award; provided, that the
Company shall in no event take any action to amend its severance plans, except
as required by applicable Law;
(xviii) fail to initiate appropriate steps to renew any material FCC
Licenses held by the Company or its Subsidiaries that are scheduled to terminate
prior to or within 60 days after the Effective Time;
(xix) engage in the conduct of any business requiring the receipt or
transfer of a License issued by a Governmental Entity other than engaging in the
mobile wireless voice and data business in the U.S. and activities incident
thereto, other than any other current lines of business and geographic locations
of the Company or any of its Subsidiaries and other than as expressly permitted
by Section 6.1(a)(iii) of the Company Disclosure Letter;
(xx) except as otherwise permitted hereby with respect to employees,
enter into any material Contract with or engage in any material transaction with
DoCoMo or any other Affiliate of the Company;
(xxi) adopt a technology platform other than existing technologies,
(including analog, TDMA, EDGE, GSM and GPRS), HSDPA or UMTS and W-CDMA
(including in each case the standards set forth on Section 6.1(a)(xxi) of the
Company Disclosure Letter);
(xxii) amend, modify or waive any provision under the Rights
Agreement; and
(xxiii) agree or commit to do any of the foregoing.
(b) Each of SBC and BellSouth will cause Cingular and Cingular
Wireless to take all action necessary to consummate the transactions
contemplated by this Agreement subject to the terms and conditions hereof.
Neither SBC nor BellSouth will take or permit any of its Subsidiaries to take
any action that at the time of taking such action is reasonably likely to
prevent the consummation of the Merger. Except as set forth in the corresponding
section of the disclosure letter delivered by SBC to the Company at the time of
entering into this Agreement (the "SBC Disclosure Letter"), neither SBC nor
BellSouth shall, and each shall cause its Subsidiaries not to, prior to the
Termination Date, (i) enter into any definitive agreement for the acquisition of
any business or Person which provides commercial mobile wireless voice and data
services offered to the public utilizing frequencies and spectrum licensed by
the FCC, other than the provision of such services in de minimis amounts or (ii)
take any action which would, at the time the action is taken, reasonably be
expected to materially interfere with its ability to make available to Cingular
or the Paying Agent as of the Effective Time funds
-37-
sufficient for its Specified Interest of the Merger Consideration. Each of SBC
and BellSouth will, subject to the terms and conditions of this Agreement, make
available to Cingular or the Paying Agent its Specified Interest of the Merger
Consideration.
6.2. Acquisition Proposals. The Company agrees that neither it nor
any of its Subsidiaries nor any of the officers and directors of it or its
Subsidiaries shall, and that it shall cause its and its Subsidiaries' employees,
agents and representatives (including any investment banker, attorney or
accountant ("Representatives") retained by it or any of its Subsidiaries) not
to, directly or indirectly, initiate, solicit or knowingly encourage or
facilitate any inquiries or the making of any proposal or offer with respect to
(a) a merger, reorganization, share exchange, consolidation or similar
transaction involving the Company, (b) any purchase of an equity interest
representing an amount equal to or greater than a 15% voting or economic
interest in the Company or (c) any purchase of assets, securities or ownership
interests representing an amount equal to or greater than 15% of the
consolidated assets of the Company and its Subsidiaries taken as a whole, (any
such proposal or offer being hereinafter referred to as an "Acquisition
Proposal"). The Company further agrees that neither it nor any of its
Subsidiaries nor any of the officers and directors of it or its Subsidiaries
shall, and that it shall cause its and its Subsidiaries' employees, agents and
Representatives not to, directly or indirectly, engage in any negotiations
concerning, or provide any confidential information or data to, or have any
discussions with, any Person relating to an Acquisition Proposal, or otherwise
knowingly encourage or facilitate any effort or attempt to make or implement an
Acquisition Proposal; provided, however, that nothing contained in this
Agreement shall prevent the Company or its Board of Directors from (i) complying
with its disclosure obligations under Sections 14d-9 and 14e-2 of the Exchange
Act with regard to an Acquisition Proposal; provided, however, that if such
disclosure has the effect of withdrawing, modifying or qualifying the Directors'
Recommendation in a manner adverse to Cingular or the approval of this Agreement
by the Board of Directors of the Company, Cingular shall have the right to
terminate this Agreement to the extent set forth in Section 8.4(a) of this
Agreement; and (ii) at any time prior to, but not after, the time this Agreement
is adopted by the Company Requisite Vote, (A) providing information in response
to a request therefor by a Person who has made an unsolicited bona fide written
Acquisition Proposal if the Board of Directors of the Company receives from the
Person so requesting such information an executed confidentiality agreement
(other than standstill provisions) on customary terms; (B) engaging in any
negotiations or discussions with any Person who has made an unsolicited bona
fide written Acquisition Proposal if the Board of Directors of the Company
receives from such Person an executed confidentiality agreement (other than
standstill provisions) on customary terms; or (C) recommending such an
unsolicited bona fide written Acquisition Proposal to the stockholders of the
Company, if and only to the extent that, (x) in each such case referred to in
clause (A), (B) or (C) above, the Board of Directors of the Company determines
in good faith after consultation with outside legal counsel that such action is
necessary in order for its directors to comply with their respective fiduciary
duties under applicable Law, (y) in each case referred to in clause (B) or (C)
above, the Board of Directors of the Company determines in good faith (after
consultation with its financial advisor and
-38-
outside counsel) that such Acquisition Proposal, if accepted, is reasonably
likely to be consummated, taking into account all legal, financial and
regulatory aspects of the proposal, the likelihood of obtaining financing, and
the Person making the proposal, and if consummated, would result in a
transaction more favorable to the Company's stockholders from a financial point
of view than the transaction contemplated by this Agreement taking into account
any change in proposal proposed by Cingular; or (z) in the case of clause (C),
Cingular shall have had written notice of the Company's intention to take the
action referred to in clause (C) at least three business days prior to the
taking of such action by the Company; provided, that any more favorable
Acquisition Proposal referred to in clause (B) or (C) above must involve 50%
rather than the 15% used in the definition of Acquisition Proposal (any such
more favorable Acquisition Proposal is referred to in this Agreement as a
"Superior Proposal"). The Company agrees that it will immediately cease and
cause to be terminated any existing activities, discussions or negotiations with
any Person conducted heretofore with respect to any Acquisition Proposal. The
Company agrees that it will take the necessary steps to promptly inform the
individuals or entities referred to in the first sentence of this Section 6.2 of
the obligations undertaken in this Section 6.2. The Company agrees that it will
notify Cingular promptly, but in any event within 48 hours if any such
inquiries, proposals or offers are received by, any such information is
requested from, or any such discussions or negotiations are sought to be
initiated or continued with, it or any of its Representatives indicating, in
connection with such notice, the name of such Person and the material terms and
conditions of any proposals or offers and thereafter shall keep Cingular
informed on a current basis, and, in any event, within 48 hours of any changes
in the status and terms of any such proposals or offers, including whether any
such proposal has been withdrawn or rejected. The Company also agrees to provide
any information to Cingular that it is providing to another Person pursuant to
this Section 6.2 at substantially the same time it provides it to such other
Person and that it will promptly request each Person that has heretofore
executed a confidentiality agreement in connection with its consideration of a
transaction with the Company to return all confidential information furnished
prior to the execution of this Agreement to or for the benefit of such Person by
or on behalf of it or any of its Subsidiaries. The Company agrees promptly, but
in any event, within five days after the date of this Agreement, to request the
return or destruction of all information and materials provided prior to the
date of this Agreement by it, its Affiliates or their respective Representatives
with respect to the consideration or making of any Acquisition Proposal.
Notwithstanding anything in this Section 6.2 to the contrary, any actions taken
by DoCoMo that are not in cooperation with the Company or its Subsidiaries or
their respective Representatives (except as otherwise permitted by this
Agreement) shall not constitute a breach of this Section 6.2.
6.3. Information Supplied. The Company agrees, as to itself and its
Subsidiaries, that (i) the proxy statement of the Company (the "Proxy
Statement") and any amendment or supplement thereto will comply in all material
respects with the applicable provisions of the Exchange Act and the rules and
regulations thereunder and (ii) none of the information supplied by it or any of
its Subsidiaries for inclusion or incorporation by reference in the Proxy
Statement will at the date of mailing to
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stockholders or at the time of the Stockholders Meeting 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 in which they are made, not misleading.
6.4. Stockholders Meeting. The Company will take, in accordance with
applicable Law and its certificate of incorporation and by-laws, all action
necessary to convene a meeting of holders of Shares (the "Stockholders Meeting")
as promptly as possible after the execution of this Agreement to consider and
vote upon the adoption of this Agreement. Subject to its fiduciary duties under
applicable Law, the Board of Directors of the Company shall make the Directors'
Recommendation, the Directors' Recommendation shall be included in the Proxy
Statement and the Board of Directors of the Company shall take all lawful action
to solicit the adoption of this Agreement by the holders of Shares. In the event
that subsequent to the date of this Agreement, the Board of Directors of the
Company determines after consultation with outside counsel that its fiduciary
duties under applicable Law require it to withdraw, modify or qualify the
Directors' Recommendation in a manner adverse to Cingular, the Board of
Directors of the Company may so withdraw, modify or qualify the Directors'
Recommendation, however, unless this Agreement is theretofore terminated, the
Company shall nevertheless submit this Agreement to the holders of the Shares
for adoption at the Stockholders Meeting.
6.5. Filings; Other Actions; Notification. (a) The Company shall use
its reasonable best efforts to prepare and file, as promptly as practicable
after the date of this Agreement, the Proxy Statement with the SEC and shall
promptly notify Cingular of the receipt of all comments of the SEC with respect
to the Proxy Statement and of any request by the SEC for any amendment or
supplement thereto or for additional information and shall promptly provide to
Cingular copies of all correspondence between the Company and/or any of its
Representatives and the SEC with respect to the Proxy Statement. The Company and
Cingular shall each use its best efforts to promptly provide responses to the
SEC with respect to all comments received on the Proxy Statement by the SEC and
the Company shall cause the definitive Proxy Statement to be mailed as promptly
as possible after the date the SEC staff advises that it has no further comments
thereon or that the Company may commence mailing the Proxy Statement.
(b) The Company, Cingular and Cingular Wireless shall cooperate with
each other and use, and shall cause their respective Subsidiaries to use, their
respective best efforts to take or cause to be taken all actions, and do or
cause to be done all things, necessary, proper or advisable on its part under
this Agreement and applicable Laws to consummate and make effective the Merger
and the other transactions contemplated by this Agreement as promptly as
reasonably practicable, including preparing and filing as promptly as reasonably
practicable all documentation to effect all necessary notices, reports and other
filings (including by filing no later than 30 days after the date of this
Agreement all applications required to be filed with the FCC and the
notification and required form under the HSR Act; provided, however, that the
failure to
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file within 30 days will not constitute a breach of this Agreement) and to
obtain as promptly as reasonably practicable all consents, registrations,
approvals, permits and authorizations necessary or advisable to be obtained from
any third party and/or any Governmental Entity in order to consummate the Merger
or any of the other transactions contemplated by this Agreement. BellSouth and
SBC agree to use, to cause their Subsidiaries to use and to cause Cingular,
Cingular Wireless and their respective Subsidiaries to use, their reasonable
best efforts to take or cause to be taken such actions as Governmental Entities
may require with respect to their respective businesses in order to assist
Cingular, Cingular Wireless and their respective Subsidiaries in obtaining all
necessary Governmental Consents. Nothing in this Agreement shall require, or be
construed to require, Cingular, Cingular Wireless, BellSouth, SBC or their
respective Subsidiaries to take any action or enter into any agreement with
respect to any of its assets, business or operations (the sum of the aggregate
positive and negative economic effects of all such actions and agreements on the
value of the assets, business or operations of the combined Cingular, the
Company, and their respective Subsidiaries (excluding synergies anticipated to
be realized by SBC, BellSouth, Cingular or their respective Subsidiaries from
the Merger) and on the value of the assets, business or operations of BellSouth,
SBC or their respective Subsidiaries, as applicable, as of the date of any
determination being referred to herein as the "Net Effects"), that would,
individually or in the aggregate, reasonably be expected to result in the
aggregate negative Net Effects being more than the Material Adverse Amount (as
defined in Section 6.5(b) of the Cingular Disclosure Letter (a "Material Adverse
Condition")). For purposes of calculating Net Effects with respect to the sale
of a market or spectrum it is agreed that (i) the Net Effects of the sale of a
market owned by any of the Company, Cingular or Cingular Wireless will be an
amount equal to the Per Subscriber Amount (as defined in Section 6.5 of the
Cingular Disclosure Letter) multiplied by the number of subscribers in the
system and operations in such market proposed by Cingular, in good faith, to be
sold, and (ii) the Net Effects of the sale of spectrum-only shall be $0.50 per
MHz POP. Subject to applicable Laws relating to the sharing of information,
Cingular and the Company shall have the right to review in advance, and to the
extent practicable each will consult the other on, all the information relating
to Cingular or the Company, as the case may be, and any of their respective
Subsidiaries, that appear in any filing made with, or written materials
submitted to, any third party and/or any Governmental Entity in connection with
the Merger and the other transactions contemplated by this Agreement (including
the Proxy Statement). In exercising the foregoing right, each of the Company and
Cingular shall act reasonably and as promptly as practicable. None of the
Company, Cingular, Cingular Wireless, BellSouth or SBC shall agree to
participate in any substantive meeting or discussion with any such Governmental
Entity in respect of any filing, investigation or inquiry concerning this
Agreement or the Merger unless it consults with the other parties reasonably in
advance and, to the extent permitted by such Governmental Entity, gives the
other parties the opportunity to attend and participate.
(c) The Company and Cingular each shall, upon request by the other,
furnish the other with all information concerning itself, its Subsidiaries,
directors, officers and stockholders and such other matters as may be reasonably
necessary or advisable in
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connection with the Proxy Statement or any other statement, filing, notice or
application made by or on behalf of Cingular, the Company or any of their
respective Subsidiaries to any third party and/or any Governmental Entity in
connection with the Merger and the transactions contemplated by this Agreement.
(d) Subject to applicable Law and the instructions of any
Governmental Entity, the Company and Cingular each shall keep the other apprised
of the status of matters relating to completion of the transactions contemplated
hereby, including promptly furnishing the other with copies of notices or other
communications received by Cingular or the Company, as the case may be, or any
of their respective Subsidiaries, from any third party and/or any Governmental
Entity with respect to such transactions. The Company shall give prompt notice
to Cingular of any change, fact or condition, that is reasonably likely to
result in a Material Adverse Effect or of any failure of any condition to
Cingular's obligations to effect the Merger, and Cingular shall give prompt
notice to the Company of any change, fact or condition, that is reasonably
likely to result in a failure of any condition to the Company's obligations to
effect the Merger.
(e) Cingular's obligations under this Section 6.5 shall include,
without limitation, the obligation to defend any lawsuits or other legal
proceedings, whether judicial or administrative, challenging the consummation of
the Merger or the other transactions contemplated hereby, including, except to
the extent it would reasonably be expected to result in a Material Adverse
Condition, seeking to have any stay or other injunctive relief which would
prevent or materially delay or impair the consummation of the transactions
contemplated by this Agreement entered by any court or other Governmental Entity
reversed on appeal or vacated consistent with its other obligations under this
Section 6.5.
6.6. Access. (a) Subject to applicable Laws relating to the sharing
of information, upon reasonable notice, and except as may otherwise be required
by applicable Law, the Company shall, and shall cause its Subsidiaries to,
afford Cingular's, its stockholders and its other Affiliates' officers,
employees, counsel, accountants and other authorized Representatives reasonable
access, during normal business hours throughout the period prior to the
Effective Time, to its properties, books, contracts and records and, during such
period, the Company shall, and shall cause its Subsidiaries to, furnish promptly
to Cingular all information concerning its business, properties and personnel as
may reasonably be requested; provided, that no investigation pursuant to this
Section 6.6(a) shall affect or be deemed to modify any representation or
warranty made by the Company, and provided, further, that the foregoing shall
not require the Company to permit any inspection, or to disclose any
information, that in the reasonable judgment of the Company would result in the
disclosure of any trade secrets of third parties or violate any of its
obligations with respect to confidentiality if the Company shall have used
reasonable best efforts to obtain the consent of such third party to such
inspection or disclosure. At the request of Cingular, throughout the period
prior to the Effective Time, the Company shall use its reasonable best efforts
to obtain waivers from Persons who are
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parties to Contracts with the Company or its Subsidiaries that contain
confidentiality provisions in order for Cingular to be provided reasonable
access to such Contracts.
(b) The Company shall make available to Cingular and its
Representatives for inspection the consolidated U.S. Federal Income Tax Returns
required to be prepared by the Company from and after the date of this
Agreement. The Company shall make such Tax Returns available to Cingular at
least 21 days prior to the due date for filing such Tax Returns.
6.7. Consent/Tender Offers. With respect to the indebtedness of the
Company or its Subsidiaries specified in Section 6.7 of the Company Disclosure
Letter (the "Specified Indebtedness"), at the request of Cingular, the Company
shall, with respect to the Specified Indebtedness issued by it, and cause it
Subsidiaries to, with respect to the Specified Indebtedness issued by such
Subsidiary, use its reasonable best efforts to commence consent solicitations or
issuer tender offers with respect to the Specified Indebtedness as and at the
times that Cingular shall request ("Consent/Tender Offers"), in each case with
the cooperation of Cingular. All Consent/Tender Offers shall be in accordance
with applicable Law and shall be solely on the terms and conditions specified by
Cingular; provided, that all Consent/Tender Offers (and all obligations to make
any payments to holders of all or any portion of Specified Indebtedness in
connection therewith or to modify the terms or provisions of any Specified
Indebtedness) shall be conditioned upon the consummation of the Merger, and
shall terminate immediately upon the termination of this Agreement prior to the
Effective Time. The Company agrees not to consummate any Consent/Tender Offer
unless Cingular consents in writing to such consummation. The Company agrees to
use its reasonable efforts to cooperate with Cingular and, subject to the
preceding sentence and applicable Law, to use its reasonable best efforts to
consummate all Consent/Tender Offers. Notwithstanding the foregoing, it shall be
a condition to any obligation of the Company or any of its Subsidiaries under
this Section 6.7 that (a) Cingular shall reimburse the Company for all of its
reasonable out-of-pocket costs in conducting the Consent/Tender Offers promptly
following incurrence and delivery of reasonable documentation of such costs, (b)
none of the Company or any of its Subsidiaries shall be required to make any
payments to holders of all or any portion of Specified Indebtedness or to modify
the terms or provisions of any Specified Indebtedness, in each case, prior to
the consummation of the Merger, or similarly incur any liability or obligation
in connection therewith, except for liabilities and obligations for which
Cingular has a reimbursement obligation under clause (a) above, (c) the Company
and its Subsidiaries (and their respective officers and directors) shall be
entitled to indemnification in form and substance reasonably satisfactory to
them with respect to any information relating to any Person other than the
Company or its Subsidiaries utilized in connection therewith, and (d) the
Company and its Subsidiaries shall not be required to proceed with any
Consent/Tender Offers if they would be required by Law to make any disclosure
which the Board of Directors of the Company determines in good faith is
reasonably likely to not be in the best interests of the Company and its
stockholders; provided, that subject to applicable Law and the provisions of
this Section 6.7 promptly following the time that
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such disclosure may be made, the Company shall proceed with any Consent/Tender
Offer with which it had ceased proceeding.
6.8. Employee Benefits. (a) Cingular agrees that it shall cause the
Surviving Corporation to honor all Company Compensation and Benefit Plans (other
than the Severance Plans) in accordance with their terms as in effect
immediately before the Effective Time, subject to any amendment or termination
thereof that may be permitted by such terms. For a period from the Effective
Time through at least December 31, 2005, Cingular shall provide, or shall cause
to be provided, to those individuals who as of the Effective Time were employees
of the Company and its Subsidiaries (other than collectively bargained
employees) (the "Affected Employees") compensation and employee benefits (other
than payments under the Retention Pool described in Section 6.1(a)(xvii) of the
Company Disclosure Letter, other similar payments or benefits made by reason of
the Merger and the other transactions contemplated by this Agreement or any
incremental increase in value attributable to the Merger or the other
transactions contemplated by this Agreement) no less favorable in the aggregate
than those provided to the Affected Employees immediately before the Effective
Time. Cingular shall cause the Surviving Corporation to honor the Company's
Amended and Restated Senior Officer Severance Plan in accordance with its terms
as in effect on the date of this Agreement through the second anniversary of the
Effective Time and the Company's Officer Severance Plan and the Company's
Amended and Restated Severance Pay Plan (the three plans, collectively, the
"Severance Plans") in accordance with their respective terms as in effect
immediately before the Effective Time without adverse amendment for the period
from the Effective Time through December 31, 2006. Notwithstanding the
foregoing, nothing contained herein shall obligate Cingular, the Surviving
Corporation or any Affiliate of any of them to (x) maintain any particular
Company Compensation and Benefit Plan (other than the Severance Plans), (y)
grant or issue any equity or equity-based awards or (z) retain the employment of
any Affected Employee.
(b) For all purposes under the employee benefit plans of Cingular and
its Affiliates providing benefits to any Affected Employees after the Effective
Time (the "New Plans"), each Affected Employee shall receive credit for his or
her service with the Company and its Affiliates before the Effective Time
(including predecessor or acquired entities or any other entities for which the
Company and its Affiliates have given credit for prior service), for purposes of
eligibility, vesting and benefit accrual (but not (i) for purposes of
eligibility for subsidized early retirement benefits, (ii) for purposes of
benefit accrual under defined benefit pension plans and (iii) for any new
program for which credit for benefit accrual for service prior to the effective
date of such program is not given to similarly situated employees of Cingular
other than the Affected Employees) to the same extent as such Affected Employee
was entitled, before the Effective Time, to credit for such service under any
similar or comparable Company Compensation and Benefit Plans (except to the
extent such credit would result in a duplication of accrual of benefits). In
addition, and without limiting the generality of the foregoing: (i) at the
Effective Time, each Affected Employee immediately shall be eligible to
participate, without any waiting time, in any and all New Plans to the extent
coverage under such
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New Plan replaces coverage under a similar or comparable Company Compensation
and Benefit Plans in which such Affected Employee participated immediately
before the Effective Time (such plans, collectively, the "Old Plans"); and (ii)
for purposes of each New Plan providing medical, dental, pharmaceutical and/or
vision benefits to any Affected Employee, Cingular shall cause all pre-existing
condition exclusions and actively-at-work requirements of such New Plan to be
waived for such Affected Employee and his or her covered dependents to the
extent such pre-existing condition exclusions and actively-at-work requirements
were inapplicable to or had been satisfied by such Affected Employee and his or
her covered dependants immediately prior to the Effective Time under the
relevant Old Plan, and Cingular shall cause any eligible expenses incurred by
such employee and his or her covered dependents during the portion of the plan
year of the Old Plan ending on the date such employee's participation in the
corresponding New Plan begins to be taken into account under such New Plan for
purposes of satisfying all deductible, coinsurance and maximum out-of-pocket
requirements applicable to such employee and his or her covered dependents for
the applicable plan year as if such amounts had been paid in accordance with
such New Plan.
(c) Cingular hereby acknowledges that a "change of control" or a
"change in control" within the meaning of each written Company Compensation and
Benefit Plans that has been provided to Cingular on or prior to the date of this
Agreement that contains either of such terms will occur no later than the
Effective Time.
(d) For the plan year in which the Effective Time occurs, Cingular
shall, or shall cause the Company to, cause the profit sharing formula as
established under the Company profit sharing plan for such plan year to remain
in effect and, subject to applicable law, cause a contribution to be made that
is calculated based on performance through the Effective Time for the plan year
in which the Effective Time occurs and annualized through the end of such plan
year. Cingular shall cause, or shall cause the Surviving Corporation to cause,
each Affected Employee who is a participant in the Company's 401(k) Savings Plan
and who incurs a termination of employment after the Effective Time that
entitles such Affected Employee to severance benefits under any of the Severance
Plans to be fully vested in his or her account balance under the Company's
401(k) Savings Plan.
(e) The Company shall take all actions necessary to cause the
Company's Amended and Restated Employee Stock Purchase Plan (the "Stock Purchase
Plan") to terminate prior to the Effective Time and to cause each participant's
Periodic Deposit Account, as defined in the Stock Purchase Plan, to be returned
and paid in cash at the time of termination without the purchase of any shares.
(f) With respect to matters described in this Section 6.8 relating to
benefits or compensation to be provided after the Effective Time, the Company
will to the extent permitted by applicable Law provide Cingular with copies of
any broad-based notices or other communication materials of a general nature
prior to sending them.
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(g) Prior to the Closing, to the extent permitted by applicable Law
and the terms of the applicable plan or arrangement, the Company shall cause to
be amended the employee benefit plans and arrangements of it and its
Subsidiaries to the extent necessary to provide that no employees of Cingular
and its Subsidiaries shall commence to participate therein following the
Effective Time unless the Surviving Corporation or such Subsidiary explicitly
authorizes such participation. In addition, prior to the Closing, to the extent
permitted by applicable Law and the terms of the applicable plan or arrangement,
Cingular shall cause to be amended the employee benefit plans and arrangements
of it and its Subsidiaries to the extent necessary to provide that no employees
of the Company and its Subsidiaries shall commence to participate therein
following the Effective Time unless Cingular or such Subsidiary explicitly
authorizes such participation.
(h) The Company agrees that, if the Effective Time occurs after
December 31, 2004, it will consult with Cingular to consider any proposals by
Cingular to reduce the "excess parachute payments" (as defined in Section
280G(b)(1) of the Code) which may be payable by the Company as a result of the
Merger and the other transactions contemplated by this Agreement and, if
requested by Cingular, the Company will meet with Cingular to discuss any such
proposals no later than December 15, 2004.
6.9. Indemnification; Directors' and Officers' Insurance. (a)
Cingular, Cingular Wireless and the Surviving Corporation shall jointly and
severally, from and after the Effective Time, indemnify and hold harmless each
present and former director and officer of the Company, determined as of the
Effective Time (the "Indemnified Parties"), in respect of acts or omissions in
their capacity as such, against any costs or expenses (including reasonable
attorneys' fees), judgments, fines, losses, claims, damages or liabilities
(collectively, "Costs") incurred in connection with any claim, action, suit,
proceeding or investigation, whether civil, criminal, administrative or
investigative, arising out of matters existing or occurring at or prior to the
Effective Time, whether asserted or claimed prior to, at or after the Effective
Time (including any matters arising in connection with the transactions
contemplated by this Agreement), to the fullest extent permitted by Law (and
Cingular, Cingular Wireless and the Surviving Corporation shall jointly and
severally advance expenses as incurred to the fullest extent permitted by Law);
provided, that the Person to whom expenses are advanced provides an undertaking
to repay such advances if it is ultimately determined that such Person is not
entitled to indemnification); and provided, further, that any determination
required to be made with respect to whether an officer or director is entitled
to indemnification or advancement of expenses shall be made by independent
counsel selected by Cingular and such Person.
(b) Any Indemnified Party wishing to claim indemnification under
paragraph (a) of this Section 6.9, upon learning of any such claim, action,
suit, proceeding or investigation, shall promptly notify Cingular thereof but
any failure to give such notice shall not relieve any obligation of Cingular,
Cingular Wireless or the Surviving Corporation hereunder except to the extent
Cingular, Cingular Wireless or the
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Surviving Corporation is actually prejudiced by such failure to give such
notice. In the event of any such claim, action, suit, proceeding or
investigation (whether arising before or after the Effective Time), (i)Cingular,
Cingular Wireless or the Surviving Corporation shall have the right to assume
the defense thereof and neither Cingular, Cingular Wireless nor the Surviving
Corporation shall be liable to such Indemnified Parties for any legal expenses
of other counsel or any other expenses subsequently incurred in connection with
the defense thereof, except that if Cingular, Cingular Wireless and the
Surviving Corporation do not elect to assume such defense or counsel for the
Indemnified Parties advises that there are issues which raise conflicts of
interest between Cingular, Cingular Wireless or the Surviving Corporation and
the Indemnified Parties, the Indemnified Parties may retain counsel and
Cingular, Cingular Wireless and the Surviving Corporation shall jointly and
severally agree to pay all reasonable fees and expenses of such counsel for the
Indemnified Parties promptly as statements therefor are received; provided,
however, that Cingular, Cingular Wireless and the Surviving Corporation shall be
obligated pursuant to this paragraph (b) to cause Cingular, Cingular Wireless
and the Surviving Corporation to pay for only one firm of counsel for all
Indemnified Parties in any jurisdiction unless the use of one counsel for such
Indemnified Parties would present such counsel with a conflict of interest;
provided, that the fewest number of counsels necessary to avoid conflicts of
interest shall be used, (ii) the Indemnified Parties will use their reasonable
efforts to cooperate in the defense of any such matter and (iii) neither
Cingular, Cingular Wireless nor the Surviving Corporation shall be liable for
any settlement effected without Cingular's prior written consent; provided, that
there shall not be any obligation under this Agreement to any Indemnified Party
if and when a court of competent jurisdiction shall ultimately determine, and
such determination shall have become final, that the indemnification of such
Indemnified Party in the manner contemplated hereby is prohibited by applicable
Law.
(c) The Surviving Corporation shall and Cingular shall cause the
Surviving Corporation to maintain the Company's existing officers' and
directors' liability insurance ("D&O Insurance") (including for acts or
omissions occurring in connection with this Agreement and the consummation of
the transactions contemplated hereby) covering each such Indemnified Person
covered as of the Effective Time by the Company's officers' and directors'
liability insurance policy on terms with respect to coverage and amount no less
favorable than those of such policy in effect on the date hereof for a period of
six years after the Effective Time; provided, however, that in no event shall
the Surviving Corporation be required to expend in any one year an amount in
excess of 200% of the current annual premium paid by the Company (which annual
premium is set forth on Schedule 6.9(c) of the Company Disclosure Letter) for
such insurance (such 200% amount, the "Maximum Annual Premium"); provided,
further, that if the annual premiums of such insurance coverage exceed such
amount, the Surviving Corporation shall be obligated to obtain a policy with the
greatest coverage available for a cost not exceeding the Maximum Annual Premium.
In addition, the Company may purchase a six-year "tail" prepaid policy prior to
the Effective Time on terms and conditions no less advantageous to the
Indemnified Parties than the existing directors' and officers' liability
insurance maintained by the Company; provided, that the amount paid
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by the Company shall not exceed six times the Maximum Annual Premium. If such
"tail" prepaid policies have been obtained by the Company prior to the Closing,
the Surviving Corporation shall, and Cingular and Cingular Wireless shall cause
the Surviving Corporation to, maintain such policies in full force and effect,
and continue to honor the respective obligations thereunder, and all other
obligations under this Section 6.9(c) shall terminate.
(d) The provisions of this Section 6.9 are intended to be for the
benefit of, and shall be enforceable by, each of the Indemnified Parties and
their heirs and legal representatives.
(e) The rights of the Indemnified Parties and their heirs and legal
representatives under this Section 6.9 shall be in addition to any rights such
Indemnified Parties may have under the certificate of incorporation or bylaws of
the Company or any of its Subsidiaries, or under any other applicable Laws.
(f) The obligations of Cingular, Cingular Wireless and the Surviving
Corporation under this Section 6.9 shall not be terminated or modified by
Cingular, Cingular Wireless or the Surviving Corporation in a manner as to
adversely affect any Indemnified Party to whom this Section 6.9 applies without
the consent of the affected Indemnified Party. In the event that either
Cingular, Cingular Wireless or the Surviving Corporation or any of their
respective successors or assigns (A) consolidates with or merges into any other
Persons, or (B) transfers at least 50% of its properties or assets to any
Person, then and in each case, proper provision shall be made so that the
applicable successors and assigns or transferees assume the obligations set
forth in this Section 6.9.
6.10. Other Actions by the Company.
(a) Rights Agreement. Prior to the Effective Time, the Board of
Directors of the Company shall take all necessary action to terminate all of the
outstanding Rights and to terminate the Rights Agreement, effective immediately
prior to the Effective Time without payment of any consideration in respect
thereof or in respect of the Rights.
(b) Takeover Statute. If any Takeover Statute is or may become
applicable to the Merger or the other transactions contemplated by this
Agreement, the Company 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 and by
the Merger and otherwise act to eliminate or minimize the effects of such
statute or regulation on such transactions.
(c) DoCoMo Investor Agreement. Neither the Board of Directors of the
Company nor any committee of the Board of Directors of the Company shall require
or approve a change in the Company's use of W-CDMA technology as the primary
standard for its delivery of wireless services based on 3G technology before
December 31, 2004 (other than migration to successor technologies and other than
for
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one or more of the reasons set forth in clauses (i) through (iv) of Section
4.1(a) of the DoCoMo Investor Agreement). The Company shall use its reasonable
best efforts to take or cause to be taken all action necessary to meet the 3G
Launch Obligation (as defined in the DoCoMo Investor Agreement) under Section
4.1(a) of the DoCoMo Investor Agreement prior to December 31, 2004.
(d) Director Resignations. The Company shall procure the resignation
or removal of each of the members of the Board of Directors of the Company as of
the Effective Time.
(e) Regulatory Compliance. The Company and each of its Subsidiaries
agrees to use its reasonable best efforts to (i) cure not later than the
Effective Time any violations and defaults under any applicable rules and
regulations of the FCC (the "FCC Rules") and the FAA Rules, (ii) substantially
comply with the terms of the FCC Licenses and the FAA Rules and file or cause to
be filed with the FCC and the FAA all reports and other filings to be filed
under applicable FCC Rules and FAA Rules and (iii) take all actions reasonably
requested in writing by Cingular on or before the Closing Date to be in
compliance upon the consummation of the Closing and the provisions of Sections
271 and 272 of the Communications Act (including any orders issued by the FCC
interpreting or implementing such provisions). Cingular agrees that it shall
reimburse the Company for any reasonable out-of-pocket expenses following
incurrence and delivery of reasonable documentation by the Company at the
direction of Cingular pursuant to clause (iii) of the first sentence of this
Section 6.10(e).
(f) Between the date of this Agreement and the Effective Time (or
earlier termination of this Agreement), to the extent reasonably requested by
Cingular, the Company shall, and shall cause its Subsidiaries to, cooperate with
Cingular to facilitate the disposition immediately prior to, at or after the
Effective Time of those assets or ownership interests held by the Company or any
of its Subsidiaries that are identified by Cingular in writing to the Company as
assets or ownership interests the holding of which would be inconsistent with
Cingular's strategic objectives (such assets or interests referred to as a
"Potential Sale Interest"). To the extent reasonably requested by Cingular, the
Company shall, and shall cause its Subsidiaries to, use its reasonable best
efforts to (i) permit Persons who Cingular identifies to the Company as
potential purchasers of a Potential Sale Interest to conduct (and cooperate with
such Persons') reasonable investigations with respect to such Potential Sale
Interest (provided, that any such Person executes and delivers to Augusta a
confidentiality agreement containing customary terms), (ii) comply with any
applicable right of first refusal, right of first offer, right of approval and
similar provisions that may be applicable to a proposed transfer of a Potential
Sale Interest, and (iii) deliver such notices, make such filings and execute
such Contracts relating to the disposition of Potential Sale Interests as
reasonably requested by Cingular; provided, that neither the Company nor any of
its Subsidiaries shall be required to execute any such Contract under which the
Company or any of its Subsidiaries may be required to dispose of any Potential
Sale Interest other than immediately prior to, at or after the Effective Time.
Cingular shall be permitted to identify potential purchasers of
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Potential Sale Interests and negotiate any Contracts with respect to
dispositions of Potential Sale Interests; provided, that the Company may (and,
to the extent reasonably requested by Cingular, shall) participate in such
negotiations. Notwithstanding the foregoing, (A) Cingular shall reimburse the
Company and its Subsidiaries for their reasonable out-of-pocket costs in
complying with this Section 6.10(f) promptly following incurrence and delivery
of reasonable documentation of such costs and (B) the Company and its
Subsidiaries shall not be required to breach in any material respect the terms
of any Contract governing the disposition of such Potential Sale Interest.
ARTICLE VII
Conditions
7.1. Conditions to the Obligations of the Company, Cingular and
Merger Sub to Effect the Merger. The respective obligation of each of the
Company, Cingular and Merger Sub to effect the Merger is subject to the
satisfaction or waiver at or prior to the Closing of each of the following
conditions:
(a) Stockholder Approval. This Agreement shall have been duly adopted
by holders of Shares constituting the Company Requisite Vote in accordance with
applicable Law and the Company's certificate and by-laws.
(b) Regulatory Consents. (i) The waiting period applicable to the
consummation of the Merger under the HSR Act shall have expired or been earlier
terminated, (ii) all approvals and authorizations required to be obtained from
the FCC for the consummation of the Merger shall have been obtained, except for
those consents to be obtained from the FCC that in the aggregate are immaterial
to the Company and have not been denied by the FCC, and (iii) all other
Governmental Consents, the failure of which to make or obtain would,
individually or in the aggregate, provide a reasonable basis to conclude that
the Company or its directors or officers would be subject to the risk of
criminal liability, shall have been made or obtained. For purposes of this
Agreement, the term "Governmental Consents" shall mean all notices, reports, and
other filings required to be made prior to the Effective Time by the Company or
Cingular or any of their respective Subsidiaries with, and all consents,
registrations, approvals, permits, clearances and authorizations required to be
obtained prior to the Effective Time by the Company or Cingular or any of their
respective Subsidiaries from, any Governmental Entity in connection with the
execution and delivery of this Agreement and the consummation of the Merger and
the other transactions contemplated hereby.
(c) Litigation. No court or other Governmental Entity of competent
jurisdiction shall have enacted, issued, promulgated, enforced or entered any
Law, rule, regulation, judgment, determination, decree, injunction or other
order (whether temporary, preliminary or permanent) that is in effect and
restrains, enjoins or otherwise prohibits consummation of the Merger or the
other transactions contemplated by this Agreement (collectively, an "Order"),
except for such Orders enacted, issued,
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promulgated, enforced or entered by a Governmental Entity having jurisdiction
solely outside of North America (i) that would not reasonably be expected,
individually or in the aggregate, to result in (A) a Material Adverse Effect,
(B) a material adverse effect on Cingular and its Subsidiaries taken as a whole
or (C) a material adverse effect on BellSouth or SBC and their respective
Subsidiaries or (ii) the failure to comply with which would not reasonably be
expected to lead to criminal prosecution of the officers of Cingular, SBC,
BellSouth and their Affiliates (collectively, "Immaterial Orders").
7.2. Conditions to Obligations of Cingular and Merger Sub. The
obligation of Cingular and Merger Sub to effect the Merger is also subject to
the satisfaction or waiver by Cingular at or prior to the Closing of the
following conditions:
(a) Representations and Warranties. (i) The representations and
warranties of the Company set forth in Sections 5.1(b)(i) and 5.1(b)(iii) (other
than the last sentence of Section 5.1(b)(iii)), in each case relating to the
capital stock of the Company and Section 5.1(l) of this Agreement shall be true
and correct in all material respects (A) on the date of this Agreement and (B)
on the Closing Date with the same effect as though such representations and
warranties had been made on and as of the Closing Date (except to the extent
that any such representation and warranty expressly speaks as of an earlier
date, in which case such representation and warranty shall be true and correct
as of such earlier date); (ii) the other representations and warranties of the
Company set forth in this Agreement shall be true and correct (A) on the date of
this Agreement and (B) on the Closing Date with the same effect as though such
representations and warranties had been made on and as of the Closing Date
(except to the extent that such representation and warranty expressly speaks as
of an earlier date, in which case such representation and warranty shall be true
and correct as of such earlier date); provided, however, that notwithstanding
anything herein to the contrary, the condition set forth in this Section
7.2(a)(ii) shall be deemed to have been satisfied even if any representations
and warranties of the Company are not true and correct unless the failure of
such representations and warranties of the Company to be true and correct (read
for purposes of this Section 7.2(a)(ii) without any materiality or Material
Adverse Effect qualification), individually or in the aggregate, has had or is
reasonably expected to have a Material Adverse Effect; provided, further that
the failure of any representation or warranty of the Company to be true and
correct to the extent arising from the imposition by any Governmental Entity in
a proceeding granting a Governmental Consent of conditions on the Company and
its Subsidiaries prior to the Closing shall not cause this Section 7.2(a)(ii) to
fail to be satisfied; and (iii) Cingular shall have received at the Closing a
certificate signed on behalf of the Company by the Chief Executive Officer or
Chief Financial Officer of the Company to the effect that the condition set
forth in this Section 7.2(a) has been satisfied.
(b) Performance of Obligations of the Company. The Company shall have
performed in all material respects all agreements and obligations required to be
performed by it under this Agreement at or prior to the Closing Date, and
Cingular shall have received a certificate signed on behalf of the Company by
the Chief Executive
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Officer or Chief Financial Officer of the Company to the effect that the
condition set forth in this Section 7.2(b) has been satisfied. The Company shall
not have become obligated to repurchase any Shares, other shares of its capital
stock or warrants under the DoCoMo Investor Agreement and DoCoMo and its
Affiliates shall have no other right to require any such repurchase (other than
pursuant to the Merger) and the Company shall have met the 3G Launch Obligation
specified in Section 4.1(a) of the DoCoMo Investor Agreement (or DoCoMo shall
have irrevocably waived compliance or its rights under Section 4.3(a) of the
DoCoMo Investor Agreement).
(c) Threatened Orders. No Governmental Entity shall have instituted
(or if instituted, shall not have withdrawn) any proceeding or threatened to
institute any proceeding seeking any Order (or if threatened, shall not have
withdrawn such threat), except for Orders as would reasonably be expected,
individually or in the aggregate, to result in an Immaterial Order.
(d) Governmental Consents. All Governmental Consents (other than
those described in Section 7.1(b)(i) or Section 7.1(b)(ii)) the failure of which
to make or obtain would, individually or in the aggregate (A) reasonably be
expected to be have a material adverse effect on Cingular and its Subsidiaries,
(B) reasonably be expected to result in a Material Adverse Effect or (C) provide
a reasonable basis to conclude that Cingular, Cingular Wireless, SBC or
BellSouth or any of their respective directors or officers would be subject to
the risk of criminal liability shall have been made or obtained (such consents
together with those consents that are conditions under Section 7.1(b)(i) and
(ii) hereof being the "Required Governmental Consents"). All Governmental
Consents that have been obtained shall have been obtained without the imposition
of any term, condition or consequence that would, individually or in the
aggregate, reasonably be expected to have or result in a Material Adverse
Condition and all Required Governmental Consents obtained from the FCC shall
have been obtained by Final Order. For the purpose of this Agreement, "Final
Order" means an action or decision that has been granted as to which (i) no
request for a stay or any similar request is pending, no stay is in effect, the
action or decision has not been vacated, reversed, set aside, annulled or
suspended and any deadline for filing such a request that may be designated by
statute or regulation has passed, (ii) no petition for rehearing or
reconsideration or application for review is pending and the time for the
filings of any such petition or application has passed, (iii) no Governmental
Entity has undertaken to reconsider the action on its own motion and the time
within which it may effect such reconsideration has passed and (iv) no appeal is
pending (including other administrative or judicial review) or in effect and any
deadline for filing any such appeal that may be specified by statute or rule has
passed, which in any such case (i), (ii),(iii) or (iv) is reasonably likely to
result in vacating, reversing, setting aside, annulling, suspending or modifying
such action or decision (in the case of any modification in a manner that would
impose any term, condition or consequence that would reasonably be expected to
have or result in a Material Adverse Condition).
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7.3. Conditions to Obligation 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:
(a) Representations and Warranties. (i) The representations and
warranties of Cingular, Merger Sub, SBC and BellSouth set forth in this
Agreement shall be true and correct in all material respects (A) on the date of
this Agreement and (B) on the Closing Date with the same effect as though such
representations and warranties had been made on and as of the Closing Date
(except to the extent that any such representation and warranty expressly speaks
as of an earlier date, in which case such representation and warranty shall be
true and correct as of such earlier date) and (ii) the Company shall have
received at the Closing a certificate signed on behalf of each of Cingular, SBC
and BellSouth by its respective Chief Executive Officer or Chief Financial
Officer to the effect that the condition set forth in this Section 7.3(a) as
applicable has been satisfied.
(b) Performance of Obligations of Cingular, Cingular Wireless, Merger
Sub, SBC and BellSouth. Each of Cingular, Cingular Wireless, Merger Sub, SBC and
BellSouth shall have performed in all material respects all agreements and
obligations 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 each of Cingular, Cingular Wireless, SBC and BellSouth by its
respective Chief Executive Officer or Chief Financial Officer to the effect that
the condition set forth in this Section 7.3(b) as applicable has been satisfied.
ARTICLE VIII
Termination
8.1. Termination by Mutual Consent. This Agreement may be terminated
and the Merger may be abandoned at any time prior to the Effective Time, whether
before or after the adoption by the stockholders of the Company referred to in
Section 7.1(a), by mutual written consent of the Company and Cingular by action
of their respective Boards of Directors.
8.2. Termination by Either Cingular or the Company. This Agreement
may be terminated and the Merger may be abandoned at any time prior to the
Effective Time by action of the Board of Directors of either Cingular or the
Company if (a) the Merger shall not have been consummated by December 31, 2004,
whether such date is before or after the date of the adoption of this Agreement
by the stockholders of the Company; provided, however, that in the event that,
as of December 22, 2004, the condition set forth in either Section 7.1(b) or
7.2(d) has not been satisfied, the Termination Date may be extended from time to
time by either Cingular or the Company one or more times to a date not beyond
June 30, 2005 (such later date, the "Termination Date"); provided, that, if the
condition set forth in Section 7.2(d) shall not have been
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satisfied solely by reason of a Required Governmental Consent of the FCC that
has been obtained but is not yet a Final Order, neither party may terminate this
Agreement pursuant to this Section 8.2(a) prior to the 60th day after receipt of
such Required Governmental Consent, (b) the adoption by the Company's
stockholders required by Section 7.1(a) shall not have been obtained at the
Stockholders Meeting (after giving effect to all adjournments or postponements
thereof), or (c) any Order permanently restraining, enjoining or otherwise
prohibiting consummation of the Merger shall become final and non-appealable
except for any Orders as would, individually or in the aggregate, reasonably be
expected to be Immaterial Orders (whether before or after the adoption by the
stockholders of the Company required under Section 7.1(a)),; provided, that the
right to terminate this Agreement pursuant to Section 8.2(a) or Section 8.2(c)
shall not be available to any party that has breached its obligations under this
Agreement in any manner that shall have proximately contributed to the
occurrence of the failure of the Merger to be consummated.
8.3. Termination by the Company. This Agreement may be terminated and
the Merger may be abandoned at any time prior to the Effective Time, whether
before or after the adoption by stockholders of the Company referred to in
Section 7.1(a), by action of the Board of Directors of the Company if there has
been a breach of any representations, warranties, covenants or agreements made
by Cingular, Cingular Wireless, Merger Sub, SBC or BellSouth in this Agreement,
or any such representations and warranties shall have become untrue or incorrect
after the execution of this Agreement, such that (i) Section 7.3(a) or 7.3(b)
would not be satisfied and (ii) such breach or failure to be true and correct is
not curable by the Termination Date.
8.4. Termination by Cingular. This Agreement may be terminated and
the Merger may be abandoned at any time prior to the Effective Time, by action
of the Board of Directors of Cingular (a) if the Board of Directors of the
Company shall have withdrawn, qualified or modified its approval of this
Agreement or the Directors' Recommendation in a manner adverse to Cingular, (b)
if there has been a breach of any representation, warranty, covenant or
agreement made by the Company in this Agreement, or any such representation and
warranty shall have become untrue or incorrect after the execution of this
Agreement, such that (i) Section 7.2(a) or 7.2(b) would not be satisfied and
(ii) such breach or failure to be true or correct is not curable by the
Termination Date, or (c) if, by July 31, 2004, the Stockholders Meeting shall
have not been held, or the vote of the Company's stockholders contemplated by
Section 6.4 of this Agreement has not been taken; provided, that Cingular may
not terminate this Agreement pursuant to this Section 8.4(c) if (a) the Company
has used its reasonable best efforts to convene the Stockholders' Meeting, to
have the vote of the Company's Stockholders contemplated by Section 6.4 and to
obtain the Company Requisite Vote as promptly as possible following the
execution of this Agreement and (b) the failure to convene the Stockholders
Meeting or the failure of the Company's stockholders to vote by July 31, 2004 is
unrelated to any Acquisition Proposal.
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8.5. Effect of Termination and Abandonment. (a) In the event of a
termination of this Agreement and the abandonment of the Merger pursuant to this
Article VIII, this Agreement (other than as set forth in Section 9.1) shall
become void and of no effect with no liability on the part of any party hereto
(or of any of its directors, officers, employees, agents, legal and financial
advisors or other representatives); provided, however, that, except as otherwise
provided herein, no such termination shall relieve any party hereto of any
liability or damages resulting from any willful or intentional breach of this
Agreement.
(b) In the event that after the date hereof, an Acquisition Proposal
(but substituting 40% for the 15% threshold set forth in the definition thereof)
(a "Covered Proposal") shall have been publicly made or, after the date hereof,
any Person shall have publicly announced an intention (whether or not
conditional) to make a Covered Proposal and thereafter this Agreement is
terminated by either Cingular or the Company pursuant to Section 8.2(b) or by
Cingular pursuant to Section 8.4(a) or Section 8.4(c), (i) then the Company
shall promptly, but in no event later than two business days after the date of
such termination, pay to Cingular on behalf of it, SBC and BellSouth and their
respective Affiliates incurring charges and expenses in connection with this
Agreement and the transactions contemplated hereby all of the charges and
expenses actually incurred by Cingular, SBC, BellSouth or their respective
Affiliates in connection with this Agreement and the transactions contemplated
by this Agreement up to a maximum amount of $40,000,000 (the "Expenses") payable
by wire transfer of same day funds and (ii) if, within 15 months after such
termination (I) any Person (other than Cingular or any of its Affiliates) has
entered into an agreement (X) to, directly or indirectly, acquire by purchase,
merger, consolidation, sale, assignment, lease, transfer or similar business
combination, in one transaction or any related series of transactions, 40% or
more of the voting power of the outstanding securities of the Company, or
ownership or control of 40% or more of the consolidated assets of the Company or
(Y) with respect to any transaction or series of related transactions after
which stockholders of the Company immediately prior to the consummation of such
transaction or transactions would cease to own directly or indirectly at least
60% of the voting power of the outstanding securities of the Company (or of
another Person that directly or indirectly would own all or substantially all
the assets of the Company) immediately following such transaction in the same
proportion as they owned prior to the consummation of such transaction, or (II)
there has been consummated any such merger, consolidation or similar business
combination or any such sale, assignment, lease or transaction between the
Company or one of its Subsidiaries and any Person (other than Cingular or any of
its Affiliates), then the Company shall, promptly following such event, but in
no event later than two business days after such event, pay SBC and BellSouth in
proportion to their Specified Interests an aggregate termination fee of
$1,400,000,000 (One Billion Four Hundred Million Dollars) (the "Termination
Fee") payable by wire transfer of same day funds. Upon the payment of the
Termination Fee and the Expenses, the Company shall have no further liabilities
or obligations under this Section 8.5(b). The Company acknowledges that the
agreements contained in this Section 8.5(b) are an integral part of the
transactions contemplated by this Agreement, and that, without these agreements,
Cingular would not
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enter into this Agreement; accordingly, if the Company fails to promptly pay the
amount due pursuant to this Section 8.5(b), and, in order to obtain such
payment, Cingular commences a suit that results in a judgment against the
Company for the fee set forth in this Section 8.5(b) or any portion of such fee,
the Company shall pay to Cingular its costs and expenses (including attorneys'
fees) in connection with such suit, together with interest on the amount of the
fee at the prime rate of Citibank, N.A. in effect on the date such payment was
required to be made from the date such payment was required to be made through
the date of payment.
ARTICLE IX
Miscellaneous and General
9.1. Survival. This Article IX and Article IV, Section 6.8 (Employee
Benefits) and Section 6.9 (Indemnification; Directors' and Officers' Insurance)
shall survive the consummation of the Merger. This Article IX, Section 6.7
(Consent/Tender Offers), Section 6.10(e) (Regulatory Compliance), Section
6.10(f) (Potential Sale Interest) and Section 8.5 (Effect of Termination and
Abandonment) shall survive the termination of this Agreement. Subject to the
proviso to Section 8.5(a), all other representations, warranties, covenants and
agreements in this Agreement shall not survive the consummation of the Merger or
the termination of this Agreement.
9.2. Modification or Amendment. Subject to the provisions of
applicable Law, at any time prior to the Effective Time, this Agreement may be
amended, modified or supplemented only, and any provisions herein may be waived
only, in writing executed by the parties hereto, by action of the Board of
Directors or equivalent governing body of the respective parties.
9.3. Waiver of Conditions. The conditions to each of the parties'
obligations to consummate the Merger are for the sole benefit of such party and
may be waived by such party in whole or in part to the extent permitted by
applicable Law.
9.4. Counterparts. This Agreement may be executed in any number of
counterparts, each such counterpart being deemed to be an original instrument,
and all such counterparts shall together constitute the same agreement.
9.5. GOVERNING LAW AND VENUE; WAIVER OF JURY TRIAL. (A) THIS
AGREEMENT SHALL BE DEEMED TO BE MADE IN AND IN ALL RESPECTS SHALL BE
INTERPRETED, CONSTRUED AND GOVERNED BY AND IN ACCORDANCE WITH THE LAW OF THE
STATE OF DELAWARE WITHOUT REGARD TO THE CONFLICT OF LAW PRINCIPLES THEREOF. The
parties hereby irrevocably submit exclusively to the jurisdiction of the courts
of the State of Delaware and the Federal courts of the United States of America
located in the State of Delaware solely in respect of the interpretation and
enforcement of the provisions of this Agreement and of the documents referred to
in this Agreement, and
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in respect of the transactions contemplated hereby, and hereby waive, and agree
not to assert, as a defense in any action, suit or proceeding for the
interpretation or enforcement hereof or of any such document, that it is not
subject thereto or that such action, suit or proceeding may not be brought or is
not maintainable in said courts or that the venue thereof may not be appropriate
or that this Agreement or any such document may not be enforced in or by such
courts, and the parties hereto irrevocably agree that all claims with respect to
such action or proceeding shall be heard and determined in such a Delaware State
or Federal court. The parties hereby consent to and grant any such court
jurisdiction over the person of such parties for purposes of the foregoing.
(b) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY
ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT
ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT,
OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND
ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY
HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (ii) EACH PARTY
UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (iii) EACH PARTY
MAKES THIS WAIVER VOLUNTARILY, AND (iv) EACH PARTY HAS BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 9.5.
9.6. Notices. Any notice, request, instruction or other document to
be given hereunder by any party to the others shall be in writing and delivered
personally or sent by registered or certified mail, postage prepaid, facsimile
or by overnight courier:
if to Cingular, Cingular Wireless or Merger Sub:
Cingular Wireless Corporation
0000 Xxxxxxxxx Xxxxxxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx Xxxxxxxxx, Esq.
Fax: (000) 000-0000
with copies to:
SBC Communications Inc.
000 Xxxx Xxxxxxx
Xxx Xxxxxxx, Xxxxx 00000
-00-
Xxxxxxxxx: Xxxxx Xxxxx, Xxx.
Fax: (000) 000-0000,
BellSouth Corporation
0000 Xxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Fax: (000) 000-0000,
Xxxxxxxx & Xxxxxxxx LLP
000 Xxxxx Xxxxxx, Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx, Esq. and
Xxxx X. Xxxxxxxxxxx, Esq.
Fax: (000) 000-0000
and
Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx LLP
Xxx Xxx Xxxx Xxxxx, Xxx Xxxx, XX 00000
Attention: Xxxx X. Xxxxxxxxx, Esq.
Fax: (000) 000-0000
if to the Company
AT&T Wireless Services, Inc.
0000 000xx Xxxxxx XX
Xxxxxxxx 0
Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx, General Counsel
Fax: (000) 000-0000
with a copy to:
Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxxx, Esq.
Xxxxxxxxx X. Xxxxxxxx, Esq.
Fax: (000) 000-0000
or to such other persons or addresses as may be designated in writing by the
Person to receive such notice as provided above. Any notice, request,
instruction or other document given as provided above shall be deemed given to
the receiving party upon actual receipt, if delivered personally; three business
days after deposit in the mail, if sent
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by registered or certified mail; upon confirmation of successful transmission if
sent by facsimile (provided that if given by facsimile such notice, request,
instruction or other document shall be followed up within one business day by
delivery pursuant to one of the other methods described herein); or on the next
business day after deposit with an overnight courier, if sent by an overnight
courier.
9.7. Entire Agreement; NO OTHER REPRESENTATIONS. This Agreement
(including any exhibits hereto), the Company Disclosure Letter, the Cingular
Disclosure Letter, the SBC Disclosure Letter and the Confidentiality Agreements,
as amended on January 9, 2004, between SBC and the Company and BellSouth and the
Company (the "Confidentiality Agreements"), constitute the entire agreement, and
supersede all other prior agreements, understandings, representations and
warranties both written and oral, among the parties, with respect to the subject
matter hereof. EACH PARTY HERETO AGREES THAT, EXCEPT FOR THE REPRESENTATIONS AND
WARRANTIES CONTAINED IN THIS AGREEMENT, NONE OF CINGULAR, MERGER SUB, SBC,
BELLSOUTH OR THE COMPANY MAKES ANY OTHER REPRESENTATIONS OR WARRANTIES, AND EACH
HEREBY DISCLAIMS ANY OTHER REPRESENTATIONS OR WARRANTIES MADE BY ITSELF OR ANY
OF ITS OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, FINANCIAL AND LEGAL ADVISORS OR
OTHER REPRESENTATIVES, WITH RESPECT TO THE EXECUTION AND DELIVERY OF THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, NOTWITHSTANDING THE DELIVERY
OR DISCLOSURE TO THE OTHER OR THE OTHER'S REPRESENTATIVES OF ANY DOCUMENTATION
OR OTHER INFORMATION WITH RESPECT TO ANY ONE OR MORE OF THE FOREGOING. Each of
Cingular, SBC and BellSouth acknowledges that any proposal with respect to an
Acquisition Proposal or similar transaction submitted after the date hereof may
require the Company to make disclosures in accordance with the terms of the
DoCoMo Investor Agreement and to the extent required by such agreement each
consents thereto. The Company agrees that, in the event that it is required to
make any disclosure in accordance with the terms of the DoCoMo Investor
Agreement with respect to any Acquisition Proposal, it shall (1) notify Cingular
immediately of its intention to disclose such information to DoCoMo prior to
making such disclosure, (2) disclose any such information only to the extent it
is required to be disclosed pursuant to the DoCoMo Investment Agreement, (3) use
its best efforts so that such information will be treated as "Proprietary
Information" (as defined in the DoCoMo Investor Agreement) for purposes of
Section 10.4 of the DoCoMo Investor Agreement, and (4) use its best efforts to
(x) enforce its rights under Section 10.4 of the DoCoMo Investor Agreement and
(y) ensure that DoCoMo does not disclose such information, except as permitted
under that Section 10.4.
9.8. No Third Party Beneficiaries. Except as expressly set forth in
Section 6.9 (Indemnification; Directors' and Officers' Insurance) of this
Agreement, this Agreement is not intended to, and does not, confer upon any
Person other than the parties who are signatories hereto any rights or remedies
hereunder.
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9.9. Obligations of Cingular and of the Company. Whenever this
Agreement requires a Subsidiary of Cingular to take any action, such requirement
shall be deemed to include an undertaking on the part of Cingular to cause such
Subsidiary to take such action. Whenever this Agreement requires a Subsidiary of
the Company to take any action, such requirement shall be deemed to include an
undertaking on the part of the Company to cause such Subsidiary to take such
action and, after the Effective Time, on the part of the Surviving Corporation
to cause such Subsidiary to take such action.
9.10. Definitions. Each of the terms set forth in Annex A is defined
in the Section of this Agreement set forth opposite such term.
9.11. Severability. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability or the other provisions hereof. If any
provision of this Agreement, or the application thereof to any Person or any
circumstance is determined by a court of competent jurisdiction to be invalid,
void or unenforceable the remaining provisions hereof, shall, subject to the
following sentence, remain in full force and effect and shall in no way be
affected, impaired or invalidated thereby, so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
adverse to either party. Upon such determination, the parties shall negotiate in
good faith in an effort to agree upon such a suitable and equitable provision to
effect the original intent of the parties.
9.12. Interpretation; Construction. (a) The table of contents and
headings herein are for convenience of reference only, do not constitute part of
this Agreement and shall not be deemed to limit or otherwise affect any of the
provisions hereof. Where a reference in this Agreement is made to a Section or
Exhibit, such reference shall be to a Section of or Exhibit to this Agreement
unless otherwise indicated. Whenever the words "include," "includes" or
"including" are used in this Agreement, they shall be deemed to be followed by
the words "without limitation." The word parties when used in this Agreement
shall be deemed not to include SBC and BellSouth except that the term parties
shall include SBC and BellSouth for purposes of Sections 6.1(b), 6.5(b) and
8.5(b) and this Article IX. For purposes of this Agreement the terms Subsidiary
and Affiliate, when used with respect to SBC and BellSouth, shall be deemed to
not include Cingular and its Subsidiaries and the term Affiliate when used with
respect to Cingular, Cingular Wireless and their respective Subsidiaries shall
be deemed not to include BellSouth, SBC or any of their respective Affiliates
(other than Cingular and its Subsidiaries).
(b) The parties have participated jointly in negotiating and drafting
this Agreement. In the event that an ambiguity or a question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties, and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any provision of this
Agreement.
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(c) Each party hereto has or may have set forth information in its
respective Disclosure Letter in a section thereof that corresponds to the
section of this Agreement to which it relates. A matter set forth in one section
of the Disclosure Letter need not be set forth in any other section of the
Disclosure Letter so long as its relevance to the latter section of the
Disclosure Letter or section of the Agreement is readily apparent on the face of
the information disclosed in the Disclosure Letter to the Person to which such
disclosure is being made. The fact that any item of information is disclosed in
a Disclosure Letter to this Agreement shall not be construed to mean that such
information is required to be disclosed by this Agreement. Such information and
the dollar thresholds set forth herein shall not be used as a basis for
interpreting the terms "material" or "Material Adverse Effect" or other similar
terms in this Agreement.
9.13. Guarantee; Breach. SBC and BellSouth each hereby agrees to
guarantee in proportion to their respective Specified Interest the payment of
the Merger Consideration and any payment obligation arising as a result of a
breach of this Agreement by Cingular, Cingular Wireless and Merger Sub prior to
the Effective Time. The term "Specified Interest" when used in the Agreement
with respect to SBC shall mean 60% and when used with respect to BellSouth shall
mean 40%. The parties hereto agree that BellSouth shall not have any liability
for any breach of this Agreement by SBC and SBC shall not have any liability for
any breach of this Agreement by BellSouth.
9.14. Publicity. The initial press release regarding the Merger shall
be a joint press release and thereafter the Company and Cingular each shall
consult with each other prior to issuing any press releases or otherwise making
public announcements with respect to the Merger and the other transactions
contemplated by this Agreement and prior to making any filings with any third
party and/or any Governmental Entity (including any national securities
exchange) with respect thereto, except as may be required by Law or by
obligations pursuant to any listing agreement with or rules of any national
securities exchange or by the request of any Government Entity.
9.15. Expenses. Except as otherwise provided in Sections 6.7,
6.10(e), 6.10(f), and 8.5 of this Agreement, whether or not the Merger is
consummated, all costs and expenses incurred in connection with this Agreement
and the Merger and the other transactions contemplated by this Agreement shall
be paid by the party incurring such expense.
9.16. Assignment. This Agreement shall not be assignable by either of
the parties hereto; provided, however, that Cingular may designate, by written
notice to the Company, a wholly-owned direct or indirect Subsidiary of Cingular
to be a Constituent Corporation in lieu of Merger Sub, in which event all
references herein to Merger Sub shall be deemed references to such Subsidiary,
except that all representations and warranties made herein with respect to
Merger Sub as of the date of this Agreement shall be deemed representations and
warranties also to be made with respect to such Subsidiary to the extent
applicable as of the date of such designation. No such
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designation shall relieve Cingular, SBC or BellSouth of any obligation
hereunder. Any purported assignment in violation of this Agreement will be void
ab initio.
-62-
IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by the duly authorized officers of the parties hereto as of the date
first written above.
AT&T WIRELESS SERVICES, INC.
By: /s/ Xxxx Xxxxxx
--------------------------------------
Name: Xxxx Xxxxxx
Title: CEO
CINGULAR WIRELESS CORPORATION
By: /s/ Xxxx Xxxxxx
--------------------------------------
Name: Xxxx Xxxxxx
Title: CEO
CINGULAR WIRELESS LLC
By: /s/ Xxxx Xxxxxx
--------------------------------------
Name: Xxxx Xxxxxx
Title: CEO
LINKS I CORPORATION
By: /s/ Xxxx Xxxxx
--------------------------------------
Name: Xxxx Xxxxx
Title: Authorized Officer
-63-
And solely for the purposes of Sections 5.3, 6.1(b), 6.5(b) and
Article IX of this Agreement:
BELLSOUTH CORPORATION
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President - Planning &
Development
SBC COMMUNICATIONS INC.
By: /s/ Xxxxxx X. Xxxxxxxx Xx.
-------------------------------------
Name: Xxxxxx X. Xxxxxxxx Xx.
Title: Chairman and Chief Executive
-64-
ANNEX A
DEFINED TERMS
Terms Section
Acquisition Proposal................................................. 6.2
Affected Employees................................................... 6.8(a)
Affiliate............................................................ 5.1(a)(iii)
Agreement............................................................ Preamble
Applicable Parent Reports............................................ 5.3(e)
Audit Date........................................................... 5.1(e)(i)
Bankruptcy and Equity Exception...................................... 5.1(c)(i)
BellSouth............................................................ Preamble
Board of Directors................................................... Recitals
By-Laws.............................................................. 2.2
Certificates ........................................................ 4.1(b)
Charter.............................................................. 2.1
Closing ............................................................. 1.2
Closing Date......................................................... 1.2
Code................................................................. 5.1(h)(ii)
Cingular............................................................. Preamble
Cingular Companies................................................... 4.1(a)
Cingular Disclosure Letter........................................... 5.2
Cingular LLC......................................................... 5.1(a)(i)
Cingular LLC Reports................................................. 5.2(e)
Cingular Material Adverse Effect..................................... 5.2(a)
Common Stock......................................................... 4.1(a)
Common Stock Certificate............................................. 4.1(a)
Common Stock Merger Consideration.................................... 4.1(a)
Common Stock Unit.................................................... 5.1(b)
Company.............................................................. Preamble
Company Compensation and Benefit Plans............................... 5.1(h)(i)
Company Disclosure Letter............................................ 5.1
Company Licenses..................................................... 5.1(i)(ii)
Company Non-U.S. Compensation and Benefits Plan...................... 5.1(h)(i)
Company Option....................................................... 5.1(b)
Company Pension Plan................................................. 5.1(h)(ii)
Company Reports...................................................... 5.1(e)(i)
Company Requisite Vote............................................... 5.1(c)(i)
Company U.S. Compensation and Benefits Plan.......................... 5.1(h)(ii)
Computer Software.................................................... 5.1(p)(iii)(1)
Confidentiality Agreements........................................... 9.7
Consent/Tender Offers................................................ 6.7
Constituent Corporations............................................. Preamble
Contract............................................................. 5.1(d)(ii)
Costs................................................................ 6.9(a)
Covered Proposal..................................................... 8.5(b)
D&O Insurance........................................................ 6.9(c)
Delaware Certificate of Merger....................................... 1.3
DGCL................................................................. 1.1
Directors' Recommendation............................................ 5.1(c)(ii)
Dissenting Common Shares............................................. 4.1(a)
Dissenting Common Stockholders....................................... 4.1(a)
Dissenting Preferred Shares.......................................... 4.1(b)
Dissenting Preferred Stockholders.................................... 4.1(b)
Dissenting Shares.................................................... 4.1(b)
Dissenting Stockholders.............................................. 4.1(b)
DoCoMo............................................................... 4.6
DoCoMo Investor Agreement............................................ 5.1(b)
DoCoMo Warrant Agreement............................................. 4.6
Effective Time....................................................... 1.3
Employees............................................................ 5.1(h)(i)
Environmental Law.................................................... 5.1(m)
ERISA................................................................ 5.1(h)(i)
ERISA Affiliate...................................................... 5.1(h)(iii)
ERISA Plans.......................................................... 5.1(h)(ii)
Exchange Act......................................................... 5.1(d)(i)
Exchange Fund........................................................ 4.2(a)
Excluded Common Share(s) ............................................ 4.1(a)
Excluded Share(s).................................................... 4.1(b)
Expenses............................................................. 8.5(b)
FAA.................................................................. 5.1(i)(ii)
FAA Rules............................................................ 5.1(i)(iv)
FCC.................................................................. 5.1(d)(i)
FCC Licenses......................................................... 5.1(i)(ii)
FCC Rules............................................................ 6.10(e)
Final Order.......................................................... 7.2(d)
Former Parent........................................................ 4.6
GAAP................................................................. 5.1(e)(ii)
Governmental Consents................................................ 7.1(b)
Governmental Entity.................................................. 5.1(d)(i)
Hazardous Substance.................................................. 5.1(m)
HSR Act.............................................................. 5.1(b)
Indemnified Parties.................................................. 6.9(a)
Intellectual Property................................................ 5.1(p)(iii)(2)
IRS.................................................................. 5.1(h)(ii)
IT Assets............................................................ 5.1(p)(iii)(3)
Laws................................................................. 5.1(i)(i)
Licensed-In Intellectual Property.................................... 5.1(p)(iii)(4)
Licenses............................................................. 5.1(i)(i)
Lien................................................................. 5.1(d)(ii)
Material Adverse Condition........................................... 6.5(b)
Material Adverse Effect.............................................. 5.1(a)(ii)
Material Contracts................................................... 5.1(j)(i)
Material Licenses.................................................... 5.1(i)(i)
Maximum Annual Premium............................................... 6.9(c)
Merger............................................................... Recitals
Merger Consideration................................................. 4.1(b)
Merger Sub........................................................... Preamble
Multiemployer Plan................................................... 5.1(h)(ii)
Net Effects.......................................................... 6.5(b)
New Plans............................................................ 6.8(b)
NYSE................................................................. 5.1(d)(i)
Old Plans............................................................ 6.8(b)
Order................................................................ 7.1(c)
Owned Intellectual Property.......................................... 5.1(p)(iii)(5)
Parental Material Adverse Effect..................................... 5.3
Paying Agent......................................................... 4.2(a)
Person............................................................... 4.2(d)
Potential Sale Interest.............................................. 6.9(f)
Preferred Stock...................................................... 4.1(b)
Preferred Stock Certificate.......................................... 4.1(b)
Preferred Stock Merger Consideration................................. 4.1(b)
Proxy Statement...................................................... 6.3
Representatives...................................................... 6.2
Required Governmental Consents....................................... 7.2(d)
Restricted Agreements................................................ 5.1(j)(ii)
Rights............................................................... 5.1(q)(ii)
Rights Agreement..................................................... 5.1(b)
SBC.................................................................. Preamble
SBC Disclosure Letter................................................ 6.1(b)
SEC.................................................................. 5.1(e)(i)
Securities Act....................................................... 5.1(e)(i)
Series C Preferred Stock............................................. 4.1(b)
Series E Preferred Stock............................................. 4.1(b)
Shares............................................................... 4.1(b)
Specified Indebtedness............................................... 6.7
Specified Interest................................................... 9.13
State Commissions.................................................... 5.1(d)(i)
State Licenses....................................................... 5.1(i)(ii)
Stock Plans.......................................................... 5.1(b)
Stock Purchase Plan.................................................. 6.8(e)
Stockholders Meeting................................................. 6.4
Subsidiary........................................................... 5.1(a)(i)
Superior Proposal.................................................... 6.2
Surviving Corporation................................................ 1.1
Takeover Statute..................................................... 5.1(l)
Tax.................................................................. 5.1(n)
Taxable.............................................................. 5.1(n)
Taxes................................................................ 5.1(n)
Tax Return........................................................... 5.1(n)
Terminable Contract.................................................. 5.1(j)(i)
Termination Date..................................................... 8.2
Termination Fee...................................................... 8.5(b)
Transaction Matter................................................... 6.9(a)
