EXHIBIT 3.2
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LIMITED LIABILITY COMPANY AGREEMENT
OF ALLOY LLC
by and among
SBC COMMUNICATIONS INC.,
SBC ALLOY HOLDINGS, INC.,
BELLSOUTH CORPORATION,
BELLSOUTH MOBILE DATA, INC.,
BSCC OF HOUSTON, INC.,
ACCC OF LOS ANGELES, INC.,
BELLSOUTH CELLULAR CORP.,
RAM BROADCASTING CORPORATION
and
ALLOY MANAGEMENT CORP.
Dated as of October 2, 2000
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TABLE OF CONTENTS
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ARTICLE 1
Definitions
1.1. Certain Definitions......................................................................................1
ARTICLE 2
Newco and its Business
2.1. Formation; Effectiveness................................................................................16
2.2. Company Name............................................................................................16
2.3. Term....................................................................................................16
2.4. Filing of Certificate and Amendments....................................................................16
2.5. Purpose and Business; Powers; Scope of Members' Authority...............................................16
2.6. Principal Office; Registered Agent......................................................................17
2.7. Names and Addresses of Members..........................................................................17
2.8. Partnership Treatment...................................................................................18
ARTICLE 3
Representations and Warranties
3.1. Representations of SBC, SBC Holdings, BellSouth, the BellSouth
Members and Manager.....................................................................................18
ARTICLE 4
Transfer Restrictions
4.1. Transfers...............................................................................................19
4.2. Right of First Refusal..................................................................................22
4.3. Conversions and Exchanges...............................................................................24
ARTICLE 5
Management of Newco
5.1. Management of Newco.....................................................................................24
5.2. Compensation............................................................................................25
5.3. Issuances of Additional Membership Units................................................................25
5.4. Officers................................................................................................25
5.5. Contributed Entities....................................................................................26
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ARTICLE 6
Members
6.1. Powers of Members.......................................................................................26
6.2. Partition...............................................................................................26
6.3. Place of Members' Meetings..............................................................................26
6.4. Meetings................................................................................................26
6.5. Telephonic Meetings.....................................................................................27
6.6. Notice of Meetings......................................................................................27
6.7. Waivers.................................................................................................27
6.8. Quorum..................................................................................................27
6.9. Proxies.................................................................................................27
6.10. Voting Power............................................................................................27
6.11. Written Consent.........................................................................................28
6.12. Liability...............................................................................................28
6.13. Indemnification.........................................................................................28
6.14. Designation of Tax Matters Member; Tax Matters..........................................................28
ARTICLE 7
Additional Members
7.1. Admission...............................................................................................29
7.2. Acceptance of Prior Acts................................................................................30
ARTICLE 8
Capital Contributions and
Capital Accounts
8.1. Capital Contributions...................................................................................30
8.2. LLC Units...............................................................................................30
8.3. Status of Capital Contributions.........................................................................30
8.4. Capital Accounts........................................................................................31
8.5. Interest at the Contribution Closing....................................................................31
8.6. Contribution of Proceeds of Issuance of Shares..........................................................32
8.7. No Withdrawals..........................................................................................32
ARTICLE 9
Allocations
9.1. Allocation Rules........................................................................................33
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ARTICLE 10
Distributions
10.1. Distributions...........................................................................................35
10.2. Limitations on Distributions............................................................................36
ARTICLE 11
Wireless Acquisitions
11.1. Initial Member Acquisition of Wireless Business.........................................................36
11.2. Disposition of Acquired Wireless Business...............................................................36
11.3. Fair Market Value.......................................................................................38
11.4. Acquisitions Prior to the Contribution Closing..........................................................39
ARTICLE 12
Operating Agreements; Budgets; Financial Reports
12.1. Ancillary Agreements; Exclusivity.......................................................................40
12.2. Network Preferences.....................................................................................40
12.3. Volume Discounts........................................................................................41
12.4. Initial Member Change of Control........................................................................41
12.5. Competition.............................................................................................41
12.6. Budgets.................................................................................................41
12.7. Financial Reports.......................................................................................41
12.8. Books and Records.......................................................................................42
12.9. Additional Service Territories..........................................................................42
12.10. Standstill..............................................................................................43
12.11. Payment of Debt.........................................................................................44
12.12. External Debt...........................................................................................44
12.13. Tower Transaction.......................................................................................45
12.14. Crown Castle Stock......................................................................................46
ARTICLE 13
Marketing, and New Products and Services
13.1. Generally...............................................................................................46
13.2. Newco Products and Services and Marks...................................................................46
ARTICLE 14
Intellectual Property
14.1. License Grants by Initial Members.......................................................................46
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14.2. Third Party License Grants by Newco.....................................................................47
14.3. Patents, Trade Secret, Copyright, Technology and Know-How Cross-Licenses................................47
14.4. Future Development......................................................................................47
ARTICLE 15
Termination of Newco; Liquidation
and Distribution of Assets
15.1. No Dissolution..........................................................................................47
15.2. Events Causing Dissolution..............................................................................47
15.3. Winding Up..............................................................................................48
15.4. Distribution Upon Liquidation...........................................................................49
15.5. Claims of the Members...................................................................................50
ARTICLE 16
Withdrawal of a Member
16.1. Withdrawal of a Member..................................................................................50
16.2. Effect of Withdrawal....................................................................................50
ARTICLE 17
Exchange of LLC Units; Pre-emptive Rights
17.1. Exchange of LLC Units...................................................................................50
17.2. Combinations and Subdivisions...........................................................................52
17.3. Distributions...........................................................................................52
17.4. Preemptive Rights.......................................................................................53
ARTICLE 18
Additional Agreements
18.1. Maintenance of Ultimate Parent Entity as a Party........................................................54
18.2. Certificates............................................................................................54
18.3. Miscellaneous...........................................................................................55
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Exhibits
Exhibit A BellSouth Marks
Exhibit B SBC Marks
Exhibit C Initial Business Plan
Schedules
Schedule 8.1(a) Ownership
Schedule 11.4 Specified Auctions
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THIS LIMITED LIABILITY COMPANY AGREEMENT OF ALLOY LLC (this
"Agreement") is entered into as of October 2, 2000, by and among SBC, SBC
Holdings, BellSouth, BellSouth Mobile Data, BSCC of Houston, ACCC, BellSouth
Cellular, RAM and Manager.
WHEREAS, SBC, BellSouth and Newco have entered into an Amended
and Restated Contribution and Formation Agreement dated as of April 4, 2000 (as
such agreement may be amended and restated from time to time, the "Contribution
Agreement") providing for, among other things, the contribution of certain
assets to Newco and the conditions to such contributions;
WHEREAS, the respective boards of directors of each of
Manager, SBC, SBC Holdings, BellSouth and the BellSouth Members have approved
this Agreement;
WHEREAS, upon consummation of the transactions pursuant to the
Contribution Agreement, SBC Holdings, the BellSouth Members and Manager will
Beneficially Own Percentage Interests constituting all of the LLC Units in Alloy
LLC, a limited liability company organized under the laws of Delaware ("Newco");
WHEREAS, the continued effectiveness of this Agreement is a
condition to the consummation of the Contribution Closing; and
WHEREAS, the Parties hereto desire to make certain
representations, warranties, covenants and agreements as provided in this
Agreement.
NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the Parties hereto
agree as follows:
ARTICLE 1
Definitions
1.1. Certain Definitions. (a) For the purposes of this
Agreement, the following terms shall have the following meanings:
"ACCC" shall mean ACCC of Los Angeles, Inc., a California
corporation.
"Acquired Wireless Business" shall have the meaning set forth
in Section 11.2.
"Acquiring Entity" shall mean the Entity acquiring voting
securities of SBC or BellSouth, as the case may be in a transaction or series of
transactions which constitute a Change of Control.
"Acquiring Initial Member" shall have the meaning set forth in
Section 11.2(a).
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"Acquisition Agreement" shall have the meaning set forth in
Section 15.3(d)(ii).
"Act" shall mean the Delaware Limited Liability Company Act,
as amended.
"Additional Member" shall have the meaning set forth in
Section 7.1.
"Advanced Services" shall mean high speed services, such as
ADSL (but not cable modems), which enable users to originate and receive high
quality voice and data services.
"Affiliate" shall mean with respect to any Person, any Person
directly or indirectly Controlling, Controlled by, or under Common Control with
such other Person at any time during the period for which the determination of
affiliation is being made.
"Agency Agreements" shall mean collectively, the Wireline
Agency Agreements and the Wireless Agency Agreements.
"Agent" or "Agency" shall mean a relationship in which a
Person sells, directly or indirectly, any Telecom Services on behalf of another
Person (the "Principal") to a third-party customer on a commission or other fee
basis where the Principal is the provider of the Telecom Services being sold and
establishes the retail price for such services.
"Agreement" shall have the meaning set forth in the Preamble.
"Ancillary Agreements" shall mean, collectively, the Agency
Agreements, Intellectual Property License Agreement, Registration Rights
Agreement, the Resale Agreements, the Stockholders' Agreement, the Management
Agreement, Transition Marks Agreement and Transition Services Agreement, in each
case substantially in the form attached as an Exhibit to the Contribution
Agreement.
"Auction" shall have the meaning set forth in Section 11.4(a).
"Auction Notice" shall have the meaning set forth in Section
11.4(a).
"Bank of America Debt" shall mean the debt issued under the
Credit Agreement.
"Bank of America Repayment Notice" shall have the meaning set
forth in Section 12.12(c).
"Bankruptcy and Equity Exception" shall have the meaning set
forth in Section 3.1(b).
A Person shall be deemed the "Beneficial Owner", and to have
"Beneficial Ownership" of, and to "Beneficially Own," any securities as to which
such Person is or may be deemed to be the beneficial owner pursuant to Rule
13d-3 and 13d-5 under the Exchange Act, as
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such rules are in effect on the date of this Agreement, as well as any
securities as to which such Person has the right to become Beneficial Owner
(whether such right is exercisable immediately or only after the passage of time
or the occurrence of conditions) pursuant to any agreement, arrangement or
understanding (other than customary agreements with and between underwriters and
selling group members with respect to a bona fide public offering of
securities), or upon the exercise of conversion rights, exchange rights, rights,
warrants or options, or otherwise; provided, however, that no Initial Member
shall be deemed the "Beneficial Owner" or to have "Beneficial Ownership" of, or
to "Beneficially Own," any LLC Units or Shares owned by the other Initial Member
solely by virtue of the rights set forth in this Agreement. For purposes of this
Agreement, in determining any Person's percentage Beneficial Ownership of the
Total Outstanding Shares, any shares of Public Common Stock which are not
actually outstanding but which may be acquired upon exchange of outstanding LLC
Units shall be excluded from the determination.
"BellSouth" shall mean BellSouth Corporation, a Georgia
corporation.
"BellSouth Additional Subsidiary" shall have the meaning set
forth in the Contribution Agreement.
"BellSouth Additional Subsidiary Towers" shall mean the lease
space used by the BellSouth Additional Subsidiary for its antennas, microwave
dishes and related equipment and any other wireless equipment located together
with the land surrounding such towers other than any such leases, and/or
equipment subject to the BellSouth Transaction (as defined in Schedule 4.2 to
the Contribution Agreement).
"BellSouth Affiliate" shall have the meaning set forth in
Section 12.12(d).
"BellSouth Carolina" shall mean BellSouth Carolinas PCS, L.P.,
a Delaware limited partnership.
"BellSouth Cellular" shall mean BellSouth Cellular Corp., a
Georgia corporation.
"BellSouth Debt" shall have the meaning set forth in Section
12.11.
"BellSouth Marks" shall mean the trademarks, trade names,
service marks, logos, brands, domain names and other marks of BellSouth set
forth on Exhibit A hereto, and all variants and derivatives thereof.
"BellSouth Members" shall mean, collectively, BellSouth Mobile
Data, BSCC of Houston, ACCC, BellSouth Cellular and RAM, and their respective
successor companies.
"BellSouth Mobile Data" shall mean BellSouth Mobile Data,
Inc., a Georgia corporation.
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"BellSouth Obligations" shall have the meaning set forth in
Section 18.3(p)(ii).
"Bid" shall have the meaning set forth in Section
15.3(d)(iii).
"Book Value," with respect to any asset, shall mean its
adjusted basis for U.S. federal income tax purposes, except that the initial
Book Value of any asset contributed by a Member to Newco shall be an amount
equal to the fair market value of such asset, as determined by the Manager, and
the Book Value of any asset shall thereafter be adjusted in a manner consistent
with Treasury Regulations Section 1.704-1(b)(2)(iv)(g) for Revaluations and for
the Depreciation taken into account with respect to such asset.
"BSCC of Houston" shall mean BSCC of Houston, Inc., a Texas
Corporation.
"Budget" shall have the meaning set forth in the definition of
Business Plan.
"Built-in Gain or Loss" shall mean the difference between the
fair market value and tax basis of any property contributed to Newco at the time
of such contribution.
"Business" shall mean (a) the acquisition, development,
ownership and operation of businesses engaged in the Domestic provision of
mobile wireless voice and data services utilizing radio frequencies licensed by
the FCC for the provision of Cellular Service, PCS Service, Wireless Data
Service, Satellite Services, Part 27 Service and Paging Services in Puerto Rico
and the U.S. Virgin Islands, (b) business activities customarily ancillary to
the provision of any of the foregoing services, and (c) the provision of a
Package.
"Business Day" shall mean any day other than a Saturday, a
Sunday or a day on which banks in New York City are authorized or obligated by
law or executive order to close.
"Business Plan" shall mean the set of detailed one-year and
more general five-year plans and projections with respect to Newco. Each
Business Plan shall contemplate, among other matters: (a) the markets to be
covered; (b) the activities of Newco; (c) amounts that must be invested or
otherwise contributed to Newco by its members, whether as capital contributions
or loans, during the calendar year following that of the approval of the
Business Plan, as well as the estimate for the four years immediately following;
and (d) the rates of return and profitability that are expected to be obtained
by Newco. The Business Plan shall include, among other matters: (i) market and
feasibility studies; (ii) financial and market projections and schedules; (iii)
projected balance sheets and financial statements; (iv) projected cash flow; (v)
human resources plan; (vi) projected rates of return; (vii) timetables of
additional investments and other contributions and (viii) an annual budget
including, among other things, anticipated revenues, expenditures (capital and
operating) and cash requirements of Newco for the following year (the "Budget").
The initial Business Plan is attached as Exhibit C.
"Capital Account" when used with respect to any Member shall
mean the capital account maintained for such Member in accordance with Section
8.4, as said capital account may
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be increased or decreased from time to time pursuant to the terms of Section
8.4(a). The initial Capital Accounts shall be determined in accordance with
Section 8.1(a).
"Capital Contribution," when used with respect to any Member,
shall mean the amount of capital contributed by such Member to Newco in
accordance with this Agreement.
"Cellular Service" shall mean mobile wireless voice and data
service provided pursuant to licenses issued by the FCC pursuant to Subpart H of
Part 22 of the FCC Rules and all mobile voice and data services reasonably
ancillary thereto.
"Certificate of Formation" shall mean the Certificate of
Formation of Newco filed pursuant to the Act with the Secretary of State of the
State of Delaware, as the same may hereafter be amended and/or restated from
time to time.
"Change of Control" shall mean, with respect to any Initial
Member, any transaction or series of transactions, occurring after the date that
it becomes subject to this Agreement, pursuant to which any Person becomes the
Beneficial Owner of Voting Securities of such Initial Member resulting in such
Person having the power to cast at least 50% of the votes entitled to be cast in
elections of directors (or similar officials) of such Initial Member.
"Class B Triggering Event " shall have the meaning set forth
in the Manager Certificate.
"Closing Date" shall mean the date of the Contribution
Closing.
"Code" shall mean the Internal Revenue Code of 1986, as
amended.
"Communications Act" shall mean the Communications Act of
1934, as amended or any successor statute thereto.
"Contracts" shall mean all agreements, contracts, leases and
subleases, purchase orders, arrangements, commitments, non-governmental
licenses, notes, mortgages, indentures or other obligations.
"Contribution Agreement" shall have the meaning set forth in
the Recitals.
"Contribution Closing" shall mean the Closing (as defined in
the Contribution Agreement).
"Control" (including the correlative meanings of the terms
"Controlled by" and "under Common Control with"), as used with respect to any
Person, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of management policies of such Person, whether
through the ownership of voting securities, by contract or otherwise.
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"CPE" shall mean customer-provided equipment.
"Credit Agreement" shall mean the Credit Agreement dated as of
April 30, 1998 among BellSouth Carolina, Bank of America, N.A. and the other
agents and lenders named therein.
"Crown Castle Stock" shall mean the shares of common stock of
Crown Castle International Corp., a Delaware corporation, held by Subsidiaries
of the BellSouth Companies (as defined in the Contribution Agreement).
"Dedicated Line" shall mean an unswitched line providing
user-defined, point-to-point connections or service.
"De Minimis Wireless Interest" shall mean an Initial Member's
direct or indirect interest in a Wireless Business if (A)(i) the Initial Member
does not own, directly or indirectly, more than 20% of the equity securities or
more than 20% of the voting power of the outstanding Voting Securities of the
Entity that includes the Wireless Business or have the right to elect or cause
the election or nomination of 20% or more of the directors or persons performing
similar functions in such Entity, (ii) such Entity derived more than 80% of its
total consolidated revenues, in its latest four fiscal quarters, from sources
other than the Wireless Business and (iii) the Initial Member has no active
involvement in the management of the Wireless Business of such Entity, or (B)
the Initial Member does not have Control of the Entity that includes the
Wireless Business and the Wireless Business accounts for less than 5% of the
total consolidated revenues of such Entity or (C) the Initial Member has an
investment at cost of not more than $20 million and an equity interest of not
more than 5% in such Wireless Business.
"Departing Member" shall have the meaning set forth in Section
16.1.
"Depreciation" shall mean all non-cash deductions allowable
under the Code attributable to depreciation or cost recovery with respect to the
assets of Newco, including any improvements made thereto and any tangible
personal property located therein, or amortization of the cost of any intangible
property or other assets acquired by Newco, which have a useful life exceeding
one year, provided, however, that with respect to any asset of Newco whose tax
basis differs from its Book Value at the beginning of any fiscal year or other
period, Depreciation shall be an amount which bears the same ratio to such
beginning Book Value as the depreciation, amortization or other cost recovery
deduction for such period with respect to such asset for Federal income tax
purposes bears to its adjusted tax basis as of the beginning of such year;
provided, further, that if the Federal income tax depreciation, amortization or
other cost recovery deduction for such fiscal year is zero, depreciation shall
be determined by the Tax Matters Member using any method permitted by the Code.
"Disposition Group" shall have the meaning set forth in
Section 15.3(d)(i).
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"Distributable Cash" shall mean, with respect to any Fiscal
Year, the excess, if any, of (A) the sum of (x) the amount of all cash received
by Newco (including any amounts allocated to its Subsidiaries) during such
Fiscal Year and (y) any cash and cash equivalents held by Newco at the start of
such Fiscal Year over (B) the sum of (x) all cash amounts paid or payable
(without duplication) in such Fiscal Year incurred by Newco (including any
amounts allocated to its Subsidiaries) and (y) the net amount of cash needs for
Newco set forth in the Budget for the following Fiscal Year.
"Domestic" shall mean the fifty states comprising the United
States of America, the District of Columbia, the U.S. Virgin Islands and the
Commonwealth of Puerto Rico, but excluding all other territories and possessions
of the United States of America.
"Election Notice" shall have the meaning set forth in Section
4.2(b).
"Entity" shall mean any corporation, firm, unincorporated
organization, association, partnership, limited liability company, business
trust, joint stock company, joint venture organization, entity or business.
"Excepted Cash Issuances" shall have the meaning set forth in
Section 17.4(d).
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
"Executive Officer" shall mean the chief executive officer and
chief financial officer, and individuals whose job requires them to report
directly to any of the foregoing Persons.
"Exiting Initial Member" shall have the meaning set forth in
Section 4.1(f).
"Fair Market Value" shall mean, with respect to any asset, as
of the date of determination, the cash price at which a willing seller would
sell, and a willing buyer would buy, each being apprised of all relevant facts
and neither acting under compulsion, such asset in an arm's length, negotiated
transaction with an unaffiliated third party without time constraints,
determined in accordance with Section 11.3, treating the asset to be valued as
if it were "Securities" as set forth in Section 11.3 and the parties disputing
the Fair Market Value as the Initial Members.
"FCC" shall mean the Federal Communications Commission or the
successor agency thereof.
"FCC Rules" shall mean any applicable rules and regulations of
the FCC.
"Fiscal Year" shall mean the fiscal year of Newco, which shall
be the period commencing on January 1 in any year and ending on December 31 in
such year, or such other fiscal year that the Manager shall determine is
required under the Code.
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"GAAP" shall mean United States generally accepted accounting
principles.
"Governmental Entity" shall mean any governmental or
regulatory authority, court, agency, commission, body or other similar entity.
"ILEC" shall have the meaning set forth in Section 12.9.
"Indebtedness" shall mean, with respect to any Person, (i) all
indebtedness and obligations of or assumed by such Person in respect of money
borrowed (including any indebtedness which is non-recourse to the credit of such
Person, but which is secured by a Lien on any asset of such Person) or evidenced
by a promissory note, bond, debenture, letter of credit reimbursement agreement
or other written obligations to pay money for money borrowed; (ii) any
indebtedness or obligation of others secured by a Lien on any asset of such
Person, whether or not such indebtedness or obligation is assumed by such
Person; (iii) any guaranty, endorsement, suretyship or other undertaking
pursuant to which such Person may be liable on account of any obligation of any
third party other than a Subsidiary of such Person; (iv) indebtedness for the
deferred purchase price of property or services; (v) obligations of such Person
incurred in connection with entering into a lease which, in accordance with
GAAP, should be capitalized; (vi) payments to be made pursuant to Section 2.11
of the Contribution Agreement; and (vii) the similar indebtedness or obligations
of a partnership or joint venture in which such Person is a general partner or
joint venturer.
"Indemnified Parties" shall have the meaning set forth in
Section 6.13.
"Initial Member" shall mean each of SBC or BellSouth and their
respective successors to all of their respective rights and obligations
hereunder who are admitted as a Member of Newco pursuant to Section 4.1(f) of
this Agreement.
"Intellectual Property" shall have the meaning set forth in
Section 14.3.
"IPO" shall mean a Transfer of Public Common Stock to
underwriters in connection with an underwritten public offering of such Public
Common Stock that (i) is on a firm commitment basis registered under the
Securities Act and (ii) is sold in a manner that results in a broad distribution
of such Public Common Stock, with such distribution certified to Newco by the
lead or managing underwriter or underwriters in any such offering.
"IPO Date" shall mean the date on which the IPO is
consummated.
"ISP Service" shall mean a service that provides user access
to the Internet.
"JLL Member" shall have the meaning set forth in Section
12.12(b).
"JLL Repayment Notice" shall have the meaning set forth in
Section 12.12(b).
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"Joint Billing Customers" shall mean customers of Initial
Member's Wireless Services who are billed for such Wireless Services together
with any other products or services offered by such Initial Member or its
Affiliates.
"Law" shall mean any federal, state, local or foreign law,
statute, ordinance, rule, regulation, judgment, order, injunction, decree,
arbitration award, agency requirement, franchise, license or permit of any
Governmental Entity.
"Lien" shall mean any mortgage, pledge, lien, deed of trust,
hypothecation, claim, security interest, title defect, encumbrance, burden, tax
lien (as used in Section 6321 of the Code, and the rules and regulations
promulgated thereunder or similarly by any state, local, or foreign tax
authority), charge, or other similar restriction, title retention agreement,
option, easement, covenant, encroachment or other adverse claim.
"LLC Interest" shall mean a Member's entire limited liability
company interest in Newco at any particular time, including such Member's share
of the profits and losses of Newco and right to receive distributions of Newco's
assets, and all other benefits to which a Member may be entitled, all in
accordance with the provisions of this Agreement and the Act, together with the
obligations of such Member to comply with all the terms and provisions of this
Agreement. The LLC Interests constitute one class of limited liability company
interest in Newco.
"LLC Unit" means a fractional, undivided share of the LLC
Interests of all Members issued pursuant hereto. As of the Contribution Closing,
there shall be 2,000,000,010 LLC Units outstanding.
"Manager" shall mean Alloy Management Corp., a Delaware
corporation, and any other successor Manager selected in accordance with the
terms hereof. Manager shall be a "manager" of Newco within the meaning of
Section 18-101(10) of the Act.
"Manager Certificate" shall mean the Certificate of
Incorporation of Manager, as in effect from time to time.
"Member" shall initially mean each of SBC, SBC Holdings,
BellSouth, the BellSouth Members and Manager, and shall include thereafter their
respective successors and permitted assigns, and any other members admitted to
Newco in accordance with Section 7.1.
"Member-Funded Debt" shall mean any non-recourse debt of Newco
which is loaned or guaranteed by any Member and/or is treated as "partner
non-recourse debt" under Section 1.704-2(b)(4) of the Treasury Regulations.
"Member Common Stock" shall mean the Class B Common Stock, par
value $0.01 per share, of Manager.
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"Members' Meeting" shall have the meaning set forth in Section
6.3.
"Minimum Gain" shall mean an amount equal to the excess of the
principal amount of debt, for which no Member is liable ("non-recourse debt"),
secured by Newco Assets, over the adjusted basis of such Newco Assets which
represents the minimum taxable gain which would be recognized by Newco if the
non-recourse debt were foreclosed upon and the Newco Assets were transferred to
the creditor in satisfaction thereof, and which is referred to as "minimum gain"
in Treasury Regulations Section 1.704-1(b)(4)(iv). A Member's share of Minimum
Gain shall be determined pursuant to the above-cited Treasury Regulations.
"Network Services" shall mean Telephone Exchange Service,
Exchange Access Service, Private Line Service, ISP Service, InterLATA Services
and Dedicated Lines. For the purpose of this definition, the term Exchange
Access Service shall have the meaning set forth in Section 3 of the
Communications Act.
"Newco" shall have the meaning set forth in the Recitals.
"Newco Assets" shall mean all right, title and interest of
Newco in and to all or any portion of the assets of Newco and any property (real
or personal) or estate acquired in exchange therefor or in connection therewith.
"Newco Marks" shall have the meaning set forth in Section
13.2.
"Newco Products and Services" shall mean the creation and
provision by Newco of Wireless Services, including wireless voice and data
services in a Package with Network Services and products, on the local, regional
and national level and any activities related thereto.
"Non-Exiting Initial Member" shall have the meaning set forth
in Section 4.1(f).
"Objection Date" shall have the meaning set forth in Section
12.6.
"Officers" shall mean the Executive Officers of Newco and such
other officers of Newco as shall from time to time be appointed by the Manager
until such time as any such Officer is removed in accordance with the terms of
his or her appointment.
"Order" shall have the meaning set forth in Section 12.9.
"Original Appraisers" shall have the meaning set forth in
Section 11.3(a).
"Package" shall mean the marketing, sale, resale, or any other
mode of selling a package of services, comprised of (x) one or more of Cellular
Service, PCS Service, Wireless Data Service and/or Part 27 Service, and business
activities customarily ancillary to the provision of any of the foregoing
services, in combination, whether for a single price or otherwise, with (y)
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any other Telecom Service (or other product or service) of a third party (which
may be provided by SBC, BellSouth or their respective Subsidiaries and
Affiliates).
"Paging Service" shall mean the provision of Domestic one and
two-way paging and radiotelephone service pursuant to licenses issued by the FCC
pursuant to Subpart E of Part 22 of the FCC Rules and Subpart P of Part 90 of
the FCC Rules and all one- and two-way paging and radiotelephone services
reasonably ancillary thereto.
"Part 27 Service" shall mean mobile wireless voice and data
service provided pursuant to licenses issued by the FCC pursuant to Part 27 of
the FCC Rules and all mobile voice and data services reasonably ancillary
thereto, other than with respect to the provision of multi- channel video
programming service and data services reasonably ancillary thereto.
"Parties" shall initially mean SBC, BellSouth and Manager and
shall thereafter include any other Person executing a counterpart of this
Agreement.
"PCS Service" shall mean mobile wireless voice and data
service provided pursuant to licenses issued by the FCC pursuant to Part 24 of
the FCC Rules regardless of the frequency block designated by the FCC under 47
C.F.R. ss. 24.229 and all mobile voice and data services reasonably ancillary
thereto.
"Percentage Interest" shall mean a Member's aggregate economic
percentage interest in Newco as determined by dividing the number of LLC Units
owned by such Member by the number of LLC Units then owned by all Members. The
Percentage Interests Beneficially Owned by the Initial Members as of the date
hereof are set forth in Section 8.5. Both SBC and BellSouth will be deemed to
directly have a zero (0) Percentage Interest as of the Contribution Closing.
"Permitted Transferee" shall mean a permitted transferee under
Section 4.1(a) or Section 4.1(f).
"Person" shall mean any natural person or Entity.
"Private Line Service" shall mean a leased line between
customer specified points that does not include any switched service.
"Profits" and "Losses" shall mean, for each Fiscal Year, the
net income or net loss (including capital gains and losses), respectively, of
Newco determined for each Fiscal Year in accordance with the accounting method
followed for Federal income tax purposes provided that for purposes of computing
Profits and Losses, (i) depreciation, amortization and cost recovery deductions
shall be deemed equal to Depreciation and gains or losses shall be determined by
reference to Book Value rather than tax basis; (ii) there shall be taken into
account any tax- exempt income of Newco; (iii) any expenditures of Newco which
are described in Section 705(a)(2)(B) of the Code or which are deemed to be
described in Section 705(a)(2)(B) of the
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Code pursuant to the Treasury Regulations under Section 704(b) of the Code shall
be treated as deductible expenses; (iv) items of gross income or deductions
allocated pursuant to Section 9.1(d) shall be excluded from the computation of
Profits and Losses; (v) there shall be taken into account any separately
computed items under Section 702(a) of the Code; and (vi) if the Book Value of
any Newco Asset is adjusted pursuant to the definition thereof, the amount of
such adjustment shall be taken into account in the taxable year of adjustment as
gain or loss from the disposition of such asset for purposes of computing Profit
and Loss.
"Proprietary Rights" shall mean all patent rights, copyright
rights, trademark rights, trade secret rights and other intellectual property or
proprietary rights in the United States.
"PSTN" shall mean public switched telephone network.
"Public Common Stock" shall mean the Class A common stock, par
value $0.01 per share, of Manager.
"Qualified Investment Banking Firm" means any firm engaged in
providing corporate finance, merger and acquisition, and business valuation
services and deriving revenues therefrom of at least $100 million during its
last completed fiscal year, but excluding, however, any firms which received
more than $1,000,000 in fees during the preceding twenty-four (24) calendar
months from any Initial Member or their respective Affiliates and any firms
selected by any Initial Member.
"Qualified Issuance" shall have the meaning set forth in
Section 17.4(a).
"RAM" shall mean RAM Broadcasting Corporation, a New York
corporation.
"Registration Rights Agreement" shall mean the Registration
Rights Agreement among SBC, BellSouth and Manager, substantially in the form to
be entered into in accordance with the Contribution Agreement.
"Resale" shall have the meaning specified in the Resale
Agreements.
"Resale Agreements" shall mean the agreements between Newco
and each of SBC and BellSouth, as Resellers of Wireless Services outside of
their respective Service Territories to be entered into in accordance with the
terms of the Contribution Agreement.
"Reseller" shall mean any Person that purchases Telecom
Services from another Person to be sold directly or indirectly on its own
account to a customer where the Person from which such services are purchased
holds FCC Licenses (as defined in the Contribution Agreement) relating to the
services being sold.
"Resolving Appraiser" shall have the meaning set forth in
Section 11.3(b).
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"Revaluation" shall have the meaning set forth in Section
8.4(a).
"ROFR Termination Date" shall have the meaning set forth in
Section 4.2(c).
"Satellite Services" shall mean mobile wireless voice and data
services (other than multi-channel video services and data services reasonably
ancillary thereto) provided via fixed or non-geostationary satellite, directly
or indirectly pursuant to licenses issued by the FCC pursuant to Part 25 of the
FCC Rules and all mobile wireless voice and data services reasonably ancillary
thereto that are also provided via fixed or non-geostationary satellite.
"SBC" shall mean SBC Communications Inc., a Delaware
corporation.
"SBC Debt" shall have the meaning set forth in Section 12.11.
"SBC Debt Threshold" shall have the meaning set forth in
Section 12.11.
"SBC Holdings" shall mean SBC Alloy Holdings, Inc., a Delaware
corporation.
"SBC Marks" shall mean the trademarks, trade names, service
marks, logos, brands, domain names and other marks of SBC set forth on Exhibit B
hereto, and all variants and derivatives thereof.
"SBC Obligations" shall have the meaning set forth in Section
18.3(p)(i).
"Securities" shall mean the LLC Units and the Shares.
"Securities Act" shall mean the Securities Act of 1933, as
amended.
"Service Territory" shall mean, in the case of SBC, the states
of California, Nevada, Connecticut, Texas, Missouri, Arkansas, Oklahoma, Kansas,
Illinois, Indiana, Ohio, Michigan and Wisconsin and shall mean, in the case of
BellSouth, the states of Georgia, Florida, South Carolina, North Carolina,
Alabama, Mississippi, Kentucky, Louisiana and Tennessee, together, in each case,
with such additional Service Territories determined in accordance with Section
12.9.
"Shares" shall mean shares of all classes or series of common
stock of the Manager, including the Public Common Stock and the Member Common
Stock.
"Specified Auctions" shall have the meaning set forth in
Section 11.4(a).
"SpectraSite Agreement" shall have the meaning set forth in
Section 12.13(a).
"Stockholders Agreement" shall have the meaning set forth in
the Contribution Agreement.
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"Subsidiary" shall mean, as to any Person, any Person (i) of
which such Person directly or indirectly owns securities or other equity
interests representing fifty percent or more of the aggregate voting power, (ii)
of which such Person possesses fifty percent or more of the right to elect
directors or Persons holding similar positions or (iii) which such Person
Controls directly or indirectly through one or more intermediaries.
"Tax Matters Member" shall have the meaning set forth in
Section 6.14.
"Telecom Services" shall mean any of the following products or
services: (a) Advanced Services, Information Service, InterLATA Service,
Telephone Exchange Service, Electronic Publishing Service, or any other
Telecommunications Service (other than Cellular Service, Paging Service, PCS
Service, Wireless Data Services and/or Part 27 Service); (b) all current and
future ancillary services offered in conjunction with any of the services listed
in (a), including, but not limited to, voice mail, caller ID, call waiting,
directory listing services, calling card services, toll calling plans and
associated CPE and any successors thereto; (c) security services, virtual
private networks and associated CPE; and (d) any product or service that
emulates or replicates the foregoing utilizing an IP protocol and the PSTN
(including IP telephony, IP fax, unified messaging and Internet call waiting and
associated CPE). For the purpose of this definition, the terms Information
Service, InterLATA Service, Telephone Exchange Service and Telecommunications
Service each have the meaning set forth in Section 3 of the Communications Act
and the term Electronic Publishing Service has the meaning set forth in Section
274(h) of the Communications Act.
"Third Party" shall mean any Person other than BellSouth,
Newco, SBC, Manager or any of their respective Affiliates.
"Total Outstanding Shares" shall mean, from time to time, the
sum of (i) the total number of Shares issued and outstanding, excluding any
treasury shares and (ii) the total number of LLC Units outstanding, excluding
any LLC Units Beneficially Owned by Manager.
"Transfer" shall mean any direct or indirect sale, transfer,
assignment, pledge, hypothecation, mortgage, or other disposition or
encumbrance, of any beneficial or economic interest in any LLC Units or Shares,
including those by operation or succession of law, merger or otherwise, but a
Change in Control of an Initial Member shall not be deemed to be a Transfer.
"Transfer Agent" shall have the meaning specified in the
Manager Certificate.
"Transfer Notice" shall have the meaning set forth in Section
4.2(a).
"Transferred Securities" shall have the meaning set forth in
Section 4.2(a).
"Treasury Regulations" shall mean the regulations promulgated
under the Code, as such regulations are in effect on the date hereof.
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"Ultimate Parent Entity" shall mean, with respect to any
Entity that is a Subsidiary of a Person, the Person that, directly or
indirectly, Beneficially Owns at least 50% of the Voting Securities of such
Subsidiary and is not a Subsidiary of any Person.
"Voting Securities" shall mean any securities entitled to vote
in the ordinary course in the election of directors or of Persons serving in a
similar governing capacity of any partnership, limited liability company or
other Entity, including the voting rights attached to such securities.
"Winning Bidder" shall have the meaning set forth in Section
15.3(d)(iii).
"Wireless Agency Agreements" shall mean the Agency agreements
between Newco and each of BellSouth and SBC or their respective Subsidiaries, as
agents, relating to Wireless Services to be entered into at the Contribution
Closing in accordance with the terms of the Contribution Agreement.
"Wireless Business" shall mean a business engaged in the
provision of mobile wireless voice and data services utilizing radio frequencies
licensed by the FCC for the provision of Cellular Service, PCS Service, Wireless
Data Service, Paging Service in Puerto Rico and the U.S. Virgin Islands,
Satellite Services and Part 27 Service.
"Wireless Business Offer Notice" shall have the meaning set
forth in Section 11.2(a).
"Wireless Data Service" shall mean the provision of Domestic
Wireless data service pursuant to licenses issued by the FCC pursuant to Subpart
E and H of Part 22 of the FCC Rules and Subpart S of Part 90 of the FCC Rules
and all messaging and data services customarily ancillary thereto.
"Wireless Services" shall mean the mobile wireless and data
products offered by a Wireless Business.
"Wireline Agency Agreements" shall mean the Agency agreements
between Newco, as agent, and each of BellSouth and SBC, or their respective
Subsidiaries, relating to Telecom Services entered into at the Contribution
Closing in accordance with the terms of the Contribution Agreement.
"Withdrawal Event" shall have the meaning set forth in Section
16.1.
(b) Except as expressly provided herein, whenever in this
Agreement there shall be a reference to any Law or Governmental Entity, such
reference shall be deemed to also refer to any successor thereof, and whenever
in this Agreement there shall be a reference to any Ancillary Agreement or this
Agreement, such reference shall be deemed to refer to such agreement as it may
be amended from time to time.
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ARTICLE 2
Newco and its Business
2.1. Formation; Effectiveness. Newco has been formed as a
limited liability company under the provisions of the Act by the filing of the
Certificate of Formation with the Secretary of State of the State of Delaware.
Pursuant to Section 18-201(d) of the Act, this Agreement shall become effective
upon execution by all of the Parties hereto.
2.2. Company Name. The business of Newco initially shall
be conducted in the State of Delaware under the name Alloy LLC and under such
name or such assumed names as the Manager deems necessary or appropriate to
comply with the requirements of any other jurisdiction in which Newco may be
required to qualify.
2.3. Term. The term of Newco shall continue in full force
and effect until it is dissolved, wound up and terminated as hereinafter
provided. The existence of Newco as a separate legal entity shall continue until
the cancellation of the Certificate of Formation as provided in the Act.
2.4. Filing of Certificate and Amendments. Subject to the
restrictions set forth in the Manager Certificate, the Manager shall (and shall
have the power and authority to) execute and file or cause to be executed and
filed any required amendments to the Certificate of Formation and do all other
acts requisite for the constitution of Newco as a limited liability company
pursuant to the laws of the State of Delaware or any other applicable law and
for enabling Newco or its Subsidiaries to conduct business in each applicable
jurisdiction.
2.5. Purpose and Business; Powers; Scope of Members'
Authority. (a) Newco shall be organized primarily for the purpose of conducting
the Business, including the provision and development of the Newco Products and
Services. Subject to the restrictions set forth in the Manager Certificate,
Newco is empowered, subject to the specified terms of this Agreement, to do any
and all acts and things necessary, appropriate, proper, advisable, incidental to
or convenient for the furtherance and accomplishment of the purposes and
business described herein and for the protection and benefit of Newco and its
Subsidiaries, including, without limitation, full power and authority, directly
or through its Subsidiaries or Affiliates, to enter into, perform and carry out
contracts of any kind, borrow money and issue evidences of indebtedness whether
or not secured by mortgage, deed of trust, pledge or other lien, acquire, own,
manage, improve and develop any property, and lease, sell, transfer and dispose
of any property.
(b) Except as otherwise expressly provided in this
Agreement with respect to its capacity as a Manager and notwithstanding the last
sentence of Section 18-402 of the Act, no Member shall have any authority to
bind or act for, or assume any obligations or responsibility on behalf of, any
other Member. No Member shall, by virtue of executing this Agreement, be
responsible or liable for any Indebtedness or obligation of the other Members or
otherwise
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relating to any property or assets incurred or arising either before or after
the execution of this Agreement, except as to those joint responsibilities,
liabilities, indebtedness, or obligations expressly assumed by Newco as of the
date of this Agreement or incurred thereafter pursuant to and as limited by the
terms of this Agreement.
2.6. Principal Office; Registered Agent. The principal
office of Newco shall be as determined from time to time by Manager. Subject to
the terms hereof, Newco may change its place of business to such location or
locations as may at any time or from time to time be determined by the Manager.
The mailing address of Newco shall be such address as may be selected from time
to time by the Manager. Newco shall maintain a registered office at The
Corporation Trust Company, Corporation Trust Center, 0000 Xxxxxx Xxxxxx,
Xxxxxxxxxx, Xxx Xxxxxx Xxxxxx, Xxxxxxxx 00000. The name and address of Newco's
registered agent for service of process is The Corporation Trust Company,
Corporation Trust Center, 0000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxx Xxxxxx Xxxxxx,
Xxxxxxxx 00000.
2.7. Names and Addresses of Members. The names and
addresses of the initial Members are as follows:
SBC Communications Inc.
000 Xxxx Xxxxxxx
Xxx Xxxxxxx, Xxxxx 00000
Attention: Chairman and Chief Executive Officer
SBC Alloy Holdings, Inc.
c/o SBC Communications Inc.
000 X. Xxxxxxx
Xxx Xxxxxxx, Xxxxx 00000
Attention: Chairman and Chief Executive Officer
BellSouth Corporation
0000 Xxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: Chief Executive Officer
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BellSouth Mobile Data, Inc.,
BSCC of Houston, Inc.,
ACCC of Los Angeles, Inc.,
BellSouth Cellular Corp. and
RAM Broadcasting Corporation
c/o BellSouth Corporation
0000 Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: Chief Executive Officer
Alloy Management Corp.
0000 Xxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: Chief Executive Officer
2.8. Partnership Treatment. (a) It is intended that Newco
will be treated, solely for tax purposes, as a partnership for United States
federal and, to the extent permitted by applicable law, state and local income
tax purposes. The Members agree to take any action requested by Newco that may
be desirable to ensure that Newco is so treated. No Member shall take any action
that is inconsistent with such treatment.
(b) As of the Contribution Closing, SBC and BellSouth are
parties to this Agreement and Members solely for the purposes of making certain
representations and agreements relating to the formation and operation of
Newco's business and to govern certain rights and obligations between SBC and
BellSouth relating to Newco and their respective indirect ownership of LLC
Interests in Newco. As of the Contribution Closing, SBC and BellSouth will not
have a direct interest in Newco's capital and will not have a direct interest in
Newco's Profits and Losses. Accordingly, neither SBC nor BellSouth will be
treated as a partner for any tax purpose as of the Contribution Closing.
ARTICLE 3
Representations and Warranties
3.1. Representations of SBC, SBC Holdings, BellSouth, the
BellSouth Members and Manager. As of the date hereof, each of SBC, SBC Holdings,
BellSouth, each of the BellSouth Members and Manager, severally and not jointly,
represents and warrants to the others that:
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(a) it has all requisite corporate or limited liability
company power and authority and has taken all corporate or limited liability
company action necessary in order to execute and deliver this Agreement;
(b) this Agreement has been duly executed and delivered
by it and is a valid and binding agreement of it enforceable against it 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");
(c) 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, in
connection with its execution and delivery of this Agreement, except those that
have been made or obtained or that the failure to make or obtain are not,
individually or in the aggregate, reasonably likely to (x) result in a Material
Adverse Effect (as defined in the Contribution Agreement) on Newco or (y)
prevent, materially delay or materially impair its ability to perform its
obligations under this Agreement; and
(d) the execution, delivery and performance of this
Agreement by it does not, and the consummation by it of the transactions
contemplated hereby will not, constitute or result in (i) a breach or violation
of, or a default under, its certificate of incorporation or by-laws, (ii) a
breach of or violation of or a default under, or the acceleration of any
obligations of or the creation of a Lien on its assets (with or without notice,
lapse of time or both) pursuant to, any Contracts binding upon it or any Law or
governmental or non-governmental permit or license to which it is subject or
(iii) any change in the rights or obligations of any party under any of such
Contracts to which it is a party, except, in the case of clause (ii) or (iii)
above, for any breach, violation, default, acceleration, creation or change
that, individually or in the aggregate, is not reasonably likely to (x) result
in a Material Adverse Effect (as defined in the Contribution Agreement) on Newco
or (y) prevent, materially delay or materially impair its ability to perform its
obligations under this Agreement.
ARTICLE 4
Transfer Restrictions
4.1. Transfers. Each Member severally agrees that it shall
not Transfer or permit any Transfer, in any single transaction or series of
related transactions, of Securities that are Beneficially Owned by it, except
(i) with the written consent of each Member that Beneficially Owns in excess of
10% of the Total Outstanding Shares or (ii) a Transfer by SBC or BellSouth that
complies with any of the following subsections:
(a) a Transfer of all or any such Securities to its
Ultimate Parent Entity or one or more of its or its Ultimate Parent Entity's
wholly owned Subsidiaries (but in no event may more than five Subsidiaries of
any Ultimate Parent Entity own Securities at the same time) all of
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the Voting Securities and all of the equity securities of which are Beneficially
Owned, directly or indirectly, by it; provided that (i) contemporaneously with
any such Transfer involving LLC Units any such wholly owned Subsidiary becomes a
party to a counterpart of this Agreement and SBC or BellSouth, as the case may
be, guarantees the performance of all obligations of any such wholly owned
Subsidiary under this Agreement; (ii) such wholly owned Subsidiary agrees that
it shall be bound by the obligations of SBC or BellSouth, as the case may be,
under this Agreement (but shall not have any of the rights of SBC or BellSouth,
as the case may be, under this Agreement except as provided in this Section 4.1
pursuant to an assignment effected in accordance with the terms hereof); and
(iii) such transfer will not result in a termination of Newco for United States
Federal Income Tax purposes; provided, further, that any such wholly owned
Subsidiary and SBC or BellSouth, as the case may be, shall prior to such
Transfer covenant and agree with Newco and SBC or BellSouth, as the case may be,
that, for so long as the wholly owned Subsidiary Beneficially Owns Securities,
it shall continue to be a wholly owned Subsidiary of SBC or BellSouth, as the
case may be, unless the only Securities owned by such Subsidiary are Public
Common Stock;
(b) a Transfer of Public Common Stock to underwriters in
connection with an underwritten public offering of such Public Common Stock that
(i) is on a firm commitment basis registered under the Securities Act and (ii)
is sold in a manner that results in a broad distribution of such Public Common
Stock, with such distribution certified to Newco by the lead or managing
underwriter or underwriters in any such offering;
(c) a Transfer of all or any of such Securities to Newco
or Manager or any Subsidiary of Newco or Manager;
(d) a Transfer of all or any of such Securities in a bona
fide pledge of such Securities to a financial institution to secure borrowings
as permitted by applicable Law, including, but not limited to the Communications
Act; provided that contemporaneously with such pledge such financial institution
agrees with Newco that upon any foreclosure on such pledge it shall be bound by
the obligations of SBC or BellSouth, as the case may be, under this Agreement
(but shall not have any of the rights of SBC or BellSouth, as the case may be,
under this Agreement except as provided in this Section 4.1 pursuant to an
assignment effected in accordance with the terms hereof);
(e) (x) at any time after the earliest of (i) an IPO
Date, (ii) the first anniversary of the Closing Date if Newco, Manager, or a
Subsidiary of Newco or Manager at such first anniversary does not hold licenses
from the FCC to provide Cellular Services or PCS Services covering at least 90%
of the U.S. population or (iii) the fourth anniversary of the Contribution
Closing; or (y) as provided in Section 11.1(c), a Transfer of, in the case of
clause (x), any or all, or, in the case of clause (y), all of the LLC Units or
Public Common Stock Beneficially Owned by such Initial Member by way of (A) a
distribution of such Public Common Stock or of all of the Voting Securities and
other equity securities of a Subsidiary of such Initial Member that owns LLC
Units or Public Common Stock to all of the common shareholders of a series or
class (in each case widely distributed and registered under the Exchange Act) of
such Initial Member or its
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Ultimate Parent Entity or (B) a split-off pursuant to which each common
shareholder of a series or class (in each case widely distributed and registered
under the Exchange Act) of such Initial Member or its Ultimate Parent Entity is
offered on the same terms the right to exchange common shares of such Initial
Member or its Ultimate Parent Entity for the Public Common Stock or the stock of
a Subsidiary of such Initial Member that owns LLC Units and Public Common Stock
being Transferred (provided, that neither SBC nor BellSouth may effect Transfers
pursuant to this Section 4.1(e) and Section 5.1(e) of the Stockholders'
Agreement in the aggregate more than two times);
(f) (x) at any time after the earliest of (i) an IPO
Date, (ii) the first anniversary of the Closing Date if Newco, Manager, or a
Subsidiary of Newco or Manager at such first anniversary does not hold licenses
from the FCC to provide Cellular Services or PCS Services covering at least 90%
of the U.S. population or (iii) the fourth anniversary of the Contribution
Closing; or (y) as provided in Section 11.1(c), a Transfer, not otherwise
complying with paragraphs (a) - (e) above, of all (but not less than all) of
such Securities Beneficially Owned by such Initial Member and its Ultimate
Parent Entity (the "Exiting Initial Member") to any Person, after complying with
all of the provisions set forth in Section 4.2; provided that contemporaneously
with such Transfer (i) such Person or, if such Person is a Subsidiary of any
other Person, the Ultimate Parent Entity of such Person, becomes a party to this
Agreement and the Stockholders' Agreement as SBC or BellSouth, as the case may
be (whereupon any reference to SBC or BellSouth, as the case may be, herein or
in the Stockholders' Agreement shall be deemed to be a reference to such Person
or, if applicable, its Ultimate Parent Entity), and (ii) such Person causes to
be delivered to Newco a legal opinion of counsel of national standing, in form
and substance reasonably acceptable to Newco and the non-Exiting Initial Member
(the "Non-Exiting Initial Member"), to the effect set forth in Sections 3.1(b)
and 3.1(c) that such Transfer does not result in Newco being treated as a
"publicly traded partnership" for such purposes; provided, however, that if such
Transfer causes a termination of Newco for United States federal income tax
purposes, the Exiting Initial Member and the Non-Exiting Initial Member shall
bear any cost of such termination in proportion to the amount of such Initial
Member's prior Transfers pursuant to xx.xx. 4.1(a), 4.1(e) and 4.1(f) of this
Agreement (but only to the extent such prior Transfers contributed towards
causing such termination); provided further, however, that the obligation of any
party to make a payment pursuant to the preceding proviso shall continue to
apply only with respect to Transfers that occur at a time when both SBC and
BellSouth continue to Beneficially Own at least one share of Class B Common
Stock. In no event may LLC Units be Transferred pursuant to this Section 4.1(f)
by any Initial Member that does not Beneficially Own at least 10% of the Total
Outstanding Shares and at least one share of Class B Common Stock;
(g) (i) Manager shall take and cause its Subsidiaries to
take all reasonable actions as may be reasonably necessary to approve
(including, without limitation, by convening a special meeting of the holders of
Shares) and complete the merger of any wholly owned Subsidiary of such Initial
Member, with and into Manager, and (ii) the other Initial Member agrees to vote
all Shares Beneficially Owned by it in favor of such merger; provided that (a)
Manager is the surviving corporation in such merger, (b) all of the LLC Units
owned of record
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and held by the wholly owned Subsidiary of such Initial Member to be merged into
Manager are free and clear of all Encumbrances, (c) the wholly owned Subsidiary
of such Initial Member to be merged into Manager has no liabilities, other than
(i) those incident to this Agreement and (ii) those for which the Initial Member
provides full indemnification to Manager and that do not exceed five percent of
the then current total assets of such Subsidiary, (d) the merger consideration
paid to such Initial Member is identical to the consideration that would have
been received if each of the LLC Units owned of record and held by such
Subsidiary were exchanged pursuant to Section 17.1; (e) such merger will not be
otherwise adverse to Newco except in an immaterial respect (taking into account
any efforts by such Initial Member to mitigate any adverse effects on Newco);
provided that for such purposes the termination of Newco for federal, state or
local Tax purposes and any adverse consequences therefrom shall be deemed to be
immaterial; and (f) no such merger shall be consummated until all necessary
regulatory approvals have been obtained; provided, however, that if such
transfer causes a termination of Newco for United States federal income tax
purposes, the Exiting Initial Member and the Non-Exiting Initial Member shall
bear any cost of such termination in proportion to the amount of such Initial
Member's prior Transfers pursuant to xx.xx. 4.1(a), 4.1(e) and 4.1(f) of this
Agreement (but only to the extent such prior Transfers contributed towards
causing such termination); provided further, however, that the obligation of any
party to make a payment pursuant to the preceding proviso shall continue to
apply only with respect to Transfers that occur at a time when both SBC and
BellSouth continue to Beneficially Own at least one share of Class B Common
Stock. In no event may LLC Units be Transferred pursuant to this Section 4.1(g)
by any Initial Member that does not Beneficially Own at least 10% of the Total
Outstanding Shares and at least one share of Class B Common Stock. Manager will
use commercially reasonable efforts to cause such merger to qualify as a
reorganization within the meaning of Section 368(a) of the Code; or
(h) Upon a Transfer of all of the LLC Units held by an
Initial Member, pursuant to Sections 4.1(c), (e), (f) or (g) such Initial
Member, shall have no continuing rights or obligations under this Agreement
(other than its rights under Section 12.8, in respect of books and records of
Newco relating to all periods prior to the transfer of all LLC Units), but will
remain subject to the terms of Ancillary Agreements to the extent provided by,
and in accordance with, the express terms thereof; and provided, that the
foregoing shall not relieve such Initial Member from liability for any breach of
this Agreement prior to the time of such Transfer.
4.2. Right of First Refusal.
(a) In the event that the Exiting Initial Member proposes
to Transfer all of its Securities, to a specified Person on agreed terms,
pursuant to Section 4.1(f) above, then, prior to Transferring such Securities
(the "Transferred Securities"), the Exiting Initial Member shall promptly
deliver a written notice (the "Transfer Notice") to Newco and the Non-Exiting
Initial Member stating that the Exiting Initial Member proposes to Transfer the
Transferred Securities. The Transfer Notice shall (i) specify the purchase price
for and other material terms with respect to the sale of the Transferred
Securities, (ii) identify the proposed purchaser, (iii) specify the date
scheduled for the Transfer (which date shall not be less than ninety (90) days
after the date the Transfer Notice is delivered), and (iv) have attached thereto
a copy of such offer, and any
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ancillary agreements or documents, containing all of the terms and conditions on
which the Transferred Securities are to be sold.
(b) By written notice (an "Election Notice") delivered to
Newco and the Exiting Initial Member within thirty (30) days after receipt of a
Transfer Notice, the Non-Exiting Initial Member shall have the right to elect to
purchase all (but not less than all) of the Transferred Securities on terms and
conditions no less favorable to the Exiting Initial Member than, and at the same
price, set forth in the Transfer Notice, provided, that if such terms and
conditions include in any material respect any non-cash assets or include any
non-financial requirements which would be impracticable for the Non-Exiting
Initial Member to satisfy, then the Non-Exiting Initial Member shall not be
required to satisfy such terms, conditions and requirements and the purchase
price for the Transferred Units will be equal to the Fair Market Value of such
non-cash assets in cash; provided further, however, that if the Existing Initial
Member proposes to transfer the Transferred Securities in a transaction that
would qualify in whole or in part as a tax-free exchange, then the Exiting
Initial Member and the Non-Exiting Initial Member shall use commercially
reasonable efforts to structure the acquisition by the Non- Exiting Initial
Member of the Transferred Securities to receive similar tax-free treatment.
(c) If the Non-Exiting Initial Member shall have duly
elected to purchase the Transferred Securities, the Exiting Initial Member and
the Non-Exiting Initial Member shall use reasonable efforts, including
reasonable efforts to obtain all regulatory approvals and consents to consummate
the closing of the purchase of the Transferred Securities as soon as practicable
and in any event within one year after receipt of the Transfer Notice (the "ROFR
Termination Date"), provided that, if the closing does not by then occur due to
the failure to receive any required regulatory approvals or consents, the ROFR
Termination Date may be extended by either the Exiting Initial Member or the
Non-Exiting Initial Members until such approvals are received, but in no event
for a period of more than an additional six (6) months.
(d) In the event that the Non-Exiting Initial Member does
not elect to purchase the Transferred Securities (or fails to consummate such
purchase prior to the ROFR Termination Date, as it may be extended due to
failure to obtain regulatory approvals or consents), the Exiting Initial Member
will be free, at any time within twelve (12) months after the ROFR Termination
Date or the expiration of the time an Election Notice shall be required to be
delivered without delivery thereof, as applicable, to consummate a sale of the
Transferred Securities to the proposed purchaser identified in the Transfer
Notice on terms not less favorable to the Exiting Initial Member than those set
forth therein and at the same price; provided that the closing of the
transaction contemplated by such Election Notice may be extended by the Exiting
Initial Member for six (6) months in the event that any required regulatory
approval or consent shall not have been obtained at such time and; provided
further that the entire period from delivery of the Election Notice until
closing of the transaction is not more than eighteen (18) months.
(e) The provisions of this Section 4.2 shall apply to
subsequent Transfers by the purchaser of Transferred Securities.
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4.3. Conversions and Exchanges. Notwithstanding anything
set forth in this Agreement to the contrary, the provisions of this Article 4
shall not apply to (i) conversions of Member Common Stock or (ii) exchanges of
LLC Units for Class A Common Stock in accordance with this Agreement and the
Manager Certificate.
ARTICLE 5
Management of Newco
5.1. Management of Newco. (a) The management of Newco
shall be vested exclusively in Manager. Manager hereby acknowledges that its
powers are subject to the terms of the Manager Certificate and agrees at all
times to abide by the terms and conditions set forth therein. The Members, in
such capacity, shall have no part in the management of Newco notwithstanding the
last sentence of Section 18-402 of the Act, and shall have no authority or right
to act on behalf of or bind Newco in connection with any matter, except as
expressly set forth in the Act. The Manager shall serve until the Members shall
determine by a unanimous vote of the LLC Units Beneficially Owned by the Initial
Members at such time, to remove the Manager, and a new Manager shall be elected
by a vote of the Members by a vote of a majority of the LLC Units.
(b) Subject to subsection (c) below and the terms of the
Manager Certificate, the Manager shall have the power on behalf and in the name
of Newco to carry out any and all of the objects and purposes of Newco
contemplated by Section 2.5 and to perform or authorize all acts which it may
deem necessary or advisable in connection therewith. The Members agree that all
determinations, decisions and actions made or taken by the Manager in accordance
with this Agreement shall be conclusive and absolutely binding upon Newco, the
Members and their respective successors, assigns and personal representatives.
(c) Without limiting the foregoing provisions of this
Section 5.1, the Manager shall have the following powers which may, subject to
any limitations set forth in this Agreement, be delegated to the Officers:
(i) to develop and prepare the Business Plan
each year which will set forth the operating goals and plans for Newco;
(ii) to execute and deliver or to authorize the
execution and delivery of Contracts, deeds, licenses, instruments of transfer
and other documents in the ordinary course of business on behalf of Newco;
(iii) to employ, retain, consult with and dismiss
such personnel as may be required;
(iv) to establish and enforce limits of authority
and internal controls with respect to all personnel and functions;
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(v) to engage attorneys, consultants,
accountants and other agents and representatives of and for Newco;
(vi) to develop or cause to be developed
accounting procedures for the maintenance of Newco's books of account;
(vii) to make all Tax elections in a manner which,
unless the Initial Members otherwise agree, will maximize or accelerate Tax
deductions or minimize or defer taxable income;
(viii) to determine the Fiscal Year of Newco; and
(ix) to do all such other acts as shall be
specifically authorized in this Agreement or by the Initial Members unanimously
in writing from time to time.
5.2. Compensation. Manager shall not be entitled to
compensation for services rendered to Newco in its capacity as manager, but
shall be entitled to receive from Newco all of its out of pocket costs and
expenses (i) required in connection with managing the business of Newco, and
(ii) incurred in connection with making filings and reports under the Securities
Act and the Exchange Act (including registration statements).
5.3. Issuances of Additional Membership Units. Manager is
hereby authorized to cause Newco from time to time to issue to Members
additional LLC Units in accordance with the terms hereof, including LLC Units
issued in connection with the Contribution Closing.
5.4. Officers. (a) No Officer shall, without the prior
approval of Manager, take or permit to be taken any action on behalf of or in
the name of Newco (whether for Newco itself or where Newco is acting in its
capacity as a direct or indirect member, partner or owner of any Subsidiary), or
enter into any commitment or obligation binding upon Newco, except for (i)
actions authorized in accordance with the terms and conditions of this Agreement
and (ii) actions authorized by the Manager in the manner set forth herein.
(b) The Executive Officers of Newco shall at all times be
identical to the then corresponding Executive Officers of Manager. Any changes
in the Executive Officers of Manager shall automatically and concurrently take
effect with respect to then corresponding Executive Officers of Newco. Any
changes in the Executive Officers of Newco shall automatically and concurrently
take effect with respect to the then corresponding Executive Officers of
Manager. The Members agree to take such actions as may be reasonably necessary
to effect the result of the foregoing provisions.
(c) Manager shall have the full and exclusive right,
power and authority to act on behalf of Newco (whether Newco is acting in its
own behalf or in its capacity as a direct or
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indirect member, partner or owner of any Subsidiary) except to the extent that
Manager permits the Officers or any one of them to exercise such power on behalf
of Manager.
5.5. Contributed Entities. (a) Anything herein to the
contrary notwithstanding, during the period in which a BellSouth Member is
allocated Depreciation or Built-In Gain or Loss with respect to a "Contributed
Entity" pursuant to the second sentence of Section 9.1(d)(i) of this Agreement,
Manager shall not, without the written consent of BellSouth (which consent shall
not be unreasonably withheld), take any action, including, but not limited to,
causing a dissolution of such Contributed Entity, that would cause an adjustment
to the basis of the property owned by such Contributed Entity. Solely for
purposes of this Section 5.5(a), a "Contributed Entity" shall mean Orlando SMSA
Limited Partnership, a Delaware limited partnership, or AB Cellular Holding,
LLC, a Delaware limited liability company, and this Section 5.5(a) shall apply
separately to each such Contributed Entity.
(b) Without the written consent of SBC (which consent
shall not be unreasonably withheld), for so long as SBC Holdings or any
successor thereto shall be a Member, Newco shall not take any action which would
be reasonably likely to result in a sale, transfer or other disposition of the
MI-5 Assets (as defined in the Contribution Agreement), Houma-Thibodaux (as
defined in the Contribution Agreement) or all or substantially all of its assets
or the assets of SBC-PR (as defined in the Contribution Agreement) relating to
Paging Services (as defined in the Contribution Agreement).
ARTICLE 6
Members
6.1. Powers of Members. Members shall have only such
rights and powers as are granted to Members pursuant to the express terms of
this Agreement and the Act. Except as otherwise expressly and specifically
provided in this Agreement and notwithstanding the last sentence of Section
18-402 of the Act, no Member, in such capacity, shall have any authority to
bind, to act for, to sign for or to assume any obligation or responsibility on
behalf of, any other Member or Newco. Except as expressly set forth in this
Agreement, no action by Newco or Members shall require the vote or approval of
any Member in its capacity as a Member.
6.2. Partition. Each Member waives any and all rights that
it may have to maintain an action for partition of Newco's property.
6.3. Place of Members' Meetings. Meetings of Members
(each, a "Members' Meeting") shall be held at the principal office of Newco, or
at such other place as Members shall mutually agree.
6.4. Meetings. A Members' Meeting may be called by any
Member for any matter which is appropriate for consideration thereat. Members'
Meetings shall be held from time to time, but no fewer than once in each
calendar year. Meetings shall be chaired by the
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Chairman of Newco, and the Secretary of the Meeting shall be appointed by the
Chairman of Newco.
6.5. Telephonic Meetings. Members' Meetings may be held
through the use of conference telephone or similar communications equipment so
long as all Persons participating in such Members' Meetings can hear one another
at the time of such Members' Meeting. Participation in a Members' Meeting via
conference telephone or similar communications equipment in accordance with the
preceding sentence constitutes presence in person at the Members' Meeting.
6.6. Notice of Meetings. Written notice of a Members'
Meeting shall state the place, date and hour of such Members' Meeting, and the
general nature of the business to be transacted. Notice shall be given in the
manner prescribed in Section 18.3(c) not fewer than ten (10) days nor more than
sixty (60) days before the date thereof.
6.7. Waivers. Notice of a Members' Meeting need not be
given to any Member who signs a waiver of notice, in person or by proxy, whether
before or after the Members' Meeting. The attendance of any Member at a Members'
Meeting, in person or by proxy, without protesting prior to the conclusion of
such Members' Meeting the lack of notice of such Members' Meeting, shall
constitute a waiver of notice by such Member, provided that such Member has been
given an adequate opportunity at the meeting to protest such lack of notice.
6.8. Quorum. The attendance of the authorized
representative of the Manager and at least one authorized representative of each
Initial Member with the right to vote all of the LLC Units Beneficially Owned by
such Initial Member shall constitute a quorum at a Members' Meeting for the
transaction of any business; provided that notice in accordance with the terms
of this Agreement shall have been duly provided. If no quorum is present,
holders of a majority of LLC Units present in person or by proxy may adjourn the
Members' Meeting and if a quorum is present, holders of at least two-thirds of
the LLC Units present in person or by proxy may adjourn the Members' Meeting. An
adjournment may include notice of the date, hour and place that the Members
shall reconvene. Notice of the adjournment (with the new date, time and place)
shall be given to all Members who were absent at the time of the adjournment
and, unless such date, hour and place are announced at the Members' Meeting, to
the other Members.
6.9. Proxies. Every Member entitled to vote at a Members'
Meeting may authorize another Person or Persons to act for it by proxy. Every
proxy must be signed by the Member or his attorney-in-fact. Every proxy shall be
revocable in writing at the pleasure of the Member executing it.
6.10. Voting Power. Each LLC Unit shall be entitled to one
(1) vote on all matters to be voted on by the Members.
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6.11. Written Consent. Any action required or permitted to
be taken at any Members' Meeting may be taken without a meeting if all Members
consent thereto in writing. Any such written consents shall be filed with the
minutes of the proceedings.
6.12. Liability. Except as otherwise provided by the Act,
the debts, obligations and liabilities of Newco, whether arising in contract,
tort or otherwise, shall be solely the debts, obligations and liabilities of
Newco, and no Member or Manager shall be obligated personally for any such debt,
obligation or liability of Newco solely by reason of being a Member or Manager.
6.13. Indemnification. (a) None of the Manager nor any
director, officer or employee of Manager, nor any Officer or employee of Newco
(the "Indemnified Parties") shall be liable, responsible or accountable in
damages or otherwise to Newco, to any third party or to any Member for (i) any
act performed or omission within the scope of the authority conferred on the
Indemnified Party by this Agreement or otherwise by Manager except for the gross
negligence, fraud or willful misconduct (including any willful violation of the
terms of the Manager Certificate or this Agreement) of any Indemnified Party,
(ii) the Indemnified Party's performance of, or failure to perform, any act on
the reasonable reliance on advice of legal counsel to Newco or (iii) the
negligence, dishonesty or bad faith of any agent, consultant or broker of Newco
selected, engaged or retained in good faith and with reasonable prudence. In any
threatened, pending or completed action, suit or proceeding, each Indemnified
Party shall, to the fullest extent permitted by law, be fully protected and
indemnified and held harmless by Newco against all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, proceedings, costs,
expenses and disbursements of any kind or nature whatsoever (including, without
limitation, reasonable attorneys' fees, costs of investigation, fines, judgments
and amounts paid in settlement, actually incurred by such Indemnified Party in
connection with such action, suit or proceeding) by virtue of his or her status
as an Indemnified Party or with respect to any action or omission taken or
suffered in good faith, other than liabilities and losses resulting from the
gross negligence, fraud, breach of fiduciary duty or willful misconduct
(including any willful violation of the terms of the Manager Certificate or this
Agreement) of any Indemnified Party. The indemnification provided by this
Section 6.13 shall be recoverable only out of the assets of Newco, and no Member
shall have any personal liability on account thereof.
(b) To the extent that, at law or in equity, an
Indemnified Party has duties (including fiduciary duties) and liabilities
relating thereto to Newco, any Member or to any other Indemnified Party, an
Indemnified Party acting under this Agreement shall not be liable to Newco or to
any Member or to any other Indemnified Party for its good faith reliance on the
provisions of this Agreement. The provisions of this Agreement, to the extent
that they restrict the duties and liabilities of an Indemnified Party otherwise
existing at law or in equity, are agreed by the parties hereto to replace such
other duties and liabilities of such Indemnified Party.
6.14. Designation of Tax Matters Member; Tax Matters. (a)
Manager shall act as the "tax matters partner" of Newco, as provided in the
regulations pursuant to Section 6231 of the Code (the "Tax Matters Member"). SBC
Holdings and the BellSouth Members hereby
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approve of such designation and agrees to execute, certify, acknowledge,
deliver, swear to, file and record at the appropriate public offices such
documents as may be deemed necessary or appropriate to evidence such approval.
To the extent and in the manner provided by applicable Code sections and
regulations thereunder, the Tax Matters Member (a) shall furnish the name,
address, profits interest and taxpayer identification number of each Member to
the IRS and (b) shall inform each Member of administrative or judicial
proceedings for the adjustment of Newco items required to be taken into account
by a Member for income tax purposes. The Tax Matters Member shall not enter into
an agreement with the IRS or any other taxing authority to extend the limitation
period for assessment of any federal, state or local income, franchise or
unincorporated business tax of any Member or owner thereof nor settle with the
IRS or any other taxing authority to disallow deductions or increase income from
Newco with respect to any Member, unless all of the Members shall have agreed
thereto. Each Member hereby reserves all rights under applicable law, including
the right to retain independent counsel of its choice at its expense (which
counsel shall receive the full cooperation of Manager and shall be entitled to
prior review of all submissions by Newco in respect of any dispute with the
relevant taxing authority).
(b) Notwithstanding the foregoing, SBC and BellSouth
shall retain the right to control the portion of any audit relating to
Depreciation or gain or loss with respect to any of the assets contributed at
the Contribution Closing by Affiliates of SBC and BellSouth, respectively, for
any taxable year.
(c) On or before May 1 of each year, Newco shall provide
to each Member (i) a draft Internal Revenue Service Schedule K-1 and Form 1065,
(ii) information required by such Member to allocate and apportion income for
state income tax purposes and (iii) such other information concerning Newco
reasonably requested by any Member. Each Member shall have the right to object
to any amount or information reported on such draft Schedule or Form on or
before May 15. If the Members cannot agree about the contents of such draft
Schedule or Form, the tax director of Newco shall resolve the dispute in such a
manner that maximizes or accelerates tax deductions or minimizes or defers
taxable income.
(d) The Tax Matters Member shall not be entitled to make
any material elections, including an election under Section 754 of the Code,
unless all Members shall have consented thereto.
ARTICLE 7
Additional Members
7.1. Admission. Upon Transfer (other than a pledge
permitted under Section 4.1(d)) of all or any of a Member's LLC Units permitted
under Article 4, Newco is authorized to admit any Person who is a Transferee of
such LLC Units as an additional member of Newco (each, an "Additional Member"
and collectively, the "Additional Members"); provided, that no such Person shall
be entitled to any rights hereunder except for rights under
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Section 4 in a Transfer of LLC Units pursuant to Section 4.1(a), (e) or (f).
Each such Person shall be admitted as an Additional Member at the time such
Person executes this Agreement or a counterpart of this Agreement and such
Transfer is effective under Article 4.
7.2. Acceptance of Prior Acts. Any Person who becomes an
Additional Member, by becoming an Additional Member, accepts, ratifies and
agrees to be bound by all actions duly taken pursuant to the terms and
provisions of this Agreement by Newco prior to the date it became an Additional
Member and, without limiting the generality of the foregoing, specifically
ratifies and approves all agreements and other instruments as may have been
executed and delivered on behalf of Newco prior to said date and which are in
force and effect on said date.
ARTICLE 8
Capital Contributions and
Capital Accounts
8.1. Capital Contributions. (a) At the time of the
Contribution Closing, the Percentage Interests and LLC Units shall be as set
forth in Schedule 8.1(a) hereto. SBC, SBC Holdings, BellSouth, each BellSouth
Member and Manager shall determine the contributors' Capital Accounts (which
shall be in proportion to the Members' Percentage Interests) as of the
Contribution Closing within 90 days after the Contribution Closing and shall
reflect such amounts on an amendment to Schedule 8.1(a) as promptly as
practicable thereafter. Each of SBC and BellSouth agree that the contribution of
additional assets to the capital of Newco pursuant to the terms and conditions
of the Contribution Agreement shall not modify the Percentage Interests of SBC,
SBC Holdings, BellSouth and the BellSouth Members set forth on Schedule 8.1(a)
hereto.
(b) No Member shall be required to make any additional
capital contribution to Newco, except as provided in this Article 8, Article 11
and Section 17.4 hereof and pursuant to the Contribution Agreement which
payments pursuant to the Contribution Agreement shall be treated as described in
Section 8.1(a). If the Manager takes action requiring an increase in the capital
of Newco, each Member agrees to provide to Newco additional contributions of
cash to capital. Such contributions shall be provided pro rata by each Member in
proportion to its Percentage Interest in Newco immediately prior to the time of
contribution.
8.2. LLC Units. LLC Units shall for all purposes be
personal property. No Member shall have any interest in specific property of
Newco.
8.3. Status of Capital Contributions. Except as provided
in this Agreement, no Member shall be entitled to the return of its Capital
Contributions. No return of a Member's Capital Contributions shall be made
hereunder if such distribution would violate applicable state law. Under
circumstances requiring a return of any Capital Contribution, no Member shall
have
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the right to demand or receive property other than cash, except as may be
specifically provided in this Agreement.
8.4. Capital Accounts. An individual Capital Account shall
be established and maintained for each Member in accordance with federal income
tax accounting principles, except that neither SBC nor BellSouth will directly
have a Capital Account as a result of the Capital Contributions made at the time
of the Contribution Closing. The Capital Account of each Member shall be
maintained in accordance with the following provisions:
(a) The Capital Account of each Member shall be increased
by (i) the amount of any cash and the agreed net fair market value (as used
herein, "agreed net fair market value" of property shall mean the gross fair
market value of the property reduced by all liabilities encumbering the
property) as of the date of contribution of any property contributed as a
Capital Contribution to the capital of Newco by such Member, (ii) the amount of
any Profits allocated to such Member and (iii) amounts of gain allocated
pursuant to Section 9.1(d). The Capital Account of each Member shall be
decreased by (i) the amount of any Losses allocated to such Member, (ii) the
amount of any cash and the agreed net fair market value as of the date of
distribution of any property distributed to such Member and (iii) amounts of
loss allocated pursuant to Section 9.1(d). Except as provided in the preceding
sentence, the Member's Capital Accounts shall be determined in accordance with
the detailed capital accounting rules set forth in Treasury Regulation Section
1.704-1(b)(2)(iv) and shall be adjusted upon the occurrence of certain events
(each, a "Revaluation") as provided in Treasury Regulation Section
1.704-1(b)(2)(iv)(f), provided that such events are not de minimis.
(b) A transferee of an LLC Unit shall succeed to the
Capital Account (or portion of the Capital Account) attributable to such
transferred LLC Unit.
8.5. Interest at the Contribution Closing. Immediately
following the Contribution Closing, the Percentage Interest and number of LLC
Units held by each Member and its wholly owned Subsidiaries in the aggregate
shall be as follows:
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Member Percentage Interest LLC Units
------ ------------------- ---------
SBC 0% 0
SBC Holdings 59.9999999500000 1,200,000,005
BellSouth 0% 0
BellSouth Mobile Data 0.8699999956500% 17,400,000
BSCC of Houston 0.4051819479741% 8,103,639
ACCC 1.5948180420259% 31,896,361
BellSouth Cellular 36.2499999687500% 725,000,003
RAM 0.87999999560 17,600,000
Manager 0.0000001000000% 2
-------------
TOTAL 100.0000000000000 2,000,000,010
-------------
There will be no change to LLC Units from the amounts set
forth above as a result of any contribution to or payment by Newco in accordance
with the terms of the Contribution Agreement.
8.6. Contribution of Proceeds of Issuance of Shares. In
connection with the issuance of Shares by Manager, Manager shall make a Capital
Contribution to Newco of the proceeds raised in connection with such issuance,
provided that if the proceeds actually received by Manager are less than the
gross proceeds of such issuance as a result of any underwriter's discount,
commission or fee or other expenses paid or incurred in connection with such
issuance, then Manager shall contribute the net proceeds and shall be deemed to
have made a Capital Contribution to Newco in the amount of the gross proceeds of
such issuance and Newco shall be deemed simultaneously to have reimbursed
Manager for the amount of such underwriter's discount, commission or fee or
other expenses. Newco shall cause to be issued to Manager a number of LLC Units
equal to the number of Shares issued by Manager in connection with a transaction
referred to in this Section 8.6.
8.7. No Withdrawals. No Member shall be entitled to
withdraw any part of its Capital Account or Capital Contributions or to receive
any distributions from Newco except as expressly provided in this Agreement.
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ARTICLE 9
Allocations
9.1. Allocation Rules. (a) Except as provided in Section
9.1(d) below, whenever a proportionate part of the Profits or Losses is
allocated to a Member, every item of income, gain, loss, deduction or credit
entering into the computation of such Profits or Losses or arising from the
transactions with respect to which such Profits or Losses were realized shall be
credited or charged, as the case may be, to such Member in the same proportion;
provided, however, that "recapture income", if any, shall be allocated to the
Members who were allocated the corresponding depreciation deductions.
(b) If any Member transfers all or any part of its LLC
Units during any Fiscal Year or its Percentage Interest is increased or
decreased, Profits and Losses attributable to such Interest for such Fiscal Year
shall be apportioned between the transferor and transferee or computed as to
such Members, as the case may be, on the basis of an interim closing of the
books and records of Newco for tax purposes (or such other method as shall be
agreed by Newco, the transferee and transferor), provided in all events that any
apportionment method shall be permissible under the Code and applicable
regulations thereunder.
(c) Profits and Losses shall be allocated each year among
the Members pro rata in accordance with their Percentage Interest; provided,
however, that any Profit or Loss attributable to the sale of the Crown Castle
Stock shall be allocated solely to the BellSouth Member that directly or
indirectly contributed the sold Crown Castle Stock.
(d) (i) Except as otherwise expressly set forth below in
this clause (i), allocations to the Members for federal income tax purposes (but
not for purposes of crediting or charging Capital Accounts) shall comply with
the provisions of Section 704(c) of the Code and the applicable regulations
thereunder. For federal income tax purposes, a portion of the Depreciation or
Built-In Gain or Loss that exists as of the Contribution Closing realized by
Newco with respect to any property that was contributed to Newco by a BellSouth
Member and SBC Holdings or is contributed to Newco by a BellSouth Member or SBC
Holdings in any other transaction qualifying under Section 721 of the Code (in
each case other than the BellSouth After Acquired Properties and the SBC After
Acquired Properties (each as defined in the Contribution Agreement), other than
the MI-5 Assets, Houma-Thibodaux and the assets relating to Paging Services of
SBC PR) equal to the product of (A) the sum of the BellSouth Members' and SBC
Holdings' Percentage Interests and (B) such Depreciation and Built-in Gain or
Loss, shall be allocated to the Member (i.e., the SBC Holdings or BellSouth
Member) that contributed such property and all remaining Depreciation or
Built-in Gain or Loss with respect to such property shall be allocated to other
Members other than the Initial Members, BellSouth Members and SBC Holdings. Any
other Depreciation or Built-in Gain or Loss realized by Newco with respect to
other property contributed to Newco or that was held by Newco at a time when the
Book Value of Newco Assets was adjusted pursuant to the third sentence of
Section 8.4(a) shall, in accordance with the "traditional method" under Section
704(c) of the Code and Treasury Regulation Section 1.704-1(b)(2)(iv)(d) and (f),
be allocated among the Members in a manner
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which takes into account the differences between the adjusted basis for federal
income tax purposes to Newco of its interest in such property and the fair
market value of such interest at the time of its contribution or revaluation.
(ii) If there is a net decrease in the Minimum
Gain of Newco during a taxable year (including any Minimum Gain attributable to
Member-Funded Debt), each Member at the end of such year shall be allocated,
prior to any other allocations required under this Article 9, items of gross
income for such year (and, if necessary, for subsequent years) in the amount and
proportions described in Treasury Regulation Sections 1.704-2(g) and
1.704-2(i)(4).
(iii) Notwithstanding the allocation provided for
in Section 9.1(c), no allocation of an item of loss or deduction shall be made
to a Member to the extent such allocation would cause or increase a deficit
balance in such Member's Capital Account as of the end of the taxable year to
which such allocation relates. If any Member receives an adjustment, allocation
or distribution that causes or increases such a deficit balance, taking into
account the rules of Treasury Regulation Sections 1.704-1(b)(2)(ii)(d)(4), (5)
and (6), such Member shall be allocated (after taking into account any
allocations made pursuant to Section 9.1(d)(ii)) items of income and gain in an
amount and manner to eliminate the Member's Capital Account deficit attributable
to such adjustment, allocation or distribution as quickly as possible. For
purposes of this Section 9.1(d)(iii), there shall be excluded from a Member's
deficit Capital Account balance at the end of a taxable year of Newco (a) such
Member's share, determined in accordance with Section 704(b) of the Code and
Treasury Regulation Section 1.704-2(g) of Minimum Gain (provided that, in the
case of Minimum Gain attributable to Member-Funded Debt, such Minimum Gain shall
be allocated to the Member or Members to whom such debt is attributable pursuant
to Treasury Regulation Section 1.704-2(i)), and (b) the amount that such Member
is obligated to restore to the Company under Treasury Regulation Section
1.704-1(b)(2)(ii)(c).
(iv) Notwithstanding the allocations provided for
in subsection (ii) of this Section 9.1(d) and Section 9.1(c), if there is a net
increase in Minimum Gain of Newco during a taxable year of the Company that is
attributable to Member-Funded Debt, then first Depreciation, to the extent the
increase in such Minimum Gain is allocable to depreciable property, and then a
proportionate part of other deductions and expenditures described in Section
705(a)(2)(B) of the Code, shall be allocated to the lending or guaranteeing
Member (and to joint lenders or guarantors in proportion to their relative
obligations), provided that the total amount of deductions so allocated for any
year shall not exceed the increase in Minimum Gain attributable to such
Member-Funded Debt in such year.
(v) Any special allocation under Sections
9.1(d)(ii) through (iv) shall be taken into account in computing subsequent
allocations of Profits and Losses of any item thereof pursuant to this Article 9
so that the net amount of any items so allocated and the Profits, Losses and all
items thereof allocated to each Member pursuant to this Article 9 shall, to the
extent permissible under Section 704(b) of the Code and the Treasury Regulations
promulgated thereunder, be equal to the net amount that would have been
allocated to each Member pursuant to this Article 9 if such special allocation
had not occurred.
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(vi) It is intended that prior to a distribution
of the proceeds from a liquidation of Newco pursuant to Section 15.4(e) hereof,
the positive Capital Account balance of each Member shall be in proportion to
their respective Percentage Interests. Accordingly, notwithstanding anything to
the contrary in this Section 9.1, to the extent permissible under Section 704(b)
of the Code and the Treasury Regulations promulgated thereunder, Profits and
Losses and, if necessary, items of gross income and gross deductions, of Newco
for the year of liquidation of Newco (or, if the liquidation spans more than one
year, each such year) shall be allocated among the Members so as to bring the
positive Capital Account balance of each Member as close as possible to the
amount that such Member would receive if liquidation proceeds were distributed
in accordance with Section 10.1.
(vii) Appropriate adjustments shall be made to the
provisions of this Section 9.1 if an Additional Member is admitted to Newco.
(e) The Members are aware of the income tax consequences
of the allocations made by this Article 9 and hereby agree to be bound by the
provisions of this Article 9 in reporting their shares of Newco income and loss
for income tax purposes.
ARTICLE 10
Distributions
10.1. Distributions. (a) Except as otherwise required by
law or as provided in this Agreement, no Member shall have any right to withdraw
any portion of its Capital Account or to any distribution without the consent of
all the other Members.
(b) Newco shall make the distributions set forth in
clause (c) below and distributions at such other times and in such other amounts
as shall be determined by the Manager, with all such distributions to be made
pro rata to the Members in accordance with their respective Percentage
Interests.
(c) Newco shall make distributions (i) at least two (2)
Business Days prior to the date on which the Manager is required to make its
federal estimated income tax payments in an amount sufficient to permit Manager
to satisfy all of its Tax liabilities resulting from the allocations hereunder
due for the fiscal quarter for which estimated income tax payments are due and
shall distribute proportionate amounts to all other Members and (ii) within
fifteen (15) Business Days after the end of the Fiscal Year if the amounts so
distributed pursuant to clause (i) during the preceding Fiscal Year are not in
the aggregate greater than the greater of (x) fifty percent of the Distributable
Cash and (y) the greatest amount of Taxes attributable to a Member as a result
of the operations of Newco, Newco shall distribute the amount by which the
greater of (x) and (y) exceeds the aggregate amount distributed pursuant to
clause (i) during the preceding Fiscal Year.
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10.2. Limitations on Distributions. Notwithstanding any
provision to the contrary contained in this Agreement, Newco shall not make a
distribution to any Member on account of its interest in Newco if such
distribution would violate ss. 18-607 of the Act or other applicable law.
ARTICLE 11
Wireless Acquisitions
11.1. Initial Member Acquisition of Wireless Business. (a)
If, at or after the Contribution Closing, an Initial Member shall, directly or
indirectly, own any interest in a Wireless Business (other than a De Minimis
Wireless Interest and other than the Additional Subsidiaries (as defined in the
Contribution Agreement) and other than as described in Section 4.25 of the
Contribution Agreement), and such interest is held directly, or is held
indirectly and is a Controlling Interest such that the Initial Member is able to
cause the Entity that directly holds the Wireless Business to offer the Wireless
Business to Newco, such Initial Member shall dispose of the Wireless Business in
accordance with Section 11.2.
(b) If, at or after the Contribution Closing, an Initial
Member shall, directly or indirectly, own any interest in a Wireless Business
(other than a De Minimis Wireless Interest and other than the Additional
Subsidiaries and other than as described in Section 4.25 of the Contribution
Agreement), and such interest is a non-Controlling Interest such that the
Initial Member cannot cause the Entity that directly or indirectly holds the
Wireless Business to offer the Business to Newco, then such Initial Member shall
promptly take one of the followings actions: (i) dispose of such Wireless
Business in accordance with Section 11.2, (ii) cause such interest to become a
De Minimis Wireless Interest or (iii) sell all of the securities Beneficially
Owned by the Initial Member in such Entity.
(c) Notwithstanding the required methods of disposition
set forth in Sections 11.1(a) and 11.1(b) hereof, if the ownership of a Wireless
Business would require a disposition of licenses under the Overlap Laws that is
sufficiently material to the Initial Member and its Ultimate Parent Entity as to
make Transfer of all of the Securities Beneficially Owned by it advisable, then
the Initial Member shall not be required to offer such Wireless Business to
Newco pursuant to this Article 11 but shall instead as promptly as practicable
cause the Transfer of all of the Securities Beneficially Owned by it pursuant to
Section 4.1(e)(y) or 4.1(f)(y) prior to such acquisition or immediately after
such acquisition.
11.2. Disposition of Acquired Wireless Business. (a) In any
case in which an Initial Member (in such case, an "Acquiring Initial Member")
shall be required under Section 11.1(a), or shall under Section 11.1(b)(i),
dispose of an interest in a Wireless Business (an "Acquired Wireless Business"),
such Acquiring Initial Member shall, within five (5) Business Days after
becoming the owner of such Wireless Business, submit to Newco a written notice
(the "Wireless Business Offer Notice") offering Newco such Acquired Wireless
Business and stating in reasonable detail the price and terms and conditions of
the offer, which price, terms
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and conditions shall be as nearly identical as practicable to the price, terms
and conditions applicable to the acquisition thereof by the Acquiring Initial
Member, with such allocations as may be reasonably appropriate to reflect the
fact that Acquired Wireless Business may be only a portion of the business
required by the Acquiring Initial Member. The Acquiring Initial Member agrees
that it (i) will use its reasonable best efforts to cause any acquisition by it
of an Acquired Wireless Business to be assignable to Newco by its terms, (ii)
shall not agree to any term or condition in connection with a transaction that
results in an acquisition of an Acquired Wireless Business for the purpose of
making it more difficult for Newco to acquire such Acquired Wireless Business
and (iii) will, and will use its reasonable best efforts to cause the seller of
the Acquired Wireless Business to, cooperate with Newco to structure any
purchase by Newco of the Acquired Wireless Business to be tax efficient to
Newco. Newco, by the decision of the Manager, shall have a period of thirty (30)
days after the receipt of the Wireless Business Offer Notice in which to accept
or reject such offer, and in determining whether or not to exercise such right
the Manager shall act at the instruction of the Initial Member that is not the
Acquiring Initial Member. If Newco elects to accept such offer it shall so
indicate within such thirty (30) day period by written notice to the Acquiring
Initial Member. The notice required to be given by Newco shall specify a date
for the closing of the purchase of such Acquired Wireless Business, which shall
not be more than one hundred and twenty (120) days after the date of the giving
of such notice; provided that the closing of the transaction contemplated by
such Wireless Business Offer Notice may be extended by either the Acquiring
Initial Member or Newco for up to an additional six months (in no more than
three extensions) in the event that any required approval or consent from any
Governmental Entity shall not have been obtained at such time; and provided
further that the total period from delivery of the Wireless Business Offer
Notice until closing of the transaction is not more than ten (10) months.
(b) If Newco does not exercise its right to purchase the
Acquired Wireless Business pursuant to subsection (a) above or in the event that
the Acquired Wireless Business is not sold to Newco within ten months after the
closing of such purchase of such Acquired Wireless Business by the Acquiring
Initial Member, the Acquiring Initial Member agrees to use its commercially
reasonable efforts to sell as soon as reasonably practicable, such Acquired
Wireless Business to a Third Party; provided that if the terms of such sale are
more favorable to the purchaser of such Acquired Wireless Business than the
terms on which such Acquired Wireless Business was offered to Newco or Newco
agreed to purchase such Acquired Wireless Business, Newco shall have an option
for thirty (30) days after the execution of a written agreement to sell such
Acquired Wireless Business, to enter into an agreement to acquire such Acquired
Wireless Business on the same terms and conditions as contained in such
agreement, including the price to be paid therefor (which, subject to subsection
(d), below shall be in US dollars).
(c) The Acquiring Initial Member also shall use its best
efforts to obtain from the Acquired Wireless Businesses such information
concerning such Wireless Business as Newco or the other Initial Member may
reasonably request after providing the Wireless Business Offer Notice.
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(d) At the request of the Initial Acquiring Member, Newco
shall pay all or part of the consideration for an acquisition of an Acquired
Wireless Business in additional LLC Units, but at any time after the IPO, the
consideration shall be paid in Public Common Stock in lieu of LLC Units if
requested by the Acquiring Initial Member. If the Wireless Business was acquired
in a transaction to which Section 351, 354 or 721 of the Code applied, Newco,
BellSouth and SBC shall use their commercially reasonable efforts to structure
Newco's acquisition of the Acquired Wireless Business so as not to disqualify
the previous transaction under the original tax treatment. The value of such
Securities (for the purpose of determining the number of Securities to be issued
as consideration to the Acquiring Initial Member) shall be equal to the average
of the closing prices of Public Common Stock in its principal trading exchange
or market for the twenty (20) trading days ending on the trading day prior to
the payment by Newco to the Acquiring Initial Member, or, with respect to any of
such twenty (20) days that are prior to the existence of a liquid trading market
for Public Common Stock, the Fair Market Value of such Securities, with no
premium associated with the voting or governance rights of such Securities and
no attribution of value to the acquired Wireless Business being sold (including
synergies).
(e) If an Acquiring Initial Member owns or acquires a De
Minimis Wireless Interest (other than a De Minimis Wireless Interest referred to
in clause (c) of the definition of De Minimis Wireless Interest), then the
Acquiring Initial Member shall use reasonable efforts to cause the owner of the
Wireless Business in which such member has a De Minimis Wireless Interest to
offer such Wireless Business to Newco.
(f) If at any time (i) Newco or Manager is seeking
authority from the Board of Directors of Manager or any committee thereof to
enter into an agreement to purchase any Wireless Business, and (ii) an Initial
Member shall have entered into an agreement, directly or indirectly, to purchase
all or any part of a Wireless Business but shall not yet have purchased such
Wireless Business, and (iii) (x) the acquisition by Newco of the Wireless
Business for which Newco or Manager is seeking authority and (y) the acquisition
by the Initial Member of the Wireless Business that the Initial Member is
seeking to purchase would cause Newco to be in violation of the Overlap Laws (as
defined in the Contribution Agreement), then the Initial Member seeking to make
the purchase shall cause the directors nominated by it that serve on the Board
of Directors of Manager and the committees thereof to vote with regard to the
acquisition of the Wireless Business as the directors nominated by the other
Initial Member that serve on the Board of Directors of Manager shall vote with
respect thereto.
11.3. Fair Market Value. For purposes of Section 11.2, the
Fair Market Value of Securities shall be determined as follows: (i) the Initial
Members and Newco shall initially negotiate in good faith to determine the Fair
Market Value and (ii) if the Initial Members and Newco fail to agree on the Fair
Market Value within thirty (30) days after the date the Securities are to be
delivered to the Acquiring Initial Member, the Fair Market Value of the subject
stock or other assets shall be determined pursuant to the appraisal process
described below:
(a) Not later than five (5) days after the expiration of
the aforesaid thirty (30) day period, each of the Initial Members shall select
an appraiser (which may or may not be a
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Qualified Investment Banking Firm and shall give the other participant notice of
such selection). Each of such appraisers (the "Original Appraisers") shall
determine the Fair Market Value of the Securities at the time such appraiser
renders its written appraisal.
(b) Each Original Appraiser shall deliver its written
appraisal to the party retaining such Original Appraiser within twenty (20) days
following the date of the selection of the Original Appraisers. Such written
appraisals shall be exchanged by the Initial Members at the offices of Newco, or
such other place as the Parties shall designate, at 10:00 a.m. New York time on
the twenty-first (21st) day following the date of the selection of the Original
Appraisers. In the event that the Original Appraisers agree on the Fair Market
Value, the Fair Market Value of the Securities shall be such agreed-upon amount.
In the event that the Original Appraisers do not agree on the Fair Market Value,
the Original Appraisers shall select a Qualified Investment Banking Firm (the
"Resolving Appraiser"). If the Original Appraisers cannot agree upon a Resolving
Appraiser within five (5) days following the end of the twenty (20) day period
referred to above, then the Resolving Appraiser shall be a Qualified Investment
Banking Firm appointed by the American Arbitration Association. The Resolving
Appraiser shall choose between the valuations of the Original Appraisers and the
valuation it chooses shall be the Fair Market Value of the subject assets for
purposes of this Section 11.3.
(c) Newco shall give to the Original Appraisers and the
Resolving Appraiser free and full access to and the right to inspect, during
normal business hours, all of the relevant assets, books and records of Newco
and shall permit them access to such persons and records as they may request for
the purpose of such appraisers making their valuations hereunder.
11.4. Acquisitions Prior to the Contribution Closing. (a)
In the event that prior to the Contribution Closing either of the Initial
Members shall receive written notice that any Person (including any Governmental
Entity) intends to sell assets or properties that are reasonably likely to
include licenses issued by the FCC to conduct Wireless Businesses (an
"Auction"), such Member shall notify such other Initial Member, Newco and the
Manager of such Auction within five (5) Business Days after receiving such
notice (an "Auction Notice"). In addition, Newco shall participate in the
Auctions specified on Schedule 11.4 hereto (the "Specified Auctions") and the
Initial Members agree to contribute all funds requested by the Manager to
qualify to bid in such Specified Auctions. Except as authorized by both of the
Initial Members, the Manager shall not permit Newco to participate in an
Auction, and if authorized by the Initial Members, the Manager shall cause Newco
to participate in an Auction.
(b) Each Initial Member agrees to consider in good faith
whether or not an offer should be made to acquire the assets or properties that
are the subject of an Auction, and to decide within ten (10) Business Days after
the receipt of an Auction Notice as to whether or not to make such an offer. In
such consideration, each Member agrees to make its determination only on the
basis of what is in the best interests of Newco.
(c) In the event that the Initial Members authorize Newco
to make an offer or offers in an Auction or Auctions, the Manager shall
authorize an amount of money which may be
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offered by the Executive Officers of Newco without requesting additional
authority from Manager. The Manager shall authorize an amount reasonably
anticipated to be necessary to acquire the assets or properties that are the
subject of an Auction,
(d) Each of the Initial Members agrees from time to time
to make a Capital Contribution or a loan to Newco equal to its Percentage
Interest (which for the purposes of this Section 11.4(d) shall be the Percentage
Interest set forth in Section 8.5) of the total amounts determined by the
Manager in accordance with subsections (a) and (c) above, such payment to be
made within three (3) Business Days after the written notification of such
amounts by the Manager.
ARTICLE 12
Operating Agreements; Budgets; Financial Reports
12.1. Ancillary Agreements; Exclusivity. (a) The Ancillary
Agreements are being entered into by the Parties in consideration of the
transactions contemplated herein and in the Contribution Agreement. The
Ancillary Agreements shall be applicable to any Transferees of BellSouth or SBC
only to the extent specifically provided therein.
(b) Except as otherwise expressly provided herein, in the
Ancillary Agreements, and except for the ownership and management of the
Additional Subsidiaries and the properties referred to in Section 4.25 of the
Contribution Agreement, each Initial Member (and its Subsidiaries) shall
directly or indirectly own or operate Wireless Businesses and market and sell
Wireless Services only through Manager, Newco and their respective Subsidiaries;
provided that the foregoing exclusivity shall not prohibit SBC or BellSouth or
any of their respective Subsidiaries from (i) marketing and selling Wireless
Services and issuing bills to and collecting payments from Joint Billing
Customers as of the Closing Date, (ii) entering into arrangements with
competitive providers of Wireless Services pursuant to which such competitive
provider markets its products or services in conjunction with the products or
services of such Initial Member or its Subsidiaries, (iii) marketing and selling
fixed wireless voice and data products, or (iv) marketing and selling Wireless
Services in geographic areas designated by the FCC in which Newco or its
Subsidiaries are not providing Wireless Services pursuant to licenses issued to
them by the FCC.
12.2. Network Preferences. Newco shall exclusively utilize
Network Services offered by Controlled Subsidiaries of such Initial Member
within the Service Territory of such Initial Member unless the Manager
determines that the terms of use of such Initial Member Network Services in a
particular instance would materially disadvantage Newco as compared to the terms
available from a Third Party, taking into account price, service quality and
reliability; provided that this exclusivity shall not limit the right of Newco
to construct or acquire for its own account individual Network Services
components used exclusively in all material respects by Newco such as fixed
microwave transmission equipment.
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12.3. Volume Discounts. Each of SBC and BellSouth shall use
its reasonable best efforts to make available to Newco and its Subsidiaries the
benefits of its agreements with vendors on terms no less favorable than those
generally available to it or its Affiliates. Newco shall use its reasonable best
efforts to make available to SBC and BellSouth and their respective Subsidiaries
the benefits of its agreements with vendors on terms no less favorable than
those generally available to Newco or its Affiliates.
12.4. Initial Member Change of Control. If (a) there is a
Change of Control of either Initial Member, and the Acquiring Entity or its
Ultimate Parent Entity directly or indirectly owns all or any interest in any
Wireless Business, or (b) either Initial Member acquires any direct or indirect
ownership of all or any interest in any Wireless Business, the Parties agree
that Newco will have no obligation to sell and will not be required to sell,
restructure or take any other action to eliminate FCC, antitrust or other
regulatory conflicts that may result from the Initial Member's, Acquiring
Entity's or Ultimate Parent Entity's ownership or prospective ownership of such
Wireless Business.
12.5. Competition. (a) Subject to the provisions of Section
12.1, neither BellSouth and its Affiliates nor SBC and its Affiliates shall have
any obligation to the other Party and its Affiliates to refrain from engaging
in, or carrying on, any business which is in competition with the other Party
and its Affiliates.
(b) Subject to the Ancillary Agreements, each of SBC and
BellSouth shall be entitled to compete with each other and with Newco with
respect to Resale and packaging of Wireless Services.
12.6. Budgets. Not later than October 1st of each year, the
Chief Executive Officer of Newco shall submit to the Initial Members the
Business Plan. If the Budget contained in the Business Plan is not determined by
the Manager prior to the beginning of the first Fiscal Year to which such
Business Plan applies, the Budget for the year in dispute will be the prior
year's Budget, with each line item (or series of line items) increased by 10%,
other than with respect to one time items noted as such in the preceding year's
Budget.
12.7. Financial Reports. (a) Annual Statements. As soon
as practicable following the end of each Fiscal Year, but in any event within
sixty (60) days after the end of the Fiscal Year, Newco shall cause to be
prepared and delivered to each Initial Member for so long as it Beneficially
Owns LLC Interests, the audited statement of income and statement of cash flows
for such Fiscal Year, audited balance sheet as of the end of such fiscal year,
and accompanying notes to financial statements for Newco, on a consolidated
basis, prepared in accordance with GAAP and Newco accounting practices.
(b) Quarterly Statements. As soon as practicable
following the end of each fiscal quarter, but in any event within thirty (30)
days after the end of such quarter, Newco shall cause to be prepared and
delivered to each Initial Member, for so long as it Beneficially Owns LLC
Interests, an unaudited statement of income (including taxable income) and
statement of
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cash flows for such quarter and an unaudited balance sheet as of the end of such
quarter on a consolidated basis, prepared in accordance with GAAP and Newco
accounting and tax practices.
(c) Monthly Statements. (i) As soon as possible following
the end of each calendar month in each Fiscal Year, but in any event within
fourteen (14) days after the end of such month, Newco shall cause to be prepared
and delivered to the Initial Member, for so long as it Beneficially Owns LLC
Interests, an unaudited statement of income (including taxable income) and
statement of cash flows for such month and an unaudited balance sheet as of the
end of such month on a consolidated basis, prepared in accordance with GAAP and
Newco accounting and tax practices, and (ii) for so long as they Beneficially
Own LLC Interests Newco shall provide the Initial Members with a monthly report
of significant operating and financial statistics including number of
subscribers, subscriber churn statistics, minutes of use, average revenues per
subscriber, acquisition costs and capital expenditure efficiency statistics and
such additional statistics and information as may be approved from time to time
by the Manager for internal use by Newco.
(d) Additional Information. Newco shall, upon reasonable
notice, give each of SBC and BellSouth, for so long as it Beneficially Owns LLC
Units, during regular business hours, reasonable access to the properties,
documents and records, financial and otherwise, of Newco, and shall provide
copies or extracts of Newco's documents and records as SBC or BellSouth may
reasonably request.
12.8. Books and Records. (a) At all times during the
continuance of Newco, Newco shall maintain, at its principal place of business,
separate books of account for Newco that shall show a true and accurate record
of all costs and expenses incurred, all charges made, all credits made and
received and all income derived in connection with the operation of Newco's
business in accordance with GAAP consistently applied, and, to the extent
inconsistent therewith, in accordance with this Agreement.
(b) The Manager shall prepare and maintain, or cause to
be prepared and maintained, the books of account of Newco. The Manager shall
prepare and file, or cause to be prepared and filed, all applicable federal,
state and local tax returns. Such books of account and tax returns, together
with a copy of this Agreement, shall at all times be maintained at the principal
place of business of Newco and shall be open to inspection and examination at
reasonable times by each Member and its duly authorized representative for any
purpose reasonably related to such Member's interest in Newco. Newco shall (i)
retain such books of account and tax returns until the expiration of the
applicable statute of limitations of Newco and each Member (and, to the extent a
Member notifies Newco, any extensions thereof), and (ii) give each Member
reasonable written notice prior to transferring, destroying or discarding any
such books of account or tax returns and, if the Member so requests, allow such
Member to take possession of such books of account or tax returns.
12.9. Additional Service Territories. If, within six months
after the Closing Date, either Initial Member enters into a definitive agreement
for the acquisition of an incumbent
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local exchange carrier (an "ILEC") and, prior to the eighteenth month
anniversary of the Contribution Closing, such Initial Member becomes the primary
ILEC in any State of the United States not included in the definition of Service
Territory, and, at the time such Initial Member enters into such definitive
agreement, the ILEC enters into resale and agency arrangements effective not
later than thirty (30) days after the entry into the definitive agreement with
Newco substantially similar to the arrangements set forth in the Resale
Agreements and, if applicable, Agency Agreements (unless prohibited by any rule,
statute, ordinance, regulation, judgment, order, decree, injunction, arbitration
award, or permit (an "Order") promulgated, enacted, issued, enforced or entered
by a Governmental Entity after having used best efforts to eliminate such Order,
and in which event the arrangements shall be effective as promptly as is
practicable after such legal impediment to effectiveness is eliminated), then
such State(s) shall be included in the Service Territory of such Initial Member
for purposes of this Agreement and the Ancillary Agreements to which such
Initial Member is a party. In the event the ILEC does not enter into such Agency
and Resale arrangements, the Parties agree to negotiate in good faith for sixty
(60) days after the execution of such definitive agreement in order to determine
whether such State(s) should be added to the definition of Service Territory
with respect to such Initial Member and the conditions under which such State
would be added; provided, that such eighteen-month period shall be extended for
up to an additional six months if necessary to obtain all necessary regulatory
approvals.
12.10. Standstill. (a) Each of SBC and BellSouth (for
purposes of this Section 12.10, each, with respect to the other, the "Other
Person") agrees that it will not, directly or indirectly, take any of the
following actions, unless specifically requested to do so, in writing, in
advance, by the Board of Directors of the Other Person (and it will not,
directly or indirectly, seek or request any waiver of these restrictions):
(i) acquire or seek to acquire beneficial ownership of
any securities, including rights or options, of the
Other Person;
(ii) propose to enter into any merger, purchase of
substantially all the assets or any other business
combination involving the Other Person;
(iii) participate in any solicitation of proxies to vote,
or seek to advise any Person with respect to the
voting of, any securities of the Other Person;
propose any stockholder proposals for submission to a
vote of stockholders of the Other Person, or propose
any person for election to, or the removal of any
member from, the Board of Directors of the Other
Person; or in any way seek to influence the
management or policies of the Other Person; or
(iv) enter into any discussions or understandings with any
third party which would result in a violation of the
foregoing.
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(b) The obligations of SBC and BellSouth under paragraph
(a) of this Section 12.10 shall terminate upon (i) the dissolution of Newco or
(ii) the occurrence of a Class B Triggering Event; and
This Section 12.10 shall not apply to Permitted Transferees
pursuant to Section 4.1(f).
12.11. Payment of Debt. Newco shall, and the Members shall
cause Newco to, use commercially reasonable best efforts to repay all
Indebtedness owing by Newco or any of its Subsidiaries on the date of the
Contribution Closing to BellSouth and its Affiliates (together with Net Debt
payments owed to BellSouth, the "BellSouth Debt") and all Indebtedness owing by
Newco or its Subsidiaries on the date of the Contribution Closing to SBC and its
Affiliates (together with Net Debt payments owed to SBC, the "SBC Debt") as soon
as reasonably possible. Newco shall not be permitted to make any payment of
BellSouth Debt until Newco shall have paid $1,275,000,000 in principal amount of
Indebtedness plus any accrued interest owing thereon to SBC (the "SBC Debt
Threshold"). After Newco shall have paid the SBC Debt Threshold, Newco shall, at
any time it makes any principal or interest payment in respect of BellSouth Debt
(other than Net Debt payments to be made to BellSouth) or SBC Debt (other than
Net Debt payments to be made to SBC) make such payment in a ratio of 40:60 for
so long as BellSouth Debt and SBC Debt shall be outstanding and after such time
as either BellSouth Debt or SBC Debt shall no longer be outstanding,
Indebtedness may be repaid without regard to such ratio.
12.12. External Debt. (a) Newco shall use its commercially
reasonable best efforts to assist Pacific Telesis Group in obtaining a release
from its guaranty obligations with regard to the Japanese Leveraged Leases, as
defined and described in Schedule 2.2 to the Contribution Agreement.
(b) Newco shall use its commercially reasonable best
efforts to assist BellSouth in obtaining a release from its guaranty obligations
with regard to the Bank of America Debt.
(c) In the event that SBC or any Member that is an
Affiliate of SBC (a "JLL Member") shall deliver written notice to Newco
demanding that Newco satisfy or cause its applicable Affiliate to satisfy all of
its or its Subsidiaries' obligations with respect to all or a portion of the
Japanese Leveraged Leases (a "JLL Repayment Notice"), Newco shall, within ten
(10) Business Days following delivery of a JLL Repayment Notice by SBC or an
applicable Affiliate of SBC, satisfy all outstanding obligations of Newco and
its Affiliates in connection with the Japanese Leveraged Leases that are
referenced in the particular JLL Repayment Notice. Newco shall only be required
to take or cause to be taken the actions specified in the preceding sentence
with respect to a particular JLL Repayment Notice if (i) such JLL Repayment
Notice is delivered in preparation for the IPO or (ii) SBC's and its Affiliates'
aggregate Percentage Interest is less than 50% at the time of such delivery and
in each case only if at the time of such delivery a JLL Member is a guarantor of
the applicable Japanese Leveraged Lease.
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(d) In the event that BellSouth or any Member that is an
Affiliate of BellSouth (a "BellSouth Affiliate") shall deliver written notice to
Newco demanding that Newco satisfy or cause its applicable Affiliate to satisfy
all of its or its Subsidiaries' obligations with respect to the Bank of America
Debt (the "Bank of America Repayment Notice"), Newco shall, within ten (10)
Business Days following delivery of the Bank of America Repayment Notice by
BellSouth or an applicable Affiliate of BellSouth, satisfy all outstanding
obligations of Newco and its Affiliates in connection with the Bank of America
Debt. Newco shall only be required to take or cause to be taken the actions
specified in the preceding sentence with respect to the Bank of America
Repayment Notice if (i) the Bank of America Notice is delivered in preparation
for the IPO or (ii) BellSouth's and its Affiliates' aggregate Percentage
Interest is less than 331/3 at the time of such delivery and in each case only
if at the time of such delivery BellSouth is the guarantor of the applicable
Bank of America Debt.
12.13. Tower Transaction. (a) In connection with a Tower
Transaction (as defined in Schedule 4.2 of the SBC Disclosure Letter (as defined
in the Contribution Agreement)) or in connection with another transaction with
respect to the Towers (as defined in Schedule 4.2 of the SBC Disclosure Letter)
entered into following the Closing by Newco or its Subsidiaries, Newco agrees to
take such actions as SBC shall request with respect to the Towers; provided that
Newco is reimbursed for all out-of-pocket costs associated therewith. With
respect to any Towers that have not become subject to a sublease under the
Agreement to Sublease, made and entered into on the 25th day of August, 2000, by
and among, SBC Wireless, Inc., SpectraSite Holdings, Inc. and Southern Towers,
Inc. (the "SpectraSite Agreement"), on or before the eighteen month anniversary
of the initial closing under the SpectraSite Agreement, Newco and SBC shall,
promptly after such eighteen month anniversary, negotiate in good faith in an
effort to provide SBC with benefits that it would have received if the Towers
had become subject to such sublease. In determining such benefits, Newco and SBC
shall take account of (i) the expenses incurred and avoided by Newco as a result
of not monetizing such Towers (e.g., tower lease payments and management and
utility costs), and (ii) Newco's ability to monetize the value of such Towers at
a later point in time.
(b) In connection with a Tower Transaction (as used for
purposes of Schedule 1 to the Contribution Agreement) with respect to BellSouth
Additional Subsidiary Towers or in connection with another transaction with
respect to BellSouth Additional Subsidiary Towers entered into following the
Closing by Newco or its Subsidiaries, Newco agrees to take such actions with
respect to the BellSouth Additional Subsidiary Towers as BellSouth shall
request; provided that Newco is reimbursed for all out-of-pocket costs
associated therewith. With respect to any BellSouth Additional Subsidiary Towers
that have not been transferred under a Tower Transaction on or before the
eighteen month anniversary of the entry into such transaction, Newco and
BellSouth shall, promptly after such eighteen month anniversary, negotiate in
good faith in an effort to provide BellSouth with benefits that it would have
received if such transfer had occurred. In determining such benefits, Newco and
BellSouth shall take account of (i) the expenses incurred and avoided by Newco
as a result of not monetizing such Towers (e.g., tower lease payments and
management and utility costs), and (ii) Newco's ability to monetize the value of
such Towers at a later point in time.
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12.14. Crown Castle Stock. Upon written instruction from
BellSouth, Newco shall, from time to time, sell or cause the sale of that number
of shares of Crown Castle Stock designated by BellSouth and after such sale
distribute the net proceeds from such sale (including, deductions for Taxes
imposed on Newco or its Subsidiaries, brokerage fees and other out-of- pocket
costs) as directed by BellSouth. In addition, Newco shall or shall cause the
voting of the Crown Castle Stock as directed by BellSouth.
ARTICLE 13
Marketing, and New Products and Services
13.1. Generally. (a) The Parties agree that Newco shall
have the primary responsibility for marketing Newco Products and Services in
accordance with the terms and conditions of this Agreement. Each of SBC and
BellSouth and their respective Affiliates shall also be entitled to market the
Newco Wireless Services in accordance with the terms and conditions of this
Agreement and the Agency and Resale Agreements.
(b) Notwithstanding any other term of this Agreement,
Newco shall have all right and title to make use of the BellSouth Marks and the
SBC Marks licensed to it in accordance with Article 14 below and to use its own
trademarks for the purpose of engaging in and carrying on any business purposes
approved by the Manager consistent with the scope of its license of the
BellSouth Marks and the SBC Marks.
13.2. Newco Products and Services and Marks. Newco shall be
entitled to create new Newco Products and Services and associated trademarks,
service marks, trade names, logos, brand names and other intellectual property
granted with respect thereto (such intellectual property referred to as the
"Newco Marks"); provided that Newco shall promptly disclose to each of SBC and
BellSouth in writing all Newco Marks that are owned, acquired or licensed by
Newco during the term of this Agreement.
ARTICLE 14
Intellectual Property
14.1. License Grants by Initial Members. (a) Subject to the
terms and conditions of this Agreement, at the Contribution Closing the Initial
Members severally agree to grant or cause to be granted Newco the licenses to
use the BellSouth Marks and the SBC Marks for a transitional period as described
in the Transition Marks Licenses substantially in the form attached to the
Contribution Agreement.
(b) Newco shall enter into such additional agreements,
with respect to usage guidelines, quality standards and other matters as SBC and
BellSouth or their respective Affiliates may reasonably request in order to
protect their ownership interest in the BellSouth Marks and SBC Marks,
respectively.
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14.2. Third Party License Grants by Newco. The Parties
agree that Newco shall not grant any license to or permit any Third Party,
directly or indirectly, to use any of the Newco Marks or any variant thereof in
combination or in connection with any offering of Telecom Service by any Third
Party within the Service Territories, without the prior written consent of the
Initial Member in whose Service Territory such combined services shall be
offered, which consent may be granted or withheld, or subjected to such
condition, as such Initial Member shall determine in its sole and absolute
discretion.
14.3. Patents, Trade Secret, Copyright, Technology and
Know-How Cross- Licenses. Subject to the terms and conditions of this Agreement,
the Initial Members agree at the Contribution Closing to cause their respective
Affiliates who own the patents, trade secrets, copyrights, technology and
know-how (but excluding the BellSouth Marks and the SBC Marks) (collectively
"Intellectual Property") to enter into Intellectual Property Agreements.
14.4. Future Development. Subject to the terms and
conditions of this Agreement and the Ancillary Agreements, Newco shall have
rights to all Intellectual Property developed or acquired by Newco on or after
the Closing Date. Newco may license such Intellectual Property to the Initial
Members or Affiliates of the Initial Members in its sole discretion in
accordance with terms and conditions mutually agreed to by Newco and the Initial
Member or Affiliates of the Initial Members, as the case may be.
ARTICLE 15
Termination of Newco; Liquidation
and Distribution of Assets
15.1. No Dissolution. Newco shall not be dissolved by the
admission of Additional Members in accordance with the terms of this Agreement.
15.2. Events Causing Dissolution. Newco shall be dissolved
and its affairs shall be wound up upon the first to occur of the following
events:
(a) the termination of the Contribution Agreement prior
to the Contribution Closing;
(b) the written consent of all Members;
(c) any event which makes it unlawful for Newco to be
continued; provided, that the Members shall have used their commercially
reasonable efforts to cause Newco to be continued lawfully; or
(d) the issuance of a decree by any court of competent
jurisdiction that Newco be dissolved and liquidated.
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Upon dissolution, Newco shall, subject to the terms hereof, promptly wind up its
affairs and shall promptly thereafter be liquidated and a certificate of
cancellation of the Certificate of Formation, as required by law, shall be filed
with the Secretary of State of the State of Delaware.
15.3. Winding Up. (a) In the event of the dissolution of
Newco pursuant to Section 15.2, Newco's affairs shall be wound up by the
Manager. Notwithstanding the dissolution of Newco, prior to the termination of
Newco as aforesaid, the business of Newco and the affairs of the Members as
such, shall continue to be governed by this Agreement. In connection with the
winding up of Newco the Manager shall dispose of properties in accordance with
subsection (d) below.
(b) Upon dissolution of Newco and until the filing of a
certificate of cancellation as provided in Section 18-203 of the Act, the
Manager may, in the name of, and for and on behalf of, Newco, prosecute and
defend suits, whether civil, criminal or administrative, gradually settle and
close Newco's business, dispose of and convey Newco's property, discharge or
make reasonable provision for Newco's liabilities, and distribute to the Members
in accordance with Section 15.4 any remaining assets of Newco, all without
affecting the liability of Members and without imposing liability on the
Manager.
(c) Upon the completion of the winding up of Newco, the
Manager shall file a certificate of cancellation with the Secretary of State of
the State of Delaware as provided in Section 18-203 of the Act.
(d) (i) Within ten (10) Business Days following the
dissolution of Newco, the Manager shall provide to each of BellSouth and SBC a
list of substantially all assets and properties of Newco grouped (each, a
"Disposition Group") in the fewest number of groups which the Manager determines
is reasonably likely to permit such assets and properties to be sold in an
orderly distribution of assets. The Manager shall ensure that there shall be at
least two Disposition Groups and that all Disposition Groups shall have
substantially similar fair market values.
(ii) Within twenty (20) Business Days following
the dissolution of Newco, the Initial Members and the Manager shall agree to a
form of acquisition agreement for the disposition of each of the Disposition
Groups. The Winning Bidder and the Manager (as liquidating trustee of Newco)
shall enter into such an agreement (an "Acquisition Agreement"), which shall
include provision for FCC approval of the transfer or assignment of licenses
granted by the FCC and approvals of other Governmental Entities, as required,
and a covenant to use commercially reasonable efforts to consummate the
transaction, subject only to immaterial revisions and other revisions reasonably
necessary to reflect the Disposition Group being purchased pursuant thereto,
including, but not limited to, the price to be paid for such Disposition Group.
Each Acquisition Agreement shall be entered into within five (5) Business Days
after the Winning Bidder is determined.
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(iii) Beginning on the twenty-fifth Business Day
following the dissolution of Newco and continuing until all Disposition Groups
shall have been auctioned, the Manager shall accept offers from the Initial
Members to purchase the Disposition Groups. The order of the auctions of the
Disposition Groups shall be by lot determined at the time the first of the
Disposition Groups is to be auctioned. The Manager shall notify in writing the
Initial Members of the time at which the Initial Members shall submit their
respective bids (each, a "Bid") for a Disposition Group. Within two hours after
receiving the Bid for a Disposition Group, the Manager shall notify in writing
each Initial Member of the Bid so received. If a higher Bid is not received by
the Manager from either Initial Member by 5:00 p.m., New York City time, on the
following Business Day, the Disposition Group shall be awarded to the Initial
Member making the highest Bid on the preceding day (the "Winning Bidder"). All
Bids shall be in U.S. dollars and shall only be deemed received by Newco between
the hours of 9 a.m. and 5 p.m., New York City time. In no event shall any
Disposition Group be sold after the IPO Date to an Initial Member unless the
aggregate sale price for all of the Disposition Groups shall be an amount equal
to at least the product obtained by multiplying (x) the Total Outstanding Shares
and (y) the average of the closing sales price of the Public Common Stock on its
principal trading market or exchange for the twenty (20) trading days prior to
dissolution of Newco.
(iv) In the event that an Acquisition Agreement
shall be terminated prior to the consummation of the disposition of the
Disposition Group contemplated thereby, the Initial Member that was not the
Winning Bidder shall be notified within three (3) Business Days following such
termination of its rights to purchase such Disposition Group at a price equal to
the higher of (x) 90% of the price that the Winning Bidder had agreed to pay and
(y) the highest price bid for such Disposition Group by such Initial Member.
Such option shall only be exercised within five (5) Business Days after receipt
of such notice.
(v) Newco may, in lieu of entering into an
Acquisition Agreement with an Initial Member, that is a Winning Bidder,
distribute the applicable Distribution Group to such Initial Member as part of
the distribution pursuant to Section 15.4(c). If the highest Bid of such Initial
Member exceeds the amount that would otherwise be distributed to such Initial
Member pursuant to Section 15.4(c), such Initial Member shall contribute to
Newco in cash an amount equal to such excess.
15.4. Distribution Upon Liquidation. Subject to Section
15.3, upon dissolution of Newco, a duly appointed trustee or liquidator as
provided in this Agreement, shall promptly proceed with the liquidation of Newco
and its Subsidiaries and the proceeds of such liquidation shall be applied and
distributed in the following order of priority:
(a) to the payment of debts and liabilities of Newco, in
order of priority as provided by law, other than debts or liabilities owed to
Members, including the expenses of the liquidation and winding up, and to the
setting up of any reserves that such trustee or liquidating trustee, as the case
may be, shall determine are reasonably necessary for any contingent or
unforeseen liabilities or obligations of Newco;
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(b) to the payment of other debts and liabilities of
Newco owed to Members; and
(c) to the Members in accordance with their respective
Percentage Interests.
15.5. Claims of the Members. The Members and former Members
shall look solely to Newco's assets for the return of their Capital
Contributions, and if the assets of Newco remaining after payment of or due
provision for all debts, liabilities and obligations of Newco are insufficient
to return such Capital Contributions, the Members and former Members shall have
no recourse against Newco, Manager or any other Member.
ARTICLE 16
Withdrawal of a Member
16.1. Withdrawal of a Member. Either Initial Member shall
automatically cease to be a Member at the time it no longer Beneficially Owns
any LLC Units (a "Withdrawal Event"). In the event the Total Outstanding Shares
Beneficially Owned by an Initial Member becomes less than 10% of the Total
Outstanding Shares or the Initial Member no longer Beneficially Owns any shares
of Member Common Stock (a "Class B Triggering Event" and the Initial Member that
ceases to Beneficially Own 10% of the Total Outstanding Shares or Member Common
Stock, the "Departing Member"), the Departing Member shall no longer be deemed
an Initial Member. Immediately after a Withdrawal Event or a Class B Triggering
Event with respect to an Initial Member, such Initial Member and any of its
Subsidiaries which are Members shall have no continuing rights or obligations
under this Agreement (other than (x) its rights under Section 12.8 (in the case
of a Withdrawal Event, in respect of books and records of Newco, relating to all
periods prior to the date of the Withdrawal Event) and, (y) in the case of a
Class B Triggering Event, its rights under Section 4.1(g)), but will remain
subject to the terms of Ancillary Agreements to the extent provided by, and in
accordance with, the express terms thereof. An Initial Member may voluntarily
cause a Withdrawal Event and such action shall not be a breach of this
Agreement.
16.2. Effect of Withdrawal. This Agreement shall continue
notwithstanding any withdrawal of an Initial Member and all governance rights
set forth herein with respect to the Initial Members shall be exercised by the
sole remaining Initial Member. No withdrawal shall relieve a Member for any
prior breach of this Agreement.
ARTICLE 17
Exchange of LLC Units; Pre-emptive Rights
17.1. Exchange of LLC Units. (a) Each Party hereto that is
the holder (other than the Manager or any of its Subsidiaries) of an LLC Unit
shall be entitled to surrender, at any time and from time to time, any or all of
such holder's LLC Units to Newco in exchange for the distribution by Newco, on a
one-for-one basis, of the same number of fully paid and non-
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assessable shares of Public Common Stock. Manager agrees that upon any such
surrender, Manager shall contribute to Newco that number of shares of Public
Common Stock equal to the number of LLC Units such Member elected to exchange
pursuant to this Section 17.1. Such right shall be exercised by the surrender to
the Manager as agent for Newco of the certificate or certificates representing
the LLC Units to be exchanged at any time during normal business hours at the
principal executive offices of the Manager or at the office of the Transfer
Agent (as defined in the Manager Certificate), accompanied by a written notice
of the holder of such LLC Units stating that such holder desires to exchange
such LLC Units, or a stated number of LLC Units represented by such certificate
or certificates for exchange, into the relevant number of shares of Public
Common Stock, and, if any such Public Common Stock certificate is to be issued
in a name other than that of the holder of the LLC Unit or LLC Units exchanged,
by instruments of transfer to Newco, in form satisfactory to the Manager, Newco
and the Transfer Agent, duly executed by such holder or such holder's duly
authorized attorney, and transfer tax stamps or funds therefor, if required
pursuant to Section 17.1(e). No exchange of LLC Units shall be effective until
such time as the appropriate number of fully paid non-assessable shares of
Public Common Stock shall have been duly issued in exchange therefor.
(b) As promptly as practicable following the surrender
for exchange of a certificate representing LLC Units in the manner provided in
Section 17.1(e), and the payment in cash of any amount required by Section
17.1(e), Newco will deliver or cause to be delivered at the office of the
Transfer Agent, a certificate or certificates representing the number of full
shares of Public Common Stock issuable upon such exchange, issued in such name
or names as such holder may direct; provided that Newco shall have no obligation
to deliver Public Common Stock if Manager shall have failed to deliver such
Public Common Stock to Newco. Such exchange shall be deemed to have been
effected immediately prior to the close of business on the date of the surrender
of the certificate or certificates representing LLC Units. Upon the date any
such exchange is made or effected, all rights of the holder of such LLC Units as
such holder shall cease, and the person or persons in whose name or names the
certificate or certificates representing the shares of Public Common Stock are
to be issued shall be treated for all purposes as having become the record
holder or holders of such shares of Public Common Stock. Newco shall not be
required to exchange LLC Units, and no surrender of LLC Units shall be effective
for that purpose, while the stock transfer books of the Manager are closed for
any purpose; but the surrender by Newco of LLC Units for exchange during any
period while such books are closed shall be deemed effective for exchange
immediately upon the reopening of such books, as if the exchange had been made
on the date such LLC Unit was surrendered.
(c) If the shares of Public Common Stock are converted
into another security pursuant to a reclassification or other similar
transaction approved in accordance with Article FIFTH, clause (j)(i) of the
Manager Certificate, then a holder of LLC Units shall be entitled to receive
upon exchange the securities that such holder would have received if such
exchange had occurred immediately prior to the record date of such
reclassification or other similar transaction. No adjustments in respect of
dividends shall be made upon the exchange of any LLC Unit; provided, however,
that if an LLC Unit shall be exchanged subsequent to the record date for the
payment of a dividend or other distribution on LLC Units but prior to such
payment, then the
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registered holder of such LLC Units at the close of business on such record date
shall be entitled to receive the dividend or other distribution payable on such
LLC Unit on such date notwithstanding the exchange thereof or the default in
payment of the dividend or distribution due on such date.
(d) The Manager covenants that it will at all times
reserve and keep available out of the authorized but unissued shares of Public
Common Stock, solely for the purpose of issuance and contribution to Newco for
use in the exchange of the outstanding LLC Units, such number of shares of
Public Common Stock that shall be issuable upon the exchange of all such
outstanding LLC Units. The Manager covenants that if any shares of Public Common
Stock require registration with or approval of any governmental authority under
any foreign, federal or state law before such shares of Public Common Stock may
be issued upon exchange, the Manager will promptly cause such shares to be so
registered or approved, as the case may be. The Manager will use its best
efforts to list the shares of Public Common Stock required to be delivered by
Newco upon exchange prior to such delivery upon each national securities
exchange or other recognized trading market upon which the outstanding Public
Common stock is listed at the time of such delivery. The Manager covenants that
all shares of Public Common Stock that are contributed to Newco for distribution
in exchange for the LLC Units will, upon issuance, be validly issued, fully paid
and non-assessable.
(e) The issuance of certificates for shares of Public
Common Stock upon exchange of LLC Units shall be made without charge to the
holders of such LLC Units for any stamp or other similar tax in respect of such
issuance; provided, however, that if any such certificate is to be issued in a
name other than that of the holder of the LLC Units exchanged, then the person
or persons requesting the issuance thereof shall pay to the Manager the amount
of any tax that may be payable in respect of any transfer involved in such
issuance or shall establish to the satisfaction of the Manager that such tax has
been paid or is not payable.
17.2. Combinations and Subdivisions. Newco will not in any
manner subdivide (by any split, distribution, reclassification, recapitalization
or otherwise) or combine (by reverse split, reclassification, recapitalization
or otherwise) the outstanding LLC Units unless an identical event is occurring
with respect to the Public Common Stock, in which event the LLC Units shall be
combined or subdivided concurrently with and in the same manner as the Public
Common Stock.
17.3. Distributions. (a) In the case of dividends or other
distributions by Manager consisting of voting securities of Manager other than
Public Common Stock or Member Common Stock, or of voting securities of any
corporation or other entity which is a Subsidiary of Manager, Manager shall
ensure that, upon exchange of an LLC Unit, holders of LLC Units shall be
entitled to receive, in addition to any other entitlements, the securities paid
to the holders of Public Common Stock for each LLC Unit, upon the same terms and
conditions applicable to the securities dividend or distributed to the holders
of Public Common Stock, and shall have the same restrictions on ownership
applicable to the ownership of LLC Units.
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(b) In the case of dividends or other distributions by
Manager consisting of securities convertible into, or exchangeable for, voting
securities of the Manager or voting securities of another corporation or other
entity which is a subsidiary of Manager, Manager shall ensure that, upon
exchange of an LLC Unit, holders of the LLC Units shall be entitled to receive,
in addition to any other entitlements, securities convertible or exchangeable
into the same underlying security as the holders of Public Common Stock received
upon such dividend or distribution.
17.4. Preemptive Rights. (a) Except for issuances that are
Excepted Cash Issuances, upon each issuance by Manager of Public Common Stock
solely in exchange for cash (a "Qualified Issuance"), each Initial Member shall
have the right in accordance with this Section 17.4 to purchase from Newco up to
that number of LLC Units so that such Initial Member's percentage ownership of
Total Outstanding Shares will not be reduced by such Qualified Issuance.
(b) In the event an Initial Member elects to exercise its
rights under this Section 17.4, the purchase price per LLC Unit shall be equal
to the deemed Capital Contribution to Newco per LLC Unit issued to Manager in
respect of such Qualified Issuance, and the right to purchase LLC Units shall be
conditioned upon the completion of the Qualified Issuance.
(c) Manager shall, if reasonably practicable, provide the
Initial Members and Newco twenty (20) days' prior written notice of Manager's
intention to effect a Qualified Issuance and in any event shall provide at least
ten (10) Business Days prior written notice before any Qualified Issuance. Each
such notice shall set forth the maximum offering price per share of Public
Common Stock which Manager reasonably believes to be attainable in such
offering, the maximum number of shares of Public Common Stock to be sold in such
offering, together with an estimate of the number of LLC Units purchasable by
each Initial Member if each Initial Member exercises its rights under this
Section 17.4 and the number of LLC Units purchasable if the other Initial Member
does not exercise such rights. The Initial Members shall thereafter have the
preemptive right, exercisable by written notice to Manager and Newco within five
(5) Business Days after receipt of the notice of proposed Qualified Issuance, to
purchase up to the number of LLC Units set forth in the Initial Member's
exercise notice, but in all cases limited to the maximum number that causes such
Initial Member's percentage ownership of Total Outstanding Shares not to be
reduced by such Issuance. If not all Initial Members exercise their preemptive
rights as to a Qualified Issuance, then Manager shall promptly notify the other
Initial Member of such fact and of the reduced maximum number of LLC Units that
may be purchased pursuant to the exercise of preemptive rights. A notice from an
Initial Member indicating its intention to exercise its rights hereunder shall
be irrevocable and shall certify by an executive officer of the Ultimate Parent
Entity of such Initial Member the number of Securities then Beneficially Owned
by such Initial Member. Manager shall give any Initial Member that has agreed to
purchase LLC Units pursuant to this Section 17.4 at least three (3) Business
Days notice prior to the date on which the closing of the sale of LLC Units
hereunder shall occur, which notice shall specify the final number of shares of
Public Common Stock being sold in the Qualified Issuance and the per LLC Unit
deemed Capital Contribution to be made in respect thereof. The closing of the
purchase of LLC Units hereunder shall occur, to the extent legally
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practicable and consistent with the notice periods set forth above, at the same
time and place as the Qualified Issuance and if not legally practicable then
promptly after all necessary legal approvals are obtained. The Initial Member
exercising its right to purchase hereunder and Manager agree to take and cause
to be taken all actions necessary to promptly obtain necessary legal approvals
for the issuance of LLC Units pursuant to this Section 17.4. At the closing, any
purchasing Initial Member shall certify by an executive officer its Beneficial
Ownership of Securities and Manager shall cause Newco to issue the required
number of LLC Units against delivery of the purchase price therefor under this
Section 17.4. In the event that the transaction set forth in Newco's initial
notice shall not be consummated within ninety (90) days after the date of
Manager's original notice under this Section 17.4, Manager shall be required to
provide a new notice of proposed Qualified Issuance pursuant to this Section
17.4(c).
(d) "Excepted Cash Issuances" shall mean issuances of
Public Common Stock (i) pursuant to options or other rights granted under an
employee stock option plan, stock purchase plan, similar benefit programs or
agreements or under any dividend reinvestment plan; or (ii) in an IPO.
ARTICLE 18
Additional Agreements
18.1. Maintenance of Ultimate Parent Entity as a Party. In
the event that either Initial Member shall at any time become or be a Subsidiary
of any Entity, such Initial Member covenants and agrees that the Ultimate Parent
Entity of such Person shall forthwith execute a counterpart of this Agreement
and shall assume all obligations of such Initial Member hereunder and shall be
deemed to have acquired all LLC Units Beneficially Owned by such Initial Member
and shall automatically be admitted to Newco as a Member and all references
herein to such Initial Member shall be deemed a reference to such Ultimate
Parent Entity. This paragraph shall similarly apply to any subsequent Ultimate
Parent Entities.
18.2. Certificates. (a) LLC Units shall be represented by a
certificate or certificates, setting forth upon the face thereof that Newco is a
limited liability company formed under the laws of the State of Delaware, the
name of the Person to which it is issued and the number of LLC Units which such
certificate represents. Such certificates shall be entered in the books of Newco
as they are issued, and shall be signed by the Chairman or the Chief Executive
Officer of Newco. Upon any Transfer of LLC Units permitted under this Agreement
(other than a pledge permitted under Section 4.1(d), the transferring Member
shall request Newco to (i) issue to the transferee a certificate representing
the number of LLC Units so transferred and (ii) surrender to Newco the existing
certificate and Newco shall issue to the transferring Member certificates
representing the remaining LLC Units, if any, held by such transferring Member
after taking into account such Transfer. All certificates representing LLC Units
(unless registered under the Securities Act), shall bear the following legend:
THE LIMITED LIABILITY INTERESTS REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY
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SECURITIES REGULATORY AUTHORITY OF ANY STATE, AND MAY NOT BE SOLD,
ASSIGNED, PLEDGED, ENCUMBERED, TRANSFERRED, GRANTED AN OPTION WITH
RESPECT TO OR OTHERWISE DISPOSED OF, (I) UNLESS AND UNTIL THEY HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OR SUCH SALE, ASSIGNMENT,
PLEDGE, ENCUMBRANCE, TRANSFER, OPTION GRANT OR OTHER DISPOSITION IS
EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT AND (II) UNLESS IN
ACCORDANCE WITH THE PROVISIONS OF THE LIMITED LIABILITY COMPANY
AGREEMENT OF THE COMPANY (AS AMENDED FROM TIME TO TIME), A COPY OF
WHICH IS AVAILABLE FOR INSPECTION AT THE OFFICES OF NEWCO.
(b) Each LLC Interest shall constitute a "security"
within the meaning of (i) Article 8 of the Uniform Commercial Code (including
Section 8-102(a)(15) thereof) as in effect from time to time in the States of
Delaware and New York and (ii) the Uniform Commercial Code of any other
applicable jurisdiction that now or hereafter substantially includes the 1994
revisions to Article 8 thereof as adopted by the American Law Institute and the
National Conference of Commissioners on Uniform State Laws and approved by the
American Bar Association on February 14, 1995.
(c) Lost or Destroyed Certificates. Newco may issue a new
certificate for LLC Units in place of any certificate or certificates
theretofore issued by it, alleged to have been lost or destroyed, upon the
making of an affidavit of that fact, and providing an indemnity in form and
subject reasonably satisfactory to Manager by the Person claiming the
certificate to be lost or destroyed.
(d) Incentive Plans; Registered and Private Offerings. At
any time Manager issues a share of Public Common Stock pursuant to an employee
benefit plan of Manager (whether pursuant to the exercise of a stock option or
the grant of a restricted share award or otherwise), the following shall occur:
(i) Manager shall be deemed to contribute to the capital of Newco an amount of
cash equal to the per share market price of a share of Public Common Stock at
the close of its principal trading market on the date such share is issued (or,
if earlier, the date the related option is exercised); (ii) Newco shall be
deemed to purchase such shares of Public Common Stock from Manager for an amount
of cash equal to the amount of cash deemed contributed by Manager to Newco in
clause (i) above (and such share is deemed delivered to its owner under the
applicable employee benefit plan); (iii) the net proceeds (including the amount
of any payments made on a loan with respect to a stock purchase award) received
by Manager with respect to such share, if any, shall be concurrently transferred
to Newco (and such net proceeds so transferred shall not constitute a capital
contribution); and (iv) Newco shall issue to Manager one (1) LLC Unit registered
in the name of Manager for each share deemed purchased under subclause (ii)
above.
18.3. Miscellaneous. (a) GOVERNING LAW. THIS AGREEMENT AND
THE RIGHTS AND OBLIGATIONS OF THE MEMBERS SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH AND SUBJECT TO THE LAWS OF THE
-55-
STATE OF DELAWARE, WITHOUT REFERENCE TO CONFLICTS OF LAWS PRINCIPLES.
(b) VENUE; WAIVER OF JURY TRIAL. THE PARTIES HEREBY
IRREVOCABLY SUBMIT TO THE JURISDICTION OF THE COURTS OF THE STATE OF DELAWARE
AND THE FEDERAL COURT 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 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 AND OVER THE SUBJECT MATTER OF SUCH
DISPUTE AND AGREE THAT; TO THE FULLEST EXTENT PERMITTED BY LAW, MAILING OF
PROCESS OR OTHER PAPERS IN CONNECTION WITH ANY SUCH ACTION OR PROCEEDING IN THE
MANNER PROVIDED IN PARAGRAPH (C) OF THIS SECTION OR IN SUCH OTHER MANNER AS MAY
BE PERMITTED BY LAW SHALL BE VALID AND SUFFICIENT SERVICE THEREOF.
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 PARAGRAPH (B).
(c) Notices. All notices, requests, claims, demands and
other communications hereunder shall be in writing and shall be deemed given (i)
on the first Business Day following
-56-
the date of delivery in person or by telecopy (in each case with telephonic
confirmation of receipt by the addressee), (ii) on the first business day
following timely deposit with an overnight courier service, if sent by overnight
courier specifying next day delivery or (iii) on the first business day that is
at least five (5) days following deposit in the mails, if sent by first class
mail, to the Parties at the following addresses (or at such other address for a
party as shall be specified by like notice):
If to SBC or SBC Holdings, to:
SBC Communications Inc.
000 X. Xxxxxxx
Xxx Xxxxxxx, Xxxxx 00000
Attention: Chairman and Chief Executive Officer
Facsimile: (000) 000-0000
with a copy to:
SBC Communications Inc.
000 X. Xxxxxxx
Xxx Xxxxxxx, Xxxxx 00000
Attention: Senior Executive Vice President and
General Counsel
Facsimile: (000) 000-0000
If to BellSouth or the BellSouth Members, to:
BellSouth Corporation
0000 Xxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: Chief Executive Officer
Facsimile: (000) 000-0000
-57-
with a copy to:
BellSouth Corporation
0000 Xxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: General Counsel
Facsimile: (000) 000-0000
If to Alloy Management Corp., to:
Alloy Management Corp.
0000 Xxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: Chief Executive Officer
Facsimile: (000) 000-0000
with a copy to:
SBC Communications Inc.
000 X. Xxxxxxx
Xxx Xxxxxxx, Xxxxx 00000
Attention: Senior Executive Vice President and
General Counsel
Facsimile: (000) 000-0000
and
BellSouth Corporation
0000 Xxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: General Counsel
Facsimile: (000) 000-0000
-58-
and
Alloy Management Corp.
0000 Xxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: General Counsel
Facsimile: (000) 000-0000
(d) Severability. The provisions of this Agreement shall
be deemed severable and the invalidity or unenforceability of any provision
shall not affect the validity or enforceability of the other provisions hereof.
If any provision of this Agreement, or the application thereof to any Person or
any circumstance, is invalid or unenforceable, (i) a suitable and equitable
provision shall be substituted therefor in order to carry out, so far as may be
valid and enforceable, the intent and purpose of such invalid or unenforceable
provision and (ii) the remainder of this Agreement and the application of such
provision to other Persons or circumstances shall not be affected by such
invalidity or unenforceability, nor shall such invalidity or unenforceability
affect the validity or enforceability of such provision, or the application
thereof, in any other jurisdiction.
(e) Counterparts. For the convenience of the Parties
hereto, this Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original and all of which shall together
constitute the same agreement.
(f) Headings; Recitals. All section headings and the
recitals herein are for convenience of reference only and are not part of this
Agreement, and no construction or reference shall be derived therefrom.
(g) Specific Performance. Each Party acknowledges that it
will be impossible to measure in money the damage to the other Party if a Party
fails to comply with any of the obligations imposed by this Agreement, that
every such obligation is material and that, in the event of any such failure,
the other Party will not have an adequate remedy at law or damages. Accordingly,
each Party agrees, to the fullest extent permitted by law, that injunctive
relief or other equitable remedy, in addition to remedies at law or damages, is
the appropriate remedy for any such failure and will not oppose the granting of
such relief on the basis that the other Party has an adequate remedy at law.
Each Party agrees that it shall not seek, and agrees to waive any requirement
for, the securing or posting of a bond in connection with any other Party's
seeking or obtaining such equitable relief.
(h) Filing Actions. Prior to filing or referring any
matter to a court of law or equity, the Parties agree to provide the other
Parties at least ten (10) Business Days' notice of the intention to so refer a
matter, provided that the foregoing shall not apply to any request for a
preliminary injunction or temporary restraining order.
-59-
(i) Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the Parties hereto and their respective
successors and permitted assigns and shall not be assignable except to the
extent expressly permitted hereby and any purported assignment of this Agreement
or of any LLC Interests in violation of this Agreement shall be void. In the
case of a merger or other business combination or reorganization transaction
involving Newco where securities other than those of Newco are issued to the
holders of LLC Units, this Agreement shall be assigned to and shall inure to the
benefit of and be binding upon the Person issuing securities in such transaction
and any reference herein to Newco shall be deemed to be a reference to such
Person. The rights and obligations under this Agreement shall be assigned by the
appropriate Initial Member to a Permitted Transferee in connection with the
Transfer to such Permitted Transferee pursuant to Section 4.1 to the extent of a
Transfer to any such Permitted Transferee.
(j) Entire Agreement; Amendment; Waiver. This Agreement
(including any exhibits and schedules hereto) and the Ancillary Agreements
(including any exhibits and schedules thereto), supersede all prior agreements,
written or oral, among the Parties hereto with respect to the subject matter
hereof and thereof and contain the entire agreement among the Parties with
respect to the subject matter hereof and thereof. This Agreement may not be
amended, supplemented or modified, and no provisions hereof may be modified or
waived, except by an instrument in writing signed by the party or Parties
affected or to be affected thereby, provided, that the consent or approval of
the Departing Member shall not be required to execute any amendment, supplement
or modification of this Agreement unless the Departing Member is materially and
adversely affected thereby. No waiver of any provisions hereof by any Party
shall be deemed a waiver of any other provisions hereof by any such Party, nor
shall any such waiver be deemed a continuing waiver of any provision hereof by
such Party.
(k) No Relief of Liabilities. No Transfer by an Initial
Member of Beneficial Ownership of any Securities shall relieve such Initial
Member of any liabilities or obligations to Newco or the other Initial Member,
that arose or accrued prior to the date of such Transfer.
(l) Securities Subject to Agreement; Ineffective
Transfers. All Securities that are Beneficially Owned by an Initial Member, and,
to the extent provided herein, the Affiliates of an Initial Member, shall be
subject to this Agreement. No Transfer or acquisition of any Securities in
violation of any provision of this Agreement shall be effective to pass any
title to, or create any interest in favor of, any Person, and any such purported
Transfer or acquisition shall be void, but such Initial Member, as the case may
be, in attempting to effect or in permitting or suffering such Transfer or
acquisition, shall be deemed to have committed a material breach hereof.
(m) Further Assurances; Controlled Subsidiaries. The
Parties hereto shall at any time, and from time to time execute and deliver such
additional instruments and other documents and shall at any time, and from time
to time take such further actions as may be necessary or appropriate to
effectuate, carry out and comply with all of the terms of this Agreement and the
transactions contemplated hereby. In addition to any other obligations set forth
in the Agreement, each Party agrees to take such action (including, but not
limited to, the
-60-
execution, acknowledgment and delivery of documents) as may reasonably be
requested by any other Party for the implementation or continuing performance of
this Agreement. Unless otherwise expressly set forth herein, any agreement by a
Party to take or refrain from taking any action shall constitute an agreement by
such party to cause each of its Controlled Subsidiaries to so act or refrain
from acting.
(n) THIRD PARTY BENEFICIARIES. NOTHING IN THIS AGREEMENT,
EXPRESS OR IMPLIED, IS INTENDED TO CONFER UPON ANY THIRD PARTY ANY RIGHTS OR
REMEDIES OF ANY NATURE WHATSOEVER UNDER OR BY REASON OF THIS AGREEMENT AND THE
MANAGER SHALL HAVE NO DUTY OR OBLIGATION TO ANY CREDITOR OF NEWCO TO REQUEST THE
MEMBERS TO MAKE ADDITIONAL CONTRIBUTIONS TO THE CAPITAL OF NEWCO.
(o) Exculpation. The Parties agree that the natural
persons that are executing this Agreement on behalf of the Members have done so
in their respective capacities as officers of the Members or the owners of the
Members and not individually, and none of the natural persons that are direct or
indirect partners, trustees, officers or shareholders of any Member shall be
bound or have any personal liability hereunder.
(p) Guarantees.
(i) SBC hereby irrevocably and unconditionally
guarantees to BellSouth and Newco the prompt and full discharge by SBC Holdings
of all of SBC Holdings's covenants, agreements, obligations and liabilities
under this Agreement, including the due and punctual payment of all amounts
which are or may become due and payable by SBC Holdings hereunder, when and as
the same shall become due and payable (the "SBC Obligations"), in accordance
with the terms hereof. SBC acknowledges and agrees that, with respect to all SBC
Obligations to pay money, such guaranty shall be a guaranty of payment and
performance and not of collection. If SBC Holdings shall default in the due and
punctual performance of any SBC Obligation, SBC will forthwith perform or cause
to be performed such SBC Obligation at its sole cost and expense.
(ii) BellSouth hereby irrevocably and
unconditionally guarantees to SBC and Newco the prompt and full discharge by
each of the BellSouth Members of all of the BellSouth Members's covenants,
agreements, obligations and liabilities under this Agreement, including the due
and punctual payment of all amounts which are or may become due and payable by
any of the BellSouth Members hereunder, when and as the same shall become due
and payable (the "BellSouth Obligations"), in accordance with the terms hereof.
BellSouth acknowledges and agrees that, with respect to all BellSouth
Obligations to pay money, such guaranty shall be a guaranty of payment and
performance and not of collection. If any of the BellSouth Members shall default
in the due and punctual performance of any BellSouth Obligation, BellSouth will
forthwith perform or cause to be performed such BellSouth Obligation at its sole
cost and expense.
-61-
(q) Maintenance of Subsidiaries.
(i) SBC agrees with BellSouth that for so long
as SBC Holdings Beneficially Owns Securities, SBC Holdings shall remain a wholly
owned Subsidiary of SBC.
(ii) BellSouth agrees with SBC that for so long
as any of the BellSouth Members Beneficially Owns Securities, each such
BellSouth Member shall remain a wholly owned Subsidiary of BellSouth.
-62-
IN WITNESS WHEREOF, the Parties hereto have executed this
Agreement as of the date first written above.
SBC COMMUNICATIONS INC.
By: /s/ Xxxxx X. Xxxxx
------------------------------------------------
Name: Xxxxx X. Xxxxx
Title: Senior Executive Vice President -
Corporate Development
SBC ALLOY HOLDINGS, INC.
By: /s/ Xxxxx X. Xxxxx
------------------------------------------------
Name:
Title:
BELLSOUTH CORPORATION
By: /s/ Xxxxx X. Xxxxx
------------------------------------------------
Name: Xxxxx X. Xxxxx
Title: Vice President - Corporate Development
BELLSOUTH MOBILE DATA, INC.
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
BSCC OF HOUSTON, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx
------------------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Vice President
ACCC OF LOS ANGELES, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx
------------------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Vice President
BELLSOUTH CELLULAR CORP.
By: /s/ Xxxxxxx X. Xxxxxxxxx
-----------------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Vice President
RAM BROADCASTING CORPORATION
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
ALLOY MANAGEMENT CORP.
By: /s/ Xxxx X. Xxxxxxx
------------------------------------------------
Name: Xxxx X. Xxxxxxx
Title: Chief Operating Officer
EXHIBIT A
BELLSOUTH MARKS
----------------------------------------------------------------------------------------------------------------------
CLIENT TRADEMARK APPLICATION NUMBER REGISTRATION
NUMBER
----------------------------------------------------------------------------------------------------------------------
BCC 411 EXPRESS 74/584,811 2,044,310
BCC Xxxx Symbol 81/327,677 1,327,677
BCC Xxxx Symbol 727,723 1,569,327
BCC BELLSOUTH 622,503 1,459,196
BCC BELLSOUTH 719,542 1,565,559
BCC BELLSOUTH 75/598,788 2,307,506
BCC BELLSOUTH ALL-IN-ONE 75/660928
BCC BELLSOUTH CELLULAR 75/195,478 2,189,845
CORDLESS
BCC BELLSOUTH MOBILITY 74/662,687 2,020,258
BCC BELLSOUTH MOBILITY 056650 1,702,143
BCC BELLSOUTH MOBILITY 058775 1,670,082
BCC CALL WIZARD 75/510658
BCC CALL WIZARD 75/574730
BCC CELEBRATION 74/584,808 2,067,533
BCC CELLULAR CLEAR AND SIMPLE 74/662,398 2,011,506
BCC CELLULAR LINK 773479 1,848,727
BCC CELLULAR TO GO 75/761677
BCC CELLULAR TO GO 75/502701
BCC COSMOS 74/513,593 2,027,441
BCC COSMOS UNIVERSAL CELLULAR 74/573293 2,178,749
DESIGN
BCC Design of Cellular Telephone with 75/243,737 2,132,638
Eyes, Arms & Leg
BCC FREE WAY TO CALL, THE 74/471,957 1,852,079
BCC GOLD SERIES 74/557,951 1,916,216
BCC GUARDIAN ANGEL PROGRAM 75/316,918
BCC MOBILE 2 MOBILE 74/597,773 2,044,365
XXX XXXXXX XXXXXXX 00/000,000
XXX XXXXXX XXXXXXX and design 75/331,150
BCC MOBILE MEMO 73/817181 1,605,962
BCC NEVER STAND STILL 74/514,689 2,000,239
BCC PROGRAMIT 74/678,434 2,058,096
BCC PROMOTION WORKS 74/686,065 2,044,846
BCC RAPIDREPLY 75/270843 2,200,538
BCC ROAMMATE 75/688589
BCC ROAMMATE 75/409403
BCC STAR *EXPRESS & DESIGN 74/471,958 1,875,521
BCC STAR* EXPRESS 74/471,965 1,865,946
BCC STAR*LINES 74/655,589 1,965,443
BCC TALKAMERICA 75/061,882 2,073,462
BCC TALKBANK 74/614,654 2,046,394
BCC THE ONE PHONE FOR HOME AND AWAY FROM HOME 75/493833
2
BCC VISION SS7 ONLINE 75/357101
BCC WINCENTER 75/200558
BCC WINCONNECT 75/200560
BCC WINLOGIC 75/930552
BCC WIRELESS ACCESSORIES 75/392750 2,317,344
HOTLINE
BMDCS BELLSOUTH PREPAID TO GO 75/374788 2,305,183
BMDCS DCS 2N1 75/302030
BMDCS DCS 2N1 75/776404
BMDCS DCS 2N1 NUMBER 75/495530
BMDCS DCS and Design 75/360,891 2,176,964
BMDCS DCS and Design 75/976,869 2,166,626
BMDCS DCS MINUTE MANAGER 75/475825
BMDCS NONSTOP NICKEL TALK 75/915061
BMDCS WE'VE GOT YOU IN OUR SITES 75/653172 2,306,282
BMDCS WIRELESS MINUTE MANAGER 75/875425
BSM CAR & PHONE DESIGN 650,640 1,465,876
BSM COUNT ON IT 75/466131 2,220,620
BSM LIFE'S CALLING. WHY WAIT? 75/603603
BSM MOBILITY ONE 489,828 1,348,585
BSM SPEED CENTER. WHERE FANS CONNECT. 75/822652
BSM WHY WAIT WARRANTY 75/376,343 2,184,227
BSMD ONDACOM 75/395577
3
BSMD ONDACOM and Design 75/395580
BSWD BELLSOUTH 75/598788 2,307,506
XXXX XXXXXXXXX 00/000000
XXXX XXXXXXXXX BEYOND 75/582069 2,309,057
PROTECTION PLAN
BSWD BELLSOUTH GATEWAY 75/606994
BSWD BELLSOUTH INTELLIGENT 75/585342 2,288,032
WIRELESS NETWORK
BSWD BELLSOUTH INTERACTIVE 75/702644
DISPATCH
BSWD BELLSOUTH INTERACTIVE 75/582068 2,291,241
PAGING
BSWD BELLSOUTH POWERTOOL 75/666458
BSWD BELLSOUTH PROFESSIONAL 75/621671
SERVICES
BSWD BEYOND PROTECTION 75/598789 2,304,223
BSWD COMMUNICATE@LIFESPEED 75/703523
BSWD COMPETE@LIFESPEED 75/703522
BSWD GO BEYOND PAGING 75/541571
BSWD INTERACT@LIFESPEED 75/703521
BSWD RAM INTERACTIVE DISPATCH 75/356063
BSWD REACT@LIFESPEED 75/703520
BSWD RESPOND@LIFESPEED 75/703519
BSWD THINK@LIFESPEED 751703518
BSWD WORK@LIFESPEED 75/703517
4
EXHIBIT B
SBC MARKS
WIRELESS TRADEMARKS
January 15, 2002
---------------------------------------------------------------------------------------------------------------
XXXX OWNER STATUS
---------------------------------------------------------------------------------------------------------------
#4CAST SBMS REGISTERED
#GOLF SBMS REGISTERED
#INV. SBMS PENDING
(STAR) TRIP SBMS REGISTERED
*FLOWER SBMS REGISTERED
1 CELLULAR ONE SBMS & PARTNERS REGISTERED
123 SBMS REGISTERED
1-800-MOBILE-1 AMERITECH REGISTERED
44CAST SBMS REGISTERED
74/437488 AMERITECH REGISTERED
75/758558 ARTISTIC PHONE DESIGN Pacific Xxxx Wireless PENDING
ANSWER FREE COMCAST PENDING
ANSWER FREE COMCAST PENDING
ANYTIME MINUTES SBC COMMUNICATIONS INC. PENDING
ASSURANCE CHOICE SBMS REGISTERED
BEATLINK SBMS REGISTERED
BOSTON CELLULAR TELEPHONE SBMS REGISTERED
C1 CELLULAR ONE SBMS REGISTERED
CELLULAR ONE SBMS & PARTNERS REGISTERED
CELLULAR ONE SBMS REGISTERED
CELLULAR ONE SBMS REGISTERED
CELLULAR ONE 1 SBMS & PARTNERS REGISTERED
CELLULAR ONE PHONE STORE SBMS REGISTERED
CELLULAR PASSPORT SBMS REGISTERED
CELLULAR PHONE TO PHONE SBMS PENDING
CELLULAR REWARDS AMERITECH REGISTERED
CHARGE DIRECT AMERITECH REGISTERED
CLASSLINK SBMS REGISTERED
CLEAR PATH AMERITECH REGISTERED
CLEARPACK AMERITECH PENDING
CLEARPACK PLUS AMERITECH PENDING
CLEARPATH AMERITECH REGISTERED
COIN SBMS REGISTERED
CONNECT2 SBMS REGISTERED
5
WIRELESS TRADEMARKS
January 15, 2002
---------------------------------------------------------------------------------------------------------------
XXXX OWNER STATUS
---------------------------------------------------------------------------------------------------------------
COP SBMS REGISTERED
DESIGN ONLY AMERITECH PENDING
DIGITAL EDGE SBMS
DIGITAL EDGE EAST SBMS PENDING
DIGITAL EDGE GOLD SBMS PENDING
DIGITAL EDGE NORTHEAST SBMS PENDING
DIGITAL EDGE PLUS SBMS PENDING
DUAL LINK AMERITECH REGISTERED
EMERGENCYONE SBMS REGISTERED
EN UN DOS POR TRES SBMS REGISTERED
E-PAK SBC COMMUNICATIONS INC. PENDING
E-WORKS SBC COMMUNICATIONS INC. PENDING
EXCITEMENT IS IN THE AIRE COMCAST PENDING
EXECUTIVE ONE SBMS REGISTERED
EXPRESS ONE SBMS & PARTNERS REGISTERED
EXPRESS ONE PHONE RENTAL NETWORK SBMS & PARTNERS REGISTERED
FAMILY TIES SBC COMMUNICATIONS INC. PENDING
FAMILYTALK COMCAST PENDING
FAST TRACK AMERITECH REGISTERED
FEATUREPAKS SBMS REGISTERED
FLEXPHONE SBC COMMUNICATIONS INC. PENDING
FOR EVERY TALK OF LIFE SBMS REGISTERED
FREEDOMLINK & DESIGN SWB TELECOMMUNICATIONS REGISTERED
FREEDOMONE SBMS REGISTERED
FREEDOMPAK SBMS REGISTERED
FREEDOMPLUS SWB TELECOMMUNICATIONS REGISTERED
GROUPTALK COMCAST PENDING
GSM THE ONE WITH THE SMART CHIP SBC COMMUNICATIONS INC. PENDING
HANDS ON THE WHEEL NOW AMERITECH REGISTERED
HELLO TO GO SBMS PENDING
HOME SBMS REGISTERED
HOME AND AWAY SBMS REGISTERED
HOUSEHOLD PAK SBMS REGISTERED
6
WIRELESS TRADEMARKS
January 15, 2002
---------------------------------------------------------------------------------------------------------------
XXXX OWNER STATUS
---------------------------------------------------------------------------------------------------------------
HOW HANDS ON THE WHEEL AMERITECH REGISTERED
IN TOUCH AND IN REACH COMCAST REGISTERED
INFOPAK I SBMS REGISTERED
INFOPAK II SBMS REGISTERED
INFOPAK III SBMS REGISTERED
INSIDE CONNECTION AMERITECH REGISTERED
LAREDO CELLULAR SBMS & PARTNERS REGISTERED
LEISUREONE SBMS REGISTERED
LINE ONE SBMS REGISTERED
LINK DUO SNET REGISTERED
LINX SNET MOBILCOM REGISTERED
LONE STAR CELLULAR NETWORK SBMS REGISTERED
MENTORING MINUTES SBC COMMUNICATIONS INC. PENDING
MENTORING MINUTES MAKE YOUR MINUTES COUNT CELLULARPHONE SBC COMMUNICATIONS INC. PENDING
MESSAGE PLUS SBMS REGISTERED
MESSAGE PLUS SELECT SBMS REGISTERED
MESSAGENOTES SBMS PENDING
MESSAGEPLUS PREFERRED SBMS REGISTERED
MESSAGEPLUS SELECT SBMS REGISTERED
METROPHONE 9 & 38 COMCAST REGISTERED
MINI MAIL SBC COMMUNICATIONS INC. PENDING
MOBILE EDGE SBMS REGISTERED
MOBILE MANAGER SBC COMMUNICATIONS INC PENDING
MOBILE WATCH COMCAST REGISTERED
MOBILEPARTNER AMERITECH REGISTERED
MOBILIZE YOUR LIFE SBMS REGISTERED
MONEY MANAGER - 38 SBMS PENDING
MY FACTS SBMS REGISTERED
NEVADA XXXX PCS EMAIL Pacific Telesis Group PENDING
NEVADA XXXX SMART CHIP Pacific Telesis PENDING
NIGHT OWL PLAN SBMS REGISTERED
NONE DESIGN ONLY 75/504195 AMERITECH PENDING
NONE DESIGN ONLY 75/504194 AMERITECH REGISTERED
7
WIRELESS TRADEMARKS
January 15, 2002
---------------------------------------------------------------------------------------------------------------
XXXX OWNER STATUS
---------------------------------------------------------------------------------------------------------------
NOW MORE THAN EVER, THE PHONE IS YOUR FRIEND SBC COMMUNICATIONS INC PENDING
OUR SOLUTIONS HAVE PEOPLE TALKING COMCAST PENDING
OUR SOLUTIONS HAVE PEOPLE TALKING COMCAST PENDING
OUT AND ABOUT SBMS PENDING
OYO (words & design) 9 & 38 SBC COMMUNICATIONS INC. PENDING
PACIFIC XXXX PCS EMAIL Pacific Telesis Group PENDING
PACIFIC XXXX PCS ROADTEAM Pacific Telesis Group PENDING
PACIFIC XXXX PURE DIGITAL PCS Pacific Telesis Group REGISTERED
PACIFIC XXXX SMART CHIP Pacific Telesis PENDING
PAGE ALERT COMCAST REGISTERED
PCS VALUEZONE SBMS REGISTERED
PEACE OF MIND SBMS PENDING
PERFORMANCE CHOICE SBMS REGISTERED
PERFORMANCEONE SBMS PENDING
PHONE TO PHONE SBMS PENDING
PICK UP & GO AMERITECH PENDING
PICK UP & GO CELLUAR AMERITECH REGISTERED
PURE DIGITAL PCS Pacific Telesis Group REGISTERED
QUICKLINK COMCAST REGISTERED
REINVENTING THE WAY YOUR COMPANY TALKS BUSINESS COMCAST REGISTERED
ROAD ROAMER CELLULAR NETWORK SBMS REGISTERED
ROADSIDE ONE SBMS REGISTERED
SAFETYONE SBMS REGISTERED
SMART CHOICE SBMS REGISTERED
SMARTONE SBMS REGISTERED
SNET PERSONAL PHONE SERVICE SNET REGISTERED
SO CLEAR AMERITECH REGISTERED
SOUTHWESTERN XXXX WIRELESS GO-KIT SBC COMMUNICATIONS INC. PENDING
SOUTHWESTERN XXXX WIRELESS REWARDS SBMS PENDING
8
WIRELESS TRADEMARKS
January 15, 2002
---------------------------------------------------------------------------------------------------------------
XXXX OWNER STATUS
---------------------------------------------------------------------------------------------------------------
REWARDS
START TALKIN' SBMS REGISTERED
SUPERLINK AMERITECH REGISTERED
TAKE 5IVE GUARANTEE COMCAST PENDING
TAKE FIVE GUARANTEE COMCAST PENDING
TALK ACROSS TEXAS SBC COMMUNICATIONS INC. PENDING
TALK ACROSS THE NATION SBC COMMUNICATIONS INC PENDING
TATTLE TO A TECH SBMS REGISTERED
TEXAS PASSPORT SBMS PENDING
THE BEST INTERNET SERVICE FOR THE STATE YOU'RE IN SNET PENDING
THE ONE CLUB SBMS PENDING
THE STORE WITH A FAMILIAR RING TO IT SBMS REGISTERED
TL SBMS REGISTERED
TOLL-FREEDOM SWB TELECOMMUNICATIONS REGISTERED
TRIP SBMS REGISTERED
TRAVEL SBMS REGISTERED
USA PASSPORT SBMS PENDING
VOICE CONNECT COMCAST REGISTERED
WEEKENDER CHOICE SBMS REGISTERED
WIRELESS FIELD MERCHANT AMERITECH REGISTERED
WIRELESS FIELD MESSENGER AMERITECH REGISTERED
WIRELESS FIELD PARTNER AMERITECH REGISTERED
YOU TALK, WE LISTEN SNET REGISTERED
YOUR GREAT BIG, IDEA-GENERATING FRIEND SBC COMMUNICATIONS INC. PENDING
YOUR HOW,-TO HANDS-ON, PROBLEM SOLVING FRIEND SBC COMMUNICATIONS INC. PENDING
YOUR IN-THE-KNOW ONLINE FRIEND SBC COMMUNICATIONS INC. PENDING
YOUR RATE SBMS PENDING
9
EXHIBIT C
4-Apr-00
NEWCO PRO FORMA BUSINESS PLAN
$Millions
EQUITY REVENUE CONTRIBUTION TO NEWCO
2000 2001 2002
-------- -------- --------
BellSouth 3,333 4,097 4,540
Mobile Data 140 245 377
3,473 4,342 4,917
SBC 6,361 6,658 7,289
JV Total 9,834 11,000 12,206
EQUITY EBITDA CONTRIBUTION TO NEWCO WITHOUT PARENT CORP. ALLOCATIONS
BellSouth 1,378 1,629 1,859
Mobile Data -27 34 123
SBC 2,203 2,485 2,850
JV Total 3,554 4,149 4,832
EQUITY DEPRECIATION CONTRIBUTION TO NEWCO
BellSouth w/MD 620 616 652
SBC 685 566 626
JV Total 1,305 1,182 1,278
EQUITY AMORTIZATION CONTRIBUTION TO NEWCO
BellSouth w/MD 108 149 144
SBC 216 322 300
JV Total 325 471 445
EQUITY EBIT CONTRIBUTION TO NEWCO BEFORE ASSIMILATION COSTS AND SYNERGIES
BellSouth 623 899 1,186
SBC 1,302 1,598 1,924
JV Total 1,924 2,496 3,110
100% ESTIMATED ASSIMILATION COSTS AND SYNERGIES
Hqs Expense 50 95 99
Assimilation 0 377 153
Addnl 1% rev -00 -000 -000
Xxxx Xxxxxxxxx 0 -000 -000
Net -48 234 -50
90% equity -44 211 -45
(proportionate)
Pretax Unlevered Net Income 1,968 2,286 3,154
Interest Expense 570 570 448
on total debt of $8 Billion@ 7.75%
Newco Net Income (pre tax) 1,398 1,716 2,707
-------------------------------------------------------------------------------
CAPEX
SBC 1,137 793 805
BLS w/Mobile Dat 692 578 640
Total 1,829 1,371 1,445
Cash Synergies (5%) 91 69 72
Net Capex 1,738 1,302 1,373
10
SCHEDULE 8.1(A)
Capital
Member Percentage Interest Contributions LLC Units
------ ------------------- ------------- ---------
SBC 0% 0
SBC Holdings 59.9999999500000% 1,200,000,005
-------------
BellSouth 0% 0
BellSouth Mobile Data 0.8699999956500% 17,400,000
BSCC of Houston 0.4051819479741% 8,103,639
ACCC 1.5948180420259% 31,896,361
BellSouth Cellular 36.2499999687500% 725,000,003
RAM 0.8799999956000% 17,600,000
-------------
Manager 0.0000001000000% 2
-------------
TOTAL 100.0000000000000% 2,000,000,010
-------------
11
SCHEDULE 11.4
LIMITED LIABILITY COMPANY AGREEMENT
BY AND AMONG
SBC COMMUNICATIONS INC.,
BELLSOUTH CORPORATION
AND
ALLOY MANAGEMENT CORP.
SCHEDULE 11.4
SPECIFIED AUCTIONS
Subject to the provisions of Section 11.4 of the Limited Liability Company
Agreement, Newco will participate in the following Auctions:
- FCC Auction No. 31, in which the FCC will auction certain licenses in
the 700 MHz band, for which procedures were established in Auction of
Licenses in the 747-762 and 000-000 XXx Xxxxx, Xxxxxx Xxxxxx, XX
00-000, 2000 WL 197587 (rel. Feb. 18, 2000). FCC Auction No. 31 is
scheduled to begin on May 10, 2000.
- FCC Auction No. 35, in which the FCC will auction certain C and F
blocks broadband PCS licenses, subject to the grant of any necessary
eligibility waivers by the FCC. The FCC announced Auction No. 35 in
Auction of C and F Block Broadband PCS Licenses, Public Notice, DA
00-49, 2000 WL 16440 (rel. Jan 12, 2000). FCC Auction No. 35 is
scheduled to begin on July 26, 2000.
- In addition, there are several wireless auctions that the Commission
intends to hold at some future date, but for which starting dates have
not yet been scheduled. The parties will consider participating in the
following:
- SMR 800 MHz.
- 24 GHz.
- 4.9 GHz.
- Paging lower band.
- 218-219 MHz.
- Wireless Business Acquisitions which SBC may make:
- Richmond, VA PCS to be acquired from PrimeCo PCS, (Purchase price not
to exceed $525 million)
- West Texas RSAs to be acquired from ENMR Plateau Wireless (Purchase
price not to exceed $29 million)
- Austin, TX MSA
- Wireless Business Acquisitions which BellSouth may make:
- Buyout of minority partners in the BellSouth Carolinas PCS, L.P.
12
AMENDMENT No. 1
To
LIMITED LIABILITY COMPANY AGREEMENT
OF CINGULAR WIRELESS LLC
by and among
SBC COMMUNICATIONS INC.,
SBC ALLOY HOLDINGS, INC.,
BELLSOUTH CORPORATION,
BELLSOUTH MOBILE DATA, INC.,
BSCC OF HOUSTON, LLC,
ACCC OF LOS ANGELES, INC.,
AB CELLULAR HOLDING, LLC,
WIRELESS TELECOMMUNICATIONS INVESTMENT COMPANY LLC,
BELLSOUTH CELLULAR CORP.,
RAM BROADCASTING CORPORATION
and
CINGULAR WIRELESS MANAGEMENT CORP.
Dated as of January 1, 2001
AMENDMENT No. 1
LIMITED LIABILITY COMPANY AGREEMENT
OF CINGULAR WIRELESS LLC
AMENDMENT NO. 1 TO LIMITED LIABILITY COMPANY AGREEMENT OF CINGULAR
WIRELESS LLC (hereinafter called this "Amendment"), dated as of January 1, 2001
by and among SBC Communications Inc., a Delaware corporation ("SBC"), SBC Alloy
Holdings, Inc., a Delaware corporation ("SBC Holdings"), BellSouth Corporation,
a Georgia corporation ("BellSouth"), BellSouth Mobile Data, Inc., a Georgia
corporation ("BellSouth Mobile Data"), BSCC of Houston, LLC, a Delaware limited
liability company ("BSCC of Houston"), ACCC of Los Angeles, Inc., a California
corporation ("ACCC"), AB Cellular Holding, LLC, a Delaware limited liability
company ("ABC"), Wireless Telecommunications Investment Company LLC, a Delaware
limited liability company ("Wireless Investco"), BellSouth Cellular Corp., a
Georgia corporation ("BellSouth Cellular"), RAM Broadcasting Corporation, a New
York corporation ("RAM"), and Cingular Wireless Management Corp., a Delaware
corporation ("Manager").
RECITALS
WHEREAS, SBC, SBC Holdings, BellSouth, BellSouth Mobile Data, BSCC of
Houston; ACCC, BellSouth Cellular, RAM and Manager are parties to the Limited
Liability Company Agreement of Cingular Wireless LLC dated as of October 2, 2000
("Agreement");
WHEREAS, BSCC of Houston and ACCC transferred all of their interests in
Cingular Wireless LLC to ABC and Wireless Investco pursuant to Section 4.1(a) of
the Agreement;
WHEREAS, ABC and Wireless Investco desire to become parties to the
Agreement in accordance with the terms of the Agreement.
NOW, THEREFORE, in consideration of the premises, and of the
representations, warranties, covenants and agreements contained herein and in
the Agreement, the parties hereto agree as follows:
Article 1
Effect of Amendment
1.1. Amendments. Upon the execution of this Amendment, the
Agreement shall be deemed to be amended to take account of the amendments set
forth in Article II hereof.
Article 2
Amendment to the Agreement
2.1 Addition of Members. The Agreement is hereby amended to add
ABC and Wireless Investco as Members and delete BSCC of Houston and ACCC as
Members.
2.2 Schedule 8.1(a). Schedule 8.1(a) to the Agreement is hereby
amended to delete BSCC of Houston and ACCC and their respective Percentage
Interest, Capital Contributions and LLC Units from Schedule 8.1(a) and add the
following:
"Member Percentage Interest Capital Contributions LLC Units
------ ------------------- --------------------- ---------
ABC 1.0403534447982% 20,807,069
Wireless Investco .9596465452018% 19,192,931"
Article 3
Agreements
3.1 Performance Guaranty. BellSouth hereby guarantees the
performance of all obligations of each of ABC and Wireless Investco under the
Agreement.
3.2 No Termination. Each of ABC and Wireless Investco hereby
represent and warrant that the transfer has not resulted in, and will not result
in a termination of the Company for United States Federal Income Tax purposes.
3.3 Covenants. Each of ABC and Wireless Investco covenants and
agrees that, (a) for so long as it Beneficially Owns Securities, it shall
continue to be a wholly owned Subsidiary of BellSouth, unless the only
Securities owned thereby are Public Common Stock and (b) it shall be bound by
the obligations of BellSouth under the Agreement.
Article 4
Representations and Warranties of BellSouth
4.1 Wholly Owned Subsidiaries. BellSouth hereby represents and
warrants that each of ABC and Wireless Investco is a wholly owned Subsidiary of
BellSouth.
4.2 Transfer of LLC Units. BellSouth hereby represents and
warrants that each of BSCC of Houston and ACCC has transferred all of its LLC
Units to ABC and Wireless Investco, respectively.
Article 5
Agreement of BSCC of Houston and ACCC
5.1 Each of BSCC of Houston and ACCC hereby covenants and agrees
that it is no longer a Member.
-2-
Article 6
Miscellaneous
6.1 References to Agreement. Following the execution of this
Amendment all references in the Agreement to the "Agreement" shall be deemed to
be references to the Agreement as amended by this Amendment.
6.2 Counterparts. This Amendment may be executed in one or more
counterparts, each of which shall be deemed to be an original by the parties
executing such counterpart, but all of which shall be considered one and the
same instrument.
6.3 Section Headings; Capitalized Terms. The section and paragraph
headings contained in this Amendment are for reference purposes only and shall
not in any way affect the meaning or interpretation of this Amendment.
Capitalized terms used but not defined herein shall have the meanings ascribed
to such terms in the Agreement.
6.4 Governing Law. This Amendment shall be governed by, and
construed in accordance with, the laws of the State of Delaware without
reference to the choice of law principles thereof.
6.5 No Further Amendments. Except as expressly provided in this
Amendment, the Agreement shall not be amended or deemed to be amended in any
respect.
6.6 Release of Liability. Each of BSCC of Houston and ACCC is
hereby released from its duties and obligations under the Agreement and is no
longer liable under the Agreement except for any breaches under the Agreement
while it was a Member; provided that the foregoing shall not affect any
liability of BellSouth.
-3-
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed by their respective duly authorized officers as of the day and year
first above written.
SBC COMMUNICATIONS INC.
By /s/ Xxxxxx X. Xxxxxxx
---------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Sr. Exec. Vice President & CFO
SBC ALLOY HOLDINGS, INC.
By /s/ Xxxxxx X. Xxxxxxx
---------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Chief Financial Officer
BELLSOUTH CORPORATION
By /s/ Xxxxxx X. Xxxxx
---------------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Chief Financial Officer
BELLSOUTH MOBILE DATA, INC.
By /s/ Xxxxxxx X. Xxxxxxxxxxx
---------------------------------------------
Name: Xxxxxxx X. Xxxxxxxxxxx
Title: Vice President - Regulatory
AB CELLULAR HOLDING, LLC
By /s/ Xxxxx X. Xxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Manager
-4-
WIRELESS TELECOMMUNICATIONS INVESTMENT COMPANY
LLC
By /S/ Xxxxx X. Xxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Manager
BELLSOUTH CELLULAR CORP.
By /s/ Xxxxxxx X. Xxxxxxxxxxx
---------------------------------------------
Name: Xxxxxxx X. Xxxxxxxxxxx
Title: Vice President - Regulatory
RAM BROADCASTING CORPORATION
By /s/ Xxxxxxx X. Xxxxxxxxxxx
---------------------------------------------
Name: Xxxxxxx X. Xxxxxxxxxxx
Title: Vice President - Regulatory
CINGULAR WIRELESS MANAGEMENT CORP.
By /s/ Xxxxxxxx X. Xxxxxxx
---------------------------------------------
Name: Xxxxxxxx X. Xxxxxxx
Title: Executive Vice President -
Merger Integration
BSCC OF HOUSTON LLC
By /s/ Xxxxxxx X. Xxxxxxxxxxx
---------------------------------------------
Name: Xxxxxxx X. Xxxxxxxxxxx
Title: Vice President - Regulatory
ACCC OF LOS ANGELES, INC.
By /s/ Xxxxxxx X. Xxxxxxxxxxx
---------------------------------------------
Name: Xxxxxxx X. Xxxxxxxxxxx
Title: Vice President - Regulatory
-5-
AMENDMENT No. 2
To
LIMITED LIABILITY COMPANY AGREEMENT
OF CINGULAR WIRELESS LLC
by and among
SBC COMMUNICATIONS INC.,
SBC ALLOY HOLDINGS, INC.,
BELLSOUTH CORPORATION,
BELLSOUTH MOBILE DATA, INC.,
AB CELLULAR HOLDING, LLC,
WIRELESS TELECOMMUNICATIONS INVESTMENT COMPANY LLC,
BELLSOUTH CELLULAR CORP.,
RAM BROADCASTING CORPORATION
and
CINGULAR WIRELESS MANAGEMENT CORP.
Dated as of April 3, 2001
AMENDMENT No. 2
To
LIMITED LIABILITY COMPANY AGREEMENT
OF CINGULAR WIRELESS LLC
AMENDMENT NO. 2 TO LIMITED LIABILITY COMPANY AGREEMENT OF CINGULAR
WIRELESS LLC (hereinafter called this "Amendment"), dated as of April 3, 2001 by
and among SBC Communications Inc., a Delaware corporation ("SBC"), SBC Alloy
Holdings, Inc., a Delaware corporation ("SBC Holdings"), BellSouth Corporation,
a Georgia corporation ("BellSouth"), BellSouth Mobile Data, Inc., a Georgia
corporation ("BellSouth Mobile Data"), AB Cellular Holding, LLC, a Delaware
limited liability company ("ABC"), Wireless Telecommunications Investment
Company LLC, a Delaware limited liability company ("Wireless Investco"),
BellSouth Cellular Corp., a Georgia corporation ("BellSouth Cellular"), RAM
Broadcasting Corporation, a New York corporation ("RAM"), and Cingular Wireless
Management Corp., a Delaware corporation ("Manager").
RECITALS
WHEREAS, SBC, SBC Holdings, BellSouth, BellSouth Mobile Data, BellSouth
Cellular, RAM, ABC, Wireless Investco and Manager are parties to the Limited
Liability Company Agreement of Cingular Wireless LLC dated as of October 2,
2000, as amended effective January 1, 2001 ("Agreement");
WHEREAS, SBC, SBC Holdings, BellSouth, BellSouth Mobile Data, BellSouth
Cellular, RAM, ABC, Wireless Investco and Manager desire to make certain
amendments to the Agreement.
NOW, THEREFORE, in consideration of the premises, and of the
representations, warranties, covenants and agreements contained herein and in
the Agreement, the parties hereto agree as follows:
Article I
Effect of Amendment
1.1 Amendments. Upon the execution of this Amendment, the
Agreement shall be deemed to be amended to take account of the amendments set
forth in Article II hereof.
Article II
Amendment to the Agreement
2.1 Section 9.l(d)(i) is hereby amended by adding the following
sentence after the second sentence thereof:
"Notwithstanding the prior sentence, (i) depreciation equal to
the Built-In Gain with respect to the assets of SBC Citation
VII TransCo, LLC shall be allocated under Treasury Regulation
Section 1.704-3(d), using the remedial method and treating
such Built-In Gain as 5-year property subject to depreciation
under Code Section 168(b)(1), and (ii) other depreciation with
respect to such assets shall be allocated pro rata among the
Members in accordance with their Percentage Interests."
2.2 Section 10.1(c) is hereby amended so that, as amended, Section
10.1(c) reads as follows:
"(c)(i) Newco shall make distributions at least two (2)
Business Days prior to each date on which corporate federal
estimated income tax payments are due. The amount of each
distribution shall be equal to (A) the greatest of each
Member's Taxes as a result of the operations of Newco
(calculated using the highest corporate marginal tax rate for
Newco as if Newco were a corporation for U.S. federal, state,
and local income tax purposes) due for the fiscal quarter for
which estimated income tax payments are due, divided by (B)
such Member's Percentage Interest.
(ii) The distribution to be made with respect to the corporate
federal estimated income tax payment due on September 15 of a
year shall be increased or decreased by the amount by which
(A) the amount of the distribution made pursuant to (iii),
below, for the prior Fiscal Year, was less than or exceeded,
respectively, (B) the amount that would have been distributed
had the Members' Taxes resulting from the operations of Newco
(calculated using the highest corporate marginal tax rate for
Newco as if Newco were a corporation for U.S. federal, state,
and local income tax purposes) been calculated using the
results reported in Newco's final Form K-1 for such Fiscal
Year.
(iii) Newco shall make a distribution within fifteen (15)
Business Days after the end of the Fiscal Year if the amounts
so distributed pursuant to (i), above, during the preceding
Fiscal Year (not taking into account, for this purpose, any
adjustment made pursuant to (ii), above) are not in the
aggregate greater than the greater of (A) fifty percent of the
Distributable Cash and (B) the greatest of (x) each Member's
Taxes (calculated using the highest corporate marginal tax
rate for Newco as if Newco were a corporation for U.S.
federal, state, and local income tax purposes) as a result of
the operations of Newco due for the preceding Fiscal Year,
divided by (y) such Member's Percentage Interest, in the
amount by which the greater of (A) and (B) exceeds the
aggregate amount distributed pursuant to clause (i) during the
preceding Fiscal Year (not taking into account, for this
purpose, any adjustment made pursuant to (ii), above)."
-2-
(iv) For the avoidance of doubt, all distributions made under
this section 10.1(c) shall be made in accordance with each
Member's Percentage Interest.
Article III
Miscellaneous
3.1 References to Agreement. Following the execution of this
Amendment all references in the Agreement to the "Agreement" shall be deemed to
be references to the Agreement as amended by this Amendment.
3.2 Counterparts. This Amendment may be executed in one or more
counterparts, each of which shall be deemed to be an original by the parties
executing such counterpart, but all of which shall be considered one and the
same instrument.
3.3 Section Headings; Capitalized Terms. The section and paragraph
headings contained in this Amendment are for reference purposes only and shall
not in any way affect the meaning or interpretation of this Amendment.
Capitalized Terms used but not defined herein shall have the meanings ascribed
to such terms in the Agreement.
3.4 Governing Law. This Amendment shall be governed by, and
construed in accordance with, the laws of the State of Delaware without
reference to the choice of law principles thereof.
3.5 No Further Amendments. Except as expressly provided in this
Amendment, the Agreement shall not be amended or deemed to be amended in any
respect.
-3-
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective duly authorized officers as of the day and year
first above written.
SBC COMMUNICATIONS INC.
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Sr. Exec. Vice President & CFO
SBC ALLOY HOLDINGS, INC.
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Chief Financial Officer
BELLSOUTH CORPORATION
By: /s/ Xxxxxx X. Xxxxx
---------------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Chief Financial Officer
BELLSOUTH MOBILE DATA, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
---------------------------------------------
Name: Xxxxxxx X. Xxxxxxxxxxx
Title: Vice President - Regulatory
AB CELLULAR HOLDING, LLC
By: /s/ Xxxxx X. Xxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Manager
-4-
WIRELESS TELECOMMUNICATIONS
INVESTMENT COMPANY LLC
By: /s/ Xxxxx X. Xxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Manager
BELLSOUTH CELLULAR CORP.
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
---------------------------------------------
Name: Xxxxxxx X. Xxxxxxxxxxx
Title: Vice President - Regulatory
RAM BROADCASTING CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
---------------------------------------------
Name: Xxxxxxx X. Xxxxxxxxxxx
Title: Vice President - Regulatory
CINGULAR WIRELESS MANAGEMENT CORP.
By: /s/ Xxxxxxxx X. Xxxxxxx
---------------------------------------------
Name: Xxxxxxxx X. Xxxxxxx
Title: Executive Vice President - Merger
Integration
-5-
AMENDMENT No. 3
To
LIMITED LIABILITY COMPANY AGREEMENT
OF CINGULAR WIRELESS LLC
by and among
SBC COMMUNICATIONS INC.,
SBC ALLOY HOLDINGS, INC.,
BELLSOUTH CORPORATION,
BELLSOUTH MOBILE DATA, INC.,
AB CELLULAR HOLDING, LLC,
WIRELESS TELECOMMUNICATIONS INVESTMENT COMPANY, LLC,
BELLSOUTH CELLULAR CORP.,
RAM BROADCASTING CORPORATION
and
CINGULAR WIRELESS MANAGEMENT CORP.
Dated as of April 3, 2001
AMENDMENT No. 3
LIMITED LIABILITY COMPANY AGREEMENT
OF CINGULAR WIRELESS LLC
AMENDMENT NO. 3 TO LIMITED LIABILITY COMPANY AGREEMENT OF CINGULAR
WIRELESS LLC (hereinafter called this "Amendment"), dated as of April 3, 2001 by
and among SBC Communications Inc., a Delaware corporation ("SBC"), SBC Alloy
Holdings, Inc., a Delaware corporation ("SBC Holdings"), BellSouth Corporation,
a Georgia corporation ("BellSouth"), BellSouth Mobile Data, Inc., a Georgia
corporation ("BellSouth Mobile Data"), AB Cellular Holding, LLC, a Delaware
limited liability company ("ABC"), Wireless Telecommunications Investment
Company, LLC, a Delaware limited liability company ("Wireless Investco"),
BellSouth Cellular Corp., a Georgia corporation ("BellSouth Cellular"), RAM
Broadcasting Corporation, a New York corporation ("RAM"), and Cingular Wireless
Management Corp., a Delaware corporation ("Manager").
RECITALS
WHEREAS, SBC, SBC Holdings, BellSouth, BellSouth Mobile Data, ABC,
Wireless Investco, BellSouth Cellular, RAM and Manager are parties to the
Limited Liability Company Agreement of Cingular Wireless LLC dated as of October
2, 2000 as amended ("Agreement");
WHEREAS, SBC, SBC Holdings, BellSouth, BellSouth Mobile Data, ABC,
Wireless Investco, BellSouth Cellular, Ram and Manager desire to make certain
amendments to the Agreement;
NOW, THEREFORE, in consideration of the premises, and of the
representations, warranties, covenants and agreements contained herein and in
the Agreement, the parties hereto agree as follows:
Article I
Effect of Amendment
1.1. Amendments. Upon the execution of this Amendment, the
Agreement shall be deemed to be amended to take account of the amendments set
forth in Article II hereof.
Article II
Amendments to the Agreement
2.1 Section 1.1(a) is hereby amended to add the following
paragraph to Section 1.1(a) following the definition of "ROFR Termination Date":
""Salmon LLC" shall mean Salmon PCS LLC, a Delaware limited
liability company."
2.2 Section 12.1(b) is hereby amended so that, as amended, Section
12.1(b) reads as follows:
"Except as otherwise expressly provided herein, in the
Ancillary Agreements, and except for the ownership and
management of the Additional Subsidiaries and the properties
referred to in Section 4.25 of the Contribution Agreement,
each Initial Member (and its Subsidiaries) shall directly or
indirectly own or operate Wireless Businesses and market and
sell Wireless Services only through Manager, Newco and their
respective Subsidiaries; provided that the foregoing
exclusivity shall not prohibit SBC or BellSouth or any of
their respective Subsidiaries from (i) marketing and selling
Wireless Services and issuing bills to and collecting payments
from Joint Billing Customers as of the Closing Date, (ii)
entering into arrangements with competitive providers of
Wireless Services pursuant to which such competitive provider
markets its products or services in conjunction with the
products or services of such Initial Member or its
Subsidiaries, (iii) marketing and selling fixed wireless voice
and data products, or (iv) marketing and selling Wireless
Services in geographic areas designated by the FCC in which
Newco or its Subsidiaries (including for the purposes of this
Section 12.1(b)(iv), Salmon LLC) are not providing Wireless
Services pursuant to licenses issued to them by the FCC."
2.3 Section 12.2 is hereby amended so that, as amended, Section
12.2 reads as follows:
"Network Preferences. Newco and its Subsidiaries shall
exclusively utilize Network Services offered by Controlled
Subsidiaries of such Initial Member within the Service
Territory of such Initial Member unless the Manager determines
that the terms of use of such Initial Member Network Services
in a particular instance would materially disadvantage Newco
as compared to the terms available from a Third Party, taking
into account price, service quality and reliability; provided
that this exclusivity shall not limit the right of Newco to
construct or acquire for its own account individual Network
Services components used exclusively in all material respects
by Newco such as fixed microwave transmission equipment."
2.4 Section 12.3 is hereby amended so that, as amended, Section
12.3 reads as follows:
"Volume Discounts. Each of SBC and BellSouth shall use its
reasonable best efforts to make available to Newco and its
Subsidiaries (including for the purposes of this Section 12.3
Salmon LLC) the benefits of its
-2-
agreements with vendors on terms no less favorable than those generally
available to it or its Affiliates. Newco shall use its reasonable best
efforts to make available to SBC and BellSouth and their respective
Subsidiaries the benefits of its agreements with vendors on terms no
less favorable than those generally available to Newco or its
Affiliates."
Article III
Miscellaneous
3.1 References to Agreement. Following the execution of this
Amendment all references in the Agreement to the "Agreement" shall be deemed to
be references to the Agreement as amended by this Amendment.
3.2 Counterparts. This Amendment may be executed in one or more
counterparts, each of which shall be deemed to be an original by the parties
executing such counterpart, but all of which shall be considered one and the
same instrument.
3.3 Section Headings; Capitalized Terms. The section and paragraph
headings contained in this Amendment are for reference purposes only and shall
not in any way affect the meaning or interpretation of this Amendment.
Capitalized Terms used but not defined herein shall have the meanings ascribed
to such terms in the Agreement.
3.4 Governing Law. This Amendment shall be governed by, and
construed in accordance with, the laws of the State of Delaware without
reference to the choice of law principles thereof.
3.5 No Further Amendments. Except as expressly provided in this
Amendment, the Agreement shall not be amended or deemed to be amended in any
respect.
-3-
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective duly authorized officers as of the day and year
first above written.
SBC COMMUNICATIONS INC.
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Sr. Exec. Vice President & CFO
SBC ALLOY HOLDINGS, INC.
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Chief Financial Officer
BELLSOUTH CORPORATION
By: /s/ Xxxxxx X. Xxxxx
---------------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Chief Financial Officer
BELLSOUTH MOBILE DATA, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
---------------------------------------------
Name: Xxxxxxx X. Xxxxxxxxxxx
Title: Vice President - Regulatory
AB CELLULAR HOLDING, LLC
By: /s/ Xxxxx X. Xxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Manager
-4-
WIRELESS TELECOMMUNICATIONS
INVESTMENT COMPANY, LLC
By: /s/ Xxxxx X. Xxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Manager
BELLSOUTH CELLULAR CORP.
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
---------------------------------------------
Name: Xxxxxxx X. Xxxxxxxxxxx
Title: Vice President - Regulatory
RAM BROADCASTING CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
---------------------------------------------
Name: Xxxxxxx X. Xxxxxxxxxxx
Title: Vice President - Regulatory
CINGULAR WIRELESS MANAGEMENT CORP.
By: /s/ Xxxxxxxx X. Xxxxxxx
---------------------------------------------
Name: Xxxxxxxx X. Xxxxxxx
Title: Executive Vice President - Merger
Integration
-5-
