Exhibit 2.1
MERGER AGREEMENT
BY AND AMONG
UBIQUITEL INC.,
UBIQUITEL OPERATING COMPANY,
THE MERGER SUBSIDIARIES OF UBIQUITEL INC.,
VIA WIRELESS, LLC,
THE MEMBERS OF VIA WIRELESS, LLC,
THE STOCKHOLDERS
AND
THE CONTROLLING ▇▇▇▇▇ STOCKHOLDERS
DATED: FEBRUARY 22, 2001
TABLE OF CONTENTS
ARTICLE 1 Transactions......................................................................................2
1.1 The Mergers............................................................................2
(a) The Mergers............................................................................2
(b) Consummation of the Mergers............................................................3
(c) Effective Date of the Mergers..........................................................3
(d) Effect of the Mergers..................................................................3
(e) The Surviving Corporations' Certificates of Incorporation;
Bylaws; Directors and Officers.........................................................3
1.2 Merger Consideration...................................................................3
(a) Aggregate Merger Consideration.........................................................3
(b) Consideration for Individual Mergers...................................................4
(c) Rights as Holders......................................................................5
(d) Anti-dilution..........................................................................6
(e) Treasury Stock.........................................................................6
1.3 Purchase of LLC Interest from the Selling Member.......................................6
(a) Purchase and Sale......................................................................6
(b) Purchase Price.........................................................................6
(c) Deliveries.............................................................................6
(d) Conditions to Consummating the Interest Sale...........................................6
1.4 Performance Unit Appreciation Rights Plan..............................................6
1.5 No Fractional Shares...................................................................7
1.6 Escrow of Shares.......................................................................7
ARTICLE 2 Transaction Pre-Closing and Closing...............................................................8
2.1 Pre-Closing............................................................................8
(a) Pre-Closing Date.......................................................................8
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(b) Intentionally Omitted..................................................................8
(c) Delivery of Closing Documents into Escrow..............................................8
(d) Spectrum Transition....................................................................8
(e) Proxy of the Members of LLC............................................................8
(f) Pre-Closing Covenants..................................................................9
(g) Payment of ▇▇▇▇▇' Net Assets Consideration.............................................9
2.2 Deliveries to UbiquiTel................................................................9
(a) Pre-Closing Certificate................................................................9
(b) Authorizing Documents..................................................................9
(c) Consents and Approvals.................................................................9
(d) Good Standing Certificates............................................................10
(e) Opinions of LLC Parties' Counsels.....................................................10
(f) Resignations and Releases.............................................................10
(g) Stockholder's Releases................................................................10
(h) Other Instruments.....................................................................10
2.3 UbiquiTel Parent's Deliveries.........................................................10
(a) Closing Certificate...................................................................10
(b) Resolutions...........................................................................10
(c) Consents and Approvals................................................................11
(d) Opinion of UbiquiTel Parent and UbiquiTel's Counsel...................................11
(e) UbiquiTel Stock.......................................................................11
(f) Other Instruments.....................................................................11
2.4 Related Agreements....................................................................11
(a) Loan Agreement and Subordination Agreement............................................11
(b) Management Agreement..................................................................11
(c) Lock-Up Agreement.....................................................................11
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(d) Escrow Agreement......................................................................12
(e) Indemnification Agreement with Controlling ▇▇▇▇▇ Stockholders.........................12
2.5 Closing...............................................................................12
ARTICLE 3 Pre-Closing Conditions to Consummating the Mergers...............................................12
3.1 Joint Conditions......................................................................12
(a) HSR Act...............................................................................12
(b) NASDAQ Listing........................................................................13
(c) UbiquiTel Parent Stockholders' Meeting................................................13
(d) Form S-4..............................................................................13
(e) No Litigation.........................................................................13
(f) FCC Approval..........................................................................13
3.2 UbiquiTel Parent, UbiquiTel and Merger Subs' Conditions...............................13
(a) LLC Parties' Representations True.....................................................13
(c) LLC Parties Consents..................................................................14
(e) Related Agreements....................................................................15
(f) Financing.............................................................................15
(g) Pre-Closing Deliveries................................................................15
(h) The Sprint Agreements.................................................................15
(i) Conversion Condition..................................................................15
3.3 LLC Parties' Conditions to Closing....................................................15
(a) UbiquiTel Parent, UbiquiTel and Merger Subs' Representations True.....................16
(b) UbiquiTel, UbiquiTel Parent and Merger Subs' Compliance with
Agreement.............................................................................16
(c) UbiquiTel Consents....................................................................16
(d) No Litigation.........................................................................16
(e) Related Agreements....................................................................16
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(f) Closing Deliveries....................................................................17
(g) RTFC Loan Payoff......................................................................17
ARTICLE 4 Covenants Regarding Consummation of the Transaction..............................................17
4.1 Satisfaction of Conditions to Closing.................................................17
(a) Joint Responsibilities................................................................17
(b) LLC Parties' Responsibilities.........................................................18
(c) UbiquiTel Parent, UbiquiTel and Merger Subs' Responsibilities.........................18
4.2 UbiquiTel Announcements...............................................................19
ARTICLE 5 Termination......................................................................................20
5.1 Reasons for Termination...............................................................20
(a) By Mutual Consent.....................................................................20
(b) By UbiquiTel Parent...................................................................20
(c) By LLC................................................................................20
(d) Drop Dead Date........................................................................20
5.3 UbiquiTel Parent's Termination Procedure..............................................21
5.4 LLC's Termination Procedure...........................................................21
5.5 Effect of Termination.................................................................21
ARTICLE 6 Representations and Warranties Concerning LLC....................................................22
6.1 LLC; Entry Into Agreements............................................................22
(a) Organization and Good Standing........................................................22
(b) Validity and Authorization; Power and Authority.......................................22
(c) Subsidiary............................................................................23
(d) No Conflict...........................................................................23
(e) LLC Parties Consents Required.........................................................23
6.2 Financial Information.................................................................24
(a) Financial Statements; Books and Records...............................................24
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(b) Conduct of Business...................................................................24
(c) No Material Adverse Effect............................................................25
6.3 Member Interests; Capitalization......................................................25
6.4 Assets................................................................................25
(a) Personal Property.....................................................................26
(b) Real Property.........................................................................26
(c) Intellectual Property.................................................................28
(d) Contracts.............................................................................29
6.5 Liabilities...........................................................................30
(a) No Undisclosed Liabilities............................................................30
(b) Tax Matters...........................................................................30
(c) Litigation............................................................................32
(d) Employee Liabilities..................................................................32
(e) Warranties............................................................................33
6.6 Insurance.............................................................................33
6.7 Employees.............................................................................33
6.8 Employee Benefit Plans................................................................34
6.9 Licenses..............................................................................35
6.10 Environmental Matters.................................................................37
(a) Environmental Laws....................................................................37
(b) Environmental Claims..................................................................38
(c) Permits...............................................................................38
6.11 No Brokers Fees; No Commissions.......................................................38
6.12 Certain Information...................................................................38
ARTICLE 7 Representations and Warranties Concerning the Members and the Stockholders.......................39
7.1 Stockholders; Entry Into Agreements...................................................39
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(a) Organization and Good Standing........................................................39
(b) Validity and Authorization; Power and Authority.......................................39
(c) No Conflict...........................................................................40
(d) LLC Parties Consents; Stockholders Consents Not Required..............................40
(e) Ownership and Transfer of Members' Interests..........................................40
7.2 Financial Information.................................................................40
(a) Financial Statements; Books and Records...............................................40
(b) Conduct of Business...................................................................41
7.3 Equity Interests......................................................................41
(a) Capitalization........................................................................41
(b) Ownership and Transfer by Stockholders................................................41
7.4 No Contracts..........................................................................41
(b) Tax Matters...........................................................................42
(c) Litigation............................................................................43
7.6 Sale of ▇▇▇▇▇ Telco Businesses........................................................43
7.7 Certain Information...................................................................43
ARTICLE 8 Representations and Warranties of Ubiquitel Parent, UbiquiTel and the Merger Subs................44
8.1 Entry Into Agreements.................................................................44
(a) Organization and Good Standing........................................................44
(b) Corporate Power and Authority; Validity and Authorization.............................44
8.2 Conflicts and Consents................................................................44
(a) No Conflict...........................................................................44
(b) Consents Obtained.....................................................................45
8.3 No Brokers Fees; No Commissions.......................................................45
8.4 UbiquiTel Stock.......................................................................45
8.5 SEC Documents.........................................................................45
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8.6 No Material Adverse Effect............................................................45
8.7 Capitalization........................................................................45
8.8 No Liabilities........................................................................46
8.9 Compliance with Laws..................................................................46
8.10 Certain Information...................................................................46
8.11 Disclosure............................................................................47
ARTICLE 9 Pre-Closing Covenants of the LLC Parties.........................................................47
9.1 Conduct of Business of LLC............................................................47
9.2 Access to Information and Employees...................................................47
9.3 Financial Statements..................................................................48
9.4 Conduct of the Members Pending Closing................................................48
9.5 Trading Prohibition...................................................................48
9.6 Non-Negotiation.......................................................................48
ARTICLE 11 Certain Agreements..............................................................................49
11.1 Consulting Agreement..................................................................49
11.2 Preparation of the Proxy Statement and the Form S-4...................................49
(a) Preparation...........................................................................49
(b) Proxy Statement and Form S-4..........................................................49
(c) Resale Registration Statement.........................................................49
(d) UbiquiTel Parent's Actions............................................................50
(e) Comfort Letters, Etc..................................................................50
11.3 UbiquiTel Stockholders' Meeting.......................................................50
11.4 Post-Closing Agreements of Stockholders and UbiquiTel Parent..........................50
(a) Further Actions.......................................................................50
(b) Access to Information.................................................................51
(c) Directors.............................................................................51
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(d) Member Loans..........................................................................51
(e) Reorganization Qualification..........................................................51
(f) Qualification of the ▇▇▇▇▇ Merger.....................................................51
11.5 Payoff of Certain Obligations at Closing..............................................51
11.6 Tax Matters For UbiquiTel Parent and Members..........................................52
(a) Tax Periods Ending on or Before the Closing Date......................................52
(b) Straddle Periods......................................................................52
(c) Tax Obligations.......................................................................52
(d) General Cooperation on Tax Matters....................................................53
(e) Contests..............................................................................54
(f) [Omitted].............................................................................54
(g) Additional Tax Matters................................................................54
11.7 Tax Matters in ▇▇▇▇▇ Merger...........................................................55
(a) Tax Periods Ending on or Before the Closing Date......................................56
(b) ▇▇▇▇▇ Straddle Periods................................................................56
(c) Tax Obligations.......................................................................56
(d) General Cooperation on Tax Matters....................................................57
(e) Contests..............................................................................57
(f) Carryback CFT Deduction...............................................................58
11.8 Waiver of Purchase Rights by Members..................................................59
11.9 Release from Stockholder Guarantees...................................................59
11.10 FCC Matters...........................................................................59
11.11 Amendment of Due Diligence Schedules..................................................59
ARTICLE 12 Indemnification.................................................................................60
12.1 Survival; Etc.........................................................................60
(a) Breach................................................................................60
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(b) Survival..............................................................................60
(c) Survival of Representations and Warranties............................................60
12.2 Indemnities...........................................................................61
(a) Indemnification of UbiquiTel..........................................................61
(b) UbiquiTel Parent's Indemnification....................................................62
12.3 Limitations on Indemnities............................................................62
(a) Basket................................................................................62
(b) Escrow and Maximum Indemnification Amount.............................................62
(c) No Limitations on Tax Indemnifications................................................63
(d) Damages...............................................................................63
(e) Exclusivity...........................................................................63
12.4 Notice and Opportunity to Defend......................................................63
(a) Claim Notices, Etc....................................................................63
(b) Defense Costs.........................................................................64
(c) Third Party Claims....................................................................64
12.5 Delays or Omissions, Etc..............................................................64
12.6 Governing Law.........................................................................64
12.7 Dispute Resolution....................................................................65
(a) Arbitration...........................................................................65
(b) Emergency Relief......................................................................65
ARTICLE 13 Miscellaneous...................................................................................66
13.1 Successors and Assigns................................................................66
13.2 Entire Agreement......................................................................66
13.3 Amendment.............................................................................66
13.4 Extension; Waiver.....................................................................66
13.5 Notices, Etc..........................................................................66
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13.6 Third Party Beneficiary, Etc..........................................................73
13.7 Reformation; Severability.............................................................73
13.8 Counterparts..........................................................................73
13.9 Titles and Subtitles..................................................................73
13.10 Expenses..............................................................................73
13.11 Responsibility for Merger Sub Obligations.............................................74
13.12 Confidentiality.......................................................................74
(a) Post-Signing Confidentiality..........................................................74
(b) Post-Closing Confidentiality..........................................................74
INDEX OF EXHIBITS AND SCHEDULES
Exhibit 1.2................ Merger Consideration
Exhibit 1.2(b)(ii)(B)(i)... Estimated Net Assets Statement
Exhibit 1.2(b)(ii)(B)(ii).. Remaining ▇▇▇▇▇ Stockholders
Exhibit 2.1(e)............. Proxy
Exhibit 1.4................ PAR Plan
Exhibit 2.2(f)............. Officer and Director Resignations and Releases
Exhibit 2.2(g)............. Stockholder Releases
Exhibit 2.4(c)............. Lock-Up Agreement
Exhibit 2.4(d)............. Escrow Agreement
Exhibit 11.9............... Guarantees to be Released
LLC Disclosure Schedule
Stockholders Disclosure Schedule
UbiquiTel Disclosure Schedule
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DEFINED TERMS
AAA.........................................................................65
Accounts....................................................................26
accumulated funding deficiency..............................................35
Affiliate...................................................................25
Affiliated Group............................................................55
Aggregate Merger Consideration...............................................3
Agreement....................................................................1
amount of unfunded benefit liabilities......................................35
Approvals...................................................................15
Asserted Liability..........................................................63
▇▇▇▇▇▇.......................................................................1
Basket......................................................................62
BFI..........................................................................1
Breach......................................................................60
CCC..........................................................................3
CFT Deduction...............................................................58
CFT Payment.................................................................58
Closing..................................................................8, 12
Closing Date.................................................................3
Code........................................................................32
Combined Company............................................................34
Companies...................................................................22
Company.....................................................................22
Consents....................................................................15
Contracts...............................................................29, 30
Controlling ▇▇▇▇▇ Stockholders...............................................2
Controlling ▇▇▇▇▇ Stockholders Indemnification Agreement....................12
Copyrights..................................................................28
Credit Agreement............................................................19
CVC..........................................................................1
CVC Merger...................................................................3
▇. ▇▇▇▇▇▇▇▇..................................................................1
Default.....................................................................30
Defense Costs...............................................................64
disqualified person.........................................................34
Effective Date...............................................................3
employee benefit plan.......................................................34
Employee Benefit Plans......................................................34
Environmental Claim.........................................................38
Environmental Laws..........................................................37
Equipment Leases............................................................26
ERISA.......................................................................34
ERISA Affiliate.............................................................34
Escrow Account...............................................................7
Escrow Agreement............................................................12
Escrow Amount................................................................7
Estimated Net Assets Statement...............................................4
▇▇▇▇▇........................................................................1
▇▇▇▇▇ ▇▇.....................................................................2
▇▇▇▇▇ Merger.................................................................3
▇▇▇▇▇ Pre-Acquisition Period................................................58
▇▇▇▇▇ Pre-Closing Periods...................................................56
▇▇▇▇▇ Representative........................................................16
▇▇▇▇▇ Stock..................................................................4
▇▇▇▇▇ Stockholders...........................................................4
▇▇▇▇▇ Straddle Periods......................................................56
▇▇▇▇▇ Telco Businesses.......................................................3
▇▇▇▇▇ Telco Sale Agreement..................................................43
▇▇▇▇▇ Trust..................................................................2
Event of Default............................................................30
Exchange Act................................................................45
FCC.........................................................................13
Financial Statements........................................................40
FIT Refund..................................................................58
Form S-4....................................................................49
GAAP........................................................................24
Good Standing Certificate...................................................10
Hazardous Materials.........................................................38
▇▇▇▇▇▇ Trust.................................................................2
HSR Act.....................................................................13
Indemnified Party...........................................................63
Indemnifying Party..........................................................63
Intellectual Property.......................................................28
Interest Sale................................................................6
IPLLC........................................................................1
KCI..........................................................................1
Kerman.......................................................................1
Kerman Merger................................................................2
Labor Claims................................................................34
Laws........................................................................27
Leased Premises.............................................................27
Lender......................................................................30
Lessors.....................................................................27
Licenses....................................................................36
Liens.......................................................................26
LLC..........................................................................1
LLC Disclosure Schedule.....................................................22
LLC Financial Statements....................................................24
DEFINED TERMS
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LLC Indemnitors.............................................................61
LLC Interests................................................................2
LLC Mandatory Consents......................................................15
LLC Material Adverse Change.................................................14
LLC Parties..................................................................2
LLC Parties Closing Certificate..............................................9
LLC Parties Consents........................................................14
LLC Parties Indemnitees.....................................................62
LLC Subsidiary..............................................................23
LLC's knowledge.............................................................22
Loan Agreement..............................................................11
Lock-Up Agreement...........................................................11
Loss........................................................................61
Losses......................................................................61
▇. ▇▇▇▇▇▇▇▇..................................................................1
Management Agreement........................................................11
Mandatory Consents..........................................................17
Marks.......................................................................28
Maximum Indemnification Amount..............................................62
Member.......................................................................1
Member Post-Closing Period..................................................54
Member Pre-Closing Period...................................................52
Member Representative.......................................................54
Members......................................................................1
Members Committee...........................................................20
Member's Interest............................................................2
Members' Interests...........................................................2
Members Representative......................................................16
Merger Consideration.........................................................3
Merger Sub...................................................................1
Merger Sub I.................................................................1
Merger Sub II................................................................1
Merger Sub III...............................................................1
Merger Sub IV................................................................1
Merger Sub V.................................................................1
Merger Sub VI................................................................1
Merger Subs..................................................................1
Mergers......................................................................3
Multiemployer Plan..........................................................34
Net Assets...................................................................4
Net Assets Statement.........................................................5
Order.......................................................................32
Organizational Documents....................................................23
Outside Confidentiality Agreement...........................................33
PAR Plan.....................................................................7
Parent......................................................................55
Paribas.....................................................................15
Paribas Consent.............................................................17
PARs.........................................................................7
Parties......................................................................1
Party........................................................................1
party in interest...........................................................34
Patents.....................................................................28
Paying LLC Indemnitor.......................................................61
Paying Stockholder Group Indemnitor.........................................61
PC4..........................................................................1
PC4 Merger...................................................................2
PCS..........................................................................1
PCS Licenses................................................................36
PCS Merger...................................................................2
Pension Plan................................................................35
Permits.....................................................................14
Permitted Liens.............................................................26
Person......................................................................25
Personal Property...........................................................26
Pinnacles....................................................................1
Pinnacles Merger.............................................................2
Policies....................................................................33
Post-Acquisition Period.....................................................58
Post-Closing Periods........................................................58
Prior Policies..............................................................33
Proceedings.................................................................32
prohibited transaction......................................................34
Proxy Statement.............................................................49
PTC..........................................................................1
Ramyar.......................................................................1
RCBM.........................................................................1
Real Estate Contracts.......................................................27
Real Property...............................................................26
Related Agreements..........................................................11
Remaining ▇▇▇▇▇ Stockholders.................................................4
Remaining LLC Indemnitors...................................................61
Remaining Stockholder Group Indemnitors.....................................61
reportable event............................................................35
Representatives.............................................................48
Resale Registration Statement...............................................49
Respondent..................................................................65
Revised Net Assets Statement.................................................5
RTFC Loan Agreement.........................................................30
S&K..........................................................................1
DEFINED TERMS
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SEC.........................................................................13
SEC Documents...............................................................45
SEC Filing Date.............................................................49
Securities Act..............................................................13
Selling Member...............................................................1
Signing Date.................................................................1
Sprint Affiliation Agreement................................................25
Stock........................................................................5
Stockholder Entity..........................................................39
Stockholder Group...........................................................39
Stockholder Group Indemnified Claim.........................................61
Stockholder Group Indemnitors...............................................61
Stockholders.................................................................1
Stockholders Disclosure Schedule............................................39
Straddle Periods............................................................52
Subordination Agreement.....................................................11
Survival Period.............................................................60
Tax.........................................................................32
Tax Returns.................................................................32
Taxes.......................................................................32
Technology Contracts........................................................28
Termination Date............................................................21
Testamentary Trust...........................................................2
Tower Leases................................................................28
Trade Secrets...............................................................28
Twenty Day Average Closing Price............................................62
UbiquiTel....................................................................1
UbiquiTel Closing Certificate...............................................10
UbiquiTel Confidential Information..........................................74
UbiquiTel Consents..........................................................45
UbiquiTel Disclosure Schedule...............................................44
UbiquiTel Indemnitees.......................................................61
UbiquiTel Indemnitors.......................................................62
UbiquiTel Legal Requirements................................................46
UbiquiTel Mandatory Consents................................................17
UbiquiTel Material Adverse Change...........................................16
UbiquiTel Parent.............................................................1
UbiquiTel Stock..............................................................3
UbiquiTel Stockholders' Meeting.............................................50
Vilas Trust..................................................................2
Voting Agreement............................................................20
welfare benefit plans.......................................................35
DEFINED TERMS
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MERGER AGREEMENT
This MERGER AGREEMENT (this "AGREEMENT") is entered into as of February
22, 2001 (the "SIGNING DATE"), by and among the following parties (each a
"PARTY," and collectively, the "PARTIES"):
UBIQUITEL INC.:
1. UbiquiTel Inc., a Delaware corporation ("UBIQUITEL PARENT"),
UBIQUITEL OPERATING COMPANY:
1. UbiquiTel Operating Company, a Delaware corporation and a wholly-owned
subsidiary of UbiquiTel Parent ("UBIQUITEL"),
UBIQUITEL AFFILIATES (INDIVIDUALLY, A "MERGER SUB" AND COLLECTIVELY, THE "MERGER
SUBS"):
1. UVMS I, Inc., a California corporation and wholly-owned subsidiary of
UbiquiTel Parent ("MERGER SUB I"),
2. UVMS II, Inc., a California corporation and wholly-owned subsidiary of
UbiquiTel Parent ("MERGER SUB II"),
3. UVMS III, Inc., a California corporation and wholly-owned subsidiary
of UbiquiTel Parent ("MERGER SUB III"),
4. UVMS IV, Inc., a California corporation and wholly-owned subsidiary of
UbiquiTel Parent ("MERGER SUB IV"),
5. UVMS V, Inc., a California corporation and wholly-owned subsidiary of
UbiquiTel Parent ("MERGER SUB V"),
6. UVMS VI, Inc., a California corporation and wholly-owned subsidiary of
UbiquiTel Parent ("MERGER SUB VI"),
LLC:
1. VIA Wireless, LLC, a California limited liability company ("LLC"),
THE MEMBERS OF LLC (INDIVIDUALLY, A "MEMBER" AND COLLECTIVELY, THE "MEMBERS"):
1. Central Valley Cellular, Inc., a California corporation ("CVC"),
2. Ponderosa Cellular 4, Inc., a California corporation ("PC4"),
3. Personal Communications Service, Inc., a California corporation
("PCS"),
4. Pinnacles PCS, Inc., a California corporation ("PINNACLES"),
5. Kerman Communication Technologies, Inc., a California corporation
("KERMAN"),
6. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & Associates, L.P., a California limited partnership
("SELLING MEMBER"),
THE PARTIES CONTROLLING THE MEMBERS (THE "STOCKHOLDERS"):
1. ▇.▇. ▇▇▇▇▇ Inc., a California corporation and the sole stockholder of
CVC ("▇▇▇▇▇"),
2. The Ponderosa Telephone Co., a California corporation and sole
stockholder of PC4 ("PTC"),
3. RCBM, LLC, a California limited liability company and a stockholder of
PCS ("RCBM"),
4. Ramyar, LLC, a California limited liability company and a stockholder
of PCS ("RAMYAR"),
5. Instant Phone, LLC, a California limited liability company and a
stockholder of PCS ("IPLLC"),
6. ▇▇▇▇▇ Family, Inc., a California corporation and sole stockholder of
Pinnacles ("BFI"),
7. Kerman Communications, Inc., a California corporation and a
stockholder of Kerman ("KCI"),
8. ▇▇▇▇▇▇ Family Limited Partnership, a California family limited
partnership and a stockholder of Kerman ("▇▇▇▇▇▇"),
9. S&K ▇▇▇▇▇ Family Limited Partnership, a California family limited
partnership and a stockholder of Kerman ("S&K"),
10. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, an individual resident of the State of California
and a general partner of the Selling Member ("▇. ▇▇▇▇▇▇▇▇"),
11. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, an individual resident of the State of California
and a general partner of the Selling Member ("▇. ▇▇▇▇▇▇▇▇"),
THE PARTIES CONTROLLING ▇▇▇▇▇ (THE "CONTROLLING ▇▇▇▇▇ STOCKHOLDERS"):
1. Irrevocable Trust Under the Will of ▇▇▇▇ ▇. ▇▇▇▇▇, a California
testamentary trust ("TESTAMENTARY TRUST"),
2. ▇.▇. ▇▇▇▇▇ Family Limited Partnership, a California limited
partnership ("▇▇▇▇▇ ▇▇"),
3. ▇▇▇▇ ▇▇▇▇▇ Vilas 1990 Trust, a California inter vivos irrevocable
trust ("VILAS TRUST")
4. The ▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇ Charitable Remainder Trust II, a California
inter vivos irrevocable trust ("▇▇▇▇▇▇ TRUST"), and
5. The ▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇ Charitable Remainder Trust II, a California
inter vivos irrevocable trust (the "▇▇▇▇▇ TRUST").
R E C I T A L S
A. The Members own, in the aggregate, all of the issued and outstanding
units of membership interests of LLC (the "LLC INTERESTS"), consisting
in the aggregate of 1,383,737 units (the authorized membership
interests of LLC, whether or not owned by a Member being referred to
individually as a "MEMBER'S INTEREST" and collectively as the "MEMBERS'
INTERESTS"). LLC, LLC Subsidiary (as defined in Section 6.1(c)
(SUBSIDIARY) herein), the Members, the Stockholders and, if Merger Sub
V merges into ▇▇▇▇▇, the Controlling ▇▇▇▇▇ Stockholders are sometimes
collectively referred to herein as the "LLC PARTIES."
B. The Parties deem it advisable and in their respective best interests to
enter into the transactions contemplated hereby.
C. The Parties acknowledge that they have received adequate consideration
for entering into, and have relied upon the promises, covenants,
representations and warranties contained in, this Agreement, and that
they will be benefited by the transactions contemplated herein.
A G R E E M E N T
Based on the recitals set forth above and the representations,
warranties, covenants and agreements contained herein, the Parties, intending to
be legally bound, agree as follows:
ARTICLE 1
TRANSACTIONS
1.1 THE MERGERS.
(a) THE MERGERS.
Upon the terms and subject to the conditions set forth in this
Agreement, on the Effective Date (as defined in Section 1.1(c) herein):
1. Merger Sub I shall merge with and into PC4
(the "PC4 MERGER");
2. Merger Sub II shall merge with and into PCS
(the "PCS MERGER");
3. Merger Sub III shall merge with and into
Pinnacles (the "PINNACLES MERGER");
4. Merger Sub IV shall merge with and into Kerman
(the "KERMAN MERGER"); and
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5. If ▇▇▇▇▇ no longer owns the ▇▇▇▇▇ Telco
Businesses (as defined below), Merger Sub V
shall merge with and into ▇▇▇▇▇ (the "▇▇▇▇▇
MERGER"), and if ▇▇▇▇▇ owns the ▇▇▇▇▇ Telco
Businesses, Merger Sub V shall merge with
and into CVC (the "CVC MERGER").
The foregoing mergers collectively are referred to herein as the "MERGERS." From
and after the Effective Date, the separate existence of the Merger Subs shall
cease and PC4, PCS, Pinnacles, Kerman, and either CVC or ▇▇▇▇▇, as the case may
be, shall continue as the surviving corporations in the Mergers, and shall
continue to be governed by the laws of the State of California. The capital
stock of all of the subsidiaries of ▇▇▇▇▇ other than CVC, and all businesses,
assets, rights, liabilities and obligations of ▇▇▇▇▇ and its subsidiaries of any
character whatsoever, other than the capital stock of CVC that ▇▇▇▇▇ owns,
collectively are referred to herein as the "▇▇▇▇▇ TELCO BUSINESSES."
(b) CONSUMMATION OF THE MERGERS.
The Mergers shall be consummated by filing Agreements of Merger with
the Secretary of State of the State of California, together with all other
documents, notices and filings required by the California Corporations Code
("CCC").
(c) EFFECTIVE DATE OF THE MERGERS.
The Agreements of Merger shall provide that the Mergers shall be
effective as of the date set forth in the Agreements of Merger filed with the
Secretary of State of the State of California (the "EFFECTIVE DATE").
(d) EFFECT OF THE MERGERS.
At the Effective Date, the effect of each Merger shall be as provided
in Section 1107 of the CCC.
(e) THE SURVIVING CORPORATIONS' CERTIFICATES OF
INCORPORATION; BYLAWS; DIRECTORS AND OFFICERS.
The certificates of incorporation and bylaws of the surviving
corporations, in each case as in effect on the Effective Date, shall be the
certificates of incorporation and bylaws of Merger Sub I, Merger Sub II, Merger
Sub III, Merger Sub IV and Merger Sub V, respectively, except that the first
Article of each such certificate of incorporation shall be amended to amend the
name of the surviving corporation. As of the Effective Date, the Boards of
Directors and officers of each of Merger Sub I, Merger Sub II, Merger Sub III,
Merger Sub IV and Merger Sub V shall be the Boards of Directors and officers of
each of the respective surviving corporations.
1.2 MERGER CONSIDERATION.
(a) AGGREGATE MERGER CONSIDERATION.
The aggregate consideration payable to the Stockholders (excluding the
stockholder of CVC and including the ▇▇▇▇▇ Stockholders (as defined in Section
1.2(b)(ii)(B)(I)), in the event the ▇▇▇▇▇ Merger occurs) in connection with the
Mergers and the Interest Sale (as defined in Section 1.3(a) herein)
(collectively, the "AGGREGATE MERGER CONSIDERATION"; references herein to a
Person's individual portion of the Aggregate Merger Consideration are referred
to as such Person's "MERGER CONSIDERATION") shall be 16,350,491 shares of duly
authorized, validly issued, fully paid and nonassessable shares of UbiquiTel
Parent's common stock, par value $0.0005 per share (the "UBIQUITEL STOCK"), plus
any additional shares
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of UbiquiTel Stock required to be allocated hereunder pursuant to Section
1.4, along with any dividends or distributions thereon after the Effective
Date.
(b) CONSIDERATION FOR INDIVIDUAL MERGERS.
(i) Subject to the provisions of Section 1.2(b)(ii),
the capital stock of the Members participating in the Mergers which are issued
and outstanding immediately prior to the Effective Date shall, on the Effective
Date, by virtue of the Merger and without any action on the part of the holders
thereof, be converted into the right to receive the number of shares of
UbiquiTel Stock, along with any dividends or distributions thereon after the
Effective Date, as set forth on EXHIBIT 1.2 attached hereto.
(ii) CONSIDERATION FOR THE ▇▇▇▇▇ MERGER. If the ▇▇▇▇▇
Merger occurs under Section 1.1(a) hereof (in lieu of the CVC Merger), then each
share of common stock of ▇▇▇▇▇ (the "▇▇▇▇▇ STOCK") issued and outstanding
immediately prior to the Effective Date shall, on the Effective Date, by virtue
of the ▇▇▇▇▇ Merger and without any action on the part of the holders thereof,
be converted into the following:
(A) UBIQUITEL STOCK.
The right to receive a number of shares of UbiquiTel Stock, along with
any dividends or distributions thereon after the Effective Date, determined in
accordance with the provisions of EXHIBIT 1.2.
(B) NET ASSETS CONSIDERATION.
The right to receive an amount of cash equal to the Net Assets (as
defined herein) divided by the total number of ▇▇▇▇▇ shares issued and
outstanding at the EFFECTIVE DATE (the "Net Assets Consideration"). The Net
Assets Consideration shall be paid to the ▇▇▇▇▇ Stockholders (as defined below)
on the Effective Date, except that the amount of cash and cash equivalents in
the RTFC escrow shall be paid only when it has been received by UbiquiTel, all
pursuant to Section 2.1(g). "NET ASSETS" shall mean cash and cash equivalents of
▇▇▇▇▇ and its subsidiaries as of the EFFECTIVE DATE, plus the amount of any Tax
refunds or overpayments to which ▇▇▇▇▇ and its subsidiaries are entitled as of
the EFFECTIVE DATE minus liabilities of ▇▇▇▇▇ and its subsidiaries as of the
EFFECTIVE DATE, including the liability for Taxes of ▇▇▇▇▇ and its subsidiaries,
but not including any deferred Tax liabilities as determined in accordance with
generally accepted accounting principles.
(I) CALCULATION AND PAYMENT OF NET ASSETS.
EXHIBIT 1.2(b)(ii)(B)(I) presents ▇▇▇▇▇' good faith estimate of the Net
Assets (the "ESTIMATED NET ASSETS STATEMENT"). Between the date hereof and the
PRE-CLOSING DATE (as defined in Section 2.1), ▇▇▇▇▇ and UbiquiTel Parent shall
cooperate in an effort to reach agreement on the amount of the assets and
liabilities to be set forth on the Net Assets Statement (as defined in (II)
below) to be delivered by ▇▇▇▇▇ at the PRE-CLOSING (as defined in Section 2.1).
To this end, the Controlling ▇▇▇▇▇ Stockholders and the remaining stockholders
of ▇▇▇▇▇ (as identified on EXHIBIT 1.2(b)(ii)(B)(II) attached hereto (the
"REMAINING ▇▇▇▇▇ STOCKHOLDERS," and together with the Controlling ▇▇▇▇▇
Stockholders, the "▇▇▇▇▇ STOCKHOLDERS")) shall cause ▇▇▇▇▇ to cooperate fully
with UbiquiTel Parent and its tax advisers, and shall promptly provide UbiquiTel
Parent with all information, records, tax returns, work papers, and access to
▇▇▇▇▇' tax advisers as is necessary to enable UbiquiTel Parent to understand the
basis for ▇▇▇▇▇' calculations.
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(II) CLOSING NET ASSETS STATEMENT.
Prior to the PRE-CLOSING DATE, the ▇▇▇▇▇ Representative (as defined in
Section 3.3 (LLC PARTIES' CONDITIONS TO CLOSING) herein) shall deliver to
UbiquiTel Parent a statement of the Net Assets dated as of the close of business
on the day immediately preceding the PRE-CLOSING DATE (the "NET ASSETS
STATEMENT"). The Net Assets Statement shall be prepared in accordance with the
same principles, methods and procedures used in the preparation of the Estimated
Net Assets Statement. If UbiquiTel Parent agrees with the Net Assets Statement
as delivered by the ▇▇▇▇▇ Representative, it shall so signify by initialing the
same. If it disagrees with the Net Assets Statement it shall, on or before the
PRE-CLOSING DATE, deliver to the ▇▇▇▇▇ Representative a revised net assets
statement (the "REVISED NET ASSETS STATEMENT"). If UbiquiTel Parent delivers to
the ▇▇▇▇▇ Representative a Revised Net Assets Statement, then the amount of the
difference between the liabilities shown on the Net Assets Statement and the
liabilities shown on the Revised Net Assets Statement shall be deposited by
UbiquiTel Parent in a separate interest-bearing account until the filing of the
tax returns described in Section 11.7 (TAX MATTERS IN ▇▇▇▇▇ MERGER) herein.
(III) PAYMENT OF TAX RETURN ADJUSTMENT AMOUNT.
Within 5 days after the filing of the Tax Returns described in Section
11.7, (i) UbiquiTel shall pay to the ▇▇▇▇▇ Representative the amount (including
the amounts, if any, deposited in a separate account pursuant to (II) above and
interest thereon), if any, by which the amount of Net Assets, as adjusted for
Taxes for which the ▇▇▇▇▇ Stockholders are responsible under Section 11.7 and
Tax refunds or Tax overpayments to which ▇▇▇▇▇ or its subsidiaries was entitled
as of the EFFECTIVE DATE, in either case, only to the extent not previously
taken into account in determining the Net Assets, exceeds the amount of the Net
Assets as set forth on the Net Assets Statement or Revised Net Assets Statement
above, or (ii) the ▇▇▇▇▇ Representative shall pay to UbiquiTel the amount (with
a credit for the amounts, if any, deposited in a separate account pursuant to
(II) above), if any, by which Net Assets, as adjusted for Taxes for which the
▇▇▇▇▇ Stockholders are responsible under Section 11.7 and Tax refunds or Tax
overpayments to which ▇▇▇▇▇ or its subsidiaries was entitled as of the EFFECTIVE
DATE, in either case, only to the extent not previously taken into account in
determining the Net Assets, is less than the Net Assets as set forth on the Net
Assets Statement or Revised Net Assets Statement above. If any Tax refund is
taken into account in the calculation of the Net Assets, UbiquiTel Parent or
▇▇▇▇▇, as the case may be, shall make any payment attributable thereto within
ten (10) days following the date on which UbiquiTel Parent or ▇▇▇▇▇ actually
receives the refund. Payments, if any, pursuant to this Section 1.2 shall be
made by wire transfer of immediately available funds. The Parties shall treat
any payment made pursuant to this paragraph (III) as an adjustment to the Merger
Consideration for all purposes.
(c) RIGHTS AS HOLDERS.
On and after the Effective Date, holders of stock of the Members
(including the ▇▇▇▇▇ Stockholders in lieu of the CVC stockholder if the ▇▇▇▇▇
Merger occurs) shall cease to have any rights as stockholders except the right
to receive the Merger Consideration set forth in this Section 1.2 with respect
to shares of the Members' or ▇▇▇▇▇', as the case may be, stock held by them (all
of such stock being referred to herein as "STOCK"). The Merger Consideration
paid upon the surrender for exchange of Stock in accordance with the terms of
this Agreement shall be deemed, when paid or issued hereunder, to have been paid
or issued, as the case may be, in full satisfaction of all rights pertaining to
such Stock or UbiquiTel Stock.
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(d) ANTI-DILUTION.
(i) In the event of any stock dividend, stock split,
reclassification, recapitalization, combination or exchange of shares with
respect to, or rights issued to all UbiquiTel Parent stockholders in respect
of, UbiquiTel Stock on or after the date hereof and prior to the Effective
Date, the consideration payable in the Mergers and to the Selling Member shall
be adjusted accordingly.
(ii) UbiquiTel Parent and UbiquiTel each agree that
they shall not take any action for the purposes of avoiding the provisions of
this Section 1.2(d). In the event that UbiquiTel Parent or UbiquiTel shall
enter into any transaction which is for the purpose of, or which results in,
the avoidance of the provisions of this section, the benefits provided by this
section shall nevertheless apply and be preserved.
(e) TREASURY STOCK.
All shares of capital stock of the Members or ▇▇▇▇▇, as the case may
be, that are held as treasury stock shall, on the Effective Date, be canceled
and retired and shall cease to exist, and no shares of UbiquiTel Stock or other
consideration shall be delivered or owing in exchange therefor.
1.3 PURCHASE OF LLC INTEREST FROM THE SELLING MEMBER.
(a) PURCHASE AND SALE.
At the CLOSING, the Selling Member agrees to sell, and UbiquiTel Parent
agrees to cause Merger Sub VI to purchase, all of the LLC Interest held by the
Selling Member for the consideration determined in accordance with the
provisions of EXHIBIT 1.2 attached hereto. The purchase and sale of the LLC
Interest by the Selling Member to Merger Sub VI herein is referred to as the
"INTEREST SALE."
(b) PURCHASE PRICE.
The purchase price for the LLC Interest included in the Interest Sale
shall be the number of duly authorized, validly issued, fully paid and
non-assessable shares of UbiquiTel Stock, along with any dividends or
distributions thereon after the Effective Date determined in accordance with
the provisions of EXHIBIT 1.2 attached hereto.
(c) DELIVERIES.
At the Pre-CLOSING, the Selling Member shall execute and deliver to
▇▇▇▇▇▇▇▇▇ Traurig, to hold in escrow pursuant to Section 2.1(c), documents of
transfer in a form reasonably required by Merger Sub VI, and the Selling Member
shall execute such additional agreements, including without limitation,
amendments to the Operating Agreement, as shall reasonably be deemed to be
appropriate and necessary in order to transfer the LLC Interest being sold by
the Selling Member. The Selling Member's LLC Interest shall be transferred at
CLOSING by delivery of such documents of transfer to Merger Sub VI.
(d) CONDITIONS TO CONSUMMATING THE INTEREST SALE.
The obligations of Merger Sub VI or UbiquiTel Parent and the Selling
Member to consummate the Interest Sale are conditioned on the CLOSING of the
Mergers.
1.4 PERFORMANCE UNIT APPRECIATION RIGHTS PLAN.
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EXHIBIT 1.4 lists the holders of the 8,750 LLC Performance Unit
Appreciation Rights ("PARS") currently outstanding under LLC's Performance Unit
Appreciation Rights Plan (the "PAR PLAN"), and the number of PARs held by each
such holder. At the Effective Date, LLC shall terminate its PAR Plan, and each
holder of PARs shall become entitled to receive, in substitution for the PARs
previously held by each such holder and subject to the provisions of this
Section 1.4, the number of shares of UbiquiTel Stock set forth opposite each
holder's name on EXHIBIT 1.4. All of such shares shall be issued to the former
PAR holders at the CLOSING DATE, and one-half of such shares shall be
distributed to each such holder on the CLOSING DATE. The other half of such
shares shall be distributed to each such holder on the date that is 180 days
following the CLOSING DATE; PROVIDED, HOWEVER, that if any such holder
voluntarily terminates his employment with UbiquiTel prior to such 180th day
following the CLOSING DATE, such one-half of such holder's shares shall be
forfeited and shall be cancelled unilaterally by UbiquiTel Parent (or its
transfer agent) on its stock transfer records. During such 180 days, each such
holder shall be entitled to vote the shares that have not been distributed to
him or her, to receive dividends on such shares, and to all other beneficial
rights as owner of such shares (other than the right to transfer, sell or
otherwise dispose of such shares). If any shares of UbiquiTel Stock are
forfeited hereunder by one or more holders because any such holder has
voluntarily terminated its employment with UbiquiTel prior to the 180th day
following the CLOSING DATE, such shares, after cancellation by UbiquiTel Parent
(or its transfer agent), shall be redistributed instead to the Stockholders and
the Selling Member, proportionately based on the total number of shares of
UbiquiTel Stock to be received by such Person in accordance with the provisions
of EXHIBIT 1.2. Each holder listed on EXHIBIT 1.4 shall be a third-party
beneficiary of the agreements of UbiquiTel set forth in this Section 1.4,
entitled to enforce the same for his benefit.
1.5 NO FRACTIONAL SHARES.
No certificates representing fractional shares of UbiquiTel Stock
shall be issued upon the surrender for exchange of Stock or the LLC Interests,
and such fractional share interests shall not entitle the owner thereof to vote
or to have any rights of a stockholder of UbiquiTel Parent. In lieu of any such
fractional shares, each holder of Stock or the LLC Interests who would
otherwise have been entitled to a fraction of a share of UbiquiTel Stock will
receive a full share of UbiquiTel Stock, if the fraction is one-half or
greater, and shall not receive such fractional share, if the fraction is less
than one-half.
1.6 ESCROW OF SHARES.
On the CLOSING DATE, and subject to the terms and conditions set forth
in the Escrow Agreement (as defined in Section 2.4(d) (ESCROW AGREEMENT)
herein), the Stockholders (except for ▇▇▇▇▇ and including the Controlling ▇▇▇▇▇
Stockholders, if the ▇▇▇▇▇ Merger occurs) and the Selling Member shall deposit
into the escrow created by the Escrow Agreement (the "ESCROW ACCOUNT") the
aggregate amount of 2,000,000 shares of UbiquiTel Stock (the "ESCROW AMOUNT");
and each Stockholder (except for ▇▇▇▇▇ and including the Controlling ▇▇▇▇▇
Stockholders, if the ▇▇▇▇▇ Merger occurs) and the Selling Member will deposit
the number of shares set forth in Exhibit 1.2. The Escrow Amount shall be held
and disbursed in accordance with the Escrow Agreement and Sections 3.2(a)(LLC
PARTIES' REPRESENTATIONS TRUE) and 12.3 (LIMITATIONS ON INDEMNITIES) of this
Agreement.
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ARTICLE 2
TRANSACTION PRE-CLOSING AND CLOSING
2.1 PRE-CLOSING.
(a) PRE-CLOSING DATE.
Unless this Agreement has been terminated pursuant to the provisions
of Article 5 (TERMINATION), the PRE-CLOSING of the Mergers (the "PRE-CLOSING")
shall take place on the third business day after the satisfaction or written
waiver of the conditions (other than the execution or delivery of agreements,
certificates, legal opinions or other instruments to be delivered at the
Pre-CLOSING) contained herein; PROVIDED, HOWEVER, that if on such date ▇▇▇▇▇
still owns the ▇▇▇▇▇ Telco Businesses, then, at ▇▇▇▇▇' discretion, it can
extend the PRE-CLOSING to a date which is three (3) days after the sale of the
▇▇▇▇▇ Telco Businesses, but in no event shall ▇▇▇▇▇ be permitted to extend the
PRE-CLOSING (for this reason) after June 30, 2001. The date of the PRE-CLOSING
shall be the PRE-CLOSING DATE. UbiquiTel Parent and LLC shall exercise
commercially reasonable efforts to give advance notice of the proposed
PRE-CLOSING DATE as soon as such date is ascertainable. The PRE-CLOSING shall
take place at the offices of ▇▇▇▇▇▇▇▇▇ Traurig, LLP, counsel to UbiquiTel
Parent, located at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, at 10:00 a.m.,
local time, or at such other place or by such other means as the Parties hereto
may agree.
(b) INTENTIONALLY OMITTED.
(c) DELIVERY OF CLOSING DOCUMENTS INTO ESCROW.
At the Pre-Closing, (i) the LLC Parties shall deliver to ▇▇▇▇▇▇▇▇▇
Traurig, to hold as escrow agent for UbiquiTel until the Closing, all of the
documents specified in Section 2.2 and those specified in Section 2.4 to be
delivered by any of the LLC Parties, and (ii) UbiquiTel Parent shall deliver to
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, L.L.P., to hold as escrow agent for the LLC Parties
until the Closing, (A) all of the documents specified in Section 2.3 and those
specified in Section 2.4 to be delivered by UbiquiTel, and (B) fully executed
counterparts of the Agreements of Mergers for the Mergers to be filed with the
California Secretary of State. With respect to the documents described in the
foregoing clauses (i) and (ii)(A), all of such documents so delivered shall be
dated as of the Pre-Closing Date and shall be delivered on the Closing Date
without redating or modification.
(d) SPECTRUM TRANSITION.
Immediately following the PRE-CLOSING DATE, UbiquiTel shall take such
steps, all at its sole cost and expense, as may be necessary promptly to
implement and complete the Spectrum Transition (as defined in Addendum VI to
the UbiquiTel Sprint Management Agreement). LLC shall take all necessary
actions and provide access to its properties for the purpose of enabling
UbiquiTel to complete the Spectrum Transition.
(e) PROXY OF THE MEMBERS OF LLC.
On the PRE-CLOSING DATE, each Member of LLC shall, and the
Stockholders controlling such Member shall cause such Member to, execute an
irrevocable proxy in the form attached as Exhibit 2.1(e) giving UbiquiTel the
right to vote all Members' Interests then owned by such Member during the
PRE-CLOSING Period. The Parties acknowledge, and agree not to contest, that
such irrevocable proxy is intended to be an irrevocable appointment of a proxy
for all purposes pursuant to Section 705(e)(2) of the CCC.
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(f) PRE-CLOSING COVENANTS.
In addition to the covenants and warranties of the Parties set forth
elsewhere in this Agreement, and as a special covenant related solely to the
period between the PRE-CLOSING DATE and the CLOSING DATE (the "PRE-CLOSING
Period"), each Party covenants, warrants, and agrees that he, she, or it will
take no action or forego to take any actions during the PRE-CLOSING Period that
would cause any representation or warranty set forth in this Agreement on
behalf of such Party or any Affiliate of such Party to become untrue or
inaccurate, or that would be inconsistent with any such representation or
warranty, or that would cause any document delivered pursuant to Section 2.1(c)
on behalf of such Party or an Affiliate of such Party to become untrue or
inaccurate or that would be inconsistent with any such document.
(g) PAYMENT OF ▇▇▇▇▇' NET ASSETS CONSIDERATION.
At the Pre-Closing, UbiquiTel or UbiquiTel Parent, as appropriate,
shall (a) irrevocably instruct the depositary selected by ▇▇▇▇▇ for deposit of
the cash that is included in the Net Assets Statement under the caption "Cash
and cash equivalents" (the "▇▇▇▇▇ Depositary") to transfer an amount equal to
(x) the Net Assets Consideration less (y) the amount of the cash and cash
equivalents then in the RTFC escrow (the "Net Assets Consideration Less RTFC
Escrow") to an account with a bank designated by UbiquiTel (the "Bank"), which
may be an existing UbiquiTel account or a newly-formed account, upon notice
from the ▇▇▇▇▇ Representative that the Agreement of Merger with respect to the
▇▇▇▇▇ Merger has been filed with the California Secretary of State, and (b)
irrevocably instruct the Bank to disburse the Net Assets Consideration Less
RTFC Escrow to the ▇▇▇▇▇ Stockholders at the CLOSING in the amounts set forth
on a schedule to be provided by the ▇▇▇▇▇ Representative at the Pre-Closing.
The ▇▇▇▇▇ Depositary shall also be irrevocably instructed to transfer the
amount of the cash and cash equivalents then in the RTFC escrow to the Bank as
soon as it is received by the ▇▇▇▇▇ Depositary, and the Bank shall be
irrevocably instructed to disburse such amount to the ▇▇▇▇▇ Stockholders in the
amounts set forth on a schedule to be provided by the ▇▇▇▇▇ Representative at
the Pre-Closing.
2.2 DELIVERIES TO UBIQUITEL.
At the PRE-CLOSING, the LLC Parties shall deliver, or cause to be
delivered, to UbiquiTel Parent the following items:
(a) PRE-CLOSING CERTIFICATE.
The LLC Parties shall jointly deliver a PRE-CLOSING certificate
executed by each of the LLC Parties in a form reasonably satisfactory to
UbiquiTel Parent (the "LLC PARTIES PRE-CLOSING CERTIFICATE").
(b) AUTHORIZING DOCUMENTS.
LLC and the Members (and ▇▇▇▇▇, if the ▇▇▇▇▇ Merger occurs) shall
deliver copies, certified or otherwise identified to UbiquiTel Parent's
reasonable satisfaction, of company documents that UbiquiTel Parent shall
reasonably request, including resolutions of LLC and resolutions of the Members
(and ▇▇▇▇▇, if the ▇▇▇▇▇ Merger occurs) authorizing this Agreement, the Related
Agreements (as defined in Section 2.4 (RELATED AGREEMENTS) hereof) and the
transactions and other acts contemplated herein and therein.
(c) CONSENTS AND APPROVALS.
The LLC Parties shall jointly deliver copies of all LLC Parties
Consents (as defined in Section 3.2(c) (LLC PARTIES CONSENTS) that have been
obtained by the LLC Parties.
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(d) GOOD STANDING CERTIFICATES.
LLC, LLC Subsidiary and the Members (and ▇▇▇▇▇, if the ▇▇▇▇▇ Merger
occurs) shall deliver certificates, issued within 10 days before the date of
the Pre-CLOSING, (i) from the respective Secretaries of State of the states of
incorporation or organization of such entities, evidencing that each is validly
existing and in good standing under the laws of its jurisdiction of
incorporation or organization, and (ii) from each state in which such entity is
qualified to do business as a foreign entity, evidencing that such entity is so
qualified and in good standing (each, a "GOOD STANDING CERTIFICATE") in each
such state.
(e) OPINIONS OF LLC PARTIES' COUNSELS.
The LLC Parties shall deliver legal opinions of (i) ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ &
▇▇▇▇▇▇, L.L.P., counsel to LLC, (ii) ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP,
counsel to ▇▇▇▇▇, (iii) counsels to each of the Members and Stockholders, and
(iv) FCC counsel to LLC, dated as of the PRE-CLOSING DATE, in form and
substance reasonably satisfactory to UbiquiTel Parent. In rendering their
opinions, such counsel may rely on the opinions of other counsel to LLC and/or
the Members with respect to certain matters included in such opinions.
(f) RESIGNATIONS AND RELEASES.
The LLC Parties shall deliver resignations and releases executed by
each officer of LLC, and each officer and director of each Member (and, if the
▇▇▇▇▇ Merger occurs, of ▇▇▇▇▇) in the form attached as EXHIBIT 2.2(f).
(g) STOCKHOLDER'S RELEASES.
The Stockholders shall deliver releases executed by each such
Stockholder in the form attached as EXHIBIT 2.2(g).
(h) OTHER INSTRUMENTS.
Such other instruments, documents or information that UbiquiTel Parent
reasonably requests in order to more effectively consummate the transactions
contemplated hereby or by the Related Agreements.
2.3 UBIQUITEL PARENT'S DELIVERIES.
At the PRE-CLOSING, UbiquiTel Parent shall deliver the following items
to the Selling Member and the Stockholders (and, if the ▇▇▇▇▇ Merger occurs, to
the ▇▇▇▇▇ Stockholders in lieu of CVC):
(a) PRE-CLOSING CERTIFICATE.
A PRE-CLOSING certificate executed by UbiquiTel Parent (the "UBIQUITEL
PRE-CLOSING CERTIFICATE"), in a form reasonably acceptable to the recipients
thereof.
(b) RESOLUTIONS.
Copies, certified or otherwise, identified to LLC's reasonable
satisfaction, of all company documents that LLC shall reasonably request,
including resolutions of the respective boards of directors of UbiquiTel Parent,
UbiquiTel and the Merger Subs, authorizing this Agreement, the Related
Agreements and the transactions and other acts contemplated either herein or
therein.
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(c) CONSENTS AND APPROVALS.
Copies of all of the UbiquiTel Consents (as defined in Section 8.2(b)
(CONSENTS OBTAINED) herein) that have been obtained, and all Approvals obtained
by UbiquiTel Parent.
(d) OPINION OF UBIQUITEL PARENT AND UBIQUITEL'S COUNSEL.
An opinion of ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, LLP, dated as of the PRE-CLOSING DATE,
in form and substance reasonably satisfactory to LLC.
(e) UBIQUITEL STOCK.
The UbiquiTel Stock to be delivered pursuant to Sections 1.2(a),
1.2(b)(ii)(A), and 1.4.
(f) OTHER INSTRUMENTS.
Such other instruments, documents or information that LLC reasonably
requests in order to more effectively consummate the transactions contemplated
hereby or by the Related Agreements.
2.4 RELATED AGREEMENTS.
The Parties, as appropriate, shall execute and deliver the following
documents, such agreements, documents or instruments executed by and among
UbiquiTel Parent, UbiquiTel and the Merger Subs, on the one hand, and the LLC
Parties, on the other hand, pursuant to this Agreement being referred to herein
as the "RELATED AGREEMENTS:"
(a) LOAN AGREEMENT AND SUBORDINATION AGREEMENT.
Concurrently with the execution of this Agreement, UbiquiTel and LLC
have entered into a loan agreement for a $25 million credit facility provided by
UbiquiTel to LLC (the "LOAN AGREEMENT") and the Members have entered into a
subordination agreement (the "Subordination Agreement").
(b) MANAGEMENT AGREEMENT.
Concurrently with the execution of this Agreement, UbiquiTel and LLC
have entered into a management agreement (the "MANAGEMENT AGREEMENT").
(c) LOCK-UP AGREEMENT.
At the Pre-CLOSING, each Stockholder (and, if the ▇▇▇▇▇ Merger occurs,
and the ▇▇▇▇▇ Stockholders in lieu of ▇▇▇▇▇) will enter into a lock-up agreement
with UbiquiTel Parent substantially in the form attached as EXHIBIT 2.4(c)
(each, a "LOCK-UP AGREEMENT"), which agreement shall restrict the sale or other
disposition of his, her or its holdings of UbiquiTel Stock without the prior
written consent of UbiquiTel Parent, as follows: 50% of the shares of UbiquiTel
Stock held by each Stockholder or the ▇▇▇▇▇ Stockholders after the PRE-CLOSING
shall be released from the restrictions on resale 90 days after the CLOSING
DATE; and 50% of the shares of UbiquiTel Stock held by each Stockholder or the
▇▇▇▇▇ Stockholders after the PRE-CLOSING shall be released from the restrictions
on resale 180 days after the CLOSING DATE. Notwithstanding the foregoing, each
Stockholder or ▇▇▇▇▇ Stockholder that is required to enter into a Lock-Up
Agreement shall have the right to pledge his, her or its UbiquiTel Stock subject
to the Lock-Up Agreement as collateral for margin loans before the restrictions
on resale imposed by the Lock-Up Agreement terminate.
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(d) ESCROW AGREEMENT.
At the Pre-CLOSING, UbiquiTel Parent, UbiquiTel and the Stockholders
(and, if the ▇▇▇▇▇ Merger occurs, the Controlling ▇▇▇▇▇ Stockholders) shall
enter into an escrow agreement in the form attached as EXHIBIT 2.4(d) (the
"ESCROW AGREEMENT") with such changes as the escrow agent named therein may
reasonably request, such Agreement to become effective at the CLOSING.
(e) INDEMNIFICATION AGREEMENT WITH CONTROLLING ▇▇▇▇▇
STOCKHOLDERS.
Concurrently with the execution of this Agreement, the Controlling
▇▇▇▇▇ Stockholders have entered into an indemnification agreement with UbiquiTel
Parent, UbiquiTel and the Merger Subs indemnifying them against any liabilities
arising out of or relating to ▇▇▇▇▇ or the operation of the business and
properties of ▇▇▇▇▇ prior to the ▇▇▇▇▇ Merger (the "Controlling ▇▇▇▇▇
Stockholders Indemnification Agreement").
2.5 CLOSING.
The closing of the Mergers (the "CLOSING") shall take place after the
Pre-Closing Date, on a date (the "CLOSING DATE") which shall be the third day
after UbiquiTel notifies the Members in writing that it has completed the
Spectrum Transition; PROVIDED, HOWEVER, that if the Members have not received
such notice by the 27th day following the Pre-Closing Date, then the Closing
Date shall be on the 30th day after the PRE-CLOSING DATE. On the CLOSING DATE,
the Members shall instruct and cause ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ to file with the
Secretary of State of the State of California the Agreements of Mergers for the
Mergers. Upon the acceptance for filing by the Secretary of State of the State
of California of such Agreements of Mergers, (a) ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ shall
notify UbiquiTel and ▇▇▇▇▇▇▇▇▇ Traurig that the Agreements of Mergers were so
accepted, and (b) promptly shall disburse to the LLC Parties those documents and
items it holds in escrow pursuant to Section 2.1(c) of this Agreement. Upon
receipt of notice by ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ that the Agreements of Mergers
were accepted for filing by the Secretary of State of the State of California,
(x) ▇▇▇▇▇▇▇▇▇ Traurig promptly shall disburse to UbiquiTel those documents and
items it holds in escrow pursuant to Section 2.1(c) of this Agreement, (y)
UbiquiTel shall cause all of the principal and accrued and unpaid interest on
the RTFC Loan to be paid off and discharged, in accordance with Section 11.5 of
this Agreement, and (z) UbiquiTel shall pay the Net Assets Consideration.
ARTICLE 3
PRE-CLOSING CONDITIONS TO CONSUMMATING THE MERGERS
3.1 JOINT CONDITIONS.
The obligations of UbiquiTel Parent, UbiquiTel, the Merger Subs and the
LLC Parties to consummate the transactions provided for in this Agreement and
the Related Agreements are subject to the satisfaction, at or prior to the
PRE-CLOSING DATE, of the following conditions:
(a) HSR ACT.
The waiting periods with respect to each of the Mergers and the
Interest Sale prescribed by the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
1976, as amended, and the rules and regulations promulgated thereunder
(collectively, the "HSR ACT") shall have expired or early termination of such
waiting periods under the HSR Act shall have been granted.
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(b) NASDAQ LISTING.
The UbiquiTel Stock shall have been approved for listing on The NASDAQ
Stock Market, subject to official notice of issuance.
(c) UBIQUITEL PARENT STOCKHOLDERS' MEETING.
UbiquiTel Parent shall have held the UbiquiTel Stockholders' Meeting
(as defined in Section 11.3 (UBIQUITEL STOCKHOLDERS' MEETING) herein) and its
stockholders shall have approved the consummation of the transactions provided
for in this Agreement and the Related Agreements.
(d) FORM S-4.
The Form S-4 (as defined in Section 11.2(a) (PREPARATION) herein) shall
have become effective under the Securities Act of 1933, as amended (the
"SECURITIES ACT"), and no stop order suspending the effectiveness of the Form
S-4 shall have been issued and no proceedings for that purpose shall have been
initiated or threatened by the United States Securities and Exchange Commission
(the "SEC").
(e) NO LITIGATION.
No preliminary injunction, order, decree or ruling shall be in effect
which restrains or prohibits the execution and delivery of this Agreement, any
Related Agreement or the consummation of the transactions contemplated by any of
the foregoing.
(f) FCC APPROVAL.
The Federal Communications Commission ("FCC") shall have issued one or
more public notices approving the assignment of LLC's PCS Licenses in accordance
with the terms of this Agreement.
3.2 UBIQUITEL PARENT, UBIQUITEL AND MERGER SUBS' CONDITIONS.
The obligations of UbiquiTel Parent, UbiquiTel and the Merger Subs to
consummate the transactions contemplated by this Agreement and the Related
Agreements are subject to the satisfaction, or waiver by UbiquiTel Parent, at or
prior to the PRE-CLOSING DATE, of the following conditions:
(a) LLC PARTIES' REPRESENTATIONS TRUE.
The LLC Parties' representations and warranties made in this Agreement
or any Related Agreement shall be true and correct in all respects as of the
date of this Agreement and as of the PRE-CLOSING DATE, except as affected by the
transactions contemplated hereby and except as has not resulted in and will not
constitute an LLC Material Adverse Change, and the LLC Parties shall have
delivered the LLC Parties PRE-CLOSING Certificate, which shall state the
foregoing; PROVIDED, HOWEVER, that if and to the extent that the failure to
fulfill or otherwise comply with the LLC Parties' representations, warranties,
covenants and agreements set forth in this Agreement is the sole result of the
actions or inactions of UbiquiTel in its capacity as Operating Manager pursuant
to the Management Agreement (and not the result of any actions or inactions of
the Principal LLC Officer under such Agreement, as defined therein), such
failure or non-compliance shall not be deemed a breach by the LLC Parties
hereunder. For purposes of this Agreement, "LLC MATERIAL ADVERSE CHANGE" means
(i) any termination of the Sprint Affiliation Agreement, or (ii) any change,
effect, event or occurrence that would reasonably be expected to result in (A) a
decrease in the balance sheet net worth of LLC, measured immediately prior to
the PRE-CLOSING, of at least $10.0 million, or (B) a reduction of anticipated
cash flow, or increased losses, of UbiquiTel Parent (on a consolidated basis)
attributable to LLC's operations, at or after the PRE-CLOSING, discounted at 10%
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per annum, having a net present value of at least $10.0 million. If the LLC
Parties' representations and warranties made in this Agreement or any Related
Agreement are not true and correct in all respects as of the PRE-CLOSING DATE
and such failure to be true and correct in all respects (i) does not result in
or constitute an LLC Material Adverse Change, and (ii) would give rise to a Loss
(as defined in Section 12.2(a)(i) (LLC PARTIES INDEMNIFICATION)) that would be
required to be indemnified pursuant to Section 12.2 (INDEMNITIES) hereof, then
(after application of all of the terms, deductibles and limitations set forth in
Section 12.3 (LIMITATIONS ON INDEMNITIES) the LLC Parties shall indemnify
UbiquiTel against such Loss pursuant to Section 12.2, provided that, (A) to the
extent such Loss can be quantified and agreed upon at the PRE-CLOSING by all
Parties acting in good faith, in whole or in part, the LLC Parties shall pay
UbiquiTel the amount of such Loss required to be indemnified, or part thereof,
in cash or in UbiquiTel Stock (at the LLC Parties' discretion) at the CLOSING,
and (B) to the extent such Loss or part thereof becomes quantified after the
Pre-CLOSING, the LLC Parties shall pay the amount of such Loss as and when it
becomes quantified.
(b) LLC PARTIES' COMPLIANCE WITH AGREEMENT.
The LLC Parties, in all respects, shall have performed each agreement,
and shall have complied with each covenant to be performed or complied with by
them, or any of them, on or prior to the PRE-CLOSING DATE under this Agreement
or any Related Agreement, except where the failure to so perform or comply (i)
would not constitute an LLC Material Adverse Change, or (ii) is not in bad
faith, and the LLC Parties shall have delivered the LLC Parties PRE-CLOSING
Certificate, which shall state the foregoing.
(c) LLC PARTIES CONSENTS.
The LLC Parties shall have exercised commercially reasonable efforts to
obtain the LLC Parties Consents and shall have obtained the LLC Mandatory
Consents. The term "LLC PARTIES CONSENTS" shall mean:
(i) All required governmental licenses and permits,
if any, necessary to enable UbiquiTel to conduct the business of LLC after the
PRE-CLOSING in substantially the same manner as such business was conducted
before the PRE-CLOSING (the "PERMITS");
(ii) All authorizations, consents and approvals (if
any) of any filings (if any) with any governmental authority that are required
to (A) validly execute, deliver and perform this Agreement or the Related
Agreements or (B) consummate the transactions provided for in this Agreement and
the Related Agreements (collectively, the "APPROVALS"); and
(iii) All other material consents, approvals or
authorizations of third parties required in connection with LLC or the Members'
valid execution, delivery or performance of this Agreement and the Related
Agreements or the consummation of the Mergers or Interest Sale or any of the
transactions contemplated hereby or thereby on the part of any of them
including, but not limited to, the consents required under the Contracts and
Licenses (as defined in Section 6.9 (LICENSES) herein) (collectively,
"CONSENTS"); PROVIDED, HOWEVER, that the Parties hereto acknowledge that at the
request of UbiquiTel, the LLC Parties shall not seek to obtain the consent of
Aegon (as set forth in the LLC Disclosure Schedule Section 6.1(e)).
The following LLC Parties Consents shall be deemed to be the "LLC
MANDATORY CONSENTS": the consent of Sprint, pursuant to the Sprint Affiliation
Agreement (as defined in Section 6.2(b) hereof); the Rural Telephone Finance
Cooperative, pursuant to the RTFC Loan Agreement (as defined in Section
6.4(d)(iii) hereof); and the Federal Communications Commission, pursuant to the
PCS Licenses.
(d) NO LITIGATION.
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No action, suit or proceeding shall be pending or, to the knowledge of
the LLC Parties, threatened, which seeks to restrain or prohibit, or to obtain
damages or other relief in connection with the execution and delivery of this
Agreement, any Related Agreement or the consummation of the transactions
contemplated by any of the foregoing, except as would not constitute an LLC
Material Adverse Change. The LLC Parties shall have delivered the LLC Parties
PRE-CLOSING Certificate, which shall state the foregoing with respect to the LLC
Parties.
(e) RELATED AGREEMENTS.
The LLC Parties shall have entered into the Related Agreements to which
they are to be parties.
(f) FINANCING.
The Second Amendment and Consent to Credit Agreement executed by and
among, INTER ALIA, UbiquiTel Parent, UbiquiTel, BNP Paribas ("PARIBAS") and
various banks, and shall be in full force and effect and the conditions set
forth in Section 9.02 (viii) thereof shall be satisfied, provided that if such
conditions shall not have been satisfied, (i) UbiquiTel shall not exercise its
right to terminate this Agreement for a period of 90 days from the date on which
(i) Paribas notifies UbiquiTel that one of the conditions set forth in Section
9.02(viii) has not and can not be satisfied, or (ii) the parties agree that one
of such conditions has not and can not be satisfied, during which period the
Parties shall in good faith cooperate to explore alternative means for
completing the transaction, and (ii) if UbiquiTel exercises its right to
terminate under this Section 3.2(f), it shall pay immediately to LLC, in cash or
by wire transfer, the amount of $4,900,000.
(g) PRE-CLOSING DELIVERIES.
The deliveries pursuant to Section 2.2 shall have been made.
(h) THE SPRINT AGREEMENTS.
The Sprint Affiliation Agreement and any agreements to which LLC is a
party regarding the use of Sprint's name and/or logo or other intellectual
property shall be in full force and effect on the PRE-CLOSING DATE.
(i) CONVERSION CONDITION.
The Type II Conversion (as defined in Addendum VI to the UbiquiTel
Sprint Management Agreement) shall have occurred; provided that if such
condition shall not have been met by July 30, 2001, UbiquiTel Parent shall be
deemed to have waived such condition.
3.3 LLC PARTIES' CONDITIONS TO CLOSING.
The obligations of the LLC Parties to consummate the transactions
contemplated by this Agreement and the Related Agreements are subject to the
satisfaction, or waiver in writing by the ▇▇▇▇▇ Representative (as defined
herein) (on behalf of ▇▇▇▇▇ and CVC) and the Members Representative (as defined
herein) (on behalf of the Members other than CVC) at or prior to the PRE-CLOSING
DATE, of the conditions set forth below. For purposes of this Agreement, the
"▇▇▇▇▇ REPRESENTATIVE" shall be one individual agent appointed by ▇▇▇▇▇ to act
on behalf of ▇▇▇▇▇ or the ▇▇▇▇▇ Stockholders, as the case may be, in any matter
that this Agreement designates may be taken by the ▇▇▇▇▇ Representative. For
purposes of this Agreement, the "MEMBERS REPRESENTATIVE" shall be one individual
agent appointed by the
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Members to act on behalf of the Members in any matter that this Agreement
designates may be taken by the Members Representative.
(a) UBIQUITEL PARENT, UBIQUITEL AND MERGER SUBS'
REPRESENTATIONS TRUE.
The representations and warranties made by UbiquiTel Parent, UbiquiTel
and the Merger Subs herein shall be true and correct in all respects as of the
date of this Agreement and as of the PRE-CLOSING DATE, except as affected by the
transactions contemplated hereby and except as has not resulted in and will not
constitute a UbiquiTel Material Adverse Change, and UbiquiTel Parent shall have
delivered the UbiquiTel PRE-CLOSING Certificate, which shall state the
foregoing. For purposes of this Agreement, "UBIQUITEL MATERIAL ADVERSE CHANGE"
means any termination of the UbiquiTel Sprint Management Agreement and any
change, effect, event or occurrence which would reasonably be expected to (i)
result in liabilities to UbiquiTel Parent (on a consolidated basis) at or after
the PRE-CLOSING of at least $20.0 million, or (ii) result in a reduction of cash
flow, or increased losses, of UbiquiTel Parent (on a consolidated basis) at or
after the Pre-CLOSING, discounted at 10%, having a net present value of at least
$20.0 million.
(b) UBIQUITEL, UBIQUITEL PARENT AND MERGER SUBS'
COMPLIANCE WITH AGREEMENT.
Each of UbiquiTel Parent, UbiquiTel and the Merger Subs, in all
respects, shall have complied with each covenant to be performed or complied
with by it on or prior to the PRE-CLOSING DATE under this Agreement or any
Related Agreement, except where the failure to so perform or comply (i) would
not constitute a UbiquiTel Material Adverse Change, or (ii) is not in bad faith,
and UbiquiTel Parent shall have delivered the UbiquiTel PRE-CLOSING Certificate,
which shall state the foregoing.
(c) UBIQUITEL CONSENTS.
UbiquiTel shall have used commercially reasonable efforts to obtain the
UbiquiTel Consents (as defined in Section 8.2(b) (CONSENTS OBTAINED) herein),
and shall have obtained the UbiquiTel Mandatory Consents. The following
UbiquiTel Consents shall constitute UbiquiTel Consents that, if not obtained,
will result in a UbiquiTel Material Adverse Change: (i) the consent of Paribas
and other banks pursuant to that certain Credit Agreement dated as of March 31,
2000 (the "PARIBAS CONSENT"); (ii) UbiquiTel Parent's stockholders' approval of
the transactions contemplated hereby, (iii) the Form S-4's having become
effective under the Securities Act of 1933; (iv) the consent of Sprint Spectrum
L.P. pursuant to the UbiquiTel Sprint Management Agreement; and (v) approval by
the FCC (collectively, the "UBIQUITEL MANDATORY CONSENTS") (the LLC Mandatory
Consents and UbiquiTel Mandatory Consents hereinafter are referred to
collectively as the "MANDATORY CONSENTS").
(d) NO LITIGATION.
No action, suit or proceeding shall be threatened or pending, which
seeks to restrain or prohibit, or to obtain other relief in connection with, the
execution and delivery of this Agreement, any Related Agreement or the
consummation of the transactions contemplated by any of the foregoing, except as
would not constitute a UbiquiTel Material Adverse Change. UbiquiTel Parent shall
have delivered the UbiquiTel PRE-CLOSING Certificate, which shall state the
foregoing with respect to UbiquiTel Parent, UbiquiTel and the Merger Subs.
(e) RELATED AGREEMENTS.
UbiquiTel Parent, UbiquiTel and the Merger Subs shall have entered into
the Related Agreements to which each is a party.
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(f) CLOSING DELIVERIES.
The deliveries pursuant to Section 2.3 shall have been made.
(g) RTFC LOAN PAYOFF.
All amounts of principal and accrued and unpaid interest owing
by LLC under the RTFC Loan Agreement shall have been set aside by UbiquiTel, to
the reasonable sastisfaction of LLC, to provide for repayment of such principal
and accrued and unpaid interest pursuant to Section 2.5 and 11.5 hereof.
ARTICLE 4
COVENANTS REGARDING CONSUMMATION OF THE TRANSACTION
4.1 SATISFACTION OF CONDITIONS TO CLOSING.
(a) JOINT RESPONSIBILITIES.
Each Party shall use his, her or its reasonable best efforts to satisfy
the conditions to the obligations of the Parties hereunder, and to consummate
and make effective as promptly as practicable the transactions provided for
herein, including:
(i) DEFENDING THE AGREEMENT.
Defending lawsuits or other legal proceedings challenging this
Agreement or any Related Agreement or the consummation of the transactions
provided for in this Agreement or any Related Agreement;
(ii) LIFTING INJUNCTIONS.
Using reasonable best efforts to lift or rescind any injunction,
restraining order or other order adversely affecting the ability of the Parties
to consummate the transactions provided for in this Agreement or any Related
Agreement; and
(iii) OTHER ACTIONS.
Taking such other reasonable actions that are necessary, appropriate or
advisable, unless responsibility for taking such actions has been delegated to
certain Parties pursuant to Section 4.1(b) (LLC PARTIES' RESPONSIBILITIES) or
4.1(c) (UBIQUITEL'S AND MERGER SUBS' RESPONSIBILITIES) including, without
limitation, using reasonable best efforts to obtain all Approvals and Permits,
and all consents of third parties. In case, at any time after the Effective
Date, any further action is necessary or desirable to carry out the purposes of
this Agreement, each Party and its officers and directors shall use their
reasonable best efforts to take all such action.
(iv) FCC CONSENT.
Within ten (10) business days after the execution of this Agreement,
LLC will file one or more applications with the FCC requesting the FCC's consent
to the assignment of the PCS Licenses (as defined in Section 6.9 (LICENSES)
herein). The other Parties to this Agreement shall complete and execute whatever
other documents are required to be filed in conjunction with the filing of the
aforementioned application(s) by LLC and shall otherwise cooperate with LLC in
the preparation, filing and prosecution
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of the application(s) in an effort to have such application(s) granted by the
FCC at the earliest practical date. Each Party shall promptly and timely
provide to the FCC whatever additional information the FCC may request and make
whatever additional changes in the application(s) and this Agreement the FCC
may require, unless the disclosure of such information or such action would
have a material adverse effect upon such Party. Each Party shall promptly
provide the other Parties with copies of any and all communications to or from
the FCC concerning the application(s) and shall cooperate in defending against
any petition, complaint or other objection that any third party may file to
such application(s).
(b) LLC PARTIES' RESPONSIBILITIES.
(i) HSR ACT FILINGS.
The LLC Parties shall make their HSR Act filings in compliance with
such act as soon as practicable after the execution of this Agreement, provide
any additional information that the Federal Trade Commission or the Justice
Department requests as promptly as practicable, and perform all other acts
required of them under the HSR Act in order to satisfy the condition contained
in Section 3.1(a) (HSR ACT). Time is of the essence with respect to the HSR Act
filings. The LLC Parties shall pay one-half of the total HSR Act filing fees
required in connection with the HSR Act filings, which shall be credited against
the expenses permitted to be paid by LLC pursuant to Section 13.10 (EXPENSES).
(ii) CONSENTS.
The LLC Parties shall use commercially reasonable efforts to obtain the
LLC Parties Consents and the Permits, and shall keep UbiquiTel Parent informed
of their efforts (including the nature thereof) and any difficulties they are
encountering with respect to obtaining such Consents after the execution of this
Agreement; the LLC Parties shall also provide copies of all filings, letters,
and written requests related to such efforts.
(iii) UBIQUITEL STOCKHOLDERS' MEETING.
The LLC Parties shall promptly provide to UbiquiTel Parent, upon
request, such information as UbiquiTel Parent may require to prepare the Proxy
Statement (as defined in Section 11.2(b) (PROXY STATEMENT AND FORM S-4) hereof)
to be distributed to its stockholders for the UbiquiTel Stockholders' Meeting.
(c) UBIQUITEL PARENT, UBIQUITEL AND MERGER SUBS'
RESPONSIBILITIES.
(i) HSR ACT FILINGS.
UbiquiTel Parent, UbiquiTel and the Merger Subs shall make their HSR
Act filings in compliance with such act as soon as practicable after the
execution of this Agreement, provide any additional information that the Federal
Trade Commission or the Justice Department requests as promptly as practicable,
and perform all other acts required of them under the HSR Act in order to
satisfy the condition contained in Section 3.1(a) (HSR ACT); PROVIDED, HOWEVER,
that in no event shall UbiquiTel Parent, UbiquiTel, the Merger Subs or any of
their subsidiaries be required to divest, hold separate, offer for sale,
abandon, limit its operation of or take similar action with respect to any
assets or any business interest in connection with any Approval (including,
without limitation under the HSR Act). Time is of the essence with respect to
the HSR Act filings. UbiquiTel shall pay one-half of the total HSR Act filing
fees required in connection with the HSR Act filings.
(ii) UBIQUITEL'S CONSENTS AND PERMITS.
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UbiquiTel Parent shall use commercially reasonable efforts to obtain
the UbiquiTel Parties Consents and the Permits and shall keep the LLC Parties
informed of their efforts (including the nature thereof) and any difficulties it
is encountering with respect to obtaining such Consents after the execution of
this Agreement; and UbiquiTel Parent shall also provide copies of all filings,
letters and written requests related to such efforts other than with respect to
the Paribas financing described in Section 3.2(f); provided that UbiquiTel
Parent shall provide notice within 2 business days to the LLC Parties if Paribas
provides notice to UbiquiTel that one of the conditions set forth in Section
9.02(viii) of the Credit Agreement among Paribas, as an administrative agent,
other Banks, UbiquiTel, and UbiquiTel Parent, dated as of March 31, 2000 has not
been met.
(iii) UBIQUITEL PARENT'S STOCKHOLDERS' MEETING.
UbiquiTel Parent shall take all steps required to hold the UbiquiTel
Stockholders' Meeting, including preparing and circulating to its stockholders
the Proxy Statement, as soon as practicable after the execution of this
Agreement.
(iv) VOTING AGREEMENT.
The UbiquiTel Parent's stockholders named therein shall have executed
and delivered to LLC a voting agreement in a form reasonably satisfactory to LLC
(the "VOTING AGREEMENT"). UbiquiTel Parent shall exercise its reasonable best
efforts to defend and keep the Voting Agreement in full force and effect, and to
enforce the terms of such agreement.
(v) NASDAQ LISTING.
UbiquiTel Parent shall use reasonable best efforts and pay all costs
and expenses to timely apply for and to cause to be listed on The NASDAQ Stock
Market the UbiquiTel Stock to be issued in connection with the Mergers, upon
official notice of issuance.
4.2 UBIQUITEL ANNOUNCEMENTS.
The LLC Parties, UbiquiTel Parent, UbiquiTel and the Merger Subs shall
not issue any press release with respect to the transactions contemplated
hereby; PROVIDED, that UbiquiTel Parent may issue press releases with respect to
the transactions contemplated hereby, but shall allow LLC and its counsel
adequate advance notice and opportunity to review and comment upon, and shall
consult with, LLC before issuing any press release. To the extent that UbiquiTel
Parent, acting on the advice of counsel, is required as a public company to
issue any press releases promptly, it shall provide such notice and opportunity
to review as is consistent with its legal obligations as determined by its
counsel.
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ARTICLE 5
TERMINATION
5.1 REASONS FOR TERMINATION.
This Agreement may be terminated and the transactions contemplated
hereby may be abandoned at any time prior to the PRE-CLOSING DATE,
notwithstanding adoption thereof by the stockholders of UbiquiTel Parent,
UbiquiTel, the Merger Subs, the Members or the Stockholders, only by following
the termination procedures set forth in this Article 5, for the following
reasons:
(a) BY MUTUAL CONSENT.
By the mutual written consent of UbiquiTel Parent and LLC, duly
authorized by the Board of Directors of UbiquiTel Parent and the Members
Committee of LLC. For purposes of this Agreement, "MEMBERS COMMITTEE" shall mean
the members committee of LLC comprised of ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇.
(b) BY UBIQUITEL PARENT.
(i) By UbiquiTel Parent, after compliance with the
procedures set forth in this Article 5, if any of the conditions set forth in
Section 3.2 (UBIQUITEL PARENT, UBIQUITEL AND MERGER SUBS' CONDITIONS) have not
been met or shall become impossible to satisfy.
(ii) By UbiquiTel Parent, if UbiquiTel shall have
exercised its right to terminate the Management Agreement pursuant to Section
6.2 thereof.
(c) BY LLC.
By LLC, after compliance with the procedures set forth in this Article
5, if any of the conditions set forth in Section 3.3 (LLC PARTIES' CONDITIONS TO
CLOSING) have not been met or shall become impossible to satisfy.
(d) DROP DEAD DATE.
By either of UbiquiTel Parent or LLC (acting through the Members
Committee), if the EFFECTIVE DATE shall not have occurred on or before September
30, 2001 (the "TERMINATION DATE"), otherwise than as a result of any material
breach of any provision of this Agreement by the Party seeking to effect such
termination; PROVIDED, HOWEVER, that the Termination Date shall be extended (i)
by the number of days, if any, to cure any curable matter that is the subject of
a notice under Section 5.3 (UBIQUITEL PARENT'S TERMINATION PROCEDURE) or Section
5.4 (LLC'S TERMINATION PROCEDURE), and (ii) by the number of days, if any,
required to comply with Section 3.2(f) hereof.
5.2 NOTICE OF PROBLEMS.
Each Party will promptly give written notice to the other Parties when
it becomes aware of the occurrence or failure to occur, or the impending or
threatened occurrence or failure to occur, of any fact or event that would cause
or constitute, or would be likely to cause or constitute (i) any of its
representations or warranties contained herein being or becoming untrue or
incorrect, (ii) its failure to perform any of its covenants or agreements
contained herein, or (iii) any Mandatory Consent to be obtained by such Party
being unlikely to be obtained, or (iv) any of the conditions delegated to it, or
any condition to the obligation of the Parties contained in Section 3.1 (JOINT
CONDITIONS), being or becoming
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impossible to satisfy. No such notice shall affect the representations,
warranties, covenants, agreements or conditions of the Parties hereunder, or
prevent any Party from relying on the representations and warranties contained
herein.
5.3 UBIQUITEL PARENT'S TERMINATION PROCEDURE.
If UbiquiTel Parent discovers, by reason of a written notice given
pursuant hereto or otherwise, circumstances that would give it the right to
terminate this Agreement pursuant to Section 5.1(b) (BY UBIQUITEL PARENT), then
UbiquiTel Parent shall deliver a written notice to the LLC Parties of such
circumstances, specifying the factual basis therefor in reasonable detail. The
LLC Parties shall have the right to cure any such matter within 20 business days
following the date of delivery of such notice, unless it is manifest that such
matter is not curable. If such circumstances create a termination right pursuant
to Section 5.1(b) (BY UBIQUITEL PARENT), then after such written notice and the
LLC Parties' failure to cure, or immediately following such written notice if it
is manifest that such matter is not curable, UbiquiTel Parent may terminate this
Agreement by giving a written notice of termination to the LLC Parties.
5.4 LLC'S TERMINATION PROCEDURE.
If LLC discovers, by reason of a notice given pursuant hereto or
otherwise, circumstances that would give it the right to terminate this
Agreement pursuant to Section 5.1(c) (BY LLC), then LLC, acting through the
Members Committee, shall deliver a notice to UbiquiTel Parent of such
circumstances, specifying the factual basis therefor in reasonable detail.
UbiquiTel Parent shall have the right to cure any such matter within 20 business
days following the date of delivery of such notice, unless it is manifest that
such matter is not curable. If such circumstances create a termination right
pursuant to Section 5.1(c) (BY LLC), then after such written notice and
UbiquiTel Parent's failure to cure, or immediately following such written notice
if it is manifest that such matter is not curable, LLC may terminate this
Agreement by giving a written notice of termination to UbiquiTel.
5.5 EFFECT OF TERMINATION.
Upon termination hereof pursuant to this Article 5, no Party shall have
any liability or continuing obligation to another Party arising out of this
Agreement, or out of actions taken in connection herewith, except that this
Section 5.5 and Section 13.12 (CONFIDENTIALITY) shall survive termination
hereof; PROVIDED, HOWEVER, that nothing herein shall limit or eliminate any
liability that any Party may have to another in law or in equity for any breach
of this Agreement; and PROVIDED FURTHER, that nothing herein shall limit or
eliminate the right of LLC to enforce payment of the sum of $4,900,000 required
to be paid by UbiquiTel Parent and UbiquiTel upon termination of this Agreement
for the reasons set forth in Section 3.2(f) hereof.
5.6 NO RIGHT TO TERMINATE AFTER PRE-CLOSING DATE.
No Party shall have any right to terminate this Agreement for any
reason from and after the PRE-CLOSING DATE.
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ARTICLE 6
REPRESENTATIONS AND WARRANTIES CONCERNING LLC
For purposes of this Article 6, unless otherwise expressly stated
herein or the context requires otherwise, the "COMPANIES" shall mean LLC and the
LLC Subsidiary, collectively and "COMPANY" shall mean LLC or LLC Subsidiary,
singularly. References to "LLC'S KNOWLEDGE" or words of similar import mean (i)
the actual knowledge of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇, and (ii) the
knowledge the foregoing individuals would have after reasonable inquiry and
diligence. Subject to the limitations set forth in Article 12 (INDEMNIFICATION)
hereof, the Members and the Stockholders, jointly and severally, represent and
warrant to UbiquiTel Parent, UbiquiTel and the Merger Subs that, except as
specifically set forth on the disclosure schedule to this Article 6, which shall
be organized by section and sub-section numbers corresponding to this Article 6
(the "LLC DISCLOSURE SCHEDULE"):
6.1 LLC; ENTRY INTO AGREEMENTS.
(a) ORGANIZATION AND GOOD STANDING.
LLC is a limited liability company duly organized and validly existing
under the laws of the State of California and is in good standing under such
laws. LLC Subsidiary is a limited liability company duly organized and validly
existing under the laws of the State of Nevada and is in good standing under
such laws. Each of the Companies has all requisite power and authority to own,
lease and operate all properties and assets owned or leased by it and to conduct
its business as previously and currently conducted by it. Each of the Companies
is qualified to do business and is in good standing in each jurisdiction in
which it is required to be so qualified, except where the lack of such
qualification would not have a material adverse effect on the Companies. The LLC
Disclosure Schedule lists all jurisdictions in which each Company is qualified
to do business as a foreign entity. LLC has made available to UbiquiTel true,
correct and complete copies of the Organizational Documents of LLC and LLC
Subsidiary, as currently in effect. LLC is a successor in interest to Central
Wireless Partnership, which was a general partnership duly organized and validly
existing under the laws of California. The merger of Central Wireless
Partnership into LLC conformed in all material respects with the laws of
California and all necessary action was taken to cause LLC to succeed to all of
the properties, franchises, permits, liabilities, and businesses of Central
Wireless Partnership.
As used in this Agreement, the term "ORGANIZATIONAL DOCUMENTS"
means (a) the articles or certificate of incorporation and the bylaws of a
corporation; (b) the partnership agreement and any statement of partnership of a
general partnership; (c) the limited partnership agreement and the certificate
of limited partnership of a limited partnership; (d) the articles or certificate
of organization and the regulations or operating agreement of a limited
liability company; (e) any charter or similar document adopted or filed in
connection with the creation, formation, or organization of an entity; and (f)
any amendment to any of the foregoing.
(b) VALIDITY AND AUTHORIZATION; POWER AND AUTHORITY.
This Agreement and the Related Agreements have been duly authorized,
executed and delivered by LLC and constitute (or, in the case of Related
Agreements or instruments called for hereby or thereby to be executed by LLC at
or before the CLOSING, upon execution will constitute) the legal, valid and
binding obligation of LLC enforceable against LLC in accordance with their
respective terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency and similar laws relating to creditors' rights generally
and by general principles of equity (regardless of whether such enforceability
is considered in a proceeding in equity or at law).
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(c) SUBSIDIARY.
Except for the ownership of all of the issued and outstanding Member
Interests of VIA Building, LLC (the "LLC SUBSIDIARY") by LLC, no Company owns
any capital stock or other equity interests, directly or indirectly, of any
corporation, partnership, association or other business entity and no Company is
a party to any agreement relating to the acquisition or disposition of such an
interest. LLC has good, valid and marketable title to all of the issued and
outstanding equity interests of LLC Subsidiary, free and clear of any Liens (as
defined in Section 6.4(a)(i) (TITLE) herein), other than Permitted Liens (as
defined in Section 6.4(a)(i) (TITLE) herein).
(d) NO CONFLICT.
Neither the execution, delivery or performance of this Agreement or the
Related Agreements, nor the consummation of the Mergers or the transactions
contemplated hereby or thereby will (i) result in any violation of the terms of,
(ii) contravene or conflict with, (iii) accelerate the performance of the
obligations required under, (iv) constitute a default under, (v) give any right
of termination or cancellation under, or (vi) give any right to make any change
in any of the liabilities or obligations under, the Organizational Documents of
any Company, as appropriate, any Order (as defined in Section 6.5(c)(ii)
(ORDERS) herein), or any agreement, contract, note, bond, debenture, indenture,
mortgage, deed of trust, lease, License, judgment, decree, order, law, rule or
regulation or other restriction applicable to any Company or to which any
Company is a party or by which any Company or its property or assets are bound
or affected that, in any such case, will result in a material adverse effect on
any Company. Neither the execution, delivery and performance of this Agreement
or the Related Agreements, nor the consummation of the transactions contemplated
hereby or thereby will result in the creation of any Lien upon any of the
properties or assets of any Company.
(e) LLC PARTIES CONSENTS REQUIRED.
The LLC Disclosure Schedule lists all LLC Parties Consents for which
filing or other action is required by LLC. Subject to Sections 2.1(d) and
2.1(f), LLC has taken or shall have taken prior to the PRE-CLOSING DATE all
other actions necessary for the consummation by LLC of the transactions
contemplated by this Agreement and the Related Agreements.
-23-
6.2 FINANCIAL INFORMATION.
(a) FINANCIAL STATEMENTS; BOOKS AND RECORDS.
Attached to the LLC Disclosure Schedule are true and correct copies of
(i) the audited consolidated balance sheet for the Companies at December 31,
1999, and the related statement of profit and loss and cash flows for the
periods then ended, (ii) the unaudited consolidated balance sheet for the
Companies at December 31, 2000, and the related statement of profit and loss for
the twelve-month period then ended and (iii) when delivered pursuant hereto,
similar financial statements for each additional month ending after the date
hereof (collectively, the "LLC FINANCIAL STATEMENTS"). The LLC Financial
Statements fairly present the financial position of the Companies as of the
dates thereof and the results of the Companies' operations and cash flows for
the periods then ended, in accordance with GAAP, except for the variances from
GAAP set forth in the notes to the LLC Financial Statements, subject, in the
case of the LLC Financial Statements listed in items (ii) and (iii) of the
immediately preceding paragraph, to normal recurring period-end adjustments and
absence of notes and a statement of cash flows in each case that, if presented,
would not differ materially from those included in the financial statements for
the year ended December 31, 1999. For purposes of this Agreement, "GAAP" shall
mean those generally accepted accounting principles and practices which are used
in the United States and recognized as such by the American Institute of
Certified Public Accountants acting through its Accounting Principles Board or
by the Financial Accounting Standards Board or through other appropriate boards
or committees thereof. Each of the Companies' books and records (including
without limitation, all financial records, business records, minute books,
ownership transfer records, customers lists, referral source lists and records
pertaining to services or products delivered to customers) (i) are complete and
correct in all material respects and all transactions to which such Company is
or has been a party are reflected therein in all material respects, (ii) have
been maintained in accordance with such Company's historical practices, and
(iii) form the basis for such Company's financial statements.
(b) CONDUCT OF BUSINESS.
Except as specifically contemplated herein, since December 31, 1999, no
Company has (i) changed its authorized or issued Members' Interests; granted any
option or right to purchase Members' Interests; issued any security convertible
into such Members' Interests; granted any registration rights; purchased,
redeemed, retired or otherwise acquired any Members' Interests; or declared or
paid any distribution or payment in respect of Members' Interests; (ii) amended
its Organizational Documents; (iii) sold or transferred (other than in the
ordinary course of business) any assets with a fair market value in excess of
$100,000 individually, or $250,000 in the aggregate; (iv) mortgaged, pledged or
subjected to any Lien (other than a Permitted Lien) or other encumbrance any
assets; (v) incurred or become subject to any debt, liability (including
indemnification, guaranty and repurchase obligations) or lease obligation, other
than current liabilities incurred in the ordinary course of business that do not
exceed $100,000 individually, or $250,000 in the aggregate; (vi) incurred
obligations or entered into or amended or terminated contracts outside of the
ordinary course of business; (vii) suffered any damage, destruction or loss of
any assets in the aggregate in excess of $50,000; (viii) experienced any
equipment malfunction that materially interfered or interferes with the conduct
of its business; (ix) waived or relinquished any material rights or canceled or
compromised any debt or claim owing to it, in either case, without adequate
consideration or not in the ordinary course of business; (x) made any change in
its accounting methods or practices; (xi) made any material change in its
billing and collection practices and procedures; (xii) paid any bonuses or made
any increase in the compensation, commissions or benefits payable or to become
payable to any of its officers, directors, employees, consultants or agents
other than in the ordinary course of business; (xiii) entered into any
transaction with any of its or LLC's Affiliates (including, without limitation,
by paying, distributing or transferring any funds or assets to the Members,
whether in their capacity as Members or in any other capacity other than the
payment of employment compensation to
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Members who are employees); (xiv) made capital expenditures in excess of
$10,000,000, in the aggregate; (xv) taken any action to accelerate, amend or
change the period of exercisability or vesting of options or other rights
granted under its PAR Plan, stock option or benefit plans or, except as may be
required pursuant to the terms of any such plan or any agreement entered into
prior to the date hereof pursuant thereto, authorized cash payments in
exchange for any options or other rights granted under any of such plans;
(xvi) entered into or amended any agreements pursuant to which any other party
was granted exclusive marketing, servicing, manufacturing or other exclusive
rights of any type or scope with respect to any of its services, products,
processes or technology; (xvii) paid, discharged, satisfied, settled or
compromised any case, claim, liability or obligation (absolute, accrued,
asserted or unasserted, contingent or otherwise) arising other than in the
ordinary course of business, other than the payment, discharge or satisfaction
of liabilities reflected or reserved against in the LLC Financial Statements;
(xviii) reduced the amount of any material insurance coverage provided by
existing insurance policies; (xix) revalued any of its assets, including
without limitation writing down the value of inventory or writing off notes or
accounts receivable other than in the ordinary course of business except as
required by GAAP; (xx) entered into any agreement with any third party which
limits in any manner the territory or scope of activities which LLC or LLC
Subsidiary may engage; (xxi) other than in the ordinary course of business,
made or changed any material election in respect of Taxes (as defined in
Section 6.5(b) (TAX MATTERS) herein), adopted or changed any accounting method
in respect of Taxes, filed any amendment to a material Tax Return (as defined
in Section 6.5(b) (TAX MATTERS) herein), or settled any claim or assessment in
respect of Taxes; (xxii) entered into any amendment or modification of the
Sprint Affiliation Agreement dated as of January 1999, by and between Sprint
Spectrum L.P. and Central Wireless Partnership (the "SPRINT AFFILIATION
AGREEMENT"), as amended, and any other agreements between LLC and Sprint or
incurred any breaches under such Agreement, or (xxiii) agreed to do any of the
foregoing. For purposes of this Agreement, "AFFILIATE" shall mean, with
respect to any Person (as defined herein), any other Person that, directly or
indirectly through one or more intermediaries, controls, or is controlled by,
or is under common control with, such first Person. For purposes of this
Agreement, "PERSON" shall mean an individual, corporation, partnership, joint
venture, limited liability company, association, joint stock company, trust,
unincorporated organization or other entity.
(c) NO MATERIAL ADVERSE EFFECT.
Except as contemplated by this Agreement, since the date of the most
recent LLC Financial Statements delivered prior to the date hereof, each Company
has conducted its business only in the ordinary course consistent with past
practice and there has been no event or occurrence that has caused a material
adverse effect on such Company other than economic conditions affecting the U.S.
economy generally or the telecommunications industry generally.
6.3 MEMBER INTERESTS; CAPITALIZATION.
The authorized, issued and outstanding equity interests of each
Company, as well as the identity of all of the Members and their respective
ownership of units of Members' Interests, are as set forth in the LLC Disclosure
Schedule. There are no other equity interests of any Company either authorized
or outstanding. All of the issued and outstanding units have been duly
authorized and validly issued, are fully paid and nonassessable and are free and
clear of any preemptive rights. No certificates have been issued to represent
the Members' LLC Interests or the equity interests of any Company. There are no
outstanding preemptive, conversion or other rights, or other options, warrants
or agreements granted by, issued by, or binding upon, any Company for the
issuance, sale, purchase, repurchase, redemption, acquisition or other transfer
of its equity securities.
6.4 ASSETS.
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(a) PERSONAL PROPERTY.
(i) TITLE.
LLC or LLC Subsidiary is the owner of the assets reflected in the LLC
Financial Statements and has good and marketable title to all such assets that
are personalty (the "PERSONAL PROPERTY") (other than the leased Personal
Property described below), in each case free and clear of all Liens, except for
(A) liens for non-delinquent taxes and assessments, (B) liens of lessors arising
under statute, (C) other claims and encumbrances, charges or statutory liens
that do not materially detract from the value of, or impair the use or transfer
of, such Personal Property, Real Property (as defined in Section 6.4(b) (REAL
PROPERTY) herein) or other assets, (D) inchoate statutory liens for amounts not
yet payable, and (E) those liens listed as permitted liens on the LLC Disclosure
Schedule (the "PERMITTED LIENS"). For purposes of this Agreement, "LIENS" shall
mean security interests, liens (▇▇▇▇▇▇ or inchoate), encumbrances, mortgages,
pledges, equities, charges, assessments, easements, covenants, restrictions,
reservations, defects in title, encroachments and other burdens, whether arising
by contract or under law. With respect to any Personal Property that is leased,
LLC or LLC Subsidiary is in material compliance with each such lease and is the
sole holder of a valid and subsisting leasehold interest, free and clear of any
Liens, other than Permitted Liens. The LLC Disclosure Schedule lists all lease
agreements, service agreements or other agreements related to leased Personal
Property (the "EQUIPMENT LEASES").
(ii) FACILITIES AND EQUIPMENT.
All buildings, facilities, offices, improvements on real estate,
fixtures, machinery, equipment, vehicles or other properties, owned or leased by
any Company for the conduct of its business (A) are in good condition and
repair, reasonable wear and tear excepted, and (B) are sufficient for all
business operations as presently conducted by such Company.
(iii) BANK ACCOUNTS.
The LLC Disclosure Schedule sets forth the names and locations of all
banks, trust companies, savings and loan associations and other financial
institutions at which any Company maintains accounts of any nature
(collectively, the "ACCOUNTS"), the numbers of such accounts and the names of
all persons authorized to draw thereon or to make withdrawals therefrom. The LLC
Disclosure Schedule also sets forth the name of each Person holding a general or
special power of attorney from LLC or LLC Subsidiary and a description of the
terms of such power.
(b) REAL PROPERTY.
(i) FEE SIMPLE.
The LLC Disclosure Schedule sets forth a description of each parcel of
real property owned by any Company and identifies which Company owns such real
property, including, but not limited to, those properties reflected on the LLC
Financial Statements (the "REAL PROPERTY"), together with a summary description
of the buildings, structures and improvements thereon. Such Company has good and
marketable title in fee simple absolute to all Real Property, and to the
buildings, structures and improvements thereon, in each case free and clear of
all Liens other than Permitted Liens. Except for such leases, licenses and other
interests as are particularly described in the LLC Disclosure Schedule, such
Company has not granted any leases, licenses or other interests in the Real
Property or any part thereof. All leases, licenses or other interests disclosed
therein are current, in good standing, and no Company is in default thereunder.
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(ii) LEASES.
The LLC Disclosure Schedule sets forth a description of the nature of
each Company's possession and use of the land, premises, buildings, structures
and improvements held by lease, license or otherwise (the "LEASED PREMISES") and
sets forth a description of the material basic terms of the lease or other
instrument involved (including, without limitation, the term, the number of
renewal options, if any, and the amount of rent or charges due thereunder), such
leases, subleases (including, without limitation, the prime leases governing
such subleases), licenses, easement agreements or co-location agreements with
respect thereto, including all amendments or modifications thereto and all
assignments thereof, together with those agreements in which a Company has
leased certain portions of the Real Property to third parties and/or has
subleased or licensed portions of the Leased Premises to third parties, all as
described in the LLC Disclosure Schedule, the "REAL ESTATE CONTRACTS".
The Company identified as such in the LLC Disclosure Schedule is the
sole holder of valid and subsisting leases, licenses or other interests in the
Leased Premises as specified therein, free and clear of any Liens, other than
Permitted Liens. All rental payments, charges, fees and other amounts due and
payable by any Company in connection with the Real Estate Contracts are current,
there are no defaults by any Company with respect thereto or, to LLC's
knowledge, by any other party thereto, and no event has occurred that, with the
passing of time or the giving of notice or both, would constitute a default (x)
by any Company thereunder or (y) to LLC's knowledge, by any other party
thereunder. The lessors, licensors, sublessors or grantors to LLC under the Real
Estate Contracts (the "LESSORS") have no defense, setoff or counterclaim against
any Company or against any Member arising out of the Real Estate Contracts or in
any way relating thereto. No lessee, sublessee or licensee of any Company has a
defense, setoff or counterclaim against any Company arising out of the Real
Estate Contracts or in any way related thereto. All options in favor of any
Company to purchase any of the Leased Premises, if any, are in full force and
effect and are described in the LLC Disclosure Schedule. To the extent
applicable to the Leased Premises, such Company is in exclusive and continuing
possession of the Leased Premises and, subject to the terms of the related Real
Estate Contract, has the right to quiet enjoyment of the Leased Premises for the
full term of the related Real Estate Contract and any renewal option related
thereto. Each Real Estate Contract is in full force and effect and has not been
modified, changed, altered or amended in any respect (other than as set forth in
the LLC Disclosure Schedule), no Real Estate Contract is terminable as a result
of the transaction contemplated herein, and no leasehold or other interest of
any Company in the Leased Premises is subject or subordinate to any Lien, other
than Permitted Liens. LLC has made available to UbiquiTel true, correct and
complete copies of all Real Estate Contracts, including any and all subleases,
amendments or supplements thereto, and guaranties or other security in
connection therewith. There are no leasing or other fees or commissions due, nor
will any become due, in connection with the Real Estate Contracts or any
renewals or extensions or expansions thereunder.
The Real Estate Contracts constitute all agreements with respect to the
leases, licenses and other interests set forth in the LLC Disclosure Schedule,
and there are no agreements, written or oral, other than the Real Estate
Contracts, concerning the Leased Premises. No Company has assigned its interest
in any of the Real Estate Contracts nor sublet any of the Leased Premises
thereunder, nor does any Company hold and occupy the Leased Premises under
assignment or sublease from any other party, except as provided in the LLC
Disclosure Schedule. No Company has received any written notice of, or has any
knowledge with respect to, any current violation of any judgment, writ, decree,
order, law, statute, ordinance, code, rule or regulation with respect to the
Real Estate Contracts, Leased Premises or Real Property ("LAWS"), including,
without limitation, zoning violations and violations of the Americans With
Disabilities Act, on the Leased Premises or the Real Property, and the
applicable Company is in occupancy and possession of the Leased Premises and the
Real Property in material compliance with all Laws.
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(iii) TOWER LEASES.
With respect to leases or licenses of tower space to which any Company
is a party ("TOWER LEASES"), to LLC's knowledge, (A) there are no applications,
ordinances, petitions, resolutions or other matters pending before any
governmental agency having jurisdiction to act on zoning changes that would
prohibit or make nonconforming the use of any of the Leased Premises by such
Company, (B) no Company has voluntarily granted any, and is not a party to any
agreement providing for, any easements, conditions, restrictions, reservations,
rights or options that would materially and adversely affect the use of the
Leased Premises under the Tower Leases, except for Permitted Liens; and (C) of
those Real Estate Contracts where a Company has leased, sublet, or licensed
space on the applicable Leased Premises for purposes of constructing a tower or
an addition to an existing tower thereon: the tower or referenced additions
thereto are fully constructed and operational; all contracts under any and all
construction agreements, written or oral, have been paid in full; there are no
conditions of default existing under said construction agreements as of the date
of this Agreement; and no Liens (other than Permitted Liens) have or will attach
to the applicable Real Property arising from said construction agreements. For
purposes of this Agreement, the Tower Leases are included in and are a part of
the Real Estate Contracts, and all of the representations and warranties set
forth in Section 6.4(b)(ii) above apply to the Tower Leases.
(c) INTELLECTUAL PROPERTY.
(i) INTELLECTUAL PROPERTY.
The term "INTELLECTUAL PROPERTY" shall include all fictitious business
names, trade names, registered and unregistered trademarks, service marks and
applications owned, used or licensed by any Company (collectively, "MARKS"), all
patents and patent applications (if any) owned, used or licensed by any Company
(collectively, "PATENTS"), all registered and unregistered copyrights (if any)
in both published works and unpublished works owned, used or licensed by any
Company (collectively, "COPYRIGHTS"), and all know-how, inventions, trade
secrets, confidential information, software, technical information, process
technology, plans, drawings and blue prints owned, used or licensed by any
Company as licensee or licensor (collectively, "TRADE SECRETS"). The
Intellectual Property also includes all such rights and assets of any Company
under all contracts to which any Company is a party or by which any Company is
bound relating to the Intellectual Property including, without limitation,
contracts by which any Company licenses Intellectual Property to third parties
and contracts by which third parties license to, or otherwise permit the use of
its intellectual property by, any Company (collectively, "TECHNOLOGY
CONTRACTS").
(ii) OWNERSHIP.
Except with respect to Intellectual Property licensed by a Company from
a third party pursuant to a Technology Contract, one or more of the Companies is
the owner of all right, title and interest in and to the Intellectual Property,
free and clear of all Liens (other than Permitted Liens). The Intellectual
Property includes all such property necessary for the operation of the
respective businesses of the Companies as they currently are proposed to be, and
have been, conducted. Without limiting the foregoing, each Company is properly
licensed to use all computer software (and copies thereof) used by it. No right,
license or consent of, or payment to, any third party will be required as a
result of consummation of the transactions contemplated hereby for the continued
use of the Intellectual Property by the Companies. The LLC Disclosure Schedule
contains a list of all Company-owned Intellectual Property and Intellectual
Property licensed by a Company from a third party. The Companies have taken
reasonable precautions to protect the secrecy, confidentiality and value of the
Intellectual Property. Neither LLC, LLC Subsidiary nor the Members have ever
received, or have any knowledge of, any claim alleging any interference,
infringement, misappropriation, or violation of any Intellectual Property of any
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Person (including any claim that LLC or LLC Subsidiary must license or refrain
from using any Intellectual Property of any Person). To LLC's knowledge, no
Person has interfered with, infringed upon, misappropriated, or otherwise
misused any Intellectual Property of LLC or LLC Subsidiary.
(iii) TECHNOLOGY CONTRACTS.
The LLC Disclosure Schedule contains an accurate and complete list of
all of the Technology Contracts, including all of the parties to each Technology
Contract. Each Company is, and to LLC's knowledge, each other party to the
Technology Contracts is, in compliance with all Technology Contracts in all
material respects, is not currently in default thereunder, and no event has
occurred that, with the passing of time or the giving of notice or both, would
constitute a default thereunder.
(d) CONTRACTS.
(i) DEFINITION.
The LLC Disclosure Schedule lists all agreements, contracts, notes,
bonds, debentures, indentures, mortgages, deeds of trust, leases, licenses,
obligations and promises (whether written or oral) (together with the Equipment
Leases, the Real Estate Contracts and the Technology Contracts, the
"CONTRACTS")) that are material to the business of any Company, including,
without limitation, all the foregoing (A) that provide for future payments,
claims or obligations to or from any Company of $25,000 or more per year or
$100,000 or more over the term thereof, or (B) that are (1) collective
bargaining agreements or other agreements with any labor union, (2) joint
venture agreements, partnership agreements or other agreements involving a
sharing of profits, losses, costs or liabilities, (3) agreements containing
covenants that in any way purport to restrict the business activity of any
Company or limit the freedom of any Company to engage in any line of business or
to compete with any Person, (4) standard forms of agreements providing for
payments to or for any Person based on sales, originations, CLOSINGS, purchases
or profits (other than direct payments for goods), (5) powers of attorney, (6)
agreements providing for the payment of special or consequential damages by any
Company, (7) agreements relating to capital expenditures in excess of $100,000
by any Company, (8) warranties regarding products or services, guarantees or
other similar undertakings by any Company, (9) agreements involving
indemnification for obligations of third parties, (10) employment, secrecy,
proprietary information, noncompetition, restrictive covenant, or
confidentiality agreements with key employees, (11) requirements or output
contracts, (12) business alliance or joint marketing agreements, (13) agreements
with Sprint Communication Company, L.P., Sprint Spectrum, L.P. or Sprint PCS or
any of their Affiliates, (14) documents related to debt for borrowed money, or
(15) amendments, modifications or supplements to any of the foregoing. As used
herein, the term "CONTRACTS" also shall be deemed to refer to all agreements
between any Company, on the one hand, and any Member, any Affiliate of any
Member, or any director or executive officer of any Company, on the other hand.
(ii) SPRINT AGREEMENTS.
The Sprint Affiliation Agreement and the related Sprint agreements
(which agreements are included in the definition of "Contracts" set forth above)
are in full force and effect as of the Signing Date. LLC has received no notice
of default with respect to the Sprint Affiliation Agreement and the related
Sprint agreements, other than as specifically disclosed on the LLC Disclosure
Schedule. Sprint has given its consent to the transactions contemplated by the
Merger Agreement and the Related Agreements and such consent has not been
modified or withdrawn.
(iii) RTFC LOAN AGREEMENT.
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As of the date hereof, the loan agreement (the "RTFC LOAN AGREEMENT")
by and between LLC, as borrower, and the Rural Telephone Finance Cooperative
(the "LENDER") and all other Loan Documents (as that term is defined in the RTFC
Loan Agreement), are in full force and effect, without any amendments, and no
Default (as that term is defined in the RTFC Loan Agreement) (a "DEFAULT")
exists and no Event of Default (as that term is defined in the RTFC Loan
Agreement) (an "EVENT OF DEFAULT") has occurred or is continuing under the RTFC
Loan Agreement, nor has any Company received any notice from the Lender alleging
that a Default or an Event of Default has occurred or is continuing.
(iv) LEGALLY BINDING.
All of the Contracts are legal, valid and binding on the Company party
thereto, are in full force and effect and represent legitimate transactions. No
Company is in violation of or default under any of the Contracts and, to LLC's
knowledge, no other party to any Contract is in material violation or default
thereunder. No event, occurrence or condition exists which, with the lapse of
time, the giving of notice, or both, would become a material violation or
default by any Company or, to LLC's knowledge, any other party thereto, under
any Contract. There are no outstanding, and to LLC's knowledge, no threatened,
disputes or disagreements with respect to any of the Contracts. No Company has
released any material rights under any Contract. All rights of the Companies
under the Contracts will be enforceable by the Companies after the CLOSING
without the consent or agreement of any other party.
(v) COPIES.
LLC has made available to UbiquiTel true and complete copies of each
Contract, including all amendments thereto. There are no unwritten amendments
to, or waivers under, any Contract.
6.5 LIABILITIES.
(a) NO UNDISCLOSED LIABILITIES.
There are no liabilities of any Company, whether accrued, contingent,
absolute, determined, determinable or otherwise, and there is no existing
condition, situation or set of circumstances having specific application to the
Companies (excluding general, economic or industry conditions) which could
reasonably be expected to result in any such liability, other than (i)
liabilities disclosed and/or provided for in the most recent LLC Financial
Statements, (ii) liabilities incurred in the ordinary course of business
consistent with past practices since the date of the most recent LLC Financial
Statements, or (iii) liabilities under this Agreement or the Related Agreements
or reflected in any schedule, exhibit or other documents delivered in connection
herewith or therewith.
(b) TAX MATTERS.
(i) All material Tax Returns required to be
filed by or on behalf of each Company have been properly prepared and timely
filed with the appropriate taxing authorities in all jurisdictions in which
such Tax Returns are required to be filed (after giving effect to any valid
extensions of time in which to make such filings) and all such Tax Returns
were true, complete and correct in all material respects. LLC has been subject
to tax as a partnership for federal, state, local and foreign income tax
purposes since its inception.
(ii) All Taxes (whether or not shown on any Tax
Returns) payable by or on behalf of the Companies have been fully and timely
paid, including all required estimated tax payments sufficient to avoid any
understatement penalties. The cash reserves or accruals for Taxes provided in
the books and records of the Company with respect to any period for which Tax
Returns have not yet been
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filed or for which Taxes are not yet due and owing are, or prior to the
PRE-CLOSING DATE, will be, sufficient for all unpaid Taxes of the Company
through and including the PRE-CLOSING DATE (including, without limitation,
with respect to any Taxes resulting from the Transactions contemplated by this
Agreement). Neither Company has any liability for Taxes of any other Person as
a transferee, successor, by contract or otherwise, except with respect to
Taxes for which withholding may be required. There are no Liens as a result of
any unpaid Taxes upon any of the assets of the Companies.
(iii) The Companies have not executed or filed
with the Internal Revenue Service or any other taxing authority any agreement,
waiver or other document or arrangement extending or having the effect of
extending the period for assessment or collection of Taxes (including, but not
limited to, any applicable statute of limitation), and no power of attorney
with respect to any Tax matter is currently in force. The Companies are not
the subject of any private letter ruling of the Internal Revenue Service or
comparable rulings of other taxing authorities.
(iv) The Companies have complied in all
material respects with all applicable laws, rules and regulations relating to
the payment and withholding of Taxes on amounts paid or owing to any employee,
independent contractor, creditor, Member or other third party and have duly
and timely withheld and paid over to the appropriate taxing authorities all
Taxes with respect to such amounts.
(v) All deficiencies asserted or assessments
made as a result of any examinations by the Internal Revenue Service or any
other taxing authority of the Tax Returns of or covering or including the
Companies have been fully paid, and there are no other audits or
investigations by any taxing authority or proceedings in progress, nor have
the Members or the Companies received any notice from any taxing authority
that it intends to conduct such an audit or investigation. No issue has been
raised by a U.S. federal, state, local or foreign taxing authority in any
current or prior examination of the Companies which, by application of the
same or similar principles, could reasonably be expected to result in a
proposed material deficiency for any subsequent taxable period. No claim has
been made by a taxing authority in a jurisdiction where the Companies do not
file Tax Returns such that they are or may be subject to taxation by that
jurisdiction.
(vi) Neither the Companies, nor any other
Person (including any of the Members) on behalf of the Companies, has (A)
agreed to or is required to make any adjustments pursuant to Section 481(a) of
the Code or any similar provision of state, local or foreign law by reason of
a change in accounting method initiated by the Companies, or has any
application pending with any taxing authority requesting permission for any
changes in accounting methods that relate to the business or operations of the
Companies, or has otherwise taken any action that would have the effect of
deferring any liability for Taxes from any taxable period ending on or before
the EFFECTIVE DATE to any taxable period ending thereafter or (B) executed or
entered into a CLOSING agreement pursuant to Section 7121 of the Code or any
predecessor provision thereof or any similar provision of state, local or
foreign law with respect to the Companies.
(vii) Except for this Agreement or as provided
in the Operating Agreement, the Companies are not parties to any tax-sharing
or similar agreement or arrangement (whether or not written) pursuant to which
the Companies will have any obligation to make any payments after the
PRE-CLOSING DATE.
(viii) There is no contract, agreement, plan or
arrangement covering any person that, individually or collectively, could give
rise to the payment of any amount that would not be deductible by UbiquiTel or
any of its Affiliates by reason of Section 280G of the Code, or would
constitute compensation in excess of the limitation set forth in Section
162(m) of the Code.
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(ix) Each Company has substantial authority
for the treatment of or has disclosed (in accordance with Section
6662(d)(2)(B)(ii) of the Code) on its federal income Tax Returns all positions
taken therein that could give rise to a substantial understatement of federal
income tax within the meaning of Section 6662(d) of the Code.
(x) As used in this Agreement, the term
"TAXES" means all federal, state, local, foreign and other governmental net
income, gross income, gross receipts, sales, use, ad valorem, transfer,
franchise, profits, license, lease, service, service use, withholding,
payroll, employment, unemployment, excise, severance, stamp, occupation,
premium, property, windfall profits, customs, duties or other taxes, fees,
assessments or charges of any kind whatever, together with any interest and
any penalties, additions to tax or additional amounts with respect thereto,
and the term "TAX" means any one of the foregoing Taxes; the term "TAX
RETURNS" means all returns, declarations, reports, statements and other
documents required to be filed in respect of Taxes; and the term "CODE" means
the Internal Revenue Code of 1986, as amended (all citations to the Code, or
to the Treasury Regulations promulgated thereunder, shall include any
amendments or any substitute or successor provisions thereto).
(c) LITIGATION.
(i) PROCEEDINGS.
There is no pending action, arbitration, audit, charge, complaint,
demand, litigation or suit (whether civil, criminal or administrative
(including, without limitation, Equal Employment Opportunity Commission,
Department of Labor or Office of Federal Contract Compliance, National Labor
Relations Board, and similar state or federal agencies)) that (A) has been
received or commenced by or against any Company, or (B) has been received or
commenced by or against any Company and that relates to this Agreement, any
Related Agreement or the transactions contemplated herein or therein
(collectively, the "PROCEEDINGS"), and, to LLC's knowledge, no such Proceedings
have been threatened.
(ii) ORDERS.
There is no award, decision, injunction, judgment, order, ruling,
subpoena, writ or verdict of any court, arbitrator or government agency (each,
an "ORDER") to which any Company is subject that relates to or affects this
Agreement, any Related Agreement or the transactions contemplated herein or
therein.
(iii) DISCLOSURE SCHEDULE.
The LLC Disclosure Schedule sets forth a brief description of each
Proceeding pending or, to LLC's knowledge, threatened at the date hereof.
(d) EMPLOYEE LIABILITIES.
The LLC Disclosure Schedule accurately lists as of the date set forth
therein, (i) the hire date of and year-to-date cash compensation paid to each
employee of each Company (specifying as to each such employee the respective
amounts of base salary, bonus and commissions paid to such employee), (ii) the
monthly salary of each employee for each of the last 12 months, (iii) all
written employee policies of each Company, and (iv) all accrued and unpaid
commissions, bonus payments or vacation pay due to employees of each Company as
of December 31, 2000.
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(e) WARRANTIES.
There are no express written warranties with respect to the quality or
absence of defects of the systems, products or services that any Company has
sold or performed which are in force as of the date hereof. No Company has been
required to pay direct, incidental, or consequential damages to any Person in
connection with any of such systems, products or services at any time during the
three year period preceding the date hereof.
6.6 INSURANCE.
The LLC Disclosure Schedule contains a list of all insurance policies
maintained by each Company (including, without limitation, policies on its
assets, and upon its business and operations), against loss or damage, risks,
hazards and liabilities (the "POLICIES"). The Policies are valid and enforceable
and, to LLC's knowledge, are with insurers that are financially sound and
reputable. The premiums due and owing with respect to the Policies have been
paid, premiums not yet due have been adequately accrued for, and no Company has
received any written notice of cancellation or of intention not to renew any
such Policy. The LLC Disclosure Schedule also sets forth a list of each other
insurance policy or insurance contract relating to any Company or the business
of any Company pursuant to which any Company is or may hereafter be entitled to
assert claims for insurance coverage (the "PRIOR POLICIES"). The covered Company
or Companies have timely pursued all rights to recover (if any) under the
Policies and the Prior Policies.
6.7 EMPLOYEES.
(a) To LLC's knowledge, no officer, employee or
independent contractor of any Company is in violation of any term of any
contract, proprietary information agreement, noncompetition agreement, or any
other agreement to a former employer relating to the right of any such person
to be engaged by such Company or to the use of Intellectual Property of others
in any Company's business (an "OUTSIDE CONFIDENTIALITY AGREEMENT"). There are
neither pending, nor to LLC's knowledge, threatened, any Proceedings with
respect to any Outside Confidentiality Agreement.
(b) There is no labor strike, dispute, slowdown,
picketing or stoppage pending or, to LLC's knowledge, threatened against or
directly affecting any Company, nor has any Company experienced any of the
foregoing since its formation. No Company is subject to any collective
bargaining agreement. No union representation exists and, to LLC's knowledge,
there has been no union organization effort respecting the employees of any
Company.
(c) LLC and LLC Subsidiary are in material compliance
with all applicable laws relating to the employment of labor and the
employer-employee relationship and with all agreements relating to the
employment of its employees, including applicable wage and hour laws, equal
opportunity laws, fair employment laws, safety laws, worker compensation
statutes, unemployment laws, benefits laws, immigration/visa regulations
(e.g., H-1B) and social security laws. No proceedings are pending or
threatened by or against LLC or LLC Subsidiary concerning: wages,
compensation, bonuses, commissions, awards, benefits, or payroll deductions,
wrongful termination, negligent hiring, invasion of privacy or defamation,
noncompetition agreements or similar restrictive covenants, equal employment
or alleged violations regarding race, color, religion, sex, national origin,
age, handicap, veteran's status, pregnancy, marital status, disability, or any
other recognized class, status, or attribute under any federal, state, local
or foreign equal employment law prohibiting discrimination or any other claim
based on the employment relationship or termination of the employment
relationship (collectively "LABOR CLAIMS"), and LLC knows of no basis for any
Labor Claim against LLC.
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(d) Neither LLC nor LLC Subsidiary is bound by or
subject to (and none of its respective assets or properties is bound by or
subject to) any arrangement with any labor union. No employees of LLC or LLC
Subsidiary are represented by any labor union or covered by any collective
bargaining agreement and, to LLC's knowledge, no campaign to establish such
representation is in progress.
6.8 EMPLOYEE BENEFIT PLANS.
(a) The LLC Disclosure Schedule lists all employee
benefit plans, programs, payroll practices, arrangements and contracts
(including each "employee benefit plan" as defined in Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA")), and
all other bonus, scholarship program, retirement, deferred compensation, stock
bonus, stock purchase, restricted stock, stock option, oral or written
commitment regarding retiree health, life or any other retiree benefit,
employment, dependent care, cafeteria plan, hospitalization, medical
insurance, termination, stay agreement or bonus, value appreciation, change in
control and severance plan, program, arrangement or contract that LLC and/or
any Member or any trade or business whether or not incorporated which are
under control (collectively referred to as the "COMBINED COMPANY"), or which
are treated as a single employer with the Combined Company under Section
414(b), (c), (m) or (o) or the Code ("ERISA AFFILIATE"), which the Combined
Company or an ERISA Affiliate maintains or ever has maintained, or to which
the Combined Company or any ERISA Affiliate contributes, ever has contributed
or ever has been required to contribute in connection with its employees (the
"EMPLOYEE BENEFIT PLANS"). None of the Employee Benefit Plans is a
"Multiemployer Plan" or is or has been subject to Sections 4063 or 4064 or
ERISA.
(b) All Employee Benefit Plans (and each related trust,
insurance contract or fund) comply in form and in operation in all material
respects with the applicable requirements of all laws, rules and regulations
governing or applying to such Employee Benefit Plans, including without
limitation ERISA and the Code, and each such Plan has been operated in
accordance with its terms, except as will not have a material adverse effect
on any Company or ERISA Affiliate.
(c) No liability has been incurred, and there exists no
material condition or circumstance which could result in any material
liability to any Combined Company or ERISA Affiliate under ERISA, the Code or
any other applicable law, other than liability for benefits due under the
appropriate Employee Benefit Plans. All contributions (including all employer
and employee salary reduction contributions) which are required to be made
under any of such Plans or by law (without regard to any waivers granted under
Section 412 of the Code), to any funds or trusts established thereunder or in
connection therewith, have been made by the due date thereof (including any
valid extension), and all contributions for any period ending on or before the
PRE-CLOSING DATE which are not yet due will have been paid on or prior to the
PRE-CLOSING DATE.
(d) No Company or ERISA Affiliate, "party in interest"
or "disqualified person" with respect to the Employee Benefit Plans has
engaged in or permitted to occur, any transaction prohibited by ERISA Section
406 or any "prohibited transaction" under Code Section 4975(c) or any breach
of fiduciary duty under ERISA with respect to any Employee Benefit Plans,
except for any transactions which are exempt under ERISA Section 408 or Code
Section 4975.
(e) All filings required by ERISA and the Code as to
each Employee Benefit Plan have been timely filed, and all notices and
disclosures to participants required by either ERISA or the Code, including
all notices required under ERISA Section 601 ET SEQ. and Code Section 4980B,
have been timely provided. Each Combined Company and ERISA Affiliate has
complied in all material respects with all of the provisions of Parts 6 and 7
of Title I of ERISA and Code Section 4980B, except as will not have a material
adverse effect on such Combined Company or ERISA Affiliate.
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(f) All the Combined Companies and ERISA Affiliates
have made available to UbiquiTel correct and complete copies of the plan
documents, contracts and summary plan descriptions, the most recent
determination letter received from the Internal Revenue Service, where
applicable, the most recent three years of Form 5500 Annual Reports, where
applicable, all related trust agreements, insurance contracts and other
funding agreements which implement each Employee Benefit Plan, written
communications to employees relating to the Employee Benefit Plans, if any,
written descriptions of any non-written agreements relating to the Employee
Benefit Plans, if any, and such other documents requested by UbiquiTel with
respect to each Employee Benefit Plan.
(g) There are no pending actions, claims, lawsuits,
arbitrations, governmental or other proceedings or investigations which have
been asserted, instituted or threatened against the Employee Benefit Plans,
the assets of any of the trusts under such plans, the plan sponsor or the plan
administrator, or against any fiduciary of the Employee Benefit Plans with
respect to the operation of such plans (other than routine benefit claims) and
the investment of assets of such Plans, including any investigation or review
by the IRS, Department of Labor or the Pension Benefit Guaranty Corporation,
nor does the Combined Company or any ERISA Affiliate have knowledge of facts
which could reasonably be expected to form the basis for any such claim,
lawsuit, arbitration, governmental or other proceeding or investigation.
(h) Neither the Combined Company nor any ERISA
Affiliate has: (i) withdrawn in a complete or partial withdrawal from any
Multiemployer Plan prior to the PRE-CLOSING DATE; (ii) incurred any liability
due to the termination or reorganization of a Multiemployer Plan; (iii)
terminated any "Pension Plan", as defined in Section 3(2) of ERISA, or filed a
notice of termination with respect to any Pension Plan; or (iv) received a
notice of termination issued by the Pension Benefit Guaranty Corporation
pursuant to Section 4042 of ERISA with respect to any Pension Plan. With
respect to the Pension Plans subject to Title IV of ERISA, if any, there are
no "amount of unfunded benefit liabilities" as defined in Section 4001(a)(18)
of ERISA, there has been no "reportable event" as that term is defined in
Section 4043 of ERISA and the regulations thereunder which would require the
giving of notice or any event requiring disclosure under Section 4041(c)(3)(C)
or 4063(a) of ERISA, and all premiums due the PBGC have been paid in full. No
Pension Plan which is subject to Part III of Subtitle B of Title I of ERISA or
Section 412 of the Code has incurred any "accumulated funding deficiency" as
defined in Section 302(a)(2) of ERISA and Section 412(a)(2) of the Code
whether or not waived.
(i) The Pension Plans are intended to qualify under
Section 401 of the Code and have received a favorable determination letter
from the Internal Revenue Service that the Pension Plans satisfy the
requirements of Section 401 of the Code and the related trusts maintained
pursuant thereto are exempt from federal income taxation under Section 501 of
the Code, and nothing has occurred with respect to the operation of Pension
Plans which could cause the loss of such qualification or exemption.
(j) Neither the Combined Company nor any ERISA
Affiliate maintains retiree life or retiree health insurance plans which are
Employee Benefit Plans and "welfare benefit plans" within the meaning of
Section 3(1) of ERISA and which provide for continuing benefits or coverage
for any participant or any beneficiary of a participant, except as may be
required under COBRA and at the expense of the participant or the
participant's beneficiary for employees (and their beneficiaries) of the
Combined Company and any ERISA Affiliate.
6.9 LICENSES.
(a) Each of LLC and LLC Subsidiary has all governmental
licenses, permits, approvals, authorizations, exemptions, classifications,
registrations and certificates, and all consents or agreements with
governmental authorities (collectively, "LICENSES") necessary to conduct its
business in
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the manner and to the extent that it has been conducted, except where the
failure to possess such Licenses would not have a material adverse effect on
such Company. All of the Licenses and the parties thereto are listed on the
LLC Disclosure Schedule. The LLC Disclosure Schedule also lists every
application for any new License as well as for the renewal or modification of
any existing License. The Companies have made available to UbiquiTel true and
complete copies of all of the Licenses. All Licenses are in full force and
effect, and, to LLC's knowledge, no event has occurred that may constitute or
result in a material violation of the terms and conditions of any License, or
result in the revocation, suspension, material adverse modification or
nonrenewal of any License. No Company has received any written notice of or
has any knowledge of any actual, alleged or potential violation, revocation,
suspension, modification or nonrenewal of any License.
(b) LLC has made all material filings required by any
and all federal, state and local governmental authorities (including, without
limitation, as appropriate, the FCC and the California Public Utilities
Commission), as are necessary to own, lease, license and operate its
respective properties and to conduct its business, including the planned
build-out of the PCS telecommunications network, as described in the Sprint
Affiliation Agreement. There is not pending or, to LLC's knowledge, threatened
any petition, complaint, investigation or other proceeding by or before any
federal, state or local governmental authority with respect to LLC or the
Licenses.
(c) The Licenses for PCS (the "PCS LICENSES") are not
subject to any conditions other than those conditions listed thereon and those
conditions generally applicable to entities holding similar licenses issued by
the FCC. The PCS Licenses for F Block Spectrum expire on April 28, 2007, the
five-year build-out period for the PCS Licenses expires on April 28, 2002, and
the ten-year build-out period for the PCS Licenses expires on April 28, 2007.
The PCS License for A Block Spectrum expires on December 14, 2004. The PCS
Licenses have been granted pursuant to one or more public notices that have
become "final" (meaning that all applicable administrative and judicial
appeal, review and reconsideration periods of the orders granting the PCS
Licenses have expired, without the timely filing of any such appeal or request
for review or reconsideration and without the FCC's having instituted review
of the grant of the PCS Licenses on its own motion).
(d) LLC's FCC Licenses (including the PCS Licenses)
constitute all of the licenses, permits, consents or authorizations required
by the FCC to permit LLC to operate its PCS telecommunications network and to
conduct its business, including the Build-Out Plan of the PCS
telecommunications network, as described in the Sprint Affiliation Agreement.
All fees due and payable to governmental authorities, including, but not
limited to, any required by the FCC in connection with the PCS Licenses, such
as down payments or installment payments required by FCC rules to be paid as
of the date hereof, as well as applicable payments to the Telecommunications
Relay Service Fund, Universal Service Fund, Regulatory Assessments fees, and
any such other payment obligations imposed by governmental authorities, have
been fully paid (other than the Installment Payment Plan promissory notes in
favor of the FCC in the amount set forth in the Company's unaudited financial
statements as at and for the year ended December 31, 2000).
(e) All completed and planned development,
implementation, construction and operation of the telecommunications network
pursuant to the PCS Licenses comply in all material respects with all
currently applicable telecommunications statutes or published regulations,
including, without limitation, the Communications Act of 1934, as amended by
the Telecommunications Act of 1996, and all published FCC rules, regulations,
and orders currently in effect.
(f) LLC has provided notification to licensed operators
of Fixed Microwave Services as required by Section 101.103 of the FCC's rules
(47 C.F.R. Section 101.103). Except as set forth on the LLC Disclosure
Schedule, neither LLC nor any Member has received any notice of or has any
obligations to
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reimburse any third party for any relocation expenses required under Section
24.239 through 24.253 of the FCC's rules (47 C.F.R. Sections 24.239 - 24.253).
(g) There are no material violations of the
Communications Act of 1934, as amended, or any published FCC rules or
regulations, or of any other state or local laws, published rules, or
regulations, with respect to the Licenses, and the Licenses have been duly
issued under the Communications Act and the FCC's rules and regulations and
are in force and in effect. There is no outstanding adverse decree, order, or
other ruling that has been issued by the FCC or any other governmental entity
against LLC or any Member or any other party with respect to the Licenses, and
there is no complaint, investigation, proceeding, petition, notice of
violation, notice of apparent liability, or mutually exclusive application
pending or, to LLC's knowledge, threatened, by or before the FCC or any other
administrative or governmental body, court or arbitrator against LLC or any
Member or any other party with respect to the Licenses. To LLC's knowledge no
event has occurred that would permit or warrant the FCC to commence revocation
proceedings or otherwise terminate the Licenses, or which would materially
adversely affect any of the rights of LLC or its Members thereunder.
(h) As of January 31, 2001, the principal balances
owing on each of the Installment Payment Plan promissory notes made by Central
Wireless Partnership in favor of the FCC and assigned by Central Wireless
Partnership to LLC is $6,360,574.86, the interest rate is 6.25 percent per
annum, and the suspension interest owing is $0. Except for the encumbrances
resulting from the promissory notes in favor of the FCC, the Communications
Act of 1934, as amended, and all applicable FCC's rules, regulations and
policies promulgated thereunder, on a license of the type held by LLC or any
Member, the Licenses are and will at the CLOSING be unencumbered and free of
any liens, charges or defects.
6.10 ENVIRONMENTAL MATTERS.
(a) ENVIRONMENTAL LAWS.
LLC has received no notice of, and has no knowledge with respect to,
any current violation of Environmental Laws (as hereinafter defined) related to
the Leased Premises or the Real Property, or the presence or release of
Hazardous Materials (as hereinafter defined) on or from the Leased Premises.
Neither LLC nor LLC Subsidiary has received any written communication from any
Person that alleges that any Company is not in compliance with any Environmental
Law. Neither LLC nor, to LLC's knowledge, any of the Lessors or other occupants,
have released or discharged from or on to the Leased Premises any Hazardous
Materials or any toxic wastes, substances or materials (including, without
limitation, asbestos). LLC has no knowledge that any underground or above-ground
chemical treatment or storage tanks or gas or oil ▇▇▇▇▇ are located on the
Leased Premises. As used herein, the term "ENVIRONMENTAL LAWS" means the
Resource Conservation and Recovery Act and the Comprehensive Environmental
Response Compensation and Liability Act and other federal laws governing the
environment as in effect on the date of this Agreement, together with their
implementing regulations, guidelines, rules or orders as of the date of this
Agreement, and all state, regional, county, municipal and other local laws,
regulations, ordinances and rules that are equivalent or similar to the federal
laws recited above or that purport to regulate Hazardous Materials, and, in
addition, the National Historic Preservation Act, and the National Environmental
Policy Act of 1969. As used herein, the term "HAZARDOUS MATERIALS" means
petroleum, including crude oil or any fraction thereof, natural gas, natural gas
liquids, liquefied natural gas, or synthetic gas usable for fuel (or mixtures of
natural gas or such synthetic gas), and any substance, material, waste,
pollutant or contaminant listed or defined as hazardous or toxic under any
Environmental Law.
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(b) ENVIRONMENTAL CLAIMS.
There is no Environmental Claim pending or, to LLC's knowledge,
threatened (A) against any Company, or (B) against any Person whose liability
for any Environmental Claim any Company has or may have retained or assumed
either contractually or by operation of law. As used herein, "ENVIRONMENTAL
CLAIM" means any and all written administrative, regulatory or judicial actions,
suits, Liens or notices of non-compliance or violation by any governmental
authority alleging potential liability (including, without limitation, potential
liability for enforcement, investigatory costs, cleanup costs, governmental
response costs, removal costs, remedial costs, natural resources damages,
property damages, personal injuries, or penalties) arising out of, based on or
resulting from (A) the presence, or release or threatened release into the
environment of any hazardous material or pollutant at any location, or (B) any
violation, or alleged violation, of any Environmental Law.
(c) PERMITS.
Each Company has obtained all permits and authorizations relating to
Environmental Laws necessary to operate its business, except for those permits
the failure of which to obtain would not cause a material adverse effect.
6.11 NO BROKERS FEES; NO COMMISSIONS.
All negotiations relative hereto and the transactions contemplated
hereby have been carried on by the LLC Parties directly with UbiquiTel and the
Merger Subs without any act by any Company that would give rise to any claim
against any Company, UbiquiTel, the Merger Subs or their respective Affiliates
for a brokerage commission, finder's fee or other similar payment.
6.12 CERTAIN INFORMATION.
None of the information supplied or to be supplied by LLC specifically
for inclusion in (i) the Form S-4 or Form S-1 (as defined in Section 11.2(c)
(FORM S-1) hereof), as applicable, will, at the time the Form S-4 or Form S-1,
as applicable, is filed with the SEC, at any time that such form is amended or
supplemented, and at the time such form becomes effective under the Securities
Act (as defined in Section 11.2(a) (PREPARATION) hereof), contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading, or
(ii) the Proxy Statement will, at the time it is filed with the SEC, at any time
that it is amended or supplemented, at the time it is mailed to the holders of
UbiquiTel Stock and at the time of the UbiquiTel Stockholders' Meeting, contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading.
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ARTICLE 7
REPRESENTATIONS AND WARRANTIES CONCERNING THE MEMBERS AND THE STOCKHOLDERS
In this Article 7, each Member and the Stockholder or Stockholders
owning equity in such Member are referred to collectively as a "STOCKHOLDER
GROUP." Additionally, for purposes of this Article 7 and Section 12.2(a)(ii)
(STOCKHOLDER GROUPS' INDEMNIFICATION) herein only, and in the case of an ▇▇▇▇▇
Merger only, except as otherwise stated herein, the Controlling ▇▇▇▇▇
Stockholders collectively shall be deemed to comprise a Stockholder Group, each
Controlling ▇▇▇▇▇ Stockholder shall be deemed to be a Stockholder herein, and
▇▇▇▇▇ shall be deemed to be a Member; PROVIDED, HOWEVER, that except as set
forth in Section 7.6 (SALE OF ▇▇▇▇▇ TELCO BUSINESSES) herein, no representation
or warranty is being made in this Agreement, including without limitation, this
Article 7, with respect to the ▇▇▇▇▇ Telco Businesses. For purposes of this
Article 7, the representations and warranties made with respect to any one
Stockholder Group shall be deemed to be made jointly and severally by the
members of such Stockholder Group, and the representations and warranties made
with respect to a Member or a Stockholder in this Article 7 shall be deemed to
be made jointly and severally only by the Stockholder Group to which such Member
or Stockholder belongs. The representations and warranties made herein with
respect to the members of more than one Stockholder Group shall be deemed to be
made by each Stockholder Group severally, and not jointly with other Stockholder
Groups. Subject to the foregoing and Article 12 (INDEMNIFICATION) hereof, the
Members and the Stockholders represent and warrant to UbiquiTel and the Merger
Subs that, except as specifically set forth on the disclosure schedule to this
Article 7, which shall be organized by section and sub-section numbers
corresponding to this Article 7 (the "STOCKHOLDERS DISCLOSURE SCHEDULE"):
7.1 STOCKHOLDERS; ENTRY INTO AGREEMENTS.
(a) ORGANIZATION AND GOOD STANDING.
Each member of each Stockholder Group (a "STOCKHOLDER ENTITY") that is
not a natural person is duly organized and validly existing under the laws of
the State of California, is in good standing under such laws, and has all
requisite power and authority to own, lease and operate all properties and
assets owned or leased by it and to conduct its business as previously and
currently conducted by it. Each Stockholder Entity is qualified to do business
and is in good standing in each jurisdiction in which it is required to be so
qualified, except where the lack of such qualification would not have a material
adverse effect on such Stockholder Entity. The Stockholders Disclosure Schedule
lists all jurisdictions in which any Stockholder Entity is qualified to do
business as a foreign entity and indicates which of the Stockholder Entities is
so qualified in each such jurisdiction. The Stockholders Disclosure Schedule
also lists, for each Stockholder Entity, the names of the Persons owning 10% or
more of the equity of such Stockholder Entity and the percentage owned by each
such Person. Each Member has made available to UbiquiTel a true and correct copy
of its Organizational Documents and minute books.
(b) VALIDITY AND AUTHORIZATION; POWER AND AUTHORITY.
Each Member and Stockholder, as applicable, has full power and
authority to consummate the Merger to which it is a party and to execute,
deliver and perform this Agreement, the Related Agreements and the other
instruments called for hereby or thereby to which it is a party. This Agreement
and the Related Agreements to which a Stockholder Entity is a party have been
duly authorized, executed and delivered by each such Stockholder Entity and
constitute (or, in the case of Related Agreements or instruments called for
hereby or thereby to be executed by a Stockholder Entity at or before the
CLOSING, upon execution will constitute) the legal, valid and binding obligation
of such Stockholder Entity enforceable against such Stockholder Entity in
accordance with their respective terms.
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(c) NO CONFLICT.
Except as set forth in the Stockholders Disclosure Schedule, neither
the execution, delivery or performance of this Agreement or the Related
Agreements, nor the consummation of the Mergers or the transactions contemplated
hereby or thereby will (i) result in any violation of the terms of, (ii)
contravene or conflict with, (iii) accelerate the performance of the obligations
required under, (iv) constitute a default under, (v) give any right of
termination or cancellation under, or (vi) give any right to make any change in
any of the liabilities or obligations under, the Organizational Documents of any
Stockholder Entity, any Order, or any agreement, contract, note, bond,
debenture, indenture, mortgage, deed of trust, lease, License, judgment, decree,
order, law, rule or regulation or other restriction applicable to any
Stockholder Entity or to which any Stockholder Entity is a party or by which any
Stockholder Entity or its property or assets are bound or affected that, in any
such case, will result in a material adverse effect on any Member or any
Stockholder.
(d) LLC PARTIES CONSENTS; STOCKHOLDERS CONSENTS NOT
REQUIRED.
The Stockholders Disclosure Schedule lists all LLC Parties Consents for
which filing or other action is required by a Member. Subject to Section 2.1(f),
each Member has taken or shall have taken prior to the PRE-CLOSING DATE all
other actions necessary for the consummation by such Member of the transactions
contemplated by this Agreement and the Related Agreements. No approval, filing,
consent, permit, for which filing or other action is required by any Stockholder
is required for the valid execution, delivery or performance of this Agreement
and the Related Agreements or the consummation of the Mergers, or any of the
transactions contemplated hereby or thereby.
(e) OWNERSHIP AND TRANSFER OF MEMBERS' INTERESTS.
Each Member represents that it has good, valid and marketable title to
the units of Members' Interests owned by it, free and clear of any Liens. Each
Member represents that it is not a party to any contract, agreement or
understanding (other than this Agreement) relating to the issuance, sale,
redemption, purchase, repurchase, acquisition or other transfer or voting of any
units of Members' Interests or any other equity security of any Company, other
than LLC's Operating Agreement. Consummation of the transactions contemplated by
this Agreement will transfer to UbiquiTel indirect ownership of all of the
Members' Interests of LLC free and clear of all Liens.
7.2 FINANCIAL INFORMATION.
(a) FINANCIAL STATEMENTS; BOOKS AND RECORDS.
Attached to the Stockholders Disclosure Schedule are true and correct
copies of (i) the balance sheets for each of the Members (other than the Selling
Member) as of the close of each such Member's most recent fiscal year, and the
related statement of profit and loss and cash flows for the periods then ended,
including any audit and it reports thereon that have been rendered with respect
to such financial statements, (ii) the unaudited balance sheet for each Member
at September 30, 2000, and the related statement of profit and loss for the nine
month period then ended, and (iii) when delivered pursuant hereto, similar
financial statements for each additional month ending after the date hereof
(such financial statements of a Stockholder Entity being referred to herein as
the "FINANCIAL STATEMENTS"). Each Member's Financial Statements fairly present
the financial position of the Member to which it pertains as of the dates
thereof and the results of such Member's operations and cash flows for the
periods then ended, in accordance with GAAP, except for the variances from GAAP
set forth in the notes to such Member's Financial Statements, subject, in the
case of such Member's Financial Statements listed in items (ii) and (iii) of the
immediately-preceding paragraph, to normal recurring period-end adjustments and
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absence of notes and a statement of cash flows in each case that, if presented,
would not differ materially from those included in the financial statements for
the most recent fiscal year of each such Member.
(b) CONDUCT OF BUSINESS.
Each Member (i) does not conduct, and has never conducted, any business
of any nature whatsoever except for (A) holding its Member Interest in LLC and
(B) those businesses specifically described on the Stockholders Disclosure
Schedule, and (ii) does not have any assets (other than its Member Interest).
7.3 EQUITY INTERESTS.
(a) CAPITALIZATION.
The authorized, issued and outstanding equity interests of each Member
are as set forth in the Stockholders Disclosure Schedule. There are no other
equity interests of any Member either authorized or outstanding. All of the
issued and outstanding equity interests of each Member have been duly authorized
and validly issued, are fully paid and nonassessable, and are free and clear of
any preemptive rights. There are no outstanding preemptive, conversion or other
rights, or other options, warrants or agreements granted by, issued by, or
binding upon, any Member for the issuance, sale, purchase, repurchase,
redemption, acquisition or other transfer of any equity interests or securities
of any Member. Immediately prior to the Effective Date of the Merger to which it
is a party, no Stockholder shall have the right to assert dissenters' or
appraisal rights under applicable state law (or if such dissenters' or appraisal
rights exist, each Stockholder shall have waived such rights), or otherwise have
the right to demand cash or other payment for Stock in connection with such
Merger, other than the Merger Consideration to be received by such Stockholder.
(b) OWNERSHIP AND TRANSFER BY STOCKHOLDERS.
Each Stockholder represents that it has good, valid and marketable
title to the equity interests of the Member owned by it, free and clear of any
Liens, and upon consummation of the Mergers contemplated hereby, UbiquiTel or
the Merger Subs, as the case may be, will collectively own all of the
outstanding Member Interests. Consummation of the transactions contemplated by
this Agreement will transfer to UbiquiTel all of the shares of Stock or other
equity interest of each Member.
7.4 NO CONTRACTS.
No Member is or has ever been a party to, nor are any assets of any
Member subject or ever been subject to, any Contract or agreement.
7.5 LIABILITIES.
(a) NO UNDISCLOSED LIABILITIES.
Except as set forth or reserved against in full in the most recent
Financial Statements, no Member has any debt, guaranty, liability or obligation
of any nature, whether known or unknown, accrued, absolute, contingent,
determined or determinable or otherwise, whether due or to become due, and to
each Member's knowledge, there is no basis for the assertion against it of any
such debt, guaranty, liability or obligation.
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(b) TAX MATTERS.
(i) All material Tax Returns required to be
filed by or on behalf of the Member or any of its subsidiaries or any Affiliated
Group of which the Member or any of its subsidiaries was a member have been
properly prepared and timely filed with the appropriate taxing authorities in
all jurisdictions in which such Tax Returns are required to be filed (after
giving effect to any valid extensions of time in which to make such filings) and
all such Tax Returns were true, complete and correct in all material respects.
(ii) All Taxes (whether or not shown on any Tax
Returns) payable by or on behalf of the Member or any of its subsidiaries either
directly, as part of the consolidated Tax Returns of another taxpayer, or
otherwise have been fully and timely paid, including all required estimated tax
payments sufficient to avoid any understatement penalties. The cash reserves or
accruals for Taxes provided in the books and records of the Member with respect
to any period for which Tax Returns have not yet been filed or for which Taxes
are not yet due and owing are, or prior to the EFFECTIVE DATE, will be,
sufficient for all unpaid Taxes of the Member through and including the
EFFECTIVE DATE (including, without limitation, with respect to any Taxes
resulting from the Transactions contemplated by this Agreement). Other than as
provided on the Stockholders Disclosure Schedule, neither the Member nor any of
its subsidiaries has any liability for Taxes of any other person as a
transferee, successor, by contract or otherwise, except with respect to Taxes
for which withholding may be required and has been made. There are no Liens as a
result of any unpaid Taxes upon any of the assets of the Member or any of its
subsidiaries.
(iii) Neither the Member nor any of its
subsidiaries has executed or filed with the Internal Revenue Service or any
other taxing authority any agreement, waiver or other document or arrangement
extending or having the effect of extending the period for assessment or
collection of Taxes (including, but not limited to, any applicable statute of
limitation), and no power of attorney with respect to any Tax matter is
currently in force. Neither the Member nor any of its subsidiaries is the
subject of any private letter ruling of the Internal Revenue Service or
comparable rulings of other taxing authorities.
(iv) The Member and each of its subsidiaries has
complied in all material respects with all applicable laws, rules and
regulations relating to the payment and withholding of Taxes on amounts paid or
owing to any employee, independent contractor, creditor, stockholder or other
third party and has duly and timely withheld and paid over to the appropriate
taxing authorities all Taxes with respect to such amounts.
(v) All deficiencies asserted or assessments
made as a result of any examinations by the Internal Revenue Service or any
other taxing authority of the Tax Returns of or covering or including the Member
or any of its subsidiaries have been fully paid, and there are no other audits
or investigations by any taxing authority or proceedings in progress, nor have
the Stockholders, the Member or any of its subsidiaries received any notice from
any taxing authority that it intends to conduct such an audit or investigation.
No issue has been raised by a U.S. federal, state, local or foreign taxing
authority in any current or prior examination which, by application of the same
or similar principles, could reasonably be expected to result in a proposed
material deficiency for any subsequent taxable period. No claim has been made by
a taxing authority in a jurisdiction where the Member or any of its subsidiaries
does not file Tax Returns such that it is or may be subject to taxation by that
jurisdiction.
(vi) Neither the Member, nor any member of the
Member's Affiliated Group (including any of the Stockholders) on behalf of the
Member, has (A) agreed to or is required to make any adjustments pursuant to
Section 481(a) of the Code or any similar provision of state, local or foreign
law by reason of a change in accounting method initiated by the Member, or has
any application pending with
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any taxing authority requesting permission for any changes in accounting
methods that relate to the business or operations of the Member or any of its
subsidiaries, or has otherwise taken any action that would have the effect of
deferring any liability for Taxes from any taxable period ending on or before
the EFFECTIVE DATE to any taxable period ending thereafter or (B) executed or
entered into a closing agreement pursuant to Section 7121 of the Code or any
predecessor provision thereof or any similar provision of state, local or
foreign law with respect to the Member or any of its subsidiaries.
(vii) Except for this Agreement, as provided in
the Stockholders Disclosure Schedule, and the Operating Agreement, neither the
Member nor any of its subsidiaries is a party to any tax-sharing or similar
agreement or arrangement (whether or not written) pursuant to which it will have
any obligation to make any payments after the EFFECTIVE DATE.
(viii) There is no contract, agreement, plan or
arrangement covering any person that, individually or collectively, could give
rise to the payment of any amount that would not be deductible by UbiquiTel or
any of its Affiliates by reason of Section 280G of the Code, or would constitute
compensation in excess of the limitation set forth in Section 162(m) of the
Code.
(ix) The Member and each of its subsidiaries has
substantial authority for the treatment of or has disclosed (in accordance with
Section 6662(d)(2)(B)(ii) of the Code) on its federal income Tax Returns all
positions taken therein that could give rise to a substantial understatement of
federal income tax within the meaning of Section 6662(d) of the Code.
(c) LITIGATION.
There is no pending Proceeding that has been received or commenced by
or against any Stockholder Entity that otherwise relates to or may affect the
Mergers, the Interest Sale, this Agreement, any Related Agreement or the
transactions contemplated herein or therein, nor, to each Member's knowledge,
have any such Proceedings been threatened.
7.6 SALE OF ▇▇▇▇▇ TELCO BUSINESSES.
▇▇▇▇▇ and the Controlling ▇▇▇▇▇ Stockholders (and not any of the
Members or the other Stockholders) jointly and severally make the following
warranties in this Section 7.6. The agreement for the disposition of the ▇▇▇▇▇
Telco Businesses (the "▇▇▇▇▇ TELCO SALE AGREEMENT") is a valid, binding and
enforceable obligation of the ▇▇▇▇▇ Stockholders, ▇▇▇▇▇ and its subsidiaries to
sell, and the other parties to the ▇▇▇▇▇ Telco Sale Agreement to buy, the ▇▇▇▇▇
Telco Businesses. The ▇▇▇▇▇ Telco Sale Agreement provides that UbiquiTel and its
subsidiaries and Affiliates shall not have any liabilities or obligations
whatsoever, and shall be released from any and all such liabilities and
obligations, under the ▇▇▇▇▇ Telco Sale Agreement upon the consummation of the
transactions contemplated by this Agreement. The ▇▇▇▇▇ Telco Sale Agreement
contains a valid, binding and enforceable covenant of each party to such
agreement and its Affiliates and successors and assigns not to ▇▇▇ UbiquiTel or
any of its subsidiaries or Affiliates. The ▇▇▇▇▇ Telco Sale Agreement provides
that UbiquiTel and its subsidiaries and Affiliates are third-party beneficiaries
of the above-described provisions of such agreements and that such provisions
cannot be amended, terminated, modified, waived or otherwise negated without the
prior written consent of UbiquiTel.
7.7 CERTAIN INFORMATION.
None of the information supplied or to be supplied by the Members or
the Stockholders specifically for inclusion in (i) the Form S-4 or Form S-1, as
applicable, will, at the time the Form S-4 or Form S-1, as applicable, is filed
with the SEC, at any time that such form is amended or supplemented,
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and at the time such form becomes effective under the Securities Act, contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statement therein not
misleading, or (ii) the Proxy Statement, will, at the time it is filed with
the SEC, at any time it is amended or supplemented, at the time it is mailed
to the holders of UbiquiTel Stock and at the time of the UbiquiTel
Stockholders' Meeting, contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under which they
are made, not misleading.
ARTICLE 8
REPRESENTATIONS AND WARRANTIES OF UBIQUITEL PARENT, UBIQUITEL AND THE MERGER
SUBS
For purposes of this Article 8, unless otherwise expressly stated
herein or the context requires otherwise, "UBIQUITEL" shall mean UbiquiTel
Parent and UbiquiTel, collectively. UbiquiTel and the Merger Subs, jointly and
severally, represent and warrant to the LLC Parties and the ▇▇▇▇▇ Stockholders
that, except as set specifically forth on the disclosure schedule to this
Article 8, which shall be organized by section and sub-section numbers
corresponding to this Article 8 (the "UBIQUITEL DISCLOSURE SCHEDULE"):
8.1 ENTRY INTO AGREEMENTS.
(a) ORGANIZATION AND GOOD STANDING.
UbiquiTel and each of the Merger Subs are corporations duly organized
and validly existing under the laws of the jurisdictions in which each
corporation is incorporated and are in good standing under such laws. UbiquiTel
Parent owns, beneficially and of record, all of the issued and outstanding
shares of capital stock of UbiquiTel and each Merger Sub.
(b) CORPORATE POWER AND AUTHORITY; VALIDITY AND
AUTHORIZATION.
UbiquiTel and the Merger Subs each have full corporate power and
authority to execute, deliver and perform this Agreement and the Related
Agreements. This Agreement has been duly authorized, executed and delivered by
UbiquiTel and the Merger Subs, and is enforceable against UbiquiTel and the
Merger Subs, in accordance with its terms. The Related Agreements to which
UbiquiTel and each of the Merger Subs is a party have been (or, in the case of
Related Agreements to be delivered at or before the CLOSING, upon execution will
be) duly authorized, executed and delivered by UbiquiTel and the Merger Subs,
and will constitute the legal, valid and binding obligations enforceable against
each of them in accordance with their terms.
8.2 CONFLICTS AND CONSENTS.
(a) NO CONFLICT.
The execution, delivery and performance of this Agreement and the
Related Agreements, and the consummation of the transactions contemplated hereby
and thereby will not result in any violation of the terms of and will not
contravene, conflict with, accelerate the performance of the obligations
required under, or constitute a default under, the certificate of incorporation
or bylaws of UbiquiTel or any of the Merger Subs, or any agreement, judgment,
decree, order, law, rule or regulation or other restriction applicable to any of
them, or to which any of them is a party or by which UbiquiTel or any of the
Merger Subs or their respective properties or assets is bound, or result in the
creation of any mortgage, pledge, lien, encumbrance or charge upon any of the
properties or assets of any of them.
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(b) CONSENTS OBTAINED.
Other than the approvals referred to in Section 3.1(a) (HSR ACT), the
Permits and the consents listed on the UbiquiTel Disclosure Schedule
(collectively, the "UBIQUITEL CONSENTS"), no material consents, approvals or
authorizations of third parties are required in connection with UbiquiTel and
the Merger Subs' valid execution, delivery and performance of this Agreement and
the Related Agreements or the consummation of any of the transactions
contemplated hereby or thereby on the part of such party.
8.3 NO BROKERS FEES; NO COMMISSIONS.
All negotiations relative hereto and the transactions contemplated
hereby have been carried on by UbiquiTel or any of the Merger Subs directly with
the LLC Parties without any act by UbiquiTel or the Merger Subs that would give
rise to any claim against the LLC Parties, ▇▇▇▇▇ or their Affiliates for a
brokerage commission, finder's fee or other similar payment.
8.4 UBIQUITEL STOCK.
The shares of UbiquiTel Stock, when issued, sold and delivered in
accordance with the terms hereof will be duly and validly issued, fully paid and
nonassessable and issued free and clear of any Liens.
8.5 SEC DOCUMENTS.
UbiquiTel Parent has heretofore delivered or made available to the LLC
Parties UbiquiTel Parent's Registration Statement on Form S-1, including the
final prospectus contained therein, all reports filed by UbiquiTel Parent under
Sections 13(a), 14(a), 14(c) and 15(d) of the Securities Exchange Act of 1934,
as amended, and the rules and regulations promulgated thereunder (the "EXCHANGE
ACT"), with the SEC on or after March 1, 2000 (the "SEC DOCUMENTS"). As of their
respective dates, each of the SEC Documents complied in all material respects
with all applicable requirements of the Securities Act and the Exchange Act. The
audited consolidated financial statements and unaudited consolidated financial
statements of UbiquiTel Parent included in the SEC Documents fairly present the
financial position of UbiquiTel Parent as of the dates of such financial
statements and the results of UbiquiTel's operations and cash flows for the
periods then ended, in accordance with GAAP, except for the variances from GAAP
set forth in the notes thereto.
8.6 NO MATERIAL ADVERSE EFFECT.
Since the date of the most recent filing by UbiquiTel Parent under the
Exchange Act prior to the date hereof, there has been no event or occurrence
that has caused or is reasonably expected to cause a material adverse effect on
UbiquiTel other than (i) operating losses in the ordinary course of business or
(ii) economic conditions affecting the U.S. economy generally or the
telecommunications industry generally.
8.7 CAPITALIZATION.
(a) The authorized stock of UbiquiTel consists of
10,000 shares of common stock, par value $0.01 per share; 1,000 shares of such
stock are issued and outstanding, and all of such stock is issued to UbiquiTel
Parent.
(b) The authorized capital stock of UbiquiTel Parent
consists of (i) 100,000,000 shares of UbiquiTel Stock, of which 63,543,604
shares were issued and outstanding as of December 31,
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2000, (ii) 10,000,000 shares of preferred stock, par value $.001 per share, of
which no shares were issued and outstanding as of December 31, 2000, and (iii)
those options and warrants to purchase UbiquiTel Stock as set forth in the
UbiquiTel Disclosure Schedule. All of the issued and outstanding shares of
UbiquiTel Stock have been duly authorized and validly issued, are fully paid
and nonassessable and are free and clear of any preemptive rights. Except as
set forth in the UbiquiTel Disclosure Schedule, there are no outstanding
preemptive, conversion or other rights, or other options, warrants or
agreements granted by, issued by, or binding upon, UbiquiTel Parent for the
issuance, sale, purchase, repurchase, redemption, acquisition or other
transfer of its equity securities other than stock that may be issued pursuant
to stock option plans or agreements described in the SEC Documents.
8.8 NO LIABILITIES.
At the date of this Agreement, UbiquiTel has no debt, guaranty,
liability or obligation of any nature in excess of $1.0 million, whether
accrued, absolute, contingent or otherwise, whether due or to become due, and
whether known or unknown, and there is no basis for the assertion against it of
any such debt, guaranty, liability or obligation except (i) to the extent set
forth or reserved against in full in UbiquiTel's audited consolidated financial
statements and unaudited consolidated financial statements included in the SEC
Documents, and (ii) liabilities incurred in the ordinary course of business
since September 30, 2000.
8.9 COMPLIANCE WITH LAWS.
UbiquiTel has not violated any term of any judgment, writ, decree,
order, law, statute, rule or regulation to which it is subject or a party, or by
which the business or assets of UbiquiTel are bound or affected (collectively,
the "UBIQUITEL LEGAL REQUIREMENTS"), except as would not have a material adverse
effect on UbiquiTel. UbiquiTel has not received notice of any actual, alleged or
potential violation of a UbiquiTel Legal Requirement.
8.10 CERTAIN INFORMATION.
(a) None of the information supplied or to be supplied
by UbiquiTel, specifically for inclusion or incorporation by reference in, or
which may be deemed to be in incorporated by reference in, any registration
statement filed or to be filed with the SEC, at any time that it is amended or
supplemented and at the time it becomes effective under the Securities Act,
contained or will contain any untrue statement of a material fact or omitted
or will omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading.
(b) None of the information supplied or to be supplied
by UbiquiTel specifically for inclusion or incorporation by reference in, or
which may be deemed to be in incorporated by reference in (i) the registration
statements on Form S-4 or Form S-1 will, at the time the Form S-4 or the Form
S-1 is filed with the SEC, at any time that it is amended or supplemented, and
at the time it becomes effective under the Securities Act, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading, or
(ii) the Proxy Statement will, at the time it is filed with the SEC, at any
time that it is amended or supplemented, at the time it is mailed to the
holders of UbiquiTel Stock and at the time of the UbiquiTel Stockholders'
Meeting contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they are made,
not misleading. The Proxy Statement will comply as to form in all material
respects with the requirements of the Exchange Act and the rules and
regulations thereunder, except that no representation or warranty is made by
UbiquiTel with respect to statements made or incorporated by reference therein
based on information supplied by the LLC Parties specifically for inclusion
therein.
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8.11 DISCLOSURE.
None of the representations or warranties of UbiquiTel or any of the
Merger Subs contained in this Agreement, the Related Agreements or the UbiquiTel
Disclosure Schedule contains any untrue statement of a material fact or omits to
state a material fact herein or therein necessary in order to make the
statements contained herein or therein not misleading.
ARTICLE 9
PRE-CLOSING COVENANTS OF THE LLC PARTIES
During the period from the date of this Agreement and (a) with respect
to the covenants set forth in Section 9.1, 9.2, and 9.3, continuing until the
PRE-CLOSING DATE, and (b) with respect to the covenants set forth in Sections
9.4, 9.5, and 9.6, continuing until the CLOSING DATE, the LLC Parties agree
that:
9.1 CONDUCT OF BUSINESS OF LLC.
Unless otherwise expressly contemplated hereby, in the Related
Agreements, or approved in writing by UbiquiTel Parent, LLC shall conduct its
business and operations only in, and LLC shall not take any action except in,
the ordinary course of business and consistent with past practices or otherwise
in accordance with the Management Agreement. In the conduct of its business, LLC
shall comply with the covenants set forth in Section 4.1(b) (LLC PARTIES'
RESPONSIBILITIES). The LLC Parties shall use reasonable best efforts to:
(a) maintain LLC's and the LLC Subsidiary's respective
rights and franchises and preserve their respective relationships with
customers, suppliers and others having business dealings with them with the
objective of maintaining and promoting their respective ongoing businesses;
(b) preserve, protect and maintain for UbiquiTel Parent
and UbiquiTel the goodwill of LLC and LLC Subsidiary's employees;
(c) to keep available to UbiquiTel Parent and UbiquiTel
LLC's present officers and employees and agents; and
(d) confer with UbiquiTel Parent and/or UbiquiTel
concerning LLC's operational matters of a material nature.
The LLC Parties shall consult with UbiquiTel Parent and/or UbiquiTel on
strategies for operating, maintaining and preserving LLC and LLC Subsidiary's
respective businesses and effecting an orderly transition to UbiquiTel Parent
ownership of such businesses.
9.2 ACCESS TO INFORMATION AND EMPLOYEES.
The LLC Parties shall permit, upon reasonable notice during normal
business hours, UbiquiTel Parent and its Representatives (as defined herein) to
visit and inspect any of the properties of the LLC Parties and the LLC
Subsidiary, including books and records, and to discuss the affairs, finances
and accounts of the LLC Parties and the LLC Subsidiary, and UbiquiTel Parent's
prospects, plans and intentions with the LLC Parties' officers, certain
employees (as allowed by the LLC Parties), brokers and independent UbiquiTel
Parent accountants, as often as any such person may deem necessary or desirable
and reasonably request. Notwithstanding anything in this Section 9.2 to the
contrary, prior to any investigation contemplated herein, UbiquiTel Parent
and/or its Representatives shall notify ▇▇▇▇▇ ▇▇▇▇▇▇ on behalf of the LLC
Parties and request consent to conduct the foregoing actions (which consent may
not
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be unreasonably withheld). For purposes of this Agreement, "Representatives"
means, collectively, a party's directors, officers, employees, stockholders or
members (as the case may be), partners, financial parties in interest, agents,
advisors, attorneys, accountants, consultants, Affiliates, financing sources
and representatives of any of the foregoing Persons.
9.3 FINANCIAL STATEMENTS.
The LLC Parties shall deliver to UbiquiTel Parent not later than the
20th business day of each succeeding month after the date of this Agreement, the
following financial statements for LLC for the most recently completed month: an
unaudited balance sheet as of the end of such month; and associated statements
of profit and loss and cash flow for such month.
9.4 CONDUCT OF THE MEMBERS.
Each of the Members shall continue to own no assets other than its
Member Interest, to conduct no business operations of any kind other than to own
its Member Interest, and to incur no liability other than the liabilities
associated with this Agreement, the Related Agreements, and the consummation of
the Mergers.
9.5 TRADING PROHIBITION.
The Stockholders and the Controlling ▇▇▇▇▇ Stockholders acknowledge
that the transactions contemplated hereby and information disclosed to the LLC
Parties and their representatives constitute or include material non-public
information concerning UbiquiTel Parent, and that they may not acquire or sell
any shares of UbiquiTel Stock, or encourage any other Person to do so, and that
they will advise any of their respective directors, officers, employees, agents
or Affiliates who have knowledge of the transactions contemplated hereby that
they may not acquire or sell any shares of UbiquiTel Stock, or encourage any
other Person to do so.
9.6 NON-NEGOTIATION.
In consideration of the substantial expenditure of time and money by
UbiquiTel Parent in connection with this transaction, the LLC Parties jointly
and severally agree that none of them will, after the execution of this
Agreement and until the termination of this Agreement in accordance with its
terms or the CLOSING, (i) directly or indirectly solicit, encourage, initiate,
negotiate or discuss with any third party any acquisition proposal relating to
LLC, whether by way of a purchase of assets or membership interests, business
combination, merger, or other transaction, or (ii) provide any information to
any third party the purpose of which is to permit such third party to evaluate
any such acquisition proposal. Any LLC Party that becomes aware of any
communication by a third party to any LLC Party about or relating to any such
acquisition proposal shall promptly advise UbiquiTel Parent of such
communication.
ARTICLE 10
[INTENTIONALLY OMITTED]
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ARTICLE 11
CERTAIN AGREEMENTS
11.1 CONSULTING AGREEMENT.
On the Signing Date, ▇▇▇▇▇ ▇▇▇▇▇▇ and UbiquiTel will enter into a
consulting agreement pursuant to which ▇▇▇▇▇ ▇▇▇▇▇▇ will provide consulting
services to UbiquiTel, on terms and conditions mutually acceptable to the
parties thereto.
11.2 PREPARATION OF THE PROXY STATEMENT AND THE FORM S-4.
(a) PREPARATION.
As soon as practicable following the date of this Agreement, UbiquiTel
Parent shall prepare and file with the SEC (such date of filing being referred
to herein as the "SEC FILING DATE") in accordance with the Securities Act, on
behalf of UbiquiTel Parent, a registration statement on Form S-4 to be filed
with the SEC by UbiquiTel Parent in connection with the issuance by UbiquiTel
Parent of shares of UbiquiTel Stock in the Mergers (the "FORM S-4"). UbiquiTel
Parent shall use reasonable best efforts to have the Form S-4 declared effective
under the Securities Act as promptly as practicable after such filing. UbiquiTel
Parent shall keep the LLC Parties advised of the status of the filing and
effectiveness of the Form S-4.
(b) PROXY STATEMENT AND FORM S-4.
UbiquiTel Parent and LLC (if requested by UbiquiTel Parent) shall
jointly prepare for inclusion in the Form S-4 a proxy statement (the "PROXY
STATEMENT"), in accordance with the Exchange Act and the rules and regulations
under the Exchange Act, with respect to the Mergers and the Interest Sale.
UbiquiTel Parent and the LLC Parties shall cooperate with each other in the
preparation of the Proxy Statement. UbiquiTel Parent shall use reasonable best
efforts to respond promptly to any comments made by the SEC with respect to the
Proxy Statement and to cause the Form S-4 to be declared effective under the
Securities Act as promptly as practicable after the filing thereof with the SEC.
UbiquiTel Parent shall use reasonable best efforts to cause the Proxy Statement
to be mailed to the UbiquiTel Parent stockholders, as determined by UbiquiTel
Parent, at the earliest practicable date after the Form S-4 is declared
effective by the SEC.
(c) RESALE REGISTRATION STATEMENT.
Following the CLOSING, UbiquiTel Parent, the Stockholders and the ▇▇▇▇▇
Stockholders shall jointly prepare a registration statement on Form S-3 (or Form
S-1 if UbiquiTel Parent is not then eligible to file on Form S-3) to be filed
with the SEC in connection with the resale by the Stockholders of the shares of
UbiquiTel Stock the Stockholders and holders of PARs receive pursuant to the
terms of the Mergers (the "RESALE REGISTRATION STATEMENT") in accordance with
the Securities Act. UbiquiTel Parent, the Stockholders and holders of PARs shall
use reasonable best efforts to respond promptly to any comments made by the SEC
with respect to the Resale Registration Statement and to cause the Resale
Registration Statement to be declared effective under the Securities Act as
promptly as practicable after the filing thereof with the SEC, but in no event
later than the date that shares are first permitted to be sold under the Lock-Up
Agreement. If the Resale Registration Agreement is declared effective under the
Securities Act, then UbiquiTel Parent shall use reasonable best efforts to
prepare and file such amendments and supplements to the Resale Registration
Statement and the prospectus used in connection therewith as may be necessary to
keep the Resale Registration Statement effective for a period of not less than
two years from the CLOSING DATE, PROVIDED, HOWEVER, that if UbiquiTel Parent
files on Form ▇-▇,
-▇▇-
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ may convert the Form S-1 to a registration statement on Form
S-3 from and after the time that UbiquiTel Parent first is eligible to use
Form S-3 for the registration of UbiquiTel Stock for resale.
(d) UBIQUITEL PARENT'S ACTIONS.
UbiquiTel Parent shall, as promptly as practicable, take any action
(other than qualifying to do business in any jurisdiction in which it is not now
so qualified) required to be taken under any applicable state securities laws in
connection with the issuance of UbiquiTel Stock in connection with the Mergers
and the Interest Sale, and the LLC Parties shall furnish all information
concerning the LLC Parties as may be reasonably requested in connection with any
such action. UbiquiTel Parent shall keep the LLC Parties advised of the status
of any actions taken under any applicable state securities laws.
(e) COMFORT LETTERS, ETC.
UbiquiTel Parent and the LLC Parties each shall use their reasonable
best efforts to cause to be delivered to UbiquiTel Parent "comfort" letters from
their independent certified public accountants, dated a date within two business
days before the date on which the registration statement that includes the
Stockholders' ownership of UbiquiTel Stock (either on Form S-4 or Form S-1)
shall become effective, and "bring down" letters dated a date within two
business days before the PRE-CLOSING DATE, each addressed to UbiquiTel Parent,
in form and substance reasonably satisfactory to UbiquiTel Parent and customary
in scope and substance for letters delivered by independent accountants in
connection with similar such registration statements and permitting the use of
the accountant's report in subsequent filings by UbiquiTel Parent under the
Securities Act or Exchange Act.
11.3 UBIQUITEL STOCKHOLDERS' MEETING.
UbiquiTel Parent shall take all action necessary, in accordance with
the DGCL, the Exchange Act and other applicable law and its certificate of
incorporation and bylaws, to convene and hold a special meeting of the
stockholders of UbiquiTel Parent (the "UBIQUITEL STOCKHOLDERS' MEETING") as
promptly as practicable after the date hereof for the purpose of considering,
voting and approving upon this Agreement. The Board of Directors of UbiquiTel
Parent shall (a) recommend that the stockholders of UbiquiTel Parent vote in
favor of the adoption of this Agreement at the UbiquiTel Stockholders' Meeting,
(b) cause such recommendation to be included in the Proxy Statement, (c) solicit
proxies in favor of the adoption of this Agreement, and (d) use reasonable best
efforts to obtain the required vote of the stockholders of UbiquiTel Parent.
11.4 POST-CLOSING AGREEMENTS OF STOCKHOLDERS AND UBIQUITEL PARENT.
The Stockholders and UbiquiTel Parent covenant and agree that after the
CLOSING:
(a) FURTHER ACTIONS.
UbiquiTel Parent shall have the right to act in the name and on behalf
of LLC and the Members, including, without limitation, through the execution and
delivery of such further instruments of transfer and conveyance, documents and
certificates as may be reasonably requested by UbiquiTel Parent in order to more
effectively convey and transfer to UbiquiTel Parent all of the equity interests
or other securities of the Members, to aid and assist in reducing to possession
or exercising rights with respect to same, or to consummate any of the
transactions contemplated hereby. The Stockholders shall, as promptly as
practicable after receipt, deliver to UbiquiTel Parent any cash, checks, mail,
packages, notices and other similar communications of the Members or LLC that
any of them receives.
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(b) ACCESS TO INFORMATION.
The Stockholders and UbiquiTel Parent shall afford to the other and
their respective Representatives reasonable access to their respective books and
records in order to prepare tax returns and other governmental filings.
(c) DIRECTORS.
On or before the CLOSING DATE, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ shall be appointed to
the UbiquiTel Parent Board of Directors.
(d) MEMBER LOANS.
On or before the Pre-Closing Date, LLC shall provide to UbiquiTel
Parent all documents reasonably requested by UbiquiTel Parent to evidence that
all loans made to any Member by its Stockholders have been forgiven or
terminated in their entirety to be effective as of the Closing; PROVIDED,
HOWEVER, that if the ▇▇▇▇▇ Merger occurs in lieu of the CVC Merger, the
Controlling ▇▇▇▇▇ Stockholders shall provide to UbiquiTel Parent all documents
reasonably requested by UbiquiTel Parent to evidence that all loans made to
▇▇▇▇▇ by the ▇▇▇▇▇ Stockholders have been forgiven or terminated in their
entirety to be effective as of the Closing.
(e) REORGANIZATION QUALIFICATION.
The Mergers (except the ▇▇▇▇▇ Merger) are intended to qualify as
reorganizations pursuant to Section 368(a)(1)(A) and (a)(2)(E) of the Code. The
Stockholders and UbiquiTel Parent shall take the position on all Tax Returns
that, for all purposes, such Mergers qualify as reorganizations within the
meaning of such Code sections. Further, UbiquiTel Parent and the Stockholders
agree that they will report such Mergers accordingly and that they will not take
any action which is reasonably likely to be considered to be inconsistent with
such reporting positions.
(f) QUALIFICATION OF THE ▇▇▇▇▇ MERGER.
The ▇▇▇▇▇ Merger is intended to be treated as a purchase by UbiquiTel
Parent of all of the outstanding capital stock of ▇▇▇▇▇. The ▇▇▇▇▇ Stockholders
and UbiquiTel Parent shall take the position on all Tax Returns that, for all
purposes, the ▇▇▇▇▇ Merger is so treated. Further, UbiquiTel Parent and the
▇▇▇▇▇ Stockholders agree that they will report such Merger accordingly and that
they will not take any action which is reasonably likely to be considered to be
inconsistent with such reporting position.
11.5 PAYOFF OF CERTAIN OBLIGATIONS AT CLOSING.
Immediately following the CLOSING, UbiquiTel shall pay in full all
amounts of principal and accrued but unpaid interest of LLC to RTFC under the
RTFC Loan Agreement, and shall receive in return from the RTFC, in form and
substance satisfactory to counsel for UbiquiTel and the LLC Parties, all
documents (including without limitation UCC-3 termination statements executed by
RTFC and otherwise prepared for filing) necessary to release and fully terminate
the rights, liens and security interests of RTFC or any Persons claiming through
RTFC in connection with the RTFC Loan Agreement. In connection with such
payment, UbiquiTel shall cooperate with the LLC Parties with respect to releases
of any and all guaranties or pledges given by the LLC Parties and the return of
any and all collateral properly belonging to such Parties.
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11.6 TAX MATTERS FOR UBIQUITEL PARENT AND MEMBERS.
Except as expressly provided otherwise in Section 11.7 with respect to
the ▇▇▇▇▇ Merger, the following provisions shall govern the allocation of
responsibility as between UbiquiTel Parent, the Members, and the Stockholders
for certain tax matters following the PRE-CLOSING Date or the CLOSING DATE, as
applicable:
(a) TAX PERIODS ENDING ON OR BEFORE THE CLOSING DATE.
The Stockholder of each Member (in the case of PCS, IPLLC, and in the
case of Kerman, KCI), or any designated representative thereof, shall have the
obligation to prepare all Tax Returns that are required to be filed by or with
respect to the income, assets, or operations of that Stockholder's affiliated
Member for all taxable years or other taxable periods ending on or prior to the
CLOSING DATE with respect to that Member (a "MEMBER PRE-CLOSING PERIOD"). Each
such Tax Return shall be submitted to UbiquiTel Parent at least 30 days prior to
filing for approval, which shall not be unreasonably withheld. Except as
provided in this Section 11.6 and in Section 11.7 with respect to the ▇▇▇▇▇
Merger, UbiquiTel Parent shall have the exclusive obligation and authority to
timely file or cause to be timely filed all Tax Returns that are required to be
filed by or with respect to the income, assets or operations of a Member or any
successor thereto, LLC and LLC Subsidiary.
(b) STRADDLE PERIODS.
UbiquiTel Parent shall prepare or cause to be prepared and file or
cause to be filed any Tax Returns of LLC, LLC Subsidiary, and each Member for
Tax periods that begin before the CLOSING DATE and end after the CLOSING DATE
(the "STRADDLE PERIODS"). All such Tax Returns prepared by UbiquiTel Parent
shall be submitted to the Stockholders (in the case of PCS, IPLLC, and in the
case of Kerman, KCI) of each respective Member at least thirty (30) days prior
to the filing of such Tax Return for approval, which approval shall not be
unreasonably withheld. For purposes of this Section 11.6(b), in the case of any
Taxes that are imposed on a periodic basis and are payable for a Straddle
Period, the portion of such Tax which relates to the portion of such taxable
period ending on the CLOSING DATE shall (A) in the case of any Taxes other than
Taxes based upon or related to income or receipts, be deemed to be the amount of
such Tax for the entire taxable period multiplied by a fraction, the numerator
of which is the number of days in the taxable period ending on the CLOSING DATE,
and the denominator of which is the number of days in the entire taxable period;
PROVIDED, HOWEVER, that in the case of real or personal property Taxes,
UbiquiTel Parent shall bear any supplemental or additional assessments that
result from the Mergers (except the ▇▇▇▇▇ Merger), and (B) in the case of any
Tax based upon or related to income or receipts be deemed equal to the amount
which would be payable if the relevant taxable period ended on the CLOSING DATE.
Any credits relating to a taxable period that begins before and ends after the
CLOSING DATE shall be taken into account as though the relevant taxable period
ended on the CLOSING DATE. For purposes of Section 11.6(c), the portion of any
Member's Straddle Period that ends on or before the CLOSING DATE shall be
treated as a Member PRE-CLOSING Period.
(c) TAX OBLIGATIONS.
(i) Each Stockholder Group shall be
responsible for, and shall pay or cause to be paid to or for the benefit of
UbiquiTel Parent and its subsidiaries, any and all Taxes that may be imposed
upon or assessed against or otherwise determined to be attributable to its
affiliated Member or its assets: (i) with respect to any Member PRE-CLOSING
Period, (ii) arising by reason of any breach or inaccuracy of the
representations contained in Sections 6.5(b) or 7.5(b) hereof, (iii) with
respect to any and all Taxes of any member of an Affiliated Group, as defined
in Section 11.6(g)(i), of which a Member is or was a member on or prior to the
CLOSING DATE, including any Taxes for which the Member may be
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liable under Section 1.1502-6 of the Treasury Regulations promulgated under
the Code (or any similar provision of state, local or foreign law), (iv) by
reason of being a successor-in-interest or transferee of another Person on or
prior to the CLOSING DATE, and (v) without duplication, with respect to any
Taxes incurred by the Member, in connection with the transactions contemplated
by this Agreement (subject to clause (A) of Section 11.6(b) (STRADDLE PERIODS)
hereof). Notwithstanding the foregoing, the Members shall not be responsible
for any additions to Tax, interest or penalties arising from UbiquiTel
Parent's negligence in filing of any Tax Returns timely submitted or UbiquiTel
Parent's late payment of any Taxes with respect to which funds were made
available for timely payment by the Members. For purposes of this Agreement,
the federal, state and local income Tax liabilities attributable to any
Stockholder, Member or its subsidiaries for any Member PRE-CLOSING Period
shall be computed without taking into account (A) any item of loss, deduction,
credit, refund, loss carryback or similar item that is attributable to
UbiquiTel Parent or its subsidiaries; or (B) any item of loss, deduction,
credit, refund, loss carryback or similar item that is attributable to LLC or
LLC Subsidiary for any Tax period or portion of a Tax period subsequent to the
PRE-CLOSING DATE.
(ii) Notwithstanding anything to the contrary
in Section 11.6(b), Section 11.6(c)(i), Section 11.6(g), or the Operating
Agreement, UbiquiTel Parent, but not the Members, shall be responsible for
payment of any Taxes to the extent such Taxes result from any Tax items
(whether incurred in the ordinary course of business or otherwise) of LLC that
arise after the PRE-CLOSING DATE. Furthermore, Tax items of LLC that arise
from transactions not in the ordinary course of business and not contemplated
by this Agreement and the Related Agreements that occur on or after the
PRE-CLOSING DATE shall be deemed to arise after the Effective Date.
(d) GENERAL COOPERATION ON TAX MATTERS.
(i) UbiquiTel Parent, the Members, and each of
the Stockholders shall cooperate fully, as and to the extent reasonably
requested by any other Party, in connection with the filing of Tax Returns
pursuant to this Section 11.6 and any audit, litigation or other proceeding with
respect to Taxes. Such cooperation shall include the retention and (upon the
other Party's request) the provision of records and information which are
reasonably relevant to any such audit, litigation or other proceeding and making
employees available on a mutually convenient basis to provide additional
information and explanation of any materials provided hereunder. Each Member
agrees (A) to retain all books and records with respect to Tax matters pertinent
to the Member or its Stockholders relating to any taxable period beginning
before the CLOSING DATE, until the expiration of the statute of limitations
(and, to the extent notified by UbiquiTel Parent or a Stockholder, any
extensions thereof) of the respective taxable periods, and to abide by all
record retention agreements entered into with any taxing authority, and (B) to
give the other Party reasonable written notice prior to transferring, destroying
or discarding any such books and records and, if the other Party so requests, to
allow the other Party to take possession of such books and records. UbiquiTel
Parent, the Members and each of the Stockholders acknowledge that any and all
information obtained in connection with the preparation of any Tax Return, audit
or judicial or administrative proceeding or determination pursuant to this
Section 11.6 is of a confidential nature and that all such information shall be
used only for the purposes set forth in this Section 11.6.
(ii) So long as such action would not create any
material liability for such Party, UbiquiTel Parent and each Stockholder further
agree, upon request, to use their best efforts to obtain any certificate or
other document from any governmental authority or any other Person as may be
necessary to mitigate, reduce, or eliminate any Tax that could be imposed on a
Member (including, but not limited to, with respect to the transactions
contemplated hereby).
(iii) UbiquiTel Parent and each Stockholder
further agree, upon request, to provide the other Party with all information
that either Party may be required to report pursuant to Section 6043
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of the Code and all Treasury Department Regulations promulgated thereunder.
(e) CONTESTS.
(i) Each Member's Stockholder (in the case of
PCS, IPLLC, and in the case of Kerman, KCI) and their duly appointed
representatives (collectively, the "MEMBER REPRESENTATIVE") shall have the
authority to control any audit or examination by any taxing authority, and
contest, resolve and defend against any assessment for additional Taxes, notice
of Tax deficiency or other adjustment of Taxes of or relating to any liability
of a Member for its Member PRE-CLOSING Periods; PROVIDED, HOWEVER, that no
Member Representative shall, without the prior consent of UbiquiTel Parent,
which consent shall not be unreasonably withheld, enter into any settlement of
any contest or otherwise compromise any issue that would have a material adverse
effect on the Tax benefits of UbiquiTel Parent or the Member for taxable years
ending after the CLOSING DATE. UbiquiTel Parent and its duly appointed
Representatives shall have the exclusive authority to control any audit or
examination by any taxing authority, initiate any claim for refund, amend any
Tax Return and contest, resolve and defend against any assessment for additional
Taxes, notice of Tax deficiency or other adjustment of Taxes of or relating to
any liability of a Member for Taxes for any taxable year or other taxable period
ending after the CLOSING DATE (a "MEMBER POST-CLOSING PERIOD"); PROVIDED,
HOWEVER, that (a) neither UbiquiTel Parent nor its subsidiaries nor any of their
duly appointed Representatives shall, without the prior written consent of the
Member Representative, enter into any settlement of any contest or otherwise
compromise any issue that adversely affects the liability of the Member's
Stockholder or Stockholders for any Member PRE-CLOSING Period Taxes, and (b)
neither UbiquiTel Parent nor its subsidiaries nor any of their duly appointed
representatives shall, without the prior consent of the Member Representative,
enter into any settlement of any contest or otherwise compromise any issue that
would require payment by such Member Representative's Stockholder Group
Indemnitors of any amount under this Agreement unless UbiquiTel Parent shall
have waived or caused to be waived for itself and its subsidiaries any right to
indemnification for Taxes from such Member Representative's Stockholder Group
Indemnitors.
(ii) UbiquiTel Parent agrees to notify in writing
the Member Representative of any affected Member within ten business days of
receipt of any notice, whether oral or in writing, of any federal, state, local
or foreign Tax examinations, claims, settlements, proposed adjustments, or
related matters that may affect in any way such Member Representative's
Stockholder Group Indemnitors' obligations under this Agreement and shall
promptly forward all written notifications and other communications from any Tax
authority received by UbiquiTel relating to any Tax audit or other proceeding
relating to the Tax liability of or with respect to a Member. The failure of
UbiquiTel Parent to give the Member Representative such written notice shall not
excuse such Member Representative's Stockholder Group Indemnitors from their
obligations under this Agreement with respect to any increased Tax liability
directly or indirectly attributable to any such written notification or other
communication, unless such failure materially prejudices the ability of the
Member Representative's Stockholder Group to defend or dispute such examination,
claim, settlement, adjustment or related matter.
(iii) This Section 11.6(e) shall be subject to the
provisions of Article 12 of this Agreement.
(f) [OMITTED].
(g) ADDITIONAL TAX MATTERS.
(i) TAX SHARING AGREEMENTS.
Any Tax sharing agreement (other than the Operating Agreement) to which
the LLC, LLC
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Subsidiary, or a Member is a party hereby is terminated as of the CLOSING DATE
and will have no further effect for any taxable year (whether the current
year, a future year, or a past year). For purposes of this Agreement, the term
"AFFILIATED GROUP" means an affiliated group within the meaning of Code
Section 1504(a), and when used with respect to a Member, means the Affiliated
Group to which such Member belongs.
(ii) RETURNS FOR PERIODS THROUGH THE CLOSING
DATE.
Each respective corporate Stockholder ("PARENT") of each respective
Member will include the income of the Member (including any deferred income
triggered into income by Reg. Section 1.1502-13 and Reg. Section 1.1502-14 and
the excess loss accounts taken into income under Reg. Section 1.1502-19) on
each such Parent's consolidated federal income Tax Returns for all periods
through the CLOSING DATE and pay any federal income Taxes attributable to such
income. Each Member will furnish Tax information to its respective Parent for
inclusion in such Parent's federal consolidated income Tax Return for the
period which includes the CLOSING DATE. Each Parent will allow UbiquiTel
Parent an opportunity to review and comment upon such Tax Returns (including
any amended returns) to the extent that they relate to a Member. Parent will
take no position on such returns that relate to a Member that would adversely
affect the Member after the CLOSING DATE unless such position would be
reasonable in the case of a Person that owned the Member both before and after
the CLOSING DATE. The income of each Member will be apportioned to the period
up to and including the CLOSING DATE and the period after the CLOSING DATE, by
closing the books of the Member as of the close of business on the CLOSING
DATE.
(iii) CARRYBACKS.
With respect to any post acquisition Tax attributes for which UbiquiTel
Parent cannot waive a carryback, each Parent will pay to UbiquiTel Parent within
ten (10) days any Tax refund (or reduction in Tax liability) resulting from a
carryback of a post-acquisition Tax attribute of its former Member into the
Parent's consolidated Tax Return, when such refund or reduction is realized by
Parent. Each Parent will cooperate with its former Member in obtaining such
refunds (or reduction in Tax liability), including through the filing of amended
Tax Returns or refund claims. UbiquiTel Parent agrees to indemnify each Parent
for any Taxes resulting from the disallowance of such post-acquisition Tax
attribute on audit or otherwise.
(iv) RETENTION OF CARRYOVERS.
No Parent will elect to retain any net operating loss carryovers or
capital loss carryovers of its Member under Reg. Section 1.1502-20(g). At any
Parent's request, UbiquiTel Parent will cause such Parent's former Member to
join with Parent in filing any necessary elections under Reg.
Section 1.1502-20(g).
(v) POST-CLOSING ELECTIONS.
At any Parent's request, UbiquiTel Parent will cause such Parent's
former Member to make and/or join with Parent in making any election after the
CLOSING if the making of such election does not have a material adverse impact
on UbiquiTel Parent or such Parent's former Member for any post-acquisition Tax
period.
11.7 TAX MATTERS IN ▇▇▇▇▇ MERGER.
Notwithstanding the other provisions of this Agreement (including,
without limitation, Section 7.5(b)), if the ▇▇▇▇▇ Merger occurs, the following
provisions shall govern the allocation of responsibility as between UbiquiTel
Parent, ▇▇▇▇▇ and the ▇▇▇▇▇ Stockholders for certain tax matters following the
PRE-CLOSING DATE or the CLOSING DATE, as applicable.
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(a) TAX PERIODS ENDING ON OR BEFORE THE CLOSING DATE.
The ▇▇▇▇▇ Representative shall have the obligation to prepare all Tax
Returns that are required to be filed by or with respect to the income, assets,
or operations of ▇▇▇▇▇ and its subsidiaries for all taxable years or other
taxable periods ending on or prior to the CLOSING DATE (the "▇▇▇▇▇ PRE-CLOSING
PERIODS"). Each such Tax Return shall be submitted to UbiquiTel Parent at least
30 days prior to filing for approval, which shall not be unreasonably withheld.
Except as provided in the preceding sentence, UbiquiTel Parent shall have the
exclusive obligation and authority to timely file or cause to be timely filed
all Tax Returns that are required to be filed by or with respect to the income,
assets or operations of ▇▇▇▇▇ or any successor thereto.
(b) ▇▇▇▇▇ STRADDLE PERIODS.
UbiquiTel Parent shall prepare or cause to be prepared and file or
cause to be filed any Tax Returns of ▇▇▇▇▇ or its subsidiaries for taxable years
or taxable periods which begin before the CLOSING DATE and end after the CLOSING
DATE ("▇▇▇▇▇ STRADDLE PERIODS"). UbiquiTel Parent shall furnish to the ▇▇▇▇▇
Representative for review and approval, which approval shall not be unreasonably
withheld, a draft of each such Tax Return that UbiquiTel Parent proposes to file
at least 30 days prior to the filing of such return. For purposes of this
Agreement, in the case of any Taxes that are imposed on a periodic basis and are
payable for an ▇▇▇▇▇ Straddle Period, the portion of such Tax that relates to
the portion of such taxable period ending on the CLOSING DATE shall (x) in the
case of any Taxes other than Taxes based upon or related to income or receipts,
be deemed to be the amount of such Tax for the entire taxable period multiplied
by a fraction the numerator of which is the number of days in the taxable period
ending on the CLOSING DATE and the denominator of which is the number of days in
the entire taxable period, PROVIDED, HOWEVER, that in the case of real or
personal property Taxes, UbiquiTel Parent shall bear any supplemental or
additional assessments that result from the ▇▇▇▇▇ Merger, and (y) in the case of
any Tax based upon or related to income or receipts be deemed equal to the
amount which would be payable if the relevant taxable period ended on the
CLOSING DATE. Any credits relating to an ▇▇▇▇▇ Straddle Period shall be taken
into account as though the relevant taxable period ended on the CLOSING DATE.
For purposes of Section 11.7(c), the portion of the ▇▇▇▇▇ Straddle Period that
ends on or before the CLOSING DATE shall be treated as a ▇▇▇▇▇ PRE-CLOSING
Period.
(c) TAX OBLIGATIONS.
(i) The ▇▇▇▇▇ Stockholders shall be responsible
for, shall pay or cause to be paid and reimburse UbiquiTel Parent and its
subsidiaries for any and all Taxes that may be imposed upon or assessed against,
or otherwise determined to be attributable to ▇▇▇▇▇ or its assets: (i) with
respect to any ▇▇▇▇▇ PRE-CLOSING Period, (ii) arising by reason of any breach or
inaccuracy of the representations contained in Section 6.5(b) or 7.5(b) hereof,
(iii) with respect to any and all Taxes of any member of an Affiliated Group, as
defined in Section 11.6(g)(i), of which ▇▇▇▇▇ or its subsidiaries are or was a
member on or prior to the ▇▇▇▇▇ CLOSING DATE, including any Taxes for which
▇▇▇▇▇ or its subsidiaries may be liable under Section 1.1502-6 of the Treasury
Regulations promulgated under the Code (or any similar provision of state, local
or foreign law), (iv) by reason of being a successor-in-interest or transferee
of another Person on or prior to the CLOSING DATE, and (v) without duplication,
with respect to any Taxes incurred by ▇▇▇▇▇ before the CLOSING DATE in
connection with the transactions contemplated by this Agreement (subject to
clause (x) of the third sentence of Section 11.7(b) (STRADDLE PERIODS) hereof).
Notwithstanding the foregoing, (i) the ▇▇▇▇▇ Stockholders shall not be
responsible for any Taxes pursuant to this Section 11.7(c) to the extent such
Taxes have been paid on or before the CLOSING DATE or have been taken into
account in computing the Net Assets pursuant to Section 1.2(b)(ii)(B) or the Tax
Return adjustment amount payable pursuant to Section 1.2(b)(ii)(B)(III), and
(ii) the ▇▇▇▇▇ Stockholders shall not be responsible for any additions to Tax,
interest or penalties arising from UbiquiTel Parent's
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negligence in filing of any Tax Returns timely submitted by the ▇▇▇▇▇
Stockholders or UbiquiTel Parent's late payment of any Taxes with respect to
which funds were made available for the timely payment thereof under Section
1.2(b)(ii)(B)(III). For purposes of this Agreement, the federal, state and
local income Tax liabilities attributable to ▇▇▇▇▇ or its subsidiaries for any
▇▇▇▇▇ PRE-CLOSING Period shall be computed without taking into account (A) any
item of loss, deduction, credit, refund, loss carryback or similar item that
is attributable to UbiquiTel Parent or its subsidiaries; and (B) any item of
loss, deduction, credit, refund, loss carryback or similar item that is
attributable to LLC or LLC Subsidiary for any Tax period or portion of a Tax
period subsequent to the PRE-CLOSING DATE.
(ii) Notwithstanding anything to the contrary in
Section 11.7(b), Section 11.7(c)(i) or the Operating Agreement, UbiquiTel
Parent, but not the ▇▇▇▇▇ Stockholders, shall be responsible for payment of any
Taxes to the extent such Taxes result from any Tax items (whether incurred in
the ordinary course of business or otherwise) of LLC that arise after the
PRE-CLOSING DATE. Furthermore, Tax items of LLC that arise from transactions not
in the ordinary course of business and not contemplated by this Agreement and
the Related Agreements that occur on or after the PRE-CLOSING DATE shall be
deemed to arise after the Effective Date.
(d) GENERAL COOPERATION ON TAX MATTERS.
(i) UbiquiTel Parent and the ▇▇▇▇▇
Representative agree to consult and resolve in good faith any issues arising in
connection with the preparation or review of any Tax Return or the calculation
of any Tax described in this Section 11.7. After the ▇▇▇▇▇ CLOSING, the ▇▇▇▇▇
Representative and UbiquiTel Parent shall, and shall cause their respective
Affiliates to provide the requesting Party or its designee with such assistance
as may reasonably be requested by such Party or its designee in connection with
the preparation of any Tax Return, audit or judicial or administrative
proceeding or determination relating to liability for Taxes of or with respect
to UbiquiTel Parent (relating to ▇▇▇▇▇ or its subsidiaries), ▇▇▇▇▇, or any of
their Affiliates including access to the books and records, and the assistance
of the officers and employees of ▇▇▇▇▇ and its subsidiaries. UbiquiTel Parent
and the ▇▇▇▇▇ Stockholders acknowledge that any and all information obtained in
connection with the preparation of any Tax Return, audit, or judicial or
administrative proceeding or determination pursuant to this Section 11.7(d) is
of a confidential nature and that all such information shall be used only for
the purposes set forth in the immediately preceding sentence.
(ii) So long as such action would not create any
material liability for such Party, UbiquiTel Parent and the ▇▇▇▇▇ Representative
further agree, upon request, to use their best efforts to obtain any certificate
or other document from any governmental authority or any other Person as may be
necessary to mitigate, reduce, or eliminate any Tax that could be imposed on a
Member (including, but not limited to, with respect to the transactions
contemplated hereby).
(iii) UbiquiTel Parent and the ▇▇▇▇▇
Representative further agree, upon request, to provide the other Party with all
information that either Party may be required to report pursuant to Section 6043
of the Code and all Treasury Department Regulations promulgated thereunder.
(e) CONTESTS.
(i) The ▇▇▇▇▇ Representative and its duly
appointed representatives shall have the authority to control any audit or
examination by any taxing authority, and contest, resolve and defend against any
assessment for additional Taxes, notice of Tax deficiency or other adjustment of
Taxes of or relating to any liability of ▇▇▇▇▇ and its subsidiaries for all
▇▇▇▇▇ PRE-CLOSING Periods; PROVIDED, HOWEVER, that neither the ▇▇▇▇▇
Representative nor any duly appointed representative of the ▇▇▇▇▇ Representative
shall, without the prior consent of UbiquiTel Parent, which consent shall not be
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unreasonably withheld, enter into any settlement of any contest or otherwise
compromise any issue that would have a material adverse effect on the Tax
benefits of UbiquiTel Parent or ▇▇▇▇▇ or any subsidiary for taxable years ending
after the CLOSING DATE. UbiquiTel Parent and its duly appointed Representatives
shall have the exclusive authority to control any audit or examination by any
taxing authority, initiate any claim for refund, amend any Tax Return and
contest, resolve and defend against any assessment for additional Taxes, notice
of Tax deficiency or other adjustment of Taxes of or relating to any liability
of ▇▇▇▇▇ and its subsidiaries for Taxes for any taxable year or other taxable
period ending after the CLOSING DATE (the "POST-CLOSING PERIODS"); PROVIDED,
HOWEVER, that (a) none of UbiquiTel Parent, ▇▇▇▇▇, its subsidiaries nor any of
their duly appointed representatives shall, without the prior written consent of
the ▇▇▇▇▇ Representative, enter into any settlement of any contest or otherwise
compromise any issue that adversely affects the liability of the ▇▇▇▇▇
Stockholders for any ▇▇▇▇▇ PRE-CLOSING Period Taxes, and (b) none of UbiquiTel
Parent, ▇▇▇▇▇, its subsidiaries nor any of their duly appointed representatives
shall, without the prior consent of the ▇▇▇▇▇ Representative, enter into any
settlement of any contest or otherwise compromise any issue that would require
payment by the Controlling ▇▇▇▇▇ Stockholders (as defined herein) of any amount
under this Agreement unless UbiquiTel Parent shall have waived or caused to be
waived for itself and ▇▇▇▇▇ and its subsidiaries any right to indemnification
for Taxes from the Controlling ▇▇▇▇▇ Stockholders.
(ii) NOTICES. UbiquiTel Parent agrees to notify
the ▇▇▇▇▇ Representative in writing within ten business days of receipt of any
notice, whether oral or in writing, of any federal, state, local or foreign Tax
examinations, claims, settlements, proposed adjustments, or related matters that
may affect in any way the Controlling ▇▇▇▇▇ Stockholders' obligations under this
Agreement and shall promptly forward all written notifications and other
communications from any Tax authority received by such Party or, with respect to
UbiquiTel Parent, ▇▇▇▇▇ or their respective subsidiaries relating to any Tax
audit or other proceeding relating to the Tax liability of or with respect to
▇▇▇▇▇ or its subsidiaries. The failure of UbiquiTel Parent to give the ▇▇▇▇▇
Representative such written notice shall not excuse the Controlling ▇▇▇▇▇
Stockholders from their obligations under this Agreement with respect to any
increased Tax liability directly or indirectly attributable to any such written
notification or other communication, unless such failure materially prejudices
the ability of the ▇▇▇▇▇ Representative to defend or dispute such examination,
claim, settlement, adjustment or related matter.
(iii) The provisions of this Section 11.7(e) shall
be subject to the provisions of Article 12 of this Agreement.
(f) CARRYBACK CFT DEDUCTION.
The federal income tax deduction for the California Franchise Tax (the
"CFT DEDUCTION") paid by ▇▇▇▇▇ and its subsidiaries for the tax period ending on
the CLOSING DATE may be claimed as a deduction by UbiquiTel Parent on its
consolidated federal income Tax Return for the first tax period ending
subsequent to the CLOSING DATE in which such deduction may properly be claimed
(the "POST-ACQUISITION PERIOD"). If UbiquiTel Parent files a claim for a federal
income tax refund ("FIT REFUND") for a tax period of ▇▇▇▇▇ and its subsidiaries
ending on or before the CLOSING DATE (an "▇▇▇▇▇ PRE-ACQUISITION PERIOD") as a
result of a net operating loss carryback from the Post-Acquisition Period,
UbiquiTel Parent shall make a payment to the ▇▇▇▇▇ Stockholders of 50% of any
such FIT Refund or part thereof attributable solely to the CFT Deduction (the
"CFT PAYMENT"). UbiquiTel Parent shall make the CFT payment, if any, within 60
days of, and only upon UbiquiTel Parent's actual receipt of, a FIT Refund
attributable to the CFT Deduction. UbiquiTel Parent's obligation to make any CFT
Payment shall be subject to the following additional terms and conditions: (i)
UbiquiTel Parent shall be under no obligation, and the ▇▇▇▇▇ Stockholders shall
have no right, to require UbiquiTel Parent to file any claim for refund or
amended returns relating to any ▇▇▇▇▇ Pre-Acquisition Period; (ii) except as
otherwise provided in this Agreement, UbiquiTel Parent may take any actions
following the CLOSING Date with
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regard to the transfer of the ownership of ▇▇▇▇▇, its subsidiaries or their
assets, even if such actions preclude any carryback of any net operating
losses; (iii) any UbiquiTel Parent FIT Refund shall be considered attributable
to the CFT Deduction only to the extent of any additional FIT Refund received,
if any, as a result of and but for the CFT Deduction; (iv) the maximum amount
of any CFT Payment to the ▇▇▇▇▇ Stockholders shall be $825,000; (v) UbiquiTel
Parent shall be indemnified by the ▇▇▇▇▇ Stockholders pursuant to Article 12
for any CFT Payment made to the ▇▇▇▇▇ Stockholders if any FIT Refund
attributable to the CFT Deduction is subsequently disallowed for any reason;
and (vi) UbiquiTel Parent shall have no obligation to make a CFT Payment if it
has not received a FIT Refund attributable to the CFT deduction on or before
December 31, 2005. Notwithstanding any other provision of this Agreement,
UbiquiTel Parent shall not be obligated to make any other payment to the ▇▇▇▇▇
Stockholders as a result of any Tax refund claim filed with respect to any
▇▇▇▇▇ Pre-Acquisition Period to the extent that such Tax refund claim arises
from a net operating loss carryback from any Post-Acquisition Period.
UbiquiTel Parent shall notify the ▇▇▇▇▇ Representative within 30 days of
filing a claim for an FIT Refund with respect to an ▇▇▇▇▇ Pre-Acquisition
Period and whether such claim includes an FIT Refund attributable to the CFT
Deduction. If such a refund claim is filed, UbiquiTel Parent's Chief Financial
Officer shall provide a certification to the ▇▇▇▇▇ Representative on each of
December 31, 2002, December 31, 2003, December 31, 2004, and December 31,
2005, as to whether or not UbiquiTel Parent has received an FIT Refund
attributable to the CFT Deduction.
11.8 WAIVER OF PURCHASE RIGHTS BY MEMBERS.
So long as this Agreement has not been terminated in accordance with
the provisions of Article 5 hereof, the Members waive any and all rights of
first refusal or other similar purchase rights with respect to LLC Interests
each such Member may have pursuant to the Operating Agreement, including,
without limitation, such rights as set forth in Article 12 thereof.
11.9 RELEASE FROM STOCKHOLDER GUARANTEES.
At the CLOSING, UbiquiTel Parent or UbiquiTel shall obtain the release
of the LLC Parties (and their respective officers, directors, employees,
shareholders and Affiliates) from the guarantees listed on SCHEDULE 11.9;
PROVIDED, HOWEVER, that if UbiquiTel Parent or UbiquiTel is unable to obtain
such releases at the CLOSING, UbiquiTel Parent and/or UbiquiTel shall continue
to use commercially reasonable efforts (which efforts shall include having
UbiquiTel Parent or UbiquiTel named as a guarantor, if acceptable to the
respective creditors) to obtain such releases, and in any event shall indemnify
and hold harmless the LLC Parties (and their respective officers, directors,
employees, shareholders and Affiliates) against any liability with respect to
any such guarantees. Any indemnification amounts to be paid by UbiquiTel Parent
and/or UbiquiTel pursuant to this Section 11.9 shall be paid promptly upon
demand, without limitation or offset.
11.10 FCC MATTERS.
UbiquiTel shall be responsible for any unjust enrichment payment
required by Section 1.2111 of the FCC's rules with respect to the transfer of
the PCS Licenses from VIA to UbiquiTel.
11.11 AMENDMENT OF DUE DILIGENCE SCHEDULES.
LLC may, within three days next following the execution of this
Agreement, amend the LLC Disclosure Schedule (excluding Sections 6.5 and 6.10)
for additional disclosures not to exceed $1.0 million individually or in the
aggregate.
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ARTICLE 12
INDEMNIFICATION
12.1 SURVIVAL; ETC.
(a) BREACH.
As used herein, a Party's "BREACH" shall mean (i) with respect
to any representation or warranty made in Sections 6 and 8 of this Agreement or
in any of the Related Agreements, such representation or warranty being untrue
as of the PRE-CLOSING DATE, (ii) with respect to any representation or warranty
made in Section 7 of this Agreement, such representation or warranty being
untrue as of the CLOSING DATE, and (ii) any breach of any of such Party's
covenants, agreements, or obligations under this Agreement or under any of the
Related Agreements. At the CLOSING, "Breach" shall also include any fact, event,
circumstance, or matter that causes a representation or warranty (i) made in
Sections 6 and 8 on the date of this Agreement to become untrue between the date
of this Agreement and the PRE-CLOSING DATE, or (ii) made in Section 7 on the
date of this Agreement to become untrue between the date of this Agreement and
the Closing Date, except and to the extent that such Breach has been cured in
accordance with the terms set forth in Article 5 hereof.
(b) SURVIVAL.
The representations and warranties of the Parties made in this
Agreement or any Related Agreement, and the indemnification obligations of the
Parties in connection with a Breach thereof, shall survive the CLOSING for the
periods of time set forth in Section 12.1(c) (SURVIVAL OF REPRESENTATIONS AND
WARRANTIES) below.
(c) SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
If the CLOSING occurs, the representations and warranties set forth in
Article 6 (REPRESENTATIONS AND WARRANTIES CONCERNING LLC), and Article 8
(REPRESENTATIONS AND WARRANTIES OF UBIQUITEL PARENT, UBIQUITEL AND THE MERGER
SUBS) of this Agreement shall survive for twelve (12) months following the
PRE-CLOSING DATE, and the representations and warranties set forth in Article 7
(REPRESENTATIONS AND WARRANTIES CONCERNING THE MEMBERS AND STOCKHOLDERS) of this
Agreement shall survive for twelve (12) months following the Closing Date;
PROVIDED, HOWEVER, that (i) the representations, warranties, and covenants set
forth in Sections 6.5(b) (TAX MATTERS), 7.5(b) (TAX MATTERS), 11.6 (TAX MATTERS
FOR UBIQUITEL PARENT AND MEMBERS) and 11.7 (TAX MATTERS IN ▇▇▇▇▇ MERGER) shall
survive for the period of any applicable statute of limitations, (ii) the
representations and warranties set forth in Section 6.10 (ENVIRONMENTAL MATTERS)
shall survive for twenty-four (24) months following the CLOSING DATE, and (iii)
the representations and warranties set forth in Sections 6.1(a) (ORGANIZATION
AND GOOD STANDING), 6.1(b) (VALIDITY AND AUTHORIZATION; POWER AND AUTHORITY),
6.3 (CAPITALIZATION), 7.1(a) (ORGANIZATION AND GOOD STANDING), 7.1(b) (VALIDITY
AND AUTHORIZATION; POWER AND AUTHORITY), 7.1(e) (OWNERSHIP AND TRANSFER BY
MEMBERS OF MEMBERS' INTERESTS), 8.1(a) (ORGANIZATION AND GOOD STANDING), 8.1(b)
(CORPORATE POWER AND AUTHORITY; VALIDITY AND AUTHORIZATION), 8.4 (UBIQUITEL
STOCK), 8.7 (CAPITALIZATION), and any claim based on fraud, whether at common
law or as codified in state or local statutes, shall survive without limitation
("SURVIVAL PERIOD"). Any claim for Losses (as defined in Section 12.2(a)(i) (LLC
PARTIES INDEMNIFICATION) herein) based on a Breach of a representation or
warranty that is not commenced during the Survival Period of such representation
or warranty shall be deemed waived, and no Person shall have any remedy against
any Party for any such Breaches.
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12.2 INDEMNITIES.
(a) INDEMNIFICATION OF UBIQUITEL.
(i) LLC PARTIES INDEMNIFICATION.
Subject to the other provisions of this Article 12, the Stockholders
and the Selling Member (excluding ▇▇▇▇▇ if it has merged with Merger Sub V but
including the Controlling ▇▇▇▇▇ Stockholders in such case), jointly and
severally (collectively, as applicable, the "LLC INDEMNITORS"), shall defend,
indemnify and hold UbiquiTel Parent and its Affiliates, and their respective
directors, officers, employees, stockholders or members (as the case may be),
agents, advisors, attorneys, accountants, consultants and Affiliates
(collectively, the "UBIQUITEL INDEMNITEES"), harmless from and against, and
promptly reimburse the UbiquiTel Indemnitees for, any loss, expense, damage,
deficiency, liability, claim or obligation, including investigative costs, costs
of defense, settlement costs (subject to approval as provided below) and
attorneys' and accountants' fees (individually, a "LOSS" and collectively,
"LOSSES") that any UbiquiTel Indemnitee suffers or incurs or to which any
UbiquiTel Indemnitee becomes subject, which Losses arise out of or in connection
with (a) any Breach by LLC, and (b) any claim asserted by any third party that,
assuming the truth thereof, would constitute a Breach by LLC. If any LLC
Indemnitor (a "PAYING LLC INDEMNITOR") is required to pay or is held liable for
any amount with respect to an LLC indemnified claim, each of the other LLC
Indemnitors (the "REMAINING LLC INDEMNITORS") shall be liable to the Paying LLC
Indemnitor for, and shall contribute to and hold the Paying LLC Indemnitor
harmless from and against, an amount equal to such LLC Indemnitor's
proportionate share of such liability (based upon the aggregate dollar value of
the consideration received by such LLC Indemnitor pursuant to this Agreement) as
adjusted to account for a default by any LLC Indemnitor in meeting its
obligations hereunder. Any such amounts shall be paid within five days of the
date any Paying LLC Indemnitor is held liable for, or is required to pay, an LLC
Indemnified Claim.
(ii) STOCKHOLDER GROUPS' INDEMNIFICATION.
Subject to the other provisions of this Article 12, the members of each
Stockholder Group (collectively, as applicable, the "STOCKHOLDER GROUP
INDEMNITORS"), jointly and severally among the members of such Stockholder
Group, and severally and not jointly among separate Stockholder Groups, shall
defend, indemnify and hold the UbiquiTel Indemnitees harmless from and against,
and promptly reimburse the UbiquiTel Indemnitees for, any Losses that any
UbiquiTel Indemnitee suffers or incurs or to which any UbiquiTel Indemnitee
becomes subject, which Losses arise out of or in connection with any Breach by
such Stockholder Group of Article 7 hereof or Section 11.6 (TAX MATTERS FOR
UBIQUITEL PARENT AND MEMBERS). Each Stockholder belonging to a Stockholder Group
Indemnitor agrees that any liability for indemnification (a "STOCKHOLDER GROUP
INDEMNIFIED CLAIM") under this Section 12.2(a)(ii) shall be borne by each
Stockholder belonging to such Stockholder Group Indemnitor jointly and
severally, regardless of which Stockholder of such Stockholder Group Indemnitor
is required to make any payments to a UbiquiTel Indemnitee for such Stockholder
Group Indemnified Claim pursuant to this Section 12.2(a)(ii). If any Stockholder
of a Stockholder Group Indemnitor (a "PAYING STOCKHOLDER GROUP INDEMNITOR") is
required to pay or is held liable for any amount with respect to a Stockholder
Group Indemnified Claim, each of the other Stockholders of such Stockholder
Group Indemnitor (the "REMAINING STOCKHOLDER GROUP INDEMNITORS") shall be liable
to the Paying Stockholder Group Indemnitor for, and shall contribute to and hold
the Paying Stockholder Group Indemnitor harmless from and against, an amount
equal to such Stockholder's proportionate share of such liability based upon
number of shares of UbiquiTel Stock received by such Stockholder pursuant to
this Agreement, as adjusted to account for a default by any Stockholder in
meeting its obligations hereunder. Any such amounts shall be paid within five
days of the date any Paying Stockholder Group Indemnitor is held liable for, or
is required to pay, a Stockholder Group Indemnified Claim.
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(iii) ▇▇▇▇▇ GROUP'S INDEMNIFICATION.
The UbiquiTel Indemnitees shall be indemnified pursuant to the
Controlling ▇▇▇▇▇ Stockholders Indemnification Agreement and not pursuant to
this Article 12 for any Losses that arise out of or in connection with the ▇▇▇▇▇
Telco Businesses, including but not limited to, any Losses that results from a
breach of Section 11.7 (TAX MATTERS IN ▇▇▇▇▇ MERGER) to the extent that such
Losses relate to the ▇▇▇▇▇ Telco Businesses.
(b) UBIQUITEL PARENT'S INDEMNIFICATION.
Subject to the other provisions of this Article 12, UbiquiTel Parent
and its Affiliates, jointly and severally (collectively, the "UBIQUITEL
INDEMNITORS"), shall defend, indemnify and hold the LLC Parties, the ▇▇▇▇▇
Stockholders and their Affiliates and their respective directors, officers,
employees, stockholders and members (as the case may be), agents, advisors,
attorneys, accountants, consultants and Affiliates (collectively, the "LLC
PARTIES INDEMNITEES"), harmless from and against, and promptly reimburse the LLC
Indemnitees for, any Losses that any of the LLC Parties suffers or incurs or to
which any of the LLC Parties become subject, which Losses arise out of or in
connection with (a) any Breach by any of UbiquiTel Parent, UbiquiTel or the
Merger Subs of this Agreement, and (b) any claim asserted by any third party
that, assuming the truth thereof, would constitute a Breach by any of UbiquiTel
Parent, UbiquiTel or the Merger Subs.
12.3 LIMITATIONS ON INDEMNITIES.
(a) BASKET.
After the Pre-CLOSING, none of the LLC Indemnitors or the Stockholder
Group Indemnitors shall have any obligation to indemnify the UbiquiTel
Indemnitees for Losses arising from a Breach of this Agreement until the
indemnifiable Losses incurred by the UbiquiTel Indemnitees, arising from a
Breach of this Agreement at or prior to the PRE-CLOSING (with respect to the LLC
Indemnitors) or the Closing (with respect to the Stockholder Group Indemnitors),
exceed $2,225,000 in the aggregate (the "BASKET"), at which time the LLC
Indemnitors and the Stockholder Group Indemnitors shall indemnify the UbiquiTel
Indemnitees only for amounts of the Losses in excess of the Basket, subject to
the Maximum Indemnification Amount set forth in Section 12.3(b) (ESCROW AND
MAXIMUM INDEMNIFICATION AMOUNT) below.
(b) ESCROW AND MAXIMUM INDEMNIFICATION AMOUNT.
No Stockholder, Selling Member or Controlling ▇▇▇▇▇ Stockholder shall
incur any liability for Losses pursuant to this Article 12 in excess of its
Maximum Indemnification Amount. For purposes of this Agreement, a Stockholder's,
Selling Member's or Controlling ▇▇▇▇▇ Stockholder's "MAXIMUM INDEMNIFICATION
AMOUNT" is its proportionate share of $30,000,000. Losses for Breach of this
Agreement may be assessed against shares of UbiquiTel Stock in the Escrow
Account or against one or more Stockholders, Controlling ▇▇▇▇▇ Stockholders, or
the Selling Member; PROVIDED that a Stockholder, the Selling Member or a
Controlling ▇▇▇▇▇ Stockholder may at its option discharge any indemnification
obligation with cash rather than with UbiquiTel Stock. Any shares of UbiquiTel
Stock delivered to UbiquiTel from the Escrow Account to satisfy claims for
Losses shall be valued at the Twenty Day Average CLOSING Price. For purposes of
this Agreement, "TWENTY DAY AVERAGE CLOSING PRICE" means the average of the
CLOSING sale price per share of UbiquiTel Stock as reported on The Nasdaq Stock
Market during the twenty consecutive trading-day period ending on the fifth
trading day prior to the Signing Date.
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(c) NO LIMITATIONS ON TAX INDEMNIFICATIONS.
Notwithstanding any other provisions of this Agreement, the limitations
set forth in Sections 12(a) and 12(b) do not apply with respect to any Breach of
the representations, warranties, and covenants set forth in Sections 6.5(b),
7.5(b), 11.6, and 11.7.
(d) DAMAGES.
Losses recoverable for Breach of this Agreement shall be limited to
actual damages, and no Party shall recover consequential, punitive, lost
opportunity or special damages of any nature, regardless of the nature of such
Party's claim or such Party's theory of liability. In determining such Losses,
the Parties shall make appropriate adjustments for Tax benefits and insurance
coverage and take into account the time cost of money (using the short term
Applicable Federal Rate as the discount rate). All indemnification payments made
under this Article 12 by an indemnifying party shall be deemed adjustments to
the Merger Consideration, if any, received by such indemnifying party.
(e) EXCLUSIVITY.
In the absence of fraud, the indemnification provisions of this Article
12 shall be the exclusive remedy for any Losses, expense, damage, deficiency,
liability, claim or obligation, including investigative costs, costs of defense,
settlement costs (subject to consent as provided in Section 12.4(b) (DEFENSE
COSTS) below) and attorneys' and accountants' fees in connection with this
Agreement or any Related Agreement or any Breach hereof or thereof.
12.4 NOTICE AND OPPORTUNITY TO DEFEND.
(a) CLAIM NOTICES, ETC.
If any Party (the "INDEMNIFIED PARTY") receives notice of any
third-party claim or commencement of any third-party action or proceeding (an
"ASSERTED LIABILITY") with respect to which any other Party (an "INDEMNIFYING
PARTY") is obligated to provide indemnification pursuant to this Article 12, the
Indemnified Party shall promptly give all Indemnifying Parties notice thereof.
The Indemnified Party's failure so to notify an Indemnifying Party shall not
cause the Indemnified Party to lose its right to indemnification under this
Article 12, except to the extent that such failure materially prejudices the
Indemnifying Party's ability to defend against an Asserted Liability that such
Indemnifying Party has the right to defend against hereunder (and except as
otherwise set forth in this Article 12). Such notice shall describe the Asserted
Liability in reasonable detail, and if practicable shall indicate the amount
(which may be estimated) of the Losses that have been or may be asserted by the
Indemnified Party. Each of the Indemnifying Parties may defend against an
Asserted Liability on behalf of the Indemnified Party utilizing counsel
reasonably acceptable to the Indemnified Party, unless (i) the Indemnified Party
reasonably objects to the assumption of such defense on the grounds that counsel
for such Indemnifying Party cannot represent both the Indemnified Party and such
Indemnifying Party because such representation would be reasonably likely to
result in a conflict of interest or because there may be defenses available to
the Indemnified Party that are not available to such Indemnifying Party, (ii)
such Indemnifying Party is not capable (by reason of insufficient financial
capacity, bankruptcy, receivership, liquidation, managerial deadlock, managerial
neglect or similar events) of maintaining a reasonable defense of such action or
proceeding, or (iii) the action or proceeding seeks injunctive or other
equitable relief against the Indemnified Party. In the event the Indemnifying
Party elects to conduct the defense, it is entitled to have exclusive control
over the defense and settlement thereof and the Indemnified Party will cooperate
and make available to the Indemnifying Party such assistance and materials as it
may reasonably request, at the Indemnifying Party's expense. Notwithstanding the
foregoing, the Indemnifying Party shall not be entitled to control,
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but may participate in, and the Indemnified Party shall be entitled to have
sole control over, the defense or settlement of any claim that (i) seeks a
temporary restraining order, preliminary or permanent injunction or specific
performance against the Indemnified Party, or (ii) would impose liability on
the part of the Indemnified Party for which the Indemnified Party is not
entitled to indemnification hereunder.
(b) DEFENSE COSTS.
If any Indemnifying Party defends an Asserted Liability in accordance
with Section 12.4(a) (CLAIM NOTICES, ETC.), it shall do so at its own expense
and shall not be responsible for the costs of defense, investigative costs,
attorneys' fees or other expenses incurred to defend the Asserted Liability
(collectively, "DEFENSE COSTS") of the Indemnified Party (which may continue to
defend, at its own expense). Notwithstanding the foregoing, if the Person
asserting the Asserted Liability against the Indemnified Party claims or seeks
amounts in excess of the amount set forth in Section 12.3(b) (ESCROW AND MAXIMUM
INDEMNIFICATION AMOUNT), then the Indemnifying Party shall remain liable for the
Defense Costs incurred by the Indemnified Party. If the Indemnified Party
assumes the defense of an Asserted Liability by reason of clauses (i), (ii) or
(iii) of subsection 12.4(a) (CLAIM NOTICES, ETC.) above, or because the
Indemnifying Party has not elected to assume the defense, then such Indemnifying
Party shall indemnify the Indemnified Party for its Defense Costs; PROVIDED,
HOWEVER, the Indemnifying Parties shall not be liable for the costs of more than
one counsel for all Indemnified Parties in any one jurisdiction.
(c) THIRD PARTY CLAIMS.
The Parties shall cooperate with each other with respect to the defense
of any claims or litigation made or commenced by third parties subsequent to the
applicable CLOSING DATE with respect to which indemnification is not available
(for any reason) under this Article 12, PROVIDED that the Party requesting
cooperation shall reimburse the other Party for the other Party's reasonable
out-of-pocket costs and expenses of furnishing such cooperation.
12.5 DELAYS OR OMISSIONS, ETC.
Except as provided in Section 12.1 (SURVIVAL; ETC.) and Section 12.4
(NOTICE AND OPPORTUNITY TO DEFEND), no delay or omission to exercise any right,
power or remedy inuring to any Party upon any breach or default of any Party
under this Agreement or any Related Agreement shall impair any such right, power
or remedy of such Party nor shall it be construed to be a waiver of any such
breach or default, or an acquiescence therein, or of or in any similar breach or
default thereafter occurring; nor shall any waiver of any single breach or
default be deemed a waiver of any other breach or default theretofore or
thereafter occurring.
12.6 GOVERNING LAW.
This Agreement and the Related Agreements shall be governed by, and
construed, interpreted and applied in accordance with the internal laws of the
State of Delaware. Subject to Section 12.7 (DISPUTE RESOLUTION), each Party
hereto hereby irrevocably submits to the exclusive jurisdiction of the United
States District Court for the Eastern District of California, Fresno Division
and, if such court does not have jurisdiction, of the courts of the State of
California in Fresno County, for the purposes of any action arising out of this
Agreement or any of the Related Agreements, or the subject matter hereof or
thereof, brought by any other Party. Subject to Section 12.7 (DISPUTE
RESOLUTION), to the extent permitted by applicable law, each Party hereby waives
and agrees not to assert, by way of motion, as a defense or otherwise in any
such action, any claim (i) that it is not subject to the jurisdiction of the
above-named courts, (ii) that the action is brought in an inconvenient forum,
(iii) that it is immune from any legal process with respect to itself or its
property, (iv) that the venue of the suit, action or proceeding is
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improper or (v) that this Agreement or any Related Agreement, or the subject
matter hereof or thereof, may not be enforced in or by such courts.
12.7 DISPUTE RESOLUTION.
(a) ARBITRATION.
(i) Any controversy or claim arising out of or
relating to this Agreement or any of the Related Agreements, or the breach
thereof, shall be settled by arbitration before three arbitrators in accordance
with the Commercial Arbitration Rules of the American Arbitration Association
(the "AAA") as in force on the date hereof, and judgment upon the award rendered
by the arbitrators may be entered in any court having jurisdiction thereof. The
initiating Party shall designate an arbitrator when it gives written notice of
arbitration to the other Party (the "RESPONDENT").
(ii) The Respondent shall designate its
arbitrator when it files its answering statement, and if it fails to do so, then
the second arbitrator shall be named by the AAA. The two arbitrators so selected
shall name a third arbitrator within 30 days, or if they fail to do so, then the
third arbitrator shall be appointed by the AAA. If any arbitrator appointed
hereunder shall die, resign, refuse, or become unable to act before an
arbitration decision is rendered, then the vacancy shall be filled by the
methods set forth in this Section 12.7(a) for the original appointment of such
arbitrator. All three arbitrators (and any successors) shall be impartial, and
no arbitrator shall have any bias or any personal or financial interest in the
arbitration or any past or present personal or financial relationship with the
Parties.
(iii) Each Party shall bear its own arbitration
costs and expenses; PROVIDED, HOWEVER, that the arbitrators shall have
discretion in awarding attorneys' fees and other costs, in addition to any other
relief to which a Party to the arbitration may be entitled. The arbitration
hearing shall be held in Fresno, California at a location designated by a
majority of the arbitrators. The arbitration shall be governed by the
substantive laws of the State of Delaware.
(iv) Except as set forth in Section 12.7(b)
(EMERGENCY RELIEF) below, the Parties stipulate that the provisions of this
Section 12.7 shall be a complete defense to any suit, action or proceeding
instituted in any federal, state or local court or before any administrative
tribunal with respect to any controversy or dispute arising out of this
Agreement or any of the Related Agreements. Neither Party hereto nor the
arbitrators may disclose the existence or results of any arbitration hereunder
without the prior written consent of the other Party; nor will any Party hereto
disclose to any third party any confidential information disclosed by any other
Party hereto in the course of an arbitration hereunder without the prior written
consent of such other Party. Notwithstanding the foregoing, the Parties
acknowledge that UbiquiTel Parent may disclose the existence or results of an
arbitration hereunder, as well as information otherwise required to be disclosed
by deposition, subpoena or other court or governmental action in connection with
UbiquiTel Parent's obligations under the Exchange Act and the rules and
regulations promulgated thereunder and in connection with UbiquiTel Parent's
registration of offerings of securities under the Securities Act and the rules
and regulations promulgated thereunder, other laws, regulations or stock
exchange requirements.
(b) EMERGENCY RELIEF.
Notwithstanding anything in this Section 12.7 to the contrary and
subject to the provisions of Section 12.6 (GOVERNING LAW), any Party hereto may
seek from a court any provisional remedy that may be necessary to protect any
rights or property of such Party pending the establishment of the arbitral
tribunal or its determination of the merits of the controversy.
-65-
ARTICLE 13
MISCELLANEOUS
13.1 SUCCESSORS AND ASSIGNS.
The provisions hereof shall inure to the benefit of, and be binding
upon, the permitted assigns, successors, heirs, executors and administrators of
the Parties hereto. This Agreement may not be assigned without the written
consent of UbiquiTel Parent and the LLC Parties and any attempted assignment
without such consent shall be null and void; PROVIDED, HOWEVER, UbiquiTel
Parent, UbiquiTel and the Merger Subs may assign any of its rights and
obligations hereunder to any Affiliate that agrees in writing to be bound
hereby, so long as any such assignment is consistent with Section 11.4(e)
hereof.
13.2 ENTIRE AGREEMENT.
This Agreement and the Related Agreements (including the disclosure
schedules and exhibits hereto and thereto), and the other documents delivered
pursuant hereto and thereto and referenced herein and therein, constitute the
full and entire understanding and agreement between the Parties with respect to
the subject matters set forth herein and therein and supersede any other
agreements, written or oral, with regard to the subject matter hereof. This
Agreement supersedes that certain letter agreement dated September 28, 2000, as
amended, among certain of the Parties hereto.
13.3 AMENDMENT.
Subject to any applicable provisions of the DGCL and the CCC, at any
time prior to the applicable Effective Date, the Parties hereto may modify or
amend this Agreement by written agreement executed and delivered by duly
authorized officers of the respective Parties. This Agreement may not be
modified or amended except by written agreement executed and delivered by each
of the respective Parties. Notwithstanding the foregoing, the Merger
Consideration that the Stockholders shall receive can be adjusted if all of the
Members' Committee approves of any such changes.
13.4 EXTENSION; WAIVER.
At any time prior to the applicable Effective Date, the Parties may (a)
extend the time for the performance of any of the obligations or other acts of
the other Parties, (b) waive any inaccuracies in the representations and
warranties of the other Parties contained in this Agreement or in any document
delivered pursuant to this Agreement, or (c) subject to Section 13.3
(AMENDMENT), waive compliance with any of the agreements or conditions of the
other Parties contained in this Agreement. Any agreement on the part of a Party
to any such extension or waiver shall be valid only if set forth in a written
instrument executed and delivered by a duly authorized officer on behalf of such
Party. The failure of any Party to this Agreement to assert any of its rights
under this Agreement or otherwise shall not constitute a waiver of such rights.
13.5 NOTICES, ETC.
All notices and other communications required or permitted hereunder
shall be in writing and shall be sent by certified or registered mail, postage
prepaid with return receipt requested, telecopy (with hard copy delivered by
overnight courier service), or delivered by hand, messenger or overnight courier
service, and shall be deemed given when received at the addresses or telecopy
numbers of the Parties set forth below, or at such other address or telecopy
number furnished in writing to the other Parties hereto:
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To UbiquiTel Parent , UbiquiTel or the Merger Subs:
UbiquiTel Inc.
▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President and CEO
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
With a copy to:
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇. ▇▇▇▇▇, Esq.
To LLC:
VIA Wireless, LLC
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
With a copy to:
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, L.L.P.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇.▇.
▇▇▇▇ ▇▇▇▇▇▇▇ Financial Center
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
and to:
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. Paper, Esq.
To ▇▇▇▇▇ or CVC:
▇.▇. ▇▇▇▇▇, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
With a copy to:
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP
Old Federal Reserve Bank Building
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
To PC4:
Ponderosa Cellular 4, Inc.
▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇'▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇
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With a copy to:
▇▇▇▇▇▇ & ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
To PCS:
Personal Communications Services, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
With a copy to:
Law Offices of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, P.C.
▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
To Pinnacles:
Pinnacles PCS, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
With a copy to:
▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
To Kerman:
Kerman Communication Technologies, Inc.
▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
With a copy to:
▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
To the Selling Members:
▇. ▇▇▇▇▇▇▇▇ and ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & Associates, L.P.
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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With a copy to:
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP
Old Federal Reserve Bank Building
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
To PTC:
Ponderosa Telephone Co.
▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇'▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇
With a copy to:
▇▇▇▇▇▇ & ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
To IPLLC:
Instant Phone, LLC
c/o ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇ ▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
With a copy to:
Law Offices of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, P.C.
▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
To Ramyar:
Ramyar, LLC
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
With a copy to:
Law Offices of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, P.C.
▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
To RCBM:
RCBM, LLC
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
-69-
With a copy to:
Law Offices of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, P.C.
▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
To BFI:
▇▇▇▇▇ Family, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
With a copy to:
▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
To KCI:
Kerman Communications, Inc.
▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
With a copy to:
▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
To ▇▇▇▇▇▇:
▇▇▇▇▇▇ Family Limited Partnership
▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
With a copy to:
▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
To S&K:
S&K ▇▇▇▇▇ Family Limited Partnership
▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
With a copy to:
▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
-70-
To Testamentary Trust:
Irrevocable Trust Under the Will of ▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
With a copy to:
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP
Old Federal Reserve Bank Building
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
and to:
▇▇▇▇▇▇▇▇ & Fores
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
To ▇▇▇▇▇ ▇▇:
▇.▇. ▇▇▇▇▇ Family Limited Partnership
▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
With a copy to:
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP
Old Federal Reserve Bank Building
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
and to:
▇▇▇▇▇▇▇▇ & Fores
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
To Vilas Trust:
▇▇▇▇ ▇▇▇▇▇ Vilas 1990 Trust
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
-71-
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
With a copy to:
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP
Old Federal Reserve Bank Building
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
and to:
▇▇▇▇▇▇▇▇ & Fores
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
To ▇▇▇▇▇▇ Trust:
The ▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇ Charitable Remainder Trust II
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
With a copy to:
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP
Old Federal Reserve Bank Building
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
and to:
▇▇▇▇▇▇▇▇ & Fores
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
To ▇▇▇▇▇ Trust:
The ▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇ Charitable Remainder Trust II
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
With a copy to:
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP
Old Federal Reserve Bank Building
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
-72-
and to:
▇▇▇▇▇▇▇▇ & Fores
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
or such other address as the parties hereto may by notice in writing duly
designate.
13.6 THIRD PARTY BENEFICIARY, ETC.
There shall be no third party beneficiary hereof. Neither the
availability of, nor any limit on, any remedy hereunder limits the remedies of
any Party hereto against third parties.
13.7 REFORMATION; SEVERABILITY.
In case any provision hereof shall be invalid, illegal or
unenforceable, such provision shall be reformed to best effectuate the intent of
the Parties and permit enforcement hereof, and the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby. If such provision is not capable of reformation, it shall be
severed from this Agreement and enforceability of the remaining provisions shall
not in any way be affected or impaired thereby.
13.8 COUNTERPARTS.
This Agreement may be executed in any number of counterparts, each of
which shall be an original, but all of which together shall constitute one and
the same instrument.
13.9 TITLES AND SUBTITLES.
The titles of the paragraphs and subparagraphs hereof are for
convenience of reference only and are not to be considered in construing this
Agreement.
13.10 EXPENSES.
The Stockholders (and, if the ▇▇▇▇▇ Merger occurs, the ▇▇▇▇▇
Stockholders) will bear all of the expenses (third-party or otherwise) incurred
by LLC, LLC Subsidiary, and the Members in connection with the preparation,
execution and performance of this Agreement, the Related Agreements and the
transactions contemplated herein or therein, including without limitation all
fees and expenses of agents, representatives, counsel and accountants.
Notwithstanding the foregoing, prior to the Pre-CLOSING, LLC may pay up to $3.0
million for the expenses it incurs in connection with this Agreement for its and
its Members' accountants, attorneys, filing fees (including HSR Act filing
fees), financial advisory services and fairness opinions. In its capacity as
Operating Manager under the Management Agreement, UbiquiTel will promptly
authorize payments up to such limit by LLC at the request of the Members
Committee. UbiquiTel will bear all of its expenses and the expenses of UbiquiTel
Parent and the Merger Subs.
-73-
13.11 RESPONSIBILITY FOR MERGER SUB OBLIGATIONS.
UbiquiTel Parent shall be directly responsible for assuring that the
Merger Subs perform all of their obligations hereunder.
13.12 CONFIDENTIALITY.
Each of UbiquiTel Parent, UbiquiTel and the Merger Subs, on the one
hand, and the LLC Parties, on the other hand, acknowledge and agree that the
other Party is and will be relying upon the agreements made by them in this
Section 13.12 in entering into this Agreement and consummating the transactions
contemplated hereby.
(a) POST-SIGNING CONFIDENTIALITY.
Between the date of this Agreement and the CLOSING, all of the Parties
to this Agreement will maintain in confidence, and will cause their
Representatives to maintain in confidence, any written, oral, or other
information obtained in confidence from any other Party in connection with this
Agreement or the transactions contemplated hereby, unless (i) such information
is already known to such Person or to others not bound by a duty of
confidentiality or such information becomes publicly available through no fault
of such Person, (ii) the use of such information is necessary or appropriate in
making any filing or obtaining any consent required for the consummation of the
transactions contemplated hereby, or (iii) the furnishing or use of such
information is required by or necessary or appropriate in connection with any
applicable proceedings. If the transactions contemplated hereby are not
consummated, each Party hereto will destroy as much of any written information
obtained in confidence from any other Party in connection with this Agreement or
the contemplated transactions or return such information to such Party as the
other Party may request.
(b) POST-CLOSING CONFIDENTIALITY.
From the CLOSING and for a period of two (2) years thereafter, the LLC
Parties (for the purposes of this Section 13.12(b) the LLC Parties shall not
include LLC or the Members (including ▇▇▇▇▇, if the ▇▇▇▇▇ Merger occurs)) shall
not, except as may be required by law or court order, at any time reveal,
divulge, communicate or make known to any Person (other than UbiquiTel Parent,
UbiquiTel and their respective agents) any information of UbiquiTel Parent or
UbiquiTel of a confidential and proprietary nature obtained in connection with
the transactions contemplated hereby and any technical information, product
information, customer information, marketing plans, proposals or information,
financial information, or any data, written material, records or documents used
by or relating to the business of LLC that are of a confidential nature (the
"UBIQUITEL CONFIDENTIAL INFORMATION"). In the event that any of the LLC Parties
believes that it is required to disclose any such UbiquiTel Confidential
Information pursuant to any applicable law or court order, such LLC Party shall
give timely written notice to UbiquiTel Parent so that UbiquiTel Parent may have
an opportunity to obtain a protective order or other appropriate relief.
Notwithstanding anything to the contrary contained herein, the LLC Parties'
obligations and UbiquiTel Parent 's rights under this Section 13.12(b) shall
remain in effect after, and shall survive, the CLOSING of the transactions
contemplated by this Agreement. Each of the LLC Parties specifically
acknowledges and agrees that the provisions of this Section 13.12(b) are
reasonable and necessary to protect the interests of UbiquiTel Parent and
UbiquiTel, that any violation of this Section 13.12(b) will result in an
irreparable injury to UbiquiTel Parent and UbiquiTel and that the remedy at law
for any breach of this Section 13.12(b) will be inadequate. In the event of any
breach or threatened breach by any of the LLC Parties of any provision of this
Section 13.12(b), UbiquiTel Parent, in addition to any other relief available to
it, shall be entitled to temporary and permanent injunctive relief,
-74-
restraining such Party from using or disclosing any UbiquiTel Confidential
Information in whole or in part, or from engaging in conduct that otherwise
would constitute a breach of the obligations of such Party under this Section
13.12(b), without the necessity of proving actual damages or posting a bond or
other security. Such relief shall be in addition to and not in lieu of any
other remedies that may be available, including an action for the recovery of
damages.
* * * * *
-75-
IN WITNESS WHEREOF, the undersigned have executed this MERGER AGREEMENT
as of the date first set forth above.
UBIQUITEL COMPANIES:
UBIQUITEL INC.
By:
------------------------------------
Name:
Title:
UBIQUITEL OPERATING COMPANY
By:
------------------------------------
Name:
Title:
UBIQUITEL AFFILIATES:
UVMS I, INC.
By:
------------------------------------
Name:
Title:
UVMS II, INC.
By:
------------------------------------
Name:
Title:
UVMS III, INC.
By:
------------------------------------
Name:
Title:
UVMS IV, INC.
By:
------------------------------------
Name:
Title:
IN WITNESS WHEREOF, the undersigned have executed this MERGER AGREEMENT
as of the date first set forth above.
UVMS V, INC.
By:
------------------------------------
Name:
Title:
UVMS VI, INC.
By:
------------------------------------
Name:
Title:
LLC:
VIA WIRELESS, LLC
By:
------------------------------------
Name:
Title:
THE MEMBERS:
CENTRAL VALLEY CELLULAR, INC.
By:
------------------------------------
Name:
Title:
PONDEROSA CELLULAR 4, INC.
By:
------------------------------------
Name:
Title:
PERSONAL COMMUNICATIONS SERVICE, INC.
By:
------------------------------------
Name:
Title:
IN WITNESS WHEREOF, the undersigned have executed this MERGER AGREEMENT
as of the date first set forth above.
PINNACLES PCS, INC.
By:
------------------------------------
Name:
Title:
KERMAN COMMUNICATION TECHNOLOGIES, INC.
By:
------------------------------------
Name:
Title:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ASSOCIATES, L.P.
By:
------------------------------------
Name:
Title:
THE STOCKHOLDERS:
▇.▇. ▇▇▇▇▇ INC.
By:
------------------------------------
Name:
Title:
THE PONDEROSA TELEPHONE CO.
By:
------------------------------------
Name:
Title:
RCBM, LLC
By:
------------------------------------
Name:
Title:
IN WITNESS WHEREOF, the undersigned have executed this MERGER AGREEMENT
as of the date first set forth above.
RAMYAR, LLC
By:
------------------------------------
Name:
Title:
INSTANT PHONE, LLC
By:
------------------------------------
Name:
Title:
▇▇▇▇▇ FAMILY, INC.
By:
------------------------------------
Name:
Title:
KERMAN COMMUNICATIONS, INC.
By:
------------------------------------
Name:
Title:
▇▇▇▇▇▇ FAMILY LIMITED PARTNERSHIP
By:
------------------------------------
Name:
Title:
S&K ▇▇▇▇▇ FAMILY LIMITED PARTNERSHIP
By:
------------------------------------
Name:
Title:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------------
:
IN WITNESS WHEREOF, the undersigned have executed this MERGER AGREEMENT
as of the date first set forth above.
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------------
THE CONTROLLING ▇▇▇▇▇ STOCKHOLDERS:
IRREVOCABLE TRUST UNDER THE WILL OF
▇▇▇▇ ▇. ▇▇▇▇▇
By:
------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: TRUSTEE
▇.▇. ▇▇▇▇▇ FAMILY LIMITED PARTNERSHIP
By:
------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: GENERAL PARTNER
▇▇▇▇ ▇▇▇▇▇ VILAS 1990 TRUST
By:
------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Title: TRUSTEE
By:
------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
Title: TRUSTEE
IN WITNESS WHEREOF, the undersigned have executed this MERGER AGREEMENT
as of the date first set forth above.
THE ▇▇▇ AND ▇▇▇▇▇ ▇▇▇▇▇▇
CHARITABLE REMAINDER TRUST II
By:
------------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇
Title: TRUSTEE
By:
------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
Title: TRUSTEE
By:
------------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇
Title: SPECIAL TRUSTEE
THE ▇▇▇▇ AND ▇▇▇▇▇ ▇▇▇▇▇
CHARITABLE REMAINDER TRUST II
By:
------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Title: TRUSTEE
By:
------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: TRUSTEE
By:
------------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇
Title: SPECIAL TRUSTEE