1
EXHIBIT 2.3
AMENDED AND RESTATED
AGREEMENT AND PLAN OF REORGANIZATION
by and among
Alamosa PCS Holdings, Inc.,
Alamosa Holdings, Inc. and
Alamosa Sub I, Inc.
and
Washington Oregon Wireless, LLC,
Members of Washington Oregon Wireless, LLC and
WOW Holdings, LLC
July 31, 2000
2
TABLE OF CONTENTS
PAGE
ARTICLE 1 Mergers.......................................................................................C-3
1.1 The Mergers...................................................................................C-3
(a) The Mergers............................................................................C-3
(b) Consummation of the Mergers............................................................C-4
(c) Effective Time of the Mergers..........................................................C-4
(d) Effect of the Mergers..................................................................C-4
(e) The Surviving Corporations' Certificates of Incorporation;
Bylaws; Directors and Officers.........................................................C-4
1.2 Terms of the Merger...........................................................................C-4
(a) Consideration for the Parent Merger....................................................C-4
(b) Right to Withhold......................................................................C-5
(c) Consideration Subject to Agreements....................................................C-5
(d) Antidilution...........................................................................C-5
(e) Sister Agreements......................................................................C-6
(f) Conversion of Public Stock. ..........................................................C-6
(g) Conversion of Merger Sub Stock.........................................................C-6
(h) Treasury Stock.........................................................................C-6
(i) Rights as Holders......................................................................C-6
1.3 VAR Plan......................................................................................C-7
(a) [Intentionally deleted]................................................................C-7
(b) [Intentionally deleted]................................................................C-7
(c) [Intentionally deleted]................................................................C-7
(d) VAR Plan...............................................................................C-7
1.4 Exchange Agent................................................................................C-7
1.5 Exchange Procedure............................................................................C-7
1.6 Distributions with Respect to Unexchanged Shares..............................................C-8
1.7 Cancellation and Retirement of Units..........................................................C-8
1.8 No Fractional Shares..........................................................................C-8
(a) No Certificates........................................................................C-8
(b) Cash Payments..........................................................................C-9
1.9 Investment of Exchange Fund...................................................................C-9
1.10 Termination of Exchange Fund..................................................................C-9
1.11 No Liability..................................................................................C-9
1.12 Tax Withholding..............................................................................C-10
ARTICLE 2 Closing the Transaction......................................................................C-10
2.1 Closing......................................................................................C-10
2.2 LLC Parties' Deliveries at Closing to Superholdings..........................................C-10
(a) Closing Certificate...................................................................C-10
i
3
(b) Consents and Approvals................................................................C-10
(c) Proceedings and Documents.............................................................C-11
(d) Certificates of Existence.............................................................C-11
(e) Opinions of LLC Parties' Counsel......................................................C-11
(f) Other Instruments.....................................................................C-11
2.3 Superholdings' and Public's Deliveries at Closing to LLC.....................................C-11
(a) Closing Certificate...................................................................C-11
(b) Proceedings and Documents.............................................................C-11
(c) Consents and Approvals................................................................C-11
(d) Opinion of Public's, Superholdings' and Merger Sub's Counsel..........................C-11
(e) Section 16(b) Resolution..............................................................C-12
(f) Other Instruments.....................................................................C-12
2.4 Related Agreements...........................................................................C-12
(a) Prior to Closing......................................................................C-12
(b) At Closing............................................................................C-13
ARTICLE 3 Conditions To Consummating The Transaction...................................................C-14
3.1 Joint Conditions.............................................................................C-14
(a) Public Stockholder Approval...........................................................C-14
(b) HSR Act...............................................................................C-14
(c) Nasdaq Listing........................................................................C-14
(d) Merger................................................................................C-14
(e) Subsidiary Merger.....................................................................C-14
3.2 Public's, Superholdings' and Merger Sub's Conditions.........................................C-14
(a) LLC Parties' Representations True.....................................................C-15
(b) LLC Parties' Compliance with Agreement................................................C-15
(c) LLC Parties Consents..................................................................C-16
(d) Public Consents.......................................................................C-16
(e) Permits...............................................................................C-16
(f) LLC Members Approval..................................................................C-16
(g) Form S-4..............................................................................C-16
(h) No Litigation.........................................................................C-16
(i) Approvals.............................................................................C-17
(j) Members Obligations...................................................................C-17
(k) Related Agreements....................................................................C-17
3.3 LLC Parties' Conditions to Closing...........................................................C-17
(a) Public's, Superholdings' and Merger Sub's Representations True........................C-17
(b) Public's, Superholdings' and Merger Sub's Compliance with
Agreement.............................................................................C-17
(c) Public Consents.......................................................................C-18
(d) No Litigation.........................................................................C-18
(e) Approvals.............................................................................C-18
ARTICLE 4 Covenants Regarding Consummation of the Transaction..........................................C-18
ii
4
4.1 Satisfaction of Conditions to Closing........................................................C-18
(a) Joint Responsibilities................................................................C-18
(b) LLC Parties' Responsibilities.........................................................C-19
(c) Public's, Superholdings' and Merger Sub's Responsibilities............................C-20
4.2 Preparation of the Proxy Statement, Form S-4 and Form S-1....................................C-20
(a) Preparation...........................................................................C-21
(b) Proxy Statement and Form S-4..........................................................C-21
(c) Form S-1..............................................................................C-21
(d) Public's and Superholdings' Actions...................................................C-22
4.3 Accountants' Letters.........................................................................C-22
(a) From LLC Holdings.....................................................................C-22
(b) From Public and Superholdings.........................................................C-23
4.4 Public Stockholders Meeting..................................................................C-23
4.5 Votes and Recommendations....................................................................C-23
4.6 LLC Members Meeting; LLC Holdings............................................................C-23
4.7 Public Announcements.........................................................................C-24
4.8 No Solicitation; Acquisition Proposals.......................................................C-24
(a) No Solicitation.......................................................................C-24
(b) Approval..............................................................................C-24
(c) Voting Agreement......................................................................C-24
(d) Acquisition Proposal..................................................................C-24
4.9 Affiliates and Certain Members...............................................................C-25
4.10 Pooling of Interests.........................................................................C-25
4.11 Loan Agreement...............................................................................C-25
4.12 Employment Agreements........................................................................C-25
4.13 Consulting Agreement.........................................................................C-25
4.14 Reissuance of LLC Audited Financial Statements...............................................C-26
4.15 Legends......................................................................................C-26
ARTICLE 5 Termination..................................................................................C-26
5.1 Reasons for Termination......................................................................C-26
(a) By Mutual Consent.....................................................................C-26
(b) By Public or Superholdings............................................................C-26
(c) By LLC................................................................................C-27
(d) Drop Dead Date........................................................................C-27
(e) Prohibition of the Reorganization.....................................................C-27
5.2 Notice of Problems...........................................................................C-28
5.3 Public's and Superholdings' Termination Procedure............................................C-28
5.4 LLC's Termination Procedure.................................................................C-28
5.5 Effect of Termination........................................................................C-29
ARTICLE 6 Representations and Warranties of LLC and the Members........................................C-29
6.1 LLC; Entry Into Agreements...................................................................C-29
iii
5
(a) Organization and Existence............................................................C-29
(b) Validity and Authorization; Power and Authority.......................................C-30
(c) Subsidiaries..........................................................................C-30
(d) No Conflict...........................................................................C-31
(e) LLC Parties Consents Required.........................................................C-31
(f) State Takeover Statutes...............................................................C-32
6.2 Financial Information........................................................................C-32
(a) Financial Statements; Books and Records...............................................C-32
(b) Conduct of Business...................................................................C-33
(c) No Material Adverse Effect............................................................C-33
(d) Projections...........................................................................C-34
6.3 Members' Interests...........................................................................C-34
(a) Capitalization........................................................................C-34
(b) Capitalization of LLC Holdings........................................................C-34
(c) Ownership and Transfer by Members.....................................................C-34
(d) VAR Plan..............................................................................C-35
6.4 Assets.......................................................................................C-35
(a) Personal Property.....................................................................C-35
(b) Real Property.........................................................................C-36
(c) Intellectual Property.................................................................C-37
(d) Contracts.............................................................................C-39
(e) Necessary Assets......................................................................C-43
6.5 Liabilities..................................................................................C-43
(a) No Liabilities........................................................................C-43
(b) Tax Matters...........................................................................C-43
(c) Litigation............................................................................C-45
(d) Employee Liabilities..................................................................C-45
(e) Warranties............................................................................C-46
6.6 Business.....................................................................................C-46
(a) Suppliers.............................................................................C-46
(b) Insurance.............................................................................C-46
(c) Employees.............................................................................C-46
(d) Worker's Compensation.................................................................C-47
(e) ERISA.................................................................................C-47
(f) Conflicts of Interest.................................................................C-49
(g) LLC Legal Requirements................................................................C-49
(h) Environmental Matters.................................................................C-50
(i) Build-out Plan........................................................................C-51
6.7 Other........................................................................................C-51
(a) Certain Information...................................................................C-51
(b) Documents Delivered...................................................................C-52
(c) No Brokers Fees; No Commissions.......................................................C-52
(d) Tax Advice............................................................................C-52
iv
6
(e) Disclosure............................................................................C-52
6.8 Investment Representations...................................................................C-52
ARTICLE 7 Representations and Warranties of Public, Superholdings and Merger Sub.......................C-54
7.1 Entry Into Agreements........................................................................C-54
(a) Organization and Good Standing........................................................C-54
(b) Corporate Power and Authority; Validity and Authorization.............................C-54
7.2 Conflicts and Consents.......................................................................C-54
(a) No Conflict...........................................................................C-54
(b) Consents Obtained.....................................................................C-54
7.3 No Brokers Fees; No Commissions..............................................................C-55
7.4 Superholdings Stock..........................................................................C-55
7.5 SEC Documents................................................................................C-55
7.6 No Material Adverse Effect...................................................................C-55
7.7 Capitalization...............................................................................C-55
7.8 Capitalization of Superholdings..............................................................C-56
7.9 No Liabilities...............................................................................C-56
7.10 Compliance with Laws.........................................................................C-56
7.11 Certain Information..........................................................................C-56
7.12 Disclosure...................................................................................C-57
ARTICLE 8 Covenants of the Parties.....................................................................C-57
8.1 Services Agreement...........................................................................C-57
8.2 Conduct of Business of LLC Pending Closing...................................................C-57
8.3 Access to Information and Employees..........................................................C-58
8.4 Financial Statements. .......................................................................C-58
8.5 Payment of Indebtedness of Related Persons...................................................C-58
8.6 Records of LLC...............................................................................C-58
8.7 Employee Benefit Plans.......................................................................C-58
8.8 Section 16(b) Resolution.....................................................................C-58
ARTICLE 9 Post-Closing Agreements......................................................................C-59
9.1 Further Actions..............................................................................C-59
9.2 Cooperation..................................................................................C-59
9.3 LLC Nominee Election.........................................................................C-59
9.4 Tax Returns..................................................................................C-60
9.5 Access to Information; Confidentiality.......................................................C-60
ARTICLE 10 Indemnification..............................................................................C-60
10.1 Survival; Etc................................................................................C-60
(a) Contents of this Agreement............................................................C-60
(b) No Effect on Liability................................................................C-60
(c) Survival..............................................................................C-60
(d) Commencing Actions....................................................................C-60
(e) Materiality...........................................................................C-61
v
7
10.2 Indemnities..................................................................................C-61
(a) Indemnification of Superholdings......................................................C-61
(b) Indemnification of the Members........................................................C-62
(c) Contribution..........................................................................C-62
(d) Form of Payment; Interim Losses.......................................................C-63
10.3 Limitations on Indemnities...................................................................C-64
(a) Basket................................................................................C-64
(b) Cap...................................................................................C-65
(c) Services Agreement....................................................................C-65
(d) Damages...............................................................................C-65
(e) Exclusivity...........................................................................C-65
(f) Indemnification of Escrow Agent.......................................................C-65
10.4 Notice and Opportunity to Defend.............................................................C-66
(a) Notice, Etc...........................................................................C-66
(b) Defense Costs.........................................................................C-66
(c) Third Party Claims....................................................................C-66
10.5 Delays or Omissions, Etc.....................................................................C-67
10.6 Governing Law; Attorneys' Fees...............................................................C-67
10.7 Dispute Resolution...........................................................................C-67
(a) Arbitration...........................................................................C-67
(b) Emergency Relief......................................................................C-69
ARTICLE 11 Miscellaneous................................................................................C-69
11.1 Successors and Assigns.......................................................................C-69
11.2 Entire Agreement.............................................................................C-69
11.3 Amendment....................................................................................C-69
11.4 Extension; Waiver............................................................................C-70
11.5 Notices, Etc.................................................................................C-70
11.6 Third Party Beneficiary, Etc.................................................................C-72
11.7 Reformation; Severability....................................................................C-72
11.8 Counterparts.................................................................................C-72
11.9 Titles and Subtitles.........................................................................C-73
11.10 Confidentiality..............................................................................C-73
(a) Confidential Information..............................................................C-73
(b) Disclosure............................................................................C-74
11.11 Expenses.....................................................................................C-75
11.12 Responsibility for Merger Sub................................................................C-75
11.13 Lack of Services Agreement...................................................................C-75
vi
8
INDEX OF DEFINED TERMS
Page
AAA..............................................................................................................C-68
Accounts.........................................................................................................C-35
Acquisition Proposal.............................................................................................C-24
Affiliate........................................................................................................C-49
Affiliates Letter................................................................................................C-25
Agreement.........................................................................................................C-1
Analysis.........................................................................................................C-73
Approvals........................................................................................................C-17
Articles.........................................................................................................C-73
Asserted Liability...............................................................................................C-66
Associate........................................................................................................C-49
Breach...........................................................................................................C-60
Cash Consideration................................................................................................C-5
Certificate of Existence.........................................................................................C-11
Certificates of Merger............................................................................................C-4
Closing..........................................................................................................C-10
Closing Date.....................................................................................................C-10
CoBank...........................................................................................................C-12
Code..............................................................................................................C-2
Companies........................................................................................................C-29
Confidential Information.........................................................................................C-73
Consulting Agreement.............................................................................................C-26
Contracts........................................................................................................C-39
Copyrights.......................................................................................................C-38
Credit Agreement.................................................................................................C-41
Deductible.......................................................................................................C-64
Default..........................................................................................................C-41
Defense Costs....................................................................................................C-66
DGCL..............................................................................................................C-4
Disclosing Party.................................................................................................C-72
Disclosure Schedules..............................................................................................C-3
EDC..............................................................................................................C-16
Effective Time....................................................................................................C-4
Employee Benefit Plans...........................................................................................C-47
Employee Pension Benefit Plan....................................................................................C-48
Employment Agreements............................................................................................C-25
Environmental Claim..............................................................................................C-51
Environmental Laws...............................................................................................C-50
Equipment Leases.................................................................................................C-35
vii
9
ERISA............................................................................................................C-47
ERISA Affiliate..................................................................................................C-48
Escrow Account....................................................................................................C-5
Escrow Adjustment................................................................................................C-63
Escrow Agent......................................................................................................C-5
Escrow Agreement..................................................................................................C-5
Escrow Deposit...................................................................................................C-63
Escrow Stock......................................................................................................C-5
Event of Default.................................................................................................C-41
Exchange Act.....................................................................................................C-21
Exchange Agent....................................................................................................C-7
Exchange Fund.....................................................................................................C-7
Exhibits..........................................................................................................C-3
Expiration Date..................................................................................................C-42
Form S-1.........................................................................................................C-21
Form S-4.........................................................................................................C-21
GAAP.............................................................................................................C-32
HSR Act..........................................................................................................C-14
Indemnified Party................................................................................................C-66
Indemnifying Party...............................................................................................C-65
Indemnity Agreement..............................................................................................C-13
Intellectual Property............................................................................................C-38
Interim Loss Value...............................................................................................C-63
Interim Losses...................................................................................................C-63
Leased Premises..................................................................................................C-36
Lenders..........................................................................................................C-41
Letters..........................................................................................................C-69
Licenses.........................................................................................................C-50
Liens............................................................................................................C-35
LLC...............................................................................................................C-1
LLC Financial Statements.........................................................................................C-32
LLC Holdings......................................................................................................C-1
LLC Legal Requirements...........................................................................................C-49
LLC Material Adverse Change......................................................................................C-15
LLC Nominee......................................................................................................C-59
LLC Parties.......................................................................................................C-1
LLC Parties Closing Certificate..................................................................................C-10
LLC Parties Consents.............................................................................................C-32
LLC Parties' Delegated Conditions................................................................................C-19
LLC Records......................................................................................................C-52
Loan Documents...................................................................................................C-13
Lock-Up Agreement................................................................................................C-13
Losses...........................................................................................................C-61
viii
10
Lucent...........................................................................................................C-12
Marks............................................................................................................C-38
Member Agreement.................................................................................................C-13
Member Guaranty..................................................................................................C-12
Member Indemnitors...............................................................................................C-61
Members...........................................................................................................C-1
Members Meeting..................................................................................................C-23
Members' Releases................................................................................................C-13
Members Required Vote............................................................................................C-30
Members' Agent....................................................................................................C-5
Members' Interests................................................................................................C-1
Merger Sub........................................................................................................C-1
Merger Sub Stock..................................................................................................C-2
OLLCA.............................................................................................................C-4
Orders...........................................................................................................C-45
Outside Confidentiality Agreement................................................................................C-46
Parent Merger.....................................................................................................C-1
Parent Surviving Corporation......................................................................................C-3
Patents..........................................................................................................C-38
Per Unit LLC Consideration........................................................................................C-5
Permits..........................................................................................................C-16
Permitted Liens..................................................................................................C-35
Personal Property................................................................................................C-35
Policies.........................................................................................................C-46
Prior Policies...................................................................................................C-46
Proceedings......................................................................................................C-45
Projections......................................................................................................C-34
Promissory Note..................................................................................................C-12
Proxy Statement..................................................................................................C-21
Public............................................................................................................C-1
Public Consents..................................................................................................C-55
Public Legal Requirements........................................................................................C-56
Public Loan Agreement............................................................................................C-12
Public Material Adverse Change...................................................................................C-15
Public Stock......................................................................................................C-6
Public Stockholders Meeting......................................................................................C-23
Public's, Superholdings' and Merger Sub's Delegated Conditions...................................................C-20
Real Estate Contracts............................................................................................C-36
Real Property....................................................................................................C-36
Receiving Party..................................................................................................C-73
Related Agreements...............................................................................................C-12
Reorganization....................................................................................................C-2
Representatives..................................................................................................C-58
ix
11
SEC..............................................................................................................C-16
SEC Documents....................................................................................................C-55
SEC Filing Date..................................................................................................C-21
Sections.........................................................................................................C-73
Securities Act...................................................................................................C-21
Services Agreement...............................................................................................C-12
Significant Supplier.............................................................................................C-46
Sister Agreements.................................................................................................C-3
Sister Lock-Up...................................................................................................C-13
Sprint...........................................................................................................C-12
Sprint Management Agreement......................................................................................C-40
Subsidiaries.....................................................................................................C-31
Subsidiary Merger.................................................................................................C-1
Subsidiary Merger Agreement.......................................................................................C-1
Subsidiary Surviving Corporation..................................................................................C-3
Superholdings.....................................................................................................C-1
Superholdings Closing Certificate................................................................................C-11
Superholdings Indemnitees........................................................................................C-61
Superholdings Indemnitors........................................................................................C-62
Superholdings Stock ..............................................................................................C-2
Tax..............................................................................................................C-45
Tax Returns......................................................................................................C-45
Taxes............................................................................................................C-45
Technology Contracts.............................................................................................C-38
Termination Date.................................................................................................C-27
Tower Leases.....................................................................................................C-37
Trade Secrets....................................................................................................C-38
VAR Obligations...................................................................................................C-7
VAR Plan..........................................................................................................C-7
x
12
TABLE OF EXHIBITS
Escrow Agreement.....................................................................................Exhibit 1.2(b)
Subsidiary Merger Agreement..........................................................................Exhibit 1.2(f)
LLC Parties Closing Certificate......................................................................Exhibit 2.2(a)
Form of Opinion of LLC Parties' Counsel..............................................................Exhibit 2.2(e)
Superholdings' Closing Certificate...................................................................Exhibit 2.3(a)
Form of Opinion of Public's, Superholdings' and Merger Sub's Counsel.................................Exhibit 2.3(d)
Services Agreement...................................................................................Exhibit 2.4(a)(i)
Public Loan Agreement................................................................................Exhibit 2.4(a)(ii)
Member Guaranty......................................................................................Exhibit 2.4(a)(iii)
Lock-Up Agreement (contained in Member Agreement)....................................................Exhibit 2.4(b)(i)
Indemnity Agreement (contained in Member Agreement)..................................................Exhibit 2.4(b)(i)
Members' Releases (contained in Member Agreement)....................................................Exhibit 2.4(b)(i)
xi
13
AMENDED AND RESTATED
AGREEMENT AND PLAN OF REORGANIZATION
THIS AMENDED AND RESTATED AGREEMENT AND PLAN OF REORGANIZATION (this
"Agreement") is entered into as of July 31, 2000, by and among Alamosa PCS
Holdings, Inc., a Delaware corporation ("Public"), Alamosa Holdings, Inc., a
Delaware corporation ("Superholdings"), Alamosa Sub I, Inc., a Delaware
corporation and wholly-owned direct subsidiary of Superholdings ("Merger Sub"),
and Washington Oregon Wireless, LLC, an Oregon limited liability company
("LLC"), certain members of LLC (collectively, the "Members") and WOW Holdings,
LLC, an Oregon limited liability company ("LLC Holdings").
R E C I T A L S
- - - - - - - -
A. The Members own, in the aggregate, at least 67% of the Final Percentage
Interest (as defined in LLC's operating agreement) of LLC, consisting
in the aggregate of 31,558,046 units (all of the outstanding membership
interests of LLC, whether or not owned by a Member, and any interest
received with respect to or in exchange for any such interest
(including, without limitation, units of LLC Holdings), being referred
to as "Members' Interests"). LLC, LLC Holdings and the Members are
sometimes collectively referred to herein as the "LLC Parties."
B. The Board of Managers of LLC deems it advisable and in the best
interests of its members that LLC and its members form LLC Holdings to
hold all of the Members' Interests of LLC, and that LLC Holdings, along
with any other business entity with which Superholdings has agreed to
merge, merge with and into Superholdings (the "Parent Merger")
simultaneously with the merger of Merger Sub and Public (the
"Subsidiary Merger"). In furtherance thereof, the Board of Directors of
Superholdings and the Board of Managers of LLC have approved the Parent
Merger, upon the terms and subject to the conditions set forth herein.
In addition, the Members have agreed to vote in favor of the Parent
Merger.
C. The Board of Directors of Public have deemed it advisable and in the
best interests of its stockholders to enter into the Agreement and Plan
of Reorganization dated as of July 31, 2000 (the "Subsidiary Merger
Agreement") by and among Merger Sub, Public and Superholdings and to
consummate the Subsidiary Merger simultaneously with the consummation
of the Parent Merger. In furtherance thereof, the Board of Directors of
Public has approved the Subsidiary Merger Agreement and the Subsidiary
Merger, upon the terms and subject to the conditions set forth herein.
D. Similarly, the Board of Directors of Superholdings have deemed it
advisable to enter into the Subsidiary Merger Agreement and to
consummate the Subsidiary Merger
C-1
14
simultaneously with the consummation of the Parent Merger. In
furtherance thereof, the Board of Directors of Superholdings has
approved the Subsidiary Merger Agreement and the Subsidiary Merger,
upon the terms and subject to the conditions set forth herein.
E. Further, the Board of Directors of Merger Sub have deemed it advisable
and in the best interests of its stockholders to enter into the
Subsidiary Merger Agreement and to consummate the Subsidiary Merger
simultaneously with the consummation of the Parent Merger. In
furtherance thereof, the Board of Directors of Merger Sub has approved
the Subsidiary Merger Agreement and Subsidiary Merger, upon the terms
and subject to the conditions set forth herein. The Parent Merger, the
Subsidiary Merger and the other transactions contemplated herein,
collectively referred to as the "Reorganization," and
Sister Agreements consummated contemporaneously herewith are part of a
single reorganization.
F. As of the date hereof, there are no shares of common stock of
Superholdings, par value $0.01 per share ("Superholdings Stock"),
issued and outstanding and as of the date hereof, Superholdings holds
of record all of the issued and outstanding shares of common stock of
Merger Sub, par value $0.01 per share ("Merger Sub Stock").
G. The Board of Directors of Public has determined that in order to
complete the Parent Merger in a tax-efficient manner, such acquisition
should be structured as a transaction described in Section 351(a) of
the Internal Revenue Code of 1986, as amended (the "Code") (all
citations to the Code, or to the Treasury Regulations promulgated
thereunder, shall include any amendments or any substitute or successor
provisions thereto), which will require Public to form a new holding
company. The parties desire that the Parent Merger, except as provided
in Sections 1.2(a)(ii) (Cash) and 1.8(b) (Cash Payments) herein,
qualifies as a transaction described in Section 351(a) of the Code.
H. The parties desire that the Subsidiary Merger qualify as a transaction
described in Sections 351(a) and 368(a)(1)(A) of the Code by virtue of
Section 368(a)(2)(E) of the Code. It is contemplated that the
Subsidiary Merger will be completed substantially simultaneously with
the merger or consolidation of Superholdings or one or more of its
subsidiaries with or into one or more business entities (including,
without limitation, the Parent Merger) in a transaction of the type
described in Section 351(a) of the Code.
I. For financial accounting purposes, Public and Superholdings may
determine that Superholdings' merger with LLC will be accounted for as
a pooling of interests transaction.
J. Public, Superholdings, Merger Sub and the LLC 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 benefitted by the
transactions contemplated herein.
C-2
15
K. The LLC Parties have delivered to Superholdings certain disclosure
schedules of even date herewith referred to herein. Public,
Superholdings and Merger Sub have delivered to the LLC Parties certain
disclosure schedules of even date herewith referred to herein. Any such
disclosure schedules are referred to herein as "Disclosure Schedules."
The Disclosure Schedules and the Exhibits (herein so called) referred
to herein are a part of this Agreement.
L. Public, Superholdings and Merger Sub may enter into other agreements
(the "Sister Agreements") pursuant to which other business entities
join in the Parent Merger.
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 hereto,
intending to be legally bound, agree as follows:
ARTICLE 1
Mergers
-------
1.1 The Mergers.
-----------
(a) The Mergers. Upon the terms and subject to the
conditions set forth in this Agreement:
(i) Parent Surviving Corporation. Prior to the
date hereof, LLC and its members shall form LLC Holdings. As soon as practicable
after the date hereof, but not later than thirty calendar days from the date
hereof, LLC Holdings shall hold all of the Members' Interests of LLC. At the
Effective Time, LLC Holdings will merge with and into Superholdings (along with
one or more other parties, if any, that Public and Superholdings agree to be
constituents in the Parent Merger, pursuant to the terms of a Sister Agreement)
in accordance with the terms set forth herein. From and after the Effective
Time, the separate existence of LLC Holdings and such other constituents shall
cease to exist. Superholdings shall continue as the surviving corporation in the
Parent Merger (the "Parent Surviving Corporation") and shall continue to be
governed by the laws of the State of Delaware. (LLC shall continue as a
subsidiary of Superholdings.)
(ii) Subsidiary Surviving Corporation.
Simultaneously with the Parent Merger, Merger Sub will merge with and into
Public, in accordance with the terms set forth herein and the terms of the
Subsidiary Merger Agreement. From and after the Effective Time, the separate
corporate existence of Merger Sub shall cease to exist. Public shall continue as
the surviving corporation in the Subsidiary Merger (the "Subsidiary Surviving
Corporation") and
C-3
16
shall continue to be governed by the laws of the State of Delaware. At the sole
discretion of the Board of Directors of Public, as an alternative structure to
the Subsidiary Merger, Public may merge directly with and into Superholdings,
and Superholdings shall continue as the surviving corporation and shall continue
to be governed by the laws of the State of Delaware.
(b) Consummation of the Mergers. The Parent Merger and the
Subsidiary Merger shall be consummated by filing Certificates of Merger (herein
so called) with the secretaries of state of the State of Delaware and State of
Oregon, together with all other documents, notices and filings required by the
Delaware General Corporation Law ("DGCL") and the Oregon Limited Liability
Company Act ("OLLCA").
(c) Effective Time of the Mergers. The Certificates of Merger
shall provide that the Parent Merger and the Subsidiary Merger shall be
effective as of the date and time set forth in the Certificates of Merger filed
with the Secretary of State of the State of Delaware (the "Effective Time").
(d) Effect of the Mergers. At the Effective Time, the effect
of the Parent Merger shall be as provided in Section 264 of the DGCL and other
applicable provisions of the DGCL and Section 63.481 of the OLLCA and other
applicable provisions of such act, and the effect of the Subsidiary Merger shall
be as provided in Sections 259 and 261 of the DGCL.
(e) The Surviving Corporations' Certificates of Incorporation;
Bylaws; Directors and Officers. The certificates of incorporation and bylaws of
Superholdings and Public, in each case as in effect at the Effective Time, shall
be the certificates of incorporation and bylaws of Parent Surviving Corporation
and Subsidiary Surviving Corporation, respectively. At the Effective Time, the
Board of Directors and officers of each of Parent Surviving Corporation and
Subsidiary Surviving Corporation shall be composed of the directors and officers
of Superholdings and Public serving immediately before the Effective Time,
respectively, to hold office until their respective successors are duly elected
or appointed and qualified. The rights and obligations of the then current
members of LLC, whether as members of LLC or LLC Holdings, (i) under their
respective operating agreements, limited liability company agreements, or
similar agreements, including, without limitation, the obligations to make
capital contributions and (ii) with respect to Members' Interests shall
terminate.
1.2 Terms of the Merger.
-------------------
(a) Consideration for the Parent Merger. Each unit of the
Members' Interests that are units of LLC Holdings (which the members of LLC
shall have received in exchange for their units of LLC) outstanding immediately
prior to the Effective Time shall, at the Effective Time, by virtue of the
Parent Merger and without any action on the part of the holder thereof, be
converted, as specified by and pursuant to the terms of this Section 1.2(a),
into the following:
(i) Superholdings Stock. The right to receive
a number of duly
C-4
17
authorized, validly issued, fully paid and nonassessable shares of Superholdings
Stock, along with any dividends or distributions thereon after the Effective
Time, equal to the Per Unit LLC Consideration. "Per Unit LLC Consideration"
shall be equal to 0.19171 shares of Superholdings Stock per unit of the Members'
Interests of LLC Holdings; provided, that, the aggregate number of shares of
Superholdings Stock that shall be issued in connection with the Parent Merger
pursuant to this Section 1.2(a) for all of such Members' Interests outstanding
shall be equal to 6,050,000 shares.
(ii) Cash. The right to receive cash as set
forth in the Disclosure Schedule to this Section 1.2(a)(ii), without any
interest thereon (the "Cash Consideration"); provided, that, the aggregate
amount of all Cash Consideration shall equal $12.5 million.
(iii) Adjustment of Cash. The amount of Cash
Consideration shall be subject to adjustment as provided below and shall be
reduced by the amount of any transfer Taxes owed as a result of the formation
of LLC Holdings or LLC's or LLC Holdings' participation in the Parent Merger.
(b) Right to Withhold. At the Closing, Superholdings shall
have the right to withhold from the aggregate amount of the Per Unit LLC
Consideration the amounts of any Interim Losses, as described in further detail
in Section 10.2(d) (Form of Payment; Interim Losses). The aggregate amount of
all such amounts withheld at any time is defined herein as the "Escrow Stock."
An escrow agent (the "Escrow Agent") shall keep the Escrow Stock in a separate
escrow account, maintained on behalf of Superholdings and the members of LLC
Holdings (the "Escrow Account"), subject to the terms of the Escrow Agreement
(the "Escrow Agreement") substantially in the form attached as the Exhibit to
this Section 1.2(b). LLC Holdings shall appoint an agent (the "Members' Agent")
to act on behalf of the Members in all matters regarding the Escrow Stock. The
Members' Agent shall have the authority to take any and all actions, including,
without limitation, negotiate and compromise claims on behalf of the Members
with respect to the Escrow Stock.
(c) Consideration Subject to Agreements. The consideration to
be paid pursuant to the Parent Merger pursuant to Section 1.2(a) (Consideration
for the Parent Merger) shall be subject to the terms of the Escrow Agreement,
Lock-Up Agreement, the Indemnity Agreement, the other provisions of the Member
Agreement and, to the extent applicable, Affiliate Letters. Superholdings shall
retain possession of such consideration until the later of (i) the expiration of
the Lock-Up Agreement and (ii) the resolutions of all claims for Losses that
arise pursuant to Section 10.2(a) (Indemnification of Superholdings), unless the
person or entity and, if applicable, its direct and indirect owners, entitled to
receive such consideration execute a Lock-Up Agreement and an Indemnity
Agreement, and to the extent applicable, Affiliate Letters, whereupon
Superholdings shall release such consideration.
(d) Antidilution. In the event of any stock dividend, stock
split, reclassification, recapitalization, combination or exchange of shares
with respect to, or rights
C-5
18
issued in respect of, Public Stock on or after the date hereof and prior to the
Effective Time, the Per Unit LLC Consideration shall be adjusted accordingly.
(e) Sister Agreements. The Sister Agreements, if any, shall
set forth the consideration to be paid to the other parties to the Parent
Merger.
(f) Conversion of Public Stock. Each share of common stock of
Public, par value $0.01 (the "Public Stock"), issued and outstanding immediately
prior to the Effective Time together with the related rights distributed to
holders of Public Stock pursuant to the Rights Agreement, dated as of January
31, 2000, between Public and ChaseMellon Shareholder Services, L.L.C., as Rights
Agent (other than shares of Public Stock held in Public's treasury) shall, at
the Effective Time, by virtue of the Subsidiary Merger and without any action on
the part of the holder thereof, be converted into, as specified and pursuant to
the terms of this Section 1.2(f), the right to receive one duly authorized,
validly issued, fully paid and nonassessable share of Superholdings Stock, along
with any dividends or distributions thereon after the Effective Time pursuant to
the terms of the Subsidiary Merger Agreement in the form attached as the Exhibit
to this Section 1.2(f), which agreement shall not be amended in a manner adverse
to the LLC Parties without the consent of the Members.
(g) Conversion of Merger Sub Stock. Each share of Merger Sub
Stock issued and outstanding immediately prior to the Effective Time (other than
shares of Merger Sub Stock held in Merger Sub's treasury) shall, at the
Effective Time, by virtue of the Subsidiary Merger and without any action on the
part of the holder thereof, be converted into one duly authorized, validly
issued, fully paid nonassessable share of stock of the Subsidiary Surviving
Corporation.
(h) Treasury Stock. All shares of Public Stock and Merger Sub
Stock that are owned by Public or Merger Sub, respectively, as treasury stock
shall, at the Effective Time, be canceled and retired and shall cease to exist,
and no shares of Superholdings Stock or other consideration shall be delivered
or owing in exchange therefor.
(i) Rights as Holders. On or after the Effective Time, holders
of Members' Interests shall cease to have any rights as members of LLC and LLC
Holdings, except the right to receive the consideration set forth herein in
Section 1.2(a) (Consideration for the Parent Merger) with respect to members'
interest held by them, and such Members' Interests shall be extinguished. On and
after the Effective Time, holders of certificates which immediately prior to the
Effective Time represented issued and outstanding shares of Public Stock shall
cease to have any rights as stockholders of Public, except the right to receive
the consideration set forth herein in Section 1.2(f) (Conversion of Public
Stock) with respect to each share held by them. The merger consideration paid
upon the surrender for exchange of units of Members' Interests or shares of
Public 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 and obligations pertaining to the members'
interests or shares theretofore represented by such unit of Members' Interests
or shares of Public Stock
C-6
19
1.3 VAR Plan.
--------
(a) [Intentionally deleted].
(b) [Intentionally deleted].
(c) [Intentionally deleted].
(d) VAR Plan. At the request of Superholdings, LLC shall
terminate all or any portion of its Value Appreciation Plan (the "VAR Plan")
prior to the Closing Date. On the Closing Date, Superholdings shall (i) assume
the obligations owed under the VAR Plan to the LLC employees whom Superholdings
elects to employ and (ii) either (A) assume the VAR Plan as it relates to
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ or (B) satisfy and pay the obligations owed to ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
under the VAR Plan (collectively, the "VAR Obligations"). On the Closing Date,
the aggregate amount of the Cash Consideration shall be decreased by the amount
of the VAR Obligations attributable to ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ in excess of $1,000,000.
On the Closing Date, Superholdings shall pay (i) to each LLC employee whom
Superholdings elects to employ, one-third of the VAR Obligations owed to each
such LLC employee and (ii) to ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, the amount of VAR Obligations
attributable to ▇▇▇▇▇▇▇▇ ▇▇▇▇▇. On each of the dates six and twelve months after
the Closing Date, Superholdings shall pay to each of the LLC employees other
than ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ whom Superholdings elects to employ one-third of the VAR
Obligations owed to each such LLC employee.
1.4 Exchange Agent. Prior to or concurrently with the Effective Time,
Superholdings shall enter into an agreement with such bank or trust company as
may be designated by Superholdings (the "Exchange Agent"), which shall provide
that Superholdings shall deposit with the Exchange Agent as of the Effective
Time, for the benefit of the holders of units of Members' Interests, for
exchange in accordance with this Agreement, through the Exchange Agent, (a)
certificates representing the shares of Superholdings Stock, (b) any dividends
or distributions with respect thereto with a record date after the Effective
Time, (c) any cash payable in lieu of any fractional shares of Superholdings
Stock and (d) the $12.5 million aggregate for the Cash Consideration
(collectively, the "Exchange Fund") issuable pursuant to this Agreement in
exchange for outstanding units of Members' Interests.
1.5 Exchange Procedure. After the Effective Time, each holder of
Members' Interests shall surrender the certificates representing same or, if the
Members' Interests are not certificated, deliver a release of members' interest,
in a form, duly endorsed or executed as the Parent Surviving Corporation may
reasonably require, to the Exchange Agent, together with a Lock-Up Agreement,
Members' Release and an Indemnity Agreement. Subject to Sections 1.2(b) (Right
to Withhold), 1.2(c) (Consideration Subject to Agreements) and 1.12 (Tax
Withholding), at the time of such surrender or delivery, the merger
consideration applicable to such Members' Interests, as the case may be, shall
be delivered to such holder. The merger
C-7
20
consideration 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 and
obligations pertaining to the surrendered units. No interest shall be paid or
accrued on any cash payable upon the surrender of any unit of Members'
Interests. If cash payment is to be made, or shares of Superholdings Stock
issued, to a person other than the person who surrendered the units of Members'
Interests, it shall be a condition of payment that the units of Members'
Interests so surrendered shall be properly endorsed or otherwise in proper form
for transfer and that the person requesting such payment shall pay any transfer
or other taxes required by reason of the payment to a person other than the
registered holder of the surrendered units of Members' Interests, or established
to the satisfaction of Superholdings that such taxes have been paid or are not
applicable.
1.6 Distributions with Respect to Unexchanged Shares. No dividends or
other distributions with respect to Superholdings Stock shall be paid to the
holder of any unsurrendered units of Members' Interests with respect to the
shares of Superholdings Stock issuable upon the surrender of such units of
Members' Interests pursuant to Section 1.5, (Exchange Procedure) and no cash
payment in lieu of fractional shares shall be paid to any such holder pursuant
to Section 1.8, (No Fractional Shares) and all such dividends, other
distributions and cash in lieu of fractional shares of Superholdings Stock shall
be paid by Superholdings to the Exchange Agent and shall be included in the
Exchange Fund, in each case until the surrender of such units of Members'
Interests pursuant to Section 1.5 (Exchange Procedure). Subject to the effect of
applicable escheat or similar laws and subject to Sections 1.2(b) (Right to
Withhold), 1.2(c) (Consideration Subject to Agreements) and 1.12 (Tax
Withholding), following the surrender of any such units of Members' Interests
pursuant to Section 1.5 (Exchange Procedure) there shall be paid to the holder
of the units of Members' Interests, (i) any such dividends or other
distributions, without any interest thereon, which theretofore had become
payable (with a record date or payment date prior to the surrender of units of
Members' Interests) with respect to shares of Superholdings Stock represented by
such units of Members' Interests and (ii) the amount of any cash payable in lieu
of a fractional share of Superholdings Stock to which such holder is entitled
pursuant to Sections 1.8(a) (No Certificates) and 1.8(b) (Cash Payments). No
holder of unsurrendered units of Members' Interests shall be entitled, until the
surrender of such units, to vote the shares of Superholdings Stock into which
the shares of Members' Interests represented thereby shall have been converted.
1.7 Cancellation and Retirement of Units. As of the Effective Time, all
units of Members' Interests of LLC Holdings issued and outstanding immediately
prior to the Effective Time shall cease to be outstanding and shall
automatically be canceled and retired and shall cease to exist.
1.8 No Fractional Shares.
--------------------
(a) No Certificates. No certificates representing fractional
shares of Superholdings Stock shall be issued upon the surrender for exchange of
units of Members' Interests which have been converted pursuant to this
Agreement, and such fractional share
C-8
21
interests shall not entitle the owner thereof to vote or to have any rights of a
stockholder of Superholdings.
(b) Cash Payments. In lieu of any such fractional shares, each
holder of units who would otherwise have been entitled to a fraction of a share
of Superholdings Stock upon surrender of units for exchange pursuant to this
Article 1 will be paid an amount in cash (without interest), rounded to the
nearest cent, determined by multiplying (i) the per share closing price on The
Nasdaq Stock Market of Superholdings Stock on the date on which the Effective
Time occurs (or, if Superholdings Stock does not trade on The Nasdaq Stock
Market on such date, the first date of trading of Superholdings Stock on The
Nasdaq Stock Market after the Effective Time) by (ii) the fractional interest to
which such holder otherwise would be entitled. Such amount in cash shall be
deemed to be substituted for any such fractional share and to constitute a
portion of the merger consideration with respect to the related units.
1.9 Investment of Exchange Fund. The Exchange Agent shall invest any
cash included in the Exchange Fund, as directed by Superholdings, in (a) direct
obligations of the United States of America, (b) obligations for which the full
faith and credit of the United States of America is pledged to provide for the
payment of principal and interest, (c) commercial paper rated the highest
quality by either ▇▇▇▇▇'▇ Investors Services, Inc. or Standard & Poor's
Corporation or (d) certificates of deposit, bank repurchase agreements or
bankers' acceptances of commercial banks with capital exceeding $500.0 million.
Any net earnings with respect to the Exchange Fund shall be the property of and
paid over to Superholdings as and when requested by Superholdings.
1.10 Termination of Exchange Fund. Any portion of the Exchange Fund
which remains undistributed to the holders of units of Members' Interests for
180 days after the Effective Time shall be delivered to Superholdings, upon
demand, and any holders of units of Members' Interests that have not theretofore
complied with this Article 1 shall thereafter look only to Superholdings, and
only as general creditors thereof, for payment of their claim for any merger
consideration, any cash in lieu of fractional shares of Superholdings Stock and
any dividends or distributions with respect to Superholdings Stock, as provided
herein.
1.11 No Liability. None of Public, Superholdings, Merger Sub, Parent
Surviving Corporation, Subsidiary Surviving Corporation or the Exchange Agent
shall be liable to any person in respect of any payments or distributions
payable from the Exchange Fund delivered to a public official pursuant to any
applicable abandoned property, escheat or similar law. If any units of Members'
Interests shall not have been surrendered prior to five years after the
Effective Time (or immediately prior to such earlier date on which any merger
consideration in respect of such units of Members' Interests would otherwise
escheat to or become the property of any governmental entity), any amounts
payable in respect of such units of Members' Interests shall, to the extent
permitted by applicable law, become the property of Superholdings, free and
clear of all claims or interest of any person previously entitled thereto.
C-9
22
1.12 Tax Withholding. Superholdings shall be entitled to deduct and
withhold, or cause to be deducted or withheld, from the consideration otherwise
payable pursuant to this Agreement to any holder of options or units of Members'
Interests such amounts as are required to be deducted and withheld with respect
to the making of such payment under the Code, or any provision of applicable
state, local or foreign tax law. To the extent that amounts are so deducted and
withheld, such deducted and withheld amounts shall be treated for all purposes
of this Agreement as having been paid to such holders in respect of which such
deduction and withholding was made.
ARTICLE 2
Closing the Transaction
-----------------------
2.1 Closing. On the third business day after the satisfaction or
written waiver of the conditions (other than execution, filing or delivery of
agreements, certificates, legal opinions or other instruments to be delivered at
Closing) contained (a) herein, (b) in the Subsidiary Merger Agreement and (c) at
the option of Superholdings and Public, any Sister Agreements that have not been
validly terminated in accordance with their terms, or as otherwise agreed by the
parties hereto, and unless this Agreement has been terminated pursuant to the
provisions of Article 5 (Termination), the consummation of the transactions
provided for herein and in such other agreements (the "Closing") shall take
place at the offices of ▇▇▇▇▇▇ and ▇▇▇▇▇, LLP, counsel to Superholdings, Public
and Merger Sub, 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; provided, however, that if the conditions
(other than execution, filing or delivery of agreements, certificates, legal
opinions or other instruments to be delivered at Closing) contained herein and
in the Subsidiary Merger Agreement are satisfied or waived in writing, then
Superholdings and Public may not delay the Closing beyond March 31, 2001 in
order to achieve satisfaction or waiver of the conditions contained in a Sister
Agreement; provided, further, that if (i) the closing of a Sister Agreement
occurs prior to March 31, 2001 and (ii) the conditions (other than execution,
filing or delivery of agreements, certificates, legal opinions or other
instruments to be delivered at Closing) contained herein are satisfied or waived
in writing, then the Closing of this Agreement shall also occur on the closing
date of such Sister Agreement. The time and date of the Closing are referred to
herein as the "Closing Date."
2.2 LLC Parties' Deliveries at Closing to Superholdings. At the
Closing, the LLC Parties shall deliver, or cause to be delivered, to
Superholdings the following items:
(a) Closing Certificate. The LLC Parties shall jointly deliver
to Superholdings a closing certificate executed by each of the LLC Parties (the
"LLC Parties Closing Certificate") in the form attached as the Exhibit to this
Section 2.2(a).
(b) Consents and Approvals. The LLC Parties jointly shall
deliver copies of all LLC Parties' Consents that have been obtained, and all
Approvals obtained by the LLC
C-10
23
Parties.
(c) Proceedings and Documents. The LLC Parties shall deliver
copies, certified or otherwise identified to Superholdings' reasonable
satisfaction, of all company documents that Superholdings shall reasonably
request, including resolutions of the Board of Managers of LLC Holdings and
resolutions of the members of LLC Holdings, dated on or before the date hereof
to authorize this Agreement, the Related Agreements and the transactions and
other acts contemplated either by this Agreement or the Related Agreements.
(d) Certificates of Existence. LLC Holdings shall deliver
certificates, issued within 10 days of the date of the Closing, (i) from the
Secretary of State of Oregon, evidencing that LLC and LLC Holdings are validly
existing under the laws of their jurisdictions of organization and (ii) from
each state listed on the Disclosure Schedule to Section 6.1(a) (Organization and
Existence) evidencing that LLC and LLC Holdings are qualified to do business as
foreign entities (each, a "Certificate of Existence") in each such state.
(e) Opinions of LLC Parties' Counsel. The LLC Parties shall
deliver an opinion of ▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇, counsel to the LLC Parties, dated
as of the Closing Date, in customary form and substance regarding the matters
set forth in the Exhibit to this Section 2.2(e).
(f) Other Instruments. Such other instruments, documents or
information that Superholdings reasonably requests in order to more effectively
consummate the transactions contemplated hereby.
2.3 Superholdings' and Public's Deliveries at Closing to LLC. At the
Closing, Superholdings and Public shall deliver the following items to the
Members:
(a) Closing Certificate. Superholdings shall deliver to the
Members a closing certificate executed by Superholdings (the "Superholdings
Closing Certificate") in the form attached as the Exhibit to this Section
2.3(a).
(b) Proceedings and Documents. Superholdings, Public and
Merger Sub shall deliver copies, certified or otherwise identified to LLC
Holdings' reasonable satisfaction, of all company documents that LLC Holdings
shall reasonably request, including resolutions of their respective boards of
directors, dated on or before the date hereof to authorize this Agreement, the
Related Agreements and the transactions and other acts contemplated either by
this Agreement or the Related Agreements.
(c) Consents and Approvals. Public and Superholdings jointly
shall deliver copies of all of Public's and Superholdings' Consents that have
been obtained, and all Approvals obtained by Public and Superholdings.
(d) Opinion of Public's, Superholdings' and Merger Sub's
Counsel.
C-11
24
Superholdings shall deliver an opinion of ▇▇▇▇▇▇ and ▇▇▇▇▇, LLP, dated as of the
Closing Date, in customary form and substance regarding the matters set forth in
the Exhibit to this Section 2.3(d).
(e) Section 16(b) Resolution. A copy of the resolution
referred to in Section 8.8 (Section 16(b) Resolution), certified as of the
Closing Date by the Secretary or Assistant Secretary of Superholdings.
(f) Other Instruments. Such other instruments, documents or
information that LLC Holdings reasonably requests in order to more effectively
consummate the transactions contemplated hereby.
2.4 Related Agreements. The parties, as appropriate, shall execute and
deliver the following documents. All agreements, documents or instruments
executed among Public, Superholdings and Merger Sub on the one hand, and any of
the LLC Parties on the other, pursuant to this Agreement or the transactions
contemplated hereby are referred to as the "Related Agreements." Without
limitation, the Related Agreements include:
(a) Prior to Closing. The following documents, which shall be
executed prior to Closing:
(i) Services Agreement. On the date hereof,
the parties will execute a services agreement substantially in the form attached
as the Exhibit to this Section 2.4(a)(i), which Services Agreement shall become
effective as provided therein on the date the condition contained in Section
3.1(b) (HSR Act) has been satisfied and the last consent to the transactions
contemplated hereby has been obtained from Sprint Spectrum, L.P., WirelessCo,
L.P., Sprint Communications, L.P., Sprint Spectrum Equipment Company, L.P., and
Sprint Spectrum Realty Company, L.P. (collectively, "Sprint"), Lucent
Technologies, Inc. ("Lucent") and CoBank, ACB ("CoBank") until the earlier of
the Closing Date or the Termination Date (the "Services Agreement").
(ii) Public Loan Agreement. Public shall loan
funds to LLC, pursuant to a loan agreement (the "Public Loan Agreement") in the
form attached as the Exhibit to this Section 2.4(a)(ii).
(iii) Member Guaranty. The loans under the
Public Loan Agreement shall be guaranteed by the Members, and such other members
of LLC that may join such guaranty, pursuant to a guaranty (the "Member
Guaranty") in the form attached as the Exhibit to this Section 2.4(a)(iii).
(iv) Promissory Note. LLC will execute a
promissory note (the "Promissory Note") in favor of Public in connection with
the Public Loan Agreement, in the form attached as the Exhibit to this Section
2.4(a)(iv)
C-12
25
(v) Loan Documents. All "Loan Documents," as
defined in the Public Loan Agreement.
(b) At Closing. The following documents, which shall be
executed at the Closing:
(i) Member Agreement. Superholdings, each
Member of LLC Holdings and such Member's direct and indirect owners will enter
into a member agreement (the "Member Agreement"), which shall include, among
other provisions, the following:
(A) Lock-Up Agreement. Each member of
LLC Holdings will enter into a lock-up agreement with Superholdings, which
agreement shall prohibit the sale or other disposition of their holdings of
Superholdings Stock until September 30, 2001, without the prior written consent
of Superholdings ("Lock-Up Agreement"), in the form hereto attached as the
Exhibit to this Section 2.4(b)(i)(A). If Superholdings enters into a lock-up
agreement with any person who receives at least 25% of the Superholdings Stock
issued pursuant to a Sister Agreement (a "Sister Lock-Up") with terms more
beneficial to such person than any Lock-Up Agreement, then each Member may
substitute such Lock-up Agreement in its entirety for a lockup agreement having
the same terms as such Sister Lock-Up Agreement. Notwithstanding the foregoing,
if Superholdings does not enter into a Sister Lock-up with any person who
receives at least 25% of the Superholdings Stock issued pursuant to a Sister
Agreement, then each Member shall be immediately and forever released from any
and all obligation and duty under its respective Lock-Up Agreement.
(B) Indemnity Agreement. Each member
of LLC Holdings and its direct and indirect owners will enter into an indemnity
agreement with Superholdings, pursuant to which agreement each member shall
agree to be bound by the provisions of Article 10 (Indemnification) ("Indemnity
Agreement"), in the form attached hereto as the Exhibit to this Section
2.4(b)(ii)(B) and its direct and indirect owners shall be so bound to the extent
that they receive any distribution of any merger consideration or proceeds
thereof.
(C) Members' Releases. Superholdings and the
members of LLC Holdings shall execute and deliver releases (the "Members'
Releases"), in the form attached hereto as the Exhibit to this Section
2.4(b)(iii)(C), which (x) releases any and all claims held or to be held by the
members against LLC, LLC Holdings, and their successors, assigns, officers,
directors, employees and agents, but excluding any claims the members may have
to unpaid compensation and benefits and (y) releases any obligation of such
members under the operating agreements of LLC or LLC Holdings.
(ii) Closing Certificates. The LLC Parties
Closing Certificate and the Superholdings Closing Certificate.
C-13
26
(iii) Escrow Agreement. Superholdings, LLC
Holdings, the Members' Agent and the Escrow Agent shall execute the Escrow
Agreement in the form attached as the Exhibit to Section 1.2(b) (Right to
Withhold), with such changes as the Escrow Agent may reasonably request.
ARTICLE 3
Conditions To Consummating The Transaction
------------------------------------------
3.1 Joint Conditions. The obligations of Public, Superholdings, Merger
Sub 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 Closing Date, of the following conditions:
(a) Public Stockholder Approval. The issuance of the shares of
Superholdings' common stock pursuant to the Parent Merger shall have been
approved by the affirmative vote of the holders of the requisite number of
shares of capital stock of Public in the manner required pursuant to the rules
of The Nasdaq Stock Market.
(b) HSR Act. The waiting period prescribed by the
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976 and the rules and
regulations promulgated thereunder (the "HSR Act") shall have expired or early
termination of the waiting period under the HSR Act shall have been granted.
(c) Nasdaq Listing. The Superholdings Stock issuable to the
LLC Parties and to Public's stockholders shall have been approved for listing on
The Nasdaq Stock Market, subject to official notice of issuance.
(d) Merger. The secretaries of state of the State of Delaware
and the State of Oregon shall have accepted for filing the Certificates of
Merger for the Parent Merger and the Subsidiary Merger.
(e) Subsidiary Merger. All conditions to the consummation of
the Subsidiary Merger, set forth in Section 2.1 of the Subsidiary Merger
Agreement, shall have been satisfied, including the adoption of the Subsidiary
Merger Agreement by the requisite vote of the stockholders of Public pursuant to
Public's certificate of incorporation and bylaws and applicable law; provided,
however, that the condition precedent of the Subsidiary Merger Agreement which
states that all conditions precedent to the consummation of at least this
Agreement or a Sister Agreement shall have been satisfied or duly waived, need
not be satisfied or duly waived.
3.2 Public's, Superholdings' and Merger Sub's Conditions. The
obligations of Public, Superholdings and Merger Sub to consummate the
transactions contemplated by this Agreement and the Related Agreements are
subject to the satisfaction or waiver by Public,
C-14
27
Superholdings and Merger Sub, at or prior to the Closing Date, of the following
conditions:
(a) LLC Parties' Representations True. (i) The LLC Parties'
representations and warranties made in this Agreement or any Related Agreement
shall be true and correct in all respects at the effective date of the Services
Agreement; (ii) actions by the Members, the Board of Managers of LLC or LLC
Holdings, or any employee or agent of LLC or LLC Holdings (which employee or
agent is not under the supervision of Public pursuant to the Services
Agreement), shall not have caused the LLC Parties' representations and
warranties made in this Agreement or any Related Agreement to be untrue or
incorrect in any respect at the Closing Date and (iii) the failure of any of the
persons identified in clause (ii) to take actions that (A) would be taken in the
ordinary course of LLC's and LLC Holdings' business in the exercise of
reasonable judgment and (B) have not been delegated to Public under the Services
Agreement, shall not have caused the LLC Parties' representations and warranties
made in this Agreement or any Related Agreement to be untrue or incorrect in any
respect at the Closing Date; except, in each case, as affected by the
transactions contemplated hereby and except as will not constitute a LLC
Material Adverse Change. The LLC Parties shall have delivered the LLC Parties
Closing Certificate which shall so indicate. Notwithstanding the foregoing, the
following LLC Parties' representations and warranties made in this Agreement
shall be true and correct in all respects at the Closing Date: Sections 6.1(b)
(Validity and Authorization; Power and Authority), 6.1(f) (State Takeover
Statutes), 6.3(a) (Capitalization), 6.3(b) (Ownership and Transfer by Members),
6.3(c) (Ownership and Transfer by Members), 6.3(d) (VAR Plan), 6.7(a) (Certain
Information), 6.7(b) (Documents Delivered), 6.7(c) (No Brokers Fees; No
Commissions) and 6.7(d) (Tax Advice), and the LLC Parties Closing Certificate
shall so indicate.
"LLC Material Adverse Change" means any change, effect, event or
occurrence that would reasonably be expected to (i) result in liabilities to
Superholdings (on a consolidated basis) at or after the Closing of at least
$20.0 million, (ii) result in a reduction of cash flow or increased losses, of
Superholdings (on a consolidated basis) at or after the Closing, discounted at
10%, having a net present value of at least $20.0 million or (iii) materially
impair or delay the ability of Public, Superholdings, Merger Sub or the LLC
Parties to consummate the transactions contemplated hereby.
"Public Material Adverse Change" means any change, effect, event or
occurrence that would reasonably be expected to (i) result in liabilities to
Superholdings (on a consolidated basis) at or after the Closing of at least
$130.0 million, (ii) result in a reduction of cash flow, or increased losses, of
Superholdings (on a consolidated basis) at or after the Closing, discounted at
10%, having a net present value of at least $130.0 million or (iii) materially
impair the ability of Public, Superholdings or Merger Sub to consummate the
transactions contemplated hereby including, without limitation, failure to
deliver the merger consideration described herein.
(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 Closing Date under
C-15
28
this Agreement or any Related Agreement, except as will not constitute an LLC
Material Adverse Change, and the LLC Parties shall have delivered the LLC
Parties Closing Certificate which shall so indicate. Notwithstanding the
foregoing, this condition shall be deemed to have been satisfied even though an
LLC Material Adverse Change has occurred, if the LLC Material Adverse Change (i)
is proximately caused by actions of Public pursuant to the Services Agreement,
by any employee or agent of LLC or LLC Holdings under the supervision of Public
pursuant to the Services Agreement or (ii) by Public's breach (including,
without limitation, by the persons listed in clause (i)) of Public's obligations
under the Services Agreement. The LLC Parties shall have delivered the LLC
Parties Closing Certificate which shall so indicate.
(c) LLC Parties Consents. The LLC Parties shall have obtained the LLC
Parties Consents except for those LLC Parties Consents that, if not obtained,
would not constitute an LLC Material Adverse Change. Without limitation, the
failure to obtain the following LLC Parties Consents would constitute an LLC
Material Adverse Change: (i) Sprint, (ii) CoBank and (iii) Lucent.
(d) Public Consents. Public shall have obtained the Public Consents
except for those Public Consents that, if not obtained, would not constitute a
Public Material Adverse Change. Without limitation, the failure to obtain the
consent of Export Development Corporation ("EDC") would constitute a Public
Material Adverse Change.
(e) Permits. Superholdings shall have obtained all governmental
licenses and permits, or binding commitments, if any, from governmental
authorities to issue, transfer or consent to a change of control with respect
to, all governmental licenses and permits necessary to enable Superholdings to
conduct the business of LLC after the Closing in substantially the same manner
as such business was conducted before the Closing (the "Permits"), except for
those Permits that, if not obtained, would not constitute an LLC Material
Adverse Change.
(f) LLC Members Approval. This Agreement shall have been adopted by the
affirmative vote of the holders of the requisite number of units of Members'
Interests of LLC and LLC Holdings in the manner required pursuant to LLC's and
LLC Holdings' organizational documents, LLC Agreement, the OLLCA and other
applicable law.
(g) Form S-4. The Form S-4 shall have become effective under 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 Securities and Exchange Commission (the "SEC").
(h) No Litigation. No action, suit or proceeding (other than such an
action, suit or proceeding directly or indirectly instituted by a party hereto)
shall be threatened or pending, and no preliminary or permanent injunction,
order, decree or ruling shall be in effect, seeking 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
C-16
29
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 Closing Certificate, which shall so indicate with respect to the LLC
Parties.
(i) Approvals. All authorizations, consents and approvals if any, of
and filings if any, with any governmental authority that are required to (i)
validly execute, deliver and perform this Agreement or the Related Agreements,
(ii) to consummate the transactions provided for in this Agreement or the
Related Agreements or (iii) to enable Superholdings to operate the business of
LLC after the Closing in substantially the same manner as such business was
conducted before the Closing (collectively, "Approvals"), shall have been
obtained or made except for those Approvals that, if not obtained, would not
constitute an LLC Material Adverse Change. Without limitation, the failure to
obtain the Approval of Section 3.1(b) (HSR Act) would constitute an LLC Material
Adverse Change.
(j) Members Obligations. The Members shall have repaid to LLC all
amounts, if any, owed by the Members to LLC other than unpaid capital
contributions called and payable after the date hereof.
(k) Related Agreements. The LLC Parties shall have entered into the
Related Agreements.
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 LLC
Parties, at or prior to the Closing Date, of the following conditions:
(a) Public's, Superholdings' and Merger Sub's Representations
True. The representations and warranties made by Public, Superholdings and
Merger Sub herein shall be true and correct in all respects at the effective
date of the Services Agreement, except as affected by the transactions
contemplated hereby and except as will not constitute a Public Material Adverse
Change. Superholdings shall have delivered the Superholdings Closing Certificate
which shall so indicate. Notwithstanding the foregoing, the following
representations and warranties made by Public, Superholdings and Merger Sub in
this Agreement shall be true and correct in all respects at the Closing Date,
except that representations and warranties that speak as of a specific date
shall be true and correct at that date: Sections 7.1(b) (Corporate Power and
Authority; Validity and Authorization), 7.3 (No Brokers Fees; No Commissions),
7.7 (Capitalization), 7.8 (Capitalization of Superholdings) and 7.11 (Certain
Information), and Superholdings Closing Certificate shall so indicate.
(b) Public's, Superholdings' and Merger Sub's Compliance with
Agreement. Each of Public, Superholdings and Merger Sub, in all respects, shall
have performed each agreement, and complied with each covenant to be performed
or complied with by it on or prior to the Closing Date under this Agreement or
any Related Agreement, except as will not
C-17
30
constitute a Public Material Adverse Change. Superholdings shall have delivered
the Superholdings Closing Certificate which shall so indicate.
(c) Public Consents. Public shall have obtained the Public Consents
except for those Public Consents that, if not obtained, would not constitute a
Public Material Adverse Change or have a Public Material Adverse Change. Without
limitation, the failure to obtain the consent of EDC would constitute a Public
Material Adverse Change.
(d) No Litigation. No action, suit or proceeding (other than such an
action, suit or proceeding directly or indirectly instituted by a party hereto)
shall be threatened or pending, and no preliminary or permanent injunction,
order, decree or ruling shall be in effect, seeking 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 a Public
Material Adverse Change. Superholdings shall have delivered the Superholdings
Closing Certificate, which shall so indicate with respect to Superholdings,
Public and Merger Sub.
(e) Approvals. All Approvals to be obtained by Public shall have been
obtained or made except for those Approvals that, if not obtained, would not
constitute a Public Material Adverse Change. The Approval described in Section
3.1(c) (HSR Act) shall have been obtained.
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;
(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 Sections 4.1(b) (LLC
Parties' Responsibilities) or 4.1(c)
▇-▇▇
▇▇
▇▇▇▇▇▇'▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇' and Merger Sub's Responsibilities), including, without
limitation, using reasonable best efforts to obtain all Approvals, and all
consents of third parties to contracts as are necessary for the consummation of
the Reorganization. In case at any time after the Effective Time 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.
(b) LLC Parties' Responsibilities.
(i) LLC Parties' Delegated Conditions. The LLC Parties shall
have the responsibility for satisfying the following conditions ("LLC Parties'
Delegated Conditions"), for which the LLC Parties shall have the obligations set
forth in this Section 4.1(b)(i). Public, Superholdings and Merger Sub shall
reasonably cooperate and assist with the LLC Parties in connection with the
following:
(A) Section 3.2(a) (LLC Parties' Representations True),
for which the LLC Parties' obligation shall be as follows: (x) the LLC Parties
shall take no action that will cause any of their representations or warranties
to be or remain untrue or incorrect in any material respect and (y) the LLC
Parties shall not omit any action that any of them would take in the ordinary
course of prudent business, which omission will cause their representations or
warranties to be or remain untrue or incorrect in any material respect, provided
that the LLC Parties shall not be required to take any action for which Public
has assumed responsibility under the Services Agreement; and
(B) Section 3.2(b) (LLC Parties' Compliance with
Agreement), for which the LLC Parties shall have the obligations set forth
elsewhere herein.
(ii) HSR Act Filings. The LLC Parties shall make their HSR Act
filings in compliance with such act as promptly as possible after the date
hereof, and 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(b) (HSR Act), in all cases in coordination with Public
and Superholdings. The LLC Parties shall provide to Public and Superholdings the
information required by such filings as is reasonably requested by Public and
Superholdings as soon as possible, but no later than two business days after the
date of such request. Time is of the essence with respect to the HSR Act
filings. The LLC Parties shall pay the HSR Act filing fee, if any, relating to
any filing requirement arising out of the LLC Parties' participation in the
Parent Merger.
(iii) LLC Parties' Consents. The LLC Parties shall use their
reasonable best efforts to obtain the LLC Parties Consents.
(iv) Tower Leases. The LLC Parties shall use their reasonable
best
C-19
32
efforts to assist Superholdings in obtaining, in connection with the Tower
Leases, all landlord waivers, consents, subordinations, assignability to lender
and nondisturbance from any underlying mortgage holder; provided, that,
Superholdings shall reimburse the LLC Parties for any and all expenses and costs
associated with such assistance.
(c) Public's, Superholdings' and Merger Sub's Responsibilities.
(i) Public's, Superholdings' and Merger Sub's Delegated
Conditions. Public, Superholdings and Merger Sub shall have the responsibility
for satisfying the following conditions ("Public's, Superholdings' and Merger
Sub's Delegated Conditions"), for which Public, Superholdings and Merger Sub
shall have the obligations set forth in this Section 4.1(c)(i). The LLC Parties
shall reasonably cooperate with and assist Public, Superholdings and Merger Sub
in connection with the following:
(A) Section 3.3(a) (Public's, Superholdings' and Merger
Sub's Representations True), for which Public's, Superholdings' and Merger Sub's
obligation shall be as follows: (x) Public, Superholdings and Merger Sub shall
take no action that will cause any of their representations and warranties to be
or remain untrue or incorrect in any material respect and (y) Public,
Superholdings and Merger Sub shall not omit any action that they would take in
the ordinary course of prudent business, which omission will cause any of their
representations and warranties to be or remain untrue or incorrect in any
material respect; and
(B) Section 3.3(b) (Public's, Superholdings' and Merger
Sub's Compliance with Agreement), for which Public, Superholdings and Merger Sub
shall have the obligations set forth elsewhere herein.
(ii) HSR Act Filings. Public, Superholdings and Merger Sub
shall make their HSR Act filings in compliance with such act as promptly as
possible, and 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(b) (HSR Act); provided, however, that in
no event shall Public, Superholdings or Merger Sub 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). Public shall pay the HSR Act filing fee relating to any filing
requirement arising out of its participation in the Subsidiary Merger.
(iii) Public's and Superholdings' Consents and Permits. Public
and Superholdings shall use their reasonable best efforts to obtain the Public
Consents and the Permits.
4.2 Preparation of the Proxy Statement, Form S-4 and Form S-1.
C-20
33
(a) Preparation. Public and Superholdings shall prepare and file with
the SEC as promptly as practicable, but no later than October 10, 2000 (the "SEC
Filing Date") in accordance with the Securities Act of 1933, as amended (the
"Securities Act"), on behalf of Superholdings, the Form S-4. Public and
Superholdings shall use reasonable best efforts to have the Form S-4 declared
effective under the Securities Act as promptly as practicable after such filing.
Public and Superholdings 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. Public, Superholdings and, if
requested by Public, LLC Holdings shall jointly prepare for inclusion in the
registration statement on Form S-4 to be filed with the SEC by Public and
Superholdings, on behalf of Superholdings, in connection with the issuance by
Superholdings of shares of Superholdings Stock in the Reorganization (the "Form
S-4") a proxy statement (the "Proxy Statement"), in accordance with the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and the rules
and regulations under the Exchange Act, with respect to the Reorganization, it
being understood that Public and Superholdings may, in their sole discretion,
include in the S-4 any shares of Superholdings Stock to be issued pursuant to
any Sister Agreements and may include in the Proxy Statement any matters to be
voted upon pursuant to any Sister Agreement. Public, Superholdings and LLC
Holdings shall cooperate with each other in the preparation of the Proxy
Statement. Public, Superholdings and LLC Holdings 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.
Public and Superholdings shall use reasonable best efforts to cause the Proxy
Statement to be mailed to the members of LLC Holdings (if applicable) and the
Public stockholders, as determined by Public, at the earliest practicable date
after the Form S-4 is declared effective by the SEC. The LLC Parties shall as
promptly as practicable provide any information reasonably requested by Public
or Superholdings or their respective counsel in connection with the preparation
of the Proxy Statement and the S-4 and any amendments or supplements thereto.
(c) Form S-1. If the shares of Superholdings Stock to be received by
the members in the Reorganization are not registered on the Form S-4, then
Public, Superholdings and LLC shall jointly prepare a registration statement on
Form S-1 (or other appropriate form) to be filed with the SEC by Superholdings
by July 31, 2001 in connection with the resale by the members of the shares of
Superholdings Stock the LLC Parties receive pursuant to the terms of the
Reorganization (the "Form S-1") in accordance with the Securities Act, it being
understood that Public and Superholdings may, in their sole discretion, include
in the Form S-1 any shares of Superholdings Stock issued pursuant to any Sister
Agreement and not registered on the Form S- 4. Public, Superholdings and LLC
shall use reasonable best efforts to respond promptly to any comments made by
the SEC with respect to the Form S-1 and to cause the Form S-1 to be declared
effective under the Securities Act by October 1, 2001, or as promptly thereafter
as practicable. If a Form S-1 is declared effective under the Securities Act,
then Superholdings shall use reasonable best efforts to prepare and file such
amendments and supplements to the
C-21
34
Form S-1 and the prospectus used in connection therewith as may be necessary to
keep the Form S-1 effective for a period of not less than one year from the
later of the first day that the Form S-1 is declared effective or October 1,
2001; provided, however, that if the Superholdings Stock that the LLC Parties
receive pursuant to the Reorganization becomes freely tradeable pursuant to Rule
144(k) of the Securities Act prior to the termination of the effective period,
then Superholdings shall have no further obligation to keep the Form S-1
effective; provided, further, that, if in connection with a Sister Agreement,
Superholdings agrees to registration rights of Superholdings Stock that are more
beneficial than the registration rights contained herein, then the Members may
substitute in their entirety the more beneficial registration rights for the
registration rights in this Section 4.2(c). If the shares of Superholdings Stock
to be received by the members in the Reorganization are registered on the Form
S-4, then Public and Superholdings may satisfy their obligations under this
Section 4.2(c) by filing a post-effective amendment to the Form S-4 in lieu of
filing the Form S-1.
(d) Public's and Superholdings' Actions. Public and Superholdings
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 Superholdings Stock in connection with the Parent Merger, and LLC and LLC
Holdings shall furnish all information concerning LLC, LLC Holdings and the
Members as may be reasonably requested in connection with any such action.
Public and Superholdings shall keep the LLC Parties advised of the status of any
actions taken under any applicable state securities laws.
4.3 Accountants' Letters.
(a) From LLC Holdings. LLC Holdings shall use its reasonable best
efforts to cause to be delivered to Public and Superholdings a letter of
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, LLP, the LLC Parties' independent certified public
accountants, dated a date within two business days before the date on which the
Form S-4 and Form S-1 shall become effective, and a letter of ▇▇▇▇▇▇▇, Kilbride
& ▇▇▇▇▇▇, LLP dated a date within two business days before the Closing Date,
each addressed to Public and Superholdings, 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 Public or Superholdings under the Securities Act or
Exchange Act.
If the Reorganization can be accounted for as a pooling of interests, and
if requested by Public or Superholdings, then LLC Holdings shall use its
reasonable best efforts to cause to be delivered to Public and Superholdings a
letter of ▇▇▇▇▇▇▇, Kilbride & ▇▇▇▇▇▇, LLP, addressed to Public and
Superholdings, dated as of the Closing Date, setting forth the concurrence of
▇▇▇▇▇▇▇, Kilbride & ▇▇▇▇▇▇, LLP with the conclusion of Public's and
Superholdings' management that the Parent Merger, insofar as it relates to LLC
Holdings, will qualify as a pooling of interests transaction under Opinion 16 of
the Accounting Principles Board and applicable SEC rules and regulations.
C-22
35
The LLC Parties shall use their reasonable best efforts to cause to be
delivered to Public and Superholdings a letter of ▇▇▇▇▇▇▇, Kilbride & ▇▇▇▇▇▇,
LLP consenting to the inclusion of its report on LLC's audited financial
statements in the Form S-4 and the Form S-1 and any other filings required by
the Securities Act or Exchange Act.
(b) From Public and Superholdings. Public and Superholdings shall each
use its reasonable best efforts to cause to be delivered to LLC Holdings a
letter of PricewaterhouseCoopers, LLP, Public's and Superholdings' independent
certified public accountants, dated a date within two business days before the
date on which the Form S-4 or Form S-1 registering shares of Superholdings Stock
received by the members of LLC Holdings , or any amendment, shall become
effective, or any supplement is filed, and a letter of PricewaterhouseCoopers,
LLP, dated a date within two business days before the Closing Date, each
addressed to LLC Holdings and the Members and customary in scope and substance
for letters delivered by independent public accountants in connection with
similar such registration statements.
4.4 Public Stockholders Meeting. Public 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 Public (the "Public Stockholders Meeting") as promptly as
practicable after the date hereof for the purpose of considering and voting upon
the Subsidiary Merger Agreement and the issuance of shares of Superholdings
Stock pursuant to the Parent Merger.
4.5 Votes and Recommendations. The Board of Directors of Public shall (a)
recommend that the stockholders of Public vote in favor of the adoption of the
Subsidiary Merger Agreement and the issuance of shares of Superholdings Stock
pursuant to this Agreement at the Public Stockholders Meetings, (b) cause such
recommendation to be included in the Proxy Statement, (c) solicit proxies in
favor of the adoption of the Subsidiary Merger Agreement and the issuance of
shares of Superholdings Stock pursuant to this Agreement and (d) use reasonable
best efforts to obtain the required votes of the stockholders of Public.
4.6 LLC Members Meeting; LLC Holdings. If requested by Public, LLC and LLC
Holdings shall take all action necessary, in accordance with the OLLCA, the
Exchange Act, other applicable law and its organizational documents, to convene
and hold a special meeting of the members of LLC and LLC Holdings (the "Members
Meeting") as promptly as practicable after the date hereof for the purpose of
considering and voting upon this Agreement and to solicit proxies pursuant to
the Proxy Statement in connection therewith. The Board of Managers of LLC and
LLC Holdings shall (a) recommend that the holders of the Members' Interests vote
in favor of the adoption of this Agreement at the Members 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 Members Required Vote.
C-23
36
4.7 Public Announcements. The LLC Parties shall not issue any press
release with respect to the transactions contemplated hereby. Public,
Superholdings and Merger Sub may issue press releases with respect to the
transactions contemplated hereby but, if practicable, shall allow LLC to review,
and shall consult with LLC before issuing, any press release.
4.8 No Solicitation; Acquisition Proposals.
(a) No Solicitation. During the period from and including the date of
this Agreement to and including the Effective Time, the LLC Parties shall not,
and shall not authorize or permit any Subsidiary, or any of its or their
affiliates, officers, directors, employees, agents or representatives
(including, without limitation, any investment banker, financial advisor,
attorney or accountant retained by the LLC Parties or Subsidiary), to, directly
or indirectly, initiate, solicit or encourage (including by way of furnishing
information or assistance), or take any other action to facilitate, any
inquiries, any expression of interest or the making of any proposal that
constitutes, or may reasonably be expected to lead to, an Acquisition Proposal,
or enter into or maintain or continue discussions or negotiate with any person
in furtherance of such inquiries or to obtain an Acquisition Proposal or agree
to or endorse any Acquisition Proposal.
(b) Approval. During the period from and including the date of this
Agreement to and including the Effective Time, neither the Board of Managers of
LLC or LLC Holdings nor any committee thereof shall withdraw or modify, or
propose publicly to withdraw or modify, in a manner adverse to Public,
Superholdings or Merger Sub, the approval or recommendation of this Agreement or
the transactions contemplated hereby.
(c) Voting Agreement. As of the date hereof, the Members have approved
and adopted this Agreement pursuant to Sections 63.130 and 63.487 of the OLLCA.
If requested by Public, the Members shall from time to time (i) vote, or
consent, their Members' Interests in favor of the Parent Merger and against any
Acquisition Proposal whether or not at a Members Meeting, (ii) take all
reasonable actions in support of or to consummate as promptly as practicable the
transactions contemplated hereby, (iii) take no action that will impede or
impair the consummation of the transactions contemplated hereby, (iv) not grant
to any other person or entity a proxy or other right to vote any Members'
Interests, (v) not transfer or dispose of or agree to transfer or dispose of any
Members' Interests and (vi) not exercise dissenters', appraisal or other rights
to receive cash or other consideration instead of Superholdings Stock.
In conjunction with the approval of this Agreement by LLC and its members,
the Members shall cause LLC Holdings to (i) be formed, (ii) issue one unit of
Members' Interests in exchange for one unit of Members' Interests in LLC, (iii)
approve this Agreement and (iv) obtain its members' approval of this Agreement.
(d) Acquisition Proposal. For purposes of this Agreement, "Acquisition
Proposal" means an inquiry, offer, proposal or other indication of interest
regarding any of the
C-24
37
following (other than the transactions provided for in this Agreement) involving
LLC or LLC Holdings: (i) any merger, consolidation, share exchange,
recapitalization, business combination or other similar transaction; (ii) any
sale, lease, exchange, mortgage, pledge, transfer or other disposition of all or
substantially all the assets of LLC or LLC Holdings and its Subsidiaries, taken
as a whole, or any substantial portion of its assets or business, in a single
transaction or series of related transactions; (iii) any tender offer or
exchange offer for any of the outstanding Members' Interests or the filing of a
registration statement under the Securities Act in connection therewith; (iv)
issuance of any Members' Interests; or (v) any public announcement of a
proposal, plan or intention to do any of the foregoing or any agreement to
engage in any of the foregoing.
4.9 Affiliates and Certain Members. If requested by Public, prior to the
Closing Date, LLC shall deliver to Public and Superholdings a letter identifying
all persons who are, at the time the Parent Merger is submitted for approval to
the members of LLC or LLC Holdings, "affiliates" of LLC or LLC Holdings for
purposes of Rule 145 under the Securities Act. If requested by Public, on or
prior to the Closing Date, LLC shall cause each such person to deliver to Public
and Superholdings such letter, in customary form (an "Affiliates Letter"). The
certificates representing Superholdings Stock received by such affiliates in the
Parent Merger shall bear a customary legend regarding applicable Securities Act
restrictions.
4.10 Pooling of Interests. If the Reorganization can be accounted for
as a pooling of interests, and if requested by Public or Superholdings, then the
parties shall use their reasonable best efforts to cause the Reorganization to
be accounted for as a pooling of interests under Opinion 16 of the Accounting
Principles Board and applicable SEC rules and regulations, and such accounting
treatment to be accepted by each of the parties' independent certified public
accountants, and by the SEC. None of the parties shall voluntarily take any
action that would cause such accounting treatment to be unattainable.
4.11 Loan Agreement. Pending the Closing, Public shall loan funds to
LLC pursuant to the Public Loan Agreement. Such Public loans shall be guaranteed
by the Members, which guaranties shall (a) become due and payable within 30 days
of the termination of this Agreement and (b) expire and be of no further force
and effect upon the Closing.
4.12 Employment Agreements. Superholdings or one of its subsidiaries shall
offer to enter into at Closing an employment agreement with each of ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇ (collectively, the "Employment Agreements"), reasonably
acceptable to Superholdings; provided, however, that the failure to enter into
any Employment Agreement, for any reason, shall not be a breach of this
Agreement.
4.13 Consulting Agreement. At Closing, Superholdings or one its
subsidiaries shall offer to enter into a one-year consulting agreement with
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ reasonably acceptable to Superholdings (the "Consulting
Agreement"), which Consulting Agreement shall provide that
C-25
38
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ receive aggregate compensation of $100,000; provided, however,
that the failure to enter into the Consulting Agreement, for any reason, shall
not be a breach of this Agreement.
4.14 Reissuance of LLC Audited Financial Statements. The LLC Parties shall
cause LLC Holdings' audited financial statements that are required to be
included in the Form S-4 to be reissued in accordance with GAAP and in a form
reasonably acceptable to Superholdings.
4.15 Legends. The Members consent to the placement of a legend on the
shares of Superholdings Stock to be issued to each of the LLC Parties in the
Reorganization, which legend shall be substantially as follows:
"THESE SECURITIES ARE NOT REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED, SOLD OR
OTHERWISE DISTRIBUTED FOR VALUE, NOR MAY THESE SECURITIES BE TRANSFERRED
ON THE BOOKS OF SUPERHOLDINGS, IN THE ABSENCE OF SUCH REGISTRATION UNLESS
SUPERHOLDINGS HAS RECEIVED AN OPINION OF COUNSEL OR OTHER EVIDENCE,
SATISFACTORY TO SUPERHOLDINGS AND ITS COUNSEL, THAT SUCH REGISTRATION IS
NOT REQUIRED."
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
Effective Time, notwithstanding approval thereof by the stockholders of Public,
Superholdings or Merger Sub or by the members of the LLC or LLC Holdings, 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 Public,
Superholdings, LLC and LLC Holdings, duly authorized by the Boards of Directors
of Public, Superholdings and by LLC's and LLC Holdings' Board of Managers.
(b) By Public or Superholdings. By Public or Superholdings after
compliance with the procedure set forth in this Article 5, if
(i) (x) any of the LLC Parties' representations or warranties
contained herein is or becomes or, when executed any Related Agreement would be,
untrue or incorrect in any respect prior to the last date such representation or
warranty is to be made pursuant to Section 3.2(a) (LLC Parties' Representation
True) (y) actions by the Members, the Board of Managers of LLC or LLC Holdings,
or any employee or agent of LLC or LLC Holdings, (which
C-26
39
employee or agent is not under the supervision of Public pursuant to the
Services Agreement), shall have caused the LLC Parties' representations and
warranties made in this Agreement or any Related Agreement to be untrue or
incorrect in any respect or (z) the failure of any of the persons identified in
clause (y) to take actions that (A) would be taken in the ordinary course of
LLC's and LLC Holdings' business in the exercise of reasonable judgment and (B)
have not been delegated to Public under the Services Agreement, shall have
caused the LLC Parties' representations and warranties made in this Agreement or
any Related Agreement to be untrue or incorrect in any respect; except, in each
case, as affected by the transactions contemplated hereby and except as will not
constitute a LLC Material Adverse Change;
(ii) any of the LLC Parties fails to perform any of his, her or
its covenants or agreements contained herein, or would be in breach of his or
its covenants upon execution of any Related Agreement, in any respect, except as
will not constitute an LLC Material Adverse Change, unless the LLC Material
Adverse Change (x) is proximately caused by actions of Public pursuant to the
Services Agreement, by any employee or agent of LLC or LLC Holdings under the
supervision of Public pursuant to the Services Agreement or (y) by Public's
breach (including, without limitation, by the persons listed in clause (x)) of
Public's obligations under the Services Agreement; or
(iii) any of Public's, Superholdings' or Merger Sub's
conditions to the consummation of the transactions provided for herein shall
have become impossible to satisfy.
(c) By LLC. By LLC, after compliance with the procedure set forth in
this Article 5, if (i) any of Public's, Superholdings' or Merger Sub's
representations or warranties contained herein is or becomes or, when executed
any Related Agreement would be, untrue or incorrect in any respect, except as
will not have a Public Material Adverse Change, (ii) Public, Superholdings or
Merger Sub fails to perform its covenants or agreements contained herein, or
would be in breach of its respective covenants upon execution of any Related
Agreement, in any respect, except as will not have a Public Material Adverse
Change or (iii) any of LLC's conditions to the consummation of the transactions
provided for herein shall become impossible to satisfy.
(d) Drop Dead Date. By any of Public, Superholdings or the LLC if the
Effective Time shall not have occurred on or before March 31, 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 by the number of
days, if any, to cure any curable matter that is the subject of a notice under
Section 5.3 (Public's and Superholdings' Termination Procedure) or Section 5.4
(LLC's Termination Procedure).
(e) Prohibition of the Reorganization. By any of Public, Superholdings
or LLC if any federal or state court of competent jurisdiction or other
governmental entity shall have issued an order, decree or ruling, or taken any
other action permanently restraining,
C-27
40
enjoining or otherwise prohibiting the Reorganization and such order, decree,
ruling or other action shall have become final and non-appealable, provided that
neither party may terminate this Agreement pursuant to this Section 5.1(e) if it
has not complied with its obligations under Section 4.1(a) (Joint
Responsibilities);
provided, however, the right to terminate this Agreement under this
Section 5.1 shall not be available to any party (i) that is in material breach
of its obligations hereunder or (ii) whose failure to fulfill its obligations or
to comply with its covenants under this Agreement has been the cause of, or
resulted in, the failure to satisfy any condition to the obligations of either
party hereunder.
5.2 Notice of Problems. Each party will promptly give written notice to
the other parties when any of them 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 of its Delegated
Conditions, or any condition to the obligation of the parties contained in
Section 3.1 (Joint Conditions), being or becoming 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 Public's and Superholdings' Termination Procedure. If Public or
Superholdings 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(b) (By Public or Superholdings), then Public
or Superholdings shall deliver a 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. If such circumstances create a
termination right pursuant to Section 5.1(b) (By Public or Superholdings), then
after such notice and the LLC Parties' failure to cure, either of Public or
Superholdings may terminate this Agreement by giving a 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 shall
deliver a notice to Public, Superholdings and Merger Sub of such circumstances,
specifying the factual basis therefor in reasonable detail. Public,
Superholdings and Merger Sub shall have the right to cure any such matter within
20 business days following the date of delivery of such notice. Upon such notice
and upon Public's, Superholdings' or Merger Sub's failure to cure, LLC may
terminate this Agreement by giving a notice of termination to Public,
Superholdings and Merger Sub.
C-28
41
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 Article 10 (Indemnification) and Article 11
(Miscellaneous) shall survive termination hereof. Notwithstanding the foregoing,
termination hereof shall not relieve any party from its liability for (i) the
failure, prior to termination, of such party to perform or comply with its
covenants or agreements or (ii) the representations or warranties made by such
party being untrue or incorrect in any material respect when made. In addition
to the foregoing, (a) if LLC terminates this Agreement because the issuance of
the shares of Superholdings Stock pursuant to the Parent Merger or the adoption
of the Subsidiary Merger Agreement shall not have been adopted by the holders of
the requisite number of shares of capital stock of Public (including without
limitation pursuant to Section 4.4 (Public Stockholders Meeting)) in the manner
required pursuant to Public's certificate of incorporation and bylaws, the DGCL,
or the rules of The Nasdaq Stock Market, as applicable, or other applicable law,
when all other conditions to Closing are satisfied or waived, then Public shall
pay a termination fee of $5.0 million to the LLC Parties and (b) if Public
terminates this Agreement because it was not adopted by the requisite number of
members interests of LLC Holdings (including, without limitation, pursuant to
Section 4.6 (LLC Members Meeting; LLC Holdings)) in the manner required pursuant
to LLC Holdings' organizational documents, the OLLCA and other applicable law,
whenever such approval is necessary, when all other conditions to Closing are
satisfied or waived, then the LLC Parties shall pay a termination fee of $5.0
million to Public.
ARTICLE 6
Representations and Warranties of LLC and the Members
In this Article 6, LLC, LLC Holdings and the Subsidiaries are referred to
collectively as the "Companies." The Companies (solely prior to Closing and with
the understanding that the representations and warranties by or concerning LLC
Holdings shall become effective on the date LLC Holdings enters into this
Agreement) and the Members, jointly and severally, represent and warrant to
Public, Superholdings and Merger Sub that except as set specifically forth on
the Disclosure Schedules (which exceptions shall relate only to the Sections
specifically identified in such Disclosure Schedules):
6.1 LLC; Entry Into Agreements.
(a) Organization and Existence. Each of the Companies is a limited
liability company duly organized and validly existing under the laws of the
State of Oregon. 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 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 Company. The Disclosure Schedule to
this Section 6.1(a) lists all jurisdictions in
C-29
42
which any Company is qualified to do business as a foreign corporation and
indicates which of the Companies is so qualified in each such jurisdiction.
(b) Validity and Authorization; Power and Authority. Each of the
Companies has full power and authority to consummate the Parent Merger 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.
The only vote of the holders (the "Members Required Vote") of the Members'
Interests that was necessary to approve this Agreement, the Related Agreements,
the Parent Merger, and the transactions contemplated hereby was the affirmative
vote of the holders of 67% of the Final Percentage Interest (as defined in the
operating agreements of LLC and LLC Holdings) of each of LLC Holdings and LLC.
No other action by the LLC Parties was necessary to approve this Agreement, the
Related Agreements, the Parent Merger, and the transactions contemplated hereby
or thereby.
This Agreement and the Related Agreements have been duly authorized,
executed and delivered by each of the Companies and will constitute (or, in the
case of Related Agreements or instruments called for hereby or thereby, to be
executed by such Company at or before the Closing, upon execution will
constitute) the legal, valid and binding obligation of such Company, enforceable
against such Company in accordance with their terms.
The Members have full requisite power and authority (or if natural
persons, capacity) to execute, deliver and perform this Agreement, the Related
Agreements and the other instruments called for hereby or thereby to which the
Members are a party. This Agreement has been duly executed and delivered by the
Members and constitutes (or, in the case of Related Agreements or instruments
called for hereby, to be executed by the Members at or before the Closing, will
constitute) the legal, valid and binding obligation of the Members, enforceable
against the Members in accordance with its terms. The Disclosure Schedule to
this Section 6.1(b) sets forth (i) the identity of all of the members of LLC and
(ii) their respective ownership of units of Members' Interests.
The consent or vote of the Members in favor of the transactions
contemplated by this Agreement and the Related Agreements was duly obtained
pursuant to the organizational documents of LLC and LLC Holdings and all
applicable state law (including Sections 63.130 and 63.487 of the OLLCA), and no
right of first refusal or similar restriction on transfer applies to the
conversion of the Members' Interests in the Parent Merger or the formation of
LLC Holdings and LLC Holdings' acquisition of LLC.
(c) Subsidiaries. Except as set forth in the Disclosure Schedule to
this Section 6.1(c), no Company owns a majority of the capital stock or other
equity interests entitled to vote generally in the election of the board of
directors, board of managers, general partners or similar governing body of,
directly or indirectly, any other corporation, partnership, association or other
C-30
43
business entity and no Company is a party to any agreement relating to the
acquisition or disposition of such an interest (such scheduled entities, the
"Subsidiaries").
The Subsidiaries are duly organized and validly existing under
the laws of their states of organization and are in good standing under such
laws. The Subsidiaries have all requisite power and authority to own, lease and
operate all properties and assets owned or leased by them and to conduct their
business as previously and currently conducted by them. The Subsidiaries are
qualified to do business and are in good standing in each jurisdiction in which
they are required to be so qualified, except where the lack of such
qualification would not have a material adverse effect on the Subsidiaries. The
Disclosure Schedule to this Section 6.1(c) lists all jurisdictions in which the
Subsidiaries are respectively qualified to do business as a foreign entity.
LLC has good, valid and marketable title to all of the issued and
outstanding shares of capital stock or interests, as appropriate, free and clear
of any Liens.
(d) No Conflict. Except as set forth in the Disclosure Schedule to this
Section 6.1(d), neither the execution, delivery or performance of this Agreement
or the Related Agreements, nor the consummation of the Parent Merger 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 certificate of
incorporation or similar organizational documents, bylaws, regulations or
operating agreement of any Company, as appropriate, 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 Company or any Member or to which any Company or any Member is
a party or by any Company or any Member or their respective 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 or the Members' Interests. No Member
shall have the right to assert dissenters' or appraisal rights under applicable
state law or otherwise have the right to demand cash or other payment for
Members' Interests in the Parent Merger, other than the consideration provided
in Section 1.2 (Terms of the Merger).
(e) LLC Parties Consents Required. The Disclosure Schedule to this
Section 6.1(e) lists (i) all Approvals for which filing or other action is
required by the LLC Parties, and (ii) all other material consents, approvals or
authorizations of third parties required in connection with each party's (other
than Public's, Superholdings' and Merger Sub's) valid execution, delivery or
performance of this Agreement and the Related Agreements or the consummation of
the Parent Merger or the Subsidiary Merger 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
C-31
44
Contracts and Licenses (collectively, the "LLC Parties Consents"). The Members
have taken all other limited liability company actions necessary for the
consummation by the Companies of the transactions contemplated by this Agreement
and the Related Agreements.
(f) State Takeover Statutes. No state takeover statute is applicable to
any Company in connection with this Agreement, the Parent Merger or the other
transactions contemplated hereby.
6.2 Financial Information.
(a) Financial Statements; Books and Records. Included in the Disclosure
Schedule to this Section 6.2(a) are true and correct copies of (i) the audited
consolidated balance sheets for LLC and the Subsidiaries at December 31, 1999
and the related statement of profit and loss and cash flows for the one-year
period then ended, (ii) the unaudited consolidated balance sheet for LLC and the
Subsidiaries at March 31, 2000 and the related statement of profit and loss for
the three-month period then ended and (iii) when delivered pursuant hereto,
financial statements of the kind and character prepared in conjunction with the
Credit Agreement, copies of all financial statements delivered to LLC Parties'
Board of Managers, and electronic copies of all general ledger records commonly
referred to as "QuickBooks" (collectively, the "LLC Financial Statements").
The LLC Financial Statements fairly present the financial position of LLC
and the Subsidiaries as of the dates thereof and the results of LLC's and the
Subsidiaries' 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 fiscal year
ended December 31, 1999 and the financial data set forth in the LLC Financial
Statements listed in items (ii) and (iii).
Each of the Company's 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
accurately reflected therein and (ii) form an adequate basis for the such
Company Financial Statements.
"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 and which are consistently applied for
all periods, so as to properly reflect the financial position, results of
C-32
45
operations and operating cash flow on a consolidated basis of the party, except
that any accounting principle or practice required to be changed by the
Accounting Principles Board or Financial Accounting Standards Board (or other
appropriate board or committee) in order to continue as a generally accepted
accounting principle or practice may be so changed for periods for which such
change is applicable.
(b) Conduct of Business. Except as specifically contemplated herein,
since December 31, 1999, no Company has (i) changed its outstanding 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 or, regulations or
operating agreement; (iii) sold or transferred (other than in the ordinary
course of business) any assets with a fair market value in excess of $50,000
individually, or $100,000 in the aggregate; (iv) mortgaged, pledged or subjected
to any 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 trade liabilities incurred in the
ordinary course of business that do not exceed $50,000 individually, or $100,000
in the aggregate; (vi) incurred obligations or entered into contracts outside of
the ordinary course of business or providing aggregate payments in excess of
$100,000; (vii) suffered any damage, destruction or loss of any assets in the
aggregate in excess of $500,000; (viii) experienced any equipment malfunction
that interferes with the conduct of its business; (ix) waived or relinquished
any 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
in excess of $50,000 in the aggregate; (x) made any change in its accounting
methods or practices, including the method of calculating reserves for Taxes;
(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 over the amounts paid or payable as
of such date, or entered into or terminated any employment, consulting, deferred
compensation, severance or bonus agreement with any of such parties, or made any
loan, or commitment to loan, monies to any such parties, other than customary
cash travel advances which do not exceed $25,000 in the aggregate at any time;
(xiii) declared or made any dividend, payment or distribution to the members of
LLC other than ordinary employment compensation; (xiv) 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 of LLC,
whether in their capacity as members of LLC or in any other capacity, other than
the payment of employment compensation to members of LLC who are employees);
(xv) made any capital expenditures except as set forth in Budget Model 9.5
attached as the Disclosure Schedule to this Section 6.2(b); (xvi) acquired any
business or business operations or (xvii) agreed to do any of the foregoing.
(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,
C-33
46
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 (i) operating losses in the
ordinary course of business or (ii) economic conditions affecting the U.S.
economy generally or the telecommunications industry generally.
(d) Projections. The forecasts and projections (the "Projections")
attached as the Disclosure Schedule to this Section 6.2(d) have been prepared on
the basis of the assumptions set forth therein and are arithmetically correct.
As of the date of this Agreement, all of the estimates and assumptions upon
which the Projections are based are believed in good faith by each Company, as
of the date of this Agreement, to be reasonable.
6.3 Members' Interests.
(a) Capitalization. The Members' Interests of LLC consist of
31,558,046 units and no preferred units. There are no other equity interests of
LLC 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' Interests. 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.
The Disclosure Schedule to this Section 6.3(a) identifies the holders of all of
the Members' Interests.
(b) Capitalization of LLC Holdings. Upon formation, the Members'
Interests of LLC Holdings shall consist of one unit and no preferred units.
There will be no other equity interests of LLC Holdings either authorized or
outstanding. All of the issued and outstanding units will be duly authorized and
validly issued, fully paid and nonassessable and free and clear of any
preemptive rights. No certificates will be issued to represent the Members'
Interests. There will be no outstanding preemptive, conversion or other rights,
or other options, warrants or agreements granted by, issued by, or binding upon,
LLC Holdings for the issuance, sale, purchase, repurchase, redemption,
acquisition or other transfer of its equity securities. The Disclosure Schedule
to this Section 6.3(b) identifies the holders of all of the Members' Interests.
The formation of LLC Holdings and its acquisition of LLC as contemplated hereby
will result in LLC Holdings' becoming the sole owner of LLC, holding its
interest in LLC free and clear of Liens created by the members of LLC in the
Members' Interests.
(c) Ownership and Transfer by Members. 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. There is no plan
or intention on the part of any Member to sell, exchange, transfer or otherwise
dispose of any
▇-▇▇
▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ to be received by such Member. The Disclosure Schedule to
this Section 6.3(c) lists all members of LLC (and upon formation, LLC Holdings)
and the number of Units of Members' Interests held by each member. Consummation
of the transactions contemplated by this Agreement will result in Superholdings'
becoming the sole owner of LLC Holdings and LLC, holding its interests in LLC
Holdings and LLC free and clear of Liens created by the members of LLC Holdings
in the Members' Interests.
(d) VAR Plan. The Disclosure Schedule to this Section 6.3(d) lists the
name, position, number of units, date of grant and strike price for each
participant in the VAR Plan.
6.4 Assets.
(a) Personal Property.
(i) Title. LLC or a Subsidiary is the sole 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 and (D) inchoate statutory liens for
amounts not yet payable ("Permitted Liens"). For purposes hereof, "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 the applicable Subsidiary is in 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 Disclosure Schedule to this Section
6.4(a)(i) 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, computer
hardware and software, vehicles or other properties, owned or leased by the
Company for the conduct of its business (A) have been maintained in accordance
with maintenance practices that are standard for such Company's industry, are
prudent, and are in compliance with all applicable laws and regulations, and (B)
are in good condition and repair.
(iii) Bank Accounts. The Disclosure Schedule to this Section
6.4(a)(iii) 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.
C-35
48
(b) Real Property.
(i) Fee Simple. The Disclosure Schedule to this Section 6.4(b)(i)
sets forth a legal 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. Except as set forth in the Disclosure
Schedule to this Section 6.4(b)(i), 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 and tenancies as are particularly
described in the Disclosure Schedule to this Section 6.4(b)(i), such Company has
not granted any leases on, and there are no tenancies of, the Real Property or
any part thereof.
(ii) Leases; Easements and Other Interests. The Disclosure Schedule
to this Section 6.4(b)(ii) sets forth (A) a description of the nature of each
Company's use of the land, premises, buildings, structures and improvements held
by lease or license and a description of the basic terms of the lease or license
involved and (B) a list of all other material easements, concessions, contracts
and instruments, whether or not in writing, relating to or affecting real
property or any interest therein to which any Company is a party or by which the
assets of any Company or any Company's business is bound or affected. The
interests described in items (A) and (B) above are collectively referred to
herein as the "Leased Premises" and the leases, licenses, easements,
concessions, contracts and instruments described in items (A) and (B) above (as
well as any leases and tenancies described in the Disclosure Schedule pursuant
to item (b)(i)), are collectively referred to herein as the "Real Estate
Contracts."
The Company identified as such in the Disclosure Schedule to this Section
6.4(b)(ii) is the sole holder of valid and subsisting leasehold interests or
licenses in the Leased Premises free and clear of any Liens, other than
Permitted Liens except, in the case of Tower Leases, for the co-location rights
of other tenants. All lease or rental payments and other amounts due and payable
in connection with the Real Estate Contracts are current, there are no defaults
by such Company with respect thereto or, to the Companies' 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 such Company
thereunder or (y), to the Companies' knowledge, by any other party thereunder.
All options in favor of such Company to purchase any of the Leased Premises, if
any, are in full force and effect and are described in the Disclosure Schedule
to this Section 6.4(b)(ii). To the extent applicable to the Leased Premises,
such Company is in 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. No Real Estate Contract is terminable as a
result of the transaction contemplated herein, and no leasehold or other
interest of such Company in such real property is subject or subordinate to any
Lien, other than Permitted Liens.
(iii) Eminent Domain. Neither the whole nor any portion of any Real
Property or Leased Premises has been condemned, taken by right of eminent
domain,
C-36
49
requisitioned or otherwise taken by any public authority and no Company has
received written notice from any governmental body with power of eminent domain
of any pending or threatened taking by eminent domain, requisition or
condemnation.
(iv) Ingress and Egress. Other than with respect to Tower Leases,
each Company has all easements and rights of ingress and egress necessary for
utilities and services and for all operations of its business in the manner and
to the extent previously conducted by it.
(v) Improvements. Other than with respect to Tower Leases, (i) none
of the improvements included in the Real Property or Leased Premises (A) are in
violation of any building line or use or occupancy restriction, limitation,
condition or covenant of record or any zoning or building law, code or ordinance
or public utility or other easement or (B) encroaches on the property rights of
any other person or entity, (ii) each facility located on the Real Property or
Leased Premises currently is served by gas, electricity, water, sewage and waste
disposal and rail and other utilities adequate to operate such facility, and
none of the utility companies serving any such facility has threatened LLC with
any reduction in service, (iii) such utilities either enter the Real Property
and Leased Premises through adjoining public streets or, if they pass through
adjoining private land, do so in accordance with valid, permanent public or
private easements which, following the Closing, will inure to the benefit of
Superholdings, its successors and assigns and (iv) all of said utilities are
installed and operating and all installation and connection charges have been
paid for in full. The continued maintenance and operation of the Real Property
and Leased Premises as currently maintained and operated is not dependent on
facilities, equipment, or other assets located at property other than the Real
Property or the Leased Premises, which facilities, equipment or assets may
become unavailable.
(vi) Tower Leases. With respect to leases or licenses of tower
space to which LLC is a party ("Tower Leases"), (A) to LLC's knowledge, 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
LLC, (B) LLC has good and valid easement rights providing reasonable access and
utilities to and from the Leased Premises under the Tower Leases, (C) LLC has
not voluntarily granted any, and is not a party to any agreement providing for,
and LLC has no knowledge of, any easements, conditions, restrictions,
reservations, rights or options that would adversely affect the use of any of
the Leased Premises under the Tower Leases for the same purposes and uses as
such Leased Premises have been used by LLC, except for Permitted Liens.
(vii) Leased Premises Taxes. To the extent any Company is liable
for payment therefor, there is no Tax assessment pending or, to the Companies'
knowledge, threatened, with respect to any portion of the Leased Premises,
except for ad valorem taxes for the calendar year 2000.
(c) Intellectual Property.
C-37
50
(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"). Each Company is, and to the Companies'
knowledge, each other party to the Technology Contracts is, in compliance with
all Technology Contracts, 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. The Disclosure Schedule to this Section 6.4(b)
lists all Intellectual Property owned by LLC.
(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. The Intellectual Property
includes all such property necessary for the operation of the respective
businesses of the Companies (A) as they currently are proposed to be, and have
been, conducted and (B) without violating or infringing upon the rights of any
third party. Without limiting the foregoing, each Company is properly licensed
to use all computer software (and copies thereof) used by it. No current or
former employee of any Company has any rights to any Intellectual Property. No
right, license or consent of, or payment to, any third party will be required
after consummation of the transactions contemplated hereby for the continued use
of the Intellectual Property by LLC and the Subsidiaries.
(iii) Technology Contracts. The Disclosure Schedule to this Section
6.4(c)(iii) contains an accurate and complete list of all of the Technology
Contracts, including all of the parties to each Technology Contract.
(iv) Trademarks. The Disclosure Schedule to this Section 6.4(c)(iv)
contains an accurate and complete list of all Marks for which registration has
been obtained or for which application to registration has been filed, including
application and registration dates and numbers, and jurisdiction thereof, and
all other Marks, as well as which Company owns each ▇▇▇▇. No ▇▇▇▇ is infringed
or has been challenged or threatened in any way, and the Companies are not aware
of any potentially interfering ▇▇▇▇ or application therefor of any third party.
None
C-38
51
of the Marks infringe or are, or have been, alleged to infringe any business
name, trade name, trademark, service ▇▇▇▇ or other right of any third party.
(v) Patents. The Disclosure Schedule to this Section 6.4(c)(v)
contains an accurate and complete list of all Patents, including application and
issuance dates and numbers, jurisdictions thereof, and which Company holds each
Patent. All the Patents are currently in compliance with formal legal
requirements (including payment of filing, examination and maintenance fees),
are valid and enforceable, and are not subject to any maintenance fees or taxes
or actions falling due within one year from the date hereof. No Patent has been
or is now involved in any interference, reissue, reexamination or opposition
proceeding. To the Companies' knowledge after due inquiry, there is no
potentially interfering patent or patent application of any third party. No
Patent is infringed or, to the best of the Companies' knowledge, has been
challenged or threatened in any way. None of the processes or know-how used by
any Company, infringe or are alleged to infringe any patent or other right of
any third party. Notwithstanding the foregoing, no representation or warranty is
made regarding patents, processes or know-how owned or licensed by Sprint.
(vi) Copyrights. The Disclosure Schedule to this Section 6.4(c)(vi)
contains an accurate and complete list of all registered Copyrights, including
application and registration dates and numbers, jurisdictions thereof and which
Company holds each Copyright and which Company owns each Trade Secret. None of
the Copyrights infringe or are, or have been, alleged to infringe any copyright
or any other right of any third party.
(d) Contracts.
(i) Definition. The Disclosure Schedule to this Section 6.4(d)(i)
lists all agreements, contracts, notes, bonds, debentures, indentures,
mortgages, deeds of trust, leases, licenses, obligations, promises, settlements,
repurchase obligations (including, but not limited to, repurchase obligations
pertaining to whole loan sales, securitizations, pooling and servicing
agreements, servicing agreements and other such agreements and understandings
(whether written or oral and whether express or implied) (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
other 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 in excess of
$100,000 by any Company, (7) agreements relating to capital expenditures
C-39
52
in excess of $200,000 by any Company, (8) warranties regarding products or
services, guarantees or other similar undertakings by any Company in excess of
$100,000, (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 or any of its 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. LLC has complied in all material respects
with the following agreements with Sprint Corporation (which agreements are
included in the definition of "Contracts," set forth above):
(A) Sprint PCS Management Agreement, dated as of January 25,
1999, by and between Sprint Spectrum, LP and WirelessCo, LP, as amended by
addenda dated January 25, 1999 and April 12, 2000 (collectively, the "Sprint
Management Agreement").
(B) Sprint Spectrum Trademark and Service ▇▇▇▇ License
Agreement, dated as of January 25, 1999, by and between Sprint Spectrum, LP and
LLC.
(C) Sprint Trademark and Service ▇▇▇▇ License Agreement, dated
as of January 25, 1999, by and between Sprint Communications Company, LP and
LLC.
(D) Sprint PCS Services Agreement, dated as of February 9,
2000, by and between Sprint Spectrum, LP and LLC.
(E) Asset Purchase Agreement, dated as of April 12, 2000, by
and between Sprint Spectrum L.P., Sprint Spectrum Equipment Company, L.P. and
Sprint Spectrum Realty Company, L.P. and LLC.
(F) Custom Service Agreement, dated as of February 9, 2000, by
and between Sprint Communications Company L.P. and LLC.
(G) Consent and Agreement, dated as of April 12, 2000, by and
between Sprint Spectrum L.P., Sprint Communications Company, L.P., and
WirelessCo, L.P. and CoBank.
(H) Build-out. The LLC Parties' build-out of the Service Area
Network in the Service Area as such terms are defined, pursuant to the Build-out
Plan approved by Sprint, is on schedule. As of the date hereof, no Company has
violated or failed to meet any contract date.
C-40
53
(I) Sprint PCS Technical Program Requirements. LLC has
complied with all Sprint PCS Technical Program Requirements, as defined in the
Sprint Management Agreement, in all material respects.
(J) Sprint PCS Program Requirements. LLC has complied with all
Sprint PCS Program Requirements, as defined in the Sprint Management Agreement,
in all material respects.
(K) Sprint PCS Customer Service Standards. LLC has complied
with all Sprint PCS Customer Service Standards, as defined in the Sprint
Management Agreement, in all material respects.
(L) Sprint PCS Insurance Requirements. LLC has complied with
the Sprint PCS Insurance Requirements, as defined in the Sprint Management
Agreement, in all material respects.
(M) Sprint Management Agreement. No Event of Termination (as
defined therein) has occurred under the Sprint Management Agreement.
(iii) LLC Credit Agreement.
(A) As of the date hereof, the Credit Agreement (the "Credit
Agreement") by and among LLC, as borrower, and CoBank, as administrative agent
and a lender, and the other lenders referred to in the Credit Agreement
(collectively, the "Lenders") and all other Loan Documents (as that term is
defined in the Credit Agreement), are in full force and effect, without any
amendments, and no Default (as that term is defined in the Credit Agreement) (a
"Default") (including, without limitation, by reason of any of LLC's
representations or warranties therein failing to be true and correct) exists and
no Event of Default (as that term is defined in the Credit Agreement) (an "Event
of Default") (including, without limitation, by reason of any of LLC's
representations or warranties therein failing to be true and correct) has
occurred or is continuing under the Credit Agreement, nor has any Company
received any notice from any Lender alleging that a Default or an Event of
Default has occurred or is continuing, except as listed and explained on the
Disclosure Schedule to this Section 6.4(d)(iii)(A).
(B) As of the date hereof, the current interest rate under the
Credit Agreement is LIBOR plus 3.25%.
(C) As of the date hereof, the amount of the Commitment (as
that term is defined in the Credit Agreement) under the Credit Agreement is
$45,000,000. The amount borrowed by LLC and outstanding under the Credit
Agreement (including interest any other fees and charges due or accrued) as of
June 1, 2000 is $8,062,863. The "Expiration Date" (as that term is defined in
the Credit Agreement) is March 31, 2008.
C-41
54
(D) As of the date hereof, LLC has not been required to make
any mandatory repayments under Sections 1.6(D) and 1.7 of the Credit Agreement,
except as listed on the Disclosure Schedule to this Section 6.4(d)(iii)(D).
(E) The transactions contemplated herein will not cause an
Event of Default, or otherwise cause LLC to violate any covenant or warranty of
LLC under the Credit Agreement. LLC has obtained all consents required to be
obtained (from any party whatsoever) under the Credit Agreement, with respect to
the transactions contemplated herein. LLC has attached copies of all necessary
consents as the Disclosure Schedule to this Section 6.4(d)(iii)(E).
(F) LLC has attached, as the Disclosure Schedule to this
Section 6.4(d)(iii)(F), a copy of the most recent Compliance Certificate
provided to the administrative agent in accordance with the Credit Agreement.
The information contained in the Compliance Certificate is true and correct as
of May 26, 2000.
(G) All members of LLC have made contributions to LLC, as and
when required by the Undertaking Agreement (as that term is defined in the
Credit Agreement) and any other Loan Document (as that term is defined in the
Credit Agreement).
(H) The Vendor Guaranty (as that term is defined in the Credit
Agreement) executed by Lucent is in full force and effect, without any
amendment, and will not be adversely effected by the transactions contemplated
herein.
(I) The earliest date that Superholdings will be required to
make capital contributions, if any, pursuant to the equity contribution
requirements of the Credit Agreement will be on December 31, 2000, based on
current estimates of the cash requirements of LLC, which LLC believes are
reasonable.
(iv) Legally Binding. All of the Contracts are legal, valid and
binding on the parties 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 the Companies' 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,
or the happening of any further event or condition, would become a material
violation or default by any Company or any other party thereto, under any
Contract; there are no outstanding, and to the Companies' knowledge, no
threatened, disputes or disagreements with respect to any of the Contracts; no
Company has released any material rights under any Contract; no Company is
subject to any legal obligations to renegotiate, nor is there any right to
renegotiate, any Contract; and no Company is subject to any liability, or claim
therefor, for or with respect to price adjustment under any Contract with the
United States Government or any agency thereof, including any liability for
defective pricing.
C-42
55
(v) Material Contracts. The Contracts constitute all of the
material contracts, leases and agreements necessary for the conduct of the
businesses of the Companies in the manner and to the extent conducted
respectively by them. All rights of the Companies under the Contracts will be
enforceable by Superholdings, LLC or a Subsidiary after the Closing without the
consent or agreement of any other party.
(vi) Copies. The Companies have delivered or made available to
Public true and complete copies of each Contract, including all amendments
thereto. There are no unwritten amendments to, or waivers under, any Contract.
(e) Necessary Assets. Each Company owns all assets, rights, and
properties necessary for the conduct of its business in the manner and to the
extent currently conducted including, without limitation, all items of property
reflected in the LLC Financial Statements other than (i) assets disposed of in
the ordinary course of business since March 31, 2000 and (ii) equipment subject
to financing leases.
6.5 Liabilities.
(a) No Liabilities. No Company has any debt, guaranty, liability or
obligation of the type required to be disclosed pursuant to GAAP to any Member
or an Associate or Affiliate of such Member. No Company has any debt, guaranty,
liability or obligation of the type required to be disclosed pursuant to GAAP in
excess of $50,000 individually or $100,000 in the aggregate, in each case, of
any nature, whether accrued, absolute, contingent or otherwise, whether due or
to become due, and whether known or unknown, whether or not presently
quantifiable, and there is no basis for the assertion against it of any such
debt, guaranty, liability or obligation except to the extent set forth or
reserved against in full in the LLC Financial Statements. The consolidated
current liabilities of the Companies incurred in the ordinary course of business
do not exceed $1.1 million in the aggregate (excluding current maturities of
interest bearing debt and accounts payable for fixed asset purchases).
(b) Tax Matters.
(i) Filings. Each Company has filed or will timely file all Tax
Returns that it was or is required to file on its behalf and on behalf of any
other party. All such Tax Returns were correct and complete in all material
respects. All Taxes due and owing by any Company (whether or not shown on any
Tax Return, whether known or unknown, asserted or unasserted) have been paid. No
Company is a party to any tax sharing or other agreement that will require any
payment with respect to Taxes. No Company currently is the beneficiary of any
extension of time within which to file any Tax Return. No Company has waived any
statute of limitations in respect of Taxes or has agreed to any extension of
time with respect to a Tax assessment or deficiency or the collection of Taxes.
C-43
56
(ii) Additional Taxes. No Company expects any taxing authority or
other governmental unit to assess any additional Taxes in excess of reserves or
prior payment with respect to any periods ending on or before the date hereof.
No taxing authority or other governmental unit has proposed or threatened any
assessment, deficiency, adjustment, dispute or claim concerning any Tax Return
or any Tax liability of any Company. There is no unpaid assessment, deficiency
or adjustment concerning any Tax Return or Tax liability of any Company. To the
Companies' knowledge, none of the Tax Returns of any Company has been selected
for or is now under audit or examination by any taxing authority or other
governmental unit. There are no suits, actions, proceedings or investigations
pending or, to the Companies' knowledge, threatened against any Company with
respect to any Taxes.
(iii) Withholdings. Each Company has withheld and timely deposited
or paid all Taxes required to have been withheld and deposited or paid in
connection with amounts paid or owing to any employee, independent contractor,
creditor, Members or other third party.
(iv) Specific Code Provisions. No Company has made any payments, is
obligated to make any payments, or is a party to any agreement that under any
circumstances could obligate it to make any payments that would be characterized
as "excess parachute payments" under Section 280G of the Code. None of the
assets of any Company (A) is property which is required to be treated as being
owned by any other person pursuant to the so-called "safe harbor lease"
provisions of former Section 168(f)(8) of the Code; (B) directly or indirectly
secures any debt the interest on which is tax exempt under Section 103(a) of the
Code; or (C) is "tax-exempt use property" within the meaning of Section 168(h)
of the Code. Each Company has disclosed 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. No Company (x) is a party
to any Tax allocation or sharing agreement; (y) has been a member of an
affiliated group filing a consolidated federal income Tax Return; or (z) has
liability for the Taxes of any person under Treasury Regulations Section
1.1502-6 or any similar provision of state, local, or foreign law, as a member
of a consolidated group, transferee or successor, by contract, or otherwise. No
Company has agreed to make, nor is any Company required to make, any adjustment
under Section 481(e) by reason of a change in accounting method or otherwise.
Neither the Members nor any Company is a person other than a United States
person within the meaning of the Code and the transaction contemplated herein is
not subject to the withholding provisions of Section 3406 of the Code or
subchapter A of Chapter 3 of the Code.
(v) Unpaid Taxes. The unpaid Taxes of the Companies, including all
Taxes not yet due for present and prior periods, whether known or unknown,
asserted or unasserted do not exceed the reserve for Tax liability (other than
any reserve for deferred Taxes established to reflect timing differences between
book and Tax basis in assets and liabilities) included in LLC Financial
Statements, as adjusted for the passage of time through the Closing Date.
C-44
57
As used herein, 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; and the term "Tax
Returns" means all returns, declarations, reports, statements and other
documents required to be filed in respect of Taxes.
(c) Litigation.
(i) Proceedings. There is no pending action, arbitration, audit,
charge, complaint, demand, hearing, investigation, litigation or suit (whether
civil, criminal, 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), investigative or informal) (collectively, "Proceedings") that has
been received or commenced by or against LLC that otherwise relates to or may
affect the Parent Merger, the LLC Parties, the Members' Interests, this
Agreement, any Related Agreement or the transactions contemplated herein or
therein, and, to the LLC Parties' knowledge, no such Proceedings have been
threatened. Each Member represents that there is no Proceeding that has been
received or commenced by or against such Member and that relates to the LLC
Parties that otherwise relates to or may affect the Parent Merger, the LLC
Parties, the Members' Interests, this Agreement, any Related Agreement or the
transactions contemplated herein or therein nor is there any basis therefor,
and, to such Member'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 or instrumentality to which LLC is subject that relate to or affects the
Parent Merger, the LLC Parties, the Members' Interests, this Agreement, any
Related Agreement or the transactions contemplated herein or therein is subject
or by which any of the foregoing may be affected. Each Member represents that
there is no award, decision, injunction, judgment, order, ruling, subpoena, writ
or verdict of any court, arbitrator or government agency or instrumentality to
which such Member is subject and that relates to or affects the Parent Merger,
the LLC Parties, the Members' Interests, this Agreement, any Related Agreement
or the transactions contemplated herein and therein (collectively, the
"Orders").
(iii) Disclosure Schedule. The Disclosure Schedule to this Section
6.5(c)(iii) sets forth a brief description of each Proceeding pending or, to the
Companies' knowledge, threatened, at the date hereof.
(d) Employee Liabilities. The Disclosure Schedule to this Section
6.5(d) accurately lists as of the date set forth therein, (i) the hire date of
and year-to-date compensation
C-45
58
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 May 31, 2000 and (v) all obligations owned to any persons under the VAR Plan.
(e) Warranties. There are no express warranties with respect
to the quality or absence of defects of its systems, products or services that
any Company has sold or performed which are in force as of the date hereof
except as are described in the Disclosure Schedule to this Section 6.5(e).
6.6 Business.
(a) Suppliers. No Company has knowledge of any intention or indication
of intention by a Significant Supplier or an Alliance Party to terminate its
business relationship with any Company or to limit its business relationship
with any Company in any respect. As used herein, "Significant Supplier" means
any of the 10 largest suppliers (measured by dollar value of goods purchased) of
LLC for the two-year period ended May 31, 2000.
(b) Insurance. Each Company maintains insurance policies on its assets,
and upon its business and operations, against loss or damage, risks, hazards and
liabilities (the "Policies"), with insurers the Companies reasonably believe to
be 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 notice of cancellation or of intention not
to renew any such Policy. The Disclosure Schedule to this Section 6.6(b)
contains a list of the Policies, copies of which have been provided to Public.
The Disclosure Schedule to this Section 6.6(b) 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.
(c) Employees. 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 or any restrictive
covenant or any other common law obligation to a former employer relating to the
right of any such person to be engaged by such Company or to the use of trade
secrets or proprietary information of others (an "Outside Confidentiality
Agreement"), and the engagement of such persons by such Company before or after
the Closing does not and will not subject any Company, Superholdings or Public
to any liability with respect thereto. There are neither pending, nor to the
Companies' knowledge, threatened, any Proceedings with respect to any Outside
Confidentiality Agreement. The Disclosure Schedule to this Section 6.6(c) lists
every Outside Confidentiality Agreement to
C-46
59
which any Company's officers or technical staff are a party, about which the
Companies have knowledge.
There is no labor strike, dispute, slowdown, picketing or stoppage pending
or, to the Companies' 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 question exists and, to the Companies' knowledge, there has
been no union organization effort respecting the employees of any Company. No
Company is delinquent in payments to any of its employees for any wages,
salaries, commissions, bonuses or other direct compensation for any services
performed by them or amounts required to be reimbursed to such employees. The
Disclosure Schedule to this Section 6.6(c) lists every retired employee entitled
to receive compensation from any Company or to participate in any benefit plan
of any Company. The books and records of each Company accurately reflect all
changes in compensation since such Company's formation.
There are no employment agreements with any past or former employee of any
Company which provide or create a right to continued employment or compensation.
All employees of each Company are, and have been, employed for an indefinite
period and are, and have been, terminable at will, with or without cause, and
without cost to any Company for severance obligations, or any other liability,
except for payment of accrued salaries or wages and vacation pay. No employee or
former employee has any right to be rehired by any Company prior to the hiring
of a person not previously employed by such Company. To the Companies'
knowledge, no officer, director or key employee intends to terminate employment
with any Company.
(d) Worker's Compensation. Each Company subscribes to, or is otherwise
insured under, the worker's compensation or similar statute in every state in
which it owns or leases real estate or has employees. The Disclosure Schedule to
this Section 6.6(d) lists all material claims filed by employees of any Company
in respect of employment-related injury or illness since its formation. No
Company has received any report or notice from the Occupational Safety and
Health Administration.
(e) ERISA. The Disclosure Schedule to this Section 6.6(e) lists each
employee benefit plan, program, arrangement and contract (including each
"employee benefit plan" as defined in Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA")), and any bonus, deferred
compensation, stock bonus, stock, purchase, restricted stock, stock option,
employment, termination, stay agreement or bonus, value appreciation, change in
control and severance plan, program, arrangement or contract that any Company
maintains or ever has maintained, or to which any Company contributes, ever has
contributed or ever has been required to contribute (collectively, the "Employee
Benefit Plans"). Each Employee Benefit Plan (and each related trust, insurance
contract or fund) complies in form and in operation in all respects with the
applicable requirements of all laws, rules and regulations governing or applying
to such Employee Benefit Plan, including without limitation ERISA and the Code,
and each such Plan has been operated in accordance with its terms, except as
will not
C-47
60
have a material adverse effect on any Company, Superholdings or Public. No
liability has been incurred and there exists no condition or circumstance which
could result in any liability to any Company under ERISA, the Code or any other
applicable law, other than liability for benefits due under the appropriate
Employee Benefit Plan. All contributions (including all employer and employee
salary reduction contributions) which are due have been paid in a timely manner
to each such Employee Benefit Plan which is an "employee pension benefit plan"
(as defined in ERISA ss. 3(2) (hereinafter, an "Employee Pension Benefit Plan"))
or otherwise is an "employee benefit plan" (as defined in ERISA ss. 3(3)). No
Company has engaged in or permitted to occur and, to the Companies' knowledge,
no other party has engaged in or permitted to occur, any transaction prohibited
by ERISA ss. 406 or "prohibited transaction" under Code ss. 4975(c) or any
breach of fiduciary duty under ERISA with respect to any Employee Benefit Plan,
except for any transactions which are exempt under ERISA ss. 408 or Code ss.
4975. 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
ss. 601 et seq. and Code ss. 4980B, have been timely provided. Each Company has
complied with all of the provisions of Parts 6 and 7 of Title I of ERISA and
Code ss. 4980B. The Companies have delivered or made available to Public correct
and complete copies of the plan documents or contracts and summary plan
descriptions, the most recent determination letter received from the Internal
Revenue Service, where applicable, the most recent Form 5500 Annual Report,
where applicable, all related trust agreements, insurance contracts and other
funding agreements which implement each Employee Benefit Plan, and such other
documents requested by Public with respect to each Employee Benefit Plan.
No action, suit, proceeding, hearing or investigation with respect to the
administration or the investment of the assets of any Employee Benefit Plan is
pending or, to the Companies' knowledge, threatened, except for routine claims
for benefits under such plans.
The Disclosure Schedule to this Section 6.6(e) lists all contracts with
third-party administrators, insurers, actuaries, investment managers,
consultants and other independent contractors that relate to any Employee
Benefit Plan.
No Company has or has ever had any ERISA Affiliates other than the
Companies. "ERISA Affiliate" shall mean any person that, together with any
Company, is or at any time within the six-year period preceding the date of this
Agreement would be treated as a single employer under Code ss. 414. No Employee
Pension Benefit Plan is or has ever been subject to Title IV of ERISA or Code
ss. 412.
No employee of any Company will be entitled to any additional benefits or
any acceleration of the time of payment or vesting of any benefits under any
Employee Benefit Plan as a result of the transactions contemplated by this
Agreement. No Person is entitled to receive any additional payment from any
Company or any other party in the event that the excise tax of Code ss. 4999 is
imposed on that Person.
C-48
61
(f) Conflicts of Interest.
(i) Affiliated Transactions. Since its formation, there have not
been, nor are there presently pending, any transactions between any Company and
any member holding more than 1% of the equity interests in any Company, or an
"Associate" or "Affiliate" (as such terms are defined in Rule 405 promulgated
pursuant to the Securities Act) of any Company or any such member, or any such
transaction with any Company in which any of the foregoing persons or entities
has a direct or indirect financial interest.
(ii) Ownership in Competitive Entities. Except as set forth on the
Disclosure Schedule to this Section 6.6(f)(ii), the Members (and their
respective spouses and relatives) do not, and to the best knowledge of the
Members, none of the Companies' officers, directors, employees, contractors or
consultants (or any of their respective spouses or relatives), directly or
indirectly, own any interest in any entity that is a competitor, customer or
supplier of, or has any existing contractual relationship with, any Company.
(g) LLC Legal Requirements.
(i) Compliance with Laws. No Company has 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 its business or assets are bound or affected
(collectively, "LLC Legal Requirements"), except as would not have a material
adverse effect on any Company, Superholdings or Public. No Company has received
notice of any actual, alleged or potential violation of an LLC Legal
Requirement. No Company is a public utility holding company, as defined in the
Public Utility Holding Company Act of 1935, as amended. No Company is an
investment company, as defined in the Investment Company Act of 1940, as
amended.
(ii) Certain Acts. Neither any of the LLC Parties nor any of their
former or current officers, directors, employees, agents or representatives has
made or agreed to make, directly or indirectly, with respect to the businesses
or assets of any Company, any (A) bribes or kickbacks, illegal political
contributions, payments from corporate funds not recorded on the books and
records of such Company, or funds to governmental officials (or any such
official's family members or affiliates) for the purpose of affecting their
action or the action of the government they represent, to obtain favorable
treatment in securing business or licenses or to obtain special concessions, or
illegal payments from corporate funds to obtain or retain business or (B)
payments from corporate funds to governmental officials for the purpose of
affecting their action or the action of the government they represent, to obtain
favorable treatment in securing business or licenses or to obtain special
concessions. Without limiting the generality of the foregoing, none of the
foregoing persons or entities has made or agreed to make, directly or
indirectly, any unlawful payment to obtain, or with respect to, sales.
(iii) Licenses. Each Company has all governmental licenses,
permits, approvals, authorizations, exemptions, classifications, registrations
and certificates, and all
C-49
62
consents or agreements with governmental authorities (collectively, "Licenses")
necessary to conduct its business in the manner and to the extent that it has
been conducted. All of the Licences and the parties thereto are listed on the
Disclosure Schedule to this Section 6.6(g)(iii). The Disclosure Schedule to this
Section 6.6(g)(iii) also lists every license that is in effect or has been
applied for or is pending and identifies all Licenses and applications for
Licenses that will be impaired as a result of the Parent Merger. The Companies
have delivered to Public true and complete copies of all of the Licenses.
All Licenses are in full force and effect. No event has occurred
that may constitute or result in a violation of a License, or result in the
revocation, suspension, modification or nonrenewal of any License. No LLC Party
has received any notice of any actual, alleged or potential violation,
revocation, suspension, modification or nonrenewal of any License.
(h) Environmental Matters.
(i) Compliance. Each Company is in compliance with all applicable
Environmental Laws and no Company has received any written communication from
any person that alleges that any Company is not in compliance with any
Environmental Law. As used herein, "Environmental Laws" mean all laws or orders
relating to the regulation or protection of human health, safety or the
environment (including, without limitation, ambient air, soil, surface water,
ground water, wetlands, land or subsurface strata), including, without
limitation, laws and regulations relating to releases or threatened releases of
hazardous materials or pollutants, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport,
recycling, handling, discharge, removal or remediation of hazardous materials or
pollutants.
(ii) Environmental Claims. There is no Environmental Claim pending
or, to the Companies' knowledge, threatened (A) against any Company, (B) against
any person or entity whose liability for any Environmental Claim any Company has
or may have retained or assumed either contractually or by operation of law or
(C) with respect to any real or personal property or operations which are now or
have been previously owned, leased, operated or managed, in whole or in part, by
any Company, or any real property to which any Company has transported any
hazardous materials or pollutants.
(iii) Permits. No Company is required under any Environmental Law
to apply for or maintain any permit or authorization with respect to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport, recycling, handling or discharge of any hazardous materials or
pollutants.
(iv) Pollutants. None of the Real Property or Leased Property
(including without limitation the soils, surface water or groundwater thereof)
are or have been impacted by the presence of hazardous materials or pollutants
for which LLC may have liability.
C-50
63
As used herein, "Environmental Claim" means any and all
administrative, regulatory or judicial actions, suits, demands, demand letters,
directives, claims, Liens, investigations, proceedings or notices of
non-compliance or violation (written or oral) by any person or entity (including
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,
and including, without limitation, any and all claims by any third party seeking
damages, contribution, indemnification, cost recovery, compensation or
injunctive relief in connection with the presence or release of any hazardous
materials or pollutants.
(v) Underground and Above Ground Storage Tanks. Except as set forth
on the Disclosure Schedule to this Section 6.6(h)(v), there are no underground
storage tanks or above ground storage tanks located on any of the Real Property
or Leased Premises or on any property located adjacent to any Real Property or
Leased Premises and no underground storage tanks or above ground storage tanks
have ever been located on the Real Property or Leased Premises or on any
property located adjacent to any Real Property or Leased Premises.
(vi) Environmental Assessments. Except as set forth on the
Disclosure Schedule to this Section 6.6(h)(vi), there are no environmental
reports, audits, investigations or assessments of any Company or any real or
personal property or operations which are now or have been previously owned,
leased, operated or managed, in whole or in part, by any Company.
(i) Build-out Plan. At the date of this Agreement, LLC reasonably
believes, in good faith, that its build-out plan attached as the Disclosure
Schedule to this Section 6.6(i) is achievable using such efforts as have
historically been used by LLC (taking into account the additional effort that
has been required to achieve the deadlines imposed under the Sprint Management
Agreement) including Exhibit 2.1 of the addendum to the Sprint Management
Agreement dated April 12, 2000. The technical aspects of the build-out plan have
been approved by Sprint. The Disclosure Schedule to this Section 6.6(i) sets
forth the extent of LLC's progress in the completion of the build-out and
network launch at the date hereof.
6.7 Other.
(a) Certain Information. None of the information supplied or to be
supplied by the LLC Parties specifically for inclusion in (i) the Form S-4 or
the Form S-1 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 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
C-51
64
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 Public Stock and at the
time of the Public Stockholders Meeting and, if it is mailed to the Members, at
the time it is mailed to the Members and at the time of the Members 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.
(b) Documents Delivered. The minute books and ownership transfer
records of each Company (the "LLC Records") that have been made available to
Public, Superholdings, Merger Sub or their agents are complete in all material
respects. The LLC Records contain accurate records of all meetings held of, and
corporate action taken by the respective boards of directors or managers and
members of each Company, and any committee or representative thereof. No meeting
has been held and no action has been taken, by any such board of directors or
equity security holders for which accurate records have not been prepared and
included in the LLC Records. At the Closing, all of the LLC Records will be in
the possession of LLC.
(c) No Brokers Fees; No Commissions. All negotiations relative hereto
and the transactions contemplated hereby have been carried on by the Companies
directly with Public and Merger Sub without any act by any Company that would
give rise to any claim against any Company, Public, Superholdings, Merger Sub or
their respective Affiliates for a brokerage commission, finder's fee or other
similar payment.
(d) Tax Advice. Each Company has received and the Members have had the
opportunity to receive tax advice from their own tax advisors regarding the
Reorganization. The LLC Parties have received no advice, agreement or
representation from, and are not relying in any way upon, Public, Superholdings,
Merger Sub, Parent Surviving Corporation, Subsidiary Surviving Corporation or
any of their agents or advisors with regard to tax advice or the tax impact of
the Reorganization.
(e) Disclosure. None of the representations or warranties of the LLC
Parties contained in this Agreement, the Related Agreements or the Disclosure
Schedules, 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.
6.8 Investment Representations.
(a) The Members understand and acknowledge that the Superholdings Stock
is being offered and sold under the exemptions from registration provided for in
Section 4(2) of the Securities Act, including Regulation D promulgated
thereunder, and that Superholdings' reliance upon such exemption is based in
part upon the Members' representations, warranties and agreements contained in
this Agreement.
(b) The Members have carefully read this Agreement and, to the extent
believed necessary, have discussed the representations, warranties and
agreements which the
C-52
65
Members make by signing it and the applicable limitations upon the Members'
resale of the shares of Superholdings Stock with the Members' counsel.
(c) The Superholdings Stock to be issued to such Members in the
Reorganization is being acquired by the Members solely for the Members' own
account, for investment purposes only, and is not being acquired for resale,
resyndication, distribution, subdivision of fractionalization thereof, except
pursuant to an effective registration under the Securities Act or in a
transaction exempt from registration under the Securities Act. The Members have
no contract or arrangement with any person to sell, transfer or pledge to any
person the shares of Superholdings Stock or any part thereof, any interest
herein or any rights thereto, and the Members have no present plans to enter
into any such contract or arrangement.
(d) Each of the Members understands that it may not sell or otherwise
transfer its shares of Superholdings Stock unless such sale or other transfer is
registered under the Securities Act and the applicable state securities laws or
unless the sale or other transfer is exempt from the registration requirements
under the Securities Act and such other securities laws, and that, as a result,
the Members must bear the economic risk of the investment for an indefinite
period of time. The Members understand that Superholdings may require the
Members to furnish an opinion of counsel satisfactory to Superholdings that such
sale or transfer is so exempt.
(e) Each of the Members is able (i) to bear the economic risk of an
investment in Superholdings Stock, (ii) to hold the shares of Superholdings
Stock indefinitely, and (iii) to afford a complete loss of this investment. Each
of the Members has adequate means of providing for current needs and has no
present need for liquidity in this investment.
(f) Each of the Members is an "accredited investor" as that term is
defined under Rule 501(a) of Regulation D, as amended, under the Securities Act
and possesses such knowledge and experience in financial and business matters so
that each of the Members is capable of evaluating the merits and risks of an
investment in Superholdings Stock, and of making an informed investment
decision.
(g) Each of the Members confirms that, in making the decision to
acquire the shares of Superholdings Stock in the Reorganization, the Members
have relied solely upon independent investigations made by each of the Members
and/or by its representatives, including the each of the Members' own
professional tax and other advisors and that the Members and such
representatives and advisors have been given the opportunity to ask questions
of, and to receive answers from, Superholdings concerning this Agreement and the
terms and conditions of the Reorganization, and to obtain any information
requested by the Members concerning Superholdings from such person, to the
extent such persons possessed such information or could acquire it without
unreasonable effort or expense, necessary for each of the Members to make an
informed investment in Superholdings Stock.
C-53
66
ARTICLE 7
Representations and Warranties of Public, Superholdings and Merger Sub
Public, Superholdings and Merger Sub, jointly and severally, represent and
warrant to the LLC Parties that except as set specifically forth on the
Disclosure Schedules (which exception shall relate only to the Sections
specifically identified in such Disclosure Schedules):
7.1 Entry Into Agreements.
(a) Organization and Good Standing. Public, Superholdings and Merger
Sub are corporations duly organized and validly existing under the laws of the
State of Delaware and are in good standing under such laws. Superholdings owns,
beneficially and of record, all of the issued and outstanding shares of capital
stock of Merger Sub.
(b) Corporate Power and Authority; Validity and Authorization. Public,
Superholdings and Merger Sub 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 Public, Superholdings and
Merger Sub, and is enforceable against Public, Superholdings and Merger Sub in
accordance with its terms.
When the Related Agreements to which each of Public, Superholdings and
Merger Sub is a party are delivered, such agreements will have been duly
authorized, executed and delivered by Public, Superholdings and Merger Sub, and
will constitute the legal, valid and binding obligations of Public,
Superholdings and Merger Sub, enforceable against Public, Superholdings and
Merger Sub in accordance with their terms.
7.2 Conflicts and Consents.
(a) No Conflict. Except as set forth on the Disclosure
Schedule to this Section 7.2(a), 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 Public, Superholdings or Merger Sub, or any material
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
Public, Superholdings or Merger Sub or their property 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 Public, Superholdings or Merger Sub.
(b) Consents Obtained. Other than the approvals referred to in Section
3.1(a) Stockholder Approval) and Section 3.1(b) (HSR Act) (the "Public
Consents") and except as set forth on the Disclosure Schedule to this Section
7.2(b), no material consents, approvals or
C-54
67
authorizations of third parties are required in connection with Public's,
Superholdings' and Merger Sub's valid execution, delivery, or 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.
7.3 No Brokers Fees; No Commissions. All negotiations relative hereto
and the transactions contemplated hereby have been carried on by Public and
Merger Sub directly with the LLC Parties without any act by Public or Merger Sub
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.
7.4 Superholdings Stock. The shares of Superholdings 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.
7.5 SEC Documents. Public has heretofore delivered or made available to
the LLC Parties all reports publicly filed by Public with the SEC on or after
February 3, 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 Public included in the SEC Documents fairly present the financial
position of Public as of the dates of such financial statements and the results
of Public'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.
7.6 No Material Adverse Effect. Since the date of the most recent filing
by Public 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 Public 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.
7.7 Capitalization. The authorized capital stock of Public consists (i) of
95,000,000 shares of Public Stock, of which 61,354,606 shares were issued and
outstanding as of April 20, 2000 and (ii) 5,000,000 shares of preferred stock,
par value $0.01 per share, of which no shares were issued and outstanding as of
April 20, 2000. All of the issued and outstanding shares of Public Stock have
been duly authorized and validly issued, are fully paid and nonassessable and
are free and clear of any preemptive rights. As of March 31, 2000, there were no
outstanding preemptive, conversion or other rights, or other options, warrants
or agreements granted by, issued by, or binding upon, Public 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 and obligations under the
Sister Agreements.
C-55
68
7.8 Capitalization of Superholdings. The authorized capital stock of
Superholdings immediately prior to the Closing will consist (i) of at least
290,000,000 shares of Superholdings Stock and (ii) at least 10,000,000 shares of
preferred stock, par value $0.01 per share. All of the issued and outstanding
shares of Superholdings Stock will have been duly authorized and validly issued,
fully paid and nonassessable and free and clear of any preemptive rights. On the
date of this Agreement, there are no outstanding preemptive, conversion or other
rights, or other options, warrants or agreements granted by, issued by, or
binding upon, Superholdings for the issuance, sale, purchase, repurchase,
redemption, acquisition or other transfer of its equity securities, other than
stock that may be issued pursuant to the stock option plans and agreements of
Public described above (after consummation of the Subsidiary Merger) or pursuant
to the Sister Agreements.
7.9 No Liabilities. At the date of this Agreement, Public has no debt,
guaranty, liability or obligation, or guaranty, of the type required to be
disclosed pursuant to GAAP in excess of $5.0 million, whether accrued, absolute,
contingent or otherwise, whether due or to become due, and whether known or
unknown, whether or not presently quantifiable, 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 Public's audited
consolidated financial statements and unaudited consolidated financial
statements included in the SEC Documents and (ii) such liabilities incurred in
the ordinary course of business since March 31, 2000.
7.10 Compliance with Laws. Public 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 Public are bound or
affected (collectively, "Public Legal Requirements"), except as would not have a
material adverse effect on Public. Public has not received notice of any actual,
alleged or potential violation of a Public Legal Requirement.
7.11 Certain Information. None of the information supplied or to be
supplied by Public, Superholdings or Merger Sub specifically for inclusion or
incorporation by reference in, or which may be deemed to be in incorporated by
reference in, (i) the Form S-4 or the Form S-1 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 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 Public Stock and at the time of the Public
Stockholders Meeting and, if it is mailed to the Members, at the time it is
mailed to the Members and at the time of the Members 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 Public, Superholdings or Merger Sub with
respect to statements made or incorporated
C-56
69
by reference therein based on information supplied by the LLC Parties or other
parties to Sister Agreements specifically for inclusion therein.
7.12 Disclosure. None of the representations or warranties of Public,
Superholdings or Merger Sub contained in this Agreement, the Related Agreements
or the Disclosure Schedules 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 8
Covenants of the Parties
During the periods from the date of this Agreement and continuing until
the Effective Time, the parties agree that:
8.1 Services Agreement. On the date hereof, the parties will execute the
Services Agreement. The Services Agreement sets forth the terms pursuant to
which Public will manage LLC's business after HSR Act approval has been
obtained, and after consents have been obtained from Sprint, Lucent and CoBank
until the earlier of the Closing Date or the Termination Date.
8.2 Conduct of Business of LLC Pending Closing. Unless otherwise expressly
contemplated hereby including, without limitation pursuant to the terms of the
Services Agreement, or approved in writing by Public and Superholdings, 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. 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, LLC Holdings' and the Subsidiaries' respective
rights and franchises and preserve their respective relationships with
customers, suppliers and others having business dealings with them with the
objective of minimization of the impairment of their respective ongoing
businesses;
(b) preserve, protect and maintain for Public and Superholdings the
good will of LLC's, LLC Holdings' and the Subsidiaries' respective employees;
and
(c) to keep available to Public and Superholdings the present officers
and employees of LLC, LLC Holdings and the Subsidiaries.
The LLC Parties shall consult with Public and Superholdings on strategies
for maintaining and preserving LLC's, LLC Holdings' and the Subsidiaries'
respective businesses and effecting an orderly transition to Public and
Superholdings' ownership of such business.
C-57
70
8.3 Access to Information and Employees. The LLC Parties shall permit,
upon reasonable notice during normal business hours, Public and their
Representatives to visit and inspect any of the properties of LLC, LLC Holdings
and the Subsidiaries, including books and records, and to discuss the affairs,
finances and accounts of LLC, LLC Holdings and the Subsidiaries and Public's and
Superholdings' prospects, plans and intentions with LLC's, LLC Holdings' and the
Subsidiaries' respective officers, employees, brokers and independent public
accountants, as often as any such person may deem necessary or desirable and
reasonably request. The LLC Parties shall furnish to Public copies of any
existing Phase 1 or other existing environmental reports relating to the Real
Property or the Leased Premises. The LLC Parties shall permit Public to conduct,
subject to the rights of the lessors thereof, at Public's sole discretion and
expense, environmental investigations and analyses of the Real Property.
In 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, Associates, financing sources and
representatives of any such source, representatives, and any person or entity
being considered for any such role.
8.4 Financial Statements. The LLC Parties shall deliver to Public and
Superholdings (a) copies of financial statements of the kind and character
prepared in conjunction with the Credit Agreement, (b) copies of all financial
statements delivered to LLC Parties' Board of Managers and (c) electronic copies
of all general ledger records commonly referred to as "QuickBooks" within 15
business days of each succeeding month.
8.5 Payment of Indebtedness of Related Persons. The Members will cause all
indebtedness that any of the Members or any of LLC's, LLC Holdings' or the
Subsidiaries' Affiliates owes to LLC, LLC Holdings, or any Subsidiary to be paid
in full prior to Closing (other than travel advances in the ordinary course of
business not to exceed $10,000 in the aggregate).
8.6 Records of LLC. On or prior to the Closing Date, the LLC Parties shall
transfer or cause to be transferred to LLC any files, books, records or other
documents relating to the business of LLC, LLC Holdings, or any Subsidiary that
are the property of LLC, LLC Holdings, or any Subsidiary and that are possessed
by any LLC Party or any of LLC's, LLC Holdings', or the Subsidiaries' Affiliates
and that are not otherwise possessed by LLC. The LLC Parties may make and retain
copies (at their expense) of any such files, books, records and documents
transferred to LLC.
8.7 Employee Benefit Plans. LLC shall maintain in accordance with all
legal requirements the Employee Benefit Plans and shall not take any action to
terminate or discontinue any such plan without Public's and Superholdings' prior
written consent.
8.8 Section 16(b) Resolution. Prior to the Closing Date, the Board of
Directors of uperholdings shall pass a resolution approving, for purposes of
Rule 16b-3 of the Exchange
C-58
71
Act, the issuance of Superholdings Stock pursuant to the Parent Merger and the
Subsidiary Merger, to the directors, officers and other persons subject to
potential liability under Section 16(b) of the Exchange Act, which resolution
shall specifically refer to such directors, officers and other persons and the
number of shares of Superholdings Stock issued to such persons pursuant to the
Parent Merger and the Subsidiary Merger.
ARTICLE 9
Post-Closing Agreements
The Members and Superholdings covenant and agree that after the Closing:
9.1 Further Actions. Superholdings shall have the right to act in the name
and on the behalf of LLC and LLC Holdings, including, without limitation, such
further instruments of transfer and conveyance, documents and certificates as
may be reasonably requested by Superholdings in order to more effectively convey
and transfer to Superholdings all of the Members' Interests and business of LLC,
LLC Holdings and the Subsidiaries, 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 Members shall as promptly as practical after receipt deliver to
Superholdings any cash, checks, mail, packages, notices and other similar
communications of LLC, LLC Holdings or the Subsidiaries that any of them
receives. The Members shall endorse in favor of Superholdings any checks or
other instruments of payment that by their terms are payable to the Members but
that are property of LLC, LLC Holdings or the Subsidiaries.
9.2 Cooperation. The Members shall use reasonable best efforts to aid
Superholdings in establishing itself as the new owner and operator of the
business of LLC, LLC Holdings, and the Subsidiaries and, in connection
therewith, shall use reasonable best efforts to maintain LLC's, LLC Holdings',
and the Subsidiaries' goodwill and reputation with all suppliers, customers,
distributors, creditors and others having business relations with LLC, LLC
Holdings or the Subsidiaries and in the business community generally. The
Members shall cooperate, at Superholdings' expense, and shall cause their
Representatives to cooperate, with Superholdings in connection with
Superholdings' preparation and filing under the Securities Act or Exchange Act
of any registration statement for which the assistance of the LLC Parties or
their respective Representatives is reasonably required.
9.3 LLC Nominee Election. If Superholdings determines that LLC shall have
board representation on the Superholdings Board of Directors, then LLC shall
deliver to Superholdings the name of the person, subject to Superholdings'
reasonable approval, to be a director of Superholdings (the "LLC Nominee").
Superholdings will include the LLC Nominee in management's slate of nominees for
Superholdings' Board of Directors and will solicit proxies in favor of the
election of the LLC Nominee for any annual or special meeting of Superholdings'
stockholders (commencing with the election of the LLC Nominee at Superholdings'
special meeting of stockholders in connection with the Reorganization).
C-59
72
9.4 Tax Returns. The Members shall file on behalf of LLC (and, if
necessary, on behalf of any Member), all tax returns for LLC's fiscal year ended
December 31, 2000, by not later than the unextended due date, and all tax
returns for the short period by not later than the unextended due date and shall
provide copies of such returns to Superholdings immediately after the filing of
such returns.
9.5 Access to Information; Confidentiality. The Members and Superholdings
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.
ARTICLE 10
Indemnification
10.1 Survival; Etc.
(a) Contents of this Agreement. The representations, warranties,
covenants and agreements made in Superholdings Closing Certificate, LLC Parties
Closing Certificate and any Disclosure Schedule shall be deemed representations,
warranties, covenants and agreements made herein.
(b) No Effect on Liability. None of (i) the consummation of the
transactions contemplated by this Agreement or the Related Agreements, (ii) the
delay or omission of any party to exercise any of its rights under this
Agreement or any Related Agreement or (iii) any investigation or disclosure that
any party makes, any notice or certificate that any party gives, or any
knowledge that any party obtains as a result thereof, or otherwise, shall (A)
affect the liability of the parties to one another for Breaches of this
Agreement or any Related Agreement or (B) prevent any party from relying on the
representations or warranties contained in this Agreement or any Related
Agreement.
As used herein, a party's "Breach" shall mean any representation or
warranty being untrue when made by such party, any breach of any of such party's
covenants or agreements.
(c) Survival. The representations and warranties of Public,
Superholdings, Merger Sub and the Members made in this Agreement or any Related
Agreement shall survive the Closing. The representations and warranties of LLC,
LLC Holdings and the Subsidiaries made herein shall be extinguished at the
Closing and LLC, LLC Holdings and the Subsidiaries shall each have no liability
thereafter for Breach hereof. Effective at the Closing, the Members waive and
release any claim for Breach of this Agreement or any Related Agreement by LLC,
LLC Holdings or the Subsidiaries, including without limitation any claim for
indemnification or contribution.
(d) Commencing Actions. If the Closing occurs, then any action against
any
C-60
73
party hereto for Breaches of this Agreement occurring on or prior to the time of
the Closing that is not commenced pursuant to Section 10.7 (Dispute Resolution)
within one year of the effective date of the Services Agreement, or withheld
against pursuant to Section 10.2(d) (Form of Payment; Interim Losses) shall be
deemed waived, and no person shall have any remedy against any party for any
such Breaches; provided, however, if (i) any Superholdings Indemnitee is subject
to Losses for Breaches of Sections 6.5(b) (Tax Matters), 6.5(c) (Litigation), or
6.6(h) (Environmental Matters), such Superholdings Indemnitee may commence an
action against the Members to recover such Losses within two years of the
effective date of the Services Agreement and (ii) such Superholdings Indemnitee
is subject to Losses for Breaches of Sections 6.3(b) (Capitalization of LLC
Holdings) or 6.3(c) (Ownership and Transfer by Members), such Superholdings
Indemnitee may commence an action against the Members to recover such Losses at
any time that such Superholdings Indemnitee is subject to Losses with respect
thereto; provided, that, in each circumstance described in (i) and (ii) above,
such Superholdings Indemnitee shall use reasonable best efforts to obtain for
itself and for the Members (or if the Member Indemnitors have assumed the
defense of the Asserted Liability, to cooperate with them in obtaining, at their
expense) the benefit of any statute of limitations applicable as against any
third party.
(e) Materiality. In determining whether (i) a party's representations
and warranties are true and correct in any respect, (ii) a party has performed
any of his, her or its covenants or agreements contained herein or (iii) a
Breach of this Agreement or Related Agreements has occurred, such
representations, warranties, covenants, agreements and Breaches shall be deemed
to not include any qualification or limitation with respect to materiality
(whether by reference to a "Material Adverse Change," "material adverse effect"
or otherwise). The terms "material," "material adverse effect" and similar terms
(other than Public Material Adverse Change and LLC Material Adverse Change)
shall be construed in the customary manner, but in any event shall mean changes,
effects, events, occurrences, and other matters substantially less in magnitude
than a Public Material Adverse Change in the case of Public, Superholdings or
Merger Sub or an LLC Material Adverse Change in the case of the LLC Parties.
10.2 Indemnities.
(a) Indemnification of Superholdings. Subject to the other provisions
of this Article 10, before the Closing, the LLC Parties, and after the Closing,
the members (collectively, the "Member Indemnitors") (in proportion to the
aggregate dollar value of the Per Unit LLC Consideration and the Cash
Consideration received by each member pursuant to the Parent Merger), shall
defend, indemnify and hold Superholdings 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 "Superholdings Indemnitees"), harmless from and against, and
promptly reimburse Superholdings 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 (collectively, "Losses") that any Superholdings
Indemnitee suffers or incurs or to which any Superholdings Indemnitee becomes
subject, which Losses arise out of or in connection with (i) any Breach by any
of the LLC Parties of this Agreement, (ii) any claim asserted by any third
C-61
74
party that, assuming the truth thereof, would constitute a Breach by any of the
LLC Parties of this Agreement, or (iii) all matters listed on the LLC Parties
Closing Certificate.
The amount of the Loss payable by such Member Indemnitors shall bear
interest from the date the Loss is incurred at a rate of interest per annum that
shall, from day to day, equal the lesser of (x) the variable rate of interest
published in the "Money Rates" section of the Wall Street Journal (or the
comparable section of such newspaper) as the prime rate of interest on corporate
loans at large United States money center commercial banks and (y) the maximum
rate allowed under applicable law.
(b) Indemnification of the Members. Subject to the other provisions of
this Article 10, before the Closing, Public, and after the Closing,
Superholdings, (the "Superholdings Indemnitors") shall defend, indemnify and
hold the members harmless from and against, and promptly reimburse them for, any
Losses that the members incur or to which the members become subject, which
Losses arise out of or in connection with (i) any Breach by Public,
Superholdings or Merger Sub of this Agreement or (ii) any claim asserted by any
third party that, assuming the truth thereof, would constitute a Breach by
Public, Superholdings or Merger Sub of this Agreement.
The amount of the Loss payable by the Superholdings Indemnitors shall bear
interest from the date the Loss is incurred at a rate of interest per annum that
shall, from day to day, equal the lesser of (x) the variable rate of interest
published in the "Money Rates" section of the Wall Street Journal (or the
comparable section of such newspaper) as the prime rate of interest on corporate
loans at large United States money center commercial banks and (y) the maximum
rate allowed under applicable law.
(c) Contribution. If the indemnification provided for in this Section
10.2 is unavailable to an indemnified party under Sections 10.2(a)
(Indemnification of Superholdings) or 10.2(b) (Indemnification of the Members)
in respect of any Losses with respect to such information to be provided for
inclusion in the Form S-1 or Form S-4 by reason of limitations on
enforceability, then each applicable indemnifying party, in lieu of indemnifying
such indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such Losses in such proportion as is
appropriate to reflect the relative fault of the LLC Parties (for Losses arising
prior to the Closing) or the members (for Losses arising after Closing), on the
one hand, and of Public (for Losses arising prior to the Closing) or Public and
Superholdings (for Losses arising after the Closing), on the other hand, in
connection with the Breaches which resulted in such Losses, as well as any other
relevant equitable considerations. The relative fault of the LLC Parties (for
Losses arising prior to the Closing) or the members (for Losses arising after
the Closing), on the one hand, and of Public (for Losses arising prior to the
Closing) or Superholdings (for Losses arising after the Closing), on the other
hand, shall be determined by reference to, among other things, whether the
Breach relates to information supplied by the LLC Parties or the members or by
Public or Superholdings and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such Breach.
C-62
75
The LLC Parties and Superholdings agree that it would not be just and
equitable if contribution pursuant to this Section 10.2(c) were determined by
pro rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to in the immediately preceding
paragraph. Notwithstanding the provisions of this Section 10.2(c), no person
guilty of fraudulent misrepresentation shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
(d) Form of Payment; Interim Losses.
(i) Escrow Deposit. Subject to the provisions of this Section
10.2(d), at the Closing, Superholdings may, after notice to the Members' Agent
and the members specifying the factual basis therefor in reasonable detail,
collectively withhold from the aggregate amount of the Per Unit LLC
Consideration a number of shares of Superholdings Stock representing up to $20.0
million in value (using the average of the last reported sales prices as
reported by The Nasdaq Stock Market for Public Stock for the 10 days preceding
the Closing Date) (the "Escrow Deposit") to satisfy Losses for which claims of
indemnity may have arisen at or prior to the Closing Date for which
Superholdings, as set forth in such notice, claims indemnity pursuant to this
Agreement ("Interim Losses").
(ii) Interim Loss Value. In order to quantify the amount to be held
in escrow, after the Closing a national accounting firm, independent of the
parties hereto and selected by Superholdings, shall attempt to estimate the
amount of Interim Losses (the "Interim Loss Value"). If such accounting firm is
able to reasonably estimate the amount of each claim comprising the Interim Loss
Value, as a fixed amount or as a range of amounts, then the amount withheld
shall equal the estimated fixed amount(s) and/or the maximum amount of such
estimated range(s) of amounts for each claim comprising the Interim Loss Value.
If such accounting firm is unable, for any reason whatsoever, to reasonably
estimate the amount of any claim comprising the Interim Loss Value, as a fixed
amount or as a range of amounts, then Superholdings shall have no right to
withhold any amount with respect to such claim. Superholdings shall select such
accounting firm within two weeks after the Closing Date, and the determination
by the accounting firm shall be completed as soon as practicable and in any
event within eight weeks after the Closing Date.
(iii) Escrow Adjustment. On the third business day following the
date on which the parties have agreed upon the amount of the Interim Loss Value,
or such amount has been determined pursuant to Section 10.2(d)(ii), the
difference, if any, between the Interim Loss Value and the Escrow Deposit (the
"Escrow Adjustment") shall be paid in shares of Superholdings Stock (using the
average of the last reported sales prices as reported by The Nasdaq Stock Market
for Public Stock for the 10 days preceding the Closing Date) as follows:
(A) If the amount of the Interim Loss Value is less than the
Escrow Deposit, then the Escrow Agent shall pay and cause to be paid to the
members the Escrow Adjustment, coordinated through the Members' Agent and as
provided in the Escrow Agreement.
(B) If the amount of the Interim Loss Value is greater than
the
C-63
76
Escrow Deposit, then the members shall pay and cause to be paid to the Escrow
Agent, as coordinated through the Members' Agent, the Escrow Adjustment, as
provided in the Escrow Agreement; provided, that, the value of all of the
Superholdings Stock (using the average of the last reported sales prices as
reported by The Nasdaq Stock Market for Public Stock for the 10 days preceding
the Closing Date) in the Escrow Deposit shall not exceed $20.0 million,
regardless of the amount of the Interim Loss Value.
(iv) Resolution of Claims. The Escrow Agent shall hold the Escrow
Stock in the Escrow Account until final resolution (pursuant to Section 10.7
(Dispute Resolution)) of the matters giving rise to the Losses or potential
Losses as well as other Losses that Superholdings subsequently asserts. After
such final resolution, the Escrow Agent shall deliver to Superholdings the
Superholdings Stock, together with any dividends or other distributions with
respect thereto, in satisfaction of any liability in accordance with Section
10.2(d)(v) (Satisfaction of Liability). After the distribution to Superholdings,
the Escrow Agent will release the remaining balance of the Escrow Stock not
subject to further claims, together with any dividends or other distributions
with respect thereto, to the members, as provided in the Escrow Agreement.
(v) Satisfaction of Liability. After Closing, any party may satisfy
its liability under this Article 10 by (A) delivering shares of Superholdings
Stock, valued at the average of the last reported sale prices as reported by The
Nasdaq Stock Market for the 10 days preceding the date of delivery, together
with any dividends or other distributions with respect thereto or (B) cash
payments, at the sole option of such party. If a member satisfies its liability
by cash payment instead of Superholdings Stock, then the Escrow Agent shall
release to such member the shares of Superholdings Stock as determined pursuant
to Section 1.2(a)(i) (Superholdings Stock), together with any dividends or other
distributions with respect thereto; provided, however, that Superholdings and
the Members' Agent must provide the Escrow Agent with the proper instruments, as
detailed in the Escrow Agreement, before making any distribution of the Escrow
Stock.
10.3 Limitations on Indemnities.
(a) Basket.
(i) Member Indemnitors. Notwithstanding anything to the contrary in
this Article 10, after the Closing, the Member Indemnitors shall not have any
obligation to indemnify the Superholdings Indemnitees for Losses arising from a
Breach of this Agreement at or prior to Closing until the indemnifiable Losses
incurred by the Superholdings Indemnitees or to which the Superholdings
Indemnitees become subject, arising from a Breach of this Agreement at or prior
to Closing, exceed $2.0 million (the "Deductible"), at which time the Member
Indemnitors shall indemnify the Superholdings Indemnitees pursuant to this
Article 10 for the amount of such Losses in excess of $1.0 million.
C-64
77
(ii) Superholdings Indemnitors. Notwithstanding anything to the
contrary in this Article 10, the Superholdings Indemnitors shall not have any
obligation to indemnify the members for Losses arising from a Breach of this
Agreement at or prior to Closing until the indemnifiable Losses incurred by the
members or to which members become subject, arising from a Breach of this
Agreement at or prior to Closing, exceed the Deductible, at which time the
Superholdings Indemnitors shall indemnify the members pursuant to this Article
10 for the amount of such Losses in excess of $1.0 million.
(b) Cap. After the Closing, no Indemnifying Party shall incur any
liability for Losses pursuant to this Article 10 in excess of the aggregate
dollar value of the Per Unit LLC Consideration (with each share of Superholdings
Stock valued at the average of the last reported sale prices of a share of
Public Stock as reported by The Nasdaq Stock Market for the ten (10) days
preceding the Closing Date) and the Cash Consideration paid or received by such
Indemnifying Party pursuant to the Parent Merger.
(c) Services Agreement. Notwithstanding anything to the contrary in
this Article 10, the Member Indemnitors shall not have any obligation to
indemnify the Superholdings Indemnitees for Losses to extent such Losses (i) are
proximately caused by actions of Public pursuant to the Services Agreement, by
any employee or agent of LLC or LLC Holdings under the supervision of Public
pursuant to the Services Agreement or (ii) by Public's breach (including,
without limitation, by the persons listed in clause (i)) of Public's obligations
under the Services Agreement.
(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.
(e) Exclusivity. In the absence of fraud, the indemnification
provisions of this Article 10 shall be the exclusive remedy for any loss,
expense, damage, deficiency, liability, claim or obligation, including
investigative costs, costs of defense, settlement costs (subject to consent as
provided in Section 10.4(b) (Defense Costs) below) and attorneys' and
accountants' fees in connection with this Agreement (including Superholdings
Closing Certificate or LLC Parties Closing Certificate) or any Breach hereof.
(f) Indemnification of Escrow Agent. Regarding Section 7
(Indemnification of Escrow Agent) of the Escrow Agreement, (i) the Superholdings
Indemnitors' liability pursuant to Section 7 of the Escrow Agreement shall not
exceed 50% of the aggregate loss, liability or expenses incurred by the Escrow
Agent and (ii) the Member Indemnitors' aggregate liability pursuant to Section 7
of the Escrow Agreement shall not exceed 50% of the aggregate loss, liability or
expenses incurred by the Escrow Agent; provided, that, each Member Indemnitors'
liability pursuant to Section 7 of the Escrow Agreement shall not exceed, and
shall be in proportion to, the aggregate dollar value of the merger
consideration received by such Member Indemnitor pursuant to the Parent Merger.
C-65
78
10.4 Notice and Opportunity to Defend.
(a) Notice, 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
Section 10.2(a) (Indemnification of Superholdings ) or Section 10.2(b)
(Indemnification of the Members), 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 10, 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 10). 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.
(b) Defense Costs. If any Indemnifying Party defends an Asserted
Liability, it shall do so at its own expense and shall not be responsible for
the costs of defense, investigative costs, attorney's 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 or entity asserting the Asserted
Liability against the Indemnified Party claims or seeks amounts in excess of the
amount set forth in Section 10.3(b) (Cap), 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 (a) 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. An Indemnifying Party may
settle any Asserted Liability only with the consent of the Indemnified Party,
which consent shall not be unreasonably withheld.
(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 Closing Date with respect to which
indemnification is not available (for any reason) under this Article 10;
provided, that, the party requesting cooperation shall reimburse the other party
C-66
79
for the other party's reasonable out-of-pocket costs and expenses of furnishing
such cooperation.
10.5 Delays or Omissions, Etc. Except as provided in Section 10.1
(Survival; Etc.) and Section 10.4(a) (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. Neither the exercise of
nor the failure to exercise any remedy under this Agreement or any Related
Agreement will constitute an election of remedies or limit in any manner
enforcement of any remedies. All remedies either under this Agreement or any
Related Agreement or by law or otherwise afforded to the parties shall be
cumulative and not alternative.
10.6 Governing Law; Attorneys' Fees. This Agreement and the Related
Agreements shall be governed by, construed, interpreted and applied in
accordance with the laws of the State of Texas, without giving effect to any
conflict of laws rules that would refer the matter to the laws of another
jurisdiction.
Subject to Section 10.7 (Dispute Resolution), each party hereto hereby
irrevocably submits to the exclusive jurisdiction of the United States District
Court for the Northern District of Texas, Dallas Division and, if such court
does not have jurisdiction, of the courts of the State of Texas in Dallas
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 10.7 (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 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.
The prevailing party in any action or proceeding relating to this
Agreement or any Related Agreement shall be entitled to recover reasonable
attorneys' fees and other costs from the non-prevailing parties, in addition to
any other relief to which such prevailing party may be entitled.
10.7 Dispute Resolution.
(a) Arbitration. All disputes and controversies of every kind and
nature between the parties hereto arising out of or in connection with this
Agreement (including without limitation this Article 10) or the Related
Agreements as to the construction, validity, interpretation or meaning,
performance, non-performance, enforcement, operation, or breach, shall be
submitted to arbitration pursuant to the following procedures:
C-67
80
(i) Notice. After a dispute or controversy arises, either party
may, in a written notice delivered to the other party, demand such arbitration.
Such notice shall designate the name of the arbitrator (who shall be an
impartial person) appointed by such party demanding arbitration, together with a
statement of the matter in controversy.
(ii) AAA. Within 30 days after receipt of such demand, the other
party shall, in a written notice delivered to the other party, name such party's
arbitrator (who shall be an impartial person). If such party fails to name an
arbitrator, then the second arbitrator shall be named by the American
Arbitration Association (the "AAA"). The two arbitrators so selected shall name
a third arbitrator (who shall be an impartial person) within 30 days, or in lieu
of such agreement on a third arbitrator by the two arbitrators so appointed, 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 10.7(a)(ii) for the original appointment of
such arbitrator.
(iii) Costs. Each party shall bear its own arbitration costs and
expenses. The arbitration hearing shall be held in Dallas, Texas at a location
designated by a majority of the arbitrators. The Commercial Arbitration Rules of
the American Arbitration Association shall govern at such hearing and the
substantive laws of the State of Texas (excluding conflict of laws provisions)
shall apply.
(iv) Hearing. The arbitration hearing shall be concluded within ten
days unless otherwise ordered by the arbitrators and the written award thereon
shall be made within 15 days after the close of submission of evidence. An award
rendered by a majority of the arbitrators appointed pursuant hereto shall be
final and binding on all parties to the proceeding, shall resolve the question
of costs of the arbitrators and all related matters, and judgment on such award
may be entered and enforced by either party in any court of competent
jurisdiction.
(v) Complete Defense. Except as set forth in Section 10.7(b)
(Emergency Relief) the parties stipulate that the provisions of this Section
10.7 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. The arbitration provisions hereof shall, with respect to
such controversy or dispute, survive the termination or expiration of this
Agreement or the Related Agreements.
Except in response to a subpoena or other legal process or disclosure to
professional advisors, lenders and investors, neither any 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 Public
C-68
81
or Superholdings 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
Public's or Superholdings' obligations under the Exchange Act and the rules and
regulations promulgated thereunder and in connection with Public's or
Superholdings' 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 10.7 to
the contrary and subject to the provisions of Section 10.6 (Governing Law;
Attorneys' Fees), either party 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.
ARTICLE 11
Miscellaneous
11.1 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 Public, Superholdings and the LLC
Parties and any attempted assignment without such consent shall be null and
void; provided, however, Public, Superholdings and Merger Sub may assign any of
its rights and obligations hereunder to one of its Affiliates; provided,
further, that any assignment hereunder shall not relieve any party of any
obligations or liabilities hereunder.
11.2 Entire Agreement. This Agreement (including the Disclosure Schedules
and Exhibits hereto), the other documents delivered pursuant hereto and
referenced herein constitute the full and entire understanding and agreement
between the parties and supersede any other agreement, written or oral, with
regard to the subject matter hereof. This Agreement supersedes those certain
letters dated May 7, 2000, as amended, among certain of the parties hereto (the
"Letters") and hereby supercedes and replaces in its entirety that certain
previous Agreement and Plan of Reorganization by and among Public,
Superholdings, Merger Sub, LLC, the Members and LLC Holdings dated as of July
31, 2000.
11.3 Amendment. Subject to any applicable provisions of the DGCL, at any
time prior to the Effective Time, the parties hereto may modify or amend this
Agreement by written agreement executed and delivered by duly authorized
officers of the respective parties; provided, however, that after adoption of
this Agreement at the Public Stockholders Meeting, and, if necessary, the
Members Meeting, no amendment shall be made which would reduce the amount or
change the type of consideration into which shares of Public Stock or Members'
Interests shall be converted upon consummation of the Reorganization. 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 LLC Holdings' members
C-69
82
shall receive can be adjusted if all of the members of LLC Holdings approve of
any such changes.
11.4 Extension; Waiver. At any time prior to the Effective Time, 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 11.3 (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.
11.5 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:
If to LLC: Washington Oregon Wireless, LLC
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Chairman and CEO
▇▇▇.▇▇▇.▇▇▇▇ (fax)
with copies to: F. ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇.▇▇▇.▇▇▇▇ (fax)
and with copies to: ▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇.▇▇▇.▇▇▇▇ (fax)
and with copies to: ▇▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇.▇▇▇.▇▇▇▇ (fax)
C-70
83
If to LLC Holdings: Washington Oregon Wireless, LLC
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Chairman and CEO
▇▇▇.▇▇▇.▇▇▇▇ (fax)
with copies to : F. ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇.▇▇▇.▇▇▇▇ (fax)
and with copies to: ▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇.▇▇▇.▇▇▇▇ (fax)
and with copies to: ▇▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇.▇▇▇.▇▇▇▇ (fax)
If to the Members: Cal-Ore Wireless, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇ ▇▇▇▇▇▇▇, General Manager
▇▇▇.▇▇▇.▇▇▇▇ (fax)
Clear Creek Mutual Telephone Co.
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, President
▇▇▇.▇▇▇.▇▇▇▇ (fax)
▇▇▇▇▇▇▇▇▇ Bay, LLC
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
Tacoma Financial Center
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇
C-71
84
▇▇▇.▇▇▇.▇▇▇▇ (fax)
WOW Investment Partners, LP
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇., ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: F. ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇.▇▇▇.▇▇▇▇ (fax)
with copies to: ▇▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇.▇▇▇.▇▇▇▇ (fax)
If to Public, Superholdings
or Merger Sub: Alamosa PCS Holdings, Inc.
▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
Chief Executive Officer
▇▇▇.▇▇▇.▇▇▇▇ (fax)
with copies to: ▇▇▇▇▇▇ and ▇▇▇▇▇, LLP
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇.▇▇▇.▇▇▇▇ (fax)
11.6 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.
11.7 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.
11.8 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
C-72
85
instrument. Any counterpart may be delivered by facsimile and shall be treated
as an original, provided that attachment thereof shall constitute the
representation and warranty of the person delivering such signature that such
person has full power and authority to attach such signature and to deliver this
Agreement.
11.9 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. References to "Articles" and "Sections" herein are
references to articles and sections of this Agreement, respectively. The words
"herein," "hereof," "hereto" and "hereunder" and other words of similar import
refer to this Agreement as a whole and not to any particular Article, Section or
other subdivision.
11.10 Confidentiality.
(a) Confidential Information. As used herein, "Confidential
Information" means confidential business information regarding any party hereto
or its affiliates, including, without limitation, marketing lists used by LLC or
any information identifying the source of, and the process used by LLC to
obtain, such marketing lists; customer lists and files; prices and costs;
business and financial records; information relating to personnel contracts;
stock ownership; liabilities; litigation and the terms of this Agreement or any
Related Agreement and any written analysis or other document reflecting such
information that a party hereto prepared (an "Analysis"). For purposes of this
Section 11.10, the party or parties disclosing Confidential Information are
referred to collectively as the "Disclosing Party" and the party or parties
receiving Confidential Information are referred to collectively as the
"Receiving Party." However, "Confidential Information" shall not include:
(i) any information properly obtained and already in the possession
of the Receiving Party, prior to the execution of the letter agreement, dated
May 7, 2000, as amended, or information available to the Receiving Party from
public records or from other sources in accordance with law,
(ii) any information that is in the public domain or subsequently
enters the public domain otherwise than through disclosure by the Receiving
Party or any of the Receiving Party's Representatives,
(iii) any information that is independently developed by or on
behalf of the Receiving Party without reference to the Confidential Information,
(iv) any information that is acquired from a person (other than
Public, Superholdings, Merger Sub or the LLC Parties) not known by the acquiring
party to be providing such information in breach of a confidentiality obligation
to the other party, or
(v) information the release of which has been approved in writing
by the Disclosing Party;
C-73
86
provided, that, further information received by Public, Superholdings or
Merger Sub shall cease to be Confidential Information after the Closing.
(b) Disclosure. The LLC Parties on the one hand, and Public,
Superholdings, and Merger Sub collectively on the other, will treat the
Confidential Information disclosed by the other as confidential, will use the
Confidential Information only in connection with their evaluation of the
transactions hereunder, and will not disclose it to others, except that each
party shall have the right to communicate the information to any of such party's
Representatives; provided, that, such Representative is informed that the
Confidential Information is confidential and such Representative agrees to be
bound by the terms of this Section 11.10. The parties shall be liable for any
breach of this Section 11.10 by any of their Representatives.
The parties acknowledge that Public and Superholdings may disclose
Confidential Information in connection with Public's and Superholdings'
obligations under the Exchange Act and the rules and regulations promulgated
thereunder, and in connection with Public's and Superholdings' registration of
offerings of securities under the Securities Act, and the rules and regulations
promulgated thereunder; provided, however, that prior to any such disclosure of
Confidential Information, Public or Superholdings shall provide LLC with the
opportunity to review and comment, if practicable, upon the disclosure. Any such
disclosures of Confidential Information by Public or Superholdings shall not be
a breach or violation of this Section 11.10.
Each of the LLC Parties acknowledge that (a) it is aware that the United
States securities laws prohibit any person who has material, nonpublic
information about a company from purchasing or selling securities of that
company, or from communicating that information to any other person under
circumstances in which it is reasonably foreseeable that such person is likely
to purchase or sell those securities and (b) it is familiar with the Exchange
Act and the rules and regulations promulgated thereunder, and agrees that it
will neither use, not cause any third party to use, any Confidential Information
in contravention of the Exchange Act or any such rules and regulations,
including Rules 10b-5 and 14e-3.
If any Receiving Party becomes legally compelled by deposition, subpoena
or other court or governmental action to disclose any of the Confidential
Information, then such Receiving Party will give the Disclosing Party prompt
notice to that effect, and will cooperate with the Disclosing Party if the
Disclosing Party seeks to obtain a protective order concerning the Confidential
Information. The Receiving Party will disclose only such Confidential
Information as its counsel shall advise is legally required.
The parties acknowledge that remedies at law may be inadequate to protect
against breach of this Section 11.10. Each party hereby agrees in advance to the
granting of injunctive relief in the non-breaching party's or parties' favor
without proof of actual damages as a remedy for breach of this Section 11.10.
Upon termination of this Agreement, the Receiving Party will, at the
Disclosing Party's request, return to the Disclosing Party or destroy all
originals, copies, extracts or other reproductions of the Confidential
Information that the Disclosing Party provides, and destroy any
C-74
87
Analysis.
11.11 Expenses. Except as otherwise expressly provided herein, each
party hereto will bear its respective expenses (third-party or otherwise)
incurred 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. The LLC Parties shall not utilize
assets of LLC to pay such expenses. Notwithstanding the foregoing, LLC may pay
up to $400,000 for the expenses it incurs in connection with this Agreement for
its accountants, attorneys and HSR filing fees and up to $1.5 million for the
expenses it incurs in connection with this Agreement for financial advisory
services and fairness opinions. The parties hereby agree that the $400,000
limitation referred to in the preceding sentence shall not apply to any
accounting or legal expenses reasonably incurred by the LLC Parties in
connection with preparing, filing or maintaining the effectiveness of the Form
S-1 and/or the Form S-4, the occurrence of such expenses shall be subject to the
reasonable approval of Superholdings.
11.12 Responsibility for Merger Sub. Public shall be directly
responsible for assuring that Superholdings and Merger Sub perform all of their
obligations hereunder.
11.13 Lack of Services Agreement. If the Services Agreement does not go
into effect, then the references to the effective date of the Services Agreement
contained in Sections 3.2(a) (LLC Parties' Representations True), 3.3(a)
(Public's, Superholdings' and Merger Sub's Representations True) and 10.1(d)
(Commencing Actions) shall be deemed to mean the Closing Date.
* * * * *
C-75
88
This Agreement has been executed and delivered as of the date first
written above.
WASHINGTON OREGON WIRELESS, LLC:
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Chairman/CEO
WOW HOLDINGS, LLC:
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Chairman/CEO
THE MEMBERS:
CAL-ORE WIRELESS, INC.
By:
------------------------------------
Name: ______________________________
Title: ______________________________
CLEAR CREEK MUTUAL TELEPHONE CO.
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: President
▇▇▇▇▇▇▇▇▇ BAY, LLC
By:
------------------------------------
Name: ______________________________
Title: ______________________________
WOW INVESTMENT PARTNERS, LP
By: WOW Investment Partner LLC, General Partner
By:
-------------------------------------
Name: _______________________________
Title: _______________________________
This Agreement has been executed and delivered as of the date first
written above.
WASHINGTON OREGON WIRELESS, LLC:
By:
---------------------------------
Name: ___________________________
Title: ___________________________
WOW HOLDINGS, LLC:
By:
----------------------------------
Name: ____________________________
Title: ____________________________
THE MEMBERS:
CAL-ORE WIRELESS, INC.
By: /s/ ▇▇▇▇▇▇ Ornabee
------------------------------------
Name: ▇▇▇▇▇▇ Ornabee
Title: General Manager
CLEAR CREEK MUTUAL TELEPHONE CO.
By:
------------------------------------
Name: ______________________________
Title: ______________________________
▇▇▇▇▇▇▇▇▇ BAY, LLC
By:
------------------------------------
Name: ______________________________
Title: ______________________________
WOW INVESTMENT PARTNERS, LP
By: WOW Investment Partner LLC, General Partner
By:
-------------------------------------
Name: _______________________________
Title: _______________________________
ALAMOSA PCS HOLDINGS, INC.:
By:
-------------------------------------
Name: _______________________________
Title: _______________________________
▇-▇▇
▇▇
▇▇▇▇▇▇▇ HOLDINGS, INC.:
By:
-------------------------------------
Name: _______________________________
Title: _______________________________
ALAMOSA SUB I, INC.:
By:
-------------------------------------
Name: _______________________________
Title: _______________________________
This Agreement has been executed and delivered as of the date first
written above.
WASHINGTON OREGON WIRELESS, LLC:
By:
---------------------------------
Name: ____________________________
Title: ____________________________
WOW HOLDINGS, LLC:
By:
----------------------------------
Name: ____________________________
Title: ____________________________
THE MEMBERS:
CAL-ORE WIRELESS, INC.
By:
------------------------------------
Name: ______________________________
Title: ______________________________
CLEAR CREEK MUTUAL TELEPHONE CO.
By:
------------------------------------
Name: ______________________________
Title: ______________________________
▇▇▇▇▇▇▇▇▇ BAY, LLC
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
Title: Sole Managing Member
WOW INVESTMENT PARTNERS, LP
By: WOW Investment Partner LLC, General Partner
By:
-------------------------------------
Name: _______________________________
Title: _______________________________
This Agreement has been executed and delivered as of the date first
written above.
WASHINGTON OREGON WIRELESS, LLC:
By:
---------------------------------
Name: ____________________________
Title: ____________________________
WOW HOLDINGS, LLC:
By:
----------------------------------
Name: ____________________________
Title: ____________________________
THE MEMBERS:
CAL-ORE WIRELESS, INC.
By:
------------------------------------
Name: ______________________________
Title: ______________________________
CLEAR CREEK MUTUAL TELEPHONE CO.
By:
------------------------------------
Name: ______________________________
Title: ______________________________
▇▇▇▇▇▇▇▇▇ BAY, LLC
By:
------------------------------------
Name: ______________________________
Title: ______________________________
0
WOW INVESTMENT PARTNERS, LP
By: WOW Investment Partner LLC, General Partner
By: /s/ ▇. ▇▇▇▇▇▇ Maneor
-------------------------------------
Name: ▇. ▇▇▇▇▇▇ Maneor
Title: Vice President
C-77
90
EXHIBIT 1.2(b)
ESCROW AGREEMENT
This Escrow Agreement (the "Escrow Agreement") is dated
_____________________, 2000 by and among Alamosa Holdings, Inc., a Delaware
corporation ("Superholdings"), WOW Holdings, LLC, an Oregon limited liability
company that holds all of the Members' interests in LLC ("LLC Holdings"), F.
▇▇▇▇▇▇ ▇▇▇▇▇▇ as the Members' Agent (the "Members' Agent") and _______________
the ("Escrow Agent").
RECITALS
A. The parties are entering into this Escrow Agreement pursuant to Section
1.2(b) of that certain Agreement and Plan of Reorganization (the "Agreement")
dated as of July 31, 2000.
B. All capitalized terms used herein and not otherwise defined in this
Escrow Agreement will have the meanings assigned to them in the Agreement.
AGREEMENT
In consideration of the mutual covenants and agreements herein contained
and in the Agreement, the parties hereby agree as follows:
1. Creation of Escrow Account; Delivery of Funds. An escrow account
designated by Superholdings (the "Escrow Account") has been established by the
Escrow Agent. Superholdings has delivered to the Escrow Agent ________ shares
of Superholdings Stock (the "Escrow Deposit"), and corresponding stock powers,
to be held in the Escrow Account, and the Escrow Agent acknowledges receipt of
the Escrow Deposit pursuant to the terms and conditions of this Escrow
Agreement.
2. Escrow Adjustment. The Members may deposit additional shares of
Superholdings Stock with the Escrow Agent pursuant to the terms of the
Agreement (the "Escrow Adjustment") after the date hereof. The aggregate of the
Escrow Deposit and the Escrow Adjustment shall be defined as the "Escrow
Stock."
3. Holding Period. The Escrow Agent shall hold the Escrow Stock until
instructed pursuant to (a) instruments delivered to the Escrow Agent, signed by
the Members' Agent and Superholdings (each of whom covenant to deliver such
instruments to effectuate the terms of the Agreement) authorizing the Escrow
Agent to distribute all or part of the Escrow Stock in the manner described in
the instruments or (b) a final arbitration decision, pursuant to the terms of
Section 10.7 of the Agreement. The distribution of Escrow Stock shall be made
no later than two
C-78
91
business days after receipt by the Escrow Agent of such instruments or a copy
of such arbitration decision.
4. Termination of Escrow. This Escrow Agreement shall terminate upon the
distribution of all Escrow Stock pursuant to the terms hereof.
5. Duties and Responsibilities of Escrow Agent.
5.1 Escrow Stock. By signing this Escrow Agreement, the Escrow Agent
agrees to hold and dispose of any and all Escrow Stock delivered to it in
accordance with the terms of the Escrow Agreement.
5.2 Attachment; Orders. If any property subject hereto is at any time
attached, garnished or levied upon under any arbitration or court order, or in
case the payment, assignment, transfer, conveyance or delivery of any such
property shall be stayed or enjoined by any arbitration or court order, or in
case any order, judgment or decree shall be made or entered by any arbitrator
or court affecting such property or any part thereof, then and in any of such
events, the Escrow Agent is authorized to rely upon and comply with any such
order, writ, judgment or decree which is deemed by any legal counsel of the
Escrow Agent's own choosing to be binding upon it; and if the Escrow Agent
complies with any such order, writ, judgment or decree, it shall not be liable
to any of the parties hereto or to any other person, firm or corporation by
reason of such compliance, even though such order, writ, judgment or decree may
be subsequently reversed, modified, annulled, set aside or vacated.
5.3 No Liabilities. The Escrow Agent shall not be personally liable for
any act taken or omitted hereunder if taken or omitted by it in good faith and
without gross negligence or wilful misconduct. The Escrow Agent also shall be
fully protected in relying upon any written notice, demand, certificate or
document that it believes in good faith to be genuine and effective.
5.4 Documents. The Escrow Agent shall not be responsible for the
sufficiency or accuracy of the form, execution, validity or genuineness of
documents now or hereafter deposited hereunder, or of any endorsement thereon,
or for any lack of endorsement thereon, nor shall it be responsible or liable
in any respect on account of the identity, authority or rights of the persons
executing or delivering or purporting to execute or deliver any such document
or endorsement, or this Escrow Agreement.
5.5 Instruments. The Escrow Agent shall follow all reasonable
instructions contained within instruments executed by the Members' Agent and
Superholdings.
6. Fees and Expenses of Escrow Agent. The Escrow Agent's fees for
performance of its duties hereunder are described in Exhibit A. The Escrow
Agent's fees, and any reimbursements owed to the Escrow Agent for out-of-pocket
expenses incurred by it in
C-79
92
connection with the performance of such duties, shall be paid by Superholdings.
7. Indemnification of Escrow Agent. Superholdings and the Members covenant
and agree to jointly and severally indemnify the Escrow Agent and hold it
harmless against any loss, liability or expenses arising out of or in
connection with the performance of its duties hereunder, including but not
limited to, reasonable legal and other fees and expenses, and including
specifically, but without limitation, any legal or other expenses with respect
to any action for interpleader by the Escrow Agent, except that the Escrow
Agent shall not be indemnified against any such loss, liability or expense
arising out of its gross negligence or wilful misconduct. The Escrow Agent
shall be under no obligation to institute or defend any action, suit or legal
proceeding in connection herewith, unless first indemnified and held harmless
to its satisfaction in accordance with the foregoing.
8. Miscellaneous.
8.1. Notices. 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:
If to Superholdings: Alamosa PCS Holdings, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
Chief Executive Officer
▇▇▇.▇▇▇.▇▇▇▇ (fax)
with copies to: ▇▇▇▇▇▇ and ▇▇▇▇▇, LLP
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇.▇▇▇.▇▇▇▇ (fax)
If to LLC Holdings: Washington Oregon Wireless, LLC
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Chairman and CEO
▇▇▇.▇▇▇.▇▇▇▇ (fax)
with copies to: F. ▇▇▇▇▇▇ ▇▇▇▇▇▇
C-80
93
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇.▇▇▇.▇▇▇▇ (fax)
and with copies to: ▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇.▇▇▇.▇▇▇▇ (fax)
and with copies to: ▇▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇.▇▇▇.▇▇▇▇ (fax)
If to Members' Agent: F. ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇.▇▇▇.▇▇▇▇ (fax)
and with copies to: ▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇.▇▇▇.▇▇▇▇ (fax)
and with copies to: ▇▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇.▇▇▇.▇▇▇▇ (fax)
If to Escrow Agent:
Attention:
C-81
94
(fax)
with copies to:
Attention:
(fax)
8.2 Assignment. Neither this Escrow Agreement nor any of the parties'
rights hereunder shall be assignable without the prior written consent of the
other parties.
8.3 Governing Law. This Escrow Agreement shall be construed in
accordance with the laws of the State of Texas, regardless of the choice of law
provisions of that state or any other jurisdiction.
8.4 Entire Escrow Agreement; Amendments. This Escrow Agreement
constitutes the complete agreement of the parties with respect to the subject
matter hereof. The waiver, amendment or modification of any provision of this
Escrow Agreement or any right, power or remedy hereunder, shall be effective if
(but only if) in writing and signed by each of the parties hereto.
8.5 Power and Authority. Each of the parties represents and warrants
that such party has full power and authority to execute, deliver and perform
this Escrow Agreement and to take any and all actions necessary with respect to
the Escrow Stock.
8.6 Counterparts. This Escrow Agreement may be executed in one or more
counterparts with all such counterparts constituting one and the same
instrument.
* * * * *
C-82
95
The parties hereto have executed and delivered this Escrow Agreement as of
the day and year first set forth above.
ALAMOSA HOLDINGS, INC.:
By:
Name:
Title:
WOW HOLDINGS, LLC:
By:
Name:
Title:
MEMBERS' AGENT:
By:
Name:
Title:
ESCROW AGENT:
By:
Name:
Title:
C-83
96
EXHIBIT 2.2(a)
LLC PARTIES CLOSING CERTIFICATE
This LLC Parties Closing Certificate (the "Certificate") is delivered
pursuant to Section 2.2(a) (Closing Certificate) of that certain Agreement and
Plan of Reorganization (the "Agreement") entered into as of July 31, 2000, by
and among Alamosa PCS Holdings, Inc., a Delaware corporation ("Public"),
Alamosa Holdings, Inc., a Delaware corporation ("Superholdings"), Alamosa Sub
I, Inc., a Delaware corporation and wholly-owned direct subsidiary of
Superholdings ("Merger Sub"), and Washington Oregon Wireless, LLC, an Oregon
limited liability company ("LLC"), WOW Holdings, LLC, an Oregon limited
liability company ("LLC Holdings") and members of LLC (the "Members"). LLC
(prior to Closing), LLC Holdings (when formed but prior to Closing) and the
Members are sometimes collectively referred to herein as the "LLC Parties." All
capitalized terms used herein and not otherwise defined in this Certificate
will have the meanings assigned to them in the Agreement.
The undersigned hereby certify, and represent and warrant to Public,
Superholdings and Merger Sub as follows:
1. Representations and Warranties. Except as set forth on the Schedule to
this Certificate, the LLC Parties' representations and warranties made in the
Agreement or any Related Agreement were true and correct in all respects at the
effective date of the Services Agreement. Actions by the Members, the Board of
Managers of LLC or LLC Holdings, or any employee or agent of LLC or LLC
Holdings (which employee or agent is not under the supervision of Public
pursuant to the Services Agreement) have not caused the LLC Parties'
representations and warranties made in the Agreement or any Related Agreement
to be untrue or incorrect in any respect at the Closing Date. The failure of
any of the persons identified in the preceding sentence to take actions that
(a) would have been taken in the ordinary course of LLC's and LLC Holdings'
business in the exercise of reasonable judgment and (b) were not delegated to
Public under the Services Agreement, have not caused the LLC Parties'
representations and warranties made in the Agreement or any Related Agreement
to be untrue or incorrect in any respect at the Closing Date. The following LLC
Parties' representations and warranties made in the Agreement are also true and
correct in all respects at the date hereof: Sections 6.1(b) (Validity and
Authorization; Power and Authority), 6.1(f) (State Takeover Statutes), 6.3(a)
(Capitalization), 6.3(b) (Capitalization of LLC Holdings), 6.3(c) (Ownership
and Transfer by Members), 6.3(d) (VAR Plan), 6.7(a) (Certain Information),
6.7(b) (Documents Delivered), 6.7(c) (No Brokers Fees; No Commissions) and
6.7(d) (Tax Advice).
2. Covenants. Except as set forth on the Schedule to this Certificate, the
LLC Parties, in all respects, have performed each agreement, and have complied
with each covenant, to be performed or complied with by them, or any of them,
on or prior to the Closing Date under the Agreement or any Related Agreement.
3. No Litigation. Except as set forth on the Schedule to this Certificate,
no action, suit or proceeding is pending, or to the undersigned's knowledge
threatened, and no preliminary
C-84
97
injunction, order, decree or ruling is in effect, seeking 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, to which
any of the undersigned is or would be a party.
* * * * *
C-85
98
SCHEDULE:
C-86
99
Executed as of _______________ ____, 2000.
WASHINGTON OREGON WIRELESS, LLC:
By:
Name:
Title:
WOW HOLDINGS, LLC:
By:
Name:
Title:
THE MEMBERS:
Name:
Name:
Name:
Name:
Name:
Name:
C-87
100
EXHIBIT 2.2(e)
Form of Opinion of LLC Parties' Counsel
1. Each of the Companies is a limited liability company duly organized and
validly existing under the laws of the State of Oregon. 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 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
Company.
2. Each of the Companies has full power and authority to consummate the Parent
Merger and to execute, deliver and perform the Agreement, the Related Agreements
and the other instruments called for therein to which it is a party.
3. The Agreement and the Related Agreements have been duly authorized, executed
and delivered by each of the Companies and constitute (or, in the case of
Related Agreements or instruments called for by the Agreement or the Related
Agreements, to be executed by such Company at or before the Closing, upon
execution will constitute) the legal, valid and binding obligation of such
Company, enforceable against such Company in accordance with their terms.
4. Each of the Members has full requisite power and authority (or if a natural
person, capacity) to execute, deliver and perform the Agreement, the Related
Agreements and the other instruments called for therein to which such Member is
a party. The Agreement, the Related Agreements and the other instruments called
for therein to which such Member is a party have been duly executed and
delivered by each of the Members and constitute (or, in the case of Related
Agreements or instruments called for in the Agreement, to be executed by the
Member at or before the Closing, will constitute) the legal, valid and binding
obligation of the Member, enforceable against the Member in accordance with
their terms.
5. Each of the Companies is the holder of record of all of the issued and
outstanding shares of capital stock or interests, as appropriate, of its
Subsidiaries free and clear of any Liens.
6. The Members' Interests of LLC consist of 31,558,046 units and no preferred
units. There are no other equity interests of LLC either authorized or
outstanding. Except as set forth on the exhibit to this opinion, 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' Interests. Except as set
forth on the exhibit to this opinion, 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,
▇-▇▇
▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, redemption, acquisition or other transfer of its equity
securities.
7. Each Member is the holder of record of the units set forth in the Agreement.
To our knowledge, no Member is a party to any contract, agreement or
understanding (other than the 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.
8. The Members' Interests of LLC Holdings consists of one unit and no preferred
units. There are no other equity interests of LLC Holdings either authorized or
outstanding pursuant to LLC's certificate of formation or organizational
agreements. Except as set forth on the exhibit to this opinion, all of the
issued and outstanding units are duly authorized and validly issued, fully paid
and nonassessable and free and clear of any preemptive rights. No certificates
were issued to represent the Members' Interests. Except as set forth on the
exhibit to this opinion, there are no outstanding preemptive, conversion or
other rights, or other options, warrants or agreements granted by, issued by,
or binding upon, LLC Holdings for the issuance, sale, purchase, repurchase,
redemption, acquisition or other transfer of its equity securities pursuant to
LLC's certificate of formation or organizational agreements.
9. The formation of LLC Holdings and its acquisition of LLC as contemplated
hereby will result in LLC Holdings' becoming the sole owner of LLC, holding its
interest in LLC free and clear of Liens created by the members of LLC in the
Members' Interests. Consummation of the transactions contemplated by this
Agreement will result in Superholdings' becoming the sole owner of LLC Holdings
and LLC, holding its interests in LLC Holdings and LLC free and clear of Liens
created by the members of LLC Holdings in the Members' Interests.
10. The execution, delivery and performance of the Agreement and the Related
Agreements, and the consummation of the transactions contemplated therein will
not result in any violation of the terms of, and will not contravene, conflict
with, accelerate the performance of the obligations required under, constitute
a default under or result in the creation of any mortgage, pledge, lien,
encumbrance or charge upon any of the properties or assets of any Company
pursuant to, (i) the organizational document of such Company, (ii) any material
Order or Proceeding that such Company has disclosed pursuant to the Agreement,
(iii) any material law, rule or regulation applicable to any of them, or to
which any of them is a party or by which any of them or their property or
assets is bound, (iv) the Sprint, CoBank and Lucent consents or (v) the
Contracts (as such term is defined in Section 6.4(d)(i) (Definition) of the
Agreement) and as specified on the Disclosure Schedule to Section 6.1(e) (LLC
Parties Consents Required); [provided, however, the failure to deliver this
opinion with respect to agreements in clause (v) above as will not cause an LLC
Material Adverse Change and will not constitute a failure to
C-89
102
satisfy the delivery requirement of Section 2.2(a) (Closing Certificate) of the
Agreement.]
11. The consent or vote of the Members in favor of the transactions
contemplated by this Agreement and the Related Agreements was duly obtained
pursuant to the organizational documents of LLC and LLC Holdings and all
applicable state law (including Sections 63.130 and 63.487 of the OLLCA), and
no right of first refusal or similar restriction on transfer applies to the
conversion of the Members' Interests in the Parent Merger or the formation of
LLC Holdings and LLC Holdings' acquisition of LLC.
12. To the knowledge of Counsel, there are no Proceedings or Orders pending.
13. No state takeover statute is applicable to any Company in connection with
the Agreement, the Parent Merger or the other transactions contemplated
thereby.
C-90
103
EXHIBIT 2.3(a)
SUPERHOLDINGS CLOSING CERTIFICATE
This Superholdings Closing Certificate (the "Certificate") is delivered
pursuant to Section 2.3(a) (Closing Certificate) of that certain Agreement and
Plan of Reorganization (the "Agreement") entered into as of July 31, 2000, by
and among Alamosa PCS Holdings, Inc., a Delaware corporation ("Public"),
Alamosa Holdings, Inc., a Delaware corporation ("Superholdings"), Alamosa Sub
I, Inc., a Delaware corporation and wholly-owned direct subsidiary of
Superholdings ("Merger Sub"), and Washington Oregon Wireless, an Oregon limited
liability company ("LLC"), WOW Holdings, LLC, an Oregon limited liability
company ("LLC Holdings"), and members of LLC (the "Members"). LLC (prior to
Closing), LLC Holdings (when formed but prior to Closing) and the Members are
sometimes collectively referred to herein as the "LLC Parties." All capitalized
terms used herein and not otherwise defined in this Certificate will have the
meanings assigned to them in the Agreement.
The undersigned hereby certify, and represent and warrant to the LLC
Parties as follows:
1. Representations and Warranties. Except as set forth on the Schedule to
this Certificate, Superholdings', Public's and Merger Sub's representations and
warranties made in the Agreement or any Related Agreement were true and correct
in all respects at the effective date of the Services Agreement. The following
representations and warranties made by the Companies in the Agreement are also
true and correct in all respects at the date hereof: Sections 7.1(b) (Corporate
Power and Authority; Validity and Authorization), 7.3 (No Brokers Fees; No
Commissions), 7.7 (Capitalization), 7.8 (Capitalization of Superholdings) and
7.11 (Certain Information).
2. Covenants. Except as set forth on the Schedule to this Certificate,
Superholdings, Public and Merger Sub in all respects, have performed each
agreement, and have complied with each covenant, to be performed or complied
with by them, or any of them, on or prior to the Closing Date under the
Agreement or any Related Agreement.
3. No Litigation. Except as set forth on the Schedule to this Certificate,
no action, suit or proceeding is pending, or to the undersigned's knowledge
threatened, and no preliminary injunction, order, decree or ruling is in
effect, seeking 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, to which any of the undersigned is or would be a party.
* * * * *
C-91
104
SCHEDULE:
C-92
105
Executed as of _______________ ____, 2000.
ALAMOSA PCS HOLDINGS, INC.:
By:
Name:
Title:
ALAMOSA HOLDINGS, INC.:
By:
Name:
Title:
ALAMOSA SUB I, INC.:
By:
Name:
Title:
C-93
106
EXHIBIT 2.3(d)
Form of Opinion of Public's, Superholdings' and Merger Sub's Counsel
1. Each of Public, Superholdings and Merger Sub is a corporation duly organized
and validly existing under the laws of the State of Delaware and is in good
standing under such laws. Superholdings owns, beneficially and of record, all
of the issued and outstanding shares of capital stock of Merger Sub.
2. Each of Public, Superholdings and Merger Sub has full corporate power and
authority to execute, deliver and perform the Agreement and the Related
Agreements. The Agreement has been duly authorized, executed and delivered by
each of Public, Superholdings and Merger Sub and is enforceable against Public,
Superholdings and Merger Sub in accordance with its terms.
3. When the Related Agreements to which each of Public, Superholdings and
Merger Sub is a party are delivered, such agreements will have been duly
authorized, executed and delivered by Public, Superholdings and Merger Sub, and
will constitute the legal, valid and binding obligations of Public,
Superholdings and Merger Sub, enforceable against Public, Superholdings and
Merger Sub in accordance with their terms.
4. The authorized capital stock of Public consists (i) of 95,000,000 shares of
Public Stock, of which 61,354,606 shares were issued and outstanding as of
April 20, 2000 and (ii) 5,000,000 shares of preferred stock, par value $0.01
per share, of which no shares were issued and outstanding as of April 20, 2000.
All of the issued and outstanding shares of Public Stock have been duly
authorized and validly issued, are fully paid and nonassessable and are free
and clear of any preemptive rights. Based upon our review of the minute books
of Public, as of March 31, 2000, there were no outstanding preemptive,
conversion or other rights, or other options, warrants or agreements granted
by, issued by, or binding upon, Public 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.
5. The authorized capital stock of Superholdings immediately prior to the
Closing will consist (i) of at least 290,000,000 shares of Superholdings Stock
and (ii) at least 10,000,000 shares of preferred stock, par value $0.01 per
share. All of the issued and outstanding shares of Superholdings Stock will
have been duly authorized and validly issued, fully paid and nonassessable and
free and clear of any preemptive rights. Based upon our review of the minute
books of Superholdings, on the date of the Agreement, there were no outstanding
preemptive, conversion or other rights, or other options, warrants or
agreements granted by, issued by, or binding upon, Superholdings for the
issuance, sale, purchase, repurchase, redemption, acquisition or other transfer
of its equity securities, other than stock that may be issued pursuant to the
stock
C-94
107
option plans and agreements of Public described in paragraph 4 above (after
consummation of the Subsidiary Merger), pursuant to the Agreement or the Sister
Agreements or pursuant to anticipated financing transactions.
6. The shares of Superholdings Stock, when issued, sold and delivered in
accordance with the terms of the Agreement will be duly and validly issued,
fully paid and nonassessable and issued free and clear of any Liens.
7. The execution, delivery and performance of the Agreement and the Related
Agreements, and the consummation of the transactions contemplated therein will
not result in any violation of the terms of, and will not contravene, conflict
with, accelerate the performance of the obligations required under, constitute
a default under or result in the creation of any mortgage, pledge, lien,
encumbrance or charge upon any of the properties or assets of Public,
Superholdings or Merger Sub pursuant to, (i) the certificate of incorporation
or bylaws of Public, Superholdings or Merger Sub, (ii) any material Order or
Proceeding that Public, Superholdings or Merger Sub has disclosed pursuant to
the Agreement, (iii) any material law, rule or regulation applicable to any of
them, or to which any of them is a party or by which any of them or their
property or assets is bound, or (iv) the Agreements listed on the Disclosure
Schedule to Sections 7.2(a) or 7.2(b), taking into account the third party
consents or approvals that have been obtained.
C-95
108
EXHIBIT 2.4(b)(i)
MEMBER AGREEMENT
This Member Agreement (the "Member Agreement") is delivered pursuant to
Sections 1.2(b) (Right to Withhold), 1.2(c) (Consideration Subject to
Agreements), 2.4(b)(i)(A) (Lock-Up Agreement), 2.4(b)(i)(B) (Indemnity
Agreement), 2.4(b)(i)(C) (Members' Release) and Section 10.2 (Indemnities) of
that certain Agreement and Plan of Reorganization (the "Agreement") entered
into as of July 31, 2000, by and among Alamosa PCS Holdings, Inc., a Delaware
corporation ("Public"), Alamosa Holdings, Inc., a Delaware corporation
("Superholdings"), Alamosa Sub I, Inc., a Delaware corporation and wholly-owned
direct subsidiary of Superholdings ("Merger Sub"), and Washington Oregon
Wireless, LLC, an Oregon limited liability company ("LLC"), WOW Holdings, LLC,
an Oregon limited liability company ("LLC Holdings"), and members of LLC (the
"Members"). As used herein, "Member Parties" shall be defined as the
undersigned Member and its direct and indirect beneficial owners. All
capitalized terms used herein and not otherwise defined in this Member
Agreement will have the meanings assigned to them in the Agreement. The parties
hereto agree as follows:
1. Lock-Up. The undersigned member hereby covenants to Public and
Superholdings that the undersigned will not, without the prior written consent
of Superholdings (which consent shall not be unreasonably withheld), (a) before
September 30, 2001, sell, pledge or otherwise dispose of the undersigned
member's holdings of Superholdings Stock, (b) enter into any transaction which
is designed to, or might reasonably be expected to, result in the disposition,
before September 30, 2001, of the undersigned member's holdings of
Superholdings Stock, (c) establish or increase a put equivalent position or
liquidate or decrease a call equivalent position (within the meaning of Section
16 of the Securities Exchange Act of 1934, as amended, and the rules and
regulations of the Securities and Exchange Commission promulgated thereunder)
that will be settled before September 30, 2001, with respect to any
Superholdings Stock or (d) publicly announce an intention to effect any such
transaction, other than (x) shares of Superholdings Stock disposed of as bona
fide gifts to persons who also enter into lock-up agreements in the form hereof
and (y) shares of Superholdings Stock acquired other than pursuant to the
Parent Merger. Notwithstanding the foregoing, the undersigned member may pledge
its holdings of Superholdings Stock before September 30, 2001; provided, that,
the pledgee agrees to be bound in writing by the terms of this Section 1 of the
Member Agreement with respect to such pledged Superholdings Stock. This Section
1 of this Member Agreement is the "Lock-Up Agreement" referred to in the
Agreement.
2. Registration Provisions.
(a) Certain Information. The undersigned Member hereby covenants to
provide to Public and Superholdings the information required by the Form S-1,
as provided by Section 4.2(c) (Form S-1) of the Agreement, as is reasonably
requested by Public and Superholdings as soon as possible, but no later than
five business days after the date of such request. In addition, the undersigned
Member hereby covenants that none of the information supplied or to be supplied
by the undersigned Member specifically for inclusion in the Form S-1 will, at
the time
C-96
109
the Form S-1 is filed with the SEC, at any time that such form is amended or
supplemented and at the time it becomes effective or remains in effect 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. Notwithstanding the foregoing, if the
undersigned Member becomes aware, at any time, of any untrue statement of a
material fact or omission of any material fact required to be stated in the
Form S-1 (or other appropriate registration statement form), then the
undersigned Member shall promptly notify Public and Superholdings of such
untrue statement, pursuant to Section 11.5 (Notices, Etc.) of the Agreement.
(b) Blackout. The undersigned member hereby agrees that if Superholdings
furnishes to the undersigned member a notice signed by the President of
Superholdings stating that Superholdings has determined in good faith that it
would be seriously detrimental to Superholdings and its stockholders for the
Form S-1 to be filed (or remain in effect) and it is therefore essential to
defer the filing of such Form S-1 (or temporarily suspend the effectiveness of
such registration statement or use of the related prospectus) (a "Blackout
Notice"), then Superholdings shall have the right (i) immediately to defer such
filing for a period of not more than sixty (60) days beyond the date by which
such Form S-1 was otherwise planned to be filed or (ii) suspend such
effectiveness for a period of not more than sixty (60) days (any such deferral
or suspension period of up to sixty (60) days, a "Blackout Period"). The
undersigned member agrees to cease any disposition during such Blackout Period
of the Superholdings Stock received by the undersigned member in connection
with the Parent Merger. Superholdings may not utilize any of its rights under
this Section 2 of this Member Agreement to defer the filing of the Form S- 1
(or suspend the effectiveness of the Form S-1) more than twice in any twelve
(12) month period.
(c) WOW Holdings Operating Agreement. The undersigned member has duly
executed and delivered to LLC Holdings the Operating Agreement of LLC Holdings.
3. Indemnity. The undersigned member hereby agrees to be bound by all of
the provisions of Article 10 of the Agreement (Indemnification), and the direct
and indirect owners of the undersigned's Members' Interests (who are
signatories below) shall also be so bound to the extent that they receive any
merger consideration or proceeds thereof. This Section 3 of this Member
Agreement is the "Indemnity Agreement" referred to in the Agreement.
4. Intent to Sell. The undersigned member hereby agrees that it has no
plan or intention to sell, exchange, transfer or otherwise dispose of any of
its Superholdings Stock received by such undersigned member in connection with
the Reorganization.
5. Members Releases. Superholdings hereby releases on its own behalf any
and all claims held or to be held by Superholdings against LLC, LLC Holdings,
and their successors, assigns, officers, directors, employees and agents, after
the Closing. The undersigned member hereby releases any and all claims held or
to be held by the undersigned member against LLC,
C-97
110
LLC Holdings, and their successors, assigns, officers, directors, employees and
agents, but excluding any claims the undersigned member may have to unpaid
compensation and benefits. The undersigned member hereby agrees to be released
from any obligation under the operating agreements of LLC or LLC Holdings. This
Section 5 of this Member Agreement is the "Members Releases" referred to in the
Agreement.
6. Escrow Agreement. The Member Parties hereby agree to be bound by all of
the provisions of the Escrow Agreement, including the appointment of F. ▇▇▇▇▇▇
▇▇▇▇▇▇ to serve as the Members' Agent, with the authority to negotiate and
settle all claims involving the Escrow Stock. The Member Parties hereby further
agree to indemnify and hold the Members' Agent harmless from and against any
and all loss, damage, cost, expense (including reasonable attorney's fees), or
any other charge, known or unknown, which may be made or asserted now or in the
future by or on behalf of the Member Parties against the Members' Agent arising
out of or attributable to the Members' Agent's actions under the Escrow
Agreement.
7. Consideration. The undersigned Member hereby acknowledges that the
consideration to be received by the undersigned Member pursuant to the
Agreement represents the amount of consideration the undersigned Member is
entitled to receive under the operating agreements of LLC or LLC Holdings and
satisfies in full any and all claims held or to be held by the undersigned
Member with respect to its membership interest in LLC or LLC Holdings.
8. Deliveries. The undersigned Member Parties shall deliver their holdings
of Superholdings Stock, and corresponding stock powers, to the Escrow Agent, if
applicable, in accordance with the Escrow Agreement and Section 10.2
(Indemnities) of the Agreement.
9. Investment Representations.
(a) Each of the undersigned Member Parties understands and acknowledges
that the Superholdings Stock is being offered and sold under the exemptions
from registration provided for in Section 4(2) of the Securities Act, including
Regulation D promulgated thereunder, and that Superholdings' reliance upon such
exemption is based in part upon the undersigned Member Parties'
representations, warranties and agreements contained in this Agreement.
(b) Each of the undersigned Member Parties has carefully read this
Agreement and, to the extent believed necessary, has discussed the
representations, warranties and agreements which each of the undersigned Member
Parties makes by signing it and the applicable limitations upon each of the
undersigned Member Parties' resale of the shares of Superholdings Stock with
the undersigned Member Parties' counsel.
(c) The Superholdings Stock to be issued to such undersigned Member
Parties in the Reorganization is being acquired by the undersigned Member
Parties solely for the undersigned Member Parties' own account, for investment
purposes only, and is not being acquired for resale, resyndication,
distribution, subdivision or fractionalization thereof, except pursuant to an
effective registration under the Securities Act or in a transaction exempt from
registration under the Securities Act. Each of the undersigned Member Parties
has no contract or arrangement with
C-98
111
any person to sell, transfer or pledge to any person the shares of
Superholdings Stock or any part thereof, any interest herein or any rights
thereto, and each of the undersigned Member Parties has no present plans to
enter into any such contract or arrangement.
(d) Each of the undersigned Member Parties understands that it may not
sell or otherwise transfer its shares of Superholdings Stock unless such sale
or other transfer is registered under the Securities Act and the applicable
state securities laws or unless the sale or other transfer is exempt from the
registration requirements under the Securities Act and such other securities
laws, and that, as a result, the undersigned Member Parties must bear the
economic risk of the investment for an indefinite period of time. Each of the
undersigned Member Parties understands that Superholdings may require the
undersigned Member Parties to furnish an opinion of counsel satisfactory to
Superholdings that such sale or transfer is so exempt.
(e) Each of the undersigned Member Parties is able (i) to bear the
economic risk of an investment in Superholdings Stock, (ii) to hold the shares
of Superholdings Stock indefinitely, and (iii) to afford a complete loss of
this investment. Each of the undersigned Member Parties has adequate means of
providing for current needs and has no present need for liquidity in this
investment.
(f) Each of the undersigned Member Parties is an "accredited investor" as
that term is defined under Rule 501(a) of Regulation D, as amended, under the
Securities Act and possesses such knowledge and experience in financial and
business matters so that each of the undersigned Member Parties is capable of
evaluating the merits and risks of an investment in Superholdings Stock, and of
making an informed investment decision.
(g) Each of the undersigned Member Parties confirms that, in making the
decision to acquire the shares of Superholdings Stock in the Reorganization,
each of the undersigned Member Parties has relied solely upon independent
investigations made by the undersigned Member Parties and/or by the undersigned
Member Parties' representatives, including the undersigned Member Parties' own
professional tax and other advisors and that the undersigned Member Parties and
such representatives and advisors have been given the opportunity to ask
questions of, and to receive answers from, Superholdings concerning this
Agreement and the terms and conditions of the Reorganization, and to obtain any
information requested by the undersigned Member Parties concerning
Superholdings from such person, to the extent such persons possessed such
information or could acquire it without unreasonable effort or expense,
necessary for the undersigned Member Parties to make an informed investment in
Superholdings Stock.
(h) Each of the undersigned Member Parties consents to the placement of a
legend on the shares of Superholdings Stock to be issued to the undersigned
Member Parties in the Reorganization, which legend shall be substantially as
follows:
C-99
112
"These securities are not registered under the
Securities Act of 1933, as amended, or any state
securities laws, and may not be offered, sold or
otherwise distributed for value, nor may these
securities be transferred on the books of
Superholdings, in the absence of such
registration unless Superholdings had received an
opinion of counsel or other evidence,
satisfactory to Superholdings and its counsel,
that such registration is not required."
Executed as of _______________ ____, 2000.
* * * * *
▇-▇▇▇
▇▇▇
▇▇▇▇▇▇▇ HOLDINGS, INC.:
By:
Name:
Title:
MEMBER:
Name:
DIRECT OWNERS OF MEMBER:
Name:
Name:
Name:
INDIRECT OWNERS OF MEMBER:
Name:
C-101
114
Name:
Name:
C-102
