CONFORMED COPY
______________________________________________
JOINT VENTURE FORMATION AGREEMENT
by and between
BELL ATLANTIC CORPORATION
and
NYNEX CORPORATION
Dated as of June 29, 1994
________________________________________________
TABLE OF CONTENTS
ARTICLE I
CERTAIN DEFINITIONS. . . . . . . . . . . 1
1.1 Definitions . . . . . . . . . . . . . . . . . . 1
ARTICLE II
THE TRANSACTIONS. . . . . . . . . . . . 6
2.1 Formation of the Partnerships . . . . . . . . . 6
2.2 Liabilities Assumed by Cellco . . . . . . . . . 8
2.3 NYNEX Buy-up Option . . . . . . . . . . . . . . 8
2.4 The Closings. . . . . . . . . . . . . . . . . . 8
2.5 Reasonable Efforts to Proceed Promptly. . . . . 9
2.6 Effect of Closing . . . . . . . . . . . . . . . 9
2.7 Instruments of Transfer, Etc. . . . . . . . . . 9
2.8 After-Acquired Entities . . . . . . . . . . . . 9
2.9 Capital Expenditures. . . . . . . . . . . . . . 10
2.10 Systems Licensed in the Same Markets. . . . . . 10
2.11 Failure to Contribute Systems . . . . . . . . . 11
2.12 True-Up.. . . . . . . . . . . . . . . . . . . . 12
2.13 Balance Sheet Adjustment and Accounts Receivable
Guarantee . . . . . . . . . . . . . . . . . . 13
2.14 Interim Management. . . . . . . . . . . . . . . 13
2.15 Restructuring . . . . . . . . . . . . . . . . . 13
2.16 The Corporate General Partner.. . . . . . . . . 14
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF NYNEX AND BELL ATLANTIC . 14
3.1 Organization. . . . . . . . . . . . . . . . . . 14
3.2 Interests in Systems. . . . . . . . . . . . . . 14
3.3 Authority . . . . . . . . . . . . . . . . . . . 15
3.4 Consents. . . . . . . . . . . . . . . . . . . . 15
3.5 Financial Information . . . . . . . . . . . . . 15
3.6 Compliance with Laws. . . . . . . . . . . . . . 16
3.7 Licenses. . . . . . . . . . . . . . . . . . . . 16
3.8 Assets. . . . . . . . . . . . . . . . . . . . 17
ARTICLE IV
ADDITIONAL INDEMNITY REPRESENTATIONS. . . . . . . 17
4.1 Organization. . . . . . . . . . . . . . . . . . 17
4.2 Ownership . . . . . . . . . . . . . . . . . . . 18
4.3 Consents; No Violation. . . . . . . . . . . . . 20
4.4 Financial Information; Undisclosed Liabilities. 21
4.5 Authority . . . . . . . . . . . . . . . . . . . 21
4.6 Absence of Certain Changes. . . . . . . . . . . 21
4.7 Compliance with Laws. . . . . . . . . . . . . . 21
4.8 Legal Proceedings . . . . . . . . . . . . . . . 22
4.9 Licenses. . . . . . . . . . . . . . . . . . . . 22
4.10 Finders; Investment Bankers . . . . . . . . . . 22
4.11 INTENTIONALLY OMITTED.. . . . . . . . . . . . . 23
4.12 Material Contracts. . . . . . . . . . . . . . . 23
4.13 Employee Benefit Plans. . . . . . . . . . . . . 23
4.14 Taxes . . . . . . . . . . . . . . . . . . . . . 26
4.15 MFJ Activities. . . . . . . . . . . . . . . . . 27
4.16 Environmental Matters . . . . . . . . . . . . . 27
4.17 Employees . . . . . . . . . . . . . . . . . . . 27
4.18 Insurance . . . . . . . . . . . . . . . . . . . 28
4.19 Acquired Entities . . . . . . . . . . . . . . . 28
4.20 INTENTIONALLY OMITTED . . . . . . . . . . . . . 28
4.21 Assets. . . . . . . . . . . . . . . . . . . . . 28
4.22 Restrictions. . . . . . . . . . . . . . . . . . 29
ARTICLE V
PRE-CELLULAR CLOSING COVENANTS . . . . . . . . 29
5.1 Interim Operations. . . . . . . . . . . . . . . 29
5.2 MFJ Activities. . . . . . . . . . . . . . . . . 32
5.3 Expenses. . . . . . . . . . . . . . . . . . . . 33
5.4 Business Relationships with Affiliates. . . . . 33
5.5 Creation of Employee Body and Benefits Plans. . 34
5.6 NYSMSA. . . . . . . . . . . . . . . . . . . . . 34
5.7 Non-Managed Systems . . . . . . . . . . . . . . 35
ARTICLE VI
ADDITIONAL COVENANTS. . . . . . . . . . . 35
6.1 Further Assurances; Cooperation . . . . . . . . 35
6.2 Access to Properties and Records. . . . . . . . 36
ARTICLE VII
CONDITIONS . . . . . . . . . . . . . 37
7.1 Conditions to the Obligations of NYNEX and Bell
Atlantic. . . . . . . . . . . . . . . . . . . 37
7.2 Conditions to the Obligations of NYNEX. . . . . 37
7.3 Conditions to the Obligations of Bell Atlantic. 38
ARTICLE VIII
INDEMNIFICATION. . . . . . . . . . . . 38
8.1 Indemnification by Bell Atlantic. . . . . . . . 38
8.2 Indemnification by NYNEX. . . . . . . . . . . . 39
8.3 Notice and Defense of Third Party Claims. . . . 40
8.4 Tax Indemnification . . . . . . . . . . . . . . 41
ARTICLE IX
TERMINATION. . . . . . . . . . . . . 42
9.1 Termination . . . . . . . . . . . . . . . . . . 42
9.2 Effect of Termination . . . . . . . . . . . . . 43
ARTICLE X
MISCELLANEOUS . . . . . . . . . . . . 43
10.1 Survival of Representations, Warranties and Agreements 43
10.2 Waiver and Amendment. . . . . . . . . . . . . . 43
10.3 APPLICABLE LAW. . . . . . . . . . . . . . . . . 43
10.4 Interpretation. . . . . . . . . . . . . . . . . 43
10.5 Notices . . . . . . . . . . . . . . . . . . . . 44
10.6 Counterparts. . . . . . . . . . . . . . . . . . 45
10.7 Severability. . . . . . . . . . . . . . . . . . 45
10.8 Parties in Interest; Assignment . . . . . . . . 45
10.9 Publicity . . . . . . . . . . . . . . . . . . . 45
10.10 No Third Party Beneficiaries. . . . . . . . . . 45
10.11 Confidentiality . . . . . . . . . . . . . . . . 46
EXHIBITS
Exhibit A - Form of Partnership Agreement
SCHEDULES
2.8 Planned Acquisitions
2.9 Capital Expenditures
2.10 Saleable Systems
2.11 POP Values
2.13 Accounting Principles, Procedures and Methods
2.14 Management Organization Committee; Affiliation
Standards
3.2 Systems and Contributions
3.4 Regulatory Approvals
3.7 Licenses
4.17 Employees
JOINT VENTURE FORMATION AGREEMENT
This Joint Venture Formation Agreement ("Agreement") is
dated as of June 29, 1994 by and between BELL ATLANTIC
CORPORATION, a Delaware corporation, on behalf of itself and its
Affiliates (as defined herein) which, from time to time, from the
date of this Agreement to the Cellular Closing Date (as
hereinafter defined) hold interests, directly or indirectly, in
Contributions (as defined herein) ("Bell Atlantic"), and NYNEX
CORPORATION, a Delaware corporation, on behalf of itself and its
Affiliates (as defined herein) which, from time to time, from the
date of this Agreement to the Cellular Closing Date hold
interests, directly or indirectly, in Contributions ("NYNEX").
NYNEX and Bell Atlantic are sometimes herein collectively referred
to as the "Parties" and individually as a "Party."
W I T N E S S E T H:
WHEREAS, Bell Atlantic and NYNEX are the direct and/or
indirect owners of interests in certain wireless
telecommunications systems in the United States set forth on
Schedule 3.2 to this Agreement (the "Systems"); and
WHEREAS, the Parties have concluded that it will be in
their best interests, and the best interests of the public, to
enter into a general partnership ("Cellco") for the purposes set
forth in the form of partnership agreement attached hereto as
Exhibit A; and
WHEREAS, the Parties have concluded that it will be in
their best interests, and the best interests of the public, to
enter into a general partnership ("PCSCO") for the purposes set
forth in the form of partnership agreement attached hereto as
Exhibit A.
NOW, THEREFORE, in consideration of the mutual covenants
and agreements set forth herein, the sufficiency of which is
hereby acknowledged, each of the parties hereby agrees as follows:
ARTICLE I
CERTAIN DEFINITIONS
1.1 Definitions. As used in this Agreement, the
following terms shall have the respective meanings set forth
below:
(a) "Acquired Entity" shall have the meaning set forth
in Section 2.8 hereof.
(b) "Adverse Proceedings" shall have the meaning set
forth in Section 6.1(b) hereof.
(c) "Affiliate" of a person shall mean any person
directly or indirectly controlling, controlled by, or under common
control with, such other person; "person" shall mean an
individual, a corporation, a limited liability company, a
partnership, an association, a trust or any other entity or
organization, including a government or political subdivision or
an agency or instrumentality thereof; and "control" shall mean
(i) the ownership of more than 50% of the voting securities or
other voting interests of another person, or (ii) the possession,
directly or indirectly, of the power to direct or cause the
direction of the management and policies of such person, whether
through the ownership of voting shares, by contract or otherwise;
provided, however, that neither of the Partnerships are affiliates
of NYNEX.
(d) "BOC" shall have the meaning set forth in Section
5.2(b) hereof.
(e) "Business Condition" shall have the meaning set
forth in Section 4.6 hereof.
(f) "Cellco" shall have the meaning set forth in the
second recital clause hereof.
(g) "Cellco Assumed Liabilities" shall mean Permitted
Liabilities which relate to Cellular Assets.
(h) "Cellco Partnership Agreement" shall mean a
partnership agreement substantially in the form of Exhibit A
hereto utilizing the variations indicated therein for Cellco.
(i) "Cellco Partner Subsidiary" shall have the meaning
set forth in Section 2.1(b) hereof.
(j) "Cellular Assets" shall have the meaning set forth
in Section 2.1(d) hereof.
(k) "Cellular Business" shall mean the business of
acquiring, developing, owning and operating businesses engaged in
the provision of public cellular radio telecommunications service
pursuant to a license or licenses issued under Subparts G and K of
Part 22 of the FCC's rules.
(l) "Cellular Closing" and "Cellular Closing Date"
shall have the respective meanings set forth in Section 2.4(b)
hereof.
(m) "Cellular Transactions" shall mean the formation of
Cellco and the contributions to Cellco by NYNEX and its
Affiliates, on the one hand, and by Bell Atlantic and its
Affiliates on the other hand, of the Contributed Partnerships,
Contributed Subsidiaries and Cellular Assets described in Section
2.1(d).
(n) "Code" shall mean the Internal Revenue Code of
1986, as amended from time to time (or any corresponding
provisions of succeeding law).
(o) "Contributed Partnerships" shall mean those
partnerships, or partnership interests in partnerships, which hold
interests in Systems listed on Schedule 3.2 hereto which are
actually included in the Cellular Contributions.
(p) "Contributed Subsidiaries" shall mean those
corporations holding interests in Systems or Cellular Assets
listed on Schedule 3.2 hereto, the capital stock of which is
actually included in the Cellular Contributions.
(q) "Contributions" shall mean, collectively, the
Cellular Contributions and the PCS Contributions of a Party;
"Cellular Contributions" shall have the meaning set forth in
Section 2.1(d) hereof and "PCS Contributions" shall have the
meaning set forth in Section 2.1(a) hereof.
(r) "Corporate General Partner" shall mean a
corporation organized jointly by the Parties to hold a general
partnership interest in Cellco.
(s) "Employees" shall have the meaning set forth in
Section 4.17 hereof.
(t) "ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended, and "Plans", "Employment
Agreements", "ERISA Plans", and "Controlled Group" shall have the
respective meanings set forth in Section 4.13 hereof.
(u) "FCC" shall mean the United States Federal
Communications Commission.
(v) "Financial Statements" shall have the meaning set
forth in Section 3.5(a) hereof.
(w) "Governmental Approvals" shall have the meaning set
forth in Section 7.1(b) hereof.
(x) "Governmental Entity" shall have the meaning set
forth in Section 3.4 hereof.
(y) "HSR Act" shall mean the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended.
(z) "Intangible Property" shall have the meaning set
forth in Section 4.2(d) hereof.
(aa) "Interest Rate" shall mean that rate of interest
described under the caption "Interest Rate" on Schedule 1(av).
(ab) "Letter Agreement" means the letter of the Parties
of even date herewith referring to this Agreement.
(ac) "Licenses" shall mean permits, licenses, waivers
and authorizations (including, without limitation, licenses from
the FCC and licenses, authorizations and certificates of public
convenience and necessity from the state regulatory commissions
listed on Schedule 3.4 hereto).
(ad) "Lien" shall mean, with respect to any asset, any
mortgage, lien, pledge, charge, security interest, claim, equity,
encumbrance, exception, restriction, reservation, condition,
limitation or interest of any kind, or any similar right of any
third party in respect of such asset. For purposes of this
Agreement, an asset shall also be deemed to be subject to a Lien
if such asset is subject to the interest of a vendor or lessor
under any conditional sale agreement, capital lease or other like
title retention agreement relating to such asset.
(ae) "Managed Cellular Business" shall mean that
portion of a Party's Cellular Contributions as to which the Party
has management authority for the conduct of its business
operations.
(af) "Managed System" shall mean any System for which a
Party has management authority over the conduct of its business
operations either as a result of a management agreement or similar
provisions, or because of its position as a controlling
shareholder or general partner when the System has no general
management arrangements with a third party.
(ag) "Me Too Waiver" shall have the meaning set forth
in Section 5.2(b) hereof.
(ah) "MFJ" shall have the meaning ascribed thereto in
the Partnership Agreements; "Decree Court" shall mean the court
having original jurisdiction over the MFJ; and "MFJ Approvals" and
"MFJ Transactions" shall have the meanings set forth in
Sections 3.4 and 5.2(a) hereof, respectively.
(ai) "MSA" shall mean Metropolitan Statistical Area,
"NECMA" shall mean New England County Metropolitan Statistical
Area "RSA" shall mean Rural Service Area, "BTA" shall mean Basic
Trading Area and "MTA" shall mean Major Trading Area, in each case
as such term is defined and modified by the FCC for licensing
purposes.
(aj) "MOC" shall have the meaning set forth in Section
2.14 hereof.
(ak) "NYSMSA" shall mean New York SMSA Limited
Partnership.
(al) "Owned POPs" with respect to a System shall mean
POPs multiplied by the percentage interest held, directly or
indirectly, by a Party as specified on Schedule 3.2.
(am) "Partner" shall mean individually any partner in
either of the Partnerships and collectively all of such Partners.
(an) "Partnership Agreements" shall mean the Cellco
Partnership Agreement and the PCSCO Partnership Agreement.
(ao) "Partnerships" shall mean Cellco and PCSCO.
(ap) "Partner Subsidiary" shall mean any direct or
indirect wholly owned subsidiary or partnership of a Party which
directly holds a partnership interest in a Partnership.
(aq) "Party" and "Parties" shall have the meaning set
forth in the Preamble to the Agreement.
(ar) "PCS Closing" and "PCS Closing Date" shall have the
respective meanings set forth in Section 2.4 hereof.
(as) "PCS Partner Subsidiary" shall have the meaning set
forth in Section 2.1(a) hereof.
(at) "PCS Transactions" shall mean the formation of
PCSCO and the contributions to PCSCO by NYNEX and its Affiliates
on the one hand, and by Bell Atlantic and its Affiliates, on the
other hand, as described in Section 2.1(a).
(au) "PCSCO Partnership Agreement" shall mean a
partnership agreement substantially in the form of Exhibit A
hereto utilizing the variations indicated therein for PCSCO.
(av) "Permitted Liabilities" shall mean (i) accounts
payable by a Party's Cellular Business invoiced within 30 days
prior to the Cellular Closing Date, (ii) liabilities under
contracts of the Cellular Business incurred in the ordinary course
of business which either arise on or after the Cellular Closing
Date or are contemplated to be transferred to Cellco pursuant to
Section 2.13, (iii) $87,000,000 of debt used to refinance debt
originally incurred in connection with the acquisition of a
portion of Bell Atlantic's Cellular Business, which shall be on
terms described in Schedule 1(av) (iv) debt, which shall be on the
terms described in Schedule 1(av), incurred or assumed by Cellco
pursuant to paragraph 2(e) of the Letter Agreement or Section 2.12
hereof and (v) liabilities assumed by Cellco pursuant to Section
2.8 hereof.
(aw) "POPs" with respect to a System shall mean the
population of the service area as set forth on Schedule 3.2.
(ax) "Regulatory Approvals" shall have the meaning set
forth in Section 3.4 hereof.
(ay) "Saleable Systems" shall have the meaning set forth
in Section 2.10.
(az) "System Assets" shall have the meaning set forth in
Section 2.1(d) hereof.
(ba) "Systems" shall have the meaning set forth in the
first recital hereof and each of the Systems is specifically named
on Schedule 3.2 hereto.
(bb) "Tax Returns" shall have the meaning set forth in
Section 4.14 hereof.
(bc) "Taxes" shall have the meaning set forth in Section
4.14 hereof.
(bd) "Transactions" shall mean the Cellular Transactions
and the PCS Transactions, collectively.
In addition to the defined terms set forth above in this
Article I, certain other capitalized terms used herein are defined
in the Exhibit and Schedules attached hereto and such definitions
are incorporated herein by reference to the extent not
inconsistent with the definitions included herein. All accounting
terms not otherwise defined herein shall have the meanings
assigned under generally accepted accounting principles from time
to time in effect.
ARTICLE II
THE TRANSACTIONS
2.1 Formation of the Partnerships. (a) At the PCS
Closing (as hereinafter defined), each of the Parties shall cause
one or more of its direct or indirect wholly owned subsidiaries or
partnerships (collectively, its "PCS Partner Subsidiary") to
execute and deliver the PCSCO Partnership Agreement and shall
contribute or cause to be contributed to PCSCO nominal amounts of
cash in proportion to their respective Percentage Interests in
PCSCO (collectively, the "PCS Contributions").
(b) At the Cellular Closing (as hereinafter defined),
each of the Parties shall cause one or more of its direct or
indirect wholly owned subsidiaries or partnerships (collectively,
its "Cellco Partner Subsidiary") and the Corporate General Partner
to execute and deliver the Cellco Partnership Agreement and shall
contribute or cause to be contributed to Cellco such Party's
Cellular Contribution (as described in Section 2.1(d)) and shall
cause the Corporate General Partner to contribute to Cellco
$10,000,000 and its note for the balance of the amount necessary
to cause its contributions to the capital of Cellco to equal 1% of
the aggregate contributions of all Partners to the capital of
Cellco.
(c) It is the agreement and intention of the Parties
that, subject to adjustment pursuant to the provisions of this
Agreement, the initial Percentage Interests and the initial ratio
of the Specified Account Values of Bell Atlantic and NYNEX, held
through their respective PCS Partner Subsidiary, Cellco Partner
Subsidiary or indirectly through the Corporate General Partner, in
each of PCSCO on the PCS Closing Date and Cellco on the Cellular
Closing Date shall be in the ratio of 62.35:37.65.
(d) With respect to each Party, "Cellular
Contributions" shall consist of all of such Party's right, title
and interest in (A) the Systems listed under such Party's name on
Schedule 3.2 and the FCC Licenses with respect thereto, whether
held directly ("System Assets") or indirectly through such Party's
Contributed Subsidiaries and Contributed Partnerships, and (B) all
other assets, rights, properties and business of such Party or its
Affiliates constituting part of, or used primarily in connection
with, such Party's Cellular Business and any and all claims which
such Party or its Affiliates may have against any person, firm,
corporation or other entity arising out of the conduct of the
Cellular Business, all of the foregoing assets described in this
clause (B), together with the System Assets, collectively the
"Cellular Assets."
Anything herein to the contrary notwithstanding, the
following assets of the Parties shall not be included in the
Contributions: (i) the stock of, or partnership interest in, the
PCS Partner Subsidiary and the Cellco Partner Subsidiary of each
of the Parties and such Party's ownership interest in the
Corporate General Partner and the corporate seals, minute books,
charter documents, corporate stock record books, and such other
books and records as pertain to the organization, existence or
share capitalization of each of the aforementioned corporations or
partnerships, (ii) any cash accounts which would otherwise be
included in the Cellular Assets, (iii) interests in Saleable
Systems (iv) the Springwich Interests (as defined in Section 2.10
hereof) or (v) any FCC paging licenses held by Bell Atlantic or
any of its Affiliates.
(e) The transfer by a Party of interests in the Systems
listed on Schedule 3.2 pursuant to this Agreement is conditioned
upon the inapplicability of such rights of first refusal as may
exist with respect to such Systems. In the event that, absent
this condition, this Agreement would constitute or be held or
deemed to constitute a sale, offer, transfer, or expression of
intent triggering such rights of first refusal, the Parties agree
that the interests in the Systems that would be the subject of
such rights of first refusal shall not be transferred or affected
in any way by this Agreement and the provisions of Sections 2.11
and 9.1(c) shall be applicable.
(f) Except in the case of rights of first refusal
governed by Section 2.1(e), to the extent that the rights of a
Party or its Affiliates under any agreement, contract, commitment,
lease, authorization or other Cellular Asset to be assigned to
Cellco hereunder may not be assigned without the consent of
another person which has not been obtained, this Agreement shall
not constitute an agreement to assign the same if an attempted
assignment would constitute a breach thereof or be unlawful. If
any such required consent shall not be obtained or if any
attempted assignment would be ineffective or would impair such
Party's, its Affiliates' or Cellco's rights under the Cellular
Asset in question so that Cellco would not in effect acquire the
benefit of all such rights, Cellco, to the maximum extent
permitted by law and the terms of the Cellular Asset, shall act
after the Cellular Closing as the agent of such Party or its
Affiliate in order to obtain for Cellco the benefits thereunder
and such Party or its Affiliate, at its expense, shall cooperate
with Cellco, to the maximum extent permitted by law and the terms
of the Cellular Asset, in any other reasonable arrangement
designed to provide such benefits to Cellco.
2.2 Liabilities Assumed by Cellco. At the Cellular
Closing, Cellco shall assume, by execution and delivery of
appropriate instruments of assumption, the Cellco Assumed
Liabilities.
2.3 NYNEX Buy-up Option. NYNEX shall have the right to
increase its Percentage Interest in both Cellco and PCSCO to up to
40.00% (taking into account the Percentage Interest held
indirectly by NYNEX through the Corporate General Partner) in
accordance with the procedures set forth in the Letter Agreement.
2.4 The Closings. (a) The closing of the PCS
Transactions (the "PCS Closing") shall take place at a time and
place to be agreed upon by the Parties on the later of the date
the PCSCO business plan is agreed to as contemplated by Section
2.14(b) hereof, or the fifth business day prior to the first date
on which persons intending to bid in an FCC auction for a
Designated MTA/BTA (as defined in the Partnership Agreement) must
file and qualify under rules promulgated by the FCC from time to
time, or on such other date as NYNEX and Bell Atlantic shall agree
upon in writing (the actual date of the PCS Closing being herein
referred to as the "PCS Closing Date").
(b) The closing of the Cellular Transactions (the
"Cellular Closing") shall take place at 10:00 A.M., local time, at
a time and place to be agreed upon by the Parties on the fifth
business day after all of the conditions set forth in Article VII
hereof have been fulfilled or waived or on such other date as
NYNEX and Bell Atlantic shall agree upon in writing (the actual
date of the Cellular Closing being herein referred to as the
"Cellular Closing Date").
2.5 Reasonable Efforts to Proceed Promptly. Each of
NYNEX and Bell Atlantic agree to use their respective reasonable
efforts to take all such action as may be necessary or appropriate
in order to effectuate the Transactions as promptly as possible.
2.6 Effect of Closing. All transactions entered into
on the PCS Closing Date and the Cellular Closing Date,
respectively, pursuant hereto, and all documents delivered at each
of such respective Closings, shall be deemed to have occurred and
to have been delivered simultaneously as of the close of business
on such applicable Closing Date.
2.7 Instruments of Transfer, Etc. At or prior to the
Cellular Closing, the Parties shall deliver, or cause to be
delivered, to Cellco, all such general warranty deeds, bills of
sale, assignments and other instruments of transfer and conveyance
as shall be necessary or appropriate to transfer to and vest in
Cellco all of such transferor's right, title and interest in and
to the assets transferred at such Closing. At or promptly after
such Closing, each Party shall put Cellco in possession of all
contracts, commitments, books, records, files and other data to be
transferred to Cellco hereunder at such Closing and shall take
such steps as may be necessary to put Cellco in actual possession
and operating control of the respective Cellular Contributions.
2.8 After-Acquired Entities. In the event that either
Party or any of its Affiliates acquires an interest in a Cellular
Business after the date of this Agreement (other than the
interests of the Party or its Affiliates listed on Schedule 3.2)
which acquisition is either (i) listed on Schedule 2.8 or (ii) is
approved by the other Party in writing prior to the Cellular
Closing, provided in each case that such acquisition is
consummated substantially in accordance with such Schedule or
approval (an "Acquired Entity"), such Acquired Entity shall be
contributed to Cellco as part of the acquiring Party's Cellular
Contribution and Cellco shall assume all liabilities of the Party
and its Affiliates with respect to such Acquired Entity (including
without limitation all liabilities related to, and are a part of,
the purchase price for such entity). The Party contributing an
Acquired Entity shall also assign to Cellco all rights of
indemnification under the acquisition agreement relating to such
Acquired Entity. For each Party, the aggregate amount of cash and
the fair value of any other property (excluding obligations
assumed by Cellco) paid or delivered by such Party or its
Affiliates in respect of the purchase price of Acquired Entities
and out-of-pocket expenses directly related to such acquisitions
shall be called its "Section 2.8 Amount."
2.9 Capital Expenditures. During the period from the
date hereof until the Cellular Closing either Party or any of its
Affiliates may make capital expenditures in respect of the Systems
or Acquired Entities being contributed to Cellco by such Party to
the extent such capital expenditures are included in the
Contributions and (i) are included in the amounts set forth on
Schedule 2.9, (ii) are approved by the other Party or (iii) amount
to less than $2,000,000 in any one instance or $10,000,000 in the
case of NYNEX, and $15,000,000 in the case of Bell Atlantic in the
aggregate. For each Party, the aggregate net book value as of the
Cellular Closing Date of all capital assets included in the
Cellular Contribution of such Party and its Affiliates which
represent capital expenditures permitted by this Section 2.9 shall
be called its "Section 2.9 Amount."
2.10 Systems Licensed in the Same Markets. Immediately
after the execution of this Agreement, the MOC (as hereinafter
defined) will determine which of the Systems listed in Schedule
2.10 will be disposed of in order to comply with FCC rules
("Saleable Systems"). In addition, the Parties agree that NYNEX
will dispose of its direct and indirect interests in Springwich
Cellular Limited Partnership (the "Springwich Interests") prior to
the Cellular Closing Date. The Parties will use their reasonable
efforts to cause such Saleable Systems and the Springwich
Interests to be marketed as a single transaction or in such other
manner as the Parties determine will be in the best interests of
Cellco and will be most tax-efficient. With respect to each of
the Saleable Systems, the Party which is the current licensee of
such Saleable System (i) shall, in conjunction with the other
Party, take all reasonable and necessary steps to conclude a
binding agreement to sell such Saleable System as promptly as
practicable at a reasonable price, (ii) shall file the necessary
applications for all Governmental Approvals required to consummate
such sale, and (iii) shall prosecute those applications diligently
and in good faith. Closing on the sale of each of the Saleable
Systems shall take place no later than the Cellular Closing Date.
Upon consummation of the sale of each Saleable System, the selling
Party shall determine in good faith the Net Proceeds from such
sale. The "Net Proceeds" means the sale price, less the directly
related out-of-pocket expenses of selling the Saleable System,
less any federal, state or local income taxes that the selling
Party (or any of its Affiliates) would be required to pay as a
result of such sale if it were subject to an effective tax rate of
40%. For each Party, the aggregate Net Proceeds from all sales of
Saleable Systems by such Party and its Affiliates shall be called
its "Section 2.10 Amount." The amount to be contributed by NYNEX
pursuant to paragraph 1 of the Letter Agreement shall be included
in NYNEX's Section 2.10 Amount. In the event the Parties
determine that an exchange of a Saleable System is in their mutual
best interest, the Parties will negotiate the terms of the
exchange and the treatment of the property received in such
exchange with a view to preserving the intended after tax
economics that apply in respect of Saleable Systems.
2.11 Failure to Contribute Systems. To the extent that
either or both of the Parties is unable to contribute any of its
interests in Systems listed on Schedule 3.2 (or, in the case of
interests in Systems that are so listed on Schedule 3.2 as under
contract but not owned, substantially equivalent POPs) on or
before the Cellular Closing Date due to regulatory or contractual
prohibitions or failure to consummate the acquisition of such
interests (a "Shortfall Party"), the Shortfall Party shall
determine the amount of cash equal to the number of its Owned POPs
in the Systems it is unable to contribute times the POP Value set
forth on Schedule 2.11 opposite the name of such Shortfall Party
(a "Failed Contribution Amount"). The Shortfall party at its
option shall then either (x) treat the Failed Contribution Amount
as part of its Section 2.11 Amount (as defined below) or (y)
suffer a reduction in its Percentage Interest and Specified
Account Value in Cellco to reflect its failure to contribute such
POPs (and suffer a corresponding reduction in its Percentage
Interest and Specified Account Value in PCSCO effected through a
distribution of cash by PCSCO to the PCSCO Partner Subsidiary of
the Shortfall Party). If the Shortfall Party elects to suffer a
reduction, its Percentage Interest and the ratio of its Cellco
Partner Subsidiary's Specified Account Value to the Specified
Account Value of all of the Cellco Partners shall be reduced to an
amount equal to (A) the total of such Party's Owned POPs as set
forth on Schedule 3.2 (whether or not such Owned POPs are included
in the Cellular Contributions) times the "Other POP Value" set
forth for such Party on Schedule 2.11 or, as to such Party's Owned
POPs in NYSMSA, the NYSMSA POP Value set forth on Schedule 2.11
less its Failed Contribution Amount over (B) the total of (i) all
Parties' Owned POPs as set forth on Schedule 3.2 (whether or not
such Owned POPs are included in the Cellular Contributions) times
the "Other POP Value" set forth for each Party on Schedule 2.11
or, as to such Party's Owned POPs in NYSMSA, the NYSMSA POP Value
set forth on Schedule 2.11 less (ii) the Failed Contribution
Amounts of all Partners not included in any Partner's Section 2.11
Amount. This Section 2.11 shall not apply in the case of any
failure to contribute interests in one or more of the Saleable
Systems or the Springwich Interests and shall be inoperative in
the event that either Party exercises any right to terminate
pursuant to Section 9.1 hereof. To the extent that any of the
Systems in which NYNEX's interest is indicated on Schedule 3.2 as
held or to be held at the Cellular Closing Date through Upstate
Cellular Network, a general partnership in which NYNEX is a 50%
partner, is included in such Party's Cellular Contributions but is
not the subject of an affiliation agreement meeting all of the
Affiliation Standards listed on Schedule 2.14 hereto, such Party
shall be deemed to be a Shortfall Party having an additional
Failed Contribution Amount with respect to such interest, provided
that (i) the Failed Contribution Amount with respect to such
interest shall be calculated by multiplying the number of Owned
POPs in such System by the percentage discount applicable to such
System calculated pursuant to Schedule 2.14, and (ii) the
aggregate of all such discounts with respect to any System shall
be limited to 30%. For each Party, the aggregate Failed
Contribution Amounts of such Party or its Affiliates shall be
called its "Section 2.11 Amount."
2.12 True-Up. Immediately prior to the Cellular
Closing, the Parties shall determine their respective Section 2.12
Amounts. The Section 2.12 Amount for each Party shall be the sum
of its Section 2.8 Amounts and Section 2.9 Amounts less the sum of
its Section 2.10 Amounts and Section 2.11 Amounts. If either of
the Section 2.12 Amount is positive, the Party whose percentage of
the total positive Section 2.12 Amount is less than its Percentage
Interest in Cellco shall cause its Cellco Partner Subsidiary to
make a contribution, in the form of a note in an amount which will
eliminate (i) the negative Section 2.12 Amount of such Party, if
any, and (ii) the percentage shortfall of such Party with respect
to the total positive Section 2.12 Amounts. If both Section 2.12
Amounts are negative, the Party whose percentage of the aggregate
negative Section 2.12 Amount is greater than its Percentage
Interest in Cellco shall cause its Cellco Partner Subsidiary to
contribute to Cellco, in the form of a note, the amount necessary
to eliminate such percentage excess.
In lieu of the Partner Subsidiary of any Party being
required to contribute a note pursuant to this Section 2.12, the
other Party may, in its sole discretion, cause its Partner
Subsidiary to transfer additional liabilities to Cellco that
relate to its Cellular Contributions such that the ratio of each
Partner Subsidiary's Specified Account Value to the Specified
Account Values of all of the Cellco Partners shall equal their
respective Percentage Interests.
Any note issued pursuant to this Section 2.12 shall bear
interest at the Interest Rate and be on such other terms and
conditions as the Parties shall agree.
2.13 Balance Sheet Adjustment and Accounts Receivable
Guarantee. (a) Prior to the Cellular Closing, the Parties will
adjust the balance sheets of the Cellular Business of NYNEX and
its Affiliates and the Cellular Business of Bell Atlantic and its
Affiliates in accordance with the accounting principles, practices
and methods set forth on Schedule 2.13 hereto.
(b) Within 200 days following the Cellular Closing
Date, Cellco shall advise each Party in writing of the collection
experience of accounts receivable included as part of such Party's
Cellular Contributions and of the extent to which such accounts
receivable that remained uncollected as of the 180th day after the
Cellular Closing Date exceeded, or were exceeded by, the sum of
(i) reserves for uncollectible accounts receivable and (ii)
reserves for fraud, in each case included on the books of such
Party's Cellular Contributions on the Cellular Closing Date, as
adjusted pursuant to Section 2.13(a). Within ten days following
receipt of such notice, (x) to the extent that a Party's
uncollected accounts receivable exceeded such reserves, such Party
shall pay to Cellco the amount of such excess and (y) to the
extent that the aforementioned reserves exceeded such uncollected
accounts receivable, the amount of any excess reserves shall be
returned in cash to such Party.
2.14 Interim Management. (a) The Parties hereby
constitute and appoint a Management Organization Committee (the
"MOC") which shall have the responsibilities and membership set
forth on Schedule 2.14 hereto.
(b) The Parties agree that they shall cooperate in the
preparation of initial business plans and budgets for PCSCO and
Cellco and to use their reasonable efforts to cause such business
plans and budgets to be submitted to the MOC by August 1, 1994 in
the case of the PCSCO business plan and budget and by September 1,
1994, in the case of the Cellco business plan and budget.
(c) The terms of any affiliation agreement to be
entered into by Cellco or PCSCO and any System or Acquired Entity
shall be substantially in accordance with the provisions of
Schedule 2.14 or as otherwise determined by the MOC.
(d) For the period from the date hereof until the
Cellular Closing, any expenses which are both (i) incurred by the
Parties in connection with the formation of Cellco and (ii)
specifically approved by the MOC, shall be borne ratably by the
Parties in accordance with their Percentage Interests in Cellco on
the Cellular Closing Date.
2.15 Restructuring. Prior to the Cellular Closing,
each of the Parties shall use their reasonable efforts to effect a
restructuring to make available to Cellco its Cellular
Contributions in the form of direct ownership of assets or
partnership interests rather than shares of capital stock of
corporations.
2.16 The Corporate General Partner. (a) It is the
intention of the Parties that they will own interests in Cellco
and PCSCO through direct or indirect wholly-owned subsidiary
entities or, in the case of Cellco, as above and indirectly
through the Corporate General Partner, a corporation to be
incorporated in Delaware, the outstanding common equity of which
will be held by all of the Partners.
(b) The Corporate General Partner will hold 1% of the
equity interests in Cellco. The equity interests of the Corporate
General Partner will initially be held by the Parties in the same
proportion as their initial Percentage Interests set forth in
Section 2.1(c), as such initial Percentage Interests may be
adjusted as a result of the NYNEX Election (as defined in the
Letter Agreement). The Corporate General Partner will have an
initial capitalization of $10 million, which amount will be paid
by the Parties ratably in accordance with their respective
percentage equity interests in the Corporate General Partner.
(c) The management and corporate governance principles
and procedures for the Corporate General Partner shall be
substantially identical to those applicable to PCSCO, as set forth
in Section 5.1 of the PCSCO Partnership Agreement, and the
provisions of such Section 5.1 shall be set forth, as nearly as
practicable under applicable laws, in the Certificate of
Incorporation and By-Laws of the Corporate General Partner and in
an agreement among shareholders.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF NYNEX AND BELL ATLANTIC
Bell Atlantic represents and warrants to NYNEX, and
NYNEX represents and warrants to Bell Atlantic, that with respect
to itself, the following statements are true and correct as of the
date hereof and will be true and correct as of the date of the
Cellular Closing as if made on and as of such date.
3.1 Organization. Such Party is a corporation duly
organized, validly existing and in good standing under the laws of
its jurisdiction of incorporation, and has the requisite corporate
power and authority to own, lease and operate its properties and
to carry on its business as it is now being conducted.
3.2 Interests in Systems. Schedule 3.2 accurately sets
forth for each System in which such Party or its Affiliates have
an interest (i) the name of the market, (ii) the name of the
entity holding the FCC License covering the provision of cellular
service in such market, (iii) the number of POPs in such market,
(iv) the direct or indirect percentage interest of the Party or
its Affiliates in the entity holding such FCC License, indicating
which interests are not currently owned but are subject to a
binding agreement giving the Party or its Affiliates the right to
acquire such interest, and (v) the Owned POPs in such market.
3.3 Authority. Such Party has the requisite power and
authority to execute and deliver this Agreement and to consummate
the Transactions, and such execution, delivery and consummation
have been duly authorized by all necessary corporate action. This
Agreement has been duly executed and delivered by such Party and
constitutes the valid and binding obligation thereof, enforceable
against such Party in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy,
reorganization, insolvency and similar federal and state laws
generally affecting the rights and remedies of creditors and
general principles of equity, whether considered in a proceeding
at law or in equity.
3.4 Consents. Neither the execution and delivery of
this Agreement by such Party nor the consummation of the
Transactions will require any consent, approval, or authorization
of, waiver by, notification to, or filing with, any court,
governmental agency or regulatory or administrative authority
(each, a "Governmental Entity") on the part of such Party or any
of its Affiliates (including, without limitation, any of its
Contributed Subsidiaries, or any of its Contributed Partnerships)
other than (i) the filing of certificates and other documents with
respect to the Transactions in accordance with the partnership
laws of the states in which the such Contributed Partnerships are
organized; (ii) approvals required by the FCC and the state
regulatory commissions listed on Schedule 3.4 hereto necessary to
effectuate the Transactions (the foregoing being hereinafter
referred to as the "Regulatory Approvals"); (iii) approvals
required by the Decree Court with respect to the MFJ necessary to
effectuate the Transactions (the foregoing being hereinafter
referred to as the "MFJ Approvals"); and (iv) filings with respect
to the Transactions under the HSR Act.
3.5 Financial Information. (a) Such Party has
delivered to the other Party complete and correct copies of the
following financial statements of such Party's Cellular Business:
(x) unaudited balance sheets as of December 31, 1992 and 1993 and
related statements of income and cash flows for each of the fiscal
years then ended, (y) interim statements of income and cash flows
for the three month periods ended March 31, 1993 and 1994 and the
interim balance sheets as of such dates. The year-end and interim
financial statements being delivered by NYNEX and Bell Atlantic
are collectively referred to herein as the "Financial Statements".
(b) All of such Party's Financial Statements are in
accordance with the books and records of such Party's Cellular
Business, present fairly the financial position, results of
operations and cash flows of such Party's Cellular Business as of
the dates and for the periods indicated, subject in the case of
the Financial Statements at and for the periods ended March 31,
1993 and 1994, to normal year-end adjustments. The Financial
Statements of such Party have been prepared in conformity with
generally accepted accounting principles applied on a consistent
basis throughout the periods specified, except for the lack of
explanatory footnote disclosures required by generally accepted
accounting principles. Such Party and its Cellular Business have
in place a system of financial controls designed and adequate for
the purpose of giving substantial protection against fraud,
misstatement of financial position or results of operations or
loss of cash or assets.
3.6 Compliance with Laws. Neither such Party nor any
of its Affiliates is in violation of any decree, order, judgment,
statute, rule or regulation so as to materially adversely affect,
individually or in the aggregate, the Business Condition (as
defined in Section 4.6 below) of such Party's Cellular Business,
or the ability of such Party to consummate the Transactions or the
ability to conduct its Cellular Business as it is currently being
conducted.
3.7 Licenses. Except as set forth on Schedule 3.7,
such Party's Cellular Business has Licenses which are necessary
for it to conduct its respective wireless operations in the manner
in which they are presently being conducted, other than any
Licenses, the failure of which to hold would not, singly or in the
aggregate, have an adverse effect on the Business Condition of
such Party's Cellular Business. Except as set forth on Schedule
3.7, all of the FCC and state Licenses held by such Party's
Cellular Business are valid and in full force and effect. Except
as set forth on Schedule 3.7, no event has occurred with respect
to the Licenses which is likely to result in, or after notice or
lapse of time or both would be likely to result in, revocation,
termination or non-renewal thereof or would result in any other
material impairment of the rights of the holder of any of the
Licenses, which would result in a material adverse effect on the
Business Condition of such Party's Cellular Business. Except as
set forth on Schedule 3.7, there are no facts which would prevent
the Licenses from being renewed in accordance with FCC rules and
regulations or constructed and put into commercial service within
the applicable time period. As used in this Section 3.7, the term
Licenses does not include waivers of the MFJ. Following the
Cellular Closing, Cellco will have the right and ability to
conduct the business of such Party's Cellular Business in the same
manner in all material respects in which it is operated prior to
the Cellular Closing. The provisions of this Section are
qualified in their entirety by the understanding of the Parties
that the Saleable Systems and the Springwich Interests will not be
included in the Cellular Contributions of the Parties and that the
Licenses in respect thereof would not be assignable to Cellco
because of the overlaps that exist between the Saleable Systems
and the Springwich Interests, on the one hand, and other
properties of the Partners to be included in the Cellular
Contributions on the other.
3.8 Assets. Other than Saleable Systems and the
Springwich Interests and assets whose non-contribution is
addressed pursuant to Section 2.11 hereof, such Party's
Contributions include all rights and property necessary to the
conduct of such Party's Cellular Business by Cellco in the manner
in which it is presently conducted by such Party and no property
excluded from such Party's Contribution under the last paragraph
of Section 2.1(d) hereof constitutes property or rights material
to such Party's Cellular Business.
ARTICLE IV
ADDITIONAL INDEMNITY REPRESENTATIONS
If the Cellular Closing is consummated, Bell Atlantic
agrees to indemnify NYNEX and Cellco, and NYNEX agrees to
indemnify Bell Atlantic and Cellco, pursuant to Article VIII
hereof to the extent that the following statements are not true
and correct as of the Cellular Closing Date with respect to itself
and its Cellular Contributions as if made on and as of the
Cellular Closing Date.
4.1 Organization. (a) Each of such Party, its Partner
Subsidiary (if a corporation) and its Contributed Subsidiaries is
a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation, and
has the requisite corporate power and authority to own, lease and
operate its properties and to carry on its business as it is now
being conducted. Each of such Party, its Partner Subsidiary (if a
corporation) and its Contributed Subsidiaries is duly qualified or
licensed to do business and is in good standing as a foreign
corporation in the jurisdictions in which such corporations own or
lease any real property or conduct any business, so as to require
such qualification or licensing. Each of such Party's Partner
Subsidiary and Contributed Subsidiaries is a wholly-owned, direct
or indirect subsidiary of such Party. All of the issued shares of
capital stock of each of such Party's Contributed Subsidiaries are
outstanding and are validly issued, fully paid, nonassessable and
free of pre-emptive rights.
(b) Each of such Party's Cellco Partner Subsidiary (if
a partnership) and Contributed Partnerships is duly organized,
validly existing and in good standing under the jurisdiction of
its organization, and has the requisite power and authority to
own, lease and operate its properties and to carry on its business
as it is now being conducted. The partnership agreements and each
of the other agreements among the partners in such Cellco Partner
Subsidiary (if a partnership) and Contributed Partnership
(including but not limited to loan agreements, pledge agreements,
management agreements and reseller agreements, as amended to
date), are in full force and effect.
(c) The minute books of each of such Party's Cellco
Partner Subsidiary, Contributed Subsidiaries and Contributed
Partnerships contain accurate records of all meetings and consents
in lieu of meetings of the Board of Directors or similar body and
any committee of the Board of Directors or similar body purporting
to take formal corporate or partnership action in lieu of action
by the Board of Directors, and of the stockholders or partners
thereof, through the Cellular Closing Date and accurately reflect
all transactions and other matters which are required to be passed
upon by the Board of Directors or similar body, any committees
thereof or the stockholders or partners thereof.
(d) There are no outstanding options, warrants, rights,
calls, subscriptions, commitments or agreements of any character
whatsoever relating to, or calling for the issuance, transfer,
sale or other disposition of, or the repurchase or other
acquisition of, any shares, issued or unissued, of capital stock
or other voting interests of any of such Party's Cellco Partner
Subsidiary or Contributed Subsidiaries or of such Party's direct
or indirect interest in any of the Contributed Partnerships or
any securities convertible or exchangeable into or for any of the
foregoing, to which such Party or any Affiliate thereof or any of
the Contributed Partnerships is a party or by which any of them is
bound.
(e) None of such Party's Cellco Partner Subsidiary or
any of its Contributed Subsidiaries or Contributed Partnerships
has any subsidiaries or owns any interests in any other person
except as expressly set forth in this Agreement and the Schedules
hereto and none of such entities engages in any business other
than the ownership of interests in, and the operation of, the
Systems listed under the name of such Party on Schedule 3.2
hereto.
4.2 Ownership. (a) Such Party directly or indirectly
owns all of the interests in Systems listed under its name on
Schedule 3.2 hereto, subject to the provisions of Section 2.11.
(b) Each piece of real property (i) owned by each of
the Contributed Subsidiaries and each of the Contributed
Partnerships of such Party, or by such Party or an Affiliate in
the case of real property which is a Cellular Asset or
(ii) occupied by or leased to any of such Contributed Subsidiaries
or Contributed Partnerships or to such Party or an Affiliate in
the case of leased real property which is a Cellular Asset under
any lease, sublease or other arrangement, and all buildings and
other structures located on such real property (for purposes of
this Section 4.2(b), collectively "Real Property") has all
material permits necessary to conduct the activity conducted at
such Real Property on the date hereof. Each of such Party, its
Affiliates, its Contributed Subsidiaries and Contributed
Partnerships has title as represented in current title insurance
policies for all Real Property owned by it, which policies do not
contain any exceptions the effect of which would materially
detract from the value of such Real Property to Cellco or the
System to which it relates. Such Party or one of its Affiliates,
Contributed Subsidiaries or Contributed Partnerships holds the
rights in and to all easements or other rights reasonably
necessary for access to all Real Property unless otherwise
indicated in such title policies. There is no unrecorded defect
in title which would materially adversely affect the use or value
of any of the Real Property for the maintenance and operation of a
cellular system or a communications facility related thereto. All
leases, subleases and other arrangements relating to Real Property
are in full force and effect. Neither such Party, its Affiliates
nor any of its Contributed Subsidiaries or Contributed
Partnerships has given or received notice to the effect that there
exists (i) any default or event of default by such Party or any of
its Affiliates, Contributed Subsidiaries or Contributed
Partnerships under any of such instruments, or (ii) any event or
condition which with notice or lapse of time or both would
constitute an event of default thereunder by such Party or any of
its Affiliates, Contributed Subsidiaries or Contributed
Partnership.
(c) Good and marketable title to all tangible personal
property used in connection with the Systems included in such
Party's Cellular Contribution is being transferred to Cellco, or
such tangible personal property is used or held subject to leases,
conditional sale contracts, franchises or licenses which are in
good standing and are valid and in full force and effect and there
are no facts which would interfere with Cellco's ability to use
such tangible personal property in connection with such Party's
Cellular Contribution. During the past three years there has not
been any significant interruption of the operations of any System
in which such Party is contributing an interest due to breakdown
or inadequate maintenance of its tangible personal property.
(d) All trade names, registered and unregistered
trademarks and service marks and all patents and copyrights
("Intangible Property") will be transferred or licensed to Cellco
and will be usable by Cellco in the conduct of its business on the
same terms as such Intangible Property is currently being used by
such Party and its Affiliates in the conduct of its Cellular
Business. Neither such Party nor any of its Affiliates,
Contributed Subsidiaries or Contributed Partnerships has, during
the period commencing three years prior to the Cellular Closing
Date, been charged with any infringement with respect to any of
the Intangible Property or been notified or advised of any claim
of any other person relating to any of the Intangible Property or
any confidential information of any of such Party, its Affiliates,
its Contributed Subsidiaries or its Contributed Partnerships
relating to its Cellular Business, and there are not any facts
that are likely to give rise to any charge or claim that would
adversely affect the right of Cellco to use any Intangible
Property. Such Party's Cellular Business is the licensee or the
sole and exclusive owner of such Intangible Property of all
patents and registered trade names, trademarks and service marks
included in Intangible Property and does not use any Intangible
Property by consent of any other person (other than licensors
pursuant to valid written license agreements).
4.3 Consents; No Violation. Neither the execution and
delivery of this Agreement by such Party nor the consummation of
the Transactions will (a) conflict with, or result in any breach
or violation of, any provision of the certificate of incorporation
or bylaws of such Party or any of its Contributed Subsidiaries or
of any partnership agreement of any of its Contributed
Partnerships; (b) except as set forth on Schedule 3.4 and assuming
the expiration of all applicable waiting periods under the HSR
Act, constitute, with or without notice or the passage of time or
both, a breach, violation or default, create a Lien, or give rise
to any right of termination, modification, cancellation,
prepayment or acceleration, under any order, writ, injunction,
decree, law, statute, rule or regulation, governmental permit or
license, or any mortgage, indenture, lease, agreement or other
instrument of such Party or of any of its Contributed Subsidiaries
or Contributed Partnerships or to which such Party, any of its
Contributed Subsidiaries or any of its Contributed Partnerships or
any of their respective properties is subject; (c) require any
consent, approval, or authorization of, waiver by, notification
to, or filing with, any Governmental Entity on the part of such
Party, any of its Contributed Subsidiaries, or any of its
Contributed Partnerships other than (i) the filing of certificates
and other documents with respect to the Transactions in accordance
with the partnership laws of the states in which the such
Contributed Partnerships are organized; (ii) Regulatory Approvals;
(iii) MFJ Approvals; and (iv) filings with respect to the
Transactions under the HSR Act. The representation and warranty
set forth in this Section 4.3 will not be violated by the
existence of any inhibition to the contribution of an interest in
Systems which failure to contribute is resolved pursuant to
Section 2.11.
4.4 Financial Information; Undisclosed Liabilities.
(a) Such Party's Cellular Business does not have any liabilities
or obligations of any nature (due or to become due, absolute,
accrued, contingent or otherwise), except for Permitted
Liabilities.
(b) There is no roaming subsidy of such Party's
Cellular Business that has not been expensed prior to the Cellular
Closing Date.
4.5 Authority. Such Party has the requisite power and
authority to execute and deliver this Agreement and to consummate
the Transactions, and such execution, delivery and consummation
have been duly authorized by all necessary corporate action. This
Agreement has been duly executed and delivered by such Party and
constitutes the valid and binding obligation thereof, enforceable
against such Party in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy,
reorganization, insolvency and similar federal and state laws
generally affecting the rights and remedies of creditors and
general principles of equity, whether considered in a proceeding
at law or in equity.
4.6 Absence of Certain Changes. Since March 31, 1994,
except as expressly contemplated by this Agreement or the
Transactions, and except for changes resulting from general
cellular industry conditions or as a result of a regulatory
development affecting the cellular industry generally, (a) such
Party's Cellular Business, Contributed Subsidiaries and
Contributed Partnerships and the Systems in which such entities
have an interest have conducted business only in the ordinary and
usual course and consistent with past practices, strategies and
programs; and (b) none of such Cellular Business, Contributed
Subsidiaries, Partnerships or Systems have undergone or suffered
any change in their business, financial condition, assets,
liabilities or results of operations ("Business Condition") which
has been, individually or in the aggregate, materially adverse to
any of such Cellular Business, Contributed Subsidiaries,
Contributed Partnerships and Systems, or the ability of such Party
to consummate the Transactions or the ability of each of such
Cellular Business, Contributed Subsidiaries, Contributed
Partnerships and Systems to conduct its respective business as it
is currently being conducted.
4.7 Compliance with Laws. Neither such Party nor any
of its Affiliates is in violation of any decree, order, judgment,
statute, rule or regulation so as to materially adversely affect,
individually or in the aggregate, the Business Condition of any of
such Party's Cellular Business or the ability of such Party to
consummate the Transactions or the ability to conduct such Party's
Cellular Business as it is currently being conducted.
4.8 Legal Proceedings. There is no litigation,
proceeding or governmental investigation pending or, to the best
of such Party's knowledge, threatened, against such Party, any of
its Contributed Subsidiaries or Contributed Partnerships or any of
their respective properties or businesses or any of their
respective assets which, if decided adversely, would have a
material adverse effect on the Business Condition of any of such
Party's Cellular Business, Contributed Subsidiaries or Contributed
Partnerships or any of the Systems in which such Party is
contributing an interest or on the ability of any of such Cellular
Business, Contributed Subsidiaries, Contributed Partnerships and
Systems to conduct their businesses in the same manner in all
material respects in which they are operated prior to the Cellular
Closing or on the ability of such Party to consummate the
Transactions.
4.9 Licenses. Except as set forth on Schedule 3.7,
such Party's Cellular Business has Licenses which are necessary
for it to conduct its respective wireless operations in the manner
in which they are presently being conducted, other than any
Licenses, the failure of which to hold would not, singly or in the
aggregate, have an adverse effect on the Business Condition of
such Party's Cellular Business. Except as set forth on Schedule
3.7, all of the FCC and state Licenses held by such Party's
Cellular Business are valid and in full force and effect. Except
as set forth on Schedule 3.7, no event has occurred with respect
to the Licenses which is likely to result in, or after notice or
lapse of time or both would be likely to result in, revocation,
termination or non-renewal thereof or would result in any other
material impairment of the rights of the holder of any of the
Licenses, which would result in a material adverse effect on the
Business Condition of such Party's Cellular Business. Except as
set forth on Schedule 3.7, there are no facts which would prevent
the Licenses from being renewed in accordance with FCC rules and
regulations or constructed and put into commercial service within
the applicable time period. As used in this Section 4.9, the term
Licenses does not include waivers of the MFJ. Following the
Cellular Closing, Cellco will have the right and ability to
conduct the business of such Party's Cellular Business in the same
manner in all material respects in which it is operated prior to
the Cellular Closing. The provisions of this Section are
qualified in their entirety by the understanding of the Parties
that the Saleable Systems and the Springwich Interests will not be
included in the Cellular Contributions of the Parties and that the
Licenses in respect thereof would not be assignable to Cellco
because of the overlaps that exist between the Saleable Systems
and the Springwich Interests, on the one hand, and other
properties of the Partners to be included in the Cellular
Contributions on the other.
4.10 Finders; Investment Bankers. None of such Party
or any of its Affiliates, or any of their respective officers or
directors, has employed any broker, finder or investment banker or
incurred any liability for any brokerage fees, commissions or
finder's fees in connection with the Transactions which would be a
liability of any of PCSCO, Cellco, the Contributed Subsidiaries or
the Contributed Partnerships.
4.11 INTENTIONALLY OMITTED.
4.12 Material Contracts. All contracts to which any of
such Party's Contributed Subsidiaries or any of its Contributed
Partnerships is a party or which constitute Cellular Assets which
are material to any of such Contributed Subsidiaries or
Contributed Partnerships or the Cellular Business or any of the
Systems in which an interest is being contributed by such Party,
including all agency agreements, roaming agreements, agreements
with other cellular carriers with respect to national accounts and
price and billing agreements to which any of such entities are a
party are valid and binding in accordance with their terms.
Neither such Party nor any of its Affiliates, Contributed
Subsidiaries or Contributed Partnerships has given or received
notice that there exists (i) any default or event of default by
any of such entities under any of such contracts or (ii) any event
or condition which with notice or lapse of time or both would
constitute an event of default under any of such contracts, and,
none of such contracts will be materially adversely affected by
the execution and delivery of this Agreement or the consummation
of the Transactions.
4.13 Employee Benefit Plans. (a) Each material
"employee pension benefit plan," as that term is defined in
Section 3(2) of ERISA and each material "employee welfare benefit
plan," as that term is defined in Section 3(1) of ERISA is
hereinafter referred to as an "ERISA Plan" and collectively as
"ERISA Plans", and all other material retirement, pension, profit-
sharing, money purchase, deferred compensation, incentive
compensation, bonus, stock option, stock purchase, severance pay,
unemployment benefit, vacation pay, savings, medical, dental,
post-retirement medical, accident, disability, weekly income,
salary continuation, health, life or other insurance, fringe
benefit, or other material employee benefit plans, programs,
agreements, or arrangements, whether or not subject to ERISA,
whether oral or written, under which any Employee (as defined in
Section 4.17) has any present or future right to benefits or under
which any of the Contributed Subsidiaries or any of the
Partnerships has any present or future liability together with the
ERISA Plans, are referred to hereinafter as the "Plans". Material
employment, severance, termination or similar-type agreements
covering any Employee are referred to as the "Employment
Agreements" and also as "Plans".
(b) The execution and delivery of this Agreement by
each Party and the performance of this Agreement by such Party and
its Affiliates, including the Transactions, will not, by itself,
result now or at any time in the future in the payment by PCSCO or
Cellco to any Employee of any severance, termination or similar
type payments or benefits (other than benefits under Code
Section 4980B).
(c) Each Plan may be terminated without material
liability to PCSCO or Cellco (other than those liabilities (i) for
which specific assets have been set aside in a trust or other
funding vehicle or (ii) disclosed on the Financial Statements to
the extent required by Section 4.4 hereof).
(d) (i) No Party or any of its Affiliates, any of the
ERISA Plans, any trust created thereunder, or any trustee or
administrator thereof, or any other party, has engaged in any
transaction as a result of which any of the Contributed
Subsidiaries, any of the Partnerships or either Party could
reasonably be expected to be subject to any liability pursuant to
Section 409 of ERISA or either to a civil penalty assessed
pursuant to Section 502(i) of ERISA or to a tax imposed pursuant
to Code Section 4975.
(ii) Since the effective date of ERISA, no liability
under Title IV of ERISA has been incurred or is reasonably
expected to be incurred by any Contributed Subsidiary or any
Partnership (other than liability for premiums due to the PBGC),
either directly or by reason of its affiliation with any member of
its controlled group (defined as any organization which is a
member of a controlled group of organizations within the meaning
of Code Section 414) ("Controlled Group"), unless, where permitted
by law, such liability is reserved for or otherwise reflected on
the Financial Statements or unless such liability has been
satisfied in full.
(iii) All contributions required to be made to the
Plans prior to the Cellular Closing Date under the terms of any
Plan, the Code, ERISA or other applicable law have been or will be
timely made.
(e) Except with respect to those ERISA Plans which are
"multiemployer plans":
(i) no member of such Party's Controlled Group has
engaged in a transaction which could subject it to liability under
ERISA Section 4069;
(ii) as of the Cellular Closing Date, each member of
such Party's Controlled Group has made or will have made all
required premium payments when due to the PBGC;
(iii) no member of such Party's Controlled Group has
incurred an "accumulated funding deficiency" (as defined in ERISA
Section 302 and Code Section 412), whether or not waived;
(iv) no event or condition exists (other than the
transactions contemplated by this Agreement) which could
reasonably be deemed a reportable event within the meaning of
ERISA Section 4043 which could reasonably be expected to result in
a liability to any member of such Party's Controlled Group and no
condition exists which could reasonably be expected to subject any
such member of such Party's Controlled Group to a fine under ERISA
Section 4071;
(v) each Plan has been established and administered in
all material respects in accordance with its provisions, and with
all applicable laws; and
(vi) each Plan (to the extent such Plan or the assets
and liabilities thereof will be transferred to PCSCO or Cellco)
that is intended to be "qualified" within the meaning of Code
Section 401(a), and to the extent applicable, Code Section 401(k),
is so qualified, has been determined by the Internal Revenue
Service to be so qualified, and nothing has occurred, whether by
action or failure to act, that would adversely affect the
qualified status of any such Plans.
(f) With respect to any ERISA Plans which are
multiemployer plans (as that term is defined in ERISA
Section 4001(a)(3)) to which any member of such Party's Controlled
Group has any liability or contributes (or has at any time
contributed or had an obligation to contribute):
(i) each member of such Party's Controlled Group has or
will have, as of the Cellular Closing Date, made all required
contributions to each such multiemployer plan,
(ii) no member of such Party's Controlled Group has
incurred a "complete withdrawal" or a "partial withdrawal," as
such terms are respectively defined in ERISA Sections 4203 and
4205, nor would any member of such Party's Controlled Group be
subject to any liability under Title IV of ERISA, if, as of the
Cellular Closing Date, any of such Party's Controlled Group were
to engage in such a complete or partial withdrawal from any such
multiemployer plan;
(iii) no such multiemployer plan is in reorganization
or insolvent (as those terms are defined in ERISA Sections 4241
and 4245, respectively); and
(iv) no member of such Party's Controlled Group has
engaged in a transaction which could subject it to liability under
ERISA Section 4212(c).
4.14 Taxes. Each of the Parties and the Partners (and
their respective Affiliates) has duly filed, or has obtained a
filing extension from the appropriate federal, state, local and
foreign governments or governmental agencies with respect to, all
returns and reports required to be filed by such person on or
prior to the Cellular Closing Date ("Tax Returns") for all Taxes
which if unpaid might result in a lien (or similar encumbrance)
upon any of the Contributions or upon Cellco. For purposes of
this Agreement, the term "Tax" or "Taxes" shall mean federal,
state, local or foreign income, capital gains, profits, gross
receipts, payroll, capital stock, franchise, employment,
withholding, social security, unemployment, disability, real
property, personal property, stamp, excise, occupation, sales,
use, transfer, mining, value added, investment credit recapture,
alternative or add-on minimum, severance, environmental, estimated
or other taxes, duties or assessments of any kind, including any
interest, penalty and additions imposed with respect to such
amounts. Payment in full for the payment of all Taxes shown to be
due on such Tax Returns, which if unpaid might result in a lien or
similar encumbrance upon any of the Contributions or upon Cellco,
has been made. All written assessments of Taxes due and payable
by, on behalf of or with respect to any of the Parties and the
Partners (or any of their respective Affiliates) or their
respective Contributions, which if unpaid might result in a lien
or similar encumbrance upon any of the Contributions or upon
Cellco, have been paid by such Party, or are being contested in
good faith by appropriate proceedings, in which case all amounts
owing after such contest shall be promptly paid by such person.
There are no tax liens on any Contributions of any Partner that
arose in connection with any failure (or alleged failure) to pay
any Tax, except for liens for current taxes not yet due and
payable. All amounts required to be withheld by each of the
Parties or the Partners (or any of their respective Affiliates)
from their respective employees for income taxes, social security
and other payroll taxes have been collected and withheld, and have
either been paid to the respective governmental agencies, set
aside in accounts for such purpose, or accrued, reserved against
and entered upon the books and records of the employer by such
person. Each Party shall cause all tax sharing agreements between
Contributed Subsidiaries and the Partners or their Affiliates to
terminate upon the Cellular Closing Date and no further payments
shall be made under or in respect of such agreements; provided,
however, that if the tax sharing agreement between a Party (or any
Affiliate) and a Contributed Subsidiary did not provide for
payments made on a quarterly basis with respect to estimated
income taxes (or if there is no such agreement), then such
Contributed Subsidiary shall make a payment to or receive payment
from its related Party equal to the amount with respect to the
taxable period ending on the Cellular Closing Date which would
have been paid by or to such Contributed Subsidiary had there been
a tax sharing agreement that provided for such quarterly estimated
payments.
4.15 MFJ Activities. Neither Party has any activities
which any of such Party's Contributed Subsidiaries or Contributed
Partnerships, or any of the Systems in which an interest is being
contributed by such Party, directly or indirectly engages or
participates in, alone or with any individual or entity, whether
as a principal, agent, reseller, representative, consultant or
independent contractor, activities which are prohibited by the
MFJ.
4.16 Environmental Matters. Each of such Party's
Cellular Business, Contributed Subsidiaries and Contributed
Partnerships and each of the Systems operated by any of them is in
material compliance with all applicable laws and regulations
related to the environment, health and safety, all required
permits from Governmental Entities have been obtained and are in
effect, and no on-site storage, treatment or disposal of hazardous
waste or material has been made (except in compliance with
applicable laws and regulations) in connection with any of such
Systems. There are no pending actions, proceedings, or notices of
potential action and there are no facts that would reasonably be
expected to lead to actions, proceedings, or notices of potential
action from any governmental agency regarding the condition of any
of such Systems under environmental, health or safety laws. Such
Party's Cellular Business has lawfully disposed of the waste
generated by the businesses associated with its Systems and no
pending or threatened proceedings exist concerning disposal of
waste generated by the businesses associated with any of such
Systems. There are no underground storage tanks, PCBs, asbestos,
radon gas, harmful nuclear radiation, or hazardous wastes present
on the properties of such Party's Cellular Business.
4.17 Employees. (a) Employees employed with respect
to the Cellular Businesses shall be hereinafter referred to as the
"Employees". For purposes of the preceding sentence, Employees
shall include employees on worker's compensation, military leave,
other approved leaves of absence, short-term and long-term
disability, non-occupational disability and employees on layoff
with recall rights. Except as set forth in Schedule 4.17, none of
the Contributed Subsidiaries or Contributed Partnerships of such
Party has any outstanding commitment or agreement to effect any
general wage or salary increase which covers all of the Employees
for, or to modify in any material respect the conditions or terms
of employment of, any grade, class or group of its employees,
consultants or agents. There are no controversies pending or, to
the knowledge of such Party or any of the Contributed Subsidiaries
or Contributed Partnerships of such Party, threatened, between any
of the Contributed Subsidiaries or the Contributed Partnerships of
such Party and any of the Employees which individually or in the
aggregate may have a material adverse effect on such entity.
Except as set forth on Schedule 4.17 hereto, none of the
Contributed Subsidiaries or the Contributed Partnerships of such
Party is a party to any collective bargaining agreement or other
labor union contract applicable to any of the Employees, nor does
any such entity know of any activities or proceedings of any labor
union to organize any of the Employees.
(b) There exists no employment, consulting, severance
or indemnification agreement between any of such Contributed
Subsidiaries or Contributed Partnerships and any current or past
director, officer or Employee thereof.
4.18 Insurance. The properties and the conduct of the
respective businesses of such Party's Cellular Business are
adequately insured (in the manner and to the extent customary for
businesses engaged in the same or similar business) by financially
sound and reputable insurers, all of which are unaffiliated with
such Party or are self-insured by such Party.
4.19 Acquired Entities. To the extent that either
Party includes Acquired Entities as part of its Cellular
Contribution, such Party agrees that the statements made by such
Party in this Article IV with respect to such Party's Contributed
Subsidiaries and Contributed Partnerships are made by such Party
with respect to its Acquired Entities, as appropriate, subject to
the following provisions:
(i) the statements shall be deemed made
as of the Cellular Closing Date and shall not
be deemed untrue as a result of events
occurring before or states of fact existing
on, the date such Party acquired such Acquired
Entity; and
(ii) any schedules or other information
relating to such Acquired Entity recited in
this Agreement as having been delivered on or
before the date of this Agreement shall be
delivered by such Party on the earlier of (x)
the 30th day following the acquisition of the
Acquired Entity or (y) the Cellular Closing
Date.
4.20 INTENTIONALLY OMITTED.
4.21 Assets. Other than Saleable Systems, the
Springwich Interests and assets whose non-contribution is
addressed pursuant to Section 2.11 hereof, such Party's
Contributions include all rights and property necessary to the
conduct of such Party's Cellular Business by Cellco in the manner
in which it is presently conducted by such Party and no property
excluded from such Party's Contribution under the last paragraph
of Section 2.1(d) hereof constitutes property or rights material
to such Party's Cellular Business.
4.22 Restrictions. Neither such Party nor its
Contributed Partnerships and Contributed Subsidiaries is a party
to any indenture, agreement, contract, commitment, lease, plan,
license, permit, authorization or other instrument, document or
understanding, oral or written, or subject to any charter or other
corporate restriction or any judgment, order, writ, injunction,
decree or award (other than the MFJ and any partnership agreement
of a non-wholly-owned partnership) which materially adversely
affects or materially restricts or, so far as such Party can now
reasonably foresee, may in the future materially adversely affect
or materially restrict, the business, operations, assets,
properties, prospects or condition (financial or otherwise) of
such Party's Cellular Business after consummation of the
transactions contemplated hereby.
ARTICLE V
PRE-CELLULAR CLOSING COVENANTS
5.1 Interim Operations. During the period from the
date hereof to the Cellular Closing, except as specifically
contemplated by this Agreement including, without limitation,
Sections 2.8, 2.9, 2.10, 2.11, 2.13 and 2.15 or as may be required
to comply with applicable fiduciary obligations to holders of
interests in Contributed Partnerships or obligations under
partnership agreements or law or as otherwise approved in writing
by the other Party hereto, which approval shall not be
unreasonably withheld, each Party hereby covenants as follows:
(a) Conduct of Business. Such Party will cause the
business of its Managed Cellular Business to be conducted in all
material respects only in the ordinary course and consistent with
past practice and the parties' current business plans.
(b) Capital Structure. Except as may be necessary for
either Party to effect its Cellular Contribution, such Party will
cause its Cellco Partnership Subsidiary, and its Managed Cellular
Business not to (i) issue, pledge or sell any of their capital
stock or partnership interests, as the case may be, (ii) enter
into any contract, understanding or arrangement with respect to
the issuance of capital stock, debt or partnership interests, as
the case may be, (iii) enter into any arrangement or contract with
respect to the purchase or voting of its capital stock or
partnership interests, as the case may be, or (iv) make any other
changes in its capital structure; provided, however, that any such
transactions which are solely among Affiliates may be entered into
unless such transactions would have a material adverse effect on
Cellco or the other Party or its Affiliates.
(c) Relationships. Such Party will use reasonable
efforts to preserve intact the business organization and clientele
of its Managed Cellular Business, and to preserve the goodwill of
those having business relationships with its Managed Cellular
Business.
(d) Assets. Such Party will cause its Affiliates and
itself not to encumber, sell, lease or otherwise dispose of any
interest which they own in such Party's Managed Cellular Business
other than in the ordinary course of business.
(e) Reports. Such Party will furnish to the other
Party the following reports: (i) as soon as available and in any
event within ninety (90) days after the last day of each fiscal
year the following financial statements (audited to the extent
that such Party's prior practice has been to prepare audited
financial statements of an entity) of such Party's Contributed
Subsidiaries, Contributed Partnerships and that portion of such
Party's Cellular Business as is not conducted through Contributed
Subsidiaries and Contributed Partnerships: (a) balance sheets as
of the end of the fiscal year then ended and related statements of
income and cash flows for the fiscal years then ended, in the case
of audited financial statements, with reports thereon of certified
public accountants and (ii) as soon as available but in no event
later than sixty (60) days after the end of each quarterly period
of each fiscal year of each of the above-referenced entities,
interim statements of income and cash flows for the interim period
then ended and the interim balance sheets as of the last day of
such interim period. Notwithstanding the foregoing, a Party need
only deliver unaudited and interim financial statements of
Contributed Subsidiaries in which such Party owns a minority
interest as and when such financial statements are made available
to Party. All the financial statements delivered pursuant to this
Section 5.1(e) shall be in accordance with the books and records
of the above-referenced entities, present fairly the financial
position, results of operations and cash flows of such entities as
of the dates and for the periods indicated, subject in the case of
the interim financial statements to normal year-end adjustments.
The financial statements shall be prepared in conformity with
generally accepted accounting principles applied on a consistent
basis throughout the periods specified, except for the lack of
explanatory footnote disclosures required by generally accepted
accounting principles.
(f) Employee Plans, Compensation, etc. Except for
normal changes (or, with respect to (iii) below, grants) in the
ordinary course of business that are consistent with past practice
and that, in the aggregate, do not result in a material increase
in benefits or compensation expense to such Party's Cellular
Contributions relative to the level in effect prior to such
changes and except as required by law or agreement existing on the
date hereof, such Party will not, and will cause its Managed
Cellular Business not to (without the consent of the other party
hereto) take any of the following actions with respect to
employees who are to become Cellco Employees (as defined below) if
such arrangement would continue after the Cellular Closing and
would become an obligation of Cellco:
(i adopt, enter into, amend or terminate any bonus,
profit sharing, compensation, severance, termination,
pension, retirement, deferred compensation, employment or
other employee benefit plan, agreement, trust, fund or other
arrangement for the benefit or welfare of any individual, to
the extent that any such action would affect those employees
who are to become Cellco Employees;
(ii increase in any manner the compensation or fringe
benefits of those employees who are to become Cellco
Employees or pay any benefit to those employees who are to
become Cellco Employees other than pursuant to an existing
plan or arrangement; or
(iii grant any awards to those employees who are to
become Cellco Employees under any bonus, incentive,
performance or other compensation plan or arrangement
(including, without limitation, the granting of stock
options, stock appreciation rights, stock-based or stock-
related awards, performance units or restricted stock, or the
removal of existing restrictions in any benefit plans or
agreements or awards made thereunder).
Except as required by law, such Party will not, and will
cause the members of its Controlled Group not to, take any
action to segregate assets for, or in any other way secure,
the payment of compensation or benefits to those employees
who are to become Cellco Employees under any employee plan,
agreement, contract or arrangement or adopt, enter into or
amend any contract, agreement, commitment or arrangement to
do any of the acts described in this Section 5.1(f).
(g) Such Party agrees to use reasonable efforts (except
that such efforts need not include monetary expense) to keep
available the services of those employees who are to become Cellco
Employees in order that such employees' services shall become
available at the Cellular Closing to Cellco. During the one-year
period following the Cellular Closing, neither such Party nor any
of its Affiliates shall solicit for hire or hire any of the Cellco
Employees without the prior written consent of the other Party and
Cellco, which consent shall not be unreasonably withheld.
5.2 MFJ Activities. (a) Within sixty (60) days after
the date hereof, NYNEX and Bell Atlantic shall agree on the
changes that are required to be made or the waivers that must be
obtained in order to cause the businesses and operations of Cellco
at the Cellular Closing Date to be in compliance with the rules
and regulations of the MFJ (the "MFJ Transactions"). Such
Agreement shall not be deemed a waiver by either Party of any non-
compliance with Section 4.15 hereof which is not addressed by, or
would not be cured by, completion by the other Party of its MFJ
Transactions. Each of the Parties shall promptly take all actions
requested by the other Party in such other Party's good faith
judgment in order to implement such changes. The direct labor
costs and reasonable out-of-pocket expenses incurred in connection
with any MFJ Transactions shall be borne by the Party effecting
such MFJ Transactions, except for Me Too Waivers which are
provided for below.
(b) NYNEX and Bell Atlantic agree that each shall be
obliged to request a waiver for the benefit of Cellco or such
Party, as appropriate, if the waiver (a "Me Too Waiver") is: (i)
to permit Cellco or such Party, as appropriate, to offer the same
services as those set forth in any waiver request which such Party
or an Affiliate has pending or which such Party, any of its
Affiliates, or any Bell Operating Company ("BOC") within the
meaning of the MFJ has obtained for its cellular or paging
businesses, including businesses incidental thereto; (ii) based on
relevant facts which are comparable to those set forth in any such
waiver which such Party, an Affiliate thereof or a BOC has pending
or has obtained, as the case may be; and (iii) with respect to
Cellco, within the scope of the Cellco Business (as defined in the
Cellco Partnership Agreement). Except for a Me Too Waiver,
neither Party shall be obligated to request any waiver for the
benefit of Cellco or such Party, as appropriate, if such Party
believes in good faith that the business practice or transaction
is in compliance with the MFJ or that requesting such a waiver
would prejudice the consideration of MFJ waivers which such Party
or any of its Affiliates is seeking or then intends to seek at a
future date. If either Party declines to request a waiver on its
good faith belief that its interests would be prejudiced, Cellco
or the other Party shall have the right to seek such an MFJ waiver
on its own behalf; provided, however, that Cellco or such other
Party shall not, if waiver requests of the kind contemplated to be
filed are customarily filed by the other Party or any of its
Affiliates with the Department of Justice prior to their
submission to the Decree Court, file any motion for a waiver of
the MFJ with the Decree Court until the Department of Justice has
indicated that the Department of Justice will not oppose the
waiver. If any such request for a waiver filed by Cellco with the
Decree Court is not opposed on the merits by the Department of
Justice but is rejected by the Decree Court on the grounds that
Cellco is an inappropriate party to have requested such waiver,
then each of the Parties agrees that it or one of its Affiliates
will file such waiver request with the Decree Court for the
benefit of Cellco. If any such request is rejected by the
Department of Justice on the grounds that Cellco is an
inappropriate party to have requested such waiver, and, as a
result, is not filed with the Decree Court, then each of the
Parties agrees that it or one of its Affiliates will submit such
request to the Department of Justice for the benefit of the
Partnership and, if the Department of Justice indicates it will
not oppose such request, then file the waiver request with the
Decree Court. In the event Cellco does seek a waiver of the MFJ
on its own behalf, each of the Parties shall have the right to
express its own view on the requested waiver to the Department of
Justice and to the Decree Court. Neither Party nor any of its
Affiliates shall oppose any waiver request by Cellco or the other
Party that is the same as, or that is based on facts which are
comparable to those set forth in, any waiver that either Party has
pending or which either Party or a BOC has obtained. The direct
labor costs and reasonable out-of-pocket expenses incurred in
connection with any Me Too Waivers shall be borne by Cellco.
NYNEX and Bell Atlantic shall cooperate with each other
in the preparation, filing and prosecution of requests for such
waiver and each Party shall bear its own expenses in connection
therewith. An initial listing of the waiver requests to be made
by the Parties will be delivered by the Parties within 30 days of
the execution of this Agreement.
5.3 Expenses. Other than as provided in Sections 2.8,
2.10, 2.14(d) and 5.2, each Party shall bear its own legal,
accounting and other costs, charges and expenses in connection
with the negotiation and preparation of this Agreement, the
Partnership Agreements and any related instruments or agreements
and the performance of its obligations hereunder. Each Party and
its Affiliates shall bear all costs and expenses, including,
without limitation, any sales taxes, transfer taxes, recording
fees and attorneys' or accountants' fees incurred in transferring,
or causing its Affiliates to transfer, its Cellular Contribution
to Cellco and its PCS Contribution to PCSCO, and any expenses,
fees and costs necessary for any Regulatory Approvals shall be
paid by the Party seeking such Regulatory Approval.
5.4 Business Relationships with Affiliates. No later
than thirty (30) days prior to the Cellular Closing Date, NYNEX
and Bell Atlantic shall provide each other with written schedules
describing all contracts and other business dealings (including
the material terms thereof) between each of them and their
Affiliates, on the one hand, and the businesses of each of their
respective Cellular Contributions on the other. At any time prior
to the Cellular Closing Date, each Party shall have the option,
upon written notice to the other, to cancel any contract or other
business dealing described on the other Party's schedule, which
contract is cancelable without penalty or the parties to which
contract are wholly-owned by such Party, such cancellation to
became effective no later than six months after the Cellular
Closing Date.
5.5 Creation of Employee Body and Benefits Plans.
(a) Within one hundred eighty (180) days after the
execution of this Agreement, the MOC, shall develop and propose a
compensation program, and benefit plans and personnel policies,
including a form of retirement plan, to be offered by Cellco to
its employees (the "Cellco Employees"). To assist in the creation
of such compensation program, benefits plans and personnel
policies, NYNEX and Bell Atlantic shall provide the MOC with
comprehensive written summaries of the compensation and benefits
provided by each of them to their respective employees employed in
connection with their respective Cellular Contributions. For
those employees seeking employment with Cellco, NYNEX and Bell
Atlantic shall supply the name, title, date of most recent
commencement of service and with the consent of the employee,
aggregate compensation (including salary or wages, commissions and
bonuses) paid during the 1992, 1993 and 1994 calendar years,
accrued holiday, vacation, sick leave, long-service entitlement
(if any) and permitted time off due as compensation for additional
time worked and performance evaluation for the 1992, 1993 and 1994
calendar years for each such employee.
(b) In order that Cellco may become the employer of
those employees employed by NYNEX, Bell Atlantic or any of their
respective Affiliates in connection with their respective Cellular
Contributions in sales, marketing, engineering, customer service,
administrative, maintenance, accounting, installation and
operations needed for the operation of the Systems as contemplated
herein, the MOC shall, prior to the Cellular Closing, use its
reasonable efforts to agree on those employees of both Parties who
shall become employees of Cellco. Employee costs incurred after
the Cellular Closing, including, without limitation, severance
costs, shall be borne by Cellco unless the Parties agree
otherwise.
(c) All proposals and determinations by the MOC with
respect to labor and employee policies shall be rendered as advice
to Cellco. Cellco shall itself make all determinations with
respect to its labor and employment policies.
5.6 NYSMSA. The Parties will use their reasonable
efforts to arrive at a mutually satisfactory agreement for
including NYNEX's current interest in NYSMSA (as listed in
Schedule 3.2) in the NYNEX Contributions or otherwise providing
the Parties with substantially equivalent benefits as would result
from the inclusion of such interest in Cellco. If the Parties are
unable to agree on such a method by December 31, 1995, the
provisions of Section 9.1(f) will become operative.
5.7 Non-Managed Systems. Each Party will use its
reasonable efforts, including voting its equity interest, to cause
Systems other than Managed Systems to perform the covenants set
forth in this Article V.
ARTICLE VI
ADDITIONAL COVENANTS
6.1 Further Assurances; Cooperation. Each of the
Parties hereto shall perform its obligations under this Agreement
and shall take or cause to be taken and do or cause to be done all
reasonable things necessary, proper or advisable under applicable
law to obtain all necessary Regulatory Approvals and waivers and
all other necessary consents and satisfy all conditions to the
obligations of the Parties under this Agreement and to cause the
Transactions to be carried out promptly in accordance with the
terms hereof and shall cooperate fully with one another and their
respective officers, directors, employees, agents, counsel,
accountants and other representatives in connection with any steps
required to be taken as a part of their respective obligations
under this Agreement, provided that neither Party shall be
required to agree to the imposition of material conditions or
limitations that are materially adverse to such Party (including,
without limitation, material limitations on a party's right to
hold or manage its interests in Cellco). Subject to the
foregoing, upon the execution of this Agreement and thereafter,
each Party shall do such things as may be reasonably requested by
the other Party in order more effectively to consummate the
Transactions (including, but not limited to, promptly delivering
to the other information necessary to prepare and pursue all
necessary regulatory filings, approvals and waivers), in each case
including, without limitation:
(a) Subject to the terms and conditions herein
provided, NYNEX and Bell Atlantic shall promptly make such filings
and submissions and shall take, or cause to be taken, all
reasonable actions and do, or cause to be done, all reasonable
things necessary, proper or advisable under applicable laws and
regulations to (i) obtain the consents, approvals, authorizations
and waivers described in Schedule 3.4, (ii) comply with the
provisions of the MFJ, and (iii) obtain any other required
approval of any Governmental Entity with jurisdiction over the
Transactions and obtain any other necessary consents, and, in the
event any change in the Transactions is required in order to
accomplish the foregoing, except as provided elsewhere in this
Agreement, take all reasonable steps necessary to accommodate such
change to the extent it would not materially adversely affect the
Parties' rights or obligations hereunder; provided that in any
such event, Bell Atlantic and NYNEX shall negotiate in good faith
to appropriately compensate the other to the extent adversely
affected by such change. Each of the Parties hereto agrees to
cooperate in the preparation of, and to provide all information
required for the prompt filing of, all applications, approvals and
waivers required for the approval and consummation of the
Transactions.
(b) In the event any claim, action, suit, investigation
or other proceeding by any Governmental Entity or other person is
commenced which questions the validity or legality of the
Transactions or seeks damages in connection therewith
(collectively, "Adverse Proceedings"), and, if an injunction or
other order is issued in any such Adverse Proceeding, to use
reasonable efforts to have such injunction or other order
dissolved, and to cooperate reasonably regarding the removal of
any other impediment to the consummation of the Transactions.
(c) Bell Atlantic shall give prompt written notice to
NYNEX and NYNEX shall give prompt written notice to Bell Atlantic,
to the extent known by the chief executive officer or the chief
financial officer of the Cellular Business of the Party giving
notice, of (i) the occurrence, or failure to occur, of any event
which occurrence or failure would be likely to cause any
representation or warranty of the notifying party contained in
this Agreement to be untrue or inaccurate in any material respect
individually or in the aggregate with other such events at any
time from the date hereof to the Cellular Closing or which will or
may result in the failure to satisfy any of the conditions
specified in Article VII hereof, or (ii) any failure of the
notifying party to comply with or satisfy any covenant, condition
or agreement to be complied with or satisfied by it hereunder.
6.2 Access to Properties and Records. Each Party
shall afford to the other Party and the other Party's accountants,
counsel and representatives full access during normal business
hours throughout the period prior to the Cellular Closing Date to
all of the properties, books, contracts, commitments and records
(including but not limited to financial and accounting records and
tax returns) of its Cellular Business and, during such period,
shall make available promptly to the other Party all information
concerning the business, properties and personnel of its Cellular
Business as the other Party may reasonably request, provided that
no investigation pursuant to this Section 6.2 shall affect any
representations or warranties or the conditions to the obligations
of the parties hereto to consummate the Transactions. In the case
of Systems which are not Managed Systems, such Party will use its
reasonable efforts to provide such information and access.
ARTICLE VII
CONDITIONS
7.1 Conditions to the Obligations of NYNEX and Bell
Atlantic. The obligations of NYNEX and Bell Atlantic to
consummate the Transactions at the Cellular Closing are subject to
the satisfaction or waiver, at or before the Cellular Closing, of
each of the following conditions:
(a) The Department of Justice shall have approved and
the Decree Court shall have granted the parties' requests for the
waivers contemplated by Section 5.2 hereof and any other waivers
they subsequently deem necessary for the operation of Cellco as
contemplated in this Agreement and in the Cellco Partnership
Agreement and no Governmental Entity or other person shall have
enjoined the consummation of the Transactions, or appealed the
Decree Court's order granting such requests, or the time to appeal
shall have expired, or such order shall have become final.
(b) All Regulatory Approvals, and the expiration of
waiting periods under the HSR Act ("Governmental Approvals") other
than those authorizations, orders, grants, consents, permissions
and approvals the failure of which to receive would not, singly or
in the aggregate, have a material adverse effect on the Business
Condition of Cellco or of Bell Atlantic or of NYNEX, shall have
been received and shall remain in effect, provided that none of
such Governmental Approvals (i) impose material limitations on the
ability of Cellco effectively to acquire or hold, or requiring
Cellco or either of the Parties or such Party's respective Cellco
Partner Subsidiary to dispose of or hold separate, any material
portion in the aggregate of its Cellular Contributions, other than
Saleable Systems treated in accordance with Section 2.11 hereof
and the Springwich Interests, or (ii) impose material limitations
on the ability or right either of Bell Atlantic or NYNEX or their
respective Affiliates effectively to acquire or hold, or requiring
either of Bell Atlantic or NYNEX or any of their respective
Affiliates to dispose of or hold separate, any material interest
in Cellco.
(c) The initial budgets and business plans of Cellco as
contemplated by Section 2.14(b) of this Agreement shall have been
developed and agreed upon by the Parties and the MOC.
7.2 Conditions to the Obligations of NYNEX. The
obligations of NYNEX to consummate the Transactions at the
Cellular Closing are subject to the satisfaction or waiver, at or
before the Cellular Closing, of the following conditions:
(a) The representations and warranties of Bell Atlantic
set forth in Article III shall have been true and correct in all
material respects when made and unless made as of a specified date
shall be true and correct in all material respects as if made as
of the Cellular Closing Date.
(b) On terms reasonably satisfactory to NYNEX, Bell
Atlantic has made the changes determined by NYNEX to be required
to cause the businesses and operations of the Bell Atlantic
Cellular Contribution to be in compliance with the MFJ as set
forth in Section 4.15 hereof.
(c) There shall not exist a state of facts which
creates a right of NYNEX to terminate this Agreement pursuant to
Section 9.1(c), (d)(ii), (e) or (f).
7.3 Conditions to the Obligations of Bell Atlantic. The
obligations of Bell Atlantic to consummate the Transactions at the
Cellular Closing are subject to the satisfaction or waiver, at or
before the Cellular Closing, of each of the following conditions:
(a) The representations and warranties of NYNEX set
forth in Article III shall have been true and correct in all
material respects when made and (unless made as of a specified
date) shall be true and correct in all material respects as if
made as of the Cellular Closing Date.
(b) On terms reasonably satisfactory to Bell Atlantic,
NYNEX has made the changes determined by Bell Atlantic to be
required to cause the businesses and operations of the NYNEX
Cellular Contribution to be in compliance with the MFJ as set
forth in Section 4.15 hereof.
(c) There shall not exist a state of facts which
creates a right of Bell Atlantic to terminate this Agreement
pursuant to Section 9.1(c), (d)(i), (e) or (f).
ARTICLE VIII
INDEMNIFICATION
8.1 Indemnification by Bell Atlantic. Except as
otherwise expressly provided in this Article VIII, Bell Atlantic
shall defend, indemnify and hold harmless Cellco, PCSCO and each
of Cellco's and PCSCO's officers, directors, employees, agents,
successors and assigns (Cellco and such persons hereinafter,
collectively the "Indemnified Persons"), and shall reimburse the
Indemnified Persons for, from and against each and every demand,
claim, loss, liability, judgment, damage, cost and expense
(including, without limitation, interest, penalties, costs of
preparation and investigation, and the reasonable fees,
disbursements and expenses of attorneys, accountants and other
professional advisors) (collectively, "Losses") imposed on or
incurred by the Indemnified Persons, directly or indirectly
(including without limitation diminution in value of an equity
interest), relating to, resulting from or arising out of
(a) subject to the limitations period set forth in Section 10.1,
any inaccuracy in any respect in any representation or warranty of
Bell Atlantic herein (other than the representations and
warranties contained in Section 4.14) or in any certificate or
other document delivered or to be delivered pursuant hereto,
whether or not the Indemnified Person relied thereon, except to
the extent that the Loss arises out of the failure to contribute a
Saleable System or the Springwich Interests in accordance with
Section 2.10 or a non-Contributed System in accordance with
Section 2.11; or (b) any liability or obligation of any nature
(known or unknown, absolute, accrued, contingent or otherwise)
related to Bell Atlantic's Cellular Contributions and PCS
Contributions and attributable to periods prior to the Cellular
Closing and the PCS Closing, respectively (excluding Cellco
Assumed Liabilities and contractual obligations of Bell Atlantic's
Cellular Contributions under all contracts entered into in the
ordinary course of business but related to periods subsequent to
the Cellular Closing Date), including without limitation
(i) claims such as business torts, breach of contract claims,
product liability claims and personal injury or fraud; provided,
however, that Bell Atlantic shall have no liability under this
Section 8.1 (other than liability for Bell Atlantic's breach of
any representation and warranty herein as to title to Bell
Atlantic's Cellular Contributions and PCSCO Contributions) unless
and until the aggregate of all Losses recoverable by the
Indemnified Persons exceeds $15,000,000 ("Bell Atlantic's Minimum
Amount"), in which event Bell Atlantic shall be liable for all
such Losses in excess of Bell Atlantic's Minimum Amount.
8.2 Indemnification by NYNEX. Except as otherwise
expressly provided in this Article VIII, NYNEX shall defend,
indemnify and hold harmless the Indemnified Persons, and shall
reimburse the Indemnified Persons for, from and against all Losses
imposed on or incurred by the Indemnified Persons, directly or
indirectly (including without limitation diminution in value of an
equity interest), relating to, resulting from or arising out of
(a) Subject to the limitations period set forth in Section 10.1,
any inaccuracy in any respect in any representation or warranty of
NYNEX herein (other than the representations and warranties
contained in Section 4.14) or in any certificate or other document
delivered or to be delivered pursuant hereto, whether or not the
Indemnified Persons relied thereon; or (b) any liability or
obligation of any nature (known or unknown, absolute, accrued,
contingent or otherwise) related to NYNEX's Cellular Contributions
and PCS Contributions and attributable to periods prior to the
Cellular Closing and the PCS Closing, respectively (excluding
Cellco Assumed Liabilities and contractual obligations of NYNEX's
Cellular Contributions under all contracts entered into in the
ordinary course of business but related to periods subsequent to
the Cellular Closing Date), including without limitation
(i) claims such as business torts, breach of contract claims,
product liability claims and personal injury or fraud; provided,
however, that NYNEX shall have no liability under this Section 8.2
(other than liability for NYNEX's breach of any representation and
warranty herein as to title to NYNEX's Cellular Contributions or
PCS Contributions) unless and until the aggregate of all Losses
recoverable by the Indemnified Persons exceeds $10,000,000
("NYNEX's Minimum Amount"), in which event NYNEX shall be liable
for all such Losses in excess of NYNEX's Minimum Amount.
8.3 Notice and Defense of Third Party Claims. If any
action, claim or proceeding shall be brought or asserted under
this Article VIII against any Indemnified Person in respect of
which from an indemnifying person or any successor thereto (the
"Indemnifying Person") is liable under this Article VIII, the
Indemnified Person shall give prompt written notice of such action
or claim to the Indemnifying Person who shall assume the defense
thereof, and the payment of all expenses; except that any delay or
failure to so notify the Indemnifying Person shall relieve the
Indemnifying Person of its obligations hereunder only to the
extent, if at all, that it is prejudiced by reason of such delay
or failure. The Indemnified Person shall have the right to employ
one separate counsel per jurisdiction in any of the foregoing
actions, claims or proceedings and to participate in, but not
control, the defense thereof, but the fees and expenses of such
counsel shall be at the expense of the Indemnified Person unless
both the Indemnified Person and the Indemnifying Person are named
as parties and the Indemnified Person shall in good faith
determine that representation by the same counsel is
inappropriate. In the event that the Indemnifying Person, within
ten (10) days after notice of any such action or claim, fails to
assume the defense thereof, the Indemnified Person shall have the
right to undertake the defense, compromise or settlement of such
action, claim or proceeding for the account of the Indemnifying
Person, subject to the right of the Indemnifying Person, if the
Indemnifying Party has acknowledged its liability or has been
determined to be liable hereunder, to assume the defense of such
action, claim or proceeding with counsel reasonably satisfactory
to the Indemnified Person at any time prior to the settlement,
compromise or final determination thereof. Anything in this
Article VIII to the contrary notwithstanding, the Indemnifying
Person shall not, without the Indemnified Person's prior written
consent, settle or compromise any action or claim or consent to
the entry of any judgment with respect to any action, claim or
proceeding for anything other than money damages paid by the
Indemnifying Person. If the Indemnifying Party has acknowledged
its liability or has been determined to be liable hereunder, the
Indemnifying Person may, without the Indemnified Person's prior
written consent, settle or compromise any such action, claim or
proceeding or consent to entry of any judgment with respect to any
such action or claim that requires solely the payment of money
damages by the Indemnifying Person and that includes as an
unconditional term thereof the release by the claimant or the
plaintiff of the Indemnified Person from all liability in respect
of such action, claim or proceeding. As a condition to asserting
any rights under this Article VIII, each of Indemnified Persons
must appoint NYNEX as its sole agent for all matters relating to
any claim for indemnity from NYNEX and Bell Atlantic as its sole
agent for all matters relating to any claim for indemnity from
Bell Atlantic.
8.4 Tax Indemnification (a) Each of the Parties and
the Partners shall be individually responsible for, will pay or
cause to be paid, and will individually indemnify and hold
harmless Cellco, PCSCO and/or the other Party and the other
Partners from and against any and all Taxes arising from each of
the following:
(i any and all Taxes with respect to any taxable
period of any Contributed Subsidiary or Contributed
Partnership (or any predecessor) ending on or before the
Cellular Closing Date;
(ii any and all Taxes with respect to any taxable
period ending on or before the Cellular Closing Date
resulting from any Contributed Subsidiary having been (or
ceasing to be) included in any consolidated, combined or
unitary Tax Return that included such Contributed Subsidiary
(or any predecessor) for any such period (including any
liability for taxes resulting from a "deferred intercompany
transaction," within the meaning of Treasury Regulation
Section 1.1502-13(a)(2) (or any analogous or similar
provision under state, local or foreign law or regulation);
(iii any and all Taxes arising from any member of a
consolidated, combined or unitary group of which the
Contributed Subsidiary (or any predecessor) is or was a
member on or prior to the Cellular Closing Date for which the
Controlled Subsidiary is liable pursuant to Treasury
Regulation Section 1.1502-6(a) or any analogous or similar
provision under state, local or foreign law or regulation;
(iv any breach by such Party of any representation or
warranty of matters in Section 4.14.
(b) There shall be no limitations period with respect
to any indemnity in this Section 8.4.
ARTICLE IX
TERMINATION
9.1 Termination. This Agreement may be terminated and
the Transactions may be abandoned at any time prior to the
Cellular Closing without liability on the part of either Party,
other than as provided in Section 9.1(d):
(a) By the mutual written consent of each of the
Parties;
(b) By either NYNEX or Bell Atlantic if the Cellular
Closing has not occurred prior to December 31, 1995, provided that
the right to terminate this Agreement under this Section 9.1(b)
shall not be available to a Party whose failure to fulfill any
obligation under this Agreement has been the cause of, or results
in, the failure of the Cellular Closing to have occurred within
such period;
(c) By either NYNEX or Bell Atlantic if the other Party
is (i) unable to contribute interests in Systems (or in the case
of Systems that are under contract but not owned, substantially
equivalent POPs) at the Cellular Closing having a number of POPs
equal to or greater than 90% of the POPs represented by all
Systems (other than Saleable Systems and the Springwich Interests)
listed under such Party's name on Schedule 3.2 or (ii) prohibited
by an order or injunction (other than an order or injunction on a
temporary or preliminary basis) of a court of competent
jurisdiction from making such contribution (including orders of
the FCC denying the renewal of licenses for operation) and all
means of appeal and all appeals from such order or injunction have
been finally exhausted;
(d) By either of NYNEX or Bell Atlantic if on the
Cellular Closing Date or at any time prior thereto, (i) the
aggregate amount which NYNEX would reasonably be expected to be
required to pay pursuant to Sections 8.2 and/or 8.4 would exceed
$400,000,000 or (ii) the aggregate amount which Bell Atlantic
would reasonably be expected to be required to pay pursuant to
Sections 8.1 and/or 8.4 would exceed $600,000,000; provided,
however, that if this Agreement is terminated pursuant to this
Section 9.1(d) by the Party whose liability exceeds the specified
amount, such Party shall pay the other Party the sum of
$20,000,000.
(e) By either NYNEX or Bell Atlantic if at the Cellular
Closing the other Party's Contribution includes interests in
Systems held by Contributed Subsidiaries, which Systems represent
more than 20% of the Owned POPs of such Party and its Affiliates
set forth on Schedule 3.2.
(f) By either NYNEX or Bell Atlantic if, at December
31, 1995, the agreement described in Section 5.6 shall not have
been reached.
9.2 Effect of Termination. If termination of this
Agreement pursuant to Section 9.1(b) results from the failure to
satisfy the condition set forth in either Section 7.2(a) or
7.3(a), the Party whose representations and warranties were untrue
shall not be relieved of any liability. Each Party's right to
terminate this Agreement and its obligation to perform hereunder
is limited to the specific circumstances described in Section 9.1.
In addition to the above, if this Agreement is terminated under
any of the circumstances described in Section 9.1 at any time
after the PCS Closing Date, PCSCO shall distribute the PCS
licenses in accordance with the PCS Partnership Agreement.
ARTICLE X
MISCELLANEOUS
10.1 Survival of Representations, Warranties and
Agreements. The representations and warranties and agreements
contained herein shall survive for two (2) years after the
Cellular Closing Date; provided, however, that the representations
and warranties set forth in Section 4.1, 4.2(a), 4.5, 4.9, 4.14
and 4.16 shall survive beyond such period.
10.2 Waiver and Amendment. This Agreement may be
amended or supplemented, and any provision of this Agreement may
be waived by the Party which is entitled to the benefits hereof,
at any time. No waiver, amendment or supplement shall be
effective unless in writing and signed by the Party or Parties
sought to be bound thereby. The Parties expressly agree and
acknowledge that they shall not rely on any purported oral change,
waiver, discharge, modification or termination and they hereby
request that any court disregard (to the fullest extent permitted
by law) any evidence sought to be introduced by either Party as to
the terms of any such oral change, waiver, discharge, modification
or termination.
10.3 APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK.
10.4 Interpretation. The descriptive headings
contained in this Agreement are for convenience and reference only
and shall not affect in any way the meaning or interpretation of
this Agreement.
10.5 Notices. Each Party shall promptly give written
notice to the other Party upon becoming aware of the occurrence
or, to its knowledge, a pending or threatened occurrence, of any
event which would cause or constitute a breach of any of its
representations, warranties or covenants contained or referenced
in this Agreement and will use its reasonable efforts to prevent
or promptly remedy the same. All notices and other communications
hereunder shall be sufficiently given for all purposes hereunder
if in writing and delivered personally, sent by documented
overnight delivery service or, to the extent receipt is confirmed,
telecopy, telex or other electronic transmission service to the
appropriate address or number as set forth below, addressed as
follows:
If to NYNEX:
NYNEX Mobile Communications Company
2000 Corporate Drive
Orangeburg, New York 10962
Attn.: Alfred F. Boschulte, President
Telecopy No.: (914) 365-9046
with a copy to:
NYNEX Network Systems Company
4 West Red Oak Lane
White Plains, New York 10604
Attn.: Senior Vice President and General Counsel
Telecopy No.: (914) 644-7966
If to Bell Atlantic:
Bell Atlantic Corporation
1717 Arch Street
Philadelphia, Pennsylvania 19103
Attn.: Lawrence T. Babbio, Jr.
Executive Vice President and Chief Operating
Officer
Telecopy No.: (215) 557-7214
with a copy to:
Bell Atlantic Corporation
1717 Arch Street
Philadelphia, Pennsylvania 19103
Attn.: Stephen B. Heimann
Telecopy No.: (215) 561-9568
or to such other address as any party may have furnished to the
other parties in writing in accordance with this Section 10.5.
10.6 Counterparts. This Agreement may be executed in
any number of counterparts, each of which shall be deemed to be an
original but all of which together shall constitute one agreement.
10.7 Severability. Any term or provision of this
Agreement which is invalid or unenforceable in any jurisdiction
shall, as to that jurisdiction, be ineffective to the extent of
such invalidity or unenforceability without rendering invalid or
unenforceable the remaining terms and provisions of this Agreement
or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any
provision of this Agreement is so broad as to be unenforceable,
the provision shall be interpreted to be only so broad as is
enforceable.
10.8 Parties in Interest; Assignment. Except as
otherwise specifically set forth in this Agreement, this Agreement
is binding upon and is solely for the benefit of the Parties and
their respective successors, legal representatives and permitted
assigns. Bell Atlantic and NYNEX shall have the right to assign
any of their respective rights or delegate any of their respective
obligations to a wholly-owned Affiliate thereof; provided,
however, that the assigning party shall remain liable for the
performance thereof by such Affiliate. Any purported assignment
not permitted by this Section 10.8 shall be null, void and of no
effect.
10.9 Publicity. So long as this Agreement is in
effect, each of NYNEX and Bell Atlantic agree to consult with the
other in issuing any press release or otherwise making any public
statement with respect to the Transactions or the other Party; and
neither Bell Atlantic nor NYNEX will issue any press release or
make any such public statement prior to such consultation and
giving the other a reasonable opportunity to review and comment on
any such proposed press release or public statement, except as may
be required by law.
10.10 No Third Party Beneficiaries. Nothing contained
in this Agreement is intended to or shall confer upon any person
other than the Parties, PCSCO, Cellco and any Indemnified Person
any rights or remedies hereunder.
10.11 Confidentiality. The Parties acknowledge that
information supplied to one another in connection with the
consummation of the transactions contemplated hereby is subject to
the terms and provisions of the Confidentiality Agreement dated
May 11, 1994 between the Parties.
IN WITNESS WHEREOF, the parties hereto have duly
executed this Agreement as of the date first above written.
BELL ATLANTIC CORPORATION
By: /s/ Lawrence T. Babbio, Jr.
_______________________________
Name: Lawrence T. Babbio, Jr.
_______________________________
Title: Executive Vice President
& Chief Operating Officer
_______________________________
NYNEX CORPORATION
By: /s/ Frederic V. Salerno
___________________________________
Name: Frederic V. Salerno
___________________________________
Title: Vice Chairman,
Finance & Business Development
___________________________________
SCHEDULES TO
JOINT VENTURE FORMATION AGREEMENT