EXHIBIT 10.14
AGREEMENT AND PLAN OF REORGANIZATION
TABLE OF CONTENTS
ARTICLE I. EXCHANGE OF QTI COMMON STOCK FOR NEXTEL COMMON
SHARES
1.1 Exchange of Stock
1.2 Certificates
1.3 Adjustments
ARTICLE II. EXCHANGE OF AMI-WEST COMMON STOCK FOR NEXTEL COMMON
SHARES
2.1 Creation of AMI-West
2.2 Exchange of Stock
2.3 Certificates
2.4 Adjustments
ARTICLE III. THE CLOSING
3.1 Definition
3.2 Acquisition of the SMR Assets
3.3 Actions by Questar, AMI and the Individual
Stockholders
3.4 Actions by NEXTEL
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF QUESTAR
4.1 Corporate Organization
4.2 Subsidiaries
4.3 Other Entities
4.4 Capital Stock
4.5 Options
4.6 Compliance with Laws
4.7 No Conflict
4.8 Litigation
4.9 Insurance
4.10 Intellectual Property
4.11 Capital Projects
4.12 Financial Statements
4.13 Liabilities
4.14 Transactions Not in the Ordinary Course
4.15 Changes in Conditions
4.16 Taxes
4.17 Accounts; Employees
4.18 Real Estate
4.19 Title to Properties
4.20 Contracts
4.21 Corporate Authorization
4.22 Brokers
4.23 Employee Benefit Matters
4.24 Materially Correct
4.25 Regulatory Matters
ARTICLE V. REPRESENTATIONS AND WARRANTIES OF AMI
5.1 Corporate Organization
5.2 Subsidiaries
5.3 Other Entities
5.4 Capital Stock
5.5 Options
5.6 Compliance with Laws
5.7 No Conflict
5.8 Litigation
5.9 Insurance
5.10 Intellectual Property
5.11 Capital Projects
5.12 Financial Statements
5.13 Liabilities
5.14 Transactions Not in the Ordinary Course
5.15 Changes in Conditions
5.16 Taxes
5.17 Accounts; Employees
5.18 Real Estate
5.19 Title to Properties
5.20 Contracts
5.21 Corporate Authorization
5.22 Brokers
5.23 Employee Benefit Matters
5.24 Materially Correct
5.25 Regulatory Matters
ARTICLE VI. REPRESENTATIONS AND WARRANTIES OF NEXTEL
6.1 Corporate Organization
6.2 Corporate Authorization
6.3 Common Stock; Registration
6.4 No Conflict
6.5 Compliance with Laws
6.6 Title to Properties
6.7 Litigation
6.8 Financial Statements
6.9 Taxes
6.10 Information
6.11 Information in Registration Statement
6.12 Absence of Undisclosed Liabilities
ARTICLE VII. COVENANTS OF QUESTAR AND AMI
7.1 Covenants of Questar
7.2 Covenants of AMI
7.3 Tax Provisions
ARTICLE VIII. COVENANTS OF NEXTEL
8.1 NEXTEL Common Shares
8.2 Name Change
8.3 Antitrust Filing
8.4 Registration Statement
8.5 NASDAQ Listing
8.6 Information Update
8.7 Employees
8.8 Roaming Exclusivity
8.9 Tax Provisions
8.10 Securities Laws Acknowledgment
8.11 Best Efforts
ARTICLE IX. ADDITIONAL COVENANTS
9.1 Cooperation
9.2 Confidentiality
9.3 Trading Prohibitions
9.4 Non-Competition
9.5 General Indemnity; Non-Survival of
Representations
9.6 Tax Indemnity
9.7 Digital Mobile System
9.8 Structural Modifications
9.9 Significant Transactions
9.10 Offer to Comcast
9.11 Consolidated Group Matters
ARTICLE X. CONDITIONS TO OBLIGATIONS
10.1 Conditions to Obligations of NEXTEL, Questar
and AMI
10.2 Conditions to Obligations of NEXTEL
10.3 Conditions to the Obligations of Questar and
AMI
ARTICLE XI. TERMINATION/EFFECTIVENESS
11.1 Termination
11.2 Effect
ARTICLE XII. MISCELLANEOUS
12.1 Amendments
12.2 Waivers
12.3 Assignments
12.4 Notices
12.5 Severability
12.6 Rights and Remedies
12.7 Expenses
12.8 Captions
12.9 Counterparts
12.10 Entire Agreement
12.11 Governing Law
12.12 Annexes and Schedules
12.13 Publicity
12.14 No Existing Disputes
Annexes to Agreement and Plan of Reorganization
Annex A FCC SMR Licenses
Annex A-1 Channel Targets
Annex A-2 Core Channels
Annex B Excluded Assets
Annex C Financial Statements of QTI and AMI-West
Annex D Piggyback Registration Rights
Annex E [Intentionally Omitted]
Annex F Individuals to Receive Employment or Consulting
Agreements
Annex G [Intentionally Omitted]
Annex H-1 Form of Opinions of Counsel for Questar and AMI
Annex H-2 Form of Opinions of FCC Counsel for Questar and AMI
Annex I Agreement with Respect to Tax Matters
Annex J Release
Annex K Approved Prepaid Items
Annex L Opinion of Jones, Day, Reavis & Pogue
Schedules to Agreement and Plan of Reorganization
(These schedules have been omitted from this filing)
Questar
Schedule 3.2 SMR Assets
Schedule 4.1(b) States of Foreign Qualification of QTI
Schedule 4.2 Matters Relating to Comqor
Schedule 4.3 Interests in Other Entities
Schedule 4.6 Compliance with Laws
Schedule 4.7 Conflicts
Schedule 4.8 Litigation
Schedule 4.9 Insurance
Schedule 4.10 Intellectual Property
Schedule 4.11 Capital Projects
Schedule 4.14 Transactions Not in the Ordinary Course
Schedule 4.16 Taxes
Schedule 4.17 Bank Accounts/Employees
Schedule 4.18 Real Estate
Schedule 4.19 Title to Properties
Schedule 4.20 Contracts
Schedule 4.23 Employee Benefit Matters
Schedule 4.24 Materially Correct Information Furnished by
Representatives
Schedule 4.25 Regulatory Matters
Schedule 7.1(a) Conduct of Business
AMI
Schedule 3.2 SMR Assets
Schedule 5.1(b) States of Foreign Qualification of AMI-West
Schedule 5.2 Matters Relating to Comqor
Schedule 5.3 Interests in Other Entities
Schedule 5.4 Capital Stock
Schedule 5.6 Compliance with Laws
Schedule 5.7 Conflicts
Schedule 5.8 Litigation
Schedule 5.9 Insurance
Schedule 5.10 Intellectual Property
Schedule 5.11 Capital Projects
Schedule 5.14 Transactions Not in the Ordinary Course
Schedule 5.16 Taxes
Schedule 5.17 Bank Accounts/Employees
Schedule 5.18 Real Estate
Schedule 5.19 Title to Properties
Schedule 5.20 Contracts
Schedule 5.23 Employee Benefit Matters
Schedule 5.24 Materially Correct Information Furnished by
Representatives
Schedule 5.25 Regulatory Matters
NEXTEL
Schedule 3.4 NEXTEL Common Shares Delivered at the Closing
Schedule 6.1 States of Foreign Qualification of NEXTEL
Schedule 6.4 Conflicts
Schedule 6.5 Compliance with Laws
Schedule 6.7 Litigation
Schedule 6.9 Taxes
Schedule 6.12 Undisclosed Liabilities
AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan of Reorganization, dated as of
April 29, 1994 (this "Agreement"), is by and among NEXTEL
COMMUNICATIONS, INC., a Delaware corporation ("NEXTEL"), QUESTAR
CORPORATION, a Utah corporation ("Questar"), ADVANCED MOBILECOMM,
INC., a Massachusetts corporation ("AMI"), and Robert C. Mearns
and Francis G. Fuson (the "Individual Stockholders").
PLAN OF REORGANIZATION
NEXTEL, Questar, AMI and the Individual Stockholders
intend to enter into related transactions that will be recognized
as tax-free plans of reorganization under the provisions of the
Internal Revenue Code of 1986, as amended (the "Code").
A. The plans of reorganization will comprise the
acquisition by NEXTEL of all the specialized mobile radio ("SMR")
businesses, and all assets employed in such businesses
(collectively, the "SMR Assets"), of Questar Telecom, Inc., a
Utah corporation ("QTI"), Advanced MobileComm West, Inc., a
Massachusetts corporation ("AMI-West"), and ComQor, Inc., a
Delaware corporation ("Comqor").
B. QTI is a wholly owned subsidiary of Questar. AMI-
West is a 95.6% majority-owned subsidiary of AMI. The Individual
Stockholders are the owners of the remaining 4.4% equity interest
in AMI-West. QTI and AMI-West are the sole stockholders of
Comqor.
C. The SMR Assets to be acquired by NEXTEL will
include all SMR frequencies and related Federal Communications
Commission ("FCC") SMR licenses listed in Annex A to this
Agreement (previously delivered to all parties hereto), as well
as the related physical assets of the relevant SMR systems
(including all repeater and ancillary equipment and real
property) and the related intangible assets of the relevant SMR
systems (including all customer lists, trademarks and/or trade
names and contract rights).
D. The acquisition of the SMR Assets by NEXTEL will
be effected by related share exchange transactions (the "Share
Exchanges") pursuant to which Questar, AMI and the Individual
Stockholders will exchange their respective shareholdings in QTI
and AMI-West solely for NEXTEL Class A Common Stock, par value
$.001 per share ("NEXTEL Common Shares"). As a result of the
Share Exchanges, QTI and AMI-West will become wholly owned
subsidiaries of NEXTEL, and Comqor will become a wholly owned
indirect subsidiary of NEXTEL.
E. Immediately after the consummation of the Share
Exchanges, NEXTEL will cause QTI to change its name to a name
that does not include the word "Questar."
AGREEMENT
In order to consummate the Share Exchanges, and in
consideration of the premises and the mutual agreements contained
in this Agreement, NEXTEL, Questar, AMI and the Individual
Stockholders hereby agree as follows:
ARTICLE I. EXCHANGE OF QTI COMMON STOCK
FOR NEXTEL COMMON SHARES
1.1 Exchange of Stock. Upon and subject to the terms
and conditions set forth herein, (a) Questar shall transfer,
assign, convey and deliver, at the Closing (as defined in
Article III hereof), all of the issued and outstanding shares of
QTI Common Stock, par value $1.00 per share ("QTI Common Stock"),
to NEXTEL; and (b) NEXTEL shall issue and deliver thereat in
exchange therefor NEXTEL Common Shares on the basis of 3,886
NEXTEL Common Shares for each share of QTI Common Stock (the "QTI
Exchange Ratio"), but subject to the adjustments, if applicable,
provided for in Sections 1.3 and 10.2(e) hereof, except that no
fractional NEXTEL Common Share or certificate or scrip therefor
shall be issued as a result of the exchange of any shares of QTI
Common Stock for NEXTEL Common Shares. The exchange transaction
described in this Section 1.1 is referred to herein as the "QTI
Share Exchange."
1.2 Certificates. At the Closing, Questar, as the
sole holder of an outstanding certificate or certificates
representing shares of QTI Common Stock, shall surrender the same
to NEXTEL and shall receive in exchange therefor certificates
representing the number of whole NEXTEL Common Shares into which
Questar's shares of QTI Common Stock shall be exchangeable in
accordance with the QTI Exchange Ratio.
1.3 Adjustments. The QTI Exchange Ratio is based on
the following information provided by Questar to NEXTEL: (a) on
the date hereof, there are 1,000 issued and outstanding shares of
QTI Common Stock, all of which are held of record and
beneficially by Questar; (b) at the Closing, there shall be
issued and outstanding exactly 1,000 shares of QTI Common Stock,
all of which shall be held of record and beneficially by Questar;
and (c) assuming all such shares of QTI Common Stock will be
delivered to NEXTEL by reason of the QTI Share Exchange, the QTI
Share Exchange will result in the delivery of exactly 3,886,000
NEXTEL Common Shares to Questar. Except pursuant to adjustments
made in accordance with the following sentence and the provisions
of Section 10.2(e), in no event shall NEXTEL be required to
deliver other than 3,886,000 NEXTEL Common Shares in the QTI
Share Exchange. NEXTEL and Questar agree that, in the event
prior to the Closing of any recapitalization of NEXTEL in the
nature of stock splits, combinations, share dividends or similar
changes in NEXTEL's capitalization, then appropriate adjustments
shall be made to the QTI Exchange Ratio so as to reflect
treatment designed to place each of NEXTEL and Questar in the
same posture as if the Closing had occurred immediately prior to
the occurrence of the event giving rise to such adjustment.
ARTICLE II. EXCHANGE OF AMI-WEST COMMON STOCK
FOR NEXTEL COMMON SHARES
2.1 Creation of AMI-West. (a) In contemplation of
the Share Exchanges, AMI and the Individual Stockholders have
caused the following series of transactions to occur:
(i) AMI owned 100% of the shareholdings of
Advanced MobileComm of Southern California, Inc., a Massachusetts
corporation ("AMI-SC"), and 100% of the shareholdings of Advanced
MobileComm of Colorado, Inc., a Massachusetts corporation ("AMI-
Denver"). AMI owned 90% and the Individual Stockholders owned
10% of the shareholdings of Advanced MobileComm of Nevada, Inc.,
a Massachusetts corporation ("AMI-NV"). AMI has caused all of
the shares of AMI-SC to be transferred to AMI-NV for adequate
consideration and has further caused the dissolution and complete
liquidation of AMI-SC. AMI has caused all of the shares of AMI-
Denver to be transferred to AMI-NV for adequate consideration and
has further caused the dissolution and complete liquidation of
AMI-Denver.
(ii) As a result of the foregoing transactions,
AMI-NV became the owner of all of the assets and liabilities
formerly owned by AMI-SC and AMI-Denver, including, without
limitation, those assets involving all SMR frequencies and
related FCC SMR licenses, physical assets and intangible assets
of the SMR systems formerly operated by AMI-SC in and around the
San Diego, California metropolitan area and by AMI-Denver in and
around the Denver, Colorado metropolitan area.
(iii) AMI and the Individual Stockholders have
caused certain assets of AMI-NV, listed in Annex B to this
Agreement (previously delivered to all parties hereto), to be
transferred, prior to the execution and delivery of this
Agreement, from AMI-NV to a subsidiary of AMI or to AMI itself,
with the result that such assets shall not be acquired by NEXTEL
by reason of the Share Exchanges.
(b) AMI and the Individual Stockholders have caused
AMI-NV to change its name to AMI-West. As used in this
Agreement, the name "AMI-West" shall include, for all purposes,
AM-SC, AMI-Denver and AMI-NV.
2.2 Exchange of Stock. Upon and subject to the terms
and conditions set forth herein, (a) AMI and the Individual
Stockholders shall transfer, assign, convey and deliver, at the
Closing, all of the issued and outstanding shares of AMI-West
Common Stock, without par value ("AMI-West Common Stock"), to
NEXTEL; and (b) NEXTEL shall issue and deliver thereat in
exchange therefor NEXTEL Common Shares on the basis of 66.88
NEXTEL Common Shares for each share of AMI-West Common Stock (the
"AMI-West Exchange Ratio"), but subject to the adjustments, if
applicable, provided for in Sections 2.4 and 10.2(e) hereof,
except that no fractional NEXTEL Common Share or certificate or
scrip therefor shall be issued as a result of the exchange of any
shares of AMI-West Common Stock for NEXTEL Common Shares. The
exchange transaction described in this Section 2.2 is referred to
herein as the "AMI-West Share Exchange."
2.3 Certificates. At the Closing, AMI and the
Individual Stockholders, as the sole holders of outstanding
certificates representing shares of AMI-West Common Stock, shall
surrender the same to NEXTEL and shall receive in exchange
therefor certificates representing the number of whole NEXTEL
Common Shares into which their shares of AMI-West Common Stock
shall be exchangeable in accordance with the AMI-West Exchange
Ratio.
2.4 Adjustments. The AMI-West Exchange Ratio is
based on the following information provided by AMI and the
Individual Stockholders to NEXTEL: (a) on the date hereof, there
are 28,618.42 issued and outstanding shares of AMI-West Common
Stock, 27,368.42 of which are held of record and beneficially by
AMI, 625 of which are held of record and beneficially by Robert
C. Mearns, and 625 of which are held of record and beneficially
by Francis G. Fuson; (b) at the Closing, there shall be issued
and outstanding exactly 28,618.42 shares of AMI-West Common
Stock, 27,368.42 of which shall be held of record and
beneficially by AMI, 625 of which shall be held of record and
beneficially by Robert C. Mearns, and 625 of which shall be held
of record and beneficially by Francis G. Fuson; and (c) assuming
all such shares of AMI-West Common Stock will be delivered to
NEXTEL by reason of the AMI-West Share Exchange, the AMI-West
Share Exchange will result in the delivery of exactly 1,914,000
NEXTEL Common Shares to AMI and the Individual Stockholders
(1,830,400 to AMI, 41,800 to Robert C. Mearns and 41,800 to
Francis G. Fuson). Except pursuant to adjustments made in
accordance with the following sentence and the provisions of
Section 10.2(e), in no event shall NEXTEL be required to deliver
other than 1,914,000 NEXTEL Common Shares in the AMI-West Share
Exchange. NEXTEL, AMI and the Individual Stockholders agree
that, in the event prior to the Closing of any recapitalization
of NEXTEL in the nature of stock splits, combinations, share
dividends or similar changes in NEXTEL's capitalization, then
appropriate adjustments shall be made to the AMI-West Exchange
Ratio so as to reflect treatment designed to place each of
NEXTEL, AMI and the Individual Stockholders in the same posture
as if the Closing had occurred immediately prior to the
occurrence of the event giving rise to such adjustment.
ARTICLE III. THE CLOSING
3.1 Definition. The "Closing" shall mean the time at
which (a) Questar effects the transfer of QTI Common Stock solely
in exchange for NEXTEL Common Shares by deliveries in the manner
contemplated by Section 3.3(a) hereof, after satisfaction (or
duly executed waiver) of the conditions set forth in this
Agreement; and (b) AMI and the Individual Stockholders effect the
transfer of AMI-West Common Stock solely in exchange for NEXTEL
Common Shares by deliveries in the manner contemplated by Section
3.3(b) hereof, after satisfaction (or duly executed waiver) of
the conditions set forth in this Agreement. The Closing shall
take place at the date, time and location reasonably determined
by NEXTEL after consultation with Questar and AMI, and such date,
time and location shall be confirmed in writing by such parties
and the Individual Stockholders not less than 15 days prior to
the scheduled date of the Closing. All proceedings to take place
at the Closing shall take place simultaneously, and no delivery
shall be considered to have been made until all such proceedings
have been completed.
3.2 Acquisition of the SMR Assets. At the Closing,
the SMR Assets (being the SMR Assets held by QTI, AMI-West and
Comqor as of the date hereof and set forth in a Schedule that
refers to this Section), which are the only properties and assets
used in the businesses of QTI, AMI-West and Comqor (except as
otherwise set forth in one of the Schedules to this Agreement),
shall be acquired by NEXTEL pursuant to the Share Exchanges free
from any liens, encumbrances, obligations, liabilities or adverse
claims of any kind except as provided in this Agreement or as
reflected in one of the Schedules to this Agreement (in the form
such Schedules were first delivered and attached to this
Agreement on the date hereof).
3.3 Actions by Questar, AMI and the Individual
Stockholders. At the Closing, in addition to such other action
as may be provided for herein:
(a) Questar shall deliver to NEXTEL:
(i) Certificates representing all issued and
outstanding shares of QTI Common Stock, duly endorsed (or
accompanied by appropriate stock powers properly endorsed) in
blank for transfer, together with such supporting documents as
may in the opinion of NEXTEL be necessary to permit NEXTEL to
acquire such shares free of any adverse claim; and
(ii) Such other certificates, opinions (which,
except for opinions as to FCC licenses and FCC compliance
matters, may be opinions of internal counsel to Questar),
documents and instruments as may be required by this Agreement.
(b) AMI and the Individual Stockholders shall deliver
to NEXTEL:
(i) Certificates representing all issued and
outstanding shares of AMI-West Common Stock, duly endorsed (or
accompanied by appropriate stock powers properly endorsed) in
blank for transfer, together with such supporting documents as
may in the opinion of NEXTEL be necessary to permit NEXTEL to
acquire such shares free of any adverse claim; and
(ii) Such other certificates, opinions (which,
except for opinions as to FCC licenses and FCC compliance
matters, may be opinions of internal counsel to AMI), documents
and instruments as may be required by this Agreement.
3.4 Actions by NEXTEL. At the Closing, in addition
to such other action as may be provided for herein:
(a) NEXTEL shall deliver to each of Questar, AMI and
the Individual Stockholders a certificate in the appropriate name
representing the number of NEXTEL Common Shares (as calculated in
accordance with the QTI Exchange Ratio or the AMI-West Exchange
Ratio, as the case may be) indicated opposite its or his name as
set forth in a Schedule that refers to this Section, previously
delivered by NEXTEL to each of them (subject only to the
adjustment provisions contained in Sections 1.3, 2.4 and 10.2(e)
of this Agreement); and
(b) Such other certificates, opinions, documents and
instruments as may be required by this Agreement.
ARTICLE IV. REPRESENTATIONS AND WARRANTIES
OF QUESTAR
Questar represents and warrants to NEXTEL that:
4.1 Corporate Organization.
(a) Questar has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
State of Utah.
(b) QTI has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
State of Utah and has the corporate power and authority to own or
lease its properties and to conduct its business as it has been
and is now being conducted, except where the failure to do so
would not have a material adverse effect on the business,
financial condition, results of operations, liabilities or assets
of QTI or would impair the ability of Questar or QTI to perform
in any material respect their respective obligations under this
Agreement or any of the other documents or instruments to which
either of them is a party in connection with the transactions
contemplated herein (such an effect and/or impairment referred to
herein as a "Material Adverse Effect on QTI"). The copies of the
Certificate of Incorporation of QTI, certified by the Secretary
of State of the State of Utah, and its By-Laws, certified by the
Secretary of QTI, previously delivered by Questar to NEXTEL, are
true, correct and complete. Except as set forth in a Schedule
that refers to this Section, previously delivered by Questar to
NEXTEL, QTI is duly licensed or qualified and in good standing as
a foreign corporation in all jurisdictions where it conducts
business activities, owns or leases properties or assets or
employs persons acting on its behalf, in any of the foregoing
cases, on a more than incidental or nominal basis (which
jurisdictions are identified on such Schedule) in which its
ownership of property or the character of its activities is such
as to require it to be so licensed or qualified (except where the
failure to be so licensed or qualified would not have a Material
Adverse Effect on QTI).
4.2 Subsidiaries. QTI has no direct or indirect
subsidiaries other than Comqor. QTI and AMI-West are the sole
stockholders of Comqor. Set forth in a Schedule that refers to
this Section, previously delivered by Questar to NEXTEL, is a
description of the capitalization of Comqor and QTI's ownership
interest in Comqor, and a description of the properties and
assets owned or leased by Comqor and the liabilities and
obligations, contingent or otherwise, of Comqor. Except as set
forth on such Schedule, Comqor has not conducted any business
other than in connection with its organization and
capitalization.
4.3 Other Entities. Except as set forth on a
Schedule that refers to this Section and except for its
investment in Comqor and any management agreements (provided that
all such management agreements are listed on one of the Schedules
to this Agreement), QTI does not own, directly or indirectly, any
partnership, equity, profit, participation or similar ownership
interest in any corporations, partnerships, joint ventures,
trusts, unincorporated organizations, associations or similar
entities.
4.4 Capital Stock. The authorized capital stock of
QTI consists solely of 1,000,000 shares of QTI Common Stock,
1,000 of which are issued and outstanding and none of which are
held in QTI's treasury. All outstanding shares of QTI Common
Stock were issued in compliance with all applicable laws and
regulations. QTI is a wholly owned subsidiary of Questar. All
of the issued and outstanding shares of QTI Common Stock are, as
of the date of this Agreement, and will be as of the Closing,
(a) owned, of record and beneficially, by Questar free and clear
of any mortgage, pledge, security interest, encumbrance, lien,
claim or charge of any kind, and (b) duly authorized, validly
issued, fully paid and nonassessable.
4.5 Options. No options to purchase shares of QTI
Common Stock have been granted. There are no commitments or
obligations of QTI, either firm or conditional, to issue, deliver
or sell, whether under offers, stock option agreements, stock
bonus agreements, stock purchase plans, incentive compensation
plans, warrants, conversion rights or otherwise, any authorized
but unissued shares, or treasury shares, of QTI Common Stock or
other securities of QTI.
4.6 Compliance with Laws. Except as set forth in a
Schedule that refers to this Section, previously delivered by
Questar to NEXTEL, QTI is not currently in violation of any
statute, law or regulation applicable to any of its presently or
formerly owned properties or to the conduct of its current or
past businesses. Neither QTI, nor Questar with respect to QTI,
has received any notice from any governmental agency or private
or public entity advising QTI (or Questar with respect to QTI)
that it is potentially responsible for response costs with
respect to a release or threatened release of Hazardous
Substances, Pollutants or Contaminants (as such terms are defined
in the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended). QTI has not, and, to the
knowledge of Questar and QTI, no other person has, buried, dumped
or otherwise disposed of any chemical substances, including any
Hazardous Substances, Pollutants or Contaminants on, beneath or
about any of the properties of QTI or (as to QTI) on, beneath or
about any other property. QTI has not, and, to the knowledge of
Questar and QTI, none of QTI's licensees with respect to SMR
licenses held by QTI has, received written notice of any
violation of any environmental, zoning or other land use
ordinance, law or regulation relating to the operation of its or
their businesses, nor are Questar and QTI aware of any such
violation. Questar has listed in a Schedule that refers to this
Section all environmental reports known to Questar or QTI
relating to any owned or leased real property of QTI and has
previously delivered to NEXTEL a true, correct and complete copy
of each report so listed.
4.7 No Conflict. Except as set forth in a Schedule
that refers to this Section, previously delivered by Questar to
NEXTEL, the execution and delivery of this Agreement by Questar
and the consummation of the transactions contemplated hereby do
not and will not violate any provision of, or result in the
breach of, or accelerate or permit the acceleration of the
performance required by the terms of, any applicable law, rule or
regulation of any governmental body, the Certificate of
Incorporation or By-Laws of Questar and QTI, or any agreement,
indenture or other instrument to which Questar or QTI is a party
or by which Questar or QTI may be bound, or of any order,
judgment or decree applicable to either of them, or terminate or
result in the termination of any such agreement, indenture or
instrument, or result in the creation of any lien, charge or
encumbrance upon any of the properties or assets of Questar or
QTI under any agreement to which either of them is a party, or
constitute an event which, after notice or lapse of time or both,
would result in any such violation, breach, acceleration,
termination or creation of a lien, charge or encumbrance.
4.8 Litigation. Except as set forth in a Schedule
that refers to this Section, previously delivered by Questar to
NEXTEL, there are no actions, suits, proceedings, claims or
investigations formally instituted and pending or, to the
knowledge of Questar and QTI, threatened against or specifically
affecting QTI or involving any of its properties or assets, at
law or in equity, or before or by any Federal, state, municipal
or other governmental department, commission, board, bureau,
agency or instrumentality, domestic or foreign, or any
arbitration panel or alternative dispute resolution body. Except
as set forth in such Schedule and except for orders or decrees of
general application, QTI is not subject to or in default under
any order, writ, injunction or decree of any court or Federal,
state, municipal or other governmental department, commission,
board, bureau, agency or instrumentality, or any arbitration
panel or alternative dispute resolution body.
4.9 Insurance. The managements of Questar and QTI
reasonably believe that QTI (or, as appropriate, Questar in
respect of QTI) currently maintains in full force insurance
policies, issued by reputable and sound insurers, providing
insurance coverage for QTI and its properties and business
against such losses and risk as are normally maintained by
similarly situated businesses in QTI's industry. Set forth in a
Schedule that refers to this Section, previously delivered by
Questar to NEXTEL, is a list of all insurance policies held by
QTI (or, as appropriate, by Questar in respect of QTI) indicating
the insurer, type, amount and term of coverage, deductible and
additional named insureds with respect to each such policy.
Except as set forth in such Schedule, all of these policies are
in full force and effect and all premiums due thereon have been
paid or accrued and there are no retroactive experience-based
premium adjustment features in any policy. Also set forth in
such Schedule is a description of all claims (including amounts)
currently pending under such insurance policies. Except as set
forth in such Schedule, all such insurance coverage will cease
upon the Closing as it relates to QTI.
4.10 Intellectual Property. Except as set forth in a
Schedule that refers to this Section, previously delivered by
Questar to NEXTEL:
(a) There are no patents or patent applications;
trademarks, service marks, trade dress, trade names, corporate
names or any applications to register any of the foregoing;
copyrights or copyright registrations; or any licenses to or from
third parties with respect to any of the foregoing (including,
without limiting the generality of the foregoing, all computer
software, data and documentation) relating to QTI's business as
now conducted or as presently proposed to be conducted.
(b) QTI owns and possesses all right, title and
interest in and to the proprietary rights set forth in such
Schedule (except where the failure to have such right would not
have a Material Adverse Effect on QTI), and no claims by any
third party contesting the validity, enforceability, use or
ownership of any proprietary rights set forth in such Schedule
has been made, is currently outstanding or, to the knowledge of
Questar or QTI, has been threatened.
(c) QTI has not received any notices of any
infringement or misappropriation by, or conflict with, any third
party with respect to the proprietary rights set forth in such
Schedule.
(d) QTI has not knowingly infringed, misappropriated
or otherwise conflicted with any proprietary rights of any third
parties, and Questar and QTI are not aware of any infringement,
misappropriation or conflict which has occurred as a result of
the operation of QTI's business as now conducted.
(e) Such Schedule describes all proprietary rights
which have been licensed to third parties and those proprietary
rights which are licensed from third parties (except those
licensed from third parties which are not material to the
operation of QTI's business as now conducted).
4.11 Capital Projects. Set forth in a Schedule that
refers to this Section, previously delivered by Questar to
NEXTEL, is a description of all capital projects currently
committed for or authorized by QTI for (a) SMR systems, (b)
Digital Mobile System planning and engineering for the Nevada and
California markets, and (c) all other capital projects involving
the expenditure of more than $50,000 in any particular case or
more than $200,000 in the aggregate.
4.12 Financial Statements. Set forth in Annex C to
this Agreement (previously delivered to all parties hereto) are
the following financial statements of QTI (including any
footnotes thereto), all of which are true, correct and complete,
have been prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods
involved and present fairly the financial position of QTI, at the
dates stated in such financial statements and the results of its
operations for the periods stated therein:
(a) Balance Sheets at December 31, 1992 and
September 30, 1993, which have been audited by Ernst & Young;
(b) Statements of Operations for the years ended
December 31, 1991 and 1992 and the nine-month period ended
September 30, 1993, which have been audited by Ernst & Young;
(c) Statements of Shareholders' Equity for the years
ended December 31, 1991 and 1992 and the nine-month period ended
September 30, 1993, which have been audited by Ernst & Young; and
(d) Statements of Cash Flows for the years ended
December 31, 1991 and 1992 and the nine-month period ended
September 30, 1993, which have been audited by Ernst & Young.
4.13 Liabilities. QTI does not have, and the
managements of Questar and QTI are not aware of any facts or
circumstances that are reasonably likely to result in, any
liability or obligation, secured or unsecured (whether accrued,
absolute, known, unknown, contingent or otherwise), except:
(a) As and to the extent liabilities or obligations
are included in line items on QTI's Balance Sheet at
September 30, 1993;
(b) Those respective liabilities or obligations
reflected in any Schedule to this Agreement previously delivered
by Questar to NEXTEL, but if any such liability or obligation was
not incurred in the ordinary course of business, the relevant
Schedule item(s) will include a description of the type of
liability or obligation represented by such item(s), together
with a fixed or an estimated dollar amount of such liability or
obligation; and
(c) Those liabilities or obligations incurred since
September 30, 1993 which constitute (i) any trade payables and
accrued expenses incurred in the ordinary course of business that
are not overdue ("Current Payables"), (ii) any liens securing any
Current Payables, (iii) any liens or encumbrances connected with
operating leases entered into in the ordinary course of business,
(iv) any non-material liens or encumbrances on any of the SMR
Assets not securing any indebtedness, and (v) any liens or
encumbrances agreed to in writing by NEXTEL.
4.14 Transactions Not in the Ordinary Course. Except
as set forth in a Schedule that refers to this Section,
previously delivered by Questar to NEXTEL, from September 30,
1993 to the date hereof, Questar has caused QTI to conduct its
SMR business operations in the ordinary course consistent with
past practice and, without limiting the generality of the
foregoing, QTI has not: (a) sold, transferred or assigned any
SMR frequency or related FCC SMR license; (b) disposed of or
contracted to dispose of any property or other assets,
voluntarily incurred any absolute or contingent debt obligation
or engaged in any activity or transaction except, in each case,
in the ordinary course of business; (c) borrowed any money,
except in the ordinary course of business under currently
existing lines of credit or from affiliates; (d) declared or paid
any dividend; (e) purchased or redeemed any shares, notes or
other securities or made any other distribution to stockholders;
(f) increased the rate of remuneration to any of its directors,
officers, employees or other representatives, or agreed to do so,
other than increases in the ordinary course of business
consistent with past practice; (g) adopted any new or amended any
existing employee benefit plan; (h) formed or caused to be formed
any subsidiary; (i) issued, sold, distributed or disposed of any
shares, notes or other securities of QTI or committed itself to
do so; or (j) instituted new or changed inventory management or
accounts receivable collection practices or procedures different
from those employed consistent with past practice.
4.15 Changes in Conditions. Since September 30,
1993, there has not been any material adverse change in the
financial condition, results of operations, business, assets or
properties of QTI, taken as a whole, and there has not been any
occurrence, circumstance or combination thereof which is
reasonably likely to result in any such material adverse change
before or after the Closing, except for events relating generally
to the SMR industry.
4.16 Taxes. QTI has been included in a consolidated
Federal income tax return filed by Questar. QTI, or Questar on
its behalf, has accurately prepared in good faith, and has duly
and timely filed with all appropriate Federal, foreign, state and
local governmental agencies, all tax returns and reports required
to be filed by it (other than returns that would not have a
Material Adverse Effect on QTI if not filed). Such returns
accurately reflect all payments and distributions made by QTI to
Questar or any of Questar's affiliates and required to be
reflected on such returns. Except as set forth in a Schedule
that refers to this Section (previously delivered by Questar to
NEXTEL), all taxes owed, or which may be claimed to be owed, to
any governmental agency for or with respect to the periods
covered by such returns and reports or with respect to any period
(or portions thereof) ending at or before the Closing, and all
interest, penalties, assessments and deficiencies connected
therewith, have been or will be paid in full or provided for in
full. Except as set forth in a Schedule that refers to this
Section, neither QTI nor any affiliate of QTI has executed or
filed with any taxing authority any agreement extending the
period for assessment or collection of any taxes. Except as set
forth in a Schedule that refers to this Section, QTI is not a
party to any pending action or proceeding, and to the knowledge
of Questar and QTI, no such action or proceeding is threatened,
by any Federal, foreign, state or local governmental entity or
municipality or subdivision thereof or any authority, department,
commission, board, bureau, agency, court or instrumentality for
the assessment or collection of taxes, and no deficiency notices
or reports have been received by QTI in respect of any of its tax
returns.
4.17 Accounts; Employees. Set forth in a Schedule
that refers to this Section, previously delivered by Questar to
NEXTEL, is a list of (a) all banks in which QTI has an account or
safe deposit box and the names of all persons authorized to draw
thereon or have access thereto; (b) the current fixed annual rate
of compensation (plus total cash compensation broken down between
fixed and bonus components for calendar year 1993) as of the date
such list is provided for each of the employees of QTI for the
current fiscal year and a summary of the basis on which each such
person is compensated if such basis is other than exclusively a
fixed salary rate; and (c) the names of all persons holding
powers of attorney from QTI and a summary statement of the terms
thereof.
4.18 Real Estate. Neither Questar nor QTI owns any
real estate that is used or held for use in the business of QTI
as now conducted. Set forth in a Schedule that refers to this
Section, previously delivered by Questar to NEXTEL, is a list
describing all real estate options and leaseholds held by QTI.
Except as set forth in such Schedule, QTI has good leasehold
interests in all of its leaseholds, which interests will not be
materially and adversely affected by the transactions
contemplated hereby, and each lease with an initial term of more
than one year is, to the knowledge of Questar and QTI,
enforceable against the lessor thereunder and QTI enjoys quiet
possession of all leaseholds.
4.19 Title to Properties. QTI has good title to all
of its properties and assets, tangible and intangible (including,
without limitation, those properties and assets reflected in
QTI's Balance Sheet at September 30, 1993, except as disposed of
in the ordinary course of business since September 30, 1993, and
all those other specific items of properties and assets not so
reflected or disposed of as set forth in a Schedule that refers
to this Section, previously delivered by Questar to NEXTEL) as
may be requisite to the conduct of its business in substantially
the same manner as heretofore, and there is no title defect in
any of such properties or assets which is reasonably likely to
have at any time a Material Adverse Effect on QTI.
Notwithstanding the foregoing, none of such properties or assets
is subject to any lien or encumbrance other than (a) purchase
money security interests incurred in the ordinary course of
business in arm's-length transactions with non-affiliates (and
with respect to which security interests QTI is not in default)
and any lien for current taxes not delinquent; (b) arising by
virtue of the leases referred to in Section 4.18 of this
Agreement; (c) referred to in the financial statements (or the
footnotes thereto) described in Section 4.12 of this Agreement;
or (d) such other encumbrances as are not material in character,
amount or extent, and do not materially detract from the value
of, or interfere with the present or future use of, the property
subject thereto and affected thereby or otherwise materially
impair the business operations of QTI, taken as a whole.
4.20 Contracts. Except as set forth in a Schedule
that refers to this Section, previously delivered by Questar to
NEXTEL, QTI is not in default in any respect under the terms of
any contracts, agreements or commitments, written or oral to
which it is a party or by which it or any of its properties is
subject or bound. Except as set forth in such Schedule or in any
other Schedule previously delivered by Questar to NEXTEL
referring to any other Section of this Agreement, QTI (and any of
its properties) will not at the time such Schedule is delivered
be a party to or be bound by any (a) agreement or other
arrangement not made in the ordinary course of business;
(b) employment or consulting contract or contract with any labor
union; (c) employee bonus, pension, profit-sharing, retirement,
stock purchase or other benefit or welfare plan or agreement;
(d) contract or commitment for the purchase of raw materials or
supplies or the sale of products involving more than $50,000 per
annum; (e) indenture, agreement, note, mortgage, guaranty or
other writing which evidences or relates to any loan of money to,
or indebtedness for money borrowed by, QTI; (f) license agreement
or other contract or agreement relating to patents, trademarks,
trade names, techniques or copyrights or applications for any
thereof, inventions, trade secrets or other proprietary know-how
or technical assistance; (g) loan to officers, directors or
employees of QTI, all of which loans will be repaid in full by
the Closing; or (h) agreement relating to any direct or indirect
acquisition of SMR Licenses (as defined in Section 4.25 hereof)
in the case of any of the foregoing, whether written or oral
(and, in the case of oral commitments, with Questar providing an
accurate written summary of all material terms thereof to
NEXTEL). Except as set forth in such Schedule, QTI is not in
default under the terms of any agreements, contracts or
commitments described in subsections (a) through (h) of this
Section.
4.21 Corporate Authorization.
Questar has all necessary corporate power and
authority to enter into this Agreement and to perform all of the
obligations to be performed by it hereunder. The execution,
delivery and performance of this Agreement by Questar have been
duly authorized by Questar, and upon the execution and delivery
hereof by Questar, this Agreement will constitute the valid and
legally binding obligations of Questar, enforceable against
Questar in accordance with its terms.
4.22 Brokers. Except for Wertheim Schroder & Co.
Incorporated (whose fees and expenses are and will be the sole
and exclusive responsibility of Questar and/or AMI), Questar and
QTI have not directly or indirectly dealt with anyone acting in
the capacity of a finder or broker and have not incurred and will
not incur any obligation for any finder's or broker's fee or
commission in connection with this Agreement or the QTI Share
Exchange.
4.23 Employee Benefit Matters.
(a) Set forth in a Schedule that refers to this
Section, previously delivered by Questar to NEXTEL, is a true,
complete and correct list of all "employee benefit plans" as
defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), and all other
employee profit-sharing, incentive, deferred compensation,
welfare, pension, retirement, severance, group insurance and
other employee benefit plans, arrangements, agreements and
practices which relate to employee benefits and which constitute
a material cost to QTI currently maintained or contributed to by
QTI, or to which QTI currently is obligated to contribute,
relating to present or former employees, directors, officers,
stockholders or consultants of QTI (collectively, "QTI Employee
Plans"). Except as set forth in such Schedule, to the knowledge
of Questar and QTI, QTI has no material liability with respect to
any plans, arrangements or practices of the type described in the
preceding sentence previously maintained or contributed to by
QTI, or to which QTI previously had an obligation to contribute.
(b) Questar previously has delivered to NEXTEL true,
complete and correct copies of each of the QTI Employee Plans,
including all amendments thereto, and any other documents or
other instruments relating thereto reasonably requested by
NEXTEL.
(c) All QTI Employee Plans are being, and have been,
maintained, operated and administered in all material respects in
accordance with their respective terms and in compliance with all
applicable laws.
(d) QTI has not within the past six years had an
obligation to contribute to a "defined benefit plan" as defined
in Section 3(35) of ERISA, a pension plan subject to the minimum
funding standards of Section 302 of ERISA or Section 412 of the
Code, a "multiemployer plan" as defined in Section 3(37) of ERISA
or Section 414(f) of the Code or a "multiple employer plan"
within the meaning of Section 210(a) of ERISA or Section 413(c)
of the Code. No QTI Employee Plan is funded through a "welfare
benefit fund" as defined in Section 419(e) of the Code. Other
than Questar (or any of the subsidiaries of Questar), no other
trade or business is or, at any time within the past six years,
has been treated, together with QTI, as a single employer under
Section 414 of the Code or Section 4001 of ERISA. QTI has no
liability imposed by statute on entities under common control
with other entities with respect to any employee benefit plans
(as defined in Section 3(3) of ERISA) or group health plans (as
defined in Section 5000(b)(1) of the Code) of Questar. The
consummation of the transactions contemplated by this Agreement
will not constitute a "reportable event" under Section 4043 of
ERISA or result in a "withdrawal" from a multiemployer plan under
Section 4203 or 4205 of ERISA.
(e) Each QTI Employee Plan intended to be qualified
under Section 401(a) of the Code has been determined by the
Internal Revenue Service ("IRS") to be so qualified, or if not so
qualified each such plan may still be amended within the remedial
amendment period to cure any qualification defect to the extent
permitted by applicable law, and each trust created thereunder
which is intended to be exempt from Federal income tax under the
provisions of Section 501(a) of the Code has been determined by
the IRS to be so exempt and no fact or event has occurred since
the date of such determination by the IRS to adversely effect the
qualified status of any such QTI Employee Plan or the exempt
status of any such trust.
(f) There have been no prohibited transactions or
breaches of any of the duties imposed on "fiduciaries" (within
the meaning of Section 3(21) of ERISA) by ERISA with respect to
the QTI Employee Plans that could result in QTI becoming liable
directly or indirectly (by indemnification or otherwise) for any
material excise tax, penalty or other liability under ERISA or
the Code.
(g) Except as set forth in a Schedule that refers to
this Section, there are no actions or claims pending or, to the
knowledge of Questar and QTI, threatened, with respect to any QTI
Employee Plan (other than routine claims for benefits), and there
are no investigations or audits of any QTI Employee Plan by any
governmental authority currently pending and there have been no
such investigations or audits that have been concluded that
resulted in any liability of QTI that has not been fully
discharged.
(h) All (i) insurance premiums required to be paid
with respect to, (ii) benefits, expenses, and other amounts due
and payable under, and (iii) contributions, transfers or payments
required to be made to, any QTI Employee Plan have been made on
or before their due date. With respect to any insurance policy
providing funding for benefits under any QTI Employee Plan, (x)
there is no material liability of QTI, in the nature of a
retroactive or retrospective rate adjustment, loss sharing
arrangement, or other actual or contingent liability, nor would
there be any such liability if such insurance policy was
terminated on the date hereof, and (y) to the knowledge of
Questar and QTI, no insurance company issuing any such policy is
in receivership, conservatorship, liquidation or similar
proceeding and no such proceedings with respect to any insurer
are imminent.
(i) A Schedule that refers to this Section contains a
separate identification of each QTI Employee Plan that provides
benefits, including, without limitation, death or medical
benefits, beyond termination of employment or retirement other
than (i) coverage mandated by law, (ii) death or retirement
benefits under any qualified QTI Employee Plan, (iii) deferred
compensation benefits fully reflected on QTI's Balance Sheet at
September 30, 1993 or (iv) benefits, the full cost of which are
borne by the employee (or the employee's beneficiary) (the
"Post-Employment Benefits"). Such Balance Sheet accurately
reflects the liabilities relating to the Post-Employment
Benefits.
(j) Except as set forth in a Schedule that refers to
this Section, the execution, delivery and performance of this
Agreement will not, solely in and of itself and without regard to
any subsequent events, (i) constitute a stated triggering event
under any QTI Employee Plan that will result in any payment
(whether of severance pay or otherwise) becoming due from QTI to
any present or former officer, employee, director, stockholder or
consultant (or dependents of any thereof), or (ii) accelerate the
time of payment or vesting, or increase the amount, of
compensation due to any present or former officer, employee,
director, stockholder or consultant of QTI.
(k) Except as set forth in a Schedule that refers to
this Section, QTI has not agreed or committed to make any
amendments to any of the QTI Employee Plans not already embodied
in the documents comprising any such QTI Employee Plan, other
than any amendments required by law.
(l) All contributions, transfers and payments by QTI
in respect of any QTI Employee Plan have been or are fully
deductible under the Code.
(m) QTI's Balance Sheet at September 30, 1993
contains, and at and for the period ending on the Closing will
contain, adequate accruals for (i) bonuses, sales commissions and
vacation pay earned but not received as of such dates and
(ii) incurred or continuing but unpaid claims under QTI Employee
Plans not funded by insurance.
(n) Except as set forth in a Schedule that refers to
this Section, no QTI Employee Plan provides benefits to any
individual who is not a current or former employee, director or
consultant of QTI, or the dependents or other beneficiaries of
any such current or former employee, director or consultant.
(o) Except as set forth in a Schedule that refers to
this Section, no parachute payments within the meaning of
Section 280G of the Code will be made in connection with or as a
result of the QTI Share Exchange.
4.24 Materially Correct. Reference is hereby made
(a) to the information about QTI furnished by Questar to NEXTEL
as set forth in the Annexes and Schedules to this Agreement or as
otherwise furnished to NEXTEL or to NEXTEL's representatives in
writing by any of those officers or representatives of Questar or
QTI listed in a Schedule that refers to this Section, (b) to the
written information furnished to NEXTEL, by Questar and/or QTI
for inclusion in the Registration Statement referred to in
Section 8.4(a) of this Agreement, and (c) to the information
contained in each officer's certificate and other document
furnished by Questar or QTI at the Closing (all such written
information, taken as a whole, the "Questar Disclosure
Information"). The Questar Disclosure Information (except for
any forecasts or projections or forward-looking estimates or
similar predictive information contained therein) so received on
or prior to the date hereof by NEXTEL did not contain any untrue
statement of a material fact or omit to state a material fact
necessary in order to make the Questar Disclosure Information in
the light of the circumstances under which it was made, not
misleading. The representation made in this Section shall also
be deemed made anew by Questar and QTI to NEXTEL immediately
prior to the Closing, but with reference to the Questar
Disclosure Information received by NEXTEL prior to the Closing.
4.25 Regulatory Matters.
(a) Definitions. For purposes of this Section, the
following terms shall have the indicated meanings:
"FCC" shall mean the Federal Communications Commission
or any successor thereto.
"FCC License" shall mean any paging, mobile telephone,
specialized mobile radio or other license, permit, consent,
certificate of compliance, franchise, approval or authorization
granted or issued by the FCC, including, without limitation, any
of the foregoing authorizing the acquisition, construction or
operation of an SMR System (as defined below), radio paging
system or other radio communications system.
"QTI Management Agreement" shall mean any management
or other agreement (other than a loading agreement) pursuant to
which QTI agrees to manage or to perform other services (other
than loading) with respect to SMR Licenses held by another person
in exchange for either the right to receive a portion of the
revenues derived from such SMR Licenses or the right to purchase
such SMR Licenses or any loading agreement pursuant to which QTI
is loading SMR Licenses held by another person in exchange for
either the right to receive a portion of the revenues derived
from such SMR Licenses in excess of 25% of the aggregate revenues
derived from such SMR Licenses or the right to purchase such SMR
Licenses.
"SMR License" shall mean an FCC License authorizing
the construction, ownership and operation of a specialized mobile
radio system in the 800 or 900 MHz band issued pursuant to 47 CFR
Part 90 of the Rules and Regulations of the FCC.
"SMR System" shall mean a specialized mobile radio
system licensed under 47 CFR Part 90 of the Rules and Regulations
of the FCC.
"SMR Units" shall mean the number of mobile and
control stations (within the meaning of 47 CFR Part 90 of the
Rules and Regulations of the FCC) subscribing to SMR Systems
licensed to or managed by QTI excluding, however, any such units
which are subject to a Third-Party Management Agreement if the
respective third party has a right to purchase the SMR Licenses
which are subject to such Third-Party Management Agreement.
"Third-Party Management Agreement" shall mean any
management or other agreement (other than a loading agreement)
pursuant to which a person (other than QTI) is managing SMR
Licenses held by QTI or any loading agreement pursuant to which a
person (other than QTI) is loading SMR Licenses held by QTI in
exchange for the right to receive a portion of the revenues
derived from such SMR Licenses in excess of 25% of the aggregate
revenues derived from such SMR Licenses.
(b) License Information. Questar has delivered to
NEXTEL prior to the execution hereof a Schedule that refers to
this Section which sets forth, as of the date hereof, a true and
complete list of the following information for each SMR License
and other FCC License issued to or operated by QTI:
(i) for all FCC Licenses (including all SMR
Licenses), the name of the licensee, the name of the seller(s),
the call sign, the transmitter location (by site coordinates and
city), the type of service (e.g., paging, SMR, etc.), the
frequency or frequencies authorized, the license renewal date and
operating entity;
(ii) in the case of SMR Licenses, the number of
channels authorized, the number of channels constructed whether
the license is for a conventional or trunked SMR System for each
such SMR License, the applicable loading date and whether the SMR
License is managed by QTI pursuant to a QTI Management Agreement
or by any other persons pursuant to a Third-Party Management
Agreement;
(iii) each holder of any such FCC License that
is neither wholly owned by QTI nor owned entirely by unaffiliated
persons and managed by QTI; and
(iv) for all FCC Licenses (including SMR
Licenses), whether such FCC Licenses are subject to rights of
first refusal, options and other such rights or obligations in
existence on the date hereof, including, without limitation,
entitlements to acquire additional ownership interests, which may
affect the ownership interests of QTI.
(c) Condition of Systems. All of the properties,
equipment and systems of QTI are, and, to the knowledge of
Questar and QTI, all thereof to be acquired or added in
connection with any contemplated system expansion or construction
prior to the Closing will be, in good repair, working order and
condition and are and will be in material compliance with all
standards or rules imposed by any governmental agency or
authority (including, without limitation, the FCC and (if
applicable), any public utilities commission or other state or
local governments or instrumentalities) or as imposed under any
agreements with customers.
(d) Fees; License Compliance. QTI has paid all
franchise, license or other fees and charges which have become
due in respect of its business and has made appropriate provision
as is required by generally accepted accounting principles,
consistently applied, for any such fees and charges which have
accrued. Except as set forth in a Schedule that refers to this
Section, QTI has duly secured, on the date hereof, all necessary
permits, licenses, consents and authorizations from, and has
filed all required registrations, applications, reports and other
documents with, the FCC, and, if applicable, any public utilities
commission and other entity exercising jurisdiction over the SMR
businesses, radio paging businesses and other radio
communications businesses of QTI or the construction or delivery
systems therefor, as such businesses are currently conducted.
QTI holds the FCC Licenses specified on such Schedule and all
such FCC Licenses are valid and in full force and effect without
conditions except for such conditions as are stated on the FCC
License or as are generally applicable to holders of FCC
Licenses. Except as set forth in such Schedule, all loading
requirements with respect to any SMR Licenses listed on such
Schedule have been met and QTI has taken every reasonable action
to cause the same to be loaded in compliance with FCC
regulations. Except as set forth in such Schedule: to the
knowledge of Questar and QTI, no event has occurred and is
continuing which could (i) result in the revocation, termination
or adverse modification of any FCC License listed on such
Schedule or (ii) adversely affect any rights of QTI thereunder;
Questar and QTI have no reason to believe and no knowledge that
the SMR Licenses specified on such Schedule will not be renewed
in the ordinary course; and QTI has sufficient time, materials,
equipment, contract rights and other required resources to
complete, in a timely fashion and in full, construction of all
its respective SMR Systems, radio paging and other radio
communications systems listed on such Schedule in compliance with
all applicable technical standards and construction requirements
and deadlines. Except as set forth in such Schedule, the current
ownership and operation by QTI of such SMR Systems, radio paging
and other radio communications systems comply with the
Communications Act of 1934, as amended, and all rules,
regulations and policies of the FCC.
(e) QTI Management Agreements. Set forth in a
Schedule that refers to this Section is a complete and correct
list of all QTI Management Agreements and Third-Party Management
Agreements to which QTI is a party that correctly identifies the
manager under each such agreement and the holder of the SMR
Licenses which are the subject of such agreements, the
transmitter locations (by address), and number of channels
covered by such SMR Licenses, the term of such agreements, any
options or calls (and the respective option or call prices) in
favor of any party to such agreements to purchase or sell any
interest in such SMR Licenses and the respective fees or revenues
payable or receivable under any such agreements. To the
knowledge of Questar and QTI, the terms of all such QTI
Management Agreements and Third-Party Management Agreements and
the operation of each SMR System pursuant thereto comply with the
Communications Act of 1934, as amended, and all applicable rules,
regulations and policies of the FCC. Other than those channels
identified as subject to Third-Party Management Agreements on the
date hereof on a Schedule that refers to this Section, as at the
Closing, none of the channels licensed to QTI will be subject to
a Third Party Management Agreement. Each QTI Management
Agreement includes an option allowing QTI to purchase the
channels that are subject to that agreement.
(f) Discrete Frequency Application. Questar has
delivered to NEXTEL a true and correct copy of each Request for
Rule Waiver and related Enhanced Specialized Mobile Radio
application, as filed with the FCC, and all supplemental or
related materials filed in connection therewith by or on behalf
of QTI, all materials submitted to the FCC and/or to QTI in
connection therewith by any third party, and any written
communication issued by the FCC or any FCC staff member in
response to, or otherwise in connection with, any of the
foregoing.
ARTICLE V. REPRESENTATIONS AND WARRANTIES
OF AMI
AMI represents and warrants to NEXTEL, for itself and
for the Individual Stockholders, that:
5.1 Corporate Organization.
(a) AMI has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
Commonwealth of Massachusetts.
(b) AMI-West has been duly incorporated and is
validly existing as a corporation in good standing under the laws
of the Commonwealth of Massachusetts and has the corporate power
and authority to own or lease its properties and to conduct its
business as it has been and is now being conducted, except where
the failure to do so would not have a material adverse effect on
the business, financial condition, results of operations,
liabilities or assets of AMI-West or would impair the ability of
AMI or AMI-West to perform in any material respect their
respective obligations under this Agreement or any of the other
documents or instruments to which either of them is a party in
connection with the transactions contemplated herein (such an
effect and/or impairment referred to herein as a "Material
Adverse Effect on AMI-West"). The copies of the Certificate of
Incorporation of AMI-West, certified by the Secretary of the
Commonwealth of Massachusetts, and its By-Laws, certified by the
Secretary of AMI-West, previously delivered by AMI to NEXTEL, are
true, correct and complete. Except as set forth in a Schedule
that refers to this Section, previously delivered by AMI to
NEXTEL, AMI-West is duly licensed or qualified and in good
standing as a foreign corporation in all jurisdictions where it
conducts business activities, owns or leases properties or assets
or employs persons acting on its behalf, in any of the foregoing
cases, on a more than incidental or nominal basis (which
jurisdictions are identified on such Schedule) in which its
ownership of property or the character of its activities is such
as to require it to be so licensed or qualified (except where the
failure to be so licensed or qualified would not have a Material
Adverse Effect on AMI-West).
5.2 Subsidiaries. AMI-West has no direct or indirect
subsidiaries other than Comqor. AMI-West and QTI are the sole
stockholders of Comqor. Set forth in a Schedule that refers to
this Section, previously delivered by AMI to NEXTEL, is a
description of the capitalization of Comqor and AMI-West's
ownership interest in Comqor, and a description of the properties
and assets owned or leased by Comqor and the liabilities and
obligations, contingent or otherwise, of Comqor. Except as set
forth on such Schedule, Comqor has not conducted any business
other than in connection with its organization and
capitalization.
5.3 Other Entities. Except as set forth in a
Schedule that refers to this Section and except for its
investment in Comqor, AMI-West does not own, directly or
indirectly, any partnership, equity, profit, participation or
similar ownership interest in any corporations, partnerships,
joint ventures, trusts, unincorporated organizations,
associations or similar entities.
5.4 Capital Stock. The authorized capital stock of
AMI-West consists solely of 50,000 shares of AMI-West Common
Stock, 28,618.42 of which are issued and outstanding and none of
which are held in AMI-West's treasury. All outstanding shares of
AMI-West Common Stock were issued in compliance with all
applicable laws and regulations. The 20 shares of Cumulative
Preferred Stock of AMI-NV previously issued to AMI were redeemed
by AMI-NV prior to the date of this Agreement. Set forth in a
Schedule that refers to this Section, previously delivered by AMI
to NEXTEL, is a list of the record holders of capital stock and
other securities of AMI-West (together with an identification of
the number and type of shares of such capital stock or other
securities owned by each such record holder and the current
mailing address of such holder as shown in such record), which
list has been certified by the Clerk of AMI-West to be true,
correct and complete. All of the issued and outstanding shares
of AMI-West Common Stock are, as of the date of this Agreement
(except as set forth in such Schedule), and will be as of the
Closing, (a) owned, of record and beneficially, by AMI and the
Individual Stockholders free and clear of any mortgage, pledge,
security interest, encumbrance, lien, claim or charge of any
kind, and (b) duly authorized, validly issued, fully paid and
nonassessable.
5.5 Options. The options previously granted to the
Individual Stockholders to purchase shares of AMI-NV have been
cancelled by mutual agreement of the parties, and no other
options to purchase shares of AMI-West Common Stock have been
granted. There are no commitments or obligations of AMI-West,
either firm or conditional, to issue, deliver or sell, whether
under offers, stock option agreements, stock bonus agreements,
stock purchase plans, incentive compensation plans, warrants,
conversion rights or otherwise, any authorized but unissued
shares, or treasury shares, of AMI-West Common Stock or other
securities of AMI-West.
5.6 Compliance with Laws. Except as set forth in a
Schedule that refers to this Section, previously delivered by AMI
to NEXTEL, AMI-West is not currently in violation of any statute,
law or regulation applicable to any of its presently or formerly
owned properties or to the conduct of its current or past
businesses. Neither AMI-West, nor AMI with respect to AMI-West,
has received any notice from any governmental agency or private
or public entity advising AMI-West (or AMI with respect to AMI-
West) that it is potentially responsible for response costs with
respect to a release or threatened release of Hazardous
Substances, Pollutants or Contaminants (as such terms are defined
in the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended). AMI-West has not, and, to
the knowledge of AMI and AMI-West, no other person has, buried,
dumped or otherwise disposed of any chemical substances,
including any Hazardous Substances, Pollutants or Contaminants
on, beneath or about any of the properties of AMI-West or (as to
AMI-West) on, beneath or about any other property. AMI-West has
not, and, to the knowledge of AMI and AMI-West, none of AMI-
West's licensees with respect to SMR licenses held by AMI-West
has, received written notice of any violation of any
environmental, zoning or other land use ordinance, law or
regulation relating to the operation of its or their businesses,
nor are AMI and AMI-West aware of any such violation. AMI has
listed in a Schedule that refers to this Section all
environmental reports known to AMI and AMI-West relating to any
owned or leased real property of AMI-West and has previously
delivered to NEXTEL a true, correct and complete copy of each
report so listed.
5.7 No Conflict. Except as set forth in a Schedule
that refers to this Section, previously delivered by AMI to
NEXTEL, the execution and delivery of this Agreement by AMI and
the consummation of the transactions contemplated hereby do not
and will not violate any provision of, or result in the breach
of, or accelerate or permit the acceleration of the performance
required by the terms of, any applicable law, rule or regulation
of any governmental body, the Certificate of Incorporation or
By-Laws of AMI and AMI-West, or any agreement, indenture or other
instrument to which AMI or AMI-West is a party or by which AMI or
AMI-West may be bound, or of any order, judgment or decree
applicable to either of them, or terminate or result in the
termination of any such agreement, indenture or instrument, or
result in the creation of any lien, charge or encumbrance upon
any of the properties or assets of AMI or AMI-West under any
agreement to which either of them is a party, or constitute an
event which, after notice or lapse of time or both, would result
in any such violation, breach, acceleration, termination or
creation of a lien, charge or encumbrance.
5.8 Litigation. Except as set forth in a Schedule
that refers to this Section, previously delivered by AMI to
NEXTEL, there are no actions, suits, proceedings, claims or
investigations formally instituted and pending or, to the
knowledge of AMI and AMI-West, threatened against or specifically
affecting AMI-West or involving any of its properties or assets,
at law or in equity, or before or by any Federal, state,
municipal or other governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, or any
arbitration panel or alternative dispute resolution body. Except
as set forth in such Schedule and except for orders or decrees of
general application, AMI-West is not subject to or in default
under any order, writ, injunction or decree of any court or
Federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality, or any
arbitration panel or alternative dispute resolution body.
5.9 Insurance. The managements of AMI and AMI-West
reasonably believe that AMI-West (or, as appropriate, AMI in
respect of AMI-West) currently maintains in full force insurance
policies, issued by reputable and sound insurers, providing
insurance coverage for AMI-West and its properties and business
against such losses and risk as are normally maintained by
similarly situated businesses in AMI-West's industry. Set forth
in a Schedule that refers to this Section, previously delivered
by AMI to NEXTEL, is a list of all insurance policies held by
AMI-West (or, as appropriate, by AMI in respect of AMI-West)
indicating the insurer, type, amount and term of coverage,
deductible and additional named insureds with respect to each
such policy. Except as set forth in such Schedule, all of these
policies are in full force and effect and all premiums due
thereon have been paid or accrued and there are no retroactive
experience-based premium adjustment features in any policy. Also
set forth in such Schedule is a description of all claims
(including amounts) currently pending under such insurance
policies. Except as set forth in such Schedule, all such
insurance coverage will cease upon the Closing as it relates to
AMI-West.
5.10 Intellectual Property. Except as set forth in a
Schedule that refers to this Section, previously delivered by AMI
to NEXTEL:
(a) There are no patents or patent applications;
trademarks, service marks, trade dress, trade names, corporate
names or any applications to register any of the foregoing;
copyrights or copyright registrations; or any licenses to or from
third parties with respect to any of the foregoing (including,
without limiting the generality of the foregoing, all computer
software, data and documentation) relating to AMI-West's business
as now conducted or as presently proposed to be conducted.
(b) AMI-West owns and possesses all right, title and
interest in and to the proprietary rights set forth in such
Schedule (except where the failure to have such right would not
have a Material Adverse Effect on AMI-West), and no claims by any
third party contesting the validity, enforceability, use or
ownership of any proprietary rights set forth in such Schedule
has been made, is currently outstanding or, to the knowledge or
AMI and AMI-West, has been threatened.
(c) AMI-West has not received any notices of any
infringement or misappropriation by, or conflict with, any third
party with respect to the proprietary rights set forth in such
Schedule.
(d) AMI-West has not knowingly infringed,
misappropriated or otherwise conflicted with any proprietary
rights of any third parties, and AMI and AMI-West are not aware
of any infringement, misappropriation or conflict which has
occurred as a result of the operation of AMI-West's business as
now conducted.
(e) Such Schedule describes all proprietary rights
which have been licensed to third parties and those proprietary
rights which are licensed from third parties (except those
licensed from third parties which are not material to the
operation of AMI-West's business as now conducted).
5.11 Capital Projects. Set forth in a Schedule that
refers to this Section, previously delivered by AMI to NEXTEL, is
a description of all capital projects currently committed for or
authorized by AMI-West for (a) SMR systems, (b) Digital Mobile
System planning and engineering for the Nevada and California
markets, and (c) all other capital projects involving the
expenditure of more than $50,000 in any particular case or more
than $200,000 in the aggregate.
5.12 Financial Statements. Set forth in Annex C to
this Agreement (previously delivered to all parties hereto) are
the following financial statements of AMI-West (including any
footnotes thereto), all of which are true, correct and complete,
have been prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods
involved and present fairly the financial position of AMI-West,
at the dates stated in such financial statements and the results
of its operations for the periods stated therein:
(a) Balance Sheets at December 31, 1992 and
September 30, 1993, which have been audited by Coopers & Lybrand;
(b) Statements of Operations for the years ended
December 31, 1991 and 1992 and the nine-month period ended
September 30, 1993, which have been audited by Coopers & Lybrand;
(c) Statements of Stockholders' Equity for the years
ended December 31, 1991 and 1992 and the nine-month period ended
September 30, 1993, which have been audited by Coopers & Lybrand;
and
(d) Statements of Cash Flows for the years ended
December 31, 1991 and 1992 and the nine-month period ended
September 30, 1993, which have been audited by Coopers & Lybrand.
5.13 Liabilities. AMI-West does not have, and the
managements of AMI and AMI-West are not aware of any facts or
circumstances that are reasonably likely to result in, any
liability or obligation, secured or unsecured (whether accrued,
absolute, known, unknown, contingent or otherwise), except:
(a) As and to the extent liabilities or obligations
are included in line items on AMI-West's Balance Sheet at
September 30, 1993;
(b) Those respective liabilities or obligations
reflected in any Schedule to this Agreement previously delivered
by AMI to NEXTEL, but if any such liability or obligation was not
incurred in the ordinary course of business, the relevant
Schedule item(s) will include a description of the type of
liability or obligation represented by such item(s), together
with a fixed or an estimated dollar amount of such liability or
obligation; and
(c) Those liabilities or obligations incurred since
September 30, 1993 which constitute (i) any Current Payables,
(ii) any liens securing any Current Payables, (iii) any liens or
encumbrances connected with operating leases entered into in the
ordinary course of business, (iv) any non-material liens or
encumbrances on any of the SMR Assets not securing any
indebtedness, and (v) any liens or encumbrances agreed to in
writing by NEXTEL.
5.14 Transactions Not in the Ordinary Course. Except
as set forth in a Schedule that refers to this Section,
previously delivered by AMI to NEXTEL, from September 30, 1993 to
the date hereof, AMI has caused AMI-West to conduct its SMR
business operations in the ordinary course consistent with past
practice and, without limiting the generality of the foregoing,
AMI-West has not: (a) sold, transferred or assigned any SMR
frequency or related FCC SMR license; (b) disposed of or
contracted to dispose of any property or other assets,
voluntarily incurred any absolute or contingent debt obligation
or engaged in any activity or transaction except, in each case,
in the ordinary course of business; (c) borrowed any money,
except in the ordinary course of business under currently
existing lines of credit or from affiliates; (d) declared or paid
any dividend; (e) purchased or redeemed any shares, notes or
other securities or made any other distribution to stockholders
(excepting the redemption of AMI-West Cumulative Preferred Stock
referenced in Section 5.4 of this Agreement); (f) increased the
rate of remuneration to any of its directors, officers, employees
or other representatives, or agreed to do so, other than
increases in the ordinary course of business consistent with past
practice; (g) adopted any new or amended any existing employee
benefit plan; (h) formed or caused to be formed any subsidiary;
(i) issued, sold, distributed or disposed of any shares, notes or
other securities of AMI-West or committed itself to do so; or (j)
instituted new or changed inventory management or accounts
receivable collection practices or procedures different from
those employed consistent with past practice.
5.15 Changes in Conditions. Since September 30,
1993, there has not been any material adverse change in the
financial condition, results of operations, business, assets or
properties of AMI-West, taken as a whole, and there has not been
any occurrence, circumstance or combination thereof which is
reasonably likely to result in any such material adverse change
before or after the Closing, except for events relating generally
to the SMR industry.
5.16 Taxes. AMI-West has been included in a
consolidated Federal income tax return filed by FMR Corp. AMI-
West, or AMI on its behalf, has accurately prepared in good
faith, and has duly and timely filed with all appropriate
Federal, foreign, state and local governmental agencies, all tax
returns and reports required to be filed by it (other than
returns that would not have a Material Adverse Effect on AMI-West
if not filed). Such returns accurately reflect all payments and
distributions made by AMI-West to AMI or any of AMI's affiliates
and required to be reflected on such returns. Except as set
forth in a Schedule that refers to this Section (previously
delivered by AMI to NEXTEL), all taxes owed, or which may be
claimed to be owed, to any governmental agency for or with
respect to the periods covered by such returns and reports or
with respect to any period (or portions thereof) ending at or
before the Closing, and all interest, penalties, assessments and
deficiencies connected therewith, have been or will be paid in
full or provided for in full. Except as set forth in a Schedule
that refers to this Section, neither AMI-West nor any affiliate
of AMI-West has executed or filed with any taxing authority any
agreement extending the period for assessment or collection of
any taxes. Except as set forth in a Schedule that refers to this
Section, AMI-West is not a party to any pending action or
proceeding, and to the knowledge of AMI and AMI-West, no such
action or proceeding is threatened, by any Federal, foreign,
state or local governmental entity or municipality or subdivision
thereof or any authority, department, commission, board, bureau,
agency, court or instrumentality for the assessment or collection
of taxes, and no deficiency notices or reports have been received
by AMI-West in respect of any of its tax returns.
5.17 Accounts; Employees. Set forth in a Schedule
that refers to this Section, previously delivered by AMI to
NEXTEL, is a list of (a) all banks in which AMI-West has an
account or safe deposit box and the names of all persons
authorized to draw thereon or have access thereto; (b) the
current fixed annual rate of compensation (plus total cash
compensation broken down between fixed and bonus components for
calendar year 1993) as of the date such list is provided for each
of the employees of AMI-West for the current fiscal year and a
summary of the basis on which each such person is compensated if
such basis is other than exclusively a fixed salary rate; and (c)
the names of all persons holding powers of attorney from AMI-West
and a summary statement of the terms thereof.
5.18 Real Estate. Neither AMI nor AMI-West owns any
real estate that is used or held for use in the business of AMI-
West as currently conducted. Set forth in a Schedule that refers
to this Section, previously delivered by AMI to NEXTEL, is a list
describing all real estate options and leaseholds held by AMI-
West. Except as set forth in such Schedule, AMI-West has good
leasehold interests in all of its leaseholds, which interests
will not be materially and adversely affected by the transactions
contemplated hereby, and each lease with an initial term of more
than one year is, to the knowledge of AMI and AMI-West,
enforceable against the lessor thereunder and AMI-West enjoys
quiet possession of all leaseholds.
5.19 Title to Properties. AMI-West has good title to
all of its properties and assets, tangible and intangible
(including, without limitation, those properties and assets
reflected in AMI-West's Balance Sheet at September 30, 1993,
except as disposed of in the ordinary course of business since
September 30, 1993, and all those other specific items of
properties and assets not so reflected or disposed of as set
forth in a Schedule that refers to this Section, previously
delivered by AMI to NEXTEL) as may be requisite to the conduct of
its business in substantially the same manner as heretofore, and
there is no title defect in any of such properties or assets
which is reasonably likely to have at any time a Material Adverse
Effect on AMI-West. Notwithstanding the foregoing, none of such
properties or assets is subject to any lien or encumbrance other
than (a) purchase money security interests incurred in the
ordinary course of business in arm's-length transactions with
non-affiliates (and with respect to which security interests AMI-
West is not in default) and any lien for current taxes not
delinquent; (b) arising by virtue of the leases referred to in
Section 5.18 of this Agreement; (c) referred to in the financial
statements (or the footnotes thereto) described in Section 5.12
of this Agreement; or (d) such other encumbrances as are not
material in character, amount or extent, and do not materially
detract from the value of, or interfere with the present or
future use of, the property subject thereto and affected thereby
or otherwise materially impair the business operations of AMI-
West, taken as a whole.
5.20 Contracts. Except as set forth in a Schedule
that refers to this Section, previously delivered by AMI to
NEXTEL, AMI-West is not in default in any respect under the terms
of any contracts, agreements or commitments, written or oral to
which it is a party or by which it or any of its properties is
subject or bound. Except as set forth in such Schedule or in any
other Schedule previously delivered by AMI to NEXTEL referring to
any other Section of this Agreement, AMI-West (and any of its
properties) will not at the time such Schedule is delivered be a
party to or be bound by any (a) agreement or other arrangement
not made in the ordinary course of business; (b) employment or
consulting contract or contract with any labor union;
(c) employee bonus, pension, profit-sharing, retirement, stock
purchase or other benefit or welfare plan or agreement; (d)
contract or commitment for the purchase of raw materials or
supplies or the sale of products involving more than $50,000 per
annum; (e) indenture, agreement, note, mortgage, guaranty or
other writing which evidences or relates to any loan of money to,
or indebtedness for money borrowed by, AMI-West; (f) license
agreement or other contract or agreement relating to patents,
trademarks, trade names, techniques or copyrights or applications
for any thereof, inventions, trade secrets or other proprietary
know-how or technical assistance; (g) loan to officers, directors
or employees of AMI-West, all of which loans will be repaid in
full by the Closing; or (h) agreement relating to any direct or
indirect acquisition of SMR Licenses (as defined in Section 5.25
hereof), in the case of any of the foregoing, whether written or
oral (and, in the case of oral commitments, with AMI providing an
accurate written summary of all material terms thereof to
NEXTEL). Except as set forth in such Schedule, AMI-West is not
in default under the terms of any agreements, contracts or
commitments described in subsections (a) through (h) of this
Section.
5.21 Corporate Authorization.
AMI has all necessary corporate power and authority to
enter into this Agreement and to perform all of the obligations
to be performed by it hereunder. The execution, delivery and
performance of this Agreement by AMI have been duly authorized by
AMI, and upon the execution and delivery hereof by AMI, this
Agreement will constitute the valid and legally binding
obligations of AMI, enforceable against AMI in accordance with
its terms.
5.22 Brokers. AMI, AMI-West and the Individual
Stockholders have not directly or indirectly dealt with anyone
acting in the capacity of a finder or broker and have not
incurred and will not incur any obligation for any finder's or
broker's fee or commission in connection with this Agreement or
the AMI-West Share Exchange.
5.23 Employee Benefit Matters.
(a) Set forth in a Schedule that refers to this
Section, previously delivered by AMI to NEXTEL, is a true,
complete and correct list of all "employee benefit plans" as
defined in Section 3(3) of ERISA and all other employee
profit-sharing, incentive, deferred compensation, welfare,
pension, retirement, severance, group insurance and other
employee benefit plans, arrangements, agreements and practices
which relate to employee benefits and which constitute a material
cost to AMI-West currently maintained or contributed to by AMI-
West, or to which AMI-West currently is obligated to contribute,
relating to present or former employees, directors, officers,
stockholders or consultants of AMI-West (collectively, "AMI-West
Employee Plans"). Except as set forth in such Schedule, to the
knowledge of AMI and AMI-West, AMI-West has no material liability
with respect to any plans, arrangements or practices of the type
described in the preceding sentence previously maintained or
contributed to by AMI-West, or to which AMI-West previously had
an obligation to contribute.
(b) AMI previously has delivered to NEXTEL true,
complete and correct copies of each of the AMI-West Employee
Plans, including all amendments thereto, and any other documents
or other instruments relating thereto reasonably requested by
NEXTEL.
(c) All AMI-West Employee Plans are being, and have
been, maintained, operated and administered in all material
respects in accordance with their respective terms and in
compliance with all applicable laws.
(d) AMI-West has not, within the past six years had
an obligation to contribute to a "defined benefit plan" as
defined in Section 3(35) of ERISA, a pension plan subject to the
minimum funding standards of Section 302 of ERISA or Section 412
of the Code, a "multiemployer plan" as defined in Section 3(37)
of ERISA or Section 414(f) of the Code or a "multiple employer
plan" within the meaning of Section 210(a) of ERISA or Section
413(c) of the Code. No AMI-West Employee Plan is funded through
a "welfare benefit fund" as defined in Section 419(e) of the
Code. Other than AMI (or any of the subsidiaries of AMI), no
other trade or business is or, at any time within the past six
years, has been treated, together with AMI-West, as a single
employer under Section 414 of the Code or Section 4001 of ERISA.
AMI-West has no liability imposed by statute on entities under
common control with other entities with respect to any employee
benefit plans (as defined in Section 3(3) of ERISA) or group
health plans (as defined in Section 5000(b)(1) of the Code) of
AMI. The consummation of the transactions contemplated by this
Agreement will not constitute a "reportable event" under Section
4043 of ERISA or result in a "withdrawal" from a multiemployer
plan under Section 4203 or 4205 of ERISA.
(e) Each AMI-West Employee Plan intended to be
qualified under Section 401(a) of the Code has been determined by
the IRS to be so qualified, or if not so qualified each such plan
may still be amended within the remedial amendment period to cure
any qualification defect to the extent permitted by applicable
law, and each trust created thereunder which is intended to be
exempt from Federal income tax under the provisions of
Section 501(a) of the Code has been determined by the IRS to be
so exempt and no fact or event has occurred since the date of
such determination by the IRS to adversely effect the qualified
status of any such AMI-West Employee Plan or the exempt status of
any such trust.
(f) There have been no prohibited transactions or
breaches of any of the duties imposed on "fiduciaries" (within
the meaning of Section 3(21) of ERISA) by ERISA with respect to
the AMI-West Employee Plans that could result in AMI-West
becoming liable directly or indirectly (by indemnification or
otherwise) for any material excise tax, penalty or other
liability under ERISA or the Code.
(g) Except as set forth in a Schedule that refers to
this Section, there are no actions or claims pending or, to the
knowledge of AMI and AMI-West, threatened, with respect to any
AMI-West Employee Plan (other than routine claims for benefits),
and there are no investigations or audits of any AMI-West
Employee Plan by any governmental authority currently pending and
there have been no such investigations or audits that have been
concluded that resulted in any liability of AMI-West that has not
been fully discharged.
(h) All (i) insurance premiums required to be paid
with respect to, (ii) benefits, expenses, and other amounts due
and payable under, and (iii) contributions, transfers or payments
required to be made to, any AMI-West Employee Plan have been made
on or before their due date. With respect to any insurance
policy providing funding for benefits under any AMI-West Employee
Plan, (x) there is no material liability of AMI-West, in the
nature of a retroactive or retrospective rate adjustment, loss
sharing arrangement, or other actual or contingent liability, nor
would there be any such liability if such insurance policy was
terminated on the date hereof, and (y) to the knowledge of AMI
and AMI-West, no insurance company issuing any such policy is in
receivership, conservatorship, liquidation or similar proceeding
and no such proceedings with respect to any insurer are imminent.
(i) A Schedule that refers to this Section contains a
separate identification of each AMI-West Employee Plan that
provides benefits, including, without limitation, death or
medical benefits, beyond termination of employment or retirement
other than (i) coverage mandated by law, (ii) death or retirement
benefits under any qualified AMI-West Employee Plan, (iii)
deferred compensation benefits fully reflected on AMI-West's
Balance Sheet at September 30, 1993 or (iv) benefits, the full
cost of which are borne by the employee (or the employee's
beneficiary) (the "Post-Employment Benefits"). Such Balance
Sheet accurately reflects the liabilities relating to the
Post-Employment Benefits.
(j) Except as set forth in a Schedule that refers to
this Section, the execution, delivery and performance of this
Agreement will not, solely in and of itself and without regard to
any subsequent events, (i) constitute a stated triggering event
under any AMI-West Employee Plan that will result in any payment
(whether of severance pay or otherwise) becoming due from AMI-
West to any present or former officer, employee, director,
stockholder or consultant (or dependents of any thereof), or (ii)
accelerate the time of payment or vesting, or increase the
amount, of compensation due to any present or former officer,
employee, director, stockholder or consultant of AMI-West.
(k) Except as set forth in a Schedule that refers to
this Section, AMI-West has not agreed or committed to make any
amendments to any of the AMI-West Employee Plans not already
embodied in the documents comprising any such AMI-West Employee
Plan, other than any amendments required by law.
(l) All contributions, transfers and payments by AMI-
West in respect of any AMI-West Employee Plan have been or are
fully deductible under the Code.
(m) AMI-West's Balance Sheet at September 30, 1993
contains, and at and for the period ending on the Closing will
contain, adequate accruals for (i) bonuses, sales commissions and
vacation pay earned but not received as of such dates and
(ii) incurred or continuing but unpaid claims under AMI-West
Employee Plans not funded by insurance.
(n) Except as set forth in a Schedule that refers to
this Section, no AMI-West Employee Plan provides benefits to any
individual who is not a current or former employee, director or
consultant of AMI-West, AMI-SC or AMI-Denver or the dependents or
other beneficiaries of any such current or former employee,
director or consultant.
(o) Except as set forth in a Schedule that refers to
this Section, no parachute payments within the meaning of
Section 280G of the Code will be made in connection with or as a
result of the AMI-West Share Exchange.
5.24 Materially Correct. Reference is hereby made
(a) to the information about AMI-West furnished by AMI to NEXTEL
as set forth in the Annexes and Schedules to this Agreement or as
otherwise furnished to NEXTEL or to NEXTEL's representatives in
writing by any of those officers or representatives of AMI or
AMI-West listed in a Schedule that refers to this Section, (b) to
the written information furnished to NEXTEL by AMI, AMI-West
and/or the Individual Stockholders for inclusion in the
Registration Statement referred to in Section 8.4(a) of this
Agreement, and (c) to the information contained in each officer's
certificate and other document furnished by AMI or AMI-West at
the Closing (all such written information, taken as a whole, the
"AMI Disclosure Information"). The AMI Disclosure Information
(except for any forecasts or projections or forward-looking
estimates or similar predictive information contained therein) so
received on or prior to the date hereof by NEXTEL did not contain
any untrue statement of a material fact or omit to state a
material fact necessary in order to make the AMI Disclosure
Information in the light of the circumstances under which it was
made, not misleading. The representation made in this Section
shall also be deemed made anew by AMI and AMI-West to NEXTEL
immediately prior to the Closing, but with reference to the AMI
Disclosure Information received by NEXTEL prior to the Closing.
5.25 Regulatory Matters.
(a) Definitions. For purposes of this Section, the
following terms shall have the indicated meanings:
"FCC" shall mean the Federal Communications Commission
or any successor thereto.
"FCC License" shall mean any paging, mobile telephone,
specialized mobile radio or other license, permit, consent,
certificate of compliance, franchise, approval or authorization
granted or issued by the FCC, including, without limitation, any
of the foregoing authorizing the acquisition, construction or
operation of an SMR System (as defined below), radio paging
system or other radio communications system.
"AMI-West Management Agreement" shall mean any
management or other agreement (other than a loading agreement)
pursuant to which AMI-West agrees to manage or to perform other
services (other than loading) with respect to SMR Licenses held
by another person in exchange for either the right to receive a
portion of the revenues derived from such SMR Licenses or the
right to purchase such SMR Licenses or any loading agreement
pursuant to which AMI-West is loading SMR Licenses held by
another person in exchange for either the right to receive a
portion of the revenues derived from such SMR Licenses in excess
of 25% of the aggregate revenues derived from such SMR Licenses
or the right to purchase such SMR Licenses.
"SMR License" shall mean an FCC License authorizing
the construction, ownership and operation of a specialized mobile
radio system in the 800 or 900 MHz band issued pursuant to 47 CFR
Part 90 of the Rules and Regulations of the FCC.
"SMR System" shall mean a specialized mobile radio
system licensed under 47 CFR Part 90 of the Rules and Regulations
of the FCC.
"SMR Units" shall mean the number of mobile and
control stations (within the meaning of 47 CFR Part 90 of the
Rules and Regulations of the FCC) subscribing to SMR Systems
licensed to or managed by AMI-West excluding, however, any such
units which are subject to a Third-Party Management Agreement if
the respective third party has a right to purchase the SMR
Licenses which are subject to such Third-Party Management
Agreement.
"Third-Party Management Agreement" shall mean any
management or other agreement (other than a loading agreement)
pursuant to which a person (other than AMI-West) is managing SMR
Licenses held by AMI-West or any loading agreement pursuant to
which a person (other than AMI-West) is loading SMR Licenses held
by AMI-West in exchange for the right to receive a portion of the
revenues derived from such SMR Licenses in excess of 25% of the
aggregate revenues derived from such SMR Licenses.
(b) License Information. AMI has delivered to NEXTEL
prior to the execution hereof a Schedule that refers to this
Section which sets forth, as of the date hereof, a true and
complete list of the following information for each SMR License
and other FCC License issued to or operated by AMI-West:
(i) for all FCC Licenses (including all SMR
Licenses), the name of the licensee, the name of the seller(s),
the call sign, the transmitter location (by site coordinates and
city), the type of service (e.g., paging, SMR, etc.), the
frequency or frequencies authorized, the license renewal date and
operating entity;
(ii) in the case of SMR Licenses, the number of
channels authorized, the number of channels constructed whether
the license is for a conventional or trunked SMR System for each
such SMR License, the applicable loading date and whether the SMR
License is managed by AMI-West pursuant to a AMI-West Management
Agreement or by any other persons pursuant to a Third-Party
Management Agreement;
(iii) each holder of any such FCC License that
is neither wholly owned by AMI-West nor owned entirely by
unaffiliated persons and managed by AMI-West; and
(iv) for all FCC Licenses (including SMR
Licenses), whether such FCC Licenses are subject to rights of
first refusal, options and other such rights or obligations in
existence on the date hereof, including, without limitation,
entitlements to acquire additional ownership interests, which may
affect the ownership interests of AMI-West.
(c) Condition of Systems. All of the properties,
equipment and systems of AMI-West are, and, to the knowledge of
AMI and AMI-West, all thereof to be acquired or added in
connection with any contemplated system expansion or construction
prior to the Closing will be, in good repair, working order and
condition and are and will be in material compliance with all
standards or rules imposed by any governmental agency or
authority (including, without limitation, the FCC and (if
applicable), any public utilities commission or other state or
local governments or instrumentalities) or as imposed under any
agreements with customers.
(d) Fees; License Compliance. AMI-West has paid all
franchise, license or other fees and charges which have become
due in respect of its business and has made appropriate provision
as is required by generally accepted accounting principles,
consistently applied, for any such fees and charges which have
accrued. Except as set forth in a Schedule that refers to this
Section, AMI-West has duly secured, on the date hereof, all
necessary permits, licenses, consents and authorizations from,
and has filed all required registrations, applications, reports
and other documents with, the FCC, and, if applicable, any public
utilities commission and other entity exercising jurisdiction
over the SMR businesses, radio paging businesses and other radio
communications businesses of AMI-West or the construction or
delivery systems therefor, as such businesses are currently
conducted. AMI-West holds the FCC Licenses specified on such
Schedule and, except as set forth on such Schedule, all such FCC
Licenses are valid and in full force and effect without
conditions except for such conditions as are stated on the FCC
License or as are generally applicable to holders of FCC
Licenses. Except as set forth in such Schedule, all loading
requirements with respect to any SMR Licenses listed on such
Schedule have been met and AMI-West has taken every reasonable
action to cause the same to be loaded in compliance with FCC
regulations. Except as set forth in such Schedule: to the
knowledge of AMI and AMI-West, no event has occurred and is
continuing which could (i) result in the revocation, termination
or adverse modification of any FCC License listed on such
Schedule or (ii) adversely affect any rights of AMI-West
thereunder; except as set forth on such Schedule, AMI and AMI-
West have no reason to believe and no knowledge that the SMR
Licenses specified on such Schedule will not be renewed in the
ordinary course; and AMI-West has sufficient time, materials,
equipment, contract rights and other required resources to
complete, in a timely fashion and in full, construction of all
its respective SMR Systems, radio paging and other radio
communications systems listed on such Schedule in compliance with
all applicable technical standards and construction requirements
and deadlines. Except as set forth in such Schedule, the current
ownership and operation by AMI-West of such SMR Systems, radio
paging and other radio communications systems comply with the
Communications Act of 1934, as amended, and all applicable rules,
regulations and policies of the FCC.
(e) AMI-West Management Agreements. Set forth in a
Schedule that refers to this Section is a complete and correct
list of all AMI-West Management Agreements and Third-Party
Management Agreements to which AMI-West is a party that correctly
identifies the manager under each such agreement and the holder
of the SMR Licenses which are the subject of such agreements, the
transmitter locations (by address), and number of channels
covered by such SMR Licenses, the term of such agreements, any
options or calls (and the respective option or call prices) in
favor of any party to such agreements to purchase or sell any
interest in such SMR Licenses and the respective fees or revenues
payable or receivable under any such agreements. To the
knowledge of AMI and AMI-West, the terms of all such AMI-West
Management Agreements and Third-Party Management Agreements and
the operation of each SMR System pursuant thereto comply with the
Communications Act of 1934, as amended, and all applicable rules,
regulations and policies of the FCC. Other than those channels
identified as subject to Third-Party Management Agreements on the
date hereof on the Schedule that refers to this Section (not
including any such Agreement under which QTI acts as manager,
which shall be terminated effective as of the Closing), as of the
Closing, except as set forth on the Schedule referred to in this
Section, none of the channels licensed to AMI-West will be
subject to a Third Party Management Agreement. Each AMI-West
Management Agreement includes an option allowing AMI-West to
purchase the channels that are subject to that agreement.
(f) Discrete Frequency Application. AMI has
delivered to NEXTEL a true and correct copy of each Request for
Rule Waiver and related Enhanced Specialized Mobile Radio
application, as filed with the FCC, and all supplemental or
related materials filed in connection therewith by or on behalf
of AMI-West, all materials submitted to the FCC and/or to AMI-
West in connection therewith by any third party, and any written
communication issued by the FCC or any FCC staff member in
response to, or otherwise in connection with, any of the
foregoing.
ARTICLE VI. REPRESENTATIONS AND WARRANTIES
OF NEXTEL
NEXTEL represents and warrants to Questar, AMI and the
Individual Stockholders that:
6.1 Corporate Organization. NEXTEL has been duly
incorporated and is validly existing as a corporation in good
standing under the laws of the State of Delaware and has the
corporate power and authority to own or lease its properties and
to conduct its business as it is now being conducted. The copies
of the Amended and Restated Certificate of Incorporation of
NEXTEL, certified by the Secretary of State of the State of
Delaware, and its Amended and Restated By-Laws, certified by the
Secretary of NEXTEL, previously delivered by NEXTEL to Questar,
AMI and the Individual Stockholders, are true, correct and
complete. Except as set forth in a Schedule that refers to this
Section, previously delivered by NEXTEL to Questar, AMI and the
Individual Stockholders, NEXTEL is duly licensed or qualified and
in good standing as a foreign corporation in all jurisdictions
where it conducts business activities, owns or leases properties
or assets or employs persons acting on its behalf, in any of the
foregoing cases, on a more than incidental or nominal basis
(which jurisdictions are identified in such Schedule) in which
its ownership of property or the character of its activities is
such as to require it to be so licensed or qualified, except
where failure to be so licensed or qualified would not have a
material adverse effect on the business, financial condition,
results of operations, liabilities or assets of NEXTEL and its
subsidiaries, taken as a whole.
6.2 Corporate Authorization. NEXTEL has all
necessary corporate power and authority to enter into this
Agreement and to perform all of the obligations to be performed
by it hereunder. The execution, delivery and performance of this
Agreement by NEXTEL have been duly authorized by NEXTEL, and upon
the execution and delivery hereof by NEXTEL, this Agreement will
constitute the valid and legally binding obligations of NEXTEL,
enforceable against NEXTEL in accordance with its terms.
6.3 Common Stock; Registration. At the Closing, the
NEXTEL Common Shares issued by reason of the QTI Share Exchange
and the AMI-West Share Exchange, respectively, will be duly
authorized, validly issued, fully paid and nonassessable, will be
registered under the Securities Act of 1933, as amended, and will
be "voting stock" within the meaning of Section 368(a)(1)(B) of
the Code.
6.4 No Conflict. Except as set forth in a Schedule
that refers to this Section, previously delivered by NEXTEL to
Questar, AMI and the Individual Stockholders, the execution and
delivery of this Agreement by NEXTEL and the consummation of the
transactions contemplated hereby do not and will not violate any
provision of, or result in the breach of, or accelerate or permit
the acceleration of the performance required by the terms of, any
applicable law, rule or regulation of any governmental body, the
Amended and Restated Certificate of Incorporation or the Amended
and Restated By-Laws of NEXTEL, or any agreement, indenture or
other instrument to which NEXTEL is a party or by which NEXTEL
may be bound, or of any order, judgment or decree applicable to
it, or terminate or result in the termination of any such
agreement, indenture or instrument, or result in the creation of
any lien, charge or encumbrance upon any of the properties or
assets of NEXTEL under any agreement to which it is a party, or
constitute an event which, after notice or lapse of time or both,
would result in any such violation, breach, acceleration,
termination or creation of a lien, charge or encumbrance, except
where any such violation, breach, acceleration, termination or
creation would not have a material adverse effect on the
business, financial condition, results of operations, liabilities
or assets of NEXTEL and its subsidiaries, taken as a whole or
would impair NEXTEL's ability to perform, in any material
respect, its obligations under this Agreement or any other
document or instrument to which it is a party in connection with
the transactions contemplated herein (such effect and/or
impairment referred to as a "Material Adverse Effect on NEXTEL").
6.5 Compliance with Laws. Except as set forth in a
Schedule that refers to this Section, previously delivered by
NEXTEL to Questar, AMI and the Individual Stockholders, including
in any registration statement under the Securities Act of 1933,
as amended, filed by NEXTEL with the Securities and Exchange
Commission or any report filed under the Securities Exchange Act
of 1934, as amended, filed by NEXTEL with the Securities and
Exchange Commission (collectively, "NEXTEL SEC Filings") which is
listed on such Schedule, NEXTEL is not currently in violation of
any statute, law or regulation applicable to any of its presently
or formerly owned properties or to the conduct of its current or
past business other than violations which, individually or in the
aggregate, are not reasonably likely to have a Material Adverse
Effect on NEXTEL.
6.6 Title to Properties. NEXTEL has good title to
all of its material properties and assets.
6.7 Litigation. Except as set forth in a Schedule
that refers to this Section, previously delivered by NEXTEL to
Questar, AMI and the Individual Stockholders (including in any
NEXTEL SEC Filings which is listed on such Schedule) there are no
actions, suits, proceedings, claims or investigations formally
instituted and pending or, to the knowledge of NEXTEL, threatened
against or specifically affecting NEXTEL or involving any of its
properties or assets, at law or in equity, or before or by any
Federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality, domestic or
foreign, or any arbitration panel or alternative dispute
resolution body, which, if determined adversely to NEXTEL would,
individually or in the aggregate, have a Material Adverse Effect
on NEXTEL. Except as set forth in such Schedule (including in
any NEXTEL SEC Filing which is listed on such Schedule) and
except for orders or decrees of general application, NEXTEL is
not subject to or in default under any order, writ, injunction or
decree of any court or Federal, state, municipal or other
governmental department, commission, board, bureau, agency or
instrumentality, or any arbitration panel or alternative dispute
resolution body, which would, individually or in the aggregate,
have a Material Adverse Effect on NEXTEL.
6.8 Financial Statements. NEXTEL has heretofore
delivered to Questar, AMI and the Individual Stockholders the
following financial statements (including any footnotes thereto),
which are true, correct and complete and have been prepared in
accordance with generally accepted accounting principles
consistently applied throughout the periods involved and present
fairly the consolidated financial position of NEXTEL and its
consolidated subsidiaries, at the dates indicated in such
financial statements and the results of their operations for the
periods stated therein:
(a) Consolidated balance sheets of NEXTEL and
subsidiaries as of March 31, 1992 and 1993, and the related
consolidated statements of operations, shareholders' equity and
cash flows for each of the three years in the period ended
March 31, 1993 which have been audited by Deloitte & Touche; and
(b) Unaudited condensed consolidated balance sheets
of NEXTEL and subsidiaries as of March 31, 1993 and September 30,
1993, unaudited consolidated statements of operations and
statements of cash flows for the six months ended September 30,
1992 and 1993, contained in NEXTEL's Quarterly Report on
Form 10-Q for the quarter ended September 30, 1993 as filed with
the Securities and Exchange Commission.
6.9 Taxes. Except for such Federal, state, local or
foreign taxes that are not yet due for payment and are being
properly accrued or reserved for in accordance with generally
accepted accounting principles, and except as otherwise disclosed
in a Schedule that refers to this Section (previously delivered
by NEXTEL to Questar, AMI and the Individual Stockholders),
NEXTEL has no Federal, state, local or foreign tax liabilities
(including, without limitation, liabilities arising from any
failure to prepare or file, or from incorrectly preparing or
filing, any tax return) that, individually or in the aggregate,
would have a Material Adverse Effect on NEXTEL.
6.10 Information. NEXTEL has delivered to Questar,
AMI and the Individual Stockholders each registration statement,
schedule, report, proxy statement or information statement it has
filed with the Securities and Exchange Commission from
December 1, 1992 to the date of this Agreement, including,
without limitation, (a) NEXTEL's Annual Report on Form 10-K for
the year ended March 31, 1993 and (b) NEXTEL's Quarterly Reports
on Form 10-Q for the quarters ended June 30, 1993, September 30,
1993 and December 31, 1993, (collectively, the "Company
Reports"). As of the date of this Agreement, the Company
Reports, taken together with any other information previously
furnished by NEXTEL to Questar, AMI and the Individual
Stockholders (except for any forecasts or projections or forward-
looking estimates or similar predictive information contained
therein), did not contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or
necessary to make the statements made therein, in light of the
circumstances in which they were made, not misleading. As used
in this Section, "material" means material to the business,
financial condition, results of operations, liabilities or assets
of NEXTEL and its subsidiaries, taken as a whole. The
representation made in this Section shall also be deemed made
anew by NEXTEL to Questar, AMI and the Individual Stockholders
immediately prior to the Closing, but with reference to
information furnished by NEXTEL to them prior to the Closing.
6.11 Information in Registration Statement. The
information included in the Registration Statement referred to in
Section 8.4(a) of this Agreement, other than information to be
furnished to NEXTEL for inclusion therein by Questar, AMI and/or
the Individual Stockholders, will not, at the time the
Registration Statement is declared effective, contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which
they were made, not misleading.
6.12 Absence of Undisclosed Liabilities. Except
(a) for liabilities and obligations incurred in the ordinary
course of business and consistent with past practice since
September 30, 1993, and (b) as otherwise disclosed herein or in a
Schedule that refers to this Section, previously delivered by
NEXTEL to Questar, AMI and the Individual Stockholders (including
in any NEXTEL SEC Filing listed on such Schedule), to the best
knowledge of NEXTEL, since September 30, 1993, NEXTEL has not
incurred any material liabilities or obligations (whether direct,
indirect, accrued or contingent) that would be required to be
reflected or reserved against in a balance sheet of NEXTEL
prepared in accordance with generally accepted accounting
principles as used in preparing the financial statements referred
to in Section 6.8 of this Agreement, other than such liabilities
or obligations that, individually or in the aggregate, would not
have a Material Adverse Effect on NEXTEL.
ARTICLE VII. COVENANTS OF QUESTAR AND AMI
7.1 Covenants of Questar. From the date of this
Agreement until the Closing:
(a) Conduct of Business. Except to address
disruptions to QTI's business operations that may occur as a
result of matters beyond the reasonable control of QTI and except
as contemplated by this Agreement or as set forth in a Schedule
that refers to this Section, Questar shall cause QTI to conduct
QTI's business only in the ordinary course and, without limiting
the generality of the foregoing, QTI shall not, without the prior
written consent of NEXTEL: (i) sell, transfer or assign any SMR
frequency or related FCC SMR license or any related physical
asset of the relevant SMR system or any related intangible asset
of the relevant SMR system; (ii) dispose or contract to dispose
of any property or other assets, voluntarily incur any absolute
or contingent debt obligation or engage in any activity or
transaction except, in each case, in the ordinary course of
business; (iii) borrow any money, except in the ordinary course
of business under currently existing lines of credit or from
affiliates; (iv) enter into any lease or contract for the
purchase or sale of real estate or of any interest therein;
(v) encumber any property or other assets; (vi) declare or pay
any dividend; (vii) purchase or redeem any shares, notes or other
securities or make any other distribution to stockholders;
(viii) increase the rate of remuneration to any of its directors,
officers, employees or other representatives, or agree to do so,
other than increases in the ordinary course of business
consistent with past practices; (ix) adopt any new or amend any
existing employee benefit plan; (x) form or cause to be formed
any subsidiary; (xi) issue, sell, distribute or dispose of any
shares, notes or other securities of QTI or commit itself to do
so; (xii) make any commitments for capital improvements or
materially alter standing commitments for capital improvements;
(xiii) fail to keep its properties insured to the same extent as
they are currently insured; or (xiv) take or omit to take any
action which would cause to be breached, or might result in any
breach of, any of the representations, warranties or covenants of
Questar contained herein if the same were made anew immediately
after any such act or omission.
(b) Preserve Business. Questar shall cause QTI to
use all reasonable efforts to preserve intact QTI's business
organization and to preserve its goodwill as to customers,
suppliers and others having business relations with it.
(c) Inspection. Questar shall cause QTI to permit
representatives of NEXTEL, during normal business hours, to
examine QTI's and Comqor's properties, books, contracts, tax
returns and other records, and shall furnish or cause to be
furnished such representatives with all such information and
access to all relevant personnel and properties (including the
SMR Assets) concerning the affairs of QTI and Comqor as they may
reasonably request, subject only to such restrictions or
limitations on access as are necessary to avoid undue disruption
to the conduct of normal and ordinary business operations.
(d) SEC Registration.
(i) Questar shall, and shall cause QTI and
Comqor to, furnish to NEXTEL such information about Questar, QTI
and Comqor as may be necessary to enable NEXTEL to prepare and
file with the Securities and Exchange Commission a Registration
Statement on Form S-4 (or other appropriate and available form)
under the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder, in respect of the NEXTEL
Common Shares to be issued by reason of the QTI Share Exchange.
(ii) Questar shall furnish to NEXTEL suitable
written certifications (and shall cause its independent public
accountants to furnish standard comfort letters) regarding the
information it has furnished, or caused to be furnished, for
inclusion in such Registration Statement, both immediately prior
to the effectiveness of such Registration Statement and at the
Closing. Questar shall bear its own expenses (and the expenses,
if any, of QTI and Comqor), including accountant's and counsel's
fees and expenses, incurred in discharging the foregoing
obligations regarding such Registration Statement.
(iii) Questar covenants and agrees to enter into
standard cross indemnification arrangements with NEXTEL relating
to such Registration Statement and the inclusion therein of
information regarding such parties or their affiliates.
(iv) If resales of the NEXTEL Common Shares
received by Questar are contemplated to be effected pursuant to
such Registration Statement, Questar shall furnish to NEXTEL the
relevant information regarding its plan of distribution for
inclusion therein, and shall not change such plan of distribution
subsequent to the effectiveness of such Registration Statement.
Questar shall pay all costs incurred by it in any resales of
NEXTEL Common Shares, whether pursuant to such Registration
Statement or otherwise.
(v) Questar hereby agrees that NEXTEL shall not
be obligated to maintain the effectiveness of such Registration
Statement for more than 30 days after the Closing.
(e) Antitrust Filing. In connection with the
transactions contemplated by this Agreement, Questar shall
promptly file or cause to be filed any reports, documents,
filings or other data required to be filed pursuant to the Hart-
Scott-Rodino Antitrust Improvements Act of 1976 (the "HSR Act")
and the rules and regulations promulgated thereunder, and shall
use its best efforts to respond as promptly as practicable to all
inquiries received for additional information or documentation.
(f) Information Update. Questar shall use its best
efforts to correct and supplement in writing any information
furnished in the Schedules or otherwise expressly contemplated by
Article IV of this Agreement, and shall promptly furnish such
corrected and supplemental information to NEXTEL, so that such
information shall be correct and complete in all material
respects at the time such updated information is so provided to
NEXTEL, and thereafter to the Closing Questar shall notify NEXTEL
in writing of any changes or supplements to such updated
information needed to reflect any actions, developments or
occurrences in such period necessary to make such information
correct and complete in all material respects at all times to the
Closing. NEXTEL and Questar hereby agree that Questar's
furnishing of such corrected and supplemental information, in and
of itself, shall not create any presumption that such information
constitutes or evidences the existence of any breach or violation
by Questar of any provision of this Agreement, it being
understood that any determination as to whether such a breach or
violation exists shall be made on the basis of any relevant
information, which may include (but based on its substantive
content) such information as is so furnished by Questar pursuant
to this Section 7.1(f).
(g) Pending Licenses. Questar covenants and agrees
to cause QTI to use QTI's reasonable best efforts to deliver at
the Closing all of QTI's trunked 800 MHz SMR licenses or
applications currently on file with and pending approval from the
FCC, including all frequencies or applications pending for the
"Western States SMR Network."
(h) Best Efforts. Questar covenants and agrees to,
and to cause QTI to, take all reasonable actions (and refrain
from taking such other actions) prior to the Closing as may be
necessary or appropriate so that all of the conditions to
NEXTEL's obligations to consummate the transactions contemplated
by this Agreement, that are dependent upon reasonable action
being taken (or refrained from being taken) by Questar and/or
QTI, shall be satisfied as of the Closing.
7.2 Covenants of AMI. From the date of this
Agreement until the Closing:
(a) Conduct of Business. Except to address
disruptions to AMI-West's business operations that may occur as a
result of matters beyond the reasonable control of AMI-West, AMI
shall cause AMI-West to (and shall, pursuant to the applicable
management agreements, instruct QTI to) conduct AMI-West's
business only in the ordinary course and, without limiting the
generality of the foregoing, AMI-West shall not, without the
prior written consent of NEXTEL: (i) sell, transfer or assign
any SMR frequency or related FCC SMR license or any related
physical asset of the relevant SMR system or any related
intangible asset of the relevant SMR system; (ii) dispose or
contract to dispose of any property or other assets, voluntarily
incur any absolute or contingent debt obligation or engage in any
activity or transaction except, in each case, in the ordinary
course of business; (iii) borrow any money, except in the
ordinary course of business under currently existing lines of
credit or from affiliates; (iv) enter into any lease or contract
for the purchase or sale of real estate or of any interest
therein; (v) encumber any property or other assets; (vi) declare
or pay any dividend; (vii) purchase or redeem any shares, notes
or other securities or make any other distribution to
stockholders; (viii) increase the rate of remuneration to any of
its directors, officers, employees or other representatives, or
agree to do so, other than increases in the ordinary course of
business consistent with past practices; (ix) adopt any new or
amend any existing employee benefit plan; (x) form or cause to be
formed any subsidiary; (xi) issue, sell, distribute or dispose of
any shares, notes or other securities of AMI-West or commit
itself to do so; (xii) make any commitments for capital
improvements or materially alter standing commitments for capital
improvements; (xiii) fail to keep its properties insured to the
same extent as they are currently insured; or (xiv) take or omit
to take any action which would cause to be breached, or might
result in any breach of, any of the representations, warranties
or covenants of AMI contained herein if the same were made anew
immediately after any such act or omission.
(b) Preserve Business. AMI shall cause AMI-West to
(and shall, pursuant to the applicable management agreements,
instruct QTI to) use all reasonable efforts to preserve intact
AMI-West's business organization and to preserve its goodwill as
to customers, suppliers and others having business relations with
it.
(c) Inspection. AMI shall cause AMI-West to permit
representatives of NEXTEL, during normal business hours, to
examine AMI-West's and Comqor's properties, books, contracts, tax
returns and other records, and shall furnish or cause to be
furnished such representatives with all such information and
access to all relevant personnel and properties (including the
SMR Assets) concerning the affairs of AMI-West and Comqor as they
may reasonably request, subject only to such restrictions or
limitations on access as are necessary to avoid undue disruption
to the conduct of normal and ordinary business operations.
(d) SEC Registration.
(i) AMI shall, and shall cause AMI-West, Comqor
and the Individual Stockholders to, furnish to NEXTEL such
information about AMI, AMI-West, Comqor and the Individual
Stockholders as may be necessary to enable NEXTEL to prepare and
file with the Securities and Exchange Commission a Registration
Statement on Form S-4 (or other appropriate and available form)
under the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder, in respect of the NEXTEL
Common Shares to be issued by reason of the AMI-West Share
Exchange.
(ii) AMI shall furnish to NEXTEL suitable
written certifications (and shall cause its independent public
accountants to furnish standard comfort letters) regarding the
information it has furnished, or caused to be furnished, for
inclusion in such Registration Statement, both immediately prior
to the effectiveness of such Registration Statement and at the
Closing. AMI shall bear its own expenses (and the expenses, if
any, of AMI-West, Comqor and the Individual Stockholders),
including accountant's and counsel's fees and expenses, incurred
in discharging the foregoing obligations regarding such
Registration Statement.
(iii) AMI and the Individual Stockholders
covenant and agree to enter into standard cross indemnification
arrangements with NEXTEL relating to such Registration Statement
and the inclusion therein of information regarding such parties
or their affiliates.
(iv) If resales of the NEXTEL Common Shares
received by AMI and the Individual Stockholders are contemplated
to be effected pursuant to such Registration Statement, AMI and
the Individual Stockholders shall furnish to NEXTEL the relevant
information regarding their plans of distribution for inclusion
therein, and shall not change such plans of distribution
subsequent to the effectiveness of such Registration Statement.
AMI and the Individual Stockholders shall pay all costs incurred
by them in any resales of NEXTEL Common Shares, whether pursuant
to such Registration Statement or otherwise.
(v) AMI and the Individual Stockholders hereby
agree that NEXTEL shall not be obligated to maintain the
effectiveness of such Registration Statement for more than 30
days after the Closing.
(e) Antitrust Filing. In connection with the
transactions contemplated by this Agreement, AMI shall promptly
file or cause to be filed any reports, documents, filings or
other data required to be filed pursuant to the HSR Act and the
rules and regulations promulgated thereunder, and shall use its
best efforts to respond as promptly as practicable to all
inquiries received for additional information or documentation.
(f) Information Update. AMI shall use its best
efforts to correct and supplement in writing any information
furnished in the Schedules or otherwise expressly contemplated by
Article V of this Agreement, and shall promptly furnish such
corrected and supplemental information to NEXTEL, so that such
information shall be correct and complete in all material
respects at the time such updated information is so provided to
NEXTEL, and thereafter to the Closing AMI shall notify NEXTEL in
writing of any changes or supplements to such updated information
needed to reflect any actions, developments or occurrences in
such period necessary to make such information correct and
complete in all material respects at all times to the Closing.
NEXTEL and AMI hereby agree that AMI's furnishing of such
corrected and supplemental information, in and of itself, shall
not create any presumption that such information constitutes or
evidences the existence of any breach or violation by AMI of any
provision of this Agreement, it being understood that any
determination as to whether such a breach or violation exists
shall be made on the basis of any relevant information, which may
include (but based on its substantive content) such information
as is so furnished by AMI pursuant to this Section 7.2(f).
(g) Pending Licenses. AMI covenants and agrees to
cause AMI-West to use AMI-West's reasonable best efforts to
deliver at the Closing all of AMI-West's trunked 800 MHz SMR
licenses or applications currently on file with and pending
approval from the FCC, including all frequencies or applications
pending for the "Western States SMR Network."
(h) Best Efforts. AMI covenants and agrees to, and
to cause AMI-West to, take all reasonable actions (and refrain
from taking such other actions) prior to the Closing as may be
necessary or appropriate so that all of the conditions to
NEXTEL's obligations to consummate the transactions contemplated
by this Agreement, that are dependent upon reasonable action
being taken (or refrained from being taken) by AMI and/or AMI-
West, shall be satisfied as of the Closing.
7.3 Tax Provisions.
(a) Questar represents, warrants, covenants and
agrees that:
(i) The QTI Common Stock to be exchanged in the
QTI Share Exchange will be exchanged solely in consideration for
NEXTEL Common Shares.
(ii) Questar has been the sole shareholder of
QTI at all times since the formation of QTI.
(iii) There is no plan or intention by Questar
to sell, exchange or otherwise dispose of a number of the NEXTEL
Common Shares to be received in the QTI Share Exchange that would
reduce Questar's ownership of the NEXTEL Common Shares to a
number of shares having a value, as of the Closing, of less than
50% of the value of all of the shares of QTI Common Stock held by
Questar immediately prior to the Closing. Shares of QTI Common
Stock and NEXTEL Common Shares held by Questar (other than NEXTEL
Common Shares acquired in transactions independent from and
unrelated to those contemplated by this Agreement) that are sold,
redeemed or otherwise disposed of prior or subsequent to the
Closing will be considered in making this covenant.
(iv) At the Closing, QTI shall not have
outstanding any warrants, options, convertible securities or any
other types of right pursuant to which any person could acquire
stock in QTI that, if exercised or converted, would affect
NEXTEL's acquisition or retention of control of QTI, as defined
in Section 368(c) of the Code.
(v) As of the Closing, the fair market value of
the assets of QTI shall exceed its liabilities plus the
liabilities, if any, to which its assets are subject.
(vi) All of the business of QTI (other than the
business acquired in accordance with this Agreement) constitutes
the historic business of QTI within the meaning of Treas. Regs.
1.368-1(d)(2), (3) and (4), and all of the assets of QTI (other
than money contributed to QTI in accordance with this Agreement)
constitutes assets used in its historic business within the
meaning of Treas. Regs. 1.368-1(d)(2) and (4).
(vii) Since October 15, 1993, QTI has not made
any distribution with respect to its stock, except for regular
dividends from its own funds, and does not plan or intend to make
any extraordinary distribution with respect to its stock prior to
the Closing except for distributions of the items described in
Annex B to this Agreement.
(viii) QTI has no plan or intention to acquire
any of the NEXTEL Common Shares to be issued in the Share
Exchanges.
(ix) Questar and QTI shall pay their own
expenses, if any, incurred in connection with the QTI Share
Exchange.
(x) Neither Questar nor QTI is an investment
company as defined in Section 368(a)(2)(F)(iii) and (iv) of the
Code.
(xi) The QTI Common Stock to be acquired by
NEXTEL in the QTI Share Exchange shall not be subject to any
liabilities.
(b) AMI represents, warrants, covenants and agrees
that:
(i) The AMI-West Common Stock to be exchanged in
the AMI-West Share Exchange will be exchanged solely in
consideration for NEXTEL Common Shares.
(ii) There is no plan or intention by AMI to
sell, exchange or otherwise dispose of a number of the NEXTEL
Common Shares to be received in the AMI-West Share Exchange that
would reduce AMI's ownership of the NEXTEL Common Shares to a
number of shares having a value, as of the Closing, of less than
50% of the value of all of the shares of AMI-West Common Stock
held by AMI immediately prior to the Closing. Shares of AMI-West
Common Stock and NEXTEL Common Shares held by AMI (other than
NEXTEL Common Shares acquired in transactions independent from
and unrelated to those contemplated by this Agreement) that are
sold, redeemed or otherwise disposed of prior or subsequent to
the Closing will be considered in making this covenant.
(iii) At the Closing, AMI-West shall not have
outstanding any warrants, options, convertible securities or any
other types of right pursuant to which any person could acquire
stock in AMI-West that, if exercised or converted, would affect
NEXTEL's acquisition or retention of control of AMI-West, as
defined in Section 368(c) of the Code.
(iv) As of the Closing, the fair market value of
the assets of AMI-West shall exceed its liabilities plus the
liabilities, if any, to which its assets are subject.
(v) All of the business of AMI-West (other than
the business acquired in accordance with this Agreement)
constitutes the historic business of AMI-West within the meaning
of Treas. Regs. 1.368-1(d)(2), (3) and (4), and all of the
assets of AMI-West (other than money contributed to AMI-West in
accordance with this Agreement) constitutes assets used in its
historic business within the meaning of Treas. Regs. 1.368-
1(d)(2) and (4).
(vi) Since October 15, 1993, AMI-West has not
made any distribution with respect to its stock, except for
regular dividends from its own funds, and does not plan or intend
to make any extraordinary distribution with respect to its stock
prior to the Closing except for distributions of the items
described in Annex B to this Agreement.
(vii) AMI-West has no plan or intention to
acquire any of the NEXTEL Common Shares to be issued in the Share
Exchanges.
(viii) AMI and AMI-West shall pay their own
expenses, if any, incurred in connection with the AMI-West Share
Exchange.
(ix) Neither AMI nor AMI-West is an investment
company as defined in Section 368(a)(2)(F)(iii) and (iv) of the
Code.
(x) The AMI-West Common Stock to be acquired by
NEXTEL in the AMI-West Share Exchange shall not be subject to any
liabilities.
(xi) In the event that one or both of the
Individual Stockholders fail to execute and deliver the form of
document set forth in Annex I to this Agreement, AMI, for
purposes of its representation, warranty, covenant and agreement
set forth in subsection 7.3(b)(ii) above, shall (A) treat each
such Individual Stockholder's share in AMI-West (formerly AMI-NV)
as though it was owned by AMI and exchanged by AMI for NEXTEL
Common Shares in the AMI-West Share Exchange, and (B) treat such
NEXTEL Common Shares as though they were sold for cash
immediately after the Closing.
ARTICLE VIII. COVENANTS OF NEXTEL
8.1 NEXTEL Common Shares.
NEXTEL shall, as soon as practicable after the
execution and delivery of this Agreement, authorize the issuance
and delivery of the number of NEXTEL Common Shares necessary to
consummate the QTI Share Exchange and the AMI-West Share
Exchange.
8.2 Name Change. NEXTEL covenants and agrees to take
all such action as may be necessary, immediately following the
Closing, to amend QTI's Certificate of Incorporation to change
legally QTI's name to a name that does not include the word
"Questar." In connection therewith, NEXTEL covenants and agrees
that it shall not, by reason of the QTI Share Exchange, acquire
any rights to the name "Questar" or any variant thereof.
8.3 Antitrust Filing. In connection with the
transactions contemplated by this Agreement, NEXTEL shall
promptly file or cause to be filed any reports, documents,
filings or other data required to be filed pursuant to the HSR
Act and the rules and regulations promulgated thereunder, and
shall use its best efforts to respond as promptly as practicable
to all inquiries received for additional information or
documentation.
8.4 Registration Statement.
(a) NEXTEL shall promptly prepare and file with the
Securities and Exchange Commission a Registration Statement on
Form S-4 (or other appropriate and available form) under the
Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder, (i) relating to the NEXTEL Common Shares
to be issued by reason of the QTI Share Exchange and the AMI-West
Share Exchange, and (ii) permitting the resale of such NEXTEL
Common Shares thereafter by the recipients thereof for a period
of not less than 30 days following the effectiveness of such
Registration Statement (but, if such Registration Statement is
declared effective at or prior to the Closing, in no event ending
later than the 30th day after the Closing). At its sole option,
NEXTEL may determine to use the same Registration Statement to
register the issuance and/or resales of other NEXTEL Common
Shares to be issued to persons other than Questar, AMI and the
Individual Stockholders in other transactions. NEXTEL shall use
its reasonable best efforts to cause such Registration Statement
to become effective and to maintain its effectiveness for 30 days
after the Closing to permit resales of the registered NEXTEL
Common Shares from time to time by Questar, AMI and the
Individual Stockholders.
(b) NEXTEL shall furnish to Questar, AMI and the
Individual Stockholders suitable written certifications (and
shall cause its independent public accountants to furnish
standard comfort letters) regarding the information it has
furnished for inclusion in such Registration Statement, both
immediately prior to the effectiveness of such Registration
Statement and at the Closing. NEXTEL shall bear its own
expenses, including accountant's and counsel's fees and expenses,
incurred in discharging the foregoing obligations regarding such
Registration Statement. In addition, NEXTEL shall pay all filing
fees to register NEXTEL Common Shares with the Securities and
Exchange Commission.
(c) NEXTEL covenants and agrees to enter into
standard cross indemnification arrangements with Questar, AMI and
the Individual Stockholders relating to such Registration
Statement and the inclusion therein of information regarding such
parties or their affiliates.
(d) In addition to the registration and resale rights
provided in the foregoing subsections (a) through (c), NEXTEL
hereby grants additional registration rights ("piggyback
registration rights") to Questar, AMI and the Individual
Stockholders (the "Original Holders") at any time during the two-
year period following the Closing that NEXTEL proposes to
register NEXTEL Common Shares under the Securities Act of 1933,
as amended. The piggyback registration rights shall have the
characteristics and restrictions described in Annex D to this
Agreement (previously delivered to all parties hereto) and shall
be non-transferable except to (i) an affiliate of one of the
Original Holders that becomes a holder of NEXTEL Common Shares
received by reason of the Share Exchanges or (ii) any one person
not affiliated with one of the Original Holders that becomes a
holder of NEXTEL Common Shares received by reason of the Share
Exchanges and that is designated in writing to NEXTEL by one of
the Original Holders as the transferee of such Original Holder's
piggyback registration rights.
8.5 NASDAQ Listing. NEXTEL shall use its best
efforts to list (subject to notice of issuance) on the NASDAQ
National Market System, the NEXTEL Common Shares to be issued in
connection with the Share Exchanges.
8.6 Information Update. NEXTEL shall use its best
efforts to correct and supplement in writing any information
furnished in the Schedules or otherwise expressly contemplated by
Article VI of this Agreement, and shall promptly furnish such
corrected and supplemental information to Questar, AMI and the
Individual Stockholders, so that such information shall be
correct and complete in all material respects at the time such
updated information is so provided to Questar, AMI and the
Individual Stockholders, and thereafter to the Closing NEXTEL
shall notify Questar, AMI and the Individual Stockholders in
writing of any changes or supplements to such updated information
needed to reflect any actions, developments or occurrences in
such period necessary to make such information correct and
complete in all material respects at all times to the Closing.
NEXTEL, Questar, AMI and the Individual Stockholders hereby agree
that NEXTEL's furnishing of such corrected and supplemental
information, in and of itself, shall not create any presumption
that such information constitutes or evidences the existence of
any breach or violation by NEXTEL of any provision of this
Agreement, it being understood that any determination as to
whether a breach or violation exists shall be made on the basis
of any relevant information, which may include (but based on its
substantive content) such information as is so furnished by
NEXTEL pursuant to this Section 8.6.
8.7 Employees.
(a) NEXTEL covenants and agrees that as of the
Closing it shall offer positions of employment, or shall cause
QTI or AMI-West, as appropriate, to offer continued employment,
to all of the field and headquarters staff employees of QTI and
AMI-West with the relevant operations and at compensation levels
substantially similar to those provided by QTI and AMI-West, as
the case may be, immediately prior to the Closing.
(b) Effective as of the Closing, (i) Questar shall
cause QTI and AMI-West to withdraw from any employee benefit
plans maintained by Questar or AMI for any present or former
employees, directors, officers, shareholders or consultants of
QTI or AMI-West, and (ii) Questar shall assume from QTI and AMI-
West (and shall cause QTI and AMI-West to transfer and assign to
Questar) sponsorship of, and all liabilities and obligations with
respect to all employee benefit plans (within the meaning of
Section 3(3) of ERISA) and all other employee benefit programs
maintained as of the Closing by Questar or AMI-West.
(c) NEXTEL shall provide, or shall cause QTI or AMI-
West, as appropriate, to provide, each employee who accepts
employment with NEXTEL, QTI or AMI-West following an offer
described in paragraph (a) or this Section 8.7 (an "Acquired
Employee") with (i) three months severance pay if his employment
is terminated, other than for cause, by NEXTEL, QTI or AMI-West
(or any successor employer that may own the relevant operations)
prior to the first anniversary of the Closing, and (ii) as of the
Closing, employee plans and programs which, in the aggregate, are
no less favorable than benefit plans provided as of the Closing
to employees of NEXTEL (or any successor employer that may own
the relevant operations) employed in similar positions, with each
Acquired Employee receiving credit for services previously
rendered to QTI or AMI-West, as the case may be, for purposes of
vacation policy and other benefits based on years of service.
NEXTEL shall be responsible for all benefits with respect to the
Acquired Employees incurred, accrued or legally committed to upon
or after the Closing. Notwithstanding any provision contained in
this Section 8.7, Questar and AMI, as the case may be, shall
remain responsible with respect to continuation coverage
requirements under Section 4980B of the Code and Sections 601-606
of ERISA for current or former employees, directors, officers,
stockholders or consultants of QTI or AMI-West (other than
Acquired Employees) who have exercised or are eligible to
exercise their right to such continuation coverage, and QTI and
AMI-West shall have no such responsibility therefor upon or after
the Closing.
(d) Each field and headquarters staff employee of QTI
and AMI-West immediately prior to the Closing shall be deemed a
third party beneficiary of this Agreement solely for purposes of
subsection (a) above. Each Acquired Employee shall be deemed a
third party beneficiary of this Agreement solely for purposes of
subsection (c) above.
(e) NEXTEL hereby confirms that employment and/or
consulting agreements shall be entered into with the four
individuals listed on Annex F to this Agreement (previously
delivered to all parties hereto), and shall have the principal
substantive terms as set forth in Exhibits 1, 2, 3 and 4 to such
Annex F (previously delivered to all parties hereto), and shall
be effective as of the Closing.
8.8 Roaming Exclusivity. NEXTEL covenants and agrees
that as promptly as practicable it shall commence good faith
negotiations with QTI and AMI-West with respect to exclusive
roaming arrangements between QTI's and AMI-West's, as the case
may be, operations in Seattle, Las Vegas, Salt Lake City and San
Diego and all of NEXTEL's operations, with such roaming
arrangements to be proposed by NEXTEL on substantially the same
terms as NEXTEL is prepared to offer to operators of SMR systems
in other metropolitan areas not served by NEXTEL or its
affiliates; provided that NEXTEL shall be released from all
obligations pursuant to this Section 8.8 (and may terminate,
amend or otherwise modify any such roaming arrangements
previously entered into) from and after the Closing.
8.9 Tax Provisions. NEXTEL represents, warrants,
covenants and agrees that:
(a) The NEXTEL Common Shares to be issued in the
Share Exchanges shall be exchanged solely as consideration for
QTI Common Stock and AMI-West Common Stock.
(b) NEXTEL has no plan or intention to liquidate QTI
or AMI-West or to merge QTI or AMI-West into another corporation
(in which QTI or AMI-West, respectively, is not the surviving
corporation).
(c) Immediately after the Closing, NEXTEL shall own
directly all of the outstanding QTI Common Stock and AMI-West
Common Stock. NEXTEL has no plan or intention to sell or
otherwise dispose of any shares of QTI Common Stock or AMI-West
Common Stock. NEXTEL has no plan or intention to cause either
QTI or AMI-West to issue additional shares of QTI Common Stock or
AMI-West Common Stock, respectively, or to create any new class
of stock; and immediately after the Closing, NEXTEL shall prevent
QTI and AMI-West from issuing any warrants, options, convertible
securities or any other type of right pursuant to which any
person could acquire stock of QTI or AMI-West, the sale,
disposition, issuance, creation, exercise or conversion,
respectively, of which would adversely affect NEXTEL's
acquisition or retention of control of QTI or AMI-West, within
the meaning of Section 368(c) of the Code.
(d) NEXTEL shall pay its own expenses incurred in
connection with the Share Exchanges only, and not those of QTI,
AMI-West, Questar, AMI or any other person.
(e) Immediately after the Closing, NEXTEL shall cause
each of QTI and AMI-West to continue its respective historic
business or use a significant portion of its respective historic
business assets in a business within the meaning of Treas. Regs.
1.368-(d).
(f) NEXTEL is not an investment company as defined in
Section 368(a)(2)(F)(iii) and (iv) of the Code.
(g) NEXTEL has no plan or intention to reacquire any
of the NEXTEL Common Shares to be issued in the Share Exchanges.
(h) NEXTEL shall assume no liabilities of either
Questar or AMI in connection with the Share Exchanges.
8.10 Securities Laws Acknowledgment. NEXTEL hereby
acknowledges that Questar, AMI and the Individual Stockholders
shall be entitled to all of their respective rights and remedies
under the federal securities laws in connection with their
acquisition of NEXTEL Common Shares by reason of the Share
Exchanges.
8.11 Best Efforts. NEXTEL covenants and agrees to
take all reasonable actions (and refrain from taking such other
actions) prior to the Closing as may be necessary or appropriate
so that all of the conditions to Questar's and AMI's obligations
to consummate the transactions contemplated by this Agreement,
that are dependent upon reasonable action being taken (or
refrained from being taken) by NEXTEL, shall be satisfied as of
the Closing.
ARTICLE IX. ADDITIONAL COVENANTS
9.1 Cooperation.
(a) NEXTEL, Questar and AMI covenant and agree to,
and to cause their respective appropriate affiliates to, (i) as
promptly as practicable, use their respective reasonable efforts
to assemble, prepare and file any information (and, as needed, to
supplement such information) as may be reasonably necessary to
obtain all governmental and regulatory consents and approvals
required to consummate the transactions contemplated by this
Agreement; (ii) exert their respective reasonable best efforts to
obtain all material consents and approvals of third parties that
they (or any of their respective appropriate affiliates) are
responsible for obtaining to consummate the transactions
contemplated by this Agreement; and (iii) in the manner
contemplated by Sections 7.1(c) and 7.2(c), make available to
each other and to each other's representatives their respective
business, accounting and personnel records under all reasonable
circumstances.
(b) In the event that an acquisition, event or
transaction agreed to or effected by NEXTEL after October 15,
1993 that was not disclosed to Questar or AMI prior to
October 15, 1993 (an "Undisclosed Subsequent Matter") will
adversely affect the ability of the parties to obtain any
antitrust regulatory approval for the Share Exchanges, NEXTEL
hereby agrees to use its best efforts to eliminate any such
regulatory impediment, but only to the extent arising by reason
of such Undisclosed Subsequent Matter, to the consummation of the
transactions contemplated by this Agreement.
9.2 Confidentiality.
(a) Except for the use of information as required in
connection with NEXTEL's Registration Statement and any other
governmental filing required in order to complete the
transactions contemplated herein, all information received by
each of Questar, AMI, the Individual Stockholders and NEXTEL and
their respective representatives pursuant to the terms of this
Agreement shall be kept in strictest confidence by the receiving
party and its representatives and shall not be used by the
receiving party or its representatives other than in connection
with such receiving party's evaluation, analysis and due
diligence activities undertaken in connection with the
transactions referred to herein; provided, however, that the
parties may disclose such information to their respective
representatives, but only if such representatives reasonably need
to know such information in connection with the receiving party's
evaluation, analysis and due diligence activities undertaken in
connection with the transactions referred to herein. NEXTEL,
Questar, AMI and the Individual Stockholders shall, and shall
cause their respective appropriate affiliates to, inform each of
their respective representatives receiving information of the
confidential nature of the information and direct such
representatives to treat the information confidentially and not
to use it other than in connection with such representatives'
conduct of activities relating to or participation in the
transactions referred to herein. Without the consent of the
party to which the information pertains, the other parties shall
not, and each shall direct their respective appropriate
affiliates and their respective representatives not to, disclose
to any person (i) that any information has been made available to
them, (ii) that discussions are taking place between the parties,
or (iii) any other facts with respect to the discussions between
the parties.
(b) If the transactions contemplated hereby shall
fail to be consummated, all copies of documents or extracts
thereof containing information as to one of the other parties,
including all information prepared by the receiving party or such
receiving party's representatives, shall be turned over to the
party furnishing the same, except that such information prepared
by the receiving party or such receiving party's representatives
may be destroyed at the option of the receiving party, with
notice of such destruction (or return) to be confirmed in writing
to the disclosing party. Any information not so destroyed (or
returned) shall remain subject to these confidentiality
provisions (notwithstanding any termination of this Agreement).
(c) The foregoing confidentiality provisions shall
not apply to such portions of the information received which
(i) are or become generally available to the public through no
action by the receiving party or by such party's representatives
or (ii) are or become available to the receiving party on a
nonconfidential basis from a source, other than the disclosing
party or its representatives, which the receiving party believes,
after reasonable inquiry, is not prohibited from disclosing such
portions to it by a contractual, legal or fiduciary obligation,
and shall not apply to any disclosure by NEXTEL of any
information disclosed by Questar, QTI, AMI, AMI-West or the
Individual Stockholders, so long as such disclosure occurs after
the Closing.
(d) Each of NEXTEL, Questar and AMI confirm that,
with their respective prior written consent, which shall not be
unreasonably withheld by any of them, the information provided by
Questar and/or AMI to NEXTEL, or by NEXTEL to Questar and/or AMI,
may be furnished to other third parties having a legitimate need
for access to such information; provided that such written
consent of NEXTEL, Questar or AMI, as appropriate, may be
conditioned upon the entry by such third parties into suitable
confidentiality agreements governing their use of, and
obligations to keep confidential, such information.
(e) For purposes of this Section, the term
"information" shall mean all information furnished as
contemplated herein by or on behalf of a party (including its
respective appropriate affiliates) to another party and/or to
such other party's representatives, together with all written or
electronically stored documentation prepared by the receiving
party or its representatives to the extent based on or
reflecting, in whole or in part, any of such information.
9.3 Trading Prohibitions. Questar, AMI and the
Individual Stockholders hereby acknowledge that as a result of
disclosures by NEXTEL to each of them as contemplated under this
Agreement, Questar, AMI and their respective affiliates, and the
Individual Stockholders, may, from time to time, possess
material, non-public information concerning NEXTEL and certain
other companies. Questar and AMI, on their behalf and on behalf
of their respective affiliates, and the Individual Stockholders
confirm their awareness, and have advised their respective
representatives, that (a) the United States securities laws may
prohibit a person who has material, non-public information from
purchasing or selling (directly or indirectly) the securities of
any company to which such information relates, and (b) material,
non-public information in their possession shall not be
communicated to any other person except as permitted herein.
9.4 Non-Competition. Questar and AMI agree for
themselves and their respective affiliates that for a period of
five years after the Closing, Questar and AMI (and their
respective affiliates) shall not engage in, or have a greater
than 30% beneficial interest in a third party that engages in,
the provision of wireless communication services utilizing
spectrum (a "Competitive Business") in the States of California,
Idaho, Oregon, Montana, New Mexico, Utah, Colorado, Washington,
Wyoming, Nevada and Arizona; provided, however, that:
(a) such restriction shall not prohibit any affiliate
of AMI from making investments in a Competitive Business in the
ordinary course in connection with its mutual fund, brokerage and
investment management businesses;
(b) neither Questar nor AMI or their respective
affiliates shall be precluded from acquiring a Competitive
Business as part of a larger acquisition, so long as the
Competitive Business is disposed of as promptly as practicable
following such acquisition, allowing for an orderly disposition;
(c) Questar and its affiliates may own and operate a
Competitive Business, including SMR systems, paging systems,
mobile radio and microwave systems currently owned by them, for
(i) internal non-commercial purposes relating to the operation of
such affiliates and (ii) for existing customers of Questar and
its affiliates as of the Closing (other than any of such
customers who also then are customers of QTI);
(d) subject to the terms of a certain letter
agreement, dated December 10, 1993, between NEXTEL and Questar
Service Corporation, a wholly owned subsidiary of Questar
("Questar Service"), Questar Service may purchase certain SMR
channels owned by Crescent Communications which are subject to a
right of first refusal agreement set forth in that certain Site
Use, Systems Maintenance, Telecommunications Interconnect and
Microwave Services Agreement dated May 1, 1991, between Questar
Service and Crescent Communications; it being understood that if
such channels are purchased by a Questar subsidiary, such entity
may continue to serve and maintain the commercial customers
served by Crescent Communications at the time of the purchase,
provided that in no event shall Questar or any Questar subsidiary
solicit or otherwise serve commercial customers other than those
served by Crescent Communications at the time of the purchase;
(e) Questar Service and its affiliates may offer
SCADA (Supervisory Control and Data Acquisition) systems and
services to third parties so long as NEXTEL or any of its
subsidiaries is not then currently providing its customers with a
similar service in such geographic area;
(f) Questar and its affiliates may provide long
distance voice and data transmission services to third parties on
microwave systems;
(g) Questar Service and its affiliates may install,
implement and provide services of local area networks and wide-
area networks, on both a wired and wireless basis, for data
transmission and communications between computer systems of third
parties on an internal basis of such third party; and
(h) AMI or its affiliates may continue to own and
operate the assets referred to in Section 2.1(a)(iii) of this
Agreement.
9.5 General Indemnity; Non-Survival of
Representations.
(a) Questar and AMI hereby covenant and agree to
indemnify and save harmless NEXTEL and its affiliates (including
those resulting from the QTI Share Exchange and the AMI-West
Share Exchange) from and against any and all claims, liabilities,
costs, damages and expenses ("Costs") incurred by any of such
entities due to any breach of the representations and warranties
of Questar and/or of AMI contained in any of Sections 4.12, 4.13,
4.19, 4.25, 5.12, 5.13, 5.19, and 5.25, or any matter or
circumstance that would cause or result in the Closing condition
set forth in Section 10.2(k) not being satisfied (the "Liability
Reps and Warranties") or any failure to observe or perform any
covenant or other agreement, on the part of Questar, AMI or their
respective affiliates (including, prior to the Closing, QTI, AMI-
West and Comqor) contained in this Agreement or in any other
definitive transaction agreement. Except as and to the extent
necessary to assert any claim for indemnification in connection
with the Liability Reps and Warranties described in the
immediately preceding sentence, or to assert a claim based on a
fraudulent or intentional misrepresentation made by any of
NEXTEL, Questar or AMI in this Agreement, all representations and
warranties of NEXTEL, Questar and/or AMI contained in this
Agreement, or in any certificate, document, Schedule, Annex or
instrument delivered pursuant hereto shall terminate effective
upon the Closing. Such indemnification obligations shall be
imposed severally on Questar and AMI in the proportion of 67% and
33%, respectively, of the relevant Costs, but except as set forth
below otherwise shall not be limited in time or amount, nor
subject to any deductible, basket or other limiting factors,
except that (i) claims for indemnification of Costs incurred as a
result of breaches of such Liability Reps and Warranties (other
than breaches constituting intentional or fraudulent
misrepresentation) must be asserted on or prior to (A) the second
anniversary of the Closing or (B) the expiration of the
applicable statute of limitations period in the case of such
Liability Reps and Warranties concerning tax matters, (ii) the
resulting payments of such Costs shall be limited in aggregate
amount to $26,680,000 (the "Cap"), (iii) no payments shall be
required to be made on such claims until indemnified Costs exceed
an aggregate "basket" amount of $500,000 (with "first dollar"
recovery of all indemnified Costs (subject to the Cap) once such
basket amount is exceeded, (iv) any claim based on or resulting
from a fraudulent or intentional misrepresentation by any party
must be asserted prior to the expiration of the applicable
statute of limitations therefor and (v) any claim based on any
breach of any representation or warranty made by NEXTEL in this
Agreement or in any certificate, document, schedule or instrument
delivered pursuant hereto must be asserted on or prior to the
second anniversary of the Closing. To the extent the requirement
set forth in the immediately preceding sentence that certain
claims be asserted prior to the second anniversary of the Closing
would shorten the applicable statute of limitations, the parties
confirm that they intend such a result and agree that no claims
or causes of action may be brought against Questar and/or AMI
and/or NEXTEL or any of their respective directors, officers,
employees, affiliates, controlling persons, agents or
representatives based upon, directly or indirectly, any of the
representations, warranties, covenants or agreements contained
herein except as provided in this Section 9.5(a) after the
Closing or, except as provided in Section 11.2 hereof, after any
termination of this Agreement. This Section 9.5(a) shall not
limit any covenant or agreement of the parties which contemplates
performance after the Closing, or any right or remedy available
to any party as a result of any breach, non-fulfillment or non-
performance of any such covenant or agreement by any of the other
parties.
(b) The obligations of Questar and/or AMI to
indemnify NEXTEL under Section 9.5 hereof with respect to Costs
resulting from the assertion of liability by third parties (each,
as the case may be, a "Claim"), will be subject to the following
terms and conditions:
(i) Any party against whom any Claim is asserted
will give the party required to provide indemnity hereunder
written notice of any such Claim promptly after learning of such
Claim, and the indemnifying party may at its option undertake the
defense thereof by representatives of its own choosing. Failure
to give prompt notice of a Claim hereunder shall not affect the
indemnifying party's obligations under this Section 9.5, except
to the extent the indemnifying party is materially prejudiced by
such failure to give prompt notice. If the indemnifying party,
within 30 days after notice of any such Claim, or such shorter
period as is reasonably required, fails to assume the defense of
such Claim, NEXTEL shall have the sole right thereafter to
undertake the defense, compromise or settlement of such claim on
behalf of and for the account and risk, and at the expense, of
the indemnifying party; and
(ii) Anything in this Section 9.5 to the contrary
notwithstanding, the indemnifying party shall not enter into any
settlement or compromise of any action, suit or proceeding or
consent to the entry of any judgment (A) which does not include
as an unconditional term thereof the delivery by the claimant or
plaintiff to NEXTEL of a written release from all liability in
respect of such action, suit or proceeding or (B) for other than
monetary damages without the prior written consent of NEXTEL,
which consent shall not be unreasonably withheld.
9.6 Tax Indemnity.
(a)(i) NEXTEL shall indemnify and save Questar and
AMI and their respective affiliates (each of them, an
"Indemnified Party") harmless from any and all Costs
("Indemnifiable Amounts") (including, without limitation, any
Reorganization Taxes (as defined in subsection (b)(iv)) and any
Additional Amounts (as defined in subsection (b)(i)) incurred by
any of such Indemnified Parties by reason of a Share Exchange
failing to qualify as a Reorganization (as defined in subsection
(b)(vii)) if the primary cause of such failure is (A) a breach by
NEXTEL (or any NEXTEL affiliate or a person under NEXTEL's direct
or indirect control or acting in concert with NEXTEL, including,
from and after the Closing, QTI, AMI-West and Comqor (a "NEXTEL
Entity")) of any representation, warranty or covenant contained
in Section 8.9 hereof or (B) any other act (or failure to act) by
NEXTEL or a NEXTEL Entity taken (or not taken) before the fifth
anniversary of the Closing; provided, however, that in no event
shall any such act (or failure to act) constitute the primary
cause of a failure of any Share Exchange to qualify as a
Reorganization if it is specifically required by the terms of
this Agreement. Notwithstanding the foregoing, NEXTEL shall have
no liability to pay any given Indemnified Party any Indemnifiable
Amount under this Section with respect to a Share Exchange in
which such Indemnified Party (or any affiliate) was a party, if,
regardless of any breach described in clause (A) above or any
other act (or failure to act) by NEXTEL or any NEXTEL Entity, a
substantive factual basis for a Final Determination (as defined
in subsection (b)(iii)) that such Share Exchange did not qualify
as a Reorganization was attributable to (X) any breach by an
Indemnified Party (or any affiliate or a person under such
Indemnified Party's direct or indirect control or acting in
concert with such Indemnified Party) of any representation,
warranty or covenant contained in Section 7.3 hereof, or (Y) any
other acts or failures to act of any person other than NEXTEL or
any NEXTEL Entity; it being understood that for purposes of the
preceding clause of this sentence, a substantive factual basis
for such Final Determination is only a basis which would, in and
of itself, be, or have been, sufficient to support such Final
Determination.
(ii) Each Indemnified Party shall promptly
notify NEXTEL upon receipt of notice of the commencement of any
audit for a period which includes the Closing or any other
inquiry from a taxing authority for any such period or any other
period concerning a Share Exchange. NEXTEL shall have the right,
at NEXTEL's cost, to participate in and control any such audit or
any response to any such inquiry to the extent such audit or
inquiry concerns any matter regarding whether a Share Exchange
might be a Reorganization; provided, however, NEXTEL shall have
control only over the portion of such audit or inquiry addressing
such matter (the "NEXTEL Portion"); and provided further, that
nothing herein shall limit such Indemnified Party's right to
participate, at its own expense, in the NEXTEL Portion of any
such audit or inquiry. NEXTEL shall also have the right, at
NEXTEL's cost, to participate in and control any further
proceedings to contest, resolve and defend against any assessment
of, notice of deficiency in, or other adjustment to, taxes of an
Indemnified Party for which NEXTEL may have liability under
subsection (a)(i) ("Further Proceedings") and to employ counsel
(and such other advisors) of its choice, at its expense; and
provided that NEXTEL shall not settle or otherwise resolve any
issue which may affect an Indemnified Party's liability for
Reorganization Taxes for which NEXTEL does not have
responsibility for payment thereof, without such Indemnified
Party's consent. In furtherance of the respective parties'
rights to participate in any such audits, inquiries or Further
Proceedings, and NEXTEL's right, as described above, to control
such audits, inquiries or Further Proceedings, the parties shall
use their best efforts to cooperate, in good faith, in the
conduct of such audits, inquiries or Further Proceedings.
Without limiting the generality of the foregoing, each
Indemnified Party shall at NEXTEL's expense (A) promptly upon the
commencement of any such audit or Further Proceeding, provide
NEXTEL with a limited power of attorney authorizing NEXTEL (or
its authorized representatives) to represent such Indemnified
Party with respect to the NEXTEL Portion of such audit or inquiry
or with respect to such Further Proceedings; provided, however,
that NEXTEL shall not supply such limited power of attorney to,
or contact in any way in relation to such audit, any taxing
authority until the taxing authority or other governmental
representative has raised an inquiry concerning a Share Exchange;
(B) promptly provide NEXTEL with copies of any notices or other
communications between such Indemnified Party and the taxing
authority or other governmental representative relating or
relevant to the NEXTEL Portion of such audit, inquiry or Further
Proceeding; (C) provide NEXTEL (or its authorized
representatives) the opportunity to participate in, prepare, and
control any communications (including, without limitation, any
meetings, conferences, or other written or oral presentations)
from such Indemnified Party to the taxing authority or other
governmental representative relating to the NEXTEL Portion of
such audit, inquiry or Further Proceeding; and (D) promptly
provide NEXTEL with any information and assistance reasonably
requested by NEXTEL relating to the NEXTEL Portion of such audit
or inquiry or to such Further Proceeding.
(iii) If NEXTEL does not exercise its rights of
participation or control under subsection (ii), within five days
after a Final Determination that a Share Exchange did not qualify
as a Reorganization (or, in the case of an Additional Amount
described in subsection (b)(i)(A) below, after receipt of a
notice of assessment of such Additional Amount), then an
Indemnified Party claiming indemnification from NEXTEL pursuant
to subsection (i) shall provide to NEXTEL a written claim for
such indemnification setting forth the grounds for the claim and
the amount claimed, including the computation thereof and
sufficient background documentation of such computation to enable
NEXTEL to make reasonable verification of the accuracy of such
claim, and NEXTEL shall pay any Indemnifiable Amounts for which
it is liable under subsection (i) to the appropriate Indemnified
Party by wire transfer, no later than ten days after receiving
such claim and the supporting documentation described above,
unless such tax or Additional Amount is due (i.e., the last day
on which it is payable without the assessment of additional
interest or penalty) earlier, in which case, no later than the
day preceding the date due. If NEXTEL does exercise its rights
of participation or control under subsection (ii), then NEXTEL
shall pay any Indemnifiable Amounts for which it is liable under
subsection (i) to the appropriate Indemnified Party by wire
transfer, no later than five days after a Final Determination
that a Share Exchange did not qualify as a Reorganization (or, in
the case of an Additional Amount described in subsection
(b)(i)(A) below, after receipt of a notice of assessment of such
Additional Amount).
(b) For purposes of this Section:
(i) "Additional Amounts" shall mean (A) any
portion of any interest, penalties or additions to any
Reorganization Taxes or any other tax of an Indemnified Party,
whenever assessed, which interest, penalty or addition relates to
the failure of a Share Exchange to qualify as a Reorganization
and would not have been assessed or asserted but for a Share
Exchange failing to qualify as a Reorganization and (B) any tax
imposed on an Indemnified Party by reason of any payment to it of
Indemnifiable Amounts (including Additional Amounts described in
this clause (B)) with respect to either (1) any Charitable
Contribution Share (as defined in subsection (b)(ii)), or (2) any
NEXTEL Common Share exchanged (or deemed exchanged) for a share
or shares (or portions thereof) of Advanced MobileComm of
Colorado, Inc.; in the interest of convenience, for purposes of
quantifying any Additional Amounts defined under clause (B) of
this subparagraph, the tax rate shall be deemed to be the same as
the rate specified in subsection (b)(iv)(A).
(ii) "Charitable Contribution Share" shall mean
any NEXTEL Common Share disposed of by an Indemnified Party,
prior to a Final Determination that a Share Exchange in which
such NEXTEL Common Share was received failed to qualify as a
Reorganization, which disposition constitutes a charitable
contribution within the meaning of Section 170 of the Code and to
which Section 170(e)(1)(B)(ii) of the Code does not apply.
(iii) "Final Determination" shall mean a final
settlement with a taxing authority or a final or otherwise non-
appealable judgment by a court of competent jurisdiction.
(iv) "Reorganization Taxes" shall mean with
respect to any given Indemnified Party, any tax, imposed or
assessed with respect to a Share Exchange as a result of a Final
Determination that, with respect to such Indemnified Party, such
Share Exchange did not qualify as a Reorganization; in the
interest of convenience, for purposes of quantifying NEXTEL's
liability to pay Indemnifiable Amounts, the amount of
Reorganization Taxes shall equal the product of (A) 40% and
(B) the aggregate amount of the Share Exchange Gain (as defined
in subsection (b)(vi)) with respect to such Share Exchange.
(v) "Retained Share" shall mean any NEXTEL
Common Share received in a Share Exchange by an Indemnified Party
(or any affiliate) pursuant to the QTI Exchange Ratio or the AMI-
West Exchange Ratio, as the case may be (as adjusted pursuant to
Sections 1.3, 2.4 or 10.2(e) hereof), and held by such
Indemnified Party as of the date of the Final Determination that
such Share Exchange failed to qualify as a Reorganization;
provided, that for purposes of this Section, Retained Shares
shall include, without limitation, (i) all Charitable
Contribution Shares and (ii) any such NEXTEL Common Share
transferred by an Indemnified Party (or any affiliate) prior to
the date of such Final Determination but only if each such
transfer was in a transaction in which such NEXTEL Common Share
(or the property received in exchange therefor) constituted
substituted basis property, within the meaning of Section
7701(a)(42) of the Code, except to the extent (on a proportionate
basis) that such Indemnified Party (or affiliate) recognized gain
with respect to such NEXTEL Common Share in the transaction; for
example, if an Indemnified Party were to exchange NEXTEL Common
Shares in a transaction in which such NEXTEL Common Shares
constituted substituted basis property and such Indemnified Party
were required to recognize 10% of the gain realized on such
exchange, then 9 out of every 10 of such exchanged NEXTEL Common
Shares would be deemed to be Retained Shares.
(vi) "Share Exchange Gain" shall mean with
respect to each Retained Share the excess of (A) the average of
the highest and lowest trading price of a NEXTEL Common Share on
the NASDAQ exchange (or, if not traded on the NASDAQ exchange,
the principal exchange on which the NEXTEL Common Shares trade)
on the Closing over (B) such Indemnified Party's adjusted tax
basis (as of the Closing) for a share (or portion thereof) of
either QTI or AMI-West which such Indemnified Party exchanged for
such Retained Share. Proper adjustments shall be made to the
calculation of the number of the Retained Shares and the amount
of Share Exchange Gain with respect to such Retained Shares in
the event of any stock dividend, stock split, recapitalization or
other similar event affecting the NEXTEL Common Shares between
the Closing and the date of a Final Determination that a Share
Exchange in which such NEXTEL Common Shares were received failed
to qualify as a Reorganization.
(vii) "Reorganization" shall mean a
reorganization, within the meaning of Section 368(a) of the Code.
9.7 Digital Mobile System. Notwithstanding Section
7.1(a) as it relates to Questar and Section 7.2(a) as it relates
to AMI, Questar and AMI shall cause QTI and AMI-West,
respectively, to carry out currently contemplated Digital Mobile
System ("DMS") planning and engineering activities with respect
to the proposed DMS for Las Vegas, Nevada and to continue to
pursue the grant of pending applications for, and to maintain
authorizations received for construction or operation of any DMS
of either of QTI or AMI-West in any State; provided, however,
that Questar and AMI shall have no obligation to cause QTI and
AMI-West, respectively, to incur any expenditures for capital
assets relating to any such DMS, or to carry out planning and
engineering activities with respect to any such DMS (other than
Las Vegas, Nevada as provided above) or (other than as may be
required to meet or satisfy the conditions described in Sections
10.2(d) and (e) of this Agreement) to acquire any SMR channels or
related FCC SMR licenses in addition to those set forth on
Annex A to this Agreement, unless in any such case NEXTEL agrees
to supply the relevant entity with the necessary funds for such
purpose (in which case Questar and AMI shall promptly reimburse
NEXTEL upon request for the aggregate amount of all funds so
supplied by NEXTEL to the relevant entity, if the acquisition of
the SMR Assets as contemplated herein is not consummated).
Subject to the foregoing, and unless otherwise expressly required
by this Agreement, neither Questar nor AMI shall be obligated to
provide any cash or working capital to either of QTI or AMI-West.
9.8 Structural Modifications.
(a) The parties to this Agreement covenant, agree and
acknowledge that they shall agree to appropriate modifications to
the Share Exchanges if necessary to provide for a more favorable
tax treatment with respect to the tax-free nature of the
acquisition of the SMR Assets by NEXTEL so long as such
modifications do not result in any more than nominal increase in
transaction costs, or any more than nominal loss of expected
transaction benefits, to NEXTEL.
(b) If, prior to the Closing, NEXTEL proposes to
adopt a holding company form of corporate structure in which
NEXTEL would become a wholly owned subsidiary of a newly-formed
holding company ("Holdco") that would have a capital structure
identical to the capital structure of NEXTEL, then, if requested
by NEXTEL and so long as (i) the intended tax-free treatment of
the Share Exchanges would not be adversely affected and (ii) the
other aspects of related share exchange transactions involving
Holdco equity would be equivalent to or no less favorable than
the Shares Exchanges involving NEXTEL equity to Questar, AMI and
the Individual Stockholders, the parties to this Agreement
covenant, agree and acknowledge that they shall agree to
appropriate modifications to the Share Exchanges to accommodate
share exchanges involving Holdco equity, and to the substitution
of Holdco for NEXTEL in such share exchanges.
9.9 Significant Transactions.
(a) Notwithstanding any other provisions of this
Agreement, NEXTEL agrees that, prior to the Closing, each of
Questar and AMI shall be permitted, so long as neither Questar
nor AMI (or any of its affiliates or representatives) have
solicited or encouraged any inquiries, proposals or offers from
any person relating to any transaction in which any third party
seeks to acquire any of the securities of any of QTI, AMI-West or
Comqor, or any of the SMR frequencies and related FCC SMR
licenses owned by any of QTI, AMI-West or Comqor, or control or
have the ability to control any of QTI, AMI-West or Comqor or any
of their respective businesses or any material part of their
respective holdings of SMR Assets ("Significant Transaction"), to
participate in any discussions or negotiations with a third party
with respect to a Significant Transaction, and furnish to any
other person any confidential information with respect to any of
QTI, AMI-West or Comqor or their securities, businesses or the
SMR Assets, but only if the Boards of Directors of Questar and
AMI receive any bona fide proposal from a credible third party
for a Significant Transaction and are advised by counsel that
approval, acceptance or recommendation of such proposal would be
required by their fiduciary obligations under applicable law, and
in such case this Agreement, subject to subsection (b) below, may
be terminated by Questar and AMI.
(b) Upon the termination of this Agreement as
provided in subsection (a) above, Questar and AMI shall promptly
take all actions required to sell, assign and transfer to NEXTEL,
at NEXTEL's written request delivered to Questar and AMI within
30 days following such termination, all SMR Assets then owned or
managed by any of QTI, AMI-West or Comqor in the State of
California ("California Assets") at an aggregate price, payable
in cash at the closing of such transaction to Questar and AMI (as
they may direct) equal to the sum given by the formula [Y
multiplied by $350,000] plus [Z multiplied by $100,000], where Y
equals the number of frequencies included in such California
Assets that would satisfy the requirements for "core channel
area" trunked 800 MHz SMR channels in the San Diego, California
metropolitan market (as determined in accordance with Section
10.2(d) and (e) of this Agreement) ("Core Channels") and Z equals
the number of remaining frequencies included in such California
Assets representing trunked 800 MHz SMR channels that are not
Core Channels. The terms of any such sale, assignment and
transfer of the California Assets otherwise shall be consistent
with the terms that would have been applicable to the acquisition
of the SMR Assets hereunder, except that Questar and AMI shall
cause QTI, AMI-West and Comqor to promptly, at NEXTEL's request,
adopt any reasonable interim arrangements, such as, without
limitation, entering into a standard management agreement in
favor of NEXTEL covering such California Assets, pending the
consummation of their sale, assignment and transfer.
(c) Questar and AMI hereby acknowledge and agree that
the foregoing provisions are expressly intended to survive any
termination of this Agreement until all obligations of the
parties have been completely fulfilled, and NEXTEL shall be
entitled to specific performance of such provisions without
needing to allege or to establish the inadequacy as a remedy of
monetary damages.
9.10 Offer to Comcast. Questar and AMI, on their own
behalf and on behalf of their respective appropriate affiliates,
hereby acknowledge and agree that NEXTEL has advised them that
NEXTEL has certain contractual obligations to offer to Comcast
Corporation, or its affiliates ("Comcast"), the opportunity to
acquire NEXTEL Common Shares ("Comcast Offer"), based upon the
issuance of NEXTEL Common Shares as contemplated in this
Agreement, and that NEXTEL intends to propose to Comcast that
such Comcast Offer will be made and, if accepted by Comcast, will
be consummated on terms including a per share price for the
NEXTEL Common Shares subject to such Comcast Offer equal to the
closing price for such a share as reported on the NASDAQ-NMS on
the final trading day prior to public announcement of the
transactions contemplated herein. Subject to the foregoing,
Questar and AMI, on their own behalf and on behalf of their
respective appropriate affiliates, hereby confirm their
understanding that such Comcast Offer may proceed on such
specific terms as NEXTEL and Comcast may agree.
9.11 Consolidated Group Matters. Questar covenants
and agrees with NEXTEL, with respect to QTI, and AMI covenants
and agrees with NEXTEL, with respect to AMI-West, that: (a)(i)
Questar shall be responsible for and promptly satisfy (or, as to
payments due prior to the Closing and if in accordance with
customary practice of the parties, cause QTI to satisfy) (x)
QTI's obligations and liabilities for taxes ("QTI's Tax
Liabilities") for any tax period that ends on or prior to the
date on which the Closing occurs (the "Closing Date"); (y) with
respect to any tax period that begins before and ends after the
Closing Date (a "straddle period"), QTI's Tax Liabilities for the
portion of such straddle period that ends on the Closing Date (a
"pre-Closing straddle period"), provided that, for excise taxes
or taxes based on gross or net income or on the sale, transfer,
assignment or other disposition of property (each a "Transfer"),
Questar's responsibility for QTI's Tax Liabilities for the pre-
Closing straddle period shall be determined using a closing of
the books method, by reference to QTI's recorded income and loss
for, and Transfers occurring during, the pre-Closing straddle
period, and that for other taxes, Questar's liability for taxes
for the pre-Closing straddle period shall be determined on a pro
rata basis; and (z) obligations and liabilities for taxes of any
affiliate of Questar other than QTI for any tax period for which
QTI could face liability under Treas. Regs. 1.1502-6 or any
similar principle of law; (ii) NEXTEL shall be responsible for
QTI's Tax Liabilities for tax periods that begin after the
Closing Date and, with respect to straddle periods, for the
portion of the straddle period that occurs after the Closing Date
(with the amount of such liabilities to be determined under the
principles set forth in paragraph (a)(i)(y) immediately above);
(b)(i) AMI shall be responsible for and promptly satisfy (or, as
to payments due prior to the Closing and if in accordance with
customary practice of the parties, cause AMI-West to satisfy) (x)
AMI-West's obligations and liabilities for taxes ("AMI-West's Tax
Liabilities") for any tax period that ends on or prior to the
Closing Date; (y) with respect to any straddle period, AMI-West's
Tax Liabilities for the pre-Closing straddle period, provided
that the portion of such liabilities for the pre-Closing straddle
period shall be determined under the principles set forth in
paragraph (a)(i)(y) immediately above; and (z) obligations and
liabilities for taxes of any affiliate of AMI other than AMI-West
for any tax period for which AMI-West could face liability under
Treas. Regs. 1.1502-6 or any similar principle of law; (ii)
NEXTEL shall be responsible for AMI-West's Tax Liabilities for
taxable periods that begin after the Closing Date and, with
respect to straddle periods, for the portion of the straddle
period that occurs after the Closing Date (with the amount of
such liabilities to be determined under the principles set forth
in paragraph (a)(i)(y) immediately above); (c) Questar or AMI, as
the case may be, shall be entitled to any refund of taxes that
QTI or AMI-West receives for any tax period for which Questar or
AMI, as the case may be, has sole responsibility for such taxes
under paragraph (a) or (b) immediately above, and to a portion of
any refund received for a straddle period, with such portion to
be determined using measurement principles corresponding to those
set forth in paragraph (a)(i)(y) above; (d) any tax sharing or
tax allocation agreement or arrangement between QTI and any other
member of any Questar combined or consolidated group, and between
AMI-West and any other member of any FMR Corp. combined or
consolidated group, shall be terminated as to QTI and AMI-West as
of the Closing, and no further payments shall thereafter be made
to or from QTI or AMI-West thereunder; (e) after the Closing,
Questar and AMI on the one hand and NEXTEL on the other shall
timely provide such information as each may reasonably request of
the other to timely prepare and file tax returns, reports and
related filings for each of QTI and AMI-West (or, as it relates
to QTI or AMI-West, for any Questar, AMI or NEXTEL consolidated
or combined group tax return or filing), provided that all tax
returns, reports and related filings with respect to QTI and AMI-
West that are filed after the Closing, regardless by whom filed,
shall be filed consistently with the prior such returns and
filings, except as otherwise required by law; and (f) the parties
shall cooperate fully after the Closing in preparing tax returns
and related filings and in all other matters relating to taxes
and shall preserve all business records and documents that they
may respectively have relating to QTI and AMI-West and not
destroy such records or documents without giving reasonable
notice to the other party and reasonable opportunity to such
party to make copies of such records and documents before they
are destroyed.
ARTICLE X. CONDITIONS TO OBLIGATIONS
10.1 Conditions to Obligations of NEXTEL, Questar and
AMI. The obligations of NEXTEL, Questar and AMI to consummate,
or cause to be consummated, the Share Exchanges are subject to
the satisfaction of the following conditions, any of which may be
waived in writing by such parties:
(a) All waiting periods under the HSR Act and the
regulations promulgated thereunder applicable to the Share
Exchanges shall have expired or been terminated.
(b) All necessary approvals, clearances and consents of
governmental agencies and regulatory authorities (including all
required FCC approvals and consents) required to be procured by
NEXTEL, Questar and AMI in connection with the Share Exchanges
shall have been procured.
(c) There shall not be in force any order or decree,
statute, rule or regulation nor shall there be on file any
complaint by a governmental agency seeking an order or decree,
restraining, enjoining or prohibiting the consummation of the
Share Exchanges, and neither NEXTEL nor Questar or AMI shall have
received notice from any governmental agency that it has
determined to institute any suit or proceeding to restrain or
enjoin the consummation of the Share Exchanges or to nullify or
render ineffective this Agreement if consummated, or to take any
other action which would result in the prohibition or material
change in the Share Exchanges.
(d) NEXTEL's Registration Statement on Form S-4 (or
other appropriate and available form) (i) relating to the NEXTEL
Common Shares to be issued by reason of the Share Exchanges and
(ii) permitting the resale of such NEXTEL Common Shares
thereafter by the recipients thereof shall have become effective
under the Securities Act of 1933, as amended, and no stop order
suspending such effectiveness shall have been issued and no
proceedings for that purpose shall have been initiated or
threatened by the Securities and Exchange Commission.
(e) The registration statements or other filings as may
be required under applicable blue sky laws shall have become
effective, and no stop order shall be threatened or in effect
with respect thereto.
(f) The NEXTEL Common Shares issuable in the Share
Exchanges shall have been listed or approved for listing upon
notice of issuance by the NASDAQ NMS.
10.2 Conditions to Obligations of NEXTEL. The
obligation of NEXTEL to consummate, or cause to be consummated,
the transactions contemplated by this Agreement is subject to the
satisfaction of the following additional conditions, any one of
which may be waived in writing by NEXTEL:
(a) Each of the representations and warranties of
Questar and AMI contained in this Agreement shall be true and
correct in all material respects both on the date hereof and as
of the Closing, as if made anew at and as of that time; provided,
however, that the condition set forth in this Section 10.2(a)
shall be deemed to have been satisfied even if any such
representations or warranties (other than those set forth in
Sections 4.1, 4.2, 4.3, 4.4, 4.5, 4.12, 4.13, 4.15, 4.19, 4.25,
5.1, 5.2, 5.3, 5.4, 5.5, 5.12, 5.13, 5.15, 5.19 and 5.25, which
must be true and correct in all material respects) are not true
and correct in all material respects, unless the failure of any
such representations or warranties to be so true and correct
(without giving effect to any limitation as to "materiality" or
"material adverse effect" set forth therein) has had or could
reasonably be expected to have, individually or in the aggregate,
a Material Adverse Effect on QTI or AMI or upon the consummation
of the transactions contemplated hereby.
(b) Each of the covenants and agreements of Questar and
AMI to be performed as of or prior to the Closing shall have been
duly performed, except in each case for changes after the date
hereof which are contemplated or expressly permitted by this
Agreement.
(c) Questar and AMI shall have each delivered to NEXTEL
a certificate signed by its President, dated the Closing,
certifying, in form reasonably satisfactory to NEXTEL and to its
counsel that (i) the resolutions of the Board of Directors of
Questar and AMI, respectively, attached to such certificate
evidence the authorization and approval of this Agreement and the
transactions contemplated hereby; and (ii) to the best of the
knowledge and belief of such officer, the conditions specified in
Section 10.1 (a), (b) and (c) and in Section 10.2(a) and (b) as
they relate to Questar or AMI, as the case may be, have been
fulfilled.
(d) NEXTEL shall have received favorable opinions,
dated the Closing (i) from internal or outside counsel for each
of Questar and AMI on the matters set forth in Annex H-1 to this
Agreement, and (ii) from outside counsel for each of Questar and
AMI reasonably acceptable to NEXTEL on the matters set forth in
Annex H-2 to this Agreement.
(e) The SMR Assets to be acquired at the Closing shall
include all of those SMR FCC licenses listed on Annex A to this
Agreement (which SMR FCC licenses shall represent SMR frequencies
owned by either QTI or AMI-West at the Closing, except for those
expressly indicated on Annex A to be subject to management
agreements). The condition set forth in the preceding sentence
shall be deemed satisfied if (i) for each market identified on
Annex A-1 to this Agreement (previously delivered to all parties
hereto), the number of 800 MHz SMR frequencies ("SMR Channels")
(which SMR Channels are specifically described on Annex A-1)
covered by the SMR FCC licenses included in the SMR Assets being
acquired at the Closing represent at least 95% of the SMR Channel
target established for each such market; and (ii) all of the SMR
Channels representing frequencies covered by the SMR FCC licenses
included in the SMR Assets being acquired at the Closing
represent at least 95% of the aggregate number of SMR Channels
specified on Annex A-1. For purposes of meeting the targeted
percentages in the preceding sentence, QTI and/or AMI-West may
substitute for any SMR Channel listed on Annex A-1 that has been
taken back by the FCC an alternative SMR Channel so long as the
alternative SMR Channel is in a similar location and provides
comparable coverage characteristics as the SMR Channel that was
taken back.
(f) (i) At the Closing, the sum of (A) the SMR Channels
owned by QTI and AMI-West, plus (B) the SMR Channels that can be
purchased by QTI or AMI-West under management agreements or
option agreements to purchase SMR Channels that are managed by
QTI or AMI-West (including any such agreement (provided that such
agreement does not include frequencies having call signs WNBF 492
and/or WNBF 494) whereby NEXTEL has an option or right to
purchase provided that Questar or AMI decide to and contribute to
QTI or AMI-West the necessary funds to consummate such purchase)
so long as the options to purchase are fully funded, plus (C) the
SMR Channels that are the subject of both (1) a legally binding
agreement of purchase and sale that entitles either QTI or AMI-
West to purchase (including any such agreement (provided that
such agreement does not include frequencies having call signs
WNBF 492 and/or WNBF 494) whereby NEXTEL has an option or right
to purchase provided that Questar or AMI decide to and contribute
to QTI or AMI-West the necessary funds to consummate such
purchase) and (2) an application to request the FCC's consent to
the transfer of the SMR Channel to either QTI or AMI-West so long
as the payment obligations of QTI and AMI-West under the
agreements of purchase and sale are fully funded, shall equal: at
least 80 discrete "core channel area" (as defined below) SMR
Channels for Salt Lake City, Utah; at least 45 discrete "core
channel area" SMR Channels for San Diego, California; and at
least 32 discrete "core channel area" SMR Channels for Denver,
Colorado. "Core channel area" SMR Channels in any market are
those that are designated as "core channel area" SMR Channels for
that market set forth on Annex A-2 to this Agreement (previously
delivered to all parties hereto) or that meet the characteristics
and/or criteria set forth on such Annex A-2 for that market.
(ii) Notwithstanding the provisions of subsection
(e)(i), a contribution of $2,500,000 at the Closing from Questar
and AMI to QTI and AMI-West shall be deemed a credit for
delivering 10 discrete "core channel area" SMR Channels for San
Diego, California ("Deemed San Diego Channels"), in addition to
the actual number of SMR Channels delivered (provided that such
frequencies shall not include frequencies having call signs WNBF
494 and/or WNBF 492).
(A) If the number of discrete "core channel
area" SMR Channels for San Diego (provided that such frequencies
shall not include frequencies having call signs WNBF 494 and/or
WNBF 492) delivered (including Deemed San Diego Channels) shall
be less than 54, then the number of NEXTEL Common Shares to be
issued by reason of the Share Exchanges shall be reduced, in
accordance with subsection (iv) below, by the quotient equal to
the lesser of (1) $11,550,000 or (2) an amount equal to the sum
of $4,800,000 plus the product of $750,000 times the difference
between 54 and the number of discrete "core channel area" SMR
Channels delivered (including Deemed San Diego Channels) for
San Diego, divided by $60.
(B) If the number of discrete "core channel
area" SMR Channels for San Diego (provided that such frequencies
shall not include frequencies having call signs WNBF 494 and/or
WNBF 492) delivered (including Deemed San Diego Channels) shall
be greater than or equal to 54, but less than 70, then the number
of NEXTEL Common Shares to be issued by reason of the Share
Exchanges shall be reduced, in accordance with subsection (iv)
below, by the quotient of the product of $300,000 times the
difference between 70 and the number of discrete "core channel
area" SMR Channels delivered (including Deemed San Diego
Channels) for San Diego, divided by $60.
(iii) Notwithstanding the provisions of subsection
(e)(i), discrete "core channel area" SMR Channels for Reno,
Nevada delivered by Questar and AMI to NEXTEL at the Closing
("Deemed Denver Channels") shall be deemed a credit for
delivering an identical number of discrete "core channel area"
SMR Channels for Denver, Colorado. If the number of discrete
"core channel area" SMR Channels for Denver delivered (including
Deemed Denver Channels) shall be less than 60, then the number of
NEXTEL Common Shares to be issued by reason of the Share
Exchanges shall be reduced, in accordance with subsection (iv)
below, by the quotient equal to the lesser of (A) $3,080,000 or
(B) the product of $110,000 times the difference between 60 and
the number of discrete "core channel area" SMR Channels delivered
(including Deemed Denver Channels) for Denver, divided by $60.
(iv) Unless Questar and AMI agree to a different
allocation in writing and deliver such writing to NEXTEL prior to
the Closing, any reduction in the number of NEXTEL Common Shares
to be issued by reason of the Share Exchanges as a result of the
adjustments provided in this subsection (e) shall be allocated
67% to Questar and 33% to AMI and the Individual Stockholders;
and the aggregate number of NEXTEL Common Shares to be issued to
each such party in the QTI Share Exchange or the AMI-West Share
Exchange, as the case may be, shall be reduced accordingly.
(g) From the date hereof until the Closing, there shall
not have occurred or come into existence any fact or circumstance
which would be reasonably likely to have a Material Adverse
Effect on QTI or a Material Adverse Effect on AMI-West.
(h) NEXTEL shall have received an opinion of its legal
counsel, in form and substance reasonably satisfactory to it, to
the effect that all necessary approvals, clearances and consents
of all third parties necessary to be obtained by Questar and QTI,
and by AMI and AMI-West, as the case may be, in connection with
the Share Exchanges have been obtained.
(i) NEXTEL shall have received letters from Ernst &
Young and Coopers & Lybrand, dated at the time of filing the
Registration Statement and as of the Closing, addressed to
NEXTEL, containing such matters as are customarily contained in
auditors' letters regarding information, respectively, about QTI
provided by Questar, and about AMI-West provided by AMI,
expressly for inclusion in such Registration Statement, and in
form and substance reasonably satisfactory to NEXTEL.
(j) At the time of filing the Registration Statement
and also at the Closing, Questar and AMI shall have each
furnished to NEXTEL certificates, dated as of said times and
signed by its President and Secretary, to the effect that to the
best of the knowledge and belief of the signing persons the
material contained in the Registration Statement which relates to
their company, contains, as of the date of each of such
certificates, no material misstatement of fact and does not omit
to state any material fact necessary to make the statements made
not misleading.
(k) NEXTEL shall have received (i) an executed
representation, warranty, covenant and agreement with respect to
tax matters as set forth in the form of Annex I to this Agreement
(previously delivered to all parties hereto) from each of the
Individual Stockholders, and (ii) an executed release as set
forth in the form of Annex J to this Agreement (previously
delivered to all parties hereto) from each of the Individual
Stockholders or an indemnity of AMI satisfactory to NEXTEL
covering the substance of such release.
(l) At the Closing: (i) the SMR Assets, and all of the
issued and outstanding shares of QTI Common Stock and AMI-West
Common Stock, shall be free and clear of all liens, encumbrances,
obligations, liabilities and other adverse claims of any nature
whatsoever, except for (A) those liens, encumbrances,
obligations, liabilities or other adverse claims of any nature
which constitute (1) any Current Payables, (2) any liens securing
any Current Payables, (3) any liens or encumbrances connected
with operating leases entered into in the ordinary course of
business, consistent with past practices, (4) any non-material
liens or encumbrances on any of the SMR Assets not securing any
indebtedness, and (5) any liens or encumbrances agreed to in
writing by NEXTEL; (B) contractual rights and/or obligations
arising pursuant to the terms of management agreements,
liabilities or obligations (not constituting indebtedness)
incurred in the ordinary course of business coming due for
payment or performance after the Closing; and (C) such other
matters as may be specifically approved in writing by NEXTEL
prior to the Closing; (ii) except as permitted in the foregoing
subsection (l)(i), neither QTI, AMI-West nor Comqor shall have
any liabilities or obligations (including, without limitation,
any indebtedness or other obligations to pay money) of any nature
whatsoever; provided, however, that either of QTI, AMI-West or
Comqor may have obligations relating to previously consummated or
pending acquisitions of SMR Assets, but only if and to the extent
that such acquisitions (including the material terms of all
definitive agreements relating to such acquisitions) have been
disclosed to NEXTEL and that QTI, AMI-West or Comqor, as the case
may be, possesses sufficient unrestricted funds (which funds
shall not represent any indebtedness) net of any "Approved
Prepaid Items" (as described by type, dollar amount and otherwise
in Annex K to this Agreement, previously delivered to all parties
hereto) on the relevant company's Balance Sheet at the Closing to
consummate such acquisitions and to satisfy all monetary
obligations of the relevant company relating to such
acquisitions; and provided further, that QTI, AMI-West or Comqor,
as the case may be, shall possess sufficient unrestricted funds
(which shall not represent any indebtedness), net of any Approved
Prepaid Items on the relevant company's Balance Sheet at the
Closing to consummate all acquisitions of SMR Assets based upon
the assumed exercise of all options to acquire SMR channels and
related assets contained in management or option agreements to
which either of QTI, AMI-West or Comqor is a party (regardless of
whether such options have been or will be exercised).
(m) All necessary approvals, clearances and consents of
all third parties necessary to be obtained by Questar, QTI, AMI
and AMI-West in connection with the Share Exchanges shall have
been obtained.
10.3 Conditions to the Obligations of Questar and AMI.
The obligations of Questar and AMI to consummate the transactions
contemplated by this Agreement are subject to the satisfaction of
the following additional conditions, any one of which may be
waived in writing by Questar and AMI:
(a) Each of the representations and warranties of
NEXTEL contained in this Agreement shall be true and correct in
all material respects both on the date hereof and as of the
Closing, as if made anew at and as of that time, and each of the
covenants and agreements of NEXTEL to be performed as of or prior
to the Closing shall have been duly performed, except in each
case for changes after the date hereof which are contemplated or
expressly permitted by this Agreement.
(b) NEXTEL shall have delivered to Questar and AMI a
certificate signed by the President of NEXTEL, dated the Closing,
certifying, in form reasonably satisfactory to Questar, AMI and
their respective counsel, to the effect that to the best of the
knowledge and belief of such officer, the conditions specified in
Section 10.1 (a), (b) and (c) as they relate to NEXTEL and in
Section 10.3(a) have been fulfilled.
(c) Questar and AMI shall have received a favorable
opinion, dated as of the Closing, from outside counsel for NEXTEL
reasonably acceptable to them on the matters set forth in Annex L
to this Agreement.
(d) Questar and AMI shall have each received an opinion
of its legal counsel, in form and substance reasonably
satisfactory to it, to the effect that all necessary approvals,
clearances and consents of all third parties necessary to be
obtained by NEXTEL in connection with the Share Exchanges have
been obtained.
ARTICLE XI. TERMINATION/EFFECTIVENESS
11.1 Termination. This Agreement may be terminated and
the transactions contemplated hereby abandoned:
(a) By mutual written consent of the parties prior to
the Closing;
(b) By Questar and AMI in accordance with Section 9.9
of this Agreement;
(c) By NEXTEL, prior to the Closing, by written notice
to Questar, AMI and the Individual Stockholders from NEXTEL if
(i) the conditions referred to in Sections 10.2(d) and (e) shall
not have been satisfied by July 31, 1994; or (ii) the regulatory
approvals contemplated by Sections 10.1(a) and (b) shall have
become impossible to obtain; or
(d) By Questar and AMI, prior to the Closing, by
written notice to NEXTEL from Questar and AMI, if (i) the
regulatory approvals contemplated by Sections 10.1(a) and (b)
shall have become impossible to obtain; or (ii) the conditions
referred to in Section 10.1(d) and Section 10.3(a) (as it relates
to Section 6.3 only) shall not have been satisfied by July 31,
1994.
11.2 Effect. Any termination of this Agreement
effected in accordance with the provisions of Section 11.1 shall
not release or relieve either of NEXTEL, Questar, AMI or the
Individual Stockholders from any liability for (or other
consequences relating to) any breach or violation of the terms of
this Agreement by such party occurring prior to the effective
time of such termination; and any such termination shall not
release or relieve any party from its obligations or duties under
this Agreement which, by their terms and/or expressed intent, may
require performance subsequent to any such termination, and all
provisions of this Agreement which set forth such obligations or
duties and such other general or procedural provisions which may
be relevant to any attempt to enforce such obligations or duties,
shall survive any such termination of this Agreement until such
obligations or duties shall have been performed or discharged in
full.
ARTICLE XII. MISCELLANEOUS
12.1 Amendments. This Agreement may be amended at any
time or from time to time prior to the Closing only by a writing
which refers to this Agreement and is signed by all of the
parties hereto.
12.2 Waivers. Any waiver by a party of a failure to
comply with any provision of, or of any breach of, this Agreement
by another party shall be in writing and shall not be construed
as, or constitute, a continuing waiver of such provision, or a
waiver of any other breach of, or failure to comply with, any
other provision of this Agreement.
12.3 Assignments. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their
respective successors and assigns. No party hereto may make any
assignment of this Agreement or any of its rights or interests
herein without the prior written consent of the others; provided,
however, that NEXTEL may assign this Agreement in accordance with
Section 9.8(b) of this Agreement. Anything in this Section 12.3
to the contrary notwithstanding, no assignment of this Agreement
or any rights or interests hereunder shall relieve the assignor
of any liability or obligation hereunder.
12.4 Notices. All notices and other communications
among the parties shall be in writing and shall be deemed to have
been duly given when delivered in person or posted by United
States registered or certified mail, or delivered by telecopy and
promptly confirmed by delivery in person or post as aforesaid in
each case, with postage prepaid, addressed as follows:
(a) If to NEXTEL, to:
201 Route 17 North
Rutherford, New Jersey 07070
Attention: Secretary
Telecopier No.: (201) 438-5540
(b) If to Questar, to:
180 East First South
Salt Lake City, Utah 84111
Attention: Secretary
(c) If to AMI, to:
82 Devonshire Street, R25D
Boston, Massachusetts 02109
Attention: Secretary
(d) If to the Individual Stockholders, to:
(i) Robert C. Mearns
6604 Villa Bonita
Las Vegas, Nevada 89102
(ii) Franics G. Fuson
3346 Brookfield Avenue
Las Vegas, Nevada 89120
or to such other address or addresses as the parties may from
time to time designate in writing.
12.5 Severability. Each Article, Section, subsection
and lesser section of this Agreement constitutes a separate and
distinct undertaking, covenant and/or provision hereof. Whenever
possible, each provision of this Agreement shall be interpreted
in such a manner as to be effective and valid under applicable
law. In the event that any provision of this Agreement shall be
determined to be unlawful, such provision shall be deemed severed
from this Agreement, but every other provision of this Agreement
shall remain in full force and effect, and in substitution for
any such provision held unlawful there shall be substituted a
provision of similar import reflecting the original intent of the
parties hereto to the extent permissible under applicable law.
12.6 Rights and Remedies. Except as expressly set
forth in this Agreement, the parties hereto confirm their mutual
understanding and intent that (a) no third party is intended to
be a beneficiary of, or otherwise to be or to become entitled to
rely on the provisions of this Agreement, (b) no third party
shall have any recourse against the parties hereto or any of
their affiliates based upon or arising out of this Agreement, and
(c) none of the parties hereto or any of their affiliates shall
have any liability or responsibility whatsoever to any third
party on any basis (including, without limitation, in contract or
tort, under federal or state securities laws or otherwise) based
upon or arising out of this Agreement.
12.7 Expenses. Except as otherwise provided in this
Agreement, each party hereto shall bear all of its own fees and
expenses associated with and incurred in connection with this
Agreement and the transactions herein contemplated, regardless of
whether such transactions shall be consummated; provided,
however, that NEXTEL shall reimburse Questar and AMI for legal,
accounting and related third party expenses incurred by them only
at NEXTEL's request in connection with any registration statement
relating to NEXTEL Common Shares other than the Registration
Statement referred to in Section 8.4(a) of this Agreement and, as
of the date of this Agreement, Questar and AMI confirm to NEXTEL
that such reimbursable expenses do not exceed $40,000 in the
aggregate. Questar and AMI shall bear all of the fees and
expenses of QTI and AMI-West, respectively, associated with and
incurred in connection with this Agreement and the transactions
herein contemplated, regardless of whether such transactions
shall be consummated. Questar and AMI shall also bear all of the
fees and expenses incurred by any of QTI, AMI-West or Comqor in
connection with the previously contemplated initial public
offering by Comqor, including those related to preparation of the
related Form S-1 Registration Statement.
12.8 Captions. The captions in this Agreement are
intended solely for convenience of reference and shall be given
no effect in the construction or interpretation of this
Agreement.
12.9 Counterparts. This Agreement may be executed in
any number of counterparts, each of which shall be deemed an
original but all of which shall constitute the same agreement.
12.10 Entire Agreement. Except as expressly set forth
herein or in an instrument in writing signed by the party to be
bound thereby which makes reference to this Agreement, this
Agreement, including the Annexes and Schedules referred to herein
and any related items disclosed in writing to each of the parties
hereto under cover of an instrument referring to this Section,
embodies the entire agreement in relation to the subject matter
hereof, and supersedes all prior letters of intent,
representations, warranties, covenants, understandings or
agreements, whether oral or written, relating to the subject
matter hereof.
12.11 Governing Law. This Agreement shall be governed
by and construed in accordance with the internal substantive laws
of the State of Delaware, without regard to the principles of
conflicts or choices of laws thereof.
12.12 Annexes and Schedules. The Annexes and Schedules
referred to in this Agreement are a part of this Agreement for
all purposes.
12.13 Publicity. All press releases or other public
communications of any nature whatsoever relating to the
transactions contemplated by this Agreement, and the method of
the release for publication thereof, shall be subject to the
prior mutual approval of NEXTEL, Questar and AMI, which approval
shall not be unreasonably withheld by any party; provided,
however, that nothing herein shall prevent any disclosure of
"information" (as defined in Section 9.2(e) of this Agreement) in
the manner and to the extent reasonably believed by the
disclosing party to be required by any applicable law.
12.14 No Existing Disputes. The parties hereto confirm
to each other (on their behalf and on behalf of any of their
affiliates) that each such party, assuming compliance by the
other parties with the terms of this Agreement, is aware of no
action, condition or matter that is presently the basis for any
dispute or claim of such party against any of the others
concerning this Agreement.
IN WITNESS WHEREOF, the parties have caused this
Agreement to be duly executed as of the date first above written.
NEXTEL COMMUNICATIONS, INC.
By:
QUESTAR CORPORATION
By:
ADVANCED MOBILECOMM, INC.
By:
_____________________________
Robert C. Mearns
_____________________________
Francis G. Fuson