FORM 8-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 8, 1998
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AERIAL COMMUNICATIONS, INC.
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(Exact name of registrant as specified in its charter)
Delaware 0-28262 39-1706857
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
8410 West Bryn Mawr Avenue, Chicago, Illinois 60631
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (773) 399-4200
Not Applicable
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(Former name or former address, if changed since last report)
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Item 5. Other Events.
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Pursuant to a Purchase Agreement dated June 1, 1998 (the
"Purchase Agreement") by and among Aerial Communications, Inc. (the "Company"),
Aerial Operating Co., Inc., a wholly-owned subsidiary of the Company (formerly
known as APT Operating Company, Inc.) ("AOC"), Telephone and Data Systems, Inc.,
the parent corporation of the Company ("TDS"), and Sonera Ltd., a limited
liability company organized under the laws of Finland (formerly known as Sonera
Corporation) ("Sonera"), on September 8, 1998, Sonera purchased from AOC
2,410,482 shares of common stock of AOC (the "Purchased Shares") for an
aggregate purchase price of $200 million, representing a 19.423% equity interest
in AOC. Sonera will have the right under certain circumstances to exchange each
Purchased Share for 6.72919 Common Shares of Aerial ("Aerial Common Shares"),
subject to adjustment. Upon the exchange of all of the Purchased Shares at such
exchange rate, Sonera would own approximately an 18.5% equity interest in the
Company, reflecting a purchase price equivalent to approximately $12.33 per
Aerial Common Share. The number of Purchased Shares is subject to adjustment
depending on the future performance of the market price of Aerial Common Shares.
Depending on the stock price, the price paid will range from a low of $12.33 per
equivalent Aerial share to a high of $16.68 per equivalent Aerial Common Share,
which would represent approximately a 14.3% equity interest in the Company.
In connection with the closing of the Purchase Agreement, the
parties entered into the following agreements: (i) an Investment Agreement by
and between TDS, Aerial, AOC and Sonera, (ii) a Registration Rights Agreement by
and between Aerial and Sonera, (iii) a Joint Venture Agreement by and between
Aerial, AOC and Sonera Corporation U.S., and (iv) a Supplemental Agreement by
and between Aerial, AOC and Sonera. Copies of such agreements are attached
hereto as exhibits and incorporated herein by reference.
In addition, pursuant to the terms of the Purchase Agreement,
at the closing, (i) a Revolving Credit Agreement dated August 1, 1995 between
TDS and Aerial, pursuant to which Aerial was indebted to TDS in the amount of
$665 million, plus accrued interest, was terminated, and a new Revolving Credit
Agreement between TDS and AOC was substituted, pursuant to which AOC is indebted
to TDS in the same amount, (ii) Aerial executed a Guaranty of AOC's obligations
to TDS under the new Revolving Credit Agreement, and (iii) the Tax Allocation
Agreement dated January 1, 1996 between TDS and Aerial was amended and restated
in order to include AOC as a party. Copies of such agreements are attached
hereto as exhibits and incorporated herein by reference.
There were no prior material relationships between the Company
or any of the Company's affiliates, any director or officer of the Company, or
any associate of any such director or officer, on the one hand, and Sonera on
the other hand.
Additional information concerning this transaction is
contained in the Purchase Agreement which was filed with the Commission by the
Company on Form 8-K on June 16, 1998, and is incorporated herein by reference.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereto duly authorized.
AERIAL COMMUNICATIONS, INC.
(Registrant)
Date: September 17, 1998 By: /s/ J. Clarke Smith
--------------------------------------
J. Clarke Smith
Vice President - Finance and Administration,
Chief Financial Officer and Treasurer
SIGNATURE PAGE TO AERIAL FORM 8-K DATED SEPTEMBER 8, 1998
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EXHIBIT INDEX
Exhibit Number Description of Exhibit
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99.1 Aerial news release dated
September 8, 1998
99.2 The Investment Agreement
between Telephone and Data
Systems, Inc., Aerial
Communications, Inc.,
Aerial Operating Co., Inc.
(formerly APT Operating
Company, Inc.) and Sonera
Ltd. (formerly Sonera
Corporation), dated
September 8, 1998.
99.3 The Registration Rights
Agreement between Aerial
Communications, Inc. and
Sonera Ltd. (formerly
Sonera Corporation), dated
September 8, 1998.
99.4 The Joint Venture Agreement
between Aerial
Communications, Inc.,
Aerial Operating Co., Inc.
(formerly APT Operating
Company, Inc.) and Sonera
Corporation U.S., dated
September 8, 1998.
99.5 The Supplemental Agreement
between Aerial
Communications, Inc.,
Aerial Operating Co., Inc.
(formerly APT Operating
Company, Inc.) and Sonera
Ltd. (formerly Sonera
Corporation), dated
September 8, 1998.
99.6 The Tax Allocation
Agreement between Telephone
and Data Systems, Inc.,
Aerial Communications, Inc.
and Aerial Operating Co.,
Inc. (formerly APT
Operating Company, Inc.),
dated September 8, 1998.
99.7 The Guaranty between
Telephone and Data Systems,
Inc. and Aerial
Communications, Inc., dated
August 31, 1998.
99.8 The Revolving Credit
Agreement between Telephone
and Data Systems, Inc. and
Aerial Operating Co., Inc.
(formerly APT Operating
Company, Inc.), dated
August 31, 1998.
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99.9 The Purchase Agreement
between Telephone and Data
Systems, Inc., Aerial
Communications, Inc.,
Aerial Operating Co., Inc.
(formerly APT Operating
Company, Inc.) and Sonera
Ltd. (formerly Sonera
Corporation), dated June 1,
1998, is hereby
incorporated by reference
to Exhibit 99.2 to the
Company's Form 8-K dated
June 1, 1998.
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EXHIBIT 99.1
NEWS RELEASE
Contact:
J. Clarke Smith
(773) 399 4200
Aerial Communications, Inc.
Kaj-Erik Relander
+358 2040 5365
Sonera Corporation
FOR RELEASE: IMMEDIATE
SONERA LTD., COMPLETES $200 MILLION INVESTMENT IN AERIAL
COMMUNICATIONS, INC.
September 8, 1998 Chicago, Illinois - Aerial Communications, Inc. [NASDAQ:AERL],
announced that Sonera Ltd. (formerly Telecom Finland Ltd), one of Europe's
leading wireless telecommunications operators, today completed its $200-million
investment in Aerial Operating Company, Inc. (AOC) a wholly-owned subsidiary of
Aerial through which Aerial conducts its PCS business. Aerial is a leading U.S.
provider of personal communications services (PCS). The transaction recently
received regulatory approval.
This investment represents an approximate 19.4% equity ownership in AOC. After
five years, Sonera's AOC stake becomes incrementally exchangeable for up to
approximately 18.5% of the equity of Aerial or in certain circumstances, for
cash or equity in Aerial's parent, Telephone and Data Systems, Inc.
Sonera paid the equivalent of $12.33 per Aerial share for the AOC stock. The
equivalent price per share and the equity ownership percentage are subject to
adjustment based on Aerial's 20-day average share price during the three years
beginning upon today's closing. Depending on the Aerial share price, the price
paid for the AOC stock will range from a low of $12.33 per equivalent Aerial
share for an approximate equivalent 18.5% equity ownership, to a high of $16.68
per equivalent Aerial share for an approximate 14.3% equivalent equity
ownership.
As part of the agreement, the two companies also formed a strategic partnership
to work together in areas such as new product development, and to jointly
explore new business opportunities in the U.S. PCS market.
Don Warkentin, Aerial's President and Chief Executive Officer, said "This new
partnership will benefit Aerial in several ways, including the ability to tap
into Sonera's considerable experience and expertise to enhance the business and,
in turn, improve shareholder value. For example, Sonera personnel will join
Aerial's staff in key strategic positions, especially in the area of new product
development. Two Sonera executives also will join the Aerial Board of Directors.
With this transaction, Aerial also has secured the final piece of financing
originally planned by the Company, Warkentin said. Aerial will use the proceeds
to fund working capital and to pay down existing debt.
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Kaj-Erik Relander, Executive Vice President of Sonera, said that his company's
investment in Aerial fulfills an important part of its global strategy to
continue to expand beyond Finland's traditional borders.
Sonera's growing international operations include seven wholly-owned
subsidiaries as well as strategic investments in more than 20 companies around
the world. In addition, Sonera has a record of successful experience in wireless
joint ventures in markets like Turkey, Russia and the Middle East.
Sonera is Finland's leading telecommunications company, based in Helsinki. The
company has numerous subsidiaries and affiliate companies in several different
countries. It is currently state-owned, but the Finnish government has announced
plans for a partial privatization of the company. Sonera offers a full line of
telecommunications services and products, and had sales of U.S. $1.4 billion in
1997.
Aerial, headquartered in Chicago, holds licenses to provide PCS service in areas
covering 27.6 million of the U.S. population. Aerial's markets include Columbus,
Ohio; Houston, Minneapolis, Kansas City, Pittsburgh and Tampa/Orlando/St.
Petersburg. Aerial is a majority-owned subsidiary of Telephone and Data Systems,
Inc., a $1.5 billion telecommunications company based in Chicago.
Except for historical and factual information contained herein, other
information set forth in this news release represents forward-looking
statements, including all statements about the Company's plans, beliefs,
estimates and expectations. These statements are based on current estimates and
projections, which involve certain risks and uncertainties that could cause
actual results to differ materially from those in the forward-looking
statements. Important factors that may affect these forward-looking statements
include, but are not limited to: changes in Delaware law; potential litigation;
and changes in market conditions. Investors are encouraged to consider these and
other risks and uncertainties which are discussed in documents filed by the
Company with the Securities and Exchange Commission.
####
Aerial is a service mark of Aerial Communications, Inc.
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EXHIBIT 99.2
EXECUTION COPY
INVESTMENT AGREEMENT
AMONG
TELEPHONE AND DATA SYSTEMS, INC.
a Delaware corporation,
AERIAL COMMUNICATIONS, INC.,
a Delaware corporation,
AERIAL OPERATING CO., INC.,
a Delaware corporation,
AND
SONERA LTD.,
a Finnish Limited Liability Company
dated as of September 8, 1998
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TABLE OF CONTENTS
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Page
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INVESTMENT AGREEMENT......................................................... 1
ARTICLE 1.................................................................... 3
DEFINITIONS......................................................... 3
ARTICLE 2................................................................... 18
RELATED EVENTS..................................................... 18
2.1 Transactions..................................... 18
2.2 Aerial Board of Directors........................ 19
2.3 Identity of Directors............................ 20
ARTICLE 3................................................................... 20
REPRESENTATIONS AND WARRANTIES..................................... 20
3.1 Representations and Warranties of TDS............ 21
3.2 Representations and Warranties of Aerial......... 25
3.3 Representations and Warranties of Sonera......... 28
ARTICLE 4................................................................... 30
RIGHTS TO PURCHASE ADDITIONAL AOC SHARES........................... 30
4.1 Subscription Rights.............................. 30
4.2 Three-Year Option................................ 33
4.3 Seven-Year Option................................ 35
4.4 Effect of Aerial Merger or Distribution.......... 37
4.5 AOC Option....................................... 39
4.6 Limitations...................................... 41
4.7 Termination of Options........................... 41
ARTICLE 5................................................................... 42
TRANSFER OF AOC SHARES............................................. 42
5.1 Restriction on Transfer.......................... 42
5.2 Right of First Negotiation....................... 43
5.3 Assignment of Rights............................. 46
5.4 Issuance of Derivative........................... 47
5.5 Transfers Prior to Fifth Anniversary............. 49
ARTICLE 6................................................................... 50
RESTRICTION ON LIENS............................................... 50
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ARTICLE 7................................................................... 51
EQUITY EXCHANGE ELECTION........................................... 51
7.1 Exchange of AOC Shares for Aerial Shares......... 51
7.2 Exchange Rate.................................... 52
7.3 Adjustment of Exchange Rate...................... 52
7.4 Surrender of AOC Certificates.................... 61
7.5 Issuance of Aerial Certificates.................. 62
7.6 Dividends........................................ 63
7.7 Redemption of AOC Shares......................... 63
7.8 Application...................................... 63
7.9 Notice of Adjustment............................. 64
7.10 Ownership of Surrendered AOC Shares.............. 65
7.11 Termination...................................... 65
ARTICLE 8................................................................... 65
EQUITY PURCHASE ELECTION........................................... 65
ARTICLE 9................................................................... 67
RIGHTS TO PURCHASE
AERIAL SHARES............................................. 67
9.1 Right to Purchase................................ 68
9.2 Exercise of Purchase Right....................... 70
9.3 Failure to Subscribe............................. 70
9.4 Termination of Rights............................ 71
9.5 No Other Purchases............................... 71
ARTICLE 10.................................................................. 71
TRANSFERS OF CONTROL............................................... 71
10.1 Restriction on Transfers of Control of Aerial.... 71
10.2 Interpretation................................... 74
10.3 Spin-off......................................... 75
10.4 Termination...................................... 76
10.5 Drag-Along Right................................. 76
10.6 Tag-Along Right.................................. 77
10.7 Effect of Transfer of Control of Sonera.......... 79
ARTICLE 11.................................................................. 80
CERTAIN COVENANTS OF TDS, AERIAL AND AOC........................... 80
11.1 General.......................................... 81
11.2 Auditors......................................... 81
11.3 Financial and Other Information.................. 81
11.4 No Adverse Actions. ............................ 83
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11.5 Performance of Intercompany Agreements and
Policies......................................... 83
11.6 Reservation of Aerial Shares..................... 85
11.7 Intra-Corporate Transactions..................... 86
11.8 Performance of Registration Rights Agreement and
Waiver........................................... 87
11.9 Operation in Ordinary Course..................... 88
ARTICLE 12.................................................................. 89
MISCELLANEOUS...................................................... 89
12.1 Expenses........................................... 89
12.2 Equitable Remedies................................. 89
12.3 Notices............................................ 89
12.4 Entire Agreement................................... 92
12.5 Remedies Cumulative................................ 92
12.6 Governing Law...................................... 92
12.7 Counterparts. .................................... 93
12.8 Waivers............................................ 93
12.9 Successors and Assigns............................. 93
12.10 Further Assurances................................. 93
12.11 Information for Governmental Filings............... 94
12.12 Disclosures........................................ 94
12.13 Termination........................................ 95
12.14 Disputes........................................... 96
12.15 No Claim of Immunity............................... 99
12.16 Remedies........................................... 99
12.17 Severability....................................... 99
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INVESTMENT AGREEMENT
This INVESTMENT AGREEMENT is made as of September 8, 1998,
(the "Agreement") by and among TELEPHONE AND DATA SYSTEMS, INC., a Delaware
corporation ("TDS"), AERIAL COMMUNICATIONS, INC., a Delaware corporation
("Aerial"), AERIAL OPERATING CO., INC., a Delaware corporation ("AOC"), and
SONERA LTD., a limited liability company organized under the laws of the
Republic of Finland and formerly known as Sonera Corporation ("Sonera").
R E C I T A L S :
WHEREAS, TDS is the owner of more than 80% of the outstanding
capital stock of Aerial;
WHEREAS, Aerial is the owner of more than 80% of the
outstanding capital stock of AOC;
WHEREAS, Telephone and Data Systems, Inc., an Iowa corporation
and TDS's immediate predecessor ("TDS Iowa"), and one of its wholly-owned
Subsidiaries, filed with the Securities and Exchange Commission a Registration
Statement on Form S-4, and Amendments No. 1 and 2 thereto, which included a
Proxy Statement and Prospectus (the "TDS Proxy Statement"), copies of which, as
amended and supplemented, were furnished to Sonera;
<PAGE>
WHEREAS, the shareholders of TDS Iowa approved the proposal
(the "Tracking Stock Proposal") described in the TDS Proxy Statement dated March
24, 1998, as amended by a Proxy Statement Supplement dated April 20, 1998;
WHEREAS, effective May 22, 1998, TDS Iowa was merged with and
into TDS;
WHEREAS, immediately prior to the effective time of such
merger, the Certificate of Incorporation of TDS was amended and restated to,
among other things, authorize a new class of common stock of TDS ("Aerial Group
Shares") intended to separately reflect TDS's interest in the personal
communications service business of Aerial and its Subsidiaries, including all
assets and liabilities allocated thereto (the "Aerial Group");
WHEREAS, (i) TDS Iowa offered to issue Aerial Group Shares in
exchange for all outstanding Aerial Common Shares pursuant to a merger between
Aerial and a wholly-owned subsidiary of TDS, and (ii) TDS intends to make a
distribution of Aerial Group Shares, in the form of a stock dividend, with
respect to each outstanding Common and Series A Common Share of TDS;
WHEREAS, Sonera has purchased an aggregate of 2,410,482 shares
of AOC's common stock, par value $0.001 per share (the "Purchased Shares"), for
an aggregate purchase price of $200,000,000 (the "Purchase Price"); and
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WHEREAS, in connection with Sonera becoming a long-term
investor in AOC and/or Aerial Common Shares or Aerial Group Shares, the parties
desire to regulate certain aspects of their relationship;
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants, conditions and promises hereinafter set forth, the parties
hereby agree as follows:
ARTICLE 1
DEFINITIONS
Unless the context otherwise requires, the terms defined below
shall have the meanings specified for all purposes of this Agreement, applicable
to both the singular and plural forms of any of the terms so defined. For
purposes of this Agreement:
"Aerial" shall have the meaning set forth in the preamble
hereof.
"Aerial Adjustment Event" shall have the meaning set forth in
Section 4.3(d) hereof.
"Aerial Average" shall mean (i) for any period of reference
prior to the earlier to occur of (A) the Aerial Merger, or (B) the Distribution,
the average of the daily means of the high and low sales prices for Aerial
Common Shares, as reported in the applicable composite transactions
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section or national market issues section of The Wall Street Journal, and (ii)
for any period of reference thereafter, the Aerial Group Average.
"Aerial Common Shares" shall mean the class of shares of
Aerial designated as Common Shares in its Certificate of Incorporation, as in
effect on the date of this Agreement.
"Aerial Common Stock" shall mean (i) Aerial Common Shares and
the class of shares of Aerial designated as Series A Common Shares in its
Certificate of Incorporation, as in effect on the date of this Agreement, or
(ii) in the event the Aerial Merger occurs, Aerial Group Shares.
"Aerial Group" shall have the meaning set forth in the
preamble hereof and, for purposes of the definition of the term "Competitor"
herein, shall also include each alliance that owns or operates a system
providing B-PCS services in which alliance Aerial or a Subsidiary of Aerial owns
a 20% or greater interest.
"Aerial Group Allocation Procedures" shall mean the manner in
which Aerial allocated among AOC and other members of the Aerial Group all
credits, fees, charges and expenses related to, arising under or in connection
with the Intercompany Agreements immediately prior to the date hereof.
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"Aerial Group Average" shall mean, for any period of
reference, the average of the daily means of the high and low sales prices for
Aerial Group Shares, as reported in the applicable composite transactions
section or national market issues section of The Wall Street Journal.
"Aerial Group Shares" shall have the meaning set forth in the
preamble hereof.
"Aerial Merger" shall mean the acquisition by TDS of all of
the Aerial Common Shares that it does not own, pursuant to (i) a transaction,
including the Aerial Merger (as that term is defined in the TDS Proxy Statement)
in which Aerial Group Shares are issued and immediately after which Aerial Group
Shares are listed on a national securities exchange or authorized for quotation
on the NASDAQ, or (ii) any other transaction upon the consummation of which
Aerial becomes a wholly-owned subsidiary of TDS and TDS has issued and
outstanding Aerial Group Shares that are listed on a national securities
exchange or authorized for quotation on the NASDAQ.
"Aerial Negotiation Notice" shall have the meaning set forth
in Section 10.1(b) hereof.
"Aerial Negotiation Period" shall have the meaning set forth
in Section 10.1(c) hereof.
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"Aerial Shares" shall mean (i) with respect to any time of
reference prior to the earlier to occur of (A) the Aerial Merger, or (B) the
Distribution, Aerial Common Shares, and (ii) with respect to any time of
reference thereafter, Aerial Group Shares.
"Aerial Transfer Notice" shall have the meaning set forth in
Section 10.1(b) hereof.
"Affiliate" shall mean, with respect to any party hereto, any
corporation or other business entity which, directly or indirectly, through
stock ownership or through any other arrangement, controls, is controlled by or
is under common control with, such party. The term "control" shall mean the
possession, direct or indirect, of the power to direct or cause the direction of
the management or policies of such person, whether by reason of ownership of
voting stock or other equity interests, by contract or otherwise.
"Aggregate Converted Percentage" shall mean the percentage
obtained by dividing (i) the sum of (A) the number of AOC Shares owned by Sonera
and all of its Permitted Affiliate Transferees, excluding any AOC Shares in
respect of which any Sonera Holder has issued a Derivative, (B) the quotient
obtained by dividing the number of Aerial Common Shares owned by Sonera and all
of its Permitted Affiliate Transferees by the Exchange Rate Applicable to Aerial
Common Shares, and (C) the quotient obtained by dividing the number of Aerial
Group Shares owned by Sonera and all of its Permitted Affiliate Transferees by
the Exchange Rate Applicable to Aerial Group Shares, by (ii) the total number of
AOC Shares outstanding.
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"Agreement" shall have the meaning set forth in the preamble
hereof.
"Anniversary" shall mean the date occurring 12 months after
the date of this Agreement and the date occurring each 12 months thereafter.
"AOC" shall have the meaning set forth in the preamble hereof.
"AOC Option" shall have the meaning set forth in Section
4.5(a) hereof.
"AOC Option Shares" shall have the meaning set forth in
Section 4.5(a) hereof.
"AOC Shares" shall mean the class of shares of AOC designated
as Common Stock in its Certificate of Incorporation, as in effect on the date of
this Agreement.
"Authorization" shall mean any franchise, license,
authorization, consent, permit, waiver, approval, qualification or registration
of, with or from the FCC, any state public utility or public service commission,
or any other governmental authority, agency or instrumentality having
jurisdiction over the relevant party and matter.
"B-PCS services" shall mean broadband personal communications
services provided in the United States on the following frequency blocks:
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Block A 1850-1865 MHZ paired with 1930-1945 MHZ
Block B 1870-1885 MHZ paired with 1950-1965 MHZ
Block C 1895-1910 MHZ paired with 1975-1990 MHZ
Block D 1865-1870 MHZ paired with 1945-1950 MHZ
Block E 1885-1890 MHZ paired with 1965-1970 MHZ
Block F 1890-1895 MHZ paired with 1970-1975 MHZ
The term "B-PCS services" does not include narrowband personal communications
services, paging or other Wireless Services not constituting broadband personal
communications services.
"Business Day" shall mean any day other than a Saturday,
Sunday, legal holiday in Chicago, Illinois, or other day on which commercial
banks in Chicago are authorized by law or governmental decree to close.
"Cellular Service" shall mean any service governed by Section
22.99 of the rules of the FCC.
"Code" shall mean the Internal Revenue Code of 1986, as
amended.
"Competitor" shall mean any Person that, directly or
indirectly, operates or manages, or owns a 20% or greater interest in, a
business engaged in the provision of Wireless Services if the population within
the geographic areas served by the systems providing Wireless Services owned
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or operated by such Person (including its Affiliates) that overlap with
geographic areas served by the systems owned or operated by the Aerial Group or
the USCC Group, as the case may be, is equal to or greater than 2% of the total
population within the geographic areas of all systems owned and operated by the
Aerial Group or the USCC Group, as applicable; provided, however, that the
geographic areas served by the systems owned or operated by the USCC Group shall
not be considered in determining whether a Person is a "Competitor" at any time
that USCC ceases to be an Affiliate of Aerial.
"Derivative" shall have the meaning set forth in Section
5.4(a) hereof.
"Derivative Take-Out Consideration" shall have the meaning set
forth in Section 5.4(c) hereof.
"Derivative Take-Out Election" shall have the meaning set
forth in Section 5.4(b) hereof.
"Disclosures" shall have the meaning set forth in Section
12.12(a) hereof.
"Disposition Transaction" shall have the meaning set forth in
Section 10.1(a) hereof.
"Distribution" shall mean the distribution by TDS of Aerial
Group Shares, in the form of a stock dividend, with respect to each outstanding
Common and Series A Common Share of TDS.
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"$" shall mean the basic unit of the lawful currency of the
United States of America.
"Equity Exchange Election" shall have the meaning set forth in
Section 7.1 hereof.
"Equity Purchase Election" shall have the meaning set forth in
Article 8 hereof.
"ERISA" shall have the meaning set forth in Section 3.1(i)
hereof.
"Event Notice" shall have the meaning set forth in Section
10.7(a) hereof.
"Exchange Agreement" shall mean the Exchange Agreement dated
as of April 15, 1996, between TDS and Aerial (f/k/a American Portable Telecom,
Inc.).
"Exchange Date" shall have the meaning set forth in Section
7.4 hereof.
"Exchange Rate" shall mean, (i) with respect to any time of
reference prior to the earlier to occur of (A) the Aerial Merger, or (B) the
Distribution, the Exchange Rate Applicable to the Aerial Common Shares, and (ii)
with respect to any time of reference thereafter, the Exchange Rate Applicable
to Aerial Group Shares.
"Exchange Rate Applicable to Aerial Common Shares" shall have
the meaning set forth in Section 7.2 hereof.
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"Exchange Rate Applicable to Aerial Group Shares" shall have
the meaning set forth in Section 7.3(b)(iii) hereof.
"FCC" shall mean the Federal Communications Commission.
"Intercompany Agreements" shall mean the Cash Management
Agreement, the Employee Benefit Plans Agreement, the Exchange Agreement, the
Insurance Cost Sharing Agreement, the Intercompany Agreement, the Revolving
Credit Agreement and the Tax Allocation Agreement between TDS and Aerial, copies
of which agreements (as amended through the date hereof) previously have been
furnished to Sonera, as the same may be amended from time to time.
"Intercompany Policy" shall mean each policy implemented by
TDS and Aerial upon the consummation of the Aerial Merger to replace a related
Intercompany Agreement, copies of which policies previously have been furnished
to Sonera and Sonera.
"Joint Venture Agreement" shall have the meaning set forth in
Section 2.1(b) hereof.
"Liens" shall have the meaning set forth in Article 6 hereof.
"Material Adverse Effect" on a Person shall mean a material
adverse effect on the financial condition, operations or business of such Person
and its Subsidiaries, taken as a whole, or on the ability of such Person to
enter into and consummate the transactions contemplated by and
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lawfully to perform its obligations under this Agreement, the Joint Venture
Agreement and the Registration Rights Agreement in accordance with their
respective terms.
"Minimum Number of AOC Shares" shall have the meaning set
forth in Article 8 hereof.
"Minimum Option Prices" shall have the meaning set forth in
Section 4.3(d) hereof.
"NASDAQ" shall mean National Association of Securities
Dealers, Inc., Automated Quotation System.
"New Issue Closing" shall have the meaning set forth in
Section 9.2 hereof.
"New Issue Sale Notice" shall have the meaning set forth in
Section 9.1 hereof.
"New Issue Securities" shall have the meaning set forth in
Section 9.1 hereof.
"Number of Aerial Group Shares" shall mean the sum of (i) the
number of Aerial Group Shares held by shareholders of TDS, (ii) the "Number of
Aerial Group Shares Issuable with Respect to Retained Interest" (as that term is
defined in the Restated Certificate) in the Aerial Group, and (iii) the "Number
of Aerial Group Shares Issuable with Respect to Inter-Group Interest" (as that
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term is defined in the Restated Certificate) in the Aerial Group by all other
"Tracking Groups" (as that term is defined in the Restated Certificate), if any.
"Option Closing" shall have the meaning set forth in Section
4.2(c) hereof.
"Permitted Affiliate Transferee" shall mean (i) Sonera, and
(ii) any direct or indirect Subsidiary of Sonera.
"Person" shall mean any general or limited partnership,
corporation, limited liability company, joint venture, trust, business trust,
cooperative, association, individual or other entity, and heirs, executors,
administrators, legal representatives, successors and assigns of such person.
"Purchase Agreement" shall mean that certain agreement dated
June 1, 1998, pursuant to which AOC agreed to sell to Sonera, and Sonera agreed
to purchase from AOC, the Purchased Shares.
"Purchase Consideration" shall have the meaning set forth in
Article 8 hereof.
"Purchase Price" shall have the meaning set forth in the
preamble hereof.
"Purchased Shares" shall have the meaning set forth in the
preamble hereof.
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"Registration Rights Agreement" shall have the meaning set
forth in Section 2.1(c) hereof.
"Restated Certificate" shall mean the Restated Certificate of
Incorporation of TDS, which is the surviving entity of the merger with TDS Iowa
described in the TDS Proxy Statement.
"Seven-Year Option" shall have the meaning set forth in
Section 4.3(a) hereof.
"Seven-Year Option Shares" shall have the meaning set forth in
Section 4.3(a) hereof.
"SMR Service" shall mean any service governed by Section 90.7
of the rules of the FCC.
"Sonera" shall have the meaning set forth in the preamble
hereof.
"Sonera Holder" shall mean Sonera and each Permitted Affiliate
Transferee of Sonera that acquires AOC Shares.
"Sonera Negotiation Notice" shall have the meaning set forth
in Section 5.2(a) hereof.
"Sonera Negotiation Period" shall have the meaning set forth
in Section 5.2(b) hereof.
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"Sonera Transaction Notice" shall have the meaning set forth
in Section 10.7(a) hereof.
"Sonera Transfer Notice" shall have the meaning set forth in
Section 5.2(a) hereof.
"Subsidiary" of a Person shall mean a corporation as to which
a majority of the voting power is owned or controlled by such Person, either
directly or indirectly; but any such corporation shall be deemed to be a
Subsidiary of such Person only as long as such ownership or control exists.
"Taxes" shall mean all taxes, charges, levies or other
assessments of any kind, including income, gross receipts, sales, use, ad
valorem, franchise, profits, license, withholding, payroll, employment, excise,
severance, stamp, occupation, premium, property or windfall profits taxes,
customs duties or similar fees, assessments or charges of any kind whatsoever,
together with any interest and penalties, additions to tax or additional amounts
imposed by any taxing authority, domestic or foreign and any expenses incurred
in connection with the determination, settlement or litigation of any liability
for any of the foregoing.
"Tax Return" shall mean a report, return or other information
required to be supplied to a taxing authority with respect to Taxes.
"TDS" shall have the meaning set forth in the preamble hereof.
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<PAGE>
"TDS Adjustment Event" shall have the meaning set forth in
Section 4.4(c) hereof.
"TDS Average" shall mean, for any period of reference, the
average closing price for TDS Shares, as reported in the applicable composite
transactions section or national market issues section of The Wall Street
Journal.
"TDS Change in Control" shall be deemed to have occurred at
such time as (i) any Person (including one or more Affiliates of such Person)
has become the beneficial owner of 50% or more of the combined voting power (on
matters other than the election of directors) of all of TDS's then outstanding
equity securities, or (ii) there is consummated any consolidation or merger of
TDS (A) in which TDS is not the surviving corporation, or (B) pursuant to which
the common stock of TDS is converted into cash, securities or other property, in
each case other than a consolidation or merger of TDS in which (1) the holders
of the Series A Common Shares of TDS immediately prior to such consolidation or
merger have, directly or indirectly, 30% or more of the combined voting power
(on matters other than the election of directors) of the common equity
securities of the surviving corporation immediately after such consolidation or
merger, and (2) such voting power is greater than the combined voting power (on
matters other than the election of directors) of the common equity securities of
the surviving corporation immediately after such consolidation or merger held by
any other Person (including one or more Affiliates of such other Person).
"TDS Iowa" shall have the meaning set forth in the preamble
hereof.
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"TDS Parties" shall have the meaning set forth in Section
12.14(b) hereof.
"TDS Shares" shall mean (i) with respect to any time of
reference prior to the earlier to occur of (A) the Aerial Merger, or (B) the
Distribution, Common Shares of TDS, par value $.01 per share, and (ii) with
respect to any time of reference thereafter, Aerial Group Shares, provided in
any case that such shares are traded on a national securities exchange or
authorized for quotation on the NASDAQ.
"Third Party Transferee" shall have the meaning set forth in
Section 5.1(b) hereof.
"Three-Year Option" shall have the meaning set forth in
Section 4.2(a) hereof.
"Three-Year Option Shares" shall have the meaning set forth in
Section 4.2(a) hereof.
"Tracking Stock Proposal" shall have the meaning set forth in
the preamble hereof.
"Transfer" shall have the meaning set forth in Section 5.1(b)
hereof.
"USCC" shall mean United States Cellular Corporation, a
Delaware corporation and an Affiliate of Aerial.
"USCC Group" shall mean USCC and its Subsidiaries.
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"U.S. GAAP" shall mean the United States Generally Accepted
Accounting Principles.
"Wireless Services" shall mean B-PCS services, Cellular
Service or SMR Service.
When a reference is made in this Agreement to a Section, such
reference shall be to a Section of this Agreement unless otherwise indicated.
Whenever the words "include," "includes" or "including" are used in this
Agreement, they shall be deemed to be followed by the words "without
limitation." The use of a gender herein shall be deemed to include the neuter,
masculine and feminine genders whenever necessary or appropriate. Whenever the
word "herein" or "hereof" is used in this Agreement, it shall be deemed to refer
to this Agreement and not to a particular Section of this Agreement unless
expressly stated otherwise.
ARTICLE 2
RELATED EVENTS
2.1 Transactions. Simultaneously with the execution of
this Agreement:
(a) AOC is selling the Purchased Shares to Sonera upon
the terms set forth in the Purchase Agreement;
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(b) Aerial and Sonera Corporation U.S. are entering into a
Joint Venture Agreement in the form of EXHIBIT 1.2 attached to the Purchase
Agreement (the "Joint Venture Agreement"); and
(c) Aerial and Sonera are entering into a Registration Rights
Agreement in the form of EXHIBIT 1.3 attached to the Purchase Agreement (the
"Registration Rights Agreement").
2.2 Aerial Board of Directors. Simultaneously with the
execution of this Agreement, TDS and Aerial shall (a) amend Aerial's By-laws to
increase to at least 12 the number of Aerial directors, (b) add two directors
designated by Sonera to the Aerial Board of Directors, and (c) designate one of
such new directors a member of the Audit Committee of Aerial. TDS and Aerial
agree that Sonera's designees shall be nominated for election to the Board of
Directors of Aerial by the holders of Aerial Common Shares, at the time and in
the manner proper for such nomination, and TDS agrees to execute a proxy giving
Sonera the power to vote in the election of directors that number of Aerial
Common Shares owned by TDS which, when added to the Aerial Common Shares owned
by Sonera and its Affiliates, will be sufficient to elect such nominees to the
Board of Directors of Aerial. Sonera shall retain the right to designate two
directors pursuant to this Section 2.2 so long as (i) the Aggregate Converted
Percentage is at least 7.9%, or (ii) if the Aggregate Converted Percentage is
less than 7.9%, so long as Sonera and its Permitted Affiliate Transferees have
not transferred to any third party any of the Purchased Shares or any of the
Aerial Shares for which any such Purchased Shares may have been exchanged
pursuant to Article 7 or 8 hereof. In the event the Aggregate Converted
Percentage is less than 7.9% but at least 5.3% and clause (ii) of
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the immediately preceding sentence is inapplicable, Sonera shall retain the
right to designate one director to the Board of Directors of Aerial, which
director may or may not, at the discretion of the Aerial Board of Directors, be
appointed to the Audit Committee of Aerial. In the event the Aggregate Converted
Percentage is less than 5.3% and clause (ii) of the second preceding sentence is
inapplicable, the right of Sonera under this Section 2.2 shall terminate.
2.3 Identity of Directors. Sonera agrees that it will not
designate as its representative to Aerial's Board of Directors any individual
who is an officer, director or representative of any Person that is in
competition with Aerial or any of its Affiliates in the provision of Wireless
Services to any significant extent. Aerial agrees that, as long as Sonera is
entitled to designate at least one representative to Aerial's Board of
Directors, Aerial will not nominate to its Board of Directors, and will not
appoint to the Board of Directors of AOC, any individual (other than an
individual whose principal occupation, at the time of such nomination, is that
of employee or officer of Aerial or one of its Affiliates, or who is a Person in
control of Aerial or one of its Affiliates or is an incumbent on the Aerial
Board of Directors) who is an officer, director or representative of any Person
that is in competition with Sonera or any of its Affiliates to any significant
extent. For purposes of the immediately preceding sentence, the term "control"
shall have the meaning set forth in the last sentence of the definition of
"Affiliate" in Article 1 hereof.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
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3.1 Representations and Warranties of TDS. TDS represents and
warrants to Sonera, which representations and warranties shall survive the
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby, as follows:
(a) Due Organization. TDS is a corporation duly incorporated
and validly existing under the laws of the State of Delaware. TDS is duly
qualified to do business and is in good standing in all jurisdictions where the
conduct of its business or the ownership of its properties makes such
qualification necessary, except where the failure to so qualify would not have a
Material Adverse Effect on TDS.
(b) Power and Authority; No Violation. TDS has full power and
authority to execute, deliver and perform its obligations under this Agreement
and to consummate the transactions contemplated hereby. This Agreement and any
transactions contemplated hereby have been duly and validly authorized by all
necessary action on the part of TDS and this Agreement constitutes a legal,
valid and binding obligation of TDS enforceable in accordance with its terms,
except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting or relating to
enforcement of creditors' rights generally. Neither the execution, delivery or
performance of this Agreement, nor the consummation by TDS of the transactions
contemplated hereby will, with or without the giving of notice or the passage of
time, or both, (i) conflict with, violate, result in a default, breach or loss
of rights (or give rise to any right of termination, cancellation or
acceleration) under, or result in the creation of any Lien, pursuant to (A) any
provision of the Restated Certificate or By-laws of TDS, (B) any material note,
bond,
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indenture, mortgage, deed of trust, contract, agreement, lease or other
instrument or obligation to which TDS is a party or by which TDS or any of its
property may be bound, or (C) any law, order, judgment, ordinance, rule,
regulation or decree to which TDS or any of its property is bound, or (ii) give
rise to any right of first refusal, subscription or similar right with respect
to any interest in, or any properties or assets of, TDS or any of its
Subsidiaries.
(c) Legal Matters. There is no claim, legal action,
counterclaim, suit, arbitration, governmental investigation or other legal,
administrative or tax proceeding, nor any order, decree or judgment, in progress
or pending, or to the knowledge of TDS threatened, against or relating to the
right of TDS to execute and deliver this Agreement or perform its obligations
hereunder, or which could reasonably be expected to have a Material Adverse
Effect on TDS, nor does TDS know of any basis for the same. There is outstanding
no order, writ, injunction, judgment or decree of any court, governmental agency
or arbitration tribunal which, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect on TDS, other than
orders or decrees involving the wireless telephone industry in general.
(d) Truth and Correctness. No representation or warranty by
TDS in this Agreement contains or will contain any untrue statement of a
material fact or omits or will omit to state a material fact necessary to make
the statements contained herein, in light of the circumstances under which such
statements are made, not misleading.
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(e) Compliance with Laws. Except as set forth on Exhibit
3.1(e) annexed hereto, each of TDS and its Subsidiaries is in compliance with
all applicable laws, regulations, administrative orders and authorizations of
the United States and States in which they transact their respective businesses
(including all applicable rules, regulations and authorizations of FCC, any
state public utilities or public service commission, or any other federal or
state governmental agency or instrumentality exercising jurisdiction over TDS),
and of each municipality, county or subdivision of any thereof, to which any of
their respective businesses or any of their respective properties may be
subject, the non-compliance with which would have a Material Adverse Effect on
TDS.
(f) Authorization. Each of TDS and its Subsidiaries has (i)
all requisite Authorizations of the FCC (including all PCS Authorizations) and
of all state public utility or public service commissions and (ii) all other
material Authorizations of governmental agencies exercising jurisdiction over
TDS or such Subsidiary, respectively, required to carry on its business as now
conducted or as contemplated to be conducted, except for any Authorizations, the
failure of which to obtain would not have a Material Adverse Effect on TDS.
(g) Taxes. TDS and its Subsidiaries have timely filed all
federal, state, county, local and foreign Tax Returns required to be filed by
them, and have paid all Taxes which have become due pursuant thereto or
otherwise, other than Taxes the liability for which is being contested in good
faith and appropriate reserves for which have been made in TDS's financial
statements. Except to the extent set forth on EXHIBIT 4.1(j) annexed to the
Purchase Agreement or
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appropriately reserved for in TDS's financial statements, there are no
additional assessments or adjustments of Taxes pending or threatened against TDS
or its Subsidiaries for any period.
(h) No Material Adverse Change. Since December 31, 1997, there
has not been any event or condition which has caused, or is reasonably likely to
cause, a Material Adverse Effect on TDS, other than as a result of conditions
affecting the U.S. telecommunications industry generally.
(i) Employee Benefit Plans. All employee benefit or employee
welfare plans maintained by TDS or any of its Subsidiaries and subject to the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), comply in
all material respects with the requirements of ERISA, and no such plan which is
subject to Part 3 of Subtitle B of Title 1 of ERISA has incurred any
"Accumulated Funding Deficiency" within the meaning of Section 302 of ERISA or
Section 412 of the Code, and neither TDS nor any of its Subsidiaries has
incurred any liability on account of such an "Accumulated Funding Deficiency"
with respect to any such employee benefit plan subject to ERISA. No liability to
the Pension Benefit Guaranty Corporation established under ERISA has been
incurred with respect to any such plan subject to ERISA and neither TDS nor any
of its Subsidiaries has incurred any liability for any Tax implied by Section
4975 of the Code. As of the most recent valuation date of any such plan, there
are no "unfunded benefit liabilities" within the meaning of Section 4001(a)(18)
of ERISA; and no "prohibited transaction" has occurred within the meaning of
Section 4975 of the Code or Section 406 of ERISA that would subject TDS or any
of its Subsidiaries to Tax or penalty.
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(j) Compliance with other Instruments. Neither TDS nor any of
its Subsidiaries is in violation of any term of (i) any agreement or instrument
related to indebtedness for borrowed money or any other material agreement to
which it is a party or by which it is bound, or (ii) any applicable order,
judgment or decree of any court, arbitrator or governmental authority, the
consequences of which violation, whether individually or in the aggregate, would
result in a Material Adverse Effect on TDS. TDS is not a party to or bound by
any agreement, instrument or constituent document compliance with which could
reasonably be expected to result in a Material Adverse Effect on TDS.
(k) Organization of Subsidiaries. Each Subsidiary of TDS
listed on EXHIBIT 3.1(k) annexed hereto is a corporation or other legal entity
duly organized and in good standing under the laws of the jurisdiction of its
organization and is duly qualified and has the full power and authority in each
applicable jurisdiction to own its properties and conduct its business and
operations as currently conducted, except to the extent that any failure to
qualify would not have a Material Adverse Effect on TDS.
(l) Investment Company Act. TDS is not and will not become as
a result of the Closing, an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
3.2 Representations and Warranties of Aerial. Aerial and
AOC each represents and warrants to Sonera, which representations and warranties
shall survive the execution and
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delivery of this Agreement and the consummation of the transactions contemplated
hereby, as follows:
(a) Due Organization. Aerial is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware.
Each of Aerial and its Subsidiaries is duly qualified to do business and is in
good standing in all jurisdictions where the conduct of its business or the
ownership of its properties makes such qualification necessary, except where the
failure to so qualify would not have a Material Adverse Effect on Aerial.
(b) Power and Authority; No Violation. Aerial has full power
and authority to execute, deliver and perform its obligations under this
Agreement and to consummate the transactions contemplated hereby. This Agreement
and any transactions contemplated hereby have been duly and validly authorized
by all necessary action on the part of Aerial and this Agreement constitutes a
legal, valid and binding obligation of Aerial enforceable in accordance with its
terms, except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting or relating to
enforcement of creditors' rights generally. Neither the execution, delivery or
performance of this Agreement, nor the consummation by Aerial of the
transactions contemplated hereby will, with or without the giving of notice or
the passage of time, or both, (i) conflict with, violate, result in a default or
breach or loss of rights (or give rise to any right of termination, cancellation
or acceleration) under, or result in the creation of any Lien, pursuant to (A)
any provision of the Certificate of Incorporation or By-laws of Aerial, (B) any
material note, bond, indenture, mortgage, deed of trust, contract, agreement,
lease or other
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instrument or obligation to which Aerial is a party or by which Aerial or any of
its property may be bound or affected, or (C) any law, order, judgment,
ordinance, rule, regulation or decree to which Aerial is a party or by which any
of its property is bound, or (ii) give rise to any right of first refusal,
subscription or similar right with respect to any interest in, or any properties
or assets of, Aerial or any of its Subsidiaries.
(c) Legal Matters. There is no claim, legal action,
counterclaim, suit, arbitration, governmental investigation or other legal,
administrative or tax proceeding, or any order, decree or judgment, in progress
or pending, or to the knowledge of Aerial threatened, against or relating to the
right of Aerial to execute and deliver this Agreement or perform its obligations
hereunder, or which could reasonably be expected to have a Material Adverse
Effect on Aerial, nor does Aerial know of any basis for the same. There is
outstanding no order, writ, injunction, judgment or decree of any court,
governmental agency or arbitration tribunal which, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect on
Aerial, other than orders or decrees involving the wireless telephone industry
in general.
(d) Capitalization of Aerial. The authorized capital stock of
Aerial consists of 100,000,000 Common Shares, $1.00 par value; 60,000,000 Series
A Common Shares, $1.00 par value; 60,000,000 Series B Common Shares, $1.00 par
value; and 10,000,000 shares of Preferred Stock, $1.00 par value, issuable in
series. At July 31, 1998, there were outstanding 31,733,362 Common Shares,
40,000,000 Series A Common Shares, and no Series B Common Shares or shares of
Preferred Stock. At that date, TDS was the owner of 19,086,000 Common Shares and
40,000,000
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Series A Common Shares. The Series A Common Shares are convertible on a
share-for-share basis into Aerial Common Shares.
(e) Aerial Assets. Except to the extent set forth on SCHEDULE
3.2(e) attached hereto, all of the material assets reflected on the balance
sheets contained in the Operating Financial Statements attached as EXHIBIT
4.1(g) to the Purchase Agreement and used or useful in connection with the
business of operating Aerial services are owned by AOC or its subsidiaries.
3.3 Representations and Warranties of Sonera. Sonera
represents and warrants to TDS and Aerial, which representations and warranties
shall survive the execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby, as follows:
(a) Due Organization. Sonera is a limited liability company
duly organized, validly existing and in good standing under the laws of the
Republic of Finland. Sonera is duly qualified to do business and is in good
standing in all jurisdictions where the conduct of its business or the ownership
of its properties makes such qualification necessary, except where the failure
to so qualify would not have a Material Adverse Effect on Sonera.
(b) Power and Authority; No Violation. Sonera has full power
and authority to execute, deliver and perform its obligations under this
Agreement and to consummate the transactions contemplated hereby. This Agreement
and any transactions contemplated hereby have been duly and validly authorized
by all necessary action on the part of Sonera and this Agreement
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constitutes a legal, valid and binding obligation of Sonera, enforceable in
accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting or relating to enforcement of creditors' rights generally. Neither the
execution, delivery or performance of this Agreement, nor the consummation by
Sonera of the transactions contemplated hereby will, with or without the giving
of notice or the passage of time, or both, conflict with, violate, result in a
default or breach or loss of rights (or give rise to any right of termination,
cancellation or acceleration) under, or result in the creation of any Lien,
pursuant to (A) any provision of the Certificate of Incorporation or By-laws of
Sonera; (B) any material note, bond, indenture, mortgage, deed of trust,
contract, agreement, lease or other instrument or obligation to which Sonera is
a party or by which Sonera or any of its property may be bound.
(c) Legal Matters. There is no claim, legal action,
counterclaim, suit, arbitration, governmental investigation or other legal,
administrative or tax proceeding, nor any order, decree or judgment, in progress
or pending, or to the knowledge of Sonera threatened, against or relating to
Sonera's right to execute and deliver this Agreement or perform its obligations
hereunder, or which could reasonably be expected to have a Material Adverse
Effect on Sonera, nor does Sonera know of any basis for the same. There is
outstanding no order, writ, injunction, judgment or decree of any court,
governmental agency or arbitration tribunal which, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect on
Sonera or impair in any material respect the performance of Sonera's obligations
hereunder or the consummation of the transactions contemplated hereby, other
than orders or decrees involving the wireless telephone industry in general.
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ARTICLE 4
RIGHTS TO PURCHASE ADDITIONAL AOC SHARES
4.1 Subscription Rights. (a) If, at any time after the date of
this Agreement, AOC proposes to issue (or sell from treasury) AOC Shares, or
securities convertible into or exchangeable for AOC Shares, including debt
securities convertible into equity securities of AOC but excluding non-voting,
non-convertible preferred stock and debt securities containing nominal equity
features, and excluding AOC Shares issuable upon conversion of debt securities
into equity securities of AOC, each of Aerial and Sonera shall have the right
(which right may be exercised in full or in part) to subscribe for and to
purchase that proportion of each such issuance (or sale from treasury) equal to
the proportion of AOC Shares that Aerial or Sonera, as the case may be, owns
immediately before such issuance (or sale from treasury). The subscription
rights granted by the preceding sentence shall be exercisable by Aerial and
Sonera by delivering a written election to subscribe to a specified number or
amount (in conformity with the preceding sentence) of the securities to be
issued, within such reasonable period of time as may be established by the Board
of Directors of AOC after the giving of written notice of the proposed issuance
to Aerial and Sonera. The purchase and sale, if any, of such securities, shall
take place at the offices of AOC on the twentieth Business Day after AOC's
receipt of the subscription election described in the preceding sentence of this
Section 4.1(a), or at such other place or on such other date as Aerial, Sonera
and AOC may agree in writing. At such closing, AOC shall deliver certificates
representing the securities to be purchased, against the payment of the purchase
price therefor by wire transfer of immediately available funds to an account
designated by AOC at least five Business Days prior to the date of such closing.
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(b) As promptly as practicable after any sale after the date
of this Agreement (i) by Aerial, of any equity securities of Aerial, including
Aerial Common Stock, preferred stock, warrants, options or other rights to
acquire equity securities and equity securities issued upon the conversion of
convertible debt securities, but excluding debt securities convertible into
equity securities or debt securities containing nominal equity features, or (ii)
by TDS, after the earlier to occur of the Aerial Merger or the Distribution, of
any equity securities of the Aerial Group, the proceeds of which are allocated
to the Aerial Group, including preferred stock, warrants, options or other
rights to acquire such equity securities and equity securities issued upon the
conversion of convertible debt securities, but excluding debt securities
convertible into equity securities or debt securities containing nominal equity
features, Aerial or TDS, as the case may be, shall transfer all cash or other
property received in connection with such sale to AOC (indirectly, through
Aerial, if TDS is the transferor) in exchange for that number of newly issued
AOC Shares equal to the quotient obtained by dividing the aggregate amount paid
by the purchaser of securities (without regard to any commissions, concessions
or discounts paid or allowed or expenses incurred by Aerial or TDS in connection
with such sale) by the product obtained by multiplying the Aerial Average for
the 20 trading days ending on the last trading day prior to the date on which
such securities were sold by the Exchange Rate; provided, however, that all of
the proceeds from the sale of such equity securities from April 1 to December
31, 1998, and during each calendar year thereafter, pursuant to stock option,
employee stock purchase, 401(k) or other employee benefit programs maintained by
Aerial or TDS, as the case may be, shall be accumulated by Aerial and shall be
transferred to AOC in exchange for AOC Shares as soon as practicable after the
end of each such calendar year (and in any event within 90 days thereafter) in
accordance with the foregoing provisions of this Section 4.1(b).
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(c) In connection with any such issuance of AOC Shares to
Aerial pursuant to Section 4.1(b) hereof, Sonera shall have the right to
subscribe for and to purchase all or any portion of that number of additional
AOC Shares obtained by subtracting (i) the total number of AOC Shares owned by
all Sonera Holders immediately prior to such issuance from (ii) the product
obtained by multiplying (A) the Sonera Holders' aggregate percentage ownership
of AOC Shares immediately prior to such issuance by (B) the quotient obtained by
dividing (I) the sum of the total number of AOC Shares owned immediately prior
to such issuance by all shareholders other than the Sonera Holders, and the
number of AOC Shares to be issued to Aerial pursuant to Section 4.1(b) hereof,
by (II) the aggregate percentage ownership of AOC Shares of all shareholders
other than the Sonera Holders immediately prior to such issuance. The per share
purchase price for each AOC Share so purchased by Sonera shall be equal to the
quotient obtained by dividing the aggregate value of all cash and property to be
transferred to AOC by Aerial in exchange for the AOC Shares to be issued to
Aerial by the number of AOC Shares to be issued to Aerial.
(d) No less than 30 Business Days prior to the transfer of
cash or property to AOC pursuant to Section 4.1(b) hereof, Aerial shall give a
written notice to Sonera of such transfer setting forth the date such transfer
will occur, the aggregate value of all cash and property to be transferred by
Aerial to AOC and the number of AOC Shares to be issued to Aerial. If Sonera
elects to exercise its subscription right set forth in Section 4.1(c) hereof,
then Sonera shall give a written notice to Aerial advising Aerial of such
election within ten Business Days after the date upon which Aerial gave notice
to Sonera pursuant to the immediately preceding sentence. The purchase and sale
of such AOC Shares pursuant to Section 4.1(b) hereof shall take place at the
offices of AOC on the date
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set forth in the notice from Aerial to Sonera given pursuant to the first
sentence of this Section 4.1(d), or at such other place or on such other date as
Aerial and Sonera may agree in writing. At such closing, AOC shall deliver
certificates representing the number of AOC Shares to be purchased (i) in the
case of Aerial, against transfer to AOC of the cash or property as set forth in
Section 4.1(b) hereof and (ii) in the case of Sonera (to Sonera or any Permitted
Affiliate Transferee designated by Sonera), against payment of the purchase
price therefor by wire transfer of immediately available funds to an account
designated by AOC at least five Business Days prior to such closing.
4.2 Three-Year Option. (a) In addition to the subscription
rights referred to in Section 4.1 hereof, Sonera shall have the right (but not
the obligation), for a period commencing on the date hereof and ending on the
third Anniversary (the "Three-Year Option") to purchase from AOC, and AOC shall
issue, sell and deliver to Sonera, 89,518 additional AOC Shares (the "Three-
Year Option Shares").
(b) The purchase price for the Three-Year Option Shares shall
be an amount equal to the product of (i) the product of (A) the number of AOC
Shares with respect to which such option is exercised, multiplied by (B) the
Exchange Rate, multiplied by (ii) the greater of (A) 145% of the Aerial Average
for the 20 consecutive trading day period ending on the last trading day prior
to the date on which AOC receives Sonera's notice exercising such option, or (B)
$12.33. The Three-Year Option shall be exercisable, in whole or in part, at any
time prior to the third such Anniversary, by delivering a written notice of such
exercise to AOC stating the number of AOC Shares to be
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purchased, which notice shall constitute a binding commitment on the part of
Sonera to purchase such number of Three-Year Option Shares upon the terms set
forth herein.
(c) The purchase and sale of the Three-Year Option Shares (an
"Option Closing"), if any, shall take place at the offices of AOC on the
twentieth Business Day after AOC's receipt of the notice described in Section
4.2(b) hereof, or at such other place or on such other date as AOC and Sonera
may agree in writing. At the Option Closing, AOC shall deliver to Sonera (or any
Permitted Affiliate Transferee designated by Sonera) certificates representing
the number of AOC Shares to be purchased, against payment of the purchase price
therefor by wire transfer of immediately available funds to an account
designated by AOC at least five Business Days prior to the date of such Option
Closing.
(d) The number of AOC Shares with respect to which the
Three-Year Option may be exercised shall be increased to the extent necessary to
preserve the right of Sonera to increase the number of AOC Shares owned by
Sonera and its Permitted Affiliate Transferees to 20% of the total outstanding
AOC Shares by exercising the Three-Year Option in full if: (i) additional AOC
Shares have been issued to any Person other than Sonera and Sonera has exercised
in full the subscription rights provided for in Section 4.1 of this Agreement;
or (ii) any of the Purchased Shares are canceled pursuant to Section 2.3 of the
Purchase Agreement and, if additional AOC Shares have previously been issued to
Aerial, Sonera has exercised in full the subscription rights provided for in
Section 4.1 of this Agreement.
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4.3 Seven-Year Option. (a) In addition to the subscription
rights referred to in Section 4.1 hereof, and the Three-Year Option, Sonera
shall have the right (but not the obligation), for a period commencing
immediately after the third Anniversary and ending on the tenth Anniversary (the
"Seven-Year Option") to purchase from AOC, and AOC shall issue, sell, and
deliver to Sonera, that number of additional AOC Shares equal to (i) the
quotient obtained by dividing the aggregate number of outstanding AOC Shares
owned by Persons other than Sonera and its Permitted Affiliate Transferees by
.8, minus (ii) the total number of outstanding AOC Shares, in each case
determined immediately prior to the exercise of such option (the "Seven-Year
Option Shares").
(b) The purchase price for the Seven-Year Option Shares shall
be (i) for any Seven-Year Option Shares acquired after the third and prior to
the seventh Anniversary, an amount equal to the product of (A) the product of
(I) the number of AOC Shares with respect to which such option is exercised,
multiplied by (II) the Exchange Rate, multiplied by (B) the greater of (I) 130%
of the Aerial Average for the 20 consecutive trading day period ending on the
last trading day prior to the date on which AOC receives Sonera's notice
exercising such option, or (II) $20.00, and (ii) for any Seven-Year Option
Shares acquired after the seventh and prior to the tenth Anniversary, an amount
equal to the product of (A) the product of (I) the number of AOC Shares with
respect to which such option is exercised, multiplied by (II) the Exchange Rate,
multiplied by (B) the greater of (I) 130% of the Aerial Average for the 20
consecutive trading day period ending on the last trading day prior to the date
on which AOC receives Sonera's notice exercising such option, or (II) $30.00.
The Seven-Year Option shall be exercisable, in whole or in part, at any time
after the third
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and prior to the tenth Anniversary, by delivering a written notice of such
exercise to AOC stating the number of AOC Shares to be purchased, which notice
shall constitute a binding commitment on the part of Sonera to purchase such
number of Seven-Year Option Shares upon the terms set forth herein.
(c) The purchase and sale of the Seven-Year Option Shares, if
any, shall take place at an Option Closing at the offices of AOC on the
twentieth Business Day after AOC's receipt of the notice described in Section
4.3(b) hereof, or at such other place or on such other date as AOC and Sonera
may agree in writing. At such Option Closing, AOC shall deliver to Sonera (or
any Permitted Affiliate Transferee designated by Sonera) certificates
representing the number of AOC Shares to be purchased, against the payment of
the purchase price therefor by wire transfer of immediately available funds to
an account designated by AOC at least five Business Days prior to the date of
such Option Closing.
(d) In the event that, at any time after the date hereof and
prior to the earlier to occur of the Aerial Merger and the Distribution, Aerial
shall effect any transaction, including (i) the payment of a dividend on the
outstanding Aerial Common Shares in the form of Aerial Common Shares, (ii) a
subdivision of the outstanding Aerial Common Shares into a larger number of such
Aerial Common Shares, (iii) a combination of the outstanding Aerial Common
Shares into a smaller number of such Aerial Common Shares, or (iv) any
reorganization or reclassification of the Aerial Common Shares, or any
consolidation or merger with another corporation, or the sale of all or
substantially all of its assets to another corporation, in such a way that the
holders of the outstanding
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Aerial Common Shares shall be entitled to receive (either directly or upon
subsequent liquidation) stock, securities or other property with respect to or
in exchange for such Aerial Common Shares (any such transaction or event being
referred to as an "Aerial Adjustment Event"), then the minimum purchase prices
for the Three-Year Option Shares referred to in Section 4.2(b)(ii)(B) hereof and
for the Seven-Year Option Shares referred to in Section 4.3(b)(i)(B)(II) and
(b)(ii)(B)(II) hereof (the "Minimum Option Prices") shall be proportionately
adjusted to reflect such Aerial Adjustment Event.
4.4 Effect of Aerial Merger or Distribution. (a) In the event
that the Aerial Merger shall occur at any time after the date of this Agreement
and prior to the Distribution, the Minimum Option Prices shall be adjusted by
dividing such prices by a fraction, the numerator of which shall be the Number
of Aerial Group Shares, determined immediately after the Aerial Merger, and the
denominator of which shall be the number of shares of Aerial Common Stock
outstanding immediately prior to the Aerial Merger.
(b) In the event that the Distribution shall occur at any time
after the date of this Agreement and prior to the date of the Aerial Merger,
then:
(i) the Minimum Option Prices shall be adjusted by
dividing such prices by a fraction, the numerator of which shall be the quotient
obtained by dividing the Number of Aerial Group Shares by TDS's percentage
ownership of Aerial Common Stock, in each case determined
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immediately after the Distribution, and the denominator of which shall be the
total number of shares of Aerial Common Stock outstanding immediately prior to
such Distribution; and
(ii) in the event that the Aerial Merger shall
thereafter occur, the Minimum Option Prices shall be adjusted by dividing
such prices by a fraction, the numerator of which is the Number of Aerial Group
Shares, determined immediately after the Aerial Merger, and the denominator
of which is the quotient obtained by dividing the Number of Aerial Group Shares
by TDS's percentage ownership of Aerial Common Stock, determined in each
case immediately before the Aerial Merger.
(c) In the event that, at any time after the earlier to occur
of the Aerial Merger and the Distribution, TDS shall effect any transaction,
including (i) a combination of the Aerial Group Shares into a smaller number of
such Aerial Group Shares, (ii) a subdivision of the Aerial Group Shares into a
larger number of such Aerial Group Shares, or (iii) any reorganization or
reclassification of the Aerial Group Shares, or the sale of all or substantially
all of the assets of the Aerial Group to another corporation, in such a way that
the holders of Aerial Group Shares shall be entitled to receive (either directly
or upon subsequent liquidation) stock, securities or other property with respect
to or in exchange for such Aerial Group Shares (any such transaction or event
being referred to as a "TDS Adjustment Event"), then the Minimum Option Prices
shall be proportionately adjusted to reflect such TDS Adjustment Event.
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4.5 AOC Option. (a) If, at any time after the date of this
Agreement and prior to the tenth Anniversary, (i) Sonera shall have the right to
purchase any additional Aerial Shares pursuant to Section 9.1 hereof, and (ii)
the Three-Year Option or the Seven-Year Option, as the case may be, shall at
such time also be exercisable, then, in lieu of purchasing some or all of such
additional Aerial Shares pursuant to Section 9.1 hereof, Sonera shall have the
right to apply all or any portion of the purchase price otherwise required to
purchase Aerial Shares pursuant to Section 9.1 hereof, to the purchase of
additional AOC Shares (the "AOC Option") pursuant to this Section 4.5. The
number of additional AOC Shares ("AOC Option Shares") issuable pursuant to the
exercise of the AOC Option shall be equal to that number (or any lesser number
elected by Sonera) of AOC Shares that Sonera would at such time have the right
to purchase upon the exercise of the Three-Year Option or the Seven-Year Option,
as the case may be.
(b) The purchase price for the AOC Option Shares shall be an
amount equal to the product of (i) the product of (A) the number of AOC Shares
with respect to which such option is exercised, multiplied by (B) the Exchange
Rate, multiplied by (ii)(A) the Aerial Average referred to in Section 9.1(a)
hereof, or (B) the Aerial Group Average referred to in Section 9.1(b) hereof, as
the case may be. Except as otherwise provided in paragraph (d) below, the AOC
Option shall be exercisable no later than the time Sonera delivers the
applicable written notice referred to in Section 9.2 hereof. The purchase and
sale of the AOC Option Shares, if any, shall take place at the New Issue
Closing. At such closing, AOC shall deliver certificates to Sonera (or any
Permitted Affiliate Transferee designated by Sonera) representing the number of
AOC Shares to be purchased, against
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the payment of the purchase price therefor by wire transfer of immediately
available funds to an account designated by Aerial at least five Business Days
prior to the date of such closing.
(c) In the event that Sonera elects to exercise the AOC
Option, the number of Aerial Shares that Sonera shall have the right to purchase
pursuant to Section 9.1 hereof shall be reduced by the number of Aerial Shares
obtained by dividing (i) the aggregate amount payable by Sonera pursuant to
Section 4.5(b) hereof, by (ii) (A) the Aerial Average referred to in Section
9.1(a) hereof, or (B) the Aerial Group Average referred to in Section 9.1(b)
hereof, as the case may be.
(d) In the event that Sonera shall have purchased any Aerial
Shares pursuant to Section 9.1 of this Agreement at any time prior to the third
Anniversary then, notwithstanding Sections 4.5(b) and (c) above, Sonera shall
have the right, at any time prior to the third Anniversary, (i) to require
Aerial (or TDS, in the case of Aerial Group Shares) to redeem some or all of
such Aerial Shares, and (ii) simultaneously to reinvest all (but not less than
all) of the proceeds of such redemption in AOC Shares; provided, however, that
the number of additional AOC Shares issuable pursuant to this Section 4.5(d)
shall not exceed the number of AOC Shares that Sonera would at such time have
the right to purchase upon the exercise of the Three-Year Option. The per share
redemption price for any Aerial Shares to be redeemed by Aerial pursuant to this
Section 4.5(d) shall be equal to the Aerial Average for the 20 trading days
ending on the last trading day prior to the date of Sonera's notice to Aerial
requiring such redemption. The per share purchase price for any AOC Shares to be
issued to Sonera pursuant to this Section 4.5(d) shall be an amount equal to the
product
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of (A) the then applicable Exchange Rate multiplied by (B) the Aerial Average
referred to in the preceding sentence. The redemption of any Aerial Shares and
the simultaneous purchase and sale of the corresponding AOC Shares pursuant to
this Section 4.5(d) shall take place at the offices of Aerial on the twentieth
Business Day after Aerial's receipt of Sonera's notice exercising the right to
require such redemption and purchase, or at such other place or on such other
date as Aerial and Sonera may agree in writing. At such closing, Sonera shall
deliver certificates representing the securities to be redeemed, against the
payment of the purchase price therefor, and AOC shall deliver certificates
representing the securities to be purchased and sold to Sonera (or any Permitted
Affiliate Transferee designated by Sonera), against the payment of the purchase
price therefor.
4.6 Limitations. Notwithstanding the provisions of Sections
4.1 through 4.5 hereof, (a) the rights to purchase additional AOC Shares
provided therein shall not be available to Sonera to the extent that Sonera is
unable to subscribe for or own such additional AOC Shares as a result of its
inability to satisfy any applicable legal or regulatory requirement for such
subscription or ownership, and (b) except as otherwise permitted by Article 10
hereof, in no event shall the Sonera Holders have the right at any time to
purchase or own more than 20% of the aggregate number of outstanding AOC Shares.
4.7 Termination of Options. The right to purchase additional
AOC Shares pursuant to the Three-Year Option, the Seven-Year Option, or the AOC
Option shall terminate in the event that any Sonera Holder (a) fails to exercise
any subscription right that it may have pursuant to Section 4.1 hereof, (b)
issues a Derivative pursuant to Section 5.4 or Section 5.5 hereof, or (c)
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Transfers any AOC Shares (or any of the Aerial Shares for which such AOC Shares
may be exchanged) to a Third Party Transferee.
ARTICLE 5
TRANSFER OF AOC SHARES
5.1 Restriction on Transfer. (a) A Sonera Holder shall have
the unrestricted right to Transfer its AOC Shares to any Permitted Affiliate
Transferee; provided (i) the transferee of such AOC Shares agrees to be bound by
the terms and provisions of this Agreement applicable to the transferring Sonera
Holder, and (ii) all necessary approvals have been obtained from the FCC and any
other regulatory agency.
(b) Except as otherwise expressly provided for in this
Agreement, no Sonera Holder shall sell, assign or otherwise dispose of any of
its AOC Shares, directly or indirectly, by operation of law or otherwise (a
"Transfer"), and no attempted Transfer to any Person other than a Permitted
Affiliate Transferee (a "Third Party Transferee") shall be valid unless (i) such
Transfer complies with the provisions of this Article 5 and Section 10.5 hereof,
(ii) the Third Party Transferee agrees to be bound by the terms and provisions
of this Agreement applicable to the transferring Sonera Holder (including
Section 10.5 hereof), and (iii) all necessary approvals have been obtained from
the FCC and any other regulatory agency.
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(c) Prior to the fifth Anniversary, and except as otherwise
provided in Section 5.5 hereof, no Sonera Holder shall Transfer any AOC Shares
to any Person other than a Permitted Affiliate Transferee without the prior
written consent of TDS and Aerial, which consent may be withheld by either TDS
or Aerial in its sole discretion.
5.2 Right of First Negotiation. (a) After the fifth
Anniversary, a Sonera Holder desiring to Transfer any AOC Shares to a Third
Party Transferee without the prior written consent of TDS and Aerial shall first
give written notice to Aerial of its desire to effect such a Transfer, which
notice shall set forth the number of AOC Shares that the transferring Sonera
Holder desires to Transfer and refer to this Section 5.2 (a "Sonera Transfer
Notice"). Aerial shall have a period of ten Business Days from its receipt of
the Sonera Transfer Notice within which to give such transferring Sonera Holder
a written notice that Aerial desires to invoke the provisions of Section 5.2(b)
hereof, (the "Sonera Negotiation Notice"). If Aerial fails to timely give a
Sonera Negotiation Notice or comply with any of the provisions of Section 5.2(b)
hereof, then the transferring Sonera Holder may Transfer such AOC Shares to such
Third Party Transferee, provided such Third Party Transferee is not a
Competitor, and may assign certain of its rights under this Agreement to such
Third Party Transferee in accordance with Section 5.3 hereof.
(b) If Aerial timely gives a Sonera Negotiation Notice to the
transferring Sonera Holder pursuant to Section 5.2(a) hereof, then Aerial shall
have the exclusive right to negotiate with such transferring Sonera Holder
regarding the possible acquisition by Aerial of such AOC Shares for a period
(the "Sonera Negotiation Period") beginning on the date of the receipt by the
transferring
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Sonera Holder of the Sonera Negotiation Notice and ending on the earlier to
occur of (i) the date upon which the transferring Sonera Holder and Aerial reach
agreement on the terms of a Transfer of such AOC Shares to Aerial, (ii) the date
upon which the transferring Sonera Holder and Aerial agree that no such
agreement can be reached, or (iii) 60 days after the commencement of the Sonera
Negotiation Period. During the Sonera Negotiation Period, the transferring
Sonera Holder and Aerial shall negotiate in good faith to reach agreement on the
terms of a Transfer of such AOC Shares from the transferring Sonera Holder to
Aerial. If the parties reach such agreement during the Sonera Negotiation
Period, then the parties shall promptly prepare and file all necessary
applications with the FCC and any other applicable regulatory agencies and the
closing of the Transfer of such AOC Shares shall occur within 30 days after the
receipt of all necessary FCC and other regulatory approvals. In the event that
the parties do not reach such agreement during the Sonera Negotiation Period,
then Aerial shall give to the transferring Sonera Holder a written notice of
Aerial's final bid to acquire such AOC Shares (in whatever form Aerial desires)
on or before the last day of the Sonera Negotiation Period, which final bid the
transferring Sonera Holder shall have the right to accept (A) for a period of 30
days after its receipt thereof, during which 30-day period such final bid shall
be irrevocable, and (B) for a period of an additional 60 days thereafter, during
which additional 60-day period such final bid shall be revocable by Aerial at
any time prior to Aerial's receipt of the transferring Sonera Holder's
acceptance of such final bid.
(c) In the event that the transferring Sonera Holder neither
reaches agreement with Aerial to Transfer such AOC Shares to Aerial nor accepts
Aerial's final bid pursuant to Section 5.2(b) hereof, then the transferring
Sonera Holder shall be permitted to Transfer such AOC Shares
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to a Third Party Transferee that is not a Competitor; provided, however, that in
no event shall the transferring Sonera Holder Transfer, or enter into an
agreement to Transfer, such AOC Shares to a Third Party Transferee unless (i)
the transferring Sonera Holder has negotiated in good faith during the Sonera
Negotiation Period to effect a Transfer of such AOC Shares to Aerial pursuant to
Section 5.2(b) hereof, and (ii) the transferring Sonera Holder enters into a
binding agreement within 180 days after the termination of such Sonera
Negotiation Period to Transfer such AOC Shares to a Third Party Transferee at a
price higher than the price offered to the transferring Sonera Holder by Aerial
in its final bid.
(d) For purposes of this Section 5.2, if the price in a
binding agreement to consummate a Transfer, or in Aerial's final bid, is to be
paid in something other than money in a lump sum at the closing, then the
transferring Sonera Holder and Aerial shall use their best efforts to reach
agreement as to an equivalent in monetary terms, which shall constitute the
price for the purposes of Section 5.2(c)(ii). If such an agreement cannot be
reached within 15 days after the transferring Sonera Holder (in the case of a
final bid) or Aerial (in the case of a binding agreement to consummate a
Transfer) receives written notice of the price offered, such equivalent shall be
determined by an appraiser, agreed upon within ten days after the end of such
15-day period (and paid equally) by the transferring Sonera Holder and Aerial
or, if they cannot agree upon an appraiser, by three appraisers, one of whom
shall be chosen within 20 days after the end of such 15-day period by the
transferring Sonera Holder (and paid by the transferring Sonera Holder), one of
whom shall be chosen within the same period (and paid) by Aerial, and the third
of whom shall be chosen by the first two so chosen within an additional ten days
and paid equally by the transferring Sonera Holder
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and Aerial. The decision of the agreed-upon appraiser or, as the case may be, a
majority of the three appraisers, shall be made within 45 days after he or they,
as the case may be, are chosen and shall be final and binding upon the
transferring Sonera Holder and Aerial. All time periods specified in Section
5.2(a) through (c) shall be extended by the length of time necessary for such
appraiser(s) to be chosen and for such appraisal to be made (if it becomes
necessary).
5.3 Assignment of Rights. In the event that a Sonera Holder
has obtained the consent of TDS and Aerial under Section 5.1(c) hereof or
complied with Section 5.2 hereof and effects a Transfer of AOC Shares in
compliance with Section 5.1(b)(or pursuant to Section 10.7) hereof to a Third
Party Transferee:
(a) the Three-Year Option, the Seven-Year Option, the AOC
Option, the Equity Purchase Election, the right to purchase Aerial Shares
pursuant to Article 9 hereof, Sonera's right of first negotiation under Section
10.1 hereof and the right to issue a Derivative pursuant to Section 5.4 hereof
shall terminate and shall not be assignable to any Third Party Transferee;
(b) the right of Sonera to designate one or two directors of
Aerial pursuant to Section 2.2 hereof may be assigned to any Third Party
Transferee who acquires at least 964,193 or 1,928,386 AOC Shares (appropriately
adjusted to reflect any stock dividend, subdivision or combination affecting AOC
Shares), respectively;
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(c) the Equity Exchange Election provided for in Article 7
hereof may be assigned to any Third Party Transferee who acquires at least
964,193 AOC Shares (appropriately adjusted to reflect any stock dividend,
subdivision or combination affecting AOC Shares); provided, however, that no
such Third Party Transferee shall exercise such election after the twelfth
Anniversary;
(d) Aerial agrees that it will enter into an agreement with a
Third Party Transferee who acquires at least 964,193 AOC Shares (appropriately
adjusted to reflect any stock dividend, subdivision or combination affecting AOC
Shares) to provide such transferee with registration rights substantially
identical to those provided to Sonera and its Affiliates under the Registration
Rights Agreement; and
(e) all of the AOC Shares transferred to any Third Party
Transferee will remain subject to the provisions of Section 10.5 hereof.
5.4 Issuance of Derivative. (a) At any time after the fifth Anniversary
and prior to the tenth Anniversary, each Sonera Holder shall have the right,
upon 90 days' written notice to Aerial, to issue a security which becomes
exchangeable, after the tenth Anniversary, for AOC Shares owned by such Sonera
Holder (a "Derivative"), and to assign to the purchaser of such Derivative the
right to exercise the Equity Purchase Election at any time after the tenth
Anniversary. Any Derivative issued by a Sonera Holder pursuant to this Section
5.4(a) shall be issued expressly subject to the provisions of Sections 5.4(b)
and (c), 8(d) and 10.5 hereof.
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(b) In the event that a Sonera Holder issues a Derivative,
(including a Derivative issued pursuant to Section 5.5(a) hereof) such Sonera
Holder's rights to exchange the AOC Shares with respect to which such Derivative
is issued for Aerial Shares, pursuant to the provisions of Article 7 of this
Agreement, shall terminate and, at any time after the tenth Anniversary, Aerial
shall have the right, upon written notice to Sonera, to repurchase all but not
less than all of the AOC Shares represented by such Derivative (the "Derivative
Take-Out Election").
(c) In the event Aerial makes the Derivative Take-Out
Election, each AOC Share subject to such Derivative shall be exchanged for, at
Aerial's option, (i) that number of Aerial Shares equal to the product obtained
by multiplying the number of AOC Shares to be so purchased by the Exchange Rate
provided for in Section 7.2 hereof, (ii) that number of TDS Shares determined by
dividing the TDS Average for the 20 trading days ending on the last trading day
prior to the date of Aerial's notice exercising the Derivative Take-Out
Election, into the product obtained by multiplying the number of Aerial Shares
referred to in clause (i) above by the Aerial Average during the 20-day period
referred to in this clause (ii), (iii) cash in an amount equal to the product
obtained by multiplying the number of Aerial Shares referred to in clause (i)
above by the Aerial Average during the 20-day period referred to in clause (ii)
above, or (iv) any combination of Aerial Shares, TDS Shares or cash having the
same aggregate value (the "Derivative Take-Out Consideration"), using the TDS
Average referred to in clause (ii) above, and the Aerial Average referred to in
clause (iii) above, to determine the value of any TDS Shares or Aerial Shares
delivered in such exchange. Aerial agrees to deliver or cause the Derivative
Take-Out Consideration to be delivered, on or before the twentieth Business Day
after Aerial's exercise of the Derivative Take-Out Election, to or upon
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the written order of the Sonera Holder that issued the Derivative, with any
Aerial Shares or TDS Shares to be so delivered to be issued in such name or
names as such Sonera Holder may direct.
(d) The right to issue a Derivative pursuant to this Section
5.4 shall terminate in the event that the Aggregate Converted Percentage falls
below 5.3%.
5.5 Transfers Prior to Fifth Anniversary. (a) In the event
that (i) prior to the third Anniversary, Sonera Corporation U.S. has delivered
at least one Project Notice (including a Proposed Business Plan) to AOC pursuant
to Section 3.01(b) of the Joint Venture Agreement, (ii) the Investment Election
Period provided for in Section 3.01(b) of the Joint Venture Agreement has
expired with respect to all such notices, and (iii) AOC and Sonera Corporation
U.S. have not formed or agreed to form any LLC (as defined in Section 2.02 of
the Joint Venture Agreement), then, notwithstanding Sections 5.1(c) and 5.4(a)
hereof, (A) each Sonera Holder shall have the right, upon 90 days' written
notice to Aerial, to issue a Derivative (and to assign such Sonera Holder's
right to exercise the Equity Purchase Election after the tenth Anniversary),
provided that any Derivative issued by a Sonera Holder pursuant to this Section
5.5(a) shall be expressly subject to the provisions of Sections 5.4(b) and (c),
8(d) and 10.5 hereof, and (B) the Sonera Holders, jointly and not severally,
shall have the right, exercisable at any time prior to the fifth Anniversary by
giving written notice to Aerial, to Transfer all of the AOC Shares owned by them
to any one (and not more than one) Third Party Transferee, other than a
Competitor, without the consent of TDS or Aerial; provided, however, that no
such Transfer shall be made unless the transferring Sonera Holders first
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deliver a Transfer Notice to Aerial and afford Aerial the opportunity to
negotiate an acquisition of all (and not less than all) such AOC Shares in the
manner provided in Section 5.2 hereof.
(b) In the event that the Sonera Holders, jointly, have
complied with Section 5.2 hereof and effect a Transfer of AOC Shares (in
compliance with Section 5.1(b)) to a Third Party Transferee pursuant to Section
5.5(a) hereof:
(i) the transferring Sonera Holders shall have
the right to assign all of their rights under this Agreement to any Third Party
Transferee;
(ii) Aerial agrees that it will enter into an
agreement with a Third Party Transferee who acquires at least 964,193 AOC Shares
to provide such transferee with registration rights substantially identical to
those provided to Sonera and its Affiliates under the Registration Rights
Agreement; and
(iii) all of the AOC Shares transferred to any Third
Party Transferee will remain subject to the provisions of Section 10.5 hereof.
ARTICLE 6
RESTRICTION ON LIENS
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No Sonera Holder shall effect any pledge, mortgage, assignment
by way of security, or other lien or encumbrance of any nature ("Lien"), other
than such as may be deemed to arise pursuant to this Agreement, on or with
respect to any of the AOC Shares held by it; provided, however, that any such
holder shall be permitted, when required under instruments governing its
indebtedness for borrowed money, to place Liens on AOC Shares owned by it to
secure such indebtedness if such Liens or any rights of the secured party
thereunder with respect to the AOC Shares are subject to the rights and
obligations of the holder of such AOC Shares under this Agreement and neither
such secured party nor any Affiliate thereof is a Competitor; and provided,
further, that upon any foreclosure or enforcement of remedies by such secured
party upon the AOC Shares subject to such Lien, such secured party shall be
deemed to be a Sonera Holder entitled to exercise the rights provided to Sonera
Holders under Section 5.4 and Articles 7 and 8 hereof or any other rights
provided Sonera Holders (including such secured party) under this Agreement
shall terminate.
ARTICLE 7
EQUITY EXCHANGE ELECTION
7.1 Exchange of AOC Shares for Aerial Shares. Aerial agrees
that each Sonera Holder shall have the right, at the option of such Sonera
Holder, at any time after (a) the close of business on the tenth Anniversary, or
(b) any TDS Change in Control occurring prior to the tenth Anniversary, and
except in either case as otherwise provided herein, to exchange one or more AOC
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Shares for Aerial Shares (except as otherwise provided in Section 7.8 hereof) on
and subject to the terms and conditions hereinafter set forth (the "Equity
Exchange Election").
7.2 Exchange Rate. Subject to the provisions for adjustment
set forth in this Article 7, each AOC Share shall be exchangeable for 6.72919
fully paid and non-assessable Aerial Common Shares, calculated as to each
exchange to the nearest whole share (such exchange rate, as adjusted from time
to time pursuant to Section 7.3(a) hereof, being hereinafter called the
"Exchange Rate Applicable to Aerial Common Shares").
7.3 Adjustment of Exchange Rate. (a) Prior to Aerial
Merger or Distribution. Prior to the earlier to occur of the Aerial Merger or
the Distribution, the Exchange Rate Applicable to Aerial Common Shares shall be
adjusted from time to time as follows:
(i) In the event that Aerial shall (A) pay a
dividend on the outstanding Aerial Common Shares in the form of Aerial Common
Shares, (B) subdivide the outstanding Aerial Common Shares into a greater number
of shares, or (C) combine the outstanding Aerial Common Shares into a smaller
number of shares, the Exchange Rate Applicable to Aerial Common Shares in effect
immediately prior thereto shall be adjusted so that the holder of any AOC Share
thereafter surrendered for exchange shall be entitled to receive the number of
Aerial Common Shares which such holder would have owned or been entitled to
receive after the happening of any such event had such AOC Share been exchanged
immediately prior to the happening of such event. Any adjustment pursuant to
this Section 7.3(a)(i) shall become effective retroactively immediately after
the record
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date in the case of any dividend and shall become effective immediately after
the effective date in the case of any subdivision or combination.
(ii) In the event that Aerial shall issue to all holders of the outs-
tanding Aerial Common Shares any rights or warrants entitling them (for a period
expiring within 45 days after the record date specified below) to subscribe
for or purchase Aerial Common Shares at a price per share less than the Aerial
Average for the 20 consecutive trading day period ending on the third trading
date prior to the record date for the determination of shareholders entitled to
receive such rights or warrants, the Exchange Rate Applicable to Aerial Common
Shares shall be adjusted so that it shall equal the rate determined as follows:
the Exchange Rate Applicable to Aerial Common Shares in effect immediately prior
to such record date shall be multiplied by a fraction, the numerator of which
shall be (A) the sum of the number of shares of Aerial Common Stock outstanding
on such record date plus the number of additional Aerial Common Shares offered
for subscription or purchase, and the denominator of which shall be (B) the sum
of the number of shares of Aerial Common Stock outstanding on such record date
plus the quotient obtained by dividing the aggregate offering price for the
total number of Aerial Common Shares so offered for subscription or purchase
(before deduction of commissions, concessions or discounts paid or allowed or
expenses incurred) by such Aerial Average. Such adjustment shall be made
successively whenever any such rights or warrants are issued and shall become
effective retroactively immediately after such record date. In determining
whether any rights or warrants entitle the holders to subscribe for or purchase
Aerial Common Shares at less than the Aerial Average, and in determining the
aggregate offering price of Aerial Common Shares, there shall be taken into
account any consideration received by Aerial for
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such rights or warrants, the value of such consideration, if other than cash, to
be reasonably determined by its Board of Directors. In the event that all of the
Aerial Common Shares offered for subscription or purchase are not subscribed for
and purchased pursuant to the rights or warrants referred to in the first
sentence of this Section 7.3(a)(ii), the Exchange Rate Applicable to Aerial
Common Shares shall be retroactively adjusted, as of the record date referred to
in the first sentence of this Section 7.3(a)(ii), to reflect that fact, and any
exchanges occurring after such record date and prior to such retroactive
adjustment shall be adjusted accordingly.
(iii) In the event that Aerial shall distribute to all holders of the outstand-
ing Aerial Common Shares any shares of its stock of any class (other than Aerial
Common Shares), any securities, evidences of indebtedness or rights or warrants
of Aerial or any subsidiary thereof (other than rights or warrants referred to
in Section 7.3(a)(ii) hereof), or any other assets (other than cash dividends
payable out of earnings or surplus legally available therefor under the laws of
the jurisdiction of incorporation of Aerial), the Exchange Rate Applicable to
Aerial Common Shares shall be adjusted so that it shall equal the rate
determined as follows: the Exchange Rate Applicable to Aerial Common Shares in
effect immediately prior to the record date for the determination of
shareholders entitled to receive such distribution shall be multiplied by a
fraction, the numerator of which shall be the Aerial Average for the 20
consecutive trading day period ending on the third trading day prior to such
record date and the denominator of which shall be such Aerial Average minus the
fair value (as reasonably determined by the Board of Directors of Aerial, which
determination shall be conclusive) of such distribution with respect to each
Aerial Common Share
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outstanding immediately prior to such record date. Such adjustment shall become
effective immediately after such record date.
(iv) In the event of any capital reorganization
of Aerial, any reclassification of Aerial Common Shares or any merger or
consolidation of Aerial with or into any other corporation (other than a merger
in which Aerial shall be the surviving corporation and which shall not result in
any reclassification of the outstanding Aerial Common Shares), provision shall
be made as part of the terms of such capital reorganization, reclassification,
merger or consolidation whereby each AOC Share outstanding after such capital
reorganization, reclassification, merger or consolidation shall be exchangeable
for the kind and amount of shares of stock or other securities or property to
which the Aerial Common Shares issuable (at the time of such capital
reorganization, reclassification, merger or consolidation) upon exchange of such
AOC Share would have been entitled upon such capital reorganization,
reclassification, merger or consolidation and shall have the benefit of
adjustments thereafter which shall be as nearly equivalent as practicable to the
adjustments provided for in this Section 7.3(a). Neither the subdivision or
combination of the outstanding Aerial Common Shares into a greater or lesser
number of Aerial Common Shares, nor the change in the par value of the Aerial
Common Shares, or from par value to no par value, or from no par value to par
value, shall be deemed to be a reclassification of the Aerial Common Shares for
the purposes of this Section 7.3(a)(iv). The provisions of this Section
7.3(a)(iv) shall similarly apply to successive capital reorganizations,
reclassifications, mergers or consolidations.
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(b) Effect of Aerial Merger or Distribution. (i) In the event that the
Aerial Merger shall occur at any time after the date of this Agreement and prior
to the Distribution, then in lieu of any adjustment otherwise required by
Section 7.3(a) hereof, the Exchange Rate Applicable to Aerial Common Shares in
effect immediately prior to the date of such Merger shall be adjusted (to
determine the Exchange Rate Applicable to Aerial Group Shares, as hereinafter
defined) by multiplying such exchange rate by a fraction, the numerator of which
shall be the Number of Aerial Group Shares, determined immediately after the
Aerial Merger, and the denominator of which shall be the total number of shares
of Aerial Common Stock outstanding immediately prior to the Aerial Merger.
(ii) In the event that the Distribution shall
occur at any time after the date of this Agreement and prior to the Aerial
Merger, then in lieu of any adjustment otherwise required by Section 7.3(a)
hereof:
(A) the Exchange Rate Applicable to Aerial
Common Shares in effect immediately prior to the date of such Distribution shall
be adjusted (to determine the Exchange Rate Applicable to Aerial Group Shares,
as hereinafter defined) by multiplying such exchange rate by a fraction, the
numerator of which shall be the quotient obtained by dividing the Number of
Aerial Group Shares by TDS's percentage ownership of Aerial Common Stock, in
each case determined immediately after the Distribution, and the denominator of
which shall be the total number of shares of Aerial Common Stock outstanding
immediately prior to such Distribution; and
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(B) in the event that the Aerial Merger shall
thereafter occur, the Exchange Rate applicable to Aerial Group Shares in effect
immediately prior to the date of such merger shall be adjusted so that,
immediately after such merger, the quotient obtained by dividing (I) the product
of the aggregate number of AOC Shares owned by Sonera and its Permitted
Affiliate Transferees (determined immediately after such merger) multiplied by
such exchange rate, as adjusted pursuant to this Section 7.3(b)(ii)(B), by (II)
the sum of (1) the Number of Aerial Group Shares, determined immediately after
such merger, and (2) the product referred to in (I) above, shall be equal to the
quotient obtained by dividing (x) the product of the aggregate number of AOC
Shares owned by Sonera and its Permitted Affiliate Transferees, multiplied by
the exchange Rate Applicable to Aerial Group Shares, in each case determined
immediately before such merger, by (y) the sum of (1) the quotient obtained by
dividing the Number of Aerial Group Shares by TDS's percentage ownership of
Aerial Common Stock (determined immediately before such merger), and (2) the
product referred to in (x) above.
(iii) The Exchange Rate Applicable to Aerial Common
Shares, as adjusted pursuant to Section 7.3(b)(i) or (ii) hereof, as applicable,
and as further adjusted from time to time pursuant to Section 7.3(c) hereof, is
hereinafter called the "Exchange Rate Applicable to Aerial Group Shares".
(iv) In the event that the Equity Exchange Election
is exercised at any time after the earlier of (A) the date of the Aerial Merger,
or (B) the date of the Distribution, each AOC Share shall be exchanged for
that number of fully paid and non-assessable Aerial Group Shares,
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equal to the Exchange Rate Applicable to Aerial Group Shares, calculated as to
each exchange of shares to the nearest Aerial Group Share.
(c) After Aerial Merger or Distribution. After the earlier to
occur of the Aerial Merger or the Distribution, the Exchange Rate Applicable to
Aerial Group Shares shall be adjusted from time to time as follows:
(i) In the event that TDS shall (A) pay a
dividend with respect to Aerial Group Shares in the form of Aerial Group Shares,
(B) subdivide the Aerial Group Shares into a greater number of shares, or (C)
combine the Aerial Group Shares into a smaller number of shares, the Exchange
Rate Applicable to Aerial Group Shares in effect immediately prior thereto shall
be adjusted so that the holder of any AOC Share thereafter surrendered for
exchange shall be entitled to receive the number of Aerial Group Shares which
such holder would have owned or been entitled to receive after the happening of
any such event had such AOC Share been exchanged immediately prior to the
happening of such event. Any adjustment pursuant to this Section 7.3(c)(i) shall
become effective retroactively immediately after the record date in the case of
any dividend and shall become effective immediately after the effective date in
the case of any subdivision or combination.
(ii) In the event that TDS shall issue to all holders
of the Aerial Group Shares any rights or warrants entitling them (for a period
expiring within 45 days after the record date specified below) to subscribe
for or purchase Aerial Group Shares at a price per share less than the Aerial
Average for the 20 consecutive trading day period ending on the third trading
date prior to
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the record date for the determination of shareholders entitled to receive such
rights or warrants, the Exchange Rate Applicable to Aerial Group Shares shall be
adjusted so that it shall equal the rate determined as follows: the Exchange
Rate Applicable to Aerial Group Shares in effect immediately prior to such
record date shall be multiplied by a fraction, the numerator of which shall be
(A) the sum of the Number of Aerial Group Shares on such record date plus the
number of additional Aerial Group Shares offered for subscription or purchase
(including any Aerial Group Shares issued to increase the "Retained Interest" or
any "Inter-Group Interest" (as those terms are defined in the Restated
Certificate)), and the denominator of which shall be (B) the sum of the Number
of Aerial Group Shares on such record date plus the quotient obtained by
dividing the aggregate offering price for the total number of Aerial Group
Shares (including any Aerial Group Shares issued to increase the "Retained
Interest" or any "Inter-Group Interest" (as those terms are defined in the
Restated Certificate)) so offered for subscription or purchase (before deduction
of commissions, concessions or discounts paid or allowed or expenses incurred)
by such Aerial Average. Such adjustment shall be made successively whenever any
such rights or warrants are issued and shall become effective retroactively
immediately after such record date. In determining whether any rights or
warrants entitle the holders to subscribe for or purchase Aerial Group Shares at
less than the Aerial Average, and in determining the aggregate offering price of
Aerial Group Shares, there shall be taken into account any consideration
received by TDS for such rights or warrants, the value of such consideration, if
other than cash, to be reasonably determined by its Board of Directors. In the
event that all of the Aerial Group Shares offered for subscription or purchase
(including any Aerial Group Shares issued to increase the "Retained Interest" or
any "Inter-Group Interest" (as those terms are defined in the Restated
Certificate)) are not subscribed for and purchased pursuant to the rights or
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warrants referred to in the first sentence of this Section 7.3(c)(ii), the
Exchange Rate Applicable to Aerial Group Shares shall be retroactively adjusted,
as of the record date referred to in the first sentence of this Section
7.3(c)(ii), to reflect that fact, and any exchanges occurring after such record
date and prior to such retroactive adjustment shall be adjusted accordingly.
(iii) In the event that TDS shall make a distribution
with respect to the Number of Aerial Group Shares of any shares of its stock of
any class (other than Aerial Group Shares), any securities, evidences of
indebtedness or rights or warrants of TDS or any subsidiary thereof (other than
rights or warrants referred to in Section 7.3(c)(ii) hereof), or any other
assets (other than cash dividends payable out of earnings or surplus legally
available therefor under the laws of the jurisdiction of incorporation of TDS),
the Exchange Rate Applicable to Aerial Group Shares shall be adjusted so that it
shall equal the rate determined as follows: the Exchange Rate Applicable to
Aerial Group Shares in effect immediately prior to the record date for the
determination of shareholders entitled to receive such distribution shall be
multiplied by a fraction, the numerator of which shall be the Aerial Average for
the 20 consecutive trading day period ending on the third trading day prior to
such record date and the denominator of which shall be such Aerial Average minus
the fair value (as reasonably determined by the Board of Directors of TDS, which
determination shall be conclusive) of such distribution with respect to each
Aerial Group Share (including any "Aerial Group Shares Issuable with Respect to
Retained Interest" and "Aerial Group Shares Issuable with Respect to Inter-Group
Interest", as those terms are defined in the Restated Certificate). Such
adjustment shall become effective immediately after such record date.
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(iv) In the event of any capital reorganization of
TDS, any reclassification of Aerial Group Shares or any merger or consolidation
of TDS with or into any other corporation (other than a merger in which TDS
shall be the surviving corporation and which shall not result in any
reclassification of the outstanding Aerial Group Shares), provision shall be
made as part of the terms of such capital reorganization, reclassification,
merger or consolidation whereby each AOC Share outstanding after such capital
reorganization, reclassification, merger or consolidation shall be exchangeable
for the kind and amount of shares of stock or other securities or property to
which the Aerial Group Shares issuable (at the time of such capital
reorganization, reclassification, merger or consolidation) upon exchange of such
AOC Share would have been entitled upon such capital reorganization,
reclassification, merger or consolidation and shall have the benefit of
adjustments thereafter which shall be as nearly equivalent as practicable to the
adjustments provided for in Section 7.3(c) hereof. Neither the subdivision or
combination of the outstanding Aerial Group Shares into a greater or lesser
number of Aerial Group Shares, nor the change in the par value of the Aerial
Group Shares, or from par value to no par value, or from no par value to par
value, shall be deemed to be a reclassification of the Aerial Group Shares for
the purposes of this Section 7.3(c)(iv). The provisions of this Section
7.3(c)(iv) shall similarly apply to successive capital reorganizations,
reclassifications, mergers or consolidations.
7.4 Surrender of AOC Certificates. Each exchange of AOC Shares
for Aerial Shares shall be effected by surrendering to Aerial during regular
business hours at its principal executive office one or more certificates
representing AOC Shares, accompanied by a written notice executed by the
surrendering holder specifying the number of AOC Shares represented by each
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certificate to be exchanged and the name and address of the Person in whose name
each certificate for Aerial Shares is to be issued and, if so required by
Aerial, accompanied by an instrument of transfer, in form satisfactory to
Aerial, duly executed by such holder or his duly authorized representative and
payment of any applicable transfer taxes. Subject to the provisions of Section
7.8 hereof, each such exchange shall be deemed to have been effected on the date
(the "Exchange Date") on which the requirements of the immediately preceding
sentence shall have been satisfied, and the person in whose name each
certificate for Aerial Shares shall be issuable on such exchange shall be deemed
to have become on the Exchange Date the holder of record of the Aerial Shares to
be represented thereby.
7.5 Issuance of Aerial Certificates. As promptly as
practicable and in no event more than 30 days after the surrender for exchange,
as provided in Section 7.4 hereof, of any certificate representing AOC Shares,
Aerial (or TDS, if applicable) shall deliver at such office, to or upon the
written order of the holder thereof, a certificate or certificates for the
number of full Aerial Shares issuable upon such exchange. No fractional Aerial
Share, or scrip representing a fractional Aerial Share, shall be issued upon
such exchange, but in lieu thereof, Aerial (or TDS, if applicable) shall pay in
cash the fair value thereof as of the Exchange Date, based upon the Aerial
Average (or the Aerial Group Average, if applicable) for the 20 consecutive
trading day period ending on the third trading day prior to the Exchange Date.
If more than one certificate representing AOC Shares shall be surrendered for
exchange, the number of full Aerial Shares which shall be issuable upon such
exchange shall be determined on the basis of the aggregate number of AOC Shares
being exchanged. In case any certificate for AOC Shares shall be surrendered for
exchange
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of only a part of the shares represented thereby, AOC shall deliver at such
office, to or upon the written order of the holder thereof, a certificate or
certificates for the number of AOC Shares not being exchanged. No charge shall
be made upon the exchange of AOC Shares for Aerial Shares. Neither Aerial nor
TDS shall be required to pay any tax which may be payable because of the
delivery of any certificate in a name other than that of the registered holder
of the AOC Shares being exchanged, and none of Aerial, TDS or AOC shall be
required to deliver any such certificate unless and until the amount of such tax
and the payment thereof shall have been established to the satisfaction of the
issuer of such certificate.
7.6 Dividends. No payment or adjustment shall be made on
account of any cash dividends paid or payable on Aerial Shares, except cash
dividends which shall be payable to holders of Aerial Shares of record on or
after the applicable Exchange Date.
7.7 Redemption of AOC Shares. In the case of AOC Shares called
for redemption in accordance with AOC's Certificate of Incorporation, as
amended, the right to exchange such shares as provided in this Article 7 shall
terminate at the close of business on the date fixed for redemption of such
shares (defined as the "Redemption Date" in such Certificate of Incorporation),
unless payment of the redemption price of such shares shall not be duly paid in
accordance with such Certificate of Incorporation.
7.8 Application. (a) In any case in which Section
7.3(a) or 7.3(c) provides that an adjustment shall become effective
retroactively immediately after a record date for an event,
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Aerial or TDS, as the case may be, may defer until the occurrence of such event
(i) delivering to the holder of any AOC Share exchanged after such record date
and before the occurrence of such event the additional Aerial Shares deliverable
upon such exchange by reason of the adjustment required by such event over and
above the Aerial Shares issuable upon such exchange before giving effect to such
adjustment, and (ii) paying to such holder any amount in cash in lieu of any
fraction pursuant to Section 7.5 hereof.
(b) No adjustment in the Exchange Rate shall be made by reason
of any conversion of Series A Common Shares of Aerial into Aerial Common Shares.
(c) Each adjustment in the Exchange Rate shall be made to the
fifth decimal place and all calculations under this Article 7 shall be made as
to each exchange to the nearest whole share.
7.9 Notice of Adjustment. Whenever the Exchange Rate shall be
adjusted as provided in Section 7.3 hereof by at least one-tenth (1/10th) of a
share, Aerial or TDS, as the case may be, shall promptly prepare a notice
setting forth the Exchange Rate after such adjustment, a brief statement of the
facts requiring such adjustment and the effective date of such adjustment, and
shall cause the same to be mailed promptly to the holders of record of AOC
Shares (other than Aerial) at their addresses as shown on the books of AOC.
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7.10 Ownership of Surrendered AOC Shares. All AOC Shares which
shall have been surrendered for exchange as provided in this Article 7 shall
thereafter be deemed for all purposes to be owned by Aerial or TDS, as the case
may be.
7.11 Termination. The Equity Exchange Election shall terminate
(a) with respect to any AOC Shares transferred to a Third Party Transferee that
acquires less than 964,193 AOC Shares (appropriately adjusted to reflect any
stock dividend subdivision or combination affecting AOC Shares), upon such
Transfer, (b) with respect to any AOC Shares transferred to a Third Party
Transferee that acquires at least 964,193 AOC Shares (appropriately adjusted to
reflect any stock dividend subdivision or combination affecting AOC Shares),
upon the twelfth Anniversary, and (c) with respect to all other AOC Shares, upon
the twentieth Anniversary.
ARTICLE 8
EQUITY PURCHASE ELECTION
(a) At any time (i) after the ninth Anniversary, or (ii)
during the 40 Business Days after its receipt of notice from TDS that (A) a TDS
Change in Control has occurred, (B) the shareholders of TDS have approved a
going private transaction, as a result of which TDS will no longer have any
equity securities trading on a national securities exchange or authorized for
quotation on the NASDAQ, or (C) Aerial has authorized the sale of all or
substantially all of the assets of AOC and its Subsidiaries, Sonera shall have
the right, upon 30 days' written notice to
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Aerial, to require Aerial to purchase all but not less than all of the AOC
Shares owned by all of the Sonera Holders (the "Equity Purchase Election").
(b) In the event Sonera makes the Equity Purchase Election,
each AOC Share shall be exchanged for, at Aerial's option, (i) that number of
Aerial Shares equal to the product obtained by multiplying the number of AOC
Shares to be so purchased by the Exchange Rate, (ii) that number of TDS Shares
determined by dividing the TDS Average for the 20 trading days ending on the
last trading day prior to its receipt of Sonera's notice making the Equity
Purchase Election, into the product obtained by multiplying the number of Aerial
Shares referred to in clause (i) above by the Aerial Average during the 20-day
period referred to in this clause (ii), (iii) cash in an amount equal to the
product obtained by multiplying the number of Aerial Shares referred to in
clause (i) above by the Aerial Average during the 20-day period referred to in
clause (ii) above, or (iv) any combination of Aerial Shares, TDS Shares or cash
having the same aggregate value (the "Purchase Consideration"), using the TDS
Average referred to in clause (ii) above, and the Aerial Average (or the Aerial
Group Average, if applicable) referred to in clause (iii) above, to determine
the value of any TDS Shares or Aerial Shares delivered in connection with such
exchange. On or before the fortieth Business Day after its receipt of Sonera's
notice making the Equity Purchase Election, Aerial agrees to deliver or cause
the Purchase Consideration to be delivered to or upon the written order of
Sonera, with any Aerial Shares or TDS Shares to be so delivered to be issued in
such name or names as Sonera may direct. Notwithstanding the foregoing
provisions of this paragraph (b), Aerial's right to deliver TDS Shares other
than Aerial Group Shares in lieu of Aerial Shares shall terminate upon the
earlier to occur of the Aerial Merger or the Distribution.
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(c) At any time during the 30 calendar days following each of
the fifth, sixth, seventh and eighth Anniversaries, Sonera shall have the right,
upon written notice to Aerial, to make the Equity Purchase Election with respect
to one-fifth of the aggregate number of Purchased Shares (the "Minimum Number of
AOC Shares"). Such right shall be cumulative, provided that such right may not
be exercised at any time to require Aerial to purchase fewer than the Minimum
Number of AOC Shares.
(d) Notwithstanding any provision of this Agreement to the
contrary, if (i) Sonera and its Permitted Affiliate Transferees own in the
aggregate less than 5% of the outstanding AOC Shares at any time, and (ii) any
Sonera Holder has (A) failed to exercise in full any subscription right that it
may have pursuant to Section 4.1 hereof, (B) issued a Derivative pursuant to
Section 5.4 or 5.5 hereof, or (C) Transferred any AOC Shares (or any of the
Aerial Shares for which such AOC Shares may be exchanged), then Aerial shall
have the right, by giving written notice to Sonera, to require Sonera and each
of its Permitted Affiliate Transferees to exercise the Equity Purchase Election
and they shall promptly exercise, and in the absence thereof shall be deemed to
have exercised, the Equity Purchase Election on the thirtieth day after the date
of Aerial's written notice to Sonera.
ARTICLE 9
RIGHTS TO PURCHASE
AERIAL SHARES
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9.1 Right to Purchase. (a) Aerial Common Shares. If, at any
time after the date of this Agreement and prior to the tenth Anniversary, Aerial
proposes to issue for cash (or sell for cash from treasury) Aerial Common
Shares, or securities convertible into or exchangeable for Aerial Common Shares,
including debt securities convertible into equity securities of Aerial but
excluding non-voting, non-convertible preferred stock and debt securities
containing nominal equity features, and excluding Aerial Common Shares issuable
(i) in connection with bona fide stock option or other employee benefit plans,
(ii) upon conversion of debt securities into equity securities of Aerial, or
(iii) upon conversion of Series A Common Shares of Aerial, Aerial shall give
written notice (a "New Issue Sale Notice") to Sonera setting forth in reasonable
detail (A) the designation or any of the terms and provisions of the equity
securities proposed to be issued (the "New Issue Securities"), (B) the price and
other terms of the proposed sale of such securities, (C) the amount of such
securities proposed to be issued, and (D) such other information as may
reasonably be requested in order to evaluate the proposed issuance; provided,
however, that if the New Issue Securities to be sold are Aerial Common Shares,
then the price at which Aerial shall offer to sell such shares to Sonera shall
be equal to the Aerial Average for the five trading days ending on the last
trading day prior to the date of the New Issue Sale Notice. Subject to (1) the
subscription rights granted to TDS as a holder of Series A Common Shares of
Aerial pursuant to Aerial's Certificate of Incorporation, and (2) the
subscription rights granted to TDS under Article III of the Exchange Agreement,
Sonera shall have the right to subscribe to purchase all or any portion of such
New Issue Securities issued.
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(b) Aerial Group Shares. If, at any time after the date of
this Agreement and prior to the tenth Anniversary, TDS proposes (i) to issue for
cash (or sell for cash from treasury) Aerial Group Shares, or securities
convertible into or exchangeable for Aerial Group Shares, including debt
securities convertible into Aerial Group Shares but excluding shares issued or
sold out of the Retained Interest or any Inter-Group Interest with respect to
the Aerial Group, non-voting, non-convertible preferred stock and debt
securities containing nominal equity features, and excluding Aerial Group Shares
issuable (A) in connection with bona fide stock options or other employee
benefit plans, or (B) upon conversion of debt securities convertible into Aerial
Group Shares, or (ii) to increase the "Number of Shares Issuable with Respect to
Retained Interest" (as that term is defined in the Restated Certificate) or the
"Number of Shares Issuable with Respect to the Inter-Group Interest" (as that
term is defined in the Restated Certificate), in each case with respect to the
Aerial Group, TDS shall give a New Issue Sale Notice to Sonera setting forth in
reasonable detail (1) the designation and all of the terms and provisions of
such New Issue Securities, (2) the price and other terms of the proposed
issuance or sale of such securities, (3) the amount of such securities proposed
to be issued or sold, and (4) such other information as may reasonably be
necessary in order to evaluate the proposed issuance; provided, however, that,
if such New Issue Securities to be sold are Aerial Group Shares, then the price
at which TDS shall offer to sell such shares to Sonera shall be the Aerial Group
Average for the five trading days ending on the last trading day prior to the
date of the New Issue Sale Notice. Sonera shall have the right to subscribe to
purchase 17.5% of such New Issue Securities.
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(c) Notwithstanding the provisions of Sections 9.1(a) and
9.1(b) hereof, the right to purchase New Issue Securities provided therein shall
not be available to Sonera to the extent that (i) the exercise thereof would
increase the Aggregate Converted Percentage above 35%, or (ii) Sonera is unable
to subscribe for or own the New Issue Securities as a result of its inability to
satisfy any applicable legal or regulatory requirement for such subscription or
ownership.
9.2 Exercise of Purchase Right. Sonera shall give written
notice that it wishes to subscribe for New Issue Securities to Aerial or TDS, as
the case may be, within ten Business Days after its receipt of the New Issue
Sale Notice. Payment for the New Issue Securities subscribed for shall be made
on a date specified in the New Issue Sale Notice (a "New Issue Closing"), which
shall be at least 30 Business Days after the date of such notice, at the offices
of Aerial or TDS, as the case may be, or at such other place or on such other
date as Aerial or TDS, as the case may be, and Sonera may agree in writing. At
the New Issue Closing, Aerial or TDS, as the case may be, shall deliver
certificates to Sonera (or any Permitted Affiliate Transferee designated by
Sonera) representing the New Issue Securities to be purchased, against payment
of the purchase price therefor by wire transfer of immediately available funds
to an account designated by Aerial or TDS, as the case may be, at least five
Business Days prior to the date of such New Issue Closing.
9.3 Failure to Subscribe. If Sonera fails to subscribe for all
of the New Issue Securities pursuant to Section 9.2 hereof, Aerial or TDS, as
the case may be, shall be free, for a period ending 210 days after the date of
such New Issue Sale Notice, to sell all or any portion of such New Issue
Securities that Sonera has not elected to purchase at prices then available in
the market
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and otherwise on terms and conditions no more favorable to the purchasers
thereof than those set forth in the New Issue Sale Notice.
9.4 Termination of Rights. The rights of all Sonera Holders to
purchase additional Aerial Shares pursuant to the provisions of this Article 9
shall terminate in the event that any Sonera Holder disposes of any Purchased
Shares (or any of the Aerial Shares for which such Purchased Shares may be
exchanged), or issues a Derivative pursuant to Section 5.4 or Section 5.5
hereof.
9.5 No Other Purchases. Except as otherwise permitted by
Sections 9.1 through 9.4 hereof, Sonera agrees that, prior to the tenth
Anniversary, it will not, and will cause each other Sonera Party not to,
directly or indirectly, acquire, offer to acquire or agree to acquire, by
purchase or otherwise, any Aerial Shares, or any other securities of Aerial
having the right to vote in the election of directors, without the advance
written consent of TDS.
ARTICLE 10
TRANSFERS OF CONTROL
10.1 Restriction on Transfers of Control of Aerial. (a) Each
of TDS and Aerial agrees that it will not (i) enter into any agreement providing
for the sale, assignment or other
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disposition of its equity interest in Aerial or AOC, respectively, or (ii) cause
or permit Aerial or AOC to enter into any agreement providing for a merger
(other than the Aerial Merger) or consolidation of Aerial or AOC with or into
any corporation, if in either case the result of such transaction would be that,
(A) TDS would own less that 33 1/3% of the outstanding Aerial Common Shares or
control less than 50% of the combined voting power (on matters other than the
election of directors) of all of the then outstanding Aerial Common Shares, or
(B) Aerial would own less than a majority of the then outstanding AOC Shares
(any such sale, assignment, disposition, merger or consolidation being
hereinafter referred to as a "Disposition Transaction"), unless such transaction
is entered into in accordance with the provisions of this Article 10.
(b) If TDS or Aerial desires to enter into a Disposition
Transaction, it shall first give written notice to Sonera of its desire to
effect such a transaction, which notice shall describe the transaction that TDS
or Aerial, as the case may be, desires to effect and refer to this Section 10.1
(the "Aerial Transfer Notice"). Sonera shall have a period of ten days from its
receipt of the Aerial Transfer Notice within which to give TDS or Aerial, as the
case may be, a written notice that Sonera desires to invoke the provisions of
Section 10.1(c) hereof (the "Aerial Negotiation Notice"). If Sonera fails to
timely give an Aerial Negotiation Notice or comply with any of the provisions of
Section 10.1(c) hereof, then TDS or Aerial, as the case may be, may effect such
Disposition Transaction, subject to Section 10.6 hereof.
(c) If Sonera timely gives an Aerial Negotiation Notice to TDS
or Aerial, as the case may be, pursuant to Section 10.1(b) hereof, then Sonera
shall have the exclusive right to
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negotiate with TDS or Aerial, as the case may be, regarding the possible
Disposition Transaction for a period (the "Aerial Negotiation Period") beginning
on the date of the receipt by TDS or Aerial, as the case may be, of the Aerial
Negotiation Notice and ending on the earlier to occur of (i) the date upon which
TDS or Aerial, as the case may be, and Sonera reach agreement on the terms of a
Disposition Transaction, (ii) the date upon which TDS or Aerial, as the case may
be, and Sonera agree that no such agreement can be reached, or (iii) 60 days
after the commencement of the Aerial Negotiation Period. During the Aerial
Negotiation Period, TDS or Aerial, as the case may be, and Sonera shall
negotiate in good faith to reach agreement on the terms of a Disposition
Transaction, and TDS or Aerial, as the case may be, shall provide Sonera with
such information in the possession or control of TDS or Aerial regarding the
Disposition Transaction, TDS, Aerial or AOC, as Sonera may reasonably request.
If the negotiating parties reach such agreement during the Aerial Negotiation
Period, then they shall promptly prepare and file all necessary applications
with the FCC and any other regulatory agencies and the closing of the
Disposition Transaction shall occur within 30 days after the receipt of all
necessary FCC and other regulatory approvals. In the event that the negotiating
parties do not reach such agreement during the Aerial Negotiation Period, then
Sonera shall give to TDS or Aerial, as the case may be, a written notice of
Sonera's final proposal for a Disposition Transaction (in whatever form Sonera
desires) on or before the last day of the Aerial Negotiation Period, which final
proposal TDS or Aerial, as the case may be, shall have the right to accept (A)
for a period of 30 days after its receipt thereof, during which 30-day period
such final proposal shall be irrevocable, and (B) for a period of an additional
60 days thereafter, during which additional 60-day period such final proposal
shall be revocable by Sonera at any time prior to Sonera's receipt of an
acceptance of such final proposal by TDS or Aerial, as the case may be.
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(d) In the event that TDS or Aerial, as the case may be,
neither reaches agreement with Sonera for a Disposition Transaction nor accepts
Sonera's final proposal pursuant to Section 10.1(c) hereof, then TDS or Aerial,
as the case may be, shall be permitted to enter into a Disposition Transaction
with any third party; provided, however, that in no event shall TDS or Aerial,
as the case may be, enter into an agreement for or complete any Disposition
Transaction unless (i) TDS or Aerial, as the case may be, has negotiated in good
faith during the Aerial Negotiation Period to effect a Disposition Transaction
with Sonera pursuant to Section 10.1(c) hereof, (ii) TDS or Aerial, as the case
may be, enters into a binding agreement within 180 days after the termination of
such Aerial Negotiation Period for a Disposition Transaction with a third party
at a price higher than the price offered to TDS or Aerial, as the case may be,
by Sonera in its final proposal, and (iii) TDS or Aerial, as the case may be,
and such third party shall comply with the provisions of Section 10.6 hereof.
(e) In the event that TDS or Aerial enters into a binding
agreement with a third party to consummate a Disposition Transaction prior to
the tenth Anniversary and Sonera has not exercised its tag-along right pursuant
to Section 10.6 hereof, each of TDS and Aerial agree that the agreement
effecting such Disposition Transaction shall require the acquiring party to
agree in writing to accept and be bound by all of the rights of Sonera and its
Affiliates under this Agreement and the Joint Venture Agreement.
10.2 Interpretation. For purposes of Section 10.1 hereof, if
the price in a binding agreement to consummate a Disposition Transaction, or in
Sonera's final proposal, is to be paid in
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something other than money in a lump sum at the closing, then TDS or Aerial, as
the case may be, and Sonera shall use their best efforts to reach agreement as
to an equivalent in monetary terms, which shall constitute the price for the
purposes of Section 10.1(d) above. If such an agreement cannot be reached within
15 days after TDS or Aerial, as the case may be (in the case of a final bid), or
Sonera (in the case of a binding agreement to consummate a Disposition
Transaction) receives written notice of the price offered, such equivalent shall
be determined by an appraiser agreed-upon within ten days after the end of such
15-day period (and paid equally) by TDS or Aerial, as the case may be, and
Sonera or, if they cannot agree upon an appraiser, by three appraisers, one of
whom shall be chosen within 20 days after the end of such 15-day period by TDS
or Aerial, as the case may be (and paid by TDS or Aerial), one of whom shall be
chosen (and paid) by Sonera within the same period, and the third of whom shall
be chosen by the first two so chosen within an additional ten days and paid
equally by TDS or Aerial, as the case may be, and Sonera. The decision of the
agreed-upon appraiser or, as the case may be, a majority of the three
appraisers, shall be made within 45 days after he or they, as the case may be,
are chosen and shall be final and binding upon TDS or Aerial, as the case may
be, and Sonera. All time periods specified in Section 10.1 hereof shall be
extended by the length of time necessary for such appraiser(s) to be chosen and
for such appraisal to be made (if it becomes necessary).
10.3 Spin-off. The parties agree that (a) a distribution by
TDS of the equity of Aerial to the shareholders of TDS in a spin-off or similar
transaction in which the holders of the Series A Common Shares of TDS
immediately prior to such transaction are the owners, directly or indirectly, of
30% or more of the combined voting power (on matters other than the election of
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directors) of the common equity securities of Aerial outstanding immediately
after such transaction, or (b) the Distribution, will not constitute a
Disposition Transaction within the meaning of this Article 10.
10.4 Termination. The right of first negotiation provided for
by Section 10.1 shall terminate in the event that (a) any Sonera Holder issues a
Derivative, (b) the Aggregate Converted Percentage falls below 10%, or (c) as
provided in Section 5.3 hereof.
10.5 Drag-Along Right. (a) In the event that (i) Sonera or any
of its Permitted Affiliate Transferees disposes of any Purchased Shares (or any
of the Aerial Shares for which such Purchased Shares may be exchanged) or issues
a Derivative, and (ii) at any time thereafter the Aggregate Converted Percentage
is less than 7.9%, then either TDS or Aerial shall have the right, if it enters
into a binding agreement to consummate a Disposition Transaction, to require
Sonera, all of its Permitted Affiliate Transferees, any Third Party Transferee,
and the holder of any Derivative, to sell all but not less than all of the AOC
Shares, and the Derivative, as the case may be, such sale to occur concurrently
with the consummation of the Disposition Transaction, at the same price per
share (assuming any such AOC Shares are converted to Aerial Shares) and on
substantially the same terms and conditions as are obtained by TDS or Aerial, as
the case may be, in such Disposition Transaction.
(b) In the event the right provided in this Section 10.5 is
exercised, each Sonera Holder, each Third Party Transferee, and each holder of a
Derivative shall take all reasonable steps
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necessary to enable such Person to comply with the provisions of this Section
10.5, including executing and performing a purchase and sale, merger or other
agreement on substantially the same terms as TDS or Aerial, as the case may be.
TDS and Aerial, on the one hand, and Sonera, on the other hand, each agree to
make full disclosure to the other concerning the details of any relationship or
dealings it may have with the other party to the proposed Disposition
Transaction. Each of TDS and Aerial, as the case may be, agrees to keep Sonera
advised in writing of, and consult on a timely basis with Sonera concerning, any
proposed Disposition Transaction with respect to which it has exercised the
right provided in this Section 10.5.
(c) The right provided by this Section 10.5 shall be exercised
by giving a written notice of such exercise to each Sonera Holder, each Third
Party Transferee, and each holder of a Derivative, setting forth in reasonable
detail the identity of the parties to the proposed Disposition Transaction, the
proposed purchase price, the terms of payment and the other material terms of
the proposed Disposition Transaction. Each Sonera Holder, each Third Party
Transferee, and each holder of a Derivative shall thereafter be obligated to
sell to such third party all (but not less than all) of its AOC Shares and the
Derivative, as the case may be.
10.6 Tag-Along Right. (a) Subject to the provisions of
paragraph (d) hereof, neither TDS nor Aerial shall enter into a binding
agreement with a third party to consummate a Disposition Transaction unless each
Sonera Holder is given the opportunity to sell to the third party all but not
less than all of such Sonera Holders' AOC Shares and Aerial Shares for which any
AOC Shares may have been exchanged, such sale to be concurrent with the
consummation of the Disposition
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Transaction, at the same price per share (assuming any such AOC Shares are
converted to Aerial Shares) and on substantially the same terms and conditions
as are obtained by TDS or Aerial, as the case may be, in such Disposition
Transaction.
(b) In the event the right provided in this Section 10.6 is
exercised, each Sonera Holder agrees to take all reasonable steps necessary to
enable such holder to comply with the provisions of this Section 10.6, including
executing and performing a purchase and sale, merger or other agreement on
substantially the same terms as TDS or Aerial, as the case may be. TDS and
Aerial, on the one hand, and Sonera, on the other hand, each agree to make full
disclosure to the other concerning the details of any relationship or dealings
it may have with the other party to the proposed Disposition Transaction. Each
of TDS and Aerial, as the case may be, agrees to keep Sonera advised in writing
of, and consult on a timely basis with Sonera concerning, any proposed
Disposition Transaction with respect to which any Sonera Holder has exercised
the right provided in this Section 10.6.
(c) The right provided by this Section 10.6 shall be exercised
by each Sonera Holder by giving a written notice of such exercise to TDS or
Aerial, as applicable, within 15 days after receipt by such Sonera Holder of
written notice from TDS or Aerial, as the case may be, of such proposed
Disposition Transaction, which written notice from TDS or Aerial to such Sonera
Holder shall set forth in reasonable detail the identity of the proposed
transferee, the proposed purchase price, terms of payment and other material
terms of the proposed Disposition Transaction. Each Sonera Holder that exercises
such right shall thereafter be obligated to sell to such third party all (but
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not less than all) of its AOC Shares and any Aerial Shares for which any AOC
Shares may have been exchanged and TDS or Aerial, as the case may be, shall not
consummate the proposed Disposition Transaction with the third party unless such
third party also acquires all of the AOC Shares, and any Aerial Shares for which
any AOC Shares have been exchanged, that are held by each Sonera Holder
exercising such right.
(d) The tag-along right provided by this Section 10.6 shall
terminate in the event that (i) any Sonera Holder disposes of any Purchased
Shares (or any of the Aerial Shares for which such Purchased Shares may be
exchanged) or issues a Derivative and (ii) at any time thereafter the Aggregate
Converted Percentage is less than 7.9%.
10.7 Effect of Transfer of Control of Sonera. (a) In the event
that Sonera enters into, or the shareholders of Sonera authorize, any
transaction providing for a reorganization, merger, consolidation or other
combination of Sonera with or into any other Person, or for the sale, assignment
or other disposition of all or substantially all of Sonera's assets to any other
Person, Sonera shall give written notice to TDS and Aerial of such proposed
transaction, which notice shall describe the transaction in reasonable detail
and identify the other party to it (the "Sonera Transaction Notice"). If such
Person, or any other Person directly or indirectly in control of such Person, is
a Competitor and TDS or Aerial determines in its reasonable judgement that such
competition is material, TDS or Aerial shall have the right to serve written
notice (an "Event Notice") on Sonera within 30 days of its receipt of the Sonera
Transaction Notice that it intends to invoke the provisions of Section 10.7(b)
hereof with respect to such proposed transaction. Both TDS
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and Aerial shall be deemed to have consented to any proposed transaction
described in a Sonera Transaction Notice if (i) neither TDS nor Aerial gives an
Event Notice to Sonera within 30 days of its receipt of such Sonera Transaction
Notice, and (ii) such proposed transaction is consummated within 12 months of
the date of such Sonera Transaction Notice. Sonera hereby agrees that it will
not enter into any transaction of the type contemplated by this Section 10.7(a)
unless the other Person party to such transaction agrees to be bound by the
provisions of this Section 10.7.
(b) If either TDS or Aerial timely gives an Event Notice to
Sonera, then Sonera shall use its reasonable best efforts to negotiate a
Transfer of all of the AOC Shares owned by Sonera and each of its Permitted
Affiliate Transferees to another Person reasonably acceptable to TDS and Aerial,
such sale to be consummated no later than six months after the closing of the
transaction that was the subject of the Sonera Transaction Notice. In the event
that no such Transfer shall occur prior to the end of such six-month period,
then Sonera and each of its Permitted Affiliate Transferees shall exercise, and
in the absence thereof shall be deemed to have exercised, the Equity Purchase
Election upon the last day of such six-month period. No Transfer by Sonera
pursuant to this Section 10.7 shall be subject to the right of first negotiation
provided for in Section 5.2 hereof and any such Transfer shall be subject to the
provisions of Section 5.3 hereof.
ARTICLE 11
CERTAIN COVENANTS OF TDS, AERIAL AND AOC
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11.1 General. From and after the execution and delivery of
this Agreement and until such time as the Aggregate Converted Percentage shall
be less than 7.9%, TDS, Aerial and AOC shall comply in all material respects
with the covenants set forth in this Article 11.
11.2 Auditors. Each of TDS (so long as it is domiciled in the
United States), Aerial and AOC shall maintain a system of accounting established
and administered in accordance with U.S. GAAP and shall set aside on its books
all such proper reserves as shall be required by U.S. GAAP. AOC shall retain a
firm of independent certified public accountants of recognized standing (which
may be the auditors of Aerial) to audit and report on AOC's annual consolidated
balance sheets and statements of operations, shareholders' equity and cash
flows. All major accounting policies and principles shall be determined in
accordance with U.S. GAAP.
11.3 Financial and Other Information. (a) Each of TDS (with
respect to the Aerial Group), Aerial and AOC shall prepare annual consolidated
balance sheets and statements of operations, shareholders' equity and cash
flows, which shall be prepared in accordance with U.S. GAAP, set forth in each
case in comparative form the figures for the previous year, and be audited by
the auditors referred to in Section 11.2 hereof. Aerial shall also prepare
quarterly unaudited consolidated balance sheets and statements of operations,
shareholders' equity and cash flows for itself and its Subsidiaries, certified
by its chief financial officer or chief executive officer and prepared in
accordance with U.S. GAAP, setting forth in each case in comparative form the
same figures for the comparable period of the previous year and, in addition,
year-to-date figures. TDS,
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Aerial or AOC, as applicable, shall furnish to Sonera the following information
within the times specified:
(i) as soon as practicable after the end of each fiscal
quarter, and in any event within 50 days thereafter, all of the
financial information relating to Aerial, AOC or the Aerial Group, as
applicable, referred to herein,
(ii) as soon as practicable after the end of each fiscal year,
and in any event within 100 days thereafter, all of the annual
financial information relating to Aerial, AOC or the Aerial Group, as
applicable, referred to herein, and
(iii) on a regular and timely basis, such other standard
monthly management, operational and financial reports and information
relating to Aerial, AOC or the Aerial Group, as applicable, as Sonera
may reasonably request.
(b) Sonera shall have the right to carry out an audit (by its
independent auditor) once each year to determine compliance by Aerial and AOC
with the allocation of credits, fees, charges and expenses in accordance with
the terms of the Intercompany Agreements or Intercompany Policies, as
applicable, and the Aerial Group Allocation Procedures. Each such audit shall be
at Sonera's sole cost and expense unless it is determined that the aggregate
allocations of fees, charges and expenses (net of any credits) made with respect
to AOC exceeded the aggregate of such allocations (net of any credits) which
should have been made in accordance with the Intercompany Agreements or
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Intercompany Policies, as applicable, and the Aerial Group Allocation Procedures
by more than 10%, in which event the cost of such audit shall be borne by
Aerial.
11.4 No Adverse Actions. TDS, Aerial and AOC agree that,
except (a) with the prior written consent of Sonera, (b) in connection with the
transactions contemplated by the TDS Proxy Statement, or (c) as required or
permitted by the terms of their respective charters or by-laws, this Agreement,
the Joint Venture Agreement, the Registration Rights Agreement, or any
Intercompany Agreement, they will not take any action, or cause or permit any
Subsidiary to take or omit to take any action, which action or omission to take
action could reasonably be expected to (i) have a material adverse effect upon
the rights of Sonera (A) provided in this Agreement, the Joint Venture Agreement
or the Registration Rights Agreement, or (B) provided in such charters or
by-laws, (ii) authorize or permit any Subsidiary of TDS other than Aerial or its
Subsidiaries to acquire an FCC license to provide B-PCS services or to acquire
control of any entity that has such a license, except to the extent that any
B-PCS services to be so provided are incidental to the business of such other
TDS Subsidiary and not competitive with any services provided by Aerial or any
of its Subsidiaries, or (iii) effect a fundamental change in the nature of the
business carried on by Aerial and AOC from that of constructing, owning or
managing and operating a B-PCS services business and providing related services.
11.5 Performance of Intercompany Agreements and Policies. (a)
TDS and Aerial agree that they will (i) duly and timely perform their respective
obligations under each Intercompany Agreement in accordance with its terms
(subject to any amendment, modification or waiver with
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respect thereto in accordance with the terms of such agreement and this
Agreement), except in respects that are not material and which would not, in
accordance with the terms thereof, give rise to the right to claim a breach or
default thereunder and (ii) not terminate, (except in accordance with its terms
or Section 11.5(b) hereof) amend or modify any Intercompany Agreement in any
manner materially adverse to Aerial or its Subsidiaries without the approval of
a majority of the independent directors of Aerial. TDS agrees to and does hereby
consent to the execution by Aerial and AOC of this Agreement and to the
performance by them of their respective obligations hereunder, including the
issuance of equity by Aerial or AOC in accordance with the provisions hereof.
Aerial agrees that it will continue to allocate among AOC, its Subsidiaries, and
each limited liability company formed pursuant to the Joint Venture Agreement,
all credits, fees, charges and expenses related to, arising under or in
connection with the Intercompany Agreements in accordance with the Aerial Group
Allocation Procedures.
(b) Sonera acknowledges that TDS and Aerial intend to replace
one or more Intercompany Agreements with a related Intercompany Policy upon
consummation of the Aerial Merger. In the event that one or more Intercompany
Agreements are so replaced, then the provisions of Section 11.5(a) shall be
deemed to apply to such Intercompany Policy, rather than to the Intercompany
Agreement so replaced, as if such Intercompany Policy constituted a binding
contractual obligation between TDS and Aerial.
(c) TDS agrees to and does hereby waive its rights under
Section 3.01 of the Exchange Agreement to subscribe to a proportion of each
issuance of Aerial Common Shares or
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other voting securities of Aerial, or any securities convertible into or
exchangeable for, or carrying a right to subscribe to or acquire, Aerial Common
Shares or other voting securities of Aerial, to the extent, and only to the
extent that such waiver is necessary to permit the issuance of Aerial Common
Shares to Sonera Holders pursuant to and in accordance with the provisions of
Article 7 or Article 8 of this Agreement. TDS further agrees that it will not
assign (pursuant to Section 3.04 of the Exchange Agreement) its rights under
Section 3.01 of the Exchange Agreement to any Person without requiring such
Person to provide an identical waiver.
11.6 Reservation of Aerial Shares. (a) At all times prior to
the earlier to occur of the Aerial Merger or the Distribution, Aerial shall
reserve and keep available, free of pre-emptive or other subscription rights,
out of its authorized but unissued Aerial Common Shares, or out of Aerial Common
Shares held in its treasury, solely for the purpose of performance of this
Agreement, such number of Aerial Common Shares as shall be deliverable by Aerial
from time to time hereunder.
(b) At all times after the earlier to occur of the Aerial
Merger or the Distribution, TDS shall reserve and keep available, free of
pre-emptive or other subscription rights, out of its authorized but unissued
Aerial Group Shares, solely for the purpose of performance of this Agreement,
such number of Aerial Group Shares as shall be deliverable by TDS from time to
time hereunder.
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(c) If and so long as the Aerial Shares shall be listed on any
national securities exchange, Aerial or TDS, as the case may be, shall, if
permitted by the rules of such exchange, list and keep listed on such exchange,
upon official notice of issuance, all Aerial Shares issuable hereunder upon the
exchange of AOC Shares. All Aerial Shares which may be issued or transferred
upon any exchange hereunder shall, upon issuance thereof, be validly issued,
fully paid and non-assessable.
11.7 Intra-Corporate Transactions. TDS agrees that it will not
take any action to cause Aerial to fail to perform its obligations under this
Agreement or any Intercompany Agreement. TDS agrees that, in the event it causes
or permits Aerial or AOC to enter into any agreement providing for a business
combination transaction other than the Aerial Merger, whether by merger,
consolidation, transfer of equity, assignment of assets or otherwise, with TDS
or any Affiliate of TDS, then (i) if such transaction is consummated and Aerial
or AOC, as applicable, continues to be operated as a separate corporate entity,
all of the contractual rights of Sonera and its Permitted Affiliate Transferees
under the terms of this Agreement shall survive the consummation of such
transaction and shall continue in full force and effect, and (ii) if such
transaction is consummated and the business of Aerial is combined with other
businesses within the same corporate entity other than Aerial or AOC, then (A)
all of the contractual rights of Sonera and its Permitted Affiliate Transferees
under the terms of this Agreement shall survive the consummation of such
transaction as obligations of the surviving entity, and (B) Sonera will be
provided two seats on the Board of Directors of the surviving entity, so long as
it has an interest in the combined equity of such entity, on the six month
anniversary of the closing of such transaction and thereafter, of at least 5%
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(determined as if all securities owned by Sonera and its Affiliates that are
convertible into or exchangeable for equity securities of such surviving entity
had been so converted or exchanged, regardless of whether such securities are
then convertible or exchangeable).
11.8 Performance of Registration Rights Agreement and Waiver.
(a) As a condition precedent to the consummation of the Aerial Merger, TDS and
Aerial agree that Aerial shall assign to TDS, and TDS shall assume from Aerial,
the Registration Rights Agreement, including all of the rights and obligations
of Aerial thereunder, and the obligations of Aerial under Sections 5.3(d) and
5.5(b)(ii) hereof. Upon such assignment, all references to "the Company" in the
Registration Rights Agreement and "Aerial" in the referenced sections of this
Agreement shall be deemed to refer to TDS rather than to Aerial and the
references to "common stock" in the definition of "Common Stock" set forth in
Section 1.1 of the Registration Rights Agreement shall be deemed to refer to the
Aerial Group Shares of TDS rather than to the common stock of Aerial.
(b) Prior to the execution of this Agreement and the
Registration Rights Agreement, TDS and Aerial entered into a Registration Rights
Agreement, dated as of April 15, 1996 (the "TDS Registration Rights Agreement"),
pursuant to which Aerial granted certain registration rights to TDS with respect
to the securities of Aerial held by TDS. TDS and Aerial hereby waive the
application of Section 8(h) of the TDS Registration Rights Agreement to any
"Piggyback Registration" (as defined in the Registration Rights Agreement) by
Sonera pursuant to Section 3 of the Registration Rights Agreement, subject to
the terms, conditions and restrictions set
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forth in the Registration Rights Agreement governing Sonera's right to exercise
a Piggyback Registration.
11.9 Operation in Ordinary Course. TDS, Aerial and AOC
acknowledge that Sonera has acquired the AOC Shares with the intention that it
will become a security holder of AOC with the rights provided to Sonera by the
Purchase Agreement, the Registration Rights Agreement and this Agreement. TDS,
Aerial and AOC agree that Aerial will, and will cause its Subsidiaries to,
conduct their respective businesses in the ordinary normal course thereof. In
furtherance and not in limitation of the preceding sentence, Aerial agrees that
substantially all of the material assets reflected from time to time on the
consolidated balance sheets of Aerial and its subsidiaries and used or useful in
connection with the business of operating Aerial shall be owned by AOC or
subsidiaries of AOC and Aerial will use its reasonable best efforts to transfer
to AOC or its subsidiaries, on or before December 31, 1998, any and all such
assets that are not owned by AOC or its subsidiaries on the date of this
Agreement. TDS, Aerial and AOC further covenant and agree that all material
assets used or useful in connection with the business of operating Aerial that
are acquired in the future shall be acquired by AOC or its subsidiaries or, if
acquired by Aerial, shall be transferred to AOC or its subsidiaries promptly
after such acquisition. Aerial and AOC also covenant and agree that if, at any
time after the date of this Agreement, Aerial receives proceeds from any loan or
from the sale of any debt instrument, Aerial shall promptly upon such receipt
advance the full amount of such proceeds to AOC or its subsidiaries, and AOC
shall borrow such proceeds, or shall cause one or more of its subsidiaries to
borrow such proceeds, in any case at the same interest rate and on substantially
the same terms as those on which Aerial has incurred such debt.
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<PAGE>
ARTICLE 12
MISCELLANEOUS
12.1 Expenses. Each party shall bear its own expenses incident
to the negotiation, preparation, authorization and consummation of this
Agreement and the transactions contemplated hereby, including all fees and
expenses of its counsel and accountants, whether or not such transactions are
consummated.
12.2 Equitable Remedies. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with the specific terms of the
provisions or were otherwise breached. It is accordingly agreed that the parties
shall be entitled to an injunction or injunctions to prevent breaches of this
Agreement and to enforce specifically the terms and provisions hereof in any
court of the United States or any state having jurisdiction, this being in
addition to any other remedy to which they are entitled at law or in equity.
Each party agrees that it will not assert, as a defense against a claim for
specific performance or other equitable remedy, that the party seeking such
equitable remedy has an adequate remedy at law.
12.3 Notices. All notices, claims and other communications
hereunder shall be in writing and shall be given by hand delivery, facsimile, or
overnight air courier guaranteeing next day delivery:
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<PAGE>
(a) if to TDS, at:
Telephone and Data Systems, Inc.
30 North LaSalle Street
Suite 4000
Chicago, Illinois 60602
Attention: Mr. LeRoy T. Carlson, Jr.
Phone: (312) 630-1900
Fax: (312) 630-9299
with a copy (which shall not constitute notice) to:
Aerial Communications, Inc.
8410 West Bryn Mawr Avenue
Suite 1100
Chicago, Illinois 60631
Attention: Mr. Donald W. Warkentin
Phone: (773) 399-4145
Fax: (773) 399-7997
with a copy (which shall not constitute notice) to:
Sidley & Austin
One First National Plaza
42nd Floor - SW
Chicago, Illinois 60603
Attention: Michael G. Hron, Esq.
Phone: (312) 853-2030
Fax: (312) 853-7036
(b) if to Aerial or AOC, at:
Aerial Communications, Inc.
8410 West Bryn Mawr Avenue
Suite 1100
Chicago, Illinois 60631
Attention: Mr. Donald W. Warkentin
Phone: (773) 399-4145
Fax: (773) 399-7997
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<PAGE>
with a copy (which shall not constitute notice) to:
Telephone and Data Systems, Inc.
30 North LaSalle Street
Suite 4000
Chicago, Illinois 60602
Attention: Mr. LeRoy T. Carlson, Jr.
Phone: (312) 630-1900
Fax: (312) 630-9299
with a copy (which shall not constitute notice) to:
Sidley & Austin
One First National Plaza
42nd Floor - SW
Chicago, Illinois 60603
Attention: Michael G. Hron, Esq.
Phone: (312) 853-2030
Fax: (312) 853-7036
(c) if to Sonera, at:
Sonera Ltd.
P.O. Box 106
FIN-00051-TELE
Teollisuuskatu 15, HELSINKI
Attention: Maire Laitinen, Esq.
Phone: 011-35-8-2040-3641
Fax: 011-35-8-2040-3414
with a copy (which shall not constitute notice) to:
Patton Boggs, L.L.P.
2550 M. Street, N.W.
Washington, D.C. 20037-1350
Attention: Richard M. Stolbach, Esq.
Phone: (202) 457-6324
Fax: (202) 457-6315
or at such other address as any party may from time to time furnish to the other
parties by a notice given in accordance with the provisions of this Section
12.3. All such notices and communications
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shall be deemed to have been duly given at the time delivered by hand, if
personally delivered; when receipt confirmed, if sent by facsimile; and on the
next Business Day after timely delivery to the courier, if sent by an overnight
air courier service guaranteeing next day delivery.
12.4 Entire Agreement. This Agreement, the Joint Venture
Agreement and the Registration Rights Agreement, together with the EXHIBITS
annexed hereto and thereto, contain the entire understanding among the parties
hereto concerning the subject matter hereof and this Agreement may not be
changed, modified, altered or terminated except by an agreement in writing
executed by the parties hereto. Any waiver by any party of any of its rights
under this Agreement or of any breach of this Agreement shall not constitute a
waiver of any other rights or of any other or future breach.
12.5 Remedies Cumulative. Except as otherwise provided herein,
each or any of the rights and remedies in this Agreement provided, and each or
any of the rights and remedies allowed at law and in equity in like case, shall
be cumulative, and the exercise of one right or remedy shall not be exclusive of
the right to exercise or resort to any or any other rights or remedies provided
in this Agreement or at law or in equity.
12.6 Governing Law. This Agreement shall be construed in
accordance with and subject to the laws and decisions of the State of Delaware
applicable to contracts made and to be performed entirely therein.
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<PAGE>
12.7 Counterparts. This Agreement may be executed in several
counterparts hereof, and by the different parties hereto on separate
counterparts hereof, each of which shall be an original; but such counterparts
shall together constitute one and the same instrument.
12.8 Waivers. No provision in this Agreement shall be deemed
waived except by an instrument in writing signed by the party waiving such
provision.
12.9 Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and to their respective
permitted successors and assigns; provided, however, that, except as otherwise
expressly set forth in this Agreement, neither the rights nor the obligations of
either party may be assigned or delegated without the prior written consent of
the other parties; provided further, that the Aerial Merger shall not be deemed
to effect an assignment within the meaning of this Section 12.9; and provided
further, that Sonera shall have the right to assign its rights and obligations
under this Agreement to any wholly-owned Subsidiary of Sonera, provided that
Sonera shall irrevocably and unconditionally guarantee the performance by such
Subsidiary of all of the obligations of Sonera hereunder.
12.10 Further Assurances. Sonera shall, at the request of TDS,
Aerial or AOC, and TDS, Aerial and AOC shall, at the request of Sonera, from
time to time, execute and deliver such other assignments, transfers, conveyances
and other instruments and documents and do and perform such other acts and
things as may be reasonably necessary or desirable for effecting complete
consummation of this Agreement and the transactions herein contemplated.
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<PAGE>
12.11 Information for Governmental Filings. Sonera agrees to
provide such information regarding itself and its Affiliates as may reasonably
be requested by TDS, Aerial or AOC, for inclusion in such documents as TDS,
Aerial or AOC, as the case may be, may from time to time be required to file
with the Securities and Exchange Commission, the FCC, or other agencies of the
United States government. The information provided by Sonera for inclusion in
such documents will not contain any material misstatement of fact or omit to
state any material fact necessary to make the statements, in light of the
circumstances under which they are made, not misleading. All statements included
in the TDS Proxy Statement and such other documents relating to Sonera shall be
subject to the approval of Sonera, such approval not to be unreasonably
withheld.
12.12 Disclosures. (a) Confidentiality. Sonera and each of
TDS, Aerial and AOC acknowledge and confirm in connection with the negotiation
of this Agreement and the execution hereof, during the period from the date
hereof through the date that this Agreement remains in effect, the parties
hereto will have furnished to one another certain materials, information, data
and other documentation ("Disclosures") concerning their business, financial
condition and operations which are proprietary and confidential. Each party
acknowledges the party making such Disclosures considers them secret and
confidential and asserts a proprietary interest therein. Accordingly, Sonera, on
the one hand, and each of TDS, Aerial and AOC, on the other hand, covenants and
agrees that it shall maintain all Disclosures made by another party in strict
confidence and shall not use such Disclosures for its own benefit or disclose
them to third parties, except to its agents, representatives, bankers,
investment bankers, counsel and employees involved in evaluating the
transactions contemplated by this Agreement and informed of the requirement of
confidentiality,
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or as otherwise required by law (including the requirement of TDS or Aerial to
disclose such terms under the federal securities laws or under the rules of any
securities exchange on which its securities are listed, and including the
requirement of Sonera or any of its Affiliates to disclose such terms under the
securities laws of Finland or other applicable jurisdiction).
(b) Public Announcements. No public announcement with regard
to the transactions contemplated hereby or the material terms hereof shall be
issued by any party hereto without the mutual prior written consent of the other
parties, except to the extent that the parties are unable to agree on a press
release and legal counsel for one party is of the opinion that such press
release is required by law.
(c) Non-Confidential Information. This Agreement shall not
restrict any party hereto from using information already known to it, to which
it is entitled under existing agreements, or information generally in the public
domain or any information received from a third party with a right to possess or
make disclosure thereof.
12.13 Termination. This Agreement may be terminated and the
transactions contemplated hereby may be abandoned, without further obligation of
TDS, Aerial, AOC or Sonera at any time by mutual written consent duly authorized
by the boards of directors of TDS, Aerial, AOC and Sonera.
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<PAGE>
12.14 Disputes. (a) General. The parties agree to address
disagreements and disputes arising out of or related to this Agreement or the
breach hereof through the procedures set forth in this Section 12.14.
(b) Negotiation Procedure. (i) TDS, Aerial and AOC (the "TDS
Parties"), on the one hand, and Sonera, on the other hand, shall designate one
or more employees or representatives who will be the initial contact for
resolving disputes that may arise under this Agreement that do not involve an
amount in excess of $50,000. The TDS Parties and Sonera shall first raise such
disputes with a designated employee or representative of the other party. The
designated employees shall work together to resolve the relevant issue in a
manner that meets the interests of both the TDS Parties and Sonera, or until the
issue is referred to designated officers of the parties as set forth in Section
12.14(b)(ii) hereof. Any disputes that involve an amount in excess of $50,000
shall be referred to the designated officers of the parties as set forth in
Section 12.14(b)(ii) hereof.
(ii) The TDS Parties and Sonera shall also designate one or
more officers who will review (A) disputes that involve an amount in excess of
$50,000, and (B) disputes that the designated employees are unable to resolve
pursuant to Section 12.14(b)(i) hereof. Any matter not resolved by such
designated employees within 30 days after the date on which a party hereto first
notifies a designated employee of the other party shall be referred to such
designated officers for resolution. The designated officers shall work together
to resolve the disputes so referred to them in a manner that meets the interests
of both the TDS Parties and Sonera, either until such agreement is reached, or
until an impasse is declared by either the TDS Parties or Sonera; provided,
however,
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<PAGE>
that an impasse shall not be declared by either the TDS Parties or Sonera prior
to the fifteenth day after such dispute has first been referred to such
designated officers. Notice of declaration of any impasse shall be given in
accordance with Section 12.3 hereof.
(iii) The employees and officers initially designated by the
TDS Parties and Sonera for purposes of this Section 12.14 are listed on EXHIBIT
12.14(b)(iii) annexed hereto. Parties may change such designation by giving
notice of such change pursuant to Section 12.3 hereof.
(iv) Any resolution of a dispute by the designated employees
or representatives pursuant to Section 12.14(b)(i) hereof or by the designated
officers pursuant to Section 12.14(b)(ii) hereof shall be in writing signed by
such persons on behalf of the parties. Notwithstanding any provision of this
Section 12.14, no resolution of any dispute by any designated employee,
representative or officer shall constitute on amendment of this Agreement
without the approval of the respective boards of directors of each party hereto.
(c) Unresolved Disputes. The parties shall be entitled to
exercise or resort to any and all rights and remedies provided in this Agreement
or at law or in equity with respect to any controversy or claim not resolved
through the procedures set forth above.
(d) Jurisdiction; Consent to Service of Process. (i) Each
party hereby irrevocably consents and submits to the jurisdiction of the United
States District Court for the District of Delaware and any court of the State of
Delaware, in any action, suit or proceeding arising out of,
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<PAGE>
resulting from or relating to this Agreement, and agrees that any such action,
suit or proceeding shall be brought only in such courts (and waives any
objection based on forum non conveniens or any objection to venue therein);
provided, however, that such consent to jurisdiction is solely for the purpose
referred to in this Section 12.14(d) and shall not be deemed to be a general
submission to the jurisdiction of said courts or the State of Delaware other
than for such purpose.
(ii) Sonera hereby irrevocably appoints The Corporation Trust
Company, at its office at 1209 Orange Street, Wilmington, Delaware, United
States of America, its lawful agent and attorney to accept and acknowledge
service of any process against it in any action, suit or proceeding arising out
of, resulting from or relating to this Agreement, and upon whom such process may
be served, with the same effect as if it were a resident of the State of
Delaware, and had been lawfully served with such process in such jurisdiction,
and waives all claim of error by reason of such service, provided that in the
case of any service upon such agent and attorney, the Aerial Parties shall also
deliver a copy thereof to Sonera at the address and in the manner specified in
Section 12.3 hereof. In the event that such agent and attorney resigns or
otherwise becomes incapable of acting as such, Sonera will appoint a successor
agent and attorney in Wilmington, Delaware, reasonably satisfactory to the
Aerial Parties, with like powers, or if Sonera fails to make such appointment,
Sonera hereby authorizes the Aerial Parties to appoint such agent for Sonera.
Sonera shall pay the annual fee due to The Corporation Trust Company or such
successor agent for acting in such capacity; provided, however, that if Sonera
shall fail to make such payment, then the Aerial Parties shall have the right to
do so.
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12.15 No Claim of Immunity. Sonera agrees that, to the extent
that it or any of its property, its Affiliates, or property of its Affiliates is
or becomes entitled at any time to any immunity, on the grounds of sovereignty
or otherwise, based upon its status as an agency or instrumentality of
government, from any arbitration, legal action, suit or proceeding or from
setoff or counterclaim relating to this Agreement from the jurisdiction of any
arbitrator or competent court, from service of process, from attachment prior to
judgment, from attachment in aid of execution of a judgment, from execution
pursuant to a judgement or arbitration award, or from any other legal process in
any jurisdiction, it, for itself, its Affiliates, its property and that of its
Affiliates, expressly, irrevocably and unconditionally agrees not to plead or
claim, any such immunity with respect to such matters arising with respect to
this Agreement or the subject matter hereof (including any obligation for the
payment of money).
12.16 Remedies. In addition to any other remedies which may be
available to TDS or Aerial at law or in equity, Sonera agrees that each of TDS,
Aerial and AOC shall have no obligation to honor Transfers of AOC Shares, Aerial
Common Shares, or other securities of Aerial, to Sonera or any of its
Affiliates, which would cause Sonera or any of its Affiliates to own AOC Shares,
Aerial Common Shares or other securities of Aerial in violation of this
Agreement, any such Transfers shall be void and of no effect, and Aerial shall
be entitled to instruct any transfer agent to refuse to honor such transfers.
12.17 Severability. In the event any provision of this
Agreement is found to be invalid or unenforceable in whole or in part, the
remaining provisions of this Agreement nevertheless
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shall be binding and the invalid or unenforceable provision shall be replaced by
a valid and enforceable provision which comes closest to the intent or economic
effect of the provision to be replaced.
* * * * *
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above written.
TELEPHONE AND DATA SYSTEMS, INC.
By: /s/ LeRoy T. Carlson, Jr.
--------------------------------
LeRoy T. Carlson, Jr.
President
AERIAL COMMUNICATIONS, INC.
By: /s/ Donald W. Warkentin
--------------------------------
Donald W. Warkentin
President
AERIAL OPERATING CO., INC.
By: /s/ Donald W. Warkentin
--------------------------------
Donald W. Warkentin
President
SONERA LTD.
By: /s/ Aulis Salin
-------------------------------
Name: Aulis Salin
-------------------------------
Title: President and CEO
-------------------------------
SIGNATURE PAGE TO INVESTMENT AGREEMENT,
DATED AS OF SEPTEMBER 8, 1998,
AMONG TELEPHONE AND DATA SYSTEMS, INC.,
AERIAL COMMUNICATIONS, INC., AERIAL OPERATING
CO., INC. AND SONERA LTD.
<PAGE>
EXHIBIT 99.3
EXECUTION COPY
REGISTRATION RIGHTS AGREEMENT
dated as of September 8, 1998
between
AERIAL COMMUNICATIONS, INC.
and
SONERA LTD.
<PAGE>
TABLE OF CONTENTS
Page
Section 1. Definitions and Usage............................................2
---------------------
Section 2. Demand Registration..............................................8
-------------------
Section 3. Piggyback Registration..........................................12
----------------------
Section 4. Registration Procedures.........................................13
-----------------------
Section 5. Holder's Obligations............................................18
--------------------
Section 6. Expenses of Registration........................................19
------------------------
Section 7. Indemnification; Contribution...................................20
-----------------------------
Section 8. Holdback........................................................26
--------
Section 9. Amendment, Modification and Waivers; Further Assurances.........27
-------------------------------------------------------
Section 10. Assignment and Assumption.......................................27
-------------------------
Section 11. Miscellaneous...................................................29
-------------
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REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of
September 8, 1998, between AERIAL COMMUNICATIONS, INC., a Delaware corporation
(the "Company"), and SONERA LTD., a limited liability company organized under
the laws of the Republic of Finland and formerly known as Sonera Corporation
(the "Holder").
RECITALS
--------
WHEREAS, the parties hereto hereby desire to set forth the
Holder's rights and the Company's obligations to cause the registration of the
Registrable Securities pursuant to the Securities Act;
NOW, THEREFORE, in consideration of the investment by the
Holder in the AOC Common Stock pursuant to the Purchase Agreement and the
Investment Agreement and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
<PAGE>
Section 1. Definitions and Usage. As used in this Agreement:
1.1. Definitions.
Agent. "Agent" means the principal placement agent on an
agented placement of securities of the Company.
AOC Common Stock. "AOC Common Stock" shall mean (i) the common
stock, par value $0.001 per share, of Aerial Operating Co., Inc. ("AOC"), and
(ii) shares of capital stock of AOC issued by AOC in respect of or in exchange
for shares of such common stock in connection with any stock dividend or
distribution, stock split-up, recapitalization, recombination or exchange by AOC
of shares of such common stock.
Commission. "Commission" shall mean the Securities and
Exchange Commission.
Common Stock. "Common Stock" shall mean (i) the common stock,
par value $1.00 per share, of the Company, and (ii) shares of capital stock of
the Company issued by the Company in respect of or in exchange for shares of
such common stock in connection with any stock dividend or distribution, stock
split-up, recapitalization, recombination or exchange by the Company generally
of shares of such common stock.
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Continuously Effective. "Continuously Effective", with respect
to a specified registration statement, shall mean that it shall not cease to be
effective and available for Transfers of Registrable Securities thereunder for
longer than either (i) any ten (10) consecutive business days, or (ii) an
aggregate of fifteen (15) business days during the period specified in the
relevant provision of this Agreement.
Demand Registration. "Demand Registration" shall have the
meaning set forth in Section 2.1(a).
Exchange Act. "Exchange Act" shall mean the Securities
Exchange Act of 1934.
Investment Agreement. "Investment Agreement" means the
Investment Agreement, dated as of September 8, 1998, by and among the Company,
AOC, Telephone and Data Systems, Inc. and the Holder.
Person. "Person" shall mean any individual, corporation,
partnership, joint venture, association, joint-stock company, limited liability
company, trust, unincorporated organization or government or other agency or
political subdivision thereof.
Piggyback Registration. "Piggyback Registration" shall have
the meaning set forth in Section 3.1.
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Purchase Agreement. "Purchase Agreement" shall mean the
Purchase Agreement, dated as of June 1, 1998, by and among the Company, AOC,
Telephone and Data Systems, Inc. and the Holder.
Purchased Shares. "Purchased Shares" shall mean the 2,410,482
shares of AOC Common Stock initially acquired by the Holder pursuant to the
Purchase Agreement.
Register, Registered and Registration. "Register",
"registered", and "registration" shall refer to a registration effected by
preparing and filing a registration statement or similar document in compliance
with the Securities Act, and the declaration or ordering by the Commission of
effectiveness of such registration statement or document.
Registrable Securities. "Registrable Securities" shall mean
(i) the Shares owned by the Holder on the date of determination or (ii) any
securities of any Person issued in exchange for or on conversion of Shares in
any merger or reorganization of the Company owned by the Holder on the date of
determination whether pursuant to Section 11.8 of the Investment Agreement or
otherwise; provided, however, that Registrable Securities shall not include any
securities which have theretofore been registered and sold pursuant to the
Securities Act or which have been sold to the public pursuant to Rule 144 or any
similar rule promulgated by the Commission pursuant to the Securities Act, and,
provided further, the Company shall have no obligation under Sections 2 and 3 to
register any Registrable Securities of the Holder if the Company shall deliver
to the Holder an opinion of counsel reasonably satisfactory to such Holder and
its counsel to the effect that the
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<PAGE>
proposed sale or disposition by the Holder of all of the Registrable Securities
for which registration was requested does not require registration under the
Securities Act, and offers to remove any and all Transfer restrictions and
legends restricting Transfer from the certificates evidencing such Registrable
Securities.
Registration Expenses. "Registration Expenses" shall have the
meaning set forth in Section 6.1.
Registration Rights Period. "Registration Rights Period" means
the period commencing on the fifth anniversary hereof and terminating on the
earliest to occur of (i) the twentieth anniversary hereof, (ii) if the Holder or
any Permitted Affiliate Transferee (as defined in the Investment Agreement) has
Transferred any Purchased Shares or any securities acquired in exchange for or
on conversion of such Purchased Shares, then the date, if any, on which the
Holder and the Permitted Affiliate Transferees, in the aggregate, fail to
maintain an Aggregate Converted Percentage (as determined pursuant to the
Investment Agreement) equal to at least 5.3%, or (iii) if neither the Holder nor
any Permitted Affiliate Transferee has Transferred any Purchased Shares, or any
securities acquired in exchange for or on conversion of such Purchased Shares,
then the date, if any, on which the Holder and the Permitted Affiliate
Transferees, in the aggregate, fail to maintain an Aggregate Converted
Percentage equal to at least 2.1%.
Securities Act. "Securities Act" shall mean the Securities Act
of 1933.
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<PAGE>
Selling Holder. "Selling Holder" shall mean, with respect to a
specified registration of securities pursuant to this Agreement, the Holder if
any of the Holder's Registrable Securities are included in such registration.
Shares. "Shares" shall mean any or all of the shares of Common
Stock held by the Holder that are acquired by the Holder from the Company
pursuant to the Investment Agreement, whether such acquisition by the Holder is
by the purchase of Common Stock or by the exchange of AOC Common Stock for
Common Stock.
Transfer. "Transfer" shall mean and include the act of
selling, giving, transferring, creating a trust (voting or otherwise), assigning
or otherwise disposing of to an unaffiliated third party (other than pledging,
hypothecating or otherwise transferring as security) (and correlative words
shall have correlative meanings); provided however, that any transfer or other
disposition upon foreclosure or other exercise of remedies of a secured creditor
after an event of default under or with respect to a pledge, hypothecation or
other transfer as security shall constitute a "Transfer".
Underwriters' Representative. "Underwriters' Representative"
shall mean the managing underwriter or, in the case of a co-managed
underwriting, the managing underwriter designated as the Underwriters'
Representative by the co-managers for the sale of securities of the Company.
Violation. "Violation" shall have the meaning set forth in
Section 7.1.
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1.2. Usage. (a) References to a Person are also references to
its assigns and successors in interest (by means of merger, consolidation or
sale of all or substantially all the assets of such Person or otherwise, as the
case may be).
(b) References to Registrable Securities "owned" by the Holder
shall include Registrable Securities beneficially owned by such Person but which
are held of record in the name of a nominee, trustee, custodian, or other agent.
(c) References to a document are to it as amended, waived and
otherwise modified from time to time and references to a statute or other
governmental rule are to it as amended and otherwise modified from time to time
(and references to any provision thereof shall include references to any
successor provision).
(d) References to Sections are to sections hereof unless the
context otherwise requires.
(e) The definitions set forth herein are equally applicable
both to the singular and plural forms and the feminine, masculine and neuter
forms of the terms defined.
(f) The term "including" and correlative terms shall be deemed
to be followed by "without limitation" whether or not followed by such words or
words of like import.
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(g) The term "hereof" and similar terms refer to this
Agreement as a whole.
(h) The "date of" any notice or request given pursuant to this
Agreement shall be determined in accordance with Section 11.2.
Section 2. Demand Registration.
2.1. (a) If at any time during the Registration Rights Period,
the Holder shall make a written request to the Company to register Registrable
Securities then held by the Holder, the Company shall cause there to be filed
with the Commission a registration statement meeting the requirements of the
Securities Act (a "Demand Registration") and the Holder shall be entitled to
have included therein all or such number of such Holder's Registrable
Securities, as the Holder shall specify in writing; provided, however, that no
request may be made pursuant to this Section 2.1 if within twelve (12) months
prior to the date of such request a registration statement in connection with
either a Demand Registration pursuant to this Section 2.1 or a Piggyback
Registration pursuant to Section 3.1 shall have been declared effective by the
Commission. Any request made pursuant to this Section 2.1 shall be addressed to
the attention of the Secretary of the Company, and shall specify the number of
Registrable Securities to be registered, the intended methods of disposition
thereof and that the request is for a Demand Registration pursuant to this
Section 2.1(a).
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(b) The Company shall be entitled to (i) postpone the filing
of any Demand Registration statement otherwise required to be prepared and filed
pursuant to this Section 2.1, and (ii) after effectiveness of any Demand
Registration statement prepared and filed pursuant to this Section 2.1, suspend
the use of such Demand Registration statement and require the Selling Holder to
suspend sales pursuant to the prospectus contained therein, if, in either case,
the Board determines, in its good faith reasonable judgment (with the
concurrence of the managing underwriter, if any), that such registration and the
Transfer of Registrable Securities contemplated thereby would materially
interfere with, or require premature disclosure of, any financing, acquisition,
divestiture, reorganization or other material transaction involving the Company
or any of its majority-owned subsidiaries and the Company promptly gives the
Holder notice of such determination; provided, however, that any such
postponement and/or suspension pursuant to this Section 2.1(b) shall not, in the
aggregate, exceed 180 days with respect to any one Demand Registration
statement.
2.2. Following receipt of a request for a Demand Registration,
the Company shall:
(a) File a registration statement with the Commission as
promptly as practicable, and shall use the Company's reasonable best efforts to
have the registration declared effective under the Securities Act as soon as
reasonably practicable, in each instance giving due regard to the need to
prepare current financial statements, conduct due diligence and complete other
actions that are reasonably necessary under applicable federal and state law to
effect a registered public offering.
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(b) Subject to Section 2.1(b), use the Company's reasonable
best efforts to keep the registration statement relating to the Demand
Registration Continuously Effective for up to 180 days or until such earlier
date as of which all the Registrable Securities under the Demand Registration
statement shall have been disposed of in the manner described in such
registration statement. Notwithstanding the foregoing, if for any reason the
effectiveness of a registration statement pursuant to this Section 2 is
suspended, the foregoing period shall be extended by the aggregate number of
days of such suspension.
2.3. During the Registration Rights Period, the Company shall
be obligated to effect no more than three (3) Demand Registrations. For purposes
of the preceding sentence, registration shall not be deemed to have been
effected (i) if after such registration statement has become effective, such
registration or the related offer, sale or distribution of Registrable
Securities thereunder is interfered with by any stop order, injunction or other
order or requirement of the Commission or other governmental agency or court for
any reason not attributable to the Selling Holder and such interference is not
thereafter eliminated, (ii) if, during the period that a Demand Registration
Statement is effective immediately following a postponement or suspension by the
Company pursuant to Section 2.1(b), the Selling Holder is unable to reasonably
complete the offering and sale of Registrable Securities registered pursuant to
such registration statement due to adverse market conditions and could have
reasonably completed such offering and sale but for such postponement or
suspension, or (iii) if the conditions to closing specified in the underwriting
agreement, if any, entered into in connection with such registration are not
satisfied or waived, other than by reason of a failure on the part of the
Selling Holder. If the Company shall have complied
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with its obligations under this Agreement, a right to demand a registration
pursuant to this Section 2 shall be deemed to have been satisfied upon the
earlier of (x) the date as of which all of the Registrable Securities included
therein shall have been disposed of pursuant to the Registration Statement, and
(y) the date as of which such Demand Registration shall have been Continuously
Effective for a period of 180 days, provided no stop order or similar order, or
proceedings for such an order, is thereafter entered or initiated.
2.4. A registration pursuant to this Section 2 shall be on
such appropriate registration form of the Commission as shall (i) be selected by
the Company and be reasonably acceptable to the Selling Holder, and (ii) permit
the disposition of the Registrable Securities in accordance with the intended
method or methods of disposition specified in the request pursuant to Section
2.1(a).
2.5. If any registration pursuant to this Section 2 involves
an underwritten offering (whether on a "firm", "best efforts" or "all reasonable
efforts" basis or otherwise), or an agented offering, the Selling Holder shall
have the right to select the underwriter or underwriters and manager or managers
to administer such underwritten offering or the placement agent or agents for
such agented offering; provided, however, that each Person so selected shall be
reasonably acceptable to the Company.
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Section 3. Piggyback Registration.
3.1. If at any time during the Registration Rights Period the
Company proposes to register (including for this purpose a registration effected
by the Company for shareholders of the Company other than the Holder) equity
securities under the Securities Act in connection with the public offering
solely for cash on Form S-1, S-2 or S-3 (or any replacement or successor forms),
the Company shall promptly give the Holder of Registrable Securities written
notice of such registration (a "Piggyback Registration"). Upon the written
request of the Holder given within 30 days following the date of such notice,
the Company shall cause to be included in such registration statement and use
its reasonable best efforts to be registered under the Securities Act all the
Registrable Securities that such Holder shall have requested to be registered;
provided, however, that such right of inclusion shall not apply to any
registration statement covering an underwritten offering of convertible debt
securities; provided further, that, if Telephone and Data Systems, Inc. ("TDS"),
the parent corporation of the Company, has assumed the rights and obligations of
the Company under this Agreement and the Registrable Securities consist of a
class of tracking stock of TDS, then such right of inclusion shall only apply to
a registration statement covering an underwritten offering of such class of
tracking stock; and provided further, that no request may be made pursuant to
this Section 3.1 if within twelve (12) months prior to the date of such request
a registration statement in connection with either a Demand Registration
pursuant to Section 2.1 or a Piggyback Registration pursuant to this Section 3.1
shall have been declared effective by the Commission. The Company shall have the
absolute right to withdraw or cease to prepare or file any registration
statement for any offering referred to in this Section 3 without any obligation
or liability to the Holder.
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3.2. If the Underwriters' Representative or Agent shall advise
the Company in writing (with a copy to the Selling Holder) that, in its opinion,
the amount of Registrable Securities requested to be included in such
registration would materially adversely affect such offering or the timing
thereof, then the Company will include in such registration, to the extent of
the amount which the Company is so advised can be sold without such material
adverse effect: (i) first, all securities proposed to be sold by the Company for
its own account; (ii) second, the Registrable Securities requested to be
included in such registration by the Holder pursuant to this Section 3, and all
other securities being registered pursuant to the exercise of contractual rights
comparable to the rights granted in this Section 3, pro rata based on the
estimated gross proceeds from the sale thereof; and (iii) third, all other
securities requested to be included in such registration.
3.3. During the Registration Rights Period, the Holder shall
be entitled to have its Registrable Securities included in up to five (5)
Piggyback Registrations pursuant to this Section 3.
Section 4. Registration Procedures. Whenever required under
Section 2 or Section 3 to effect the registration of any Registrable Securities,
the Company shall, as promptly as practicable:
4.1. Prepare and file with the Commission a registration
statement with respect to such Registrable Securities and use the Company's
reasonable best efforts to cause such registration statement to become
effective; provided, however, that before filing a registration statement or
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prospectus or any amendments or supplements thereto, including documents
incorporated by reference after the initial filing of the registration statement
and prior to effectiveness thereof, the Company shall furnish to one firm of
counsel for the Selling Holder copies of all such documents in the form
substantially as proposed to be filed with the Commission prior to filing for
review and comment by such counsel.
4.2. Prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
with such registration statement as may be necessary to comply with the
provisions of the Securities Act and rules thereunder with respect to the
disposition of all securities covered by such registration statement. If the
registration is for an underwritten offering, the Company shall amend the
registration statement or supplement the prospectus whenever required by the
terms of the underwriting agreement entered into pursuant to Section 4.5.
Pending such amendment or supplement the Holder shall cease making offers or
Transfers of Registerable Shares pursuant to the prior prospectus. In the event
that any Registrable Securities included in a registration statement subject to,
or required by, this Agreement remain unsold at the end of the period during
which the Company is obligated to use its reasonable best efforts to maintain
the Continuously Effective status of such registration statement, the Company
may file a post-effective amendment to the registration statement for the
purpose of removing such securities from registered status.
4.3. Furnish to the Selling Holder, without charge, such
numbers of copies of the registration statement, any pre-effective or
post-effective amendment thereto, the prospectus,
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including each preliminary prospectus and any amendments or supplements thereto,
in each case in conformity with the requirements of the Securities Act and the
rules thereunder, and such other related documents as the Selling Holder may
reasonably request in order to facilitate the disposition of all Registrable
Securities included in the registration.
4.4. Use the Company's reasonable best efforts (i) to register
and qualify the securities covered by such registration statement under such
other securities or Blue Sky laws of such states or jurisdictions of the United
States as shall be reasonably requested by the Underwriters' Representative or
Agent (as applicable, or if inapplicable, in those states designated by the
Selling Holder), and (ii) to obtain the withdrawal of any order suspending the
effectiveness of a registration statement, or the lifting of any suspension of
the qualification (or exemption from qualification) of the offer and transfer of
any of the Registrable Securities in any jurisdiction, at the earliest possible
moment; provided, however, that the Company shall not be required in connection
therewith or as a condition thereto to qualify to do business or to file a
general consent to service of process in any such states or jurisdictions.
4.5. In the event of any underwritten or agented offering,
enter into and perform the Company's obligations under an underwriting or agency
agreement (including indemnification and contribution obligations of
underwriters or agents), in usual and customary form, with the managing
underwriter or underwriters of or agents for such offering. The Company shall
also cooperate with the Selling Holder and the Underwriters' Representative or
Agent for such offering in the marketing of the Registrable Securities,
including making reasonably available the Company's officers,
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accountants, counsel, premises, books and records for such purpose, but the
Company shall not be required to incur any significant out-of-pocket expense
pursuant to this sentence.
4.6. Promptly notify the Selling Holder of any stop order
issued or threatened to be issued by the Commission in connection therewith (and
take all reasonable actions required to prevent the entry of such stop order or
to remove it if entered).
4.7. Make available for inspection by the Selling Holder, any
underwriter participating in such offering and the representatives of the
Selling Holder and Underwriter (but not more than one firm of counsel to the
Selling Holder), all financial and other information as shall be reasonably
requested by them, and provide the Selling Holder, any underwriter participating
in such offering and the representatives of the Selling Holder and Underwriter
the reasonable opportunity to discuss the business affairs and financial
statements of the Company with its principal executives and independent public
accountants who have certified the audited financial statements included in such
registration statement, in each case all as necessary to enable them to exercise
their due diligence responsibility under the Securities Act; provided, however,
that information that the Company determines, in good faith, to be confidential
and which the Company advises such Person in writing is confidential shall not
be disclosed unless such Person signs a confidentiality agreement reasonably
satisfactory to the Company or the Selling Holder agrees to be responsible for
such Person's breach of confidentiality on terms reasonably satisfactory to the
Company.
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4.8. Use the Company's reasonable best efforts to obtain a
so-called "comfort letter" from its independent public accountants, and legal
opinions of counsel to the Company addressed to the Selling Holder, in customary
form and covering such matters of the type customarily covered by such letters,
and in a form that shall be reasonably satisfactory to the Selling Holder. The
Company shall furnish to the Selling Holder a signed counterpart of any such
comfort letter or legal opinion. Delivery of any such opinion or comfort letter
shall be subject to the recipient furnishing such written representations or
acknowledgments as are customarily provided by selling shareholders who receive
such comfort letters or opinions.
4.9. Provide and cause to be maintained a transfer agent and
registrar for all Registrable Securities covered by such registration statement
from and after a date not later than the effective date of such registration
statement.
4.10. Use the Company's reasonable best efforts to cause the
Registrable Securities covered by such registration statement (i) to be listed
on a securities exchange or included for quotation in a recognized trading
market to the extent that the Common Stock is so listed or included, and (ii) to
be registered with or approved by such other United States or state governmental
agencies or authorities as may be necessary by virtue of the business and
operations of the Company to enable the Selling Holder lawfully to consummate
the disposition of such Registrable Securities.
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4.11. Use the Company's reasonable best efforts to provide a
CUSIP number for the Registrable Securities prior to the effective date of the
first registration statement filed hereunder including Registrable Securities.
4.12. Take such other actions as are reasonably required in
order to expedite or facilitate the disposition of Registrable Securities
included in each such registration.
Section 5. Holder's Obligations. It shall be a condition
precedent to the obligations of the Company to take any action pursuant to this
Agreement with respect to the Registrable Securities of the Selling Holder that
the Selling Holder shall:
5.1. Furnish to the Company such information regarding the
Selling Holder, the number of the Registrable Securities owned by it and the
intended method of disposition of such securities as shall be required to effect
the registration of the Selling Holder's Registrable Securities, and to
cooperate with the Company in preparing such registration;
5.2. Agree to sell its Registrable Securities to the
underwriters at the same price and on substantially the same terms and
conditions as the Company or the other Persons, if any, on whose behalf the
registration statement is being filed have agreed to sell their securities, and
to execute the underwriting agreement agreed to by the Selling Holder (in the
case of a registration
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under Section 2) or the Company and the Selling Holder (in the case of a
registration under Section 3).
Section 6. Expenses of Registration. Expenses in connection
with registrations pursuant to this Agreement shall be allocated and paid as
follows:
6.1. With respect to each Demand Registration, the Selling
Holder shall bear and pay all expenses incurred in connection with any
registration, filing, or qualification of Registrable Securities with respect to
such Demand Registration, including all registration, filing and National
Association of Securities Dealers, Inc. fees, all fees and expenses of complying
with securities or blue sky laws, all word processing, duplicating and printing
expenses, messenger and delivery expenses, the reasonable fees and disbursements
of counsel for the Company, and of the Company's independent public accountants,
including the expenses of "cold comfort" letters required by or incident to such
performance and compliance, the fees and disbursements of counsel for the
Selling Holder, and the management fees, underwriting discounts and commissions
relating to the Selling Holder's Registrable Securities included in such
registration (collectively, the "Registration Expenses").
6.2. The Company shall bear and pay all Registration Expenses
incurred in connection with any Piggyback Registrations pursuant to Section 3;
provided, however, that the Selling Holder shall pay (i) the fees and
disbursements of counsel for the Selling Holder and (ii) the
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management fees, underwriting discounts and commissions relating to the Selling
Holder's Registrable Securities included in such registration.
6.3. Any failure of the Selling Holder or the Company to pay
any Registration Expenses as required by this Section 6 shall not relieve the
Selling Holder or the Company, as applicable, of its obligations under this
Agreement.
Section 7. Indemnification; Contribution. If any Registrable
Securities are included in a registration statement under this Agreement:
7.1. To the extent permitted by applicable law, the Company
shall indemnify and hold harmless the Selling Holder, each Person, if any, who
controls the Selling Holder within the meaning of the Securities Act, and each
officer, director, partner, and employee of the Selling Holder and such
controlling Person, against any and all losses, claims, damages, liabilities and
expenses (joint and several), including attorneys' fees and disbursements and
expenses of investigation, incurred by such party pursuant to any actual or
threatened action, suit, proceeding or investigation, or to which any of the
foregoing Persons may become subject under the Securities Act, the Exchange Act
or other federal or state laws, insofar as such losses, claims, damages,
liabilities and expenses arise out of or are based upon any of the following
statements, omissions or violations (collectively a "Violation"):
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(i) Any untrue statement or alleged untrue statement of a
material fact contained in such registration statement, including any
preliminary prospectus or final prospectus contained therein, any
amendments or supplements thereto or any documents incorporated by
reference therein (collectively, the "Registration Statement");
(ii) The omission or alleged omission to state in the
Registration Statement a material fact required to be stated therein,
or necessary to make the statements therein not misleading; or
(iii) Any violation or alleged violation by the Company of the
Securities Act, the Exchange Act, any applicable state securities law
or any rule or regulation promulgated under the Securities Act, the
Exchange Act or any applicable state securities law;
provided, however, that the indemnification required by this Section 7.1 shall
not apply to amounts paid in settlement of any such loss, claim, damage,
liability or expense if such settlement is effected without the consent of the
Company, which consent shall not be unreasonably withheld, nor shall the Company
be liable in any such case for any such loss, claim, damage, liability or
expense to the extent that it arises out of or is based upon a Violation which
occurs in reliance upon and in conformity with written information furnished to
the Company by the indemnified party expressly for use in connection with such
registration.
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7.2. To the extent permitted by applicable law, the Selling
Holder shall indemnify and hold harmless the Company, each of its directors,
each of its officers who shall have signed the registration statement, and each
Person, if any, who controls the Company within the meaning of the Securities
Act, against any and all losses, claims, damages, liabilities and expenses
(joint and several), including attorneys' fees and disbursements and expenses of
investigation, incurred by such party pursuant to any actual or threatened
action, suit, proceeding or investigation, or to which any of the foregoing
Persons may become subject under the Securities Act, the Exchange Act or other
federal or state laws, insofar as such losses, claims, damages, liabilities and
expenses arise out of or are based upon any Violation, in each case to the
extent (and only to the extent) that such Violation occurs in reliance upon and
in conformity with written information furnished by the Selling Holder expressly
for use in connection with such registration; provided, however, that (x) the
indemnification required by this Section 7.2 shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or expense if settlement
is effected without the consent of the Selling Holder, which consent shall not
be unreasonably withheld, and (y) in no event shall the amount of any indemnity
under this Section 7.2 exceed the gross proceeds from the applicable offering
received by the Selling Holder.
7.3. Promptly after receipt by an indemnified party under this
Section 7 of notice of the commencement of any action, suit, proceeding,
investigation or threat thereof made in writing for which such indemnified party
may make a claim under this Section 7, such indemnified party shall deliver to
the indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in and, to the extent the
indemnifying party so
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desires, jointly with any other indemnifying party similarly noticed, to assume
the defense thereof with counsel mutually satisfactory to the parties; provided,
however, that an indemnified party shall have the right to retain its own
counsel, with the fees and disbursements and expenses to be paid by the
indemnifying party, if representation of such indemnified party by the counsel
retained by the indemnifying party would be inappropriate due to actual or
potential differing interests between such indemnified party and any other party
represented by such counsel in such proceeding. The failure to deliver written
notice to the indemnifying party within a reasonable time following the
commencement of any such action, if materially prejudicial to its ability to
defend such action, shall relieve such indemnifying party of any liability to
the indemnified party under this Section 7 but shall not relieve the
indemnifying party of any liability that it may have to any indemnified party
otherwise than pursuant to this Section 7. Any fees and expenses incurred by the
indemnified party (including any fees and expenses incurred in connection with
investigating or preparing to defend such action or proceeding) shall be paid to
the indemnified party, as incurred, within thirty (30) days of written notice
thereof to the indemnifying party (regardless of whether it is ultimately
determined that an indemnified party is not entitled to indemnification
hereunder). Any such indemnified party shall have the right to employ separate
counsel in any such action, claim or proceeding and to participate in the
defense thereof, but the fees and expenses of such counsel shall be the expenses
of such indemnified party unless (i) the indemnifying party has agreed to pay
such fees and expenses or (ii) the indemnifying party shall have failed to
promptly assume the defense of such action, claim or proceeding or (iii) the
named parties to any such action, claim or proceeding (including any impleaded
parties) include both such indemnified party and the indemnifying party, and
such indemnified party shall have been advised by counsel that there may be one
or more legal defenses
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available to it which are different from or in addition to those available to
the indemnifying party and that the assertion of such defenses would create a
conflict of interest such that counsel employed by the indemnifying party could
not faithfully represent the indemnified party (in which case, if such
indemnified party notifies the indemnifying party in writing that it elects to
employ separate counsel at the expense of the indemnifying party, the
indemnifying party shall not have the right to assume the defense of such
action, claim or proceeding on behalf of such indemnified party, it being
understood, however, that the indemnifying party shall not, in connection with
any one such action, claim or proceeding or separate but substantially similar
or related actions, claims or proceedings in the same jurisdiction arising out
of the same general allegations or circumstances, be liable for the reasonable
fees and expenses of more than one firm of attorneys (together with appropriate
local counsel) separate from its own counsel at any time for all such
indemnified parties, unless in the reasonable judgment of such indemnified party
a conflict of interest may exist between such indemnified party and any other of
such indemnified parties with respect to such action, claim or proceeding, in
which event the indemnifying party shall be obligated to pay the fees and
expenses of such additional counsel or counsels). No indemnifying party shall be
liable to an indemnified party for any settlement of any action, proceeding or
claim without the written consent of the indemnifying party, which consent shall
not be unreasonably withheld.
7.4. If the indemnification required by this Section 7 from
the indemnifying party is unavailable to an indemnified party hereunder in
respect of any losses, claims, damages, liabilities or expenses referred to in
this Section 7:
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(a) The indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages, liabilities or
expenses in such proportion as is appropriate to reflect the relative fault of
the indemnifying party and indemnified parties in connection with the actions
which resulted in such losses, claims, damages, liabilities or expenses, as well
as any other relevant equitable considerations. The relative fault of such
indemnifying party and indemnified parties shall be determined by reference to,
among other things, whether any Violation has been committed by, or relates to
information supplied by, such indemnifying party or indemnified parties, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such Violation. The amount paid or payable by a party as a
result of the losses, claims, damages, liabilities and expenses referred to
above shall be deemed to include, subject to the limitations set forth in
Section 7.1 and Section 7.2, any legal or other fees or expenses reasonably
incurred by such party in connection with any investigation or proceeding.
(b) The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 7.4 were determined by pro
rata allocation or by any other method of allocation which does not take into
account the equitable considerations referred to in Section 7.4(a). No Person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any Person who was
not guilty of such fraudulent misrepresentation.
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7.5. If indemnification is available under this Section 7, the
indemnifying parties shall indemnify each indemnified party to the full extent
provided in this Section 7 without regard to the relative fault of such
indemnifying party or indemnified party or any other equitable consideration
referred to in Section 7.4.
7.6. The obligations of the Company and the Selling Holder
under this Section 7 shall survive the completion of any offering of Registrable
Securities pursuant to a registration statement under this Agreement.
Section 8. Holdback. The Holder, if so requested by the
Underwriters' Representative or Agent in connection with an offering of any
securities covered by a registration statement filed by the Company, whether or
not the Holder's securities are included therein, shall not effect any public
sale or distribution of shares of Common Stock or any securities convertible
into or exchangeable or exercisable for shares of Common Stock, including a sale
pursuant to Rule 144 under the Securities Act (except as part of such
underwritten or agented registration), during the 15- day period prior to, and
during the 180-day period beginning on, the date such registration statement is
declared effective under the Securities Act by the Commission, provided that
such Holder is timely notified of such effective date in writing by the Company
or such Underwriters' Representative or Agent. In order to enforce the foregoing
covenant, the Company shall be entitled to impose stop-transfer instructions
with respect to the Registrable Securities of the Holder until the end of such
period.
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Section 9. Amendment, Modification and Waivers; Further
Assurances. (a) This Agreement may not be amended, modified or supplemented
except by an agreement in writing executed by each of the Company and the
Holder.
(b) No waiver of any terms or conditions of this Agreement
shall operate as a waiver of any other breach of such terms and conditions or
any other term or condition, nor shall any failure to enforce any provision
hereof operate as a waiver of such provision or of any other provision hereof.
No written waiver hereunder, unless it by its own terms explicitly provides to
the contrary, shall be construed to effect a continuing waiver of the provisions
being waived and no such waiver in any instance shall constitute a waiver in any
other instance or for any other purpose or impair the right of the party against
whom such waiver is claimed in all other instances or for all other purposes to
require full compliance with such provision.
(c) Each of the parties hereto shall execute all such further
instruments and documents and take all such further action as any other party
hereto may reasonably require in order to effectuate the terms and purposes of
this Agreement.
Section 10. Assignment and Assumption.
Section 10.1. Assignment; Benefit. This Agreement and all of
the provisions hereof shall be binding upon and shall inure to the benefit of
the parties hereto and their respective heirs,
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assigns, executors, administrators or successors; provided, however, that
neither this Agreement nor any of the rights, interests or obligations hereunder
shall be assigned or delegated by the Holder to any person who purchases such
Registrable Securities from the Holder, except (i) as provided in the Investment
Agreement or (ii) to one or more "affiliates" of the Holder within the meaning
of Rule 144(a)(1) adopted by the Commission pursuant to the Securities Act.
10.2 Assumption Upon Merger, Consolidation or Reorganization.
The Company shall not, directly or indirectly, enter into any merger,
consolidation or reorganization in which the Company shall not be the surviving
corporation unless the proposed surviving corporation shall, before such merger,
consolidation or reorganization, agree in writing to assume the obligations of
the Company under this Agreement, and for that purpose references hereunder to
"Registrable Securities" shall be deemed to be references to the securities
which the Holder would be entitled to receive in exchange for Registrable
Securities under any such merger, consolidation or reorganization; provided,
however, that the provisions of this Agreement shall not apply in the event of
any merger, consolidation or reorganization in which the Company is not the
surviving corporation if the Holder is entitled to receive in exchange for its
Registrable Securities (i) cash or (ii) securities which may be sold without
registration or other restriction under the Act.
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Section 11. Miscellaneous.
11.1. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING
REGARD TO THE CONFLICT OF LAWS PRINCIPLES THEREOF.
11.2. Notices. All notices, requests and other communications
hereunder shall be in writing and shall be made by hand delivery, facsimile, or
overnight air courier guaranteeing next day delivery, as follows:
(a) If to the Company, at:
Aerial Communications, Inc.
8410 West Bryn Mawr Avenue
Suite 1100
Chicago, Illinois 60631
Attention: Donald W. Warkentin
Telephone: (773) 399-4145
Facsimile: (773) 399-7997
with a copy (which shall not constitute notice) to:
Telephone and Data Systems, Inc.
30 North LaSalle Street
Suite 4000
Chicago, Illinois 60602
Attention: LeRoy T. Carlson, Jr.
Telephone: (312) 630-1900
Facsimile: (312) 630-9299
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<PAGE>
and a copy (which shall not constitute notice) to:
Sidley & Austin
One First National Plaza
42nd Floor - SW
Chicago, Illinois 60603
Attention: Michael G. Hron, Esq.
Telephone: (312) 853-2030
Facsimile: (312) 853-7036
(b) if to the Holder, at:
SONERA LTD.
P.O. Box 106
FIN-00051-TELE
Teollisuuskatu 15, HELSINKI
Attention: Maire Laitinen, Esq.
Telephone: 011-35-8-2040-3641
Facsimile: 011-35-8-2040-3414
with a copy (which shall not constitute notice) to:
Patton Boggs, L.L.P.
2550 M. Street, N.W.
Washington, D.C. 20037-1350
Attention: Richard M. Stolbach, Esq.
Telephone: (202) 457-6324
Facsimile: (202) 457-6315
or at such other address as any party may from time to time furnish to the other
parties by a notice given in accordance with the provisions of this Section
11.2. All such notices and communications shall be deemed to have been duly
given at the time delivered by hand, if personally delivered; when receipt
confirmed, if sent by facsimile; and the next business day after timely delivery
to the courier, if sent by an overnight air courier service guaranteeing next
day delivery.
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<PAGE>
11.3. Entire Agreement; Integration. This Agreement supersedes
all prior agreements between or among either of the parties hereto with respect
to the subject matter contained herein and embodies the entire understanding
among the parties relating to such subject matter.
11.4. Injunctive Relief. Each of the parties hereto
acknowledges that in the event of a breach by any of them of any material
provision of this Agreement, the aggrieved party may be without an adequate
remedy at law. Each of the parties therefore agrees that in the event of such a
breach hereof the aggrieved party may elect to institute and prosecute
proceedings in any court of competent jurisdiction to enforce specific
performance or to enjoin the continuing breach hereof. By seeking or obtaining
any such relief, the aggrieved party shall not be precluded from seeking or
obtaining any other relief to which it may be entitled.
11.5. Section Headings. Section headings are for convenience
of reference only and shall not affect the meaning of any provision of this
Agreement.
11.6. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be an original, and all of which
shall together constitute one and the same instrument. All signatures need not
be on the same counterpart.
11.7. Severability. If any provision of this Agreement shall
be invalid or unenforceable, such invalidity or unenforceability shall not
affect the validity and enforceability of
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<PAGE>
the remaining provisions of this Agreement, unless the result thereof would be
unreasonable, in which case the parties hereto shall negotiate in good faith as
to appropriate amendments hereto.
11.8. Filing. A copy of this Agreement and of all amendments
thereto shall be filed at the principal executive office of the Company with the
corporate recorder of the Company.
11.9. Termination. This Agreement may be terminated at any
time by a written instrument signed by the parties hereto. Unless sooner
terminated in accordance with the preceding sentence, this Agreement (other than
Section 7 hereof) shall terminate in its entirety on the earlier to occur of (i)
the expiration of the Registration Rights Period or (ii) such date as there
shall be no Registrable Securities outstanding, provided that any shares of
Common Stock previously subject to this Agreement shall not be Registrable
Securities following the sale of any such shares in an offering registered
pursuant to this Agreement.
11.10. Attorneys' Fees. In any action or proceeding brought to
enforce any provision of this Agreement, or where any provision hereof is
validly asserted as a defense, the successful party shall be entitled to recover
reasonable attorneys' fees (including any fees incurred in any appeal) in
addition to its costs and expenses and any other available remedy.
11.11. No Third Party Beneficiaries. Nothing herein expressed
or implied is intended to confer upon any person, other than the parties hereto
or their respective permitted assigns,
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<PAGE>
successors, heirs and legal representatives, any rights, remedies, obligations
or liabilities under or by reason of this Agreement.
11.12. Compliance with Rule 144. With a view to making
available to the Holder the benefits of Rule 144 promulgated under the
Securities Act, the Company agrees to use its reasonable best efforts during the
Registration Rights Period to:
(a) if the Company is required to file reports pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), file with the
Commission, as and when applicable, on a timely basis, all reports required to
be filed by the Company under the Exchange Act; or
(b) if the Company is not required to file reports pursuant to
the Exchange Act, upon the request of any Holder of Registrable Securities, the
Company shall make publicly available the information specified in subparagraph
(c)(2) of Rule 144 of the Securities Act, and take such further action as may be
reasonably required from time to time and as may be within the reasonable
control of the Company, to enable the Holder to Transfer Registrable Securities
without registration under the Securities Act within the limitation of the
exemptions provided by Rule 144 under the Securities Act or any similar rule or
regulation hereafter adopted by the Commission.
* * * * *
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<PAGE>
IN WITNESS WHEREOF, this Agreement has been duly executed by
the parties hereto as of the date first written above.
AERIAL COMMUNICATIONS, INC.
By: /s/ Donald W. Warkentin
-------------------------------
Donald W. Warkentin
President and Chief Executive Officer
SONERA LTD.
By: /s/ Aulis Salin
----------------------------
Name: Aulis Salin
----------------------------
Title: President and CEO
----------------------------
SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT,
DATED AS OF SEPTEMBER 8, 1998,
BETWEEN AERIAL COMMUNICATIONS, INC. AND SONERA LTD.
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<PAGE>
EXHIBIT 99.4
EXECUTION COPY
JOINT VENTURE AGREEMENT
By and Among
AERIAL COMMUNICATIONS, INC.
AERIAL OPERATING CO., INC.
and
SONERA CORPORATION U.S.
Dated as of September 8, 1998
<PAGE>
TABLE OF CONTENTS
-----------------
Page
----
ARTICLE I DEFINITIONS
Section 1.01 Defined Terms..........................................3
-------------
Section 1.02 Determination of Beneficial Ownership.................14
-------------------------------------
ARTICLE II FORMATION AND PURPOSE
Section 2.01 Formation and Purpose of Joint Venture................15
--------------------------------------
Section 2.02 Formation of LLCs.....................................15
-----------------
ARTICLE III VENTURE OPPORTUNITIES
Section 3.01 Exclusivity of Venture; Venture Opportunities.........16
---------------------------------------------
Section 3.02 Partial Termination of Exclusivity Period.............19
-----------------------------------------
Section 3.03 Termination of Agreement..............................21
------------------------
Section 3.04 Other Business; Non-Competition.......................23
-------------------------------
Section 3.05 Exempt Aerial Party Markets...........................25
---------------------------
Section 3.06 C or F Block B-PCS Licenses...........................26
---------------------------
ARTICLE IV INVESTMENT
Section 4.01 Initial Investment in LLC.............................27
-------------------------
Section 4.02 Carried Interest......................................29
----------------
Section 4.03 Additional Initial Investment.........................33
-----------------------------
Section 4.04 Amount of Investment..................................34
--------------------
Section 4.05 Additional Initial Investors..........................35
----------------------------
Section 4.06 Limitation on Percentage Interest.....................37
---------------------------------
ARTICLE V TRANSFER OF INTEREST
Section 5.01 Restrictions on Transfer..............................37
------------------------
Section 5.02 Right of First Negotiation............................39
--------------------------
Section 5.03 Tag-Along Rights......................................43
----------------
Section 5.04 Limitation on Non-Transferring Party's Rights.........44
---------------------------------------------
ARTICLE VI TECHNOLOGY
Section 6.01 Technological Changes and Advances....................45
----------------------------------
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<PAGE>
ARTICLE VII NAME OF LLC
Section 7.01 Name of LLC...........................................46
-----------
ARTICLE VIII MANAGEMENT AND OPERATION
Section 8.01 Board of Managers.....................................46
-----------------
Section 8.02 Unanimous Approval....................................48
------------------
Section 8.03 Right of First Negotiation............................49
--------------------------
Section 8.04 Management and Operation..............................53
------------------------
ARTICLE IX DISPUTES
Section 9.01 General...............................................54
-------
Section 9.02 Negotiation Procedure.................................54
---------------------
Section 9.03 Unresolved Disputes...................................55
-------------------
Section 9.04 Jurisdiction; Consent to Service of Process...........57
-------------------------------------------
ARTICLE X REPRESENTATIONS AND WARRANTIES
Section 10.01 Organization and Standing............................59
-------------------------
Section 10.02 Authorization........................................59
-------------
Section 10.03 Litigation...........................................59
----------
Section 10.04 Absence of Conflict..................................59
-------------------
Section 10.05 Absence of Undisclosed Liabilities...................60
----------------------------------
ARTICLE XI MISCELLANEOUS
Section 11.01 Confidentiality......................................60
---------------
Section 11.02 Notices..............................................62
-------
Section 11.03 Further Assurances...................................63
------------------
Section 11.04 Amendment............................................64
---------
Section 11.05 Waiver of Compliance; Consents.......................64
------------------------------
Section 11.06 Expenses.............................................64
--------
Section 11.07 Entire Agreement.....................................64
----------------
Section 11.08 Counterparts.........................................65
------------
Section 11.09 Headings and Captions................................65
---------------------
Section 11.10 Severability.........................................65
------------
Section 11.11 Governing Law........................................65
-------------
Section 11.12 Compliance with FCC Rules............................65
-------------------------
Section 11.13 No Claim of Immunity.................................67
--------------------
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<PAGE>
Section 11.14 Successors and Assigns...............................68
----------------------
Section 11.15 Equitable Remedies...................................68
------------------
Section 11.16 Remedies Cumulative..................................68
-------------------
Section 11.17 Limitation on Damages................................69
---------------------
SCHEDULES
- ---------
3.05 -- Exempt Aerial Party Markets
9.02(c) -- Designated Employees, Representatives and Officers
EXHIBITS
- --------
A -- Form of Certificate of Formation
B -- Form of Limited Liability Company Agreement
C -- Form of Trademark License Agreement
D -- Form of Management Agreement
- iii -
<PAGE>
JOINT VENTURE AGREEMENT
This JOINT VENTURE AGREEMENT, dated as of September 8, 1998
(the "Agreement"), is entered into between AERIAL COMMUNICATIONS, INC., a
Delaware corporation ("Aerial"), AERIAL OPERATING CO., INC., a Delaware
corporation and wholly-owned subsidiary of Aerial ("AOC" and, together with
Aerial, the "Aerial Parties"), and SONERA CORPORATION U.S., a Delaware
corporation ("Sonera U.S.").
W I T N E S S E T H:
WHEREAS, each of Aerial and United States Cellular
Corporation, a Delaware corporation ("USCC"), are majority-owned subsidiaries of
Telephone and Data Systems, Inc., a Delaware corporation ("TDS"), and, thus,
AOC, Aerial, USCC and TDS are Affiliates (as defined herein);
WHEREAS, Sonera U.S. is a wholly-owned subsidiary of Sonera
Ltd., a Finnish limited liability company ("Sonera" and, together with Sonera
U.S., the "Sonera Parties"), and, thus, the Sonera Parties are Affiliates;
WHEREAS, the parties hereto desire to form a joint venture
which, subject to certain exceptions as set forth herein, will serve during the
Exclusivity Period (as defined herein) as the exclusive vehicle through which
the Aerial Parties and the Sonera Parties will (i) acquire licenses issued by
the Federal Communications Commission to provide B-PCS (as defined herein) and
(ii)
<PAGE>
build and operate systems with respect to such licenses utilizing GSM Technology
(as defined herein);
WHEREAS, the parties hereto desire that a separate limited
liability company be formed pursuant to the laws of the State of Delaware for
each Market (as defined herein) in which one or more B-PCS Licenses (as defined
herein) will be acquired as contemplated hereunder, and that each of AOC and
Sonera U.S. (or a wholly-owned direct or indirect subsidiary of AOC or Sonera)
be a member of such limited liability company;
WHEREAS, the parties hereto desire that (i) AOC or an
Affiliate of AOC manage such B-PCS system for each such limited liability
company pursuant to the terms of this Agreement and a Management Agreement (as
defined herein) and (ii) Aerial grant a license to such limited liability
company authorizing, inter alia, the use of Aerial's name pursuant to a
Trademark License Agreement (as defined herein); and
WHEREAS, the parties hereto desire to set forth their
respective rights and obligations with respect to such joint venture, limited
liability companies and management arrangements.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants, conditions and promises hereinafter set forth, the parties
hereby agree as follows:
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<PAGE>
ARTICLE I
DEFINITIONS
Section 1.01 Defined Terms. Capitalized terms used in this
Agreement shall have the meanings set forth in this Section 1.01.
"Additional Initial Class A Member" has the meaning set forth
in Section 4.01(c) hereof.
"Aerial Entity" means Aerial, AOC and any Person in which
Aerial, directly or indirectly, through one or more intermediaries, owns an
interest, regardless of whether Aerial controls such Person.
"Aerial Group" means Aerial, each Aerial Sub and each alliance
that owns or operates a system providing B-PCS in which alliance Aerial or an
Aerial Sub owns a 20% or greater interest.
"Aerial Sub" means AOC or any other Subsidiary of Aerial.
"Affiliate" means any Person that, directly or indirectly,
through one or more intermediaries, controls, is controlled by or is under
common control with such Person. The term "control" shall mean the possession,
direct or indirect, of the power to direct or cause the direction
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<PAGE>
of the management or policies of such person, whether by reason of ownership of
voting stock or other equity interests, by contract or otherwise.
"Aggregate Class A Membership Interest Percentage" means the
sum of the percentages of the Class A Membership Interests.
"Aggregate Class B Membership Interest Percentage" means the
sum of the percentages of the Class B Membership Interests.
"Aggregate Required Capital Contribution" means, with respect
to any LLC formed pursuant to Section 2.02 hereof, the aggregate required
capital contribution set forth in the related Proposed Business Plan with
respect to any Proposed Project approved pursuant to Section 3.01(b) hereof or
the aggregate required capital contribution as reasonably determined by Sonera
U.S. with respect to any Market identified in Section 3.01(c) hereof, as
applicable.
"AOC Initial LLC Interest" has the meaning set forth in
Section 4.03 hereof.
"AOC Shares" has the meaning set forth in the Investment
Agreement.
"B-PCS" means broadband personal communications services
provided in the United States on the following frequency blocks:
Block A: 1850-1865 MHz paired with 1930-1945 MHz
Block B: 1870-1885 MHz paired with 1950-1965 MHz
Block C: 1895-1910 MHz paired with 1975-1990 MHz
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<PAGE>
Block D: 1865-1870 MHz paired with 1945-1950 MHz
Block E: 1885-1890 MHz paired with 1965-1970 MHz
Block F: 1890-1895 MHz paired with 1970-1975 MHz
B-PCS does not include narrowband personal communications services, paging or
other Wireless Services not constituting broadband personal communications
services.
"B-PCS License" means a license issued by the FCC authorizing
the holder thereof to provide B-PCS in any Market.
"BTA" means any one of the 487 Basic Trading Areas based on
the Rand McNally 1992 Commercial Atlas & Marketing Guide, 123rd Edition, at
pages 38-39, with the following additions licensed separately as BTA-like areas:
(i) American Samoa; (ii) Guam; (iii) Northern Mariana Islands; (iv)
Mayaguez/Aguadilla-Ponce, Puerto Rico; (v) San Juan, Puerto Rico; and (vi) the
United States Virgin Islands. The Mayaguez/Aguadilla-Ponce BTA-like service area
consists of the following municipios: Adjuntas, Aguada, Aguadilla, Anasco,
Arroyo, Cabo Rojo, Coamo, Guanica, Guayama, Guayanilla, Hormigueros, Isabela,
Jayuya, Juana Diaz, Lajas, Las Marias, Maricoa, Maunabo, Mayaguez, Moca,
Patillas, Penuelas, Ponce, Quebradillas, Rincon, Sabana Grande, Salinas, San
Germain, Santa Isabel, Villalba, and Yauco. The San Juan BTA-like service area
consists of all other municipios in Puerto Rico.
"Business Day" means any day other than a Saturday, Sunday,
legal holiday in Chicago, Illinois or other day on which commercial banks in
Chicago are authorized by law or governmental decree to close.
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<PAGE>
"C or F Block Notice" has the meaning set forth in Section
3.06(b) hereof.
"Carried Interest" has the meaning set forth in Section
4.02(a) hereof.
"Carried Interest Amendment" has the meaning set forth in
Section 4.02(c) hereof.
"Carried Interest Negotiation Notice" has the meaning set
forth in Section 4.02(c)hereof.
"Cellular Service" means any service governed by Section 22.99
of the rules of the FCC.
"Class A Member" means a member of an LLC formed pursuant to
Section 2.02 hereof holding a Class A Membership Interest.
"Class A Membership Interest" means each beneficial interest
in an LLC formed pursuant to Section 2.02 hereof designated as a Class A
Membership Interest on Schedule I attached to the related Limited Liability
Company Agreement.
"Class B Member" means a member of an LLC formed pursuant to
Section 2.02 hereof holding a Class B Membership Interest.
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<PAGE>
"Class B Membership Interest" means each beneficial interest
in an LLC formed pursuant to Section 2.02 hereof designated as a Class B
Membership Interest on Schedule I attached to the related Limited Liability
Company Agreement.
"Class C Member" means a member of an LLC formed pursuant to
Section 2.02 hereof holding a Class C Membership Interest.
"Class C Membership Interest" means each beneficial interest
in an LLC formed pursuant to Section 2.02 hereof designated as a Class C
Membership Interest on Schedule I attached to the related Limited Liability
Company Agreement.
"Compete" and "Competition" means to provide, or the provision
of, respectively, Wireless Services within the same geographic area.
"Derivative" has the meaning set forth in the Investment
Agreement.
"Disapproved License" has the meaning set forth in Section
3.02(a) hereof.
"Disapproving Party" has the meaning set forth in Section
3.02(a) hereof.
"Exclusivity Period" has the meaning set forth in Section
3.01(a) hereof.
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<PAGE>
"Exempt Aerial Party Markets" has the meaning set forth in
Section 3.05(a) hereof.
"FCC" means the Federal Communications Commission or any
successor thereto.
"GSM Technology" means Global Systems For Mobile
Communications technology, subject to such changes resulting from the evolution
of such technology or the development of subsequent technologies based thereon
or derived therefrom as determined pursuant to Section 6.01 hereof.
"Investment Agreement" means the Investment Agreement, dated
as of September 8, 1998, among TDS, Aerial, AOC and Sonera.
"Investment Election Period" has the meaning set forth in
Section 3.01(b) hereof.
"Limited Liability Company Agreement" has the meaning set
forth in Section 2.02 hereof.
"LLC" has the meaning set forth in Section 2.02 hereof.
"LLC Board" has the meaning set forth in Section 8.01(a)
hereof.
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<PAGE>
"LLC Fifth Anniversary" means, with respect to an LLC, the
fifth anniversary of the date of formation of such LLC pursuant to Section 2.02
hereof.
"LLC Tenth Anniversary" means, with respect to an LLC, the
tenth anniversary of the date of formation of such LLC pursuant to Section 2.02
hereof.
"Majority Class A Member" means the Class A Member holding a
majority of the Aggregate Class A Membership Interest Percentage.
"Majority Class B Member" means the Class B Member holding a
majority of the Aggregate Class B Membership Interest Percentage.
"Management Agreement" has the meaning set forth in Section
8.04 hereof.
"Management Compensation Amendment" has the meaning set forth
in Section 4.02(c) hereof.
"Management Compensation Negotiation Period" has the meaning
set forth in Section 4.02(c) hereof.
"Market" means an MTA or BTA, as applicable.
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<PAGE>
"Minimum Sonera U.S. Initial LLC Interest" has the meaning set
forth in Section 4.01(a) hereof.
"Minority Class A Member" means any Class A Member holding
less than a majority of the Aggregate Class A Membership Interest Percentage.
"Minority Class B Member" means any Class B Member holding
less than a majority of the Aggregate Class B Membership Interest Percentage.
"MTA" means any one of the 47 Major Trading Areas based on the
Rand McNally 1992 Commercial Atlas & Marketing Guide, 123rd Edition, at pages
38-39, with the following exceptions and additions: (i) Alaska is separated from
the Seattle MTA and is licensed separately; (ii) Guam and the Northern Mariana
Islands are licensed as a single MTA-like area; (iii) Puerto Rico and the United
States Virgin Islands are licensed as a single MTA-like area; and (iv) American
Samoa is licensed as a single MTA-like area.
"Non-Transferring Party" has the meaning set forth in Section
5.01(a) hereof.
"Partial Termination Notice" has the meaning set forth in
Section 3.02(a) hereof.
"Person" means any general partnership, limited partnership,
corporation, limited liability company, joint venture, trust, business trust,
cooperative, association, individual or other
- 10 -
<PAGE>
entity, and the heirs, executors, administrators, legal representatives,
successors and assigns of such person, as the context may require.
"Project Notice" has the meaning set forth in Section 3.01(b)
hereof.
"Proposal Recipient" has the meaning set forth in Section 3.01
(b) hereof.
"Proposed Business Plan" has the meaning set forth in Section
3.01(b) hereof.
"Proposed Project" has the meaning set forth in Section
3.01(b) hereof.
"Proposing Party" has the meaning set forth in Section 3.01(b)
hereof.
"Proposed Sonera U.S. Initial LLC Interest" has the meaning
set forth in Section 4.03 hereof.
"Purchase Agreement" means the Purchase Agreement, dated as of
June 1, 1998, among TDS, Aerial, AOC and Sonera.
"Restricted Business Combination" means any business
combination of an LLC formed pursuant to Section 2.02 hereof with or into any
other entity other than a business combination which satisfies each of the
following criteria: (i) such LLC is the surviving entity of
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<PAGE>
such business combination; (ii) each of the Majority Class A Member and the
Majority Class B Member immediately prior to such business combination continue
as the Majority Class A Member and the Majority Class B Member, respectively,
immediately after such business combination; and (iii) such business combination
does not materially adversely affect the rights of the Class A Members or the
Class B Members under this Agreement or the Limited Liability Company Agreement.
"Restricted LLC Action" has the meaning set forth in Section
8.03(a) hereof.
"Restricted LLC Action Negotiation Notice" has the meaning set
forth in Section 8.03(a) hereof.
"Restricted LLC Action Negotiation Period" has the meaning set
forth in Section 8.03(b) hereof.
"Restricted LLC Action Notice" has the meaning set forth in
Section 8.03(a) hereof.
"SMR Service" means any service governed by Section 90.7 of
the rules of the FCC.
"Sonera Entity" means Sonera, Sonera U.S. and any Person in
which Sonera, directly or indirectly, through one or more intermediaries, owns
an interest, regardless of whether Sonera controls such Person.
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<PAGE>
"Sonera U.S. Initial LLC Interest" has the meaning set forth
in Section 4.03 hereof.
"Subsidiary" of a Person shall mean a corporation as to which
a majority of the voting power is owned or controlled by such Person, either
directly or indirectly; but any such corporation shall be deemed to be a
Subsidiary of such Person only as long as such ownership or control exists.
"Supplemental Agreement" means the Supplemental Agreement,
dated as of September 8, 1998, by and among Aerial, AOC and Sonera.
"Tag-Along Notice" has the meaning set forth in Section
5.03(a) hereof.
"Technology Dispute" has the meaning set forth in Section 6.01
hereof.
"Third Party Transferee" has the meaning set forth in Section
5.02(a) hereof.
"Trademark License Agreement" has the meaning set forth in
Section 7.01 hereof.
"Transfer" means to, directly or indirectly, sell, transfer or
otherwise dispose of.
"Transfer Negotiation Notice" has the meaning set forth in
Section 5.02(a) hereof.
"Transfer Negotiation Period" has the meaning set forth in
Section 5.02(b) hereof.
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<PAGE>
"Transfer Notice" has the meaning set forth in Section 5.02(a)
hereof.
"Transferring Party" has the meaning set forth in Section
5.01(a) hereof.
"USCC Group" means USCC and each Subsidiary of USCC.
"Venture" has the meaning set forth in Section 2.01 hereof.
"Wireless Services" means any B-PCS, Cellular Service or SMR
Service.
Section 1.02 Determination of Beneficial Ownership. For
purposes of determining in connection with this Agreement the beneficial
ownership interest of one entity (the "Owner") in another entity (the "Owned
Entity"), beneficial ownership shall be: (i) if the Owner directly owns an
interest in the Owned Entity, such percentage interest so directly owned, or
(ii) if the Owner indirectly owns an interest in the Owned Entity, the
percentage interest owned by the Owner in the intervening entity in which the
Owner directly owns an interest multiplied by the percentage interest directly
owned by the intervening entity in the Owned Entity. If there is more than one
intervening entity between the Owner and the Owned Entity, then the principles
of clause (ii) hereof shall be reapplied such that all percentage interests in
the intervening entities indirectly owned by the Owner are taken into account.
For purposes of determining the beneficial ownership of Sonera U.S. or an
Affiliate of Sonera U.S. in an Owned Entity in which Aerial or any Aerial Sub,
directly or indirectly,
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<PAGE>
also owns an interest, any percentage interest owned, directly or indirectly, by
Sonera U.S., Sonera or an Affiliate of Sonera in Aerial or any Aerial Sub shall
not be taken into account.
ARTICLE II
FORMATION AND PURPOSE
Section 2.01 Formation and Purpose of Joint Venture. The
Aerial Parties and Sonera U.S. hereby form a joint venture (the "Venture") for
the purpose of acquiring B-PCS Licenses and building and operating systems in
the United States with respect to such B-PCS Licenses utilizing GSM Technology.
It shall be the primary intention of the Venture (i) to build out the GSM
Technology footprint in the United States by providing B-PCS utilizing GSM
Technology and (ii) not to acquire or attempt to acquire control of any B-PCS
Licenses for geographic areas in which the Venture would Compete with other
providers of Wireless Services that utilize GSM Technology. The scope of the
Venture shall not include narrowband personal communications services, paging or
other Wireless Services not constituting B-PCS.
Section 2.02 Formation of LLCs. AOC and Sonera U.S. shall form
a separate limited liability company (each an "LLC") with respect to each Market
for which the Venture determines pursuant to this Agreement to acquire one or
more B-PCS Licenses. Such LLC shall hold all of the B-PCS Licenses acquired for
such Market and shall build and operate the system related thereto. The LLC need
not be formed, and AOC and Sonera U.S. need not invest therein pursuant to
Article IV hereof, until such time as the Venture has negotiated on behalf of
such LLC a definitive
- 15 -
<PAGE>
agreement to acquire a B-PCS License. Each such LLC shall be formed pursuant to
the Delaware Limited Liability Company Act, as amended, by filing with the
Delaware Secretary of State a Certificate of Formation in substantially the form
attached hereto as Exhibit A. Each such LLC shall have a duration of 40 years
and shall be governed by an operating agreement in substantially the form of the
Limited Liability Company Agreement attached hereto as Exhibit B.
ARTICLE III
VENTURE OPPORTUNITIES
Section 3.01 Exclusivity of Venture; Venture Opportunities.
(a) Except as otherwise expressly permitted by this Agreement, the Venture will
be the exclusive vehicle through which any Aerial Entity expands in B-PCS in the
United States and through which any Sonera Entity participates in B-PCS in the
United States, in each case during the period (the "Exclusivity Period")
commencing on the date hereof and terminating on the earlier to occur of: (i)
the fifth anniversary of the date hereof; or (ii) the date upon which Sonera
U.S. has invested (as determined pursuant to Section 4.04(b) hereof) an
aggregate of $400 million in the equity of one or more LLCs formed pursuant to
Section 2.02 hereof; provided, however, that the Exclusivity Period may be
extended by mutual written agreement of the parties hereto. Except as otherwise
provided in this Article III, all B-PCS Licenses in all Markets are subject to
the provisions of this Section 3.01 during the Exclusivity Period. During the
Exclusivity Period, the Aerial Parties and the Sonera Parties shall share with
each other, on a regular and timely basis, information in such party's
possession relating to possible Venture opportunities and to work together on an
ongoing basis to develop and review
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<PAGE>
possible Venture opportunities prior to submission of a formal Project Notice
pursuant to Section 3.01(b) hereof. Upon termination of the Exclusivity Period,
the parties shall no longer be required, but nonetheless may continue, to comply
with the provisions of this Section 3.01 with respect to pursuing opportunities
to acquire B-PCS Licenses. Any compliance after the expiration of the
Exclusivity Period by any party hereto with the provisions of this Section 3.01
shall not be deemed to be a reinstatement of the provisions of this Section 3.01
with respect to any other B-PCS Licenses. For purposes of this Section 3.01(a),
the terms "expand" and "participate" shall mean (i) the acquisition or
beneficial ownership by any Aerial Entity or any Sonera Entity, respectively, of
a 20% or greater interest in any business engaged in the provision of B-PCS,
(ii) the active involvement by any Aerial Entity or any Sonera Entity,
respectively, in the acquisition of a B-PCS License or in the solicitation of
other investors in such acquisition or in a business engaged in the provision of
B-PCS, (iii) the operation or management by any Aerial Entity or any Sonera
Entity, respectively, of a business engaged in the provision of B-PCS or the
B-PCS system related thereto or (iv) the right of any Aerial Entity or any
Sonera Entity, respectively, to elect or appoint one or more representatives to
the governing body of a business engaged in the provision of B-PCS.
(b) Except as set forth in Section 3.01(c) hereof, if at any
time during the Exclusivity Period either Aerial Party or any Aerial Sub on the
one hand, or either Sonera Party or any Affiliate thereof on the other hand,
desires to acquire a B-PCS License in any Market, then AOC or Sonera U.S., as
applicable, shall prepare and submit to the other party a written notice (a
"Project Notice") notifying the other party of its desire to proceed with the
project (the "Proposed Project") and a proposed business plan (a "Proposed
Business Plan") setting forth in detail the proposed purchase
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price and anticipated sources of funding (which shall not reasonably be
projected to result in a debt to equity ratio of greater than 80/20 at the time
of commencement of service in the Market) for acquisition of the B-PCS License
and construction of the system, the projected construction schedule, the
projected financial results and such other information as the party preparing
the Proposed Business Plan (the "Proposing Party") deems material. AOC and
Sonera U.S. shall be required to prepare a separate Project Notice and Proposed
Business Plan for each B-PCS License that AOC or Sonera U.S., respectively,
desires to acquire unless (i) such B-PCS Licenses are in the same Market, (ii)
such B-PCS Licenses are in contiguous Markets or (iii) the Proposing Party has
been advised by the party holding such B-PCS Licenses that such B-PCS Licenses
are only available for acquisition as a group. The party receiving the Project
Notice and Proposed Business Plan (the "Proposal Recipient") shall have a period
(the "Investment Election Period") of 30 days from the date of receipt of the
Project Notice and Proposed Business Plan (or, if not received together, then 30
days from the later of the date of receipt of the Project Notice and the date of
receipt of the Proposed Business Plan) to review the Proposed Business Plan,
request additional information from the Proposing Party and notify the Proposing
Party of the Proposal Recipient's decision whether to invest in and, in the case
of AOC, manage the Proposed Project; provided, however, that if the Proposal
Recipient has requested from the Proposing Party additional information
reasonable in scope and relevant to a decision with respect to the Proposed
Project within 15 days of commencement of the Investment Election Period, then
the Investment Election Period shall terminate on the later of (i) the 30th day
after commencement of the Investment Election Period or (ii) the 10th day after
receipt by the Proposal Recipient of such additional information. In the event
that the Proposal Recipient elects to invest in and, in the case of AOC, manage
the Proposed Project,
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then (A) AOC and Sonera U.S. shall form an LLC for each Market which is the
subject of the Proposed Project pursuant to Section 2.02 hereof for the purpose
of implementing the Proposed Project, (B) AOC and Sonera U.S. shall invest in
each such LLC pursuant to Article IV hereof and (C) AOC shall manage each such
LLC pursuant to Article VIII hereof. The provisions of this Section 3.01(b)
shall apply to any Proposed Project for which both a Project Notice and a
Proposed Business Plan have been received by the Proposal Recipient prior to the
expiration of the Exclusivity Period, regardless of whether the Investment
Election Period terminates after the expiration of the Exclusivity Period.
(c) Notwithstanding the provisions of Section 3.01(b) hereof,
if at any time during the Exclusivity Period Sonera U.S. arranges for the
acquisition (on terms which shall not reasonably be projected to result in a
debt to equity ratio of greater than 80/20 at the time of commencement of
service in the applicable Market) of control of one or more B-PCS Licenses (of
at least 15 megahertz) to serve either the Chicago BTA or the Dallas BTA and, in
each case, AOC receives written notice from Sonera U.S. of such arrangement on
or prior to the expiration of the Exclusivity Period, then (A) AOC and Sonera
U.S. shall form an LLC pursuant to Section 2.02 hereof for the purpose of
acquiring such B-PCS License(s) and building the system related thereto, (B) AOC
and Sonera U.S. shall invest in such LLC pursuant to Article IV hereof and (C)
AOC shall manage such system pursuant to Article VIII hereof.
Section 3.02 Partial Termination of Exclusivity Period. (a) In
the event that the Proposal Recipient does not elect to invest in and, in the
case of AOC, manage a Proposed Project
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pursuant to Section 3.01(b) hereof (such Proposal Recipient being referred to as
a "Disapproving Party"), then the Proposing Party may, but shall not be required
to, terminate the Exclusivity Period with respect to each B-PCS License which
was the subject of the Proposed Project (each a "Disapproved License") by
providing written notice (a "Partial Termination Notice") to the Disapproving
Party of such termination within 30 days after receipt by the Proposing Party of
the Disapproving Party's decision not to invest in the Proposed Project, in
which case the Disapproving Party shall have no further interest hereunder in
such Disapproved License and the Proposing Party shall have the right to pursue
independently of the Venture the opportunity to invest in and operate a B-PCS
system for such Disapproved License; provided, however, that if, within 180 days
after providing such Partial Termination Notice to the Disapproving Party, the
Proposing Party has not entered into a binding agreement to acquire each
Disapproved License set forth in the Project Notice at a price equal to or
higher than the price set forth in the Project Notice, then each Disapproved
License relating to such Project Notice shall remain subject to the Exclusivity
Period. In the event that the Proposing Party presents a Project Notice or
Proposed Business Plan that contemplates the acquisition of B-PCS Licenses in
more than one Market (or more than one B-PCS License within a Market), then the
Proposing Party shall have no right to pursue independently of the Venture any
Disapproved License with respect to such Proposed Project unless the Proposing
Party pursues all of the Disapproved Licenses with respect to such Proposed
Project. In the event that the Disapproving Party has not received a Partial
Termination Notice from the Proposing Party within the time period set forth
above, then each Disapproved License shall remain subject to the Exclusivity
Period.
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<PAGE>
(b) In the event that a Proposal Recipient has elected to
invest in a Proposed Project pursuant to Section 3.01(b) hereof or Sonera U.S.
has arranged for the acquisition of a B-PCS License pursuant to Section 3.01(c)
hereof but, in either case, either (i) Sonera U.S., either individually or in
conjunction with an Additional Initial Class A Member (as defined herein), and
AOC have not agreed to fund collectively 100% of the equity required in
connection therewith and firm commitments for funding of the remainder through
additional equity investors have not been obtained pursuant to Section 4.05
hereof within the 120-day period set forth therein or (ii) such Proposed Project
or arrangement contemplated the use of debt financing (not reasonably projected
to exceed a debt to equity ratio of 80/20 at the time of commencement of service
in the applicable Market) and firm commitments to provide such financing have
not been obtained within 120 days after the date on which AOC has advised Sonera
U.S. in writing of the AOC Initial LLC Interest pursuant to Section 4.03 hereof,
then: (x) if AOC is the Proposing Party, the related B-PCS License shall be
deemed a "Disapproved License" and Sonera U.S. shall be deemed a "Disapproving
Party" with respect to such Disapproved License for purposes of Section 3.02(a)
hereof and AOC may, but shall not be required to, terminate the Exclusivity
Period with respect to such Disapproved License by providing a Partial
Termination Notice to Sonera U.S. within 30 days after the expiration of such
120-day period set forth in clause (i) or (ii) hereof, as applicable; or (y) if
Sonera U.S. is the Proposing Party or the B-PCS License is in one of the Markets
identified in Section 3.01(c) hereof, then the B-PCS License shall remain
subject to the Exclusivity Period.
Section 3.03 Termination of Agreement. This Agreement and,
thus, the Venture may be terminated in its entirety as follows:
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<PAGE>
(a) Unless the parties hereto shall otherwise agree in
writing, this Agreement shall automatically terminate in the event that, prior
to the fifth anniversary of the date hereof, Sonera or an Affiliate of Sonera
shall, pursuant to Section 5.5 of the Investment Agreement, either (i) Transfer
any of its AOC Shares without the consent of TDS or Aerial to a Person other
than an Affiliate of Sonera or (ii) issue a Derivative.
(b) In the event that either (i) as of the fifth anniversary
of the date hereof no LLC formed by AOC and Sonera U.S. pursuant to Section 2.02
hereof has acquired a B-PCS License or (ii) at any time that, but only at such
time that, on or after the fifth anniversary of the date hereof there is no LLC
that had been formed pursuant to Section 2.02 hereof which continues to hold a
B- PCS License and in which each of AOC and Sonera own, directly or indirectly,
a beneficial interest, then, in either case, the Aerial Parties and Sonera U.S.
shall each have the option to elect to terminate this Agreement in its entirety
upon 30 days' advance written notice to the other. Notwithstanding the
foregoing, such termination option shall not be exercisable (i) as long as there
is at least one Management Agreement in force and effect between AOC or an
Affiliate thereof and an LLC formed pursuant to Section 2.02 hereof or (ii) if
an LLC formed pursuant to Section 2.02 hereof has, on or prior to the fifth
anniversary of the date hereof, entered into a definitive agreement to acquire
one or more B-PCS Licenses but such acquisition has not yet been consummated,
unless such definitive agreement is thereafter terminated prior to the
consummation of such acquisition. In addition to the foregoing provisions
restricting exercise of the termination option set forth in this Section
3.01(b), if both a Project Notice and a Proposed Business Plan have been
received by a Proposal Recipient but the Investment Election Period with respect
to the related Proposed Project has not terminated
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<PAGE>
prior to expiration of the Exclusivity Period, then the exercise of such
termination option shall be further restricted as follows: (i) if the Proposal
Recipient does not accept the Proposed Project within the Investment Election
Period, then such termination option shall not be exercisable until the earlier
to occur of (A) the rejection of such Proposed Project by the Proposal Recipient
or (B) the expiration of the Investment Election Period; or (ii) if the Proposal
Recipient elects to accept the Proposed Project within the Investment Election
Period, then such termination option shall not be exercisable if, within six
months after the fifth anniversary of the date hereof, an LLC is formed pursuant
to Section 2.02 hereof and such LLC has either (A) acquired the B-PCS License(s)
relating to the Proposed Project or (B) entered into a definitive agreement to
acquire the B-PCS License(s) relating to the Proposed Project but such
acquisition has not yet been consummated, unless such definitive agreement is
thereafter terminated prior to the consummation of such acquisition.
(c) This Agreement may be terminated in its entirety at any
time upon the mutual written consent of the parties hereto.
Section 3.04 Other Business; Non-Competition. (a) Except as
set forth in Section 3.01 and Section 3.04(b) hereof, any Aerial Entity and any
Sonera Entity may engage in one or more other businesses, and own interests in
one or more other business ventures, of every kind and description,
independently or with others. No party to this Agreement or any LLC formed
pursuant to Section 2.02 hereof shall have any rights in or to such independent
businesses or business ventures of any other party to this Agreement or to the
income or profits therefrom by virtue of this Agreement.
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<PAGE>
(b) Notwithstanding any other provision of this Agreement: (i)
neither an Aerial Entity nor a Sonera Entity shall, directly or indirectly,
operate or manage, or beneficially own a 20% or greater interest in, any
business engaged in the provision of Wireless Services in Competition with any
LLC formed pursuant to Section 2.02 hereof to any significant extent; and (ii)
no Sonera Entity shall, directly or indirectly, operate or manage, or
beneficially own a 20% or greater interest in, any business engaged in the
provision of Wireless Services if the population within the geographic areas
served by the systems providing Wireless Services operated, managed or owned by
the Sonera Entities or such other business, as the case may be, which overlap
with geographic areas served by the systems owned or operated by the USCC Group
or the Aerial Group, as applicable, is equal to or greater than 2% of the total
population within the geographic areas of all such systems owned and operated by
the USCC Group or the Aerial Group, as applicable; provided, however, that the
provisions of this Section 3.04(b)(ii) shall not be applicable to the USCC Group
at any time that USCC ceases to be an Affiliate of Aerial; provided further,
that no Sonera Entity shall be deemed to be in violation of this Section
3.04(b)(ii) if (A) such violation results from the commencement of the ownership
or operation of a system by a member of the USCC Group or the Aerial Group after
the execution by a Sonera Entity of a binding commitment to operate or manage,
or own a 20% or greater interest in, such business and (B) the execution by the
Sonera Entity of such binding commitment preceded the execution of a binding
commitment to so own or operate such system by a member of the USCC Group or
Aerial Group, as applicable. The Sonera Parties and the Aerial Parties shall,
and with respect to members of the USCC Group the Aerial Parties shall use their
reasonable best efforts to, timely advise a senior officer of the other of the
execution of any such binding commitment by any Sonera Entity or any member of
the Aerial Group (or USCC Group),
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<PAGE>
respectively, to operate, manage or own a system providing Wireless Services in
the United States, and the party receiving such information hereby covenants to
maintain the confidentiality thereof pursuant to the terms of Section 11.01
hereof.
Section 3.05 Exempt Aerial Party Markets. (a) Schedule 3.05
hereto sets forth a list of the Markets in which the Aerial Parties participate,
directly or indirectly, in B-PCS as of the date hereof (the "Exempt Aerial Party
Markets"). Notwithstanding the provisions of Section 3.01 hereof and subject to
the provisions of Section 3.05(b) hereof, the Exclusivity Period shall not be
applicable to any Aerial Entity with respect to any of the B-PCS Licenses in
such Exempt Aerial Party Markets. If Sonera U.S. submits a Project Notice and
Proposed Business Plan to AOC proposing the acquisition of a B-PCS License in an
Exempt Aerial Party Market and AOC elects not to invest in such Proposed
Project, then such Project Notice and Proposed Business Plan shall not be deemed
to constitute a Project Notice and Proposed Business Plan for purposes of
Section 5.5 of the Investment Agreement. Such Schedule 3.05 shall be modified
from time to time as required pursuant to Section 3.05(b).
(b) Notwithstanding the provisions of Section 3.01 hereof,
during the Exclusivity Period any Aerial Entity shall be permitted to pursue
independently of the Venture the acquisition of one or more B-PCS Licenses
otherwise subject to the Exclusivity Period if the consideration to be exchanged
by such Aerial Entity for such B-PCS License(s) consists of one or more B-PCS
Licenses in Exempt Aerial Party Markets. Upon completion of such exchange, (i)
the Market relating to each such B-PCS License obtained by an Aerial Entity in
such exchange shall be added
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<PAGE>
to Schedule 3.05, thereby including such Market among the Exempt Aerial Party
Markets not subject to the Exclusivity Period and (ii) each Exempt Aerial Party
Market relating to each such B-PCS License so exchanged by an Aerial Entity
shall, unless an Aerial Entity continues to hold a B-PCS License in such Market,
be deleted from Schedule 3.05, thereby causing the B-PCS Licenses in such Market
to become subject to the Exclusivity Period.
Section 3.06 C or F Block B-PCS Licenses. (a) Notwithstanding
the provisions of Section 3.01 hereof and subject to the provisions of Section
3.06(b) hereof, each B-PCS License to provide service on frequency Block C or
Block F, as defined in the definition of "B-PCS" set forth in Section 1.01
hereof (each a "C or F Block License"), shall not be subject to the Exclusivity
Period.
(b) If at any time during the Exclusivity Period either Aerial
Party or any Aerial Sub on the one hand, or either Sonera Party or any Affiliate
thereof on the other hand, desires to acquire a C or F Block License, or an
interest in any entity holding a C or F Block License, in any Market (other than
an Exempt Aerial Party Market), then AOC or Sonera U.S. as applicable, shall
submit to the other party a written notice (a "C or F Block Notice") notifying
the other party of its desire to proceed with such acquisition. For a period of
30 days beginning on the date of receipt of the C or F Block Notice, AOC and
Sonera U.S. shall engage in good faith negotiations in an attempt to structure a
transaction in which they jointly acquire such C or F Block License, or each
acquire an interest in an entity holding such C or F Block License, and in which
AOC or an Affiliate thereof shall manage the related system, all on mutually
acceptable terms and conditions. As part of such negotiation process, AOC and
Sonera U.S. shall determine which provisions of this Agreement and
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<PAGE>
the agreements attached hereto as exhibits shall be incorporated into such
structure. If AOC and Sonera U.S. do not reach an agreement as to the structure
of such transaction within such 30-day period, then AOC and Sonera U.S. shall be
permitted to pursue the acquisition of such C or F Block License, or an interest
in the entity holding such C or F Block License, independently of the Venture
and such C or F Block Notice shall not be deemed to be a Project Notice (and
Proposed Business Plan) for purposes of Section 5.5 of the Investment Agreement.
If AOC and Sonera U.S. reach an agreement as to the structure of such
transaction within such 30-day period, then the provisions of Section 5.5 of the
Investment Agreement shall no longer be applicable.
ARTICLE IV
INVESTMENT
Section 4.01 Initial Investment in LLC. (a) With respect to
each LLC formed pursuant to Section 2.02 hereof, (i) Sonera U.S. shall invest
cash in immediately available funds (or otherwise in accordance with the
applicable Project Notice and Proposed Business Plan) in an amount determined
pursuant to Section 4.04(a) hereof such that Sonera U.S. beneficially owns at
least 34.5% of the equity of the LLC (the "Minimum Sonera U.S. Initial LLC
Interest"), subject to Section 4.01(c) hereof, and (ii) AOC shall invest cash in
immediately available funds (or otherwise in accordance with the applicable
Project Notice and Proposed Business Plan) in an amount determined pursuant to
Section 4.04(a) hereof such that AOC beneficially owns at least 1% of the equity
of the LLC. Each of AOC and Sonera U.S., at its sole option, may invest in any
of the LLCs formed pursuant to Section 2.02 hereof either directly in such LLC
or indirectly through one or more
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wholly-owned subsidiaries of AOC or Sonera, respectively, and the references in
this Article IV to "AOC" and "Sonera U.S." shall be deemed to include any such
wholly-owned subsidiary of AOC or Sonera, respectively. Sonera U.S. shall be
deemed a Class A Member in the LLC and the entire initial equity interest of
Sonera U.S. in such LLC shall be designated as a Class A Membership Interest.
AOC shall be deemed a Class B Member in such LLC and the entire initial equity
interest of AOC in such LLC shall be designated as a Class B Membership
Interest. As a Class A Member or Class B Member in an LLC, Sonera U.S. and AOC
shall be subject to the provisions applicable to Class A Members or Class B
Members, respectively, set forth in this Agreement and in the Limited Liability
Company Agreement governing such LLC.
(b) Notwithstanding the provisions of Section 4.01(a) hereof,
either AOC or Sonera U.S. may, in lieu of cash, contribute property to an LLC,
to be used in the business of and in furtherance of the purpose of such LLC, but
only if: (i) with respect to any Market governed by Section 3.01(b) hereof, the
parties hereto have agreed in writing to such contribution and the value of the
property so contributed; or (ii) with respect to either Market governed by
Section 3.01(c) hereof, the property contributed is valued at the contributing
party's book value of such property.
(c) Notwithstanding the provisions of Section 4.01(a) hereof,
Sonera U.S. may permit a third party (an "Additional Initial Class A Member") to
make a portion of the investment required to be made by Sonera U.S. pursuant to
Section 4.01(a) hereof in connection with the Minimum Sonera U.S. Initial LLC
Interest, provided that Sonera U.S. beneficially owns at least 19.5% of the
equity of the LLC and such Additional Initial Class A Member owns equity in the
LLC equal to no
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more than the portion of the Minimum Sonera U.S. Initial LLC Interest not owned
by Sonera U.S. Each of Sonera U.S. and such Additional Initial Class A Member
shall be deemed Class A Members and the investment by each of Sonera U.S. and
such Additional Initial Class A Member shall be designated as a Class A
Membership Interest. It shall be a condition precedent to such investment by an
Additional Initial Class A Member that such Additional Initial Class A Member
agree to be bound by the provisions of Articles IV and V of this Agreement that
are applicable to such Additional Initial Class A Member.
Section 4.02 Carried Interest. (a) Upon the purchase by AOC of
at least a 1% beneficial interest in each LLC pursuant to Section 4.01 hereof,
AOC shall be granted an additional 15% beneficial interest in such LLC (a
"Carried Interest"). Such Carried Interest shall not require the investment of
any additional cash by AOC and may be held directly or indirectly by AOC.
Pursuant to Section 4.02(b) hereof, the Carried Interest in an LLC shall be
subject to divestiture prior to the fifth anniversary of the formation of such
LLC. Subject to Section 4.02(c) hereof, the Carried Interest in an LLC shall be
non-dilutable as long as (i) such Carried Interest is held, directly or
indirectly, by AOC and (ii) AOC or an Affiliate thereof is serving in the
capacity as manager pursuant to the Management Agreement.
(b) (i) With respect to each LLC formed pursuant to Section
2.02 hereof, if the related Management Agreement between such LLC and AOC or an
Affiliate of AOC is properly terminated (after all applicable cure provisions
have expired) pursuant to either Section 8.2(a) or
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Section 8.3 thereof, then the Carried Interest shall be subject to divestiture
according to the following schedule:
<TABLE>
<CAPTION>
Date of Termination of % of Carried % of Carried
Management Agreement Interest Divested Interest Remaining
- -------------------------- ----------------- ------------------
<S> <C> <C>
Prior to 1st Anniversary 12 3
On or After 1st Anniversary
but Prior to 2nd Anniversary 9 6
On or After 2nd Anniversary
but Prior to 3rd Anniversary 6 9
On or After 3rd Anniversary
but Prior to 4th Anniversary 4 11
On or After 4th Anniversary
but Prior to 5th Anniversary 2 13
On or After 5th Anniversary 0 15
</TABLE>
For purposes of determining the date of termination of the Management Agreement
in connection with the foregoing schedule, such date shall be deemed to be the
date upon which (A) such LLC provides AOC or an Affiliate of AOC, as applicable,
acting as manager pursuant to the Management Agreement, with a written notice of
termination pursuant to Section 8.2(a) of the Management Agreement or (B) the
date of automatic termination of the Management Agreement pursuant to Section
8.3 thereof. The term "Anniversary" as used above shall refer to the date
occurring 12 months after the date of the Management Agreement or the date
occurring in 12-month increments thereafter, as applicable.
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(ii) Any termination of the Management Agreement other than
pursuant to Section 8.2(a) or Section 8.3 thereof shall not result in a
divestiture of the Carried Interest. If AOC or its Affiliate, as applicable,
acting as manager pursuant to the Management Agreement, cures the event giving
rise to the right of such LLC to terminate the Management Agreement within the
applicable cure period, if any, set forth in the Management Agreement, then the
Management Agreement shall not terminate and the Carried Interest shall not be
divested. Any portion of the Carried Interest that is divested pursuant to this
Section 4.02(b) shall be re-allocated among the members of the LLC as provided
in the Limited Liability Company Agreement and, pursuant to Section 4.02(a)
hereof, the entire Carried Interest shall no longer be non-dilutable.
(c ) AOC and Sonera U.S. acknowledge that the primary purpose
of the Carried Interest in each LLC formed pursuant to Section 2.02 hereof is to
compensate AOC for its agreement to act as manager of the B-PCS System for such
LLC and provide the full range of services specified in the Management
Agreement, all at AOC's cost thereof. AOC and Sonera U.S. further acknowledge
that it is their mutual intention and expectation that, over time, depending on
the initial capitalization of such LLC and in the absence of exceptional
circumstances such as significant changes in technology or in the nature or
scope of the LLC's business, each LLC will have the ability to raise adequate
capital without additional capital contributions by LLC members. The parties
therefore agree that, after a reasonable period of time within which such
capital self- sufficiency should have been achieved but in no event prior to the
LLC Tenth Anniversary, it may be equitable and appropriate to decrease the
non-dilutable portion of the Carried Interest and to increase the compensation
to be provided to Aerial pursuant to the Management Agreement. Accordingly, if
on
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or after an LLC Tenth Anniversary Sonera U.S. desires to negotiate with AOC to
amend the percentage beneficial interest in such LLC which shall be deemed a
non-dilutable Carried Interest with respect to future capital contributions, if
any, to such LLC (a "Carried Interest Amendment"), then Sonera U.S. shall so
notify AOC in writing, which notice shall reference this Section 4.02(c) (the
"Carried Interest Negotiation Notice"). Sonera U.S. and AOC shall then negotiate
with each other regarding such possible Carried Interest Amendment as well as an
amendment to the related Management Agreement to provide AOC or its Affiliate,
as applicable, acting in the capacity of manager thereunder, with additional
compensation for such management services over and above such manager's costs
(together with the Carried Interest Amendment, a "Management Compensation
Amendment") for a period (the "Management Compensation Negotiation Period")
beginning on the date of receipt of the Carried Interest Negotiation Notice and
ending on the earlier to occur of (i) the date upon which Sonera U.S. and AOC
reach agreement on the terms of a Management Compensation Amendment or (ii) 60
days after commencement of the Management Compensation Negotiation Period.
During the Management Compensation Negotiation Period, Sonera U.S. and AOC shall
negotiate in good faith to reach agreement on the terms of a Management
Compensation Amendment. If Sonera U.S. and AOC reach such agreement during the
Management Compensation Negotiation Period, then the parties hereto shall
execute all documents as shall be necessary to effectuate such agreement. In the
event that Sonera U.S. and AOC do not reach such agreement during the Management
Compensation Negotiation Period, then each of Sonera U.S. and AOC shall give to
the other a written notice of its final proposal with respect to a Management
Compensation Amendment (in whatever form such party desires) on or before the
last day of the Management Compensation Negotiation Period and such matter shall
be submitted to arbitration pursuant to
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Section 9.03(b) hereof (without first complying with the negotiation procedure
set forth in Section 9.02 hereof), with the arbitrator selecting one of the two
final proposals. Upon resolution of such matter by the arbitrator, the parties
hereto shall execute all documents necessary to effectuate the final proposal
selected by the arbitrator. Notwithstanding the provisions of this Section
4.02(c), the percentage beneficial interest held by AOC in such LLC shall not be
decreased as a result of a Management Compensation Amendment.
Section 4.03 Additional Initial Investment. Each of AOC and,
if there is no Additional Initial Class A Member, Sonera U.S. shall be entitled,
at the time that an LLC is formed, to invest an additional amount of cash in
immediately available funds (or otherwise in accordance with the applicable
Project Notice and Proposed Business Plan) in such LLC and thereby own a greater
percentage interest in such LLC than the minimum 34.5% beneficial ownership
interest required of Sonera U.S. or the minimum 16% beneficial ownership
interest (including the Carried Interest) required of AOC. Sonera U.S. shall
advise AOC in writing of the aggregate initial percentage interest in the LLC
that Sonera U.S. desires to acquire (the "Proposed Sonera U.S. Initial LLC
Interest"), such Proposed Sonera U.S. Initial LLC Interest to be no less than
34.5% and no greater than 84%, such written notice to be delivered by Sonera
U.S. (i) at the time that Sonera U.S., as the Proposing Party, submits a
Proposed Business Plan to AOC pursuant to Section 3.01(b) hereof, (ii) at the
time that Sonera U.S., as the Proposal Recipient, notifies AOC of Sonera U.S.'s
decision to invest in a Proposed Project submitted to Sonera U.S. by AOC
pursuant to Section 3.01(b) hereof or (iii) at the time that Sonera U.S.
notifies AOC of an arrangement to acquire a B- PCS License for a Market
identified in Section 3.01(c) hereof, as applicable. If Sonera U.S.
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proposes to include an Additional Initial Class A Member, then the Proposed
Sonera U.S. Initial LLC Interest shall be 34.5%. AOC shall then advise Sonera
U.S. in writing of the aggregate initial percentage interest (including the
Carried Interest) in the LLC that AOC shall acquire (the "AOC Initial LLC
Interest"), such AOC Initial LLC Interest to be no less than 16% and no greater
than the lesser of (A) 49% and (B) a percentage interest that is less than the
Proposed Sonera U.S. Initial LLC Interest, such written notice to be delivered
by AOC (i) at the time that AOC, as the Proposal Recipient, notifies Sonera U.S.
of AOC's decision to invest in a Proposed Project submitted to AOC by Sonera
U.S. pursuant to Section 3.01(b) hereof, (ii) within 30 days after Sonera U.S.,
as the Proposal Recipient, notifies AOC of Sonera U.S.'s decision to invest in a
Proposed Project submitted to Sonera U.S. by AOC pursuant to Section 3.01(b)
hereof or (iii) within 30 days after Sonera U.S. notifies AOC of an arrangement
to acquire a B-PCS License for a Market identified in Section 3.01(c) hereof.
The actual aggregate initial percentage interest in the LLC that Sonera U.S.
and, if applicable, any Additional Initial Class A Member shall acquire (the
"Sonera U.S. Initial LLC Interest") shall then be equal to the lesser of (A) the
Proposed Sonera U.S. Initial LLC Interest and (B) the percentage interest which
when added to the AOC Initial LLC Interest equals 100%. The amount of cash to be
invested by each of AOC, Sonera U.S. and, if applicable, any Additional Initial
Class A Member shall be determined in accordance with Section 4.04(a).
Section 4.04 Amount of Investment. (a) The initial amount of
cash required to be invested by each of AOC, Sonera U.S. and, if applicable, any
Additional Initial Class A Member, as the case may be, in the equity of each LLC
shall be equal to the quotient of: (x) the product of (A) the percentage
interest to be acquired by AOC, Sonera U.S. or any Additional Initial Class A
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Member, as applicable, expressed as a decimal multiplied by (B) the Aggregate
Required Capital Contribution; divided by (y) 0.85. For purposes of performing
the foregoing calculation, the percentage interest to be acquired by AOC shall
not include the Carried Interest.
(b) For purposes of determining the amount of cash invested by
Sonera U.S. in the equity of each LLC formed pursuant to Section 2.02 hereof
and, therefore, whether Sonera U.S. has invested an aggregate of $400 million
for purposes of Section 3.01(a) hereof, the amount of cash deemed to be invested
by Sonera U.S. in each LLC shall be equal to the amount of cash invested in the
equity of each LLC by Sonera U.S. and any Additional Initial Class A Member
(exclusive of such amounts so invested that are re-allocated to the capital
account of AOC in such LLC in connection with the Carried Interest).
Section 4.05 Additional Initial Investors. (a) In the event
that the sum of the Sonera U.S. Initial LLC Interest and the AOC Initial LLC
Interest does not equal 100%, then Sonera U.S. and AOC shall have 120 days after
the date on which AOC has advised Sonera U.S. in writing of the AOC Initial LLC
Interest pursuant to Section 4.03 hereof to obtain firm commitments for the
funding of the remaining Aggregate Required Capital Contribution by third
parties, subject to Section 4.05(b) hereof, and Sonera U.S. and AOC shall
cooperate in seeking such funding. If firm commitments are obtained to provide
the remaining Aggregate Required Capital Contribution, the initial percentage
interest of each such third party in such LLC shall be equal to the product of:
(x) the quotient of (A) that portion of the remaining Aggregate Required Capital
Contribution paid by such third party divided by (B) the Aggregate Required
Capital Contribution; multiplied by (y) 0.85.
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Any third party investing in such LLC pursuant to this Section 4.05 shall be
deemed a Class C Member in the LLC and the equity interest of such third party
in the LLC shall be designated as a Class C Membership Interest. If firm
commitments are not so obtained, then an LLC shall not be formed pursuant to
Section 2.02 hereof and the related B-PCS License shall be subject to the
provisions of Section 3.02(b) hereof. Notwithstanding the investment of any
third party in such LLC, the beneficial interest of Sonera U.S. in such LLC
shall, at all times prior to the LLC Fifth Anniversary of such LLC, be greater
than the beneficial interest in such LLC of AOC or any other Person owning a
beneficial interest in such LLC.
(b) No third party shall be permitted to invest as an
additional initial investor in an LLC pursuant to Section 4.05(a) hereof if (A)
such third party, directly or indirectly, operates or manages, or beneficially
owns a 20% or greater interest in, any business engaged in the provision of
Wireless Services, and the population within the geographic areas served by the
systems providing Wireless Services operated, managed or owned by such third
party (including its Affiliates) which overlap with geographic areas served by
systems providing Wireless Services owned or operated by the USCC Group or the
Aerial Group, as applicable, is equal to or greater than 2% of the total
population within the geographic areas of all such systems owned and operated by
the USCC Group or the Aerial Group, as applicable, or (B) AOC reasonably
believes the identity of such third party, or the ownership of B-PCS Licenses by
the third party through its ownership of an equity interest in the Company,
would be likely to present cross-ownership or competitive problems for any
member of the USCC Group or the Aerial Group at the FCC or any other U.S.
government agency or result in a violation of any federal or state law, rule or
regulation applicable to any member of the
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USCC Group or the Aerial Group; provided, however, that the provisions of this
Section 4.05(b) shall not be applicable to the USCC Group at any time that USCC
ceases to be an Affiliate of Aerial.
Section 4.06 Limitation on Percentage Interest. No Class C
Member, Minority Class A Member or a Minority Class B Member in an LLC shall be
permitted to hold, directly or indirectly, an aggregate equity interest in such
LLC, regardless of class, equal to or greater than 20%.
ARTICLE V
TRANSFER OF INTEREST
Section 5.01 Restrictions on Transfer. (a) All references in
this Article V to (i) a Class A Member shall be deemed to include each Affiliate
of such Class A Member that holds a beneficial interest in an LLC, and (ii) a
Class B Member shall be deemed to include each Affiliate of such Class B Member
that holds a beneficial interest in an LLC. All references in this Article V to
the "Transferring Party" shall be deemed to refer to any Class A Member or Class
B Member that desires to Transfer its beneficial interest or any portion thereof
in an LLC. If either the Majority Class A Member or the Majority Class B Member
is the Transferring Party, then the references in this Article V to the
"Non-Transferring Party" shall be deemed to refer to the Majority Class B Member
or the Majority Class A Member, respectively. If any Minority Class A Member or
any Minority Class B Member is the Transferring Party, then the Non-Transferring
Party shall be deemed to refer to (A) in the case of a Minority Class A Member,
first the Majority Class A Member and
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then the Majority Class B Member and (ii) in the case of a Minority Class B
Member, first the Majority Class B Member and then the Majority Class A Member,
such that, in each case, the provisions of this Article V shall be satisfied
sequentially with respect to each Non-Transferring Party in the applicable order
of priority prior to any Transfer by a Transferring Party to a Third Party
Transferee (as defined herein).
(b) No Transfer by a Transferring Party of a beneficial
interest in an LLC shall be valid unless (i) such Transfer shall comply with the
provisions of this Article V and the provisions of Article VI of the Limited
Liability Company Agreement governing such LLC, (ii) such transferee shall
become bound by the terms and provisions of such LLC's governing documents and
(iii) all necessary approvals shall have been obtained from the FCC and any
other regulatory agencies.
(c) Prior to an LLC Fifth Anniversary, no Transferring Party
shall Transfer its beneficial interest in such LLC or any portion thereof to any
other Person without the prior written consent of the Non-Transferring Party,
which consent may be withheld by the Non-Transferring Party in its sole
discretion.
(d) On or after an LLC Fifth Anniversary, each Transferring
Party shall be permitted to Transfer its beneficial interest in such LLC or any
portion thereof to any other Person without the prior written consent of the
Non-Transferring Party; provided, however, that such Transferring Party must
first comply with the provisions of Sections 5.02 and 5.03 hereof.
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(e) Notwithstanding the provisions of Sections 5.01(c) and
5.01(d), a Transferring Party may Transfer its beneficial interest in an LLC or
any portion thereof to an Affiliate of such Transferring Party at any time after
the formation of such LLC without the prior written consent of the
Non-Transferring Party and without compliance with the provisions of Sections
5.02 and 5.03 hereof; provided, however, that, such Affiliate shall be a
wholly-owned subsidiary of such Transferring Party, so that, after giving effect
to such Transfer, such Transferring Party shall continue to own, directly or
indirectly, the percentage beneficial interest in the LLC that it owned
immediately prior to such Transfer.
Section 5.02 Right of First Negotiation. (a) If on or after an
LLC Fifth Anniversary a Transferring Party desires to Transfer its beneficial
interest in an LLC or any portion thereof without the prior written consent of
the Non-Transferring Party to a Person other than the Non- Transferring Party or
a wholly-owned Subsidiary of such Transferring Party (a "Third Party
Transferee"), then the Transferring Party must first notify the Non-Transferring
Party in writing of its desire to effect a Transfer, which notice shall state
the percentage interest in the LLC that the Transferring Party desires to
Transfer and refer to this Section 5.02 (the "Transfer Notice"). The
Non-Transferring Party shall have a period of ten days from the receipt of the
Transfer Notice within which to provide the Transferring Party with a written
notice that the Non-Transferring Party desires to invoke the provisions of
Section 5.02(b) (the "Transfer Negotiation Notice"). If the Non- Transferring
Party fails to timely provide a Transfer Negotiation Notice or comply with any
of the provisions of Section 5.02(b), then the Transferring Party may Transfer
such interest in such LLC
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to a Third Party Transferee, subject to compliance with the provisions of
Sections 5.01(a) and 5.03 hereof.
(b) If the Non-Transferring Party timely provides a Transfer
Negotiation Notice to the Transferring Party pursuant to Section 5.02(a), then
the Non-Transferring Party shall have the exclusive right to negotiate with the
Transferring Party regarding the possible acquisition by the Non-Transferring
Party of such interest of the Transferring Party in the LLC for a period (the
"Transfer Negotiation Period") beginning on the date of receipt by the
Transferring Party of the Transfer Negotiation Notice and ending on the earlier
to occur of (i) the date upon which the Transferring Party and the
Non-Transferring Party reach agreement on the terms of the Transfer of such LLC
interest from the Transferring Party to the Non-Transferring Party or (ii) 60
days after the commencement of the Transfer Negotiation Period. During the
Transfer Negotiation Period, the Transferring Party and the Non-Transferring
Party shall negotiate in good faith to reach agreement on the terms of a
Transfer of such LLC interest from the Transferring Party to the
Non-Transferring Party. If the parties reach such agreement during the Transfer
Negotiation Period, then the parties shall promptly prepare and file all
necessary applications with the FCC and any other regulatory agencies and the
closing of the Transfer of the LLC interest from the Transferring Party to the
Non- Transferring Party shall occur within 30 days after the receipt of all
necessary FCC and other regulatory approvals. In the event that the parties do
not reach such agreement during the Transfer Negotiation Period, then the
Non-Transferring Party shall give to the Transferring Party a written notice of
the Non-Transferring Party's final bid to acquire such interest (in whatever
form the Non- Transferring Party desires) on or before the last day of the
Transfer Negotiation Period, which final
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bid the Transferring Party shall have the right to accept (A) for a period of 30
days after its receipt thereof, during which 30-day period such final bid shall
be irrevocable, and (B) for a period of an additional 60 days thereafter, during
which additional 60-day period such final bid shall be revocable upon the
Transferring Party's receipt of written notice of revocation from the
Non-Transferring Party prior to the Transferring Party's acceptance of such
final bid.
(c) In the event that the Transferring Party neither reaches
agreement via negotiation with the Non-Transferring Party to Transfer such
interest in the LLC to the Non-Transferring Party nor accepts the
Non-Transferring Party's final bid pursuant to Section 5.02(b), then the
Transferring Party shall be permitted to Transfer such interest in the LLC to a
Third Party Transferee; provided, however, that in no event shall the
Transferring Party Transfer, or enter into an agreement to Transfer, such LLC
interest to a Third Party Transferee unless (i) the Transferring Party has
negotiated in good faith during the Transfer Negotiation Period to effect a
Transfer of such interest to the Non-Transferring Party pursuant to Section
5.02(b), (ii) the Transferring Party enters into a binding agreement within 180
days after the termination of the latest Transfer Negotiation Period to Transfer
such interest to a Third Party Transferee at a higher price than the price
offered to the Transferring Party by any Non-Transferring Party in its final bid
and (iii) the Transferring Party and the Third Party Transferee shall comply
with the provisions of Section 5.03 hereof. If such binding agreement is
terminated prior to consummation of such Transfer, then the provisions of this
Section 5.02 shall once again become applicable to such Transferring Party's
interest in the LLC.
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(d) For purposes of this Section 5.02, if the price in a
binding agreement to consummate a Transfer, or in the Non-Transferring Party's
final bid, is to be paid in something other than money in a lump sum at the
closing, then the Transferring Party and the Non-Transferring Party shall use
their reasonable best efforts to reach agreement as to an equivalent in monetary
terms, which shall constitute the price for the purposes of Section 5.02(c)(ii).
In the event that the price in a binding agreement or final bid is to be paid in
whole or in part in shares of a public company and such shares are traded on a
national stock exchange, the value of such securities, for purposes of
calculating such price, shall be the average closing price for such shares as
reported in The Wall Street Journal for the twenty trading days ending on and
including the third trading day prior to the date of the Non-Transferring
Party's written notice of its final bid as set forth in Section 5.02(b) or the
date of the execution of the binding agreement as referenced in Section 5.02(c),
as the case may be; provided, however, appropriate adjustments shall be made to
the value of such shares for (i) extraordinary dividends, stock splits or any
other extraordinary distributions, (ii) a combination of such public company's
outstanding shares into a smaller number of shares or (iii) any reorganization
or reclassification of such public company's shares or any consolidation or
merger with another company. If such an agreement cannot be reached within ten
days after the Transferring Party (in the case of a final bid) or the
Non-Transferring Party (in the case of a binding agreement to consummate a
Transfer) receives written notice of the price offered, such equivalent shall be
determined by an appraiser agreed upon (and paid equally) by the Transferring
Party and the Non- Transferring Party or, if they cannot agree upon an appraiser
within ten days after the end of such initial ten-day period, by three
appraisers, one of whom shall be chosen within ten days after the end of such
second ten-day period by the Transferring Party (and paid by the Transferring
Party), one
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of whom shall be chosen (and paid) by the Non-Transferring Party within the same
period, and the third of whom shall be chosen by the first two so chosen within
an additional ten days and paid equally by the Transferring Party and the
Non-Transferring Party. The decision of the agreed-upon appraiser or, as the
case may be, a majority of the three appraisers, shall be made within 45 days
after he or they, as the case may be, are chosen and shall be final and binding
upon the Transferring Party and the Non-Transferring Party. All time periods
specified in Sections 5.02(a) through (c) shall be extended by the length of
time necessary for such appraiser(s) to be chosen and for such appraisal to be
made (if it becomes necessary).
Section 5.03 Tag-Along Rights. (a) Subject to the provisions
of Section 5.03(b) hereof, a Majority Class A Member shall not Transfer any
portion of its beneficial interest in an LLC formed pursuant to Section 2.02
hereof to a Third Party Transferee unless the Majority Class B Member is given
the opportunity to Transfer to the Third Party Transferee up to that percentage
of such Majority Class B Member's beneficial interest in such LLC that bears the
same proportion to the total percentage beneficial interest of the Majority
Class B Member in the LLC as the percentage beneficial interest in the LLC
proposed to be Transferred by the Majority Class A Member bears to the total
percentage beneficial interest in the LLC of the Majority Class A Member, such
transfer to be concurrent with the Transfer by the Majority Class A Member to
the Third Party Transferee and at a price per percentage beneficial interest and
on terms and subject to conditions that are no less favorable to the Majority
Class B Member than those to the Majority Class A Member. The Majority Class B
Member may exercise such tag-along right by giving written notice (a "Tag-Along
Notice") of such exercise to the Majority Class A Member no later than 15 days
after the Majority
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Class A Member has provided written notice to the Majority Class B Member of
such proposed Transfer, such notice by the Majority Class A Member to include
the identity of the Third Party Transferee, the percentage interest that the
Majority Class A Member will Transfer to the Third Party Transferee and the
price, terms and conditions upon which such Transfer is to be effected. Such
Tag-Along Notice shall specify the percentage interest that the Majority Class B
Member shall Transfer to the Third Party Transferee pursuant to this Section
5.03. If the Majority Class B Member exercises such tag-along right, then the
Majority Class A Member shall not Transfer its LLC interest to the Third Party
Transferee unless the Third Party Transferee also acquires the interest of the
Majority Class B Member specified in the Tag-Along Notice in accordance with the
provisions of this Section 5.03.
(b) In the event that the Transfer by the Majority Class A
Member would result in the Majority Class A Member no longer holding a majority
of the Aggregate Class A Membership Interest Percentage, then the Majority Class
B Member shall be entitled to Transfer to the Third Party Transferee up to 100%
of the Majority Class B Member's beneficial interest in such LLC. Any partial
exercise by the Majority Class B Member of, or failure by the Majority Class B
Member to exercise, its rights set forth in this Section 5.03 shall not prohibit
the Majority Class B Member from exercising such rights in connection with one
or more subsequent Transfers to which this Section 5.03 is applicable.
Section 5.04 Limitation on Non-Transferring Party's Rights. A
Non-Transferring Party or a Majority Class B Member shall only be entitled to
exercise its rights as set forth in
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Sections 5.02 or 5.03 hereof, respectively, with respect to an LLC at any time
that either the Non- Transferring Party (and any Affiliate thereof) or the
Majority Class B Member (and any Affiliate thereof), respectively, holds at
least a 15% beneficial interest in such LLC.
ARTICLE VI
TECHNOLOGY
Section 6.01 Technological Changes and Advances. The parties
hereto agree that one of the primary reasons for forming the Venture is the
parties' mutual interest in GSM Technology. Sonera U.S. and AOC shall work
together to determine, with respect to the system operated by each LLC formed
pursuant to Section 2.02 hereof, the nature, timing and implementation of
technological changes and advances, including changes involving the evolution of
GSM Technology and the development of subsequent technologies based on or
derived from GSM Technology, consistent with such mutual interest in GSM
Technology. In making such determination, Sonera U.S. and AOC shall give full
consideration to the operational plans and capabilities of AOC and its
Affiliates with respect to other B-PCS Markets owned or managed by AOC or its
Affiliates, as well as the parties' mutual interest in maintaining consistency
between the technology utilized by each LLC formed pursuant to Section 2.02
hereof and the technology utilized by (i) each other LLC formed pursuant to
Section 2.02 hereof, (ii) AOC and its Affiliates with respect to other B-PCS
Markets owned or managed by AOC or its Affiliates and (iii) other providers of
B-PCS in the United States utilizing GSM Technology. If Sonera U.S. and AOC are
unable to agree regarding the proposed implementation of any technological
changes or advances with respect
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to any LLC formed pursuant to Section 2.02 hereof (a "Technology Dispute"),
then, prior to such implementation, Sonera U.S. and AOC shall address such
Technology Dispute pursuant to the provisions of Section 9.02 and Section
9.03(b) hereof.
ARTICLE VII
NAME OF LLC
Section 7.01 Name of LLC. At all times that AOC or an
Affiliate thereof is managing the B-PCS System of an LLC formed pursuant to
Section 2.02 hereof, the business of such LLC shall be carried on using the same
name, and only such name, as that used from time to time by Aerial in the
Markets identified on Schedule 3.05, with such variations and changes thereto as
Aerial shall deem useful, appropriate or necessary for any legal or reasonable
business purpose, giving due consideration to the potential impact on any LLC
formed pursuant to Section 2.02 hereof, and Aerial shall grant each LLC a
license to use such name, all pursuant to the terms and conditions of the
Trademark License Agreement in substantially the form attached hereto as Exhibit
C.
ARTICLE VIII
MANAGEMENT AND OPERATION
Section 8.01 Board of Managers. (a) The Class A Members and
the Class B Members will appoint a Board of Managers for each LLC formed
pursuant to Section 2.02 hereof (an "LLC Board"), which LLC Board in each case
will consist of seven Managers. Four of the
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Managers shall be elected by the Class A Members and three of the Managers shall
be elected by the Class B Members. The Class C Members, if any, shall not be
entitled to elect any Managers to the LLC Board. In electing Managers to
represent the Class A Members and the Class B Members on the LLC Board, the vote
of a majority of the Aggregate Class A Membership Interest Percentage or
Aggregate Class B Membership Interest Percentage, respectively, shall govern.
(b) Sonera U.S. agrees that, as long as Sonera U.S. or an
Affiliate of Sonera U.S. is the Majority Class A Member and AOC or an Affiliate
of AOC directly or indirectly owns a beneficial interest in an LLC formed
pursuant to Section 2.02 hereof, Sonera U.S. will not designate as a
representative of Sonera U.S. on the LLC Board of such LLC any individual who is
an officer, director or representative of any third party (other than Sonera or
Sonera U.S.) that is in Competition with AOC or any Affiliate of AOC to any
significant extent. AOC agrees that, as long as AOC or an Affiliate of AOC is
the Majority Class B Member and Sonera U.S. or an Affiliate of Sonera U.S.
directly or indirectly owns a beneficial interest in an LLC formed pursuant to
Section 2.02 hereof, AOC will not designate as a representative of AOC on the
LLC Board of such LLC any individual who is an officer, director or
representative of any third party (other than Aerial or AOC) that is in
Competition with Sonera U.S. or any Affiliate of Sonera U.S. to any significant
extent.
(c) In addition, if (i) either AOC or an Affiliate thereof, on
the one hand, or Sonera U.S. or an Affiliate thereof, on the other hand, has
appointed as its representative to the LLC Board of any LLC formed pursuant to
Section 2.02 hereof an officer or director of a third party, (ii) either AOC or
any Affiliate thereof, on the one hand, or Sonera U.S. or any Affiliate thereof,
on the other
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hand, jointly pursuant to this Agreement or individually, has entered into a
binding agreement to acquire a license issued by the FCC to provide Wireless
Services or to operate or manage a system providing Wireless Services, (iii) the
presence of such officer or director of such third party on such LLC Board would
prevent such acquisition, operation or management due to the restrictions on
spectrum aggregation set forth in Section 20.6 of the FCC rules and (iv) the
party committing to acquire such license or operate or manage such system has
requested a waiver from the FCC with respect to the application of Section 20.6,
then the party that appointed such third party officer or director agrees to
replace such third party officer or director as its representative on such LLC
Board with a representative that will not prevent such acquisition, operation or
management pursuant to Section 20.6 of the FCC rules; provided, however, that if
such waiver subsequently is granted by the FCC, then such third party officer or
director shall again become eligible to serve on such LLC Board. All expenses
incurred in connection with the preparation and filing of such waiver
application shall be the responsibility of the party requesting such waiver.
Section 8.02 Unanimous Approval. No LLC formed pursuant to
Section 2.02 hereof shall take any of the following actions without the
unanimous approval of its LLC Board:
(i) prior to the LLC Fifth Anniversary of such LLC, any
transfer, assignment or disposition of all or any substantial portion
of the assets of such LLC, any plan or agreement by which such LLC
disaggregates or partitions its B-PCS License or assigns its B-PCS
License or makes spectrum available through a resale or use
arrangement, or any Restricted Business Combination of such LLC with or
into any other entity, in each case whether
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involving a member of such LLC, an Affiliate of such LLC or of a
member, or a third party; or
(ii) any other action for which unanimous approval of the LLC
Board is required as set forth in the Limited Liability Company
Agreement governing such LLC.
Section 8.03 Right of First Negotiation. (a) If on or after an
LLC Fifth Anniversary the Majority Class A Member desires to enter into or
permit such LLC to enter into any agreement with respect to any matter set forth
in clause (i) of Section 8.02 hereof (a "Restricted LLC Action"), then the
Majority Class A Member must first notify the Majority Class B Member in writing
of its desire to effect a Restricted LLC Action, which notice shall indicate the
type of Restricted LLC Action that the Majority Class A Member desires to effect
and refer to this Section 8.03 (the "Restricted LLC Action Notice"). The
Majority Class B Member shall have a period of ten days from the receipt of the
Restricted LLC Action Notice within which to provide the Majority Class A Member
with a written notice that the Majority Class B Member desires to invoke the
provisions of Section 8.03(b) (the "Restricted LLC Action Negotiation Notice").
If the Majority Class B Member fails to timely provide a Restricted LLC Action
Negotiation Notice or comply with any of the provisions of Section 8.03(b), then
the Majority Class A Member and the LLC may consummate such Restricted LLC
Action with one or more Persons other than the Majority Class B Member.
(b) If the Majority Class B Member timely provides a
Restricted LLC Action Negotiation Notice to the Majority Class A Member pursuant
to Section 8.03(a), then the Majority
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Class B Member shall have the exclusive right to negotiate with the Majority
Class A Member (with the Majority Class A Member representing the LLC) regarding
the possible consummation of the Restricted LLC Action with the Majority Class B
Member rather than with one or more other Persons for a period (the "Restricted
LLC Action Negotiation Period") beginning on the date of receipt by the Majority
Class A Member of the Restricted LLC Action Negotiation Notice and ending on the
earlier to occur of (i) the date upon which the Majority Class B Member and the
Majority Class A Member reach agreement on the terms of the consummation of the
Restricted LLC Action with the Majority Class B Member rather than with one or
more other Persons, or (ii) 60 days after commencement of the Restricted LLC
Action Negotiation Period. During the Restricted LLC Action Negotiation Period,
the Majority Class A Member and the Majority Class B Member shall negotiate in
good faith to reach agreement on the terms of a consummation of the Restricted
LLC Action with the Majority Class B Member rather than with one or more other
Persons. If the parties reach such agreement during the Restricted LLC Action
Negotiation Period, then the parties shall promptly prepare and file all
necessary applications with the FCC and any other regulatory agencies and the
closing of the Restricted LLC Action with the Majority Class B Member shall
occur within 30 days after receipt of all necessary FCC and other regulatory
approvals. In the event that the parties do not reach such agreement during the
Restricted LLC Action Negotiation Period, then the Majority Class B Member shall
give to the Majority Class A Member a written notice of the Majority Class B
Member's final bid to consummate such Restricted LLC Action with the LLC (in
whatever form the Majority Class B Member desires) on or before the last day of
the Restricted LLC Action Negotiation Period, which final bid the Majority Class
A Member shall have the right to accept (A) for a period of 30 days after its
receipt thereof, during which 30-day period such final bid
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shall be irrevocable, and (B) for a period of an additional 60 days thereafter,
during which additional 60-day period such final bid shall be revocable upon the
Majority Class A Member's receipt of written notice of revocation from the
Majority Class B Member prior to the Majority Class A Member's acceptance of
such final bid.
(c) In the event that the Majority Class A Member neither
reaches agreement via negotiation with the Majority Class B Member to consummate
the Restricted LLC Action with the Majority Class B Member nor accepts the
Majority Class B Member's final bid pursuant to Section 8.03(b), then the
Majority Class A Member and the LLC shall be permitted to consummate the
Restricted LLC Action with one or more Persons other than the Majority Class B
Member; provided, however, that in no event shall the Majority Class A Member or
the LLC consummate, or enter into an agreement to consummate, the Restricted LLC
Action with such other Persons unless (i) the Majority Class A Member has
negotiated in good faith during the Restricted LLC Action Negotiation Period to
effect such Restricted LLC Action with the Majority Class B Member pursuant to
Section 8.03(b) and (ii) the Majority Class A Member or the LLC enters into a
binding agreement within 180 days after the termination of the Restricted LLC
Action Negotiation Period to consummate such Restricted LLC Action with one or
more Persons other than the Majority Class B Member at a higher price than the
price offered to the Majority Class A Member or the LLC by the Majority Class B
Member in its final bid.
(d) For purposes of this Section 8.03, if the price in a
binding agreement to consummate a Restricted LLC Action, or in the Majority
Class B Member's final bid, is to be paid
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in something other than money in a lump sum at the closing, then the Majority
Class A Member and the Majority Class B Member shall use their reasonable best
efforts to reach agreement as to an equivalent in monetary terms, which shall
constitute the price for the purposes of Section 8.03(c)(ii). In the event that
the price in a binding agreement or final bid is to be paid in whole or in part
in shares of a public company and such shares are traded on a national stock
exchange, the value of such securities, for purposes of calculating such price,
shall be the average closing price for such shares as reported in The Wall
Street Journal for the twenty trading days ending on and including the third
trading day prior to the date of the Majority Class B Member's written notice of
its final bid as set forth in Section 8.02(b) or the date of the execution of
the binding agreement as referenced in Section 8.02(c), as the case may be;
provided, however, appropriate adjustments shall be made to the value of such
shares for (i) extraordinary dividends, stock splits or any other extraordinary
distributions, (ii) a combination of such public company's outstanding shares
into a smaller number of shares or (iii) any reorganization or reclassification
of such public company's shares or any consolidation or merger with another
company. If such an agreement cannot be reached within ten days after the
Majority Class A Member (in the case of a final bid) or the Majority Class B
Member (in the case of a binding agreement to consummate a Restricted LLC
Action) receives written notice of the price offered, such equivalent shall be
determined by an appraiser agreed upon (and paid equally) by the Majority Class
A Member and the Majority Class B Member or, if they cannot agree upon an
appraiser within ten days after the end of such initial ten-day period, by three
appraisers, one of whom shall be chosen within ten days after the end of such
second ten-day period by the Majority Class A Member (and paid by the Majority
Class A Member), one of whom shall be chosen (and paid) by the Majority Class B
Member within the same period, and the third of whom shall be
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chosen by the first two so chosen within an additional ten days and paid equally
by the Majority Class A Member and the Majority Class B Member. The decision of
the agreed-upon appraiser or, as the case may be, a majority of the three
appraisers, shall be made within 45 days after he or they, as the case may be,
are chosen and shall be final and binding upon the Majority Class A Member and
the Majority Class B Member. All time periods specified in Sections 8.03(a)
through (c) shall be extended by the length of time necessary for such
appraiser(s) to be chosen and for such appraisal to be made (if it becomes
necessary).
(e) The Majority Class B Member shall not be entitled to
exercise its rights as set forth in this Section 8.03 with respect to any LLC at
any time that the Majority Class B Member (and any Affiliate thereof) holds less
than a 15% beneficial interest in such LLC.
Section 8.04 Management and Operation. Each LLC formed
pursuant to Section 2.02 hereof shall, as of the date of formation, enter into a
management agreement with AOC or an Affiliate of AOC in substantially the form
attached hereto as Exhibit D (the "Management Agreement") pursuant to which AOC
or an Affiliate of AOC shall manage the daily operations of the B-PCS system of
such LLC. If the System Manager is not AOC but rather an Affiliate of AOC, then
AOC shall cause such Affiliate to perform the covenants and obligations of such
Affiliate set forth in the Management Agreement and shall make available to such
Affiliate sufficient resources to enable such Affiliate to so perform. The
Management Agreement between AOC or its Affiliate and the LLC shall not be
terminated by the LLC except pursuant to the terms thereof.
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ARTICLE IX
DISPUTES
Section 9.01 General. The parties agree to address
disagreements and disputes arising out of or related to this Agreement or the
breach hereof through the procedures set forth in this Article IX.
Section 9.02 Negotiation Procedure. (a) The Aerial Parties, on
the one hand, and Sonera U.S., on the other hand, shall designate one or more
employees or representatives who will be the initial contact for resolving
disputes that may arise under this Agreement that do not involve an amount in
excess of $50,000. The Aerial Parties and Sonera U.S. shall first raise such
disputes with a designated employee or representative of the other party. The
designated employees or representatives shall work together to resolve the
relevant issue in a manner that meets the interests of both the Aerial Parties
and Sonera U.S., or until the issue is referred to designated officers of the
parties as set forth in Section 9.02(b). Any disputes that involve an amount in
excess of $50,000 shall be referred to the designated officers of the parties as
set forth in Section 9.02(b).
(b) The Aerial Parties and Sonera U.S. shall also designate
one or more officers who will review (i) disputes that involve an amount in
excess of $50,000 or (ii) disputes that the designated employees or
representatives are unable to resolve pursuant to Section 9.02(a). Any matter
not resolved by such designated employees within 30 days after the date on which
a party hereto first notifies a designated employee of the other party shall be
referred to such designated
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officers for resolution. The designated officers shall work together to resolve
the disputes so referred to them in a manner that meets the interests of both
the Aerial Parties and Sonera U.S., either until such agreement is reached, or
until an impasse is declared by either the Aerial Parties or Sonera U.S.;
provided, however, that an impasse shall not be declared by either the Aerial
Parties or Sonera U.S. prior to the fifteenth day after such dispute has first
been referred to such designated officers. Notice of declaration of any impasse
shall be given pursuant to Section 11.02 hereof.
(c) The employees or representatives and officers initially
designated by the Aerial Parties and Sonera U.S. for purposes of this Section
9.02 are set forth in Schedule 9.02(c) to this Agreement. Parties may change
such designation by giving notice of such change pursuant to Section 11.02
hereof.
(d) Any resolution of a dispute by the designated employees or
representatives pursuant to Section 9.02(a) hereof or by the designated officers
pursuant to Section 9.02(b) hereof shall be in writing signed by such persons on
behalf of the parties. Notwithstanding any provision of this Article IX, no
resolution of any dispute by any designated employee, representative or officer
shall constitute an amendment of this Agreement without the approval of the
respective boards of directors of each party hereto.
Section 9.03 Unresolved Disputes. (a) Except as set forth in
Section 9.03(b) hereof, the parties shall be entitled to exercise or resort to
any and all rights and remedies provided in this
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Agreement or at law or in equity with respect to any controversy or claim not
resolved through the procedures set forth in Section 9.02 hereof.
(b) Any Technology Dispute arising pursuant to Section 6.01
hereof not resolved through the procedures set forth in Section 9.02 hereof and
any final proposals submitted in connection with a Management Compensation
Amendment pursuant to Section 4.02(c) hereof shall be settled by arbitration,
which shall be final and non-appealable, administered by the American
Arbitration Association in accordance with its Commercial Rules and judgment on
the award rendered by the arbitrator may be entered in any court having
jurisdiction thereof. The arbitration proceeding shall be conducted in the
Washington, D.C. metropolitan area by one neutral arbitrator, unless either the
Aerial Parties or Sonera U.S. notifies the other, prior to commencement of the
procedure to select an arbitrator, that such Aerial Parties or Sonera U.S., as
applicable, desire to have the arbitration proceeding conducted by three neutral
arbitrators. The arbitrator shall have the authority to award any remedy or
relief that a court of competent jurisdiction could order or grant, including,
without limitation, the issuance of an injunction. However, any party may,
without inconsistency with this arbitration provision, apply to any court having
jurisdiction hereof and seek interim provisional, injunctive or other equitable
relief until the arbitration award is rendered or the controversy is otherwise
resolved. The arbitrator shall set forth the arbitration award in a written
opinion issued within 90 days from the date of selection of such arbitrator,
unless such 90-day period is extended by mutual agreement of the parties.
Neither a party or an Affiliate thereof nor an arbitrator may disclose the
existence, content, or results of any arbitration hereunder without the prior
written consent of all parties, except as necessary in court proceedings to
enforce this
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arbitration provision or an award rendered hereunder, or to obtain interim
relief, or as otherwise required by law (including the requirement of Aerial or
any Affiliate thereof to disclose such terms under the federal securities laws
or under the rules of any securities exchange on which its securities are
listed, and including the requirement of Sonera or any Affiliate thereof to
disclose such terms under the securities laws of Finland or other applicable
jurisdictions). The parties acknowledge that this contract evidences a
transaction involving interstate commerce. Notwithstanding any choice of law
provision included in this Agreement, the United States Federal Arbitration Act
shall govern the interpretation and enforcement of this arbitration provision.
Section 9.04 Jurisdiction; Consent to Service of Process. (a)
Subject to and in furtherance of the provisions of Section 9.03, each party
hereby irrevocably consents and submits to the jurisdiction of the United States
District Court for the District of Delaware and any court of the State of
Delaware in any action, suit or proceeding arising out of, resulting from or
relating to this Agreement, and agrees that any such action, suit or proceeding
shall be brought only in such courts (and waives any objection based on forum
non conveniens or any other objection to venue therein); provided, however, that
such consent to jurisdiction is solely for the purpose referred to in this
Section 9.04 and shall not be deemed to be a general submission to the
jurisdiction of said courts or the State of Delaware other than for such
purpose.
(b) Sonera U.S. hereby irrevocably appoints The Corporation
Trust Company, at its office at 1209 Orange Street, Wilmington, Delaware, United
States of America, its lawful agent and attorney to accept and acknowledge
service of any and all process against it in any action, suit or
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proceeding arising out of, resulting from or relating to this Agreement, and
upon whom such process may be served, with the same effect as if it were a
resident of the State of Delaware, and had been lawfully served with such
process in such jurisdiction, and waives all claim of error by reason of such
service, provided that in the case of any service upon such agent and attorney,
the Aerial Parties shall also deliver a copy thereof to Sonera U.S. at the
address and in the manner specified in Section 11.02. In the event that such
agent and attorney resigns or otherwise becomes incapable of acting as such,
Sonera U.S. will appoint a successor agent and attorney in Wilmington, Delaware,
reasonably satisfactory to the Aerial Parties, with like powers or, if Sonera
U.S. fails to make such appointment, Sonera U.S. hereby authorizes either Aerial
Party to appoint such agent. Sonera U.S. shall pay the annual fee due to The
Corporation Trust Company or such successor agent for acting in such capacity;
provided, however, that if Sonera U.S. fails to make such payment, then the
Aerial Parties shall be permitted to do so.
ARTICLE X
REPRESENTATIONS AND WARRANTIES
Each party hereby represents and warrants to the other party
as follows (each party making said representations and warranties as to itself
and as to and on behalf of each of its Affiliates which is a party to any or all
of the agreements and instruments which are being executed and delivered in
connection herewith):
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Section 10.01 Organization and Standing. It is a corporation,
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, has all requisite authority and power to carry
on its business as now being conducted by it, and is in good standing in each
jurisdiction in which the nature of the business conducted by it requires it to
be qualified therein to do business.
Section 10.02 Authorization. It has taken all action necessary
for the authorization, execution, delivery and performance by it of this
Agreement and the other agreements being delivered simultaneously herewith to
which it is a party, and when this Agreement and other agreements are executed
and delivered by it, they will constitute its valid and binding obligations in
accordance with their respective terms. It has all necessary corporate and other
power with respect to the foregoing.
Section 10.03 Litigation. It is not a party to any pending or,
to the best of its knowledge threatened, litigation or other proceeding which,
if adversely determined, would have a material adverse effect upon the Venture
or any LLC formed pursuant to Section 2.02 hereof or such LLC's tangible or
intangible assets or operations.
Section 10.04 Absence of Conflict. Neither the execution,
delivery or performance by it of this Agreement or of any other agreements which
are being executed and delivered simultaneously herewith to which it is a party,
nor the consummation of the transactions herein or therein contemplated, nor the
fulfillment of or compliance with the terms and conditions hereof or
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thereof, will (nor with the giving of notice or lapse of time or both would)
conflict with its charter, bylaws or other instrument pursuant to which it is
organized, or result in a breach of or constitute a default under or conflict
with any material contract, agreement or instrument to which it is a party or by
which it or any of its properties are bound, or any law, rule, or regulation
applicable to it or any of its properties. Any third party, governmental or
administrative consents or approvals which are required in connection with the
foregoing have been obtained and are in full force and effect.
Section 10.05 Absence of Undisclosed Liabilities. It has no
material debts, liabilities, contracts or other obligations which could
reasonably be expected to affect the Venture or any LLC formed pursuant to
Section 2.02 hereof in a materially adverse manner.
ARTICLE XI
MISCELLANEOUS
Section 11.01 Confidentiality. (a) In addition to any
obligations of confidentiality pursuant to other agreements already existing
between the parties hereto (which this Section 11.01 is not intended to
supersede with respect to information disclosed prior to the execution of this
Agreement), each party hereto will, and will cause its Affiliates to, hold in
confidence and not disclose to any of its own personnel or personnel of its
Affiliates not having a need to know or to any third party without the prior
written consent of the other parties hereto: (i) any information received by it
from the other parties in connection with the transactions contemplated hereby
or (ii) any specific terms of this Agreement or any agreement being delivered
simultaneously herewith.
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(b) The foregoing obligation of confidence shall extend for
the term of this Agreement and any extensions hereof and for a period of 5 years
thereafter; provided, however, that no party shall be obligated to maintain in
confidence information:
(i) which is or becomes part of the public domain other than
through breach of this Agreement or through the fault of the receiving
party;
(ii) which is or becomes available to the receiving party from
a source other than the disclosing party, which source has no
obligation to the disclosing party in respect thereof;
(iii) which is made available by the disclosing party in
written form to a third party which is not an Affiliate of the
disclosing party on an unrestricted basis;
(iv) which is required to be disclosed by law; or
(v) disclosure of which is mutually agreed to by the parties.
(c) If any party hereto discloses such information to a third
party, such disclosing party shall ensure that suitable undertakings of secrecy
are imposed upon such third party which are no less stringent than those of this
Section 11.01.
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Section 11.02 Notices. All notices, claims and other
communications hereunder shall be in writing and shall be made by hand delivery,
facsimile, or overnight air courier guaranteeing next day delivery, as follows:
(a) If to the Aerial Parties, at:
Aerial Communications, Inc.
8410 West Bryn Mawr Avenue
Suite 1100
Chicago, Illinois 60631
Attention: Donald W. Warkentin
Telephone: (773) 399-4145
Facsimile: (773) 399-7997
with a copy (which shall not constitute notice) to:
Telephone and Data Systems, Inc.
30 North LaSalle Street
Suite 4000
Chicago, Illinois 60602
Attention: LeRoy T. Carlson, Jr.
Telephone: (312) 630-1900
Facsimile: (312) 630-9299
and a copy (which shall not constitute notice) to:
Sidley & Austin
One First National Plaza
42nd Floor - SW
Chicago, Illinois 60603
Attention: Michael G. Hron, Esq.
Telephone: (312) 853-2030
Facsimile: (312) 853-7036
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(b) if to Sonera U.S., at:
Sonera Ltd.
P.O. Box 106
FIN-00051-TELE
Teollisuuskatu 15, Helsinki
Attention: Maire Laitinen, Esq.
Telephone: 011-35-8-2040-3641
Facsimile: 011-35-8-2040-3414
with a copy (which shall not constitute notice) to:
Patton Boggs, L.L.P.
2550 M. Street, N.W.
Washington, D.C. 20037-1350
Attention: Richard M. Stolbach, Esq.
Telephone: (202) 457-6324
Facsimile: (202) 457-6315
or at such other address as any party may from time to time furnish to the other
parties by a notice given in accordance with the provisions of this Section
11.02. All such notices and communications shall be deemed to have been duly
given at the time delivered by hand, if personally delivered; when receipt
confirmed, if sent by facsimile; and the next Business Day after timely delivery
to the courier, if sent by an overnight air courier service guaranteeing next
day delivery.
Section 11.03 Further Assurances. Each of the parties hereto
agrees to take all reasonably necessary steps to do all such further acts and
things as may be necessary to carry out the purposes and intentions of this
Agreement and to ensure that the Venture can carry on its business through LLCs
consistent with and as contemplated by this Agreement.
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Section 11.04 Amendment. This Agreement may be amended,
modified and supplemented only by written agreement of Sonera U.S. and the
Aerial Parties.
Section 11.05 Waiver of Compliance; Consents. Any failure by
the Aerial Parties or Sonera U.S. to comply with any obligation, covenant,
agreement or condition herein may be waived in writing by the other, but such
waiver or failure to insist upon strict compliance with such obligation,
covenant, agreement or condition shall not operate as a waiver of, or estoppel
with respect to, any subsequent or other failure. Whenever this Agreement
requires or permits waivers or consents by or on behalf of any party, such
waiver or consent shall be given in writing.
Section 11.06 Expenses. Each party hereto shall pay its own
legal, accounting and other expenses incident to this Agreement and the
consummation of the transactions contemplated thereby.
Section 11.07 Entire Agreement. This Agreement, the
Supplemental Agreement, the Purchase Agreement, the Investment Agreement and the
documents referred to herein and therein embody the whole agreement and
understanding of the parties with respect to the relations contemplated hereby.
There are no restrictions, promises, representations, warranties, covenants or
undertakings with respect thereto, other than those set forth or referred to in
such agreements. Such agreements supersede all prior agreements and
understandings between the parties with respect to the subject matter hereof. No
rights in favor of third parties are hereby created.
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Section 11.08 Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
Section 11.09 Headings and Captions. The headings and captions
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement.
Section 11.10 Severability. In the event any provision of this
Agreement is found to be invalid or unenforceable in whole or in part, the
remaining provisions of this Agreement nevertheless shall be binding and the
invalid or unenforceable provision shall be replaced by a valid and enforceable
provision which comes closest to the intent or economic effect of the provision
to be replaced.
Section 11.11 Governing Law. This Agreement shall be construed
in accordance with and subject to the local, internal laws of the State of
Delaware.
Section 11.12 Compliance with FCC Rules. (a) Notwithstanding
any other provision in this Agreement, the parties hereto shall at all times
comply with, and all provisions of this Agreement shall be subject to, all
applicable rules and regulations of the FCC, including but not limited to
approval by the FCC prior to the acquisition of any B-PCS License and to the
restrictions
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on spectrum aggregation set forth in Section 20.6 of the FCC rules, and the
parties hereto shall cooperate in the preparation and filing of all necessary
applications with the FCC.
(b) To the extent that (i) any party hereto or an Affiliate
thereof, jointly pursuant to this Agreement or individually, desires to enter
into a binding agreement to acquire a license issued by the FCC to provide
Wireless Services or to manage or operate a system providing Wireless Services
and (ii) such acquisition, operation or management would be prevented due to the
restrictions on spectrum aggregation set forth in Section 20.6 of the FCC rules,
then the parties shall, for a period of not less than 15 business days,
cooperate in good faith to consider, but (except as set forth in Section 8.01(c)
hereof) shall not be obligated to take, such action as may be necessary to
render the restrictions of Section 20.6 inapplicable to such acquisition,
operation or management.
(c) Upon the request of any party hereto, the parties hereto
agree to reasonably cooperate in seeking a waiver from the FCC of the
application of Section 20.6 of the FCC rules to the acquisition by any Person
(other than by a Person who, as a result of such acquisition, will be the
Majority Class A Member or the Majority Class B Member) of an equity interest in
an LLC formed pursuant to Section 2.02 hereof equal to or greater than 20%. All
expenses incurred in connection with the preparation and filing of such waver
application shall be the responsibility of the party proposing that such waiver
be obtained. The pendency of such waiver request shall not restrict or otherwise
delay any party from taking any action permitted by, or exercising any rights
set forth in, this Agreement or the related Limited Liability Company Agreement.
If such waiver is granted by the FCC, then such acquisition of an equity
interest equal to or greater than 20% shall
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not be deemed a violation of Section 4.06 hereof or Sections 3.4 or 6.2(f) of
the Limited Liability Company Agreement.
(d) In the event that the FCC, pursuant to a rulemaking
proceeding, adopts rules, which have become final and non-appealable, amending
the restrictions on spectrum aggregation set forth in Section 20.6 of the FCC
rules, then the parties hereto shall, to the extent consistent with such
amendment, (i) amend Sections 4.06 and 8.01(c) hereof and Sections 3.4 and
6.2(f) of the form of Limited Liability Company Agreement and (ii) in connection
with each LLC already formed pursuant to Section 2.02 hereof, propose that the
related Limited Liability Company Agreement be similarly amended.
Section 11.13 No Claim of Immunity. Sonera U.S. agrees that,
to the extent that it or any of its property, its Affiliates, or property of its
Affiliates is or becomes entitled at any time to any immunity, on the grounds of
sovereignty or otherwise, based upon its status as an agency or instrumentality
of government, from any arbitration, legal action, suit or proceeding or from
setoff or counterclaim relating to this Agreement from the jurisdiction of any
arbitrator or competent court, from service of process, from attachment prior to
judgment, from attachment in aid of execution of a judgment, from execution
pursuant to a judgment or arbitration award, or from any other legal process in
any jurisdiction, it, for itself, its Affiliates, its property and that of its
Affiliates, expressly, irrevocably and unconditionally agrees not to plead or
claim, any such immunity with respect to such matters arising with respect to
this Agreement or the subject matter hereof (including any obligation for the
payment of money).
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Section 11.14 Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and to their
respective permitted successors and assigns; provided, however, that neither the
rights nor the obligations of any party may be assigned or delegated without the
prior written consent of the other parties.
Section 11.15 Equitable Remedies. The parties hereto agree
that irreparable damage would occur in the event that any of the provisions of
this Agreement were not performed in accordance with the specific terms hereof
or the provisions hereof were otherwise breached. It is accordingly agreed that
the parties shall be entitled to an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the terms and provisions
hereof in any court of the United States or any state having jurisdiction, this
being in addition to any other remedy to which they are entitled at law or in
equity. Each party agrees that it will not assert, as a defense against a claim
for specific performance, that the party seeking specific performance has an
adequate remedy at law.
Section 11.16 Remedies Cumulative. Except as otherwise
provided herein, each and all of the rights and remedies in this Agreement
provided, and each and all of the rights and remedies allowed at law and in
equity in like case, shall be cumulative, and the exercise of one right or
remedy shall not be exclusive of the right to exercise or resort to any and all
other rights or remedies provided in this Agreement or at law or in equity.
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Section 11.17 Limitation on Damages. Neither the Aerial
Parties nor Sonera U.S. shall be liable to the other for damages hereunder
except for reasonable direct economic and pecuniary costs (including reasonable
attorneys' fees) and damages (which shall not include consequential, exemplary,
expectancy, indirect, punitive or special damages) arising out of or in
connection with any act or failure to act under, or breach of the terms of, this
Agreement.
* * * * *
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first written above.
AERIAL COMMUNICATIONS, INC.
By: /s/ Donald W. Warkentin
-------------------------------------
Donald W. Warkentin
President and Chief Executive Officer
AERIAL OPERATING CO., INC.
By: /s/ Donald W. Warkentin
-------------------------------------
Donald W. Warkentin
President and Chief Executive Officer
SONERA CORPORATION U.S.
By: /s/ Kaj-Erik Relander
-------------------------------------
Name: Kaj-Erik Relander
-------------------------------------
Title: President
-------------------------------------
SIGNATURE PAGE TO JOINT VENTURE AGREEMENT,
DATED AS OF SEPTEMBER 8, 1998,
AMONG AERIAL COMMUNICATIONS, INC., AERIAL OPERATING
CO., INC. AND SONERA CORPORATION U.S.
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EXHIBIT 99.5
EXECUTION COPY
SUPPLEMENTAL AGREEMENT
By and Among
AERIAL COMMUNICATIONS, INC.
AERIAL OPERATING CO., INC.
and
SONERA LTD.
Dated as of September 8, 1998
<PAGE>
TABLE OF CONTENTS
-----------------
Page
----
ARTICLE I DEFINITIONS
Section 1.01 Defined Terms..........................................2
-------------
ARTICLE II COVENANTS
Section 2.01 Performance of Joint Venture Agreement.................2
--------------------------------------
Section 2.02 Restriction on B-PCS Participation.....................3
----------------------------------
Section 2.03 References to Joint Venture Agreement..................3
-------------------------------------
ARTICLE III TERMINATION
Section 3.01 Termination............................................3
-----------
ARTICLE IV DISPUTES
Section 4.01 General................................................4
-------
Section 4.02 Negotiation Procedure..................................4
---------------------
Section 4.03 Unresolved Disputes....................................6
-------------------
Section 4.04 Jurisdiction; Consent to Service of Process............6
-------------------------------------------
ARTICLE V REPRESENTATIONS AND WARRANTIES
Section 5.01 Organization and Standing..............................7
-------------------------
Section 5.02 Authorization..........................................8
-------------
Section 5.03 Litigation.............................................8
----------
Section 5.04 Absence of Conflict....................................8
-------------------
Section 5.05 Absence of Undisclosed Liabilities.....................9
----------------------------------
ARTICLE VI MISCELLANEOUS
Section 6.01 Confidentiality........................................9
---------------
Section 6.02 Notices...............................................10
-------
Section 6.03 Further Assurances....................................12
------------------
Section 6.04 Amendment.............................................12
---------
Section 6.05 Waiver of Compliance; Consents........................12
------------------------------
Section 6.06 Expenses..............................................13
--------
Section 6.07 Entire Agreement......................................13
----------------
Section 6.08 Counterparts..........................................13
------------
Section 6.09 Headings and Captions.................................14
---------------------
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Section 6.10 Severability..........................................14
------------
Section 6.11 Governing Law.........................................14
-------------
Section 6.12 Compliance with FCC Rules.............................14
-------------------------
Section 6.13 No Claim of Immunity..................................15
--------------------
Section 6.14 Successors and Assigns................................15
----------------------
Section 6.15 Equitable Remedies....................................16
------------------
Section 6.16 Remedies Cumulative...................................16
-------------------
Section 6.17 Limitation on Damages.................................16
---------------------
SCHEDULES
- ---------
4.02(c) -- Designated Employees, Representatives and Officers
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<PAGE>
SUPPLEMENTAL AGREEMENT
This SUPPLEMENTAL AGREEMENT, dated as of September 8, 1998
(the "Agreement"), is entered into between AERIAL COMMUNICATIONS, INC., a
Delaware corporation ("Aerial"), AERIAL OPERATING CO., INC., a Delaware
corporation and wholly-owned subsidiary of Aerial ("AOC" and, together with
Aerial, the "Aerial Parties"), and SONERA LTD., a limited liability company
organized under the laws of the Republic of Finland and formerly known as Sonera
Corporation ("Sonera").
W I T N E S S E T H:
WHEREAS, Aerial, AOC and Sonera Corporation U.S., a Delaware
corporation and wholly-owned subsidiary of Sonera ("Sonera U.S." and, together
with Sonera, the "Sonera Parties"), have entered into a Joint Venture Agreement,
dated as of the date hereof (the "Joint Venture Agreement"), pursuant to which
Aerial, AOC and Sonera U.S. have formed a joint venture (the "Venture") which,
subject to certain exceptions as set forth therein, will serve during the
Exclusivity Period (as defined therein) as the exclusive vehicle through which
the Aerial Parties and the Sonera Parties will (i) acquire licenses issued by
the Federal Communications Commission to provide B- PCS (as defined therein) and
(ii) build and operate systems with respect to such licenses utilizing GSM
Technology (as defined therein);
WHEREAS, the Joint Venture Agreement sets forth certain
obligations, restrictions and prohibitions applicable to the Sonera Parties and
their affiliates with respect to the Venture; and
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WHEREAS, Sonera, as the corporate parent of Sonera U.S., in
consideration of the execution and delivery by the Aerial Parties of the Joint
Venture Agreement, desires to affirm to the Aerial Parties Sonera's acceptance
of the provisions of the Joint Venture Agreement and to set forth certain
covenants in this Agreement with respect thereto;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants, conditions and promises hereinafter set forth, the parties
hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Defined Terms. Capitalized terms not otherwise
defined in this Agreement shall have the meanings set forth in the Joint Venture
Agreement.
ARTICLE II
COVENANTS
Section 2.01 Performance of Joint Venture Agreement. Sonera
hereby covenants to the Aerial Parties that Sonera shall not directly or
indirectly (i) take, or cause or permit Sonera U.S. or any Affiliate of either
Sonera Party to take, any action that Sonera U.S. or any Affiliate of either
Sonera Party is prohibited from taking pursuant to the Joint Venture Agreement
or (ii) cause
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or permit Sonera U.S. or any Affiliate of either Sonera Party to fail to perform
any obligation of Sonera U.S. or any Affiliate of either Sonera Party under the
Joint Venture Agreement.
Section 2.02 Restriction on B-PCS Participation. Sonera
expressly agrees to restrict its ability to participate, directly or indirectly,
by itself or through any Affiliate or other Sonera Entity, in B-PCS in the
United States except as expressly permitted by the Joint Venture Agreement or as
otherwise agreed in writing by the Aerial Parties.
Section 2.03 References to Joint Venture Agreement. Sonera
further expressly acknowledges and agrees that all references to the "Joint
Venture Agreement" set forth in the Purchase Agreement, the Investment
Agreement, the Limited Liability Company Agreement, the Management Agreement,
any agreement or instrument referenced in, or attached as an exhibit to, any of
the foregoing agreements and any certificate or instrument delivered in
connection with the closing of the Purchase Agreement on the date hereof shall
be deemed to include this Agreement.
ARTICLE III
TERMINATION
Section 3.01 Termination. This Agreement shall commence upon
the date hereof and shall remain in full force and effect at all times that the
Joint Venture Agreement remains in effect. This Agreement shall terminate only
upon termination of the Joint Venture Agreement.
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ARTICLE IV
DISPUTES
Section 4.01 General. The parties agree to address
disagreements and disputes arising out of or related to this Agreement or the
breach hereof through the procedures set forth in this Article IV.
Section 4.02 Negotiation Procedure. (a) The Aerial Parties, on
the one hand, and Sonera, on the other hand, shall designate one or more
employees or representatives who will be the initial contact for resolving
disputes that may arise under this Agreement that do not involve an amount in
excess of $50,000. The Aerial Parties and Sonera shall first raise such disputes
with a designated employee or representative of the other party. The designated
employees or representatives shall work together to resolve the relevant issue
in a manner that meets the interests of both the Aerial Parties and Sonera, or
until the issue is referred to designated officers of the parties as set forth
in Section 4.02(b). Any disputes that involve an amount in excess of $50,000
shall be referred to the designated officers of the parties as set forth in
Section 4.02(b).
(b) The Aerial Parties and Sonera shall also designate one or
more officers who will review (i) disputes that involve an amount in excess of
$50,000 or (ii) disputes that the designated employees or representatives are
unable to resolve pursuant to Section 4.02(a). Any matter not resolved by such
designated employees within 30 days after the date on which a party hereto first
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notifies a designated employee of the other party shall be referred to such
designated officers for resolution. The designated officers shall work together
to resolve the disputes so referred to them in a manner that meets the interests
of both the Aerial Parties and Sonera, either until such agreement is reached,
or until an impasse is declared by either the Aerial Parties or Sonera;
provided, however, that an impasse shall not be declared by either the Aerial
Parties or Sonera prior to the fifteenth day after such dispute has first been
referred to such designated officers. Notice of declaration of any impasse shall
be given pursuant to Section 6.02 hereof.
(c) The employees or representatives and officers initially
designated by the Aerial Parties and Sonera for purposes of this Section 4.02
are set forth in Schedule 4.02(c) to this Agreement. Parties may change such
designation by giving notice of such change pursuant to Section 6.02 hereof.
(d) Any resolution of a dispute by the designated employees or
representatives pursuant to Section 4.02(a) hereof or by the designated officers
pursuant to Section 4.02(b) hereof shall be in writing signed by such persons on
behalf of the parties. Notwithstanding any provision of this Article IX, no
resolution of any dispute by any designated employee, representative or officer
shall constitute an amendment of this Agreement without the approval of the
respective boards of directors of each party hereto.
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Section 4.03 Unresolved Disputes. The parties shall be
entitled to exercise or resort to any and all rights and remedies provided in
this Agreement or at law or in equity with respect to any controversy or claim
not resolved through the procedures set forth above.
Section 4.04 Jurisdiction; Consent to Service of Process. (a)
Subject to and in furtherance of the provisions of Section 4.03, each party
hereby irrevocably consents and submits to the jurisdiction of the United States
District Court for the District of Delaware and any court of the State of
Delaware in any action, suit or proceeding arising out of, resulting from or
relating to this Agreement, and agrees that any such action, suit or proceeding
shall be brought only in such courts (and waives any objection based on forum
non conveniens or any other objection to venue therein); provided, however, that
such consent to jurisdiction is solely for the purpose referred to in this
Section 4.04 and shall not be deemed to be a general submission to the
jurisdiction of said courts or the State of Delaware other than for such
purpose.
(b) Sonera hereby irrevocably appoints The Corporation Trust
Company, at its office at 1209 Orange Street, Wilmington, Delaware, United
States of America, its lawful agent and attorney to accept and acknowledge
service of any and all process against it in any action, suit or proceeding
arising out of, resulting from or relating to this Agreement, and upon whom such
process may be served, with the same effect as if it were a resident of the
State of Delaware, and had been lawfully served with such process in such
jurisdiction, and waives all claim of error by reason of such service, provided
that in the case of any service upon such agent and attorney, the Aerial Parties
shall also deliver a copy thereof to Sonera at the address and in the manner
specified in Section 6.02.
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In the event that such agent and attorney resigns or otherwise becomes incapable
of acting as such, Sonera will appoint a successor agent and attorney in
Wilmington, Delaware, reasonably satisfactory to the Aerial Parties, with like
powers or, if Sonera fails to make such appointment, Sonera hereby authorizes
either Aerial Party to appoint such agent. Sonera shall pay the annual fee due
to The Corporation Trust Company or such successor agent for acting in such
capacity; provided, however, that if Sonera fails to make such payment, then the
Aerial Parties shall be permitted to do so.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Each party hereby represents and warrants to the other party
as follows (each party making said representations and warranties as to itself
and as to and on behalf of each of its Affiliates which is a party to any or all
of the agreements and instruments which are being executed and delivered in
connection herewith):
Section 5.01 Organization and Standing. It is a corporation,
in the case of each Aerial Party, or a limited liability company, in the case of
Sonera, duly organized, validly existing and in good standing under the laws of
the jurisdiction of its organization, has all requisite authority and power to
carry on its business as now being conducted by it, and is in good standing in
each jurisdiction in which the nature of the business conducted by it requires
it to be qualified therein to do business.
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Section 5.02 Authorization. It has taken all action necessary
for the authorization, execution, delivery and performance by it of this
Agreement and the other agreements being delivered simultaneously herewith to
which it is a party, and when this Agreement and other agreements are executed
and delivered by it, they will constitute its valid and binding obligations in
accordance with their respective terms. It has all necessary corporate and other
power with respect to the foregoing.
Section 5.03 Litigation. It is not a party to any pending or,
to the best of its knowledge threatened, litigation or other proceeding which,
if adversely determined, would have a material adverse effect upon the Venture
or any LLC formed pursuant to the Joint Venture Agreement or such LLC's tangible
or intangible assets or operations.
Section 5.04 Absence of Conflict. Neither the execution,
delivery or performance by it of this Agreement or of any other agreements which
are being executed and delivered simultaneously herewith to which it is a party,
nor the consummation of the transactions herein or therein contemplated, nor the
fulfillment of or compliance with the terms and conditions hereof or thereof,
will (nor with the giving of notice or lapse of time or both would) conflict
with its charter, bylaws or other instrument pursuant to which it is organized,
or result in a breach of or constitute a default under or conflict with any
material contract, agreement or instrument to which it is a party or by which it
or any of its properties are bound, or any law, rule, or regulation applicable
to it or any of its properties. Any third party, governmental or administrative
consents or approvals which are required in connection with the foregoing have
been obtained and are in full force and effect.
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Section 5.05 Absence of Undisclosed Liabilities. It has no
material debts, liabilities, contracts or other obligations which could
reasonably be expected to affect the Venture or any LLC formed pursuant to the
Joint Venture Agreement in a materially adverse manner.
ARTICLE VI
MISCELLANEOUS
Section 6.01 Confidentiality. (a) In addition to any
obligations of confidentiality pursuant to other agreements already existing
between the parties hereto (which this Section 6.01 is not intended to supersede
with respect to information disclosed prior to the execution of this Agreement),
each party hereto will, and will cause its Affiliates to, hold in confidence and
not disclose to any of its own personnel or personnel of its Affiliates not
having a need to know or to any third party without the prior written consent of
the other parties hereto: (i) any information received by it from the other
parties in connection with the transactions contemplated hereby or (ii) any
specific terms of this Agreement or any agreement being delivered simultaneously
herewith.
(b) The foregoing obligation of confidence shall extend for
the term of this Agreement and any extensions hereof and for a period of 5 years
thereafter; provided, however, that no party shall be obligated to maintain in
confidence information:
(i) which is or becomes part of the public domain other than
through breach of this Agreement or through the fault of the receiving
party;
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(ii) which is or becomes available to the receiving party from
a source other than the disclosing party, which source has no
obligation to the disclosing party in respect thereof;
(iii) which is made available by the disclosing party in
written form to a third party which is not an Affiliate of the
disclosing party on an unrestricted basis;
(iv) which is required to be disclosed by law; or
(v) disclosure of which is mutually agreed to by the parties.
(c) If any party hereto discloses such information to a third
party, such disclosing party shall ensure that suitable undertakings of secrecy
are imposed upon such third party which are no less stringent than those of this
Section 6.01.
Section 6.02 Notices. All notices, claims and other
communications hereunder shall be in writing and shall be made by hand delivery,
facsimile, or overnight air courier guaranteeing next day delivery, as follows:
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(a) If to the Aerial Parties, at:
Aerial Communications, Inc.
8410 West Bryn Mawr Avenue
Suite 1100
Chicago, Illinois 60631
Attention: Donald W. Warkentin
Telephone: (773) 399-4145
Facsimile: (773) 399-7997
with a copy (which shall not constitute notice) to:
Telephone and Data Systems, Inc.
30 North LaSalle Street
Suite 4000
Chicago, Illinois 60602
Attention: LeRoy T. Carlson, Jr.
Telephone: (312) 630-1900
Facsimile: (312) 630-9299
and a copy (which shall not constitute notice) to:
Sidley & Austin
One First National Plaza
42nd Floor - SW
Chicago, Illinois 60603
Attention: Michael G. Hron, Esq.
Telephone: (312) 853-2030
Facsimile: (312) 853-7036
(b) if to Sonera, at:
Sonera Ltd.
P.O. Box 106
FIN-00051-TELE
Teollisuuskatu 15, Helsinki
Attention: Maire Laitinen, Esq.
Telephone: 011-35-8-2040-3641
Facsimile: 011-35-8-2040-3414
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with a copy (which shall not constitute notice) to:
Patton Boggs, L.L.P.
2550 M. Street, N.W.
Washington, D.C. 20037-1350
Attention: Richard M. Stolbach, Esq.
Telephone: (202) 457-6324
Facsimile: (202) 457-6315
or at such other address as any party may from time to time furnish to the other
parties by a notice given in accordance with the provisions of this Section
6.02. All such notices and communications shall be deemed to have been duly
given at the time delivered by hand, if personally delivered; when receipt
confirmed, if sent by facsimile; and the next Business Day after timely delivery
to the courier, if sent by an overnight air courier service guaranteeing next
day delivery.
Section 6.03 Further Assurances. Each of the parties hereto
agrees to take all reasonably necessary steps to do all such further acts and
things as may be necessary to carry out the purposes and intentions of this
Agreement and to ensure that the Venture can carry on its business through LLCs
consistent with and as contemplated by the Joint Venture Agreement.
Section 6.04 Amendment. This Agreement may be amended,
modified and supplemented only by written agreement of Sonera and the Aerial
Parties.
Section 6.05 Waiver of Compliance; Consents. Any failure by
the Aerial Parties or Sonera to comply with any obligation, covenant, agreement
or condition herein may be waived in writing by the other, but such waiver or
failure to insist upon strict compliance with such obligation,
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covenant, agreement or condition shall not operate as a waiver of, or estoppel
with respect to, any subsequent or other failure. Whenever this Agreement
requires or permits waivers or consents by or on behalf of any party, such
waiver or consent shall be given in writing.
Section 6.06 Expenses. Each party hereto shall pay its own
legal, accounting and other expenses incident to this Agreement and the
consummation of the transactions contemplated thereby.
Section 6.07 Entire Agreement. This Agreement, the Joint
Venture Agreement, the Purchase Agreement, the Investment Agreement and the
documents referred to herein and therein embody the whole agreement and
understanding of the parties with respect to the relations contemplated hereby.
There are no restrictions, promises, representations, warranties, covenants or
undertakings with respect thereto, other than those set forth or referred to in
such agreements. Such agreements supersede all prior agreements and
understandings between the parties with respect to the subject matter hereof. No
rights in favor of third parties are hereby created.
Section 6.08 Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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Section 6.09 Headings and Captions. The headings and captions
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement.
Section 6.10 Severability. In the event any provision of this
Agreement is found to be invalid or unenforceable in whole or in part, the
remaining provisions of this Agreement nevertheless shall be binding and the
invalid or unenforceable provision shall be replaced by a valid and enforceable
provision which comes closest to the intent or economic effect of the provision
to be replaced.
Section 6.11 Governing Law. This Agreement shall be construed
in accordance with and subject to the local, internal laws of the State of
Delaware.
Section 6.12 Compliance with FCC Rules. Notwithstanding any
other provision in this Agreement, the parties hereto shall at all times comply
with, and all provisions of this Agreement shall be subject to, all applicable
rules and regulations of the FCC, including but not limited to approval by the
FCC prior to the acquisition of any B-PCS License and to the restrictions on
spectrum aggregation set forth in Section 20.6 of the FCC rules, and the parties
hereto shall cooperate in the preparation and filing of all necessary
applications with the FCC. To the extent that (i) any party hereto or an
Affiliate thereof, jointly pursuant to the Joint Venture Agreement or
individually, desires to enter into a binding agreement to acquire a license
issued by the FCC to provide Wireless Services or to manage or operate a system
providing Wireless Services and (ii)
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such acquisition, operation or management would be prevented due to the
restrictions on spectrum aggregation set forth in Section 20.6 of the FCC rules,
then the parties shall, for a period of not less than 15 business days,
cooperate in good faith to consider, but (except as set forth in Section 8.01 of
the Joint Venture Agreement) shall not be obligated to take, such action as may
be necessary to render the restrictions of Section 20.6 inapplicable to such
acquisition, operation or management.
Section 6.13 No Claim of Immunity. Sonera agrees that, to the
extent that it or any of its property, its Affiliates, or property of its
Affiliates is or becomes entitled at any time to any immunity, on the grounds of
sovereignty or otherwise, based upon its status as an agency or instrumentality
of government, from any arbitration, legal action, suit or proceeding or from
setoff or counterclaim relating to this Agreement from the jurisdiction of any
arbitrator or competent court, from service of process, from attachment prior to
judgment, from attachment in aid of execution of a judgment, from execution
pursuant to a judgment or arbitration award, or from any other legal process in
any jurisdiction, it, for itself, its Affiliates, its property and that of its
Affiliates, expressly, irrevocably and unconditionally agrees not to plead or
claim, any such immunity with respect to such matters arising with respect to
this Agreement or the subject matter hereof (including any obligation for the
payment of money).
Section 6.14 Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and to their
respective permitted successors and assigns; provided, however, that neither the
rights nor the obligations of any party may be assigned or delegated without the
prior written consent of the other parties.
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Section 6.15 Equitable Remedies. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with the specific terms hereof or the
provisions hereof were otherwise breached. It is accordingly agreed that the
parties shall be entitled to an injunction or injunctions to prevent breaches of
this Agreement and to enforce specifically the terms and provisions hereof in
any court of the United States or any state having jurisdiction, this being in
addition to any other remedy to which they are entitled at law or in equity.
Each party agrees that it will not assert, as a defense against a claim for
specific performance, that the party seeking specific performance has an
adequate remedy at law.
Section 6.16 Remedies Cumulative. Except as otherwise provided
herein, each and all of the rights and remedies in this Agreement provided, and
each and all of the rights and remedies allowed at law and in equity in like
case, shall be cumulative, and the exercise of one right or remedy shall not be
exclusive of the right to exercise or resort to any and all other rights or
remedies provided in this Agreement or at law or in equity. Sonera expressly
agrees that neither Aerial Party shall be required to exercise its rights or
remedies under the Joint Venture Agreement prior to exercise by such Aerial
Party of any right or remedy provided in this Agreement.
Section 6.17 Limitation on Damages. Neither the Aerial Parties
nor Sonera shall be liable to the other for damages hereunder except for
reasonable direct economic and pecuniary costs (including reasonable attorneys'
fees) and damages (which shall not include consequential,
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exemplary, expectancy, indirect, punitive or special damages) arising out of or
in connection with any act or failure to act under, or breach of the terms of,
this Agreement.
* * * * *
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first written above.
AERIAL COMMUNICATIONS, INC.
By: /s/ Donald W. Warkentin
------------------------------------
Donald W. Warkentin
President and Chief Executive Officer
AERIAL OPERATING CO., INC.
By: /s/ Donald W. Warkentin
------------------------------------
Donald W. Warkentin
President and Chief Executive Officer
SONERA LTD.
By: /s/ Aulis Salin
-----------------------------------
Name: Aulis Salin
-----------------------------------
Title: President and CEO
-----------------------------------
SIGNATURE PAGE TO SUPPLEMENTAL AGREEMENT,
DATED AS OF SEPTEMBER 8, 1998,
AMONG AERIAL COMMUNICATIONS, INC., AERIAL OPERATING
CO., INC. AND SONERA LTD.
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EXHIBIT 99.6
EXECUTION COPY
TAX ALLOCATION AGREEMENT
This Tax Allocation Agreement, dated as of September 8, 1998,
is entered into between Telephone and Data Systems, Inc., a Delaware corporation
(herein called "TDS"), Aerial Communications Inc., a Delaware corporation
(herein called "Aerial"), and Aerial Operating Co., Inc., a Delaware corporation
(herein called "AOC").
WHEREAS, for federal income tax purposes, Aerial and its
Subsidiaries join with TDS and other members of its Affiliated Group in filing
consolidated federal income tax returns; and
WHEREAS, in connection with a contemplated offering by AOC of
its Common Shares, TDS, Aerial and AOC desire to enter into this Agreement in
order to (i) specify certain rights and obligations of the parties hereto with
respect to the filing of consolidated federal income tax returns and the payment
of federal income tax for taxable years during which Aerial or AOC remains a
member of the TDS Affiliated Group, (ii) provide for certain reimbursements and
specify the manner in which adjustments to the federal income tax liabilities
for consolidated return years shall be determined and settled between the
parties hereto in the event that Aerial or AOC leaves the group, (iii) apply the
provisions regarding federal income tax liabilities to state franchise or income
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tax liabilities required to be determined on a unitary, combined or consolidated
basis, and (iv) specify certain rights and obligations of the parties hereto
with respect to state franchise or income tax liabilities that are not required
to be so determined.
NOW, THEREFORE, in consideration of the mutual agreements
herein contained, the parties hereto agree as follows:
Section 1. Definitions. For purposes of this Agreement, the
following definitions shall apply:
"Affiliated Group" means an "affiliated group" as defined in
Section 1504(a) of the Code.
"Code" means the Internal Revenue Code of 1986, as amended and
in effect from time to time, and any law that may be a successor thereto. A
reference to any Section of the Code means such Section as in effect from time
to time and any comparable provision of any prior or successor law.
"Consolidated Return Regulations" means the Treasury
Regulations promulgated under Section 1502 of the Code, as in effect from time
to time.
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"Consolidated Return Year" means a taxable year of the TDS
Affiliated Group during any part of which Aerial or AOC is a member of such
group and joins in the filing of a consolidated federal income tax return for
such group.
"Final Determination" means the first to occur of (i) a
decision by a court of competent jurisdiction that is not subject to further
judicial review (by appeal or otherwise) and has become final; (ii) the
expiration of 30 days after IRS acceptance of a Waiver of Restrictions on
Assessment and Collection of Deficiency in Tax and Acceptance of Overassessment
on Internal Revenue Form 870 or 870-AD (or any successor comparable form)
unless, within such 30-day period, TDS gives notice to Aerial of its intention
to attempt to recover all or part of any amount paid pursuant to such Waiver by
the filing of a timely claim for refund; (iii) the expiration of the time for
filing a claim for refund, or for instituting suit in respect of a claim for
refund disallowed in whole or in part by the IRS; (iv) the execution by or on
behalf of the taxpayer and the IRS of a closing agreement under Section 7121 of
the Code; (v) the acceptance by the IRS or its counsel of a tender pursuant to
an offer in compromise under Section 7122 of the Code; or (vi) any other event
that the parties hereto agree is a final and irrevocable determination of
liability for federal income tax for any taxable year.
"IRS" means the United States Internal Revenue Service or any
successor thereto, including, but not limited to, its agents, representatives
and attorneys.
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"Separate Return Year" means any taxable year for which Aerial
and its Subsidiaries file separate federal income tax returns or join in filing
a consolidated federal income tax return with an Affiliated Group of which
Aerial is the common parent.
"Subsidiaries" means AOC and those direct and indirect
subsidiaries of Aerial that are members of the TDS Affiliated Group from time to
time.
"Tax Attribute" means income, gain, loss, deduction and
credit, and all items entering into the computation thereof, for federal income
tax purposes.
"TDS Affiliated Group" means the Affiliated Group of which TDS
is the common parent.
"Transition Date" means January 1, 1996.
"Treasury Regulations" means the income tax regulations
promulgated under the Code.
Section 2. Continued Filing of Consolidated Returns.
(a) Aerial and its Subsidiaries shall continue to join in
filing consolidated federal income tax returns with the TDS Affiliated Group for
such taxable years for which they are eligible
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to do so under the Code and the Consolidated Return Regulations unless TDS shall
request otherwise. TDS shall have the right to exercise all the powers of a
common parent with respect to such returns as are conferred upon it by the
Consolidated Return Regulations. Without limiting the generality of the
foregoing, TDS shall be the sole agent for Aerial and its Subsidiaries in any or
all matters relating to the federal income tax liability of the TDS Affiliated
Group for all Consolidated Return Years. Aerial and its Subsidiaries shall have
no authority to act for or to represent itself in any such matter. Aerial and
its Subsidiaries shall not, without the consent of TDS, (i) terminate such
agency or (ii) participate, or attempt to participate, in any matters related to
the federal income tax liability of the TDS Affiliated Group for any
Consolidated Return Year, including, but not limited to, preparation or filing
of, or resolution of disputes with the IRS concerning the consolidated federal
income tax return for any Consolidated Return Year. The decision of the chief
executive officer or the chief financial officer of TDS shall, subject to the
provisions of this Agreement, be binding in any dispute between TDS and Aerial
and its Subsidiaries as to the tax position to be taken with respect to any item
or transaction of Aerial and its Subsidiaries includable in the consolidated
federal income tax return for any Consolidated Return Year.
(b) Aerial and its Subsidiaries shall furnish to TDS in a
timely manner such information and documents as TDS may request for the purpose
of preparing tax returns or in connection with any subsequent audit of such
returns, claim for refund, or administrative or judicial proceeding involving
such returns.
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(c) The federal income tax liability of the TDS Affiliated
Group for the Consolidated Return Year ended December 31, 1995, as shown on the
return filed for such year, shall be shared by all the members of such Group in
accordance with the method of allocation used for prior Consolidated Return
Years. The federal income tax liability of the TDS Affiliated Group for each
Consolidated Return Year ending after the Transition Date, as shown on the
return filed for each such year, shall be allocated as follows: Aerial shall pay
to TDS an amount equal to the greater of (i) the federal income tax liability of
Aerial and its Subsidiaries computed as if they constituted a separate
Affiliated Group filing a consolidated return (including any minimum tax
liability of such Group), or (ii) the federal income tax liability of Aerial and
its Subsidiaries computed as if they constituted a separate Affiliated Group
filing a consolidated return subject to tax at a rate equal to the quotient of
(A) the federal income tax liability, before tax credits, of the TDS Affiliated
Group for the Consolidated Return Year, divided by (B) the federal taxable
income of the TDS Affiliated Group for such year; and TDS shall pay the balance
of the consolidated tax liability, if any. For purposes of the preceding
sentence, Aerial and its Subsidiaries shall be treated as if they were formed as
an Affiliated Group (with Aerial as the common parent) on January 1, 1996, and
shall be entitled to carry forward (within the allowable statutory period) their
Affiliated Group's net operating or capital losses or unused tax credits, if
any, arising thereafter to offset the subsequent income and tax liability, if
any, of such Group.
(d) Aerial and its Subsidiaries shall pay to TDS their
respective shares of the consolidated tax liability of the TDS Affiliated Group
for each Consolidated Return Year, as determined pursuant to paragraph (c)
above, (less any amounts previously paid in respect of
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estimated taxes for such year) no later than March 15 of the following year;
provided, however, that for 1996 and each subsequent year, Aerial and its
Subsidiaries shall be required to pay to TDS at least 90% of TDS's best estimate
of their respective shares of the consolidated tax liability to be shown on the
return for the Consolidated Return Year in question (less any amounts previously
paid in respect of estimated taxes for such year) no later than March 15 and any
balance due shall be paid by the following September 15; and provided, further,
that for each Consolidated Return Year after 1995, Aerial shall pay to TDS, no
later than each due date for an estimated tax payment prescribed by Section 6154
of the Code, the minimum amount required to be paid to avoid the imposition of a
penalty under Section 6655 of the Code, determined on the same basis as the
share of Aerial and its Subsidiaries in the total tax liability for the
Consolidated Return Year in question is determined under paragraph (c) above.
(e) Pursuant to the tax sharing or allocation agreement or
arrangement in effect between the parties hereto prior to the date hereof, TDS
shall be and remain obligated to pay to Aerial an amount equal to the reduction
(net of any actual or anticipated loss of any unused tax credits eligible to be
carried forward) in the provision for federal income taxes reflected in TDS's
audited consolidated statements of income for all Consolidated Return Years
through 1995 that resulted from the inclusion of Aerial and its Subsidiaries in
the TDS Affiliated Group for such Consolidated Return Years.
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Section 3. Contests and Claims for Refund.
(a) If TDS receives from the IRS a written notice of proposed
deficiency (30-day letter) that involves any Tax Attribute of Aerial or its
Subsidiaries for any Consolidated Return Year, TDS shall within 15 days provide
Aerial with a copy of such 30-day letter (and any accompanying forms and
schedules) and shall notify Aerial of any action TDS intends to take with
respect to such proposed deficiency and the amount of any proposed additional
taxes that, in the opinion of TDS, are the responsibility of Aerial and its
Subsidiaries under this Agreement. If TDS shall deem it appropriate to make a
claim for refund of income tax (by filing an amended return or otherwise),
arising from a Tax Attribute of Aerial or its Subsidiaries for any Consolidated
Return Year (including carrybacks of losses or credits from a later Consolidated
Return Year or a Separate Return Year), TDS shall so notify Aerial.
(b) TDS shall be permitted, through its counsel or otherwise,
at Aerial's expense, to contest any proposed deficiency or prosecute any claim
for refund with respect to any Consolidated Return Year in administrative or
judicial proceedings, and shall have the right to make any decision as to
settlement of the contest or claim or any issue involved therein, choice of
forum for judicial proceedings and prosecution of appeals. Aerial shall pay TDS
for any liability, expense or loss arising out of or relating to the Aerial
issues involved in the contest or claim (including, without limitation, all
out-of-pocket expenses, costs, losses, reasonable legal, accounting, engineers'
and like professional fees, disbursements, interest, penalties and additions to
tax relating to such issues) as the same shall be incurred. If such contest is
to be conducted in a manner requiring payment of a
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proposed tax deficiency, Aerial shall advance to TDS, on an interest-free basis,
an amount sufficient to make payment of the amount attributable to Aerial
issues, together with any required interest or penalties.
(c) If there is a Final Determination of a deficiency in
federal income tax for any Consolidated Return Year, the portion of such
deficiency, if any, that is attributable to an adjustment to the reported Tax
Attributes of Aerial or its Subsidiaries, and any interest or penalties
applicable thereto, shall be paid by Aerial. Any such payments shall be made to
TDS upon notice to Aerial. If a refund of federal income tax is received by TDS
for any Consolidated Return Year, the portion of such refund, if any, that is
attributable to an adjustment to the previously assessed Tax Attributes of
Aerial or its Subsidiaries, and any interest applicable thereto, shall be paid
by TDS to Aerial. Any such payments shall be made by TDS promptly after any such
refund and interest are received by it.
Section 4. Reimbursements Subsequent to Affiliation. If Aerial
and its Subsidiaries or AOC and its Subsidiaries do not remain members of the
TDS Affiliated Group, TDS shall reimburse the former TDS Affiliated Group
members for any amount of federal income tax which they are thereafter required
to pay for a Separate Return Year under the Code and which they would not have
been required to pay if they had not been members of the TDS Affiliated Group
after the Transition Date; provided, however, that no such reimbursement shall
be made to Aerial or any of its Subsidiaries if, at any time after TDS becomes
the owner of Series A Common Shares, par value $1.00 per share, of Aerial, less
than 500,000 Series A Common Shares are outstanding, and no such
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reimbursement shall be made to any Subsidiary of Aerial if, after the Transition
Date, another person or group (other than a person or group owning capital stock
of TDS having more than 50% of the total voting power in the election of
directors of all shares of TDS's capital stock outstanding at the time) acquires
(i) capital stock of such Subsidiary having more than 50% of the total voting
power in the election of directors of all shares of such Subsidiary's capital
stock outstanding at the time or (ii) assets of such Subsidiary representing in
the aggregate more than 50% of the total value of the assets of such Subsidiary
as reflected on the most recent balance sheet of such Subsidiary prepared in
accordance with generally accepted accounting principles in effect at the time.
As used in this Section 4, the term "person" means any individual, firm,
corporation, partnership, trust or other entity; and "group" means any group of
persons formed for the purpose of acquiring, holding, voting or disposing of
capital stock of Aerial or any Subsidiary (or TDS). Thus, any net operating or
capital losses or tax credits of Aerial and its Subsidiaries, computed as if
such corporations constituted a separate Affiliated Group with Aerial (if the
event triggering the application of this Section 4 is the departure of Aerial
and its Subsidiaries from the TDS Affiliated Group) or AOC (if such event is the
departure of AOC and its Subsidiaries) as the common parent, that arise after
December 31, 1995, and are not used to offset the separate tax liability of such
Group in subsequent Consolidated Return Years shall be treated as available
carryovers to Separate Return Years (within the allowable statutory carryover
period). For the purpose of determining the amount of reimbursement: (i) it
shall be assumed that Aerial and its Subsidiaries (or AOC and its Subsidiaries)
would have filed consolidated federal income tax returns for all periods
commencing on January 1, 1996, and ending before the first Separate Return Year,
with the same Tax Attributes as were reported in the corresponding consolidated
returns of the TDS Affiliated Group (without regard to any adjustments
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to such Tax Attributes reflected in any deficiency in tax or refund of tax paid
by or to Aerial pursuant to Section 3(c) of this Agreement); and (ii) any Tax
Attributes of Aerial (or AOC) in Separate Return Years, or of other members of
the Aerial Affiliated Group (or the AOC Affiliated Group) joining in the returns
for such years, arising from sources other than the business activities in which
Aerial and its Subsidiaries (or AOC and its Subsidiaries) were engaged on the
first day of the first Separate Return Year shall be disregarded. Such
reimbursement shall be made, on an interest-free basis, within 15 days after TDS
receives a copy of the tax return or of a Final Determination of tax liability
for the Separate Return Year in question and a claim for reimbursement, together
with sufficient information and/or documentation to permit TDS to verify the
accuracy of such claim.
Section 5. Action by and Payments to Subsidiaries. Any
provision of this Agreement that requires the Subsidiaries to take or refrain
from taking action shall be construed to include a requirement either that
Aerial cause its Subsidiaries to take or refrain from taking such action or that
Aerial take such action on behalf of its Subsidiaries. Any provision of this
Agreement that requires TDS to make a payment to the Subsidiaries shall be
satisfied by a payment to Aerial on behalf of the Subsidiaries, except to the
extent TDS is required to make a payment to AOC under Section 4 of this
Agreement.
Section 6. State Franchise or Income Tax Liabilities.
(a) To the extent appropriate, rules similar to the provisions
of Sections 2, 3, 4 and 5 of this Agreement shall be applied to the provision of
information and documents, the filing of
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returns, contests and claims for refund, the allocation of and reimbursements
with respect to state franchise or income tax liabilities to which TDS and
Aerial and its Subsidiaries are subject and which are required to be determined
on a unitary, combined or consolidated basis.
(b) If any such state tax liabilities are not required to be
determined on a unitary, combined or consolidated basis, then TDS shall have the
option to act as the sole agent for Aerial and its Subsidiaries in any and all
matters relating to such state tax liabilities of Aerial and its Subsidiaries
for all Consolidated Return Years. If TDS elects to exercise such option, and
for so long as such agency continues, neither Aerial nor any of its Subsidiaries
shall have no authority to act for or to represent itself in any such matter,
and neither Aerial nor any of its Subsidiaries shall, without the consent of
TDS, (i) terminate such agency or (ii) participate, or attempt to participate,
in matters related to such state liabilities of Aerial and its Subsidiaries for
any Consolidated Return Year, including, but not limited to, preparation or
filing of, or resolution of disputes with tax authorities concerning, the state
franchise or income tax returns (including returns with respect to estimated
taxes) filed on behalf of Aerial for any Consolidated Return Year. Aerial and
its Subsidiaries shall furnish to TDS in a timely manner such information and
documents as TDS may request for the purpose of preparing such returns or in
connection with a subsequent audit of such returns by tax authorities or a claim
for refund or judicial proceeding involving such returns. Aerial shall execute
such returns at TDS's request, and the decision of the chief executive officer
or the chief financial officer of TDS shall, subject to the provisions of this
Agreement, be binding in any dispute between TDS and Aerial as to the tax
position to be taken by Aerial in such returns. All taxes due with respect to
such returns shall be the obligation of Aerial, and all refunds of such taxes
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shall inure to the benefit of Aerial. TDS shall not have any obligation for such
taxes nor shall it be entitled to any refund for such taxes.
Section 7. Additions to Payments. The amount of any payment
required to be made by any party to another under this Agreement shall be an
amount which, after subtraction of any additional federal, state or local taxes
payable by the recipient in respect of the receipt of such payment, is equal to
the amount payable hereunder.
Section 8. Election under Section 1552 of the Code. Nothing in
this Agreement is intended to change or otherwise affect any election made by or
on behalf of the TDS Affiliated Group with respect to the calculation of
earnings and profits under Section 1552 of the Code or the Consolidated Return
Regulations.
Section 9. Representations and Warranties. As an inducement to
enter into this Agreement, each party represents to and agrees with the others
that:
(a) it is a corporation duly organized, validly existing and
in good standing under the laws of its state of incorporation and has
all requisite corporate power to own, lease and operate its properties,
to carry on its business as presently conducted and to carry out the
transactions contemplated by this Agreement;
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(b) it has duly and validly taken all corporate action
necessary to authorize the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby;
(c) this Agreement has been duly executed and delivered by it
and constitutes its legal, valid and binding obligation enforceable in
accordance with its terms (subject, as to the enforcement of remedies,
to applicable bankruptcy, reorganization, insolvency, moratorium or
other similar laws affecting the enforcement of creditors' rights
generally from time to time in effect, and subject to equitable
limitations on the availability of the remedy of specific performance);
and
(d) none of the execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby or the compliance
with any of the provisions of this Agreement will (i) conflict with or
result in a breach of any provision of its corporate charter or bylaws,
(ii) breach, violate or result in a default under any of the terms of
any agreement or other instrument or obligation to which it is a party
or by which it or any of its properties or assets may be bound or (iii)
violate any order, writ, injunction, decree, statute, rule or
regulation applicable to it or affecting any of its properties or
assets.
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Section 10. Term of Agreement. This Agreement shall become
effective as of the date of its execution and, except as otherwise expressly
provided herein, the respective covenants of the parties contained herein shall
continue in full force and effect indefinitely.
Section 11. Prior Tax Sharing Agreements. This Agreement shall
supersede any other tax sharing or allocation agreement or arrangement in effect
between the parties hereto prior to the date hereof with respect to the matters
expressly dealt with herein, but any such prior agreement or arrangement shall
otherwise remain in effect according to its terms.
Section 12. Miscellaneous.
(a) Injunctions. The parties acknowledge that irreparable
damage would occur in the event that any of the provisions of this Agreement
were not performed in accordance with their specific terms or were otherwise
breached. Therefore, the parties hereto shall be entitled to an injunction or
injunctions to prevent breaches of the provisions of this Agreement and to
enforce specifically the terms and provisions hereof in any court having
jurisdiction, such remedy being in addition to any other remedy to which they
may be entitled at law or equity.
(b) Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to be
invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated. It is hereby
stipulated and declared to be
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the intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such which may
be hereafter declared invalid, void or unenforceable. In the event that any such
term, provision, covenant or restriction is held to be in valid, void or
unenforceable, the parties hereto shall use their best efforts to find and
employ an alternate means to achieve the same or substantially the same result
as that contemplated by such term, provision, covenant or restriction.
(c) Assignment. Except by operation of law or in connection
with the sale or transfer of all or substantially all the assets of a party
hereto or of all or substantially all of the capital stock of Aerial or AOC
beneficially owned by TDS or Aerial, respectively, this Agreement shall not be
assignable, in whole or in part, directly or indirectly, by any party hereto
without the written consent of the other party, and any attempt to assign any
rights or obligations arising under this Agreement without such consent shall be
void; provided, however, that the provisions of this Agreement shall be binding
upon, inure to the benefit of and be enforceable by the parties hereto and their
respective successors and permitted assigns.
(d) Further Assurances. Subject to the provisions hereof, the
parties hereto shall make, execute, acknowledge and deliver such other
instruments and documents, and take all such other actions, as may be reasonably
required in order to effectuate the purposes of this Agreement and to consummate
the transactions contemplated hereby. Subject to the provisions hereof, each of
the parties shall, in connection with entering into this Agreement, performing
its obligations hereunder and taking any and all actions relating hereto, comply
with all applicable laws,
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regulations, orders and decrees, obtain all required consents and approvals and
make all required filings with any governmental agency, other regulatory or
administrative agency, commission or similar authority and promptly provide the
other party with all such information as they may reasonably request in order to
be able to comply with the provisions of this sentence.
(e) Parties in Interest. Except as herein otherwise
specifically provided, nothing in this Agreement expressed or implied is
intended to confer any right or benefit upon any person, firm or corporation
other than the parties and their respective successors and permitted assigns.
(f) Waivers, Etc. No failure or delay on the part of the
parties in exercising any power or right hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right or power, or
any abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. No amendment, modification or waiver of any provision of this
Agreement nor consent to any departure by the parties therefrom shall in any
event be effective unless the same shall be in writing and signed by the chief
executive officer or the chief financial officer of each party in the case of
amendments or modifications, or by the chief executive officer or the chief
financial officer of the waiving or consenting party, and then such waiver or
consent shall be effective only in the specific instance and for the purpose for
which given.
(g) Setoff. All payments to be made by any party under this
Agreement shall be made without setoff, counterclaim or withholding, all of
which are expressly waived.
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(h) Changes of Law. If, due to any change in applicable law or
regulations or the interpretation thereof by any court of law or other governing
body having jurisdiction subsequent to the date of this Agreement, performance
of any provision of this Agreement or any transaction contemplated thereby shall
become impracticable or impossible, the parties hereto shall use their best
efforts to find and employ an alternative means to achieve the same or
substantially the same result as that contemplated by such provision.
(i) Confidentiality. Subject to any contrary requirement of
law and the right of each party to enforce its rights hereunder in any legal
action, each party agrees that it shall keep strictly confidential, and shall
cause its employees and agents to keep strictly confidential, any information
which it or any of its agents or employees may acquire pursuant to, or in the
course of performing its obligations under, any provision of this Agreement;
provided, however, that such obligation to maintain confidentiality shall not
apply to information which (x) at the time of disclosure was in the public
domain not as a result of acts by the receiving party or (y) was in the
possession of the receiving party at the time of disclosure.
(j) Headings. Descriptive headings are for convenience only
and shall not control or affect the meaning or construction of any provision of
this Agreement.
(k) Counterparts. For the convenience of the parties, any
number of counterparts of this Agreement may be executed by the parties hereto,
and each such executed counterpart shall be, and shall be deemed to be, an
original instrument.
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(l) Notices. All notices, consents, requests, instructions,
approvals and other communications provided for herein shall be validly given,
made or served, if in writing and delivered personally, by telegram or sent by
registered mail, postage prepaid to:
TDS at: 30 North LaSalle Street
Suite 4000
Chicago, IL 60602-2507
Attention: President
with separate copies at such address to the attention of the
Chief Financial Officer and the Corporate Secretary
Aerial at: 8410 W. Bryn Mawr Ave.
Suite 1100
Chicago, IL 60631
Attention: President
with separate copies at such address to the attention of the
Chief Financial Officer and the Corporate Secretary
AOC at: 8410 W. Bryn Mawr Ave.
Suite 1100
Chicago, IL 60631
Attention: President
with separate copies at such address to the attention of the
Chief Financial Officer and the Corporate Secretary
or to such other address as any party may, from time to time, designate in a
written notice given in a like manner. Any notice given under this Agreement
shall be deemed delivered when received at the appropriate address.
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(m) Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Illinois
applicable to contracts made and to be performed therein.
IN WITNESS WHEREOF, TDS, Aerial and AOC have caused this
Agreement to be duly executed by their respective officers, each of whom is duly
authorized, all as of the day and year first above written.
Telephone and Data Systems, Inc.
By: /s/ LeRoy T. Carlson, Jr.
--------------------------------
LeRoy T. Carlson, Jr.
President and CEO
Aerial Communications, Inc.
By: /s/ Donald W. Warkentin
--------------------------------
Donald W. Warkentin
President and CEO
Aerial Operating Co., Inc.
By: /s/ Donald W. Warkentin
---------------------------------
Donald W. Warkentin
President
Signature page of Tax Allocation Agreement
dated as of September 8, 1998.
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EXHIBIT 99.7
EXECUTION COPY
GUARANTY
This GUARANTY ("Guaranty") is made as of the 31st day of
August, 1998, by Aerial Communications, Inc., a Delaware corporation (the
"Guarantor"), in favor of Telephone and Data Systems, Inc., a Delaware
corporation (the "Lender") under that certain Revolving Credit Agreement of even
date herewith by and among Aerial Operating Company, Inc., a Delaware
corporation (the "Borrower") and the Lender (the "Credit Agreement"). Such
Credit Agreement, as it may be amended, modified or supplemented from time to
time, is hereinafter referred to as the "Credit Agreement". Unless otherwise
defined herein, capitalized terms used herein shall have the meanings ascribed
to them in the Credit Agreement.
1. Guaranty. (i) For value received and in consideration of
any loan, advance or financial accommodation of any kind whatsoever heretofore,
now or hereafter made, given or granted to the Borrower by the Lender, the
Guarantor unconditionally guarantees for the benefit of the Lender the full and
prompt payment when due, whether at maturity or earlier, by reason of
acceleration or otherwise, and at all times thereafter, of all of the payment
and performance of all now existing and hereafter acquired or arising
obligations and liabilities of the Borrower to the Lender under or with respect
to the Credit Agreement, whether or not fixed, matured, unmatured, liquidated or
contingent, with respect to principal, interest, expenses, indemnities or
otherwise (including, without limitation, interest accruing following the filing
of a bankruptcy petition by or against the Borrower, at the applicable rate
specified in the Credit Agreement, whether or not such interest is allowed as a
claim in bankruptcy) (hereinafter, collectively, the "Obligations").
(ii) At any time after the occurrence of an Event of Default,
the Guarantor shall pay to the Lender, on demand and in immediately available
funds, the full amount of the Obligations (including any portion thereof which
is not yet due and payable). The Guarantor further agrees to pay to the Lender
and reimburse the Lender for, on demand and in immediately available funds, (a)
all losses (including, without limitation, lost profits), fees, costs and
expenses (including, without limitation, all court costs and attorneys' and
paralegals' fees, costs and expenses) paid or incurred by the Lender in: (1)
endeavoring to collect all or any part of the Obligations from, or in
prosecuting any action against, the Borrower or the Guarantor relating to the
Credit Agreement, this Guaranty or the transactions contemplated thereby; (2)
taking any action with respect to any security or collateral securing the
Obligations or the Guarantor's obligations hereunder; and (3) preserving,
protecting or defending the enforceability of, or enforcing, this Guaranty or
its rights hereunder (all such costs and expenses are hereinafter referred to as
the "Expenses") and (b) interest on (1) the Obligations which do not constitute
interest, (2) to the extent permitted by applicable law, the Obligations which
constitute interest, and (3) the Expenses, from the date of demand under this
Guaranty until paid in full at post-maturity per annum rate of interest
described in Section 3 of the Credit Agreement (the "Interest Rate"). The
Guarantor hereby agrees that this Guaranty is an absolute guaranty of payment
and is not a guaranty of collection.
<PAGE>
2. Obligations Unconditional. The Guarantor hereby agrees that
its obligations under this Guaranty shall be unconditional, irrespective of:
(i) the validity, enforceability, avoidance, novation or
subordination of any of the Obligations, the Credit Agreement or of any
promissory note or other instrument, document or agreement evidencing
or relating to all or any part of the Obligations (collectively, the
"Loan Documents");
(ii) the absence of any attempt by, or on behalf of, the
Lender to collect, or to take any other action to enforce, all or any
part of the Obligations whether from or against the Borrower, any other
guarantor of the Obligations or any other person or entity;
(iii) the election of any remedy by, or on behalf of, the
Lender with respect to all or any part of the Obligations;
(iv) the waiver, consent, extension, forbearance or granting
of any indulgence by, or on behalf of, the Lender with respect to any
provision of any of the Loan Documents;
(v) the failure of the Lender to take any steps to perfect and
maintain its security interest in, or to preserve its rights to, any
security or collateral for the Obligations;
(vi) the election by, or on behalf of, the Lender, in any
proceeding instituted under Chapter 11 of Title 11 of the United States
Code (11 U.S.C. 101 et seq.) (the "Bankruptcy Code"), of the
application of Section 1111(b)(2) of the Bankruptcy Code;
(vii) any borrowing or grant of a security interest by the
Borrower, as debtor-in-possession, under Section 364 of the Bankruptcy
Code;
(viii) the disallowance, under Section 502 of the Bankruptcy
Code, of all or any portion of the claims of the Lender for repayment
of all or any part of the Obligations or any Expenses; or
(ix) any other circumstance which might otherwise constitute a
legal or equitable discharge or defense of the Borrower or the
Guarantor.
3. Enforcement; Application of Payments. Upon the occurrence
of an Event of Default, the Lender may proceed directly and at once, without
notice, against the Guarantor to obtain performance of and to collect and
recover the full amount, or any portion, of the Obligations, without first
proceeding against the Borrower or any other person or entity, or against any
security or collateral for the Obligations. Subject only to the terms and
provisions of the Credit Agreement, the Lender shall have the exclusive right to
determine the application of payments and credits, if any, from the Guarantor,
the Borrower or from any other Person on account of the Obligations or any other
liability of the Guarantor to the Lender.
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4. Waivers. (i) The Guarantor hereby waives diligence,
presentment, demand of payment, filing of claims with a court in the event of
receivership or bankruptcy of the Borrower, protest or notice with respect to
the Obligations, all setoffs and counterclaims and all presentments, demands for
performance, notices of nonperformance, protests, notices of protest, notices of
dishonor and notices of acceptance of this Guaranty, the benefits of all
statutes of limitation, and all other demands whatsoever (and shall not require
that the same be made on the Borrower as a condition precedent to the
Guarantor's obligations hereunder), and covenants that this Guaranty will not be
discharged, except by complete payment (in cash) and performance of the
Obligations and any other obligations contained herein. The Guarantor further
waives all notices of the existence, creation or incurring of new or additional
indebtedness, arising either from additional loans extended to the Borrower or
otherwise, and also waives all notices that the principal amount, or any portion
thereof, and/or any interest on any instrument or document evidencing all or any
part of the Obligations is due, notices of any and all proceedings to collect
from the maker, any endorser or any other guarantor of all or any part of the
Obligations, or from any other person or entity, and, to the extent permitted by
law, notices of exchange, sale, surrender or other handling of any security or
collateral given to the Lender to secure payment of all or any part of the
Obligations.
(ii) The Lender is hereby authorized, without notice or demand
and without affecting the liability of the Guarantor hereunder, from time to
time, (a) to renew, extend, accelerate or otherwise change the time for payment
of, or other terms relating to, all or any part of the Obligations, or to
otherwise modify, amend or change the terms of any promissory note or other
agreement, document or instrument now or hereafter executed by the Borrower or
any other guarantor of the Obligations and delivered to or for the benefit of
the Lender; (b) to accept partial payments on all or any part of the
Obligations; (c) to take and hold security or collateral for the payment of all
or any part of the Obligations, this Guaranty, or any other guaranties of all or
any part of the Obligations or other liabilities of the Borrower, (d) to
exchange, enforce, waive and release any such security or collateral; (e) to
apply such security or collateral and direct the order or manner of sale thereof
as in its discretion it may determine; (f) to settle, release, exchange,
enforce, waive, compromise or collect or otherwise liquidate all or any part of
the Obligations, this Guaranty, any other guaranty of all or any part of the
Obligations, and any security or collateral for the Obligations or for any such
guaranty. Any of the foregoing may be done in any manner, without affecting or
impairing the obligations of the Guarantor hereunder.
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5. Setoff. At any time after all or any part of the
Obligations have become due and payable (by acceleration or otherwise), the
Lender may, without notice to the Guarantor and regardless of the acceptance of
any security or collateral for the payment hereof, appropriate and apply toward
the payment of all or any part of the Obligations (i) any indebtedness due or to
become due from the Lender to the Guarantor, and (ii) any moneys, credits or
other property belonging to the Guarantor, at any time held by or coming into
the possession of the Lender or its affiliates.
6. Financial Information. The Guarantor hereby assumes
responsibility for keeping itself informed of the financial condition of the
Borrower and any and all endorsers and/or other guarantors of all or any part of
the Obligations, and of all other circumstances bearing upon the risk of
nonpayment of the Obligations, or any part thereof, that diligent inquiry would
reveal, and the Guarantor hereby agrees that the Lender shall have no duty to
advise the Guarantor of information known to it regarding such condition or any
such circumstances. In the event the Lender, in its sole discretion, undertakes
at any time or from time to time to provide any such information to the
Guarantor, the Lender shall be under no obligation (i) to undertake any
investigation not a part of its regular business routine, (ii) to disclose any
information which the Lender, pursuant to accepted or reasonable commercial
finance or banking practices, wishes to maintain confidential or (iii) to make
any other or future disclosures of such information or any other information to
the Guarantor.
7. No Marshalling; Reinstatement. The Guarantor consents and
agrees that neither the Lender nor any person or entity acting for or on behalf
of the Lender shall be under any obligation to marshall any assets in favor of
the Guarantor or against or in payment of any or all of the Obligations. The
Guarantor further agrees that, to the extent that the Borrower, the Guarantor or
any other guarantor of all or any part of the Obligations makes a payment or
payments to the Lender, or the Lender receives any proceeds of Collateral, which
payment or payments or any part thereof are subsequently invalidated, declared
to be fraudulent or preferential, set aside and/or required to be repaid to the
Borrower, the Guarantor, such other guarantor or any other Person, or their
respective estates, trustees, receivers or any other party, including, without
limitation, the Guarantor, under any bankruptcy law, state or federal law,
common law or equitable cause, then, to the extent of such payment or repayment,
the part of the Obligations which has been paid, reduced or satisfied by such
amount shall be reinstated and continued in full force and effect as of the time
immediately preceding such initial payment, reduction or satisfaction.
8. Subrogation. Until the Obligations have been paid in full,
the Guarantor (i) shall have no right of subrogation with respect to such
Obligations and (ii) waives any right to enforce any remedy which the Lender now
has or may hereafter have against the Borrower, any endorser or any guarantor of
all or any part of the Obligations or any other person or entity, and the
Guarantor waives any benefit of, and any right to participate in, any security
or collateral given to the Lender to secure the payment or performance of all or
any part of the Obligations or any other liability of the Borrower to the
Lender.
9. Subordination. The Guarantor agrees that any and all claims
of the Guarantor against the Borrower, any endorser or any other guarantor of
all or any part of the Obligations, or
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against any of their respective properties, shall be subordinate and subject in
right of payment to the prior payment, in full and in cash, of all Obligations
(including, without limitation, interest accruing following the filing of a
bankruptcy petition by or against the Borrower, at the applicable rate specified
in the Credit Agreement, whether or not such interest is allowed as a claim in
bankruptcy). Notwithstanding any right of the Guarantor to ask, demand, sue for,
take or receive any payment from the Borrower, all rights, liens and security
interests of the Guarantor, whether now or hereafter arising and howsoever
existing, in any assets of the Borrower (whether constituting part of the
security or collateral given to the Lender to secure payment of all or any part
of the Obligations or otherwise) shall be and hereby are subordinated to the
rights of the Lender in those assets. The Guarantor shall have no right to
possession of any such asset or to foreclose upon any such asset, whether by
judicial action or otherwise, unless and until all of the Obligations shall have
been fully paid and satisfied and all financing arrangements between the
Borrower and the Lender have been terminated. If all or any part of the assets
of the Borrower, or the proceeds thereof, are subject to any distribution,
division or application to the creditors of the Borrower, whether partial or
complete, voluntary or involuntary, and whether by reason of liquidation,
bankruptcy, arrangement, receivership, assignment for the benefit of creditors
or any other action or proceeding, or if the business of the Borrower is
dissolved or if substantially all of the assets of the Borrower are sold, then,
and in any such event, any payment or distribution of any kind or character,
either in cash, securities or other property, which shall be payable or
deliverable upon or with resect to any indebtedness of the Borrower to the
Guarantor ("Borrower Indebtedness") shall be paid or delivered directly to the
Lender for application on any of the Obligations, due or to become due, until
such Obligations shall have first been fully paid and satisfied. The Guarantor
irrevocably authorizes and empowers the Lender to demand, sue for, collect and
receive every such payment or distribution and give acquittance therefor and to
make and present for and on behalf of the Guarantor such proofs of claim and
take such other action, in the Lender's own name or in the name of the Guarantor
or otherwise, as the Lender may deem necessary or advisable for the enforcement
of this Guaranty. The Lender may vote such proofs of claim in any such
proceeding, receive and collect any and all dividends or other payments or
disbursements made thereon in whatever form the same may be paid or issued and
apply the same on account of any of the Obligations. Should any payment,
distribution, security or instrument or proceeds thereof be received by the
Guarantor upon or with respect to the Borrower Indebtedness prior to the
satisfaction of all of the Obligations and the termination of all financing
arrangements between the Borrower and the Lender, the Guarantor shall receive
and hold the same in trust, as trustee, for the benefit of the Lender and shall
forthwith deliver the same to the Lender, in precisely the form received (except
for the endorsement or assignment of the Guarantor where necessary), for
application to any of the Obligations, due or not due, and, until so delivered,
the same shall be held in trust by the Guarantor as the property of the Lender.
If the Guarantor fails to make any such endorsement or assignment to the Lender,
the Lender or any of its officers or employees are hereby irrevocably authorized
to make the same. The Guarantor agrees that until the Obligations have been paid
in full (in cash) and satisfied and all financing arrangements between the
Borrower and the Lender have been terminated, the Guarantor will not assign or
transfer to any Person any claim the Guarantor has or may have against the
Borrower.
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<PAGE>
10. Enforcement; Amendments; Waivers. No delay on the part of
the Lender in the exercise of any right or remedy arising under this Guaranty,
the Credit Agreement, any of the other Loan Documents or otherwise with respect
to all or any part of the Obligations, the Collateral or any other guaranty of
or security for all or any part of the Obligations shall operate as a waiver
thereof, and no single or partial exercise by the Lender of any such right or
remedy shall preclude any further exercise thereof. No modification or waiver of
any of the provisions of this Guaranty shall be binding upon the Lender, except
as expressly set forth in a writing duly signed and delivered by the Lender.
Failure by the Lender at any time or times hereafter to require strict
performance by the Borrower, the Guarantor, any other guarantor of all or any
part of the Obligations or any other Person of any of the provisions,
warranties, terms and conditions contained in any of the Loan Documents now or
at any time or times hereafter executed by such Persons and delivered to the
Lender shall not waive, affect or diminish any right of the Lender at any time
or times hereafter to demand strict performance thereof and such right shall not
be deemed to have been waived by any act or knowledge of the Lender, or its
agents, officers or employees, unless such waiver is contained in an instrument
in writing, directed and delivered to the Borrower or the Guarantor, as
applicable, specifying such waiver, and is signed by the Lender. No waiver of
any Event of Default by the Lender shall operate as a waiver of any other Event
of Default or the same Event of Default on a future occasion, and no action by
the Lender permitted hereunder shall in any way affect or impair the Lender's
rights and remedies or the obligations of the Guarantor under this Guaranty. Any
determination by a court of competent jurisdiction of the amount of any
principal and/or interest owing by the Borrower to the Lender shall be
conclusive and binding on the Guarantor irrespective of whether the Guarantor
was a arty to the suit or action in which such determination was made.
11. Effectiveness; Termination. This Guaranty shall become
effective upon its execution by the Guarantor and shall continue in full force
and effect and may not be terminated or otherwise revoked until the Obligations
shall have been fully paid in cash and discharged and the Credit Agreement and
all financing arrangements between the Borrower and the Lender shall have been
terminated. If, notwithstanding the foregoing, the Guarantor shall have any
right under applicable law to terminate or revoke this Guaranty, the Guarantor
agrees that such termination or revocation shall not be effective until a
written notice of such revocation or termination, specifically referring hereto,
signed by the Guarantor, is actually received by the Lender. Such notice shall
not affect the right and power of the Lender to enforce rights arising prior to
receipt thereof by the Lender. If the Lender grants loans or takes other action
after the Guarantor terminates or revokes this Guaranty but before the Lender
receives such written notice, the rights of the Lender with respect thereto
shall be the same as if such termination or revocation had not occurred.
12. Successors and Assigns. This Guaranty shall be binding
upon the Guarantor and upon its successors and assigns and shall inure to the
benefit of the Lender and its successors and assigns; all references herein to
the Borrower and to the Guarantor shall be deemed to include their respective
successors and assigns. The successors and assigns of the Guarantor and the
Borrower shall include, without limitation, their respective receivers, trustees
or debtors-in-possession. All references to the singular shall be deemed to
include the plural where the context so requires.
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<PAGE>
13. Governing Law. This Guaranty has been executed and
delivered by the parties hereto in Chicago, Illinois. Any dispute between the
Lender and the Guarantor arising out of or related to the relationship
established between them in connection with this Guaranty, and whether arising
in contract, tort, equity, or otherwise, shall be resolved in accordance with
the internal laws, and not the conflicts of law provisions, of the State of
Illinois.
14. Waiver of Jury Trial. Each of the Guarantor and the Lender
waives any right to trial by jury in any dispute, whether sounding in contract,
tort, or otherwise, between the Lender and the Guarantor arising out of or
related to the transactions contemplated by this Guaranty or any other
instrument, document or agreement executed or delivered in connection herewith.
Either the Guarantor or the Lender may file an original counterpart or a copy of
this Guaranty with any court as written evidence of the consent of the parties
hereto to the waiver of their right to trial by jury.
15. Notices. All notices and other communications required or
desired to be served, given or delivered hereunder shall be in writing or by a
telecommunications device capable of creating a printed record and shall be
addressed to the party to be notified as follows:
if to the Guarantor, at:
Aerial Communications, Inc.
8410 West Bryn Mawr
Suite 1100
Chicago, Illinois 60631
Attention: Vice President-Finance
Telecopy: (773) 399-4170
if to the Lender, at
Telephone and Data Systems, Inc.
30 North LaSalle Street
Suite 4000
Chicago, Illinois 60602
Attention: Treasurer
Telecopy: (312) 630-9299/1908
with a copy to
Sidley & Austin
One First National Plaza
Chicago, Illinois 60603
Attention: Michael G. Hron, Esq.
Telecopy: (312) 853-7036
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<PAGE>
or, as to each party, at such other address as designated by such party in a
written notice to the other party. All such notices and communications shall be
deemed to be validly served, given or delivered (i) three (3) days following
deposit in the United States mails, with proper postage prepaid; (ii) upon
delivery thereof if delivered by hand to the party to be notified; (iii) upon
delivery thereof to a reputable overnight courier service, with delivery charges
prepaid; or (iv) upon confirmation of receipt thereof if transmitted by a
telecommunications device.
16. Severability. Wherever possible, each provision of this
Guaranty shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Guaranty shall be prohibited by or
invalid under such law, such provision shall be ineffective to the extent of
such prohibition or invalidity without invalidating the remainder of such
provision or the remaining provisions of this Guaranty.
17. Merger. This Guaranty represents the final agreement of
the Guarantor with respect to the matters contained herein and may not be
contradicted by evidence of prior or contemporaneous agreements, or subsequent
oral agreements, between the Guarantor and the Lender.
18. Execution in Counterparts. This Guaranty may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
* * * * *
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<PAGE>
IN WITNESS WHEREOF, this Guaranty has been duly executed by
the Guarantor as of the day and year first set forth above.
AERIAL COMMUNICATIONS, INC.
By: /s/ Donald W. Warkentin
-----------------------
Donald W. Warkentin
President & CEO
Acknowledged and agreed to
as of the 31st day of August, 1998.
TELEPHONE AND DATA SYSTEMS, INC.
By: /s/ LeRoy T. Carlson, Jr.
--------------------------------
LeRoy T. Carlson, Jr.
President & CEO
SIGNATURE PAGE TO AERIAL GUARANTY
OF TDS LOANS TO
AERIAL OPERATING CO.
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<PAGE>
EXHIBIT 99.8
EXECUTION COPY
REVOLVING CREDIT AGREEMENT
This Revolving Credit Agreement, dated as of August 31, 1998, is
entered into between Telephone and Data Systems, Inc., a Delaware corporation
(herein called "TDS"), and Aerial Operating Co., Inc., a Delaware corporation
(herein called the "Company").
WHEREAS, (i) TDS owns approximately 82% of the issued and
outstanding shares of the capital stock of Aerial Communications, Inc., a
Delaware corporation formerly known as American Portable Telecommunications,
Inc. ("Aerial"), and (ii) Aerial owns 100% of the issued and outstanding shares
of the capital stock of the Company;
WHEREAS, TDS and Aerial are parties to a certain Revolving Credit
Agreement dated as of August 1, 1995, as heretofore amended (the "Aerial Credit
Agreement"), pursuant to which TDS (including certain of its affiliates) has
made revolving loans to Aerial, the entire proceeds of which have been loaned to
the Company by Aerial;
WHEREAS, as of August 31, 1998, the outstanding principal balance of
the loans made by TDS and its affiliates to Aerial under the Aerial Credit
Agreement, and the outstanding principal balance of the loans made by Aerial to
the Company with the proceeds of such loans, is $665,000,000.00; as of August
31, 1998, accrued and unpaid interest with respect to such loans is
$5,620,000.01;
<PAGE>
WHEREAS, representatives of TDS, Aerial and the Company have negotiated
with representatives of Sonera Ltd. (f/k/a Sonera Corporation), a limited
liability company organized under the laws of the Republic of Finland
("Sonera"), a Purchase Agreement (the "Purchase Agreement") pursuant to which
the Company would sell newly issued common stock of the Company to Sonera in an
amount which, upon issuance, would constitute 19.423% of the issued and
outstanding common stock of the Company;
WHEREAS, in connection with the closing of the transactions
contemplated by the Purchase Agreement, the Company, Aerial and TDS have agreed
that TDS and the Company would enter into this Revolving Credit Agreement in
order to (i) enable the Company to repay its loans from Aerial in their
entirety, together with accrued and unpaid interest with respect thereto , (ii)
enable Aerial to repay its loans from TDS and its affiliates under the Aerial
Credit Agreement in their entirety, together with accrued and unpaid interest
thereunder and (iii) provide for TDS's commitment to provide, directly or
through affiliates, additional revolving credit loans directly to the Company
for general corporate purposes;
WHEREAS, in order to provide the Company with funds for the purposes
specified above, the Company has requested TDS to extend loans to the Company in
an aggregate amount not to exceed the "Applicable Maximum Amount" (as defined
below), and TDS is willing to extend such loans upon the terms and conditions of
this Revolving Credit Agreement;
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<PAGE>
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, the parties hereto agree to as follows:
1. COMMITMENT OF TDS. Subject to the terms and conditions of this
Revolving Credit Agreement, TDS, either directly or through one or more of its
Subsidiaries, agrees to lend to the Company on a revolving basis, during the
period from the date hereof through December 31, 1999, such amount as the
Company may from time to time request upon written notice given not less than
five Business Days before the date of the loan, but not exceeding an aggregate
outstanding principal amount equal to the Applicable Maximum Amount at any one
time outstanding; provided, however, effective as of the date hereof upon
satisfaction or waiver by TDS of the conditions set forth in Section 8 hereof,
(a) the Company shall be deemed to have irrevocably requested that TDS and
certain of its affiliates make, and TDS and certain of its affiliates shall be
deemed to have made, an initial loan to the Company under this Revolving Credit
Agreement in the aggregate principal amount of $665,000,000 and (b) the entire
proceeds of such initial loan shall be deemed to have been applied by the
Company to the payment in full of all loans heretofore made by Aerial to the
Company which are outstanding as of the date hereof, together with all accrued
and unpaid interest thereon, and further applied by Aerial to the payment in
full of all loans heretofore made by TDS and certain of its affiliates to Aerial
under the Aerial Credit Agreement which are outstanding as of the date hereof,
together with all accrued and unpaid interest thereon, in each case without the
necessity of any actual transfer of funds by TDS, any of its affiliates, the
Company or Aerial. Notwithstanding any other provision of this Revolving Credit
Agreement, no loan shall be required
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<PAGE>
to be made hereunder if any Event of Default has occurred, or if any Default has
occurred and is continuing.
2. EVIDENCE OF BORROWINGS. Each borrowing hereunder by the Company
shall be evidenced by a recording of the borrowing on a schedule substantially
in the form set forth in Exhibit A and shall be dated the date of the borrowing,
and shall mature on December 31, 1999, unless the Company in the written notice
requesting the loan specifies that an earlier date on which an interest payment
is due shall be the maturity date. Notwithstanding the foregoing, the aggregate
outstanding principal balance of the loans shall be prepaid by the Company
concurrently with the Company's or Aerial's receipt of any proceeds of debt or
equity securities issued by any such entity to, or loans or advances made to or
for the benefit of any such entity by, any person or entity other than TDS or
any affiliate of TDS, which prepayments shall be made by the Company in amounts
equal to the gross proceeds of such securities, loans or advances net of all
reasonable expenses and fees paid by the Company or Aerial in connection with
the closing of such transaction.
3. PAYMENT OF INTEREST AND PRINCIPAL. The Company agrees to pay
interest on the unpaid principal amount of each borrowing hereunder at a rate
per annum equal to 1 1/2% above the Prime Lending Rate as in effect from time to
time, payable on the first day of January, April, July and October until the
principal amount becomes due (whether at maturity, by acceleration or
otherwise); and to pay on demand interest on any overdue principal and (to the
extent permitted by applicable law) on any overdue installment of interest, at a
rate per annum equal to 3 1/2% above the Prime Lending Rate as in effect from
time to time. Interest shall be computed on the basis of a
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<PAGE>
year of 360 days, as the case may be, and actual days elapsed (including the
first day but excluding the last day) occurring in the period of which payable.
4. COMPANY'S RIGHT TO PREPAY BORROWINGS. The Company may from time to
time and without premium prepay any borrowing in whole or in part. Any
prepayment of the full amount of any borrowings shall include accrued interest
thereon. Any prepayment made upon any borrowing shall reinstate the Credit in
the amount of such prepayment.
5. TERM OF REVOLVING CREDIT AGREEMENT. Unless sooner terminated as
elsewhere provided herein, this Revolving Credit Agreement and TDS's obligation
to furnish the Credit shall terminate on December 31, 1999. Notwithstanding
anything in this Revolving Credit Agreement to the contrary, in the event that
TDS's direct ownership of the outstanding voting equity securities of Aerial
shall be less than 70% (computed on a fully-diluted basis), TDS's commitment to
make additional loans hereunder shall expire on the 180th day immediately
following the date of such event.
6. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. To induce TDS to
grant the Credit and make loans hereunder, the Company represents and warrants
that:
(a) The Company and its Subsidiaries are corporations, each
duly organized and existing, in good standing, under the laws of the
jurisdiction of its incorporation, and each has the corporate power to
own its property and to carry on its business as now being
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<PAGE>
conducted. The Company is duly qualified to do business and is in good
standing in each jurisdiction, if any, in which the character of the
properties owned or leased by it therein or in which the transaction of
its business makes such qualifications necessary, except for such
failures to qualify or to be in good standing, if any, as in the
aggregate are not material to the business or financial conditions of
the Company and its Subsidiaries taken as a whole.
(b) The company has full corporate power and authority to
enter into this Revolving Credit Agreement, to make the borrowings
hereunder, to execute and deliver the Notes, and to incur the
obligations provided for herein and therein, all of which have been
duly authorized by all proper and necessary corporate action.
(c) All authorizations, consents, approvals, registrations,
exemptions and licenses with or from governmental authorities which are
necessary for the borrowings hereunder, the execution and delivery of
this Revolving Credit Agreement, the Notes and the performance by the
Company of its obligations hereunder and thereunder have been effected
or obtained and are in full force and effect.
(d) This Revolving Credit Agreement constitutes and the Notes,
when executed and delivered pursuant hereto for value received, will
constitute, the valid and legally binding obligations of the Company
enforceable in accordance with their terms, subject, as to enforcement,
to bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditor's rights and to general
equity principles.
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<PAGE>
(e) There are no proceedings or investigations pending or
threatened before any court or arbitrator or before or by any
governmental authority in which there is a reasonable possibility of an
adverse decision which would materially adversely affect the business
or financial conditions of the Company and its Subsidiaries taken as a
whole or materially impair the ability of the Company to perform its
obligations under this Revolving Credit Agreement or the Notes.
(f) There is no statute, regulation, rule, order or judgment,
and no provision of any mortgage, indenture, contract, license, permit,
agreement or other instrument or obligation binding on the Company or
any Subsidiary or affecting their respective properties which would
prohibit, conflict (except to the extent cured by waivers or consents
or the extent the consequences of such conflict would not, in the
aggregate, be material to the financial condition of the Company and
its Subsidiaries taken as a whole) with or in any way prevent the
execution, delivery, or carrying out of the terms of this Revolving
Credit Agreement and/or of the Notes.
(g) The Company and its Subsidiaries, taken as a whole, have
good, valid and marketable title to their respective real, personal and
other properties and assets material to the conduct of the business of
the Company and its Subsidiaries, free and clear of all mortgages,
liens, pledges, charges or encumbrances.
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<PAGE>
7. COVENANTS OF THE COMPANY.
(a) Until the expiration or termination of the Credit and
thereafter until all the Notes and other liabilities of the Company
hereunder are paid in full, the Company as appropriate shall:
(1) furnish TDS, (i) within 120 days after each
fiscal year of the Company, a copy of the annual audit report
of the Company and its Subsidiaries, prepared on a
consolidated basis and in conformity with the generally
accepted accounting principles applied on a basis consistent
with that of the preceding fiscal year, and signed by
independent certified public accountants satisfactory to TDS,
together with financial statements consisting of consolidated
balance sheets of the Company and its Subsidiaries as of the
end of such fiscal year and consolidated statement of income
and expense, retained earnings, paid-in capital and surplus
and cash flow statement of the Company and its Subsidiaries
for such fiscal year; (ii) as soon as available but in no
event more than 120 days after the close of each of the
Company's fiscal year, a letter or opinion of the accountants
who prepared the annual audit report relating to the Company
and its Subsidiaries stating whether anything in such
accountants' examination has revealed the occurrence of any
event which constitutes a Default or an Event of Default and,
if so, stating the facts with respect thereto (provided that
the furnishing of such letter or opinion shall not require
expansion of the scope of such accountants' examination);
(iii) within 60 days after each quarter (except the last
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<PAGE>
quarter) of each fiscal year of the Company, a copy of its
unaudited financial statements, similarly prepared, consisting
of at least a balance sheet as at the close of such quarter
and a profit and loss statement and a cash flow statement and
analysis of surplus for such quarter and for the period from
the beginning of such fiscal year to the close of such
quarter, and signed by a proper accounting officer of the
Company accompanied by a certificate of said officer stating
whether any event has occurred which constitutes a Default or
an Event of Default; and (iv) from time to time, such other
information as TDS may reasonably request;
(2) permit, and cause each of its Subsidiaries to
permit, TDS to have one or more of its officers, employees or
agents, upon at least one day's notice, and at TDS's expense,
visit and inspect any of the properties of the Company or any
Subsidiary and examine the minute books, books of account and
other records of the Company or any Subsidiary and make copies
thereof or extracts therefrom, and discuss its affairs,
finances and accounts with its officers and employees and, at
the request of TDS, with the Company's independent
accountants, during normal business hours and at such other
reasonable times and as often as TDS may reasonably desire;
(3) maintain, and cause each of its Subsidiaries to
maintain, insurance to such extent and against such hazards
and liabilities as is commonly maintained by companies
similarly situated;
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<PAGE>
(4) pay, and cause each of its Subsidiaries to pay,
when due all taxes, assessments, and other liabilities, except
and so long as contested in good faith;
(5) preserve and maintain, and cause each of its
Subsidiaries to preserve and maintain, its corporate existence
and all of its material (considering the Company and its
Subsidiaries taken as a whole) rights, privileges and
Franchises (including Franchises and any licenses granted by
the Federal Communications Commission) necessary in the normal
conduct of its business; provided that nothing herein
contained shall prevent (i) the termination of the business or
corporate existence of any Subsidiary which comprises less
than 5% of the consolidated assets of the Company and its
Subsidiaries, or (ii) the Company or any Subsidiary from
merging with another Person if the Company or such Subsidiary
is the surviving corporation or the other Person is controlled
by the Company or any Subsidiary, or any Subsidiary from
merging into, consolidating with or transferring assets to the
Company or another Subsidiary or any Person controlled by the
Company or any Subsidiary, provided that the effect of such
merger will not constitute a Default or Event of Default;
(6) comply, and cause each Subsidiary to comply, with
the requirements of all applicable laws, rules, regulations
and orders of any governmental authority, a breach of which
would materially and adversely affect the business or credit
of the
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Company and its Subsidiaries taken as a whole, except were
contested in good faith and by proper proceedings;
(7) promptly notify TDS upon the discovery by any
officer of the Company of the occurrence of any Default or
Event of Default, in each case describing the nature thereof
and the action the Company proposes to take with respect
thereto; and
(8) cause each Subsidiary of the Company, except to
the extent limited by partnership agreements, to comply with
all sections of this Revolving Credit Agreement applicable to
Subsidiaries to the same extent as if such Subsidiary were the
Company.
(b) Until the expiration or termination of the Credit and
thereafter until all the Notes and other liabilities of the Company
hereunder are paid in full:
(1) the Company shall not purchase or redeem any
shares of its stock (other than pursuant to the Purchase
Agreement, in accordance with Article Fourth of the Company's
Certificate of Incorporation, as amended, in connection with
stock option or other employee benefit programs or where the
redemption price is payable in shares of TDS furnished by TDS
to the Company to enable it to effect the redemption), declare
or pay any dividends thereon or make any other distribution to
any of its shareholders, except to the extent that the
cumulative sum of all such
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<PAGE>
payments (excluding any payments to redeem shares of the
Company's stock with shares of TDS furnished by TDS to the
Company to enable it to effect the redemption) shall not
exceed one-half of the cumulative consolidated net income of
the Company;
(2) the Company shall not incur or permit to exist
any indebtedness for Borrowed Money, except (i) borrowings
under this Revolving Credit Agreement, or (ii) indebtedness of
the Company or which is guaranteed by the Company if, as to
the Company's obligations thereunder, such indebtedness is
subordinate to all borrowings and other obligations of the
Company under this Revolving Credit Agreement pursuant to
terms, conditions and subordination agreements acceptable to
TDS, unless otherwise waived in writing by TDS;
(3) the Company shall not create or permit to exist
or allow any of its Subsidiaries to create or permit to exist
any mortgage, pledge, title retention lien, or other
encumbrance or security interest with respect to any assets
now owned or hereafter acquired by the Company's Subsidiaries,
except (i) liens in connection with the acquisition of
property and attaching only to the property acquired, any
licenses related thereto, and the partnership interests in any
partnership making the acquisition; (ii) liens for current
taxes not delinquent or as security for taxes being contested
in good faith, or in connection with workmen and materialmen
for sums not due or sums being contested in good faith; (iii)
liens created in the normal course
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of business to procure surety bonds; (iv) liens on property or
assets of a Subsidiary to secure obligations of such
Subsidiary to the Company or another Subsidiary; (v) liens
existing on real property owned or leased that are incidental
to the conduct of business of the Company or the ownership of
its property and assets and that were not incurred in
connection with the borrowing of money or the obtaining of
advances or credit, and which do not in the aggregate
materially detract from the value of the assets of the Company
and its Subsidiaries taken as a whole or materially impair the
use thereof in the operation of the business of the Company
and its Subsidiaries taken as a whole; (vi) liens existing on
the date hereof and approved in writing by TDS on or before
the date hereof; (vii) liens on assets of any corporation
existing at the time such corporation is merged into or
consolidated with a Subsidiary or becomes a Subsidiary and not
created in contemplation of such event; (viii) liens existing
on any asset prior to the acquisition thereof by a Subsidiary
and not created in contemplation of such acquisition; (ix)
liens arising out of the refinancing, extension, renewal or
refunding of any debt secured by any lien permitted by any of
the foregoing clauses of this Section, provided that such debt
is not increased and is not secured by any additional assets;
(x) deposits or pledges to secure obligations under worker's
compensation, social security or similar laws, or under
unemployment insurance; and
(4) the Company shall not enter into or be a party
to, or allow any of its Subsidiaries to enter into or be a
party to, any contract for the purchase of materials,
supplies, other property or services if such contract requires
that payment be made
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by the Company or its Subsidiaries regardless of whether
delivery is ever made of such materials, supplies, other
property or services.
8. CONDITIONS OF LENDING. TDS shall not be required to make the first
loan contemplated hereunder unless the Company shall have first delivered to
TDS:
(a) a certified copy of the Company's Board of Director's
resolutions authorizing the execution and delivery of the Notes and
this Revolving Credit Agreement;
(b) a certificate executed by the President or a Vice
President of the Company and dated the date of the loan certifying (i)
that the warranties and representation made in Section 6 by the Company
are true and correct on such date, (ii) that no Event of Default has
occurred or would result from the Company obtaining the requested loan,
and (iii) that no Default has occurred and is continuing;
(c) a Note appropriately completed, duly executed and dated
the date the loan is to be made;
(d) such other documents as TDS shall request;
(e) an opinion from counsel to the Company that the Company is
a corporation duly existing under the laws of the State of Delaware;
that the Company has full power to execute and deliver this Revolving
Credit Agreement, to borrow money hereunder, to execute and
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deliver its Note at each borrowing, and to perform its obligations
under this Revolving Credit Agreement and the Notes; that such actions
are not in conflict with any provision of law or of the charter or
bylaws of the Company, nor in conflict with any agreement binding upon
the Company of which such counsel has knowledge; and that this
Revolving Credit Agreement is, and the Notes when executed and
delivered by the Company will be, the legal and binding obligations of
the Company;
(f) an agreement and acknowledgment executed and delivered by
Aerial, in form and substance acceptable in all respects by TDS,
pursuant to which Aerial agrees (i) to the provisions of the proviso to
the first sentence of Section 1 hereof and (ii) that any and all
commitments by, or obligations of, TDS to advance additional loans or
provide any other accommodations to Aerial under the Aerial Credit
Agreement have been irrevocably terminated; and
(g) an unconditional and irrevocable guarantee of all of the
Company's obligations under the Notes and this Revolving Credit Agreement
executed and delivered by Aerial, in form and substance acceptable in all
respects to TDS.
9. EVENTS OF DEFAULT. The occurrence of any one or more of the
following events, unless waived in writing by TDS either before or after the
occurrence, shall constitute an "Event of Default" hereunder:
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(a) the Company fails to pay the principal of or interest of
any Note when and as the same shall become due and payable, whether at
the due date thereof, by acceleration or otherwise, and such failure
shall continue for more than five business days after notice is given
to the Company;
(b) the Company, or any Subsidiary which comprises more than
5% of the consolidated assets of the Company and its Subsidiaries,
admits in writing its inability to pay its debts as they mature or
applies for, consents to, or acquiesces in the appointment of a trustee
or receiver for the Company or such Subsidiary or any property thereof;
in the absence of such application, consent, or acquiescence, a trustee
or receiver is appointed for the Company or any such Subsidiary or for
a substantial part of the property of any thereof and is not discharged
within 30 days; or any bankruptcy, reorganization, debt arrangement, or
other proceeding under any bankruptcy or insolvency law, or any
dissolution or liquidation proceeding, is instituted by or against the
Company of any such Subsidiary, and if instituted against the Company
or any such Subsidiary is consented to or acquiesced in by the Company
or any such Subsidiary or remains for 30 days undismissed;
(c) any representation or warranty made by the Company herein
is untrue in any material respect and such representation or warranty
is not made true within 30 days after an officer of the Company becomes
aware of such material untruth, or if such representation or warranty
is not made true within 90 days after an officer of the Company becomes
aware of such material untruth provided the Company is trying in good
faith to make such
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representation or warranty true at all times after an officer of the
Company becomes aware of such material untruth;
(d) any schedule, statement, report, notice, or writing
furnished by the Company is untrue in any material respect on the date
as of which the facts set forth are stated or certified if such
document is not revised to be true and furnished by the Company to TDS
within ten days after an officer of the Company becomes aware of such
material untruth;
(e) the Company breaches any of the terms, covenants or
agreements herein set forth and such breach continues (i) for 30 days
after notice to the Company, (ii) for 60 days after an officer of the
Company becomes aware of such breach, or (iii) for 90 days after an
officer of the Company becomes aware of such breach in the case of a
breach of any of the terms, covenants or agreements of Sections
7(a)(5), 7(a)(6) and 7(b)(3), provided that the Company is making a
good faith effort to cure the breach at all times after an officer of
the Company becomes aware of it;
(f) any event shall occur or fail to occur if the effect of
such occurrence or failure is to accelerate the maturity of any
indebtedness for Borrowed Money (other than the indebtedness under this
Revolving Credit Agreement) of the Company or any of its subsidiaries,
which indebtedness for Borrowed Money in the aggregate exceeds 10% of
the Company's consolidated equity as reflected on the most recent
consolidated balance sheet of the Company and its Subsidiaries, or to
permit the holder thereof to cause such
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<PAGE>
indebtedness to become due prior to the stated maturity thereof, and
any such occurrence or failure shall not have been remedied or waived
within any applicable period of grace;
(g) the Company or any of its Subsidiaries defaults in the
payment of any indebtedness for Borrowed Money other than the
indebtedness under this Revolving Credit Agreement if the aggregate of
such indebtedness for Borrowed Money, including the defaulted payment,
exceeds 10% of the Company's consolidated equity as reflected on the
most recent consolidated balance sheet of the Company and its
Subsidiaries; and
(h) one or more judgments against the Company or any of its
Subsidiaries or attachments against its property, which in the
aggregate exceed $2,000,000, or the operation or result of which would
be to interfere materially and adversely with the conduct of the
business of the Company and its Subsidiaries taken as a whole, remain,
unpaid, unstayed on appeal, undischarged, unbonded, or undissmissed for
a period of 30 days.
The Company shall immediately advise TDS of any Event of Default or of
any Default. If any Event of Default shall occur, whether the Event of Default
shall then be continuing, TDS may declare the Credit to be terminated at any
time thereafter and all Notes to be due and payable, whereupon the Credit shall
immediately terminate, and all outstanding Notes shall become immediately due
and payable, both as to principal and interest, with presentment, demand,
protest or any other notice of any kind, all of which are hereby expressly
waived, anything contained herein or in the Notes to the contrary
notwithstanding (provided that TDS's commitment hereunder shall
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forthwith terminate, and the unpaid principal of and accrued interest on the
loans and all other amounts owing hereunder shall automatically become and be
forthwith due and payable upon the occurrence of any event specified in clause
(b) above without any such notice or other action, all of which are hereby
expressly waived by the Company). TDS shall promptly advise the Company of any
such declaration, but failure to do so shall not impair the effect of such
declaration.
10. DEFINITIONS.
(a) Unless otherwise specified herein, all accounting terms
used herein shall be interpreted, all determinations with respect to
accounting matters hereunder shall be made, and all financial
statements and certificates and reports as to financial matters
required to be delivered hereunder shall be prepared, in accordance
with generally accepted accounting principles.
(b) The following terms shall have the meanings ascribed to
them below:
"Applicable Maximum Amount" shall mean, as of any date of
determination, the dollar amount set forth in Schedule I hereto and
pertaining to the period during which such date occurs, minus the
aggregate principal amount of all prepayments required to be paid
pursuant to the last sentence of Section 2.
"Borrowed Money" shall mean as to any Person any obligation of
such Person to repay money, and indebtedness of such Person evidenced
by notes, bonds, debentures or similar obligations, any obligation of
such Person under a conditional sale or other title
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retention agreement, any obligation of others secured by any asset of
such Person, whether or not such obligation is assumed by such Person,
any obligation of others Guaranteed by such Person, all Capital Lease
Obligations, and any reimbursement obligations of such Person (whether
contingent or otherwise) in respect of letters of credit, bankers
acceptances and similar instruments, provided, however, that Borrowed
Money indebtedness shall not include performance bonds, franchise
bonds, obligations to reimburse drawings under letters of credit issued
in lieu of performance or franchise bonds and other obligations of like
nature, trade payables, and accrued liabilities and subscriber advance
payments and deposits, arising in the ordinary course of such Person's
business.
"Business Day" shall mean any day on which commercial banks
are not generally authorized or required to close in Chicago, Illinois.
"Capital Lease obligations" shall mean, to any Person, the
obligations of such Person to pay rent or other amounts under a lease
of (or other agreement containing the right to use) real and/or
personal property which obligations are required to be classified and
accounted for as a capital lease on the balance sheet of such Person
under generally accepted accounting principles and, for the purposes of
the Agreement, the amount of such obligations shall be the capitalized
amount thereof, determined in accordance with generally accepted
accounting principles.
"Code" shall mean the Internal Revenue Code of 1986, as
amended.
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"Control" (including, with its correlative meanings,
"controlled by" and under "common control with") shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of a Person.
"Credit" shall mean TDS's commitment to loan funds to the
Company pursuant to the terms and conditions of this Revolving Credit
Agreement.
"Default" shall mean any event which, with the giving of
notice or the lapse of time, or both, would constitute an Event of
Default.
"Dollars" (including "$") shall mean lawful money of the
United States of America.
"Franchise" shall mean a franchise, license, authorization or
right to construct, own, promote, extend and/or otherwise exploit any
System operated or to be operated by the Company or any of its
Subsidiaries granted by the Federal Communications Commission or by any
state, county, city, town, village or other local government authority
but shall not include any such franchise, license, authorization or
right which is incidentally required for the purpose of installing,
constructing or extending.
"Guarantee" by any Person shall mean any obligation,
contingent or otherwise, of such Person directly or indirectly
guaranteeing any indebtedness for Borrowed Money or other obligation of
any other Person, or in any manner providing for the payment of any
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indebtedness for Borrowed Money or other obligation of any other
Person, or otherwise protecting the holder of such indebtedness against
loss (whether by virtue of partnership arrangements, agreements to
purchase assets, goods, securities or services, or to take-or-pay or
otherwise), provided that the term "guarantee" shall not include
endorsements for collection or deposit in the ordinary course of
business. The term "guarantee" used as a verb shall have correlative
meaning.
"Notes" shall mean any and all promissory notes of the Company
to TDS, evidencing a borrowing made under this Revolving Credit
Agreement.
"Person" shall mean an individual, a corporation, a
partnership, a joint venture, a trust or unincorporated organization, a
joint stock company or similar organization, a government or any
political subdivision thereof, or any other legal entity.
"Prime Lending Rate" shall mean the rate of interest announced
by LaSalle National Bank ("LaSalle") from time to time as its prime
rate, or if no such rate of interest is announced by LaSalle, the rate
of interest announced by Bank of America National Trust and Savings
Association from time to time as its "reference rate."
"Purchase Agreement" shall mean the Purchase Agreement, dated
as of June 1, 1998, by and among TDS, Aerial, the Company and Sonera.
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"Subsidiary" shall mean any Person other than the Company
whose accounts are included in the consolidated financial statements of
the Company and its Subsidiaries prepared in accordance with generally
accepted accounting principles in effect at the time.
"System" shall mean the assets constituting a cellular
telephone system serving subscribers within a geographical area covered
by one or more Franchises.
11. MISCELLANEOUS.
(a) No delay on the part of TDS or the holder of any Note in
the exercise of any power or right shall operate as a waiver thereof,
nor shall any single or partial exercise of any power or right preclude
other or further exercise thereof, or the exercise of any other power
or right. No waiver by TDS shall be valid unless it is in writing and
signed by the Chief Executive Officer or the Chief Financial Officer of
TDS and then only to the extent specifically set forth in such writing.
(b) All notices, consents, requests, instructions, approvals
and other communications provided for herein shall be validly given,
made or served, if in writing and delivered personally, by telegram or
sent by registered mail, postage prepaid to:
TDS at: 30 North LaSalle Street
Suite 4000
Chicago, Illinois 60603
Attention of President
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<PAGE>
with separate copies at such address to the Attention of the Chief
Financial Officer and the Corporate Secretary:
The Company at: 8410 W. Bryn Mawr
Suite 1100
Chicago, Illinois 60631
Attention of President
with separate copies at such address to the Attention of the Chief
Financial Officer and the Corporate Secretary or to such other address
as any party may, from time to time, designate in a written notice
given in a like manner. Any notice given under this Agreement shall be
deemed delivered when received at the appropriate address.
(c) The Company agrees to reimburse TDS upon demand for all
reasonable out-of-pocket expenses (including reasonable attorney's fees
and legal expenses) incurred by TDS in enforcing the obligations of the
Company hereunder or under any Note and to pay, and save TDS harmless
from all liability for, any stamp or other taxes which may be payable
with respect to the execution or delivery of this Revolving Credit
Agreement or the issuance of the Notes, which obligations of the
Company shall survive any termination of this Revolving Credit
Agreement.
(d) This Revolving Credit Agreement and each Note shall be a
contract made under and governed by the laws of the State of Illinois.
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(e) This Revolving Credit Agreement shall be binding upon the
Company and TDS and their respective successors and assigns, and shall
inure to the benefit of the Company and TDS and the successors and
assigns of TDS.
(f) TDS may at any time sell, assign, transfer, grant
participation in, or otherwise dispose of all or any portion of its
loans or Notes or of its Credit or of its right, title or interest
therein or thereto or in or to this Revolving Credit Agreement
(collectively, "Participation") to any other Person ("Participant").
The Company agrees that any Participant may exercise any and all rights
of banker's lien, set-off and counterclaim with respect to its
Participation as fully as if such Participant were the maker of a loan
in the amount of its Participation. TDS shall be released from its
obligations in connection with any assignment of its rights hereunder
if such obligations are expressly assumed by the assignee of such
rights. TDS shall promptly furnish the Company with notice of any
assignment or Participation hereunder, specifying in each case the
identity of the assignee or Participant and the amounts and terms of
the assignment or Participation. Any provision of this Revolving Credit
Agreement may be amended, modified or waived only by an instrument or
instruments in writing and signed by the Chief Executive Officer or
Chief Financial Officer of TDS and the Chief Executive Officer or Chief
Financial Officer of the Company.
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(g) This Revolving Credit Agreement may be executed in any
number of counterparts and by different parties in separate
counterparts. Each counterpart shall be deemed an original and all
counterparts taken together shall constitute one instrument.
(h) All representations, warranties and covenants of the
parties shall survive the delivery of the Notes and the furnishing of
the Credit and shall expire upon the termination of this Revolving
Credit Agreement.
(i) If any provision of this Revolving Credit Agreement is
held prohibited, invalid or unenforceable under applicable law, such
provision shall be ineffective only to the extent of such prohibition
or invalidity, without invalidating the remainder of such provision or
the remaining provisions of this Revolving Credit Agreement or the
Notes.
(j) Subject to the provisions hereof, TDS and the Company
shall each make, execute, acknowledge and deliver such other
instruments and documents, and take all such other actions as may be
reasonably required in order to effectuate the purposes of this
Revolving Credit Agreement and to consummate the transactions
contemplated hereby. Subject to the provisions hereof, TDS and the
Company shall each, in connection with entering into this Revolving
Credit Agreement, performing its obligations hereunder and taking any
and all actions relating hereto, comply with all applicable laws,
regulations, order and decrees, obtain all required consents and
approvals and make all required filings with any governmental agency,
other regulatory or administrative agency, commission or similar
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authority and promptly provide the other with all such information as
the other may reasonably request in order to be able to comply with the
provisions of this sentence.
(k) Nothing in this Revolving Credit Agreement expressed or
implied is intended or shall be construed to confer any right or
benefit upon any Person other than TDS and the Company and their
respective permitted successors and assigns.
(l) Subject to any contrary requirement of law and the right
of each party to enforce its rights hereunder in any legal action, each
party shall keep strictly confidential and shall cause its employees
and agents to keep strictly confidential, any information which it or
any of its agents or employees may acquire pursuant to, or in the
course of performing its obligations under, any provision of this
Revolving Credit Agreement; provided, however, that such obligation to
maintain confidentiality shall not apply to information which (x) at
the time of disclosure was in the public domain not as a result of acts
by the receiving party, or (y) was in the possession of the receiving
party at the time of disclosure.
(m) This Revolving Credit Agreement contains the entire
understanding of the parties with respect to the transactions
contemplated hereby.
(n) Descriptive headings are for convenience only and shall
not control or affect the meaning or construction of any provision of
this Revolving Credit Agreement.
* * * * *
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IN WITNESS WHEREOF, the parties have executed this Revolving
Credit Agreement in Chicago, Illinois, as of the day and year first above
written.
TELEPHONE DATA AND SYSTEMS, INC.
By: /s/ LeRoy T. Carlson, Jr.
-----------------------------
LeRoy T. Carlson, Jr.
President & CEO
AERIAL OPERATING CO., INC.
By /s/ Donald W. Warkentin
------------------------------
Donald W. Warkentin
President
Signature Page of Revolving Credit Agreement
dated as of August 31, 1998
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