<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(RESTATED) *
American Mobile Systems Incorporated
(NAME OF ISSUER)
Common Stock, $0.01 par value
(TITLE OF CLASS OF SECURITIES)
027559 50 9
(CUSIP NUMBER)
Jeanne M. Rickert, Esq., Jones, Day, Reavis & Pogue
901 Lakeside Avenue, Cleveland, Ohio 44114 (216) 586-7220
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO RECEIVE NOTICES AND
COMMUNICATIONS)
April 25, 1995
(DATE OF EVENT WHICH REQUIRES FILING OF THIS STATEMENT)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box / /.
Check the following box if a fee is being paid with the statement / /. (A fee
is not required only if the reporting person: (1) has a previous statement on
file reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7).
NOTE: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities,
and for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
<PAGE> 2
CUSIP NO. 027559 50 9 PAGE 1 OF 100 PAGES
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Nextel Communications, Inc.
[formerly known as Fleet Call, Inc.]
I.R.S. Identification No.: 13-3414376
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP a / /
b /x/
3 SEC USE ONLY
4 SOURCE OF FUNDS* WC, 00
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or (e) / /
6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
7 SOLE VOTING POWER 2,514,286*
* The shares shown in this Number 7 include
1,800,000 shares presently subject to an option,
which are deemed to be beneficially owned by Rule
13d-3(d)(1)(i).
NUMBERS OF
SHARES
BENEFICIALLY 8 SHARED VOTING POWER -0-
OWNED BY EACH
REPORTING
PERSON WITH 9 SOLE DISPOSITIVE POWER 2,514,286*
* The shares shown in this Number 9 include
1,800,000 shares presently subject to an option,
which are deemed to be beneficially owned by Rule
13d-3(d)(1)(i).
10 SHARED DISPOSITIVE POWER -0-
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,514,286* * The shares shown in this Number 11 include
1,800,000 shares presently subject to an option, which are
deemed to be beneficially owned by Rule 13d-3(d)(1)(i).
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES / /
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 27.8%*
* Percent has been calculated treating as outstanding
1,800,000 shares presently subject to an option, in
accordance with the requirements of Rule 13d-3(d)(1)(i).
14 TYPE OF REPORTING PERSON* CO
*SEE INSTRUCTIONS BEFORE FILLING OUT!
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CUSIP NO. 027559 50 9 PAGE 2 OF 100 PAGES
Item 1. Security and Issuer.
The title of the class of equity securities to which this statement
relates is the Common Stock, par value $.01 per share (the "AMS Common Stock"),
of American Mobile Systems Incorporated, a Delaware corporation ("AMS"). The
principal executive offices of AMS are located at 20120-C Warner Center Lane,
Woodland Hills, California 91367-5002.
Item 2. Identity and Background.
This statement is being filed by NEXTEL Communications, Inc. (formerly
Fleet Call, Inc.), a Delaware corporation ("Nextel"), whose principal business
is the ownership, operation and management of Specialized Mobile Radio ("SMR")
wireless communications systems. The address of Nextel's principal business
and principal office is 201 Route 17, North, Rutherford, New Jersey 07070.
The following are the executive officers and directors of Nextel and
certain information relating thereto:
<TABLE>
<CAPTION>
Name Title Business Address Present Principal
Occupation
<S> <C> <C> <C>
Brian D. McAuley President; Director 201 Route 17, North President of Nextel
Rutherford, NJ 07070
Morgan E. O'Brien Chairman of the 201 Route 17, North Chairman of the Board of
Board of Directors; Rutherford, NJ 07070 Directors of Nextel
Director
Wayland Hicks Chief Executive 201 Route 17, North Chief Executive Officer of
Officer; Director Rutherford, NJ 07070 Nextel
James M. Dixon Executive Vice 201 Route 17, North Executive Vice President
President Rutherford, NJ 07070 of Nextel and President of
Smart SMR of California,
Inc., a wholly-owned
subsidiary of Nextel
Thomas J. Sidman Vice President and 201 Route 17, North Vice President and General
General Counsel Rutherford, NJ 07070 Counsel of Nextel
Louis Salamone Jr. Vice President and 201 Route 17, North Vice President and Chief
Chief Financial Rutherford, NJ 07070 Financial Officer of
Officer Nextel
Jack A. Markell Senior Vice 201 Route 17, North Senior Vice President and
President and Rutherford, NJ 07070 Assistant Secretary of
Assistant Secretary Nextel
Robert S. Foosaner Senior Vice 201 Route 17, North Senior Vice President of
President Rutherford, NJ 07070 Nextel
Richard Randazzo Senior Vice 201 Route 17, North Senior Vice President
President Human Rutherford, NJ 07070 Human Resources of Nextel
Resources
John Pescatore Vice President 201 Route 17, North Vice President of Nextel
Rutherford, NJ 07070
</TABLE>
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CUSIP NO. 027559 50 9 PAGE 3 OF 100 PAGES
<TABLE>
<S> <C> <C> <C>
Ann Poh Controller 201 Route 17, North Controller of Nextel
Rutherford, NJ 07070
Elizabeth G. Long Vice President, 201 Route 17, North Vice President, Treasurer
Treasurer and Rutherford, NJ 07070 and Secretary of Nextel
Secretary
John Vele Assistant Treasurer 201 Route 17, North Assistant Treasurer of
Rutherford, NJ 07070 Nextel
John Willmoth Assistant Vice 201 Route 17, North Assistant Vice President
President Rutherford, NJ 07070 of Nextel
Mary Ann Bowen Assistant Secretary 201 Route 17, North Assistant Secretary of
Rutherford, NJ 07070 Nextel
Thomas D. Hickey Assistant General 201 Route 17, North Assistant General Counsel
Counsel Rutherford, NJ 07070 of Nextel
Thomas Barry Assistant Controller 201 Route 17, North Assistant Controller of
Rutherford, NJ 07070 Nextel
Julian Brodsky Director 1500 Market Street Vice Chairman of the Board
Philadelphia, PA 19102 of Directors of Comcast
Corporation
Robert Cooper Director [805 Burlway Road - 94010 President of Touch Tel
Burlingame, CA 94011 Corp.
Donald Harris Director 480 East Swedesford Road President of Comcast
Wayne, PA 19807 Cellular Communications
Koichiro Hayashi, Ph.D. Director 101 Park Avenue, 41st Floor President and Chief
New York, NY 10178 Executive Officer of NTT
America, Inc.
Scot Jarvis Director 2320 Carillon Point Vice President of Eagle
Kirtland, WA 94104 River, Inc. and President
of FiberLink, Inc.
Joel A. Schleicher Director 140 Knightsbridge Private Investor
Wachung, NJ 07060
Masaaki Torimoto Director 201 Route 17, North Chief Liaison between
Rutherford, NJ 07070 Nextel and Matsushita
Communications Industrial
Co., Ltd.
</TABLE>
All of the executive officers and directors of Nextel are citizens of
the United States, except Masaaki Torimoto who is a citizen of Japan.
During the last five years, neither Nextel nor any of the directors or
executive officers of Nextel has been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors) or has been a party to a
civil proceeding of a judicial or administrative body of competent jurisdiction
and as a result of such proceeding was or is subject to a judgment, decree or
final order enjoining future violations of, or prohibiting or mandating
activities subject to, federal or state securities laws or finding any
violation with respect to such laws.
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CUSIP NO. 027559 50 9 PAGE 4 OF 100 PAGES
Item 3. Source and Amount of Funds or Other Consideration.
Pursuant to a letter agreement, dated March 29, 1993 (the "Original
Letter Agreement"; a copy of the Original Letter Agreement was attached to the
original Schedule 13D as Exhibit A), as amended by a letter agreement, dated
April 12, 1993 (the "April Amendment"; a copy of the April Amendment was
attached to the original Schedule 13D as Exhibit B and a composite conformed
copy of the Original Letter Agreement, as amended by the April Amendment, was
attached to the original Schedule 13D as Exhibit C), Nextel, then known as
Fleet Call, Inc., and AMS agreed that Nextel would acquire an aggregate minimum
of 7,142,857 shares of AMS Common Stock for an aggregate minimum purchase price
of $50 million and up to an aggregate estimated maximum of 9,428,571 shares of
AMS Common Stock for an aggregate estimated maximum purchase price of $66
million (disregarding any shares of AMS Common Stock Nextel might acquire
pursuant to the exercise of the Option (as defined below)) (the "Stock Purchase
Transaction"). The consideration for the shares of AMS Common Stock to be
purchased in the Stock Purchase Transaction was to be comprised of two
components: (i) a minimum cash payment of $20 million (or $15 million, net of
the $5 million cash payment for the Initial Shares (as defined below)), and
(ii) property consisting of certain SMR businesses located in the state of
Florida, including the related Federal Communications Commission ("FCC")
licenses, SMR channels, contract rights, customer lists, transmission
equipment, real property and other assets, that Nextel or one of its
wholly-owned subsidiaries had acquired or would acquire (the "Florida SMR
Systems"). Other than certain previously owned SMR businesses in Florida,
which were to be valued by agreement between AMS and Nextel, the Florida SMR
Systems were to be valued at Nextel's fully-loaded acquisition costs therefor,
including all reasonable transactions costs (including consulting and
non-compete payments) constituting direct out of pocket expenditures of Nextel
(excepting only Nextel overhead and salary expenses).
On April 7, 1993, as the first step to consummating the Stock Purchase
Transaction, Nextel and AMS entered into an Initial Stock Purchase Agreement
(the "Initial Stock Purchase Agreement"; a copy of such Initial Stock Purchase
Agreement was attached to the original Schedule 13D as Exhibit D), pursuant to
which Nextel purchased on April 7, 1993, 714,286 shares of AMS Common Stock
(the "Initial Shares") for an aggregate cash payment of $5 million, or $7.00
per share. Also pursuant to the Initial Stock Purchase Agreement, Nextel
received, without payment of additional consideration, (i) an option (the
"Option"; a copy of the Current Stock Unit Purchase Option Agreement relating
to the Option (the "Option Agreement") was attached to the original Schedule
13D as Exhibit E) to purchase up to 1.8 million shares of AMS Common Stock at
an exercise price of $8.50 per share, and (ii) the right to require AMS to
repurchase the Initial Shares for $5 million if the purchase of the remaining
shares of AMS Common Stock to be purchased in the Stock Purchase Transaction
did not occur on or prior to April 7, 1994 (unless the failure to complete the
purchase was solely due to the fault of Nextel) (the "Put"; a copy of the Put
Agreement relating to the Put (the "Put Agreement") was attached to the
original Schedule 13D as Exhibit F).
The cash used to purchase the Initial Shares, any cash used to
purchase AMS Common Stock under the exercise of the Option, the anticipated $15
million cash payment for the remaining AMS Common Stock to be purchased in the
Stock Purchase Transaction, and any cash used to purchase the Florida SMR
Systems to be transferred to AMS as a portion of the consideration under the
Stock Purchase Transaction were and were expected to be derived from Nextel's
working capital.
By letter agreement, dated May 26, 1993 (the "May Amendment"; a copy
of the May Amendment was attached to Amendment No. 1 to the original Schedule
13D as Exhibit I and a composite conformed copy of the Original Letter
Agreement, as amended by the April Amendment and the May Amendment was attached
to Amendment No. 1 to the original Schedule 13D as Exhibit J), the parties
agreed to increase the aggregate estimated maximum number of shares of AMS
Common Stock that could be purchased pursuant to the Stock Purchase Transaction
to 10,714,286 and the aggregate estimated maximum purchase price under the
Stock Purchase Transaction to $75 million.
On August 25, 1993, Nextel and AMS entered into a definitive Stock
Purchase Agreement (the "Stock Purchase Agreement"; a copy of the Stock
Purchase Agreement was attached to Amendment No. 2 to the original Schedule 13D
as Exhibit K), further detailing the terms of the contemplated Stock Purchase
Transaction. Also on that date the parties (i) amended the Option Agreement
(the "Amended Option Agreement"; a copy of the Amended Option Agreement was
attached to Amendment No. 2 to the original Schedule 13D as Exhibit L) to
increase, in certain circumstances, the number of shares of AMS Common Stock
for which the Option could be exercised from 1.8 million to 1.95 million, and
(ii) amended the
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CUSIP NO. 027559 50 9 PAGE 5 OF 100 PAGES
Put Agreement (the "Amended Put Agreement"; a copy of the Amended Put Agreement
was attached to the original Schedule 13D as Exhibit M) to extend the
expiration of the Put to June 30, 1994.
On September 8, 1994, Nextel formally presented a written proposal to
the AMS board of directors proposing that AMS merge with and into a
wholly-owned subsidiary of Nextel (the "Original Merger Proposal"). Pursuant
to the Original Merger Proposal each outstanding share of AMS Common Stock
(other than shares held by Nextel), was to be exchanged for 0.443 shares of
Class A Common Stock, par value $.001 per share, of Nextel ("Nextel Common
Stock"), up to a maximum of 3 million shares of Nextel Common Stock. Based on
the closing price of Nextel Common Stock on September 7, 1994, the Original
Merger Proposal was valued at approximately $73 million, or $10.80 per share of
AMS Common Stock, assuming 6,773,123 shares of AMS Common Stock outstanding on
a fully diluted basis.
On September 24, 1994, Nextel and AMS entered into a letter agreement
(the "Merger Letter Agreement"; a copy of the Merger Letter Agreement was
attached to Amendment No. 4 to the original Schedule 13D as Exhibit N)
providing the basic terms and conditions upon which AMS would be merged with
and into a wholly-owned subsidiary of Nextel (the "Amended Merger Proposal").
Pursuant to the Amended Merger Proposal each outstanding share of AMS Common
Stock (other than shares held by Nextel), was to be exchanged for 0.545 shares
of Nextel Common Stock, up to a maximum of 3.7 million shares of Nextel Common
Stock, assuming 6,783,054 shares of AMS Common Stock outstanding on a fully
diluted basis.
On November 18, 1994, in connection with the negotiations of
definitive transaction agreements concerning the Amended Merger Proposal,
Nextel and AMS entered into (i) a written agreement terminating the Amended Put
Agreement (the "Put Termination Agreement"; a copy of the Put Termination
Agreement was attached to Amendment No. 4 to the original Schedule 13D as
Exhibit O) and (ii) Amendment No. 4 to the Stock Purchase Agreement ("Amendment
No. 4 to Stock Purchase Agreement", a copy of Amendment No. 4 to Stock Purchase
Agreement was attached to Amendment No. 5 (and a corrected copy was attached to
Amendment No. 6 ) to the original Schedule 13D as Exhibit P) which provided
Nextel additional time to comply with certain obligations relating to Nextel's
ownership and operation of certain SMR systems and related assets acquired or
being acquired from third parties located in the State of Florida following the
closing of the Stock Purchase Transaction and extended various time limits set
forth in the Stock Purchase Agreement and certain related documents.
On December 13, 1994, the AMS board of directors indicated their
preference for the Stock Purchase Transaction rather than further pursuit of
the Amended Merger Proposal. As a result Nextel formally withdrew the Amended
Merger Proposal and the parties resumed pursuit of the Stock Purchase
Transaction.
On April 25, 1995, the board of directors of each of AMS and Nextel
approved, and AMS and Nextel entered into, an Agreement and Plan of Merger (the
"Merger Agreement"; a copy of the Merger Agreement is attached to this Restated
Schedule 13D as Exhibit Q), pursuant to which a wholly-owned subsidiary of
Nextel will merge with and into AMS in exchange for up to a maximum of 4.2
million shares of Nextel Common Stock (the "Merger Transaction"). Under the
Merger Agreement, each outstanding share of AMS Common Stock (other than shares
held by Nextel or to which Nextel would be entitled upon exercise of the
Option) will be converted into 0.62 shares of Nextel Common Stock. Based on
the closing price of the Nextel Common Stock on April 24, 1995, the Merger
Transaction is valued at approximately $65,625,000 or $9.68 per share of AMS
Common Stock, assuming 6,779,721 shares of AMS Common Stock outstanding on a
fully diluted basis.
The Merger Agreement replaces, except in limited circumstances, the
Stock Purchase Agreement.
Item 4. Purpose of Transaction.
Nextel's intent since it entered into the Original Letter Agreement on
March 29, 1993, has been to acquire control of AMS.
Upon consummation of the Stock Purchase Transaction, Nextel would have
held at least a 51% fully diluted voting and economic ownership interest in all
outstanding shares of AMS Common Stock or AMS Common Stock equivalents (the
"Majority Interest"). In addition to the purchase of the Majority Interest,
Nextel would have also been obligated to offer to
<PAGE> 7
CUSIP NO. 027559 50 9 PAGE 6 OF 100 PAGES
exchange, under certain conditions, either cash or shares of Nextel Common
Stock for certain remaining outstanding equity interests in AMS at various
times in the future. With respect to Nextel's acquisition of the Majority
Interest, AMS also agreed to take appropriate action to cause the "interested
stockholder" and similar restrictions imposed by Section 203 of the Delaware
General Corporation Law not to be applicable to Nextel. The Stock Purchase
Transaction also provided that so long as Nextel owned at least 51% of the
outstanding voting securities of AMS, Nextel would have been entitled to
designate a majority of the members of the board of directors and committees
thereof of AMS, and (if necessary) the AMS articles and by-laws, and any
applicable shareholder voting agreements, would have been appropriately amended
to so provide.
Upon consummation of the Merger Transaction AMS will become a
wholly-owned subsidiary of Nextel.
Due to its acquisition of the Initial Shares, Nextel became entitled
to designate one member to serve on AMS's board of directors, which currently
consists of three directors. Nextel, however, has never exercised, and
currently does not expect to exercise, its right to designate the one director.
Nextel is committed under the terms of the Merger Agreement to vote
all its shares of AMS Common Stock in favor of the Merger Transaction and has
entered into a letter agreement (the "Nextel/TCI Letter Agreement"; a copy of
the Nextel/TCI Letter Agreement is attached to this Restated Schedule 13D as
Exhibit R) with Tele-Communications, Inc. ("TCI"), pursuant to which TCI
agreed, among other things, (i) not to dispose of its AMS Common Stock prior to
the consummation of the Merger Transaction except in certain limited
circumstances, and (ii) to vote (or grant a proxy to Nextel to vote) its shares
of AMS Common Stock in favor of the Merger Transaction. Nextel and TCI
beneficially own approximately 46% of the outstanding shares of AMS Common
Stock.
Until such time as the Merger Transaction is consummated Nextel may
purchase additional shares of AMS Common Stock or other securities of AMS by
exercise of the Option, pursuant to certain preemptive rights granted to Nextel
at the time of its purchase of the Initial Shares, through public markets or in
private transactions, or, in certain circumstances if the Merger Agreement is
not consummated, pursuant to the Stock Purchase Transaction, and Nextel expects
that all such purchases would be made in furtherance of its principal purpose
of acquiring control of AMS.
Until such time as the Merger Transaction, or, in certain
circumstances if the Merger Agreement is not consummated, the Stock Purchase
Transaction, is consummated or if neither the Merger Transaction nor the Stock
Purchase Transaction is consummated, Nextel intends to review continually AMS's
business affairs and financial condition, as well as conditions in the
securities markets and general economic and industry conditions. Based on an
evaluation of these and other similar considerations and subject to compliance
with the terms of applicable agreements as may from time to time be in effect
between Nextel and AMS, Nextel will continue to consider various alternative
courses of action and will in the future take such actions with respect to AMS
as it deems appropriate and consistent with such agreements in light of the
circumstances existing from time to time. Such actions may include, but are
not limited to: (i) the acquisition of additional shares of AMS Common Stock
or other securities of AMS; (ii) otherwise seeking to control or influence the
management and policies of AMS; (iii) selling or otherwise disposing of some or
all of its shares of AMS Common Stock or other securities of AMS; (iv) other
acquisitions, dispositions, mergers or transactions involving AMS or any of its
affiliates; or (v) considering the implementation of amendments to AMS's
articles or by-laws that may maintain, preserve or enhance Nextel's ability to
control AMS. At the present time, other than the actions discussed in this
statement, Nextel has no specific plans or proposals that relate to or would
result in any of the actions specified in clauses (a) through (j) of Item 4 of
Schedule 13D.
Item 5. Interest in Securities of the Issuer.
On April 7, 1993 pursuant to the Initial Purchase Agreement, Nextel
purchased 714,286 shares of AMS Common Stock for a purchase price of $7.00 per
share and obtained an immediately exercisable Option, without any further
consideration therefor, to purchase 1.8 million shares of AMS Common Stock for
a purchase price of $8.50 per share. Based on the Amended Option Agreement,
the number of shares of AMS Common Stock for which the Option may be exercised
may be increased, in certain circumstances, to as many as 1.95 million shares.
Based upon the 7,247,007 shares of AMS Common Stock (including the Initial
Shares) reported by AMS in Schedule 3.6(a) to the Merger Agreement to be
outstanding on April 25, 1995, and the additional 1.8 million shares of AMS
Common Stock for which the Option is presently exercisable deemed to be
outstanding as of that date pursuant to Rule 13d-3(d)(1)(i), for a total of
9,047,007 shares of AMS Common
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CUSIP NO. 027559 50 9 PAGE 7 OF 100 PAGES
Stock outstanding or deemed to be outstanding on April 25, 1995, Nextel would
own (upon exercise in full of the Option) 27.8% of the outstanding AMS Common
Stock.
Nextel has, or, in the case of the shares of AMS Common Stock that may
be acquired by exercise of the Option, would have, the sole power to vote or
dispose of all of the shares of AMS Common Stock beneficially owned by Nextel.
There are no transactions by Nextel (other than those described in this
statement) in the AMS Common Stock that were effected during the past sixty
days.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer.
On March 29, 1993, Nextel, then known as Fleet Call, Inc., and AMS
entered into the Original Letter Agreement setting forth the principal terms on
which Nextel would acquire an aggregate minimum of 7,142,857 shares of AMS
Common Stock, constituting a Majority Interest in AMS, for an aggregate minimum
purchase price of $50 million, with the consideration consisting of a
combination of cash and the Florida SMR Systems. Nextel was also granted
certain pre-emptive rights (on customary terms) to acquire additional
securities of AMS upon issuance thereof, and certain anti-dilution rights if
the number, type and/or per share price of AMS securities to be acquired by
Nextel upon the consummation of the Stock Purchase Transaction were to change.
In addition to the purchase of the Majority Interest, Nextel was also obligated
to offer to exchange, under certain conditions, either cash or shares of Nextel
Common Stock for certain remaining outstanding equity interests in AMS at
various times in the future.
The Original Letter Agreement also provided that upon consummation of
the Stock Purchase Transaction, and thereafter so long as Nextel was the
beneficial owner of securities of AMS representing at least 25% of the voting
power of all outstanding AMS securities, calculated on a fully diluted basis,
Nextel would (i) conduct all of its SMR (including its proposed enhanced SMR,
or "Digital Mobile") operations in the state of Florida through AMS, (ii)
include the Florida SMR operations of AMS as part of Nextel's proposed
nationwide Digital Mobile network, and (iii) use its good faith efforts to make
available to AMS infrastructure and subscriber equipment on the same basic
terms that such equipment is purchased by Nextel from its vendor, plus any
related incremental costs incurred by Nextel and subject to any security or
similar arrangements, which AMS on request would confirm, implement or perfect,
as required. So long as Nextel owned at least 51% of the outstanding voting
securities of AMS, Nextel would be entitled to designate a majority of the
members of the board of directors and committees thereof of AMS, and (if
necessary) the AMS articles and by-laws, and any applicable shareholder voting
agreements, would be appropriately amended to so provide. Nextel also
committed in the Original Letter Agreement to enter into a shareholders'
agreement with TCI, pursuant to which Nextel would agree to vote, at the
request of TCI, all of Nextel's shares of AMS Common Stock in favor of the
election to the AMS board of directors of one nominee of TCI, for so long as
TCI beneficially owned at least 5% of the outstanding shares of AMS Common
Stock.
The consummation of the Stock Purchase Transaction was subject to a
number of conditions, among the more significant of which were a requirement
that a nationally recognized investment banking firm selected by AMS have
issued a fairness opinion stating that, from a financial point of view, the
Stock Purchase Transaction is fair to AMS stockholders, and the receipt of the
affirmative vote of the holders of a majority of the outstanding shares of AMS
Common Stock. The closing of the Stock Purchase Transaction (and, if and to
the extent required, of the acquisition of shares of AMS Common Stock pursuant
to the exercise of the Option) also was conditioned upon receipt of necessary
governmental approvals and compliance with applicable legal requirements,
including those imposed under the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended (the "HSR Act") or by the FCC, and upon receipt of
necessary third party consents and approvals.
On April 7, 1993, Nextel and AMS entered into the Initial Stock
Purchase Agreement, the Option Agreement and the Put Agreement. Pursuant to
the Initial Stock Purchase Agreement, Nextel acquired 714,286 shares of AMS
Common Stock for $5 million in cash. The Initial Stock Purchase Agreement also
provided that, at Nextel's discretion, Nextel could designate one member of the
board of directors of AMS, which currently consists of three directors.
Nextel, however, has never exercised, and currently does not expect to
exercise, its right to designate the one director. Pursuant to the Option
Agreement, Nextel was granted the Option to acquire up to 1.8 million shares of
Common Stock at an exercise price per share of $8.50. The Option Agreement
also contained anti- dilution provisions similar to those found in the Original
Letter Agreement. Pursuant to the Put Agreement, Nextel received the right to
require AMS to repurchase the Initial Shares for $5 million in cash if the
purchase of the remaining shares of AMS Common Stock contemplated in the Stock
Purchase
<PAGE> 9
CUSIP NO. 027559 50 9 PAGE 8 OF 100 PAGES
Transaction did not occur on or prior to April 7, 1994 (unless the failure to
complete the purchase was solely due to the fault of Nextel).
On April 12, 1993, Nextel and AMS entered into the April Amendment,
which amended the terms of the Original Letter Agreement to reflect an
additional new significant potential acquisition by Nextel of SMR businesses in
the state of Florida (the "New Acquisition"). Pursuant to the April Amendment,
the New Acquisition, if consummated, was to be included in the Florida SMR
Systems that would be transferred to AMS in partial consideration of the
purchase of AMS Common Stock contemplated by the Original Letter Agreement.
Accordingly, the purchase price and number of shares AMS Common Stock to be
purchased in the Stock Purchase Transaction were adjusted so that Nextel was
obligated to purchase an aggregate minimum of 7,142,857 shares of AMS Common
Stock for a minimum aggregate purchase price of $50 million (if the New
Acquisition was not included in the Florida SMR Systems) and an estimated
aggregate maximum of 9,428,571 shares of AMS Common Stock for a maximum
estimated aggregate purchase price of $66 million (if the New Acquisition was
included in the Florida SMR Systems, and if the aggregate indicated value
assigned to such properties, calculated as specified in the Original Letter
Agreement, was approximately $46 million) (in each case, including the Initial
Shares but excluding any shares obtained through the exercise of the Option).
The parties further agreed in the April Amendment that the consideration to be
paid for the AMS Common Stock would include a cash payment of at least $20
million (or $15 million, net of the $5 million cash payment for the Initial
Shares), with the balance payable by transfer of the Florida SMR Systems to AMS
(or, alternatively, by transfer of all of the capital stock of the subsidiary
of Nextel used to effect the acquisitions of the Florida SMR Systems).
On May 26, 1993, Nextel and AMS entered into the May Amendment, which
essentially superseded the April Amendment and further amended the Original
Letter Agreement to reflect additional new significant potential acquisitions
by Nextel of SMR businesses in the state of Florida (the "Additional
Acquisitions"). Pursuant to the May Amendment, the Additional Acquisitions, if
consummated, were to be included in the Florida SMR Systems that would be
transferred to AMS in partial consideration of the purchase of AMS Common Stock
contemplated by the Original Letter Agreement. Accordingly, the purchase price
and number of shares AMS Common Stock to be purchased in the Stock Purchase
Transaction were adjusted so that Nextel was obligated to purchase an aggregate
minimum of 7,142,857 shares of AMS Common Stock for a minimum aggregate
purchase price of $50 million (if the Additional Acquisitions were not included
in the Florida SMR Systems) and an estimated aggregate maximum of 10,714,286
shares of AMS Common Stock for a maximum estimated aggregate purchase price of
$75 million (if the Additional Acquisitions were included in the Florida SMR
Systems, and if the aggregate indicated value assigned to such properties,
calculated as specified in the Original Letter Agreement, was approximately
$55,000,000) (in each case, including the Initial Shares but excluding any
shares obtained through the exercise of the Option).
On August 25, 1993, Nextel and AMS entered into the Stock Purchase
Agreement further detailing the terms of the contemplated Stock Purchase
Transaction. Also on that date the parties (i) amended the Option Agreement to
increase, in certain circumstances, the number of shares of AMS Common Stock
for which the Option could be exercised from 1.8 million to 1.95 million, and
(ii) amended the Put Agreement to extend the expiration of the Put to June 30,
1994.
On September 8, 1994, Nextel formally presented the Original Merger
Proposal to the AMS board of directors. Pursuant to the Original Merger
Proposal, AMS was to be merged with and into a wholly-owned subsidiary of
Nextel and each outstanding share of AMS Common Stock (other than shares held
by Nextel or shares of AMS Common Stock for which the Option could be
exercised), was to be exchanged for 0.443 shares of Nextel Common Stock, up to
a maximum of 3 million shares of Nextel Common Stock. The transaction
contemplated by the Original Merger Proposal was to be structured as a tax free
reorganization under Section 368 of the Internal Revenue Code of 1986, as
amended.
On September 24, 1994, Nextel and AMS entered into the Merger Letter
Agreement providing the basic terms and conditions of the Amended Merger
Proposal. Pursuant to the Amended Merger Proposal AMS was to be merged with
and into a wholly-owned subsidiary of Nextel and each outstanding share of AMS
Common Stock (other than shares held by Nextel or shares of AMS Common Stock
for which the Option could be exercised) was to be exchanged for 0.545 shares
of Nextel Common Stock, up to a maximum of 3.7 million shares of Nextel Common
Stock, assuming 6,783,054 shares of AMS Common Stock outstanding on a fully
diluted basis. The transaction contemplated by the Amended Merger Proposal was
to be structured as a tax free reorganization under Section 368 of the Internal
Revenue Code of 1986, as amended.
<PAGE> 10
CUSIP NO. 027559 50 9 PAGE 9 OF 100 PAGES
Under the terms of the Merger Letter Agreement, the Amended Merger
Proposal was to be in lieu of the Stock Purchase Transaction and upon the
execution of a definitive agreement with respect to the Amended Merger
Agreement, the Stock Purchase Agreement would terminate. If the parties were
unable to reach agreement on the definitive transaction documents for the
Amended Merger Proposal, the termination for the consummation of the Stock
Purchase Transactions in the Stock Purchase Agreement would be extended for a
period of 90 days after the termination of the parties' pursuit of the
transactions contemplated by the Amended Merger Proposal.
On November 18, 1994, in connection with the negotiations of
definitive transaction agreements concerning the Amended Merger Proposal,
Nextel and AMS entered into (i) the Put Termination Agreement terminating the
Put, and (ii) Amendment No. 4 to the Stock Purchase Agreement which provided
Nextel additional time to comply with certain obligations relating to the
Florida SMR Systems following the closing of the Stock Purchase Transaction and
extended various time limits set forth in the Stock Purchase Agreement and
certain related documents.
On December 13, 1994, the AMS board of directors indicated their
preference for the Stock Purchase Transaction rather than further pursuit of
the transaction contemplated by the Amended Merger Proposal. As a result
Nextel formally withdrew the Amended Merger Proposal and the parties resumed
pursuit of the Stock Purchase Transaction.
On April 25, 1995, the board of directors of each of AMS and Nextel
approved, and AMS and Nextel entered into, the Merger Agreement pursuant to
which a wholly-owned subsidiary of Nextel will merge with and into AMS in
exchange for up to a maximum of 4.2 million shares of Nextel Common Stock (the
"Merger Transaction"). Under the Merger Agreement, each outstanding share of
AMS Common Stock (other than shares held by Nextel or to which Nextel would be
entitled upon exercise of the Option) will be converted into 0.62 shares of
Nextel Common Stock. The Merger Transaction is to be structured as a tax free
reorganization under Section 368 of the Internal Revenue Code of 1986, as
amended.
The consummation of the Merger Transaction is subject to customary
closing conditions, including (i) approval of the Merger Transaction by AMS
stockholders, (ii) receipt of all necessary governmental approvals and
compliance with applicable legal requirements, including those imposed under
the HSR Act or by the FCC, (iii) receipt of necessary third party consents and
approvals, including consents under the indentures pursuant to which certain of
Nextel's outstanding indebtedness has been issued (the "Nextel Indentures"),
and (iv) receipt of opinions of counsel to the effect, among other things, that
the Merger Transaction can be consummated on a tax free basis. Additionally,
the Merger Transaction is subject to (x) the consummation of the purchase of
equity securities of Nextel by an affiliate of Craig O. McCaw contemplated by
that certain Securities Purchase Agreement, dated April 4, 1995 (the "McCaw
Purchase"), (y) no holder of AMS Common Stock being entitled to exercise
appraisal rights in connection with the Merger Transaction, and (z) the ability
to repay all of AMS' outstanding indebtedness without prepayment penalties or
similar charges (subject to limited exceptions) or any third party consents.
The Merger Agreement may be terminated upon the occurrence of any of
the following events, among others: (i) by AMS or Nextel, if (a) the Merger
Transaction is not consummated by September 30, 1995, (b) Nextel is unable to
obtain the necessary consents under the Nextel Indentures by September 15,
1995, or (c) the proxy statement/prospectus relating to the Merger Transactions
is not mailed to holders of AMS Common Stock by July 31, 1995, (ii) by Nextel,
if AMS is not listed on the Nasdaq National Market on the record date for the
special meeting of AMS stockholders relating to the Merger Transaction, or
(iii) by AMS, if the McCaw Purchase is not consummated by September 15, 1995.
Upon the execution of the Merger Agreement, the Stock Purchase
Agreement, as amended, was terminated and superseded, subject to the Stock
Purchase Agreement, as amended, being returned to full force and effect if the
Merger Agreement is terminated because (i) the McCaw Purchase is not
consummated by September 15, 1995, (ii) Nextel is unable to obtain the
necessary consents under the Nextel Indentures by September 15, 1995, (iii) AMS
is not listed on the Nasdaq National Market on the record date for the special
meeting of AMS stockholders relating to the Merger Transactions, or (iv) the
proxy statement/prospectus relating to the Merger Transaction is not mailed to
AMS stockholders by July 31, 1995.
In connection with the Merger Transaction, Nextel has entered into the
Nextel/TCI Letter Agreement with TCI, pursuant to which TCI agreed, among other
things, (i) not to dispose of its shares of AMS Common Stock prior to the
<PAGE> 11
CUSIP NO. 027559 50 9 PAGE 10 OF 100 PAGES
consummation of the Merger Transaction except in certain limited circumstances,
and (ii) to vote (or grant a proxy to Nextel to vote) its shares of AMS Common
Stock in favor of the Merger Transaction.
Certain finder's fee arrangements between Nextel and Ritzel
Communications Inc. regarding the proposed transactions described in this
statement are as set forth in an agreement between such parties, dated April
15, 1993 (the "Finder's Fee Agreement"; a copy of the Finder's Fee Agreement
was attached to the original Schedule 13D as Exhibit G).
Item 7. Exhibits.
Exhibit A Letter Agreement dated March 29, 1993 by and between
Fleet Call, Inc. and American Mobile Systems
Incorporated.
Exhibit B Letter Agreement dated April 12, 1993 by and between
Fleet Call, Inc. and American Mobile Systems
Incorporated.
Exhibit C Composite conformed copy of March 29, 1993 letter
agreement by and between Fleet Call, Inc. and
American Mobile Systems Incorporated, reflecting
amendments thereto effected by April 12, 1993 letter
agreement by and between Fleet Call, Inc. and
American Mobile Systems Incorporated.
Exhibit D Initial Stock Purchase Agreement dated as of April 7,
1993 by and between Fleet Call, Inc. and American
Mobile Systems Incorporated.
Exhibit E Current Stock Unit Purchase Option Agreement (No. 1)
dated April 7, 1993 by and between Fleet Call, Inc.
and American Mobile Systems Incorporated.
Exhibit F Put Agreement dated as of April 7, 1993 by and
between Fleet Call, Inc. and American Mobile Systems
Incorporated.
Exhibit G Agreement regarding finder's fee dated April 15, 1993
by and between Fleet Call, Inc. and Ritzel
Communications, Inc.
Exhibit H Press Release of Fleet Call, Inc. dated March 29,
1993.
Exhibit I Letter Agreement dated May 26, 1993 by and between
Fleet Call, Inc. and American Mobile Systems
Incorporated.
Exhibit J Composite conformed copy of March 29, 1993 letter
agreement by and between Fleet Call, Inc. and
American Mobile Systems Incorporated, reflecting
amendments thereto effected by the April 12, 1993
letter agreement by and between Fleet Call, Inc. and
American Mobile Systems Incorporated and by the May
26, 1993 letter agreement by and between Fleet Call,
Inc. and American Mobile Systems Incorporated.
Exhibit K Stock Purchase Agreement, dated August 25, 1993, by
and between Nextel Communications, Inc. and American
Mobile Systems Incorporated.
Exhibit L Option Agreement, dated April 7, 1993, as amended by
agreement, dated August 25, 1993.
Exhibit M Put Agreement, dated April 7, 1993, as amended by
agreement, dated August 25, 1993.
Exhibit N Letter Agreement dated September 23, 1994, by and
between Nextel Communications, Inc. and American
Mobile Systems Incorporated.
<PAGE> 12
CUSIP NO. 027559 50 9 PAGE 11 OF 100 PAGES
Exhibit O Put Termination Agreement dated November 18, 1994 by
and between Nextel Communications, Inc. and American
Mobile Systems Incorporated.
Exhibit P Amendment No. 4 dated November 18, 1994 to Stock
Purchase Agreement dated August 25, 1993 by and
between Nextel Communications, Inc. and American
Mobile Systems Incorporated.
Revised Exhibit P Corrected Amendment No. 4 to Stock Purchase
Agreement.
Exhibit Q Agreement and Plan of Merger dated April 25, 1995 by
and among American Mobile Systems Incorporated,
Nextel Communications, Inc. and Mobile Communications
of Florida, Inc.
Exhibit R Letter Agreement dated April 25, 1995 by and between
Nextel Communications, Inc. and Tele-Communication,
Inc.
<PAGE> 13
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
-------
<S> <C> <C>
A Letter Agreement dated March 29, 1993 by and between Fleet Call, Inc. and Original Schedule 13D
American Mobile Systems Incorporated.
B Letter Agreement dated April 12, 1993 by and between Fleet Call, Inc. and Original Schedule 13D
American Mobile Systems Incorporated.
C Composite conformed copy of March 29, 1993 letter agreement by and between Original Schedule 13D
Fleet Call, Inc. and American Mobile Systems Incorporated, reflecting
amendments thereto effected by April 12, 1993 letter agreement by and between
Fleet Call, Inc. and American Mobile Systems Incorporated.
D Initial Stock Purchase Agreement dated as of April 7, 1993 by and between Original Schedule 13D
Fleet Call, Inc. and American Mobile Systems Incorporated.
E Current Stock Unit Purchase Option Agreement (No. 1) dated April 7, 1993 by Original Schedule 13D
and between Fleet Call, Inc. and American Mobile Systems Incorporated.
F Put Agreement dated as of April 7, 1993 by and between Fleet Call, Inc. and Original Schedule 13D
American Mobile Systems Incorporated.
G Agreement regarding finder's fee dated April 15, 1993 by and between Fleet Original Schedule 13D
Call, Inc. and Ritzel Communications, Inc.
H Press Release of Fleet Call, Inc. dated March 29, 1993. Original Schedule 13D
I Letter Agreement dated May 26, 1993 by and between Fleet Call, Inc. and AMS. Amendment No. 1 to
Original Schedule 13D
J Composite conformed copy of March 29, 1993 letter agreement by and between Amendment No. 1 to
Fleet Call, Inc. and American Mobile Systems Incorporated, reflecting Original Schedule 13D
amendments thereto effected by the April 12, 1993 letter agreement by and
between Fleet Call, Inc. and American Mobile Systems Incorporated and by the
May 26, 1993 letter agreement by and between Fleet Call, Inc. and American
Mobile Systems Incorporated.
K Stock Purchase Agreement, dated August 25, 1993, by and between Nextel Amendment No. 2 to
Communications, Inc. and American Mobile Systems Incorporated. Original Schedule 13D
L Option Agreement, dated April 7, 1993, as amended by agreement, dated Amendment No. 2 to
August 25, 1993. Original Schedule 13D
M Put Agreement, dated April 7, 1993, as amended by agreement, dated August 25, Amendment No. 2 to
1993. Original Schedule 13D
N Letter Agreement dated September 23, 1994, by and between Nextel Amendment No. 4 to
Communications, Inc. and American Mobile Systems Incorporated. Original Schedule 13D
O Put Termination Agreement dated November 18, 1994 by and between Nextel Amendment No. 5 to
Communications, Inc. and American Mobile Systems Incorporated. Original Schedule 13D
P Amendment No. 4 dated November 18, 1994 to Stock Purchase Agreement dated Amendment No. 5 to
August 25, 1993 by and between Nextel Communications, Inc. and American Mobile Original Schedule 13D
Systems Incorporated.
Revised P Corrected Amendment No. 4 to Stock Purchase Agreement. Amendment No. 6 to
Original Schedule 13D
</TABLE>
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<PAGE> 14
<TABLE>
<CAPTION>
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<S> <C> <C>
Q Agreement and Plan of Merger dated April 25, 1995 by and among American Mobile Page 14
Systems Incorporated, Nextel Communications, Inc. and Mobile Communications of
Florida, Inc.
R Letter Agreement dated April 25, 1995 by and between Nextel Communications, Page 97
Inc. and Tele-Communication, Inc.
</TABLE>
Page 13 of 100
<PAGE> 1
Exhibit Q
To Restated
Schedule 13D
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
AMERICAN MOBILE SYSTEMS INCORPORATED,
NEXTEL COMMUNICATIONS, INC.
AND
MOBILE COMMUNICATIONS OF FLORIDA, INC.
DATED AS OF April 25, 1995
Page 14 of 100
<PAGE> 2
TABLE OF CONTENTS
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ARTICLE I. MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.1 Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2 Effective Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.3 Certificate of Incorporation and By-Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.4 Directors and Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE II. CONVERSION OF AMS COMMON STOCK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.1 Conversion of Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.2 Adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.3 Assumption of Employee Stock Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.4 Exchange Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.5 Exchange of Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.6 Notice of Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.7 Payment of Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.8 Transfer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.9 Distribution with Respect to Unexchanged
Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.10 Fractional Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
2.11 Rule 145 Legending . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF AMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.1 Corporate Status, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.2 Power and Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
3.3 Consents/Approvals; Enforceability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
3.4 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
3.5 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
3.6 Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
3.7 No Pending or Threatened Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
3.8 No Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
3.9 No Material Adverse Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
3.10 Title to Properties; Encumbrances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
3.11 Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
3.12 Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
3.13 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
3.14 Materially Correct . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
3.15 Regulatory Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
(a) Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
(b) License Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
(c) Condition of Systems 35 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
(d) Fees; License Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
(e) Management Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
(f) Wide-Area System Application . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
3.16 Proxy Statement/Prospectus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
3.17 Non-Contravention . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
3.18 Third-Party Investment Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
</TABLE>
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3.19 Related Party Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
3.20 Transactions Not in the Ordinary Course . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
3.21 Employee Benefit Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
3.22 Registration Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
3.23 Certain Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF
NEXTEL AND NEWCO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
4.1 Corporate Status, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
4.2 Power and Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
4.3 Consents/Approvals; Enforceability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
4.4 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
4.5 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
4.6 Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
4.7 No Pending or Threatened Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
4.8 No Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
4.9 No Material Adverse Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
4.10 Title to Properties; Encumbrances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
4.11 Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
4.12 Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
4.13 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
4.14 Materially Correct . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
4.15 Regulatory Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
(a) License Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
(b) Other Regulatory Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
(c) Wide-Area System Application . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
4.16 Proxy Statement/Prospectus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
4.17 Non Contravention . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
ARTICLE V. COVENANTS OF AMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
5.1 Conduct of AMS Pending the Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
5.2 SEC Registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
5.3 Stockholder Approval . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
5.4 Covenants of AMS Prior to the Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
5.5 No Solicitation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
5.6 Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
5.7 Warrant and Option Holders, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
5.8 Vote of AMS Directors and Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
5.9 No Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
ARTICLE VI. COVENANTS OF NEWCO AND NEXTEL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
6.1 Conduct of Nextel Prior to the Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
6.2 SEC Registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
6.3 Current Public Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
6.4 NASDAQ Listing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
6.5 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
</TABLE>
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ARTICLE VII. JOINT COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
7.1 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
7.2 State Takeover Statutes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
7.3 FCC Filings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
7.4 Related Nextel Stock Issuance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
7.5 Support of Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
7.6 Antitrust Filing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
7.7 Substitution of Subsidiary or Successor
Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
7.8 Stock Purchase Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
7.9 Nextel Vote of AMS Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
7.10 Transfer of AMS Common Stock by Nextel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
ARTICLE VIII. CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
8.1 Filing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
8.2 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
ARTICLE IX. CONDITIONS TO OBLIGATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
9.1 Conditions to Obligations of Nextel,
Newco and AMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
9.2 Conditions to Obligations of Nextel
and Newco . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
9.3 Conditions to the Obligations of AMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
ARTICLE X. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
10.1 Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
10.2 Other Definitional Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111
ARTICLE XI. TERMINATION/EFFECTIVENESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112
11.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112
11.2 Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114
ARTICLE XII. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115
12.1 Communications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115
12.2 Non-Waiver of Remedies and Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116
12.3 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116
12.4 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116
12.5 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116
12.6 Enforceability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117
12.7 Law Governing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117
12.8 Communications Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117
12.9 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117
12.10 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117
12.11 Publicity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118
</TABLE>
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<PAGE> 5
<TABLE>
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12.12 Specific Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118
12.13 Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119
12.14 Third-Party Beneficiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119
</TABLE>
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<PAGE> 6
TABLE OF EXHIBITS, ANNEXES AND SCHEDULES
<TABLE>
<CAPTION>
EXHIBITS DESCRIPTION
<S> <C>
A Certificate of Incorporation of AMS
B By-laws of AMS
C Directors and Officers
ANNEX DESCRIPTION
A Form of Restrictive Legend
B Form of Rule 145 Affiliate Agreement
1 Original Warrant
2 Side Agreement
SCHEDULE DESCRIPTION
2.1 Excluded Shares
2.3 AMS Employee Stock Options
3.1(b) States in Which AMS and Subsidiaries are not Authorized to Conduct Business
3.1(c) Any Obligations of AMS with respect to Shares
3.1(e) Subsidiaries of AMS
3.1(f) Debt of AMS due after December 31, 1994
3.3(b) Third-Party Consents
3.4 Violation of any Statute, Laws or Regulations
3.5 Material Debts, Obligations, Liabilities or Commitments
3.6 Capitalization as of December 31, 1994 - Authorized and Outstanding Shares of the AMS
3.7 Pending or Threatened Litigation
3.8 Contractual Defaults
3.9 Material Adverse Changes Since December 31, 1994 and Material Contracts
</TABLE>
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<TABLE>
<CAPTION>
SCHEDULE DESCRIPTION
<S> <C>
3.10 Liens and Encumbrances
3.11 Excluded Patents, Patent Rights, Trademarks, Trademark Rights, Trade Names, Trade Name Rights,
Copyright Registrations, Know-How and Other Proprietary Information
3.13 Tax Related Matters
3.15(b) License Information
3.15(c) License Issues
3.17 Contravention
3.19 Related Party Transactions
3.20 Material Transactions Not in the Ordinary Course of Business
3.21(a) Employee Benefit Plans
3.21(j) Material Post-Employment Benefits
3.21(k) Acceleration of Vesting Benefit Due to Execution of Agreement
3.21(l) Amendments to Employee Plans
3.21(n) Accruals and Unpaid Claims
3.21(o) Benefits to Non-Employees
3.21(p) Parachute Payments
3.22 Registration Rights
3.23 Certain Contracts
3.27(e) Managed Licensee List
4.1(b) Qualification
4.1(d) Liens
4.3 Consents/Approvals; Enforceability
4.4 Noncompliance With Laws
4.6 Capitalization of Nextel
4.7 Pending or Threatened Actions
4.8 Contractual Defaults
</TABLE>
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<TABLE>
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SCHEDULE DESCRIPTION
<S> <C>
4.9 Material Adverse Changes
4.10 Title to Properties
4.11 Intellectual Property
4.13 Taxes
4.15(a) License Information
4.15(b) Other Regulatory Matters
4.17 Non-Contravention
5.1 Exceptions to Conduct of Business Pending the Closing
5.6 Rule 145 Affiliates
</TABLE>
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<PAGE> 9
AGREEMENT AND PLAN OF MERGER
Agreement and Plan of Merger dated as of April 25, 1995
("Agreement") by and among NEXTEL Communications, Inc., a Delaware corporation
("Nextel"), American Mobile Systems Incorporated, a Delaware corporation
("AMS") and Mobile Communications of Florida, Inc., a Delaware corporation and
a wholly-owned subsidiary of Nextel ("Newco").
RECITALS
WHEREAS, the respective Boards of Directors of Nextel, Newco
and AMS have each determined that it is in the best interests of their
respective stockholders for Newco to merge with and into AMS upon the terms and
subject to the conditions set forth herein;
WHEREAS, the respective Boards of Directors of Newco and AMS
have each approved the merger of Newco with and into AMS, upon the terms and
subject to the conditions set forth herein; and
WHEREAS, for Federal income tax purposes, it is intended that
the merger of Newco into AMS qualify as a reorganization under the provisions
of Section 368 of the Internal Revenue Code of 1986, as amended (the "Code").
NOW, THEREFORE, in consideration of the foregoing premises and
the representations, warranties and agreements contained herein, and subject to
the terms and conditions set forth herein, the parties hereby agree as follows:
ARTICLE I. MERGER
1.1 Merger. At the Effective Time (as hereinafter
defined), Newco shall be merged with and into AMS in accordance with the
provisions of Section 251 of the Delaware General Corporation Law ("DGCL") and
the separate corporate existence of Newco shall thereupon cease (the "Merger").
AMS shall be the surviving corporation (the "Surviving Corporation") and shall
be governed by the laws of the State of Delaware.
1.2 Effective Time. As soon as practicable following
the satisfaction (or, to the extent permitted by law, the waiver) of all of the
conditions set forth in Article IX, and provided that this
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<PAGE> 10
Agreement has not been terminated pursuant to Article XI, AMS and Newco shall
cause a Certificate of Merger to be executed and filed with the Secretary of
State of Delaware as provided in Section 251 of the DGCL. The Merger will
become effective at the time and date when such Certificate of Merger is filed
with the Secretary of State of Delaware (the "Effective Time").
1.3 Certificate of Incorporation and By-Laws. The
Certificate of Incorporation of AMS as in effect immediately prior to the
Effective Time shall be amended and restated at the Effective Time to read in
its entirety as shown on Exhibit A attached hereto and, as so amended and
restated, shall be the Certificate of Incorporation of AMS as the Surviving
Corporation and from the Effective Time shall constitute the "Certificate of
Incorporation" of the Surviving Corporation within the meaning of Section 104
of the DGCL until duly amended in accordance with its terms. The By-Laws of
AMS as in effect immediately prior to the Effective Time shall be amended and
restated in their entirety at the Effective Time to read as shown in Exhibit B
attached hereto and, as so amended and restated, shall become the By-Laws of
AMS as the Surviving Corporation and from the Effective Time shall constitute
the By-Laws of the Surviving Corporation until amended in accordance with law
and the Certificate of Incorporation of the Surviving Corporation.
1.4 Directors and Officers. The directors and officers
of AMS immediately prior to the Effective Time shall resign effective as of the
Effective Time and shall be replaced, at the Effective Time, by those persons
who shall be designated or elected and appointed, as the case may be, as set
forth on Exhibit C attached hereto, to serve as the directors and officers of
the Surviving Corporation from the Effective Time until their respective
successors are duly elected and qualified in the manner provided in the
Certificate of Incorporation and By-Laws of the Surviving Corporation, or until
their earlier resignation or removal or as otherwise provided by law.
ARTICLE II. CONVERSION OF AMS COMMON STOCK
2.1 Conversion of Stock. Each share of AMS Common Stock,
par value $0.01 per share ("AMS Common Stock"), that shall be issued and
outstanding at the Effective Time (other than (i) the Excluded Shares (as
defined below), (ii) shares of AMS Common Stock, if any, owned by Newco, and
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<PAGE> 11
(iii) shares of AMS Common Stock held in the treasury of AMS, which shall be
cancelled as part of the Merger), shall, by virtue of the Merger and without
more, be converted at the Effective Time into and become 0.620 of a share of
Nextel Class A Common Stock, par value $0.001 per share ("Nextel Common
Shares"), as contemplated and further detailed by the provisions of Section 2.2
herein, and subject to adjustment only in accordance with Section 2.2 herein
(the "Exchange Ratio"). To the extent the conversion of any holder's
outstanding shares of AMS Common Stock would otherwise have resulted in the
issuance of a fractional Nextel Common Share, the holder thereof shall be
entitled to receive payment therefor in accordance with the provisions of
Section 2.10. Any such purchases of fractional interests are merely intended
to provide a mechanical rounding off of fractional shares and are not a
separately bargained for consideration. Notwithstanding any other provision of
this Article II, in no event will the Nextel Common Shares issued upon the
effectiveness of the Merger be issued in any circumstances other than in
conversion of outstanding shares of AMS Common Stock. Notwithstanding any
other provision of this Article II, if all AMS Equivalent Securities (as
defined below) that are outstanding and unexercised at the Effective Time were
exercised, converted or otherwise exchanged in accordance with their terms
immediately prior to the Effective Time into shares of AMS Common Stock, and
Nextel Common Shares were issued therefor upon the Effective Time in accordance
with this Section 2.1, then the maximum number of Nextel Common Shares that
could be issued in accordance with this Section 2.1 for all shares of AMS
Common Stock then issued and outstanding (other than any Excluded Shares) would
not exceed 4,200,000 Nextel Common Shares ("Maximum Nextel Shares"). For
purposes of this Agreement, "Excluded Shares" means those shares of AMS Common
Stock issued and outstanding and owned by Nextel on the date hereof and at the
Effective Time, as reflected and described on Schedule 2.1, and those shares of
AMS Common Stock that are issued or would be issuable upon exercise of the
Warrant granted to Nextel by AMS on or about April 7, 1993, as amended to the
date hereof (the "Original Warrant"). For purposes of this Agreement, "AMS
Equivalent Securities" means options, warrants, rights and other securities of
AMS (other than the Original Warrant) which, upon their exchange, exercise,
conversion and/or substitution (including related procedures) would result in
or require (whether on the occurrence of any event or contingency or otherwise)
the issuance of shares of AMS Common Stock.
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<PAGE> 12
2.2 Adjustments. (a) The Exchange Ratio is based on the
following information provided by AMS to Nextel: (i) on the date hereof, there
are 6,528,721 outstanding shares of AMS Common Stock; (ii) additionally, on the
date hereof, there are outstanding commitments to issue (A) up to 87,000 shares
of AMS Common Stock upon exercise of options now outstanding as reflected and
described on Schedule 3.6 and (B) up to 160,000 shares of AMS Common Stock upon
exercise of warrants now outstanding as reflected and described on Schedule
3.6; and (iii) notwithstanding the foregoing, at the Effective Time there shall
be issued and outstanding (on a fully diluted basis) no more than 6,775,721
shares of AMS Common Stock (the "Maximum AMS Common Equivalents") and, assuming
the Maximum AMS Common Equivalents were to be converted in the Merger into
Nextel Common Shares in accordance with Section 2.1, such conversion would
result in the issuance of no more than the Maximum Nextel Shares; provided,
that the information reflected in each of the foregoing clauses (i), (ii) and
(iii) is stated without taking into effect and does not include any of the
Excluded Shares.
(b) If the number of shares of AMS Common Stock
issued and outstanding (on a fully diluted basis) at the Effective Time (but
not including any of the Excluded Shares) exceeds the Maximum AMS Common
Equivalents, then Nextel may elect to proportionately decrease the Exchange
Ratio, rounding to the nearest one one-thousandth (.001) of a Nextel Common
Share, rounding upward to the next highest one one-thousandth (.001) of a
Nextel Common Share in the case of any .0005 of a Nextel Common Share (1.0004
Nextel Common Shares would accordingly be 1.000 Nextel Common Shares and 1.0005
Nextel Common Shares would be 1.001 Nextel Common Shares).
(c) In addition to the adjustments provided
pursuant to the foregoing Section 2.2(b), Nextel and AMS agree that, in the
event of any change in the authorized capital stock of AMS, or the declaration
or payment of any dividend or distribution by either AMS or Nextel to their
respective stockholders, or any split or reclassification in respect of the
outstanding stock of either of them, then appropriate adjustments shall be made
to the Exchange Ratio so as to reflect treatment designed to place each of
Nextel, AMS and the converting holders of shares of AMS Common Stock and AMS
Equivalent Securities in the same posture (except as to cash for fractional
shares) as if the Effective Time had occurred immediately prior to the
occurrence of the event giving rise to such adjustment.
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2.3 Assumption of Employee Stock Options. (a) Schedule
2.3 lists each employee stock option outstanding on the date of this Agreement,
whether or not fully exercisable (collectively, the "AMS Stock Options"), to
purchase AMS Common Stock heretofore granted outside of the AMS Stock Option
Plan or granted or assumed by AMS pursuant to the AMS Stock Option Plan as
amended and in effect on the date of this Agreement, a true, complete and
correct copy of which plan AMS hereby confirms has been delivered to Nextel
prior to the date hereof (the "AMS Option Plan"). Schedule 2.3 also sets forth
with respect to each AMS Stock Option the option exercise price, the number of
shares subject to the option, any related stock appreciation rights, the dates
of grant, vesting, exercisability and expiration of the option and whether the
option is an incentive stock option or a non-qualified stock option. All
rights under the AMS Stock Options shall be treated as provided in this Section
2.3 and, to the extent the terms of the AMS Option Plan and/or of any related
agreements are inconsistent with the treatment to be accorded to the AMS Stock
Options pursuant to this Section 2.3, then AMS shall use its best efforts to
cause the AMS Option Plan and/or any related agreements with affected
participants to be amended, and all required third party, governmental and
regulatory body consents or approvals to such amendments to be procured, such
that all such inconsistencies shall be eliminated by the Effective Time.
(b) Each AMS Stock Option outstanding at the
Effective Time shall be assumed at the Effective Time by Nextel and continue to
be an issued and outstanding option in accordance with the terms of the AMS
Option Plan and/or any related agreement, except that: (i) Nextel and the
Compensation Committee of its Board of Directors shall be substituted for AMS
and the Committee of the Board of Directors of AMS administering such AMS
Option Plan, (ii) from and after the Effective Time, each such AMS Stock Option
may be exercised only for Nextel Common Shares notwithstanding any contrary
provision of the AMS Option Plan or any related stock option agreements
executed in connection with the grant of such AMS Stock Option, (iii) each such
AMS Stock Option shall at the Effective Time become an option to purchase a
number of Nextel Common Shares equal to the product arrived at by multiplying
the Exchange Ratio by the number of shares of AMS Common Stock subject to such
option immediately prior to the Effective Time ("Converted Nextel Shares"), and
(iv) the exercise price per Converted Nextel Share at which each such AMS Stock
Option is exercisable shall be the amount (rounded
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<PAGE> 14
to the nearest whole cent) arrived at by dividing the exercise price per share
of AMS Common Stock at which such AMS Stock Option is exercisable immediately
prior to the Effective Time by the Exchange Ratio (the "Converted Per Share
Price"); provided, however, that, notwithstanding the foregoing, Nextel shall
not issue or pay for any fractional share otherwise issuable upon any exercise
by any holder of AMS Stock Options, as assumed and adjusted as aforesaid. In
addition, notwithstanding clauses (iii) and (iv) of the immediately preceding
sentence, each AMS Stock Option which is identified on Schedule 2.3 to be an
incentive stock option shall be adjusted as required by Section 424 of the
Code, and the regulations promulgated thereunder, so as not to constitute a
modification, extension or renewal of the option, within the meaning of Section
424(h) of the Code.
(c) If, at or prior to the Effective Time, the
terms of any stock option plan maintained by Nextel would permit Nextel and/or
the Compensation Committee of its Board of Directors to grant substitute
options for Nextel Common Shares in exchange for or in replacement of AMS Stock
Options, provided that such substitution is effected on terms providing
identical substantive treatment to the holders of AMS Stock Options as the
substantive treatment such holders are contemplated to receive pursuant to the
foregoing Sections 2.3(a) and 2.3(b), then Nextel at the Effective Time may
grant such substitute options in exchange for or in replacement of, instead of
assuming, the AMS Stock Options outstanding immediately prior to the Effective
Time.
(d) The Board of Directors of AMS and/or of the
Surviving Corporation, as appropriate, shall take such action as may be
required under the AMS Option Plan to effectuate the foregoing. Prior to the
Effective Time, Nextel shall reserve for issuance (and, if not previously
registered pursuant to the Securities Act of 1933, as amended (the "Securities
Act"), register) the number of shares of Nextel Common Shares necessary to
satisfy the obligations of Nextel and/or of the Surviving Corporation under
this Section 2.3. Prior to the Effective Time, AMS, and thereafter the
Surviving Corporation, as may be appropriate, shall take such actions as are
necessary to effect the provisions of this Section 2.3, and to preserve for the
holders of AMS Stock Options the benefits to be provided pursuant to this
Section 2.3. Notwithstanding anything in this Section 2.3(d), neither AMS nor
Nextel shall have any liability for failing to
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<PAGE> 15
take (or to cause to be taken) actions in respect of any employee stock option
plan or related agreement that would violate (in any material respect) the
terms thereof or would be prohibited by applicable law.
2.4 Exchange Agent. First Chicago Trust Company of New
York, or any other national bank or trust company designated by Nextel prior to
the Effective Time (and reasonably acceptable to AMS) shall act as agent of the
Surviving Corporation for purposes of, among other things, mailing and
receiving transmittal letters and distributing certificates for Nextel Common
Shares, and cash in lieu of fractional shares of Nextel Common Shares, to the
AMS stockholders (the "Exchange Agent"). Prior to the Effective Time, Nextel
and the Exchange Agent shall enter into an exchange agent agreement providing
for, among other things, the matters set forth in Sections 2.2 through 2.11.
2.5 Exchange of Certificates. After the Effective Time,
each holder of a certificate that immediately prior to the Effective Time
represented shares of AMS Common Stock (other than certificates representing
any Excluded Shares or shares held in the treasury of AMS) (a "Certificate")
shall, upon surrender of the same to the Exchange Agent, be entitled to receive
in exchange therefor certificates representing the number of whole Nextel
Common Shares into which such holder's shares of AMS Common Stock shall have
been converted by the Merger in accordance with Section 2.1. Pending such
surrender and exchange, each Certificate shall be deemed for all corporate
purposes, other than as set forth in Section 2.7, to evidence the number of
whole Nextel Common Shares into which such shares of AMS Common Stock shall
have been so converted by the Merger and the right to receive cash for any
fractional interest resulting therefrom.
2.6 Notice of Exchange. Promptly after the Effective
Time, the Surviving Corporation shall cause the Exchange Agent to mail and/or
make available to each record holder of a Certificate a notice and letter of
transmittal advising such holder of the effectiveness of the Merger and the
procedures to be used in effecting the surrender and exchange of the
Certificate and specifying that delivery shall be effected, and risk of loss
and title to the Certificate shall pass, only upon proper delivery of the
Certificate to the Exchange Agent, and such other matters as the Surviving
Corporation shall reasonably specify. Upon surrender to the Exchange Agent of
a Certificate, together with such letter of transmittal duly executed and
completed in accordance with the instructions thereon, and such other documents
as may be required by
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<PAGE> 16
such instructions or letter of transmittal, and subject to any withholding of
Taxes (as hereinafter defined), the Exchange Agent shall promptly deliver to
the person entitled thereto a certificate for the number of Nextel Common
Shares (together with cash in lieu of a fractional share of Nextel Common
Shares, if any), and the surrendered Certificate shall, by virtue of such
delivery, automatically be cancelled. The certificates representing Nextel
Common Shares to be issued in the Merger shall be properly issued and
countersigned and executed and authenticated, as appropriate.
2.7 Payment of Dividends. Unless and until any
Certificate shall be surrendered pursuant to Section 2.6, no dividend (cash or
stock) or other distribution payable to holders of record of Nextel Common
Shares as of any date subsequent to the Effective Time shall be paid to the
holder of a Certificate, but upon such surrender of a Certificate there shall
be paid to the record holder of the certificate for Nextel Common Shares issued
in exchange therefor the amount of dividends, if any, but without interest,
that have theretofore become payable subsequent to the Effective Time with
respect to the number of whole Nextel Common Shares represented by such
certificate issued upon such surrender and exchange.
2.8 Transfer. The stock transfer books of AMS shall be
closed at the Effective Time. If Nextel Common Shares are to be issued to a
person other than the person in whose name the Certificates are registered, it
shall be a condition of such issuance that the Certificates surrendered shall
be properly endorsed or otherwise in proper form for transfer and that the
person requesting such issuance shall pay all transfer and other Taxes required
by reason of the receipt by a person other than the registered holder of the
Certificates surrendered, or establish to the reasonable satisfaction of the
Surviving Corporation or the Exchange Agent that such Tax has been paid or is
not applicable. Except as provided in this Section 2.8 or as expressly
directed or consented to by Nextel or by the Surviving Corporation, no transfer
or assignment of any shares of or rights in AMS capital stock (including,
without limitation, AMS Equivalent Securities) shall take place after the
Effective Time.
2.9 Distribution with Respect to Unexchanged
Certificates. At any time following one year after the Effective Time, the
Surviving Corporation shall be entitled to require the Exchange Agent to
deliver to the Surviving Corporation any Nextel Common Shares which had been
made available to the Exchange Agent by or on behalf of Nextel, Newco or the
Surviving Corporation and which have not been
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disbursed to holders of Certificates, and thereafter such holders shall be
entitled to look to the Surviving Corporation (subject to abandoned property,
escheat or other similar laws) only as general creditors thereof with respect
to the Nextel Common Shares payable upon due surrender of their Certificates.
Notwithstanding the foregoing, the Surviving Corporation shall not be liable to
a holder of Certificates for amounts delivered to a public official pursuant to
any applicable abandoned property, escheat or similar laws. The Surviving
Corporation shall pay all charges and expenses, including those of the Exchange
Agent, in connection with the exchange of shares.
2.10 Fractional Shares. Notwithstanding any other
provision of this Agreement, no fractional Nextel Common Share or certificates
or scrip therefor shall be issued as a result of the conversion of issued and
outstanding capital stock of AMS into Nextel Common Shares, but in lieu of each
fractional interest, Nextel may either (i) in its sole and absolute discretion,
deliver a number of whole Nextel Common Shares rounding up to the nearest whole
share to eliminate such fraction or (ii) make a payment in cash therefor,
without interest, at a pro rata price based on the closing price per one whole
Nextel Common Share on the last day of sale on the Nasdaq National Market
before the Effective Time (the "Closing Per Share Value"). Arrangements shall
be made with the Exchange Agent pursuant to which holders of Certificates
entitled to fractional interests shall receive such rounded- up whole shares or
such cash payments, as Nextel may elect. If Nextel elects to settle such
fractional share interests by cash payments, Nextel shall provide the Exchange
Agent with sufficient cash to make such payments, and, thereafter, Nextel shall
cause the Exchange Agent to make such payments to such holders in cash, without
interest, on the surrender of their Certificates.
2.11 Rule 145 Legending. All Rule 145 Affiliates shall
receive certificates for Nextel Common Shares which shall bear restrictive
legending of the type contemplated in Annex A, whether or not they are
signatories to a written agreement in substantially the form of Annex B hereto
which is delivered to Nextel at the Closing.
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<PAGE> 18
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF AMS
In order to induce Nextel and Newco to enter into this
Agreement, AMS represents and warrants to Nextel and Newco (which
representations and warranties shall not survive the Merger) that:
3.1 Corporate Status, etc. (a) AMS and each of its
Subsidiaries is a corporation duly incorporated, validly existing and in good
standing under the laws of its respective jurisdiction of incorporation.
(b) Except as set forth in the attached
Disclosure Schedule under a reference to this Section, AMS and/or each of its
Subsidiaries, as the case may be, is duly qualified and in good standing to
conduct business as a foreign corporation in all jurisdictions where it
currently conducts business activities or owns or leases properties or assets,
in any of the foregoing cases, on a more than incidental or nominal basis in
which its ownership of property or the character of its activities is such as
to require it to be so licensed or qualified, except where failure to be so
licensed or qualified would not have a Material Adverse Effect on AMS and its
Subsidiaries, taken as a whole, and would not materially adversely affect AMS'
ability to perform its obligations under this Agreement.
(c) Except as expressly set forth in or as
specifically contemplated by this Agreement or the Disclosure Schedule attached
hereto under a reference to this Section, neither AMS nor any of its
Subsidiaries (i) owns, directly or indirectly, any of the outstanding capital
stock or other securities having voting rights or securities convertible into
capital stock of any Person (except the capital stock of any of the
Subsidiaries of the AMS) or other securities having voting rights of any
Person; (ii) has any commitments or obligations, either firm or conditional, to
issue, sell, hypothecate, pledge or otherwise encumber or dispose of any shares
of capital stock of AMS or of any of the Subsidiaries of AMS to any party other
than AMS or a wholly-owned Subsidiary of AMS; (iii) has any commitments or
obligations, either firm or conditional, to redeem, repurchase or otherwise
acquire any outstanding shares of capital stock or other securities of AMS or
shares of capital stock or other securities of any other Person; or (iv) is a
party to (or, other than the voting agreements relating to AMS expressly
provided for herein, committed to enter into) any voting trust or stockholder
agreements with any holders of any shares of capital stock of AMS or any of its
Subsidiaries. Except as set forth in the Disclosure Schedule attached hereto
with a reference to this
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<PAGE> 19
Section and other than with respect to its Subsidiaries, AMS does not own,
directly or indirectly, any partnership, equity, profit, participation or
similar ownership interest in any corporations, partnerships, joint ventures,
trusts, unincorporated organizations, associations or similar entities.
(d) AMS has the corporate power and authority
(directly or indirectly through one or more of its Subsidiaries) to own or
lease (as appropriate) and operate its (and such Subsidiaries') properties and
to conduct the business in the manner in which it (and any of such
Subsidiaries) is currently engaged.
(e) Set forth in the Disclosure Schedule under a
reference to this Section is a complete list of the direct and indirect
Subsidiaries of AMS, which list sets forth the name of each of the
Subsidiaries, each assumed, fictitious or similar name by or under which such
Subsidiary conducts business, its place of organization and the ownership
interest held therein by AMS. Except as set forth in such Disclosure Schedule,
AMS owns, directly or indirectly, free and clear of all Liens and has the
unrestricted power to dispose of (subject to the requirements of state and
Federal securities laws), all of the outstanding capital stock of each of its
Subsidiaries and, except as set forth in such Disclosure Schedule, since the
date of acquisition or formation, as appropriate, by AMS, the assets,
liabilities and results of operations of the Subsidiaries of AMS have been
included in the consolidated financial statements of AMS referred to in Section
3.5 of this Agreement in the manner and to the extent required by GAAP. All of
such shares of stock of the Subsidiaries so owned by AMS are duly authorized,
validly issued, fully paid and nonassessable.
(f) Except as disclosed in the 1994 10-K (as
hereinafter defined) or in the Disclosure Schedule under a reference to this
Section, AMS and its Subsidiaries have no debt for borrowed money including
capital leases which, pursuant to its terms and giving effect to its normal
schedule for payment or amortization, will come due for payment after December
31, 1994.
3.2 Power and Authority. (a) Except for any requirement
to obtain stockholder approval of the Merger, which shall be sought as
contemplated in Section 5.3 herein, AMS has the corporate power and authority
to execute and deliver this Agreement and to perform its obligations and the
transactions contemplated hereby and has taken all necessary corporate action
to authorize the execution, delivery and performance of this Agreement and the
transactions contemplated hereby and thereby.
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<PAGE> 20
(b) This Agreement has been duly authorized,
executed and delivered by AMS and constitutes a legal, valid and binding
obligation of AMS, enforceable against AMS in accordance with its terms, except
to the extent that such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally or by general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
3.3 Consents/Approvals; Enforceability. (a) No consents
of, filings with, authorizations or other actions of, any Governmental
Authority are required to be received, made or filed by, or taken on behalf of,
AMS for AMS' execution, delivery and performance of this Agreement, other than
(i) compliance with any applicable requirements of the HSR Act, (ii) compliance
with any applicable requirements of the Securities Act and the Exchange Act and
any applicable state securities or "blue sky" laws or (iii) compliance with any
applicable requirements of the Federal Communications Commission (the "FCC"),
except for any such consents, filings, authorizations or other actions the
failure to receive, make or take would not (1) have a Material Adverse Effect
on AMS and its Subsidiaries, taken as a whole, or assuming and giving effect to
the consummation of the Merger, on the Surviving Corporation and its
Subsidiaries, taken as a whole, or (2) adversely affect the consummation of the
transactions contemplated hereby or (3) materially adversely affect AMS'
ability to perform its obligations under this Agreement.
(b) Except as set forth in the Disclosure
Schedule under a reference to this Section, no consent, approval, waiver or
other action by any Person (other than any Governmental Authority, referred to
in Section 3.3(a) above) under any contract, agreement, indenture, lease or
other similar document to which AMS or any of its Subsidiaries is a party or by
which any of them or any of their respective properties is bound is required
for the execution, delivery and performance by AMS of this Agreement or the
consummation of the transactions contemplated hereby or thereby, except for any
such consents, approvals, waivers or other actions the failure to receive or
take would not (1) have a Material Adverse Effect on AMS and its Subsidiaries,
taken as a whole, or assuming and giving effect to the consummation of the
Merger, on the Surviving Corporation and its Subsidiaries, taken as a whole, or
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<PAGE> 21
(2) adversely affect the consummation of the transactions contemplated hereby
or (3) materially adversely affect AMS' ability to perform its obligations
under this Agreement.
3.4 Compliance with Laws. Except as set forth in the
Disclosure Schedule under a reference to this Section:
(a) each of AMS and its Subsidiaries is not
currently in violation (nor are any of them currently liable or otherwise
currently responsible with respect to prior violations) of any statute, law or
regulation applicable to any of its or their presently or formerly owned
properties or to the conduct of its or their current or past businesses, nor do
(i) any of the business practices followed, services provided or products made,
modified or installed by any of them (in the ordinary course of their
businesses or otherwise), or (ii) to the knowledge of AMS, (A) any of the SMR
Licenses (as such term is defined in Section 3.15) or SMR Systems (as such term
is defined in Section 3.15) that are subject to a Management Agreement (as such
term is defined in Section 3.15) or (B) any of the parties who, pursuant to
Third-Party Management Agreements (as such term is defined in Section 3.15),
manage or perform other services with respect to SMR Licenses held by AMS or
one of its Subsidiaries (such parties collectively, "Third-Party Managers"),
violate any statute, law or regulation applicable thereto, which violations
are, individually or in the aggregate, reasonably likely to have a Material
Adverse Effect on AMS and its Subsidiaries, taken as a whole, or to materially
adversely affect AMS' ability to perform its obligations under this Agreement,
or the costs or consequences of correction or remediation of which, to the
extent required to comply with applicable Requirements of Law, individually or
in the aggregate, are reasonably likely to have a Material Adverse Effect on
AMS and its Subsidiaries, taken as a whole, or to materially adversely affect
AMS' ability to perform its obligations under this Agreement;
(b) none of (i) the business of AMS or any of its
Subsidiaries, (ii) the business practices followed, services or products
performed, sold or otherwise made available by AMS or any of its Subsidiaries
or (iii) to AMS' knowledge, the business practices, services or products
followed, performed, sold or otherwise made available by any of the Third-Party
Managers, violates any applicable law or regulation relating to air, water or
noise pollution or employee health and safety or the production, storage,
labeling, transportation or disposition of solid waste or hazardous or toxic
substances, which violations,
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<PAGE> 22
individually or in the aggregate, are reasonably likely to have a Material
Adverse Effect on AMS and its Subsidiaries, taken as a whole, or to materially
adversely affect AMS' ability to perform its obligations under this Agreement,
or the costs or consequences of correction or remediation of which (to the
extent required to comply with applicable Requirements of Law), individually or
in the aggregate, are reasonably likely to have a Material Adverse Effect on
AMS and its Subsidiaries, taken as a whole or to materially adversely affect
AMS' ability to perform its obligations under this Agreement;
(c) AMS and its Subsidiaries and, to AMS'
knowledge, each person holding any SMR Licenses or SMR Systems that are subject
to a Management Agreement and each of the Third-Party Managers, have timely
obtained all licenses and permits and timely filed all reports required to be
filed under any such applicable laws or regulations except for any such
license, permit or report the failure to obtain or make are not reasonably
likely to have a Material Adverse Effect on AMS and its Subsidiaries taken as a
whole; and
(d) AMS and its Subsidiaries have not, and, to
AMS' knowledge, no other person has, (i) stored any chemical substances,
including any "Hazardous Substances," "Pollutants" or "Contaminants" (as such
terms are defined in the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended ("CERCLA")) on or beneath any of the real
properties owned or leased by AMS or any of its Subsidiaries, (ii) received any
notice from any Governmental Authority advising that any of AMS or any of its
Subsidiaries are potentially responsible for response costs with respect to a
release or threatened release of Hazardous Substances, Pollutants or
Contaminants, (iii) buried, dumped or otherwise disposed of any chemical
substances, including any Hazardous Substances, Pollutants or Contaminants on
or beneath any of the real properties owned or leased by AMS or any of its
Subsidiaries or (solely as to AMS or any of its Subsidiaries and not with
respect to any other person) on or beneath any other real property or (iv)
received written notice of any violation of any environmental, zoning or other
land use ordinance, law or regulation relating to the operation of the business
of AMS or any of its Subsidiaries, or to any of the processes followed,
services provided or products made, modified or installed (in the ordinary
course of its or their business or otherwise), including, but not limited to,
the Toxic Substances Control Act of 1976, as amended, the Resource Conservation
Recovery Act of 1976, as amended, the Clean
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<PAGE> 23
Air Act, as amended, the Federal Water Pollution Control Act, as amended,
CERCLA or the Occupational Safety and Health Act of 1976, as amended, nor are
any of AMS or any of its Subsidiaries aware of any such violation, other than,
in the case of the foregoing clauses (i) through (iv), for such matters,
individually or in the aggregate, as are not reasonably likely to have a
Material Adverse Effect on AMS and its Subsidiaries, taken as a whole, or to
materially adversely affect AMS' ability to perform its obligations under this
Agreement.
3.5 Financial Statements. AMS has furnished to Nextel
(or an authorized representative of Nextel) (a) the audited financial
statements, including the notes thereto, contained in AMS' Annual Report on
Form 10-K for the fiscal year ended June 30, 1994, in final form as filed with
the SEC (such Form 10-K the "1994 10-K") and (b) an unaudited balance sheet,
statement of operations and statement of cash flows as of and for the six
months ended December 31, 1994 (together with the audited financial statements,
the "AMS Financial Statements"). Such AMS Financial Statements (together with
the notes thereto) present fairly, in all material respects, the financial
condition and results of operations of AMS and its Subsidiaries as of the dates
and for the periods indicated (subject, in the case of the unaudited financial
statements, to normal year end audit adjustments none of which, alone or in the
aggregate, would have a Material Adverse Effect on AMS and its Subsidiaries
taken as a whole), are consistent in all material respects with the books and
records of AMS and its Subsidiaries and have been prepared in accordance with
GAAP (applied consistently throughout the periods involved except as otherwise
stated in the notes thereto). The balance sheets (and, in the case of audited
balance sheets, the notes thereto) included in the AMS Financial Statements
disclose or reflect all material liabilities in existence on the relevant date
and required by GAAP to be disclosed or reflected therein. Except as disclosed
or reflected in the AMS Financial Statements or as disclosed in the Disclosure
Schedule under a reference to this Section, there are no (i) material debts,
obligations or liabilities of any nature, including Contingent Obligations, of
AMS and its Subsidiaries except for those debts, obligations and liabilities of
AMS and its Subsidiaries that may have been incurred after December 31, 1994 in
the ordinary course of business provided that such debts, obligations and
liabilities are usual in nature and amount and were incurred consistent with
past sound business practice, both individually and in the aggregate, (ii) site
leases or (iii) other leases or commitments that will not be
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<PAGE> 24
fully performed and satisfied within one year from the date hereof, which
leases or commitments individually involve payments to be made, or goods or
services to be provided or purchased having a fair market value in excess of
$25,000 individually, to which AMS or any of its Subsidiaries is a party or by
which any of them or any of their respective properties is bound, other than
those made in the ordinary course of business.
3.6 Capitalization. (a) As of the date hereof, the
authorized and outstanding shares of capital stock of AMS (exclusive of shares
held in AMS' treasury) is as shown in the Disclosure Schedule under a reference
to this Section. Except as specifically set forth in such Disclosure Schedule
under a reference to this Section, all outstanding shares of capital stock of
AMS have been duly authorized and validly issued and are fully paid and
non-assessable, and have been originally issued (or re-issued, as the case may
be) by AMS in transactions that complied, in all material respects, with the
Requirements of Law in effect at the relevant times of the issuances and
applicable to AMS in the context of such transactions. Except as set forth in
the Disclosure Schedule under a reference to this Section, there are no
outstanding (nor is there any obligation of AMS to issue any) AMS Equivalent
Securities. There are no outstanding obligations of AMS or any Subsidiary of
AMS to repurchase, redeem or otherwise acquire any AMS Equivalent Securities,
other than those specifically identified as such and described and listed in
the Disclosure Schedule under a reference to this Section.
(b) Except as specifically contemplated by this
Agreement, all rights, preferences, restrictions, and limitations applicable to
the capital stock of AMS are set forth in the Certificate of Incorporation as
certified by the Secretary of State of Delaware on July 27, 1993. A true,
correct and complete copy of each of the Certificate of Incorporation and the
By- Laws of AMS has been delivered to Nextel (or an authorized representative
of Nextel) prior to the execution hereof. There are no amendments pending or
proposed to either such Certificate of Incorporation or such By-Laws except as
expressly contemplated and provided herein.
3.7 No Pending or Threatened Actions. Except as
disclosed in the 1994 10-K and the Purported Class Actions (as described in the
Disclosure Schedule under a reference to this Section) and such other matters
as are set forth in the Disclosure Schedule under a reference to this Section,
there are no actions, suits, proceedings, claims or investigations
(collectively, "Claims") formally instituted and pending or,
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<PAGE> 25
to the knowledge of AMS, threatened against AMS or any of its Subsidiaries or
that specifically identify AMS or any of its Subsidiaries or any of their
properties or assets (other than Claims affecting generally any group of
similarly situated third parties such as members of the SMR industry), or
before or by any Governmental Authority, or any arbitration panel or
alternative dispute resolution body (collectively, "Forums"), which are
reasonably likely, individually or in the aggregate, to have a Material Adverse
Effect on AMS and its Subsidiaries, taken as a whole, or to materially
adversely affect AMS' ability to perform its obligations under this Agreement.
Except as set forth in such Disclosure Schedule under a reference to this
Section, neither AMS nor any of its Subsidiaries is subject to or in default
under any order, writ, injunction or decree (collectively, "Order") of any
Forum which would, individually or in the aggregate, be reasonably likely to
have a Material Adverse Effect on AMS and its Subsidiaries, taken as a whole,
or to materially adversely affect AMS' ability to perform its obligations under
this Agreement.
3.8 No Defaults. Except as set forth in the Disclosure
Schedule under a reference to this Section, (i) neither AMS nor any of its
Subsidiaries is in default under or with respect to any contractual obligation
to which AMS or any of its Subsidiaries is a party or by which any of them or
their respective properties is bound, which default would have a Material
Adverse Effect on AMS and its Subsidiaries taken as a whole or would materially
adversely affect AMS' ability to perform its obligations under this Agreement
and (ii) to AMS' knowledge, no other party to any contract to which AMS or any
of its Subsidiaries is a party or by which any of them or their respective
properties is bound is in default of such contract in any material respect or
has indicated an intention to terminate any such contract, excluding any of the
foregoing that, individually or in the aggregate, would not have a Material
Adverse Effect on AMS and its Subsidiaries, taken as a whole.
3.9 No Material Adverse Change. Except as set forth in
the Disclosure Schedule under a reference to this Section, since December 31,
1994, there has not been any Material Adverse Change to AMS and its
Subsidiaries, taken as a whole.
3.10 Title to Properties; Encumbrances. Except as set
forth in the Disclosure Schedule under a reference to this Section, AMS and
each of its Subsidiaries has good and valid title to all its material
properties and assets, real and personal, tangible and intangible (including,
without limitation, all the
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<PAGE> 26
properties and assets reflected in the consolidated balance sheet of AMS as of
June 30, 1994, contained in the 1994 10-K except for such properties and assets
which have been sold or otherwise disposed of in the ordinary course of
business or with the consent of Nextel since the date thereof) as is requisite
to the conduct of their respective businesses in substantially the same manner
as presently conducted and there is no title defect in any of such properties
or assets which is reasonably likely to have at any time a Material Adverse
Effect on AMS and its Subsidiaries, taken as a whole. Such properties and
assets of AMS and its Subsidiaries are subject to no Liens, except for (i)
Liens reflected on or disclosed in such consolidated balance sheet of AMS
(including the notes thereto), (ii) Liens set forth on the Disclosure Schedule
under a reference to this Section, (iii) Liens consisting of zoning or planning
restrictions, easements, permits and other restrictions or limitations on the
use of real property or irregularities in or exceptions to title thereto which
individually or in the aggregate do not materially detract from the value of,
or materially impair the use of, such property by AMS or its Subsidiaries in
the operation of its or their respective businesses as currently conducted,
(iv) Permitted Liens and (v) Liens incurred in the ordinary course of business
since June 30, 1994 securing the payment of indebtedness or other amounts not
in excess of $25,000 individually or $100,000 in the aggregate (with respect to
related items).
3.11 Intellectual Property. Except as set forth in the
Disclosure Schedule under a reference to this Section, (a) AMS and its
Subsidiaries each own or possess adequate licenses or other valid rights to use
all patents, patent rights, trademarks, trademark rights, trade names, trade
name rights, copyright registrations, know-how and other proprietary
information ("Rights") used in the conduct of their respective businesses as
presently being conducted, except for such licenses or rights the failure to
own or possess by AMS and its Subsidiaries is not likely to have a Material
Adverse Effect on AMS and its Subsidiaries taken as a whole; (b) the validity
of such items and the title thereto of AMS and its Subsidiaries have not been
disputed in any litigation to which AMS or any of its Subsidiaries is a party
nor, to the knowledge of AMS, is any such litigation threatened; and (c) the
conduct of the businesses of AMS and its Subsidiaries as now conducted does not
conflict with Rights of others in any way that is reasonably likely to have a
Material Adverse Effect on AMS and its Subsidiaries taken as a whole. No
material infringement of any Right owned by or licensed by or to AMS or its
Subsidiaries is known to AMS.
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3.12 Brokers. AMS has no arrangements with any broker,
finder or investment banker which would entitle any such Person to a brokerage,
finder's or other fee or commission in connection with the transactions
contemplated by this Agreement, except in connection with the retention of an
investment banking firm as contemplated by Section 9.3(g) hereof. A copy of
the engagement letter between AMS and such financial advisor, and all related
agreements or instruments, has been provided to Nextel prior to the execution
and delivery of this Agreement.
3.13 Taxes. Except as set forth in the Disclosure Schedule
under a reference to this Section, AMS and its Subsidiaries, individually or as
successors to any combined or merged entity, have timely and correctly filed or
caused to be filed all federal, foreign, state, county and local tax returns,
reports and statements (the "Tax Returns") heretofore required to be filed by
AMS and its Subsidiaries other than any Tax Returns as to which (i) no
Governmental Authority has notified AMS or any of its Subsidiaries of any
obligation or requirement to file and (ii) the failure to file would not
constitute or result in a Material Adverse Effect on AMS and its Subsidiaries,
taken as a whole; provided, that AMS (or its appropriate Subsidiaries) shall
file or cause to be filed all Tax Returns not filed on a timely basis (if any)
promptly after becoming aware of any obligation or requirement to file such Tax
Returns. All net income, gross income, gross receipts, sales, use, ad valorem,
transfer, franchise, profits, license, withholding, payroll, employment,
excise, estimated, severance, stamp, occupation, property or other taxes,
customs, duties, fees, assessments or charges of any kind whatsoever, together
with any interest and any penalties, additions to tax or additional amounts
imposed by any domestic or foreign taxing authority (collectively, the "Taxes")
due and payable on or before the Closing in respect of such Tax Returns have
been or will be duly and timely paid in full by the Closing. There is no basis
for any adjustment to any of the Tax Returns referred to above that would
result in any material increase in the amount of Taxes owed, with respect to
the relevant period covered by the relevant Tax Return, by AMS and its
Subsidiaries (except for any such adjustment and resulting increase in Taxes
that is covered by sufficient reserves with respect to the relevant period).
Adequate provision (i) has been made with respect to interim periods for which
AMS has prepared unaudited interim balance sheets ended prior to the date
hereof or (ii) will be made, with respect to future comparable periods, in each
of AMS' unaudited interim balance sheets for periods ending prior to the
Closing, for the payment of all unpaid
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Taxes of AMS and its Subsidiaries that have accrued with respect to the period
ending on or prior to the date of the applicable unaudited interim balance
sheet. Except as set forth in the Disclosure Schedule under a reference to
this Section, (a) to AMS' knowledge, no Tax audits or disputes exist between
AMS or its Subsidiaries and any Governmental Authority, and (b) AMS and its
Subsidiaries have not agreed to any extension of time for the assessment or
collection of Taxes by any Governmental Authority.
3.14 Materially Correct. Reference is hereby made to (i) the
SEC Filings furnished by AMS to Nextel pursuant to or in connection with this
Agreement, whether furnished prior to, at or subsequent to the date hereof,
(ii) this Agreement, including the Schedules hereto, and (iii) the information
contained in each Officers' Certificate and documents furnished by AMS at the
Closing (all such written information, taken as a whole, the "AMS Disclosure
Information"). The AMS Disclosure Information so received on or prior to the
date hereof by Nextel, (A) as to the SEC Filings, as of their respective dates
did not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make any
statement of material fact contained therein, in the light of the circumstances
under which it was made, not misleading and (B) as to AMS Disclosure
Information of the types described in either of the foregoing clauses (ii) or
(iii), is and at the closing will be true and correct in all material respects.
The foregoing representations made in the immediately preceding sentence also
shall be deemed made anew by AMS to Nextel immediately prior to the Closing,
but with reference to the AMS Disclosure Information so received prior to the
Closing by Nextel. As used in this Section 3.14, "material" means material to
the financial condition, results of operations, prospects, business, assets or
properties of AMS and its Subsidiaries, taken as a whole.
3.15 Regulatory Matters. (a) Definitions. For purposes of
this Section 3.15, the following terms shall have the indicated meanings:
"FCC License" shall mean any paging, mobile telephone,
specialized mobile radio or other license, permit, consent, certificate of
compliance, franchise, approval or authorization granted or issued by the FCC,
including, without limitation, any of the foregoing authorizing the
acquisition, construction or operation of an SMR System (as defined below),
radio paging system or other radio communications system.
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"Management Agreement" shall mean (i) any management agreement
pursuant to which AMS or one of its Subsidiaries is managing SMR Licenses held
by another Person or (ii) any other agreement pursuant to which AMS or one of
its Subsidiaries is providing loading or other services with respect to SMR
Licenses held by another Person in exchange for either the right to receive a
portion of the revenues derived from such SMR Licenses in excess of 25% of the
aggregate revenues derived from such SMR Licenses, or the right to purchase
such SMR Licenses.
"SMR License" shall mean an FCC License authorizing the
construction, ownership and operation of a specialized mobile radio system in
the 800 or 900 MHz band issued pursuant to 47 CFR Part 90 of the rules and
regulations of the FCC.
"SMR System" shall mean a specialized mobile radio system
licensed under 47 CFR Part 90 of the rules and regulations of the FCC.
"SMR Units" shall mean the number of billed mobile and control
stations (within the meaning of 47 CFR Part 90 of the rules and regulations of
the FCC) subscribing to SMR Systems licensed to or managed by AMS and its
Subsidiaries excluding, however, any such units which are subject to a
Third-Party Management Agreement if the respective third party has a right to
purchase the SMR Licenses which are subject to such Third-Party Management
Agreement.
"Third-Party Management Agreement" shall mean (i) any
management agreement pursuant to which a Person (other than AMS or one of its
Subsidiaries) is managing SMR Licenses held by AMS or one of its Subsidiaries
or (ii) any other agreement pursuant to which a Person (other than AMS or one
of its Subsidiaries) is providing loading or other services with respect to SMR
Licenses held by AMS or one of its Subsidiaries in exchange for the right to
receive a portion of the revenues derived from such SMR Licenses in excess of
25% of the aggregate revenues derived from such SMR Licenses, or the right to
purchase such SMR Licenses.
(b) License Information. The Disclosure Schedule
under a reference to this Section sets forth a true and complete list (as of
the date hereof), of the following information for each SMR License and other
FCC License issued to or managed by AMS or any of its Subsidiaries:
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(i) for all FCC Licenses (including all SMR
Licenses), the name of the licensee, the call sign, the transmitter
location (by site coordinates and city), the type of service ( e.g.,
paging, SMR, etc.), the frequency or frequencies authorized and the
license renewal date;
(ii) in the case of SMR Licenses, the number of
channels authorized, whether the SMR License is for a conventional or
trunked SMR System, whether the SMR License is managed by AMS or any
of its Subsidiaries pursuant to a Management Agreement or by any other
Persons pursuant to a Third-Party Management Agreement and (separately
stated by affected SMR License) for each SMR License of AMS and its
Subsidiaries as to which the applicable loading requirements (if any)
are not met, the applicable loading date;
(iii) each holder of any such FCC License that is
neither wholly owned by AMS nor owned entirely by unaffiliated Persons
and managed by AMS; and
(iv) for all FCC Licenses (including SMR
Licenses), whether such FCC Licenses are subject to rights of first
refusal, options and other such rights or obligations in existence on
the date hereof, including, without limitation, entitlement to acquire
additional ownership interests, which may affect the ownership
interests of AMS or any of its Subsidiaries.
(c) Condition of Systems. All of the material
properties and equipment employed in the SMR Systems of each of AMS and each of
its Subsidiaries (including, without limitation, SMR Systems that include SMR
Licenses managed by AMS or any of its Subsidiaries pursuant to a Management
Agreement) are, and, to the knowledge of AMS, all such properties and equipment
to be acquired or added by AMS or its Subsidiaries in connection with any
contemplated SMR System expansion or construction, in either case prior to the
Closing, will be, in good repair, working order and condition and are and will
be in material compliance with all standards or rules imposed by any
governmental agency or authority (including, without limitation, the FCC and
(if applicable) any public utilities commission or other state or local
governments or instrumentalities) or as imposed under any agreements with
customers. Except as set forth in the Disclosure Schedule under a reference to
this Section, all SMR Systems of AMS and each of its Subsidiaries (including,
without limitation, SMR Systems that include SMR Licenses managed by AMS
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or any of its Subsidiaries pursuant to a Management Agreement) are constructed
as required to comply in all material respects with applicable FCC rules,
regulations and policies.
(d) Fees; License Compliance. Each of AMS and
each of its Subsidiaries has paid all material franchise, license or other fees
and charges which have become due and payable in respect of its business and
has made appropriate provision as is required by GAAP for any such fees and
charges which have accrued. Except as set forth on the Disclosure Schedule
under a reference to this Section, each of AMS and its Subsidiaries has duly
secured all necessary and material permits, licenses, consents and
authorizations from, and has filed all required and material registrations,
applications, reports and other documents with, the FCC. Except as
specifically indicated thereon, AMS and its Subsidiaries hold the FCC Licenses
specified on the Disclosure Schedule under a reference to this Section and all
such FCC Licenses are valid and in full force and effect without conditions
except for such conditions as are generally applicable to holders of FCC
Licenses. Except as set forth in the Disclosure Schedule under a reference to
this Section or Section 3.15(b)(ii), all loading requirements (if any) with
respect to any SMR Licenses listed on such Disclosure Schedule have been met.
Except as set forth in the Disclosure Schedule under a reference to this
Section, (i) to the knowledge of AMS, no event has occurred and is continuing
which is reasonably likely to result in the revocation, termination or adverse
modification of any FCC License listed on such Disclosure Schedule and (ii) AMS
has no reason to believe and no knowledge that the SMR Licenses specified on
such Disclosure Schedule will not be renewed in the ordinary course. Except as
set forth in the Disclosure Schedule under a reference to this Section, the
current ownership and operation by AMS and its Subsidiaries of such SMR Systems
(including, without limitation, SMR Systems that include SMR Licenses managed
by AMS or any of its Subsidiaries pursuant to a Management Agreement), radio
paging and other radio communications systems comply in all material respects
with the Communications Act of 1934, as amended, and all rules, regulations and
policies of the FCC except, in the case of those SMR Systems that include SMR
Licenses managed by AMS or any of its Subsidiaries pursuant to a Management
Agreement, where the failure to so comply will not result in a Material Adverse
Effect on AMS and its Subsidiaries, taken as a whole.
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(e) Management Agreements. The Disclosure
Schedule sets forth, under a reference to this Section, a complete and correct
list of all Management Agreements and Third-Party Management Agreements to
which AMS or any of its Subsidiaries is a party and such list correctly
identifies the respective manager under each such agreement and the respective
holder of the SMR Licenses which are the subject of such agreements, the
transmitter locations (by site coordinates and city), and number of channels
covered by such SMR Licenses. With reference to any such Management Agreement
or Third Party Management Agreement that has been entered into or modified in
any material aspect since August 25, 1993, such list also correctly sets forth
the term of such agreement, any options or calls (and the respective option or
call prices) or rights of first refusal in favor of any party to such agreement
to purchase or sell any interest in such SMR Licenses and the respective fees
or revenues payable or receivable under any such agreement. To the best
knowledge of AMS, the terms of all such Third-Party Management Agreements and
the operation of each SMR System pursuant thereto comply with the
Communications Act of 1934, as amended, and all rules, regulations and policies
of the FCC except where the failure to so comply will not result in a Material
Adverse Effect on AMS and its Subsidiaries, taken as a whole. AMS has made
available to Nextel or its representatives for review true, correct and
complete copies of all such Management Agreements and Third-Party Management
Agreements, and all pending or proposed amendments, supplements or
modifications thereto.
(f) Wide-Area System Application. AMS has
furnished to Nextel a true and correct copy of AMS' Request for Rule Waiver for
a Wide-Area SMR System and associated applications, as filed with the FCC, and
all material supplemental or related materials filed in connection therewith by
or on behalf of AMS and/or any of its Subsidiaries, and any written
communication issued by the FCC or any FCC staff member of which AMS has
knowledge in respect to, or otherwise in connection with, any of the foregoing.
3.16 Proxy Statement/Prospectus. None of the information
supplied or to be supplied by AMS for inclusion or incorporation by reference
in the Proxy Statement/Prospectus will, at the time of the mailing of the Proxy
Statement/Prospectus, at the time of the Special Meeting or at the Effective
Time, contain any untrue statement of a material fact or omit to state any
material fact required to be stated
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therein or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading. To the extent
information is supplied or is to be supplied by AMS for inclusion or
incorporation by reference therein, the Proxy Statement/Prospectus will comply
as to form in all material respects with the requirements of the Securities Act
and the Exchange Act and the respective rules and regulations adopted
thereunder.
3.17 Non-Contravention. Subject to receipt of the requisite
vote of stockholders of AMS on the Merger and the submission of all filings
with, and receipt of all consents, approvals and waivers from, any Governmental
Authority referred to in Section 3.3(a) and except as set forth in the
Disclosure Schedule under a reference to this Section, none of the execution
and delivery by AMS of this Agreement, the consummation of the transactions
contemplated hereby nor the compliance by AMS with the terms and provisions
hereof, results or will result in the creation or imposition of any Lien on the
properties or assets of AMS or any of its Subsidiaries, violates or will
violate any Requirement of Law applicable to AMS or any of its Subsidiaries,
conflicts with or will conflict with or results or will result in any breach of
any term, condition or provision of, or constitutes or will constitute (with
due notice or lapse of time or both) a default under, or pursuant to the terms
of, any mortgage, deed of trust or other agreement or instrument to which AMS
or any of its Subsidiaries is a party or by which any of them or any of their
respective properties is bound (except for any such violations, conflicts,
breaches or defaults that could not reasonably be expected to have a Material
Adverse Effect on AMS and its Subsidiaries, taken as a whole, and which will
not materially adversely affect AMS' ability to perform its obligations under
this Agreement) or the Certificate of Incorporation or by-laws of AMS. All
issued and outstanding shares of AMS Common Stock are (i) duly authorized,
validly issued, fully paid and non-assessable, (ii) free and clear of all Liens
created or imposed by AMS, and (iii) not subject to any voting or trust
agreement, proxy, buy-sell agreement, preemptive right or similar restriction
created or imposed by AMS.
3.18 Third-Party Investment Rights. Since August 25, 1993,
AMS has not given, nor entered into any agreement or legally binding commitment
to give, to any Person any right to invest in or otherwise acquire any capital
stock or other securities of AMS, other than (i) option grants which are
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disclosed and included as part of the AMS Equivalent Securities referenced in
Section 3.6 hereof and (ii) to Nextel.
3.19 Related Party Transactions. Except as (i) set forth in
the Disclosure Schedule under a reference to this Section, or (ii) disclosed in
the SEC Filings made prior to the date of this Agreement, no current or, to the
knowledge of AMS after due inquiry within AMS, former director, officer or key
employee of AMS is presently a party to, directly or indirectly through his
Affiliates, any arrangement or transaction with AMS or any of its Subsidiaries
providing for the furnishing of services (except as an employee) by or to, or
rental of real or personal property from or to, or otherwise requiring cash
payments to or by any such person, other than those that do not involve
payments or the furnishing of goods or services having a fair market value by,
from or to AMS or its Subsidiaries of more than $5,000 in any calendar year and
which may be terminated, without payment of any penalty, termination fee,
liquidated damages or other similar amount, on not more than 30 days notice by
AMS or its appropriate Subsidiary.
3.20 Transactions Not in the Ordinary Course. Except as set
forth in the Disclosure Schedule under a reference to this Section, or as
otherwise disclosed to and approved in writing by Nextel, since August 25,
1993, neither AMS nor any of its Subsidiaries has taken any action without the
consent of Nextel which, if taken after such date without the consent of
Nextel, would violate Section 5.1, assuming such Section to have been operative
on and after such date (and as if the phrase "the date hereof" in such Section
were replaced by the date "August 25, 1993").
3.21 Employee Benefit Matters. (a) Set forth in the
Disclosure Schedule under a reference to this Section, is a true, complete and
correct list of all "employee benefit plans" as defined in Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and all
other employee profit-sharing, incentive, deferred compensation, welfare,
pension, retirement, severance, group insurance and other employee benefit
plans, arrangements, agreements and practices currently maintained or
contributed to by AMS or any of its Subsidiaries, or to which AMS or any of its
Subsidiaries currently is obligated to contribute, relating to present or
former employees, directors, officers, stockholders or consultants of AMS or
any of its Subsidiaries (collectively, "Employee Plans"). Except as set forth
in such portion of the Disclosure Schedule under a reference to this Section or
as shown in the 1994 10-K or any SEC Filings made
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in the period from July 1, 1994 to the date hereof, true, complete and correct
copies of which have heretofore been delivered to Nextel, neither AMS nor any
of its Subsidiaries has any material liability with respect to any plans,
arrangements or practices of the type described in the preceding sentence
previously maintained or contributed to by AMS or any of its Subsidiaries, or
to which AMS or any of its Subsidiaries previously had an obligation to
contribute. AMS previously has delivered or made available to Nextel or its
counsel true, complete and correct copies of each of the Employee Plans,
including all amendments thereto, and any other documents or other instruments
relating thereto reasonably requested by Nextel or its counsel.
(b) All Employee Plans are being, and have been,
maintained, operated and administered in all material respects in accordance
with their respective terms and in all material respects in compliance with all
applicable laws and all Form 5500 reports required to be filed in respect of
any Employee Plan have been (if required to be filed prior to the date hereof)
or will be (if required to be filed on or after the date hereof but prior to
the Closing) timely and duly filed.
(c) Neither AMS nor any of its Subsidiaries has
or, within the past six years, had an obligation to contribute to a "defined
benefit plan" as defined in Section 3(35) of ERISA, a pension plan subject to
the minimum funding standards of Section 302 of ERISA or Section 412 of the
Code a "multiemployer plan" as defined in Section 3(37) of ERISA or Section
414(f) of the Code or a "multiple employer plan" within the meaning of Section
210(a) of ERISA or Section 413(c) of the Code. No Employee Plan is funded
through a "welfare benefit fund" as defined in Section 419(e) of the Code.
Except for the AMS' Subsidiaries, no other trade or business is, or at any time
within the past six years has been, treated together with AMS as a single
employer under Section 414 of the Code of Section 4001 of ERISA.
(d) Each Employee Plan intended to be qualified
under Section 401(a) of the Code is so qualified, and each trust created
thereunder is exempt from tax under the provisions of Section 501(a) of the
Code, except where the failure to be so qualified or exempt would not have a
Material Adverse Effect on AMS; provided, that AMS has delivered to the Nextel
prior to the execution and delivery hereof copies of all written communications
received by AMS from the Internal Revenue Service that question or dispute such
qualification of any Employee Plan or exempt status of any related trust.
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(e) There have been no prohibited transactions or breaches of any of the
duties imposed on "fiduciaries" (within the meaning of Section 3(21) of ERISA)
by ERISA with respect to the Employee Plans that could result in AMS or any of
its Subsidiaries becoming liable directly or indirectly (by indemnification or
otherwise) for any material excise tax, penalty or other liability under ERISA
or the Code.
(f) There are no material actions or claims pending or, to AMS' knowledge
after due inquiry, threatened, with respect to any Employee Plan (other than
routine claims for benefits), and to AMS' knowledge after due inquiry, there are
no material investigations or audits of any Employee Plan by any Governmental
Authority currently pending and there have been no such investigations or audits
that have been concluded that resulted in any material liability of AMS or any
of its Subsidiaries that has not been fully discharged.
(g) All (i) insurance premiums required to be paid with respect to, (ii)
benefits, expenses, and other amounts due and payable under, and (iii)
contributions, transfers, or payments required to be made to, any Employee Plan
have been paid, made or accrued as a liability on the balance sheets included in
the 1994 10-K or to the extent such amounts are properly due and payable in
subsequent periods, in the AMS Financial Statements included in any SEC Filing
for such subsequent period (provided that a true, correct and complete copy of
such SEC Filing shall have been delivered to Nextel, if filed with the SEC prior
to the date hereof, prior to the execution and delivery of this Agreement, and
if filed with the SEC thereafter, promptly after such filing with the SEC). With
respect to any insurance policy providing funding for benefits under any
Employee Plan, (x) there is no material liability of AMS or any of its
Subsidiaries, in the nature of a retroactive rate adjustment, loss sharing
arrangement, or other actual or contingent liability, nor would there be any
such liability if such insurance policy was terminated on the date hereof, and
(y) except as previously disclosed in writing to Nextel, no insurance company
issuing any such policy is in receivership, conservatorship, liquidation or
similar proceeding and, to the best of AMS' knowledge, no such proceedings with
respect to any insurer are imminent.
(h) Each Employee Plan that is a group health plan subject to Section 4980B
of the Code (or which was subject to Section 162(k) of the Code) has been
operated in all material respects
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in compliance with the continuation coverage requirements of Section 4980B of
the Code and Section 162(k) of the Code, as applicable, and Part 6 of Subtitle B
of Title I of ERISA.
(i) Each Employee Plan that is subject to Section 1862(b)(1) of the Social
Security Act has been operated in all material respects in compliance with the
secondary payer requirements of Section 1862(b)(1) of such Act.
(j) The Disclosure Schedule under a reference to this Section contains a
separate identification of each Employee Plan that provides benefits, including,
without limitation, death or medical benefits, beyond termination of employment
or retirement other than (i) coverage mandated by law, (ii) death or retirement
benefits under any qualified Employee Plan, or (iii) deferred compensation
benefits fully reflected in the balance sheets included in the 1994 10-K (the
"Post-Employment Benefits"). The Disclosure Schedule under a reference to this
Section contains an accurate summary (with reasonably descriptive detail as to
both type and dollar amount) of all liabilities reasonably estimated to be in
excess of $25,000 as of December 31, 1994 relating to the Post-Employment
Benefits.
(k) Except as set forth in the Disclosure Schedule under a reference to
this Section, the execution and performance of this Agreement will not, solely
in and of itself, (i) constitute a stated triggering event under any Employee
Plan that will result in any payment (whether of severance pay or otherwise)
becoming due from AMS or any of its Subsidiaries to any present or former
officer, employee, director, stockholder or consultant, or former employee (or
dependents of any thereof), or (ii) accelerate the time of payment or vesting,
or increase the amount, of compensation due to any employee, officer, director,
stockholder or consultant of AMS or any of its Subsidiaries.
(l) Except as set forth in the Disclosure Schedule under a reference to
this Section, neither AMS nor any of its Subsidiaries has agreed or committed to
make any amendments to any of the Employee Plans not already embodied in the
documents comprising any such Employee Plan, other than any amendments required
by law.
(m) All contributions, transfers, and payments by AMS in excess of $50,000
made in any calendar year with respect to which the applicable statute of
limitations period has not expired in respect of any Employee Plan have been or
are fully deductible under the Code.
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(n) Except as set forth in the Disclosure Schedule under a reference
to this Section, as of December 31, 1994 there are no (i) bonuses, sales
commissions or vacation pay earned but not received and (ii) incurred or
continuing but unpaid claims under Employee Plans not funded by insurance, other
than such of the foregoing items described in clauses (i) and (ii) above which
in the aggregate do not exceed $50,000.
(o) Except as set forth in the Disclosure Schedule under a reference
to this Section, no Employee Plan provides benefits to any individual who is not
a current or former employee of AMS or one of its Subsidiaries, or the
dependents or other beneficiaries of any such individual who is not a current or
former employee.
(p) Except as set forth in the Disclosure Schedule under a reference
to this Section, no parachute payments (within the meaning of Section 280(G) of
the Code) will be made in connection with or as a result of all or any of the
transactions contemplated by this Agreement to occur at the Closing.
3.22 Registration Rights. Except as set forth in the Disclosure Schedule
under a reference to this Section, no Person has any rights to require
registration under the Securities Act of any shares of capital stock of AMS. No
such Person who has such registration rights is a Rule 145 Affiliate of AMS, and
such registration rights do not apply to any securities that are not presently
outstanding shares of AMS Common Stock. True, correct and complete copies of all
agreements listed on the Disclosure Schedule under a reference to this Section
have been delivered to Nextel (or its authorized representative).
3.23 Certain Contracts. Except as set forth on the Disclosure Schedule
under a reference to Section 3.19 hereof and/or to this Section, neither AMS nor
any of its Subsidiaries (nor any of their properties) is a party to or is bound
by or has executory rights or obligations under (except in any case as may
result from indemnification, contribution or similar rights or obligations under
agreements with respect to which, to AMS' knowledge after due inquiry, AMS has
neither asserted in writing any Claim nor received any written notice of any
Claim that has not been resolved) (i) other than the agreements referred to in
sections (ii) through (ix) hereafter, any other agreement or arrangement not
made in the ordinary course of business involving payments, or the furnishing of
goods or services, by AMS or any of its
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Subsidiaries in an amount in excess of $25,000 individually or (in the case of
related agreements or arrangements) $100,000 in the aggregate; (ii) any
employment or consulting contract; (iii) any contract with any labor union; (iv)
any lease with respect to real or personal property other than site leases,
whether as lessor or lessee, involving lease payments in excess of $25,000 per
item or $100,000 in the aggregate (in the case of related leases) per annum; (v)
any wholly or partially unfulfilled contract or commitment for the purchase of
raw materials or supplies or the sale of products involving more than $25,000
per item or $100,000 in the aggregate (in the case of related contracts or
commitments) per annum; (vi) any indenture, agreement, note, mortgage, guaranty
or other writing which evidences or relates to any loan of money to, or
indebtedness for money borrowed by, AMS or any of its Subsidiaries; (vii) any
license agreement or other contract or agreement relating to patents,
trademarks, trade names, techniques or copyrights or applications for any
thereof, inventions, trade secrets or other proprietary know-how or technical
assistance; (viii) any loan by (or guaranteed by) AMS or any of its Subsidiaries
to officers, directors or employees of AMS or any of its Subsidiaries (other
than advances made in the ordinary course of business and not exceeding $2,500
in the aggregate); (ix) any agreement relating to any direct or indirect
acquisition or disposition by AMS of SMR Licenses (as defined in Section 3.27),
which agreement either (A) was entered into after August 25, 1993 or (B)
provides obligations, duties or rights of any party thereto that have not been
fully satisfied, performed or exercised as of the date of this Agreement, in the
case of any of the foregoing, whether written or oral (and, in the case of oral
agreements, with AMS providing a written summary of all material terms thereof
to Nextel) or (x) any site leases. Except as set forth in the Disclosure
Schedule under a reference to this Section, neither AMS nor any of its
Subsidiaries is now or will be in default in any material respect upon and
giving effect to the Merger under the terms of, or otherwise be or become
deprived of any material benefit (or of the ability to enforce any material term
presently in effect on the date hereof) under, any commitments described in
Subsections (i) through (ix) of this Section 3.22 which default would have a
Material Adverse Effect on AMS and its Subsidiaries taken as a whole or would
materially adversely affect AMS' ability to perform its obligations under this
Agreement.
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ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF
NEXTEL AND NEWCO
In order to induce AMS to enter into this Agreement, Nextel and Newco
represent and warrant to AMS (which representations and warranties shall not
survive the Merger) that:
4.1 Corporate Status, etc. (a) Nextel and each of the Nextel Subsidiaries
is a corporation duly incorporated, validly existing and in good standing under
the laws of its respective jurisdiction of incorporation.
(b) Except as set forth in Schedule 4.1(b), Nextel and/or each of the
Nextel Subsidiaries, as the case may be, is duly qualified and in good standing
to conduct business as a foreign corporation in all jurisdictions where it
currently conducts business activities or owns or leases properties or assets,
in any of the foregoing cases, on a more than incidental or nominal basis in
which its ownership of property or the character of its activities is such as to
require it to be so licensed or qualified, except where failure to be so
licensed or qualified would not have a Material Adverse Effect on Nextel and the
Nextel Subsidiaries, taken as a whole, and would not materially adversely affect
Nextel's ability to perform its obligations under this Agreement.
(c) Nextel has the corporate power and authority (directly or
indirectly through one or more of the Nextel Subsidiaries) to own or lease (as
appropriate) and operate its (and such Subsidiaries') properties and to conduct
the business in the manner in which it (and any of such Subsidiaries) is
currently engaged.
(d) Except as set forth in Schedule 4.1(d), Nextel owns, directly or
indirectly, free and clear of all Liens and has the unrestricted power to
dispose of (subject to the requirements of state and Federal securities laws),
all of the outstanding capital stock of each of its Subsidiaries and, except as
set forth in such Schedule, since the date of acquisition or formation, as
appropriate, by Nextel, the assets, liabilities and results of operations of the
Subsidiaries of Nextel have been included in the consolidated financial
statements of Nextel in the manner and to the extent required by GAAP. All of
such shares of stock of the Subsidiaries so owned by Nextel are duly authorized,
validly issued, fully paid and nonassessable.
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4.2 Power and Authority. Each of Nextel and Newco has the corporate power
and authority to execute and deliver, and to perform its obligations under, this
Agreement and the transactions contemplated hereby and each of Nextel and Newco
has taken all necessary corporate action to authorize its execution, delivery
and performance of this Agreement and the transactions contemplated hereby. This
Agreement has been duly executed and delivered by Nextel and Newco and
constitutes a legal, valid and binding obligation of each of Nextel and Newco,
enforceable against Nextel and Newco in accordance with its terms, except to the
extent that such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights generally or by general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
4.3 Consents/Approvals; Enforceability. (a) No consents of, filings with,
authorizations or other actions of any Governmental Authority are required to be
received, made or filed by or taken on behalf of, Nextel or Newco for either
Nextel's or Newco's execution, delivery and performance of this Agreement, other
than (i) compliance with any applicable requirements of the HSR Act, (ii)
compliance with any applicable requirements of the Securities Act and the
Exchange Act and any applicable state securities or "blue sky" law or (iii)
compliance with any applicable requirements of the FCC, except for any such
consents, filings, authorizations or other actions the failure to receive, make
or take would not (1) have a Material Adverse Effect on Nextel and the Nextel
Subsidiaries, taken as a whole or (2) adversely affect the consummation of the
transactions contemplated hereby or (3) materially adversely affect Nextel's or
Newco's ability to perform its obligations under this Agreement.
(b) Except as set forth on Schedule 4.3(b) attached hereto, no
consent, approval, waiver or other action by any Person (other than any
Government Authority referred to in Section 4.3(a) above) under any contract,
agreement, indenture, lease, or other similar document to which Nextel or Newco
is a party or by which Nextel or Newco is bound is required for the execution,
delivery and performance by Nextel or Newco of this Agreement, or the
consummation of the transactions contemplated hereby, except for any such
consents, approvals, waivers or other actions the failure to receive or take
would not (1) have a Material Adverse Effect on Nextel and the Nextel
Subsidiaries, taken as a whole or
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(2) adversely affect the consummation of the transactions contemplated hereby or
(3) materially adversely affect Nextel's or Newco's ability to perform its
obligations under this Agreement.
4.4 Compliance with Laws. Except as set forth in Schedule 4.4:
(a) each of Nextel and the Nextel Subsidiaries is not currently in
violation (nor are any of them currently liable or otherwise currently
responsible with respect to prior violations) of any statute, law or regulation
applicable to any of its or their presently or formerly owned properties or to
the conduct of its or their current or past businesses, nor do any of the
business practices followed, services provided or products made, modified or
installed by any of them (in the ordinary course of their businesses or
otherwise), violate any statute, law or regulation applicable thereto, which
violations are, individually or in the aggregate, reasonably likely to have a
Material Adverse Effect on Nextel and the Nextel Subsidiaries, taken as a whole,
or to materially adversely affect Nextel's ability to perform its obligations
under this Agreement, or the costs or consequences of correction or remediation
of which, to the extent required to comply with applicable Requirements of Law,
individually or in the aggregate, are reasonably likely to have a Material
Adverse Effect on Nextel and the Nextel Subsidiaries, taken as a whole, or to
materially adversely affect Nextel's ability to perform its obligations under
this Agreement;
(b) none of (i) the business of Nextel or any of the Nextel
Subsidiaries, or (ii) the business practices followed, services or products
performed, sold or otherwise made available by Nextel or any of the Nextel
Subsidiaries, violates any applicable law or regulation relating to air, water
or noise pollution or employee health and safety or the production, storage,
labeling, transportation or disposition of solid waste or hazardous or toxic
substances, which violations, individually or in the aggregate, are reasonably
likely to have a Material Adverse Effect on Nextel and the Nextel Subsidiaries,
taken as a whole, or to materially adversely affect Nextel's ability to perform
its obligations under this Agreement, or the costs or consequences of correction
or remediation of which (to the extent required to comply with applicable
Requirements of Law), individually or in the aggregate, are reasonably likely to
have a Material Adverse Effect on Nextel and the Nextel Subsidiaries, taken as a
whole or to materially adversely affect Nextel's ability to perform its
obligations under this Agreement; and
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(c) Nextel and the Nextel Subsidiaries and, to Nextel's knowledge,
each person holding any SMR Licenses or SMR Systems that are subject to a
Management Agreement, have timely obtained all licenses and permits and timely
filed all reports required to be filed under any such applicable laws or
regulations except for any such license, permit or report the failure to obtain
or make are not reasonably likely to have a Material Adverse Effect on Nextel
and the Nextel Subsidiaries taken as a whole.
4.5 Financial Statements. Nextel has furnished to AMS (or an authorized
representative of AMS) the following financial statements: (a) an audited
consolidated balance sheet of Nextel and the Nextel Consolidated Subsidiaries as
of, and the related audited consolidated statements of operations and cash
flows, for the nine month transition period ended December 31, 1994 and (b) the
audited consolidated balance sheets of Nextel and the Nextel Consolidated
Subsidiaries as of March 31, 1993 and 1994, and the related consolidated
statements of operations, stockholders' equity and cash flows for each of the
two years ended March 31, 1993 and 1994 (including, in the case of the financial
statements described in each of the foregoing clauses (a) and (b), any footnotes
thereto and the related certifications of Deloitte & Touche, L.L.P.)
(collectively, the "Nextel Financial Statements"), which are true and correct in
all material respects, have been prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods involved and
present fairly the consolidated financial position of Nextel and the Nextel
consolidated Subsidiaries, at the dates indicated in such financial statements
and results of their operations for the periods stated therein.
4.6 Capitalization. The authorized capital stock of Nextel consists solely
of (i) 230,000,000 shares of Class A Common Stock, par value of $.001 per share
("Class A"), (ii) 20,000,000 shares of Class B Non-Voting Common Stock, par
value of $.001 per share ("Class B"), and (iii) 10,000,000 shares of Preferred
Stock, par value of $.010 per share ("Preferred"), of which (i) 106,927,574
Class A shares, (ii) zero Class B shares, and (iii) zero Preferred shares were
issued and outstanding as of April 5, 1995 and 24,860 Class A shares of which
were then held as treasury shares. Schedule 4.6 sets forth all outstanding
options to purchase Nextel Common Shares, the number of shares purchasable
thereunder, and the per share exercise price of each option; and all outstanding
warrants for the purchase of Nextel Common Shares, the number of shares
purchasable thereunder, and the per share exercise price of each warrant. Except
as set
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forth on such Schedule 4.6, and for issuances made or to be made in compliance
with the terms of pending agreements listed on Schedule 4.6, there are no
commitments or obligations of Nextel, either firm or conditional, to issue,
deliver or sell, whether under offers, stock option agreements, stock bonus
agreements, stock purchase plans, incentive compensation plans, warrants,
conversion rights or otherwise, any authorized but unissued shares, or treasury
shares, of Nextel Common Shares or other securities of Nextel. At the Effective
Time, the Nextel Common Shares issued by reason of the Merger will be duly
authorized, validly issued, fully paid and nonassessable, and their issuance in
connection with the Merger will be registered under the Securities Act and
registered or exempt from registration under applicable state securities laws,
and such Nextel Common Shares will be listed on the NASDAQ-NMS.
A true, correct and complete copy of each of the certificate of
incorporation and the by-laws of Nextel has been delivered to AMS (or an
authorized representative of AMS) prior to the execution hereof. Except as set
forth in Schedule 4.6, there are no amendments pending or proposed to either
such certificate of incorporation or such by-laws of Nextel.
4.7 No Pending or Threatened Actions. Except for the
Purported Class Actions and such other matters as are set forth on Schedule 4.7
or in a registration statement or a report filed by Nextel with the SEC prior to
the date hereof, there are no Claims formally instituted and pending or, to the
knowledge of Nextel, threatened against or specifically identifying Nextel or
any of the Nextel Subsidiaries or any of their properties or assets (other than
Claims affecting generally any group of similarly situated third parties such as
members of the SMR industry), or before or by any Forums which is reasonably
likely, individually or in the aggregate, to have a Material Adverse Effect on
Nextel and the Nextel Subsidiaries, taken as a whole, or to materially adversely
affect Nextel's or Newco's ability to perform its obligations under this
Agreement. Except as set forth in such Schedule, to the knowledge of Nextel,
neither Nextel nor any of the Nextel Subsidiaries is subject to or in default
under any Order of any Forum which would, individually or in the aggregate, be
reasonably likely to have a Material Adverse Effect on Nextel and the Nextel
Subsidiaries, taken as a whole, or to materially adversely affect Nextel's or
Newco's ability to perform its obligations under this Agreement.
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4.8 No Defaults. Except as set forth in Schedule 4.8,
(i) neither Nextel nor any of the Nextel Subsidiaries is in default under or
with respect to any contractual obligation to which Nextel or any of the Nextel
Subsidiaries is a party or by which any of them or their respective properties
is bound, which default would have a Material Adverse Effect on Nextel and the
Nextel Subsidiaries taken as a whole or would materially adversely affect
Nextel's ability to perform its obligations under this Agreement and (ii) to
Nextel's knowledge, no other party to any contract to which Nextel or any of its
Subsidiaries is a party or by which any of them or their respective properties
is bound is in default of such contract in any material respect or has indicated
an intention to terminate any such contract, excluding any of the foregoing
that, individually or in the aggregate, would not have a Material Adverse Effect
on Nextel and the Nextel Subsidiaries, taken as a whole.
4.9 No Material Adverse Change. Except as set forth in
Schedule 4.9, since December 31, 1994, there has not been any Material Adverse
Change to Nextel and the Nextel Subsidiaries, taken as a whole.
4.10 Title to Properties; Encumbrances. Except as set
forth in Schedule 4.10, Nextel and each Nextel Subsidiary has such title to all
of its material properties and assets, real and personal, tangible and
intangible (including, without limitation, those material properties and assets
reflected in the Nextel Financial Statements, except as disposed of pursuant to
the Consent Decree (as hereinafter defined) or in the ordinary course of
business since December 31, 1994) as is requisite to the conduct of their
respective businesses in substantially the same manner as presently conducted,
and there is no title defect in any of such properties or assets which is
reasonably likely to have at any time a Material Adverse Effect on Nextel and
the Nextel Subsidiaries, taken as a whole. None of such properties or assets is
subject to any Lien other than (i) Liens on digital mobile system infrastructure
equipment, subscriber units and related items imposed pursuant to financing
arrangements in place on the date hereof and relating to purchases of such
equipment, units and items, and purchase money security interests incurred in
the ordinary and normal course of business in arm's-length transactions with
non-affiliates and any Lien for current Taxes not delinquent or being contested
in good faith; (ii) arising by virtue of any real or personal property leases
entered into in the ordinary course of business in arms length transactions with
non-affiliates; (iii) referred to in the Nextel
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Financial Statements; (iv) Liens in the nature of reserves, set-asides or
escrows to secure payment or performance obligations in connection with leases
of subscriber units or site lease construction or channel build-out; or (v) such
other Liens which do not and are not reasonably likely to have, individually or
in the aggregate, a Material Adverse Effect on Nextel and the Nextel
Subsidiaries, taken as a whole.
4.11 Intellectual Property. Except as set forth in
Schedule 4.11, (a) Nextel and the Nextel Subsidiaries each own or possess
adequate licenses or other valid rights to use all Rights used in the conduct of
their respective businesses as presently being conducted, except for such
licenses or rights the failure to own or possess by Nextel and the Nextel
Subsidiaries is not likely to have a Material Adverse Effect on Nextel and the
Nextel Subsidiaries taken as a whole; (b) the validity of such items and the
title thereto of Nextel and the Nextel Subsidiaries have not been disputed in
any litigation to which Nextel or any of the Nextel Subsidiaries is a party nor,
to the knowledge of Nextel, is any such litigation threatened; and (c) the
conduct of the businesses of Nextel and the Nextel Subsidiaries as now conducted
does not conflict with Rights of others in any way that is reasonably likely to
have a Material Adverse Effect on Nextel and the Nextel Subsidiaries taken as a
whole. Except as set forth on Schedule 4.11, no material infringement of any
Right owned by or licensed by or to Nextel or the Nextel Subsidiaries is known
to Nextel.
4.12 Brokers. Neither Nextel nor Newco has any
arrangements with any broker, finder or investment banker which would entitle
any such Person to a brokerage, finder's or other fee or commission in
connection with the transactions contemplated by this Agreement, other than any
arrangements that may exist between Nextel and Ritzel Communications, as to
which Nextel will bear the sole and exclusive responsibility for required
payments, if any.
4.13 Taxes. Except as set forth on Schedule 4.13,
Nextel and the Nextel Subsidiaries, individually or as successors to any
combined or merged entity, have timely and correctly filed or caused to be filed
all material Tax Returns required to be filed by Nextel and the Nextel
Subsidiaries. All material Taxes that are due and payable on or before the
Closing in respect of such Tax Returns have been or will be duly and timely paid
or deposited, as the case may be, in full by the Closing. Except as set forth in
such Schedule, neither Nextel nor any of the Nextel Subsidiaries has made an
agreement with any third party in
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which Nextel or such Nextel Subsidiaries has agreed to indemnify or reimburse
such third party for any liability for Taxes such third party may have.
4.14 Materially Correct. Reference is hereby made to (i) the SEC filings
furnished by Nextel to AMS pursuant to or in connection with this Agreement,
whether furnished prior to, at or subsequent to the date hereof, (ii) this
Agreement, including the Schedules hereto, and (iii) the information contained
in each Officers' Certificate and documents furnished by Nextel at the Closing
(all such written information, taken as a whole, the "Nextel Disclosure
Information"). The Nextel Disclosure Information so received on or prior to the
date hereof by AMS, (A) as to the SEC filings, as of their respective dates did
not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make any
statement of material fact contained therein, in the light of the circumstances
under which it was made, not misleading and (B) as to Nextel Disclosure
Information of the types described in either of the foregoing clauses (ii) or
(iii), is and at the Closing will be true and correct in all material respects.
The foregoing representations made in the immediately preceding sentence also
shall be deemed made anew by Nextel to AMS immediately prior to the Closing, but
with reference to the Nextel Disclosure Information so received prior to the
Closing by AMS. As used in this Section 4.14, "material" means material to the
financial condition, results of operations, prospects, business, assets or
properties of Nextel and the Nextel Subsidiaries, taken as a whole.
4.15 Regulatory Matters.
(a) License Information. Schedule 4.15(a) to this Section sets forth
all of the following information for each SMR License and other FCC License
(except for community repeater authorizations) issued to, or subject to a
binding Management Agreement or any other agreement that contains a binding
right to acquire SMR Licenses or FCC Licenses, either directly or through an
acquisition of the Person owning such Licenses, so long as such Management
Agreement or other agreement is with Nextel or any of the Nextel Subsidiaries:
(i) for all FCC Licenses (including all SMR
Licenses), the name of the licensee, the call sign, the transmitter
location (by city), the type of service (paging, SMR, etc., by name or
FCC abbreviation), the frequency or frequencies authorized and the
license renewal date;
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(ii) in the case of SMR Licenses, whether the license
is for a conventional or trunked SMR System, the applicable loading
date and whether the SMR License is managed by Nextel or any of the
Nextel Subsidiaries pursuant to a Management Agreement; and
(iii) each holder of any such FCC License that is
neither wholly-owned by Nextel nor owned entirely by unaffiliated
persons and managed by Nextel.
(b) Other Regulatory Matters. Except as set forth on Schedule 4.15(b),
to the knowledge of Nextel, as of date hereof (i) Nextel or a Nextel Subsidiary
holds, manages or has the right to acquire all FCC Licenses used in, or
necessary for the conduct of, its business as currently conducted; (ii) neither
Nextel nor a Nextel Subsidiary has received any written notice of proceedings
relating to the revocation, modification or denial of any applications for any
of its Licenses which would have a Material Adverse Effect on Nextel and the
Nextel Subsidiaries, taken as a whole; (iii) Nextel and each of the Nextel
Subsidiaries has fulfilled and performed its material obligations with respect
to its Licenses; (iv) no event has occurred and remains uncured that allows
revocation or termination of any of the Licenses held by Nextel or any of the
Nextel Subsidiaries or would result in any other material impairment of the
rights in the Licenses held or managed by Nextel or any of the Nextel
Subsidiaries; and (v) the Licenses held or managed by Nextel or the Nextel
Subsidiaries contain no restrictions (other than those generally applicable to
FCC Licenses) that are materially burdensome to Nextel or any of Nextel
Subsidiaries (except for Licenses indicated as authorized on a secondary basis).
(c) Wide-Area System Application. Nextel has furnished to AMS a true
and correct copy of each material Request for Rule Waiver for a Wide-Area SMR
System and associated applications, as filed with the FCC, and all material
supplemental or related materials filed in connection therewith by or on behalf
of Nextel and/or any of the Nextel Subsidiaries and any written communication
issued by the FCC or any FCC staff member of which Nextel has knowledge in
response to, or otherwise in connection with, any of the foregoing.
4.16 Proxy Statement/Prospectus. None of the information supplied or to be
supplied by Nextel for inclusion or incorporation by reference in the Proxy
Statement/Prospectus will, at the time of the mailing of the Proxy
Statement/Prospectus, at the time of the Special Meeting or at the Effective
Time,
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contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading. To the extent information is supplied or is to be supplied by Nextel
for inclusion or incorporation by reference therein, the Proxy
Statement/Prospectus will comply as to form in all material respects with the
requirements of the Securities Act and the Exchange Act and the respective rules
and regulations adopted thereunder.
4.17 Non Contravention. Subject to the submission of
all filings with, and receipt of all consents, approvals and waivers from, any
Governmental Authority referred to in Section 4.3(a), and except as set forth in
Schedule 4.17, none of the execution and delivery by Nextel or Newco of this
Agreement, the consummation of the transactions contemplated hereby, nor the
compliance by Nextel or Newco with the terms and provisions hereof, results or
will result in the creation or imposition of any Lien upon any of the properties
or assets of Nextel or Newco or violates or will violate any Requirement of Law
applicable to Nextel or to Newco, conflicts with or will conflict with or
results or will result in any breach of any term, condition or provisions of,
constitutes or will constitute (with due notice or lapse of time or both) a
default under or pursuant to the terms of, any mortgage, deed of trust or other
agreement or instrument to which Nextel or Newco is a party or by which either
of them or any of their respective properties is bound (except for any of such
violations, conflicts, breaches or defaults that could not reasonably be
expected to have a Material Adverse Effect on Nextel and the Nextel
Subsidiaries, taken as a whole, and will not materially adversely affect
Nextel's or Newco's ability to perform its obligations under this Agreement) or
Nextel's or Newco's certificate of incorporation or by-laws.
ARTICLE V. COVENANTS OF AMS
5.1 Conduct of AMS Pending the Closing. Except as set
forth on the Disclosure Schedule under a reference to this Section from the date
hereof until the Closing, AMS shall, and shall cause each of its Subsidiaries
to, conduct its business in accordance with the provisions of this Section 5.1:
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(a) AMS shall, and shall cause each of its Subsidiaries to, conduct
its business only in the ordinary course of business, on an arm's-length basis
and in accordance in all material respects with all applicable laws, rules and
regulations;
(b) Except as specifically contemplated by or as provided in this
Agreement or to the extent consented to in writing by Nextel, AMS shall not, and
shall cause each of its Subsidiaries not to, (i) issue or sell any additional
shares of, or any options, warrants, conversion privileges or rights of any kind
to acquire any shares of, any of its capital stock, except pursuant to
outstanding AMS Equivalent Securities as listed and described in the Disclosure
Schedule under a reference to Section 3.6 hereof; (ii) sell, assign, transfer,
or subject to any Lien (A) any of its SMR Licenses, or (B) any of its other
assets with an aggregate fair market value in excess of $50,000 (except, in the
case of assets other than SMR Licenses, in the ordinary course of business or
Permitted Liens); (iii) amend or propose to amend its Certificate of
Incorporation or By-Laws; (iv) split, combine or reclassify any outstanding
shares of capital stock, or declare, set aside or pay any dividend or other
distribution payable in cash, stock or other property with respect to the
capital stock, except dividends paid by any Subsidiary of AMS to any wholly
owned Subsidiary of AMS or to AMS; (v) redeem, purchase or acquire or offer to
acquire any shares of capital stock; (vi) acquire (by merger, exchange,
consolidation, acquisition of stock or assets or otherwise) any corporation,
partnership, joint venture or other business organization or material assets, or
any additional SMR Systems or related operations, rights, assets or properties
located in the state of Florida; or (vii) borrow any money or incur or become
subject to any material liability, except liabilities (other than for borrowed
money) incurred in the ordinary course of business;
(c) AMS shall not and shall cause each of its Subsidiaries not to,
enter into or modify any employment, severance or similar agreements or
arrangements with, or grant any bonuses, wage, salary or compensation increases,
severance or termination pay to, any director, officer or employee who earns
more than $50,000 per year; except for wage, salary or compensation increases or
severance arrangements made in the ordinary course and consistent with past
practice;
(d) AMS shall not, and shall cause each of its Subsidiaries not to,
adopt or amend any bonus, profit sharing, stock option, pension, retirement,
deferred compensation or other employee
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benefit plan, trust, fund, contract or arrangement for the benefit or welfare of
any employees except as required by law;
(e) AMS shall not, and shall cause each of its Subsidiaries not to,
enter into any settlement or similar agreement with respect to any action, suit,
proceeding, order or investigation against AMS or such Subsidiary (including,
without limitation, the Purported Class Actions) for an amount in excess of
$50,000.00;
(f) AMS shall, and shall cause each of its Subsidiaries to, use all
reasonable efforts to preserve intact (to the extent desirable in the exercise
of AMS' reasonable business judgment) its business organization and good will,
keep available the services of its officers and employees as a group and
preserve intact advantageous business relationships and material agreements;
(g) AMS shall not, and shall cause each of its Subsidiaries not to,
either (i) take any action which it knows would result in, or (ii) refrain from
taking any action which to AMS' knowledge is needed to avoid, any loss of FCC
License grants of AMS and its Subsidiaries. Notwithstanding the foregoing, AMS
(a) shall not be required to take any action or refrain from taking any action
if it would be unreasonable to do so based upon sound and customary business
practice in the SMR industry, and (b) may take any action, or refrain from
taking any action, contemplated by Section 3.9. AMS shall not, and shall cause
each of its Subsidiaries not to, take any action with respect to AMS' Request
for Rule Waiver referred to in Section 3.15(d) hereof, other than actions
approved in advance by Nextel, which approval will not be unreasonably withheld
or delayed; and
(h) At Nextel's request, AMS shall use its best efforts to take or
cause to be taken such actions as shall be reasonably necessary and appropriate
for the conditions specified in Article IX hereof to be fulfilled as soon as
practicable, and in no event later than immediately prior to the Closing
hereunder.
(i) AMS shall cooperate with Nextel and Newco and use its reasonable
best efforts to ensure that the consummation of the Merger shall not constitute
a default or an event that, with notice or lapse of time or both, would ripen
into a default, for purposes of any of the Nextel Indentures, or would require
the issuance of any Subsidiary guarantees under any of the Nextel Indentures.
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5.2 SEC Registration. (a) AMS shall use its reasonable best efforts to
furnish to Nextel such information about AMS (including its subsidiaries and
affiliates) as may be necessary to enable Nextel to prepare and file with the
SEC a Proxy Statement/Prospectus, or other appropriate form, under the
Securities Act and the rules and regulations promulgated thereunder, in respect
of the Nextel Common Shares to be issued by reason of the Merger (such
registration statement, the prospectus included therein and the proxy statement
to be furnished to the holders of AMS Common Stock, in each case together with
any amendments thereto, the "Proxy Statement/Prospectus"). AMS shall use its
best efforts so that AMS Information (as defined below) included in the Proxy
Statement/Prospectus shall not, at the time the Proxy Statement/Prospectus is
declared effective, contain any untrue statement of a material fact, omit to
state any material fact required to be stated therein, or omit any material fact
necessary in order to make the statements therein not misleading. If at any time
prior to the time of the Special Meeting or the Effective Time any event or
circumstance should be discovered by AMS with respect to AMS Information which
is required to be set forth in an amendment or supplement to the Proxy
Statement/Prospectus, AMS will immediately notify Nextel and will use its best
efforts to assist Nextel in appropriately amending or supplementing the Proxy
Statement/Prospectus or in preparing and distributing such amendment or
supplement, if required, in the manner contemplated in Section 6.2. The Proxy
Statement/Prospectus, insofar as it relates to information concerning AMS, or
any of its businesses, assets, directors, officers or stockholders that is
supplied by AMS (including third party information required to be obtained by
AMS) for inclusion in the Proxy Statement/Prospectus (the "AMS Information")
will comply as to form and substance in all material respects with the
applicable requirements of the Securities Act and the rules and regulations
thereunder and the Exchange Act and the rules and regulations thereunder.
(b) AMS shall instruct its accountants to deliver, and shall use its
best efforts to cause its accountants, KPMG Peat Marwick L.L.P., to deliver, to
Nextel letters dated at the time the Proxy Statement/Prospectus becomes
effective and as of the Closing, addressed to Nextel, containing such matters as
are customarily contained in auditors' letters regarding information about AMS
provided by AMS expressly for inclusion in such Proxy Statement/Prospectus, and
in form and substance reasonably satisfactory to Nextel.
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(c) AMS will use its reasonable best efforts to cause the AMS Common
Stock to continue to be listed on the Nasdaq National Market until the record
date for the Special Meeting (as defined below). Without Nextel's prior written
consent, AMS shall not set or change the record date for the Special Meeting for
or to any date on which the AMS Common Stock is not a listed security on the
Nasdaq National Market.
5.3 Stockholder Approval. (a) After the Proxy Statement/Prospectus has
become effective, AMS shall cause a special meeting (the "Special Meeting") of
its stockholders to be duly called for the purpose of submitting for approval of
AMS' stockholders this Agreement and all actions contemplated hereby which
require such approval under the DGCL, the Certificate of Incorporation and/or
By-laws of AMS or the requirements of Nasdaq National Market. AMS shall use all
reasonable efforts, (i) to cause the definitive Proxy Statement/Prospectus
relating to this Agreement and the transactions contemplated hereby to be mailed
to its stockholders and (ii) give notice of, convene and hold such Special
Meeting, as soon as practicable (but subject to compliance with Section 5.2(c)).
(b) The Board of Directors of AMS (assuming such Board's receipt of
the written opinion referenced in Section 9.3(g) herein) shall recommend that
stockholders of AMS vote in favor of the approval of this Agreement, and all
actions contemplated hereby which require such approval, provided that nothing
herein shall require the Board of Directors of AMS to act, or refrain from
acting, in any manner that, in the judgment of the Board of Directors of AMS
(after obtaining and considering the advice of independent counsel), is
reasonably expected to conflict with the proper discharge of the fiduciary
duties of the Board of Directors of AMS under applicable law. Subject to the
proviso in the preceding sentence, AMS shall use its reasonable best efforts to
(i) solicit from stockholders of AMS proxies in favor of such approval and (ii)
take all other action to secure a vote of stockholders of AMS in favor of each
matter presented as contemplated by this Agreement for the approval of the
stockholders of AMS.
5.4 Covenants of AMS Prior to the Closing. (a) From the date of this
Agreement to and including the Closing, AMS shall give Nextel, its counsel,
financial advisors, auditors and other authorized representatives reasonable
access to the offices, properties, books and records of AMS and its
Subsidiaries, shall furnish to Nextel, its counsel, financial advisors, auditors
and other authorized
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representatives such financial and operating data and other information
concerning AMS and its Subsidiaries required to be contained in any document
required to be filed by Nextel or AMS with any Governmental Authority in
connection with any of the transactions contemplated by this Agreement as such
Persons may reasonably request and shall instruct AMS' employees, counsel and
financial advisors to cooperate with Nextel in its investigation of the business
of AMS and the Subsidiaries; provided however, that (i) such
investigation shall not unreasonably disrupt the personnel or operations of AMS
and its Subsidiaries, (ii) Nextel shall consult with AMS in good faith to
establish such arrangements as are reasonably designed in the circumstances to
protect any attorney-client or similar privilege which might otherwise be
available with respect to the information or material at issue (and AMS shall
not assert that any such privilege would prevent or limit disclosure of such
information or material to Nextel unless the subject matter to which it relates
is disclosed on a schedule to this Agreement or to Nextel in writing) and (iii)
such information as AMS may be under a contractual obligation not to disclose or
to make available to a third party such as Nextel need not be furnished to
Nextel by AMS if, after using its reasonable efforts in good faith to secure all
necessary consents to permit such disclosure, AMS is unable to obtain such
consents; and provided further, that no investigation pursuant
to this Section shall affect any representation or warranty given by AMS to
Nextel hereunder or under any other agreement between AMS and Nextel.
(b) Promptly following AMS' filing of any SEC Filing containing
financial statements of AMS, AMS shall deliver copies thereof to Nextel with a
written certification by the chief financial officer of AMS that such financial
statements have been prepared in accordance with GAAP; provided, that copies of
such monthly financial statements and financial information concerning AMS
and/or any of its Subsidiaries in such form, content and detail as are prepared
and furnished to any officers of AMS and/or any such Subsidiary, shall be
delivered to Nextel promptly after such financial statements or information
become available.
(c) AMS shall make on a prompt and timely basis all governmental or
regulatory notifications and filings, including, without limitation, any
required notifications and filings under the HSR Act, necessary to be made by it
for the consummation of the transactions contemplated hereby, and
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shall cooperate in all reasonable respects with Nextel's actions taken to
fulfill the parallel covenants set forth in Section 6.1 hereof.
5.5 No Solicitation. Neither AMS nor any of its
Subsidiaries shall directly or indirectly encourage, solicit, initiate or
participate in any way in any discussion or negotiations with, or provide any
information to, or afford any access to the properties, books or records of AMS
or any of its Subsidiaries in connection with any merger, consolidation,
business combination, liquidation, reorganization, sale of substantial assets
(other than radio inventories), sale of shares of capital stock or similar
transactions involving AMS or any Subsidiary; provided that in the event a party
expresses in writing a bona fide intention to make an offer to AMS involving any
merger, consolidation, business combination, liquidation, reorganization, sale
of substantial assets, sale of shares of capital stock or similar transactions,
AMS may participate in discussions or negotiations with, or provide information
to, or afford access to the properties, books or records of AMS or any
Subsidiary, if to fail to do so would, in the reasonable judgment of the Board
of Directors of AMS (after obtaining and considering the advice of independent
counsel), conflict with the proper discharge of the fiduciary duties of the
Board of Directors of AMS under applicable law. AMS shall promptly notify Nextel
if any such information is requested of it or any Subsidiary or any such
negotiations or discussions are sought with it or any Subsidiary.
5.6 Affiliates. AMS shall use its best efforts to cause
each person that is an "affiliate" of AMS for purposes of Rule 145 under the
Securities Act ("Rule 145 Affiliates", which shall include all executive
officers and directors of AMS and all holders of 5% or more of the outstanding
shares of AMS Common Stock and such other individuals or entities listed as Rule
145 Affiliates as set forth on Schedule 5.6) to deliver to Nextel at the Closing
a written agreement substantially in the form attached hereto as Annex B.
5.7 Warrant and Option Holders, Etc. AMS shall use its
best efforts to cause: (a) all warrant and option holders of AMS Common Stock
either to exercise, cancel, convert or otherwise act as permitted in Section 2.3
with respect to their warrants and options; (b) holders of AMS Common Stock who
have registration rights (other than those Persons and registration rights set
forth on the Disclosure Schedule under a reference to Section 3.22), pre-emptive
or anti-dilutive rights, rights to appoint directors or to have
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other representatives on the Board of Directors of AMS or any other corporate
governance rights associated with such holder's stock (other than rights arising
under the AMS Certificate of Incorporation or By-Laws), to terminate such
rights; and (c) all such actions to become effective at and upon the Effective
Time.
5.8 Vote of AMS Directors and Officers. AMS shall use
reasonable best efforts, subject to any restrictions under applicable law, to
obtain agreements from each officer and director of AMS to vote his or her
shares of AMS Common Stock in favor of the Merger.
5.9 No Subsidiaries. AMS shall use its reasonable best
efforts to cause its Subsidiaries to be dissolved and the assets distributed to,
or merged with and into, AMS on or prior to the Closing, so that as of the
Effective Time AMS shall have no Subsidiaries.
ARTICLE VI. COVENANTS OF NEWCO AND NEXTEL
6.1 Conduct of Nextel Prior to the Closing. Nextel
shall make on a prompt and timely basis all governmental or regulatory
notifications and filings, including, without limitation, any required
notifications and filings under the HSR Act, necessary to be made by it for the
consummation of the transactions contemplated hereby, and shall cooperate in all
reasonable respects with AMS' actions taken to fulfill the parallel covenants
set forth in Section 5.4(c) hereof.
6.2 SEC Registration.
(a) Nextel shall use all reasonable efforts to prepare
and file as promptly as practicable with the SEC the Proxy Statement/Prospectus.
Nextel may elect to use the same Proxy Statement/Prospectus to register the
issuance and/or resales of other shares of Nextel stock that Nextel contemplates
issuing to persons other than the stockholders of AMS in other transactions;
provided that the inclusion of such shares in the Proxy Statement/Prospectus
will not delay or impede the process of the Proxy Statement/Prospectus becoming
and remaining effective as contemplated hereunder. Nextel shall use its
reasonable best efforts to cause such Proxy Statement/Prospectus to become
effective as promptly as practicable, and shall use its reasonable best efforts
to take any action required to be taken to comply in all material respects with
any applicable federal or state securities laws in connection with the issuance
of Nextel
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Common Shares in the Merger; except that such covenant of Nextel is made, as to
those portions of the Proxy Statement/Prospectus containing or required to
contain AMS Information, assuming and relying on timely and full compliance by
AMS with Section 5.2.
(b) Nextel shall use its reasonable best efforts
so that the information included in the Proxy Statement/Prospectus shall not,
at the time the Proxy Statement/Prospectus is declared effective and at the
time of the Special Meeting, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein not misleading; except that such covenant
of Nextel is made, as to those portions of the Proxy Statement/Prospectus
containing or required to contain AMS Information, assuming and relying on
timely and full compliance by AMS with Section 5.2. If at any time prior to
the time of the Special Meeting or the Effective Time any event or circumstance
should be discovered by Nextel which is required to be set forth in an
amendment or supplement to the Proxy Statement/Prospectus, Nextel will promptly
advise AMS and use its reasonable best efforts to appropriately amend or
supplement and mail the Proxy Statement/ Prospectus or such amendment or
supplement, if required. Any amendment or supplement may be accomplished, to
the extent permitted by law, rule or regulation, by including such information
in a filing under the Exchange Act that is incorporated by reference into the
Proxy Statement/Prospectus.
(c) Nextel shall cause the Proxy
Statement/Prospectus and all other documents required to be filed by Nextel
with the SEC in connection with the transactions contemplated herein to comply
as to form and substance in all material respects with the applicable
requirements of the Securities Act and the rules and regulations thereunder and
the Exchange Act and the rules and regulations thereunder; except that Nextel
shall have no liability or obligation for any AMS Information included in such
Proxy Statement/Prospectus and/or other documents filed by Nextel with the SEC.
(d) Nextel shall instruct its accountants to
deliver, and shall use its best efforts to cause its accountants, Deloitte &
Touche, to deliver, to AMS letters dated at the time the Proxy
Statement/Prospectus becomes effective and as of the Closing, addressed to AMS,
containing such matters as are customarily contained in auditors' letters
regarding information about Nextel and Newco contained in the Proxy
Statement/Prospectus, and in form and substance reasonably satisfactory to AMS.
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6.3 Current Public Information. After the Effective
Time, Nextel shall use all reasonable efforts to file all reports required to
be filed by it under the Securities Act or the Exchange Act and the rules and
regulations adopted by the SEC thereunder and shall use all reasonable efforts
to take such further action as may be necessary to ensure that the requirements
of Rule 144(c) under the Securities Act are satisfied such as to enable any
Rule 145 Affiliates of AMS to offer or sell the Nextel Common Shares received
by them in the Merger pursuant to paragraph (d) of Rule 145 (subject to
compliance with the provisions of paragraphs (e), (f) and (g) of Rule 144) and
subject also to Section 5.6 and any certificates delivered in accordance
therewith by any of such Rule 145 Affiliates of AMS.
6.4 NASDAQ Listing. Nextel shall use its reasonable best
efforts to list (subject to notice of issuance) on the Nasdaq National Market,
the Nextel Common Shares to be issued in connection with the Merger.
6.5 Indemnification. (a) From and after the Effective
Time until the tenth anniversary of the Effective Time (the "Indemnification
Period"), the Surviving Corporation shall indemnify and hold harmless each
present and former director and officer of AMS (each, an "Indemnitee") against
any costs or expenses (including attorneys' fees), judgments, fines, losses,
claims, damages or liabilities incurred in connection with any claim, action,
suit, proceeding or investigation, whether civil, criminal, administrative or
investigative, arising out of or pertaining to matters existing or occurring at
or prior to the Effective Time, whether asserted or claimed prior to, at or
after the Effective Time, to the fullest extent that AMS would have been
permitted under Delaware law and its charter and by-laws in effect as of the
date hereof to indemnify such persons (including the advancing of expenses as
incurred (including the cost of any investigation and preparation incurred in
connection therewith)) to the fullest extent permitted under Delaware law,
provided the Indemnitee to whom such expenses are advanced provides an
undertaking to the Surviving Corporation to repay such advance if it is
ultimately determined that such person is not entitled to indemnification under
Delaware law; provided, further, that any determination required to be made
with respect to whether an Indemnitee's conduct complies with the standards set
forth under Delaware law and AMS's charter and by-laws shall be made by
independent counsel selected by the Surviving Corporation and reasonably
satisfactory to such Indemnitee ("Independent Counsel"). If any claim or
claims are asserted or
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made within the Indemnification Period, all rights to indemnification hereunder
in respect of any such claim shall continue until disposition of any and all
such claims, irrespective of whether such disposition occurs within the
Indemnification Period.
(b) An Indemnitee shall give prompt written notice to the
Surviving Corporation upon learning of any claim, action, suit or proceeding
for which indemnification properly may be sought hereunder (although the
failure to so notify the Surviving Corporation shall not relieve the Surviving
Corporation from any liability which the Surviving Corporation may have under
this Section 6.5, except to the extent such failure actually prejudices the
Surviving Corporation), and the Surviving Corporation, through counsel
reasonably satisfactory to the Indemnitee, may assume the defense thereof;
provided, however, that any Indemnitee shall be entitled to participate in (but
not control) any such action, suit or proceeding with counsel of his own choice
but at his own expense; and provided, further, that any Indemnitee shall be
entitled to participate in (and control, with respect to matters pertaining to
such Indemnitee) any such action, suit or proceeding with counsel of his own
choice at the expense of the Surviving Corporation if (in the opinion of
Independent Counsel) representation by the Surviving Corporation's counsel
would, or would reasonably be expected to, present a conflict of interest or if
there would be, or there would reasonably be expected to be, defenses available
to the Indemnitee which could be in conflict or inconsistent with those
available to the Surviving Corporation. In any event, if the Surviving
Corporation's counsel fails to assume the defense within a reasonable time, the
Indemnitee may assume such defense and the fees and expenses of his attorneys
(if indemnification for the subject claims was properly sought hereunder) shall
be borne by the Surviving Corporation. No action, suit or proceeding for which
indemnification may be sought shall be compromised or settled without the
consent of the Surviving Corporation, which consent shall not be unreasonably
withheld. The Surviving Corporation shall not, without the consent of the
Indemnitee, (i) compromise or settle any action, suit or proceeding or consent
to the entry of any judgment which does not include as an unconditional term
thereof the delivery by the claimant or plaintiff to the Indemnitee of a
written release from all liability in respect of such action, suit or
proceeding or (ii) compromise or settle any action, suit or proceeding in any
manner that may adversely affect the Indemnitee other than as a result of money
damages
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or other money payments for which the Surviving Corporation is fully
responsible with no recourse by the claimant to the assets of any Indemnitee.
(c) Notwithstanding any provision to the contrary in this Section
6.5, (i) the law firm of Richards, Layton & Finger shall, at the expense of the
Surviving Corporation, be the lead attorneys who shall represent (and shall
control the defense of) the directors of AMS in the Purported Class Actions,
and in any other action, suit or proceeding arising out of or related to this
Agreement or any of the transactions contemplated hereby (whether or not any
such action, suit or proceeding is consolidated or combined with the Purported
Class Actions) and (ii) the law firm of Fellheimer Eichen Braverman & Kaskey
(or any other attorneys reasonably acceptable to the current directors of AMS)
shall, at the expense of the Surviving Corporation, be the (or among the)
attorneys who represent and defend the directors of AMS in the action captioned
Seidman, et al. v. American Mobile Systems Incorporated, et al., Civil Action
No. 92-1782 (E.D.P.A. filed March 30, 1992). Counsel retained by the Surviving
Corporation (at its own expense) may participate in the defense of any claim,
action, suit or proceeding commenced against or involving any Indemnitee for
which indemnification properly may be sought hereunder, except under the
circumstances referred to in the final proviso of the first sentence of Section
6.5(b).
(d) This Section 6.5 shall survive the consummation of the Merger.
The provisions of this Section 6.5 are intended to be for the benefit of, and
shall be enforceable by, each Indemnitee, his heirs and representatives and
shall be binding upon the Surviving Corporation and its successors and assigns.
The rights provided to the Indemnitees hereunder shall be in addition to, and
shall not be in lieu of or otherwise diminish in any respect, any rights to
indemnity which such parties may have under the charter or bylaws of AMS or the
Surviving Corporation or any other agreement entered into by an Indemnitee with
AMS prior to the date hereof; provided, that true, complete and correct copies
of such agreements shall have been delivered to Nextel prior to the date
hereof.
(e) If Nextel elects, pursuant to Section 7.7(a), to substitute a
Subsidiary (the "Substitute Subsidiary") for Newco in connection with the
Merger, Nextel shall, within 45 days after the Effective Time, cause the assets
of Mobile Communications of Florida, Inc. to be transferred to such Substitute
Subsidiary. Nextel will not cause the Surviving Corporation to dispose of more
than 20% of the assets of the Surviving
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Corporation for other than fair value without putting into place
indemnification provisions reasonably satisfactory to the Indemnitees.
ARTICLE VII. JOINT COVENANTS
7.1 Confidentiality. Each of AMS and Nextel shall (and
shall cause its respective officers, employees and representatives to) keep all
information furnished to it pursuant to or in connection with this Agreement or
any of the transactions contemplated herein confidential (including, without
limitation, any of such information relating to either of AMS' or Nextel's
respective business) and shall not disclose any of such information to any
third party, except (i) as contemplated herein, (ii) as required by (A) law
(including information disclosures that may be required to be set forth in the
Proxy Statement/Prospectus or other materials furnished to AMS stockholders as
contemplated in Section 5.3 hereof), (B) valid judicial or regulatory process
to any Governmental Authority including but not limited to the FCC, the Federal
Trade Commission and the Department of Justice, or (C) securities exchange
rules or regulations (or comparable rules and regulations of the Nasdaq
National Market), and (iii) for disclosures of such information concerning the
transactions contemplated by this Agreement which are made to AMS' or to
Nextel's respective stockholders, officers, directors, financial advisors,
accountants, counsel or other representatives on a need-to-know basis;
provided, that such confidentiality obligations shall not apply to any
information (i) which becomes public through no fault of the receiving party or
its representatives or (ii) which the receiving party can show was already
known to it on a non-confidential basis prior to the disclosure thereof by the
other party. Whether or not containing confidential information, all press
releases and similar public disclosures concerning any of the transactions
contemplated by this Agreement shall be approved by each of the parties hereto
(which approval shall not be unreasonably withheld or delayed) prior to their
release or publication. Upon the occurrence of the Merger, Nextel shall
automatically be released from the confidentiality obligations imposed on it
pursuant to this Section 7.1 or otherwise with respect to any information
furnished to it by or on behalf of AMS.
7.2 State Takeover Statutes. Following the execution
hereof, each of Nextel and AMS shall, upon the request of the other, use all
reasonable efforts to take all available steps to (a) exempt the transactions
contemplated hereby from the requirements of any otherwise applicable state
takeover law and
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(b) assist the other party in any challenge to the validity or applicability to
the transactions contemplated hereby of any state takeover law.
7.3 FCC Filings. Nextel and AMS have entered into a side
agreement dated June 4, 1993, as amended to the date hereof, in connection with
certain matters relevant to a "wide area" SMR filing application with the FCC
(the "Side Agreement"). AMS and Nextel hereby confirm that such Side
Agreement, as to the matters it addresses, relates to and supplements this
Agreement, and the execution and delivery of this Agreement is not intended to
and shall not supersede or terminate such Side Agreement.
7.4 Related Nextel Stock Issuance. Nextel has indicated
to AMS that Nextel may reach agreement with Comcast Corporation ("Comcast")
and/or Motorola Inc. ("Motorola") and/or Digital Radio L.L.C. (the "McCaw
Investor") on the terms that will be applicable to any exercise by such parties
or any of them of anti-dilutive rights, whether now held by, or hereafter to be
granted to, such parties (or their affiliates), triggered by issuances of
Nextel Common Shares in or in connection with the Merger and/or certain other
completed, pending or proposed issuances of Nextel Common Shares previously
disclosed in writing to AMS (the "Other Issuances"). AMS confirms that Nextel
may reach agreements with Comcast, Motorola and/or the McCaw Investor on such
anti- dilutive rights and such parties' exercise thereof, by reason of the
Merger and/or any or all of such Other Issuances, on such specific terms as the
Board of Nextel determines is appropriate provided that such agreements do not
delay the consummation of the Merger other than any delay related to or arising
from the existing contractual arrangements between Nextel and Motorola or
Nextel and Comcast or Nextel and the McCaw Investor or its affiliates.
7.5 Support of Transactions. Each of Nextel and AMS
shall, and each shall cause its respective affiliates to (i) use his or its
reasonable best efforts to assemble, prepare and file any information (and, as
needed, to supplement such information) as may be reasonably necessary to
obtain as promptly as practicable all governmental and regulatory consents
required under Articles III and IV, (ii) exert his or its reasonable best
efforts to obtain all material consents and approvals of Forums and third
parties that any of Nextel, AMS or their respective affiliates are required to
obtain in order to consummate the Merger (including all FCC approvals and
consents), (iii) take such other action as may reasonably be necessary or as
the other party may reasonably request to satisfy the conditions of Article IX
or otherwise to comply with
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this Agreement, and (iv) refrain from taking or causing to be taken any action,
whether before or after the Effective Time, which would disqualify the Merger
as a "reorganization" within the meaning of Section 368(a) of the Code.
7.6 Antitrust Filing. To the extent not already
performed or accomplished, within 20 days following the date hereof each of AMS
and Nextel (and, to the extent required, their respective affiliates) shall
promptly file or cause to be filed any reports, documents, filings or other
data required to be filed with respect to the transactions contemplated hereby
by each of them respectively pursuant to the HSR Act and the rules and
regulations promulgated thereunder, and each shall use its respective
reasonable best efforts to respond as promptly as practicable to all inquiries
received for additional information or documentation. AMS shall permit Nextel
to participate in any discussions with representatives of the United States
Federal Trade Commission and the United States Department of Justice, and shall
use all reasonable efforts to permit Nextel (through its counsel) to direct all
communications and contacts with and to such representatives. Each of Nextel
and AMS shall use its best efforts to resolve such objections, if any, which
may be asserted with respect to the Merger under the antitrust laws, including,
without limitation, the HSR Act. In the event a suit is threatened or
instituted challenging the Merger as violative of the antitrust laws, each of
Nextel and AMS shall use its best efforts to avoid the filing of, resist or
resolve such suit.
7.7 Substitution of Subsidiary or Successor Company.
(a) Nextel has the option to substitute any
wholly owned direct subsidiary of Nextel for Newco in connection with the
Merger, provided that such substitution does not adversely affect the interests
of AMS or its stockholders hereunder. If Nextel makes such an election, each
reference to Newco herein shall be deemed to refer to the new subsidiary.
(b) If Nextel elects to engage in a corporate
reorganization transaction prior to or contemporaneously with the Closing in
which Nextel is merged into a corporation that has a capital structure
identical to the capital structure of Nextel and succeeds to all of the
obligations of Nextel (including, without limitation, under this Agreement),
then, if requested by Nextel, so long as (i) the intended tax-free treatment of
the Merger would not be adversely affected, and (ii) the other aspects of a
transaction involving the equity of the entity resulting from such
reorganization transaction would be equivalent to or no
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less favorable to the stockholders of AMS than the Merger involving Nextel
equity, the parties shall agree to appropriate modifications to this Agreement
and any related documents to accommodate a transaction involving such resulting
entity and the equity of such resulting entity. The modifications and related
documentation may include an additional agreement to confirm that the Merger
would be part of a broader reorganization of Nextel that is intended to qualify
for tax-free treatment under Section 351 of the Code and other modifications to
confirm that the Merger is part of the broader transaction under Section 351.
7.8 Stock Purchase Agreement. (a) Nextel and AMS are
parties to a Stock Purchase Agreement, dated as of August 25, 1993, and as
amended by Amendment No. 1 dated June 14, 1994 ("Amendment No. 1"), and by
Amendment No. 2 dated August 12, 1994 ("Amendment No. 2"), and by Amendment No.
3 dated September 14, 1994 ("Amendment No. 3") and by Amendment No. 4 dated
November 18, 1994 ("Amendment No. 4") (such agreement, as so amended, the
"Stock Purchase Agreement"). Upon execution of this Agreement, the Stock
Purchase Agreement shall lapse and be of no further force and effect; provided,
that if this Agreement shall be terminated in accordance with Section
11.1(b)(iv), Section 11.1(c)(iv), Section 11.1(d)(iii), or Section 11.1(d)(iv)
(each a "Spring Back Event") then, upon the occurrence of such Spring Back
Event, the Stock Purchase Agreement shall be returned automatically to full
force and effect and shall once again become the binding, legally enforceable
agreement of Nextel and AMS; provided, that upon the occurrence of such Spring
Back Event and the reinstitution of the Stock Purchase Agreement, such Stock
Purchase Agreement shall, without any further action on the part of the parties
thereto, be amended as follows:
(i) the first sentence of Section 4.11(b) of the Stock Purchase
Agreement shall be amended by substituting for the date "June 30, 1999" the
words "the fourth anniversary of the Termination Date".
(ii) Section 4.11(b) shall be further amended to add the following
sentence as the last sentence of such Section:
"As used herein, the term "Termination Date" means the day which is
the 120th day following the occurrence of a Spring Back Event (as such
term is defined in that certain Agreement and Plan of Merger, dated as
of April 25, 1995, by and among the Issuer, the Purchaser and Mobile
Communications of Florida, Inc.
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(iii) The term "Market Value Date" in Section 6.1 of the Stock
Purchase Agreement shall be amended by substituting for the date "June 30,
1999" the words "the fourth anniversary of the Termination Date".
(iv) Section 7.12(a)(ii) of the Stock Purchase Agreement is amended
by substituting for the date "June 30, 1999" the words "the fourth anniversary
of the Termination Date".
(v) Section 7.12(a)(iv) of the Stock Purchase Agreement is amended by
substituting for the date "June 30, 1995" the words "the Termination Date".
(b) Upon the occurrence of a Spring Back Event and the reinstitution of the
Stock Purchase Agreement, that certain Option Agreement dated as of April 7,
1993 by and between Nextel and AMS, as amended (the "Amended Option Agreement")
shall, without any further action on the part of the parties thereto, be
amended as follows:
(i) Section 15 of the Amended Option Agreement shall be amended by
substituting for the date "June 30, 1995" each time it appears therein the
words "the Termination Date".
(ii) Section 15 of the Amended Option Agreement shall be further
amended by substituting for the date "October 31, 1994" the words "30 days
preceding the Termination Date".
(c) Upon the occurrence of a Spring Back Event and the reinstitution of the
Stock Purchase Agreement, that certain letter agreement dated June 4, 1993
between Nextel and AMS, as amended (the "Short Spacing Letter") shall, without
any further action on the part of the parties thereto, be amended by
substituting for the date "June 30, 1995" each time it appears in Sections 2, 4
and 5 of the Short Spacing Letter the words "the Termination Date".
7.9 Nextel Vote of AMS Shares. Subject to any
restrictions under applicable law, Nextel will vote its shares of AMS Common
Stock in favor of the Merger.
7.10 Transfer of AMS Common Stock by Nextel. From the date
of execution of this Agreement until the Closing (or any earlier termination of
this Agreement), Nextel shall not sell, transfer, assign or convey any shares
of AMS Common Stock beneficially owned by Nextel.
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ARTICLE VIII. CLOSING
8.1 Filing. As soon as all of the conditions set forth
in Article IX have either been fulfilled or waived, and if the Merger Agreement
has not theretofore been terminated pursuant to its terms, the Boards of
Directors of Nextel and AMS hereby direct their officers forthwith to file and
record all relevant documents with the appropriate government officials to
effectuate the Merger.
8.2 Closing. The Closing shall, unless another date or
place is agreed to in writing by the parties hereto, take place at a location
and time mutually agreed upon by Nextel and AMS at the earliest practicable
date, and such date, time and location shall be confirmed in writing by such
parties not less than 10 days prior to the scheduled date of the Closing. The
term "Closing," when used in this Agreement, means the Effective Time.
ARTICLE IX. CONDITIONS TO OBLIGATIONS
9.1 Conditions to Obligations of Nextel, Newco and AMS.
The obligations of Nextel, Newco and AMS to consummate, or cause to be
consummated, the Merger are subject to the satisfaction of the following
conditions, any one or more of which may be waived in writing by such parties
to the extent permitted by law:
(a) The stockholders of AMS shall have taken all
necessary action to authorize, approve and adopt the transactions referred to
in this Agreement.
(b) All waiting periods under the HSR Act and the
regulations promulgated thereunder applicable to the Merger shall have expired
or been terminated.
(c) All required FCC approvals and consents,
which shall be obtained for purposes of this Agreement only when they have
become Final Orders (as defined in this section), shall have been obtained, any
approval or consent required to be obtained under the Nextel Indentures (as
herein defined) to consummate the transactions contemplated hereby shall have
been obtained, and any approval or consent of any other third party required as
a condition to the consummation of the Merger shall have been obtained, if the
failure to obtain such approval or consent would preclude or prohibit the
consummation of the Merger or would have a Material Adverse Effect on AMS (or,
assuming and giving effect to
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consummation of the Merger, on the Surviving Corporation) and its Subsidiaries,
taken as a whole or on Nextel and the Nextel Subsidiaries, taken as a whole.
Any consent or approval granted or an order entered by the FCC shall be a
"Final Order" when a sufficient number of days shall have elapsed from the date
of entry or grant thereof without the filing of any adverse request, petition
or appeal by either party or third party or by the FCC (on its own motion) with
respect to such consent, approval or order, or any aspect or portion thereof,
or any resubmissions of any applications or requests for any of such consents,
approvals or orders, or, if challenged, that such consent, approval or order
(or affected aspects or portions thereof) shall have been reaffirmed or upheld
and the applicable period for seeking further administrative or judicial review
shall have expired without the filing of any action, petition or request for
further review.
(d) There shall not be in force any order or
decree, statute, rule or regulation, nor shall there be on file any complaint
in any Forum seeking an order or decree, restraining, enjoining or prohibiting
the consummation of the Merger, and neither Nextel nor AMS shall have received
notice from any Governmental Authority that it has determined to institute any
suit or proceeding to restrain or enjoin the consummation of the Merger or to
nullify or render ineffective this Agreement if consummated, or to take any
other action which would result in the prohibition of, or material change in,
the terms of or applicable to the Merger; provided that so long as no order,
decree or judgment has been obtained and is in effect that would restrain,
enjoin, prohibit or materially change the terms of or applicable to, the
Merger, the existence or pendency of the Purported Class Actions shall not be
deemed to constitute all or any part of the basis for any party to claim that
the condition set forth in this Section 9.1(d) is not satisfied.
(e) The Proxy Statement/Prospectus shall have
become effective under the Securities Act, and no stop order suspending such
effectiveness shall have been issued or threatened with respect thereto.
(f) The registration statements or other filings
as may be required under applicable blue sky laws shall have become effective,
and no stop order shall be threatened or in effect with respect thereto.
(g) The Nextel Common Shares issuable in the
Merger shall have been listed or approved for listing upon notice of issuance
by the Nasdaq National Market.
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(h) Nextel and AMS shall each have obtained an
opinion of their respective counsel, based on customary representations and
warranties, and otherwise reasonably satisfactory to each of them (in the case
of the opinion addressed to such party). The opinion of Nextel counsel shall
be addressed to Nextel and shall be to the effect that (i) the Merger will
constitute a Tax-free reorganization within the meaning of Section 368(a) of
the Code, and (ii) no gain or loss will be recognized by Newco, Nextel or AMS
by reason of the Merger. The opinion of AMS counsel shall be addressed to AMS
and shall be to the effect that (i) the Merger will constitute a Tax-free
reorganization within the meaning of Section 368(a) of the Code, and (ii) no
gain or loss will be recognized by the stockholders of AMS upon the conversion
of their shares of AMS Common Stock into shares of Nextel Common Shares
pursuant to the terms of the Merger (except for the effect of any cash received
in lieu of fractional shares).
(i) The purchase of Units by the McCaw Investor,
as contemplated in that certain Securities Purchase Agreement dated as of April
4, 1995 by and among Nextel, the McCaw Investor and Craig O. McCaw, shall have
been consummated.
9.2 Conditions to Obligations of Nextel and Newco. The
obligation of each of Nextel and Newco to consummate, or cause to be
consummated, the transactions contemplated by this Agreement is subject to the
satisfaction of the following additional conditions, any one or more of which
may be waived in writing by Nextel:
(a) The representations and warranties of AMS
contained in this Agreement shall be true and correct on the date hereof, and
shall remain true and correct in all material respects as of the Closing, as if
made anew at that time, and each of the covenants and agreements of AMS to be
performed as of or prior to the Closing shall have been duly performed in all
material respects.
(b) AMS shall have delivered to Nextel a
certificate signed by an officer of AMS, dated the Closing, certifying that, to
the best of the knowledge and belief of such officer, the conditions specified
in Section 9.1 as they relate to AMS, and in subsection 9.2(a), (g) and (i)
have been fulfilled.
(c) Nextel shall have received an opinion, dated
the Closing, from counsel to AMS in a form reasonably satisfactory to Nextel.
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(d) Nextel shall have received a letter from KPMG
Peat Marwick L.L.P., dated as of the Closing, addressed to Nextel pursuant to
Section 5.2(b).
(e) At the time the Proxy Statement/Prospectus
becomes effective, and also at the Closing, AMS shall have furnished to Nextel
certificates, dated as of said times and signed by its President and Secretary,
to the effect that to the best of the knowledge and belief of the signing
persons the material contained in the Proxy Statement/Prospectus which
constitutes AMS Information, contains, as of the date of each of such
certificates, no material misstatement of fact and does not omit to state any
material fact necessary to make the statements made not misleading.
(f) No holder of outstanding shares of AMS Common
Stock shall be entitled to assert appraisal rights.
(g) All options and warrants to acquire AMS
Common Stock or any other securities of AMS shall either have been exercised,
expired by their terms or otherwise been cancelled or converted into or
exchanged for corresponding options or warrants of Nextel as contemplated in
Sections 2.2 or 2.3, and all Persons having any rights of the type(s) referred
to in Section 5.7(b) hereof shall have executed and delivered written
instruments, in form and substance reasonably acceptable to Nextel, terminating
such rights effective as of the Closing.
(h) Nextel shall have received duly executed
agreements, each in substantially the form attached hereto as Annex B, from
each of the Rule 145 Affiliates.
(i) The terms and conditions of any Debt (as such
term is defined in the Nextel Indentures) of AMS or any of its Subsidiaries
outstanding immediately prior to the Closing shall permit payment in full at
any time at the borrower's election, without prepayment penalties, similar
charges or any lender's or other third party's consents (unless received and in
effect at such time), other than charges payable to Kansallis Osake Pannki
("KOP") under AMS' existing credit agreement with KOP to the extent the
interest earned on the proceeds of any such repayment is less than the interest
that would have otherwise been payable under such applicable credit agreement
with respect to such amount (for the period from the date of such repayment
until the date of the succeeding interest rate redetermination (or other
similar provision) under such applicable credit agreement.
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(j) AMS shall have delivered to Nextel a
certificate, in a form reasonably satisfactory to Nextel, signed by an officer
of AMS, dated the Closing, certifying that, to the best knowledge of such
officer, the Nextel Common Shares issued in the Merger will be held in a manner
consistent with the "continuity of interest" conditions imposed by the Code.
9.3 Conditions to the Obligations of AMS. The obligation
of AMS to consummate the transactions contemplated by this Agreement is subject
to the satisfaction of the following additional conditions, any one or more of
which may be waived in writing by AMS:
(a) The representations and warranties of Nextel
and Newco contained in this Agreement shall be true and correct on the date
hereof, and shall remain true and correct in all material respects as of the
Closing, as if made anew at that time, and each of the covenants and agreements
of Nextel and Newco to be performed as of or prior to the Closing shall have
been duly performed in all material respects.
(b) Nextel shall have delivered to AMS a
certificate signed by an officer of Nextel, dated the Closing, certifying that,
to the best of the knowledge and belief of such officer, the conditions
specified in Section 9.1 as they relate to Nextel and/or Newco and in
subsection 9.3(a) have been fulfilled.
(c) AMS shall have received an opinion, dated the
Closing, from counsel to Nextel in a form reasonably satisfactory to AMS.
(d) AMS shall have received a letter from
Deloitte & Touche, L.L.P., dated as of the Closing, addressed to AMS, pursuant
to Section 6.2(d).
(e) At the time the Proxy Statement/Prospectus
becomes effective, and also at the Closing, Nextel shall have furnished to AMS
certificates, dated as of said times and signed by its President and Secretary,
to the effect that to the best of the knowledge and belief of the signing
persons the material contained in the Proxy Statement/Prospectus (other than
AMS Information) contains, as of the date of each of such certificates, no
material misstatement of fact and does not omit to state any material fact
necessary to make the statements made not misleading.
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(f) There shall not be any pending litigation
filed against Nextel, the outcome of which may reasonably be expected to result
in a Material Adverse Effect on Nextel and the Nextel Subsidiaries, taken as a
whole.
(g) The Board of Directors of AMS shall have
received an opinion, dated within 5 days of the date of the definitive Proxy
Statement/Prospectus relating to the Special Meeting, from Salomon Brothers
Inc., financial advisors to AMS, to the effect that, from a financial point of
view, the Exchange Ratio is fair to the public holders of AMS Common Stock
(other than Nextel).
ARTICLE X. DEFINITIONS
10.1 Defined Terms. In addition to the definitions set
forth in Section 3.15, as used herein the following terms shall have the
following meanings:
"Affiliate" means as to any Person, another Person which
controls, is controlled by or is under common control with, such Person.
"Agreement" has the meaning assigned to such term in the
introduction hereof.
"AMS" means American Mobile Systems Incorporated, a Delaware
corporation.
"AMS Common Stock" means AMS' common stock, par value $0.01
per share.
"AMS Disclosure Information" has the meaning assigned to such
term in Section 3.14 hereof.
"AMS Equivalent Securities" has the meaning assigned to such
term in Section 2.1 hereof.
"AMS Information" has the meaning assigned to such term in
Section 5.2 hereof.
"AMS Financial Statements" has the meaning assigned to such
term in Section 3.5 hereof.
"AMS Option Plan" has the meaning assigned to such term in
Section 2.3 hereof.
"AMS Stock Option" has the meaning assigned to such term in
Section 2.3 above.
"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended.
"Certificate" has the meaning assigned to such term in Section
2.5 hereof.
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"Certificate of Incorporation" means AMS' Certificate of
Incorporation, as the same may be supplemented, amended or restated from time
to time.
"Charter Documents" means, with respect to any corporation,
the certificate or articles of incorporation and by-laws or regulations of such
corporation.
"Claims" has the meaning assigned to such term in Section 3.7
hereof.
"Closing" has the meanings assigned to such term in Section
8.2 hereof.
"Closing Per Share Value" has the meaning assigned to such
term in Section 2.10 hereof.
"Code" means the Internal Revenue Code of 1986, as amended,
including, when appropriate, the statutory predecessor of the Code, and all
applicable regulations under the Code and the statutory predecessor of the
Code, and any official published rulings and judicial determinations under the
foregoing.
"Consent Decree" means that certain agreed order by and among
the U.S. Department of Justice, Motorola, Inc. and Nextel, dated October 27,
1994, which Nextel anticipates will be incorporated in a final Order of an
appropriate Forum, and which is in substantially the form of the draft thereof
furnished to AMS prior to the date hereof.
"Contaminants" has the meaning assigned to such term in CERCLA.
"Contingent Obligation" means any obligation of any Person
guaranteeing or otherwise becoming responsible for, in any manner whatsoever,
whether directly or indirectly, any indebtedness, lease, dividend or other
obligation of any other Person, whether or not contingent; provided, however,
that the term "Contingent Obligation" shall not include endorsements of
instruments for deposit or collection in the ordinary course of business.
"Converted Nextel Shares" has the meaning assigned to such
term in Section 2.3(b) hereof.
"Converted Per Share Price" has the meaning assigned to such
term in Section 2.3(b) hereof.
"DGCL" has the meaning assigned to such term in Section 1.1
hereof.
"Effective Time" has the meaning assigned to such term in
Section 1.2 hereof.
"Employee Plans" has the meaning assigned to such term in
Section 3.21 hereof.
"ERISA" has the meaning assigned to such term in Section 3.21
hereof.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
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"Exchange Ratio" has the meaning assigned to such term in
Section 2.1 hereof.
"Excluded Shares" has the meaning assigned to such term in
Section 2.1 hereof.
"FCC" has the meaning assigned to such term in Section 3.3
hereof.
"Final Order" means that forty (40) days shall have elapsed
from the date of grant of FCC consent to the transfers of control and/or
assignments contemplated by the relevant applications or requests submitted to
the FCC without the filing of any adverse request, petition or appeal by any
party or third party or by the FCC on its own motion with respect to such
consents, or any resubmissions of any applications or requests for such
consents, or, if challenged, that such FCC consents shall have been reaffirmed
or upheld and the applicable period for seeking further administrative or
judicial review shall have expired without the filing of any action, petition
or request for further review.
"Forums" has the meaning assigned to such term in Section 3.7
hereof.
"GAAP" means generally accepted accounting principles in
effect in the United States of America from time to time, applied on a
consistent basis.
"Governmental Authority" means any nation or government, any
state or other political subdivision thereof, and any entity or official
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Hazardous Substances" has the meaning assigned to such term
in CERCLA.
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended.
"Indemnitee" means a party entitled to indemnification under
Section 6.5 hereof.
"Lien" means any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including any conditional sale or
other title retention agreement, any lease in the nature thereof, and the
filing of or agreement to give any financing statement under the Uniform
Commercial Code or comparable law of any jurisdiction in connection with such
mortgage, pledge, security interest, encumbrance, lien or charge).
"Material Adverse Change (or Effect)" means a change (or
effect) in the financial condition, results of operations, assets or business,
which change (or effect), individually or in the aggregate, is or is reasonably
expected to be materially adverse to such condition, results of operations,
assets or business.
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"Maximum AMS Common Equivalents" has the meaning assigned to
such term in Section 2.2(a) hereof.
"Maximum Nextel Shares" has the meaning assigned to such term
in Section 2.1 hereof.
"McCaw Investor" has the meaning assigned to such term in
Section 7.4.
"Merger" has the meaning assigned to such term in Section 1.1
hereof.
"Newco" means American Mobile Acquisition Corp., a Delaware
corporation.
"Nextel" means NEXTEL Communications, Inc., a Delaware
corporation.
"Nextel Common Shares" means shares of Nextel Class A Common
Stock, par value $.001 per share.
"Nextel Disclosure Information" has the meaning assigned to
such term in Section 4.14 hereof.
"Nextel Financial Statements" has the meaning assigned in
Section 4.5.
"Nextel Indentures" means, collectively, the First Nextel
Indenture, the Second Nextel Indenture and, from and after the time of which
the OneComm Merger has been consummated, the OneComm Indenture. The "First
Nextel Indenture" means that certain Indenture dated as of August 15, 1993 by
and between Nextel and The Bank of New York, as Trustee ("Trustee"), in the
form heretofore delivered to AMS; the "Second Nextel Indenture" means that
certain Indenture dated as of February 15, 1994, by and between Nextel and the
Trustee, in the form heretofore delivered to AMS; and the "OneComm Indenture"
means that certain Indenture dated as of January 13, 1994 by and between
CenCall Communications Corp. (now known as OneComm Corporation; "OneComm") and
the Trustee, in the form heretofore delivered to AMS, and as the same may be
supplemented and amended as contemplated by its terms in connection with its
assumption by Nextel, as successor to OneComm, in the OneComm Merger.
"Nextel Subsidiary" means a Subsidiary of Nextel.
"Officers' Certificate" means a certificate executed on behalf
of AMS or Nextel, as applicable, by its President or by one of its Vice
Presidents, and by its Treasurer, Secretary or by one of its Assistant
Secretaries.
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"OneComm Merger" means that certain merger of OneComm with and
into Nextel on substantially the terms contemplated in that certain Agreement
and Plan of Merger by and between Nextel and OneComm dated as of July 13, 1994,
as heretofore amended, a copy of which has been heretofore delivered to AMS.
"Original Warrant" has the meaning assigned to such term in
Section 2.1 hereof.
"Other Issuances" has the meaning assigned to such term in
Section 7.4 hereof.
"Permitted Liabilities" means liabilities or obligations that
(i) are associated with obligations (other than indebtedness for borrowed
money) not due for payment or performance under executory contractual
arrangements, such as liabilities associated with obligations to make future
payments under leases or maintenance contracts that, in accordance with GAAP,
would be characterized as operating leases and (ii) in accordance with GAAP,
would not be included as a liability on the liability side of a balance sheet.
"Permitted Lien" means (i) Liens that secure only Permitted
Liabilities and apply only to items of collateral that give rise to such
Permitted Liability, (ii) Liens for taxes, assessments or governmental charges
or claims that either (a) are not yet delinquent or (b) are being contested in
good faith by appropriate proceedings; (iii) statutory Liens of landlords and
carriers', warehousemen's, mechanics', suppliers', materialmen's, repairmen's
or other like Liens arising in the ordinary course of business and with respect
to amounts that either (a) are not yet delinquent or (b) are being contested in
good faith by appropriate proceedings; (iv) Liens incurred or deposits made in
the ordinary course of business in connection with workers' compensation,
unemployment insurance and other types of social security; (v) Liens incurred
or deposits made to secure the performance of tenders, bids, leases, statutory
obligations, surety and appeal bonds, progress payments, government contracts
and other obligations of like nature incurred in the ordinary course of
business; (vi) easements, rights-of-way, restrictions and other similar changes
or encumbrances not interfering with the ordinary conduct of business; and
(vii) Liens created for the sole purpose of extending, renewing or refunding
any other Permitted Lien or any Lien existing prior to the date of acquisition
of the asset, property, right or interest subject to such Lien; provided,
however, that such extension, renewal or refunding Lien shall be limited to all
or any part of the asset, property, right or interest that secured the Lien
being extended, renewed or refunded.
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"Person" means an individual, partnership, corporation,
business trust, joint stock company, trust, unincorporated association, joint
venture, Governmental Authority or other entity, of whatever nature.
"Pollutants" has the meaning assigned to such term in CERCLA.
"Post-Employment Benefits" has the meaning assigned to such
term in Section 3.21(j) hereof.
"Proxy Statement/Prospectus" means the registration statement,
the prospectus included therein and the proxy statement to be furnished to the
holders of AMS Common Stock, in each case together with any amendments thereto
pursuant to Sections 5.3 and 6.2 hereof.
"Purported Class Actions" has the meaning assigned to such
term in Section 3.7 hereof.
"Requirement of Law" means as to any Person, the articles of
incorporation, by-laws or other organizational or governing documents of such
Person, and any law, or determination of any arbitrator or a court or other
Governmental Authority, in each case applicable to or binding upon such Person
or any of its property or to which such Person or any of its property is
subject.
"Rights" has the meaning assigned to such term in Section 3.11
hereof.
"Rule 145 Affiliates" has the meaning assigned to such term in
Section 5.6 hereof.
"SEC" means the Securities and Exchange Commission.
"SEC Filings" means each and all of the forms, reports or
statements filed by AMS with the SEC, pursuant to the requirements of (i)
Section 13 or 14 of the Exchange Act or (ii) the Securities Act, on or after
July 1, 1992, including all exhibits, amendments and supplements thereto.
"Securities Act" means the Securities Act of 1933 as amended,
and the rules and regulations promulgated by the SEC from time to time
thereunder.
"Securities Purchase Agreement" (a true and correct copy of
which has been previously delivered to AMS) has the meaning assigned to such
term in Section 9.1(i).
"Side Agreement" has the meaning assigned to such term in
Section 7.3 hereof.
"SMR" means specialized mobile radio.
"Special Meeting" has the meaning assigned to such term in
Section 5.3 hereof.
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"Subsidiary" means, as to any Person, a corporation of which
more than 50% of the outstanding capital stock having full voting power is at
the time directly or indirectly owned or controlled by such Person.
"Subsidiary Guarantees" means those guarantees contemplated to
be required to be issued by certain Nextel Subsidiaries pursuant to the terms,
and in the circumstances described, in Section 1009 and elsewhere in the First
Nextel Indenture.
"Substitute Subsidiary" has the meaning assigned to such term
in Section 6.5(e).
"Surviving Corporation" has the meaning assigned to such term
in Section 1.1 hereof.
"Tax Returns" has the meaning assigned to such term in Section
3.13 hereof.
"Taxes" has the meaning assigned to such term in Section 3.13
hereof.
"Third Party Managers" has the meaning assigned to such term
in Section 3.15 hereof.
"1994 10-K" has the meaning assigned to such term in Section
3.7 hereof.
10.2 Other Definitional Provisions.
(a) All terms defined in this Agreement shall
have the defined meanings when used in any certificate, report or other
document made or delivered pursuant hereto or thereto, unless the context
otherwise requires.
(b) Terms defined in the singular shall have a
comparable meaning when used in the plural, and vice versa.
(c) All matters of an accounting nature in
connection with this Agreement and the transactions contemplated hereby shall
be determined in accordance with GAAP.
(d) As used herein, the neuter gender shall also
denote the masculine and feminine, and the masculine gender shall also denote
the neuter and feminine, where the context so permits.
(e) The words "hereof", "herein" and "hereunder",
and words of similar import, when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement.
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ARTICLE XI. TERMINATION/EFFECTIVENESS
11.1 Termination. This Agreement may be terminated and
the transactions contemplated hereby abandoned:
(a) By mutual written consent of the parties
authorized by their respective Boards of Directors, at any time prior to the
Closing.
(b) Prior to the Closing, by written notice to
AMS from Nextel authorized by the Board of Directors of Nextel, if (i) there is
a material breach of any representation, warranty, covenant or agreement on the
part of AMS set forth in this Agreement, or if a representation or warranty of
AMS shall be untrue in any material respect, in either case such that the
condition specified in Sections 9.2(a) or 9.2(b) cannot be satisfied at
Closing, except that, if such breach is curable by the breaching party through
the exercise of its reasonable best efforts, then, for up to 30 days, but only
as long as the breaching party continues to exercise such reasonable best
efforts, Nextel may not terminate this Agreement under this Section 11.1(b)(i),
(ii) any governmental or regulatory consent or approval required for
consummation of the transactions contemplated hereby is denied by or in a final
order or other final action issued or taken by the appropriate governmental or
regulatory authority, agency or similar body, (iii) consummation of any of the
transactions contemplated hereby is enjoined, prohibited or otherwise
restrained by the terms of a final, non-appealable order or judgment of a court
of competent jurisdiction, or (iv) the record date (as originally set or as
changed) for the Special Meeting is a date on which the AMS Common Stock is not
listed on the Nasdaq National Market (without regard to whether Nextel has
consented to the setting or changing of such record date).
(c) Prior to the Closing, by written notice to
Nextel from AMS authorized by its Board of Directors, if (i) there is a
material breach of any representation, warranty, covenant or agreement on the
part of Nextel or Newco, set forth in this Agreement, or if a representation or
warranty of Nextel or Newco, shall be untrue in any material respect, in either
case such that the condition specified in Sections 9.3(a) or 9.3(b) cannot be
satisfied at Closing, except that, if such breach is curable by the breaching
party through the exercise of its reasonable best efforts then for up to 30
days, but only as long as the breaching party continues to exercise such
reasonable best efforts, AMS may not terminate this Agreement
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under this Section 11.1(c)(i), (ii) any governmental or regulatory consent or
approval required for consummation of the transactions contemplated hereby is
denied by or in a final order or other final action issued or taken by the
appropriate governmental or regulatory authority, agency or similar body, (iii)
consummation of any of the transactions contemplated hereby is enjoined,
prohibited or otherwise restrained by the terms of a final, non-appealable
order or judgment of a court of competent jurisdiction or (iv) the condition
set forth in Section 9.1(i) hereof has not been satisfied on or prior to
September 15, 1995.
(d) By action of the Board of Directors of either
Nextel or AMS if (i) the Merger shall not have been consummated by September
30, 1995, (ii) the Merger Agreement is not approved by the requisite vote of
AMS stockholders following the vote thereon at the Special Meeting, (iii) any
consent required to be obtained under the Nextel Indentures is not obtained on
or prior to September 15, 1995 (except that AMS may not terminate this
Agreement pursuant to this clause (iii) if the consent which is not obtained is
requested by reason of the existence of Debt that does not satisfy the
condition set forth in Section 9.2(i)) or (iv) the Proxy Statement/Prospectus
has not been mailed to AMS stockholders on or prior to July 31, 1995 (provided
that the right to terminate this Agreement under this Section 11.1(d) shall not
be available to a party whose failure to fulfill any obligation under this
Agreement has been the cause of or resulted in the event described in clause
(i), (ii), (iii) or (iv) above, and such event is the basis upon which such
party proposes to terminate this Agreement).
11.2 Effect. Any termination of this Agreement, however
effected, shall not release any of Nextel, Newco or AMS from any liability or
other consequences arising from any breach or violation by any such party of
the terms of this Agreement prior to the effective time of such termination,
nor shall any such termination release any party from its obligations or duties
under this Agreement which, by their terms and/or expressed intent, may require
performance subsequent to any such termination, and all provisions of this
Agreement which set forth such obligations or duties (including, without
limitation, Sections 7.1 and 7.8 and, to the extent provided therein, in
Section 12.10) and such other general or procedural provisions which may be
relevant to any attempt to enforce such obligations or duties, shall survive
any such termination of this Agreement until such obligations or duties shall
have been performed or discharged in full.
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ARTICLE XII. MISCELLANEOUS
12.1 Communications. Except as otherwise specifically
provided in this Agreement, all communication hereunder shall be in writing
(including telegraphic communication) and shall be sent by first-class mail,
telegraph, facsimile or overnight courier or delivered in person to AMS at
20120-C Warner Center Lane, Woodland Hills, California 91367-5002, Attention:
Mr. Richard Somers, with copies to (i) Alice Cheung, Treasurer of AMS and (ii)
Baker & Botts, L.L.P., 885 Third Avenue, Suite 1900, New York, New York 10022,
Attention: Robert W. Murray Jr., Esq.; and to Nextel and Newco at 201 Rte. 17
North, Rutherford, New Jersey 07070, Attention: General Counsel, with a copy
to Jones, Day, Reavis & Pogue, North Point, 901 Lakeside Avenue, Cleveland,
Ohio 44114, Attention: Jeanne M. Rickert, Esq., or to such other addresses as
AMS, Nextel or Newco may designate by notice in writing. Notices shall be
deemed to have been given when received.
12.2 Non-Waiver of Remedies and Actions. No course of
dealing between AMS and Nextel and/or Newco with respect to any of the
transactions contemplated herein, or any delay on the part of either such party
in exercising any rights available to such party shall operate as a waiver of
any right of such party, except to the extent expressly waived in writing by
such party.
12.3 Headings. The headings in this Agreement are for
purposes of reference only and shall not be considered in construing this
Agreement.
12.4 Counterparts. This Agreement may be executed in any
number of counterparts, each of which when so executed and delivered, shall
constitute an original and all together shall constitute one instrument.
12.5 Successors and Assigns. Except as otherwise
specifically provided herein, this Agreement shall bind and inure to the
benefit of AMS', Newco's and Nextel's respective successors and permitted
assigns; provided that, except as expressly provided herein, none of AMS, Newco
or Nextel shall assign any of its rights hereunder or any interest herein
without obtaining the written consent of the others to such assignment, and any
purported assignment made without obtaining such written consent shall be null
and void.
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12.6 Enforceability. If any term or provision of this
Agreement, or the application thereof to any Person or circumstance, shall, to
any extent, be invalid or unenforceable, the remaining terms and provisions of
this Agreement or application to other Persons and circumstances shall not be
invalidated thereby, and each term and provision hereof shall be construed with
all other remaining terms and provisions hereof to effect the intent of the
parties hereto to the fullest extent permitted by law.
12.7 Law Governing. This Agreement shall be construed and
enforced in accordance with and shall be governed by the laws of the State of
Delaware applicable to contracts executed by residents of that state, and fully
to be performed, in that state.
12.8 Communications Act. Nothing in this Agreement is
intended or shall be construed to diminish or affect the control of AMS or any
of its Subsidiaries, or of Nextel or any of its Subsidiaries, over any FCC
Licenses held by any of them in any manner prohibited by the Communications Act
of 1934, as amended, or the rules and regulations issued by the FCC.
12.9 Expenses. Except as expressly provided otherwise herein
or therein, each of AMS and Nextel shall bear its own costs and expenses
incurred by each of them in connection with the negotiation, preparation,
execution, delivery, performance or other activity connected with this
Agreement.
12.10 Entire Agreement. (a) This Agreement, the Original
Warrant, and the Side Agreement contain the entire agreement between AMS,
Nextel and Newco with respect to the transactions contemplated hereby and
thereby, and, except to the extent specifically set forth herein, such
agreements supersede all other prior agreements (including, without limitation,
the Current Letter Agreement, the Prior Letter Agreement and the Stock Purchase
Agreement) between or among any of such parties with respect to these matters.
(b) The parties hereto confirm that the Original
Warrant and the Side Agreement, as conformed and in effect at the execution and
delivery hereof, are as set forth in Annexes 1 and 2 hereto.
12.11 Publicity. So long as this Agreement is in effect, AMS
and Nextel shall consult with each other in issuing any press release or
otherwise making any public statement with respect to the transactions
contemplated by this Agreement.
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12.12 Specific Performance. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement, the Option Agreement or the Side Agreement were not performed in
accordance with its specific terms or were otherwise breached. It is agreed
accordingly that the parties hereto shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement, the Option Agreement or the
Side Agreement and to enforce specifically the terms and provisions hereof in
any court of the United States or any state thereof having jurisdiction, this
being in addition to any other remedy to which they are entitled at law or in
equity, and each party acknowledges that neither party shall be required to
allege or to prove the inadequacy of money damages as a remedy to seek any
appropriate form of equitable relief or remedy.
12.13 Amendments. Neither this Agreement, the Option
Agreement nor the Side Agreement may be amended, except pursuant to an
instrument in writing signed by each of AMS, Nextel and Newco.
12.14 Third-Party Beneficiaries. Except as set forth in
Article II, no parties other than AMS, Newco and Nextel shall have any rights,
or be entitled to enforce any provisions, under this Agreement; provided that
with respect to Section 6.5 hereof, as to which the appropriate directors and
officers of AMS are intended beneficiaries, such Persons may enforce the
provisions of such Section 6.5 against the Surviving Corporation as provided
therein and such Section 6.5 may not be amended as to any such director or
officer without the affected director's or officer's consent.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered as of the day and year first above
written.
AMERICAN MOBILE SYSTEMS
INCORPORATED
By: /s/ Richard G. Somers
-------------------------------------
Name: Richard G. Somers
Title: President and
Chief Executive Officer
NEXTEL COMMUNICATIONS, INC.
By: /s/ Brian D. McAuley
-------------------------------------
Name: Brian D. McAuley
Title: President
MOBILE COMMUNICATIONS OF FLORIDA, INC.
By: /s/ Brian D. McAuley
-------------------------------------
Name: Brian D. McAuley
Title: President
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Exhibit R
To Restated
Schedule 13D
Tele-Communications, Inc.
5619 DTC Parkway
Englewood, Colorado 80111
April 25, 1995
NEXTEL Communications, Inc.
201 Route 17 North
Rutherford, New Jersey 07070
Attention: President
(Fax No.: (201) 438-5540)
Re: American Mobile Systems Incorporated
Gentlemen:
As a condition to negotiating and entering into that certain
Agreement and Plan of Merger, dated as of April 25, 1995 (the " Merger
Agreement"), by and among NEXTEL Communications, Inc. ("Nextel") a Delaware
corporation, Mobile Communications of Florida, Inc., a Delaware corporation and
a wholly-owned subsidiary of Nextel, and American Mobile Systems Incorporated
(the "Company"), a Delaware corporation, and to consummate the Merger (as
defined in the Merger Agreement), you have requested that the undersigned,
which beneficially owns 2,668,734 shares (the "Shares") of Common Stock, par
value $.01 per share, of the Company (the "Common Stock"), agree with you to
take certain actions described herein in support of the Merger, and the
undersigned hereby agrees, as follows:
As used herein, the term "Shares" also shall mean and include
both the Shares (as defined above) and all other shares of Common Stock as to
which the undersigned (at any time prior to the termination of this letter
agreement) is the beneficial owner and all securities issued or exchanged with
respect to any such Shares upon any reclassification, recapitalization,
reorganization, merger, consolidation, spin-off, stock split, combination,
stock or other dividend or any other change in the Company's capital structure
(other than pursuant to the Merger). The undersigned owns the Shares free of
any restriction on voting and has the right to vote the same free of any
encumbrance (other than any general fiduciary obligation imposed by law).
1. The undersigned hereby revokes any and all proxies and
voting instructions with respect to the Shares previously given by the
undersigned and agrees that, except as otherwise consented to in writing by
you, the undersigned will not grant or give any other proxies or voting
instructions with respect to the Shares, enter into any voting trust or other
arrangement or agreement with respect to the voting of the Shares, or agree, in
any manner, to vote the Shares for or against any proposal submitted to the
stockholders of the Company except in furtherance of the purposes set forth in
paragraph 2 hereof.
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2. (a) The undersigned agrees:
(i) to vote the Shares, to the extent entitled to
vote, (y) in favor of the approval of the Merger Agreement and
the Merger and (z) with respect to all other proposals submitted
to the stockholders of the Company which, directly or
indirectly, in any way relate to or affect the Merger, in such
manner as you may direct; and
(ii) not to solicit, encourage or recommend to other
stockholders of the Company that (w) they vote their shares of
Common Stock or any other securities of the Company in any
contrary manner, (x) they abstain from voting, or otherwise fail
to vote, their shares at all, (y) they sell, transfer, tender or
otherwise dispose of their shares or (z) they attempt to
exercise any statutory appraisal or other similar rights they
may have.
Unless otherwise instructed in writing by you, the undersigned will vote the
Shares (x) against any and all transactions (each a "Competing Transaction") of
any kind (including, without limitation, a merger, consolidation, share
exchange, reclassification, reorganization, recapitalization, sale or
encumbrance of any of the assets of the Company or sale by the Company or any
stockholders of the Company of any shares of its capital stock) proposed by any
person in lieu of or in opposition to the Merger, other than any Competing
Transaction proposed by you or any of your controlled affiliates or to which
either you or any such controlled affiliate is a party and which Competing
Transaction is approved by the Board of Directors of the Company (such a
transaction, a "Qualifying Transaction") and (y) in favor of any such
Qualifying Transaction.
(b) Except with your prior written consent, the
undersigned shall not, and shall not permit any officer, director or attorney,
accountant, investment banker or other agent of the undersigned to, initiate,
solicit, negotiate, encourage, or provide confidential information in order to
facilitate any Competing Transaction.
3. In furtherance of the foregoing, the undersigned is granting
to you or to your designee(s) an irrevocable proxy (which may be in the form
annexed or such other form consistent with the terms hereof and thereof as you
specify) to vote the Shares, to the extent such Shares are entitled to vote,
and hereby specifically agrees not to revoke such proxies granted under any
circumstances:
(i) at any and all meetings of stockholders of the
Company, notice of which meetings are given prior to the due and
proper termination of this letter agreement, with respect to
matters presented to the Company's stockholders for vote which,
directly or indirectly, in any way relate to or affect (x) the
Merger or the Merger Agreement or the approval of any thereof
(including, without limitation, such matters which nominally
concern proposed amendments of the certificate of incorporation
or the bylaws of the Company, but which may relate to or have
any effect on the Merger or the Merger Agreement or the approval
of any thereof); and (y) any Competing Transaction; or
(ii) with respect to action to be taken by written
consent of the stockholders of the Company which, directly or
indirectly, in any way relates to or affects any of the
foregoing, and which consent is solicited prior to the due and
proper termination of this letter agreement.
4. The undersigned further agrees that except pursuant to the
Merger or a Qualifying Transaction, the undersigned will not, and will not
agree to, sell, assign or transfer, or issue an option or call in respect to,
any of the Shares, or sell short ("against the box" or otherwise) any Shares
during the term of this agreement. Notwithstanding the foregoing, the
undersigned may transfer or sell the Shares if the beneficial ownership of the
Shares by the undersigned would adversely affect its ability, or the ability of
any entity in which it is an investor, to bid for and obtain any personal
services communications license to be auctioned by the FCC commencing in
December 1994 (a "Permitted Transfer"). Prior to effecting a Permitted
Transfer, the undersigned shall first offer the Shares to you in a writing
setting forth the same
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terms and conditions as the undersigned intends to offer such shares to any
proposed buyer (the "First Offer") and, if you decline to accept such First
Offer within 10 days of your receipt of the writing setting forth such First
Offer, use its commercially reasonable efforts to cause the buyer of the Shares
to acquire the Shares only upon assuming the undersigned's obligations with
respect to such Shares under this letter agreement and to execute an
irrevocable proxy to you substantially similar to the irrevocable proxy
delivered to you by the undersigned pursuant to this letter agreement. Subject
to the immediately preceding sentence, the undersigned acknowledges that it
shall have a period of 25 days subsequent to the date of your receipt of the
writing setting forth the First Offer to reach a binding written agreement with
a proposed buyer setting forth all of the terms and conditions applicable to
any contemplated purchase of the Shares by such proposed buyer. If such terms
and conditions are, in any material respects, more favorable to the proposed
buyer than the terms and conditions of the relevant First Offer given to you,
or if such written agreement is not entered into within such 25 day period, the
undersigned will not effect any Permitted Transfer of the Shares without first
again complying with the First Offer process set forth above.
5. Any transfer or other distribution by the undersigned of
some or all of the Shares to some or all of its controlled affiliates prior to
consummation of the Merger shall require your prior written consent, which you
agree not to withhold unreasonably; provided that each transferee provides you,
if you so request, with a letter agreement and irrevocable proxies
substantially similar to this letter agreement and the attached proxies and
otherwise in form and substance reasonably satisfactory to you, and with such
other assurances as you may reasonably require.
6. The provisions of this agreement are severable and, if any
thereof are invalid or unenforceable in any jurisdiction, the same and the
other provisions hereof shall not be rendered otherwise invalid or
unenforceable.
7. The parties hereto acknowledge and agree that all
obligations of the undersigned hereunder shall be subject to applicable law and
that none of the provisions herein set forth shall be deemed to restrict or
limit any fiduciary duty the undersigned or any of its affiliates may have as a
member of the Board of Directors or executive officer of the Company; provided
that no such duty shall excuse the undersigned from its obligation as a
stockholder of the Company to vote the Shares, to the extent that they may be
so voted, as herein provided and to otherwise comply with the terms and
conditions of this Agreement.
8. (a) This agreement shall terminate upon the earliest
to occur of (i) the consummation of the Merger, (ii) the termination of the
Merger Agreement pursuant to Section 11.1 thereof, (iii) the consummation of
any Qualifying Transaction; and (iv) one year after the date hereof;
(b) No amendment of the Merger Agreement to provide
for a Qualifying Transaction shall affect the obligations of the undersigned
under this letter agreement.
(c) The provisions of this letter agreement shall be
binding upon and inure to the benefit of each of you and the undersigned and
your and its respective successors and assigns.
9. This letter agreement shall be governed by and construed in
accordance with the laws of the State of Delaware without giving effect to the
principles of conflict of laws thereof. Each of the parties to this letter
agreement hereby irrevocably and unconditionally (a) consents to submit to the
exclusive jurisdiction of the courts of the State of Delaware for any
proceeding arising in connection with this letter agreement (and each such
party agrees not to commence any such proceeding, except in such courts), (b)
to the extent such party is not a resident of the State of Delaware, agrees to
appoint an agent in the State of Delaware as such party's agent for acceptance
of legal process in any such proceeding against such party with the same legal
force and validity as if served upon such party personally within the State of
Delaware, and to notify promptly each other party hereto of the name and
address of such agent, (c) waives any objection to the laying of venue of any
such proceeding in the courts of the State of Delaware, and (d) waives, and
agrees
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not to plead or to make, any claim that any such proceeding brought in any
court of the State of Delaware has been brought in an improper or otherwise
inconvenient forum.
10. All notices, requests, claims, demands and other
communications hereunder shall be deemed to have been duly given when delivered
in person, or when sent, if sent by telegram, telex or telecopy, or by
registered or certified mail (postage prepaid, return receipt requested) to
each of you and to the undersigned, to the attention of the President of such
party, at the address or facsimile number specified on the first page hereof.
If this letter accurately sets forth our understanding and
agreement with respect to the foregoing matters, please so confirm by signing
the enclosed copy of this letter at the places set forth below and returning it
to us.
Very truly yours,
TELE-COMMUNICATIONS, INC.
By: /s/ Stephen M. Brett
----------------------------------
Name: Stephen M. Brett
----------------------------------
Title: Executive Vice President
----------------------------------
Confirmed and Agreed:
NEXTEL COMMUNICATIONS, INC.
By: /s/ Brian D. McAuley
------------------------
Name: Brian D. McAuley
------------------------
Title: President
------------------------
Date: April 25, 1995
------------------------
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