Table of Contents

 

Page

 

ARTICLE I
DEFINITIONS

 

Section 1.1		Definitions		1
Section 1.2		Construction		15

 

ARTICLE II
THE TRANSACTION

 

Section 2.1		Formation of, and Contributions to, Newco		16
Section 2.2		Purchase and Sale of the Newco Interest; Purchase Price		16
Section 2.3		Closing		16
Section 2.4		Closing Deliveries		17
Section 2.5		Purchase Price Adjustment		18

 

ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER

 

Section 3.1		Corporate Status		21
Section 3.2		No Divestiture Trustee		21
Section 3.3		Authorization; etc.		21
Section 3.4		Governmental Authorization; Non-Contravention		21
Section 3.5		Ownership of Newco; Assets and Liabilities of Newco		22
Section 3.6		No Judgments, Litigation		22
Section 3.7		Sufficiency		22
Section 3.8		Financial Statements		23
Section 3.9		Compliance		23
Section 3.10		Governing Regulatory Documents		23
Section 3.11		Tax Matters		24
Section 3.12		Labor Matters		24
Section 3.13		Employee Matters		25
Section 3.14		Permits		25
Section 3.15		Real Property		25
Section 3.16		Environmental Matters		26
Section 3.17		Subscribers		26
Section 3.18		Contracts		26
Section 3.19		Finders’ Fees		27

 

 

Table of Contents
(continued)

 

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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER

 

Section 4.1		Corporate Status		27
Section 4.2		Authorization; etc.		27
Section 4.3		Governmental Authorization; Non-Contravention		27
Section 4.4		No Judgments, Litigation		28
Section 4.5		Legal Qualification		28
Section 4.6		Going Concern		28
Section 4.7		Acquisition for Own Account		28
Section 4.8		Available Funds		28
Section 4.9		Financial Statements		28
Section 4.10		Finders’ Fees		28
Section 4.11		No Other Representations or Warranties		29

 

ARTICLE V
CERTAIN COVENANTS AND AGREEMENTS

 

Section 5.1		No Inconsistent Actions		29
Section 5.2		Compliance with Governing Regulatory Documents		29
Section 5.3		Filings		30
Section 5.4		Transition Services		31
Section 5.5		Transition Planning		31
Section 5.6		Permits		32
Section 5.7		Intellectual Property Consents; License to Excluded Shared Assets		32
Section 5.8		Employee Matters		32
Section 5.9		Permits and Deferred Assets		35
Section 5.10		Notifications		35
Section 5.11		Confidentiality		36
Section 5.12		Reasonable Best Efforts		36
Section 5.13		Access		37
Section 5.14		Allocation of Consideration		38
Section 5.15		Damage to Transferred Assets Prior to Closing		38
Section 5.16		No Interference		39
Section 5.17		Third Party Rights		39

 

ARTICLE VI
CONDITIONS PRECEDENT

 

Section 6.1		Conditions Precedent to Seller’s Obligation to Close		40
Section 6.2		Conditions Precedent to Purchaser’s Obligation to Close		41

 

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Table of Contents
(continued)

 

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ARTICLE VII
TERMINATION

 

Section 7.1		Termination		42
Section 7.2		Consequences of Termination		43

 

ARTICLE VIII
GENERAL

 

Section 8.1		Governing Law; Submission to Jurisdiction		44
Section 8.2		Counterparts		44
Section 8.3		Additional Instruments		45
Section 8.4		Notices		45
Section 8.5		Specific Performance		45
Section 8.6		Miscellaneous		46

 

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PURCHASE AGREEMENT

 

THIS PURCHASE AGREEMENT (this “ Agreement ”) is entered into as of June 9, 2009, by and between Atlantic Tele-Network, Inc., a Delaware corporation (“ Purchaser ”), and Cellco Partnership, a Delaware general partnership doing business as Verizon Wireless (“ Seller ”).  Capitalized terms used and not otherwise defined herein have the respective meanings specified in Section 1.1 .

 

WHEREAS, in connection with the approval by the DOJ, certain States and the FCC of Seller’s acquisition of Alltel Corporation (“ Alltel ”), Seller has agreed to divest certain assets;

 

WHEREAS, prior to Closing, Seller shall cause the entities that own and operate such assets and certain related liabilities to transfer such assets and liabilities to a Delaware limited liability company (“ Newco ”) wholly owned by a Delaware limited liability company to be formed by one or more of the Contributing Entities (“ Newco Parent ”);

 

WHEREAS, Purchaser wishes to purchase from Newco Parent, and Seller wishes to cause Newco Parent to sell to Purchaser, all right, title and interest in and to Newco on the terms and conditions of this Agreement; and

 

WHEREAS, concurrently with the execution and delivery of this Agreement, Seller and Purchaser are entering into a Transition Services Agreement (the “ Transition Services Agreement ”), pursuant to which Seller and its Affiliates shall provide certain services to Purchaser and its Affiliates in connection with their operation of the Business after the Closing;

 

NOW, THEREFORE, in consideration of the mutual promises contained herein, and for other good and valuable consideration, the receipt and sufficiency of which the parties acknowledge, the parties hereby agree as follows:

 

ARTICLE I
DEFINITIONS

 

Section 1.1             Definitions .  Except as otherwise provided herein, the capitalized terms used in this Agreement shall have the following meanings:

 

 

“ Affiliate ” means, with respect to any Person, any other Person that, directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such first-named Person.

 

“ Agreement ” has the meaning set forth in the Preamble.

 

“ Alltel ” has the meaning set forth in the first Recital.

 

“ Allocation Date ” has the meaning set forth in Section 5.14 .

 

“ Applicable Accounting Principles ” has the meaning set forth in Section 2.5(b) .

 

“ Assumed Liabilities ” means all liabilities and other obligations incurred in the operation of, and that are primarily related to, the Business (excluding liabilities for litigation that is ongoing at the time of the Closing and for income Taxes for pre-Closing tax periods or portions thereof), whether known, unknown, absolute, accrued, contingent or otherwise, and whether due or to become due.

 

“ Business ” means the business of marketing, selling and providing mobile wireless telecommunications services conducted by or through the Contributing Entities in their respective Markets using the spectrum authorized by their respective Licenses.

 

“ Business Benefit Plan ” has the meaning set forth in Section 3.13(a) .

 

“ Business Day ” means any day that is not a Saturday, a Sunday or other day on which commercial banks are required or authorized by Law to be closed in New York City, New York.

 

“ Business Employees ” means all employees who ( a ) are identified on Schedule 1A(x)  or ( b ) perform substantially all of their services in the operation of the Business and at a location in the Markets, including such individuals who are not actively at work due to vacation, illness, jury duty, bereavement leave, short-term or long-term disability leave, workers’ compensation or other authorized leave of absence (the number of such individuals as of the date hereof is set forth on Schedule 1A(x) ); provided that “Business Employees” shall not include any employee who ( i ) performs such services primarily at

 

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any facility or leased property that is an Excluded Asset or ( ii ) is identified on Schedule 1A(y) .

 

“ Change ” means an event, change, occurrence, fact, condition, effect or development.

 

“ Closing ” means the closing of the transactions contemplated by this Agreement.

 

“ Closing Balance Sheet ” means the consolidated balance sheet of the Business as of the Closing Date (but without giving effect to the Closing) prepared in accordance with the calculation and accounting principles, practices and methodologies that are consistent with those used in preparing the December 31, 2008 balance sheet included in the Financial Statements.

 

“ Closing Date ” has the meaning set forth in Section 2.3 .

 

“ Closing Date Subscriber Price Adjustment ” has the meaning set forth in Section 2.4 .

 

“ Closing Date Subscribers ” means the Postpay Subscribers as of the Closing Date.

 

“ Closing Statement ” has the meaning set forth in Section 2.5(c) .

 

“ Closing Statement Dispute Notice ” has the meaning set forth in Section 2.5(d) .

 

“ Closing Working Capital ” means ( i ) Current Assets, minus ( ii ) Current Liabilities.

 

“ Cluster ” means a group of Markets required to be divested together to a single acquirer under Section IV.I. of the Proposed Final Judgment.

 

“ Code ” means the Internal Revenue Code of 1986, as amended.

 

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“ Confidentiality Agreement ” has the meaning set forth in Section 5.11(a) .

 

“ Contract ” means any oral or written agreement, contract, commitment, instrument, undertaking or arrangement.

 

“ Contributing Entities ” means the entities listed on Schedule 1B (each a “ Contributing Entity ”).

 

“ control ” (including, with correlative meanings, the terms “ controlled by ” and “ under common control with ”), as applied to any Person, means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities or other ownership interest, by Contract or otherwise.

 

“ Covered Returns ” has the meaning set forth in Section 3.11(a) .

 

“ Current Assets ” means all Transferred Assets that are “current assets” (as such term is defined by GAAP).

 

“ Current Liabilities ” means all Assumed Liabilities that are “current liabilities” (as such term is defined by GAAP).

 

“ Damaged Assets ” has the meaning set forth in Section 5.15 .

 

“ Deferred Asset ” has the meaning set forth in Section 5.9 .

 

“ Disclosure Schedules ” means the Purchaser Disclosure Schedules and the Seller Disclosure Schedules.

 

“ Disputed Item ” has the meaning set forth in Section 2.5(d) .

 

“ Divestiture Trustee ” means the divestiture trustee contemplated by the DOJ Consent Decrees.

 

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“ DOJ ” means the United States Department of Justice.

 

“ DOJ Consent ” means the DOJ’s approval of the transactions contemplated by this Agreement, as required by the terms of each of the DOJ Consent Decrees.

 

“ DOJ Consent Decrees ” means ( i ) the Proposed Final Judgment, ( ii ) the Modified Final Judgment signed by the United States District Court for the District of Columbia on December 30, 2008 in United States v. Bell Atlantic Corp., et al. , Civil Action No. 1:99CV01119 (EGS), and ( iii)  the Modified Final Judgment signed by the United States District Court for the District of Minnesota on October 31, 2008 in United States & State of Minnesota v. Alltel Corp. & Midwest Wireless Holdings, L.L.C., Case No. 06-3631.

 

“ Environmental Law ” means any Law relating to ( i ) the protection of human health or the environment from the effects of Hazardous Substances, including those pertaining to reporting, licensing, permitting, investigating and remediating discharges, releases or threatened releases of Hazardous Substances into the air, surface water, sediments, groundwater or land, or ( ii ) the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Substances.

 

“ ERISA ” has the meaning set forth in Section 3.13(a) .

 

“ Estimated Closing Date Subscribers ” has the meaning set forth in Section 2.5 .

 

“ Estimated Closing Statement ” has the meaning set forth in Section 2.5(b) .

 

“ Estimated Closing Working Capital ” has the meaning set forth in Section 2.5(b) .

 

“ Excluded Assets ” means:

 

(i)               cash and cash equivalents other than cash included in cash registers in the Markets as of the Closing Date;

 

(ii)              Excluded Shared Assets;

 

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(iii)             trademarks, trade names and Intellectual Property, including the marks set forth on Schedule 1C , all rights related thereto, and all other Intellectual Property not solely and specifically used in the Business;

 

(iv)             Business Benefit Plans;

 

(v)              claims for tax refunds and/or credits for periods prior to the Closing;

 

(vi)             any recovery in respect of any accounts receivable or other Current Assets that have been written off prior to the Closing in accordance with GAAP in the ordinary course of business consistent with past practice;

 

(vii)            minute books and tax returns of transferors;

 

(viii)           insurance policies, other than rights to insurance proceeds under Section 5.15 ;

 

(ix)             any Contract with any labor union, labor organization or other representative of employees;

 

(x)              any Contract with a Multi-line Business Customer the primary business address of which is not in any Market;

 

(xi)             reseller, sales agent, roaming and interconnection Contracts and arrangements (excluding any of the foregoing specifically and solely relating to the Business); and

 

(xii)            any other asset listed on Schedule 1C .

 

“ Excluded Market ” means any Market that ( i ) the DOJ has not, within 45 days after the date hereof, indicated to the parties is highly likely to be permitted to be transferred to Purchaser’s control or ( ii ) the FCC has indicated to the parties is unlikely to be permitted to be transferred to Purchaser’s control.

 

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“ Excluded Shared Asset ” means any asset used substantially in the operations of Seller’s or any of its Affiliates’ overall wireless telecommunications services business that must be retained to continue the existing operations of the wireless properties that Seller and its Affiliates are not required to divest by the Governing Regulatory Documents, and that either is not capable of being divided between the Business and the wireless telecommunications services businesses not divested or is listed on Schedule 1D .

 

“ FAA ” means Federal Aviation Administration.

 

“ FCC ” means the Federal Communications Commission.

 

“ FCC Consent ” means any required consent of the FCC to the transfer, assignment or change in control of the Licenses pursuant to this Agreement.

 

“ FCC Order ” means the decision approving the transfer of control to Seller of the FCC authorizations controlled by Alltel adopted by the FCC, FCC 08-258 (rel. Nov. 10, 2008).

 

“ FCC Rules ” has the meaning set forth in Section 3.9 .

 

“ Final Order ” means action by a Governmental Authority which has not been vacated, reversed, set aside, annulled or suspended and as to which: ( i ) no request for stay by such authority of the action is pending, no such stay is in effect, and, if any deadline for filing any such request is designated by statute or regulation, it has passed; ( ii ) no petition for rehearing or reconsideration of the action is pending before such Governmental Authority, and the time for filing any such petition has passed; ( iii ) such Governmental Authority does not have the action under reconsideration on its own motion and the time for such reconsideration has passed; and ( iv ) no appeal to a court, or request for stay by a court, of such Governmental Authority’s action is pending or in effect, and, if any deadline for filing any such appeal or request is designated by statute or rule, it has passed.

 

“ Financial Statements ” has the meaning set forth in Section 3.8 .

 

“ Financing Sources ” means any one or more Persons (and the Representatives of such Persons) identified by Purchaser to Seller as a possible source of third-party

 

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financing Purchaser may elect to seek in connection with the transactions contemplated by this Agreement.

 

“ FTC ” means the United States Federal Trade Commission.

 

“ GAAP ” shall mean United States generally accepted accounting principles.

 

“ Governing Regulatory Documents ” means ( i ) the DOJ Consent Decrees, ( ii ) the FCC Order and ( iii ) the Preservation of Assets Orders.

 

“ Governmental Authority ” means any nation or government, any state or other political subdivision thereof, any entity, authority or body exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, any court, tribunal or arbitrator, and any self-regulatory organization.

 

“ Hazardous Substance ” means any substance listed, defined, designated, classified or regulated as a waste, pollutant or contaminant or as hazardous, toxic, radioactive or dangerous or any other term of similar import under any Environmental Law, including petroleum, radon, asbestos, toxic molds, urea formaldehyde or polychlorinated biphenyls.

 

“ HSR Act ” means the Hart-Scott-Rodino Antitrust Improvement Act of 1976, as amended, and the rules and regulations promulgated thereunder.

 

“ Independent Accountant ” means a certified public accountant satisfactory to Purchaser and Seller.

 

“ Intellectual Property ” means all trademarks, service marks, trade names, trade dress, including all goodwill associated with the foregoing, domain names, copyrights (whether or not registered), software, Internet web sites, mask works and other semiconductor chip rights, and similar rights, and registrations and applications to register or renew the registration of any of the foregoing, patents and patent applications (including all continuations, continuations-in-part, continuing examinations, reissues, renewals, substitutes, reexaminations and extensions), trade secrets and all similar intellectual property rights anywhere in the world.

 

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“ Inventory ” means all inventories of mobile telephones and other wireless access devices designed to operate on cellular radiotelephone service frequencies, including, wireless email devices, user unit batteries, SIM cards, spare parts, mobile phone accessories and supplies.

 

“ Knowledge ” ( i ) of Purchaser means the actual knowledge of any executive officer of Purchaser or any of its Subsidiaries and ( ii ) of Seller means the actual knowledge of the individuals listed in Schedule 1E .

 

“ Law ” means any federal, state, local, municipal or foreign statute, law, ordinance, regulation, rule, code, order, principle of common law, injunction, decree, arbitration award, or judgment enacted, promulgated, issued, enforced or entered by any Governmental Authority, or other requirement or rule of law.

 

“ Licenses ” means the FCC licenses and authorizations listed on Schedule 1B .

 

“ Lien ” means any mortgage, pledge, hypothecation, collateral assignment, security interest, encumbrance, lien or charge of any kind (including any agreement to give any of the foregoing, 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 of any jurisdiction).

 

“ Markets ” means the markets specified on Schedule 1B .

 

“ Management Trustee ” means the Management Trustee contemplated by the Governing Regulatory Documents.

 

“ Material Adverse Effect ” means any Change that, individually or together with any other Change, has or is reasonably likely to have a material adverse effect on ( i ) the operations of the Business, taken as a whole, or ( ii ) the ability of Seller to consummate the transactions contemplated by this Agreement; provided , however, that in no event shall any of the following be deemed to constitute, nor shall any of the following be taken into account in determining whether there has been or will be, a “Material Adverse Effect”: any Change arising or resulting from ( a ) compliance by Seller or its Affiliates with the terms and conditions of this Agreement, the Transition Services Agreement or the Governing Regulatory Documents, ( b ) the announcement or pendency of the transactions contemplated by this Agreement (including any actions by Subscribers or competitors or loss of personnel or Subscribers), ( c ) matters affecting the wireless

 

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communication industry generally or any segment thereof or the economy generally (including legal and regulatory Changes, and Changes generally affecting any national, regional or local market for any communications service), ( d ) any action taken by Purchaser or its Affiliates relating to the Business, ( e ) acts of war (whether or not declared), sabotage, terrorism, military actions or the escalation of any of the foregoing, any hurricane, flood, tornado, earthquake or other natural disaster, or any other force majeure event, or ( f)  matters disclosed in the Seller Disclosure Schedules as of the date hereof.

 

“ Multi-line Business Customer ” means a corporate or business customer of the Business that contracts with Seller or one of its Affiliates for mobile wireless telecommunications services to provide multiple telephones to its employees or members whose services are provided pursuant to a Contract with the corporate or business customer.

 

“ Newco ” has the meaning set forth in the second Recital.

 

“ Newco Membership Interest ” has the meaning set forth in Section 2.2(a) .

 

“ Newco Parent ” has the meaning set forth in the second Recital.

 

“ Organizational Documents ” means the articles of incorporation, certificate of incorporation, charter, bylaws, articles of formation, certificate of formation, regulations, operating agreement, limited liability company agreement, certificate of limited partnership, partnership agreement, and all other similar documents, instruments or certificates executed, adopted, or filed in connection with the creation, formation, or organization of a Person, including any amendments thereto.

 

“ Partnership Interests ” means the partnership interests listed on Schedule 1F .

 

“ PCS ” means Personal Communications Services as that term is defined in 47 C.F.R. § 24.5.

 

“ Permitted Liens ” means ( i ) statutory liens for taxes, assessments or other governmental charges not yet due or payable, or that are being contested in good faith by appropriate proceedings and that are not material in amount or for which appropriate reserves are reflected in the Financial Statements, ( ii ) leases and subleases and landlord

 

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liens arising thereunder, ( iii ) statutory or other inchoate liens of mechanics, materialmen, landlords, carriers, warehousemen, repairmen and contractors imposed by Law incurred in the ordinary course of business for sums not yet due and payable, ( iv ) title exceptions, defects, encumbrances, liens, charges, restrictions, restrictive covenants, easements, rights-of-way and other matters, whether or not of record, that ( a ) do not, individually or in the aggregate, materially adversely affect the continued use of the encumbered property for the purposes for which such property is currently being used, ( b ) were or are not created by any party or any of its Affiliates and affect the underlying fee interest of any real property, ( c ) were or are incurred in the ordinary course of business and on a basis consistent with past practice securing obligations or liabilities that are not individually or in the aggregate material to the relevant Transferred Assets, or ( d ) arose or arise under zoning and subdivision Laws, ( v ) exceptions that an accurate up-to-date real property survey would show and ( vi ) any Lien described on Schedule 1H .

 

“ Person ” means any individual, corporation, association, partnership, joint venture, trust, estate, limited liability company, limited liability partnership, governmental authority, or other entity or organization.’

 

“ Postpay Subscribers ” means the aggregate number of Subscribers that are in active service and as to which there are no unpaid charges over 120 days past due, excluding Subscribers with telephone numbers assigned pursuant to prepaid and reseller contracts.

 

“ Preservation of Assets Orders ” means ( i ) the Preservation of Assets Stipulation and Order signed by the United States District Court for the District of Columbia on December 8, 2008 in United States et al. v. Verizon Communications Inc. and Alltel Corporation , Civil Action No. 08-1878, ( ii ) the Order and Stipulation with Respect to Modified Final Judgment and Preservation of Assets signed by the United States District Court for the District of Columbia on December 8, 2008 in United States v. Bell Atlantic Corp., et al. , Civil Action No. 1:99CV01119 (EGS), and ( iii ) the Modified Preservation of Assets Order signed by the United States District Court for the District of Minnesota on October 31, 2008 in United States & State of Minnesota v. Alltel Corp. & Midwest Wireless Holdings, L.L.C., Case No. 06-3631.

 

“ Proposed Final Judgment ” means the proposed Final Judgment filed on October 30, 2008 in United States et al.  v. Verizon Communications Inc. and Alltel Corporation , Civil Action No. 08-1878, in the United States District Court for the District of Columbia, as it may be modified upon adoption and entry by such court.

 

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“ Purchase Price ” means $200,000,000.

 

“ Purchaser ” has the meaning set forth in the Preamble.

 

“ Purchaser Disclosure Schedules ” means the disclosure schedules delivered by Purchaser to Seller on the date hereof.

 

“ Purchaser 401(k) Plan ” has the meaning set forth in Section 5.8(d) .

 

“ Purchaser Plans ” has the meaning set forth in Section 5.8(c) .

 

“ Representative ” of any Person means the directors, officers, employees, agents, counsel, investment bankers, accountants and other authorized representatives of such Person.

 

“ Resolution Period ” has the meaning set forth in Section 2.5(e) .

 

“ Roaming Agreement ” has the meaning set forth in Section 5.18 .

 

“ ROFR Asset Value ” has the meaning set forth in Section 5.17(b) .

 

“ SEC ” means the U.S. Securities and Exchange Commission.

 

“ Section 1060 Allocation ” has the meaning set forth in Section 5.14 .

 

“ Securities Act ” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

 

“ Seller ” has the meaning set forth in the Preamble.

 

“ Seller Disclosure Schedules ” means the disclosure schedules delivered by Seller to Purchaser on the date hereof.

 

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“ Seller 401(k) Plan ” has the meaning set forth in Section 5.8(d) .

 

“ Subscriber ” means a mobile telephone number that ( i ) is not part of a multi-line consumer account, is associated with a land line rate center that falls within a Market identified on Schedule 1B as being branded “Alltel” and is assigned to an end user, other than pursuant to any contract that is an Excluded Asset, who thereby obtains mobile wireless telecommunications services branded “Alltel” or ( ii ) is part of a multi-line consumer account, has a primary billing address that falls within a Market identified on Schedule 1B as being branded “Alltel” and is assigned to an end user, other than pursuant to any contract that is an Excluded Asset, who thereby obtains mobile wireless telecommunications services branded “Alltel”.

 

“ Subsidiary ” means, with respect to any Person, any entity of which securities or other ownership interests ( i ) having ordinary voting power to elect a majority of the board of directors or other persons performing similar functions or ( ii ) representing at least 50% of the total number of such securities or ownership interests then outstanding are at the time directly or indirectly owned by such Person.

 

“ Tax Return ” has the meaning set forth in Section 3.11(c) .

 

“ Taxes ” has the meaning set forth in Section 3.11(c) .

 

“ Third Party ” means any Person as defined in this Agreement or in Section 13(d) of the 1934 Act, other than Seller, Purchaser or any of their respective Affiliates.

 

“ Third Party Rights ” has the meaning set forth in Section 5.17(a) .

 

“ T-Mobile Roaming Agreement ” has the meaning set forth in Section 5.18 .

 

“ Transferred Assets ” means all assets, tangible or intangible, properties or rights owned, leased or licensed by the Contributing Entities and primarily used in the operation of the Business, other than the Excluded Assets, including (to the extent not an Excluded Asset):

 

(i)               the Licenses;

 

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(ii)              all network assets and other equipment used primarily in one or more Markets, including transport facilities, test equipment, network management equipment, communication equipment (including transmitters and receivers, antennae, generators, towers, and network facilities);

 

(iii)             all interest of the Contributing Entities in owned or leased real property (including tower leases) primarily used to support the assets described in the foregoing clause (ii), including all interest of the Contributing Entities in owned or leased real property primarily relating to the cell sites set forth on Schedule 1G ;

 

(iv)             engineering records, customer files, network plans, including all FCC and FAA compliance records of the Business;

 

(v)              all state and local permits primarily used in one or more Markets;

 

(vi)             all retail facilities and operations of the Business, including the retail leases set forth on Schedule 1G ;

 

(vii)            vehicles, equipment, furniture and other personal property (owned or leased) located in any Market and primarily used in the Business;

 

(viii)           Inventory held by any Contributing Entity at any retail outlet within any Market for consumption by or sale to the public solely in connection with the Business;

 

(ix)             Contracts primarily related to the Business, including Subscriber contracts, agent contracts and contracts with Multi-line Business Customers the primary business address of which is in a Market;

 

(x)              prepaid expenses and deposits primarily related to any other “Transferred Asset”;

 

(xi)             the Partnership Interests; and

 

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(xii)            to the extent not otherwise described in subparagraphs ( i ) through ( xi ) above, any other asset relating to the Business to the extent required to be divested pursuant to any DOJ Consent Decree.

 

“ Transferred Employees ” has the meaning set forth in Section 5.8(a) .

 

“ Transition Services Agreement ” has the meaning set forth in the Recitals.

 

“ Treasury Regulation ” means the regulations prescribed under the Code.

 

“ Unresolved Items ” has the meaning set forth in Section 2.5(f) .

 

“ WARN Act ” has the meaning set forth in Section 5.8(f) .

 

Section 1.2             Construction .  The words “hereof”, “herein” and “hereunder” and words of like import used in this Agreement shall refer to this Agreement as a whole (including all of the Schedules) and not to any particular provision of this Agreement unless otherwise specified.  The words “party” or “parties” shall refer to parties to this Agreement.  References to Recitals, Articles, Sections and Schedules are to Recitals, Articles, Sections and Schedules of this Agreement unless otherwise specified.  All Disclosure Schedules annexed hereto or referred to herein are hereby incorporated in and made a part of this Agreement as if set forth in full herein.  Any capitalized term used in any Disclosure Schedule but not otherwise defined therein shall have the meaning given to such term in this Agreement.  Any singular term in this Agreement shall be deemed to include the plural, and any plural term the singular, and words of one gender shall be held to include the other gender as the context requires.  Whenever the words “include”, “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation,” whether or not they are in fact followed by those words or words of like import.  “Writing”, “written” and comparable terms refer to printing, typing and other means of reproducing words (including electronic media) in a visible form.  References to any agreement or contract are to that agreement or contract as amended, modified or supplemented from time to time in accordance with the terms hereof and thereof.  References to any Person include the successors and permitted assigns of that Person.  References from or through any date mean, unless otherwise specified, from and including or through and including, respectively.  Any reference to “days” means calendar days unless Business Days are expressly specified.  If any action under this Agreement is required to be done or taken on a day that is not a Business Day, then such action shall be required to be done or taken not on such day but on the first succeeding Business Day thereafter.

 

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ARTICLE II
THE TRANSACTION

 

Section 2.1                                       Formation of, and Contributions to, Newco .  Prior to Closing, Seller shall cause Newco Parent to form Newco.  Immediately prior to Closing, Seller shall ( i ) cause the Contributing Entities to contribute to Newco all of the Contributing Entities’ right, title, and interest in and to the Transferred Assets, free and clear of all liens other than Permitted Liens, and ( ii ) cause Newco to assume the Assumed Liabilities.  All contributions of assets to, or assumptions of liability by, Newco shall be made pursuant to documents of transfer, assignment and contribution or assumption reasonably satisfactory to Purchaser.

 

Section 2.2                                       Purchase and Sale of the Newco Interest; Purchase Price .

 

(a)                                   Subject to the terms and conditions of this Agreement, at the Closing, Seller shall cause Newco Parent to sell, transfer, convey, assign and deliver to Purchaser, and Purchaser shall purchase and acquire from Newco Parent, all of Newco Parent’s right, title and interest in and to its entire membership interest in Newco (the “ Newco Membership Interest ”), which shall constitute 100% of the membership interests in Newco.

 

(b)                                  In consideration for the Newco Membership Interest, at the Closing Purchaser shall pay the Purchase Price, subject to adjustment as set forth in Sections 2.5 , 5.12(c)  and 5.17(b)  to, or at the direction of, Seller.

 

Section 2.3                                       Closing .  Unless otherwise agreed by the parties, the Closing shall take place at the offices of Debevoise & Plimpton LLP, 919 Third Avenue, New York, New York, at 10:00 a.m. on the date (the “ Closing Date ”) that is ( x ) three Business Days, or ( y ) if requested by Seller in order to settle or otherwise resolve any Third Party Rights pursuant to Section 5.17 , a later date designated by Seller on not less than three Business Days notice to Purchaser that is not more than 30 days, after the satisfaction or waiver (to the extent permitted by applicable Law) of the conditions set forth in Article VI (other than conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or waiver of such conditions).  If the Closing occurs, for purposes of this Agreement, the Closing shall be deemed to have occurred at 12:00:01 a.m. Eastern time on the Closing Date or such other time as agreed upon by Purchaser and Seller.

 

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Section 2.4                                       Closing Deliveries .

 

(a)                                   At the Closing, Purchaser shall deliver to Seller:

 

(i)                                              by wire transfer of immediately available funds, to one or more accounts designated by Seller at least one Business Day prior to the Closing Date, an amount equal to the Purchase Price, plus ( x ) the amount, if any, by which Estimated Closing Working Capital is greater than zero, and minus ( y ) the sum of (1) the amount, if any, by which Estimated Closing Working Capital is less than zero and (2) the product of (A) the amount, if any, by which the Estimated Closing Date Subscribers is less than 520,146 multiplied by (B) $375 (the “ Closing Date Subscriber Price Adjustment ”);

 

(ii)                                           a certificate of an officer of Purchaser, dated the Closing Date, certifying that, as of such Closing Date, each of the conditions contained in Section 6.1(b)  has been satisfied;

 

(iii)                                        copies of the Roaming Agreement and the T-Mobile Roaming Agreement, in each case executed by Purchaser.

 

(b)                                  At the Closing, Seller shall deliver to Purchaser:

 

(i)                                              an executed copy of a document, in form and substance reasonably satisfactory to Purchaser, transferring the Newco Membership Interest to Purchaser

 

(ii)                                           a certificate of an officer of Seller, dated the Closing Date, certifying that, as of such Closing Date, each of the conditions contained in Section 6.2(b)  has been satisfied;

 

(iii)                                        true and correct copies of ( A ) the Organizational Documents of Newco, as in effect on the Closing Date, which shall be reasonably satisfactory to Purchaser, and ( B ) the resignations of all directors, officers and managers (or the equivalent thereof), if any, of Newco;

 

(iv)                                       a copy of the Roaming Agreement executed by Seller and Newco; and

 

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(v)                                          a certificate by Seller or non-foreign status satisfying the requirements of Treasury Regulations Section 1.1445-2(b)(2) in a form reasonably acceptable to Purchaser.

 

Section 2.5                                       Purchase Price Adjustment .

 

(a)                                   Closing of the Books on the Closing Date .  In preparation for the Closing, Seller shall use its reasonable best efforts to cause a full balance sheet closing of the books of the Business to take place on the Closing Date as if it were the last day of a fiscal period for the Business.

 

(b)                                  Pre-Closing Adjustment .  At least five Business Days prior to the Closing Date, Seller shall prepare and deliver to Purchaser a statement (the “ Estimated Closing Statement ”) consisting of ( i ) an estimated Closing Balance Sheet, ( ii ) an estimated calculation in reasonable detail of Closing Working Capital (“ Estimated Closing Working Capital ”) derived from such estimated Closing Balance Sheet, ( iii ) an estimate of the number of Closing Date Subscribers (“ Estimated Closing Date Subscribers ”) and ( iv ) a calculation of the amount, if any, by which the payment at Closing will be increased or reduced pursuant to Section 2.4(a)(i) .  The Estimated Closing Statement shall be prepared in good faith and in accordance with the example thereof set forth in Schedule 2.5(b) , which assumes the Closing occurred on December 31, 2008 and utilizes the calculation and accounting principles, practices and methodologies specified therein (the “ Applicable Accounting Principles ”).

 

(c)                                   Closing Statement .  As promptly as practicable following the Closing Date (but in any event within 60 days thereafter) Purchaser shall prepare and deliver to Seller a statement (the “ Closing Statement ”) consisting of ( i ) the Closing Balance Sheet, ( ii ) a calculation in reasonable detail of Closing Working Capital derived from the Closing Balance Sheet, ( iii ) a calculation of the number of Closing Date Subscribers and ( iv ) a calculation of the amount, if any, payable pursuant to clause (h) of this Section 2.5 .  The Closing Statement shall be prepared in good faith and in accordance with the example thereof set forth in Schedule 2.5(b) , including the Applicable Accounting Principles.  Seller shall use commercially reasonable efforts to provide to Purchaser all information and access to employees as Purchaser shall reasonably request in connection with Purchaser’s preparation of the Closing Statement.

 

(d)                                  Closing Statement Dispute Notice .  The Closing Statement shall become final, binding and conclusive upon Seller and Purchaser on the 60 th  day following Seller’s receipt of the Closing Statement unless on or prior to such 60 th  day Seller delivers to

 

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Purchaser a written notice (a “ Closing Statement Dispute Notice ”) stating that Seller disputes one or more items contained in the Closing Statement (a “ Disputed Item ”) and specifying in reasonable detail each Disputed Item.

 

(e)                                   Resolution Period .  If Seller delivers a Closing Statement Dispute Notice, then Purchaser and Seller shall seek in good faith to resolve the Disputed Items during the 30-day period beginning on the date Purchaser receives the Closing Statement Dispute Notice (the “ Resolution Period ”).  If Purchaser and Seller reach agreement with respect to any Disputed Items, Purchaser shall revise the Closing Statement to reflect such agreement.

 

(f)                                     Independent Accountant .  If Purchaser and Seller are unable to resolve all Disputed Items during the Resolution Period, then, at the request of either party, Purchaser and Seller shall jointly engage and submit the unresolved Disputed Items (the “ Unresolved Items ”) to the Independent Accountant; provided that if Purchaser and Seller do not appoint an Independent Accountant within ten days after either Purchaser or Seller gives notice to the other of such request, either of them may request the American Arbitration Association to appoint as the Independent Accountant a partner in the New York office of a nationally recognized independent registered public accounting firm based on its determination that the partner has had no material relationships with the parties or their respective Affiliates within the preceding two years and taking into account such firm’s material relationships during the preceding two years with the parties and their respective Affiliates, and such appointment shall be final, binding and conclusive on Purchaser and Seller.  Purchaser and Seller shall use their reasonable best efforts to cause the Independent Accountant to issue its written determination regarding the Unresolved Items within 30 days after such items are submitted for review.  The Independent Accountant shall make a determination with respect to the Unresolved Items only and in a manner consistent with this Section 2.5 and the Applicable Accounting Principles.  Each party shall use its reasonable best efforts to furnish to the Independent Accountant such work papers and other documents and information pertaining to the Unresolved Items as the Independent Accountant may request.  The determination of the Independent Accountant shall be final, binding and conclusive on Purchaser and Seller absent manifest error, and Purchaser shall revise the Closing Statement to reflect such determination upon receipt thereof.  The fees, expenses and costs of the American Arbitration Association and the Independent Accountant shall be borne in the same proportion as the aggregate amount of the Unresolved Items that is unsuccessfully disputed by each (as determined by the Independent Accountant) bears to the total amount of the Unresolved Items submitted to the Independent Accountant.

 

(g)                                  Access to Information .  Purchaser shall provide promptly to Seller all information and access to employees as Seller shall reasonably request in connection with

 

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Seller’s review of the Closing Statement, including all work papers of the accountants who audited, compiled or reviewed the Closing Statement.

 

(h)                                  Final Adjustment .

 

(i)                                      If ( A ) Closing Working Capital exceeds Estimated Closing Working Capital, then Purchaser shall pay to the Seller an amount equal to such excess; if ( B ) Estimated Closing Working Capital exceeds Closing Working Capital, then Seller shall pay to Purchaser an amount equal to such excess; ( C ) if the Closing Date Subscribers is less than 520,146, then ( 1 ) Seller shall pay to Purchaser a sum equal to the amount, if any, by which ( I ) the product of ( x ) an amount equal to such difference multiplied by ( y ) $375, exceeds ( II ) the Closing Date Subscriber Price Adjustment, and ( 2 ) Purchaser shall pay to Seller a sum equal to the amount, if any, by which ( I ) the Closing Date Subscriber Price Adjustment exceeds ( II ) the product of ( x ) an amount equal to such difference multiplied by ( y ) $375; and ( D ) if the Closing Date Subscribers exceeds 635,734, then Purchaser shall pay to Seller an amount equal to the sum of ( I ) the product of ( x ) an amount equal to such excess multiplied by ( y ) $375, plus ( II ) the amount determined pursuant to Section 2.4(a)(i)(y)(2) .

 

(ii)                                           The party that is required to make a payment pursuant to Section 2.5(h)(i)  shall make such payment within two Business Days after the Closing Statement is finalized pursuant to clause (d), (e) or (f) of this Section 2.5 .

 

(i)                                      Method of Payment, Interest, etc .  Any amount paid pursuant to Section 2.5(h)  shall be ( i ) increased by interest on such amount, compounded daily, at an annual interest rate equal to the 30-day LIBOR in effect at such time, plus 300 basis points, from the Closing Date to and including the date of payment based on a 365 day year, ( ii ) made by wire transfer of immediately available funds to an account designated by the receiving party and ( iii ) treated as an adjustment to the Purchase Price for tax reporting purposes.

 

ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER

 

Except ( i ) as disclosed in any form, document, statement or report filed by Alltel or any of its Subsidiaries with the SEC between January 1, 2008 and the date of this Agreement (other than any disclosures set forth in any risk factor section or in any section relating to forward-looking statements), but only to the extent the applicability of such disclosure to any representation or warranty contained in this Article III is

 

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reasonably apparent or ( ii ) as disclosed in the Seller Disclosure Schedules (it being agreed that disclosure of any item in any Section of the Seller Disclosure Schedules shall also be deemed disclosure with respect to any other Section of this Article III to which the relevance of such item is reasonably apparent), and subject to the terms of, and except as required in order to comply with, the Governing Regulatory Documents, Seller represents and warrants to Purchaser as of the date hereof and as of the Closing Date:

 

Section 3.1                                       Corporate Status .  Seller is a general partnership duly formed and validly existing under the laws of the State of Delaware.  Each of the Contributing Entities is, and as of the Closing Newco will be, duly organized, validly existing and in good standing under the Laws of the respective states of their organization, and each has, or, in the case of Newco, as of the Closing will have, all requisite corporate or other power and authority to carry on its business as now conducted.

 

Section 3.2                                       No Divestiture Trustee .  As of the date hereof, no Divestiture Trustee has been appointed and no time period specified in any DOJ Consent Decree for the divestiture of any Transferred Assets has expired.

 

Section 3.3                                       Authorization; etc .  Seller has full power and authority to execute, deliver and perform its obligations under this Agreement and each of Newco and the Contributing Entities has (or, in the case of Newco, will have) the power and authority to consummate the transactions contemplated by this Agreement.  The execution, delivery and performance of this Agreement have been duly and validly authorized and approved by all necessary action of Seller.  This Agreement is a legal, valid and binding obligation of Seller, enforceable against it in accordance with its terms, except to the extent enforcement may be limited by applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar Laws of general applicability affecting the rights of creditors and general principles of equity (regardless of whether such enforceability is c